Why the wealth of Africa does not make Africans wealthy

Why the wealth of Africa does not make Africans wealthy

25/04/2016

The resource cure. A gold mine in the Democratic Republic

 of Congo.The country holds natural resources worth trillions

  of dollars but the population is blighted with extreme poverty

and violence. in a new edition of his book  'The Looting

Machine,' Investigative journalist Tom Burgis explores

why resource-rich states are falling their people.

 

The resource cure. Ugandan Prime Minster Milton Obote, 

speaking on stage following the declaration of Ugandan

 independence, Uganda September 10th 1962.

Burgis argues that exploitation of colonialism continued 

after independence in many African states, as new ruling

 elites used natural resources to enhance their wealth and 

power at the expense of their public.

The resource curse. International mining compagnies were

 allowed to maintain power in independent African states

 despite their involvement with colonial-era exploitation

and atrocities

The resource curse. Botswana has sought to counter-act

the 'resource curse' effect by building high-skill industries

such as diamond polishing, rather than just exporting

 raw materials.

The resource curse. Innoson Motors factory in Nnewi.

Nigeria is attempting to diversify its economy away

from oil dependency, and towards manufacturing.

The resource curse.

The resource curse. The global supply chain still relies on

 cheap raw materials from Africa, which makes western

 governments and consumers complicit in the crimes

 around resource extraction, says Burgis.

The resource curse. Some measures have been taken to

 address the issue, such as the Kimberly Process to

stop 'blood diamond' trafficking. 

Katanga province in the Democratic Republic of Congo is blessed with enormous natural wealth, including vast deposits of precious minerals such as diamonds, gold, and tantalum.

Katanga saw a spectacular mining boom around the turn of the century, when President Laurent-Desire Kabila and then his son Joseph licensed international mining companies to tap its treasures.

This arrangement generated riches for the Congolese elite, and vastly more for the prospectors, but offered little to the poverty-ravaged population. From 1999 to 2002, the Kabila regime "transferred ownership of at least $5 billion of assets from the state-mining sector to private companies under its control... with no compensation or benefit for the State treasury," a United Nations investigation found.

The bonanza coincided with a ruthless crackdown on dissent. In 2004, a small, mostly civilian group took over a mine operated by the Australian firm Anvil Mining in Kilwa village, protesting that the company was making huge profits without rewarding the local workforce.

According to a UN report, the Congolese army crushed the uprising and killed around 100 people, many by summary execution.

Workers extracting cobalt from a lake in Katanga

 province, DR Congo.

Modern colonialism

The combination of staggering wealth, rampant violence, and abject poverty in DR Congo is no coincidence, but part of a pattern causing devastation across Africa, according to Financial Times investigative journalist Tom Burgis.

In a new edition of his book The Looting Machine, the author probes the paradox of "the continent that is at once the world's poorest and, arguably, its richest."

Burgis, a former correspondent in Lagos and Johannesburg, finds a wide variety of kleptocrats and rackets over his travels through dozens of resource-rich countries. But a common thread is that the wholesale expropriation of resources during colonial times has barely slowed through the post-independence era, albeit with new beneficiaries.

"Western governments are not supposed to wield commercial and political power at the same time, and certainly not to use one to benefit the other," says Burgis. "In colonial states...The British or Portugese would cultivate a small group of local people who would fuse political and commercial power to control the economy."

"When the foreign power leaves, you are left with an elite that has no division between political and commercial power. The only source of wealth is mines or oilfields, and that is a recipe for ultra-corrupt states. Somewhere like Nigeria, an 'extractor elite'...wanted to draw to itself the rent that oil and mining resources generate."

Burgis cites another colonial hangover in the continued presence and power of oil and mining firms.

"The multinational companies hold enormous economic and political power in post-independence African countries," he says. "In this way, there is a pretty straight line from colonial exploitation to modern exploitation."

British businessman Cecil Rhodes (center) founded the 

De Beers diamond company in South Africa,

 implicated in colonial atrocities.

Fueling oppression

The ability of governments to rely on resource revenue leads to corruption and oppression, Burgis argues, as they are not accountable to their people through a social contract based on taxation and representation.

He cites Angola, which earns almost half of its GDP from oil, as an example of government as "a service for the elite." A 2011 IMF audit revealed that $32 billion disappeared from official accounts between 2007 and 2010, a quarter of the state's income.

The Angolan elite rejects accountability and does not tolerate any challenge from the public, Burgis adds, recalling the recent case of activists being jailed for a public reading of a pro-democracy book.

"Government can behave that way if it doesn't need the consent of its people," the author says.

Angola has taken steps to address such criticism in recent years, with the 2012 election deemed "generally free and fair" by neutral observers. But human rights groups attest that oppression remains a fact of life.

Garbage piles up as so little of Angola's wealth trickles

 down to the communities.

Secret deals

The growth of offshore banking in the late 20th century created new opportunities for resource tycoons to cover their tracks, a practice laid bare in the Panama Papers.

Israeli businessman Dan Gertler was an early pioneer. After forging a close friendship with DR Congo President Joseph Kabila, he was granted a near monopoly on exporting the nation's diamonds, and quickly became a billionaire. Gertler routed the cash through an elaborate network of offshore accounts in tax havens, keeping the details of controversial deals secret.

"In the case of African resource deals, offshore funds have been shown to conceal questionable transactions," says Burgis. "In the 1980s, bribes were literally cars full of cash and you handed the key to the official you were trying to bribe."

"Bribery now is much more sophisticated, and has become harder to define as bribery if it's (through) offshore transactions or people being given equity shares in offshore companies...You have to crack open a lot of offshore secrecy to see the conflict of interest that lies at the heart of them."

The era of global finance has opened African markets to a new generation of mysterious traders. Burgis spent years on the trail of elusive Chinese businessman Sam Pa, who has cycled through multiple aliases while making deals across the continent from Angolan oil to Zimbabwean diamonds. Pa is believed to lead the secretive Queensway investor group, and Burgis claims he has represented the Chinese state, although the government denies this.

China's President Xi Jinping shakes hands with 

Zimbabwe's President Robert Mugabe 

in Harare

Breaking the chain

Burgis is skeptical that resource industries can ever be reformed.

"There is a troubling possibility that it's not possible to put natural resources in these countries to work for the common good," says Burgess. "(Almost) everywhere that receives a significant share of its income from oil or mining is badly run and often violent -- it's in the nature of these industries to cause these problems."

Botswana and South Africa have befitted from moving up the value chain -- developing high-skilled industries from natural resources rather than just exporting raw materials, such as diamond polishing or manufacturing metallic goods. Burgis believes that diversifying economies away from a single resource -- as President Buhari's government in Nigeria is attempting to do -- can mitigate the effects of dependency.

He suggests another option is to keep resources in the country and implement high tariffs to protect domestic industries, but African leaders have been reluctant to adopt such measures.

"We have a world trading architecture with strict rules on imposing tariffs," says Burgis. "African countries have adopted the market orthodoxy that led them to pare down states and embrace global economic competition -- in which they are overwhelmingly the losers."

A diamond polishing factory in Botswana, part of a 

high-skill industry that has been developed from

 the nation's raw materials.

Collective complicity

Responsibility for the plight of resource-dependent nations goes beyond traders and dictators. The global economy still requires a huge supply of raw materials that originate in Africa, creating an imperative to maintain the existing, destructive model.

Burgis applauds steps such as the Kimberley Process for preventing 'blood diamond' trade, but feels that developed nations could go much further.

"The lesson for those in the West who want to address the damage from oil and mining industries, and the corruption that goes with them, is 'put your own house in order,'" he says. "There has been a tendency to lecture African rulers (but) the problems are in the world financial system."

The author suggests a global public registry of companies and trusts to counter the use of shell companies in illicit deals.

"That financial secrecy is available is not Africa's fault," says Burgis. "Address the part that sits within the global system, which can be regulated from Western capitals."

The nature of the global supply chain means that complicity with the crimes around resource extraction extends from African dictators all the way to a European mobile phone buyer.

At every level, delusion is a powerful barrier to change. Burgis recalls a meeting with a leading figure of Angola's kleptocratic regime, who argued passionately that he was protecting his people from even worse abuses.

"It's human nature," says Burgis. "Nobody thinks they are the bad guy."

By Kieron Monks,

Angola Accuses Congo of Wrecking Joint-Oil Development Agreement

Angola Accuses Congo of Wrecking Joint-Oil Development Agreement

22/04/2016

Map of oil blocs off of DR Congo’s Atlantic coast 

and inland

Angola’s oil minister accused neighboring Democratic Republic of Congo’s government of wrecking an agreement to jointly develop offshore oilfields after it failed to respect the terms of the deal.

Congo failed to honor a January 2015 accord between Angolan state-owned oil company Sonangol and Congo’s Cohydro on crude prospecting in a so-called common-interest zone, Petroleum Minister Maria Botelho de Vasconcelos said April 17 in an interview in Luanda. The collapse is the latest setback in a long-standing disagreement between Congo and Angola over their maritime borders and access to the area’s lucrative offshore oil blocks.

“When we got to implementing the deal, the decisions were not taken forward,” Vasconcelos said. “Many times we reach a certain consensus, but then we hear Congolese officials going back on their word.”

Congo pumps about 25,000 barrels of oil per day and wants to expand output by asserting its rights to Angolan production that it says falls within its own offshore area. It has officially claimed a proportion of the oil pumped from four Angolan blocks since 2003. The two governments signed a cooperation agreement in 2007 to create a common interest zone -- a maritime corridor between the two countries in which they would jointly explore for hydrocarbons -- but struggled to make further progress.

War Buddies

The breakdown in relations comes at a difficult time for President Joseph Kabila, whom opposition parties accuse of trying to delay presidential elections scheduled for November. Angola supported Kabila’s father, Laurent-Desire, when he seized power in 1997 and Congo has remained dependent on political and security support from Angola since then, a factor that has always complicated the oil negotiations.

In 2013, former Oil Minister Crispin Atama said the two countries would begin talks on a production-sharing agreement for the common-interest zone and could start production from the shared block within 36 months. Details of the resulting 2015 commercial agreement with Sonangol were never made public in Congo, despite a May 2011 decree by Congo’s government requiring that contracts for any cession, sale, or rental of the state’s natural resources be published within 60 days of execution.

Angola’s oil minister said they had established a “clearly defined joint development corridor that was accepted by all parties.”

Congolese Oil Minister Aime Ngoy Mukena was not available when Bloomberg made four requests to his office for comment.

UN Ruling

Angola will now await a ruling from the United Nations on its December 2013 request to recognize the extension of its sovereign rights beyond the 200 nautical-mile (370-kilometer) limit currently recorded as its exclusive economic zone, before deciding what to do next, Vasconcelos said. The country is open to further negotiations, he said.

Congo has already opposed Angola’s request in two letters to the UN in April 2014 and September 2015, documents on the website of the UN Commission on the Limits of the Continental Shelf show. In the letters, Congo said Angola was “unilaterally ignoring” its rights to exercise control over its own territorial sea and called on the UN to prohibit consideration of Angola’s submission until the two countries settled their border dispute.

Chevron Corp., which has a 31 percent interest in a production-sharing contract for block 14, part of which is within the proposed common zone, didn’t respond to an e-mailed request for comment. Exxon Mobil Corp., BP Plc, Statoil ASA and ENI SpA also have stakes in the blocks that are part claimed by Congo, according to charts on Sonangol’s website.

Angola, which vies with Nigeria to be Africa’s biggest oil producer, produced an average of 1.8 million barrels per day in March, according to OPEC.

By Thomas Wilson 

Candido Mendes

Bloomberg

US and EU conservation funds failing to protect trees or people, claims report

US and EU conservation funds failing to protect trees or people, claims report

22/04/2016

Up to $500m spent by donors on protecting rainforest in the Congo basin has failed to prevent destructive developments, says the Rainforest Foundation

Sangha forest in Central African Republic, one of five

 equatorial African countries in the Congo basin

studied by the Rainforest Foundation.

Up to $500m (£346m) spent by the US, EU and other donors to protect the world’s second largest swath of rainforest has failed – for the trees, the animals and the people who live among them – a major study has found.

Analysis of five equatorial African countries in the Congo basin has found that destructive developments including illegal logging, oil and gas exploration, and palm oil plantations are taking place in 34 large protected areas, and that conservation has displaced villages and led to conflict and human rights abuses.


According to the Rainforest Foundation – whose researchers spent 18 months interviewing people in the Democratic Republic of the Congo, Cameroon, Gabon, Central African Republic and the Republic of Congo – elephants, bongos, gorillas and chimpanzees are declining at alarming rates while communities report abuse by people paid to protect the environment.


“Without exception, all communities in the countries where field research took place associate protected areas with increasing hardships due to restrictions to their livelihood activities, including diminished access to food,” said the report, Protected areas in the Congo basin: failing people and biodiversity. “Whenever gains may have resulted from protected areas, very little, if anything, has reached local communities to date.”


In only eight of the 24 areas did conservation provide any work, and this was sporadic employment as park rangers or tourist guides. No evidence was found of compensation paid to communities for stopping hunting or taking timber.

Sustainable logging in Mindourou, Cameroon

According to the Rainforest Foundation, the biggest overall funder of Congo rainforest conservation has been the US government – mostly through the US Agency for International Development (USAid), but also through the State Department.


“We have identified at least $110m that has been put into conservation efforts just by USAid from 2004-10, and they have committed to spending another $50m from 2013-18,” said Simon Counsell, Rainforest Foundation director.


The next biggest funder has been the EU, which spent about $118m between 1992 and 2010. Money was channelled through the Ecofac project (pdf), with a further €30m (£24m) for funding committed for the next five years.


A further $50m has come through the African Development Bank, the Norwegian government, Germany, Japan and others.


“Taking into account all the money that has come through organisations such as WWF and WCS [the Wildlife Conservation Society] from private donations and foundations, we calculate that probably $400m has been spent on these protected areas in the last 15 years or so, and quite possibly as much as $500m,” said Counsell.


The report said most conservation in the Congo basin is based on a militaristic approach, known as “guns and guards”. It depends on armed anti-poaching “ecoguards” restricting hunting and stopping people going into the forest.


But this model is described in the report as heavy-handed, leading to communities being threatened and turning them against conservation. Indigenous groups, such as the Pygmies, are said to suffer the most, largely because their semi-nomadic lifestyles tend to overlap with protected areas.


The authors blame governments, saying they are obliged by law to uphold land and human rights as well as people’s rights to free, prior and informed consent.


“Business as usual in the form of top-down conservation in the Congo basin can be counterproductive and is often downright unjust as human rights abuses are perpetrated in the name of conservation,” said the report.


“Local people bear the brunt of anti-poaching measures even though they are not the drivers of poaching. At the same time, systematic efforts to tackle high level illegal wildlife trade networks have not taken pressure off local communities or diminished the abuses they suffer.”

 An elephant eats fruit on the forest floor in the Republic

of Congo’s Nouabalé-Ndoki national park.

Counsell said: “A new, more sustainable form is needed in Africa, which works with local people rather than against them. Donor governments need to carefully consider whether their support to strict forest preservation is effective.”

Of the 34 protected areas included in the study, 26 reported displacement of people to make way for conservation, 21 reported conflicts between park management and communities, and 18 said they were not consulted before the protected areas were created.


The study follows a complaint by Survival International to the Organisation for Economic Co-operation and Development accusing WWF of inadvertently facilitating serious human rights abuses against Pygmies living in Cameroonian rainforests.


The WWF, in a response included in the report, said enforcing protected areas is problematic across the Congo basin and made more difficult because of nearby armed conflict.


“Militarisation of the south-east Cameroon area – linked to arms trafficking, well-armed poaching and conflict in Central African Republic – has been identified as a factor in an increased number of reports of unacceptable conduct and alleged abuse by ecoguards and others,” Frederick Kwame Kumah, WWF’s director for Africa, said in the report.


The authors recommend a shift away from the conventional people-free parks philosophy to one that sees the remaining Congo basin rainforests not as pristine nature to be saved but as places where local communities are part of the equation and can benefit from the forests.


By John Vidal
The Guardian



DRC media repression continues as radio journalist assaulted warns RSF

DRC media repression continues as radio journalist assaulted warns RSF

22/04/2016

A UN soldier is pictured at the Uruguayan base in Goma,

 DRC on 21 April 2016

Reporters Without Borders (RSF) has condemned the beating that Radio Tomisa journalist Badylon Kawanda received from members of the National Intelligence Agency (ANR) in the Democratic Republic of Congo (DRC)'s south-western city of Kikwit last week. Reporters in the DRC are facing repeated threats and violence in the volatile African nation that is now ranked 152nd out of 180 countries in the latest World Press Freedom Index published by RSF.

Critics of President Joseph Kabila – who is bound by the constitution to step down in December 2016 as he has served two full terms since 2001 – have accused him of trying to postpone presidential elections slated for November 2016 in a bid to extend his grip on power. Those same critics are facing death threats, politically motivated arrests or beatings from authorities for opposing attempts to prolong the president's term in office.


RSF's partner organisation in the DRC, Journaliste En Danger (Journalist In Danger, JED), confirmed Kawanda, who works for a religious radio station based in the capital of the southwestern province of Kwilu, was physically attacked on 14 April in the provincial headquarters of the National Intelligence Agency (ANR) by the head of the office and his staff.

A map showing the huge size of the Democratic

Republic of Congo

A 'disgraceful attack' on Badylon Kawanda



According to the information obtained by JED, Kawanda went to the ANR provincial office to ask about a freight agency employee who was being held there after a reported brawl with a taxi driver.


After giving his name, Kawanda was hit several times by the head of this provincial office, who then ordered his employees to "thrash" him. According to JED, the officers threw Kawanda to the ground, causing him to wrench a knee, and broke his work equipment.


Reached by telephone, Kawanda confirmed that he lodged a formal complaint about the attack with the military and civilian authorities in Kikwit.


"All of the authorities that I personally contacted after this disgraceful attack promised me that they would raise it with the local ANR chief," he said. "I am still waiting to learn what action has been taken in response to my complaint."


JED called on ANR general administrator Kalev Mutond to order an immediate investigation with the aim of identifying and punishing the perpetrators of the attack. RSF, meanwhile, called on the Congolese authorities to investigate the attack without delay so that those responsible can be punished. An ANR official refused to talk to JED when reached by telephone.

Government crackdown on media and opposition

Earlier this month, rights groups strongly condemned the expulsion of Jason Stearns, a prominent American researcher and director of the Congo Research Group (CRG) at New York University, from the DRC.


While the reason given by Congolese authorities for Jason Stearns' expulsion was his "undesirability", his ousting came just weeks after he published a report linking soldiers in Congo's army to the massacres of civilians in the town of Beni, in the country's northeast, since 2014.


Civil society groups are also urging the African Union to demand the immediate and unconditional release of two Congolese youth activists, Fred Bauma and Yves Makwambala, who have been imprisoned for over a year now in an apparently politically-motivated drive to silence dissent.




By Elsa Buchanan

Standing up for democracy in the Congo President Kabila must step down when his term ends

Standing up for democracy in the Congo

President Kabila must step down when his term ends

19/07/2016

Two years ago Secretary of State John Kerry visited the Democratic Republic of Congo (DRC) and publicly called on President Joseph Kabila to respect the country’s constitution and not seek a third term in 2016. In remarks before the African Union last summer, President Obama affirmed the U.S. view that Africa needs no more “presidents for life” but rather new ideas and leadership resulting from elections.

Mr. Kabila’s response has been an ongoing campaign to undermine the constitution, jail opponents and shut down media outlets. These actions have brought this large, strategically important nation in the center of Africa ever closer to the precipice of a major political conflict. To avert a destabilizing political and human rights crisis, and to cement his legacy as a strong advocate for democracy in Africa, Mr. Obama should stand firm on his administration’s pro-democracy policy and to do what he can to ensure Mr. Kabila follows his country’s constitution and holds national elections.

Mr. Kabila came to power in 2001 after the assassination of his father. His election to a second term in 2011 was deeply flawed and widely criticized by the international community. Corruption has been rampant as the economy has stagnated. Mr. Kabila has never said explicitly he would breach the constitution, which he himself spearheaded in 2005, but top U.S. officials are clearly concerned about his intentions and what they might mean for stability in the Congo.

Last month, in testimony before the Senate Foreign Relations Committee, Thomas Perriello, the State Department’s special envoy for the Great Lakes Region of Africa, warned, “the DRC could fall into a crisis more violent and destabilizing than the current crisis in Burundi,” where President Pierre Nkurunziza’s decision to seek a third term in violation of the constitution has resulted in hundreds of deaths and a refugee crisis.

Mr. Kabila’s attempts to derail his country’s fledging democratic system are apparent. In early 2015, he attempted to postpone elections, leading to mass protests in which many people were arrested or killed by government security forces. Shortly after that, a mass grave with 400 bodies was discovered and remains the focus of queries by human rights groups. Subsequently, he has arrested numerous opposition political leaders and shut down opposition radio and television stations and newspapers. He has weakened his main opponents by redrawing political boundaries and starved the country’s election commission of funds. After deliberately engineering obstacles to scheduled elections, he has now called for a “national dialogue,” which probably is intended to stall the electoral process and extend his presidency.

While Mr. Kabila has been trying to maneuver around the constitution, leaders of political parties once part of the governing coalition have abandoned him and are standing with millions of Congolese who insist that the rule of law be honored. The DRC’s constitution stipulates when his mandate ends, and lays out the protocols for the transition to a successor. There is no mention of a “national dialogue” or any popular consultation to be held before the next election. Mr. Kabila is aware of this but is persisting in his efforts.

There is still time for President Kabila to reverse course and do the right thing, and the United States and international community should continue to strongly encourage him to move in that direction. Mr. Obama and Mr. Kerry should publicly renew their call for Mr. Kabila to pledge to uphold the constitution and step down. In exchange, the United States should pledge to work with the European Union, the United Nations and the African Union to provide technical and logistical support, as well as major funding to facilitate free and fair elections. If Mr. Kabila chooses to derail the democratic process, the U.S. should deny visas to Mr. Kabila’s immediate family and political cohorts, review all assistance programs that might benefit the presidency, and be prepared to undertake financial sanctions aimed at his personal holdings.

The administration should also seek the support of the key western European and democratic allies. With 22,000 U.N. peacekeepers and personnel in the Congo, the international community should be prepared to speak out in support of stability and continued political progress. Political instability will only exacerbate and prolong the U.N.’s work.

Mr. Kabila is counting on the United States to continue to monitor the situation, make earnest statements and to move slowly. There is still time to produce a better democratic outcome in the Congo, and the United States should step up its diplomacy and make clear there will be consequences for Mr. Kabila and those around him if they undermine the constitution and create greater instability in the Congo.

By James Jones Jr. and Johnnie Carson

• James Jones Jr. is a retired U.S. Marine Corps general and a former U.S. national security adviser. Johnnie Carson is a former ambassador and assistant secretary of State for Africa (2009-13).