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June, 2017

 

OPEC oil output jumps to 2017 high as Nigeria, Libya pump more

* OPEC output rises by 280,000 bpd to 32.72 million bpd

* Compliance by 11 countries with output targets 92 pct vs 95 pct

* Saudi Arabian output remains below OPEC target

* Output by country, compliance details:

By Alex Lawler

LONDON, June 30 (Reuters) – OPEC oil output has risen in June by 280,000 barrels per day (bpd) to a 2017 high, a Reuters survey found, as a further recovery in supply from the two member countries exempt from a production-cutting deal offset strong compliance by their peers.

High compliance by Gulf producers Saudi Arabia and Kuwait helped keep OPEC’s adherence with its supply curbs at a historically high 92 percent in June, compared with 95 percent in May, the survey found.

But extra oil from Nigeria and Libya, exempted from the cut because conflict curbed their output, means supply by the 13 OPEC members originally part of the deal has risen far above their implied production target.

The recovery adds to the challenge the OPEC-led effort to support the market is facing from a persistent inventory glut. If the recovery lasts, calls could grow within OPEC for the exempt countries to be brought into the production deal.

“The rise in OPEC production will further delay the point at which balance is restored on the oil market,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt.

As part of a deal with Russia and other non-members, the Organization of the Petroleum Exporting Countries originally pledged to reduce output by about 1.2 million bpd for six months from Jan. 1.

Oil prices have gained some ground but high stocks and rising U.S. output kept them in check. To provide additional support for prices, the producers decided in May to prolong the deal until March 2018.

June’s biggest rise came from Nigeria, where output extended a recovery after being curtailed by militant attacks on oil installations. The second-biggest was from Libya.

Nigerian output is expected to rise further in coming weeks. Planned exports in August are scheduled to reach at least 2 million bpd, a 17-month high.

In Libya, output was on average higher despite fluctuation and has now exceeded 1 million bpd, a four-year high. Production remains some way short of the 1.6 million bpd Libya pumped before the 2011 civil war.

Saudi Arabia pumped 40,000 bpd more, the survey found, although its compliance remained above 100 percent. Even with June’s increase, the curb achieved by OPEC’s top producer is 564,000 bpd, well above the target cut of 486,000 bpd.

Aside from a rise in Angolan exports, no other significant change in output occurred elsewhere in OPEC.

OPEC announced a production target of 32.5 million bpd last year, which was based on low figures for Libya and Nigeria. The target includes Indonesia, which has since left, and does not include Equatorial Guinea, the latest country to join OPEC.

The Libyan and Nigerian increases mean OPEC output in June averaged 32.57 million bpd, about 820,000 bpd above its supply target, adjusted to remove Indonesia and not including Equatorial Guinea.

Equatorial Guinea, which became an OPEC member in late May, has now been added to the Reuters survey. The country’s crude production is estimated at 150,000 bpd, which brings total OPEC production in June to 32.72 million bpd.

The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data, and information provided by sources at oil companies, OPEC and consulting firms. (With additional reporting by Rania El Gamal; Editing by Dale Hudson)


Nigeria's crude account one of world's least transparent – NRGI

LONDON, June 28 (Reuters) – Nigeria’s Excess Crude Account tied for the world’s most poorly governed sovereign wealth fund, according to a report by the Natural Resource Governance Institute (NRGI) released on Wednesday.

The $2.4 billion account was ranked alongside the Qatar Investment Authority as the worst in terms of oversight and transparency in NRGI’s index of resource management. NRGI rated 11 sovereign wealth funds, managing least $1.5 trillion in total, as “failing”.

“The government discloses almost none of the rules or practices governing deposits, withdrawals or investments of the ECA,” the report said. It added that the account, along with the other worst performers, is “so opaque that there is no way to know how much may be lost to mismanagement.”

Nigeria’s finance ministry did not immediately return a request for comment.

Money from the account – which is rainy day fund – is occasionally used by the government to cover budget shortfalls. In such cases, the money is shared between the federal, state and local governments.

Nigeria also runs the Nigeria Sovereign Investment Authority, with some $1.25 billion under management, but NRGI said it had ranked the ECA due to its larger balance sheet

The NRGI report ranked Nigeria 55th in overall resource management, with a high score on its taxation ranking helping to balance its last-place finish in sovereign wealth fund management. It scored higher than 70th placed Angola, which is second to Nigeria in African oil exports, while nearby Equatorial Guinea was fifth from the bottom of the table. (Reporting By Libby George, additional reporting by Alexis Akwagyiram in Lagos, editing by David Evans)


RPT-China pumps cash into African floating LNG projects in strategic push

(Repeats report without changes)

* Western banks wary of FLNG projects

* But well-capitalised Chinese players step up lending

* China aims to become lowest-cost seller of FLNG plants

* Its shipyards to build floating plants for African projects

By Oleg Vukmanovic and Colin Leopold

LONDON, June 27 (Reuters) – China plans to pour almost $7 billion into floating liquefied natural gas (FLNG) projects in Africa, betting on a largely untested technology in the hope that energy markets will recover by the time they start production in the early 2020s.

Western banks are wary due to the depressed state of the shipping and gas markets, as well as the technical difficulties of pumping gas extracted from below the ocean floor, chilling it into liquid form on a floating platform and transferring it into tankers for export.

China, however, is making a strategic push into FLNG, aiming to become the lowest cost seller of the complex floating plants and lead the global rollout of a technique that remains in its infancy, with only one project in commercial production so far.

The country needs gas as a cleaner alternative to coal under a drive to improve air quality in its cities, and has already lent $12 billion to Russia’s conventional Yamal LNG project in the Arctic as U.S. sanctions scared away Western banks.

It has also lent or committed almost $4 billion to three FLNG schemes off the African coast. In two more African projects costing a total of $3 billion, it plans not only to provide the funding, but also build the production platforms.

“We see a real commitment to FLNG in China both from the construction side and from the LNG consumption side where decreasing costs mean potentially lower cost LNG,” said Steve Lowden, chairman of Jersey-based NewAge which is planning FLNG projects off Congo Republic and Cameroon.

China already dominates the global market for solar panels and is a major supplier of coal-fired power plants, aided by easy money, cheaper labour and state support.

Now, with Beijing pushing President Xi Jinping’s “Belt and Road” vision of expanding trade links between Asia, Africa and Europe, it is turning to FLNG to bring high technology work to its shipyards and create jobs – a strategic priority.

FLNG is also attractive to resource-rich but debt-burdened African countries. Projects can sail into place, drop anchor, and begin exporting for much less than the cost of onshore plants, the price of which quadrupled in the decade to 2013.

That, at least, is the theory. The reality is that the technology remains complex. Royal Dutch Shell’s mammoth Prelude FLNG plant, for example will be aboard the world’s biggest floating structure, but must squeeze the equipment into a quarter of the space occupied by an LNG plant on dry land.

Wave motion and ocean currents add to the difficulties.

The $12.6 billion Prelude project, which is due to start operating off Australia in 2018, is typical of those conceived during the era of high energy prices. However, spot LNG prices have fallen 70 percent since early 2014 and are expected to remain under pressure or drop further due to extra supply from new conventional plants in Australia and the United States.

Despite this, some producers and buyers are banking on the glut ending early in the next decade, although they don’t want to lock themselves into big projects, preferring smaller, more flexible ones like in Africa.

The only operational FLNG project launched in Malaysia last year, with construction of the floating platform costing around $1.6-$1.7 billion. Bankers say this is still too expensive and if the Chinese can build one for $1 billion, they would corner the market.

ESTABLISHED SHIPYARDS

With new investments in costly conventional LNG plants on hold, the only two production projects to advance this year are floating types, in Mozambique and Equatorial Guinea. Both are largely backed by Chinese loans although the platforms are being built by more established Asian shipyards.

Lowden said the two NewAge projects will be wholly financed by Chinese companies and this time also built in Chinese shipyards. “They are more than fully able to handle such projects,” he said.

Still, Dutch offshore engineer SBM and JGC of Japan will partner with the Chinese players, including China Offshore Oil Engineering & Construction Ltd.

NewAge expects to sanction both the projects next year.

Last year, China’s Wison Offshore & Marine completed the first-ever FLNG ship but it remains unused following the cancellation of a project in Colombia it was intended for.

VERY DEEP POCKETS

As typical Western sources of funding have slowed due to the weak state of the shipping business, highly-capitalised Chinese players believe the market has reached the bottom and are keen to step up lending before the cycle turns and pushes up costs.

“The difference is that in the West banks lend at the top of the market when they have most liquidity, but in China they’re smarter and put money in at the bottom,” a financier who advises Chinese lenders on LNG shipping deals said.

This month, Chinese banks including Industrial and Commercial Bank of China, and Bank of China committed around 1.75 billion to project finance the Coral South FLNG project in Mozambique, bankers said. ICBC declined comment while BOC did not respond to a request for comment.

By contrast Western commercial banks provided just $200 million in uncovered debt to Coral, to be developed by Italy’s Eni, instead of an originally proposed $1.9 billion. They cited uncertainties around FLNG technology and a public debt crisis in Mozambique.

Adam Byrne, Managing Director at ING Bank, said Chinese lenders “have very deep pockets indeed”.

“If they decide to, they can support something for even a billion or a billion and a half dollars,” Byrne told a shipping conference earlier this month.

AFRICA AND BEYOND

The next big African deal, in Equatorial Guinea, is being financed by China State Shipbuilding Corp with a $1.2 billion loan for Fortuna FLNG, bankers say. This project – which is being developed by UK-listed Ophir Energy, shipping firm Golar LNG and oil services group Schlumberger – will produce 2.2 million tonnes of LNG a year and is expected to be sanctioned within weeks.

China State Shipbuilding Corp (CSSC) also lent $960 million to Golar LNG in 2015 for the first-ever conversion of a conventional LNG tanker into an FLNG platform, which is set to enter operation this year in Cameroon. CSSC declined comment.

All these projects were awarded to established shipbuilders in South Korea, Singapore or Japan, but the experience sets up Chinese developers to take the lead on other projects in Africa and beyond, say consultants and industry sources.

Equatorial Guinea sees scope for another two FLNG projects, its petroleum minister has said, while BP and joint venture partner Kosmos Energy are also eyeing two in the waters of Senegal and Mauritania.

China also has plans for conventional LNG production in Africa. Chinese conglomerate Poly-GCL has begun construction of an onshore LNG facility in Djibouti which will export Ethiopian gas to China, according to Poly-GCL’s website. (Colin Leopold reports for Project Finance International, a Thomson Reuters company; Additional reporting by Shu Zhang and Brenda Goh in Beijing; Editing by Veronica Brown and David Stamp)


China pumps cash into African floating LNG projects in strategic push

* Western banks wary of FLNG projects

* But well-capitalised Chinese players step up lending

* China aims to become lowest-cost seller of FLNG plants

* Its shipyards to build floating plants for African projects

By Oleg Vukmanovic and Colin Leopold

LONDON, June 27 (Reuters) – China plans to pour almost $7 billion into floating liquefied natural gas (FLNG) projects in Africa, betting on a largely untested technology in the hope that energy markets will recover by the time they start production in the early 2020s.

Western banks are wary due to the depressed state of the shipping and gas markets, as well as the technical difficulties of pumping gas extracted from below the ocean floor, chilling it into liquid form on a floating platform and transferring it into tankers for export.

China, however, is making a strategic push into FLNG, aiming to become the lowest cost seller of the complex floating plants and lead the global rollout of a technique that remains in its infancy, with only one project in commercial production so far.

The country needs gas as a cleaner alternative to coal under a drive to improve air quality in its cities, and has already lent $12 billion to Russia’s conventional Yamal LNG project in the Arctic as U.S. sanctions scared away Western banks.

It has also lent or committed almost $4 billion to three FLNG schemes off the African coast. In two more African projects costing a total of $3 billion, it plans not only to provide the funding, but also build the production platforms.

“We see a real commitment to FLNG in China both from the construction side and from the LNG consumption side where decreasing costs mean potentially lower cost LNG,” said Steve Lowden, chairman of Jersey-based NewAge which is planning FLNG projects off Congo Republic and Cameroon.

China already dominates the global market for solar panels and is a major supplier of coal-fired power plants, aided by easy money, cheaper labour and state support.

Now, with Beijing pushing President Xi Jinping’s “Belt and Road” vision of expanding trade links between Asia, Africa and Europe, it is turning to FLNG to bring high technology work to its shipyards and create jobs – a strategic priority.

FLNG is also attractive to resource-rich but debt-burdened African countries. Projects can sail into place, drop anchor, and begin exporting for much less than the cost of onshore plants, the price of which quadrupled in the decade to 2013.

That, at least, is the theory. The reality is that the technology remains complex. Royal Dutch Shell’s mammoth Prelude FLNG plant, for example will be aboard the world’s biggest floating structure, but must squeeze the equipment into a quarter of the space occupied by an LNG plant on dry land.

Wave motion and ocean currents add to the difficulties.

The $12.6 billion Prelude project, which is due to start operating off Australia in 2018, is typical of those conceived during the era of high energy prices. However, spot LNG prices have fallen 70 percent since early 2014 and are expected to remain under pressure or drop further due to extra supply from new conventional plants in Australia and the United States.

Despite this, some producers and buyers are banking on the glut ending early in the next decade, although they don’t want to lock themselves into big projects, preferring smaller, more flexible ones like in Africa.

The only operational FLNG project launched in Malaysia last year, with construction of the floating platform costing around $1.6-$1.7 billion. Bankers say this is still too expensive and if the Chinese can build one for $1 billion, they would corner the market.

ESTABLISHED SHIPYARDS

With new investments in costly conventional LNG plants on hold, the only two production projects to advance this year are floating types, in Mozambique and Equatorial Guinea. Both are largely backed by Chinese loans although the platforms are being built by more established Asian shipyards.

Lowden said the two NewAge projects will be wholly financed by Chinese companies and this time also built in Chinese shipyards. “They are more than fully able to handle such projects,” he said.

Still, Dutch offshore engineer SBM and JGC of Japan will partner with the Chinese players, including China Offshore Oil Engineering & Construction Ltd.

NewAge expects to sanction both the projects next year.

Last year, China’s Wison Offshore & Marine completed the first-ever FLNG ship but it remains unused following the cancellation of a project in Colombia it was intended for.

VERY DEEP POCKETS

As typical Western sources of funding have slowed due to the weak state of the shipping business, highly-capitalised Chinese players believe the market has reached the bottom and are keen to step up lending before the cycle turns and pushes up costs.

“The difference is that in the West banks lend at the top of the market when they have most liquidity, but in China they’re smarter and put money in at the bottom,” a financier who advises Chinese lenders on LNG shipping deals said.

This month, Chinese banks including Industrial and Commercial Bank of China, and Bank of China committed around 1.75 billion to project finance the Coral South FLNG project in Mozambique, bankers said. ICBC declined comment while BOC did not respond to a request for comment.

By contrast Western commercial banks provided just $200 million in uncovered debt to Coral, to be developed by Italy’s Eni, instead of an originally proposed $1.9 billion. They cited uncertainties around FLNG technology and a public debt crisis in Mozambique.

Adam Byrne, Managing Director at ING Bank, said Chinese lenders “have very deep pockets indeed”.

“If they decide to, they can support something for even a billion or a billion and a half dollars,” Byrne told a shipping conference earlier this month.

AFRICA AND BEYOND

The next big African deal, in Equatorial Guinea, is being financed by China State Shipbuilding Corp with a $1.2 billion loan for Fortuna FLNG, bankers say. This project – which is being developed by UK-listed Ophir Energy, shipping firm Golar LNG and oil services group Schlumberger – will produce 2.2 million tonnes of LNG a year and is expected to be sanctioned within weeks.

China State Shipbuilding Corp (CSSC) also lent $960 million to Golar LNG in 2015 for the first-ever conversion of a conventional LNG tanker into an FLNG platform, which is set to enter operation this year in Cameroon. CSSC declined comment.

All these projects were awarded to established shipbuilders in South Korea, Singapore or Japan, but the experience sets up Chinese developers to take the lead on other projects in Africa and beyond, say consultants and industry sources.

Equatorial Guinea sees scope for another two FLNG projects, its petroleum minister has said, while BP and joint venture partner Kosmos Energy are also eyeing two in the waters of Senegal and Mauritania.

China also has plans for conventional LNG production in Africa. Chinese conglomerate Poly-GCL has begun construction of an onshore LNG facility in Djibouti which will export Ethiopian gas to China, according to Poly-GCL’s website. (Colin Leopold reports for Project Finance International, a Thomson Reuters company; Additional reporting by Shu Zhang and Brenda Goh in Beijing; Editing by Veronica Brown and David Stamp)


Tax evasion and dirty money are draining Africa

Anti-corruption bilboard in Uganda.
futureatlas.com/Flickr, CC BY

Adam Abdou Hassan, Université de Rouen Normandie

Tax evasion benefits individuals to the detriment of society, wiping out state services. It also hampers the achievement of the eight United Nations millennium development goals (MDGs), which were designed to meet the needs of the world’s poorest people.

If tax evasion takes place in the grey area between legality and illegality – such as when companies shift their headquarters to tax havens – tax fraud involves the overt breaking of laws. It is often combined with dirty money from illegal activities (trafficking, terrorism, etc.) and thus weakens the gross domestic product (GDP) of African states. The organisation Global Financial Integrity estimates that Mauritania loses 12% of its GDP to such activity, Chad 20%, and the Republic of Congo 25%. As a result, illicit financial flows both damage African states and hold back their industrialisation and development.

Tax evasion, a major obstacle to the development of Africa

The chart shows that fraud and tax evasion weigh heavily on the timing of countries that want to achieve their millennium development goals. Source: Global Financial Integrity.

Illegal financial flows bleed Africa dry

The Conversation“PIB” stands for gross domestic product (GDP). The chart shows illicit financial flows as percentage of GDP. Africa loses far more than it receives in aid and foreign direct investment.

Adam Abdou Hassan, Enseignant chercheur, Université de Rouen Normandie

This article was originally published on The Conversation. Read the original article.

© 2017, Newstime Africa. All rights reserved. – The views expressed here are purely those of the author and not necessarily those of the publishers. – Newstime Africa content cannot be reproduced in any form – electronic or print – without prior consent of the Publishers. Copyright infringement will be pursued and perpetrators prosecuted.

1,735,276 total views, 210 views today


Why ex-combatants pose a threat to Côte d’Ivoire’s stability

A soldier stands guard after a clash with demobilised ex-rebel fighters at the entrance of Bouaké,Côte d’Ivoire, 23 May 2017.
REUTERS/Abdul Fatai

Tarila Marclint Ebiede, University of Leuven

Dissatisfied ex-combatants who aren’t serving in Côte d’Ivoire’s formal military structures pose the biggest long-term threat to the stability of the country. This is particularly true in regions where groups of these men were present during the civil wars.

At least 42,564 ex-combatants emerged out of Côte d’Ivoire’s first civil war which stretched from 2002 to 2007. By the end of the second civil war, which started in 2010 and ended in 2011, the number of ex-combatants had risen to 74,000.

The Ivorian government set out to integrate only about 8,400 ex-combatants into the national army. The majority of ex-combatants were supposed to go through a regular disarmament, demobilisation and reintegration (DDR) programme. The programme was designed to remove weapons from combatants and take them out of military structures by helping them to integrate socially and economically into society.

The UN claims that the programme in Cote d’Ivoire has been successful. But recent protests and reports of disorder perpetuated by ex-combatants in Bouaké are evidence that the process hasn’t been seamless. Former combatants – particularly those who weren’t enlisted in the army – continue to pose a threat to the country’s stability.

But the government’s efforts at integrating former combantants into the national army hasn’t worked particularly well either as was evident recently when they mutinied. Their demand for financial bonuses, which they said had been promised to them, was only resolved after the government offered to pay them a total of about $12,000.

This had a ripple effect, and set off a new wave of violence by ex-combatants enrolled in the disarmament, demobilisation and reintegration programme. They too wanted payment from the government.

The reason for these episodes is therefore down to the different incentives and opportunities offered to both groups.

A recurring issue

Research into the disarmament, demobilisation and reintegration programmes has highlighted some serious flaws. The programmes don’t sufficiently address the destitute state that ex-combatants find themselves in. This problem doesn’t just affect Côte d’Ivoire. It’s been a recurring issue in conflict affected societies where similar programmes have been applied, such as Nigeria, Nepal and Angola.

Côte d’Ivoirian ex-combatants that carried out the recent protests aren’t interested in the disarmament, demobilisation and reintegration programme. This is because many of them face an uncertain future with dim job prospects. And their situation seems much worse than their compatriots who have been integrated in the military, securing jobs and financial rewards.

This issue needs to be addressed to reduce the risks of conflict recurrence and instability in Côte d’Ivoire.

Research shows that cash payments, known as reinsertion grants, are an important component of these kinds of programmes. Payments ensure that ex-combatants don’t burden their families and communities. In some instances, this is a one-off grant. In most cases, ex-combatants get an agreed sum that could last up to 12 months. In Nigeria ex-combatants have received monthly payments for more than five years. But this is an exception.

In addition to these financial payments, ex-combatants receive vocational training. In principle, the grants are terminated at the end of it. Ex-combatants are expected to find jobs based on the skills they have gained. The results have been mixed. UN reports that many ex-combatants gained new skills but that these didn’t translate into employment for all of them.

Reintegration in Côte d’Ivoire

The first programme in Côte d’Ivoire was part of a UN resolution to facilitate the reintegration of ex-combatants that participated in the first Ivorian civil war.

The plan stated that ex-combatants would be entitled to a reinsertion grant of 499,500 CFA (USD$850) over a period of six months. At the end of demobilisation, ex-combatants interested in resuming studies would receive an additional education grant. Those interested in entrepreneurship or agricultural projects would receive micro-credit loans ranging from $170 to $300 per individual.

Violence broke out again in 2010 after Laurent Gbagbo refused to step down after losing the presidential election to Alassane Ouattara. Many ex-combatants rejoined armed factions, such as the Forces Nouvelles, to fight in the second war. This created the need for a new programme.

Once he was in office Ouattara implemented reforms to manage the armed groups that had been active in the second war. These included the integration of some rebel factions into the national army based on an agreement between the rebels and the Ivorian government. This was followed by the establishment of the Authority for Disarmament, Demobilisation and Reintegration. Its focus is on ex-combatants who were not integrated into the national army. It provided transitional financial support and vocational training to facilitate their reintegration back into society. Under it, at least 90% of 74,000 ex-combatants were disarmed, demobilised and reintegrated.

But the recent incidents show that there are many groups that are dissatisfied and that there is still instability within the armed forces.

The way forward

It is important for the Ivorian government to design appropriate policies that reorient ex-combatants towards meaningful reintegration instead of renegotiating cash payments as a reward for their participation in the civil war.

In Colombia, for example, new approaches that connect economic, political and social reintegration are beginning to take root. These allow ex-combatants to participate in issues such as environmental conservation and protection that are important to their communities, while earning a living.

The ConversationThis approach could prove useful in places such as Côte d’Ivoire as the country rethinks its reintegration programme. This is because reintegration is not just about finding jobs, but also about finding meaning and connecting ex-combatants to a purpose beyond the individual.

Tarila Marclint Ebiede, PhD researcher, University of Leuven

This article was originally published on The Conversation. Read the original article.

© 2017, Newstime Africa. All rights reserved. – The views expressed here are purely those of the author and not necessarily those of the publishers. – Newstime Africa content cannot be reproduced in any form – electronic or print – without prior consent of the Publishers. Copyright infringement will be pursued and perpetrators prosecuted.

32,249 total views, 116 views today


From Mobutu to Kabila, the Democratic Republic of Congo is paying a heavy price for autocrats at its helm

Reuben Loffman, Queen Mary University of London

Congolese children play on a destroyed military tank, abandoned by rebel fighters in 2013 – Kenny Katombe-Reuters

The Democratic Republic of Congo (DRC) will mark 57 years of independence on Friday, 30 June. This year also marks the 20th anniversary of Mobutu Sese Seko’s fall from power in 1997.

The DRC is currently perilously close to the status of a failed state. Former UN Secretary-General Kofi Annan recently suggested that the country is in grave danger after President Joseph Kabila’s delaying of the elections that should have taken place in 2016.

Annan’s warning is timely. Kabila’s struggle to stay in power beyond his mandate has accelerated conflicts in the country.

Although large portions of the Congo are peaceful, the northeastern parts of the country have been in a state of low-level conflict since the end of the Cold War. There remains a dizzying array of armed groups present in the DRC to this day.

But currently the most significant violence is the ongoing uprising in the central Kasai province – the Kamwina Nsapu rebellion. Named after its former leader, the armed opposition has already led to the decapitation of more than forty policemen and has claimed the lives of over 3,000 people.

Over 20,000 Congolese refugees have fled into Angola.

The present political instability is taking place against a backdrop of continuing poverty. The country has a population of 77.27 million and six out of seven live on less than $1.25 a day.

The endemic poverty in the Congo is a far cry from the unbounded optimism that greeted the independence of the country on 30 June 1960. The country’s first prime minister, Patrice Lumumba, wanted to tackle income inequality.

But the Congo soon descended into civil war. Five years after independence, Joseph Mobutu, the leader of the Congolese army, took power in a bloodless coup. Mobutu’s rule was greeted with optimism but ended in a catastrophic decline in state services after he embezzled international development funds.

Thirty-seven years after the coup, Mobutu was removed from power by Laurent Desire Kabila under whose rule corruption continued unabated.

Kabila’s son, Joseph, has ruled in a less corrupt fashion than his two predecessors. But he and his family have built a vast business empire on the back of his political power.

Since decolonisation, the Congo has never been ruled by men who put the state’s interests above their own. This has meant that its vast mineral and agricultural wealth has not been put to the service of its people.

Post independence

Mobutu wrested the presidency from Joseph Kasa-Vubu in 1965. Kasa-Vubu’s role as the Congo’s first president has been overlooked by the history books.

His role has always been eclipsed by the country’s more charismatic first prime minister, Patrice Lumumba, as well as by Mobutu’s lengthy dictatorship.

Kasa-Vubu tried harder than Mobutu to bridge the ideological chasm that opened up in Congolese politics after independence. Nevertheless both he and Mobutu failed as presidents.

Mobutu used the appendages of statehood to enrich himself at the expense of his people while Kasa-Vubu struggled to hold together the vast array of political factions that developed in the Congo after independence. As a result, their tenures triggered protracted conflicts and civil wars neither could control.

The political forces that shaped Mobutu and Kasa-Vubu’s rule can be explained in part by the Cold War. Kasa-Vubu could not hold the centre together as the US and the USSR vied for supremacy in Central Africa. Both sponsored militants to advance their agendas. Mobutu was one of their beneficiaries, and he rose through the ranks to take power.

Mobutu’s reign

When the USSR collapsed Mobutu was no longer useful to the US as an ally and he was left without a superpower patron.

He immediately became vulnerable to the catalogue of grievances that his citizens had against him, which included using divide and rule tactics to remain in power, a disorganised administration and widespread corruption.

Mobutu tried to reinvent himself as an empathetic statesman after the 1994 Rwanda genocide by offering to host refugees. But his handling of the refugee crisis was shaped by his own poisonous agenda.

He ruthlessly played ethnic constituencies against one another and fomented a social and political powder keg in the north-east of the country. By consistently denying Tutsis citizenship Mobutu fermented ethnic consciousness among the Kivus.

Tutsi groups, such as the Banyamulenge, would happily join forces with opposition groups to unseat Mobutu from power as a result. Once Kivu exploded into conflict in 1994, Mobutu and his regime were caught in the cross hairs – as were countless innocent civilians.

As the dust was settling in 1997, Laurent Desire Kabila and his Democratic Alliance for the Liberation of Zaire took the opportunity to seize power. Given Mobutu’s brutal and corrupt regime, some welcomed his arrival. But many did not as they feared their liberties would be restricted.

The Kabila’s

Laurent Kabila, known as Kabila Père, was even more autocratic and violent than his predecessor. In the early days, his government was controlled by the Rwandan backers who had supported his putsch.

They wanted to ensure that the Hutu extremists who had engineered the Rwandan Genocide could never again threaten their country. They did this by attacking the refugee camps in eastern Congo that hosted Hutus.

But a year into his presidency, Kabila tired of being a puppet, ordered his Rwandan handlers to leave Kinshasa. Angry that they had lost control of the Congo, and fearful the country could be used as a base by Hutu extremists, Rwanda plotted to end Kabila’s rule.

Along with Burundi and Uganda, who eyed opportunities to forestall rebellions on their own Congolese borders, Rwanda invaded the Congo in August 1998.

Kabila Père did not live to see the end of the conflict. Shot by one of his bodyguards on 16 January 2001, his rule had lasted only four years – the shortest of any Congolese president.

History has not been kind to Kabila Père. Other than ousting Mobutu, he scored few successes. The 1996 mass killing of Hutu’s that took place close to Kisangani in the northeast of the country cast a long shadow over his presidency.

When Kabila Père was assassinated, his senior advisers were unsure what to do next. Eventually, they engineered his son’s ascent to power.

Unlike his father, Joseph Kabila reached out to the US and other countries to garner support for his rule. And he received it overwhelmingly.

The younger Kabila relied heavily on the work of the United Nations Mission to the Congo to create peace. Yet he cleverly exaggerated his role in that achievement to win the country’s first democratic general election in decades in 2006.

But Joseph Kabila’s rule has been far from perfect. He has used state-instigated violence to clamp down on activists and journalists. Meanwhile, localised violence continues to wreak havoc in the northeast of the country.

Kabila initially seemed to be the president who had the strong hand of Mobutu and the political acumen of Kasa-Vubu. But his recent attempts to cling to power at all costs have cast him firmly in the image of Mobutu.

Had he organised elections in a timely fashion and been proactive in stepping down, history might have judged him to have been the best president the Congo has ever had.

The ConversationAs it stands, 57 years after independence, Kabila is doing more to regress the country to its violent past than to guide it into a truly progressive future.

Reuben Loffman, Lecturer in African History, Queen Mary University of London

This article was originally published on The Conversation. Read the original article.

© 2017, Newstime Africa. All rights reserved. – The views expressed here are purely those of the author and not necessarily those of the publishers. – Newstime Africa content cannot be reproduced in any form – electronic or print – without prior consent of the Publishers. Copyright infringement will be pursued and perpetrators prosecuted.

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African Markets – Factors to watch on June 23

The following company announcements, scheduled economic indicators, debt and currency market
moves and political events may affect African markets on Friday.
    - - - - -
 EVENTS:
 UN Secretary General in Uganda to attend summit on South
 Sudan refugees aimed at raising $2 billion from donors
 
 
 GLOBAL MARKETS
 Asian shares flatlined on Friday but remained on track for a
 weekly gain, while crude oil prices pulled away from this
 week's 10-month lows.            
            
 
 WORLD OIL PRICES
 Oil edged up on Friday, recovering slightly from steep falls
 earlier in the week, but is set for the worst performing
 first-half in two decades despite ongoing production
 cuts.                 
 
 EMERGING MARKETS
 For the top emerging markets news, double click on
            
 
 AFRICA STOCKS
 For the latest news on African stocks, click on     
 
 
 
 SOUTH AFRICA MARKETS
 South Africa's rand rallied on Thursday as investors cheered
 a constitutional court ruling that parliament could hold a
 secret ballot in a no-confidence vote against President
 Jacob Zuma, who has said such a vote would be unfair.
 Meanwhile, shares dipped.            
 
 
 NIGERIA MARKETS
 Nigeria's recent tentative steps to free up its naira
 currency, particularly via a new trading window, have gone
 down well with some adventurous stock and bond investors who
 are cautiously returning to the markets they fled two years
 ago.            
 
 
 NIGERIA BUDGET
 Nigeria's distributable government revenues rose to 462.4
 billion naira ($1.43 billion) in May from 415.7 billion
 naira in April due to higher proceeds from corporate taxes,
 a government statement said on Thursday.            
 
 
 KENYA MARKETS
 The Kenyan shilling        weakened on Thursday due to
 dollar demand from multinational companies paying dividends,
 traders said.            
 
 
 UGANDA MARKETS
 The Ugandan shilling        was unchanged on Thursday and
 was expected to get support from coffee export dollar
 inflows, traders said.            
 
 
 UGANDA COFFEE
 Uganda's coffee exports jumped 42 percent in May from a
 similar period last year, lifted by extra yields from new
 maturing trees, state-run Uganda Coffee Development
 Authority said on Thursday.            
 
 
 UGANDA REFUGEES
 The European Union has offered 85 million euros ($94.89
 million) to help fund relief operations for hundreds of
 thousands of refugees flowing into Uganda from neighbouring
 South Sudan, it said in a statement on Thursday.            
 
 
 
 SENEGAL AIRLINES
 Senegal Air SA has ordered two ATR 72-600 aircraft in a 50
 million euro ($56 million) deal as the new flagship carrier
 seeks to build up a fleet ahead of its launch later this
 year, the ministry of tourism and air transportation said on
 Thursday.                        
 
 
 DJIBOUTI PORT
 Djibouti opened a $64 million port on Thursday, the third of
 four ports designed to boost the tiny Horn of Africa
 nation's position as a trading hub, its ports authority
 said.             
 
 
 SOMALIA ATTACK
 A car bomb targeting a police station killed at least seven
 people in Somalia's capital Mogadishu on Thursday, police
 said, and al Qaeda-linked al Shabaab said it was behind the
 attack, the second this week.            
 
 
 CONGO VIOLENCE
 At least 12 people were killed in northeastern Democratic
 Republic of Congo in heavy firefights between the army and
 militia fighters on Thursday, and several students sitting
 exams were wounded in an explosion at a school, local
 activists said.             
 
 
 NAMIBIA ECONOMY
 Namibia's economy shrunk by 2.7 percent in the first quarter
 of this year after a revised contraction of 1.4 percent in
 the last quarter of 2017, the statistics agency said on
 Thursday.            
 
 
 MAURITIUS TRADE              
 Mauritius' trade deficit widened 38 percent to 8.03 billion
 rupees in April from the same period a year earlier driven
 by higher imports of mineral fuels and lubricants, official
 data showed on Thursday.            
 
 
 ZAMBIA COPPER
 Copper production in Zambia, Africa's No.2 producer of the
 metal, is expected to rise to 850,000 tonnes in 2017 from
 770,597 tonnes last year, the nation's vice president said
 on Thursday.             
 
 
     For the latest precious metals report click on        
     For the latest base metals report click on         
     For the latest crude oil report click on       
   
   

Djibouti opens salt port, latest in series of shipping projects

NAIROBI, June 22 (Reuters) – Djibouti opened a $64 million port on Thursday, the third of four ports designed to boost the tiny Horn of Africa nation’s position as a trading hub, its ports authority said.

Djibouti Ports and Free Zones Authority (DFZA) said in a statement the Port of Ghoubet would serve as a terminal to export of salt from Lake Assal, a saline lake that lies below sea level.

The port would be able to handle ships up to 100,000 dead weight tonnes, with capacity to export over 5 million tonnes of salt a year, the ports authority said.

The nation, with a population of 876,000, already hosts U.S. and French naval bases, while China is building a base.

Djibouti handles about 95 percent of the inbound trade for neighbouring Ethiopia, which has a population 99 million.

The ports authority opened another port, Tadjourah, on June 15 to export potash, which is used to make fertiliser. Tadjourah was built at a cost of $90 million and has a capacity to handle 4 million tonnes of potash a year.

“Both projects are part of the government’s efforts to develop critical infrastructure in the north, including the redevelopment of regional highways,” the ports authority said.

In May, Djibouti launched the Doraleh Multipurpose Port, which has capacity to handle 8 million tonnes a year, including container traffic and bulk cargo.

Djibouti mainly handles goods from Asia, representing nearly 60 percent of traffic, the port authority says. In 2015, overall traffic to Djibouti increased 20 percent to 5.7 million tonnes.

As part of its infrastructure development, Djibouti launched a $327 million cross-border project this week for the supply of drinking water from Ethiopia, said Mohamed Fouad Abdo, director of the National Office for Water and Sanitation. (Reporting by George Obulutsa, with additional reporting by Abdourahim Arteh in Djibouti; Editing by Edmund Blair)


African Union urges restraint in Djibouti-Eritrea border spat

ADDIS ABABA, June 17 (Reuters) – The African Union urged Djibouti and Eritrea to remain calm and exercise restraint on Saturday after Djibouti accused its neighbour of occupying disputed territory along their border following the withdrawal of Qatari peacekeepers.

On Friday, Djibouti’s Foreign Minister Mahamoud Ali Youssouf said Eritrean troops had seized Dumeira Mountain and Dumeira Island, areas the neighbours contest, and his country’s military was on alert.

Authorities in the Eritrean capital Asmara were not available for comment.

Qatari peacekeepers were previously deployed along the frontier. Doha announced on June 14 that it had pulled its contingent out, days after the East African countries sided with Saudi Arabia and its allies in their standoff with Qatar.

In a statement, the African Union Commission’s Chairperson Moussa Faki Mahamat appealed for calm.

“The AU Commission, in close consultations with the authorities in Djibouti and Eritrea, is in the process of deploying a fact-finding mission to the Djibouti-Eritrea border,” he said.

The United Nations Security Council is due to discuss the situation behind closed doors on Monday, according to diplomats.

Clashes broke out between the Horn of Africa countries in June 2008 after Djibouti accused Asmara of moving troops across the border, raising fears the spat could engulf the region.

The dispute triggered several days of fighting in which a dozen Djiboutian troops died and dozens were wounded. Eritrea had initially denied making any incursions, accusing Djibouti of launching unprovoked attacks.

At the time, the U.N. Security Council requested both sides withdraw, before the neighbours accepted a Qatari request to mediate and deploy peacekeepers.

Qatar has not given reasons for its withdrawal, but it comes amid a diplomatic crisis with some of its Arab neighbours. They cut ties a week ago, accusing Qatar of backing Islamist militants and Iran – claims Doha strongly denies. (Reporting by Aaron Maasho; Editing by Mark Trevelyan)