Kenya cynical of establishment of a single EAC financial market

Kenya has opted out of the East African capital markets integration (CMI) project that is to be effected later this year in a bid to make trading in shares quicker and cheaper.

In a letter written to the EAC Secretariat in mid-November, Kenya said it would not join Burundi, Rwanda, Tanzania and Uganda to launch the platform in September, suggesting it had concerns on the infrastructure.

It said it would monitor the performance of the regional platform vis-à-vis its ongoing modernisation of trading interfaces.

Kenya pulled out of the CMI project in 2015, citing irregularities in the $3.3 million tendering process of the software and requested for more time to consult on the matter.

Quality of the software

Among the concerns Kenya had was on the quality of the software being purchased and whether it will be compatible with the Nairobi Securities Exchange’s clearing and settlement system as well as the capacity of the vendor to deliver on the project.

Burundi, Rwanda, Tanzania and Uganda are working on a schedule to have the project up and running by its September 2018 completion target.

The project involves acquisition and installation of an information technology platform, the Smart Order Routing System, linking the clearing and settlements systems of securities trade among the EAC member states.

It is part of a wider World Bank-funded EAC Financial Sector Development and Regionalisation Project 1, which seeks to support the establishment of a single financial market among the EAC member states.

To ensure that the project is completed on time, the EAC Sectoral Council on Finance and Economic Affairs has directed the four nations to fast-track the CMI implementation by ensuring the integration between their systems and the CMI.

The Sectoral Council of Finance Ministers’ report indicates that although the system hardware and software (including the Smart Order Router, the Central Systems Depository Interface, and the Messaging Platform), delivery and installation was done within schedule but the partner bourses have not yet tested it.

This has delayed the CMI implementation workplan and may have legal consequences for the Community.

“To avoid the incidental legal risks, the stakeholders need to work closely with the secretariat and InfoTech Private Ltd so that the latter can deliver a real-time system to the EAC as envisaged in the contract,” said the Finance ministers in their report.

The stakeholders in the project include the Dar es Salaam Stock Exchange and the Uganda Securities Exchange with the vendor, STT on the one hand, and the Bank of the Republic of Burundi and the National Bank of Rwanda with their vendor, CMA Small Systems on the other. Without this, the CMI implementation may never be completed as envisaged.

[box] Nairobi Securities Exchange Logo[/box]

Integration

The integration of the region’s capital markets is in line with the provisions of the EAC Common Market Protocol, which provides for free movement of capital in the region.

The software was to link the trading platforms of the NSE, Uganda Securities Exchange, Dar es Salaam Securities Exchange and Rwanda Stock Exchange so that they run as a single market in real time.

The connection would allow investors to buy and sell shares of companies located in different EAC countries without necessarily going through different brokers.

It would also reduce the time it takes to trade in cross-listed shares from the more than 30 days presently to as low as three.

The project was initiated in 2011 by the EAC Secretariat in collaboration with the World Bank and runs through two back-to-back projects over a nine-year period. The initial phase covers 2011 to 2014 and the second from 2014 to 2019.

 First Published by   – The East African

Uganda’s Museveni accuses U.N. of “preserving terrorism” in eastern Congo

Reuters Staff

KAMPALA (Reuters) – Ugandan President Yoweri Museveni accused the United Nations on Wednesday of “preserving terrorism” in neighboring Democratic Republic of Congo where U.N. peacekeepers have been unable to curb deadly attacks by Islamist rebels.

Museveni leveled the criticism in a statement after meeting U.N. officials investigating an ambush of peacekeepers in eastern Congo last month that left 15 dead and 53 wounded.

Outgoing Comesa Chairperson Ugandan President Yoweri Museveni (R) hands over to DR Congo President Joseph Kabila

The Allied Democratic Forces (ADF), a Ugandan Islamist rebel group that has been operating in the chaotic eastern Congo jungles for years, was widely blamed for the attack.

“The United Nations is responsible for preserving terrorism in the Democratic Republic of Congo,” Museveni told U.N. investigators, according to the statement from his office.

It did not elaborate and Museveni’s spokeswoman did not respond to calls seeking an explanation. There was no immediate comment from the United Nations.

The attack was described by U.N. Secretary General Antonio Guterres as the worst on the world body in recent history.

Set up in 2010, the U.N. peacekeeping mission in Congo called MONUSCO is the global body’s largest but has struggled to neutralize a patchwork of rebel and militia factions in eastern Congo and has previously drawn criticism from Museveni.

A few days after the ADF attack, Uganda carried out air and artillery strikes on the group’s camps. Kampala said it had intelligence the rebels were planning hostile acts against it.

The East African country, which has a history of meddling in lawless eastern Congo, is eager to prevent the ADF from re-entering Uganda’s oil-rich western region as the resulting insecurity could force out investors.

Uganda is aiming to start pumping crude in its west in 2020.

Reporting by Elias Biryabarema; editing by Mark Heinrich

Institutionalizing Poverty in Africa by Members of the European Parliament

Prof. Diran Makinde is Senior Advisor to NEPAD’s CEO in Midrand, South Africa.Until 1st April 2016 he was the Director of NEPAD Planning and Coordinating Agency, African Biosafety Network of Expertise (ABNE) based in Ouagadougou, Burkina Faso. He is the past Director of the NEPAD West African Biosciences Network in Dakar, Senegal.

Back in 2015, Members of the European Parliament (MEPs) called on the New Alliance for Food Security and Nutrition not to support genetically modified (GM) crops in Africa. This call is very unfortunate and would institutionalise poverty on a continent that is already facing dire challenges. The G7 group of nations’ joint initiative with the New Alliance – aimed at lifting 500 million Africans out of poverty by 2022 in part through improving access to agricultural biotechnology – must not be thrown out of the window.

 The recent European Parliament report recommended that intensive agriculture, which made Europe, the Americas and many parts of Asia food secure, should not be applied in Africa, but that the continent should remain reliant on small-scale farming practices that have not been able to meet our food and nutrition needs. Despite the huge amount of GM cereals and legumes imported into Europe used as feedstuff, their cultivation is prohibited in several (though not all) EU countries – to ‘protect’ the environment, to maintain the organic market, and, more importantly, for ideological reasons, something which is both paradoxical and absurd. The science clearly shows that GMO crops are safe and can offer several benefits to farmers, consumers and the environment.

It has been established that agricultural biotechnology is needs-based in Africa. Reports from other developing countries that adopted the technology speak volumes on the benefits. The African end users, farmers and consumers need to be given the opportunity to access and assess the technology themselves.

What we are striving to achieve in Africa is to embrace a science-based approach towards GMO policy decisions, with the European Food Safety Authority as a possible reference point. On trade, once Africa is able to harmonise the regulatory frameworks properly within the regional economic communities (REC), intra-Africa trade will be big enough to absorb demand for GM products, which would focus on African commodities, thereby minimising any impact on trade with the EU.

Most African countries and the EU and its member states are parties to the Convention on Biological Diversity which states in Article 16 that the transfer of technology, including biotechnologies, is essential to the attainment of the goals of the Convention.  The Convention further urges Parties in Article 19 to promote priority access to the benefits arising from biotechnologies, especially for developing countries. This call for Africa not to grow GMO crops will be in contravention of the Convention on Biological Diversity.

The European Parliament should uphold its tenets of respect for human dignity, liberty, democracy, equality, the rule of law and respect for human rights by not opposing the African Union’s efforts to make use of all available beneficial technologies. It is surprising to note that the Parliament’s call is only directed at Africa but not towards other developing countries in Latin America and Asia. The African farmer must have the right to decide whether to plant improved seeds and must have access to safe new products that will benefit the family farm, local communities and also contribute to improved livelihoods and socio-economic development.

Africa and the global security architecture

 

ON PEACE AND SECURITY

In his remarks at the Tana High-Level Forum on Security in Africa in Bahir Dar, Ethiopia on 16-17 April 2016, Kofi Annan, Chair of the Africa Progress Panel, warned that rising inequality and non-inclusive growth have implications on Africa’s security. The Tana Forum is chaired by Panel Member Olusegun Obasanjo.

Mr. Chairman, Your Excellencies, ladies and gentlemen. At the outset of these remarks, allow me to thank our Chairman for inviting me to the Tana River Forum. This is the first time I am attending this prestigious event, which brings together many distinguished participants who share a deep, mutual interest in the security and well-being of Africa.

Our topic this afternoon is Africa and the Global Security Architecture. During the Cold War years that would have not been a subject for much discussion. In those days, we looked for big-power champions who could provide diplomatic and security cover.

The contemporary world is far more complex. And, as the awful atrocities that have been perpetrated in West, East and North Africa have shown, the continent is not immune to the security threats that many countries around the world now face.

But I want to start with some good news. Africa is actually doing better than many people may realize in terms of the security of its citizenry. Today, and despite a few egregious exceptions, armed conflict is actually a smaller risk to most Africans than traffic accidents. This improvement of the security situation helped set the stage for rapid economic growth of 5-6% per year for the last fifteen years. As a result of this sustained period of growth, extreme poverty has fallen by 40% since 1990. And Africa’s growth can no longer be explained just by global demand for its commodities.

6th Tana Forum: Day1 :Olusegun Obasanjo

Two thirds of Africa’s growth over the last decade has come from increased domestic demand for goods and services in thriving sectors such as telecoms, financial services, manufacturing and construction. As a result, today, inflows of private investment dwarf international aid. They have been encouraged by the efforts of governments across Africa to improve their macro-economic environments.

Although there is still some way to go, we have seen encouraging steps towards gender parity, and the continent is moving towards universal primary education. The spread of HIV/AIDS is in decline, and the number of deaths from tuberculosis and malaria is falling.  Democracy is extending its roots as Burkina Faso, Guinea and Nigeria have recently demonstrated. Other countries like Cote d’Ivoire, have emerged from the abyss of conflict and are making strides towards a better and more democratic future.

In other words, our continent is generally heading in the right direction. This encouraging analysis will come, I know, as very cold comfort for those millions of people who are still living every day in the shadow of violent conflict and abject poverty.

Progress remains uneven, and the dangers today are both internal and external. Rebel groups have flourished in the impoverished parts of weak states that feel hard-done by their governments, where the population is often abused by the security forces, or where they do not trust the courts to deliver justice.

External forces are taking advantage of these shortcomings. We cannot ignore that from Mauritania in the west to Somalia in the east, the flag of Jihad is being raised. More than a dozen sub-Saharan countries are concerned, and tens of thousands have already died as a result. Boko Haram actually killed more people last year than the Islamic State. Attacks in many places are a daily or weekly occurrence.  And local extremist groups are now linking up to each other across borders, and even to global franchises like Al Qaeda or Islamic State.

Precisely because of these affiliations, these conflicts are generally seen through a unique prism: the global war on Islamist terrorism. This neglects what they have in common with other insurgencies on the continent, which have nothing to do with Islam.

It is no secret that unemployed young men are especially vulnerable to the temptations of violence and easily instrumentalised for that purpose. This is not a specifically Muslim problem: a World Bank survey in 2011 showed that about 40% of those who join rebel movements say they are motivated by a lack of jobs.

In Africa, as elsewhere, the answer does not lie in a purely military response that fails to deal with the root causes of disaffection and violence. As I constantly repeat, you cannot have peace and security without inclusive development, the rule of law and the respect for human rights. These are the three pillars of all successful societies. It is largely because these three pillars are quite fragile in parts of Africa that we are still seeing instability and violence.

The truth is that the economic growth in Africa over the last fifteen years, though impressive, has been neither sufficient nor inclusive. In fact, Africa has become the world’s second most unequal continent, according to the African Development Bank. Too much of that growth has enriched a narrow elite and not enough was spent on infrastructure, health or education, which would have fostered development. It is no coincidence that Boko Haram originated in one of the world’s poorest and most deprived areas of the continent. Not only does wealth not trickle down, but it is barely taxed, depriving the state of resources to provide public services. It is not just that Africa is unequal: it is also unfair. An African Union report has estimated that up to one quarter of the continent’s GDP is syphoned off every year through corruption.

The trafficking of drugs creates an especially difficult challenge. Drug money is insidious and invasive. It corrodes political institutions. We must focus on the money trail.  We have been locking up the minor offenders while the big fish swim free. The fight against violent rebel movements is necessary, and will require enhanced inter-African as well as international cooperation.

But this is not enough because the challenge of security in Africa is often a political challenge revolving around the acquisition and use of power. As a result, elections are a source of tension and repression rather than an opportunity for the free expression of political will. Leaders who hang on to power indefinitely by gaming elections and suppressing criticism and opposition are sowing the seeds of violence and instability. African leaders, like leaders everywhere, must remember that they are at the service of their citizens, and not the other way around.  They have a mandate given to them, in trust, by their people, who can also take it away from them if they are found wanting and to have outstayed their welcome.

So looking forward, I see five critical challenges for Africa as it fashions its role in the global security order. First, at the global level, Africa must have a strong and consistent voice at the pinnacle of the international security architecture – in the Security Council. Ideally, this means African permanent seats. But until that can be accomplished, Africa must ensure that its positions on international security concerns – and not just African issues – are carefully coordinated and well presented.

Second, at the regional level, we should recognize and applaud the work of the AU and the sub-regional organisations, which have acquired considerable and commendable experience in mounting peace operations. This effort must continue. But African states will have to give the AU the means to do so and, in future, rely less on outside funding.

Third, looking to the national level, the most urgent challenge is to create enough jobs for the continent’s youth. According to the World Bank, eleven million young people are expected to enter Africa’s labour market every year for the next decade. If these young people cannot find jobs, and do not believe in the future, they may be tempted by rebel movements of all kinds, as well as crime and migration. Wherever I am in Africa, I am always struck not just by the number of young people, but also by their energy, their creativity and their talent. We should invest in them, harness their talent and ensure that the next generation of leaders will do better than we have done.

Another major challenge lies in building confidence in the integrity of the electoral process.  Elections should be the vehicle for popular choice in which the winner does not take all and the losers do not lose all.

Those who win must recognize that they do not have a licence to rule without restraint or remain in office in perpetuity. Let us not confuse legality with legitimacy. Elections that meet legal form but fail the test of integrity are only pyrrhic victories that usually store up trouble for the future.

Finally, I want to mention the quality of national security forces. Madiba once said that “freedom would be meaningless without security in the home and in the streets”. That security in the home and in the streets depends in good measure on our security forces. We must invest in them but also make them fully accountable as part of our democratic societies. They must be trained to protect the individual and his or her family and property, to earn their trust and work with the people.

Ladies and Gentlemen, we have come a long way from the Cold War days. Africa is now part and parcel of the global security architecture.  We can and must step up to that role by investing in our people and by protecting rights and not just regimes.  If we do that, I am convinced that our future will be more peaceful and secure than our recent past and Africa will exert a powerful and constructive influence within the global security architecture.

 

Togo: Unrest threatens Gnassingbe dynasty

Recent protests in Togo suggest the Gnassingbe dynasty might be on the verge of political atrophy. President Faure Gnassingbe has ruled Togo since 2005, after his father, Gnassingbe Eyadema, ran the country from 1967. His repressive rule and insistence on unlimited presidential terms is angering many Togolese and may be the cause of his downfall.The atmosphere of change in the West African sub-region and Africa generally point to change in Togo. Change may come with a high socio-political cost to the country and neighbouring nations.

Togo, has witnessed unprecedented popular resistance in the last few months. From the capital of Lome to cities like Sokode, Bafilo and Mango, protesters have demonstrated their anger at governmental reforms (or lack thereof) that would see President Gnassingbe hold onto power until 2030. The government response has been repressive, leading to as many as 13 deaths.

Internal protests alone may not remove the president. Yet in the context of other developments in the West African sub-region and Africa, continued popular protests might lead to the political decline of the Gnassingbe dynasty.

Protests in Togo are adding to the mounting disaffection of Togolese with the extended rule of Faure Gnassingbe. The country started out as a promising republic under president Sylvanus Olympio in 1961, after gaining independence in 1960. But this era was cut short when Olympio was assassinated in a military coup led by Faure’s father, Gnassingbe Eyadema, in 1963.

In 1979, Eyadema allowed elections in the de facto one-party state, in which he was confirmed president in an unopposed national referendum. Subsequently, Eyadema embarked on constitutional gerrymandering, political arm-twisting and intimidation, and the exile and murder of political opponents. Under such conditions, the president could conduct fraudulent elections that guaranteed him victory before the count.

In that democratic dictatorship — ‘dictocracy’ — press freedom was at its lowest ebb and civil society voices were ably contained. Eyadema enjoyed the support of the Togolese military, in which promotion and reward depended on loyalty to the president. Combined with a draconian deployment of a police state against political or civil dissent, Eyadema stayed in power for almost 40 years. Faure Gnassingbe became Togo’s president in 2005 after the death of his father.

Violent confrontations between the government and Togolese reflect not just an oppressive regime, but also its longevity. While the Gnassingbe dynasty’s repressive police state has eroded the government’s legitimacy, the dynasty’s duration suggests it will not easily succumb to pressure. Faure Gnassingbe has inherited and deployed his father’s Machiavellian tactics. With the support of the armed forces, he will not easily relinquish power and shows no sign of limiting presidential terms.

In 2015, Faure Gnassingbe, along with then Gambian dictator Yahya Jammeh, successfully resisted an attempt by ECOWAS to enforce a presidential term limit in all West African countries. With Faure as the current chairperson of the sub-regional body, the possibility of ECOWAS pressure on Togo — at least in 2018 — is largely absent. That means leadership change in Togo is unlikely to gain regional political support. Faure might remain the only dictator standing in West Africa, surrounded by countries at varying stages of democratisation.

Protesters and opposition elements will continue to put pressure on Faure for the foreseeable future. Main opposition leader Jean-Pierre Fabre and advocates such as Farida Nabourema have called for a limit on presidential terms in Togo and, subsequently, an end to the president’s reign.

The president’s resolve to stay in power and protesters resolve to bring him down will lead to more demonstrations. With Faure’s continuing deployment of his father’s tactics, protests will be increasingly violent. However, without regional political support, protests alone might not lead to Faure’s ouster. Internally, if popular dissent wins some factional solidary within the Togolese military — as was the case in Burkina Faso and more recently in Zimbabwe — a coup may become a “legitimate” conduit to end the Gnassingbe dynasty.

Maj. Gen. David R. Hogg, commander, U.S. Army Africa, traveled to Ghana, Togo and Benin to visit with key military leaders and land force commanders Jan. 10-14 during his latest Senior Leader Engagement excursion. Hogg spent the week visiting with key leaders in all three West African nations and toured the peace keeping training facility in Togo for a first-hand look at the capabilities of their land forces.

While the opposition is aware that natural death rather than popular protests resulted in Eyadema’s departure from the presidency, the current protest movement is operating in a different political era. Apart from an internal military coup or popular pressure, two factors may prove to be crucial for change in Togo.

During Eyadema’s rule, the sub-region was home to other dictators, including in Gambia (Yahya Jammeh) and Burkina Faso (Blaise Compaore). These leaders have fallen after years of campaigning for change. Across the continent, long-term rulers like Muamar Gadhafi and Robert Mugabe have been removed from office. African politics has turned in favour of democratic change.

Togo remains the only West African country to have had one family rule since independence and the only one to have limitless presidential terms. The fall of Jammeh and Compaore provide the political atmosphere for the end of Togo as an oasis of dictatorship. These are reasons for Faure Gnassingbe to worry, despite the protesters’ lack of political support from the leadership of West African countries. Simply put, the existing regional geopolitical temperament may work for those seeking change.

Social media also provides critical leverage to agents of change in Togo. Online platforms have provided a bedrock for political activism which might facilitate the possibility of a post-Gnassingbe Togo. Campaigners have taken to social media to rally their base and have travelled to meet colleagues in Gambia, Burkina Faso, Ghana, Nigeria and Benin, taking the campaign beyond Togo’s borders. The Togo protests have become entangled in the online popular repugnance for dictatorships – the internet’s lack of respect for state sovereignty seems to be working for the anti-Gnassingbe cause.

Due to Togo’s negligible economic and political might in both Africa and West Africa, internal protests, violent or not, may have little regional impact. But in a worst-case scenario, these seemingly internal protests may transform into a major civil conflict. If this happens, large scale displacement of people and a spillover of conflicts into neighbouring countries, especially Ghana, will be highly likely. Thus, protests in Togo — West Africa’s last citadel of dictatorship — may be a warning of a major socio-political event for which all actors must be alert. The days of the Gnassingbe dynasty are numbered as it increasingly comes under threat from within. However, it is left to be seen when — not if — internal popular protest will coalesce with regional political support for change to bring the dynasty down. In any case, regional stakeholders should prepare for a post-Gnassingbe Togo.