For Online E-newspaper
The East African : April 21st 2014
The EastAfrican 34 BUSINESS APRIL 19-25,2014 How oil-≥ich Af≥ican nations could benefit f≥om the Uk≥aine c≥isis COMMENTARY CHARLES D. ELLISON “No one’s investing in Africa just to get good PR and a UN shout-out.” of European tension known as Ukraine, but as drama unfolds in Eastern Europe, their destinies could be closely aligned. In essence, the more Russia’s K President Vladimir Putin uses Russian gas prices as a weapon, the more Western powers, from NATO to the United States, feel squeezed and desperate to look for oil elsewhere. Africa fits that profile. Suddenly, there’s a new sense of urgency on the continent, with the US stepping up its military and economic engagement posthaste since Putin made his Crimean power grab. Before Putin could move to checkmate the West on the geopolitical chess map, US President Barack Obama moved a few pieces to the continent. It’s an interesting gamble, considering Africa has less than 10 per cent of proven global oil reserves. Yet, in the search for alternative sources of energy, the potential returns on intervention in Africa are fairly fast. Where the Middle East, cra- dle of oil booms, is volatile and where Shale Country USA is still in its infancy, Africa presents a quick-fix solution for petroleumhungry Western countries that don’t have time for renewableenergy cars to fully penetrate their markets. Africa’s not ideal, but it’s much more manageable than Al Qaida networks in the Middle East and a cranky Russian dictator on a Black Sea enya, Libya, Uganda and Nigeria are thousands of miles removed from that swirl power trip. Oil-spilling BP can tell you all about it, “project[ing] Africa will experience the world’s fastest regional energy demand growth [with] combined oil and gas production in Africa between today and 2035, bigger than in any of the BRIC countries.” If BP has its eyes on Africa, best believe everyone else does. Within a month of Crimea, additional US Special Forces troops ended up in Uganda to augment a hundred already there hunting Lord’s Resistance Army leader Joseph Kony. And to top that, the Pentagon sent in four freshly minted futuristic V-22 Osprey tilt-rotor hybrid gunships to show we mean business. Not humanitarian play “Please note that the deploy- ment of these aircraft and personnel does not signify a change in the nature of the US military advisory role in this effort. African Union-led regional forces remain in the lead, with US forces supporting and advising their efforts,” Daniel Travis, a US Embassy spokesman in Uganda, deadpanned. Which could mean that Ugan- dan jungles are getting lit up like that epic battle scene in Avatar. But the speed with which well-armed US troops were deployed to Uganda and elsewhere in Africa after Putin’s powerplay means this is more than just a nice humanitarian play. Critical strategic interests in Africa are suddenly on the front burner stopping renegade Libyan oil tankers from sending black market fuel to North Korea. The headline fight against the rising Islamic terrorist tides in Africa is a good pitch story. But the lesser known — yet more important — story is the continental energy rush gradually unfolding in Africa. Western powers, already irritated by China’s aggressive entry into African markets — highlighted by billions of dollars in investment and a $200 million “gift” to build a shiny new AU headquarters in Addis Ababa, Ethiopia — are stepping up their game before the rising Asian power dominates the whole game. Becoming refrontiered That’s happened quite fast between slow increases in US troops on African soil to the presence of more than 2,000 French troops patrolling the war-torn Central African Republic. And just a few weeks ago, the European Union nervously announced the commitment of an additional 1,000 troops, which struck many as odd, given Europe’s current preoccupation with Russian troops on its doorstep. Folks seem awfully pressed to stabilise that region, which neighbours Uganda and isn’t all that far away from Nigeria — another African country that accounts for five per cent of US oil imports. In essence, Africa is becom- Armed proRussia activists block a collumn of Ukrainian men riding on Armoured Personnel Carriers in the eastern Ukrainian city of Kramatorsk on April 16. Picture: AFP in the race for energy. Uganda is part of the fast-growth East Africa bloc that includes Kenya, Tanzania, Rwanda and Burundi. As a recent Stratfor analysis noted, “New oil and gas exploration projects, along with the potential establishment of a manufacturing base in East Africa, have created an interest in pipeline projects to carry natural gas and crude oil to export markets or refineries.” Renewed strategic positioning in Africa is, of course, nothing new. The George W. Bush administration was dropping $5 billion a year into HIV/Aids and malaria-prevention programmes, essentially softening the landscape for the eventual expansion of Africom, the US military command for Africa. Continental energy rush Hence, it was no surprise to find American planes blasting holes in Libya, drone bases in far-flung places like Niger, Djibouti, Burkina Faso and South Sudan and US intelligence supporting French troops in Mali. Folks like Muammar Gadd- afi needed to get out of the way, and now it’s US naval ships ing refrontiered, the next — but already charted — neocolonial play with subtle shades of humanitarianism and economic growth to make it look good. Make no mistake about it: There are real geopolitical intentions at work. Hunting down warlords and preventing Rwanda genocide redux is, of course, needed foreign policy common sense. But these are belt-tightening times for governments and their militaries. No one’s investing in Africa just to get good PR and a UN shout-out. Charles D. Ellison is a veter- an political strategist and frequent contributor to The Root. Adapted from Washington PostBloomberg Kigali to sell ag≥icultu≥e assets aiming to boost p≥oduction By KABONA ESIARA Special Correspondent RWANDA HAS lined up several state assets in the agricultural sector for privatisation as it seeks to boost production. The investments, which are scattered across the country, are to be completely or partially privatised and the proceeds of the sale reinvested in the agriculture sector to boost production from 5.8 per cent to 8.5 per cent, government officials said. The projects on offer include the irrigated Muvumba maize farm and Gishari Flower Park in eastern Rwanda, the $11.7 million agriculture park at the Special Economic Zone in Kigali and Mukamira maize mill in the north. “If we do not privatise the companies now, they could go down further and we would be locking out the private sector from taking over the economy,” said Tonny Nsaganira, Permanent Secretary in the Ministry of Agriculture and Animal Husbandry. The government and its development partners have invested some $600 million in the past 13 years in projects to boost crop production and value addition. Private investments, according to government officials, could help to position Rwanda as a middleincome economy by 2020. The economy is heavily dependent on agriculture, which employs the majority of the population. Officials also say some of the assets and businesses are not serving the purpose for which they were created, either because of lack of capacity or outright mismanagement. For instance, Rwanda still imports day-old chicks even after the government refurbished the hatchery at Rubirizi in Kigali. $11.7m “We are not totally pulling out of the businesses; instead, we are inviting a private investor to manage them and make them profitable,” said Dr Jean Jacques Mbonigaba, director-general of the Rwanda Agriculture Board. It is also expected that the investor will build capacity for the exportation of day-old chicks. Talks between a Kenyan firm Value of the agriculture park at the Special Economic Zone in Kigali, which is up for sale — which cannot be named at the moment as the parties have entered into a non-disclosure agreement — to take over Gishari Flower Park in Rwamagana are ongoing. The 35-hectare park, which is under construction, is expected to produce the first cut flowers in Rwanda and put the country at par with regional peers Kenya, Uganda and Tanzania in flower exports. “Rwanda could start exporting flowers before the year ends,” said George William Kayonga, directorgeneral of the National Agriculture Export Board. The government kicked off privatisation of its assets in 1995 when it put up for sale 80 parastatals, 60 of which have been sold, according to Rwanda Development Board data. But critics cite deals gone bad. The government recently repossessed the Mukamira maize mill from Ruhengeri Catholic Diocese after the church failed to implement the agreed business plan.
April 14th 2014
April 28th 2014