Sarkozy seeks fresh start and better trade at Africa summit

[caption id="" align="aligncenter" width="262" caption="French President Nicolas Sarkozy greeted Rwanda's President Paul Kagame."][/caption]

Over 250 African and French business leaders rubbed shoulders with African heads-of-state in Nice on Monday, as the 25th France-Africa summit, which for the first time will focus on both trade and politics, got under way.

NICE, France—Africa has the potential for exponential economic growth and must have a louder voice in world politics, President Nicolas Sarkozy said Monday, opening a summit with 38 African leaders.

Paris wants to use the gathering as a springboard for business deals and to bury bitter memories of colonial rule.

It is "completely abnormal" that no African country has a permanent seat on the United Nations Security Council, Mr. Sarkozy said, calling for reform of the body in an address to the Africa-France summit in the Riviera city of Nice.

"It is not possible to talk about the great questions of the world without the presence of Africa," Mr. Sarkozy said. "Our destinies are indissolubly linked." He said "Africa is our future" and will be a principle reservoir for world economic growth in the decades to come.

The 25th Africa-France summit coincides with the 50th anniversary of independence for 14 former French colonies. It marks a new era of ties—for Mr. Sarkozy a partnership of friends able to discuss commerce or stickier questions like human rights.

Breaking away from tradition, France has invited nearly 200 business leaders from France and Africa to this year's summit.

The dictatorships, conflicts, corruption and poverty that have plagued African nations for decades and define their image in the West have been reduced to sideline events at the two-day summit.

Egyptian President Hosni Mubarak stressed the need to change "African realities" through commerce and new infrastructure. He asked that the summit put the accent on developing African economies, including strengthening the role of the private sector.

"We want at all cost to end the marginal status of the African continent," he said.

A harsh reality for nations like France is the growing presence in Africa of China, India, Brazil and Iran, and to a lesser degree the U.S. Many of those nations are moving full speed ahead to scoop up Africa's natural resources, make trade and win contracts to build infrastructure.

In French-speaking countries, mainly in north and west Africa, France must live down its past as a colonial ruler. An Elysee Palace official said Mr. Sarkozy is more interested in bilateral talks with leaders of countries not in the circle of former colonies.

Only one African country wasn't invited to the summit—Madagascar, the Indian Ocean island where a 2009 coup toppled an elected president.

Notable absent leaders include Sudanese President Omar al-Bashir, sought by the International Criminal Court for allegedly masterminding atrocities in Darfur. Zimbabwean President Robert Mugabe, facing EU sanctions travel restrictions, also wasn't invited.

This happens in the context of China's increase and economic-political expansion in Africa. Trade between Africa and China has increased 10 fold since 2000.

France is seeking to renew its ties with Africa at the two-day gathering that will touch on global governance and Africa's campaign for more of say at the United Nations Security Council, the UN's top decision-making body. France wants to increase the number of African states represented and also have two permanent African nations on the UN security counsel, but not let them have no veto power. Of course the lack of veto power was not welcomed by African delegates.



The summit is viewed by many as an attempt by the Elysee Palace to boost its dwindling influence in the region in the face of stiff competition from China, India and other emerging economic superpowers. China is now Africa’s biggest trading partner, and has invested billions over the past decade to tap into the continent’s raw materials to fuel its own fast-growing economy.

When he took office in 2007, French President Nicolas Sarkzoy vowed to break with the past and end what he described as the paternalistic relationship between France and its former colonies, a relationship based on privileges and hand-outs popularly referred to as “Francafrique”.

France has been frequently criticized for ignoring human rights violations in its former African colonies and propping up autocratic leaders in its quest for business privileges in the resource-rich continent.

In recent months, Sarkozy has attempted to mend France’s tense relations with Rwanda following the 1994 genocide. During a landmark trip to Kigali in March, Sarkozy said France would do everything possible to ensure that "all those responsible for the genocide are found and punished." Diplomatic relations between France and Rwanda were restored last year, three years after Kigali severed ties with Paris.

Has France really turned over a new leaf in Africa?

But critics say that 50 years after several African nations gained independence from France, not much has changed in the country's relationship with its former colonies.

While Sarkozy impressed when Liberian President Ellen Johnson Sirleaf became the first African head of state to be invited to the presidential palace after he took office, he disappointed many when his first visit to the continent was to Gabon: then-President Omar Bongo of Gabon was a central figure in the ‘old’ ‘Françafrique’ style of diplomacy.

The disappointment turned to outrage last year, when the French government appeared to support Bongo’s son, Ali Bongo, in the August 2009 polls, sparking criticism among Gabonese opposition figures and igniting street protests across Paris.

Sarkozy’s cozy relations with Paul Biya, whose 28-year rule in Cameroon has been criticised by international rights groups, has also raised eyebrows in Africa circles. Last year, when Sarkozy welcomed the controversial African leader by praising Cameroon for its moderation, demonstrators in Paris sported placards that read, "Biya murderer, Sarkozy accomplice."

At this year's summit however, Sarkozy aims to focus on business. To mark the start of the much-trumpeted new era in French-African relations, a charter is set to be signed at the end of the conference which will pledge greater cooperation in training, jobs and environmental issues.

And while the annual summit has traditionally focused on former French colonies, the only two heads of state to hold face-to-face talks with Sarkozy at the conference's sidelines are South Africa's Jacob Zuma and Nigeria’s Goodluck Jonathan, both leaders of former British colonies

China defends its policies in Africa

In the Wall-Street Journal, China's vice commerce minister pushed back against Western criticism of China's activities in Africa saying that  they are "more market-driven"

Economic activity in Africa has surged in recent years, with Beijing becoming an important investor, creditor and donor for many African nations. But with the rise of China's influence upon the continent, concerns persist that Beijing is preying on the continent's resources to feed the Chinese economy, contributing little significant improvement to African livelihoods.

Amid such criticism—and as China asserts that its presence in Africa is increasingly being shaped by nongovernment actors—Beijing has put in place some mechanisms to deal with issues surrounding its investment and trade on the resource-rich continent.

"China's presence in Africa is becoming more and more market driven, the actors operating there are diverse, there are many models, and the areas they are in are broad," said Fu Ziying, the vice commerce minister, in a recent interview. "The Chinese government is more and more aware that as the economic and trade cooperation between China and Africa evolves, there need to be some laws and protections in place."

In a rare discussion about China-Africa ties, Mr. Fu, the senior trade official in charge of China's Africa portfolio, spoke about what he termed the misunderstandings surrounding China's presence in Africa.

In response to questions about some sensitive cases in the past year related to China's moves in Africa, Mr. Fu's comments suggested there were limits to what the government could do, shedding little light on the controversies.

Last year, a Hong Kong-based entity named the China International Fund struck a massive, $7 billion mining and infrastructure deal in Guinea that gave it, through two Singapore-registered entities, sweeping concessions to the mineral riches of the West African nation. Guinea authorities are now investigating the deal.

Company filings and other documents show that some CIF executives have ties to a Chinese state-owned enterprise. Mr. Fu reiterated denials by Chinese government officials that the government has any involvement in CIF.

"This fund is entirely built by individuals, and it has absolutely no government or Chinese state-owned company background in it," Mr. Fu said, adding that the Chinese government took the step to "inform relevant countries" that no such fund is registered in China.

Meanwhile, when asked about the investigation by Namibian authorities into alleged bribery involving Chinese security-equipment provider Nuctech Co., Mr. Fu said the matter was a civil-commercial dispute, arising from commercial competition, and that the Chinese government wouldn't intervene in such cases.

Mr. Fu, who accompanied powerful Politburo member Jia Qinglin to Namibia in March, said that the Nuctech case hadn't come up during the visit. Neither Nuctech nor its parent company has commented on the investigation.

The probe, which emerged late last year, is sensitive because the Communist Party Secretary of Nuctech's parent company is Hu Haifeng, the son of Chinese President Hu Jintao. References to the case disappeared from Chinese news websites soon after the story surfaced.

Mr. Fu also expressed frustration over persistent criticisms against China by Western nations and multilateral development agencies, which have cited Beijing's lack of transparency in its dealings in Africa and that the financing it provides without conditions on better governance or tackling corruption sets back the local economy.

"It's like marriage. The husband and wife are happy. Their happiness quotient is very high. But suddenly you have someone beside you that keeps criticizing the marriage," he said. "If Africa has a criticism about China's investment in Africa, then that is a problem."

China's engagement with Africa has begun to be studied only in the past few years. One recent study by the Centre for Chinese Studies at South Africa's Stellenbosch University and the Rockefeller Foundation listed the development of local worker skills and labor rights as key challenges that may determine whether Africans will benefit from China's presence on the continent in the long run.

The study also recommended more joint ventures be set up between African and Chinese companies to transfer technology and build capacity and an increase in the role of African civil society in project consultations.

This year China-Africa trade will exceed $100 billion, and the growth in bilateral investment is likely to enter its fastest period in the next five years, Mr. Fu said. Last year, trade between China and Africa fell to $91 billion amid the global financial crisis, from $107 billion in 2008, according to Chinese government data.

In 43 African countries, China and the corresponding African nation have set up a joint committee that convenes to discuss economic and trade issues when needed, Mr. Fu said. Such committees often don't meet more than once a year, and Mr. Fu indicated that there are cases that end up outside of that framework. But he claimed that, along with agreements on bilateral trade and investment protection, they offer a way to smooth burgeoning ties between the two developing economies.

Mr. Fu also responded to a question about a case involving investment in the other direction, from Africa into China. South Africa's Sasol Ltd. in December submitted a plan with its Chinese joint venture partner to build a plant that will convert coal to liquid fuel in China. The project, estimated to cost $5 billion to $7 billion, would be among the largest by an African company in China.

However, a document prepared by the local-level economic-planning agency in Ningxia, where the plant will be located, said that the review of Sasol's plan was being delayed to await a rival plan based on Chinese technology. Sasol has said it remains confident in the project.

"This [Sasol's] project hasn't been rejected," Mr. Fu said, adding that at issue is still a broader question of whether it is better to stick to using crude oil or convert coal to oil for China's energy needs.

Mr. Fu himself led a delegation in April to five African countries: the Central African Republic, the Republic of Congo, Gabon, Liberia and Chad.

In Liberia, where China is carrying out a $2.6 billion project to revitalize the iron ore Bong Mines, Mr. Fu said his group convened a roundtable with senior representatives, including ambassadors, from the local embassies, including ones from the U.S. and EU, along with foreign and local media.

Mr. Fu said the roundtable, including another one set up while he was in Gabon, was done to address the misunderstandings of China in Africa.

China's business with Africa.



More discussion on China in Africa.



China in Africa : Friend or foe for the European Union?



More detailed discussion if China is a constructive partner for Africa or new colonist.



China accused of neo-colonialism taking Africa's resource away.

China eyes Africa's resources

[caption id="" align="aligncenter" width="470" caption="Mamadou Tandja, Niger president (left), who was welcomed in Beijing by Hu Jintao, Chinese president, at the Forum on China-Africa Cooperation which gathered representatives of 48 African countries in November 2006, became the first African leader whose downfall could be traced directly to his embrace of Chinese suitors."][/caption]

Here is a detailed look how Africa is viewed through the eyes of Beijing:

T he lions of Niamey are going up in the world. The cramped cats may not know it, but when they move to their spacious new enclosure at the zoo in the capital of landlocked Niger, they will be the latest beneficiaries of a latter-day scramble for Africa.

Their $60,000 (£42,000, €49,000) pen is the merest nicety compared with the rest of the largesse that Beijing and companies acting on its behalf are lavishing on an arid west African nation of 15m people more accustomed to hunger and penury.

Following the same bargain it has struck across the continent – swapping infrastructure and cash for resources to sustain its breakneck growth – China has secured access not only to another source of African oil but also to what is perhaps the single commodity considered more sensitive than crude: uranium. It has also turned Niger into a bellwether for those who fear that the struggle to secure the continent’s resources risks re-creating the ruinous brinkmanship of the cold war.

A few mud-red blocks from the zoo, two colonial thoroughfares converge. One, Avenue du Général de Gaulle, is named for the French leader who ensured his country’s stamp remained on its African colonies long after independence. The other, Avenue de l’Uranium, bears the name of the metal that has made Niger the bedrock of France’s nuclear-powered economy.

China has vied with western groups in Africa for oil and minerals for the best part of a decade. But it also has ambitious nuclear power targets and its quest for uranium – repositories of which are few and far between – has thrown the rivalry into sharper focus.



In the past three years, as China embarked on its new thrust into Africa, relations between Niamey and Paris plunged. The award of uranium concessions to China’s Sino-U and other prospectors broke the de facto 40-year monopoly of Areva, France’s state-controlled nuclear group.

The yellowcake trail

In January 2003 George W. Bush, US president, sought to further the case for war by claiming Saddam Hussein had tried to buy material for a nuclear weapon in Africa. The report on which the claim was based – documenting Iraqi attempts to secure yellowcake, semi-processed uranium ore, from Niger – had one flaw. It was fabricated. As coalition forces failed to find yellowcake in Iraq, the affair rumbled on. Lewis “Scooter” Libby, an aide to vice-president Dick Cheney, was convicted of perjury in 2007, following a probe into the outing of a CIA operative whose husband had worked to debunk the claim.

The competition has seen work start on Niger’s first refinery and a $700m hydroelectric barrage, not to mention hundreds of millions of dollars in “signature bonuses”, courtesy of Beijing. It helped the country wring tougher terms from France before granting permission for Areva’s vast new mine, which will make the country the world’s second-biggest uranium producer after Kazakhstan.

Yet a February coup d’etat heightened the anxiety of those who see danger in a stand-off. Although ethnic rivalries and opportunism played their part in the putsch, Mamadou Tandja became the first African leader whose downfall could be traced directly to his embrace of Chinese suitors. “It was because Tandja had Chinese money that he felt he could mock the European Union, Ecowas [the regional bloc], the US,” says Mohamed Bazoum, a former minister who now serves on the “consultative council” created by the military junta that seized power.

The volatility in Niger is worrying to western intelligence agencies as they contemplate al-Qaeda’s presence in the effectively borderless lands of the Sahara. Drugs, weapons and counterfeit goods flow freely. That uranium destined for a dirty bomb could do the same ranks among the west’s security nightmares. Niger’s uranium could also prove of strategic importance as Europe frets about its dependence on Russian gas and looks to nuclear energy to help combat climate change.

With China's increased presence and quick business deals, this has brought alot of criticism towards Beijing.

Rights groups denounce Beijing for its readiness to do business with authoritarians in Sudan or Angola provided the oil keeps flowing. Yet they note that relationships such as Washington’s cosy ties to Equatorial Guinea’s petro-dictatorship deprive the west of any moral high ground.

Even Mr Tandja’s critics would not liken him to a Mobutu or a Mengistu. But that is partly because he failed to cling to power. “He became arrogant,” says one western diplomat. “He counted too much on the Chinese to be there.”

Perhaps Mr Tandja had not acquainted himself with China’s policy of non-interference in the domestic affairs of African states. When young officers stormed the presidential palace on February 18, Beijing was as silent as it had been while he amassed power. The toppled president remains under lock and key. The junta pledged elections by February and has barred its own members from contesting them – so those overseeing the transition are not themselves participants. The soldiers have signalled they have no plans to break with China, although they intend to audit all Tandja-era mining permits.

If Mr Tandja set too much store by his Chinese allies, perhaps Beijing also invested too much in him – and his family. One son, Ousmane, was Niger’s commercial attaché in China. According to people familiar with the matter, he has close links to Trendfield Holdings, a British Virgin Islands-registered consultancy that helped China secure its uranium permits and is funding the lion enclosure at Niamey zoo. (El-Moctar Ichah, head of Trendfield’s Niger subsidiary, dismisses such claims as “speculation”.)

France’s critics say its subdued criticism of both Mr Tandja’s authoritarianism and the coup undermined democratic forces in Niger. “There is a sense of neo-colonialism – that France has no friends, only interests,” says one French expatriate.

Those interests may remain secure. “Fundamentally, Areva is still the big partner,” says another western diplomat. Olivier Muller, Areva’s managing director in Niger, dismisses talk of damaging rivalry with China. “It’s like in oil: there are enough blocks to produce,” he says. “You might compete for the blocks you want but after [they are assigned] you co-operate. In the next 10 years ... all the so-called ‘competitors’ will share infrastructure.”

Areva’s €1.2bn ($1.5bn, £870m) Imouraren mine is on track to start production in 2013. It is slated to yield 5,000 tonnes of uranium a year, doubling Areva’s output in the country. Mr Muller says the negotiations with Mr Tandja were tough but that Areva’s agreement to increase payments to the government by 50 per cent had more to do with rising global prices than competition. He describes Salou Djibo, the previously unknown officer and former United Nations peacekeeper now heading the junta, as “a nice guy”, adding: “I met the president for an hour this morning ... If you have one hour with the president, it has gone well. If not, you get five minutes. Obviously, we don’t talk politics, just business.”

Xia Huang, China’s ambassador in Niamey, says Beijing’s bonds to Niger are unshaken and that grander projects are in the offing, including pipelines and coal-fired power stations. China, he says, has offered Africa a “more profitable option” than other partners have. With a little overstatement, he adds: “This country has already seen uranium extraction for nearly 40 years. But when one sees that the direct revenues from uranium are more or less equivalent to those derived from the export of onions each year, there’s a problem.”

Beijing’s critics are unbowed. Mr Idrissa, the transparency campaigner, repeats charges heard across the continent. Chinese companies prefer to import their own labour and, when they do employ locals, they do so in poor conditions and at low wages, he says. “They are going to take our riches and go,” Mr Idrissa concludes.

But for others, China’s efforts offer an opportunity for industrialisation on a scale never countenanced by the colonisers of old. Ibrahim Iddi Ango, an industrialist and president of the chamber of commerce, is pushing for regulations that would oblige foreign investors to foster the local private sector. He notes that France’s Total and others including ExxonMobil of the US sat on the Agadem block for years but balked at Niamey’s demands. “Each time the government said, ‘build a refinery’, they said: ‘it’s impossible’. The Chinese came and said: ‘A refinery? What size?’”

The loser in this particular thrust?  France's Areva, which enjoyed a 40-year monopoly on Niger uranium. Given the level of development in Niger, I would say that competition wouldn't be a bad step.

Conclusion: China doesn't take a missionary approach to world affairs, seeking to spread an ideology or a system of government. Moral progress in international affairs is an American goal, not a Chinese one; China's actions abroad are propelled by its need to secure energy, metals and strategic materials in order to support the rising living standards of its immense population, which amounts to about one-fifth of the worlds population.

Asia's demand triggers frontier integration in Africa via mining companies

Financial Times reports:

Six of the world’s biggest mining and steel companies have converged on an unprecedented scale on a mineral-rich corner of west Africa beset until recently by civil war.



The companies plan to spend billions of dollars in Guinea, Liberia and Sierra Leone, where some of the world’s richest deposits of iron ore, the raw ingredient of steel, are found.

The groups are Vale, the Brazilian iron ore miner, Rio Tinto and BHP Billiton, the Anglo-Australian mining houses, ArcelorMittal, the UK steel company, Russia’s Severstal, and Chinalco, the state-owned Chinese mining company.

Buoyant demand for steel has lifted iron ore prices, intensifying global competition for Africa’s hitherto little exploited deposits, and pushing companies into increasingly risky territory.

Liberia and Sierra Leone emerged only recently from civil wars, while Guinea has been teetering on the brink of conflict since the death of dictator Lansana Conte prompted a military coup in 2008.

As yet there is little infrastructure to facilitate mineral exports from any of these countries, whose governments want to use the multinational corporations to fund the ports, roads, and railways needed to lift their struggling economies.

Last month, Vale agreed to spend between $5bn-$8bn on building mines, ports, and railways in Guinea and Liberia by 2020. By comparison, the gross domestic product of Liberia is under $1bn (€800m, £700m).

Vale entered the region by paying Beny Steinmetz Group (BSG), a mini-conglomerate associated with the Israeli billionaire, $2.5bn for exploration rights in Guinea’s Simandou mountains.

BSG’s claim is controversial, as Rio Tinto still disputes the Guinean government’s decision in 2008 to remove half of its Simandou exploration rights.

Teams from both Vale and BSG are in Monrovia, Liberia’s capital, to negotiate details of the infrastructure deal with the country’s government. The idea is to transport the iron ore mined in Guinea through Liberia to a new export facility on the coast.

Marc Struik, head of mining at BSG, told the Financial Times the Vale-BSG joint venture wanted to build a new port at Didia in Liberia. That could cost $1bn, Mr Struik estimated.

The joint venture, he said, could spend more than $5bn on ancillary infrastructure to run the Simandou mines in Guinea. This would include two railway lines. The first would reconstruct a line through Guinea for passenger use. The second would be a new line to carry iron ore through Liberia to Didia.

The venture hoped to finalise the plan by the end of June, BSG said. It has signed only a memorandum of understanding with Liberia, which potentially stands to gain as much as Guinea from ore exports.

“We have come with a proposal that no one else has matched,” said Mr Struik. “Liberia is not going to stop the infrastructure development agreement.”

But recent history has shown such agreements to be fragile. Rio Tinto has not acknowledged that it has lost the title to the northern block of Simandou, which Vale now controls.

Rio still holds exploration rights in the southern Simandou block, where most of the region’s known reserves of iron ore are found.

In March, Rio brought in Chinalco, China’s state champion, in a joint venture to develop Simandou. Chinalco has ties to Chinese infrastructure contractors that could be key to developing the southern Simandou block – or more.

But no one is jumping to conclusions about the outcome. Elections are coming up in Guinea. Vale’s deal was signed by the interim government, installed after the former military leader was shot. Guinea’s unions and some opposition politicians say no new deals should have been made in the transitional period.

Done well, this can be a big boost to local economic development.  The hoped-for key difference with the past is the sustained, boom-like demand from Asia, which constitutes a socio-economic revolution all its own for Africa.

China strengthens investments in South Africa

China increases business stake in South Africa.

China on Thursday announced its largest investment in South Africa for more than two years, entrenching its position as the resource-rich continent’s most important economic and commercial partner.

For example, FAW, a Chinese carmaker, last month announced a $100m investment in South Africa. “Chinese companies are coming to the party,” said Martyn Davies, chief executive of Frontier Advisory Services, a Johannesburg-based consultancy. “They have a high level of confidence in the continent and see South Africa as a springboard for expansion elsewhere.”

The China Africa Development Fund and Jidong Development Group will help build a new cement plant worth at least Rmb1.5bn.

The announcement lays the ground for a planned August visit to Beijing by Jacob Zuma, the South African president, who has made deepening economic and political ties with China a priority of his foreign policy.

China emerged as South Africa’s largest trading partner last year, partly due to a large rise in iron ore exports, mirroring a trend in other countries on the continent, which have been courted by Beijing for their resources and growing markets.

The latest agreement will see the two Chinese entities joining forces with Continental Cement, a local enterprise, and Women Investment Portfolio Holdings, a South African company dedicated to empowering black women. They will build the new plant in Gauteng province, outside Johannesburg.

The new plant is aimed at making up a shortfall of domestic building products, such as cement, much of its caused by the huge infrastructure programme from construction for the football World Cup.

Congested roads and railways make it relatively costly for South Africa to import cement, so investment in local production facilities is correspondingly more attractive.

Growing economic ties with China and other big emerging markets have paved the way for closer political ties, especially since Mr Zuma came to office last May. While his predecessor, Thabo Mbeki, expressed reservations about China’s role in Africa, Mr Zuma’s own enthusiasm has been greater.

A $5.5bn investment by the Industrial and Commercial Bank of China in South Africa’s Standard Bank agreed in October 2007 remains easily the largest Chinese investment in Africa to date, accounting for about a quarter of the funds that Beijing dedicated to the continent.

Much of that investment has concentrated on roads, power plants and other infrastructure but analysts say a growing number of Chinese companies are beginning to buy building and other materials locally. They are also eyeing Africa’s rapidly growing consumer markets.

Namibia to get $1 billion in funds from Russia for Uranium hunt

Russia has agreed to fund $1 billion for a uranium hunt in Namibia.

Russia was ready to invest $1 billion (R7.75bn) in uranium exploration in Namibia, Russia's state nuclear firm said yesterday, as it seeks to compete for projects in the country with global mining house Rio Tinto.

"We're ready to start investing already this year," Sergei Kiriyenko, the head of state corporation Rosatom, told journalists. He said the uranium could be used for the nuclear power plant Russia was building in Turkey.

The comment came as Namibia's President Hifikepunye Pohamba visited Moscow to meet Russia's President Dmitry Medvedev and Prime Minister Vladimir Putin.

Earlier this month Russia and Turkey signed off on a $20bn project for Moscow to build and own a controlling stake in Turkey's first nuclear power plant.

Medvedev discussed the possibility of investing in uranium exploration in Namibia last year when he visited the country.

Medvedev said yesterday that Russia was also ready to invest in the completion of two hydroelectric stations in Namibia.

In an earlier post i discussed Russia's new found interest in enhancing its position and economic dealings in Africa.

Mineral OPEC for African Countries?

African countries are discussing  plans to form a mineral OPEC to better serve their interests.

African leaders are pushing for tougher terms on mining concessions after 25 years of structural adjustment when countries cut red tape and offered generous tax holidays to foreign prospectors.

The new dynamic was on display at a recent mining conference in Senegal. The chief executive officer of a multinational Africa mining firm was speaking, but Senegal's president didn't appear to be listening.....

"I think we're at a turning point," says Bonnie Campbell, political science professor at the University of Quebec in Montreal and author of "Mining in Africa." "There's been a quarter-century where a certain investment-friendly road has been taken. [Now] there is a recognition that there needs to be another focus."

A Cartel Modeled After OPEC?

The capstone of that push, at least for Wade, would be an international alliance of Africa's mineral-rich nations, modeled after OPEC  a pan-African body that could influence the price of metals like the cobalt in Chinese-made laptop and cellphone batteries, 90 percent of which comes from Africa, according to the business watchdog SwedWatch.

"It's an ambitious but feasible idea," says Mazou Yessouph Faudy, geological director for Niger's Mining Ministry. "Our economy is falling. As a producer of uranium, it would be good to involve ourselves in a union of producers that could set the price."

Already, according to estimates by gold mining company Randgold Resources, the continent produces 30 percent of the minerals required by the US and China.

"[Africa is] going to become a very important player in the commodity and minerals market," says Roger Dixon, chairman for South Africa's SRK mining consultancy, citing China's 11.9 percent growth in its gross domestic product, the total of goods and services produced, in the first quarter of 2010. "With that kind of demand, I think it's a great opportunity for Africa to move to the forefront of things."

Certainly good idea for Africa, a continent that is full of natural resources.  When uranium prices were flying over $100 in the international markets , Avera (a french company ) that has been exploiting Niger main resource for over 50 years, locked the price for that poorest country in the world at around $ 25.

Considering Africa has some of the poorest nations on the planet, I can't really blame them for wanting to band together to control their resources. Problem of course, like always will be corruption. Just look at the Petro states and where that has lead those governments.

Russia's New Dash in Africa

Russia feeling left out by other countries like China, India, the U.S., has rapidly expanded its presence on the continent after a long absence due to the break up of the Soviet Union. This is a while back but gives the reasoning and insight into President Medvedev's trip in Summer 2009:

The Kremlin has launched an ambitious project to restore Moscow's past glory on the African continent. Policy makers in the U.S. and Europe need to understand that it's happening -- and formulate an effective response -- before they find their own relationships with Africa changing in significant and problematic ways.

Russian President Dmitry Medvedev and more than a hundred Russian businessmen last week visited Egypt, Nigeria, Namibia and Angola on the longest tour of Africa a Russian leader has undertaken since the collapse of the Soviet Union. Unlike President Obama, who is going to Africa next week for a brief stop to talk about global warming, Mr. Medvedev and his team targeted oil, gas, diamonds and uranium...

By all appearances Mr. Medvedev and, by extension, Prime Minister Vladimir Putin are reviving the old Soviet Africa strategy. The Soviet Union maintained friendly relations with many African countries, including Egypt, Sudan, Ethiopia, Somalia, Namibia, Angola and Mozambique. Starting in the 1950s, Africa was viewed as a prime economic battlefield between Soviet command-and-control planning and Western capitalism. From the 1960s to the '80s, Western institutions like the World Bank and U.S. Agency for International Development poured billions of dollars into supporting governments in countries like Zaire and Nigeria. Moscow offered similar funding to its "friends."....

Africa lost its significance as an ideological chessboard after the collapse of the Soviet Union, and the current volume of trade between Africa and Russia is trivial. But the continent remains an economic prize. China has spent billions of dollars in the past few years gaining friends, influencing dictators, and tying African countries to Beijing.

Now the Kremlin is trying to regain its status as a global player, including re-asserting itself in Africa. Mr. Medvedev's visit to Africa appears to be the first coordinated attempt by Moscow to do so. Where once the Soviet Union sought political hegemony, today's Kremlin is after economic objectives like trade and access to raw materials. But a shift in Africa's relationship with Russia will have consequences for many.

Africans may benefit from increased competition among the world's powers to develop its vast resources. Russia and China have already invested billions to gain a foothold there. Western companies are similarly interested. The income generated from developing these resources has the potential to generate jobs and boost incomes in Africa. But this isn't a sure thing. Resource-rich countries are vulnerable to corruption and instability.

Competition is always good for industry and nations, large or small, but African countries need to be as always, careful.

A flood of Russian money could facilitate corruption in places where that's already a problem. Moreover, Moscow and Beijing are comfortable working with oppressive regimes, like Sudan's, that Western countries condemn. As a result, Africans may suffer even more as Russia and China expand their influence.

Reporting of the trip by state controlled Russia Today.



This policy that Russia is embarking on should be seen in the context to increase and deepen the influence that it has on Europe as a whole. Russia is Europe's biggest energy supplier, and Moscow wants to maintain this status as long as possible. North and Western African states are growing suppliers of oil and gas to Western European markets, which have the potential to eat into the profits of Russian energy companies.  One way of slowing this down is to "cooperate" with African states in the energy sector, create so called partnerships that benefit the Kremlin and don't fully target the strategic hold that Russia has on Europe.

A Look at China's Presence in Africa

There has been a change in ideological sentiment on China’s involvement in Africa. The paradigm shift has been led by Zambian economist Dambisa Moyo’s bestseller, Dead Aid, which gave voice to the possibility of a development model defined by diligent business practices as opposed to the traditional Western model which is driven by foreign aid. If managed prudently the Sino- African relationship could prove to be an empowering change for several African governments and provide the foundation for the continent to take its place as a partner in the global economy. For China, Africa is an excellent complement to its resource and market-seeking global agenda. Since 2000 China-Africa trade has grown at an average annual rate of 33.5 per cent. Although still second to the United States (whose trade with Africa amounted to US$140 billion in 2008), trade rose from US$55 billion in 2006 to around US$107 billion in 2008, accounting for 4.5 per cent of China’s total trade and surpassing the US$100 billion trade target set for 2010 at the 2006 Forum on China- Africa Cooperation (FOCAC).



China has also identified the value of Africa as a political ally in its quest for a greater role in international affairs. The benefits of China’s African diplomacy became clear in 1971 when China’s accession to the UN General Assembly and Security Council was assisted by 26 affirmative votes cast by African countries. Today China has diplomatic relations with 49 of 53 African nations and China’s deepening engagement means that the US, Europe and other emerging partners have little choice but to compete for access to the continent’s emerging markets and resources. In November 2009, Chinese Premier Wen Jiabao took the opportunity to declare China’s commitment to African development while challenging the established industrial powers to do the same:

In the global financial crisis, what people tend to easily ignore is the implementation of the Millennium Development Goals … Here I would like to once again appeal to the international community to work hard with firm determination and effective measures to reach the MDGs while tackling the global financial crisis.

This declaration was accompanied by the announcement of US$10 billion in preferential loans to support African countries over the next three years. In light of the OECD’s prediction that the G8 will fall US$23 billion short of its 2005 promise of US$50 billion in foreign aid to the poorest and most vulnerable by 2010 (Africa contains 33 of the 49 Least Developed Countries, as classified by the UN ), it is little wonder China’s diplomacy is gaining traction among African governments.

Although the China-induced resource boom is providing a shortterm fillip to African growth and Moyo’s ambitions for a business-driven model of growth, China alone will not be the continent’s saviour. To avoid destructive competition in the region, a cooperative framework on African issues is required between China, the US and Europe and emerging partners to the continent such as Brazil, India and Russia. This is increasingly important in the context of trade frictions that are present in the current global economic environment.

Legitimate concerns about human rights and exploitative practices surround China’s non-interference based involvement in African nations. The list includes arms dealing with repressive regimes, support for autocratic governments isolated by the West, plundering resources with little concern for environmental issues and importing unskilled Chinese labour who are culturally ignorant and unwilling to integrate.

Many of these issues highlight what seem to be self-serving political and strategic motives behind China’s activity in Africa. Many are fuelled by Western hypocrisy. The West’s involvement on the continent has been, and continues to be, littered with tales of mismanagement, exploitation and funding despots. Furthermore, China is hardly alone in marrying political and strategic considerations to its aid agenda. In December last year the US President, Barack Obama, signed off on a deal with Israel worth US$2.77 billion in 2010 (worth a total of US$30 billion over the next decade) with 75 per cent tied to the purchase of US-made military hardware.

Defending exploitative behaviour is not the issue. The business-driven model of development provides new opportunities to several African nations long overlooked as legitimate trading and investment partners. African countries and the African Union need coherent, longterm strategies to apply leverage to international commercial interests and to create opportunities for enduring economic competitiveness and growth. With the prediction by the International Energy Agency that China’s oil imports will increase four-fold by 2030, it is vital for Africa itself to respond strategically to the opportunity that China offers the continent. Although the FOCAC provides an effective forum to develop diplomatic and commercial relations, the issues cited above will continue to bedevil China’s involvement with the continent if strong institutional frameworks of governance and dispute resolution mechanisms are not properly implemented.

In the latest issue of The Atlantic magazine, China's resource play in Africa and development pledges are discussed in vivid detail and questions are asked.

All across Africa, new tracks are being laid, highways built,ports deepened, commercial contracts signed—all on an unprecedented scale, and led by China, whose appetite for commodities seems insatiable. Do China’s grand designs promise the transformation,at last, of a star-crossed continent? Or merely its exploitation?

At some point, at sometime, Africans are going to have to take control of their own destinies. Howard is very descriptive in regards to what Chinese laborers and business men are doing in Africa. However, one ends up asking: "What are Africans doing to advance their own needs?"

Surely they can't all be reading the paper and taking a nap?

All joking aside, the cold reality is that foreign attempts to develop Africa have spectacularly failed. No one disputes that developmental polices have traditionally been short sighted. Nevertheless, development projects are only as good as the repairman has money, skills, ambition, a society that encourages entrepreneurship, and the will to see the service they manage succeed.

The only people that can - and should - save Africa at the end of the day, are Africans.

Japan Makes Move on Oil pipeline plan

Financial Times reports that Japan

Plans to transform the east African oil sector by building a pipeline from south Sudan to the Kenyan coast were boosted on Wednesday when a Japanese company expressed interest in joining the project.

Toyota Tsusho, the trading arm of the Japanese carmaker, said it was developing plans to build the $1.5bn pipeline, which would run for 1,400km from Juba, the capital of south Sudan, to the Kenyan island of Lamu, where an oil export terminal would be constructed.

The project would be the boldest yet by a Japanese company in Africa. China has also been studying the proposed pipeline and Toyota Tshusho said that co-operation with Beijing was possible.

The geopolitics of east Africa could be reshaped in January, when south Sudan will hold a referendum on independence. If it chooses to secede, a new country will emerge with about three-quarters of all the oil presently possessed by Sudan.

At present, the oil is exported via pipelines leading through northern Sudan to an export facility on the Red Sea. The government of the semi-autonomous south wants the new pipeline to reduce its dependence on the north and to create an export route via Kenya.

Takashi Hattori, a Toyota Tsusho executive, said the company’s plans were preliminary but that the goal was to build a pipeline with a capacity of 450,000 barrels a day, and an export terminal, the ownership of both of which would revert to Kenya after 20 years.

Mr Hattori said: “Of course, we need to discuss with the governments. But this is to show our intention to be involved.”

Japan is the only big industrialised country that buys Sudanese oil, receiving 2 per cent of the country’s petroleum exports in the first half of last year.

Japan is racing to join its fellow Asian countries like India and China to gain access to resources, raw materials and energy. China is following the recent Japanese engagement because it has

also expressed interest in the pipeline through Kenya and Mr Hattori has opened the door to possible co-operation with Japan. He said: “Maybe to collaborate with a Chinese company would be one of the options. We’d like to study any possible scheme further with the Kenyan government and the Sudanese government.”

Mr Hattori added that a “key success factor” would be securing finance from the Japan Bank for International Co-operation.

But Dennis Awori, the head of Toyota East Africa, said: “Everything is subject to very thorough feasibility studies, not to mention agreements with governments.”

If south Sudan achieves independence, the views of its government on who should build the pipeline will be crucial. “It’s all academic until we know what the south Sudanese want,” said David Raad, a business consultant in Juba. He added: “All the parties involved will be looking at the expertise, the resources and the intensity of proposals being made.”

Kenya supports the proposed pipeline as a way to bring development to its northern territories. The Toyota Tshusho executives were briefing the press in the office of Raila Odinga, the Kenyan prime minister, who visited Japan last month to discuss the pipeline and other investment opportunities.

Securing oil and other natural resources in Africa is one of Japanese diplomats main objectives, something that they share with China.  Tokyo has boosted its presence

Unlike China’s state-backed drive to secure resources and influence in Africa, Japan’s activity on the continent has been more fragmented .

Toyota Motor has a production hub in South Africa and Komatsu, a big Japanese maker of construction equipment, counts Africa as one of its biggest markets.

Toyota Tsusho’s rivals – trading companies such as Sumitomo and Sojitsu – have mining and oil interests in other corners of the continent, but they have not backed large infrastructure projects such as the Kenya oil pipeline.

Japanese funding for infrastructure has instead come in the form of government aid, which has given the country a more visible presence on the continent. Aid to improve agricultural productivity has also been abundant.

Unlike China, Japan can't be ruthless in its Business dealings like China.  Japan isn't criticized for its form of government or human rights like say China, which in the long run will give it an edge, just like many western businesses and corporations.  The tide is already turning against Chinese business dealings, although rather slowly, it is turning.