By Lovemore Meya

Zimbabwe Electricity Transmission and Distribution Company (ZETDC) paid Powertel close to $10 million as commission for selling prepaid electricity to wholesalers, something it could have done itself, Auditor-General Mrs Mildred Chiri has revealed.

The electricity supplier also suffered a financial loss through under billing with some meter readings last conducted in 1984.

In her report on State Enterprises and Parastatals for the financial year ending December 31, 2016, Mrs Chiri notes that ZETDC is a subsidiary of ZESA Holdings and its business is the distribution and retail of electricity to the final user.

She recommends that the company sells electricity directly to wholesalers and that meter readings should be done within a period of three months in accordance to company policy.

“Without qualifying my audit opinion, I draw your attention to the fact that the company incurred a loss before tax of $111 474 084 (2014: $118 312 961) for the year ended December 31, 2015 and as of that date its current liabilities exceeded its current assets by $771 383 372 (2014: $958 567 146).

“The company also had an accumulated loss of $516 649 272 (2014: $438 326 775).

“These conditions along with other matters indicate the existence of a material uncertainty that may cast significant doubt about the ability of the company to continue operating as a going concern,” Mrs Chiri said.

On the distribution of electricity, the Auditor-General said the company sold its prepaid electricity through Powertel, which in turn distributes electricity to 10 wholesalers (super vendors) who also distribute the electricity to sub-vendors.

“The economic rationale of selling through Powertel is not clear as the company has a capacity to sell directly to wholesalers. This eliminates commission paid to Powertel and also improves efficiency of the network and the total amount paid during the year was $9 646, 318,” reads the report.

The auditor concluded that there was financial loss through unnecessary commission costs due to inefficiency of the prepaid metering system network as a result of increased layers of vendors.

There was also financial loss through under billing.

“The company’s policy requires that all meters should have actual readings taken at least once in three months. Some customers, however, had actual meter readings last recorded some years back, for example in 1984, 1991 and 2005. Other clients’ readings took up to 982 days before they were taken,” Mrs Chiri notes in her report.

The report states that 191 162 meters have not been read for over one year, while 15 782 have not been read in two years, 7 372 (three years), 2 795 (four years), 531 (five years) and 1 861 (over five years).

In its response, ZETDC said: “The preferred model is one with multiple aggregators (wholesalers) connecting directly to the ZETDC prepaid platform as recommended by the auditors.

“However, ZETDC adopted a model that was in line with the aspirations enshrined in the Zim-Asset blueprint with Powertel as the sole aggregator and eight State-owned enterprises as super vendors. The company is currently in the process of reviewing the third party vending model to make it more efficient.

“The company is in the process of replacing post-paid meters with prepaid meters. Approximately 130 000 customers are still to be placed on the pre-paid platform and these installations are expected to be completed by year end.”

By Jeffrey Moyo

Harare — Wetlands can ease the impacts of a changing climate by maintaining groundwater levels and protecting areas from the worst impacts of floods by absorbing excess water

Unspooling the rope tied to a metal bucket, Shylet Nhari listens to the repeated clangs of the tin striking the walls of the well as her bucket makes its way down.

When the 46-year-old pulls the container back up, she finds it filled with undrinkable muddy water. Water levels in the well are dwindling fast and not being replenished, she says.

Nhari lives in Westlea, a middle-class suburb of the Zimbabwean capital and an area built on wetlands. Like many residents, she has no piped water and relies on the well, which has become more erratic in the face of longer drought.

“Since 2015, our wells here started having problems in storing groundwater for longer periods as they began to dry up quickly,” she said.

Residents like Nhari, and a growing number of newcomers to Harare, find themselves in a bind. They need somewhere to live, and developers are all too ready to sell them land in wetland areas. But as construction covers more wetlands, water sources are drying up.

Wetlands – which include bogs and swamps – are essential to the well-being of the city, environmentalists say.

They can ease the impacts of a changing climate by helping maintain ground water levels, and protect areas from the worst impacts of floods by absorbing excess water.

By law, anyone intending to build on a wetland must apply for a permit from the government’s Environmental Management Agency (EMA).

In January, EMA threatened to evict wetland residents in Masvingo, one of the country’s oldest towns, saying their homes had been built without government approval.

But in Westlea, Nhari is sceptical about the likelihood of enforcement.

“I have lived here for close to 10 years and have not seen any resident being questioned for building on this so-called wetland,” she said. She added that she doesn’t know how wetlands function and why they are important.

According to EMA spokesman Steady Kangata, 27 wetland areas in Harare and Chitungwiza, a town 25 km (15 miles) from the Zimbabwean capital, have been partially built on.

In Chitungwiza, 14 out of 15 wetlands have been built on, and 13 of Harare’s 29 wetlands have been taken over for construction, Kangata told the Thomson Reuters Foundation.

“Approximately 60 percent of Harare and Chitungwiza’s wetlands have been invaded or taken over for construction purposes. All these constructions on wetlands are unlawful,” Kangata said.

The Westlea wetland is an area of 123 hectares (304 acres). It has 87 houses, the first of which was built in 2008, according to the Harare Residents Trust, a nongovernmental organisation.

Nhari moved into her home in 2009 with her husband, after he bought a 600-square-metre plot from a private landowner. She says she has a deed of sale to prove it – but what she doesn’t have is water.

Environmental experts say residents like Nhari are the source of their own problems.

“A wetland acts like a sponge which absorbs water and then recharges underground water so that the water table remains high. Construction disrupts this process,” said Sandra Gobvu of Environment Africa, a nongovernmental organisation that works in southern Africa to promote sustainable development.

When wetland areas are concreted over, much less water is absorbed, Gobvu added.

Wetlands also help control flooding by absorbing excess water and releasing it gradually into water bodies, she said.

“If we preserved them in their natural state, wetlands would actually help us adapt to the changing climatic conditions,” said Barnabas Mawire, Environment Africa’s Zimbabwe country director.

He believes that while Zimbabwe’s widespread water problems are due to a number of factors, wetland destruction plays a role.

“Climate change will make future efforts to restore or rehabilitate wetlands more difficult, especially if we continue to destroy them at this rate,” said Mawire.

Environmental activists in Zimbabwe say they are struggling to keep up with the rate of wetlands encroachment.

“It is hard to measure the proportion of construction work occurring on wetlands here because daily we wake up to new building activities emerging around many wetlands,” said Liberty Chiura, a member of the Zimbabwe Environmental Law Association.

Meanwhile, landowners say they are not acting illegally by selling wetlands plots.

“We don’t just wake up and start pegging land at wetlands for people without binding permits from local authorities,” said Elton Javangwe, a private landowner based in Harare.

“This is part of a farm I bought and later decided to subdivide before selling housing stands, after local authorities and EMA regularised it,” Javangwe said.

Mawire said that some construction on wetlands is authorised.

“Developers know they have to apply to the Environmental Management Authority for permits to build, and they do get these permits at times,” he said.

“However, there are many other people who invade pieces of land without any knowledge that there are wetlands and start construction. And there are others who know, but deliberately ignore what the law says and go on to build,” Mawire added.

He said that as people migrate from the countryside and demand for land in urban areas increases, new residents are unlikely to be aware of the risks of building on wetlands, to themselves and the broader community.

“The developer might know, but sadly for many people they only realise the consequences once they finish building and start experiencing floods, cracks and collapse of infrastructure,” said Mawire.

Failure to abide by Zimbabwe’s laws governing wetlands can result in a fine of up to $500, imprisonment of up to two years, or both.

Minister of Environment, Water and Climate Oppah Muchinguri has the power to serve a written order to stop development on any wetland.

“As government, we are accountable for handling wetlands and we have to accept accountability where we would have failed,” she told the Thomson Reuters Foundation.

“We now have an inter-ministerial taskforce to investigate the building of properties on wetlands and take possible action in order to protect our threatened wetlands (which are) crucial to restoring water basins,” Muchinguri added.

By Collins Mwai

President Paul Kagame has said that Rwanda will proceed with the planned phase-out of importation of second-hand clothes despite the threats that it could lead to a review of eligibility to access duty-free access to the American market.

President Kagame made the remarks yesterday while addressing a news conference moments after submitting his nomination papers to the National Electoral Commission (NEC).

Rwanda, Uganda and Tanzania’s eligibility to trade with the US is under review, following the region’s move to phase out the importation of used clothes.

The review could see Rwanda and her neighbours lose duty-free access to the American market under the African Growth and Opportunity Act (AGOA).

Kagame, however, said the situation leads Rwanda to make a choice between continued importation of used clothes and developing the local textile industry.

He said that despite the consequences of being locked out of AGOA, Rwanda is keen on developing its local textile industry.

“Rwanda and other countries in the region that are part of AGOA, have to do other things, we have to grow and establish our industries,” Kagame said.

“We are put in a situation where we have to choose; you choose to be a recipient of used clothes with a threat hanging or choose to grow our textile industries, which Rwandans deserve at the expense of being part of AGOA.

“This is the choice we find that we have to make. As far as I am concerned, making the choice is simple, we might suffer consequences. Even when confronted with difficult choices, there is always a way,” he added.

The President noted that this is not the first time that Rwanda has had to make tough decisions in the interest of citizens.

EAC member countries have moved to phase out the importation of used clothes and shoes across the East African region as part of an industrialisation plan to give rise to the growth of the local textile industry.

As part of the move, Rwanda last year increased taxes on used clothes from $0.2 to $2.5 per kilogramme, while taxes on used shoes will increase from $0.2 to $3 per kilogramme.

Budget focus

In the 2017/18 Budget Estimates, the Government also eased taxes on inputs under the Made-in-Rwanda initiative, which is expected to facilitate the growth of the local textile industry.

President Kagame is one of the African heads of state advocating for improved engagement terms between African countries and Western countries for mutual benefit.

Kagame has said several times that it’s time to consider Africa as an equal partner in development as opposed to a beneficiary requiring donations and aid.

As part of the move to make the continent less dependent on external financing, Kagame was last year asked to spearhead the African Union reforms.

He said he will continue playing the role as requested by the African heads of state to support the reforms process.

Kagame is scheduled to present a progress update at a meeting in Addis Ababa, Ethiopia, next month.

The President said that the intention by African leaders to change status quo was a huge step.

“The fact that the leaders of Africa have found it necessary to do things different is a very big step,” he said.

Going forward, he said the move by the continent will reduce the impact of external factors on the continent’s socio- economic progress.

INTERVIEW

Washington, DC —Dr. Akinwumi Adesina is focusing on five areas to achieve the African and global goals for a prosperous continent since becoming president of the African Development Bank – Africa’s largest public financial institution in September 2015. He was a keynote speaker at this month’s Corporate Council on Africa’s U.S.- Africa Business Summit in Washington D.C. and moderated a lively panel with five African government ministers. He also received theGene White Lifetime Achievement Award from the Global Child Nutrition Foundation. This week, he was named the 2017 recipient of the World Food Prize, a prestigious honor that includes a $250,000 award. In an interview in Washington, DC, Adesina discussed the Development Bank’s ambitious agenda and his vision for attracting the growth capital Africa needs. Posting questions for AllAfrica was Noluthando Crockett-Ntonga.

What are your top priorities at the African Development Bank?

At the African Development Bank, we have developed the fast-track ‘high fives’ – to light up and power Africa, to feed Africa, to industrialize Africa, to integrate Africa and to improve the quality of life for the people of Africa. An independent analysis by the United Nations Development Program found that, if Africa focuses on these high fives then Africa will achieve 90% of the sustainable development main goals and 90% of Agenda 2063 set up by the African Union.

We’ve got to light up and to power Africa. You cannot develop in the dark. The kids cannot study and the economies cannot be vibrant if you do not have access to electricity. We decided we’re going to do something about it.

Look, 138 years after Thomas Edison developed the light bulb, many African countries are still struggling to light the bulb. In Africa, you’ve got 645 million people that do not have access to electricity. Does it make sense that 600,000 people die every single year simply trying to cook a meal because [they] don’t have access to cooking energy? So we decided to focus on electricity – to put in $12 billion of our own resources and leverage $45 or $50 billion from the private sector to tackle this issue.

The same thing with agriculture. You have literally 250 million people that do not have access to food and therefore are malnourished. God has blessed Africa with a huge amount of land. You have great sunshine. You’ve got water. But we’re not getting wealth from that because we do not do agriculture as a business. At the African Development Bank, we decided we will invest $24 billion of our own resources in this sector to help to transform our economies, to create a lot of jobs, and to end Africa having to spend $35 billion a year importing food it should be exporting.

Why do you believe, as you have said on several occasions, that political leadership matters more than anything?

I firmly believe that leadership is the currency of development. Our leaders are leaders because people voted for them and they want them to change things. Leaders have to be accountable to the people. When a leader is connecting to the people and doing things that benefit the people, then that means they’re credible. At the end of the day, leaders have to face the challenges that are in front of them.

What do you see as the role of African leaders in creating the environment for investment and energy and agriculture?

Money goes to the place where money is not nervous. The investment environment has to be good for investors to put their money there. You have to have sanctity of contract. There must be peace and security, and there must be policy consistency.

I’m actually quite optimistic, because if you take a look at business regulation environments globally, in 2016 Africa accounted for 30% of all the improvements. The 2017 Doing Business report by the World Bank shows that 34 out of 47 African countries had at least an improvement in one area of business or regulatory environment last year, and five of the 10 countries are top performers.

Africa is a good place to invest because Africa is reforming very fast.

Why are investors here in the United States missing the boat?

When they go to Africa, they’re simply bringing their notebooks. The Chinese bring their checkbooks! Today, China is number one in terms of trade relationship with Africa. The amount of bilateral trade with China and India is about 250% of that of United States. I think that they’re seeing something there. Look at Japan: Japan promised to put 30 billion dollars into Africa. India put $10 billion on export funding towards Africa. South Korea put in $10 billion over five years towards Africa.

What are they seeing? They are seeing Africa from a different lens. They are seeing a continent not just in terms of a development lens, but in terms of an investment lens. They are seeing a continent where you’re going to have the investments rise to $1.4 trillion in the next three years. Business-to-business investments will rise to

43.5 trillion in the next eight years. They’re looking at a continent where the population is going to rise by 40 million young people by 2015. They are seeing Africa as an investment destination.

What is the role of training youth leaders, especially as it relates to agriculture and business?

The youth are the present, and they are also the future of our continent. Africa is going to be the youngest continent in the world by 2050. What we do for them today is going to make Africa ready. We need to prepare them not for the jobs of yesterday but for the jobs of the future.

The future is going to be digital – the fourth industrial revolution. It’s going to be about nanotechnology, robotics, artificial intelligence. It’s going to be about ability to manage knowledge. At the African Development Bank, we have launched ‘Jobs for Africa’s Youth’, and the goal is to help African countries create 25 million jobs in the next 10 years looking at two critical sectors – agriculture and the ICT industry.

I actually think agriculture is really, really cool. We rolled out our program last year with $800 million for a program that’s called ‘Enable Youth’ – to create a new generation of young entrepreneurial farmers. These are going to be the new millionaires and billionaires of Africa.

Sometimes people don’t think agriculture is a very profitable sector. But if it’s not profitable, why are we spending 35 billion dollars to import food? If it’s not profitable, why is it by 2030 that the [value of] food in Africa will be $one trillion? That’s a lot of money to be made. We just have to get people to understand that sometimes they pass gold by; they think gold is dirt. We have to create this new generation of young farmers.

While we’re on agriculture, could you explain the importance of nutrition for Africa’s development?

Nutrition is very, very important for the future of any economy. When people don’t eat well, in particular when children don’t eat well, they become stunted. Stunted children today lead to stunted economies tomorrow. If you look at Africa, the stunting rate is just ridiculously high – 58 million kids are stunted. It means that you’re losing people’s capacity that will affect their life earnings and ability to be competitive in a global world. So we’ve taken all the challenge.

I’m a member of the Global Panel on Food Systems and Nutrition. There must be accountability for the malnutrition and stunting that we have on the continent today. And that’s why the African Development Bank together with Bill Gates and Kofi Annan and former President Kufuor of Ghana launched what is called African Leaders for Nutrition.

We want to get nutritious food to all the kids. We want to make sure that mothers have access to basic things like vitamin A and iron that will reduce the level of anemia that they have. We want to make sure that kids have access to vitamin A that will allow them not to have night blindness.

In addition to humanitarian concerns, you are viewing nutrition as an economic investment to boost GDP.

Absolutely. It’s all about the economy.

The most important infrastructure that you can build is gray matter infrastructure – that is brain cells. When that’s damaged, you can’t repair it. It’s the people that boost your GDP. When kids stay in school, when kids learn and they can perform, they are going to grow up and do great things, right? They become the great innovators. When I was a grad student here in the United States at Purdue University in the early 80’s, I saw what the supplemental nutrition program did for people. The so-called the ‘food stamp program’ reached roughly about 45 million people – half of those children.

I believe that God made stomachs to be filled, not to go empty. We’ve got to make sure that kids are fed because the future of economies depend on it.

You mentioned innovation. What do you see as the role of innovation in positioning Africa?

Innovation drives development. When people have creativity, they have ideas and they are able to make economies grow. Whether you’re looking at innovation in agriculture, bio sciences, or in ICT communications, they are all very, very important. Investment in research and development is critical, and many African countries are spending less than 1% of their GDP on research and development. Most of the countries that have done well spend 3-4% of their GDP on research and development.

The second thing which is very important for the future is the digital economy. The innovations will come from those that have solid grounding in science, technology, education and mathematics. At many African universities, the level of ICT enrollment is only about 2%. People like to study law and economics and social sciences. I don’t have anything against those areas. But the big jobs are going to come from the ICT industry. So, we want to make sure that we are preparing students in Africa for the science, technology, engineering and mathematics that will drive innovation of the future.

That’s why the African Development Bank launched a world-class program for ICT training with the Kigali Institute of Technology. We’re also helping set up centers to train 230,000 Africans to be computer coders so they can take advantage of the cloud technology and actually add a lot of value in terms of ICT industry. That’s what drives innovation.

Tell us about the investment conference you are planning to convene.

We’re launching the Africa Investment Forum this year. Africa needs a lot of private capital to develop. In developed countries where global savings is about $5 trillion, the real rate of returns are negative. In Africa, the rate of return can be high. We’re trying to attract the global pension funds, the sovereign wealth funds and similar institutional investors to invest in infrastructure in Africa. And to do that, the African Development Bank is using its convening power as Africa’s trusted bank to bring other partners – the World Bank, the International Finance Corporation, the European Investment Bank and European Bank for Reconstruction and Development and several others – to be on an investment platform.

It’s not going to be a talk shop. Who has time for talking? We just want things done. We want deals done that would make things happen in Africa.  The forum is structured to be totally transactional – to make sure that we can develop the right projects. We want to make sure investors have the right returns for the risk that they are going to be taking. We want to work with governments to offer the right environments for the private sector.

What role do you see for the African diaspora in bringing the investment Africa needs?

The diaspora has a big role. The African American community here plays a big role. If you look at the diaspora community, my goodness, there is a lot of money. Total remittances – well over $65 billion – far exceeds official development assistance.

The issue is how we get people in the diaspora to own a share in companies in Africa, to be able to securitize their remittances and invest in infrastructure and make money. The opportunities are limitless and we are looking very big time into the diaspora.

At the Power Africa Summit in DC early this year, we were told there is a ‘wall of money’ ready to invest in energy. What is holding it back?

People sometimes have the wrong information. Our role is getting people to have the right information. Look at Africa’s GDP growth rate this year – 3.4%. At the African Development Bank, we project it will rise to 4.3% – well above the global averages. But that doesn’t tell you whole story: 12 African countries grew at above 5% last year, and 20 African countries grew at 3% to 5%. The opportunities are there all across Africa

Secondly, when you want to invest, you want to be sure your risks are going to be covered. The African Development Bank works with countries to make sure that they do the right things in term of the regulatory and investment environment. To respect the sanctity of contract; to have arbitration systems and good judicial systems in place. And finally, the African Development Bank also helps to ‘de-risk’ projects.

I’ll give you two quick examples. The largest wind farm in Africa is at Lake Turkana in Kenya. The African Development Bank helped to de-risk that project, as the lead arranger. Today it is going to be putting in roughly 310 megawatts to light up roughly a million households in Kenya. Look, the world’s largest concentrated solar power plant – in Ouarzazate, Morocco, with over 500 megawatts. We help make that happen. That tells you the role that we play in intermediation when it comes to investment.

Africa is already behind. Africa has no time to lose. Everything has to be fast tracked.

We want to go fast, but we need gas in the tank. And so the African Development Bank needs to recapitalize and get the resources that are needed to do more for Africa.

We’re read

By Umberto Bacchi

Rome — Making agriculture “cool” for young people in Africa is key to lifting millions out of poverty and stemming migration to Europe – African Development Bank president

Making agriculture profitable and “cool” for young people in Africa is key to lifting millions out of poverty and stemming migration to Europe, said the president of the African Development Bank (AfDB).

Akinwumi Adesina was named the winner of this year’s World Food Prize on Monday for his decades-long work to boost food production in his native Nigeria, increase access to credit for small farmers across Africa and transform the continent’s agriculture.

Kenneth Quinn, president of the Des Moines, Iowa-based World Food Prize Foundation, said the $250,000 award reflected Adesina’s “breakthrough achievements” as Nigeria’s minister of agriculture and his critical role in the development of the nonprofit Alliance for a Green Revolution in Africa (AGRA).

Adesina, 57, told the Thomson Reuters Foundation he was humbled by the award but felt his work to ensure Africa could feed itself was “uncompleted business”.

Almost 30 percent of the 795 million people in the world who do not have enough to eat are in Africa, according to the U.N. Food and Agriculture Organization (FAO).

“When I look at Africa today I see that many rural areas unfortunately have become zones of economic misery,” Adesina said in a phone interview ahead of the award’s announcement.

No sector has greater potential to revive those areas than agriculture, but investments are needed to make it attractive for young people, many of whom risk their lives migrating in search of better opportunities in Europe, Adesina said.

“We must make agriculture cool for young people,” he said.

“The key is to make agriculture a business. Agriculture is not a way of life, is not a development activity, it’s a business.”

Africa has 65 percent of the world’s uncultivated arable land but imports food for $35 billion every year, a bill that is expected to swell to $110 billion by 2025, he said.

“It makes no sense. That is food Africa should be producing, processing, selling and exporting,” he said.

“Africa in the future should not only feed itself but it must contribute to feeding the world.”

Toward this end, agriculture must become more industrialised, with farmers gaining better access to seeds, fertiliser, credit, power and infrastructure, he said.

Farmers should be supported to transform from producers of raw materials, such as cocoa and cotton, to manufacturers of finished goods such as chocolate and garments, which have less volatile prices, Adesina said.

To accelerate growth, the AfDB aimed to invest $12 billion in the energy sector, hoping to leverage another $50 billion from the private sector, he said.

Last year, AfDB had invested $800 million to support young agro-entrepreneurs in eight countries and planned to extend the scheme to 30 nations, he added.

Adesina called on governments and institutional investors, such as pension and insurance funds, to “see the gold” in African agriculture and invest in it to unlock its potential.

He said he was convinced the future billionaires of Africa would come from agriculture.

“I don’t believe that the future of African youth lies at the bottom of the Mediterranean Sea,” he said.

“The future of African young people lies in a more prosperous and inclusive Africa, and there is no other sector that has greater power to create growth than the agricultural sector.”

Adesina was named winner of the World Food Prize, regarded as the equivalent of a Nobel Prize for agriculture, in a ceremony on Monday at the U.S. Department of Agriculture in Washington.

 – Reporting by Umberto Bacchi @UmbertoBacchi

COLUMNBy Carmel Rickard

While South Africans were enjoying the 1 May Workers’ Day public holiday, something extraordinary was unfolding in Port Elizabeth.

Something with far-reaching implications for international human rights and for international trade, a novel legal situation highlighting the plight of a little-remembered, embryonic state – Africa’s last colony, the Western Sahara.

Early that morning, the ship, N M Cherry Blossom, arrived at Coega, the specialised port on the outskirts of Port Elizabeth, to take on fuel.

Its cargo was phosphate worth about US$6m, bound for New Zealand. That much was clear. But just who owned the cargo is a much tougher question and one that the courts here have been asked to resolve.

The night before the Cherry Blossom arrived, the Saharawi Arab Democratic Republic (SADR) and the Polisario Front had brought an application before Judge Elna Revelas. They asked for a temporary order to keep the ship’s cargo in the area of the court’s jurisdiction and for the sheriff to attach the cargo pending the outcome of their action.

She granted the temporary order, subject to a confirmatory affidavit being filed once it arrived in South African territorial waters, and set 18 May for a full hearing on the disputed order. Through the night, as the Cherry Blossom closed in on the crucial 12 nautical mile zone off the South African coast, Polisario members all round the world, along with their lawyers in South Africa, were all watching its progress on their computers.

Once the ship arrived, it was a comparatively simple matter to serve the order. But come 18 May, when the question of confirming the order was argued, a specially constituted full Bench of the High Court presided, given ‘the novelty of the matter and the complexity of the international law issues’ involved.

Last Thursday those three judges delivered their decision: they approved the order that the sheriff attach and hold the cargo in Port Elizabeth and remove the ship’s registration documents and trading certificates.

However, the order provides that, if appropriate security is put up, the cargo would be allowed to continue its journey.

Now the SADR and Polisario have a month to issue summons for the return of the cargo, failing which the order lapses. Once summons has been issued, the dispute is likely to feature on the court rolls in South Africa for years ahead, with possible applications and appeals even before the hearing about ownership of the cargo.

There is no dispute that the phosphate comes from the Boucraa mine in the northern part of Western Sahara. That mine is operated by Phosboucraa, a Moroccan company and a wholly owned subsidiary of OCP, another Moroccan company, the largest exporter of phosphate rock and phosphoric acid, and producer of fertiliser extracts, in the world.

But why is a Moroccan company mining phosphate in Western Sahara, its southern neighbour? Because Morocco claims the area as its own. And that is where the issue of Africa’s last colony comes in.

From 1884, during the height of African colonisation and for nearly a century, this was known as Spanish Sahara. Polisario was formed to liberate the country and represent its people. In 1976 Spain eventually pulled out, but not before offering its former colony – not to its own people, but to neighbouring Morocco and Mauritania. In the meantime, however, the Polisario had claimed the Saharawi Arab Democratic Republic as a sovereign state.

Although Mauritania has since abandoned its claim, Morocco holds much of the area in a military grip. Anticipating by decades US President Donald Trump’s idea of a security ‘wall’, Morocco has built a rock and sand barrier three metres high and 2 700 km long across the desert. Some 80% of the country is on the western side of this berm, ‘occupied’ by Morocco. For additional security this part is controlled by 120 000 Moroccan troops, while literally millions of landmines are embedded in the sand around the length of the berm itself.

The question of the status of Western Sahara has proved intractable, with the United Nations so far unable to reach any finality. Key members of the Security Council have strong bonds with Morocco and appear reluctant to back self-determination for the region against the wish of their ally.

If this sounds familiar, you may be remembering pre-independence Namibia. After the Germans quit their former colony, it was ‘colonised’ by its neighbour, South Africa, and for a long time that neighbour-coloniser tried to hold on in the face of world disapproval.

Instead of a berm, however, South Africa waged a more conventional war to maintain its hold. Just as the war in Namibia was complicated by international politics and the cold war in particular, so is the situation in Western Sahara complicated by international terrorism with a number of security reports warning that disaffected refugees from Western Sahara are easy prey for extremists.

Seen against this background the phosphate cargo becomes almost a symbol. It was mined by a Moroccan company, operating in land that Polisario describes as unlawfully ‘occupied’ by Morocco. Polisario says the area’s mineral wealth belongs to the SADR, not Morocco, and money from the sale of the phosphate belongs to the people of the land where it was mined.

That question – to whom does the phosphate belong? – is what the court has now agreed to consider. If to Western Sahara, then the mining company would have to relinquish the cargo. No one has suggested the phosphate belongs to Morocco. Perhaps the best alternative candidates might be the New Zealand company that has bought the fertiliser and that is stressing about the delay in arrival. But reports in the New Zealand media quote the buyers there, Balance Agri-Nutrients, as saying they have not yet paid for it and that the cargo still belongs to the mining company.

The fact that the full Bench decided South African courts could consider the dispute, and that the vessel must stay put pending that decision has infuriated OCP. It has declared its ‘outrage’, and ‘denounces’ and ‘contests’ the decision of the court which, in the view of the company, ‘has no jurisdiction to rule’ on the situation.

According to OCP, the court’s decision disregards established international law principles and the ongoing UN process, and ‘impedes international trade in South Africa’. The company also contrasts the Port Elizabeth decision to hear the case with a very similar case brought in Panama earlier this month, again by the SADR and Polisario, contesting ownership of a cargo. In that case, the judge declared the court had no jurisdiction to entertain the matter, a view that the company ‘commends and welcomes’.

Back in Port Elizabeth, however, the full Bench quoted key findings of the International Court of Justice: Morocco has no claim to sovereignty over Western Sahara; it acquired control of the area by force, contrary to customary international law. The natural resources of a territory may only be exploited on behalf of its people ‘if to do so will be for (their) benefit’. Yet OCP does not claim to have mined the phosphate ‘with the consent of the people’ of the territory, and ‘they do not and cannot claim to do so on behalf of its people’.

As to the criticism that the court should not agree to hear the case because it affects the legal rights of Morocco, the judges say that Morocco did not assert any right or interest in the cargo. It was not a party to the case. If a South African court found that the company’s exploitation of minerals was illegal this ‘can have no effect upon the legal rights of Morocco’.

It’s a fascinating judgment, important for the way it interprets the law and how it highlights a continuing international disgrace – the failure of both the UN (where Morocco is a member, but not Western Sahara) and continental bodies such as the African Union (of which both are members) to resolve the issue of the continent’s last colony. There are even suggestions that the case could play a significant role in resolving the dispute because of the pressure it might put on the parties – and other world players – to focus on ending the stalemate.

By Samuel Kamndaya

Dodoma — The government has advanced a proposal that seeks to ensure investors from East Africa and beyond as well as Tanzanians in diaspora are able to take part in the impending initial public offerings (IPOs).

Winding up the debate on the Sh31.7 trillion budget for the Financial Year 2017/18 in Parliament yesterday, the Finance and Planning Minister, Dr Philip Mpango informed the House that the government would amend the Electronic and Postal Communications Act (Epoca) 2010 with a view to allowing investors across the East African Community member states, Tanzanians in diaspora and foreign investors to take part in pending IPOs for telecommunications firms, including those for Airtel Tanzania and Tigo.

Going by Epoca 2010, telecommunication firms are required to offload 25 per cent of their shares for the public through the Dar es Salaam Stock Exchange (DSE).

In this regard, Vodacom Tanzania became the first telecommunications firm to issue an IPO early this year in which it sought to raise Sh476 billion by selling 560 million shares at Sh850 each.

With capital controls, however, the IPO was only open to local investors and so far, the company has been unable to reveal the IPO results, with pundits speculating that it might have underperformed due to a tight liquidity in the economy.

The Vodacom Tanzania PLC’s IPO ended on May 11 and subsequent listing was scheduled for June 12 but it has remained silent–including on revealing the IPO outcomes–since then, causing anxiety among some of its new investors.

The company’s MD, Mr Ian Ferrao, told The Citizen on Monday that Vodacom was only awaiting regulatory approvals from capital markets authorities to go ahead with listing after a total of 40,000 new investors bought shares.

But speaking after eight Cabinet ministers and his deputy, Dr Ashatu Kijaji responded to some other issues as raised by MPs during the six days of the budget debate, Dr Mpango, said the government is amending the Epoca 2010–probably through the Finance Bills 2017–so as to allow more investors to take part in telecommunication firms’ IPOs.

“If a company that will have issued an IPO and fails to raise the required amount, the relevant ministry will come up with a modality that will guide it (the company) on how to raise the entire money as required by the law,” he said.

Dr Mpango’s statement comes at a time when Airtel Tanzania has already successfully completed the process of issuing an IPO after India’s Bharti Airtel and the Tanzanian government successfully agreed to offload 12.5 per cent of their shares each.

Similarly, Maxcom Maxcom Africa–popularly known as MaxMalipo–has already received the approval of capital markets authorities to change its name to a plc while several other telecommunications companies are on several stages of issuing their IPOs in line with Epoca 2010 as amended in the Finance Act 2016.

Water supply

Responding to some of the issues, Dr Mpango said the government has noted with concern that water remains a serious challenge in various constituencies but hastened to say that at least six major projects–currently in offing–will relegate water blues to history.

“Similarly, we are currently finalising a $500 million (about Sh1.1 trillion) from Exim Bank of India that will specifically be targeted towards alleviating water shortage.

The government is also targeting to get some money through the Green Climate Fund–which assists developing countries in adaptation and mitigation practices to counter climate change–to source money the Simiyu Water Project.

Road licence

Presenting the Sh31.7 trillion revenue and expenditure plan for the financial year 2017/18 in the House on Thursday, June 8, Dr Mpango announced the abolition of the annual motor vehicle license fees and instead increased excise duty on petroleum products by Sh40.

The proposal did not, however, go down well with some MPs, with the Opposition bench saying it would affect the poor–mostly those who use kerosene–hard.

In response however, Dr Mpango said exempting the Sh40 on kerosene may result in fuel adulteration. “Currently, the difference in excise duty rate between petrol and kerosene is only Sh53. If we exempt kerosene from the proposed Sh40, the difference will rise to Sh93 and that will entice sellers to mix kerosene with petrol and maximize their profits,” he said.

Property tax

During the budget presentation, Dr Mpango said the government will continue to collect property tax for both valued and non-valued houses in all local government authorities.

He said TRA would continue collecting the tax as determined by the Minister of Finance and Planning, noting that for unvalued houses, a flat rate of Sh10,000 per normal house will be charged and Sh50,000 on every floor of a multiple-storey house.

However, the proposal was opposed by the opposition MPs who said the move meant that even the poor–who live in mud-walled, thatched house would also be required to pay tax.

In response however, Dr Mpango said going by the Urban Authorities (Rating) Act, 1983, the houses for which tax is to be paid are those built in cities, towns townships.

“In the same vain, claims that the retired people will also be subjected to this form of tax make little sense since the law says people above 60 years will not be subjected to tax payment,” said Dr Mpango.

MCs, caterers

In the endeavour to increase tax revenue, the government is also targeting caterers and those working as Master of Ceremonies (MCs) in various projects.

Presenting the budget, Dr Mpango said small scale business operators including food vendors, small scale second hand clothes sellers, sellers of agricultural products such as vegetables, bananas and fruits among others would be given special identity cards as the government seeks to identify them so they could be given special places where they will conduct their businesses from.

Bank lending rates

The other hot topic was the one on commercial banks’ lending rates, which were described as being too high to nurture the growth of the private sector, with some MPs blaming the situation on the government’s huge appetite to borrow locally.

But according to Dr Mpango, it is impossible for the government–through the Bank of Tanzania–to regulate lending rates in commercial banks, saying that if it does so, it won’t be able to bring the banks to task when they register losses.

“It should also be remembered that our economy has grown by an average of 6.7 per cent for the past ten years due to the policy of leaving interest rates to be controlled by market forces,” he said.

He said as much as he understands, the major challenge facing commercial banks now is an increase in the level of non-performing loans (NPLs).

“BoT has instructed commercial banks to ensure that they bring their rising NPLs back to an average of five per cent of their total gross loans. They have also been instructed to make use of credit reference bureau to know some of the habitual defaulters,” he said.

COLUMNBy Kasera Nick Oyoo

That Africa needs to redress the huge gulf between its wealth and its poverty is a foregone conclusion.

Statistics of outflows from Africa against inflows in everything from aid, foreign direct investment to remittances will boggle the mind.

But you already know that.

What Africa needs to do about it is another matter altogether. President John Magufuli seems to agree with the view that there is outright robbery which must come to an end.

Others, and especially so if they are beneficiaries, feel foreign investment shall be destabilised if radical adjustments are made.

There needs to be common ground because radical approaches will do more harm than good. However, we must begin by establishing some hard truths as to where the rain began to beat Africa.

Not so much as to the timing, although that too is of significance, but to the complicity of a combination of factors that have enabled Africa’s wealth to continue to make Western capitals glitter in diamonds, gold and silver while Africans remain basket cases worth of pity.

Back in the old continent, we are our worst enemy. Africans are hopelessly divided on the basis of nations and our friends in the richer world exploit these divisions to the maximum to the detriment of Africa.

Take the on and off case of common external tariff in the East African Community (EAC). We have everything in common that includes natural resources. Many of the people in this region share common ancestry, traditions and languages. Unfortunately, our politics, which drives decision making, are also shared in their naivety. None of which convinces us that tourists visit our regions not because of our common borders, but to enjoy flora and fauna that do not share such a myopic view of national borders.

Year after year in schools and colleges, our curriculum still takes the view that each of our nations is self-sufficient and that its worst enemy is the sister nation next door. We continue to exhort the war across the River Kagera to remove Iddi Amin as if it was a war between Tanzania and Uganda. It wasn’t.

Recently no debate has dominated headlines more than the ban on mineral concentrates and its ramifications.

Last week, at the Annual Mwalimu Nyerere convention at the University of Dar es Salaam, Professors Bathily of Senegal and Lumumba of Kenya spoke very passionately about African unity.

This war that Dr Magufuli has started has been waiting for someone to start it. It needs one to be bold, daring and willing to face the consequences for consequences shall be there.

But in the bigger context, the two professors are right that for this war to be won the approach must be Afrocentric. That means this is really not about Acacia versus the government of Tanzania. Our friends, if you notice showed up with the Canadian High Commissioner to Tanzania. It tells you this matter goes beyond Acacia. It’s an economic war.

There is a chance now for us to engage as a region and get the best of us to prepare in advance for negotiations. There will be conditions ahead of negotiations. This is a hurdle we must be prepared for.

International diplomatic stakes are in high gear. Lobbying is going on out there; we cannot afford to wait to get EAC, South African Development Community and African Union on our side.

Individual countries too, for after all, the same North Mara Gold Mine belt stretches into Macalder Mines in Kenya and Acacia have an interest there as well.

We should remain firm and focused, unleash the best for this country and the continent to have a win-win deal. That will depend on how well we are prepared to face this onerous task.

By Anthony Wesaka

Kampala — The Court of Appeal has ordered government to pay over Shs100b to about 1000 former spies under Internal Security Organisation (ISO) in terminal benefits.

The ruling by Justice Remmy Kasule upheld the 2005 judgment of the High Court that awarded the same former spies Shs72b, which the government’s Attorney General and leaders of the complainants later negotiated downwards to Shs36b.

The money attracted interest of 10 per cent per annum as ruled by Justice Okum Wengi of the High Court, about 12 years ago.

“The remedies to be pursued must be those that ensure that the judgment of the court is respected and complied within its entirety by all parties to the suit. The judgment debtor (Attorney General) has to fulfil what the judgment orders him to do. The judgment creditors (former spies) must get in full what the judgment has awarded to them. The remedies must be to ensure that a court of law does not act in vain whatever the circumstances,” Justice Kasule ruled in his judgment delivered on June 12.

Due to the accruing interest, the amount the government owes the former intelligence operatives has accumulated to more than Shs100b to-date since the High Court judgment was passed.

About 1,000 intelligence officers sued government for terminating their services and failing to pay them their terminal benefits.

They said their employment was terminated contrary to the law and in denial of their terminal and severance packages and as such they had suffered loss and damage.

They sought court orders for terminal benefits, pension, gratuity, arrears of unpaid allowances, money in lieu of notice of termination, medical and transport allowances as well as general damages.

On May 20, 2005, the then trial judge of the High Court Wengi ruled in favour of the former spies and granted them all their prayers in the suit.

The court also awarded each of them Shs500,000 as general damages.

The other issue that Justice Kasule determined in his ruling was the prayer by the ex-spies to substitute three of their leaders whom they accused of colluding with the AG to vary the original award from Shs72b to Shs36b without the consent of others.

However, in his ruling, Justice Kasule referred them back to the High Court which originally handled the case to sort out this issue if they suspect the terms and amount of their compensation were altered to their disadvantage.

Counsel Roberts Kagoro and Fred Muwema from Muwema & Company Advocates, who represented the former spies in court, welcomed the ruling of Court of Appeal.

“This ruling has far reaching implications in that judgments of the court now can’t be varied by the AG just like that,” Mr Kagoro said by telephone yesterday.

When Daily Monitor contacted Mr Denis Bireje, the director civil litigation in the Justice ministry, about the ruling, he said he had not yet received it and could therefore not ably comment on it.