Troubled and ambiguous

Heritage: the long shadows of past and present

Commemorating heritage in Africa is no longer the exclusive province of governments

People dressed in traditional
costume welcome guests to the opening ceremony and inauguration of the new museum of black civilisations in Dakar, Senegal, on 6 December, 2018. Photo: SEYLLOU / AFP

There was an interesting exchange between Thabo Mbeki and Constand Viljoen in the late 1990s. The former was an aristocrat of an African liberation movement who would become South Africa’s president, and the latter was the chief of the country’s apartheid-era defence force, a soldier’s soldier and politician. Both had a keen sense of the manner in which the past echoes into the present. Responding to a rancorous debate on white settlement in the country, Viljoen objected that his forebears had come to South Africa “because we wanted to be free burghers, not to colonise”. Mbeki responded: “Phew! We have a long way to go. There is a different understanding of the history of the country, a different understanding of the realities of the country.” That sentiment is still relevant to South Africa’s politics, and possibly even more acutely now two decades after this conversation took place.

And while South Africa may at times be a somewhat hyperbolic example, it is far from a unique one. For in Africa the past looms large over the present – probably more than anywhere else on earth. Heritage is the memorialisation and veneration of that past, and of the culture that has grown up within it. It is a society’s memories, its rituals, its artefacts, statues and architecture, its sense of history. For many, it justifies their claim on belonging to a society. Africa’s history is perhaps unique for the degree to which it has been mediated through external lenses, often denying the role of Africans as originators of their stories. “There was a refusal to see Africans as the creators of original cultures, which flowered and survived over the centuries in patterns of their own making,” wrote Amadou-Mahtar M’Bow, former director general of the United Nations Economic and Social Council, in the General History of Africa in 1993. Indeed, the colonial experience not only intruded into memory, but commandeered much of its tangible heritage.

A report commissioned by French President Emmanuel Macron found that “over 90% of the material cultural legacy of sub-Saharan Africa remains preserved and housed outside of the African continent”. Among these were the magnificent Benin bronzes, seized in 1897 when Benin City was sacked and torched by a British expeditionary force. Some of these were auctioned to defray the costs of the invasion. A treasure of African art – and an inspiration for the modernist movement – they reside for the most part in museums outside Africa. The colonial powers liked to leave memorials of their presence in Africa. In southern Africa, this meant memorials of a heritage that celebrated the European offshoot societies that remained. They were part of the African story, but for African nationalists celebrating this has represented an uncomfortable reminder of past subjugation. Post-liberation, there was a powerful impulse to remove these tokens of memory. “We want to wipe the slate clean and present our image of independent Zimbabwe without these vestiges of colonialism,” said former president Robert Mugabe in 1984, four years after the country’s independence.

By that time, Zimbabwe had replaced Rhodesia, the colonial capital Salisbury had become Harare, and street names that had once proudly declaimed a connection to British empire were replaced with ones saluting African nationalism. Zimbabwe was but one example. Colonial Gold Coast became independent Ghana in 1957 – the new name harking backing to an eponymous medieval empire. Most recently, Swaziland was renamed eSwatini, in 2018. Africa’s past intrudes directly into its present-day and speaks to the brand of politics that holds sway in many countries, says Steven Gruzd of the South African Institute of International Affairs. “History is ever present in African politics,” he said in an interview with Africa in Fact. “Some parties are decades, or [even] a century old, and [they] hark back to what they see as glorious, heroic histories. In states where liberation wars were fought, such as in southern Africa, this past is frequently evoked and glorified.” This is the politics that both Mugabe and Mbeki, in different ways, represented.

Society could and would be remade along the lines of a new narrative. A revisioned heritage would underwrite a new moral order. Yet, in practice, the concept of “heritage” is troubled and ambiguous. Whatever the dreams of nationalist politicians, the impact of the colonial era has proved virtually impossible to expunge. Most African states owe their borders to their colonial experiences, and they conduct much of their business in English, French and Portuguese. Governance systems draw heavily on this connection, too. The physical remnants of colonialism linger. Some potentially portable signifiers of that history have demonstrated a remarkable tenacity. Architecture predating independence, which was often meant to convey dominance and permanence, remains visible in many African cityscapes. Despite Zimbabwe’s determination to reinvent itself, and its later turn to outright racial nationalism, a statue of the Scots explorer and missionary Dr David Livingstone remains prominently in place at the Victoria Falls (now known, too, as Mosioa- Tunya, or “the smoke that thunders”).

“What is clear is that Zimbabwe has a conflicted relationship with its colonial past and relics,” the Zimbabwean journalist Farai Mudzingwa comments, speaking for much of the continent. Elsewhere, reminders of the colonial past have slipped by ignored, or have been commandeered to provide energy for the tourist trade. Ironically, when Zimbabwe suggested removing the statue of Dr Livingstone, neighbouring Zambia asked to take possession of it, seeing it as a tourist drawcard. Tours of Kenya cash in on its colonial past as showcased in movies such as Out of Africa. In Nigeria, the city of Lokoja, a colonial-era state capital, tries to do likewise, attracting magazine headlines such as “Lokoja: Colonial Town, Rich History”. Excising the past may not be as simple as the liberationist narrative would have it. In a society such as South Africa vocal constituencies have championed retaining the country’s colonial heritage. These have involved both court challenges and physical stand-offs.

An Afrikaans singer, Sunette Bridges, chained herself to the Kruger memorial in Church Square in Pretoria (or Tshwane) in 2015 after calls for its removal. Cultural activists saw the call not just as a threat to physical artefacts but to the legitimacy of a cultural minority’s presence. Some heritage is difficult to pigeonhole. Large numbers of Africans fought in colonial armies in the second world war. They were subject people forced into supporting colonial overlords, certainly; yet theirs was also a contribution to a moral conflict against unspeakable evil. Numerous video clips celebrating this now circulate on social media. In collaboration with the Commonwealth War Graves Commission, Nigeria has recently repurposed preexisting monuments by incorporating them into a new memorial in Abuja. The memorial records the names of Nigerians killed in both world wars and is surmounted by a pair of bronze sculptures depicting a Hausa rifleman and an Igbo porter made in the 1930s by the British artist James Alexander Stevenson.

Dealing with Africa’s colonial heritage is challenging. Memorialising what has transpired in the generations since independence may prove even more so. Stevenson’s depiction of Nigeria’s multi-ethnic contribution to the first world war might uncannily have presaged its later politics. Nigeria’s nascent nationhood was nearly destroyed in the brutal war that accompanied the attempted secession of the Republic of Biafra in the 1960s. It was a trauma from which the country has never entirely recovered. For decades, it was official policy to downplay the conflict in the interests of a new Nigerianism, with the result that there are few public memorials to it; even displays about the conflict at the country’s National War Museum are controversial. This is a Whiggish interpretation of history – that is, an interpretation of history in the service of the present, says Nigerian museum curator Iheanyichukwu Onwuegbucha in a recent paper, “The National War Museum Umuahia: Representation of the Biafra War History”.

The fact the Biafran war occurred, and the continuing silence about it, can be seen as expressions of ongoing ethnopolitics. For people with memories of Biafra, the official narrative indicates that the Nigerian state has never attempted an appropriate historical reckoning of its own conduct. Rwanda’s 1994 genocide is powerfully remembered in monuments and social rituals, and – perhaps more importantly – in the country’s political culture. But there, remembering, rather than forgetting, is just as much a two-edged sword. Resisting “genocide ideology” has become a catch-all justification for measures that hurt civil liberties and restrict political opposition. Even without traumas such as these, an unsettled post-colonial past challenges the present. Post-colonial African states embodied aspirations for development and nation building.

Some of them have produced near-messianic figures to deliver on these goals – resulting in profound frustration when these all too often proved to be a disappointment. Post-colonial monuments rise and fall according to political fashion, says Martin Plaut of the Institute of Commonwealth Studies. Perhaps the most glaring example of this accompanied the deposition of Ghana’s founding father, Kwame Nkrumah. An outsized figure in his time, a sculpture of the former leader stood prominently before the presidential mansion, but the statue was decapitated after Nkrumah was ousted in 1966. Even more symbolically, parts of the statue have been preserved separately, perhaps in memory both of the former leader and of the coup that toppled him. Another example is the African Union’s controversial erection of a stature of Ethiopian emperor Haile Selassie at its Addis Ababa headquarters.

“Emperor Haile Selassie is an example of how leaders have gone in and out of fashion,” says Plaut. “The movements they led wax and wane — and with them go the reputations of those who led them.” Haile Selassie’s statue is recognition of his role as a champion of African freedom against colonial intervention, Plaut adds. Yet the emperor is also remembered as the last representative of a feudal order, and for his personal aloofness. A report by Human Rights Watch in 1991 described the “official indifference” to famine during his reign, for example. Across the continent, the reputations of some of Africa’s post-colonial icons – such as Kenneth Kaunda in Zambia or Julius Nyerere in Tanzania – have come under critical scrutiny. The University of Ghana removed a statue of Mahatma Gandhi, another towering personality of the anti-colonial movement, citing the “racist attitudes” he expressed in his younger days.

Rather astoundingly, the reputation of Jean-Bédel Bokassa of the Central African Republic (CAR) – and self-proclaimed emperor of the short-lived Central African Empire – has enjoyed something of a recovery. He was long remembered as a man of sinister brutality and farcical pomp, but some today see his rule as a time of progress and development that his successors have failed to match. In 2010, then CAR President François Bozizé issued a decree formally “rehabilitating” him. In Kenya, the country’s political elite once decried the memory of the Mau Mau uprising as “hooliganism”. This has been reassessed and at least partially accepted as an honourable part of the struggle for independence. A museum has now been established to relay this narrative. In recent years, the importance of preserving Africa’s heritage has gained growing recognition. The opening in 2018 of the enormous, multi-storey Museum of Black Civilisations in Dakar was emblematic of this.

Intended as a record of Africa and its offshoot societies, its design and facilities are impressive and its ideological messaging fitting. Senegal’s first president, Léopold Sédar Senghor, was an exponent of Negritude, a philosophical movement celebrating blackness and Africanism. Hopes have been expressed that the museum will play a role in securing the repatriation of items carted off during the colonial era. Yet this may not be Africa’s most difficult challenge. African societies will need to navigate the meaning of the continent’s heritage for the present. A good starting point is to acknowledge the obvious: heritage is not intrinsically a force for unity, since it remembers factious and divided pasts. “All history is the story of conflict, humiliation and division,” says Plaut. “As one historian put it, imperialism is the natural order of human history.”

Conflicting claims about the past are an intrinsic part of a plural society, and as such they are not altogether negative. Commemorating heritage is also no longer the exclusive province of governments. Africans are today experimenting successfully with alternative models of commemoration, such as localised community museums or online memorials. New layers are inexorably being added to the continent’s memories. The ambiguity of Africa’s heritage must be acknowledged. And in this sense, Thabo Mbeki was profoundly mistaken. A common understanding of the past is not possible. The challenge for South Africa – and the continent as a whole – is not to find a single set of memories and understanding, but to accept their multiplicity.

Terence Corrigan is an independent researcher, writer, editor and illustrator. He is currently a research fellow at the South African Institute of International Affairs (SAIIA) in its Governance and African Peer Review Mechanism Programme and a policy fellow at the Institute of Race Relations (IRR).

Rising stock

African capital markets

While investor interest in the continent’s stock exchanges rises, liquidity and other regulations restrain this growth

By Simon Allison

Ironically, Africa’s chronic economic underdevelopment may now be its greatest opportunity. After so many decades of sluggish economic growth and lagging far behind other continents, Africa can be regarded as a place of unmatched potential. In the post-crash world, where economies everywhere are stalling and investment opportunities few and far between, the received wisdom is that Africa is the last great untapped market. This does not mean, however, that investing in Africa is easy. Quite the opposite. When it comes to attracting foreign investment, the continent’s real challenge is to connect cash with opportunities. How can African countries make it easier to invest in African businesses? Historically, most foreign investment in Africa has occurred through private equity and this trend continues today. But private equity works only for certain types of investors—those with large pockets and long-term goals. In this context, institutional investors are becoming more interested in other options, especially Africa’s capital markets.

The rationale behind any stock exchange is simple. At their most basic, they are a place where companies can go shopping for capital—the money they need to expand their business. At the same time, they are a one-stop shop for investors who can back a range of companies in a transparent, regulated environment. By most estimates Africa has about 30 listed markets. These range from the Johannesburg Stock Exchange (JSE), which trades in more than 400 shares and is consistently rated as one of the most competitive stock exchanges in the world, to the tiny Rwandan Stock Exchange (RSE), which boasts only seven listed companies and is open for just three hours a day. The RSE, however, is more typical of the continent. In its 2014 “Bright Africa” report, investment advisory firm RisCura rates the quality of African stock exchanges according to their liquidity level, availability of information, governance, regulation, openness to foreign ownership and ease of capital flows. Only the JSE gets an A grade.

The Egyptian Stock Exchange (EGX) is next with a C, while the Nigerian Stock Exchange (NSE) receives an E—despite the country having the continent’s largest GDP, and arguably its most attractive investment destination. Most African exchanges are in the lowest categories, F and G. “Looking at some of the exchanges in the F and G categories, a common trend of significantly lower values traded, as well as lack of information in efficiency, ease of capital flows and openness to foreign ownership were observed,” said the “Bright Africa” report. “To put this in perspective, the combined value traded for the 15 exchanges in categories F and G is approximately 0.57% of that of the JSE.” In other words: most African stock exchanges are simply not up to scratch. This is largely a function of size, but other related challenges also play a part. One is liquidity, or how easily stocks can be bought and sold. This is important for investors because they need to know that they can sell their shares when they want to. But only the South African and Egyptian exchanges can match global average levels of liquidity. This problem is compounded in many countries by domestic investment regulations, which encourage major domestic investors such as pension funds to buy and hold local shares.

A second challenge is the high transaction costs of doing business on many African exchanges. In Zimbabwe, for example, it costs approximately 3.3% of the value traded to buy and then sell shares, which thwarts regular trading. “It’s still quite expensive to trade in Africa,” said Rory Ord, head of RisCura Fundamentals and editor of the “Bright Africa” report. “Investors need to have quite a long-term mindset. African exchanges are not places where you want to buy in one day and sell the next. Your transaction costs are simply too high to do that. ” A third challenge is the type of shares traded, which typically focus on financial services, Mr Ord said. Some of Africa’s largest growth sectors—such as telecoms or manufacturing—are poorly represented on local exchanges. Investors wanting to access these markets will probably have to find another route. Investors also struggle to find large enough investments to justify the effort that goes into expanding into a new market. Despite these obstacles, Africa’s listed markets have made impressive progress over the last few years. Average growth for African exchanges between 2012 and 2014 was 16%, according to the “Bright Africa” report.

But more can be done to make African exchanges more attractive, and so spur growth even further. One option is to work towards consolidating some of Africa’s smaller bourses into regional exchanges. A regional exchange is far more than the sum of its parts because it offers a much greater number of shares than those available on local bourses and improves liquidity in the process. “Setting up larger regional stock exchanges could provide the liquidity, security and ease of access that investors crave,” wrote The Economist in January 2015. “For this to happen, the continent’s leaders would have to set aside national vanity and instead focus on enriching the capital diet for all.” Easier said than done, of course. “Even with obvious rewards such as a bigger market size, low costs and more liquidity, the conditions for regional integration are yet to mature,” explains Masimba Tafirenyika, editor-in-chief of the UN’s Africa Renewal online journal. the UN’s Africa Renewal online journal. “According to financial experts, progress would require African countries to harmonise their trading laws and accounting standards, set up convertible currencies and establish free trade among members.

Also, nationalism still plays a part: countries tend to treat stock markets as national symbols and therefore are not rushing to relinquish control.” The idea of regional stock exchanges sounds like common sense, but the continent only has two regional bourses, and their experience suggests that they are no panacea. The Bourse régionale des valeurs mobilières (BRVM), based in Abidjan, serves Benin, Burkina Faso, Guinea-Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo, while the Bourse des valeurs mobilières de l’Afrique Centrale (BVMAC), in Libreville, serves the Central African Republic, Chad, Equatorial Guinea, Gabon and the Republic of Congo. These exchanges are an improvement on individual exchanges for each of their eight and five members respectively, but neither exchange has really made an impact. The market capitalisation of BRVM, the larger of the two, is still less than that of exchanges in Botswana, Cameroon or the Seychelles. Another option is to improve liquidity by encouraging more intra- African trade. At the moment, this is minimal, with the major exception of South African financial institutions investing elsewhere on the continent.

This is partly because of the paucity of African investors with sufficient capital, while national regulations often make it difficult to invest outside the domestic market. This problem is particularly pronounced when it comes to pension funds. “Each African country has its own set of rules” for pension funds, Mr Ord explained. “Some allow investment in other countries, others don’t. For example, Nigeria has quite conservative rules and they don’t allow investment outside of their own country except in very specific circumstances. So while they’re building institutional capital in that market, you’re not seeing investment in other parts of the continent. Similarly in Kenya.” Countries such as Botswana and Zambia do permit foreign investment, he added, but they typically invest outside the continent. However, “most countries have been liberalising. This is one of the areas we’re going to see growing as the different sets of regulations get relaxed. We’ll see more intra-African investment over time.” The African Securities Exchange Association, the umbrella body for Africa’s stock exchanges, is the critical player driving these changes. Currently, it has 25 members. Its intended role is to act as a clearing house for information and technical expertise so that members can learn from each other.

The association also pushes for common standards, better regulations and improved professionalism from members. Its ability to play this role will have a major impact on making Africa’s listed markets more attractive and easier to access over time. Ultimately, however, the fate of Africa’s capital markets rests with individual exchanges and the governments that regulate them. Key to unlocking their potential is to improve systems and automate trade, to make them as efficient and user-friendly as possible. At the same time, corporate governance must be raised to match international standards so that investors can trust that the opportunities on offer are as good as they look on paper. Finally, if the continent’s stock exchanges are really to succeed, governments need to create an investor-friendly regulatory climate that streamlines trade and investment. The logic behind this is simple: if a country makes it easy for capital to enter, then more of that capital will end up in stock markets. Africa’s listed exchanges are clearly vital to the continent’s continued economic development.

Already, the growth in investment flowing in their direction is impressive. Given their small size and poor liquidity levels, this shows that there is enormous interest in investing in Africa, and a desire to find ways to do so beyond the traditional private equity route. The question that we should all be asking, then, is: how much money could be raised if Africa’s stock exchanges were all as well-regulated and crucially, as liquid, as the JSE?

Simon Allison is the Africa correspondent for the Daily Maverick website, in Johannesburg. He has reported from Egypt, Palestine and Somalia for the Asia Times and Agence France Presse.

Dragging out the law

Namibia: justice delayed

Despite attempts at reform, Namibia’s courts are inefficient and deny litigants the right to a speedy trial

By Frederico Links

In September 2015, the Namibian High Court, in the country’s capital Windhoek, found Geoffrey Mwilima, a former opposition parliamentarian, and 29 others guilty in the so-called Caprivi treason trial. The court convicted the accused of a range of offences, including high treason, murder and attempted murder. However, another 35 people were acquitted. The legal drama was “the longest criminal trial in Namibia’s history”, according to The Namibian, an online newspaper. The verdict stemmed from an attack on August 2nd 1999 by members of a secessionist rebel group, the Caprivi Liberation Army, on a military base and police station in Namibia’s northeastern Zambezi region, formerly known as the Caprivi region. Eleven people, including three policemen and three soldiers, were killed. The Namibian authorities arrested around 300 people on suspicion of participating in the attack, or of sympathising with it, and a few days later charged 132 of them.

Nico Horn, a professor of law at the University of Namibia and former state advocate, was very critical of the Namibian judicial system’s handling of the trial. “A more intelligent way of prosecuting would have [kept] ringleaders together and those [presented] for minor crimes separate,” he said to a local news outlet in September. The people who had been acquitted had spent 16 years in prison and would likely want to sue the state, Professor Horn added. From its beginning the trial got caught up in procedural issues. The High Court refused an application for bail by 53 of the defendants in September 2001. Another application for bail by two of the defendants was refused in December 2002. In June 2003 Albert Kawana, then (and again presently) justice minister, told parliament that the trial would take “between two or three years” to conclude. He blamed the accused, “who decided to enforce their rights before the courts of law”, for the delay.

International human-rights NGO Amnesty International (AI) questioned the “inordinate length of time” the state was taking to bring the accused to trial, citing its own “Fair Trials Manual” of 1998. Then, in February 2004, Judge Elton Hoff in the High Court ruled that 13 of the defendants had been brought “irregularly” to trial, having been returned to Namibia without formal extradition procedures from Zambia and Botswana, where they had sought political asylum. Ten of the accused were convicted and sentenced in 2007, but the Supreme Court set the convictions aside, judging that Namibian authorities had not followed formal extradition procedures. Over the years the High Court had to free some of the accused from imprisonment for several reasons, including lack of evidence and the deaths of witnesses. During the long years of the trial, some 22 people died in custody, according to official figures. Arguments in the High Court trial finally closed in August 2014.

By September 2015, when Judge Elton Hoff finally began handing down his judgment in the case, only 65 suspects out of the original 300 remained in the dock. Arguments in mitigation were expected to take place in early October, according to The Namibian. The slow pace of the Caprivi treason trial was not unique. In late 2008, the Law Society of Namibia (LSN), a body representing lawyers in the country, said that the large number of cases that were clogging the courts was having “a deleterious effect on the rule of law and human rights in Namibia”. Judges and magistrates who needlessly allowed cases to drag on should face misconduct charges, the LSN said. Article 12 of Namibia’s constitution stipulates that every trial must be fair and conducted within “a reasonable time”, though it does not define the length of such a period. Namibia is a signatory to various regional, continental and international protocols and treaties that bind it to this legal principle, including the African Charter on Human and Peoples’ Rights and the International Covenant on Civil and Political Rights.

These instruments do not specify time limits. The High Court and the JSC have tried to accelerate justice by writing guidelines, which came into effect on December 1st 2009, and include prescriptions of the time it should take to deliver a judgement. A new case management system was also introduced, requiring judges to do their job properly. But other factors continued to bedevil the system, among them mismanagement by judicial officers and administrative staff, corruption, perennial understaffing and under-resourcing. Poor police investigative work and a lack of competence among prosecutors and magistrates have compounded these problems. Speaking at a workshop in February 2015, the prosecutor-general, Martha Imalwa suggested extending court working hours into the evenings and holding weekend courts to deal with the case backlog. From May 2011 to November 2012, the High Court finalised an average of 58 cases per month, more than three times the average 17 cases a month it had adjudicated in 2010.

In 2014 the High Court also introduced alternative dispute resolution or mediation as an option in civil matters to expedite cases and reduce legal costs. More than 500 court-accredited mediations were completed between June 2014 and March 2015, according to the High Court’s chief registrar, Elsie Schickerling. In 2014, Hage Geingob, then Namibia’s prime minister and now president, pushed through a raft of constitutional amendments to make the justice system more efficient. Critics have accused Mr Geingob and the political party of which he is vice-president, the Swapo Party (formerly the South-West African People’s Organisation), of using their parliamentary majority to push through amendments to the constitution. One of the proposed amendments includes the creation of an office independent of the justice ministry to administer the courts at all levels. A draft bill that would pave the way for the establishment of the Office of the Judiciary had yet to be tabled, Chief Justice Shivute told staff at the Keetmanshoop Magistrate’s office on September 14th 2015. Yet cases still drag on.

Namibia’s ombudsman, John Walters, wrote to Judge Petrus Damaseb in mid-2015 to enquire about outstanding judgments that had been brought to his attention. In reply, the judge president, who presides over the country’s High Court, said that all the matters in question would be finalised by late October 2015. Systemic problems, such as overloaded dockets, continue to impair the High Court’s efficiency, according to Toni Hancox, director of the Legal Assistance Centre, a public interest law firm based in Windhoek. Judges are still taking too long to hand down judgments, even interlocutory ones that are intended to provide clarity on points of law, she says. Meanwhile, few or no reforms have been successfully introduced at the lower court level. In June 2013, the ombudsman released a scathing report detailing a dismal scenario of long delays and bottlenecks.  Among others, the report mentions the case of Daniel Shakasha, who was being held in the Walvis Bay prison, and filed an appeal against his guilty verdict and imprisonment in September 2005 with the clerk of the court there.

After receiving no response, he sought the assistance of the ombudsman, who sent the clerk a series of letters asking about the case, between November 2006 and November 2012. Even so, the clerk never filed the appeal. On January 8th 2013, the Walvis Bay prison authority informed the ombudsman that Mr Shakasha had been released. “His right of appeal was frustrated by the individual failing of the clerk of the court to timeously prepare and file the appeal record with the registrar,” the report concluded. In international terms, Namibia gets relatively high marks. It is ranked 53 out of 188 countries in the World Bank’s 2015 rule of law rankings. According to the 2015 Ibrahim Index of African Governance, the country was 4th in Africa for upholding the rule of law in 2014. Yet it would appear that the recent flurry of reform initiatives has so far had little effect on the slow pace of justice. At the time of writing, the last stages of the Caprivi treason trial had been yet again postponed, until March 30th 2016. If there is no further delay, it will have taken 17 years to conclude the trial. Mr Walters, the ombudsman, remains critical of “the unreasonable amount of time from arrest to the conclusion of a matter” in Namibia.

Frederico Links is a Namibian journalist, editor, researcher, trainer and activist. Research associate of Namibia’s Institute for Public Policy Research (IPPR). He is primarily concerned with democracy and governance, particularly corruption and maladministration. He is chairperson of the Access to Information in Namibia (ACTION) Coalition of civil society, media and social activists.

Opportunity knocks

Kenya: accelerating investment growth

This East African country is enjoying a boom in foreign investment, but corruption and political instability still pose risks

By Mark Kapchanga

Kenya is on track to triple its foreign direct investment (FDI) inflows in 2016 as compared to 2014 on the strength of renewed investor confidence, the Kenya Investment Authority (KenInvest) says. FDI inflows are expected to reach $3 billion this year as compared to $1.2 billion in 2014, according to a 2015 African Development Bank survey. Kenya “is increasingly becoming a favoured business hub, not only for oil and gas exploration, but also for manufacturing, transport and the booming technology industry,” according to the report. The agriculture and energy sectors were also mentioned as FDI drivers. Other investment opportunities exist for direct and joint-venture investments in the iron and steel industries, manufacture of fertiliser, agro-processing, motor vehicle assembly and manufacture of spare parts, says Moses Ikiara, managing director of KenInvest, an investment promotions government parastatal. The East African Community (EAC), the Common Market for East and Southern Africa (Comesa) and the African Growth Opportunity Act represent a “huge market”, he says.

The EAC has a population of 138 million and a GDP of $82.1 billion. Comesa, a 19-member union, has a population of 444 million with a combined GDP of $596 billion. Kenya’s recent “tremendous” growth in FDI has been helped by high profile investment forums such as the 10th Ministerial World Trade Organisation meeting in December last year and the Global Entrepreneurship Summit in July, both in Nairobi, says Mr Ikiara. This August, the city will host the Tokyo International Conference on African Development—the first such meeting in Africa. Kenya is on course to reclaiming the investment image it enjoyed before the global economic crisis of 2008/2009; the country recorded $1.6 billion in FDI flows in 2007, says Mr Ikiara. Currently, Kenya’s top investment sources include the US, the UK, the Netherlands, Belgium, France, Brazil, China and India, with the latter two now Kenya’s largest bilateral trade partners. Improved regional integration has aided inflows from Africa, particularly South Africa, he says.

“Kenya has established itself as a regional business hub, defying continual terrorism threats that have crippled tourism—a chief foreign exchange earner. We expect the $14.5-billion Konza Technology City, to attract more foreign investment in…business process outsourcing, software development and data centres,” Mr Ikiara told Africa in Fact. Dubbed the “African silicon savannah”, the 5,000-acre project, which is 64 kilometres south of Nairobi, is expected to generate more than 16,000 jobs by 2019, and 200,000 by 2030. Other mega projects in progress include the $24.5-billion Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) corridor programme, as well as the Northern Corridor Integration and Central Corridor Infrastructure project co-ordinated by Kenya, Uganda, Rwanda and South Sudan, which have driven investor interest in Kenya as an entry point to the region

The country’s real estate sector has been a key driver of Kenya’s GDP, says Hezron Gikang’a, East Africa managing director of KEAMSCO, a New York, Bremen and Nairobi-based consulting firm. Nairobi has ranked in the top 20 Global Property HotSpots of the Knight Frank global house price index for three years, he said. Major commercial, residential and mixed-use projects are under way, including Two Rivers, sub-Saharan Africa’s second biggest mall at 64,000 square metres. The recovery of FDI inflows to Kenya is mainly due to its diversification of its economy, says Aly Khan Satchu, CEO of rich.co.ke, an economics and investment analysis platform. Investor interest in Kenya’s “soft commodities”, such as tea, coffee and horticulture, was “an added sweetener”, he said. The country was well positioned as a gateway to the EAC, while another contributing factor to its attractiveness was an “extraordinary ICT and financial mobile money-led revolution”.

Mr Satchu added that FDI to Kenya would continue to outperform many African countries in 2016 and 2017 as funds were displaced from Lagos, Johannesburg, Luanda, Cairo and other key sub-Saharan African destinations in favour of Kenya. Commodity-dependent countries such as Angola, Mozambique, Zambia, Nigeria, Ghana and South Africa were facing gaping budget deficits following the recent collapse in oil and commodity prices, as well as slower growth in China. Kenya’s higher FDI has also been propelled by capital projects, says Morris Aron, an East African economist based in Nairobi. They include Irish oil company Tullow’s Kwale Mineral Sands project, a $4-billion standard gauge railway linking Mombasa City and Nairobi, a Roads Annuity Plan for the country’s 8,000-kilometre road network and the country’s planned acquisition of 5,000 MW in electrical power. “Any big investor, any mega project entering the region must find itself in Kenya,” says Mr Aron.

The country offers cheaper costs for oil companies exploring for oil than most other countries in the region, he said, while its large-scale infrastructure projects “drive connectivity, competitiveness, and margins for manufacturers”. The increased FDI inflows were also stimulating relative stability in the country’s foreign exchange market, he added. Mr Aron expects further improvements to the business environment, including simpler business licence requirements and the development of public-private partnerships as part of the government’s “Vision 2030” strategy, the government’s long-term economic plan. But he argues that Kenya must lower the cost of energy, simplify taxation regimes and timelines, decentralise and digitise land records and registration, ease work-permit processes and costs and strive to keep politics out of business.The shift in FDI to Kenya is partly associated with perceptions of political risk elsewhere on the continent, says Mr Gikang’a.

East Africa is the fastest growing region in Africa, and the region’s average GDP growth rate was expected to be 5% between 2015 and 2019, with Ethiopia leading at 7.3% and Kenya at 5.8%, according to the IMF. This compared well with other heavyweights in the emerging markets category such as India (6.8%) and China (5.8%), he said. Kenya is now the second-best country in sub-Saharan Africa in which to invest, according to an October 2015 report by the IMF. It ranked at 108 out of 189 countries by the World Bank Doing Business 2016 survey, an improvement of 28 places on the 2015 rankings. Yet the rise in FDI in Kenya is still constrained, some commentators say. A January 2015 report by the United Nations Conference on Trade and Development (UNCTAD) cited political instability, security issues, low quality infrastructure and an unfavourable business climate as “hindrances to investment”.

Various militia groups accounted for an estimated 333 reported deaths per year between 2000 and 2014, according to a 2015 report by the South Africa-based Institute of Security Studies. Nevertheless, the instability of Kenyan politics posed a still greater threat to the country, it said. Some commentators say corruption in Kenya is sliding out of control. Currently, the Ethics and Anti-Corruption Commission is investigating major scandals involving the National Youth Service and the Eurobond. In March last year, President Uhuru Kenyatta fired four cabinet secretaries over graft allegations. Eight months later, Anne Waiguru, the devolution and planning cabinet secretary resigned following sustained pressure from activists, media and the opposition over corruption in her ministry. Transparency International’s 2015 Corruption Perception Index, released in January this year, ranked Kenya at 139 out of 169 countries.

Kenya was contributing to an increased rate of economic crime in Africa, with the second-highest rate on the continent after South Africa, according to the 2016 Global Economic Crime Survey by PriceWaterhouseCooper. “Corruption has deepened and widened” since Mr Kenyatta assumed power in 2013, says anti-corruption activist John Githongo. It is therefore not surprising that, as noted by the US State Department, challenges with regard to ease of doing a business and corruption remain “key challenges” for investors.

Mark Kapchanga is a senior economics writer for the Standard newspaper in Kenya and a columnist for the Global Times, an English language newspaper in China. He is pursuing a PhD in investigative business journalism at the University of Nairobi.

Balancing act

China in Africa: Chinese FDI

China aims to stimulate industrialisation on the continent, but will it pay off?

By Ross Anthony

China likes to position its engagement with Africa as that of one developing region assisting another. However, Beijing sometimes claims that it is “just another market player” on the continent—often as a retort to Western critics. In the main it tends to emphasise the former narrative. Many African states share a socialist history with China of anti-colonial and anti-capitalist struggle. The latter claim is perhaps ironic today, given China’s adoption of capitalism, but it is an important political basis for the identity of the BRICS grouping—Brazil, Russia, India, China and South Africa. It also underlies the idea of a “global South”. African states often vote in China’s interests at the UN, while Africa’s under-developed markets and resources offer Chinese companies numerous opportunities. China’s recent economic slowdown has led mainly Western and African journalists and economists to suggest it will reduce its African engagement.

Yet the country announced that it would triple its investment in the continent, from $20 billion in 2012 to $60 billion, at a summit of the Forum on China-Africa Cooperation (FOCAC) in Johannesburg in December last year. Though the pledge did not come with a time frame, China would be “likely to fulfil most of its commitment” before announcing new ones at the next forum in 2018, according to the Brookings Institution, a public policy organisation in Washington, D.C. Africa is gaining increasing military strategic importance to China, particularly in its Indian Ocean region. In 2015, for instance, China said it would set up a military base in the East African country of Djibouti, as a supply hub for its naval escort duties off the coast of Somalia and in the Gulf. More broadly, the base will function as part of China’s “21st Century Maritime Silk Route Economic Belt” initiative, a security mechanism which envisages new transport infrastructure and trade routes stretching across South East Asia to East Africa.

Currently, however, Chinese investment in Africa is in fact that of “just another market player”, as it sometimes likes to claim. In 2015 its FDI in Africa ranked only fourth in the continent, with France first and the United States second, according to the Financial Times. Africa’s main exports to China are energy resources and metals, while the bulk of Chinese FDI to the continent, in monetary terms, also focuses on these sectors. Resource exports are seldom refined or otherwise beneficiated within Africa. Instead they are sold on international markets, with little value added. There are shifts in this regard, however. Chinese companies have, for example, recently acquired, and are constructing, steelworks in Sierra Leone and South Africa. An energy venture involving the China National Offshore Oil Corporation, the French oil company Total and the Irish oil company Tullow has committed to building a refinery in Uganda.

China’s infrastructural investments have achieved a successful soft power coup in Africa, often as part of larger resource deals and couched in terms of a “win-win” rhetoric. For instance, in 2004, Angola paid for a $2 billion loan from China’s Exim Bank to fund various infrastructure projects (including telecom expansion, railway rehabilitation and electricity generation) by supplying China with 10,000 barrels of oil per day. Another example is the much delayed $6 billion deal between the Democratic Republic of Congo and a Chinese consortium, in which copper and cobalt reserves would fund infrastructure projects, including road and hospital construction. Such projects are often sold as having potential multiplier effects, including the facilitation of interregional trade, but they are largely executed by Chinese companies. African countries often pay for them at concessionary or commercial rates, and sometimes even at above-commercial rates, according to Professor Deborah Brautigam, a China expert at Johns Hopkins University in Baltimore.

If China is to maintain a symmetry between its development assistance discourse, which is apparently sincere, and its actual economic activity on the ground, it will need to focus more of its FDI to Africa on industrialisation. This is not only the opinion of development experts but of the Chinese government itself. In 2015, Foreign Minister Wang Yi pledged to speed up industrialisation in Africa as part of a programme styled as the “Three Networks and Industrialisation”, which includes transport development and the shifting of certain elements of the China’s industrial base to Africa There are signs that it is beginning to do so. At the 2015 FOCAC event, the Chinese government pledged a $10 billion “China-Africa Production Capacity Cooperation Fund” to support industry partnering, including manufacturing, hi-tech industries, agriculture, energy, infrastructure and finance, and the development of industrial parks.

It will also support the “education” of 200,000 African specialists through setting up professional schools in Africa and training 40,000 Africans in China, according to the Chinese president, Xi Jinping, in his opening speech in Johannesburg. The strategy dovetails with developments in China’s domestic economy. The competitive advantage of its industrial sector is diminishing because its middle class is growing and salaries are increasing. This is why it is now producing incentives to relocate some of its industries abroad. Historically, China’s attempts to interest its companies in investing in Africa have encountered difficulties, including poor local infrastructure, bureaucratic hurdles, corruption, labour disputes and local resentment. To address these problems, China has developed Special Economic Zones (SEZs) in Ethiopia, Mauritius, Zambia, Nigeria, Algeria and Egypt.

Drawing on similar zones set up in China in the 1980s, they aim to attract Chinese investment, supported and subsidised by the state, to areas with quality infrastructure and streamlined operations. But the SEZs have been plagued by stifling bureaucracy, poor communication, poor local infrastructure, inadequate market linkages and a lack of commitment on the part of host governments, while some were poorly located. As a result, they have failed to attract many Chinese enterprises, according to studies by Professor Brautigam, as well as by Chinese scholars Tang Xiaoyang and Yejoo Kim. In South Africa, which has strong labour laws, the high cost of labour and difficulty in firing workers have put off Chinese investors in the manufacturing sector. Some South African unions are hostile to Chinese industrialisation, given the role of Chinese textile exports in the decimation of the South Africa’s own textile industry.

Hisense, a Chinese home appliance and electronics manufacturer, has avoided such restrictions through on-the-job “learnership” programmes and minimum wage exemptions at its production facility just outside Cape Town, but the strategy is not sustainable in the long term. Profit margins are higher in countries where there is no minimum wage, such as Ethiopia. The Huajian Shoe Factory, located in the Chinesebuilt SEZ at Bishofu, just outside Addis Ababa, employs 3,000 local workers and produces shoes for a number of international brands. It must be noted that China’s own industrialisation “miracle” was only possible at severe human and ecological cost. Euro-American demand for Chinese manufactured goods was driven in part by the country’s low wages and poor labour protection. A lack of environmental and safety standards, as well as a general lack of corporate social responsibility (CSR) added to its competitive edge. And Chinese industrial development has been accompanied by severe water and air contamination, a rapid loss of biodiversity habitats and social unrest.

However, China is changing its approach in this regard. Recently, the state-owned Assets Supervision and Administration Commission of the State Council and Exim bank developed a formal set of guidelines for the engagement of state-owned enterprises in CSR abroad. Mr Xi’s anti-corruption campaign within China now extends to pressuring companies to engage in above-board practices overseas. As China rebalances its economy domestically, it will also have to intensify its economic engagements in Africa. This will make increasing financial sense at home, as well as political sense in terms of its relations with the continent. The former colonial powers failed to jumpstart African industrialisation. If China succeeds in doing so, it will serve as a major diplomatic coup in terms of South- South development. But the barriers to achieving this are formidable. The next several years will see a new phase of experimentation based on the 2015 FOCAC pledges and focusing on industrialisation. They will shed light on China’s commitment, and ability, to advance Africa’s development.

ROSS ANTHONY is the interim director of the Centre for Chinese Studies at the University of Stellenbosch. He holds a doctorate from the University of Cambridge. In Africa, his research focuses on Chinese economic investments in Africa and geo-political security concerns.