COMESA RISK ASSESSMENT BULLETIN
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Volume 1 – N 4- April 20 2009 - Fortnightly published by AFRIKASOURCES
HOT TOPIICS
HOT TOP CS
DRCongo and Angola set up a joint commission to resolve long-standing border rows that recently culminated with
DR Congo
DR Congo accusations Angola was stealing oil from its northern neighbour. Grievances have arisen between Angola and Congo-Kinshasa
about their borders - offshore and onshore. Kinshasa's Prime Minister Adolphe Muzito and ministers Célestin Mbuyu (Interior),
Imbroglio with Angola Alexis Thambwe Mwamba (Foreign Affairs) and René Isekemanga Nkeka (Hydrocarbons) met Angolan President José Eduardo
dos Santos and Prime Minister António Paulo Kassoma in Luanda on 21 April and agreed to set up a joint technical commission
to discuss the maritime border, which will meet in May.
Angola pumps most of its oil from wells off the coast of Cabinda -- a northern enclave separated from the rest of Angola by a strip
of Congolese land -- while mineral-rich Congo has no offshore operations of its own.
The move to claim Angolan offshore oil field comes as Congo's economy teeters on the brink of collapse due to a worldwide drop
in demand for its mineral exports, its main source of foreign currency revenues.
Although strong regional allies, the neighbors have been at odds over their 9,000 km land border. Congo has repeatedly accused
Angolan troops of trespassing onto its territory.
Ethiopia's Priorities mixed up as Coca-Cola company shuts down - The East African Bottling Share Company (EABSC) in
ETHIIOPIIA
ETH OP A
Ethiopia stopped its production of Coca-Cola and related beverage brands. It shut down due to the country's shortage of foreign
currency and around 1,000 direct employees are left without jobs. Ethiopia's shortage of foreign currency means the local bottling
Ethiopia v. Coca‐Cola company cannot import crown cork, the squishy white material found inside bottlecaps. The cork seals the bottle, maintaining
the drink's carbonation. Together with vending shops beneficiaries nationwide and others indirectly involved in products and
services, more than 150,000 Ethiopians will be badly affected because of the closure.
According to local sources, EABSC asked the Ethiopian government to intervene and for the national bank to temporarily borrow
money to fulfill the foreign currency need. But the company's appeal was allegedly rejected and some critics believe it was a big
mistake to allow a big company to close, since tens of thousands of Ethiopians depend on it for their livelihood in this tough
period when jobs are scarce and when Ethiopia's inflation has become the second highest in the world.
The Coca-Cola Company in Ethiopia began in 1959 and opened its second branch in Ethiopia's second largest city of Dire Dawa
in 1965.
Burundi to introduce VAT to boost business. The new 18 percent VAT system is due to take effect by July 2009, when the
BURUNDII
BURUND landlocked Burundi and neighbour Rwanda are expected to join the East African Community (EAC) trade bloc. The VAT system
will replace a 17 percent transaction tax (TT) which the authorities say was hampering investment.
New VAT taxation The EAC already has a customs union for three of its largest economies Kenya, Uganda and Tanzania.
The VAT system will replace a 17 percent transaction tax (TT) which the authorities say was hampering investment.
The coffee growing central African nation has fixed the value-added tax at 18 percent, which is the same VAT rate applied by
Rwanda and Uganda. \"We want to harmonise our fiscal systems with those of other members of the East African Community,\"
said Ntakirutimana, the head of taxation in Burundi's finance ministry. to reporters after a two-day training workshop on the
VAT system. Ntakirutimana said the VAT will also help regulate informal trade, and ensure taxes from the sector end up in the
treasury.
As a developing economy recovering from years of civil strife, Burundi faces significant economic challenges. Enforcement of the
rule of law is highly politicized, inefficient, and arbitrary in much of the country.
Indian ONGC firm to quit block in Sudan - Caught in the crossfire of domestic political tussle between the federal and
SUDAN
SUDAN regional governments in Sudan, ONGC Videsh Ltd, flagship explorer ONGC's overseas investment arm, is quitting a prospective
acreage in the African nation and writing off investments of about $90 million.
Oil failure The acreage, identified as Block 5B, is in the southern part of the Muglad basin in south Sudan and spread across 20,000 sq km.
In May 2004, ONGC Videsh acquired over 24% equity by buying out Austrian firm OMV from a consortium of Malaysia's
Petronas, Sweden's Lundin and Sudan's state firm Sudapet. ONGC Videsh later assigned 1% of its equity to Sudapet.
The decision was taken after the regional government allowed Maldovan firm Ascom to prospect in the acreage in contravention
of Sudan National Petroleum Commission's resolution and decrees from the federal government. The Moldovan firm is reported
to have dug three exploratory wells in a hurry. But these turned out `dry' as they were dug without proper geological study.
ONGC Videsh has other assets in Sudan it is 25% partner in the Greater Nile oil project with China's CNPC, Petronas and
Sudapet. It also has an exploration, Block 5A in the Muglad basin. ONGC Videsh gets over 3 million tonnes of oil from Sudan as
its share of the production from the Greater Nile project.
Horn of Africa ‐ Saudi‐Ethiopian oil tycoon Sheikh Al‐Amoudi who distributes Pepsi in the Horn of Africa nations, has been named by Forbes as the
43rd richest man in the world.
Zimbabwe ‐ Marauding wild animals in Zimbabwe's Matabeleland North Province are adding anguish to the pain of hunger as they destroy scarce
crops. To counter the threat of elephants and other wild animals like wild pigs, baboons and quelea birds from the nearby Hwange National Park,
where over 100,000 elephants roam the country's biggest animal sanctuary, villagers have taken to guarding their fields.
COMESA – The Common Market for East and Southern Africa is expected to launch a customs union at its heads of state and government meeting
scheduled for June 2009 in Victoria Falls [Zimbabwe].
Malawi ‐ ALEXANDER Kububa, the director of the Zimbabwe Competition and Tariff Commission, has been appointed one of the nine commissioners
of the newly‐established Common Market for Eastern and Southern Africa (COMESA) Competition Commission, to be officially opened in Blantyre,
Malawi.
Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [CEO-Senior analyst]
The content of this publication is based on a selection of information browsed by our services. Request for a more detailed analysis at payet@in.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius]

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Swiss-based ICB Bank, controlled by former Malaysian finance minister Tun Daim Zainuddin, is looking to expand its business
ZAMBIIA
ZAMB A to Zambia. It recently received the go-ahead from the Bank of Zambia to establish the International Commercial Bank Zambia
Ltd. Operations are expected to commence in June 2009.
New bank ICB Bank operates in other countries in Africa - Senegal, Gambia, Guinea, Sierra Leone, Ghana, Djibouti, Tanzania, Malawi and
Mozambique, apart from Albania (Europe), Laos, Bangladesh and Indonesia. ICB, listed on the AIM market of the London Stock
Exchange, offers consumer banking, commercial corporate banking, international banking and electronic banking.
According to the results for the financial year ended December 31 2008 released earlier in April, its group assets grew by 9.2 per
cent to US$1.12 billion, total loan and advances grew by 8.7 per cent to US$588 million and customer deposits grew by 4.1 per
cent to US$777.6 million. The bank attributed the growth to its operations in Asia, namely the acquisition of ICB Bangladesh.
Rumors say that he may be linked in this operation with Rajan Mahtani, the owner of Finance Bank in Zambia.
The Zambian Finance and National Planning Deputy Minister Chileshe Kapwepwe supports emerging banks that show interest
in policy implementation and strategies which facilitate the establishment of banking institutions in areas without such facilities.
Comoros Union President Ahmed Abdallah Sambi has announced a 17 May constitutional referendum, with the electoral
COMOROS
COMOROS campaign to be held from 26 April to 15 May, hoping to strengthen his central office.
During a televised speech, President Sambi made few concrete references to which constitutional changes that would be presented
Constitutional referendum to Comoran voters, mostly vaguely referring to a \"harmonisation\" of power sharing on the decentralised archipelago.
in May ? President Sambi had earlier proposed to extend his mandate from four to five years, lessen the powers of the three autonomous
island presidents by naming them governors, strengthen central powers, giving him powers to dissolve parliament and define
Comoros as an Islamic state. He signed on 3 March a decree to hold that referendum on 22 March, but protesting island
authorities achieved a constitutional court order to stop the referendum. The court ruled the presidential decree to be \"illegal on
procedural grounds.\" [see Risk Bulletin no2].
Despite a constant power struggle between union and island governments, Comoros has seen an unprecedented period of peace
and stability since the 2001 constitution provided for a decentralised union. Analysts fear President Sambi's insistence of a
constitutional reform may again create a climate of instability and political violence on the archipelago.
REGIONAL NEWS
AFRICAN INVESTMENTS BY THE BRIC COUNTRIES SEACOM CABLE SOON
The world's largest emerging markets (called BRIC: Brazil, Russia, India, & China) SEACOM announced that the first portions of deepwater cable are now resting
will alter the global financial landscape in the coming decades. Although Russia on the seabed of the Indian Ocean and Red Sea. The cable has been laid from the
was severely caught in the financial storm, economic output in China, India & edge of the South African waters to Mozambique and cable laying is also
Brazil continue to grow and finances are sound, supported by prudent policies, proceeding in the Red Sea from Egypt towards the coast of Yemen. A third ship is
large foreign currency reserves and growing domestic markets. loaded with the remainder of SEACOM's deepwater cable which will be deployed
China’s pragmatic views on trade relations and expansion have allowed it to from India towards Africa, where these three cable segments will be joined.
become one of the most active free traders in the world, while the U.S. is In parallel to the marine installation, SEACOM has made significant strides in land-
faltering. The China-Africa Development Fund (CADFund) was created with an based construction. The high-performance optical transmission equipment, which
initial $1 billion and is expected to grow to $5 billion. connects customers to inland terrestrial networks, has been installed in the
For some analyst, India will see its trade with Africa increase 1,000% in 10 years Maputo, Mumbai and Djibouti cable landing stations. Construction of the cable
and Russian companies have begun politicizing business operations in Africa. As station in Kenya will be complete soon followed shortly by the Tanzanian and
an indication of this new orientation, Standard Bank [South Africa] has purchased South African stations. Equipment installation in these locations, and in Egypt, will
33% of Troika Dialog, the most established and largest independent investment be complete in May.
bank in Russia. From June 2009, southern and eastern Africa will finally get truly connected to
Over the past few years, South-South FDI growth has been especially fast—a international broadband networks. Plentiful and readily available bandwidth will
trend that is expected to continue, according to a MIGA survey. result in lower telecommunications costs and new opportunities across many
African states have also actively encouraged Gulf investors seeing them as a sectors that will include the call center and business process outsourcing
useful counterweight to China's influence. industries.
SNAPSHOTS
Oxfam highlights challenges of climate-related disasters
Some 375 million people a year will probably be affected by climate change-related disasters by 2015 - up from 250 million a year as at present - says a new report by the
UK charity Oxfam, which points out that this could overwhelm the world’s current humanitarian aid capacity.
The report launched on 21 April and entitled The Right to Survive: the humanitarian challenge for the 21st century provides compelling evidence of the need to rethink
the way the world responds to, prepares for and prevents disasters. Based on data from 6,500 climate-related disasters since 1980, Oxfam predicts that the current
number of people affected annually would rise by 133 million or 54 percent - not counting those affected by wars, earthquakes and volcanic eruptions.
This report shows that the humanitarian challenge of the twenty-first century demands a step-change in the quantity and nature of humanitarian response. Whether or
not there is sufficient will to do this will be one of the defining features of our age – and will dictate whether millions live or die. The world will need to increase its
humanitarian aid spending from 2006 levels of US$14.2 billion to at least $25 billion a year, Oxfam said.
Oxfam's Rob Bailey said that in 2004, the equivalent of more than $1,200 (£823) was spent on each victim of the Asian tsunami, compared with just $23 per person for
the recent crisis in Chad. \"Entrenched poverty in many parts of the world makes people more vulnerable to disasters,\" also said Raymond C. Offenheiser, President of
Oxfam America. \"Climate change is already threatening our work to overcome poverty, and now it is increasing the pressure on our relief work. It is crucial that we
tackle global warming head on by cutting dangerous greenhouse gas emissions, but we must also invest in community preparedness to cope with climate-related
disasters.\" \"Communities around the world have the knowledge and experience to craft their response to the negative impacts of climate change, but they need adequate
funding to make it happen,\" said Offenheiser. \"Investing in community resilience, especially for the most vulnerable, must be a cornerstone of any American effort on
climate change.\"
Climate change could also increase the threat of new conflicts, which will mean more people displaced, and the need for more humanitarian aid. One recent report
estimated that 46 countries will face a ‘high risk of violent conflict’ when climate change exacerbates traditional security threats.
Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [CEO-Senior analyst]
The content of this publication is based on a selection of information browsed by our services. Request for a more detailed analysis at payet@in.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius]
NEXT EDITION: 5 May 2009