The document provides updates on political and economic developments in several African countries. It discusses tensions in Comoros over postponing a referendum, economic hardships in Egypt due to declines in foreign investment and tourism, and Djibouti's efforts to reduce its reliance on France through partnerships with Iran and others. It also summarizes political instability in Madagascar after a coup and calls for aid in Zimbabwe as its economic crisis deepens.

1. COMESA RISK ASSESSMENT BULLETIN
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Volume 1 – N 2- 20 March 2009 - Fortnightly published by AFRIKASOURCES
HOT TOPIICS
HOT TOP CS
The President of the Union of the Comoros, Ahmed Abdallah Sambi, has postponed to a later date the holding of the
COMOROS
COMOROS constitutional referendum intended to standardize the electoral calendar of the archipelago. Opponents to the President argue that
he wants to find the way to stay on. Indeed, the executive proposes to extend for one year the mandate of the current head of state
Political tensions in order to organize the presidential elections of the Union, the presidential elections of each island (3) and the legislative polls in
2011.
This proposal worries the Comorian political microcosm, particularly on the Moheli Island, which according to the principle of a
rotating presidency should preside over the Union from May 2010. An internal dialogue between national political forces and the
civil society was held from 3 to 7 March to talk about the constitutional reforms to be undertaken.
According to a recent IMF mission, “against…deteriorating global conditions, real GDP growth increased modestly to 1 % in
2008 from 0.5 % in 2007, underpinned by activity in subsistence agriculture, donor-funded public works, and private sector
construction… In a difficult international context, decisive steps ought to be taken to preserve recent gains in national political
reconciliation and institution building.”
Growing economic, social and political tensions in Egypt - The global financial and economic crisis has had a major
EGYPT
EGYPT impact on Egypt. Foreign direct investment, its largest currency earner, fell by 30 % during the first quarter of 2008/09, from $3
billion to $2.1 billion. The decline in world trade has also affected the level of traffic through the Suez Canal: a drop in revenues
Hard times of $200 million or 13.7 % in the second quarter of financial year 2008/09, caused by an 8.8 % fall in cargo. Egypt's second major
currency earner, tourism, is also down. Not only are visitor numbers down, particularly from Russia, Britain, Germany and Italy,
but they are spending less. Tourism is expected to decline by at least 18 % in 2009. It provides direct and indirect employment to
12.6 % of the workforce and accounts for 6.5 % of GDP. The downturn in the construction industry in the Gulf, where 8
million Egyptians work, means that many have lost their jobs, and remittances from expatriates have dropped.
In such situation, there is a growing anger against the corruption and ever growing wealth of the ruling elite, press censorship and
political suppression. The opposition group calling itself the April 6 Youth Movement has called for a strike on April 6, the same
day a similar call was made last year that culminated in a riot in a Delta province in which one person was killed and about 100
wounded.
Competition in the Horn of Africa.
DJJIIBOUTII
D BOUT The French Development Agency (Agence française de développement-AFD) has signed a loan agreement with Djibouti
Telecom. The loan’s amount is US$30 million over a 12-year period and will be party used by to pay for Djibouti’s stake in the
Erosion of the French Europe-India-Gateway (EIG) submarine fiber cable.
influence French interest for Djibouti looks to be renewed as a delegation of French business community comprising multi-sector
entrepreneur recently met and led discussions with members of the Djibouti business community.
Few days before, Iranian president Mahmoud Ahmadinejad signed a series of accords with Djibouti president Ismail Omar
Guelle. A new protocol opened an Iranian credit line for Djibouti, whose president commended the cooperation between two
nations belonging to the quot;great Islamic Ummah.quot; Tehran continues its expansion in the Horn of Africa, including Somalia and
Eritrea.
Global marine terminal operator Dubai Port World's recently inaugurated Doraleh Container terminal at Djibouti enhancing the
port's status as a regional hub, a vital trading link between Europe, Africa and Asia.
The game is not over
MADAGASCAR - The African Union has suspended Madagascar after determining that quot;what occurred in
MADAGASCAR Madagascar enters the definition of unconstitutional change of governmentquot; when opposition leader Andry Rajoelina took power
with the support of the military. The U.S. State Department called the takeover of power quot;tantamount to a coup d’état.quot;
2 captains The Rajoelina regime has quickly canceled a multi-million dollar crop growing agreement with Daewoo of South Korea. Under
for a drunk boat the arrangement, Daewoo invested funds to grow crops for use in South Korea in a region the size
of Belgium from Madagascar. It is not clear that this was a land lease deal or a land use deal, big legal difference in French
and US law, but it appears to have been a use deal not a rental. Rajoelina claims that the Constitution bans land rentals. This is a
tricky issue because the legal rights depend on the wording of the agreement. The significance of this first big decision by
Rajoelina is that it begins to expose the underlying economic power struggle that resulted in this coup.
The former President Marc Ravalomanana is fighting back. A clandestine radio station calling itself Radio Mada Internationale
and supported by Tiako I Madagasikara (I Love Madagascar, TIM), his Party, is calling for daily protests against the new
government.
Seychelles mobile operator Airtel has upgraded its network to 3G with an HSDPA software upgrade. This will enable Airtel to offer high speed data
services. The network upgrade and the equipment have been supplied by Huawei.
Uganda. Aggrey Awori [from the Uganda People’s Congress] has been appointed as the new Minister for Information and Communication Technology
in Uganda. He replaces outgoing minister, Dr Ham Mulira who is now a presidential advisor on the sector.
Kenya. Food insecurity in Kenya, already affecting millions of people, is set to escalate because the long rains are late and unlikely to be sufficient,
officials warned. Immediate, medium and long‐term priority interventions, including controlling food prices, providing food aid and creating
employment, are required to stop more Kenyans going hungry, an inter‐agency assessment of the 2008/2009 short rains recommends.
Cholera. Zimbabwe remains the worst affected country in a regional cholera outbreak, but in nine southern African countries surveyed, case numbers
and fatalities are rising, according to a UN report released on 6 March.
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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President Mugabe made an appeal to European states for more than $5 billion in emergency financial aid. His statement is
ZIIMBABWE
Z MBABWE vintage Mugabe in blaming others for the consequences of his unrestrained excess in bad government. It also finally exposes the
true motive behind Mugabe’s willingness to tolerate power sharing with Prime Minister Tsvangirai: the country is running out of
Help… wanted money.
Zimbabwe's new finance minister, Tendai Biti, has slashed the revenue target for this year from US$1.7 billion to US$1 billion in
a revised budget that tries to deal with the reality of the country's economic disaster. quot;This is a loss of budgeted expenditure of 43
%,quot; Biti told Parliament, updating the revenue forecasts made at the beginning of the year by President Robert Mugabe's ZANU-
PF cabinet. Zimbabwe tops a list of countries at very high risk of social and political unrest as the impact of the global recession
unfolds, according to an index developed by the Economist Intelligence Unit (EIU).
Statistics from the Reserve Bank of Zimbabwe (RBZ) indicate that the country’s cumulative stock of debt at the end of last year
stood at an estimated US$4 billion, with multilateral agencies such as the IMF, World Bank and the African Development Bank
owed about US$1,1 billion.
Continuous crisis between North and south Sudan
SUDAN
SUDAN The expulsion or closure of 16 aid groups in Sudan could worsen North-South relations, stall the Darfur peace process and deter
future humanitarian action. Furthermore, following the issuance of a warrant for President Omar Hassan Ahmad al-Bashir by the
What next ? International Criminal Court, the government of Sudan has exhibited a greater reluctance to cooperate with the international
community.
Internally, relations are especially tense along the border between North and South Sudan, where the heaviest fighting took place.
While the government has argued that the expulsions apply countrywide, the Southern government has encouraged NGOs to
continue working there. But in contested areas along the border, especially three quot;transitional areasquot; singled out in the peace
agreement - Abyei, the Nuba Mountains in South Kordofan state, and Southern Blue Nile state - it is unclear whose rules prevail.
In the region, Sudan and Chad are already engaged in a proxy war - each supporting rebels trying to topple their respective
governments. Analysts fear relations could deteriorate, as some of the 2.7 million people living in Darfur's camps travel over the
border.
REGIONAL INTEGRATION
GROWING APPETITE FOR AFRICA
UNITED STATES OF AFRICA
Nkosazana Dlamini Zuma [South Africa], Chairperson of the Council of Ministers of the According to a recent article in the Harvard Business Review, the average annual return on
Southern Africa Development Community (SADC) believes that regional integration needs to investment in Africa is between 65 and 70 percent higher than in any other country, including
be achieved before the formation of a single African Union (AU) government can be realized. China. Gulf countries have already invested in a number of transportation projects in some
This point was high on the agenda of the 12th AU Heads of State Summit in Addis Ababa, challenging countries.
Ethiopia in January 2009. While African leaders agreed that more regional integration was Dubai Port World opened the largest and most modern container terminal in East Africa in
needed to boost Africa's international standing, they could not agree on the establishment of Djibouti. The Kenyan president, Mwai Kibaki, has started negotiations with Qatar for a 34,5
a single AU government as many were reluctant to relinquish any of their sovereignty to a billion dollar loan to build a new port for Lamu, an island off the Kenyan coast.
new government. As Africa has become key in the international race for natural resources, Gulf States like
Regarding the COMESA-EAC-SADC Tripartite Decision for the establishment of a Free Trade China have to view Africa as a long-term partner and not as a quick fix for immediate needs.
Area of the 3 Regional Economic Communities (RECs) with the ultimate aim of establishing a According to a recent economic research note by JPMorgan Securities out of Hong Kong there
single Customs Union (CU) several decisions has been taken: a feasibility study for the is a “virtuous circle of trade and investment growth between China and other emerging
creation of the FTA and the facilitation of free movement of business persons; economies, particularly the commodity producers”, which helps to moderate the global
implementation of joint programme of regional infrastructure development; finalization of downturn. The links between the Gulf sovereign wealth funds and the China Investment Corp,
legal and institutional framework for the Tripartite Framework and arrangements for the the official Chinese sovereign fund, have also grown closer.”
North-South Pilot Corridor Donors Conference taking place in Lusaka in April. India will have to calm his anxiety over China’s growing influence on the continent.
SNAPSHOTS
How IMF is helping African countries affected by the financial crisis
According to the IMF, the downturn in global growth, the decline in most commodity prices and tighter credit have significantly worsened the economic outlook for
sub-Saharan Africa. “Risks are rising and how long the crisis will last is uncertain. Policymakers must walk a tightrope between not aggravating the shock in aggregate
demand on the one side, while protecting hard-won gains in economic fundamentals on the other.”
How IMF is acting:
• The IMF increased its financial support to African countries during last year’s food and fuel price crisis and remains a catalyst for critically needed donor support.
• Its lending window known as the Exogenous Shocks Facility was modified in September 2008 to provide assistance more quickly and in larger amounts to low-
income countries dealing with exogenous shocks. Malawi was the first country to benefit from this facility, and since then Comoros, Senegal, and most recently
Ethiopia have accessed the facility. The IMF has also increased access to the Poverty Reduction and Growth Facility for a number of countries.
• To meet the diverse and evolving needs of low-income countries, the IMF is considering further major reforms of the architecture of its financing facilities,
higher access limits to Fund resources, and additional concessional assistance, as well as more flexibility to finance infrastructure projects and other critical
investments.
• The IMF will continue to provide extensive technical assistance to strengthen public sector capacity in Africa, because over the long term African countries need
efficient and careful public financial management to ensure that their development priorities can be met. To this end, the IMF plans to add two new Regional
Technical Assistance Centers in Africa to the three that are already operational.
IMF research shows that in the past a 1 % slowdown in global growth has led to an estimated 0.5 % slowdown in sub-Saharan Africa. The effects may be more
pronounced this time because the tightening of global credit compounds the impact of the slowdown, exacerbating risks for trade finance and other capital flows.
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 April 2009