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Algerians outraged over latest corruption accusations against state oil and gas behemoth

March 12, 2013 Leave a comment

Fox News

March 3, 2013 / Associated Press

ALGIERS, Algeria –  Corrupt and gorging itself at the trough of Algeria’s vast oil wealth — that’s how most Algerians privately view the elites running the country. Yet few have been willing to say so publicly, until now.

New corruption scandals are shining a new spotlight on state oil company Sonatrach, which jointly with BP and Norway’s Statoil runs the desert gas plant that was the scene of a bloody hostage standoff in January.

A recent anguished public plea by a former Sonatrach official shocked Algerians and raised hopes that the leadership will try to clean up the oil and gas sector in Africa’s largest country.

There’s plenty at stake: Algeria is also one of the continent’s richest countries, as the No. 3 supplier of natural gas to Europe, with $190 billion in reserves, up $8 billion in the last year alone.

The Feb. 18 letter by former Sonatrach vice president Hocine Malti in the French-language Algerian daily El Watan broke the silence around the company. Addressing the shadowy leader of Algeria’s intelligence service, it asks if he is really serious about investigating new bribery scandals involving Sonatrach and Italian and Canadian companies.

When Italian prosecutors in January announced an investigation into oil company ENI and subsidiary SAIPEM for allegedly paying €197 million ($256.1 million) in bribes to secure an €11 billion contract with Sonatrach, it provoked a firestorm in the Algerian media, until the North African country’s justice system finally announced its own inquiry Feb. 10.

Malti, author of the “Secret History of Algerian Oil,” scoffed that Algerian authorities were only following the lead of international investigators and wondered if Mohammed “Tewfik” Mediene, the feared head of the Department of Research and Security, would allow the real sources of corruption to be tried in court.

“Is it too much to dream that some of your fellow generals, certain ministers or corrupt businessmen — members of the pyramid that you are on top of — members of this fraternity, might also end up in front of justice?” he asked in the letter. “Or will it be like always, just the small fry are targeted by this new investigation?”

“Will we have to continue to listen for news from the Milan prosecutor to know the sad reality of our country, to discover how certain people, whom you know quite well, people you have come across in your long professional career, have gorged themselves on millions of dollars and euros of the country’s oil revenues?” he added.

The response to the letter was swift. Energy Minister Youcef Yousfi promised that once an investigation was complete “we will take all necessary measures” against those harming the interests of the nation.

President Abdelaziz Bouteflika, who rarely appears in public, said in a written statement, “these revelations provoke our disgust and condemnation, but I trust the justice system of our country to bring clarity to the web of accusations and discover who is responsible.”

Malti told The Associated Press by telephone from his home in France that he wrote the letter partly out of anger that Algeria had to rely on foreign prosecutors to reveal the extent of its own corruption and addressed it to the head of intelligence to shock people.

“It made a lot of noise because with this letter, I broke a taboo,” he said. “The head of the DRS is an unapproachable figure in Algeria, at times we can’t even pronounce (say) his name.”

It is not the first time the state-owned hydrocarbon company, which provides Algeria with 97 percent of its hard currency earnings, has been enmeshed in scandal.

In 2010, its head, three of its vice presidents and the minister of energy were all fired in a corruption investigation run by Mediene’s intelligence agency.

However, rather than restore faith in the country’s corruption-fighting mechanism, the 2010 purge was widely seen as a chance to settle scores between the DRS and Bouteflika, since most of those fired were his close associates.

Algeria ranks 105 out of 176 in Transparency International‘s 2012 corruption index, and the occasional corruption investigation often just seems to be how the elites settle their scores, such as a string of revelations about prominent politicians in November, which observers said were linked to next year’s presidential elections.

“I realize that people might be shocked by what is happening at Sonatrach — these scandals are terrible and we condemn them as individual acts,” Sonatrach head Abdelhamid Zerguine said on the radio Sunday, the anniversary of Algeria’s 1971 nationalization of its oil industry from the French. He promised to fight further corruption “with utmost vigor,” even while denying it was systemic.

The scale of the scandals is staggering. Nearly €200 million ($260 million) was paid out by the Italians, according to the Milan prosecutor. ENI has pledged full cooperation with prosecutors in their investigations.

Meanwhile, according to a joint investigation by Canada’s Globe and Mail newspaper and an Italian business paper published Feb. 22, Canadian company SNC-Lavalin paid a series of bribes of its own to secure a $1 billion engineering contract. Company spokeswoman Lilly Nguyen responded to queries about the case saying “to the best of our knowledge, SNC-Lavalin is not specifically under investigation in the Sonatrach matter.”

With commissions on deals like this going to the highest levels of power, the Algerian press rarely reports about it — until the subject is broached by the foreign media.

Malti, who was there at the founding of Sonatrach in 1963, estimated that the country was losing between $3 and 6 billion annually to corruption in the oil sector alone.

“If a judge says that an inquiry has opened or even a minister promises to take measures against ‘people working against Algeria’s interests,’ I don’t believe them,” Mohammed Saidj, a professor of international relations at Algiers University, told the AP. “It’s just words to appease a public opinion shocked when it hears about the corruption and billions of dollars stolen by high-level political and military officials, including those close to the president.”

The chances of this situation changing are dim, considering how much the country relies on a single company.

In a chapter on Sonatrach in the 2012 book “Oil and Governance,” John Entelis, an Algeria expert at New York’s Fordham University, described the importance of a company established just a year after Algeria won its independence from France, and wrote, “Algeria’s governing elite rely upon Sonatrach for revenue from which they gain power, patronage, and privileges.”

Entelis told AP that the letter in El Watan shows that Algerians are increasingly able to complain about this system, even if that won’t necessarily change things.

“This is the heart of the Algerian political system — Sonatrach, the DRS, civil society in the form of … willingness to make these things public. Some say this is what enables it to maintain itself instead of collapse,” he said.

___

Paul Schemm reported from Rabat, Morocco. Associated Press writer Karim Kebir contributed to this report from Algiers, Algeria.

Trade between Europe and Africa: how to resuscitate an ailing deal

March 1, 2013 Leave a comment

The Guardian

By Isabelle Ramdoo

Thursday, Feb. 28th, 2013

After 10 years of negotiations, how can policymakers on both sides revive a flagging relationship?

Trade negotiations between Europe and Africa seem to have stalled. Despite both sides last year celebrating the 10th anniversary of the start of negotiations over economic partnership agreements (EPAs), their attention now appears to have shifted elsewhere.

In crisis-ridden Europe, leaders are stressing the important contribution of trade to jobs and growth for economic recovery in Europe, as they did during the last European council in early February. They call for ambitious, proactive and constructive trade engagements with their “strategic partners”. But, interestingly, these partners are located on the other side of the Atlantic and in emerging Asian economies, as a letter by José Manuel Barroso, president of the European commission to Herman Van Rompuy, president of the council, highlights.

In his address to the commission, Barroso made no mention of Africa or the controversial EPAs, which haven’t been finalised by many, despite 10 long and difficult years of negotiations. And it’s no surprise why: the negotiations have been disappointing. Of the 77 African, Caribbean and Pacific countries negotiating with the EU, only 36 finalised an agreement, of which only 18 are in Africa.

Signals from Africa have not been much better: the continent is increasingly turning east and south, towards emerging markets, and is giving less attention to Europe. Although a few countries remained truly committed to an ambitious trade relationship with Europe, the lastAfrican Union summit, held in January, made no mention of EU-Africa trade. Instead, it focused on Africa’s own domestic economic dynamics, prioritising deeper regional economic integration and increased intra-Africa trade – a logical step and one which Europe itself has followed since the 1950s.

Given the political lethargy, the eurozone crisis that legitimises inward-facing economic politics and new dynamics in Africa, should we conclude that the trade relationship between Europe and Africa is dead? No. Despite all this, there are reasons and ways to resuscitate an ailing trade deal.

The reasons are that both regions remain important to each other: Europe is still the main trade, development and investment partner of most African countries. And despite its relatively low volume of trade with the EU, Africa is nevertheless a crucial source of hard and soft commodities for Europe, and in particular of strategic metals and minerals, essential for its high-tech and green-tech industries. Furthermore, the recent new discoveries of hydrocarbons are of crucial geo-strategic importance – they represent an important alternative, given the difficult political situation in the Middle East, notably with Iran. By keeping trade talks locked in the EPA debates, Europe might accentuate resentments in Africa and therefore miss out on the emerging opportunities. Continued game playing would clearly be counter-productive for both sides.

Develop a partnership of equals

What is needed is a more mature relationship, one that is based on understanding the changing dynamics of both partners and on a real partnership of equals. Europe and Africa have to be clear on their agenda, define their expectations and priorities according to agreed values, principles and interests. The shifting international balance of power places Africa in a better position to revive its partnerships to make them more effective – the challenge will be to translate the new vision into action.

On its side, Europe’s diminishing political clout in Africa implies that it needs to rethink its strategy to become a smarter partner and its engagement with developing countries in Asia or Latin America is proof that Europe can cut its coat according to its cloth. Relationships with Asia and Latin America are more business-like in nature and reflect the priorities and ambitions of each partner. The EU–Latin America and the Caribbean summit, held in January, focused on alliance for sustainable development to promote investment of social and environmental quality. In Asia, the focus is clearly on strategic economic partnerships, with specific relationships nurtured with ChinaIndiaJapan and South Korea.

Clear, consistent communications are key

Both partners have to learn to listen to each other and avoid mixed signals and conflicting incentives. Currently, Europe does not have a coherent agenda for Africa: it has different and multispeed approaches to North AfricaSouth Africa and the rest of sub-Saharan Africa. Even towards the last segment, it has different policies as the recent desire tofocus engagement on least developed countries underlines.

Appreciate regional differences

In addition, the limited success of the EPAs should teach policymakers that insisting on comprehensive trade agreements with countries that have different expectations simply does not work. Agreements should instead reflect the real interests and capacity of countries. Botswana is not Guinea. European wonks should be careful in their engagement with North Africa so that political conditionalities do not ultimately backfire on the EU’s relationship with the whole region.

Timing is everything

The moment for change is opportune. The African Union has a new chairperson who has taken up the challenge to lift the continent into a new prosperous era. Beyond gathering her troops to deliver the “African renaissance”, Nkosazana Dlamini-Zuma will have to reboot the collaboration with international partners. The challenge for her will be to balance Africa’s geo-strategic interests to get the most of all partners. For Europe, the challenge will be to plug into the new dynamics and remain relevant. But both sides need to think of a revived partnership that goes beyond trade and effectively support Africa’s structural transformation. It is the harder ask but one that will lead to the most sustainable mutual gains, and is something worth considering at theupcoming EU-Africa Summit, scheduled for the first half of 2014.

Isabelle Ramdoo is the trade and economic governance policy officer at the European Centre for Development Policy Management (ECDPM). Follow her on Twitter: @ir_ramdoo

This content is brought to you by Guardian Professional.

Public Works as a Safety Net: Design, Evidence, and Implementation

February 28, 2013 Leave a comment

World Bank

Synopsis

PWBookCover

Public Works as a Safety Net: Design, Evidence, and Implementation reviews the conceptual underpinnings and operational elements of public works programs around the world. Drawing from a rich evidence base including program documentation, policy papers, peer-reviewed publications, and empirical data from over 40 countries, it provides an overview of the state of public works programs and how they function as part of wider social protection systems.

The book provides a comprehensive analysis of the design features and alternative models of public works implemented under diverse country settings. Topics covered include program objectives, institutional and financing arrangements, targeting, costs and benefits, gender considerations, and monitoring and evaluation. Political economy issues that inform the development and effectiveness of public works programs are also addressed, bringing into focus the centrality of governance and transparency to ensure the achievement of program outcomes.

The comprehensive nature of the review, and its thorough analysis of available data, fills a gap in knowledge related to public works program design and implementation. The book should benefit both policy makers and practitioners involved in public works planning. It will also help inform future efforts to incorporate public works as an important tool of integrated national social protection systems, that will help respond to unpredictable global shocks leading to sudden declines in employment, whether seasonal or systemic. Download the report here.

AAR Promotes Technical Procurement, Supply Chain Management at MRO Africa

February 27, 2013 Leave a comment

Aviationpros.com

February 27, 2013

WOOD DALE, Illinois, February 27, 2013 – In a further sign of its commitment to doing business in Africa, a senior executive from global aerospace leader AAR’s (NYSE: AIR) Middle East, Africa and India Operations will participate in a panel focused on technical procurement and supply chain management at the 22nd annual MRO Africa Conference and Exhibition in Addis Ababa, Ethiopia.

On Wednesday, Rahul Shah, Senior Vice President and Managing Director, Middle East, Africa and India Operations, will join the discussion, “Optimizing Technical Procurement and Supply Chain Management,” along with representatives from Kenya Airlines, South African Airways and Air Namibia.

This year, the conference, sponsored by Ethiopian Airlines, is focused on establishing centers of excellence and standardizing aircraft maintenance, repair and overhaul (MRO) capabilities for airline fleets across the African continent. The forum, which opened on Monday, also aims to promote closer technical cooperation between African airlines, as well as develop relationships with aircraft and engine manufacturers, industry suppliers and aviation service and technology firms, such as AAR.

“There are exciting advancements taking place in several African airlines that are poised for complete transformation in the very near term,” Shah said. “As these airlines continue to modernize and add more sophisticated aircraft to their fleets, AAR has the expertise to provide maintenance, repair and supply chain services directly to the airlines and the African aviation industries.”

The annual African aviation conferences are attended by senior government and regulatory bodies, airline and aviation officials; financial institutions; aircraft and engine leasing companies; MRO providers; and other key stakeholders worldwide.

On February 22, AAR Vice President of Government Affairs and Corporate Development Cheryle Jackson joined key government, business and international trade leaders in Washington, D.C., for the “Doing Business in Africa” forum sponsored by the White House Business Council. Jackson was a leader of the breakout session, “How to Get Started in Sub-Saharan Africa.”

About AAR

AAR is a global aerospace and defense contractor that employs more than 6,000 people in 17 countries. Based in Wood Dale, Illinois, AAR supports commercial, government and defense customers through two operating segments: Aviation Services and Technology Products. AAR’s services include inventory management and parts distribution; aircraft maintenance, repair and overhaul; and expeditionary airlift.  AAR’s products include cargo systems and containers; mobility systems and shelters; advanced aerostructures; and command and control systems.  More information can be found atwww.aarcorp.com.

Burkina Faso creates new ministry for water and sanitation

February 27, 2013 Leave a comment

WASH News Africa

February 26, 2013

Sector stakeholders were delighted when the new government of Burkina Faso announced the creation of the Ministère de l’Eau, des Aménagements Hydrauliques et de l’Assainissement (Ministry of Water, Hydraulic Planning and Sanitation) in January 2013 [1]. Mrs. Mamounata Belem/Ouédraogo, who heads the new ministry, has a challenging job ahead.

According to news site LeFaso.et [2], currently only 1% of the rural population has access to sanitation, while the coverage rate at the national level is 3% (these figures are lower than the 2012  WHO/UNICEF-JMP estimates: 6% and 17%, respectively [3]). It will be impossible for Burkina Faso to meet the Millennium Development Goal (MDG) sanitation targets of 54% coverage for rural sanitation and 57% for urban sanitation in 2015. Even access to safe water, which has a much higher coverage rate, is still way below the targeted level.

[1] Gouvernement du Burkina Faso: La composition du gouvernement Luc Adolphe Tiao II, 4 Jan 2013.  Available at: www.gouvernement.gov.bf/spip.php?article1134

[2] Grégoire B. Bazie, Un ministère plein pour l’eau et l’assainissement : une option judicieuse et pleine de sens, LeFaso.net, 08 Jan 2013

[3] WHO/UNICEF Joint Monitoring Programme for Water Supply and Sanitation, 2012. Estimates for the use of improved sanitation facilities : Burkina Faso.  Available at: washurl.net/dbp8gc

Related news: IRC International Water and Sanitation Centre opens its second office in AfricaIRC, 02 Oct 2012

Related web sites:

Ethiopia: WFP Buys Record Quantity of Maize From Ethiopian Cooperative Unions

February 26, 2013 Leave a comment

AllAfrica.com

February 26th, 2013

Addis Ababa — The United Nations World Food Programme (WFP) has announced that local farmers cooperatives in Ethiopia have begun delivering the largest amount of maize they have ever sold to WFP, enough to support more than 1.8 million people for a month.

Before the planting season last year, WFP signed forward contracts with 16 cooperative unions in Ethiopia for purchase of more than 28,000 metric tons of maize. The first deliveries on those contracts began arriving at WFP warehouses last week. The maize will be used for WFP relief distributions in Ethiopia.

“Our goal here is to support Ethiopia feeding itself,” said WFP Country Director Abdou Dieng. “Buying food for our Ethiopia operation right here in Ethiopia makes sense in cost-effectiveness, and in providing a boost for the local economy by helping small farmers to get closer to markets.”

This is being done under WFP’s Purchase for Progress initiative (P4P), which is financed by the Bill and Melinda Gates Foundation and implemented in collaboration with the government of Ethiopia through the Agricultural Transformation Agency (ATA).

The forward delivery contracts signed with the cooperatives are one approach the P4P pilot initiative is testing to promote small farmers’ access to markets. To support the cooperatives in fulfilling their contracts, WFP provides technical assistance to farmers associations for storage and post-harvest handling and logistical support. Through agreements with local banks, several agricultural cooperatives were able to use their WFP contracts as collateral for loans to buy new equipment and aggregate more maize from their members.

In Ethiopia, WFP buys food grown locally in two ways: It buys from small-scale farmers and farmer cooperatives through P4P, and also buys large quantities of locally grown commodities through its regular procurement tender process.

In 2012, WFP purchased more than 112,000 metric tons of food in Ethiopia, more than any other country on the continent.

About 90 percent of this food has been used directly for WFP operations within Ethiopia. For example, more than 37 schools taking part in the WFP school meal programme in Ethiopia receive food harvested nearby.

Last year WFP assisted more than six million people throughout Ethiopia, including refugees.

 

Constitution emboldens citizens to take part in budgeting

February 9, 2013 Leave a comment

Pambazuka

By George Jaramba and Salim Changani

February 7, 2013

Despite being some of the most taxed citizens of the world, Kenyans have had little say in the manner their economy is managed. For as long as the country has been independent, the national budget , normally announced in June every year, has dictated the costs of basic commodities and essential services. Weeks before the minister for finance makes the important budget speech in parliament, many unscrupulous traders deliberately create a scarcity of particular commodities whose prices they expect to go up on Budget Day. This unpopular trend has affected the cost of essential commodities such as sugar, cooking oil, maize meal, petrol and kerosene just to mention but a few.

But of crucial concern is the manner the minister prioritizes the issues he wishes the government to spend the most on. In the past, budget allocations have favoured some government departments as opposed to others which are equally in need. The end result in such circumstances has, however, not been very helpful in the general growth of the national economy.

The Constitution of Kenya (2010) has, however, given much impetus to the ordinary citizen to participate in the management and decision-making process in governance socially, economically and politically. Article 174 illustrates this point. It is this constitutional relief that the residents of Kwale County have taken advantage of to come up with their own budget proposals as a means of kick-starting their development agenda.

Dubbed Participatory Budget for local governments (PB), residents of Kwale County in collaboration with representatives of local community based organizations are working in partnership with Fahamu, a nongovernmental organization, to sensitize the communities to develop their budgets at the ward level as a way of ensuring that agenda setting begins at the community level.

Participatory budgeting is a process of democratic deliberation and decision-making, and a type of participatory democracy, in which ordinary people decide how to allocate part of a municipal or public budget.

The practice allows citizens to identify, discuss, and prioritize public spending on projects, and gives them the power to make actual decisions on which projects to undertake as a matter of priority.

Although the concept is yet to be actualized in Kenya, participatory budgeting has worked in other parts of the world including the US, UK, Brazil, South Africa and Senegal. Fahamu is currently piloting the concept in two Kenyan counties, namely Kwale in the Coast and Kajiado in the Rift Valley region.

In September 2012, the Kwale community engaged in a needs assessment process after which the priority areas were identified before electing budget delegates at the ward level. Kwale County currently has 20 wards following the recent boundary demarcations by the Andrew Ligale-led Interim Independent Boundaries Commission. The 20 wards are in Matuga, Msambweni, Kinango and the newly created Lunga-Lunga constituencies.

The ward delegates are charged with developing specific spending proposals which will later be presented to the community for validation. If the community approves of the proposals, the same are to be forwarded to the county government for consideration of implementation.

If implemented, participatory budgeting is expected to raise the social and economic well-being of the two counties. Areas that are expected to benefit significantly include education, health, agriculture, roads and energy sectors.

Kwale and Kajiado participatory budget committees are scheduled to engage individuals seeking elective positions at the county level to sign a charter declaring that they will support and advocate for the implementation of the concept.

The fate of this noble idea now depends on the outcome of the forthcoming elections and whether the elected leadership implements the proposals submitted by the communities.

Various studies have suggested that participatory budgeting results in more equitable public spending, higher quality of life, increased satisfaction of basic needs, greater government transparency and accountability, increased levels of public participation (especially by marginalized or poorer residents), and democratic and citizenship learning.

* George Jaramba is the Ward Delegate elected through the Participatory Budgeting project for Gombato-Bongwe while Salim Changani works with Msabweni Human Rights Watch.

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