A brewing conflict in the Sahara if left unchecked could contribute to destabilizing forces across North Africa and the Sahel. Renewed clashes between Polisario, a leftist rebel group, and Morocco is the latest armed confrontation riling the continent. The past few months have seen an increase in insurgent activities in Mozambique and an outbreak of a new war in Ethiopia. In contrast, the United States has largely been distracted by the 2020 presidential campaign. The deterioration in the status quo between Morocco and Polisario in the Western Sahara deserves greater attention because decisive action now may be able to preserve a ceasefire which has largely held since 1991.
It is also worth noting that African Lion – a major military exercise involving the United States is set to take place in Morocco in a few months. That exercise will involve some 5,000 military personnel from the U.S., Egypt, Morocco, Mauritania, Senegal, Tunisia, Belgium, Canada, France, Germany, Italy, Spain, the United Kingdom, Australia, the Netherlands and Portugal. Morocco will be one of the hosts for this exercise along with other countries in the region including Senegal, Spain and Tunisia.
The Chairperson of the African Union Commission Moussa Faki Mahamat has described conflict under these terms: “the Western Sahara conflict remains the oldest unresolved conflict on the continent.” While technically not true (the conflict in Katanga which dates to 1960 is a decade older) the quote speaks to the perception of the conflict as an intractable one.
The current crisis focuses on a thin strip of land along Morocco’s border with Mauritania that is controlled by Polisario. Last month Polisario forces set-up a roadblock to prevent traffic between Mauritania and Morocco. This blockade stranded some 200 Moroccan truck drivers and trade with Morocco and parties across West Africa and the Sahel. Under the terms of the ceasefire a line of control divides the two parties and a United Nations observer force, MINURSO, monitors the situation though such trade is supposed to continued largely uninterrupted since 1991.
A recent extension of MINURSO’s mandate – which the United States supported in October appears to have been the final straw for Polisario which is frustrated by a perceived lack of progress on ameliorating the conflict. Strategically the resumption of the armed conflict may have been meant to take advantage of President Trump’s lame-duck period to create new realities which it can use as barter in future negotiations. Indeed, a recent UN report on that current crisis noted multiple such “freedom of movement” provocations in recent months.
Polisario’s declaration of war comes following a recent United Nations report which called on to respect the terms of its ceasefire and highlighted those freedom of movement violations. Perhaps even more alarmingly the report noted discrepancies “observed between the order of battle and the number of heavy weapons held by Frente POLISARIO units in Agwanit, Bir Lahlou and Tifariti in the restricted area were declared violations in January, March and April. Requests by MINURSO to remove them from the restricted area remained unaddressed.” This seems to suggest the current clashes may have been part of a broader strategy. Even so, Morocco’s King Mohammed has reiterated his comment to the ceasefire and peacebuilding.
If Polisario had hopped to capture international attention with the conflict, they might have been badly misguided. Already, Guyana has severed ties to the group following the resumption of clashes. Sadly, a Polisario that is even more isolated on the national stage may not make it more conducive to international peace. It may also open opportunities for narco-traffickers who are increasingly using the Western Sahara as a transit area to increase their activities. This would be in no one’s best interest. Given the precarious nature of the situation, it is essential for the United States and the United Nations to move quickly to ensure this obscure conflict does not spiral into full open war.
Illegal firearms trafficking remains a critical problem for African states, and a new United Nations’ report on the problem may reveal just the tip of the iceberg.
The United Nations Office on Drugs and Crime released a report on firearms trafficking in July, a follow-up on a 2015 study on firearms. “Pistols are the world’s most seized type of firearm… driven to a large extent by the Americas,” the “Global Study on Firearms Trafficking 2020” notes. “In Africa and Asia, shotguns were the most prominent type. Rifles were the main type of firearm seized in Oceania, and in Europe the distribution was equal between pistols, rifles, and shotguns.”
Africa’s oversupply of shotguns suggests many of the weapons seized are used for poaching activities, particularly the poaching of birds. Yet, in focusing on trafficked weapons, the UN report left out the role of improvised weapons, an essential part of the illegal weapons trade in Africa.
Relying on data from 2016 and 2017, the report noted that some 550,000 firearms were seized in eighty-one countries. By comparison, a January 2019 BBC news report on Ghana’s illegal arms trade suggested that illegal gunsmiths in Ghana have the capacity to make up to 200,000 guns a year. While much of the improvised weapons are used to commit crimes, a large portion of these guns are essentially single use.
About 90 percent of armed robberies in Ghana are reported to involve the use of homemade guns, according to the Ghana Police Service. Such weapons can be purchased for as little as US$9, and most are used for home defense by residents who live in areas with a high crime rate. Many of these weapons are crudely fashioned single-use zip guns.
Ghana’s blacksmith may be the most productive on the continent. By comparison, Mali authorities estimate that some 5,000 guns are produced in the country each year.
Ghana’s blacksmiths have been making guns for centuries after European traders often refused to sell Africans firearms in large quantities to not lose their comparative military advantage during colonial era conflicts. Ghana’s gunsmiths are perhaps the most advanced on the continent capable of producing weapons that mimic in appearance (but, not functionality) Kalashnikovs AKMs, for example. What they lack in modern machinery they more than compensate with skill.
Some twenty-two African countries have notable illegal firearms manufacturing, most of which are located in West Africa. Such ECOWAS countries include Ghana, Nigeria, Benin, and Mali.
Homemade weapons usually lack the durability to become a significant combat arm of insurgent groups. One exception is in the Cameroonian conflict known as the Anglophone Crisis, where the relative lack of availability of internationally produced weapons has led some armed Anglophone separatists to rely on improvised hunting rifles as their primary combat arm.
In 2019, the African Union Commission and the Small Arms Survey released a study, “Weapons Compass: Mapping Illicit Small Arms Flows in Africa”, that identified the scale, availability, and supply patterns of illicit small arms on the continent. The study estimated there were some 40 million firearms in the hands of African civilians (including militias and rebel groups), whereas governments held fewer than 11 million firearms.
Weapons originating outside the continent can have diffuse origins. Europe and the Middle East have long been a source for Africa’s illegal small arms trade (especially in the Horn of Africa and the Sahel. However, China is a growing source for much of the continent’s weapons. According to the Stockholm International Peace Research Institute (SIPRI), China’s conventional arms sales surged from US$645 million in 2008 to US$1.04 billion in 2018. Though only a small percentage of those weapons have ended up in Africa, the number is growing.
A 2020 study released by Conflict Armament Research found that most of ammunition used to fuel conflict between herders and farmers in Nigeria originated in China.
Checkpoints for weapons searches and quicker response times to reports of shots fired by local security forces are two measures that can lead to more arms seizures. Indeed a combination of tighter enforcement measures within countries and renewed searches at borders suggest probable.
The death of Nelson Mandela in 2013 elicited tributes from around the globe in honor of the man who negotiated with South Africa’s apartheid rulers to bring about majority rule. He continues to be a symbol of resistance and reform. In his delivery of the latest Nelson Mandela Annual Lecture on July 18, the late statesman’s birthday, United Nations secretary-general António Guterres used the opportunity to call for wide-ranging reforms to the international order.
But despite the commemorations, which often focus on his capacity for forgiveness in the 1990s and his ability to make peace with the regime that had imprisoned him, the Mandela of the early 1960s was a very different man. He was a guerrilla, not a peacemaker, and in 1961 had co-founded the armed-wing of the African National Congress (ANC), uMkhonto we Sizwe (MK), meaning Spear of the Nation.
To truly understand Mandela, we must understand this earlier part of his life. And to understand this earlier part of his life, we must examine his attraction to Ethiopia, where he spent time as a revolutionary and guerrilla in training. In his various memoirs, he made numerous references to Ethiopia, which he first visited in 1962.
Since Mandela’s passing, a degree of controversy around his time in Ethiopia has also emerged, coming from an unlikely source. Shortly after his death, a story in the Israeli newspaper Haaretz reported that Israel’s secret intelligence agency Mossad had clandestinely trained Mandela. As evidence, Haaretz quoted part of a letter by a member of Israeli embassy staff that describes Mandela: “He greeted our men with ‘Shalom,’ was familiar with the problems of Jewry and of Israel, and gave the impression of being an intellectual. The staff tried to make him into a Zionist.”
The Nelson Mandela Foundation has questioned the authenticity of the letter, but there is no doubt Mandela was indeed familiar with Jewish and Israeli issues. In his autobiography Long Walk to Freedom, he writes that he “read The Revolt by Menachem Begin and was encouraged by the fact that the Israeli leader had led a guerrilla force in a country with neither mountains nor forests, a situation similar to our own.”
Ethiopia, the African kingdom that successfully resisted colonization save for a brief Italian occupation from 1936 to 1941, held a particular allure for Nelson Mandela and many African nationalists in the post-colonial period. It could be argued that Emperor Haile Selassie was Africa’s most famous politician of the 20th century, until he was eclipsed by Nelson Mandela. In Jamaica and elsewhere, the emperor was revered as a messianic figure among followers of the Rastafari movement. But history has not been kind to the emperor, partly due to Polish journalist Ryszard Kapuściński’s book The Emperor: Downfall of an Autocrat, with many now remembering him as the ruler who spent his time feeding the pride of lions he kept at his palace, indifferent to domestic affairs.
Meeting the Ras
Nevertheless, it should not be forgotten the Selassie of the 1960s was an ardent Pan-Africanist, and it was in AddisAbaba that the Pan-African Freedom Movement for East, Central, and Southern Africa (PAFMECSA) was hosted in 1962. PAFMECSA was the forerunner of the Organisation of African Unity (OAU), which was, in turn, the forerunner of the African Union.
In his autobiography Long Walk to Freedom, Mandela recalls his excitement upon visiting Ethiopia. The prospect of seeing Ethiopia had always intrigued him more than visiting Europe or America. “Ethiopia has always held a special place in my own imagination…” he writes. “I felt I would be visiting my own genesis, unearthing the roots of what made me an African.”
Forty-three years old at the time, Mandela experienced a culture shock when he boarded the Ethiopian Airlines flight from Khartoum to Addis Ababa to find an Ethiopian pilot at the controls. “How could a black man fly an airplane? But a moment later I caught myself: I had fallen into the apartheid mind-set, thinking Africans were inferior, and that flying was a white man’s job. I sat back in my seat and chided myself for such thoughts. Once we were in the air, I lost my nervousness and studied the geography of Ethiopia, thinking how guerrilla forces hid in these very forests to fight the Italian imperialists.”
Entering Addis Ababa, which he calls the Imperial City, in February 1962, Mandela’s vision of Ethiopia was, for the moment, shattered: “a few tarred streets, and more goats and sheep than cars. Apart from the Imperial Palace, the university, and the Ras Hotel, where we stayed, few structures could compare with even the least impressive buildings of Johannesburg.”
Today, most roads are paved and crowded with cars, especially the city’s ubiquitous shared taxis, though the city’s skyline is still somewhat spartan when compared to the skyscrapers of Johannesburg. Time, though, has been less kind to the Ras Hotel: in one corner stands a haggard stuffed lion while women of the night cast around the lobby for potential customers. Outside the revolving door, touts and beggars wait to pounce on tourists under a portico next to the neighboring book vendor selling Amharic and a few English books, including a knockoff copy of Kapuściński’s The Emperor. The Ethiopian “national cuisine” served in the hotel is among the best in the city. It remains one of the few places in the Ethiopian capital where one can find meat dishes being served even on days of the week Ethiopian Orthodox Christians observe fasting days where they avoid consuming meat.
Another change from when Mandela first visited the city is that a room on the third floor has since been turned into a veritable shrine to the man himself, albeit one that is available for booking, and the third floor is now the Mandela Floor. A larger-than-life image of a grey-haired Mandela greets visitors from the top of the stairs, followed by a photo of Robben Island on the door to the Mandela Room. The three-chambered suite is modest by today’s standards, but would have seemed lavish in the early 1960s, when it was graced by many notables, including the Yugoslav statesman Marshal Tito.
Mandela met many revolutionaries and people of note at the 1962 PAFMECSA conference, but it was Emperor Selassie—whom Mandela asked for help raising funds, a crucial part of the ANC’s revolutionary cause—who made one of the biggest impressions. As he later recalled in Conversations with Myself: “That was an impressive fellow, man, very impressive. It was my first time to watch... a head of state going through the formalities... the motions of formality. This chap came wearing a uniform and he then came and bowed. But it was a bow which was not a bow—he stood erect, you see, but just brought down his head.”
He later observed Selassie at a military parade. At the time, Ethiopia was a United States ally, and US military advisors at the occasion paid their respects to the emperor, leading Mandela to note: “to see whites going to a black monarch emperor and bowing was also very interesting.” The US was one of just six countries to never recognize the Italian occupation of Ethiopia, and the two states were enjoying warm relations at the time of Mandela’s visit. In 1957, then US vice president Richard Nixon visited Ethiopia and hailed the kingdom as “one of the United States’ most stalwart and consistent allies.”
Training in Guerrilla Warfare
After the conference, Mandela left Ethiopia to continue his wide-ranging fundraising tour, visiting Egypt, Mali, Tunisia, Guinea, Sierra Leone, Liberia, Senegal, Sudan, and the United Kingdom. Tunisian president Habib Bourguiba was a particularly strong supporter, donating £5,000 (about US$150,000 in today’s money) to uMkhonto we Sizwe for arms. En route, Mandela also received some training in guerrilla warfare from Algerian rebels in Morocco.
As agreed, Mandela soon returned to Ethiopia for military training. The ANC had offices in Cairo and Accra, but neither Nasser’s Egypt nor Nkrumah’s Ghana had a military versed in guerrilla warfare. Many Ethiopian officers had honed their field craft fighting the Italians during World War II. In deciding to train in Ethiopia rather than a Warsaw Pact country or China, Mandela was openly branding the armed portion of the ANC struggle as African and moving the ANC’s position away from the Soviet Union, a policy that might have influenced him to meet with the Israelis.
Ethiopia, whose military had multiple veterans of the guerrilla war against the Italian occupation, also possibly presented Mandela with the best opportunity to learn the military skills necessary to lead uMkhonto we Sizwe. He planned to spend six months receiving training on weaponry, tactics, and leadership. The ANC’s armed wing had already launched a series of sabotage attacks in South Africa, so instruction on mines and other explosives was also given. Mandela’s training included live-fire exercises with both Eastern Bloc- and American-made weapons. His instructors were Colonel Tadesse Birru, Colonel Fekadu Wakene, and Lieutenant Wondoni Befikadu. Wondoni, a former fighter, led the physical training, and Tadesse lectured Mandela in the philosophy of guerrilla warfare. The recently emerged Israeli government letter implies Mandela was trained by someone referred to as “the Ethiopian,” which could mean some of Mandela’s instructors were linked to the Israelis.
Indeed, Israel was keen to cultivate good relations with the non-Arab countries in Africa at the time, though later, as African liberation movements came to be dominated by communist elements, this policy shifted slowly to an awkward security relationship with the apartheid South African government.
Biniyam Mengistu, a tour guide and local historian in the southern Ethiopian city of Harrar, believes Mandela received some of his instruction in Harar. If this were true, it was perhaps Tadesse who invited him to visit this important city in the east of the country. The region’s main inhabitants, the Oromo people, are Ethiopia’s largest ethnic group, and Tadesse eventually launched his own guerrilla war against the state four years later in the name of Oromo nationalism. In 1975, he was executed by the Derg regime.
To this day, the time Tadesse spent with Mandela is a source of pride for Oromo nationalists. A grainy photo of him in uniform standing next to Mandela can be found on many Oromo nationalist websites, and the Oromo National Congress (now the Oromo Federalist Congress) originally named itself after Mandela’s African National Congress.
The Way of the Gun
In the end, Mandela’s time in Ethiopia lasted only a few short weeks before it was decided he was needed in South Africa. On the orders of Haile Selassie, Tadesse gave Mandela a Bulgarian-made Makarov pistol and 200 rounds of ammunition before his trip home. He was also issued with an Ethiopian passport under the name David Motsamayi (meaning David the Walker).
Upon his arrival in South Africa, Mandela spent time at an ANC safe house, Liliesleaf Farm, in Johannesburg. As the police closed in on him, he decided to bury the pistol. Digging a 1.5 meter pit not far from the farm’s kitchen, he wrapped the weapon and its ammunition in foil and placed the stash, along with his military uniform, under a tin plate. He was arrested days later.
Mandela did return to Ethiopia decades later, in 1990, to address the OAU in Addis Ababa. This meant meeting Mengistu Haile Mariam, Ethiopia’s brutal dictator who had ruled the country directly or indirectly since 1974. During Mengistu’s rule, more than 2 million Ethiopians were murdered or died of starvation, and with the Soviet Union on the verge of collapse, Mengistu beseeched Mandela to visit and provide him with a small propaganda victory.
Perhaps reluctantly, Mandela agreed to the short visit while already on a trip to Tanzania. Coarse footage from the period shows the veteran Mengistu beaming as he honors Mandela, yet it is Mandela who appears the statelier figure. When Mengistu was overthrown the next year, he fled to Zimbabwe and even briefly visited South Africa in 1999 for medical treatment. Mandela’s government considered turning him over to international authorities, but Mengistu soon returned to Zimbabwe, where he has kept a low profile ever since.
Mandela’s time in Ethiopia provides insight into the man and helps place the ANC struggle in its broader African context. It further illuminates his commitment to the armed struggle, making his later role as peacemaker all the more revealing.
Ethiopia has never forgotten its links to Nelson Mandela, and in 2011, for example, 2,300 trees were planted around Addis Ababa in his honor on the Second Annual International Nelson Mandela Day.
The pistol Mandela received in Ethiopia and buried in Johannesburg has never been found. He provided information about its probable location and even searched for it on a visit to Liliesleaf in 2003. Excavations began on the site in 2011 to search for the lost pistol, but it remains lost.
A version of this story was published in Think Africa Press in 2014.
Angolan billionaire Isabel dos Santos is going down swinging, and even the late Bruce Lee has been drawn into the saga. The eldest daughter of former president José Eduardo dos Santos claims a copy of a fake passport bearing the replicated signature of the martial artist and movie star was used as evidence to justify the freezing of her Angolan assets.
In a statement released on June 29 after she lost an appeal against the freezing of her assets, she claimed she had been denied justice. “This denial of justice comes from the Angolan courts, which have rejected my appeal on the grounds that it was not filed on time,” she said. “It is disappointing not to be allowed a day in court to prove my innocence and establish the truth.”
It Runs in the Family
José Eduardo dos Santos was the president of Angola for thirty-eight years, during which time his family amassed a fortune estimated at billions of dollars.
In 2016, he appointed Isabel, his eldest daughter, as chairperson of the state oil company Sonangol. By that time, her half-brother José Filomeno dos Santos, also known as Zenu, was already the chairperson of the state’s sovereign wealth fund.
Some of their lesser-known siblings and the first lady also had numerous business ventures that benefited from contracts with the state.
Isabel became a significant investor in banking and telecommunications assets in Portugal, and the international press lauded her as a self-made billionaire. She was ostensibly the eighth-richest woman in the world, who had achieved this status through shrewd business instincts, hard work, and tenacity. She and her husband, Congolese businessman Sindika Dokolo, were often photographed with celebrities at glitzy events.
A New Order
João Lourenço took over as president in September 2017. He had barely been sworn in before he took drastic steps to crack down on corruption, including firing both Isabel and Zenu from their posts.
On December 23, 2019, the Angolan high court froze the domestic assets of Isabel, Dokolo, and Mário Leite da Silva, the chairman of Banco de Fomento Angola, while investigations were ongoing into claims she and her businesses owed Angola more than US$1 billion. (That figure has since ballooned to US$5 billion.)
The Angolan authorities requested that Portugal freeze their bank accounts, and in February the public prosecutor’s office in Lisbon confirmed that dozens of their personal and corporate accounts had been seized.
Zenu is currently on trial in Angola, accused of transferring US$500 million to a foreign bank account using fake documents.
The Luanda Leaks
In January 2020, the International Consortium of Investigative Journalists (ICIJ) published a report of its investigation after it had obtained a trove of documents that came to be known as the Luanda Leaks. The investigation drew on 715,000 confidential financial and business documents and hundreds of interviews to trace Isabel dos Santos’s wealth, the result of two decades’ worth of nepotism, shell companies, and insider deals that robbed the Angolan people of the wealth stemming from the country’s rich oil and diamond deposits.
It presented a stark illustration of how dictators and their families move their ill-gotten gains to offshore secrecy jurisdictions with the aid of prominent Western banking and credit firms.
The results of such corruption have been devastating for Angola: the country is ranked as one of the most corrupt in the world, and has an average life expectancy at birth of just sixty and an infant mortality rate among the highest in the world.
The ICIJ, in conjunction with thirty-six media partners, found that Isabel dos Santos, Sindika Dokolo, and several intermediaries built a fraudulent international business empire with more than 400 companies and subsidiaries in 41 countries. At least 94 of these companies were in secrecy jurisdictions like Malta, Hong Kong, and Mauritius. Secrecy jurisdictions are places where businesses or individuals can escape financial rules, regulations, and laws of other jurisdictions through the use of shadow accounts and other secretive measures. These companies extracted billions of dollars’ worth of consulting jobs, loans, and public contracts from the Angolan government.
Western consulting firms like PricewaterhouseCoopers and Boston Consulting played a crucial role in aiding and abetting the dos Santos kleptocratic empire. Large companies and state enterprises from China and the Netherlands maintained partnerships with the dos Santos family even after other international banking firms like Barclays and Citigroup Global Markets Ltd. pulled out of deals due to heightened scrutiny and concerns over the close connections between Isabel and her husband’s business accounts with the Angolan state.
Denial and Counterattack
Isabel and her husband, who currently live in the UK, have not been formally indicted, but civil and criminal proceedings have been opened against them, according to Angola’s public prosecutor’s office.
They have maintained their innocence, claiming the accusations against them are politically motivated, and have enlisted the services of lawyers and reputation managers.
In interviews with the media, Isabel has even suggested she might run for president of Angola in 2022.
NAD chats to the Ethiopian ambassador to Ghana, Regassa Kefale Ere, about relations between the two countries, free trade, industrial parks, and the aerospace industry.
New Africa Daily: How would you characterize Ethiopian-Ghanaian relations?
Regassa Kefale: Ethiopia never was a colony of a European power. After Ghana received its independence in 1957, Ghanaian leader Kwame Nkrumah and Ethiopia’s Emperor Haile Selassie worked together on founding the Organization of African Unity, which later became the African Union. The two leaders worked closely together, and this political history is at the core of the relationship.
More recently, we have sought to expand economic ties between the two countries, too, building on the long-standing political ties. Ghanaian investors are interested in various Ethiopian economic sectors, from pharmaceuticals to animal hides. We have had trade events in the two capitals in the past two years to promote trade between our countries.
NAD: How does the signing of the African Continental Free Trade Area change the trade picture for Africa?
RK: Free trade is an important issue. The signing of the agreement establishing the African Continental Free Trade Area is an important turning point, and we are working to develop this opportunity to ensure the prosperity of Ethiopia.
A key part of our strategy is the development of industrial parks and free zones, offering large-scale employment opportunities for the citizens of our country. Indeed, some 60,000 people work at Hawassa Industrial Park (HIP). We have also developed Bole Lemi Industrial Park and other similar parks, which allow us to take advantage of new opportunities under the new trade agreement and other relationships. For too long, Africa’s trade relations have been focused externally, and not on the opportunities of intra-African trade.
The industrial parks will promote development and attract foreign direct investment to Ethiopia
NAD: Tell us more about the strategy behind Ethiopia’s industrial parks.
RK: These industrial parks offer exporters a one-stop approach, including customs, roads, and electricity. It’s not just the infrastructure, however; there are also incentives for companies who relocate to these zones, such as tax holidays. The government is committed to this policy. The industrial parks will promote development and attract foreign direct investment to Ethiopia.
NAD: One of the main economic components in the Ethiopian-Ghanaian relationship is in the aerospace industry. In December 2018, an agreement was announced to have Ethiopian Airlines play a key role in the relaunch of Ghana’s national carrier.
RK: Ethiopian Airlines, which has a strong brand and a solid history, will take a minority stake in the new national air carrier of Ghana. Ethiopian is a widely respected carrier and Africa’s most successful airline. It flies to more than 110 destinations around the world and operates about 1,000 aircraft, including the Airbus A380, the world’s largest passenger airliner. Above all, Ethiopian Airlines stands for unique quality and a high level of service. These were all factors in the Ghanaian decision. It is a win for both countries, as there are daily direct flights between Addis Ababa and Accra.
New Africa Daily spoke to Viola Llewellyn, president and co-founder of Ovamba Solutions, about her company’s approach to some of Africa’s challenges. Ovamba creates technologies for banks so they can serve small and medium-sized enterprises with sharia-compliant trade finance products.
New Africa Daily: Ovamba started in Cameroon. Could you tell us a little about your model and how Ovamba has transitioned from a classic fintech company to a tradetech company?
Viola Llewellyn: We started in 2013 as a platform for the African diaspora to take what would ordinarily be remittances and use that capital for investment in home communities. This was not a viable model back then and it failed before it even started. Our pivots since then took us through the journey of our actual customers. By going through bank account opening, loan application, trying to get services, importing, and looking at how risk works and who would be a reliable customer, we were able to shift effectively to our current model, namely a tradetech solution with additional services. It is comprised of a suite of services available on a mobile app and connected to a risk-measuring and transaction-authorization back office, from e-commerce to logistics services.
NAD: Do you think lending is a healthy option for development of prosperity in Africa?
VL: Lending requires a steep list of criteria to qualify, which inevitably excludes businesses and people who are a good risk but their best aspects cannot be measured by traditional credit processes. Credit that can be secured or not secured has a punitive consequence in the face of non-performance and can create a cycle of poverty, especially amongst sub-prime candidates. Africa requires capital and services together. It has been shown that focusing on inventory and business performance not only produces better transaction and capital deployment outcomes, but also trains businesses for better performance.
NAD: What has Ovamba learned regarding the formulation of risk models?
VL: We have learned that risk models that are formulated correctly open a wider catchment of customers. We formulate our risk models to look for ways to mitigate, not prevent, exposure to risk. We have noticed that in the African market, banks approach risk from the standpoint of total prevention of any exposure to risk, which shuts out customers who may just need an adjustment to the conditions of a transaction.
Case in point: It is common practice that if you want a loan of US$10,000, your bank will require that you have $10,000 “blocked” in your bank account. So lending is secured by your own capital, and you may be required to bring collateral to the table on top of that. This is not how risk management should be done.
NAD: What can sharia finance offer in terms of providing financial services to the informal economy?
VL: Sharia finance offers an ethical fee-based “risk-sharing” approach to finance. It puts inventory at the heart of the transaction, and not the client’s past or future financial performance. It removes the need to have a perfect track record from the main criteria for approval. After all, you can have perfect credit but absolutely poor choice in suppliers or business timing. That makes the transaction a failure. Or you could have great business acumen and mediocre cash flow or reserves, but if the financier has legal and physical control of the asset, there is a balance in the sharing of business outcomes. It works remarkably well for Africa, where wholesale and retail trade drive whole economies.
NAD: What does Ovamba’s description as a tradetech company mean to you?
VL: It means designing innovations to support and drive trade, while simultaneously impacting the business ecosystem through performance and capital. It involves customer selection and onboarding, and having deep knowledge of assets, inventory, logistics, market sector dynamics, value chain, and supply chains, all rolled into easily accessible innovations, apps, and processing algorithms. It is a suite of digital solutions for traditional problems.
NAD: What has Ovamba learned from working with African central banks? How can they be more efficient?
VL: We have learnt that central banks are not technology innovators. We also understand that policy development and response times cannot keep up with innovation. Central banks fully understand what is at stake. The general wariness of fintech and tradetech solutions is slowly giving way to collaboration in the form of sandboxes. Central banks are concerned about financial inclusion and the poor track record of banks who cannot control non-performing loans. We have had the opportunity to speak to quite a few central banks, which all agree that tradetech is a bona fide solution to financial inclusion and better portfolio performance from lending to the informal sector, but that it has to be at scale. Having a digital platform that has the security and bandwidth is the perfect tool to achieve this while also being mindful of data protection.
Viola Llewellyn is a member of the Africa Professional Services Group, the European Women’s Payment Network, and the African Women in Fintech & Payments. In October 2019, she was appointed to the board of advisors of Lobbying Africa. She was born in the United Kingdom to a Cameroonian family and currently lives in the United States.
Under Prime Minister Shinzo Abe, Japan has taken a much more significant interest in African affairs. This has primarily focused on economic development, but also geopolitics, at times with a commitment to work with India to counterbalance China’s Belt and Road Initiative.
The seventh Tokyo International Conference on African Development (TICAD), held in August 2019, provided a window into Japan’s policies in Africa. The event was designed in part to help Japanese companies (and their government) to position themselves in Africa, where rival China’s influence is well established. The Japanese welcomed some of Africa’s most prominent leaders, including South African president Cyril Ramaphosa and Rwandan president Paul Kagame.
Japan pledged to some US$30 billion in public and private investment over three years at the 2016 edition of TICAD. Yet, this has often been spent prudently—such as a US$94 million doled out to renovate a Kenyan geothermal plant.
The 2019 event ended with Japan promising some US$20 billion in private sector investment over three years.
“If partner countries are deeply in debt, it interferes with everyone’s effort to enter the market,” said Abe at the event. Elsewhere, his comments on sustainability of engagement in Africa offered veiled swipes at China’s role in Africa.
Despite being the fourth-largest spender on development aid in Africa, Japanese trade with the African Union has been much slower to develop. Indeed, Japan’s trade with Africa in 2017 was worth US$17 billion, less than half of what it was in 2008. Meanwhile, China conducted some US$204 billion in trade with Africa in 2018 alone. However, other metrics tell a different tale there were some 800 Japanese competes in Africa in 2018 as compared to just 250 in 2010.
One possible reason Japan is treading cautiously in Africa is that it likes to avoid moving unilaterally and may be seeking to work more closely with partners in Africa.
Of potential partners for engagement with Africa for Japan, the most important may be that other large Asian democracy which is concerned about the rise of China – India.
Japan and India were the two main drivers behind the launch in 2017 of the Asia-Africa Growth Corridor (AAGC), which is often touted as an alternative to Beijing’s Belt and Road Initiative. Bangladesh, Iran, Kenya, Madagascar, the Maldives, Mauritius, Mongolia, Myanmar, Seychelles, Singapore, Sri Lanka, Tanzania, Thailand, Zambia, and Zimbabwe all became members of the project.
Yet, three years later, little has come of the effort, and a frustrated Japan may refocus on its vision of a “Free and Open Indo-Pacific”, a vision announced in Kenya by Prime Minister Abe in 2016 at the TICAD VI summit.
Japan’s plan to help Madagascar build a port at the outer edge of the Indo-Pacific region suggests how seriously Japan is committed to the plan.
Japan envisions several economic corridors: a West African Growth ring to connect the Ivory Coast, Togo, Burkina Faso, and Ghana; an East African route to connect Kenya’s Mombasa with Uganda (which is likely in keeping with IGAD’s infrastructure corridor plans); and the Nacala Corridor which will run through the Southern African countries of Malawi, Zambia, and Mozambique (in order to export coal to Japan).
On the security front, Japan is well ahead of potential partner India in developing ties with the continent. India held its first defense exercise with seventeen African nations last year. Japan, conversely, has built its first overseas military base since World War II in Djibouti, and spent funds to help stabilize northern Nigeria.
These commitments have not come without risks. In 2017, Japan was forced to withdraw its 350-man peacekeeping contingent based in Juba, South Sudan, after its deployment caused controversy in Japan due to the ongoing South Sudanese Civil War. That same year, a Chinese official newspaper reported that a Japanese naval ship had sent scuba divers to approach a Chinese warship while both ships were docked in a Djibouti harbor.
“Japan bears the responsibility of fostering the confluence of the Pacific and Indian Oceans and of Asia and Africa into a place that values freedom, the rule of law, and the market economy, free from force or coercion, and making it prosperous,” said Prime Minister Abe at the opening session of TICAD VI.
The government of Ghana believes that investment in railway infrastructure will put the country on the fast track to economic development.
Construction on the first railway line in Ghana started in 1898, when the country was under British colonial rule. The line—between Tarkwa, a gold-mining center, and Sekondi on the coast—opened in 1901, and in the next two years it was extended north from Tarkwa to Kumasi, the capital of the Ashanti region.
When Ghana gained independence in 1957, it had a rail network of nearly 1,000 kilometers, but today only about a sixth of it remains in operation. Derailments and slow speeds are a common occurrence.
In December 2013, the government of Ghana released a railway master plan, setting out six phases of development. Targets included the rehabilitation of the existing narrow-gauge network, and the construction of new lines—built to standard-gauge specification—to link all regional capitals and ultimately connect Ghana with its neighbors, Côte d’Ivoire, Burkina Faso, and Togo. This would add more than 4,000 kilometers of track to the network, at a projected cost of US$23 billion.
The plan has received the support of successive administrations.
In 2017, President Nana Akufo-Addo established the Ghana Rail Authority by removing the components of the Ministry of Transport related to railways. The newly formed Ministry of Railway Development has two implementing agencies, the Ghana Railway Development Authority (GRDA) and the Ghana Railway Company Ltd (GRCL), the owner of the rail infrastructure and the operator of the railway routes, respectively.
The first phase of the plan involved completing priority projects over a four-year period from July 2016 to July 2020. The rehabilitation of the line between Accra and the Port of Tema has been completed, and the route reopened in January with a passenger service for 600 people. The line also links free zones in the area to the sea port, with some facilities specifically designed to take advantage of the railway link between the two cities.
The Takoradi–Tarkwa line is currently in development.
Earlier this year, South African state-owned rail and freight operator Transnet signed an agreement with the GRDA and the GRCL to develop a 66-kilometer standard-gauge railway line alongside the existing line in the Western region, between Takoradi and Tarkwa. The line is crucial for transporting freight, mostly for the mining and agriculture sectors.
Not all of the key investment in Ghana’s railway service has come from the government. Private sector initiatives, such as the completion of the first domestic facility for the production of concrete railway sleepers (as opposed to wooden sleepers) suggest that private companies are positioning themselves to take advantage of the railway boom.
Additional financing sourced through build-own-operate-transfer agreements, barter agreements, and public-private partnerships is integral to the success of the plan, says Richard Dombo, CEO of the GRDA. There has also been considerable international appetite for rail investment in the country. They have had discussions, for example, with steel producer ArcelorMittal about the right to extract iron ore at Sheini to a value equal to the cost of constructing a rail link between the mine and the coast for exporting the ore.
Ghana’s railway lines have historically been “engines of growth”, Dombo says, and the transport sector remains crucial for future development.
Since 1998, some thirty satellites have been launched into space by a number of African nations. Ghana joined the club in June 2017 when its first satellite was launched into orbit from the International Space Station. Students from All Nations University College, three of whomhad worked on the satellite, were among the 400 people who gathered in the southern city of Koforidua to watch a live broadcast of the launch, a historic moment for the country.
Named GhanaSat-1, the Earth observation satellite was designed and built in Ghana in conjunction with the Kyushu Institute of Technology in Japan, with support from the Japan Aerospace Exploration Agency (JAXA). It was completed in two years at a cost of US$500,000.
In the nearly two years the satellite was operational, Ghanaian scientists took images of the country’s 539-kilometer coastline for cartography. GhanaSat-1 was invaluable in training a new generation of scientists how to apply satellite technology in areas such as environmental monitoring to prevent activities like illegal mining and water pollution, climate monitoring for agriculture purposes, risk management, security, and intelligence.
Where Did It All Begin?
The Ghana Intelsat Satellite Earth Station in Kuntunse, near Accra, was commissioned in 1981. The Ghana Telecommunications Corporation operated it until 2008, when Ghana Vodafone took over as the major shareholder.
It was also in 2008 that Sherry Ayittey, minister of environment, science, technology, and innovation, first mooted the idea for Ghana to have a national space program. In the first phase of the plan, the Ghana Space Science and Technology Center was established on January 1, 2011, and placed under the Ghana Atomic Energy Commission’s Graduate School of Nuclear and Allied Sciences in Accra.
In phase two, on May 2, 2012, the center became the Ghana Space Science and Technology Institute (GSSTI).
The network will provide scientists with the world’s most advanced radio astronomy array.
Also in 2012, work began at the Satellite Earth Station in Kuntunse to convert it into a radio astronomy observatory. The Earth Station had three telecommunications antennas—32 meters, 16 meters, and 9 meters in diameter—but only the 16-meter antenna was still operational for satellite communication, so the larger antenna could be convertedinto a radio telescope. The GSSTI did the conversion in partnership with Vodafone and in collaboration with a team of South African scientists and engineers who had worked on the first phase of the Square Kilometre Array (SKA) in South Africa.
Ghana has signed up to the SKA Africa partnership agreement, which is spearheaded by South Africa and also involves Botswana, Kenya, Madagascar, Mauritius, Namibia, and Zambia. These countries’ radio telescopes will contribute to the network that will provide scientists with the world’s most advanced radio astronomy array.
In 2018, Ghana and South Africa jointly announced that “first light” science observations had taken place at the site in Kuntunse, signaling the successful conversion of a telecommunications antenna into a functioning radio telescope.
This is the first government-run radio astronomy facility in West Africa. It is operated by GSSTI in partnership with Vodafone, and is one of the four centers that resort under the GSSTI, namely the Satellite Communications and Development Center; the Instrumentation and Engineering Services Center; the Remote Sensing, GIS and Climate Center; and the Radio Astronomy and Astrophysics Center.
The Evolution of Satellite Technology in Ghana
Students at All Nations University College have done a pilot demonstrationof GhanaSat-2, a meteorological satellite, but the country is yet to deploy its first terrestrially launched satellite.
In 2018, the Grameen Foundation announced a satellite-supported farming initiative known as SAT4Farming. It uses digital technology and satellite imagery to provide small-scale cocoa producers in Ghana with individual farm development plans (FDPs) that would help them to make the right long-term decisions to improve their productivity and the sustainability of their crops. The initiative also enables cocoa traceability. Given the current economic climate, however, the fate of the project in the near term is uncertain.
Other Space Programs on the Continent
In the past decade, a number of Sub-Saharan African countries have entered the space economy to develop satellites and other technologies that can provide material benefits to their citizens. South Africa and Nigeria have the most advanced space programs on the continent, but as the technologies are getting more affordable, other countries are catching up.
Nigeria’s National Space Research and Development Agency was founded in 1998, and in the next twenty years it launched five satellites.
The South African National Space Agency was established in December 2010, but the country has been involved in space research and activities since helping early international space efforts in the second half of the 20th century. In 2002, South African Mark Shuttleworth was the second space tourist to join a Russian Soyuz mission to the International Space Station, making him the first African in space. In 2013, a candidate officer in the South African Air Force, Mandla Maseko, was one of twenty-three winners of a competition to attend a US space academy. He would have been the first black African to go into space. He spent a week at the Kennedy Space Center in Florida for tests and training, but the suborbital flight planned for 2015 never happened, as the private company that manufactured the aerospace vehicle went bankrupt. Maseko died in a motorcycle accident in 2019.
In 2017, the African Union announced plans to develop an African Space Agency. Ghana was a late entry to host the facility after bids from Egypt and Namibia. When Namibia withdrew its bid, the African Union announced in February 2019 that the headquarters of the new agency would be in Egypt. A recent African Union report has suggested, however, that the project was behind schedule.
The 2019 African Space Industry Report, published by Space in Africa, estimated that the African space industry was worth US$7.37 billion, and was projected to grow to more than US$10 billion in the next five years.
If completed, the Grand Inga Dam on the River Congo will be the largest hydroelectric power-generating facility in the world, and a leading US company looks set to take a critical role in a project that could bring electricity to millions of people across Central Africa.
“Inga II is part of the planned Grand Inga hydropower scheme, which, at 40 GW [gigawatts], would be the world’s largest and would be almost twice the size of Three Gorges in China. GE is helping to power the DRC now with Inga II and possibly much of Africa with Grand Inga,” reads a statement on the website of GE Renewable Energy, a division of General Electric.
On a continent where nations are starved for electricity to power their emerging economies, the Grand Inga will play a vital role. The construction of the multiple dams and transmission infrastructure needed for Grand Inga is estimated to cost about US$80 billion. Last month, GE South Africa Pty. Ltd. and the government of the Democratic Republic of the Congo (DRC) signed a memorandum of understanding on the project relating to some US$1.8 billion worth of projects. The arrangement between GE and the DRC includes US$1 billion for upgrading Inga I and II dams, and US$800 million for health infrastructure projects.
Raila Odinga, who is the African Union’s special envoy for infrastructure development in Africa and a former prime minister of Kenya, will attend a meeting in Kinshasa on April 28, 2020, that will include representatives from neighboring countries’ governments.
"The Grand Inga Dam alone could provide 40,000 megawatts, and the entire Congo River has the potential to generate 100,000 megawatts"
Estimates suggest that all of sub-Saharan Africa has an installed capacity of less than 140,000 megawatts. The Grand Inga Dam alone could provide 40,000 megawatts, and the entire Congo River has the potential to generate 100,000 megawatts using existing technology. At present, the GE deal is focused on increasing by 650 megawatts the electrical capacity of the two existing Inga dams, with an eye to playing a role in the Grand Inga project as it develops.
This isn’t the first time plans have been announced to build a massive hydroelectric project on what is, measured in volume of water, the world’s second-largest river. The potential of Inga Falls on the Congo River to provide hydroelectricity to Africa was envisioned by early colonial explorers and dreamed of by the Congo’s leaders after independence from Belgium in 1960, but has never been realized.
The retrofitting project, in which GE is set to play a critical role, will also include the two existing dams, Inga I and Inga II, which are in disrepair. The two dams, which have a combined capacity of 1,778 megawatts, were built during the era of former president Mobutu Sese Seko, in 1972 and 1982, respectively.
Old and New Players in Africa
"Political and security risks in the DRC may have kept many companies and investors away from the country, but China saw an opportunity."
General Electric’s contribution to improving energy production in the DRC is significant, given the limited engagement of US companies in addressing Africa’s huge infrastructure deficit. In recent years, while US companies have stepped back from such projects, China has moved assertively into Africa to help build dams in the Nile Basin countries Uganda and Sudan, and most recently the Grand Ethiopian Renaissance Dam, a source of geopolitical tension between Egypt and Ethiopia.
The DRC has experienced some terrible times in its recent history, most notably serving as theater for what has been referred to as “Africa’s World War”, which plunged nine African countries and multiple rebel groups in years-long fighting in the DRC. That war ended only in 2013, with the defeat of the rebel group the March 23 Movement. Political and security risks in the DRC may have kept many companies and investors away from the country, but China saw an opportunity. In 2007, China gained extensive mining rights in the DRC in exchange for agreeing to build much-needed infrastructure for the war-ravaged country. It was called the “contract of the century”. Yet, things have not always worked out for the DRC in some of its deals with China. A review of the project last year suggested that deal produced little tangible benefit. Elsewhere, Chinese investments in the DRC have been more beneficial.
The Trump administration has centered its Africa policy on countering Chinese and Russian influence. Conversely, most African governments have welcomed investments from all comers, and would be happy to see the world’s leading economies work together in expanding the continent's infrastructural network.