COMESA RISK ASSESSMENT BULLETIN Volume 1 – N o3- April 5 th 2009 - Fortnightly published by AFRIKASOURCES

Edited by AFRIKASOURCES – Author: Jean Philippe PAY ET [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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Dam..ned

The 1.8-billion-dollar (1.4-billion-euro) Chinese-engineered Merowe damMerowe damMerowe damMerowe dam has been inaugurated and will double Sudan's power production to

about 1,250 megawatts. Two of its 10 turbines, which were built by French group Alstom, are already in operation.

More than 40,000 people have had to leave their homes to make way for the dam and the vast reservoir that will be formed behind it north of the

capital Khartoum. It is the biggest project of its kind since the construction of the Aswan High Dam in Egypt in the 1950s and was developed by

China's CCMD consortium under the supervision of German group Lahmeyer.

Located in the north province of Sudan, about 500 km from the capital, it is a key-position project for both power generation and irrigation. Main

structures consist of dams and power plants. The main dam includes 3 types, namely the concrete face rock-fill dam, earth dam with clay core and

the concrete gravity dam, with a dam axis of nearly 9.8 kilometers, crest elevation is 303meters, and 67 meters for the highest point. The power

station installs 10 electric generating sets, the total installed capacity reaches to 1250 MW, 2 times as the present situation in Sudan.

Egypt has not expressed concern about this announce considering that the Nile Basin Countries have finalized 99% of a new agreement governing

the development and usage of River Nile water.

Ethiopia is also midway through construction of a dam upstream on River Omo, which is Lake Turkana’s main tributary, giving it 80 per cent of its

water. Local and international impact reports have indicated the Turkana could start drying up once the huge dam, owned by Ethiopian Electric

Power Corporation (EEPCO), cuts off the river to fill up a capacity of 11 billion cubic meters of water.

Kenya is expected $5 billion (R48 billion) to $10 billion of foreign investment from communication technology firms by next year, Bitange Ndemo, the permanent secretary at the Ministry of Information and Communication. East Africa's biggest economy is set to link up with the rest of the world via broadband from June, through three undersea telecoms cables. Burundi plans to privatize its main state-owned telecoms company Onatel this year to make it more competitive, government officials. Onatel runs a landline network, GSM and Internet services. Tanzania`s economic growth is expected to slow to 4-5 % from a previous estimate in 2008 of 7.5 %, the International Monetary Fund said. Ethiopia has scored surprisingly well and ranked among the highly stable countries in the world according to a Political Instability Index (PII)

developed by the Economist Intelligence Unit (EIU). The report shows that Ethiopia’s Political Instability Index is 5.1, while that of the USA’s is 5.3, the

country performing better than France, USA and Iceland with regard to political stability.

Clouds on Coffee exports

Africa’s biggest producer of robusta coffee cut its 2008-2009 forecasts for exports of the beans by 5.7 % after a drought cut yields.

Shipments in the 12 months through Sept. 30 may drop to 3.3 million 60-kilogram (132-pound) bags, compared with a Sept. 23

forecast of 3.5 million bags, according to David Kiwanuka, spokesman for the state-run Uganda Coffee Development Authority.

The revised figure is 2.8 % higher than the 3.21 million bags exported last season. “We have revised our forecast downwards

because we have had a drought, which affected our anticipated yields,” he said. “We have tentatively revised the forecast to 3.3

million bags.”

The East African country experienced a dry spell in the first three months of this year, which affected the secondary crop in the

main producing central and eastern regions, as well as the main crop in the southern and southwestern regions. Exports from Oct.

1 through March 31 rose 3.3 percent to 1.66 million bags, according to a tally by Bloomberg News. The country exported

256,579 bags last month, the agency said.

Uganda is Africa’s second-biggest producer of coffee, after Ethiopia. Robusta accounts for about 85 percent of the country’s

annual output and the country earned $388.4 million from coffee exports in 2007-08.

Kenyan premier says bad deals will be axed - Kenya has not audited its external debt register - where records of all loans and the

terms of repayment are kept - since 2001, and even that audit is a secret document. However, the government has completed

several investigations into scams. In 2006, the government auditor concluded an investigation into 18 questionable security-

related contracts known in Kenya as Anglo-Leasing, saying some of them involved shell companies and others may have been

overpriced. These contracts include the naval ship and communications centre.

“The Neue Zurcher Zeitung” reported that the probe into the Anglo Leasing scandal focused on about 885 million dollars of

Kenyan state contracts, including for weapons and police helicopters. Kenyan investigators suspect about half of that amount was

siphoned off into a network of offshore front companies, while about 170 million Swiss francs reached bank accounts in the Swiss

city of Geneva, at Schroder Bank, HSBC Private Bank and UBS, it added. A network of accountants and financial services firms

in Geneva were allegedly involved in the affair with a trail reaching into the British Virgin Islands and Guernsey.

It is one of a string of unresolved bribery cases that have tainted the Kenyan government's campaign against systemic corruption

in the country.

Fighting corruption

Libyan strongman and longLibyan strongman and longLibyan strongman and longLibyan strongman and long----time time time time intelligenceintelligenceintelligenceintelligence service chief Mussa Kussa was named foreign minister in a service chief Mussa Kussa was named foreign minister in a service chief Mussa Kussa was named foreign minister in a service chief Mussa Kussa was named foreign minister in a

ministerial reshuffle announced by parliamentministerial reshuffle announced by parliamentministerial reshuffle announced by parliamentministerial reshuffle announced by parliament- He replaces Abdel-Rahman Shalgam, who will become Libya's new

ambassador to the United Nations. Libya's information and electricity ministries were disbanded and other portfolios were

merged to trim a bureaucracy Libyan leader Muhammar Kadhafi has criticized.

Mr Kousa has been instrumental behind the scenes in guiding Libya from pariah status to a modicum of international

respectability. His move to a public-facing role will reinforce this process, and may well enhance the prospects of Saif al-Islam al-

Qadhafi to become head of state once his father leaves the scene.

Abdulhafid Zlitni, who held the economic planning portfolio, becomes planning and finance minister. He also is chairman of the

Libyan Investment Authority, which manages the Opec member's sovereign wealth fund of $69-billion.

Mohammed Ali al-Houeij, finance minister in the government line-up, was named minister of industries, economy and trade.

These changes were designed to convey a clear message-which the leadership was responding to the country's social and economic

discontent.

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New Cabinet

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Edited by AFRIKASOURCES – Author: Jean Philippe PAY ET [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: 20 April 2009

Fighting Piracy

COSATU v. King Mswati

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The European Commission has pledged EUR115million to improve infrastructure and remove regulatory barriers to trade in Eastern and Southern Africa. The North-South Corridor project is being driven by three of Africa’s main Regional Economic Communities –COMESA/EAC/SADC. The North-South Corridor is a pilot Aid for Trade project to improve infrastructure and remove regulatory barriers, thereby creating a reliable and efficient transport network and reducing bottlenecks that restrict trade. The goal is to improve regional trade and give countries faster access to international markets, thereby boosting growth and jobs. The contribution from the European Commission consists mainly of funding from the 10th European Development Fund, either directly for the North- South. The EU is by far the largest contributor to Aid for Trade initiatives worldwide, with a commitment of more than EUR 7 billion per year. By 2010, EUR 2 billion of Aid for Trade support will be dedicated to 'Trade Related Assistance' covering trade policy and regulation, trade development, and building of productive capacity. The World Bank also committed 500 million dollars to projects along the North-South Corridor, with an additional 500 million dollars to invest in projects that are significantly complementary to the North-South Corridor.

France has agreed to let Gulf nations take a minority stake in the French nuclear giant Areva. Kuwait and other Gulf countries could take a 1-to-5 % stake in the world's biggest builder of nuclear reactors. Paris has a separate deal with Egypt. Investment from the United Arab Emirates and Saudi Arabia could help Areva to strengthen its standing in a region that is interested in developing nuclear energy. Areva is the only nuclear concern dealing with all aspects of nuclear energy production - from uranium mining and its enrichment to the recycling of nuclear waste. The Bush administration also signed contracts for building nuclear power-generating industries with Saudi Arabia (Dec. 2, 2008) and the United Arab Emirates (Jan. 15, 2009). Potential Gulf involvement in the French nuclear industry has four key aspects: 1. A one-to-five percent stake may only be the starter for more substantial control. 2. Paris is ready to open its international nuclear establishment for Arab interests to come in by the front door. 3. The Gulf States can be expected to use this access to win a dominant role in the world's two leading energy markets – oil and nuclear power. 4. They can also use their access to advanced nuclear technology for creating the infrastructure for developing a military nuclear industry to rival Iran's.

China and India rivalry in China and India rivalry in China and India rivalry in China and India rivalry in Indian OceanIndian OceanIndian OceanIndian Ocean The presence of the Chinese and Indian warships in the Gulf of Aden underlines Beijing's and New Delhi's intense economic and strategic interests in the world's third

largest ocean. Both countries are hugely dependent on the petroleum deliveries that course through the Gulf of Aden and Strait of Hormuz to their ports. Defending

those supplies is one reason both are building bigger and bigger boats. China's navy, with more than 300 ships, may in fact soon surpass the U.S.'s as the worlds’ largest.

Beijing is certainly sparing little to stock its ships with armaments. India, in the meantime, is acquiring several nuclear-powered submarines to augment its 155 military

vessels in the ocean that bears its name.

Already, New Delhi and Beijing seem to be focusing their naval strategies on each other. China is constructing naval stations and refueling ports around India, including

in Burma, Sri Lanka and India's nemesis Pakistan. India has transformed a beautiful bay in the southern state of Karnataka into an advanced naval installation. Chinese

strategic planners look jealously on the fact that India has an aircraft carrier (the former HMS Hermes, purchased from the British Royal Navy and now called the

I.N.S. Viraat).

In the March-April edition of Foreign Affairs, Robert Kaplan envisions the U.S. as managing the rival ambitions of India and China into a workable security continuum,

even as Washington's ability to project naval power recedes. There are enough interlocking economic interests, he says, to keep tempers and national interests from

roiling the waters. For JUDAH GRUNSTEIN, from the World Politics Review, the Indian Ocean and Asia is a naval chessboard involving regional partners like

Australia and South Korea, and potential partners like India, to maintain leverage over the inevitable expansion of Chinese influence. That expansion cannot be

contained, but maintaining the ability to render it vulnerable in the event of conflict will provide a deterrent to any potential Chinese shift away from a peaceful rise.

Businesses from China and India are also pursuing strategies in Africa that are about far more than natural resources: in addition to rapidly modernizing industries, both

countries have burgeoning middle classes with rising incomes and purchasing power whose members are increasingly buying Africa's light manufactured products,

household consumer goods, and processed foods and using its back-office services, tourism facilities, and telecommunications.

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Security forces have deployed to outer islands of the Seychelles archipelago after a second vessel flying the Indian Ocean nation's

flag was seized by Somali piratesSomali piratesSomali piratesSomali pirates. Pirates hijacked the oceanographic research cruiser Indian Ocean Explorer near Seychelles'

island of Assumption with seven locals on board. Several weeks ago, pirates seized the yacht Serenity with three people on board.

"We have doubled the strength of our forces there and given the coastguards the necessary instructions. Our forces are ready for

any eventualities," said Brigadier Leopold Payet.

Seychelles President James Michel posted a somber five-minute clip on YouTube calling for support and Seychelles Foreign

Affairs Minister Patrick Pillay told reporters his government had contacted naval forces in the region to track down the boat.'

While the number of successful hijackings this year has fallen from a year earlier, there are near daily attempts and some gunmen

have shifted their focus to more remote waters north of Madagascar and near the Seychelles.

The Spanish associations of fishing vessels that target tuna in the Indian Ocean are demanding that the European bloc extend its

anti-piracy operations and control zone to the south-east of Somalia for added fleet protection. The Community tuna fishing fleet

– now totaling about 50 vessels – has been cut by 20 per cent over the last two years due to the threat of piracy.

According to the newspaper “Times of Swaziland”, South African trade unions [COSATUCOSATUCOSATUCOSATU] have called on the European Union

to impose sanctions on Swazilandsanctions on Swazilandsanctions on Swazilandsanctions on Swaziland in an attempt to force the kingdom to embrace democracy. Travel bans and the freezing

of King Mswati III’s assets and those of key members of his government are high on the agenda of the Congress of South African

Trade Unions (COSATU).

A letter has been send to José Costa Pereira, Council of the European Union Head of Africa Task Force, suggesting that the EU

has to be proactive and take leadership with regards to Swaziland. "If the Swaziland government continues to be unwilling to

implement democratic reforms, civil society organizations in Swaziland and Southern Africa have requested us to urge the EU to

implement targeted measures, including travel bans and the freezing of assets of key members of the government of Swaziland, including

the royal family until democratic measures are in place" wrote Ntshalintshali, Deputy General Secretary of COSATU.

COSATU also wants the EU to press for the release from jail of Mario Masuku, President of the People’s United Democratic

Movement (PUDEMO).

The Swazi King is said to have a net wealth of 200 million US dollars.

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NORTH-SOUTH CORRIDOR NUCLEAR GAMES