Brookings: Experts - Melvin Ayogu

Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent

Mon, 19 Mar 2012 14:00:00 -0400

Event Information

March 19, 2012
2:00 PM - 3:30 PM EDT

Saul/Zilkha Rooms
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036

New research indicates that trends in the misappropriation of foreign loans to African countries are even greater than previously projected. In fact, it is estimated that more than half of the money borrowed by African governments in recent decades was misdirected the same year, transferred in many cases to private accounts in offshore tax secrecy jurisdictions. In Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent(Zed Books, 2011), Léonce Ndikumana and James K. Boyce reveal these intimate links between foreign loans and capital flight, exploring the human cost of fund transfers as well as mechanisms to promote more responsible international financial systems.

On March 19, the Africa Growth Initiative at Brookings hosted a discussion of the book, featuring co-author Léonce Ndikumana. He was joined by Hippolyte Fofack, a senior economist at The World Bank, and Raymond Baker, director of Global Financial Integrity, who provided a broader assessment of the consequences of capital flight as they apply to Africa’s economic growth. Visiting Fellow Osita Ogbu, former senior economic adviser to the president of Nigeria, moderated the discussion. Senior Fellow Mwangi S. Kimenyi, director of the Africa Growth Initiative, provided introductory remarks.

After the program, participants took audience questions.

Participants

Moderator

Panelists

Léonce Ndikumana

Andrew Glyn Professor of Economics, Department of Economics and Political Economy Research Institute (PERI)
University of Massachusetts at Amherst

Raymond Baker

Director
Global Financial Integrity

Hippolyte Fofack

Senior Economist
The World Bank

Obama Considers Lawrence Summers for World Bank President

Melvin Ayogu — Tue, 14 Feb 2012 10:44:00 -0500

The saying goes “he who pays the piper dictates the tune” and this appears to be the driving force behind the appointment of people to fill the top positions at the World Bank and the International Monetary Fund. Although unwritten, the convention has historically been for the World Bank to be headed by an American and the IMF by a European. Despite some progress in promoting transparency and diversity at the World Bank and IMF, the appointment process at both institutions still needs to be far more open and inclusive.

It was recently reported that President Obama is considering his former director of the National Economic Council, Larry Summers, for the World Bank presidency. This choice is controversial given Summers’ checkered leadership record particularly with regard to his leadership style. There are certainly other Americans with proven leadership records like Condoleezza Rice and Colin Powell, both of whom have served as secretary of state. Additionally, there are other outstanding economists like Joseph Stiglitz and Janet Yellen, who would be a better fit although historically being an economist has not been a prerequisite for the job.

Before elaborating on Summers’ leadership style, it is useful to provide some perspective on the more recent legacies of World Bank presidents. Under James Wolfensohn, the World Bank began listening to other stakeholders, particularly those that criticized the bank’s structural adjustment policies in developing countries. Wolfensohn also openly acknowledged that the bank had made mistakes in the past, which helped boost the bank’s reputation as a more open institution. With Paul Wolfowitz, there was a push for greater gender diversity in the bank. As for the incumbent, opinions are still divided on Robert Zoellick’s legacy as World Bank president, but the institution’s capitalization increased by $5.1 billion under his leadership.

With the legacies of the previous World Bank presidents in mind, what would Summers’ legacy be as a World Bank president? I will begin first by usefully contrasting him to Joseph Stiglitz because both Stiglitz and Summers have served as World Bank chief economist and in senior positions in the U.S. government. I can envisage Stiglitz’s presidential legacy as a transformational leader who took on difficult reforms at the World Bank as I suspect that his term would be influenced by some of his views which ruffled feathers while he was the bank’s chief economist. Kaushik Basu describes him as “popular globally for championing the course of the discouraged and dispossessed and for not holding back on criticizing the U.S. Department of Treasury and the IMF.” Moreover, appointing a strong critic of the bank, who is accommodative of diverse opinions to lead the institution, will strike a slight compromise between the American-European hegemony of the Bretton Woods institution and the demands from the rest of the global community for a more inclusive voice at this ostensibly global intergovernmental agency.

By contrast, Summers will bring plenty of substance to the table but he is one for whom it bears repeating that leadership is both about “substance and style”, with style being just as important as substance. In this regard, it is important to note that substance in an organization does not come at more of a premium than at Harvard University, where Summers served as president. However, substance alone proved to be insufficient to sustain his stint at the helm of things in Cambridge. As noted by Felix Salmon, Summers’ style deficiency also manifested during his tenure at the bank with his insensitivity in articulating the economic logic of dumping toxic waste in developing countries. If sensitivity to socioeconomic issues is too much “political correctness” to expect from the World Bank’s senior management, this is nothing compared to what is expected of the institution’s president. However, this case transcends insensitivity because dumping toxic waste on an environment can shorten the lives of its inhabitants. Therefore, it is essentially about proposing a policy that would result in the widening of the life expectancy gap between the developing countries and the West.

Can we ask President Obama not to appoint to the head of the world’s preeminent development institution a leader with a predilection, even if hypothetical, to trading toxic waste for food in developing countries?

Authors

Melvin Ayogu

Image Source: © Nicholas Roberts / Reuters

Cameroon’s Presidential Election: Will the Votes Count?

Melvin Ayogu — Thu, 06 Oct 2011 09:49:00 -0400

On October 9, Cameroon will hold a presidential election. The agency entrusted with this task is Elections Cameroon (ELECAM) established in 2006. The question on the minds of many Cameroonians is whether ELECAM will deliver a fair election as a first step towards substantive democracy, but many fear that a rigged campaign will trigger a bloody civil unrest.

There are several reasons for this apprehension. Since independence, Cameroon has been led by two presidents, Ahmadou Ahidjo, for 21 years, and Paul Biya, for 29 years. Ahidjo, who was designated by the French to take over Cameroon at independence, held five terms as president of a single-party democracy with no political rivals. In November 1982, due to ill health, Ahidjo transferred power to his constitutional successor, Paul Biya. Since 1982, five Presidential elections have taken place in Cameroon—two under a single-party system and three under a multi-party system—all of which were won by Paul Biya. The last two presidential elections in 1997 and 2004 witnessed extraordinarily low voter participation, partly reflecting voter apathy with the previous government body, the Ministry of Territorial Administration, charged with organizing these elections. The October 2011 Presidential election will be the first test of ELECAM’s ability to conduct elections in Cameroon; Cameroonians and the global community are paying very close attention to the process as it unfolds.

In Cameroon, the political system is relatively open. In fact, the system as it currently exists, has been criticized for its ultra-openness by setting a low bar for individuals and parties to vie for elected positions. Critics argue that it has been deliberately designed to engender too many political parties, which results in a highly fragmented opposition. Therefore, the system cannot be faulted on the basis of erecting discriminatory barriers to entry. I will examine several other aspects of the process that result in unfair campaigns, as entry is just the first step.

Although the freedoms of expression and assembly are enshrined in the constitution, these guarantees are frequently abridged by the state’s restrictions on political content and assembly. The State owns all advertisement billboards and charges exorbitantly for their use. In Cameroon, billboards are a crucial campaign apparatus because they are highly effective in their reach, providing impressionable alternatives in environments where television set ownership and electricity distribution is very limited. Furthermore, the government imposes restrictions in urban areas with regard to where campaign posters can be posted. Campaigning is a crucial aspect of any party competition. If some contestants are de facto blocked because they are not able to campaign freely, supporters of those groups may feel despondent and, thus, opt not to participate in the voting process. Schemes that induce low voter turnout reinforce existing patters of participation and favor incumbents.

Intimidation of political opponents mainly through kidnappings and arbitrary arrests by the state often occurs; well known cases are Jean Jacques Ekindi and Kah Walla, both who were presidential contenders. Generally, when people cannot make their views known or voices heard because civil rights — freedom of speech, assembly and press — are abridged, the information necessary to induce widespread voter participation is again diminished.

Although many apparatus exist that inhibit voter turnout, political patronage can encourage voter participation, although for the wrong reasons. A democratic process is not inclusive when it is embedded in socioeconomic arrangements that control resources needed for basic survival. Patronage politics is pervasive in Cameroon, which is regularly ranked as a highly corrupt country by Transparency International in its annual TCI index. Therefore, it is easy to understand how 50 years of patronage politics in the midst of economic vulnerabilities can force people to use voting as a means of accessing resources. The political parties understand this game; in West African parlance: “You vote for us, you eat; no vote, take your chances; wrong vote, no chop money”. In such a setting, votes count for something other than electing officials food. However, one can argue that such an outcome, which may seem as hopeless at face value, has long run benefits because it carries the seeds of liberation. Over time, the strategy of selling votes for bread will backfire because it unwittingly provides incentives necessary to achieve broad voter participation one credible way to change the corrupt cycle.

In addition to poor voter turnout and patronage politics, the integrity of institutions, determined by laws and administrative arrangements that underpin the electoral process, are inherently flawed. ELECAM may not have been set up to deny Cameroonians a fair selection process for their elected representatives, but it certainly has enough loopholes to allow for abuse. There are at least three ways in which this key institution can be exploited by the government: (i) Membership appointments to the election board are made by the president of Cameroon, who can deliberately frustrate any member who refuses to protect his interest in the board. This is made possible by the fact that all remuneration and allowances for ELECAM board members are discretionarily determined by the President of Cameroon. Furthermore, should any ELECAM board member resign for whatever reason, the law allows the president to fill such vacancy without any consultation with political parties. (ii) Reassignment of civil servants to ELECAM on the request of the Director General can be another avenue for interfering with ELECAM’s autonomy, although ostensibly it can also be a source of strengthening ELECAM’s administrative capabilities. However, if this were to be the true intention, a clear strategy for stopping this practice when ELECAM stabilizes needs to be in place. (iii) Through the strategic supply of information, ELECAM autonomy is reduced by its close association with the Territorial Administrative Authority (MINATD). According to Section 40(2) of Law N° 2006/011 of 29 December 2006 establishing ELECAM, “The minister in charge of territorial administration shall ensure permanent liaison between government and Elections Cameroon… the latter shall submit copies of minutes and progress reports to him.” As the state security apparatus, MINTAD’s numerous functions include “drafting and implementation of rules and regulations relating to civil liberties, the monitoring of political organizations, religious movements, and public order maintenance together with specialised forces.” These powers make the Territorial Administrative Authority’s permanent liaison with the Electoral Commission a concern, as those powers could be abused to influence election outcomes.

Through clever administrative arrangements in structure and process, the Government of Cameroon has morphed ELECAM into an instrument of political control over the democratic process. As section 40(2) of the enabling legislation shows, ELECAM is not structurally independent. Furthermore, those running the agency have no autonomy from powerful political parties. Their career incentives align with that of political leaders. For example, they hold a four-year term with an option to renew indefinitely, only at the behest of the president. However, a single term of the ELECAM chairperson does not span the term of a president, meaning the chairperson’s position is subject to the president’s discretionary appraisal. Additionally, the internal rules of the agency make it easy for the chairperson to rule all board decisions, which are determined by a simple majority vote.

So, what can be done to reduce the anxiety over the integrity of the electoral process? First the electorate must make their voices heard—go out and vote on election day. As part of the government’s strategy of intimidating voters and inhibiting the free exchange of information, the Cameroon Minister for Communications has banned twitter as of February 2011 and threatened to block other social networking devices. By this panicky reaction to voter awareness, the government clearly signals its alarm at the implications of democratic consciousness and vigilance—vox populi. Therefore, continued vigilance over the activities of ELECAM and cognate agencies such as Territorial Administrative Authority (MINATD) is an important monitoring role, which also empowers the public.

Given the institutional set-up that confers decisive advantage to the incumbent president, it is unlikely that the election will be fair, resulting in the reelection of the incumbent. Assuming the 2011 race is a lost cause, what further steps can ensure future fair elections? Two issues must be addressed: The institutional deterrents to voter turnout and ELECAM reform.

By ensuring its independence, the following recommendations will strengthen ELECAM and enable the agency to deliver fair future elections:

Establish ELECAM’s independence from the state: Decouple ELECAM from MINATD by repealing section 40(2) of Law Nº 2006/011 (ELECAM enabling legislation).
Amend the conditions of service for electoral commissioners: electoral commissioners should be appointed for an irrevocable term of service which should span, at minimum, the length of a single term of the presidency.
Amend the appointment process for electoral commissioners: Appointments to the electoral board due to resignations should follow the same process as with initial appointments, instead of presidential discretion as is currently the case.
Amend the span of ELECAM’s mandate: A revamped ELECAM should be entrusted with the entire electoral process including the declaration of results currently vested in the Constitutional Council.

These recommendations can improve the electoral process in Cameroon. However, the commitment to a credible reform must originate from the people, as it is not in the interest of an incumbent government to initiate reforms that dilute its stronghold on power.

Authors

Melvin Ayogu

Image Source: Â© Talla Sop Ruben / Reuters

Conflict Minerals: An Assessment of the Dodd-Frank Act

Melvin Ayogu and Zenia Lewis — Mon, 03 Oct 2011 11:53:00 -0400

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which focuses on reforming U.S. financial regulation as a response to the financial crisis, was signed into law on July 21, 2010. Section 1502, which falls in the final ten pages of the 848 page act, imposes additional reporting requirements on U.S. companies regarding their sources of certain “conflict minerals.” The section is intended to address a concern by Congress “that the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo and adjoining countries (together called ‘DRC countries’) is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein…” Presumably, this provision is the result of strong advocacy by interest groups concerned with restoring peace and stability in the DRC sub-region. Countries covered under this legislation are the contiguous nation states of South Sudan, Uganda, Rwanda, Burundi, Tanzania, Malawi, Zambia, Angola, Congo, Central African Republic, and Democratic Republic of Congo. While the humanitarian underpinnings of this legislation are commendable, much remains to be done.

The presence of this provision in a bill on financial sector reform is, to say the least, unexpected. Although it may have initially seemed a minor addition to such a major reform bill, media attention around it indicates otherwise. Moreover, the Securities and Exchange Commission (SEC) has yet to issue a directive on the provision despite the legislation being passed over a year ago. This reality and recent challenges to the constitutionality of some sections of the Dodd-Frank Act have kept the legislation on the front burner of current policy debates.

Primarily, the Act uses the instrumentality of “name and shame,” and is directed at companies engaging in economic activities in which conflict minerals are “necessary to the functionality or production” of their manufactures. The regulated minerals are together known as “3TG” metals—tin, tantalum, tungsten, gold (and others determined by the U.S. Secretary of State as financing conflict in the DRC countries)—and are modeled after a certification scheme for “conflict diamonds” commonly called the Kimberly Process. The breadth of industries affected includes aerospace, automotive, electronics and communications, jewelry, healthcare machines, and manufacturing conglomerates.

The burden on affected companies is deliberately severe to acknowledge the serious realities for which the provision is intended. For a company to be compliant, it must, in addition to filing three different forms of paperwork with the SEC, publish a “Conflict Minerals Report” in both its annual report and website. The report essentially requires the country of origin to affirm whether its conflict minerals are “DRC conflict-free” and provide evidence proving this conclusion. Therefore, companies will need to conduct supply chain due diligence and, where necessary, perform third-party verification and/or furnish details which may include the mine of origin. If the company is unable to ascertain the source of its conflict minerals, this fact must be disclosed in both its annual report and website.

Two important implementation issues offer insight into whether or not the law will be effective. Both issues—arrangements for compliance monitoring and enforcement machinery—have been delegated to three government agencies: SEC, State Department, and United States Agency for International Development (USAID). To appreciate the compliance challenges which are likely to confront regulators, it is important to consider different stakeholders’ reactions to the legislation. One group, comprised of U.S. businesses and artisanal miners in DRC countries, expressed concern over the adverse consequences on the corporate “bottom line” and on the income of poor miners whom have few alternative employment opportunities. Another group, comprised of U.S. corporations concerned about the victims of violent conflicts in DRC countries, note the costly implications of the legislation, but hope to implement constructive solutions to address the challenges posed.

The National Association of Manufacturers estimates compliance costs will fall between $9 billion and $16 billion, which are significantly higher than the SEC estimate of $71 million. The variation between the two estimates is huge; however, until the SEC finalizes the regulation, these estimates remain speculative and without a solid-basis for determining the true compliance costs. It is reasonable to expect the SEC will be mindful of certain complicating factors that could unnecessarily escalate compliance costs for companies already struggling under trying economic times. Additionally, such diligence will serve to minimize—to the extent feasible—the unintended adverse effects of the provision on people’s livelihood in DRC countries. Locals are already apprehensive that U.S. companies may nearly boycott conflict minerals originating from DRC countries as a matter of expediency. However, corporate anxiety over uncertainties regarding the severity of compliance regulations can be lessened by pointing out that the Conflict Minerals Report requires only a “reasonable” country of origin inquiry. This regulation contains an escape clause for companies struggling with verification issues—if a company is unable to determine the origin of its minerals, it must simply disclose that fact.

U.S. companies’ and local miners’ concerns are well founded; however, the law is intended to force a paradigm shift in the cost-benefit assessment of mining and thus induce the desired behavioral change in the players. By forcing beneficiaries of mining activities to bear the full costs of doing business—which previously fell upon society—the law partially achieves its purpose. Local beneficiaries would now have to consider alternative means of livelihood or participate in the trade in a manner that does not initiate violence. Similarly, companies that trade the minerals may either have to explore alternative sources of 3TG metals that do not fuel conflicts, or devise rules of procurement within the region which are conflict-free.

These are serious issues of not only economic survival, but also life and death. Clearly, the appealing formula is for all sides to craft a lasting solution to mitigate conflict in the sub-region. DRC, however, maintains little authority in the eastern region of the country where this conflict is most pronounced and is, therefore, incapable of stabilizing the zone. Additionally, some adjoining countries, which are expected to aid the peace process, are instead unscrupulously manipulating the disorder to their advantage. Many adjoining countries also knowingly fuel the crisis by exporting products originating within the borders of their neighbors. For example, Uganda has no significant gold resources and yet has historically been an important gold exporter in the sub-region.

Clearly, addressing trade-related drivers of the humanitarian crisis in DRC countries must go beyond value-chain verification by U.S. businesses. Fortunately, Congress has signaled it is aware of this limitation by pushing beyond supply chain due-diligence and has enjoined the Secretary of State to liaise with USAID in formulating a strategy for peace and stability in the sub-region. Recent media coverage suggests that Dodd-Frank has indeed brought increased awareness of the humanitarian crisis and its trade-related dimensions. However, as the law commands, the proposed partial solutions are incomplete and should, in our opinion, incorporate a far-reaching, global strategy on conflict minerals.

Meanwhile, we offer the following suggestions as a call to action for the SEC, State Department, USAID, and the US Congress. They will make the implementation of the regulation more effective and will inform all stakeholders—manufacturers, NGOs and the DRC countries—of possible ways to move towards a lasting solution to the humanitarian crisis.

The SEC should seize the opportunity to supplement its direct monitoring with whistle-blower support from the NGO community, whom are already interested observers. Although the SEC directly monitors compliance through corporation filings, its audit verification strategy can be improved by co-opting the NGO third-eye.

It is important that the SEC clarifies any ambiguities surrounding definitions and standards, particularly with regard to audit. Presumably many of these vexing issues would have been tabled during the consultation stage when industry and NGOs were allowed to submit comments for consideration by the SEC. Undoubtedly clarity will reduce the overall cost of compliance and discourage the tendency to subvert the law.

In its rule making, the SEC may find instructive the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This guideline has been widely applauded as an outstanding outcome of a multi-stakeholder process. According to remarks by U.S. Secretary of State Hilary Clinton during the 50th Anniversary of the OECD Guidelines for Multinational Enterprises in May 2011, “… they do bring together labor, civil society, and business to create the broadest possible consensus behind them. This is truly the work of a global policy network in action.” The guideline has been endorsed, among others, by the NGO community and the U.S. State Department.

As the law currently stands, the most obvious punishment it carries is reputational, although other punitive measures could potentially be specified. Definitively articulated financial consequences for non-compliance will better enforce regulations than a threat to a company’s reputation, and complement threatening non-trivial compliance costs.

Congress should note that over the long term, coordinated pressure along the entire illicit value chain of conflict minerals would be more effective than a standalone intervention aimed solely at the extractive stage. For armed groups to purchase weapons, it may be necessary to launder part of the money from illicit sales that often involve human rights violation and crime. Therefore, additional remedial measures—such as supporting the global Anti-Money Laundering and Countering of Terrorism Financing (AML/CTF regime)—are indeed helpful. A good starting point would be to lobby state parties to domesticate the United Nations Convention against Corruption as well as support the implementation of Financial Action Task Force (FATF 40+9) recommendations.

Manufacturers should engage suppliers by enlightening them on how to best implement supply chain due diligence and third party verification. They can also clarify roles and expectations for suppliers as well as specify immediate and long-term implications for ongoing contractual agreements.

Create a stronger platform to promote U.S./Africa engagement aimed at establishing political order and legitimate regimes in the sub-region. This can be realized through forging a tripartite coalition of governments including the Africa Union, NGOs, and businesses. USAID’s new Community Mining Program, Friends of Congo, and Motorola Solutions for Hope are outstanding examples of ongoing initiatives by governments, NGOs, and businesses, respectively, to address the situation in the DRC from various angles. Harnessing the collective experience of these committed actors increases the likelihood of a breakthrough in the quest for a lasting peace.

Countries neighboring the DRC must help reduce the conflict minerals trade. Without support from the sub-region, the core problems of the conflict will not be fully addressed. Tanzania, as a DRC country that exports its own gold, has a good reason to partner with the government of DRC to control this problem. Uganda and other complicit states must work towards increasing accountability regarding their involvement in the conflict minerals trade.

Ultimately, resolving the multifaceted crises in the DRC requires coordination within the region and the support of the international community. Dodd-Frank is a good start at the international level. Unfortunately, the lack of a binding global due diligence regime leaves a gap in the fight to end the crisis. Activities of multinational enterprises, who do not face domestic constraints with regard to supply-chain due diligence, remain a challenge to mitigate conflict. This speaks to another reason why a coordinated global effort is an imperative. By working together to establish a lasting peace in the heart of Africa—a global public good—everybody wins: businesses reap cost savings driven by peace rather than by exploitation and opportunism, while locals enjoy peace and stability that are conducive to income growth and job creation.

Authors

Melvin Ayogu
Zenia Lewis

Image Source: Â© Mohamed Nureldin Abdallah / Reuters

Around the Halls: African Elections

Wed, 21 Sep 2011 11:18:00 -0400

In the next two months, a number of African countries will hold presidential and legislative elections. Historically, many of these countries have faced challenges in their electoral process and given the fragility, these elections will prove to be a test to the uneasy political climate throughout the region. Mwangi Kimenyi, Nelipher Moyo, Julius Agbor, Melvin Ayogu, Anne Kamau and Olu Taiwo discuss the upcoming elections in Madagascar, Cameroon, Liberia, Gambia, Congo as well as the growing importance of China in Zambia, post-election.

Zambian Elections: The Growing Importance of China
Mwangi S. Kimenyi, Senior Fellow, Director, Africa Growth Initiative and Nelipher Moyo, Research Analyst

On September 20, 2011, Zambians went to the polls to elect a new president after one of the most contested election campaigns in the nation’s history. The contest was primarily between the incumbent Rupiah ‘RB’ Banda, who represents the ruling Movement for Multiparty Democracy (MMD), which has lead the country since its first democratic elections in 1991, and Michael “King Cobra” Sata, leader of the Patriotic Front and a former MMD member.

Mr. Banda has pointed to the country’s recent economic growth and prudent economic management as justification for why he should be re-elected. Sata seeks to reach out to unemployed youths and the poor-- the constituency left behind in Zambia’s recent economic growth. Although Zambia was recently reclassified as a middle income country, many Zambians do not enjoy middle income living standards.

Mr. Sata has previously spoken out against China’s ‘exploitation’ of Zambia’s minerals and its poor labor practices. During the 2006 elections, China’s ambassador to Zambia threatened to cut diplomatic ties with Zambia if Sata was elected president. This was one of the first times that China interjected itself in the internal political affairs of an African country. While China denies providing any direct campaign assistance to Banda’s reelection bid, there is no denying the ‘made in china’ Banda campaign favors present at rallies. Some argue that this election is in fact a referendum on China, with Banda representing those Zambians in favor of closer ties and Sata representing those in favor of a more cautious approach.

Should Mr. Banda win the election, the country‘s policies will remain more or less the same. Despite softening his stance on China, it is not clear what the implications of a Sata win would be on China-Zambia relations. Would Mr. Sata revert to his previous anti-China stance, or would he prove to be more pragmatic and continue to engage the Chinese who are important for the country’s growth?

There are two areas of concern; first, Mr. Sata is among those who supported former President Chiluba’s disgraceful third term bid. In the event of a Sata Presidency, it will be important to ensure that ‘King Cobra’ does not have a similar lapse in judgment. Second, while Zambia has a history of peaceful elections, there are a large number of unemployed youths who can be mobilized for violence should either candidate fail to concede the election. It will be important for both candidates to put the interests of the country above their own.

Sustaining a Stable Post-Elections Democracy is the Crucial Challenge Facing Madagascar
Julius Agbor, Africa Research Fellow, Africa Growth Initiative

The 2011 presidential and parliamentary elections in Madagascar have been postponed three times since the beginning of the year, due to the unfavorable political climate in the country. As has been the tradition in the past, presidential elections in Madagascar have raised ethnic tensions, whereas parliamentary elections have generally taken place smoothly. Whether or not the forthcoming Malagasy election will be free and fair seems not to be the main problem. The critical challenge facing the country is sustaining a stable post-elections democratic government, considering the high degree of ethnic polarization that has characterized Malagasy politics since 1990 and has led to the frequent deposition of democratically elected Presidents. Ethnic tensions between the coastal Betsimisaraka tribe of long serving former President Didier Ratsiraka, and the highland Merina tribe of recently deposed President Marc Ravalomanana, have often polarized Malagasy political debates, fueling violent anti-government demonstrations that frequently paralyze state institutions. A recent episode is the military-backed uprising in March 2009 that led to the deposition of democratically elected President Ravalomanana’s government and the institution of a High Transitional Authority led Andry Rajoelina. Ravalomanana, who was in the third year of his second and last five-year term in office, engaged the country in an aggressive economic recovery path following a 12 percent drop in GDP provoked by the 2002 political crisis. Sadly, Ravalomanana’s economic and political reforms have largely been reversed by his successor, Andry Rajoelina.

Madagascar’s polarized politics and frequent institutional and policy reversals are creating additional disincentives for investors in a country plagued by negative per capita income growth, high inflation, and staggering poverty levels. The greatest task ahead for Madagascar’s post-election would be to uphold the outcome of the November 2010 referendum in which a new constitution was endorsed.

Autocracy in Cameroon: C’est la Vie?
Melvin Ayogu, Fellow, Africa Growth Initiative

On October 9, Cameroon will hold its presidential election. Our question, and that of many Cameroonians and international observers, is if anything has changed to ensure a fair contest, since it is not apparent that the newly established electoral commission, Elections Cameroon (ELECAM), is able guarantee a just process.

Since gaining independence in 1960, Cameroon has only been led by two presidents, who are from the same political party: Ahmadou Babatoura Ahidjo for 21 years and current President Paul Biya for 29 years. Biya has also recently announced plans to run again. Beyond the obvious problem of an autocratic history, there are many other reasons to doubt that the upcoming elections will be free and fair. The system, as it currently exists, has been criticised for its ultra openness. Critics argue that it has been deliberately designed to engender too many political parties, which prevents unstructured opposition from competing with the dominant political party. In addition, there is unequal access to the media as the State owns all the bill boards and charges exorbitantly for their use – a crucial tool to the campaign apparatus in developing countries where ownership of television sets is low and electricity very limited. Lastly, the design of ELECAM is far from independent, as the President appoints members to the election board, and laws require line reporting of ELECAM activities to the state security apparatus.

The recent ban on twitter does not give much hope that Cameroon is on the way to a meaningful procedural democracy, where free and fair elections would be the norm. Without a strong commitment to the reform of ELECAM’s structure, management and control, the idea of free elections in Cameroon remains an aspiration.

Liberia Elections: Solidifying Peace or Reversion to Conflict
Mwangi S. Kimenyi, Senior Fellow, Director, Africa Growth Initiative

On October 11, Liberia will hold presidential and legislative elections. This is a critical juncture for this post-conflict country, and fair and peaceful elections will be instrumental in solidifying gains made over the last eight years since the cessation of conflict. But Liberia remains a fragile state and tensions arising from hotly contested elections could easily reverse the recent gains. A credible election process will also impact Liberia’s economic growth trajectory, especially in regard to prudent management of natural resources. With increasing interest in oil exploration, drilling and the exploitation of other natural resources in Liberia, the election of a leader who is not committed to improving governance could expose the country to natural resource curse.

The incumbent president, Ellen Johnson Sirleaf, has been in power nearly six years and will face 15 other presidential candidates. Early in her term in office, President Sirleaf commanded broad support and there has been significant progress in consolidating peace and improving the economy. She has been particularly successful in forging a positive post-war image for the country internationally. However, her administration is increasingly facing criticisms for its failure to effectively deal with rising poverty, youth unemployment and corruption. The president is also being criticized for failing to devolve powers of what is considered an imperial presidency.

The upcoming Liberian elections promise to be most hotly contested in the country’s history. With a crowded field of presidential hopefuls, it is unlikely that any single candidate will receive the minimum proportion of votes required for an outright win. Thus, a runoff election is almost certain. Already the election campaigns have fractured the society along various axes of identification. Given the fragility of the security situation in Liberia, these elections could trigger widespread violence. The African Union and the broader international community must be prepared to assist in the electoral process and beef up security so as to prevent a replay of the recent Ivory Coast scenario.

The Gambia: Free and Fair Elections
Anne Kamau, Africa Research Fellow, Africa Growth Initiative

On November 24, 2011, The Republic of The Gambia will hold its fourth democratic presidential elections. The current president, who was elected by the popular majority, is seeking a fourth term. The opposition sees these elections as a defining moment for the future of Gambia, with the president’s reelection results bringing either the establishment or the end of a monarchy. The international community and missionaries have expressed concerns about the conduct surrounding the elections, including the voter registration process and the issuing of old identification cards. Observers are concerned that foreigners from Guinea Bissau are being registered to vote in Gambia. Natives have also expressed concern that a repeat of the turmoil that followed elections in neighboring Ivory Coast will occur in Gambia if the election process is marred by fraud. As the election date draws near, the Independent Electoral Commission (IEC) is challenged to oversee the free and fair elections and significant progress has been made to ensure this happens. However, the political undertones remain tense, with opposition not openly campaigning and fearing terror if they lose. It is evident that citizens desire a change, but the incumbent president will not relinquish power willingly. Gambia deserves the urgent attention of the world to oversee a peaceful process of free and fair elections. International communities should advise and assist in the election process to avert any violent eruptions during and after elections and to help avoid a repeat of Ivory Coast in The Republic of The Gambia.

Democracy at the Crossroads: The 2011 Elections in the Democratic Republic of Congo (DRC)
Olu Taiwo, Africa Research Fellow, Africa Growth Initiative

The presidential election in the Democratic Republic of Congo takes place on November 28, 2011 in advance of the mandate for the current president, Mr. Joseph Kabila, expiring on December 6, 2011. Current events in the country cast doubts on both the possibility of holding the election on this schedule and the credibility of the outcome if held under the current circumstances.

There are enormous challenges to the democratic process. Pre-election violence has recently surged in the capital city and elsewhere, while renewed incidents of violence are reported in the troubled eastern part of the country. The U.S. Department of State designates the DRC as a Critical Crime and High Political Violence country. Preparation for the election is underfunded, as donors have been unable to provide adequate resources. International funding of the electoral budget has dropped from 80 percent in 2006 to 40 percent in 2011 and the DRC government is unable to make up the shortfall.

Recent changes to the electoral framework challenge the credibility of the outcome. A constitutional amendment was passed in January 2011 that eliminated the second round of voting during presidential elections. This implies that a minority of total votes may elect a president as long as the candidate receives more votes than other candidates. It also makes it possible that support from a few ethnic groups or provinces would be sufficient to win the presidency. This portends clear dangers to election credibility in a country that is home to as many as 250 ethnic groups. In addition, the highest electoral body, the Independent Election Commission (IEC), which is thought to be fairly balanced in terms of composition, has been replaced by a new Independent National Election Commission (INEC) that is constituted with a more partisan majority that leans toward the ruling party.

The DRC remains a fragile state. The forthcoming election presents an opportunity to consolidate the democratic process initiated in 2006 when multiparty elections were held for the first time in 40 years. The challenges constitute real dangers of missing this opportunity.

Authors

Staying the Course: U.S. – Africa Relations

Melvin Ayogu — Thu, 30 Jun 2011 00:00:00 -0400

U.S.-Africa relations have certainly been on the front burner in recent weeks. On June 6, U.S. President Barack Obama hosted Nigerian President Goodluck Jonathan at the White House. The next day, President Obama also hosted Gabonese President Ali Bongo Ondimba. Four days later in Zambia, U.S. Secretary of State Hillary Clinton addressed participants at the closing ceremony of the African Growth and Opportunity Act (AGOA) Forum. Designed to provide preferential treatment to 37 African countries deemed to be making progress in economic and political reforms, AGOA remains the core of U.S. trade policy toward the continent over the last 10 years. Secretary Clinton also traveled to Tanzania and Ethiopia, where she addressed the Africa Union and had private talks with the Ethiopian Prime Minister Meles Zenawi. Last week, First Lady Michelle Obama traveled with her daughters in South Africa and Botswana on an official visit.

Certainly both the United States and African countries value good relations. However, this does not fully explain why the Nigerian president visited the White House barely a week after his inauguration or why President Obama would host Gabonese President Ali Bongo, whose visit was knowingly controversial and caused plenty of public outrage. What do the presidents of Nigeria and Gabon hope to gain and what can the U.S. exact in return?

Prestige and recognition is one reason why both these presidents looked forward to be hosted by President Obama. Legitimacy in the eyes of the U.S. and African public is another compelling reason. Nigeria is the most populous country in Africa with enormously unfulfilled economic potential and a fledgling democracy that has, in the eyes of the international community, failed to deliver a credible process in its last three elections. By all measures, Nigeria is seriously corrupt and poorly governed. It is as poorly governed as Gabon, but its governance indicators do not reflect this because Nigerians are very enterprising, thus enabling them to better cope with their predicament. Using information from the United Nations Development Programme’s Human Development Index to construct a practical indicator, such as the gap between a country’s wealth ranking and its welfare ranking, Nigeria registers a mere 7 percentile deficit. By contrast, Gabon registers a 16 percentile deficit. While President Jonathan of Nigeria is not responsible for the socioeconomic predicament of his people, the same cannot be said of President Ali Bongo of Gabon, who currently faces widespread allegations of plundering his country’s public resources in collaboration with his late father whom he succeeded after the latter’s 42 consecutive years of rule.

Both African presidents would like to be recognized for incipient reforms. However, many of the promised reforms have yet to be delivered. President Jonathan would like to be acknowledged for keeping his promise to conduct a credible election in Nigeria or at least for improving the status quo. Yet, the same cannot be said for the promises of reform made by President Ali Bongo. So, why did President Obama host a visit by President Bongo at the White House? The short answer is that Gabon is of strategic interest to the United States and whenever foreign policy principles are in conflict with domestic interests, the latter trumps the former.

There are maritime security interests for the U.S. around the oil rich region from the Gulf of Guinea to Skeleton Coast. There are also U.S. expectations of Gabon that include weaning France’s Africa policy of “Franceafrique,” at least with regard to Gabon and by extension to other francophone countries. Such diminution of Frances’ sphere of influence conversely promotes U.S. standing among traditionally francophone states within the sub-Saharan region. Furthermore, acting in conjunction with Rwanda, Uganda and Ethiopia, Gabon has been busy with “African affairs”, particularly around the troubled countries of Central: Africa Chad, Central African Republic, Congo, Democratic Republic of Congo, Burundi, Sudan and Somalia. Gabon also withdrew from OPEC membership in 1995, which is a preferred outcome for large oil-consuming countries like the United States.

It seems that the Gabonese president’s visit is an accommodation of the interests of a strategic ally, while there is an opportunity to leverage the Nigerian president’s visit to encourage more meaningful reforms in the nation. President Jonathan could use support from the U.S. in pressing forward with some fundamental reforms in Nigeria in the area of public finances at the national, state and local levels. However, in order to achieve meaningful reforms, the political power base in Nigeria must shift. To accomplish this purpose, President Jonathan needs all the help he can muster, externally and internally.

President Obama’s historic visit to Ghana in 2009 enunciated his administration’s foreign policy thrust toward Africa, which rests on several pillars: good governance, partnership for transformational change, support to strong and sustainable democratic governments, and the need to end conflicts in the region. Clearly some of these guiding principles are at variance with the U.S. support for countries like Ethiopia, Uganda and Gabon. In The Politics of Power: A Critical Introduction to American Government, Ira Katznelson, Mark Kesselman and Alan Draper cite human rights activist Aryeh Neier, who suggests that the United States employs double standards in its human rights policy. “It rarely condemns human rights abuses against powerful countries… ‘The United States would not press human rights concerns where important economic interests are at stake.’” To which I would add: “or where other strategic interests are at stake”, as has been demonstrated in its support of China’s application for WTO membership in 2002, of Mobutu’s administration in the Democratic Republic of Congo, of Hosni Mubarak in Egypt before the revolution and of the Saudi Monarchy. The takeaway here is that President Obama’s accommodation of Ali Bongo is not out of character with how the United States has historically conducted its foreign policy.

Authors

Melvin Ayogu

@ Brookings Podcast: African Elections and Democracy

Melvin Ayogu — Fri, 03 Jun 2011 16:14:00 -0400

Nations across Africa are holding elections, a good sign for emerging democracies on the continent. However, expert Melvin Ayogu says the quality of governance in African nations varies widely. Some states are making solid progress toward becoming effective democracies, while others remain under the sway of corrupt leaders, with serious consequences for economic growth and development.

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