Navy story.indd - Mars Group Kenya Publications

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economy east africa No Eassy rider Kenya and South Africa are in heated dispute over the control and cost of a crucial African development project – a fibre-optic cable to surround the continent and link it to the world by 2008. One of its main components, the East African Submarine System (EASSy), would place 9,900 kilometres of fibre beneath the sea, between Port Sudan in the north and Mtunzini in South Africa; it would link up with the SAT3 cable which starts in Portugal and connects West, Central and Southern Africa with Madagascar, India and Malaysia. The EASSy row embarrasses South Africa, which is promoting the project within the New Partnership for Africa’s Economic Development (NePAD), whose secretariat it hosts. Other member states and investors are frustrated by the resulting delay. EASSy would reduce the price of access to international broadband by 65 per cent. The average price in Africa for 1 gigabyte per second (gbps) of data per month is US$1,800, 90 times the price in the United States. ‘The cost of routing traffic internationally costs the continent $400 million annually, representing major capital flight out of Africa’, says Eric Osiakwan, Executive Secretary of the African Internet Service Providers (ISPs) Association. The main sticking points are ‘open access’ and the regulatory role of a government structure that would own the network. A protocol defining these matters was agreed upon in Kigali on 29 August, but of the 23 states involved only Tanzania, Uganda, Rwanda, Lesotho, Malawi, Madagascar and South Africa attended the signing. Both the African Development Bank and the World Bank want the EASSy project to use the ‘open access’ model which means that service providers could get access to the cable at cost – and sell its services on to customers in the region. The big foreign telecom companies and their state counterparts in Africa object because they would have to surrender a substantial chunk of their profitable business to much smaller companies and civic organisations. On 18 September, 31 telecom companies threatened to pull out of the project, saying the Kigali protocol was unworkable and would ‘delay the implementation of the EASSy cable to the extent of it being abandoned’. The Kenyan government had already said it might quit the project in favour of its own proposed undersea cable link The East African Marine Systems (TEAMS) between Mombasa and Fujairah, United Arab Emirates. The Permanent Secretary of Kenya’s Ministry of Communications, Bitange Ndemo, said Kenya would not sign the protocol unless the regulation issue is resolved. TEAMS could be cheaper and faster than the EASSy cable and start up next year. Moreover, says Ndemo, ‘NePAD is controlled via South Africa…first we want the EASSy project to be out of any governmental control and later on we can talk about the open access model.’ The head of NePAD’s East Africa commission, Dr. Henry Chasia, is Kenyan but questions his government’s position: ‘It would be regrettable if Kenya opted to go it alone and built its own under-sea fibre optic cable as this would weaken the EASSy initiative’. Telkom SA, South Africa’s main telecom company and one of the project’s main backers, has also said it may pull out because it might not be able to make enough return on its $10mn. investment. The government in Pretoria, keen to avoid losing face and needing plenty of bandwidth for the 2010 World Cup, may have other ideas. Industry sources say Telkom may simply be trying to strong-arm the government. Others say the project’s flaws include a lack of competition in who can bid, the unclear extent to which the project is controlled by governments and layers of bureaucracy where ‘friends’ of member governments might be placed. Another signing ceremony is scheduled for 16 November in South Africa, but Kenya will not attend unless its concerns about over-regulation and Pretoria’s monopolisation of the process are addressed. Its own undersea link would be an insurance policy. Uganda will host next year’s Commonwealth Heads of Government Meeting; its private telecom companies might jump ship and join Kenya if TEAMS, built by Kenya Data Networks, subcontracted to Flag Telecom, arrives first with its promised very low tariffs, at $150 per megabyte per second (mbps) per month. EASSy’s backers are confident that their scheme will be realised by the end of 2008. But are the investors still interested and will they remain so when TEAMS comes on stream l 1 0 2 0 O c t o b e r 2 0 0 6 - V o l 4 7 - N ° 2 1 - A f r i c a C o n f i d e n t i a l
gabon/equatorial guinea No man an island United Nations Secretary General Kofi Annan wanted to resolve a 35-year old territorial dispute between Equatorial Guinea and Gabon before his tenure ends. That looks doubtful. The minuscule, uninhabited islands of Mbanié, Cocotiers and Conga are probably rich in oil and gas, and their territorial waters towards São Tomé e Príncipe contain richer known reserves. The conflict lay dormant in the 1970s and restarted when President Omar Bongo Ondimba’s son, Ali Ben Bongo, visited the islands in February 2003. Gabon has granted exploration rights in two areas of the disputed territory: Royal Dutch Shell through its Igoumou license and Anadarko in Agali. Neither company will explore until legal title is settled. Both governments have wavered over creating a joint exploitation zone for the islands in Corsico Bay. There was to be a tense 1-5 October summit in Geneva. Squabbles within Gabon’s elite ensure that there will be little progress, having caused the summit’s cancellation. Bongo’s loyal Union newspaper broke the story on 13 September that ministers sought to sell for cash, these ‘integral’ parts of Gabonese national territory. The private press revealed the identities of the plotters: Interior Minister André Mba Obame and Communications Minister René Ndemezo’ Obiang. Buying the islands does not appeal to Malabo as it would legitimise Gabon’s claim, causing Equato-Guinean President Teodoro Obiang Nguema Mbasogo to lose face. The weekly Echos du Nord was hit with a three-month ban by the Conseil National de la Communication (CNC) on 30 September for sowing doubt as to Gabon’s ownership of the isles; when its Editor, Désiré Ename, went on hunger strike, the CNC reduced the ban to one month. Bongo called for an investigation, urging the CNC to strike off all media owned or supported by government members. Bongo’s loyal opposition has rallied to his side; Pierre Mamboundou, Zacharie Myboto and François Ebanet call for the conspirators’ resignation, while supporting Libreville against Malabo. A resolution to the Mbanié dispute was sought throughout the 1970s, when Malabo was Libreville’s poor relation. Equatorial Guinea has since replaced Gabon as Africa’s third largest oil producer; Gabon is sixth. Equatorial Guinea’s GDP grew by 30 per cent and 6.4 per cent in 2004 and 2005; Gabon expects 2.4 per cent growth in 2006. Malabo’s continued success depends on maintaining high production and realising Obiang Nguema’s desire to renegotiate oil contracts. The oil boom helped Gabon reap 46.7 billion CFA francs (US$ 84 million) for the 2006 budget. 2007 is less rosy; budgetary forecasts released on 12 October predict a further 3.2 per cent drop in production and 4.4 per cent drop in receipts. At the key Rabi- Kounga well, Shell produces 55,000 barrels per day, down from 217,000 in 1997. Gabon’s debts represent 40 per cent of GDP, and in September, Foreign Minister Jean Ping announced plans to increase them with a $3 billion, iron ore-backed loan from China’s Exim Bank for infrastructure to exploit reserves in Belinga (AC Vol 47 No 14). Equatorial Guinea and Gabon are not best friends. Rivalry sees the United States supporting ‘good friend’ and $5 bn. investment, Obiang Nguema, while increasing its military presence in the Gulf of Guinea; French companies seek interests in infrastructure projects in Equatorial Guinea. On the diplomatic front, Bongo’s mediations have failed in Côte d’Ivoire and Congo-Kinshasa, while Malabo’s star is rising as its fuel and petrodollars buy good relations with Zimbabwe. In the autumnal years of the two regimes, an amicable resolution to the Mbanié affair is unlikely but, for now, no deal is better than a bad deal. l Name: Company: VAT number (EU subscribers only) Job title: Department: Address: Country: Tel: Fax: email: Subscription Priority Order Form Zip code: Sterling US dollars 1 year subscription £710 US$1,579 Concessionary rates for academic institutions, NGOs and students available on application. Please, charge my credit card Visa Amex Mastercard Card number Security number Name on card Expiry date I enclose a cheque made payable to Asempa Ltd AC website and archives: www.africa-confidential.com Editor: Patrick Smith, Deputy editor: Gillian Lusk Managing editor: Clare Tauben, Website mgr: Juliet Amissah Published forthightly since 1960; 25 issues per year Proprietors: Asempa Ltd. ISSN 0044-6483 Return your order to Africa Confidential 73 Farringdon Road London EC1M 3JQ United Kingdom Tel: +44 (0) 20 7831 3511 Fax: +44 (0) 20 7831 6778 email: info@africa-confidential.com A f r i c a C o n f i d e n t i a l - 2 0 O c t o b e r 2 0 0 6 - V o l 4 7 - N ° 2 1 1 1
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