The two trade unions of the public and parastatal employees - Botswana Public Employees Union (BOPEU) and Manual Workers Union - are angry that the government has done away with certain fringe benefits, and it has given nothing in return. They claimed that the government reaction so far is discouraging and may cause dissatisfaction in the employees affected by the decision. While this is likely to turn skilled employees away from the public sector, it is unlikely to cause any major turbulence at this time.

A hastily called shareholders meeting of the national carrier CAMAIR announced Friday that it was searching for a second liquidator for the highly indebted company, a sign that the company has come to the end of the road. The meeting followed the sacking of a sole administrator appointed three years ago to fix up the embattled company and the sealing of his offices in Douala. The company that has been reduced to two rented aircrafts has debts of over XAF 25bn and an 800 workforce that it was unable to pay.

Judicial police spokespersons said in the weekend that a former deputy minister for public works Paulin Abono is being detained for alleged corrupt practices. Details of Abono's alleged crimes were not immediately released but police said they had enough evidence that he stole public funds while working as mayor of Yakadouma, a timber rich municipality in the east of the country between 2002 and 2006 when he was made minister.

Government launched a crackdown against corruption in 2006, arresting and jailing several senior public figures. But the operation appeared to have been suspended almost immediately until the arrest of Abono last week. Monday's papers were rife with speculations that more arrests would be made, including that of former finance minister Polycarpe Abah Abah, now a student of Theology in Yaounde.

Ghana’s headline CPI inflation accelerated further in February to 13.2% y/y from 12.8% in January, the statistical office said. Contrary to previous months when inflation was mostly driven by the fuel and utility price hikes, this time food prices are mostly responsible for the increase. Thus, inflation remains significantly above the 6-8% target of the central bank and it is accelerating despite central bank expectations that it would gradually slow down toward the target. The MPC is expected to come out with a statement this week following a review of economic indicators in Q1. At its last meeting the committee maintained its key rate at 13.5%, although it warned of inflationary pressures due to fuel and food prices, as well as a possible easing in fiscal policy ahead of this year’s elections.

The Presidential Candidate of the ruling NPP Nana Akufo Addo has stated that the NPP won the 2006 elections through the ballot box and not by rigging as the main opposition party claims. He argued that if the NPP won the elections whilst the NDC was in power it found no reason for rigging to stay in office. He charged the NDC to debate the current government on issues and not bundle around falsehoods. Nana Addo was addressing students at the University of Ghana.

The NDC has used various mechanisms to incite the electorate against the NPP most of these have helped increase the polarization of the citizenry. Over the weekend the NDC made statements on various platforms that President Kufuor had ordered a president aircraft and that an undisclosed amount had been paid a foreign company for its supply. The office of the President in its reaction pointed out that the aircraft fleet is due for grounding in 2010 and therefore a financial proposal has been put before parliament for consideration for the purchase of six military aircraft including two Y121 military planes, two MA60 passenger planes, one Airbus Jet 319, and one Falcon 900.

The Electoral Commission has started a nationwide exercise to replace lost or defaced identity cards. The 5-day exercise is the beginning of a process that occurs every election yea. Already the EC is saddled with challenges of a bloated voter register because people do not report their dead relatives for their names to be expunged while others who relocated are also tempered to re-register instead of transferring their names to the register of their new location. In April registration of those who have turned 18 will take place and this will be followed in May by revision of the register where the electorate will check to ensure their names are in the register.

Kenya’s authorities have not requested a new arrangement with the IMF so far, the resident IMF representative Scott Rogers said for the local Business Daily. This is not surprising in view of the urgent issues outstanding before Kenya’s politicians, but it is expected that a request for a new arrangement will be made after the establishment of the new cabinet. Kenya had a 3-year PRGF arrangement which expired at the end of 2007 and under which the country received SDR 150mn. Now there are expectations that Kenya will ask for a higher amount in view of the higher needs. It is also not clear how the government will proceed with the planned Eurobond issue as recent turbulence increased Kenya’s country risk, leading also to a rating downgrade by S&P.

Kenya Commercial Bank (KCB) has selected its lead transaction advisors for the upcoming rights issue expected later this year. Walker Kontos and Company Advocates will be the legal transaction advisors for the rights issue while a consortium of Standard Investment Bank and Faida Investment Bank will be the transaction advisors and lead stockbrokers. Ernst & Young will be reporting accountants, while Thompson Kenya and Scanad PR will offer media communication and public relations services. KCB is the second largest bank in terms of assets in Kenya and it is seeking to raise KES 5bn from a rights issue to finance regional expansion.

The Debate on the National Accord and Reconciliation Bill and the constitutional amendment is expected to start when Parliament resumes work on Tuesday. The new Bills are set to introduce the posts of Prime minister and two Deputy Prime Ministers, paving the way for PNU and ODM to start sharing power under a new governance system. President Kibaki is also expected to expand his Cabinet once the bills are passed into law.

In the meantime, former finance minister Musalia Mudavadi has been nominated by ODM for the post of Deputy Prime Minister in the new coalition government. Mudavadi was also ODM leader Raila Odinga’s running mate in last year’s elections. The coalition agreement provides for one deputy PM for each of the two sides, but it does not specify how the cabinet portfolios will be allocated between the PNU and the ODM, which is likely to become one source of tension.

The government announced that subscription for the long awaited Safaricom IPO will begin on Mar 28 and run for a month, while the company is to be listed on the stock exchange on Jun 9. A total of 10bn shares will be sold, which represents 25% stake in the mobile phone operator. 6.5bn shares will be sold to domestic investors at a price of KES 5, which means that the government will collect some KES 32.5bn from the exercise. This values the company at KES 200bn, which the government said includes a 14% discount to the evaluation. The remaining 3.5bn shares will be sold to foreign institutional investors through bookbuilding run by Morgan Stanley. According to comments in the local press the foreign investors are likely to pay a significant premium in the vicinity of 50%, which means the government will collect another KES 26.3bn (USD 400mn) from abroad. The sale will see the government’s interest in the company fall from 60% to 35%, while new investors will hold 25% and the remaining 40% is owned by Vodafone.

In the meantime, local concerns are related to thousands of investors whose money is locked in Nyaga Brokers. They will probably be unable to use their funds to participate in the IPO after Nyaga was put under receivership and the resolution of claims is bound to take a lot of time. This is in contras to the government’s goal to ensure maximum local participation in the IPO, but authorities apparently decided this is the lesser evil compared with another delay of the IPO.

The central bank’s forex reserves declined by USD 99mn during the week Mar 6-13, according to the latest bulletin published by the central bank. As a result reserves reached USD 3.22bn, down from a peak of USD 3.40bn during mid-January. The loss of reserves seems modest having in mind the turbulence of the last two months. The central bank recently stressed that its forex sales should not be interpreted as intervention on the forex market in an attempt to influence the exchange rate, but rather as liquidity management exercise designed to reduce domestic money supply.

Otherwise, the weekly report shows gradually returning confidence, apparently linked to progress on the political scene. The currency appreciated slightly during the period (including vs. the EUR), while the weekly T-bill auctions saw strong demand and interest rates fell further to 6.87% for the 3m paper and 7.76% for the 6m maturity.

Trade and industry minister Charles Ugwuh said Nigeria’s non-oil exports increased by 83.6% y/y to USD 1.38bn in 2007, adding that this confirmed that the economy was as he said, ‘on the right track.’ The ministry he said was aiming to sustain the growth momentum and that this was the reason it had refused to sign the Economic Partnership Agreement (EPA) proposed by the EU. Ugwuh said the agreement, if signed, would in the mid-term seriously affect non-oil sector growth as it would he argued further reduce the competitiveness of domestic as compared to European goods. At the same time, he said the costs of the not signing of the EPA were estimated at USD 100-200mn. “Our non-oil export figure now stands at about USD 1.38bn in 2007. In 2001, the figure was around USD 240mn . Now we have tried to increase this figure to almost USD 1.4bn and all this revenue is at stake if we endorse the EPA. Whereas the cost of not signing into the EPA is in the region of USD 100mn and USD 200mn,” Ugwuh said. The Nigerian economy is still overwhelmingly dependent on revenues from oil. In the 2008 budget the oil sector contributed 80%, or NGN 3.63tn. But the oil industry contributes less than 40% of the GDP. The non-oil sector, which comprises agriculture, manufacturing, solid minerals, services and other invisibles, combined will fill the 20% funding gap with a NGN 910bn contribution. Under the NEEDS framework launched in March 2004, the manufacturing sector was projected to contribute at least 45% to GDP, effectively overtaking oil.

Shell has agreed with the Nigerian government on a new plan to resolve issues of insufficient financing for joint venture operations in Nigeria, the Financial Times reported. The company was said to have given the nod to a government proposal that envisages the government share of funding being reduced and joint ventures allowed to bridge any shortfalls by borrowing on international capital markets. Shell also offered to lend the government money to meet its funding obligations but the government’s reluctance to borrow from western companies has meant a final agreement has not yet been reached. Shell, along with other foreign companies operating in the oil and gas sector, has complained about the government’s failure to meet its funding commitments under their joint venture agreements, which they said hampered investments. On the other hand, Shell and other oil majors are at the centre of concerns, particularly in the oil producing and politically volatile Niger Delta region, of not meeting commitments in the areas of societal infrastructure.

The white-collar oil sector union PENGASSAN has called a strike to start Mar 19 in protest against the dismissal of some 100 union members by the Nigerian subsidiary of ExxonMobil. PENGASSAN head Bayo Olowoshile said the industrial action would affect both upstream and downstream sectors. He added that the union had been discussing ways of resolving the issues with management but to no avail. The decision to strike will be formally taken at PENGASSAN's National Executive Council meeting tomorrow. The daily The Guardian quoted ExxonMobil’s Akin Fatunke as saying the company had paid all compensation and benefits in line with the severance agreement signed with PENGASSAN in December last year.

Minerals and energy minister Buyelwa Sonjica said today that the current draft legislation pertaining to mining royalties could be reviewed. This follows escalating concerns and lobbying by the mining industry over the potential negative impacts on mining profits and more importantly new mining investment. Although given current commodity price levels, profits are expected to remain robust in the sector, the current output constraints as a result of power shortages as well as likely increase in electricity costs have led mining companies to adopt a more conservative posture regarding future mining projects. Given the current concerns over unemployment and the current account deficit, an expansion in he mining industry is seen as a key sector to alleviate some of the highlighted problems.

Finance Minister Trevor Manuel expressed some concern over the country's current account deficit and low savings rate amid escalating global financial market turmoil. Heightened global risk aversion has seen inflows into the country's bond and equity markets dwindle with a resultant negative impact on the currency. The ZAR recently weakened to its weakest levels in over five years against the US Dollar and is trading near record low levels verse the euro. Coupled with higher oil prices the weaker currency has seen the outlook for inflation deteriorate further. Speaking on Monday, Manuel said that the current account deficit was the country's major structural weakness and that as a result South Africa would not be immune to the current global financial crisis. Data due later this week is expected to show a narrowing of the current account deficit for the fourth quarter of 2007, however, given the recent power crisis and cutbacks on mining output, this deficit is expected to widen significantly in the first quarter of 2008.

President Thabo Mbeki is set to come under renewed pressure over graft allegations related to the country’s controversial arms deal initiated in the late 1990’s. Senior leaders within his own party are reportedly pressuring the president to come clean on the controversial deal, which implicates many top government officials including Mbeki. The allegations cover supposed kick-backs from armaments companies involved in the bidding process. The fallout from the arms deal could taint entire ruling party although is not seen as having any major impact on the party’s electoral majority given the lack of a viable opposition party. Nevertheless, the fallout from any disclosure could lead to a “clean sweep” when the ANC compiles its electoral party lists later in the year in preparation for next year’s general election.

Senior ANC leaders including newly elected party president Jacob Zuma are reportedly set to meet with their counterparts from trade union federation Cosatu later this week. Cosatu are lobbying for greater policy influence within the ANC and government and will reportedly push for greater representation on the ANC’s executive structures. At the December conference, Cosatu general-secretary Zwelinzima Vavi declined to be nominated for the ANC’s national executive committee (NEC) despite popular support for the move. However, the party’s top executive body did elect key officials from the Communist Party, including current ANC secretary-general Gwede Mantashe. The push by Cosatu appears to reflect some concern that Zuma will backtrack from his close support of the labour movement, following remarks two weeks ago in which he said that some reform to the country’s labour structures could prove beneficial. However, Zuma reiterated his strong support for labour following a central committee meeting of Cosatu. The upcoming meeting is ahead of a planned alliance summit early next month, where a range of issues are set to top the agenda and may offer an early glimpse of future policy direction under a Zuma administration.

The IMF mission issued a rather positive statement after meetings with Tanzanian officials for the third review under the PSI arrangement during Feb 27 – Mar 12. The IMF welcomed the strengthening of monetary policy which has helped in reducing sharply the interest rates on government debt and allowed the central bank to meet its monetary targets for end-2007. Despite these efforts, inflation remained above the CB target, however, which is attributed to fuel and food prices. The Fund also praised fiscal performance, especially the strong growth in tax revenues, and the progress made with the resolution of the USD 133mn theft from the BoT EPA account. Looking forward, the mission warned that budget 2008/09 must balance the large development needs with the need to safeguard fiscal stability, especially in the face of uncertainty regarding donor support for the next financial year.

The IMF board is to discuss the review by the end of June and it is very likely that it would be approved. The full statement of the mission can be seen here.

The World Bank has scorned criticism against its joint community driven development strategy with Tanzania government as delivering on its objectives of reducing grass-root poverty. Critics have often dismissed the government and World Bank project’s achievements as falling short of required goals while mismanagement by senior managers and politicians is prevalent.

Tanzania Social Action Fund started in 2000 and currently has a portfolio of between USD 1.5bn and 1.8bn each year currently covering 40 of the country’s over 120 districts. Through social development, TASAF aims at helping rural communities take an active part in planning and implementing projects such as infrastructure development, income generating activities.

While the bank and host government argue that poverty has gone down from over 50% to less than 35% between 2000 and 2005, critics argue that such statistics are only good for donor use, but have very little semblance with what is happening on the ground.

PM Pinda has said commercial banks will soon be forced to lower interest rates charged on loans as the government has cut yields on its securities from more than 17% last year to 7% last January. Pinda commented that banks have an obligation to accept the falling T-bill rates and reduce the price of money offered to borrowers. Pinda said interest rates hovering above 15% cannot help economic growth as the private sector struggles to repay such debts while the market can hardly compensate them accordingly.

Falling interest rates on government securities follow a decision to reduce public borrowing as the burden of monetary policy and sterilization of forex inflows is shifted toward the forex market and CB operations. The idea behind the move was to lower domestic interest rates and fuel growth in bank lending to the real sector, but this has not happened so far.

Bank of Tanzania governor Professor Ndulu has reaffirmed that he will retain the independence of the central bank by resisting influence from politicians and any other forces. Ndulu, who took over as governor last January, said his administration has also returned to the Treasury the management of the country’s external arrears payment account because basically it is not one of the core functions of his institution. Ndulu said political interference played a leading role to frustrate the professional running of the BoT during the close to 10-year reign of his predecessor. Former governor Ballali was sacked by President Kikwete last January following an audit report by Ernst & Young which unveiled losses of over TZS 133bn (TZS 133mn) from the country’s EPA account.

The Ernst & Young report indicated that the money was paid irregularly to 22 shell companies using forged documents in 2005/6 which influence from high echelons of the country’s political elites.

The Electoral Court yesterday turned down an application by the opposition MDC to have the Election Commission disclose information on the number of ballot papers printed for elections on March 29. The court said it did not have jurisdiction over the matter.

The MDC believes that more ballot papers than necessary were printed to make it easier to manipulate the vote. It also wanted the Electoral Court to order the Election Commission to increase the number of polling stations in urban areas, traditional opposition strongholds.

The MDC secretary general Tendai Biti said it was strange that a court set up to solve electoral disputes was refusing to do so. He said they were going to take the matter to the High Court.