Wednesday, 6th December 2023


Articles that reflect opinion

Paul Kalisha is stuck in Uganda’s dream to revive copper mining.

His father was a miner, and taught him the skill so he could take over when he dies.

The 13 million tonnes of copper available at the foothills of Rwenzori Mountains can run the mines for up to 20 years. 

But Kalisha, 51, is losing track of the years, reminiscing the luxury he enjoyed growing up, which he can’t afford for his eight children.

“Time came and I married but up to now I am dwelling in a very alarming life where I can`t afford to buy food for my family and I can`t afford to take my children to better schools even when I am staying in the former residence of the mines”, Kalisha narrates.

The ripple effect of these mines extended to a town in the east, Jinja, where the smelting plant stood just next to the electricity source. The ore was transported by train.

These broken silos at Kilembe Mines Limited in Kasese, western Uganda, contain decades of shuttered dreams. Once a thriving sector, employing 5,000 people, it contributed 30 per cent to the country’s gross domestic product. Today mining in general contributes 2.3 per cent

With new policy and World Bank conditions, a lagging divestiture of the mines at the time the metal’s prices were falling, and rebel activity by the Allied Democratic Forces, the machines went silent.

Since 1982, when mining stopped completely, no developer has dug into the depths of these mines or blasted ore from the opencast except for a brief stint between 2013 and 2018.

“They started working as you have seen and as you will see in the other places, but they didn`t fulfill all the conditions. So, they had to leave and as I said when they left, because of their failures, they went to court and we first had to settle court before we resume procurement”, Fred Kyakonye, CEO, Kilembe Mines Limited explains.

In August 2022, the ministry of finance issued a procurement and disposal notice shortlisting seven bidders - China Railway No. 10, Gingko Energy, Jervois Global, Liaoning Hongda T/A Wagagai Mining, Montal-Engil Uganda, Sarrai Group, and Sinomine Power China) - who succeeded in the expression of interest for the development of Kilembe Mines, and listed eight companies that failed.

At the same time, the government released $1 million to revamp the mines before picking an investor. Most of the work done here is drainage of water from the pits.

As geologist Alex Kwatampora explains, “the underground is really in bad shape. It is flooded up to 4,300 feet above sea level. So, there is a lot of work to be done before we can say copper is going to be produced in February – that is not true.”

Asked to predict when production is likely to resume, Kwatampora explains that “I only see if a very good developer does a good job, in 2025. It is possible if he uses what is already there and actually repairs it but if he is to completely change the processing system then it can even take longer.”

New technology is expensive and a prospect must demonstrate the financial muscle of $360 million to be considered further.

This large stretch of mineralization extends to the Democratic Republic of Congo, where copper and cobalt hoard is accumulating following a standoff between China’s CMOC Group Ltd and the government (Bloomberg).

Kyakonye emphasizes that “there are a number of copper bodies but for Kilembe Mines, the copper which is there, is still economically minable or exploitable.”

Globally, cobalt, which was shunned then has now picked pace with more competitive prices. But there are also several alternatives to these metals.

Copper now costs $7,963 per ton.

There may be deposits elsewhere around the country, but here at Kilembe, copper ambitions rest on expertise and infrastructure.

Raziah Athman, for Africanews, in Kasese, Western Uganda

Can Africa fund its economic development?

Africa stands at a pivotal crossroads, grappling with political instability, climate change, and the urgent need for economic development. With a youthful population, the continent is becoming an attractive consumer market, drawing attention from supply chains worldwide. Amid these issues, one question remains: Can Africa fund its economic development, and how? 

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In today's global economy, African nations are poised for a significant transformation in their export and trade landscape, as reports suggest one trillion dollars in exports is expected by 2035.

Gambia to launch stock market for local businesses

Gambia is set to achieve a significant milestone by launching its first-ever stock market, just after debuting its first capital market. This historic event paves the way for a host of new financial opportunities within the country, creating an attractive environment for investors to participate in the nation's economic progress.

-Africa News

When Gabon's General Brice Oligui Nguema ousted his distant cousin last month, he became the eighth military leader who has taken power by force in Africa since 2020. But one aspect about the country was different: it had sold a sizeable amount of bonds on international capital markets, and had just weeks prior sealed continental Africa's first debt-for-nature swap.

The putsch not only sent Gabon's bonds tumbling 10%, but also hit those issued by a number of other countries including neighbouring Cameroon, as jittery investors scanned for who might be next.

The apparent coup trend is adding to other major concerns deterring many investors from Africa - a wave of debt crises, tense geopolitics and an extreme vulnerability to climate change.

"Nearly all markets in that region are paying some price in terms of rising cost of debt," said Sergey Dergachev, portfolio manager at Union Investment.

A UNDP study dated July shows how the costs add up. It estimated Guinea's 2008 coup and one in Mali in 2012 wiped a combined $12-$13.5 billion off the two countries' economies over a 5-year period. This represented 76% of Guinea's 2008 gross domestic product and almost half of Mali's 2012 GDP, the study calculated.

There have been scores of coups and attempted coups in recent decades including in Thailand, Ecuador, Egypt and Turkey.

Investors in those markets reacted reflexively - sell first, think later.

Gabon's coup not only hurt its bonds, it also ratcheted up the interest rate premium, or 'spread', investors demand to hold bonds in JPMorgan's multi-country "Nexgem" Africa index, a move that has still not fully retraced.

Cameroon has been particularly sensitive. Its bonds have lost more ground than Gabon's since the coup. The country's President Paul Biya has ruled for over 40 years through crackdowns and contested elections and wants his son to take over. 

In focus too is Senegal, whose President Macky Sall recently ruled out running for a third term after violent unrest, and Congo Republic which had to quash weekend rumours of an overthrow while President Denis Sassou Nguesso - in power for 38 years - was in New York for the U.N. General Assembly.


"Certainly there's a lot of eyeballs on this (coup) theme right now," said Eamon Aghdasi, a sovereign analyst at investment firm GMO, who co-authored a recent paper on whether democracy matters to debt investors.

"As a bondholder, the worst-case scenario is that a new government comes in and repudiates the previous government's debt".

There is no sign of Gabon's new leaders repudiating debt, though payments on bonds have run into trouble elsewhere, such as Niger.

Credit ratings usually suffer too. Fitch and Moody's have put Gabon on a downgrade warning since the Aug. 30 overthrow. Agencies slashed ratings for Burkina Faso, Mali and Niger, although further afield, Thailand's never budged despite two coups in the last two decades.

"Coups, in general, in Africa or anywhere else, can cause problems for debt repayment partly because of the potential for sanctions," S&P Global analyst Ravi Bhatia said, adding that vital international support can also get shelved.


Gabon, where the Bongo family had ruled for nearly 60 years amid stark inequality, has yet to face the kinds of sanctions imposed on Mali, Guinea, Burkina Faso and Niger - although its International Monetary Fund programme was already off track.

Moody's cited the rise in oil prices in its decision to hold off on a full downgrade, as well as Gabon's membership of the Central African monetary union (CFA franc), which shields it from currency volatility.

The country's bond spreads have eased somewhat since investors' initial panic and could recover entirely, some analysts say, if it makes its first post-coup bond payment on time next month.

"You may get a situation where bondholders might say, if it's a change away from long-term single leaderships, then it may well be a turn for the better," said Simon Quijano-Evans, chief economist with Gemcorp. "As long as elections and democracy come back".

Broadly though, concerns about sovereign stability across Africa loom large. This year's "Fragile States Index" published by non-profit The Fund for Peace rated 46 African countries as at least somewhat unstable.

Even in Kenya, a solid democracy on the other side of the continent, investors warn that general risk aversion could push up the cost of issuing a new bond.


As coups d'état become increasingly common across Africa, Senegal continues to stand as an exception.

This West African nation has never experienced a coup since gaining independence in 1960. 

According to Alioune Tine, a member of the Afrikajom think tank, this exceptional record can be attributed largely to the maturity of its military.

"There is a democratic culture, and there is also a strong commitment to defending this democratic culture. At the same time, we have a well-trained army. If you know the Senegalese army, I have worked with senior officers in Senegal, and frankly, it's an army of intellectuals. It's an army that, in my opinion, understands the boundaries and is aware of them."

The crises of 1968 and the violent riots in 2021 and 2023 seem to confirm this observation.

The Senegalese army has consistently upheld its principles. However, to preserve this tradition, analysts urge politicians, especially those in power, to remain vigilant. 

"In Senegal, authorities need to be extremely cautious in managing political affairs in our country. Today, it is essential that democratic principles, the rule of law, political freedom, and press freedom are vigorously preserved because the mishandling of these elements can potentially inspire certain institutions like the army and gendarmerie. This has occurred in many African countries," said Momar, Dieng.

At a time when coups are occurring in neighboring countries, Senegalese people are hoping that the specter of coups remains distant from their minds, despite the current tensions in the country.

When questioned on the matter, political figures, such as this former member of the Pastef party, are aware of the danger.

"A coup d'état has never been a solution in a normal system. In almost all countries where you see these coups, it's because the system is not functioning properly. That's why I appeal to leaders and political actors to ensure that Senegal regains its former glory," explained Momath Talla Ndao, Ex-Pastef party member.

This image is being severely tarnished by the deteriorating political climate as the country heads towards a crucial presidential election on February 25th.

-Africa News

In a world where economic stability and global markets are constantly evolving, the BRICS nations are making significant strides towards reshaping the global financial landscape. During their 15th annual summit, held recently, discussions on de-dollarization and the creation of a new currency took center stage.

The BRICS bloc, consisting of Brazil, Russia, India, China, and South Africa, has long been seen as a rising force in the global economy. As of March 2023, they collectively represent a substantial 31.5% of the world's GDP. However, their ambitions don't stop there. 

In a historic expansion move, the BRICS welcomed six new member countries into their fold. This expansion aims to bolster the bloc's influence and capabilities, giving it more weight on the global stage.

One of the most significant aspects of this expansion is the concerted effort to reduce dependence on the U.S. dollar. The BRICS nations are exploring new currency arrangements that could potentially lessen their reliance on the dollar-dominated global financial system. This shift signifies a move towards a multipolar world economy, one where the influence of the United States is not as predominant.

But can the BRICS nations truly reshape the world's economic landscape? To gain a better understanding of the situation, Africanews spoke with Mr. Jean Joseph Boillot, an economist and advisor on emerging countries at IRIS. He shed light on the BRICS+ initiative, stating that it has the potential to bring about substantial changes in the global economic order.

Coup in oil-rich Gabon: What implications for global supply?

In a separate development, the recent coup d'état in Gabon, an oil-rich nation in Central Africa, has brought political instability to the doorstep of the Organization of Petroleum Exporting Countries (OPEC). This raises concerns about potential disruptions in global oil supply, as Gabon is an OPEC member. The implications of this coup on the global oil industry remain uncertain, but it is a situation worth monitoring closely.

Nigerian firms grapple with high energy costs and exchange rates

In Nigeria, a different set of economic challenges is unfolding. President Bola Tinubu's economic reforms have led to high energy costs and a weakening local currency. The discontinuation of government subsidies on petrol and the unification of exchange rates have had a negative impact on Nigerian firms. Business owners find themselves navigating a difficult terrain, trying to adapt to these economic changes while seeking ways to remain competitive.

-Africa News

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