In a three-part analysis briefing series, EXXAfrica explores specific threats to the aviation sector in Africa. In part one, we examine how the risks of war and terrorism may manifest via an explosive device attack, assault on an airport, or shoulder to air missile attack.
As security conditions across the Sahel continue to rapidly deteriorate, regional and international states have renewed their efforts to support joint counter-terrorism operations. EXX Africa assesses the potential for these efforts to address the current crisis, and the possible outcome for the security outlook across the broader region, including the resurgence of the narcotics trade.
Until Ghana finds ways to export its excess power supply, the country will be unable to fully pay its debts to private suppliers. However, despite mounting payment arrears for independent power producers in Ghana, the government will continue to intervene in the power sector and its fuel distribution to prevent power supply disruptions.
While an alleged coup plot has been overblown by the government for political gain, the incident does put a spotlight on the deployment of politically affiliated militia groups ahead of next year’s elections. Businesses also face heightened risk of contract frustration, tax increases, and discrimination as the government seeks to raise funds for its political campaign.
On 23 September, Information Minister Kojo Oppong Nkrumah announced security forces had thwarted a coup against the government. Most Ghanaians reacted with scepticism to the suggested plot even though the government has seemingly overblown the importance of the incident for political reasons. While EXX Africa assesses that there is a low probability of an unconstitutional transfer of power in Ghana, there is a growing risk of political violence ahead of next year’s elections which has been thrown into the spotlight by this alleged incident.
As Ghana enters a new election cycle, businesses will be exposed to increased risk of commercial disruption due to unrest and rising crime rates, as well as higher political risks such contract frustration, corrupt practices, and changes to taxation. A Ghanaian election year also usually distracts the president and senior civil servants from public administration and economic management, thereby often raising the risk of payment delays to contractors. There is ample precedent for such perils based on previous election cycles.
The alleged coup plot
On 23 September, the Ministry of Information claimed that security forces had foiled a plot to overthrow the government and arrested three people believed to have been amassing makeshift bombs, weapons and computer equipment. The alleged plot was unravelled on 20 September after fifteen months of close surveillance of the activities of the coup plotters, according to the government.
The three alleged coup plotters arrested by security forces are Dr. Frederick Yao Mac-Palm, who owns the Citadel hospital in Accra and is a vocal political activist on social media; Ezor Kafui, a local weapons manufacturer; and Bright Allan Debrah Ofosu. On 25 September, the government made further arrests of some unnamed military officers in addition to the initial three main suspects. The ministry has also published a list of the weapons retrieved during the security operation, including 22 improvised explosive devices, six pistols, a long knife, three smoke grenades, seven mobile phones, and three laptops. The detained military officers are being questioned over their suspected role in procuring these weapons but did not play an active role in the coup plot.
Security experts in Ghana contacted by EXX Africa, including retired military officers, have dismissed the allegation of a coup as implausible given the profile and background of the suspects and the inferiority of weapons and ammunitions seized. The three main suspects have no military training or security-related background. Our sources say these individuals would not have had the capability and resources needed to overrun the first line of defence of Jubilee House (the official residence of the president).
The coup plotters are being defended in court by Victor Adawudu, a staunch member of the main opposition party, the National Democratic Congress (NDC). The NDC has publicly dismissed the claimed coup plot as a ploy by the government to clamp down on opposition supporters and the party’s financial backers ahead of next year’s elections.
We agree that the foiled coup plot has been overblow by the government as part of its broader electioneering strategy to re-elect President Nana Addo Dankwa Akufo-Addo next year. However, the incident does reflect growing concern over increasing risk of political violence around the elections.
Political violence outlook
Electioneering and political machinations are gathering pace in Ghana ahead of the country’s presidential and parliamentary elections in December 2020. Part of the broader strategy of the main opposition NDC party to win the election is to build a coalition against the governing New Patriotic Party (NPP). The NDC is seeking to maintain its momentum through the formation of the Coalition for National Sovereignty (CNS), which comprises nine political parties (including the NDC and the Convention People’s Party) and civil society organisations. The NDC has appointed former president John Mahama as its presidential candidate, which may be a tough sell given Mahama’s poor record of handling Ghana’s economy and his administration’s inability to fight corruption during its tenure.
The opposition CNS coalition is set to focus its campaign rising crime rates and more frequent violence in the country, as well as corruption in the energy sector, alleged abuse of state procurement, a looming banking sector crisis, and the NPP government’s unmet promises of ‘one-district, one-factory’ (building a factory in each district) and ‘one-constituency, one-ambulance’ (providing an ambulance for each constituency). However, the tone of the campaign is often belligerent and regularly ties into deep-seated local grievances in communities, raising the risk of violent unrest.
In January, a by-election in the Ayawaso West Wuogon constituency triggered violence that was orchestrated by both main political parties. The unrest left two people dead and 18 others hospitalised with gunshot wounds. The violence that marred the Ayawaso West Wuogon by-election portends concern over the outcome of the coming elections, where both parties have resolved to win, seemingly at any cost as they deploy youth militia groups.
In the unrest at the Ayawaso West Wuogon by-election, a state security operative publicly slapped NDC parliamentarian Samuel Nettey George. The report of the Commission of Inquiry set up by the government to investigate the Ayawaso West Wuogon electoral violence recommended the dismissal and prosecution of the security operative for assaulting the lawmaker. However, the government rejected the recommendation, which further reinforced the opposition’s perception of the politicisation of state security operatives. Nonetheless, the NPP government is genuinely worried that the NDC is training its militia groups to help win the elections, by applying intimidation tactics.
Our local sources are warning that both main parties are financing and training their affiliated vigilante-style militia groups to intimidate opponents in a bid to ensure electoral victory. This also relates to the background to the alleged coup plot. The arrest of Dr Mac-Palm and his co-conspirators, and the seizure of ammunitions and weapons was an attempt by the government to foil plans by the NDC party to train and arm its vigilante groups, including the notorious Hawks militia group. The opposition has meanwhile accused the government of using state security operatives to attack its supporters and leaders.
State assets for political campaigning
Another key concern in the elections lead-up relates to contract certainty as the government has begun a spree of contract cancellations and asset confiscations in order to fund its campaigning. Various local companies, banks, and their partners are at heightened risk of discrimination and confiscation over the coming year.
On 9 September, President Akufo-Addo inaugurated a nine-member board of the State Interest and Governance Authority (SIGA), which will replace the Divestiture Implementation Committee and the State Enterprises Commission. SIGA is poised to be one of the most important bodies in regulating all state-owned enterprises (SoEs), as well as joint-venture companies (JVCs) with state equity participation. The government holds equity interests in key sectors of the economy including banking, insurance and allied services, mining, engineering, energy, petroleum and gas, and agriculture. The government has identified the entities that fall under SIGA supervision. These entities included 40 SoEs, eight JVCs, eight mining companies, and five regulatory bodies.
The official purpose for the creation of SIGA is to improve the efficiency of SoEs by managing their level of borrowing, ensuring payment of dividends to the state promptly and promoting transparency and accountability. The government acknowledged that only four SoEs, five regulatory bodies, eight JVCs, and eight mining companies had ever submitted audited accounts. Moreover, only nine companies, comprising two SoEs and seven JVCs, paid dividends to the government in 2017, according to the government. In terms of financial loss, SoEs recorded losses of about GH¢1.3billion (USD 240 million) in 2016 and an USD 18 million revenue shortfall in the first half of 2019. These figures indicate the worrying level of institutional corruption at the heart of many SoEs, which have been used as a source of political patronage, as well as funding mechanisms for the governments to finance their political campaigns.
No sooner than SIGA was launched, the administration confiscated the Akwatia diamond mining concession and assets of the Great Consolidated Diamonds Ghana Limited (GCDGL) a subsidiary of Jospong Group of Companies (JGC). The GCDGL, previously state-owned, was taken over by JGC in August 2011. However, in April the government cancelled the agreement on the ground that JGC had failed to meet the terms of the contract. On 18 September, officials of SIGA supported by state security including the military shut down the mines and took over all its assets. The management of JGC is accusing the government of abuse of power.
Other JVCs and state firms privatised by the previous government are at risk of similar heavy-handedness by SIGA in its drive to raise money for the government. The opposition has accused the government of applying selective intervention tactics to target certain businesses for political gain. The opposition has also accused the government of favouritism in selecting banks to bail out during the cleaning-up exercise undertaken by the Bank of Ghana in August 2017. The revocation of the licences of UT and Capital banks that led to their takeover by Ghana Commercial Bank was claimed to be unfair. Other banks that lost their license were UniBank, Beige, Heritage, and GN Bank belonging to Papa Kwesi Nduom, the leader of the opposition Progressive People’s Party.
Whereas the National Investment Bank was also undercapitalised, the central bank allowed the state-owned bank to continue its operations. The four banks that received government bailouts through the Ghana Amalgamated Trust bond were Agricultural Development Bank, OminiBSIC, Universal Merchant Bank, and Prudential banks. All of these were tied to state interests and the NPP ruling party’s backers.
The opposition has also condemned the privatisation of the operations of the Electricity Company of Ghana (ECG) to a private company, the Power Distribution Services (PDS). PDS is expected to invest over USD 580 million in the country’s power sector within the next five years after receiving the assets and operations of ECG on 12 September. There are concerns that PDS does not have the capacity to make the expected investment in Ghana’s power sector. In the event that the opposition wins next year’s elections, the PDS contract would be at risk of being reviewed, if not cancelled.
Furthermore, the reduction of state equity participation in the Aker energy project from about 48 percent to 18 percent has been also condemned by NDC presidential candidate John Mahama, who claims that individuals associated with current Finance Minister Ken Ofori-Atta and his company Databank took part in the renegotiation of the Aker energy deal.
President Nana Akufo-Addo has presided over an economic recovery since coming to power in 2016 and Ghana will again be one of the fastest growing economies in Africa in 2019. He faces a possibly tough re-election contest against the main opposition party candidate, former president John Mahama, in December 2020. In the meantime, the government will seek to fulfil some of the bold and populist pledges it made in the 2026 electoral campaign, including the completion of hundreds of small-scale manufacturing projects across the country. To meet such pledges, the government will source new revenues through tax increases and contract reviews.
With election year fast approaching, businesses are likely to experience fresh tax hikes. In the 2019 Supplementary Budget, the telecoms sector will see an increase in the Communication Service Tax (CST) from 6 percent to 9 per cent effective from 1 October 2019. Telecoms firms have already announced plans to pass on the cost to their customers. The 2020 budget to be announced in November this year is also likely to see tax increase on tobacco and alcohol, as well as VAT.
Meanwhile, there is also heightened risk of corrupt practices affecting commercial interests ahead of the elections. The NPP government is facing mounting allegations of mispricing contracts, cronyism, and fraud, in an apparent continuation of the previous NDC government’s practices. According to some sources, Ghana’s government is losing some USD 2.8 billion per year in revenues due to overpriced contracts and commercial criminality.
In terms of the pre-election security outlook, fierce rivalry between the country’s two main political parties makes violent protests almost inevitable, especially in the lead-up to elections. Politically motivated unrest is likely over corruption allegations and poor socio-economic situations. Hotspots for protests and riots include over-crowded areas of Accra, such as Fadama, Nima, Maamobi, Ayawaso, the Agbogbloshie market and the violence-prone ‘Sodom & Gomorrah’ area close to the central business district.
There are further concerns over violence in areas where illegal mining is rife. During an election year, there is a tendency for a spike in the activity of illegal miners, locally known as galamsey. State security forces are often redeployed from providing security at mining areas to protecting political leaders in election campaigns across the country. The recent crackdown on galamsey including the arrest of 20 Chinese miners on 13 September was an indication that the government is seeking to appease public demand for actions against foreign galamsey.
Furthermore, the failure of the government to prosecute and jail Chinese illegal miners for fear of upsetting the Chinese government has led to civil groups questioning the government’s commitment to fight the scourge. Part of the government’s concern is not to jeopardise the prospect of securing USD 2 billion for the Sinohydro bauxite project.
SEE COUNTRY OUTLOOK: GHANA
With 54 countries and a continental coastline of 30,500 km that spans the Mediterranean sea in the north, the Suez Canal and the Red Sea in the northeast, the Indian Ocean in the east, and the Atlantic Ocean in the west, Africa’s borders are both numerous and vulnerable. EXX Africa delves into the primary threat actors taking advantage of these vulnerabilities to further their own objectives across the continent. The report will be submitted the United Nations General Assembly this month and is pre-released to our clients ahead of the publication.
EXX Africa takes a closer look at the idiosyncrasies of some of the prominent internet shutdowns on the continent over the last year, exploring the causes and consequences of this repressive technological tactic.
The use of internet shutdowns by African governments to suppress popular dissent is becoming increasingly common. So far in 2019, there have already been reports of internet shutdowns in at least 12 countries. The states most affected usually have few internet providers, which makes it easier to implement a ban. Although such shutdowns may be contrary to local law, they are often detrimentally effective before they can be challenged in court. Furthermore, there is a lack of a binding international legal framework to hinder governments from acting with impunity.
These partial or near-total internet blackouts are most often implemented in anticipation, or in the wake, of anti-government protests, particularly around elections. However, governments also use targeted blocking of certain websites to restrict access to specific information during critical periods, such as national examinations. We explore some recent case studies from the past 12 months in this latest briefing. We also examine the impact such shutdowns have on commercial operations and the wider economy in African countries.
This briefing follows on from EXX Africa’s special report published at the beginning of the year and updates the key forecasts established in that report (See SPECIAL REPORT: THE COST OF INTERNET SHUTDOWNS IN AFRICA).
Sudan: Prolonged shutdowns to control unrest
Internet blackouts have become a staple during the past 12 months in Sudan, particularly from December to April as protesters took to the streets to oust former president Omar Al Bashir from power. During this period, the government intermittently blocked access to Facebook, Twitter, Instagram, and Whatsapp. However, it was the near-total shutdown instituted in June until July, following particularly violent unrest in the capital, which garnered the most attention (See SUDAN: HARD-LINE DARFURI MILITIA SEIZE CONTROL OF THE CAPITAL).
On 3 June, the Sudanese Transition Military Council ordered a partial internet shutdown amidst reported paramilitary attacks on pro-democracy demonstrators in Khartoum, during which an estimated 100 people were killed. To begin with, the ban targeted mobile networks before escalating to encompass fixed-line connections on 6 June. From 6 June to 9 July, a near-complete blackout was implemented, cutting the population off from the outside world. According to NetBlocks, a web freedom group, the internet disruptions under the rule of the Council were “more severe” than those imposed under Al Bashir at the time.
The Council’s actions contributed to significant condemnation from local and international watchdogs, in turn spurring social media campaigns. For example, throughout June, international social media campaigns, #BlueForSudan and #IAmTheSudanRevolution, were launched in an attempt to gain attention for the massacres and censorship being perpetrated in Sudan.
Locally, a lawyer, Abdel-Adheem Hassan, challenged the shutdown in court. On 23 June, Hassan was successful in ordering his telecoms operator, Zain Sudan, to restore connectivity. Yet, while his win was widely publicised and celebrated in the belief that the internet would be restored countrywide the next day, the operator only restored connection to his personal line.
According to Human Rights Watch, the near-total blackout in Sudan resulted in “wide-ranging harm”. Notably, it prevented activists and residents from reporting critical information regarding paramilitary forces, who were responsible for the attacks in Khartoum and previously for violent campaigns in Darfur, Southern Kordofan and the Blue Nile. Medical professionals further added that it made it difficult to organise ways to provide care.
The internet was only fully restored on 9 July after a further court challenge and a formal denouncement of the shutdown by the UN.
Chad: The longest night
Although Chad has a very low internet penetration rate – with only 6.5 percent of the population reported as having access to the internet as of 2017 – the country was recently subjected to the longest-running internet blackout on the continent. In March 2018, President Idriss Déby announced a partial internet block that affected major sites including WhatsApp, Twitter, Instagram, YouTube, and Facebook, as he prepared to amend the constitution to remain in office until 2033. Sixteen months later, the ban was lifted on 13 July 2019 (See CHAD: CREATING A DE FACTO MONARCHY AMID MULTIPLE CHALLENGES TO POLITICAL STABILITY).
According to the government, the ban was implemented for security concerns over terrorism threats. While this justification was challenged in local courts, all appeals were ultimately unsuccessful. The government only lifted the ban following a sustained international campaign, led by Internet without Borders, which included diplomatic pressure, protest action, as well as the sponsorship of VPN access for Chadians.
Long-term social media blackouts are common in Chad. Previously, in 2017, the government cut connections for ten months following controversial elections. These long periods of internet blackouts have severe economic consequences for the already impoverished country. According to the ‘Cost of Shutdown Tool’ by NetBlocks, the 2017 blackout cost the government an estimated USD 163 million. It is estimated that the most recent blackout cost upwards of USD 253 million.
Moreover, during the blackout, the country’s largest ISP, Millicom, a Swedish telecommunications company, was subject to substantial adverse media in Sweden regarding the company’s alleged failure to honour its UN commitments to protect free expression. In the early days of the blackout, the company claimed that the outage was due to technical problems before later admitting that the government had ordered the blackout. In June 2019, Millicom completed the sale of its operations in Chad to Maroc Telecom, a Moroccan telecommunication company. Although part of wider strategic disinvestment from Africa, Millicom’s withdrawal was likely impacted by the reputational damage it faced following the Chad blackout.
Mauritania: Internet shutdowns and propaganda campaigns
Mauritania held its presidential elections on 22 June. When violent protests broke out on 23 and 24 June in the capital Nouakchott, challenging the initial election results, the government moved to disrupt the internet before instituting a near-complete ban on both mobile data and fixed-line connections by 25 June. All of Mauritania’s consumer ISPs – Mauritel, Chinguitel, and Mattel – were impacted by the government’s decision.
By suppressing social and news media, the government was able to provide its own account of the protests through a false propaganda campaign. On 26 June, the state television broadcaster paraded a group of foreign nationals who alleged to take full responsibility for the protests. Only after the internet services were fully restored on 3 July did a more accurate picture of the post-election situation emerge.
Contrary to state propaganda, a number of Mauritanian political activists were reported to have been arrested for participating in the protests. Moreover, it was revealed that during the blackout, the state had detained two prominent journalists without charges. Lastly, once connectivity had resumed, delayed reports of civil unrest in the immediate aftermath of the elections from outlying rural areas began to emerge (See MAURITANIA: NATURAL GAS AND MINING BONANZA WILL MITIGATE INVESTMENT RISKS).
Ethiopia and Somalia: Shutdowns for exams
Internet shutdowns are not always instituted for political reasons. In Ethiopia and Somalia, they have also been implemented during national exams to prevent cheating. While internet access is occasionally restored in the evenings during these periods, the impact of such shutdowns is significant. According to Netblocks, a one-day shutdown of the internet costs Ethiopia at least USD 4.5 million and has a long-term impact on investor confidence in the host country.
The latter is particularly true in the case of Ethiopia as newly elected Prime Minister Abiy Ahmed has sought to privatise the national telecommunications provider, Ethio Telecom. Nevertheless, while such government interference is likely to concern potential investors, the anticipated establishment of an independent regulator is expected to provide appropriate checks and balances (See
Countries to watch
Protests in Zimbabwe have also been met with internet shutdowns in recent months. In January 2019, for example, the government imposed a “total internet shutdown” amid violent protests against a dramatic fuel price increase. Access to the internet and social media apps like Facebook, Twitter and WhatsApp were intermittently blocked as the country’s largest telecom company, Econet, sent customers text messages relaying the government’s orders and calling the situation “beyond our reasonable control”. As the situation has continued to decline over the past few months, with reports of load shedding of up to 16 hours a day, food shortages, and the outlawing of anti-government protests, further unrest and associated internet clampdowns are expected.
Tunisia is scheduled to hold the first round of its presidential elections on 15 September 2019. The country has enjoyed relatively free access to the internet since widespread blackouts during the Arab Spring in 2011. After transitioning into a democracy, a key test for the budding democracy will be whether or not these elections are free and fair. Any internet shutdowns during the election season, which the government would likely justify by appealing to the threat of terrorism, will instead be an indication of the state’s democratic integrity.
Burundi is expected to hold presidential and parliamentary elections in May and June 2020. In 2015, as President Pierre Nkurunziza, sought to seek a third term ahead of the country’s elections, messaging services including Facebook, Whatsapp,Twitter, and Tango were shutdown. Actions by the government since then have further pointed to little tolerance for media freedom. In March 2019, for example, the government renewed its suspension of Voice of America and withdrew the BBC’s operating license. As such, it is highly likely that next year’s elections will be accompanied by an internet shutdown and near-total blackout.
Tanzania is expected to hold multiple elections in 2020, including presidential and parliamentary votes. With current President John Magufuli having cracked down on online media over the last year (See EXX Africa Special Report: The Cost of Internet Shutdowns in Africa) it is likely that he may move to control messaging ahead of and during the elections by implementing partial bans on the internet and removal of anti-government sites. Indeed, during an August 2017 meeting with leaders from China, the Tanzanian Deputy Communications Minister praised his counterpart for blocking social media platforms and replacing them with “homegrown sites that are safe, constructive and popular”.
Each case of those in power using internet blackouts to control information, and therefore people, has its particularities. However, one constant in all of these cases is the economic impact of the blackouts at both a macro- and micro-economic level. Decreased productivity, lack of email communication, disruption to online sales, decreased online advertising; these are a few examples of the consequences of internet shutdowns for commercial entities. At a national level, a recent Global Network Initiative report indicates that the loss of internet connectivity has a pronounced effect on a country’s daily GDP. The report estimates that an average high-connectivity country stands to lose at least 1.9 percent of its daily GDP for each day of a total internet shutdown. For an average medium-level connectivity country, the loss is estimated at one percent of daily GDP, and for an average low-connectivity country, the loss is estimated at 0.4 percent of daily GDP.
Activist groups like NetBlocks and Global Network Initiative are creating awareness of both the prevalence of internet shutdowns around the world and their associated economic impact. This awareness is vital for the media, NGOs, and international organisations to try to combat the increased use of shutdowns across the African continent. Indeed, internet access and the guarding against the abuse of it by those in power are fast becoming a key frontier for the protection of international human rights. However, the fight against the abuse of freedom of expression is expected to be prolonged in Africa, as more and more leaders are turning to this form of control to suppress dissent and manipulate access to information. In the interim, businesses and the wider economy are expected to bear the brunt of these decisions.
SEE COUNTRY OUTLOOK: ALL COUNTRIES
State-owned enterprises in Africa have a notorious reputation for being mismanaged and for repeatedly requiring financial bailouts. EXX Africa unpacks this notion by looking at some of the best and worst-performing entities across the continent. Our analysis spans from examples in Morocco, Ghana, and Ethiopia to Zambia and South Africa.
The central bank has taken drastic action to nearly halve the number of lenders putting at risk more than USD 1.6 billion in deposits to at least 70,000 investors. However, the action will prompt much-needed consolidation in Ghana’s over-crowded banking sector as lenders brace for the impact of more payment delays in the power sector.
Despite concerns that independent power producers will cut off supplies over sizable arrears owed by state agencies, the government will continue to intervene to ensure a stable supply of power. However, a secondary effect of the arrears is impacting fuel importers who already face heightened government non-payment risk. The viability of future LNG imports may also be threatened as import bills face long delays and cumbersome disputes.
A lack of demand for intra-regional formal trade in West Africa may prove the most serious challenge for the single currency’s eventual launch and success. Unlike the Eurozone in the 1990s, West African economies are geared towards exporting to western or Asian markets, rather than its neighbours. Few West African countries are likely to meet all currency convergence criteria over the next year, while most CFA countries will be reluctant to replace their stable monetary regime with the messy managed float of the Nigerian naira.
- BENIN: TRADE DISPUTE AND POLITICAL TENSIONS DESTABILISE COUNTRY’S EXEMPLARY MODEL
- MOZAMBIQUE: ELECTION MANIPULATION IS UNLIKELY TO TRIGGER RETURN TO CIVIL WAR
- NIGERIA: TRADE RESTRICTIONS DRIVE UP NIGERIAN INFLATION AND BOOST FUEL SMUGGLING
- KENYA: PRESIDENT STEPS UP PRESSURE TO LIFT THE LENDING RATE CAP TO APPEASE THE IMF
- BOTSWANA: POLITICAL TRANSITION WILL DRIVE MUCH-NEEDED ECONOMIC REFORMS