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USAfrica: Zuma’s failed presidency of corruption, what next? By Paul Hoffman

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Zuma’s presidency of corruption, what next?       By PAUL HOFFMAN

South Africa’s National Prosecuting Authority needs to box smart – there is no better way to clear the air than swiftly to charge Jacob Zuma for the corrupt manner in which he relieved Mxolisi Nxasana of his post as the head of the NPA. This crime is far more serious, far more recent and far more relevant to the future of the rule of law and constitutionalism in South Africa [SA].

The 18 criminal charges against former President Jacob Zuma, reinstated by the Supreme Court of Appeal on 13 October 2017 in the culmination of a judicial review initiated by the DA in April 2009, must stand. Zuma’s unpublished but bulky representations aimed at their withdrawal have failed, as was announced by current National Director of Public Prosecutions, Shaun Abrahams, in an 11-minute press briefing on 16 March 2018.

Four serious crimes are identified in the 18 charges: corruption, fraud, money laundering and racketeering. All of the charges flow from 783 transactions between Zuma and his former financial adviser, Schabir Shaik, or companies controlled by the latter or in which he had a major interest.

Shaik and his companies were convicted in the High Court on various counts of corruption and fraud in June 2005. The state alleged and proved to the satisfaction of that court (and both higher courts to which appeals were directed) that over a period of nearly seven years, they made some 238 payments either directly to, or for the benefit of, Jacob Zuma, at all material times a prominent politician. The payments had been made between October 1995 and September 2002 as an inducement to Zuma to use his name and political influence for the benefit of Shaik’s businesses or as an ongoing reward totalling R1,340,078 for having done so.

The Shaik trial lasted more than six months, generated huge media interest and attracted a great deal of public attention. More than 40 witnesses testified. The record comprises more than 12,000 pages with oral testimony constituting more than 6,000 pages.

When the Shaik matter reached the Constitutional Court on appeal relating to the forfeiture of the fruits of the crimes, Acting Deputy Chief Justice O’Regan, writing for a unanimous court, observed that:

“It is clear that corruption is a serious crime which is potentially harmful to our most important constitutional values. Moreover, it is clear that both our Parliament and the international community recognise the close links between corruption and organised crime.”

The prosecution has, for the purposes of the now pending case against Zuma, expanded the number of transactions from 238 to 783 and it intends to call over 200 witnesses in the matter, including forensic experts.

Given the length of the Shaik trial, it is clear that the Zuma trial will be considerably longer and a very expensive undertaking, particularly so if the hitherto consistent “Stalingrad strategy” of the Zuma legal team is persisted with during the trial. There is no reason to doubt that the strategy will not be abandoned.

It seems, from what little was revealed during President Ramaphosa’s first parliamentary question session, that the taxpayer will foot the bill for the defence of Zuma and will only be able to seek to recover costs if a conviction is secured at the end of the trial and the appeals which routinely form part of the Stalingrad strategy. This arrangement (flowing from an agreement with then President Mbeki) is both wrong and outrageous; the validity of the agreement ought to be impugned as Zuma does not hold any political office now and was not put in office to commit crimes.

It is also a racing certainty that, for the purpose of delaying the matter, the decision announced on 16 March 2018 will be taken on review, and if necessary on appeal, by Zuma. He may also apply for a permanent stay of prosecution which will also hold up the commencement of the trial.

A rather misguided stab at a permanent stay has already been launched by an obscure NGO in the Western Cape High Court. Both the NGO’s standing to sue and the jurisdiction of that court to hear the matter will doubtless feature prominently in the application. While it is pending, the application will delay the commencement of the criminal trial. The Judge President in Cape Town is a known Zuma sympathiser with a Stalingrad strategy of his own in relation to long-outstanding disciplinary proceedings against him.

The National Prosecuting Authority needs to box smart in the circumstances sketched above. After the review and stay applications are dispensed with (probably on appeal) a long, complex and expensive trial about 783 smallish transactions that mostly took place in a previous century is required.

This trial is not the only option for bringing Zuma to book.

Far more relevant and topical is Zuma’s role in the attempted capture of the state, some State-owned Enterprises and in particular the criminal justice administration itself.

A trial soon, over one transaction which took place as recently as the autumn of 2015 that impacts on the NPA’s overall credibility directly, would involve evidence on a single invalid and corrupt payment, admittedly made, of over R17-million and will, if successfully prosecuted, set the tone of the post-Zuma era. This prosecution is a possibility the management of the NPA ought to consider. Only one prosecution witness need be called and all of the limited quantity of documentation relating to the matter tends to support his version of the corrupt transaction at the heart of the case. Only two charges are needed, one of corruption and one of defeating the ends of justice.

A criminal complaint in relation to the matter has been under investigation by the Hawks since July 2015, when, fortified by a favourable opinion of two senior counsel, and armed with an affidavit and draft charge sheet, Accountability Now laid the two charges concerning the manner in which former NDPP Mxolisi Nxasana was relieved of his duties.

Related civil proceedings, brought by FUL, Corruption Watch and CASAC, have already reached the Constitutional Court on appeal, and judgment in the matter is imminent. The validity of the appointment of the current NDPP, Abrahams, is a live issue in the appeal. It was common cause in argument that the transaction complained of is illegal and invalid. Its criminality was not in issue in the civil case nor was the available evidence of Nxasana, which would be adduced in the criminal trial, before the court, having been excluded from the record because it was presented late. The High Court nevertheless rejected the version put forward on oath by Zuma. During argument in both courts, counsel did describe the payment of Nxasana’s golden handshake to agree to leave office as a bribe.

This low hanging fruit is available for plucking by the NPA, if it chooses to “box smart”. In the Shaik trial a sentence of 15 years was imposed on the corruptor of Jacob Zuma. This is the minimum sentence laid down in the applicable legislation. Zuma, now 75 years old, will surely not get a lesser sentence if convicted for bribing Nxasana to leave office after a short, sharp and well directed trial. There is no special dispensation for pensioners in SA, unlike the Italian criminal law which has been exploited by Silvio Berlusconi after his conviction.

What Zuma did to the country and the NPA by easing out Nxasana is a far more serious matter than his corrupt relationship with Shaik. It goes to the overall administration of criminal justice, not to 783 petty corrupt payments intended to oil the fortunes of the Shaik business empire.

The NPA top management ought to be able to muster the moral fortitude to discern the need to clear the air around its widely perceived lack of constitutionally required independence in its leadership; the dark cloud of suspicions that Abrahams was previously willing to align the NPA with Zuma’s interests rather than the interests of the administration of justice and the general feeling that the NPA “ain’t what it used to be”.

If it is so able, there is no better way to clear the air than swiftly to charge Zuma for the corrupt manner in which he relieved Nxasana of his post as the head of the NPA. This crime is far more serious, far more recent and far more relevant to the future of the rule of law and constitutionalism in SA.

The Constitution itself enjoins the entire public administration to use resources in an effective, efficient and economical way. If the objective of a “winnable case” for the prosecution is the appropriate conviction and punishment of the accused, let’s get there sooner rather than later.

It is time for the NPA to recall the words of the unanimous Constitutional Court quoted above and also to bear in mind that on 17 March 2011 our highest court’s concerns about corruption were expressed in the following words of Moseneke DCJ and Cameron J in the second Glenister case concerning the unconstitutionality of the Hawks:

There can be no gainsaying that corruption threatens to fell at the knees virtually everything we hold dear and precious in our hard-won constitutional order. It blatantly undermines the democratic ethos, the institutions of democracy, the rule of law and the foundational values of our nascent constitutional project. It fuels maladministration and public fraudulence and imperils the capacity of the State to fulfil its obligations to respect, protect, promote and fulfil all the rights enshrined in the Bill of Rights. When corruption and organised crime flourish, sustainable development and economic growth are stunted. And in turn, the stability and security of society is put at risk.”

When the relatively trivial “small time crook” nature of the corruption between Shaik and Zuma is contrasted with the serious harm done to the overall administration of justice and the trajectory of constitutionalism in SA by the “dis-appointment” of Nxasana, then it ought to be a no-brainer that the latter matter deserves priority on the roll for hearing in the criminal sessions of the High Court.

It is up to the NPA to do the right thing, not because the DA’s successful review and a change of president points it in that direction, but out of inner conviction, unswerving independent-mindedness and to preserve its own integrity.

If Jacob Zuma ever considers doing the right thing he could consider negotiating a plea bargain by pleading guilty to common law crimes (those that don’t have minimum sentences, a la the travelgate fraudsters) in both matters and confess to all other wrongdoing on his part so as to shop those he threatened to shop when first charged concerning his cosy relationship with Shaik. Zuma’s little black book of “Where the ‘smallanyana’ skeletons are buried” could be usefully handed to the NPA as part of the plea bargain.

Urban legend has it that when told by Mbeki (whom he later threatened to force into the witness box in the long arms deals related trial now in prospect) that he was being fired as deputy president because of Shaik’s conviction for corrupting him, Zuma looked around the room full of assembled Cabinet ministers and said: “But, But, but I am the poorest cadre in the room!”                                                                                                                      •Hoffman is a director of Accountability Now.

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USAfrica: Atiku’s America trip boosts U.S assessment as realistic alternative to Buhari

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By CHIDO NWANGWU, Founder & Publisher of USAfrica [Houston] • USAfricaonline.com • ChidoNwangwu.com

The first time I met Atiku Abubakar was the first Thursday of May, 1999 when he attended the world’s largest oil and. gas conference, OTC, as Nigeria’s Vice President-elect, and I co-managed with Chris Mammah his participation on behalf of NAPIMS/NNPC.

Since 2001, somehow, millions of Nigerians believe(d) and spread the allegation that Atiku Abubakar had a “guilty charge awaiting him to be arrested” for criminal culpability, should he “set his feet” on the continental shelf of the United States….

Since 2015, for the opponents of Atiku, particularly outspoken members of retired general Muhammadu Buhari’s  ruling All Progressives Congress (APC), those are “Incriminating evidences” as well as the most visible disqualifiers, open for everyone to see as proof of his “corruption records.…”

But on Wednesday evening of January 16, 2019, in Abuja, the capital city of Nigeria, the country’s former Vice President (1999 to 2007 during the presidency of retired general Olusegun Obasanjo) packed his bag with his visa. He was ready for the awaited trip to the United States of America, accompanied by some of his advisers. The jet was airborne around 1:30 Thursday morning. He arrived later in the day at the Washington Dulles international airport.

What are the key points and implications from his trip?

First, Atiku, one of the most formidable businessmen in the critical sector of logistics, effectively used the opportunity and platforms to announce to the world that he is the Nigerian free market forces candidate and the champion of privatization! And, it’s jobs, jobs, jobs! Exactly what the American leadership needed to hear. 

Second, with a mix of other factors and aggregation of interests, I think the man left the U.S, operationally enhancing his international bona fides, mid-January 2019, as a realistic alternative to Buhari.

Third, there was no mention of his controversial business tango with some Americans including Louisiana congressman Jefferson (who is in jail.). Plus, no reference to the complications from his multi-nodal transfer of substantial sums of funds into the U.S.

 Fourth, the man’s upfront and non-pretentious interest in State power specifically to become president of Nigeria is likely to draw the admiration of some American political activists and Nigerian-Americans. On the other hand, there are many who still charge him of an extraordinary ambition for apex political power  which led him to move from the PDP to the APC and then back to the PDP. It fueled the flames of antagonism and corrosive questions against him.

On this issue, with deserving regards to history and facts, the cheerleader of the choir which sang all manner of stuff against “Atiku’s character” was his former boss,  Obasanjo.

To borrow the Warri context of the word, it was Atiku who “come provoke” the unforgiving soldier who could have been a great head of state, Obasanjo!

Unfortunately, Obasanjo’s quest for an unprecedented 3rd term distracted him from the higher purposes of good governance; especially his positioning himself as the Nigerian Mandela. I addressed this comparison in my summer 2019 book titled MLK, Mandela and Achebe: Power, Leadership and Identity [ISBN 978-0-9893970-0-1]

Fifth, by wrapping up the two-day trip to the United States without any problems, I believe that Atiku has gained an excellent opportunity to refresh his narrative regarding the twin issues of integrity and corruption.

Sixth, by coming to exchange ideas with some of the most influential business executives and public policy leaders here in the United States, the moderate Muslim,  who was born on November 25, 1946, has also enhanced his stature among leaders from the emerging markets.

Seventh, Atiku has began the unavoidable task of clearing the wet blanket of doubt covering the important, strategic and thoughtful manifesto he presented with Peter Obi  over his third attempt to be elected President. •00——————————————•

Dr. Chido Nwangwu, analyst on CNN & SKY news,  moderator of the Achebe Colloquium (Governance, Security, and Peace in Africa) December 7-8, 2012 at Brown University in Rhode Island and former adviser on Africa business to the Mayor of Houston, is the Founder & Publisher of Houston-based USAfrica multimedia networks since 1993, first African-owned, U.S-based newspaper published on the internet USAfricaonline.comChido is completing the 2019 book titled MLK, MANDELA & ACHEBE: Power, Leadership and Identity.  E-mail: Chido@USAfricaonline.com

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Military coup in Gabon collapses overnight….

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Military coup in Gabon collapses overnight....

Special to USAfrica [Houston\]

Gabon’s presidency said in a statement that soldiers burst into a state radio station at dawn on Monday and called for an uprising against President Ali Bongo, who was recovering in Morocco from a stroke.

Security forces stormed the building, arrested the coup leader and killed two of his soldiers, according to the presidency.

“The secretary-General has always stood against unconstitutional changes of power, especially by force, and in that light, he condemns the attempted coup that took place this morning in Gabon,” said UN spokesman Stephane Dujarric.

Guterres added that calm appears to have returned in Libreville and calls “on all actors to follow constitutional means”, added Dujarric.

The UN envoy for Central Africa, Francois Lounceny Fall, who is based in Libreville was closely monitoring the situation and is ready to offer assistance if needed, said the spokesman.

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USAfrica: Why Nigeria’s Akwa Ibom Gov. Udom Emmanuel deserves reelection in 2019

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By Ini Ubong

Special to USAfrica [Houston] & USAfricaonline.com

There’s every likelihood that Udom Emmanuel, the incumbent Governor of Akwa Ibom State, will continue with a second term in office. Top among the reasons this will happen is the fact that the peace which eluded the state between 2007-2015 has [restored]. It has become the norm, and so, the people that were affected most, the Church in Uyo are now conducting their business unhindered. This is why the church as a body, have cried that, “afflictions shall not arise a second time “.

I was in the state for 11 days and spoke and listened to faith leaders. They want the peace experienced to continue. Udom Emmanuel The Governor is unpopular amongst the civil servants? Yes. There’s a visible anger once you mention his name. He’s not owing them their salaries, but emoluments like several years of leave allowances, pensions etc. In my quest to understand what’s on the mind of the Governor, one of his senior aides agreed that the Governor had a meeting last week with Level 14 and above officers and explained to them the poor financial situation, offering them notarized promotions.

At several instances, I have pleaded poor income for the state, and I was unkindly told that the “Udom boys are living large, buying properties and the good life.”

Udom Emmanuel –as Governor of AKS– isn’t seen as a friendly and humble person and those around him complain he’s not flexible with counsel. Human flaws? Yes, but, there’s been a lot of development in the state, and decorum in managing the finances.

This sitting Governor will return because, the defection of PDP’s Godswill Akpabio to APC has unsettled the opposition’s plans; and successes achieved before his arrival has dissipated. An aspirant of APC swore that they’ll all vote Udom Emmanuel, to “teach APC a lesson.“

Everywhere APC had structures, the uncommon transformer’s entry undid all, leaving the party with bitter tastes in their mouths. Streetwise consensus is that, if Nsima Ekere, the APC gubernatorial candidate was staking his reputation, there would have been a real battle,  the braggadocio of Godswill Akpabio.

Most people of AKS are done with that era. Take for example the primaries of APC in the state. Lives were lost in the process, and even though the process was inconclusive, candidates forced on the people were announced. This again is a relic of our locust years. PDP in Akwa Ibom State seems to be strategic.

When I screamed why Chris Ekpenyong, one time Deputy Governor of the state, who recently was lampooned, cursed and abused by constituents of Ikot Ekpene Senatorial district on a radio phone in programme, should be given a ticket to oppose Godswill Akpabio, a senior PDP person suggested that, the party might not be interested in winning that position. Again, the obvious confrontation from the camp of the NDDC CEO, regarding projects in AKS isn’t resonating with responsible adult in the state. The expectations are that, the Federal agency, should have partnered as the provision is, with the state government in determining strategic and important infrastructure to move the state forward, instead of the former behaving like another Governor of the state.

The people of Akwa Ibom State are desirous of the tranquillity that was in the state before the coming of Godswill Akpabio, and whoever is offering that peace, they have elected to petition their Maker for the best. So, the battle to return Udom Emmanuel is also a spiritual one; it is not for Udom Emmanuel himself, but, for the future of the Akwa Ibom people.

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#FLASHPOINT: DRC Congo on knife’s edge as presidential election result is postponed

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Special to USAfrica [Houston] and USAfricaonline.com

The Democratic Republic of Congo officials on Saturday delayed the announcement of preliminary results from a crucial presidential election, amid growing pressure from world powers and the influential Catholic church to respect voters’ wishes.

“It is not possible to publish the results on Sunday. We are making progress, but we do not have everything yet,” Corneille Nangaa said, without announcing a new date.

The country’s powerful National Episcopal Conference of Congo (CENCO), which represents the country’s Catholic bishops, warned popular anger could result in the event the final result were not “true to the verdict of the ballot box.”

DR Congo’s powerful Catholic Church, which provided more than 40,000 election observers, had said Thursday it knew who had won the vote, but did not name him.

In a letter to Nangaa on Saturday, CENCO president Mgr Marcel Utembi said that, given the delay, “if there is a popular uprising it would be the responsibility of the CENI.”

The December 30 vote saw 21 candidates run to replace President Joseph Kabila, who has ruled the vast, conflict-ridden country for almost 18 years.

Among the frontrunners were Kabila’s handpicked successor Emmanuel Ramazani Shadary and two opposition candidates: veteran heavyweight Felix Tshisekedi and newcomer Martin Fayulu.

At stake is the political stewardship of a mineral-rich country that has never known a peaceful transition of power since independence from Belgium in 1960.

Kabila had been due to step down two years ago, but clung on to power, sparking widespread protests which were brutally repressed, killing dozens.

The election, preceded by repeated delays, was carried out in a relatively peaceful manner. But tensions have built over the lengthy counting process, amid fears the results could be manipulated to install Kabila-backed Shadary in power.

The electoral commission had promised to announce preliminary results on Sunday, followed by a definitive count on January 15.

But Nangaa told AFP just under half of ballots had been counted by Saturday afternoon, adding: “Next week, we will announce.”

The further delay could stoke tension in the unstable central African nation of 80 million.

Nangaa has blamed the slow count on massive logistical problems in a country the size of Western Europe with poor infrastructure. Since the vote, the authorities have cut internet access and blocked broadcasts by Radio France Internationale, causing widespread frustration.

With international concerns growing over the transfer of power in sub-Saharan Africa’s largest nation, Western powers have upped the pressure.

The United States and European Union urged Kinshasa to ensure a peaceful change of power.

Donald Trump announced Friday that the United States was sending about 80 troops to Gabon to deploy in the event of election-related unrest in nearby DR Congo.

The African Union, which had sent an 80-member team to monitor the vote, insisted that respecting voters’ wishes was “crucial”.

And Denis Sassou Nguesso, president of the DR Congo’s western neighbour, the Republic of Congo, urged restraint in uncertain times to “safeguard peace and stability in this brother country”.

Nangaa wrote to CENCO head Utembi on Friday accusing the episcopal conference of putting out partial result “trends” designed to “intoxicate the population in preparing an uprising,” an accusation the latter turned on its head with Saturday’s letter in response.

In his letter Nangaa warned CENCO would “alone be responsible” for unrest after disseminating “insignificant and partial data.”

The ruling FCC coalition accused CENCO of “seriously breaching” the constitution and electoral law by “illegally declaring voting trends” in favour of a given candidate.

The last two elections in 2006 and 2011, both won by Kabila, were marred by bloodshed, and many feared a repeat if the results this time round were placed in doubt.

In 2006, Kabila defeated former warlord Jean-Pierre Bemba in a violence-tainted poll.

Five years later, he was re-elected in another vote blighted by bloodshed, chaotic organisation and alleged irregularities.

The opposition rejected the results.

Between 1996 and 2003, DR Congo lived through two fully-fledged wars that claimed millions of lives through fighting, starvation, and disease. ref: AFP

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Violence, tension in DRC Congo election; Kabila orders internet access shut down

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AFP: The Democratic Republic of Congo (DRC) on Monday began counting ballots from a presidential election marked by delays and fears of violence and vote-rigging, straining hopes for its first-ever peaceful transfer of power.

After a relatively bloodless vote, election officials embarked on the marathon task of counting and collating, their work scrutinised by opposition parties for any sign of fraud.

Sunday’s elections went ahead after two years of delays and sporadic clashes in the notoriously unstable country.

But the influential Catholic church, through its national conference of bishops, declared the vote had been “relatively calm”.

Reported incidents included harassment of some election monitors and a clash in the restive eastern province of South Kivu that left four dead.

Two telecoms operators, Global and Vodacom, said the government had ordered them to cut access to the Internet on Monday — a move that opposition supporters said aimed at blocking social-media activism.

The DRC has never had a peaceful transition of leader since it gained independence from Belgium in 1960.

Worries of a new spiral into violence deepened in 2016 after President Joseph Kabila, in power since 2001, refused to quit when his two-term limit expired.

Tension and suspicion were further stoked by repeated delays, a bloody crackdown on anti-Kabila protests and accusations that electronic voting machines would help to rig the result.

But Kabila late Sunday congratulated the public for voting “in peace and dignity”.

Provisional results are due to be announced on January 6, with final results expected on January 15. The new president is set to be sworn in on January 18.

From Kinshasa to Goma, 2,000 kilometres (1,250 miles) further east, polling stations already put up first results on Monday morning.

In Kisangani, the country’s third-largest city, observers hired by the political parties slept on the floor or on desks at a polling station to keep their eye on the vote count, an AFP reporter said.

A monitoring mission set up by the Catholic church said some of its observers had been “molested and violated.”

On Sunday evening, violence erupted at a polling station in the Walungu area of South Kivu province after an electoral official was accused of trying to rig the vote in favour of Kabila’s preferred successor, according to an opposition figure.

The electoral official was killed along with a policeman and two civilians, said Vital Kamerhe, who has been campaigning for Felix Tshisekedi.

Kabila’s champion Emmanuel Ramazani Shadary and Tshisekedi, head of a veteran opposition party, UDPS, separately claimed victory.

But the scant opinion polls that have been conducted made Martin Fayulu — until recently a little-known legislator and former oil executive — clear favourite.

He garnered around 44 percent of voting intentions, followed by Tshisekedi with 24 percent and Shadary with 18 percent, said Jason Stearns of the Congo Research Group, based at the Center on International Cooperation at New York University.

Roughly half of survey respondents, he added, said they would reject the result if Shadary — a hardline former interior minister facing EU sanctions for a crackdown on protesters — was declared winner.

The vote for a new president took place alongside legislative and municipal polls.

While turnout failed to reach 50 percent at some polling stations, many voters said they were exhilarated at taking part in the first elections after the nearly 18-year Kabila era.

But there was also much evidence of organisational problems, including with the contested voting machines.

The Catholic monitoring mission said that, as of early Monday, its observers had checked overall tallies of the vote in 4,161 polling stations.

In 3,626 stations, the number of paper ballot sheets tallied with totals kept by electronic voting machines, the observer mission said — a figure that by extrapolation suggests possible discrepancies in 535 bureaux.

DRC’s paradox

A country almost the size of continental western Europe which straddles central Africa, the DRC is rich in gold, uranium, copper, cobalt and other minerals.

Little of that wealth trickles down to the poor. Poverty, corruption and government inertia are etched into the country’s history, along with a reputation for violence.

In the last 22 years, it has twice been a battleground for wars drawing in armies from central and southern Africa.

That legacy endures in eastern DRC, where militias control swathes of territory and battle over resources, wantonly killing civilians.

Insecurity and an ongoing Ebola epidemic in part of North Kivu province, and communal violence in Yumbi, in the southwest, prompted the authorities to postpone the elections there until March.

Around 1.25 million people in a national electoral roll of around 40 million voters are affected. Despite this, elections in the rest of the country went ahead.

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USAfrica: Developing jaw-dropping settlement, MTN South Africa to pay Nigeria only US$53.2-million (R777-million) of $8.1-billion (R118-billion) CBN fines, refunds

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Special to USAfrica [Houston] @usafricalive USAfricaonline.com

Christmas [came] early for MTN Group [of South Africa]. The telecommunications operator’s shares are likely to soar when markets reopen on Thursday in Johannesburg after it announced late on Monday that it has settled a multibillion-dollar dispute in Nigeria.

It will pay just US$53.2-million (about R777-million) in a settlement with Nigeria’s central bank, a tiny fraction of the $8.1-billion (R118-billion) the Bank had sought from the group’s subsidiary in the West African country.

MTN Group shares plunged 22% on 30 August when it emerged that the Nigerian central bank had ordered four banks to refund the $8.1-billion it claimed was illegally expatriated by the telecoms provider between 2007 and 2015. Its shares, which trade on the JSE, have failed to recover significant ground since then on investor fears.At these meetings, MTN Nigeria provided additional material documentation which satisfactorily clarified its remittances

A second allegation by Nigerian authorities that MTN owes $2-billion in back taxes remains the subject of dispute, however. That matter is due to be heard by a Nigerian court in February next year.

The settlement amount with the central bank — less than 0.7% of the sum originally demanded — is likely to be seen as a significant victory for group CEO Rob Shuter, who took the reins at MTN last year from Phuthuma Nhleko. Shuter joined MTN from Vodafone Group.

In a statement late on Monday, MTN said a series of meetings were held in Lagos with central bank officials in November.

“At these meetings, MTN Nigeria provided additional material documentation which satisfactorily clarified its remittances,” it said. Upon review of this documentation, the central bank “concluded that MTN Nigeria is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders”.

“However, the central bank maintains that the proceeds from the preference shares in MTN Nigeria’s private placement remittances of 2008 of circa $1-billion were irregular, having been based on CCIs (certificates of capital importation) that only had an approval-in-principle, but not final regulatory approval of the central bank.

“The central bank instructed MTN Nigeria to implement a notional reversal of the 2008 private placement of shares in MTN Nigeria at a net cost of circa 19.2-billion naira — equivalent to $52.6-million. This is on the basis that certain CCIs utilised in the private placement were not properly issued.”

MTN Nigeria and the central bank have agreed that they will resolve the matter on the basis that the operator will pay the notional reversal amount without admission of liability, the group said.

“In terms of the resolution agreement, the central bank will regularise all the CCIs issued on the investment by shareholders of MTN Nigeria of circa $402.6-million without regard to any historical disputes relating to those CCIs, thereby bringing to a final resolution all incidental disputes arising from this matter.”

MTN Group CEO Rob Shuter


It said MTN Nigeria relied on “certain commercial banks to ensure all approvals had been obtained prior to the CCIs being issued and to ensure the CCIs were properly utilised in the private placement”.

“MTN Nigeria will be engaging with the banks in relation to the issues dealt with in the resolution agreement,” the group said. Presumably, this means MTN is going to try to recover at least some of the $53.2-million from the banks involved.

The original $8.1-billion demanded by the central bank followed just three years after the Nigerian Communications Commission imposed a $5.2-billion fine on MTN for failing to disconnect unregistered Sim cards. That fine was later reduced to about $1-billion.MTN Nigeria continues to maintain that its tax matters are up to date and no additional payment … is due

MTN Group said it remains involved in legal action with Nigeria’s attorney-general over the $2-billion in back taxes the AG claims are owed. The case came up for “initial mention” before the federal high court in Lagos on 8 November 2018 and has been adjourned to 7 February 2019.

“MTN Nigeria continues to maintain that its tax matters are up to date and no additional payment … is due,” the group said, adding that no provisions or contingent liabilities have been raised in the accounts of MTN Nigeria for the claim.

Nigeria is MTN’s biggest and most profitable market. It has more than 64 million customers in the country and it enjoys high profit margins. Earnings before interest, tax, depreciation and amortisation in the third quarter represented 43% of revenue.  ref — © 2018 NewsCentral Media

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