G8 agrees on a US$20 billion aid package for Egypt and Tunisia

The G8 summit in Deauville on 27th May agreed on a US$20 billion aid package from multilateral lending institutions for Egypt and Tunisia. The aim is to give their interim governments breathing space after they have rid themselves of their presidents as they cope with worsening economic performance yet rising expectations of a quick fix.

The Financial Times quoted a number of economic experts broadly welcoming the aid. Alia Moubayed, an economist at Barclays Capital, said, “The international show of support is expected to attend to a large part of Egypt's immediate financing needs, though it will not solve the long-term structural problem of unemployment and job creation…It is, however, extremely important for giving a positive signal to markets and keeping the government focused in its reform agenda for inclusive growth.”

Osama Bishai, chief operating officer of Orascom Construction Industries, the country's biggest building company told the paper, “I hope the Egyptian government will use some of this aid to accelerate its PPP programme to build infrastructure, which we see as one of the tools still left to create jobs. That some of the aid is in the form of loan guarantees will help both Egyptian companies and foreign investors.”

It also quoted Simon Kitchen, strategist at EFG-Hermes, the regional investment bank, as saying, “The return of bigger foreign direct investment figures will need greater clarity on the politics…Maybe this will have to wait until after elections [and the end of the transition by the end of the year.]”

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2011 Menas Associates

Western banks hold Qadhafi's funds

Some of the world's biggest banks are key holders of funds from Libya's Colonel Mu'ammar Qadhafi's regime, according to a report obtained by anti-corruption group Global Witness.

A June 2010 document, leaked to Global Witness, showed the location of state oil revenues, managed through the state-owned Libyan Investment Authority (LIA).

As of 30 June 2010, the LIA had over US$53 billion invested. Japanese bank Nomura and the Bank of New York held US$500 million each. Over US$292 million is held by HSBC and Goldman Sachs has US$43 million.

Almost US$4 billion is held in structured products with banks, hedge funds and private firms: Societe Generale for example holds US$1 billion.

Some US$19 billion is held in Libyan and Middle Eastern banks.

The LIA also holds billions of dollars in shares, including global corporations such as BP, ExxonMobil, General Electric, Pearson and Halliburton.

Despite the fact that these are state assets, the Libyan people had no access to information on how the funds were invested because banks have no obligation to disclose state assets that they hold.

Global Witness is calling for new laws requiring banks and investment funds to disclose all state funds that they manage.

When Global Witness asked HSBC to confirm they held funds for the LIA, they reportedly refused, citing client confidentially.

"It is completely absurd that banks like HSBC and Goldman Sachs can hide behind customer confidentiality in a case like this. These are state accounts, so the customer is effectively the Libyan people and these banks are withholding vital information from them," said Global Witness director Charmian Gooch.

The Qadhafi family has significant person control over the LIA, which means it is essential that banks investigate whether they have done enough to ensure state funds have not been used for the family's personal benefit.

According to a prosecutor from the International Criminal Court, "Qadhafi makes no distinction between his personal assets and the resources of the country."

Global Witness is calling on banks holding Libya state funds to ensure they have done due diligence to prevent the transfer of state funds to accounts personally controlled by individuals with links to the regime.

According to the Sovereign Wealth Fund Institute, the LIA is the 13th largest sovereign wealth fund in the world. It scores two out of 10 on the institute's transparency ranking.

In May, the EU extended its economic sanctions against Libya to include the LIA and the country's central bank. It had already frozen assets of Qadhafi and some members of his family.

Sources: BBC News, Economic Times, Global Witness

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

Niger Delta: Surrendered weapons destroyed

The federal government has destroyed the arms and ammunitions that were surrendered by former militants of the Niger Delta as part of the amnesty deal brokered by the late president Umaru Musa Yar'Adua in late 2009.

The weapons were destroyed at a public destruction ceremony in the Lokpanta, a border town on the outskirts of Enugu State in the southeast. The president's special adviser on Niger Delta affairs, Kingsley Kuku, explained that the federal government's decision to publicly destroy the weapons was informed by the realisation that the continued existence of such weapons acted as a destabilising in?uence, especially since the potential for illicit trade was still quite high.

Henry Ugbolue, of the Amnesty Of?ce, who was one of the of?cers presiding over the destruction of the weapons revealed that about 3,779 weapons in all were recovered from militants from Imo, Delta, Edo, Cross River, Akwa Ibom, Bayelsa, Rivers, and Ondo states. The weapons included various ?rearms, ri?es, rocket propelled grenades, and spears.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2011 Menas Associates

Libya: Security of foreign personnel and assets

The critical variable for foreign investors and suppliers will be the degree to which the current war conditions continue. The talk in NATO is of a relatively quick victory which would open the way for a new government to appraise the role of foreign interests in the New Libya. The difference between the war persisting with its increasing destruction of property and other assets is that when it ends the great need for foreign aid and assistance will be enhanced.

Post-war developments will also run up against problems of priorities for rehabilitation of the economy. The regional demands for investment will be strong. Inevitably, Cyrenaica will want to adopt a budget which includes a greater proportion of State revenues in order to compensate for the past 40 years' neglect.

Ideology will also affect the choice of policies. It is not impossible that any Islamic revolutionary model would diminish the importance of the oil sector, which would deprive the foreign community of a welcome by the new administration. It may be that the view taken will be more nationalist and less materialistic. Defence will also have a considerable claim on resources because in its early days the new regime will feel exposed against both internal and external threats.

Ideology will also influence the pattern of imports which could be significantly anti-Western in nature. Even if the new government pays its moral debts to Western powers who intervened to save the reform movement from early extinction, the new administration might feel that has to be whiter than white in acting to reject overly widespread influence of the OECD states.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2011 Menas Associates

Kazakhstan: New deputy oil minister appointed

Berik Tolumbaev has been appointed Kazakhstan's new deputy oil minister in place of Asset Mugauov, who has moved to become head of 120,000 b/d onshore producer. Mangistaumunaigas.

Born in 1962 in the Zhambyl oblast, Tolumbaev got his first high-profile position in 2001 when he was appointed deputy managing director of pipeline operator Kaztransoil (KTO), when the company was headed by Timur Kulibaev. He became head of KTO from 2006 until 2007 and from October 2009–April 2010 was general director of KMG-Transcaspiy, a fully-owned Kazmunaigas subsidiary set up to oversee plans to build a new cross-Caspian oil transportation network originating from the Kashagan field.

Tolumbaev's most recent post was as deputy akim (governor) of the West-Kazakhstan oblast, responsible for attracting foreign investment into the region. He remains very close to Kulibaev, Kazakh industry sources say.

Three deputy ministers serve under oil and gas supremo Sauat Mynbaev, who has held the post for more than three years (having previously been energy and natural resources minister): the other two are Lyazzat Kiinov, an oil industry veteran who comes from the west, and the younger Kanatbek Safinov.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2011 Menas Associates

More deadly clashes in Sana'a

Yemeni officials have confirmed that as many as 40 people have been killed in deadly clashes in Sana'a. Fighting broke out between Yemeni security forces and tribal fighters, loyal to tribe leader Sheikh Sadiq Al-Ahmar, breaching the ceasefire.

Yemen's Defence Ministry accused the tribal fighters of seizing the headquarters of the ruling General People's Congress in the capital, however, sources close to Sheikh Ahmar say government troops attacked his complex in the north of the city.

On Tuesday 30th May, 12 protesters were shot dead in the southern city of Taiz following a move by security forces to remove a protest camp from the city centre. There was more violence in the town of Zinjibar, between government forces and alleged Al-Qai'da militants.

On Wednesday 25th May, US President Barack Obama said President Ali Abdullah Saleh should "move immediately on his commitment to transfer power". UN Secretary General Ban Ki-Moon added that he was "deeply troubled" by the violence and called on all sides to find a peaceful solution. But the situation in Yemen seems to be deteriorating rather than improving with Saleh refusing to help ease the crisis; many fear the prospect of a civil war.

Sources: BBC News, The Associated Press, AFP, Reuters

For more news and expert analysis about Yemen, please see Yemen Focus.

Ghana predicts improved gold output for 2011

The Ghana Chamber of Mines has predicted improved gold output for 2011 based on additional production from new mines, including Adamus Resources, and increased output from Owere Mines expansion projects.

Speaking at the Chamber's 83rd AGM, chamber president Dan Owiredu said that the production of manganese and bauxite should increase in 2011 and that cumulative mineral revenue is predicted to rise in 2012. “The expected higher volumes of mineral production and the strengthening of gold price is expected to result in increased mineral revenues, with a corresponding increase in mineral royalties and corporate tax payment to government,” he said.

Owiredu said that the greatest challenge facing the industry in 2011 was illegal mining, which forced gold mining companies to spend huge sums of money to secure their concessions. Minister of Lands and Natural Resources, Mike Hammah, said that the government was looking for creative ways to tackle illegal mining, and said that areas designated by the government for small-scale mining should help reduce the problem.

For more news and expert analysis about Ghana, please see Ghana Politics & Security.

© 2011 Menas Associates