Egypt: El-Sisi Announces New Mega-Project on the Suez Canal

President Abdel Fattah El-Sisi announced, 5 August, a new plan to build additional channels on the Suez Canal which would deepen and widen the current passageway and construct new channels to speed up traffic, with an aim to greatly expand traffic along the trade route.

Admiral Mohab Mamish, the Chairman of the Suez Canal Authority (SCA), has said that the new channel would take five years to be completed, although the President has subsequently said that he would like to see the project completed in just one year. 

An official with the SCA estimated that revenues from the expansion would reach US$13.5 billion by 2023, more than doubling its current revenues. We have not been able to determine how accurate these forecasts are, however, and remain sceptical about the merits of the new plan which will just cut waiting times to use the Canal and speed up transit. We are also unsure if this project, once complete, will attract additional ships to transit through it.

In the local media, the announcement has been hailed as the country’s new mega-project, and serves as a further indication of the scale of the new President’s ambitions, as well as tapping into the vein of nationalism. El-Sisi made clear that the army would take the lead and that any private partners (he mentioned that up to 20 firms could eventually be involved) would work under its supervision. 

Work has already begun, with no public discussion of the merits of this investment and we have been told informally that the thousands of vehicles working on the project will use significant supplies of fuel, which remains in tight supply in the market at times. The President noted that shares would be offered to finance this project at different prices, although the financial regulator noted that the differential pricing of shares is illegal. It still remains uncertain how this project will be financed and, if shares are sold to finance it, what the shareholder would then be entitled to in the future.

At an expected cost of US$4 billion, we believe the economy would be improved more efficiently by investing in the modernisation of Egypt’s railway system, adding to the main cities’ mass public transport systems, and power stations (given the continuing power cuts, which are now running at up to five times a day in some areas), as well as spending on road building, water and electricity distribution in poor areas.

For expert analysis of Egypt's security, politics, economy, and business environment see Egypt Politics & Security or contact info@menas.co.uk

© 2014 Menas Associates

Cameroon: Boko Haram abducts wife of President Paul Biya's security icon

Sunday 27 July was a prodigious day in Cameroon after Boko Haram’s unprecedented and deadly attack upon the homes of two key Cameroonian politicians in the country’s Far-North Region. 

Besides partially exposing the country’s security weakness, the attack was also a pertinent reminder to the authorities in Yaoundé that Boko Haram is becoming increasingly ambitious, organised, and deadly. Ultimately, the attack that left 18 dead and saw a further 17 kidnapped, including the wife of Cameroon’s Vice Prime Minister, was an ominous warning to President Paul Biya’s government that it is in a battle against a tenacious enemy that is willing and able to use alternative tactics to strike Cameroon’s most senior politicians.

The attack took place in Kolofata, in the Far-North Region of Cameroon, home to the country’s Vice Prime Minister, Amadou Ali, and a prominent Muslim leader and critic of Boko Haram, Seini Boukar Lamine, who is also the town’s mayor. Eyewitnesses stated that the attackers arrived in a convoy of eight 4x4 pickups vehicles and several motorbikes. The militants precisely targeted the two politicians’ residences, firing a rocket-propelled grenade into Amadou Ali’s home before leaving with his wife as their prisoner. 

The attacks came on the fifth day of a running gun battle between Boko Haram and Cameroon soldiers in the north of the country. Cameroon has deployed more than a thousand soldiers along its border to help combat the Nigerian armed group, which last week launched a massive assault on the north-east Nigerian town of Damboa near the Cameroonian border, displacing more than 15,000 people. The group gained international notoriety after kidnapping more than 270 schoolgirls in northern Nigeria in April, but has been active in the country for more than 12 years.

There were very specific reasons for the attack and the kidnapping in Cameroon. For further detailed analysis on why Boko Haram targeted Amadou Ali - and on his pivotal role in Cameroon’s current and future political and security hierarchy – see Cameroon Politics & Security – 30.07.14  

Nigeria's President sounds out supporters for 2015 re-election bid

President Goodluck Jonathan won backing for a re-election bid from several People's Democratic Party (PDP) state governors and House of Representatives members at a meeting held at the Aso Rock presidential villa in Abuja in the week ending 19 July.

Insiders say Jonathan will officially declare his candidacy in late August, following the end of Ramadan and out of respect to Muslim members of the PDP. He also wants to pre-empt any rivals. His most likely opponent within the PDP for the nomination is Jigawa state’s governor Sule Lamido who has the backing of former president Olusegun Obasanjo (1999–2007).

Lamido, a quietly spoken former foreign minister, is scarcely more charismatic than Jonathan but the PDP’s northern caucus would find him more acceptable. If he mounts a serious campaign, with strong backing from PDP governors in the north, he could really damage Jonathan. This, however, requires courage and money and no one is certain about Lamido’s reserves of either commodity.

Despite this Jonathan may need to offer him a very important job if he is to be persuaded to cease and desist.

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

© 2014 Menas Associates

How will Cameroon finance pay rises?

Minister of Finance Ousmane Alamine Mey has explained that Cameroon spends CFA820 billion (US$1.69 billion) a year on government workers’ salaries.

President Paul Biya’s 5% increase in these monthly salaries will increase government spending by CFA30 billion (US$62 million) in the second half of 2014 and increase this year’s total expenditure on civil servants’ wages CFA850 billion (US$1.75 billion).

Mey did not explain, however, how the government intends to pay for the additional CFA30 billion. This is worrying because the government’s 2014 budget has already been concluded. 

Menas Associates believes that the additional income will come from increasing oil revenues. Fortunately, Cameroon is expected to witness a surge in oil production in 2014, from 24 million to 30 million barrels as new oil fields come on stream. 

Increased oil production could, therefore, provide the necessary additional revenue to finance this year’s 5% pay increase for the civil servants.

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

© 2014 Menas Associates

Another new oil minister in Yemen

Ahmed Abdul Qader Shayyeh, who was appointed minister of oil and minerals in early June, resigned a few days later on health grounds, suggesting that the process of consulting him may have gone wrong. A new minister has now been appointed, having received a phone call from President Abd Rubuh Hadi while in London.

He is Hussein Rashid Jamal Alkaff. Alkaff is well known in oil circles in Yemen and the region, as he was a deputy minister of oil in the last years of the People’s Democratic Republic of Yemen and held the same position in the first years of unity. He subsequently became CEO of Al-Nimr, a private Saudi oil company owned by the Bin Mahfouz family, who are of Yemeni origin.

For the last few years, Alkaff has functioned as a consultant on Middle East oil, and he and his sons are the owners of Sahra Petroleum, a London- and Sana’a-based oil, gas and mining services company.

He is widely respected in the sector and has provided advice on oil policy to the government and the National Dialogue Conference. He is not a political figure, however, and has no independent power apart from through the now limited prestige of the Al-Kaff Sayyids.

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

© 2014 Menas Associates

Upcoming Mauritania presidential elections

Mauritanians go to the polls on 21 June to elect a new President. The incumbent, Mohamed Ould Abdel Aziz, launched his re-election campaign on 6 June in the southern city of Kaedi, telling supporters that since he came to power the country had made ‘great strides’ in security and economic growth.

Abdel Aziz has the strong support of the West, notably the United States, France, and the UK, for his tough stance against terrorism. Also, at face value his economic claims are hard to dispute. Mauritania managed economic growth of 6 per cent last year, with the president claiming credit for the burgeoning mining sector and a drop in inflation to less than 5 per cent.

He has also brought a degree of stability and continuity, thereby reassuring international companies that have invested in the country.

Poverty is still widespread, however, and unless the country strikes oil and/or gas in good quantities fairly soon, its economic future is in the balance. 

The more radical opposition parties have formed themselves into a new alliance called the National Forum for Democracy and Unity (FNDU). They comprise the Islamist Tawassoul movement and the 10 opposition parties forming the Coordination for a Democratic Opposition (COD), which boycotted last November’s election.

The FNDU is boycotting the upcoming election because its members claim that the process lacks credibility and transparency. Other opposition parties, notably the Popular Progressive Alliance (APP), are also boycotting the election for the same reason.

The opposition parties have widely criticised Abdel Aziz for his authoritarian rule. Thousands of FNDU supporters demonstrated throughout Nouakchott on 3 June, protesting at his autocratic approach and at the way the elections have been organised.

His opponents claim, with good reason, that democracy has taken a backseat during his tenure. They accuse the president of using the government and state institutions as his own personal electoral apparatus. This month, six ministers went on vacation, reportedly ordered to do so in order to spend time helping to manage the president’s electoral campaign. Among them were the minister of justice and the government’s official spokesperson. 

Abdel Aziz’s response to the election boycott has been a defiant call for a 100 per cent turnout. The opposition, in turn, has vowed to ramp up its protests.

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

  

© 2014 Menas Associates

US-Egypt: strain in relations?

The US has yet to officially extend an invitation to President El-Sisi following his inauguration on 8 June, including for a US-Africa Leaders’ Summit set to take place on 5-6 August. Although President Barack Obama has called El-Sisi to congratulate him on his electoral victory, his call came days after most countries had already extended their congratulations.

Illustrating the strain in relations between the two countries, a proposed Senate foreign aid bill would cut aid to Egypt by US$400 million (Egypt currently receives approximately US$1.5 billion in annual military and economic aid). While many Western states continue to harbour reservations towards the politics of Egypt’s new leadership, we do expect that as President El-Sisi’s administration settles into office, a slow rapprochement will begin to take place.

In our visit to Washington DC last week, it is clear that there is an element of discomfort about Egypt and its seemingly one-sided political process, heavy-handed judiciary and a lack of institution building. It seems to be perceived in several institutions in Washington that Egypt’s authorities do not really care about these concerns, knowing that the US government will not cut aid substantially for years.

There is hope in Washington that there will be a political calming in Egypt but there is also a high scepticism that the body politic will not be inclusive and that figures will create a one-sided narrative that does not allow for critique. It is clear that discussions in Washington about how to engage productively with Egypt will continue for some time, with frustration with a lack of process and real engagement set to rise.

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

© 2014 Menas Associates

Libya pushes ahead with plan for parliamentary elections

Somewhat incredibly Libya is still pushing ahead with its plan to hold elections for a new parliament on 25 June. Despite the upheaval and chaos, some Libyans seem to believe that electing a new ruling body at this time will work as a sort of panacea and provide the country with the opportunity for a new start.

Even General Khalifa Haftar, who is battling it out against militants in the east, declared this week that he would halt all fighting for one day on 25 June so that the polls can go ahead.

Yet such optimism may well be misplaced. It is true that electing a new parliament will refresh the political scene. It is also likely to result in the Islamists losing some of their grip on power. This week the campaign poster of a Muslim Brotherhood candidate, Ali Bouzakok, was torn down by angry crowds in Benghazi.

While the Islamists will not disappear from the scene completely, it seems almost certain, given the ongoing hostility towards them, that they will not be able to dominate the parliament in the way they have been able to dominate the Congress.

However, with the country so polarised and with the central authorities still lacking in any real power or authority, it is difficult to see how these elections will really alter the status quo. Furthermore, some of the thornier issues, such as whether or not to elect a new President directly or indirectly, still have to be thrashed out, meaning that the potential for further deadlock is still a reality.

Added to all this the fact that the number of voters who have registered for these elections is still so low; it is difficult to see how this new parliament will have any real legitimacy.

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

© 2014 Menas Associates

Reshuffle in Yemen amid protests

An attack on Yemen’s electricity infrastructure in Marib led to a loss of power for much of the country on 10 June, leading the next day to demonstrations and a protest in front of President Abd Rubuh Hadi’s residence. This precipitated a long-expected cabinet reshuffle that came across as something of a panic.

Yemen has looked particularly fragile in the past month, with a major offensive in Abyan/Shabwa against AQAP, fighting in Amran between al-Huthi, supporters of Islah and an army brigade and continuing problems in the south. In Sana’a, fuel shortages have led to long queues for diesel and elsewhere exacerbated already severe humanitarian problems and led to protests in several Yemeni towns.

Criticism of the government had reached new heights before the electricity failure. Much of it was directed at Prime Minister Muhammad Basindwa, who nevertheless survived the reshuffle – perhaps because very few other politicians might be willing to take on the job at present.

The new ministers are:

• Ahmad Ubaid Bin Daghr, deputy prime minister, minister of telecommunications and information technology;
• Abdullah Mohsen al-Akwa, deputy prime minister, minister of electricity;
• Nasser Taha Mustafa, minister of information;
• Ahmed Abdul Kader Shaya, minister of oil and minerals;
• Mohammed Mansour Zemam, minister of finance; and
• Jamal Abdullah al-Salal, minister of foreign affairs.

They are thought to be close to Hadi, while representing the General People’s Congress/Joint Meeting Parties coalition in the cabinet. The new oil minister replaces Khaled Mahfouz Bahah, who was appointed to the job only three months ago, having been brought back from Canada to take up a post he had previously occupied three years earlier. Abu Bakr al-Qirby, the long-serving foreign minister, may have been surprised at his sudden exit, sweetened by an appointment to the Majlis al-Shoura (upper house of parliament). His replacement has done well as ambassador to the UN. The outgoing minister of finance has been appointed governor of Hodeida.

The president has also appointed Ahmed Awad bin Mubarak as a director of his office. He made his reputation as secretary general of the National Dialogue Conference. Mansour Ali Ahmed al-Betani was made secretary-general of the presidency.

The reshuffle will at best buy Hadi a little time. The armed forces will go after the saboteurs but problems with tribes in Marib are endemic and symptomatic of wider political, economic and social problems – and thus likely to recur.

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

© 2014 Menas Associates

Egypt: Morsi trial date set

Judge Nabil Saleeb announced that Mohamed Morsi and other Brotherhood members have been charged with "inciting the killing and torture of protesters in front of the Etihadeya (presidential) palace". The incident outside the presidential palace in December was seen as a turning point in the fortunes of the former president. Those killed had been protesting at his decree extending his own powers.

The trial date has been set for 4 November. The former president has been held at a secret location since he was deposed.
 

In another move against the organisation, the ministry of social solidarity officially dissolved the Muslim Brotherhood as a non-profit organisation and ordered all of its funds and assets be put under the control of the military-appointed government.

The moves underline that the authorities currently in power have no intention of heeding the advice of others that they should seek reconciliation with the Brotherhood: this hardline approach risks storing up problems for the future.
 

The armed forces have suffered their own casualties in the past week, mainly in Sinai, at the hands of jihadist extremists. The authorities are trying to conflate the Islamists in the Sinai with the Muslim Brotherhood in the popular imagination although the two Islamist groups are ideologically very different. Six soldiers were killed in an attack by gunmen on an army patrol near Ismailia on the Suez Canal; two were killed outside the security headquarters at Al Tour, regional capital of South Sinai; and four were killed by a car bomb in Al Arish in north Sinai.
 

An RPG was also fired at the satellite ground station used by Nilesat.
 

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

© 2013 Menas Associates