Botswana, one of Africa’s best-managed economies, has been devastated by the fall in the price of diamonds, its main export.

TO BE NOTED: From the FT:

"Botswana handed record $1.5bn loan

By Richard Lapper in Johannesburg

Published: June 4 2009 02:47 | Last updated: June 4 2009 02:47

The African Development Bank on Wednesday announced its biggest ever loan facility – a $1.5bn (€1.06bn, £910m) loan to Botswana – in a deal that it said reflected the impact of the global financial crisis and economic slowdown in Africa.

Botswana, one of Africa’s best-managed economies, has been devastated by the fall in the price of diamonds, its main export.

After several years of running budget surpluses the country faces a budget deficit equal to 13.5 per cent of gross domestic product in the current financial year. “The case of Botswana illustrates the impact that the financial crisis is having on even the best managed economies in Africa,” said Donald Kaberuka, the AfDB’s president.

“The crisis which is affecting African countries through different channels is increasing demand for support from international financial institutions.

“I am delighted that the bank has been able to respond quickly and flexibly in this unique case.”

Although Botswana’s situation is extreme, recent weakness in commodity prices and potential falls in income from economic aid and remittances paid by migrant workers have left a number of developing economies vulnerable to current account problems.

At its annual conference last month AfDB agreed to help affected African countries. An official said it had about $4.5bn available to help countries affected by foreign exchange shortfalls or liquidity problems. Additional funds were available under an arrangement negotiated with developed countries and other donors.

“Many other countries are seeking help under the terms of the facility to mitigate the impact of the financial crisis,” said an official. “[But] it is a signal [about how badly Africa is affected] when countries such as Botswana seek assistance,” he added. The previous biggest loan made by the bank was a $500m budget support package last year to Egypt, he said.

This is the first such borrowing from the AfDB by Botswana in 17 years. Previously, Botswana had several times contributed to the replenishment of the African Development Fund, the soft loan window of the Bank Group.

Earlier this year there was speculation Botswana might contribute funds to neighbouring Zimbabwe, where the transitional government led by Morgan Tsvangirai faces acute financial shortages."

to build informed societies that are better able to avoid the pitfalls of the past

TO BE NOTED: From the Guardian:

"Preparing for Africa's boom

This charter could help nations profit from their resources, rather than being undermined by them

• 
• • Paul Collier
  • The Guardian, Monday 25 May 2009
  • Article history

'Never again" is, of course, a ­sentiment that is now ­widespread in economic policy circles. I hear it too from Africa's ­economists, but then it refers to the resource curse.

The global commodity boom that ended abruptly in September was the second since African independence. Africa has yet to diversify from dependence on primary commodity exports, so these booms were huge opportunities, pumping far more money into some governments than aid will ever do. Last year, Angola alone received from oil and diamonds more than double the entire aid inflows to Africa. The first commodity boom, in the 1970s, was in large part an opportunity missed. Indeed, far from being harnessed for sustained development, it sowed the seeds of decline. It doesn't have to be like that: Botswana succeeded in using diamond revenues to lift the society out of poverty. But for every Botswana there are several Sierra Leones. In the short term, a commodity boom always helps the economy, but the long-term impact depends on policy choices. These usually go wrong: the norm is that they undermine economies rather than build them up.

Having blown its first commodity boom, Africa had to wait 20 years for the second. It may have blown that one as well, although the jury is still out. That is what "never again" is about when voiced by people such as Louis Kasekende, the chief economist of the African Development Bank. Before the next boom, African societies must get prepared. So what does being prepared actually mean?

Transforming assets beneath the ground into sustained prosperity for ordinary citizens requires integrity and astuteness. Without integrity the assets get looted, and without astuteness they get squandered. Neither is easy to achieve, but integrity is at least easy to understand. The Extractive Industries Transparency Initiative (EITI) is an international standard to which governments can make a commitment. Introduced in 2003, it was the right place to start in the struggle to break with the past. But it would be the wrong place to stop: ­integrity is not enough.

Enter the Natural Resource Charter, an attempt by academic economists, lawyers and political scientists to distil professional knowledge into a form readily accessible to governments and societies in resource-rich countries. It is distinctive both in content and process.

The content tries to do for astuteness what the EITI has done for integrity. Its summary version is a list of 12 precepts spanning the chain of decision. It covers management of the discovery process, taxing extraction companies, investment, and how rich countries could be more supportive. Anyone, even the busy president of a resource-rich country, can spare the few minutes it takes to digest. A fuller version is designed as a citizen's guide – say, for a broadcaster on community radio wondering whether that deal her government just struck with an extraction company is likely to be a good one. The full monty version is for practitioners: the permanent secretary in the ministry of mining can find out about why auctioning off concessions is likely to generate a better deal for the country than relying solely upon negotiation.

The process of putting the charter together has been a cross between the EITI and Wikipedia. An international group of academics worked together, without official sanction or finance. We consulted with likely stakeholders, holding meetings around the world as best we could, and incorporating scores of suggestions for revision and improvement. Revision will continue. For this reason, unlike the EITI, the charter is not designed as a com­mitment. The objective is not to get governments to sign an endorsement but to build informed societies that are better able to avoid the pitfalls of the past.

Depending on your world view, for academics to provide this unsolicited advice to resource-rich societies is neo-colonial arrogance, a delusional distraction from our proper jobs, or potentially useful. Ten years ago it would not have been feasible: change always had to come from governments. Now the internet has opened up a new way of achieving better policies. Citizens get up to speed on issues previously considered too technical, and governments have little option but to follow along behind. For many low-income societies with valuable natural assets, turning "never again" from resolve into reality is the critical challenge of the next decade."

The EU only last December added 11 names to a list of some 160 officials, including Mugabe himself, banned from entering the bloc.

Finally. From Reuters:

1 of 1Full Size

BRUSSELS (Reuters) - The European Union will next Monday step up pressure on Zimbabwe's President Robert Mugabe to share power by urging a probe into whether diamond sales are being used to support his government, a draft showed.

The bloc's foreign ministers, who meet in Brussels on January 26, will also add names to a list of Zimbabwean officials banned from travelling in the EU because of their links to alleged human rights abuses, a draft EU paper obtained by Reuters showed.( FINALLY )

"The (EU) Council supports action to investigate the exploitation of diamonds from the site of Marange/Chiadzwa and their significance in possible financial support to the regime and recent human rights abuses," the document, which will be presented to EU ministers, said.

The draft urges the Kimberley Process -- an international certification scheme set up to ensure diamonds do not fund conflict -- "to take action with a view to ensure Zimbabwe's compliance with its Kimberley obligations".

Alongside platinum and gold, diamonds are among the natural wealth that Zimbabwe could expect to profit from if it emerges from a humanitarian and economic crisis that has seen thousands die of cholera and inflation rocket to stratospheric rates.

The World Diamond Council industry body has put Zimbabwe's production of rough diamonds at 0.4 percent of world production, mostly exported with the Kimberley Process certificate. However in December it raised concern about possible illegal exports "for the personal gain of a few".

Despite growing international pressure on him to step down, power-sharing talks between Mugabe and opposition leader Morgan Tsvangirai remain deadlocked in a dispute over cabinet posts.

"The (EU) Council condemns the regime for its ongoing failure to address the most basic economic and social needs of its people ... The Council urges stakeholders to comply with the power sharing agreement," the EU draft said. ( THANK GOD )

Critics say Mugabe's policies, such as the seizure of white-owned farms, have ruined Zimbabwe's economy, but the ruler -- in power since independence from Britain in 1980 -- blames Western sanctions for the crisis. ( HE'S A LYING DESPOT )

The EU only last December added 11 names to a list of some 160 officials, including Mugabe himself, banned from entering the bloc. The EU draft did not say how many more would be added."

Get going!

''For the person who embezzles money, there won't be a trial. They'll be killed,''

I bet Madoff and the other financial criminals are glad that they don't live in Guinea. From the NY times:

"Guinea Coup Leader Vows to Fight Corruption( YOU JUST LED A COUP )

By THE ASSOCIATED PRESS

Filed at 4:17 p.m. ET

CONAKRY, Guinea (AP) -- Guinea's coup leader declared a zero tolerance policy on corruption Saturday, vowing to renegotiate the country's numerous mining contracts( GOOD LUCK. CHECK OUT COMMODITY PRICES ) and warning that anyone who embezzles state funds will be executed( I DON'T LIKE EMBEZZLEMENT, BUT THIS IS INTOLERABLE ).

Capt. Moussa Camara also extended an apparent concession to Guinea's opposition, telling them they could help choose a prime minister( HOW NICE ) following international criticism that elections are not planned for two more years.

On a concrete stage inside the barracks from where he launched his rebellion Tuesday, Camara jabbed his finger at the sky as he swore to do away with the corruption that has drained the mineral-rich state's coffers and impoverished the West African nation's 10 million people.

''For the person who embezzles money, there won't be a trial( THAT'S NOT ACCEPTABLE ). They'll be killed,'' he said as the crowd went wild. ''I was born in a hut. I walked to school. ... Money means nothing to me.''

Guinea is the world's largest producer of bauxite, the raw material used to make aluminum, and also produces diamonds and gold. Yet its mineral wealth was siphoned off to enrich the country's longtime ruling family and its collaborators( THIS IS A DISGRACE ).

Guinea has been ruled by only two people since gaining independence from France half century ago. The late dictator Lansana Conte died on Monday and the military junta led by Camara declared the coup a day later.

He said the country's ruling clique ''spit on the faces of the poor,'' enriching themselves at the population's expense( HE'S PROBABLY RIGHT ).

One of the remedies he proposed was reviewing the country's mining contracts and renegotiating them if the terms are unfavorable. He did not name any specific companies whose contracts might be affected( WE'LL SEE ).

Even as the crowd of thousands cheered him, the international community continued its condemnation of the coup( SEE, IT'S A COUP ). South African President Kgalema Motlanthe condemned it ''an affront to peace, stability and democracy.''

The United States has called for the immediate restoration of civilian rule, while the European Union said the junta needs to hold elections by next year, not two years from now as Camara has promised( WHAT'S WRONG WITH THREE MONTHS? ).

But Senegalese President Abdoulaye Wade -- a key player in the region's politics -- urged other countries to leave the new junta alone. ''I call on all countries, notably France, to not throw stones at them and to take them at their word,'' Wade said during a trip to Paris.

In a move appeared calculated to address the international community's concerns, Camara said he is calling on Guinea's opposition, including its powerful unions, to propose the name of a prime minister( WE'LL SEE ).

Rabiatou Serah Diallo, head of one of Guinea's largest unions, welcomed the move. She added the unions were keeping an eye on the coup leaders: ''If they deviate from the road they promise to take us on, then they'll find us blocking their path( GOOD ).''

Camara was largely unknown to most Guineans before his group seized public airwaves and declared the coup. On Saturday, he invited civilian community leaders -- including union leaders, religious heads, politicians and human rights workers -- to meet him at his barracks.

He arrived surrounded by a cordon of soldiers armed with machine guns. They hollered at the crowd to move back. Many wore fetishes tied around their arms and necks intended to protect them from harm( GET ME ONE OF THOSE ). Camara, a short man with a taut face, took the microphone, electrifying the crowd with one pronouncement after another.

A generation of Guineans have known only Lansana Conte as their ruler and even though the coup leader appears to enjoy broad support( PROBABLY TRUE ), tens of thousands turned out for the dictator's funeral on Friday. Too many people tried to enter parliament to see the president's coffin, causing security forces beat them back with rubber belts.

When the coffin wound its way to the capital's 25,000-seat stadium, so many people had crowded inside that spectators began suffocating and ambulances rushed half a dozen unconscious people away.

The funeral ended on the manicured grounds of the ex-president's estate in his village located around 40 miles (70 kilometers) northwest of the capital. With state funds, Conte built himself a house the size of a hotel fronting a lake. His family -- including two of his three wives and an estimated 20 children -- showed up in Hummers, stretch limousines and flashy SUVs.

As they put his body to rest, the sun went down over the village of his birth. Most of the country -- including much of the capital -- has no electricity. But as the darkness fell, the homes in the village shone with light."

I CAN'T HELP WISHING THE COUNTRY LUCK. I DON'T LIKE COUPS, BUT OPPOSITION TO THIS REGIME WAS SURELY JUSTIFIED. HOWEVER, THE COUP COULD ENHANCE ITS, REPUTATION, I GUESS, BY OBSERVING THE RULE OF LAW AND HAVING IMMEDIATE ELECTIONS. THAT WOULD IMPRESS ME.

------

Associated Press writers Sadibou Marone in Dakar, Senegal, and Maseco Conde in Conakry, Guinea contributed to this report.

"consumers in the west do have the power to limit their funds."

Caroline Sourt in the Guardian about the East Congo, and what we can do about it ( which isn't much ):

"Caroline Sourt

• 
  
• guardian.co.uk, Thursday 25 December 2008 17.00 GMT
• Article history

As Simon Tisdall has pointed out on Comment is Free, the conflict in eastern Democratic Republic of the Congo looks intractable – and there is little appetite, in Britain or elsewhere, to send more troops there. But while the fighting is not going to stop as long as militias control the region's natural resources, consumers in the west do have the power to limit their funds( GOOD ).

One of the precious metals mined in eastern Congo is coltan. It is used in many common products: mobiles, computers, digital cameras, GPS equipment, airbags, hearing aids and even pacemakers. While 80% of the world's known coltan reserves are in eastern Congo, only about 1% of the metal sold on the open market is Congolese.

The reality is that most of Congo's coltan is sold illegally and the revenue, instead of going towards the country's development, is helping to fund the ongoing violence. The coltan mines in the east are controlled by various armed groups. One of the consequences is that civilians, including children, are recruited as forced labour. The mortality rate in these mines is high.

In a UN report discussed yesterday by the security council, the Congolese and Rwandan governments are accused of backing militias to fight a "war by proxy". All the groups, including the Congolese army, are accused of human rights violations that range from massacres and torture to widespread rape of women and children. In this on-off war, it's estimated that 45,000 people die each month( 45,000 ); since August, 250,000( 250,000 ) have been displaced.

The UN's force in Congo, Monuc, has so far failed to stop the fighting, despite being the largest and most expensive peacekeeping mission in the world( COME ON ). Democratic Republic of the Congo is the size of western Europe: 17,000 troops, or even the proposed increase to 20,000-strong force, are insufficient. The EU recently refused to send in soldiers, preferring to try political negotiations. What it should be doing is to regulate the international sales of Congolese minerals more efficiently( TRUE ).

Just as blood diamonds fuelled the civil war in Sierra Leone, the illegal trade fuels the DRC conflict. As long as militias and politicians continue to make money from minerals, there is no real incentive to find a lasting peace( I SUPPOSE THAT'S TRUE ). The companies involved in buying Sierra Leone's diamonds only located their consciences when consumers started asking questions about where their gems were coming from, and profits were threatened.

A certificate systemis supposed to detail the origins of any coltan, but it is not strictly adhered to. Many companies don't ask and if they do, they settle for vague answers and fraudulent papers because Congo's coltan is abundant and much cheaper than that of rival exporters.

Now, a break. From Reuters:

"By Joe Bavier

KINSHASA (Reuters) - Democratic Republic of Congo hopes to set up a scheme to certify columbite-tantalite produced within its borders in 2009, the country's Deputy Mines Minister Victor Kasongo said on Tuesday.

The illegal traffic of the rare metal, used in mobile phone chips and commonly referred to as coltan, helped fuel a 1998-2003 war and resulting humanitarian crisis in the central African country that killed an estimated 5.4 million people.

But a new G8-backed and German-financed pilot initiative aimed at creating a mineral fingerprint for coltan could soon help developing countries trace ore that is illegally exported and boost their profits from legal exports.

Kasongo said he hoped a global certification process aimed at ethically-minded consumers would follow.

"All the large companies are fighting for this. They'll be able to display a certificate to prove fair trade. You'll begin seeing many machines, many iPods, that are certified," he said.

Congo plans to use the data to set up its own certification process within the next eight months, which should help the creation of a global system similar to the Kimberley Process set up to end the trade in "blood diamonds" from war zones.

"We believe that in 2009 we should be able to enforce certification ... early next year," Kasongo told Reuters in an interview. "Licences. Centralised control. Certification. More revenues to Congo. More peace and stability. Those are the things we are aiming for."

A team from Germany's Federal Institute for Geosciences and Natural Resources is due to arrive in Congo on April 2.

Researchers will map the country's coltan producing areas and isolate unique characteristics of local ore samples to create mechanisms for tracing ore to its origin.

"BLOOD COLTAN"

Congo, believed by many experts to possess the world's largest coltan reserves, was one of the principal suppliers of the ore as demand from the mobile phone and electronics industries spiked in the late 1990s.

Much of the so-called "blood coltan" originating in Congo was illegally smuggled into Uganda, Rwanda, and Burundi during a five-year war that saw the plunder of its natural resources by neighbours and foreign-backed militias.

Congo's coltan-rich eastern borderlands remain a patchwork of militia-controlled zones and rebel fiefdoms, where a United Nations Security Council-commissioned report recently said illegal armed groups still buy weapons with mining revenues.

Ethical concerns and more efficient industrialised mining have now made Australia the world's leading producer and exporter of coltan.

Congo hopes the certification process will rehabilitate the image of its coltan and help to stabilise its eastern reaches.

"We'll make sure that the coltan is not linked to any military activities. We understand that once we have control of the coltan itself, we'll have some control over the stability of the area," Kasongo said."

Back to our post:

The vast majority of those who donate to charitable appeals for Congo are unaware that their Christmas present purchases are probably feeding the conflict as fast as charities can alleviate it. Asking a few more questions about the gifts we buy would force the suppliers to come clean about their origins."

It's the least that we can do.