Amid the trade wars, populism and economic nationalism, capitalism is under fire. But which capitalism is that?
For the hard-nosed commercial titans of the roaring 2020s, the dictum by Milton Friedman that “there is one and only one social responsibility of business: to use its resources and to engage in activities designed to increase its profits” will remain the lodestar.
There is no question that this is the zeitgeist in Donald Trump’s dealmaking administration, and it is echoed in Brazil and India.
Some critics of capitalism find the ‘business of business is business’ approach more honest than a series of corporate social responsibility projects launched by communications companies.
For economist Léonce Ndikumana, who runs a commission on the reform of corporate taxation, the problem of capitalism in Africa is not a laser-like focus on profits but a failure of companies to comply with fair rules on tax and royalties.
Ndikumana and his fellow researcher, James Boyce, calculate that capital flight from 30 African countries between 1970 and 2017 totalled $1.4trn.
That is almost three times the stock of debt the countries accumulated and 1.5 times the foreign aid they received. Those figures suggests that capitalism – or at least its regulatory institutions – are failing in Africa, at great human cost.
Is the revival of interest in ‘stakeholder capitalism’ – a kind of anti-Friedmanite formula that focuses more on customers, employees, suppliers – relevant to Africa? Given its recent endorsement by the US Business Roundtable, it does reflect local and international pressures on corporate behaviour.
How that plays out on the ground will vary according to the industry and the region.
Employees want more transparency and accountability in corporate finances. Activist groups demand respect for human rights and environmental standards in the supply chain. For example, conditions in the DRC, which supplies over half the world’s cobalt for electric car batteries, are under intense scrutiny.
Globally, investments motivated by environmental, social and governance concerns are up to $30trn, about a third of the funds under professional management.
Pension funds, the biggest clients for asset managers in Africa and elsewhere, are using environmental, social and governance criteria. Analysts say they are producing higher equity returns than the old shareholder capitalist model.
Perhaps the biggest factor driving new thinking on economic systems has been the decline of trust in business and banking.
That, together with deepening inequality in most countries, informs critiques of a rigged economic system, whether in Joburg, London, Nairobi or New York.
The spiralling climate crisis along with the un-costed global effects of robotics and artificial intelligence are undermining faith in established models of trade and market capitalism.
At the least, the promoters of new ideas and strategies will have to fight it out in a new global arena.
Now, social and economic policies will have to start changing as fast as our technologies.
Julius Nyerere wanted Tanzania to be self-sufficient and not be reliant on European imports. His policies failed, but present African leaders should revise them and take important lessons from “ujamaa.”
Finding sustainable ways to propel the economy forward for the betterment of everyone was the top agenda for Julius Nyerere when he became the president of independent Tanzania. He envisioned a society that will make itself prosperous simply by eschewing capitalism.
The biggest thing for Nyerere was to make massive economic progress by embracing African socialism. By embracing the traditional ways of Tanzanians, there would be a way to surmount modern problems. What Nyerere put emphasis on was the issue of Tanzanians working for themselves and thus bettering their economy than to rely on European imports.
He sought to effect this by using the concept of ujamaa as the basis for his economic blueprint. Ujamaa is a Swahili word that means “extended family,” “brotherhood,” or socialism.” The sense that the word evokes is oneness. In a political context, this implies that a person becomes a person through the people or the community. From this perspective, Julius Nyerere wanted to create a just society in which people worked together in the villages towards economic development.
In 1967, Nyerere published his economic framework on how to take the nation forward titled the Arusha Declaration. It was based on the concept of ujamaa. It entailed the idea of collective farming and “villagization” of the countryside. This would further be extended to the nationalization of banks and industry. The person was expected to work for themselves first, and work for the community. This was African Socialism coming to life.
Nyerere desired a full reversion to the African pre-colonial way of living, one that had been disturbed by Europeans colonization. If this was the way, then urbanization, which he argued was not contributing to the better welfare of people because wage labour would be eroded away. Production was to be done in the villages. This would create a traditional level of mutual respect, bring units of families together, unity, cohesion, love, service and a moral ways of life.
In the rural areas, families would be brought together in “nucleated” settlements, each of around 250 families. By doing that, distribution of farming inputs would be made easier. Villagization would make a complete Tanzanian, and thus avoid the problems of “tribalism,” something that was bedeviling newly independent African countries.
The rationale behind using ujamaa in the discourse of national development was to use African ways of living to beat capitalism. The goal was to make Tanzania self-sufficient, a goal that had been shared by Thomas Sankara, former leader of Burkina Faso.
This is a concept that present African leaders can learn – being self-sufficient. What it now requires is using practical means and modern solutions complemented by African ethics.
African leaders should be looking at some of these policies and glean important lessons on how to take their countries forward. They should carefully look at these methods, analyze where they failed and why, and then take practical steps to perfect them.
This is compounded by the incompetence of the ruling elite, but the effects of sanctions cannot be understated.
Much of what determines the shape of global politics is hinged on the dictates of the United States of America. A country that has vehemently and aggressively defended the capitalist way of doing things, it is inimical to any country that decides to chart its course of doing things.
What happens in every country on Earth should at least be beneficial to the interests of the US. When a country decides to do what is not in the liking of the US, a weapon called sanctions is deployed against it.
Economic sanctions, for the longest time in history, have been employed as a brutal tool to compel countries to act in line with what is considered politically healthy. Sanctions have had the effect of crippling economies and making the lives of people extremely difficult.
For the United States, sanctions have been a favorite tool as far as desiring regime change is concerned. The interests of the US find space in every corner of the world, for they managed to become the biggest economic power in the world. Only recently has China been able to catch up with the US and give it a serious competition but even as though that may be, the economic and political influence of the US can be felt in every part of the world.
As such, the US has never been interested in applying economic sanctions against certain countries for genuinely good and righteous purposes. It is mainly to ensure that US interests are not harmed by the activities of that particular country. They use the pretext of vague concepts such as democracy and human rights.
While it may be true that these concepts are not applied in the interests of people in those countries, the US goes overboard so that their economic interests are thrust in danger. So, they may hide under the guise of democracy and human rights but in reality, all they desire is regime change so that their deeply entrenched economic interests are not attacked.
History is replete with examples where the US has continuously meddled in the internal affairs of other countries in a bid to implement regime change. The example of Iran brings this point to the fore. The US is the only country in the world that takes an interest in what happens in each country. If a country decides to take on its path which the US finds “dangerous,” then it becomes a certainty that sanctions are to put on that country.
Iran has battled US sanctions for simply rejecting the American way of doing things in its own country. Iran has faced American sanctions simply because it found its way back to its Islamic roots, where it rejected strongly leaders who were American puppets. This Iranian way of doing things meant that the US no longer had access to the vast supplies of Iranian oil and what better way to punish them than to impose economic sanctions on them?
In 1953, Iran’s then democratically elected leader Prime Minister Mohammed Mossadeq had sought to nationalize Iran’s oil. The British and the Americans saw this as damaging their economic interests in Iran which were mostly reliant on Iran’s oil. The American CIA took the matter into their own hands and through a coup, ousted Mossadeq from power in that year and installed the Shah of Iran, Mohammed Reza Pahlevi as their puppet leader.
In 1979, Iranians rose up in tremendous unison to demonstrate against the Shah’s rule and he was forced into exile. Religious rule was then restored when the Islamic Republic of Iran was proclaimed on the 1st of April. This did not go down with the United States and in November 1979, President Carter imposed the first illegal economic sanctions against Iran which froze about $12 billion in Iranian assets, including bank deposits, gold, and other properties. From there, sanctions kept being enforced on Iran, much to the detriment of the Iranian citizens.
The origin of the sanctions is Iran is a clear attestation to the fact that when a country goes a divergent route with the US, citizens suffer as sanctions do not affect the lives of the ruling class.
America pursues an unrelentingly toxic zeal when inflicting sanctions. Sanctions on Iran continue being imposed up to this day, and the more Iran disagrees with the US, the more sanctions are thrown on it. It also means the more its citizens suffer.
Another issue aggravating sanctions on Iran is that of nuclear energy. The US, together with its allies in the West, are fully armed with nuclear weapons. But when other countries decide to do it, deals must be negotiated and if deals are absent, sanctions become a reliable substitute. The hypocrisy is beyond alarming and shocking.
In 2015, President Rouhani agreed to a nuclear deal so that sanctions would be lifted. The deal severely cut Iran’s capacity to be involved in nuclear energy. What is crystal-clear is that the US wields its economic supremacy to dictate what other countries should do or not do.
Donald Trump has reneged on the deal and the tensions remain strongly palpable. The US sanctions still target the country’s energy, financial and shipping sectors – all-important for the survival of its citizens. Trump exclaimed that sanctions on Iran are “intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue”.
Their hatred for the regime is affecting the citizens in terms of rising inflation, a weak currency, rising cost of living, hardships for foreign Iranian students and the discontent in the citizens signals a population that is suffering under the biting effect of American sanctions.
It is not only Iran that is suffering from the draining US economic sanctions. And it is not only Iran feeling the pressure of regime change. Countries such as Venezuela, Cuba, and Zimbabwe have suffered under American sanctions. They have suffered from choosing to go the other way that lacks “democratic principles.” In Zimbabwe, sanctions were imposed after the Mugabe-led administration implemented the Land Reform program that saw white farmers losing their land, without compensation, to the black majority.
At that time, colonial imbalances meant that the vast majority of blacks did not have real access and real rights to the means of production; white farmers owned about 70% of the land when they were just a minority. Sanctions by America, which still stand to this day, have meant that the average Zimbabwean suffers acutely from economic hardships. This is compounded by the incompetence of the ruling elite, but the effects of sanctions cannot be understated
For the longest time too, Cuba was under grave sanctions for choosing not to be a capitalist country. They suffered for that. Sanctions against countries like Venezuela and Iran are ceaselessly renewed and applied with much vigor, but what happens to the ordinary man on the streets? What happens when others are told not to trade in oil with Venezuela, knowing very well that such resources are the bloodlines of those countries?
Sanctions hardly affect the politicians. Their political intentions are not felt for those whom they are targeted. But the economic consequences are dire for the citizens. Sanctions, for America, have always been a tool for regime change and because of their adverse effects on the ordinary people who may not invest much into the political happenings of their country, they have been a very evil tool.
Open my eyes to see the wonderful truths in your law.Psalm 119:18
Closed eyes and sightless eyes have something in common: neither can see beauty. The beauty is there for the seeing, but with no eyes beholding it the beauty shines on unappreciated, like a diamond in the desert sand.
Hearts have eyes, windows letting in the light of life. But if the eyes of the heart are closed, truth shines on, unobserved. The heart is darkened, the mind is confused, desires are twisted, and wrong decisions are made. The difference between right and wrong becomes blurred and indistinct until right seems wrong and wrong seems right. Eventually the very existence of objective truth is questioned and the person stumbles into a subjective morass of sensuality and sin. Meanwhile, truth shines on unabated—and unappreciated.
Any man, young or old, who is concerned that his life is heading downhill, his principles compromised and his morality eroded, at least has the eyes of his heart opened partially. But he needs to ask the Lord to open his eyes fully to the “wonderful truths” found in God’s word (119:18)—truths that have shone brightly through the centuries, pointing unerringly to who God is, who we are, what he expects, what we have done, what God has done about it, what we should do, and how we should live as a result. These are wonderful truths!
Once a man’s eyes are opened to the truth of God’s word, the man thus begins to perceive vistas of truth formerly undreamed of—mysteries previously hidden, insights formerly never imagined. He discovers answers to questions he never thought to ask, and he questions opinions never previously examined. More wonderful truths!
These truths are carefully hidden in the heart and are pondered (119:11, 15). As a result, the mind becomes educated in God’s principles and promises (119:7), the emotions are stimulated to wholesome delight and godly desire (119:16), and the will is moved to make decisions that consistently reflect the divine principles. Thus might a man live life to the full.
Happy is the man who has eyes wide open to discern, desire, and do God’s will.
As Africa continues to advance its fast-paced economic growth, we take a look at global crypto giant Paxful’s priorities for the region.
“The world has much to learn from Africa about the future of the crypto-economy,” comments Paxful, “2020 will be a landmark year for the African crypto and blockchain industry.” In a recent report conducted by Paxful into its operations undercovered that in 2019, worldwide processed US$1.6bn in trade volume and hosted 3mn wallets. Of those 3mn wallets the company confirmed 45% are from Africa.
What are Paxful’s plans for the region?
Strengthen its relationship with Africa
Over the next few years, Paxful plans to ramp up its efforts within the region to increase its customer base and continue to learn from its customers in order to provide the best peer-to-peer finance marketplace.
In addition to its marketplace, Paxful hopes to expand Africa’s participation in its Global Peer Programme, which encourages bitcoin users to educate each other on the opportunities a crypto-economy can provide.
“We are very, very bullish on Africa and believe it is critical to the future of the crypto-economy overall. While many parts of the developed world are fixated on speculative activity in the crypto economy, people in Africa are teaching us about the true use cases of bitcoin and the opportunity it presents for greater financial inclusion of the under-banked. As a company, we want to do what we can to ensure that our platform continues to be a bridge to the global economy for our customers” Says Artur Schaback, Co-Founder and COO of Paxful.
Over the years, Paxful has partnered with many key players within the cryptocurrency industry, including BitMart, BSpin, AirTM, and CoinLogiq. With this in mind, the company wants to increase its partnerships with African companies.
“Africa has tremendous potential and partnerships are essential in this pivotal time within the cryptocurrency industry. We are actively looking to join forces with African-born crypto players who share our passion and vision for the global crypto-economy,” says Ray Youssef, CEO and co-founder of Paxful.
Priorities education and social good
In 2019, Paxful completed a university education drive in East and South Africa. The drive reached over 1000 people, providing practical insights into use cases of Bitcoin, how to avoid falling prey to threats and mitigation speculation.
“With bitcoin’s original mission of financial inclusion in mind, Paxful is committed to reaching as many people as possible to help them better understand the opportunities presented by the crypto-economy. With this in mind, education and social development will always be a priority for Paxful,” concludes Youssef.
Nigeria has not managed to convince international investors – including those in the US – that it should be first in line for a post-AGOA deal.
The government of Kenya and the United States of America plan to sign a free trade agreement (FTA), continuing the duty-free access Kenya has to the US market.
It’s a first in sub-Saharan Africa, and patriots in Nigeria were surprised that the East African nation with a GDP of $100bn was chosen over the West African nation with a GDP of $450bn.
While some see the FTA with Kenya as a way for Washington to counter Chinese influence in East Africa, others say Nigeria was excluded because it is not exactly a good trade partner.
Why it matters
After enjoying recognition as the giant of Africa and the biggest economy in sub-Saharan Africa, Nigeria may have reached the end of its run.
There have been a string of foreign policy losses:
*France taking over the conversation about the West African eco, ignoring the agreements of ECOWAS heads in Abuja, *The delaying signing the AfCFTA agreement, instead of spearheading the agreement, *Losses against the so-called Islamic State, *Strained relations with its neighbours especially in Ecowas – such as Benin
Recently, Nigeria landed on Donald Trump’s infamous Travel Ban 2.0, a testament to the declining fortunes of the once most important African country.
Following the impending expiration of the African Growth and Opportunity Act in 2025, which allows many African countries to export goods to the USA without quotas or tariffs, African nations need to negotiate new deals with the USA. After a successful 15-year agreement period, the Act was renewed for another ten years in 2015.
It does not seem like the act will be renewed.
Nigeria seemed like the prime candidate for a free trade agreement with the United States based on the agreements of the African Growth and Opportunity Act. However, the current policies of the country seem not to indicate it’s not good enough as a trade partner for many of its partners.
Adedayo Bakare, an economist and investment researcher at Afrinvest stated the bulk of the trade policies the federal government and Central bank are taking are textbook protectionist and will long term discourage investors from coming to the country.
“Nigeria’s import substitution policy and shutting the land borders are sending negative signals to investors and countries saying Nigeria is not open to trade,” said Bakare.
Doing business in Nigeria is a challenging task and as other countries are presenting themselves as better investment destinations, Nigeria’s global appeal as a big market continues to dwindle.
“The foreign policy and diplomacy wins of the Obasanjo administration have gone down the drain. The reactionary stance this current government takes to everything makes it difficult for trade inside and outside the country,” trader Emeka Onyekachi told The Africa Report.
For Onyekachi, losing access to the ECOWAS market where he usually trades, will mean there would be no reason for any country to respect or want to do business with Nigeria.
Perhaps the greatest indicator that Nigeria is not excited about trade deals and trading with neighbours was its delay in signing the AfCFTA. The AfCFTA has still not been ratified by the Nigerian parliament.
But all is not lost. According to Bakare, the country is still prime for several investments.
Despite the banning of commercial motorcycles that jeopardises investments worth over $100 million (93 million euro) in Lagos, there are still several avenues for investment in the country.
“Oil has and will always be lucrative for Nigeria, but perhaps the tech sector is one of Nigeria’s hidden gems. Fintech, in particular, has proven to be a good market for the country with innovation and investment finding homes in Nigeria,” said Bakara.
The lack of regulation in the renewable energy space, also mean there is enough room for that market to grow.
Fintech in Africa has attracted investment worth over $679 million (629 million euro) in 2019 with the bulk of it coming to Nigeria. Getting the country on to the internet is a big venture that is certain to bring in investments in 2020.
Humans are amphibians—half spirit and half animal. (The Enemy’s determination to produce such a revolting hybrid was one of the things that determined Our Father to withdraw his support from Him.) As spirits they belong to the eternal world, but as animals they inhabit time. This means that while their spirit can be directed to an eternal object, their bodies, passions, and imaginations are in continual change, for to be in time means to change.
Their nearest approach to constancy, therefore, is undulation—the repeated return to a level from which they repeatedly fall back, a series of troughs and peaks. If you had watched your patient carefully you would have seen this undulation in every de-partment of his life—his interest in his work, his affection for his friends, his physical appetites, all go up and down. As long as he lives on earth periods of emotional and bodily richness and liveliness will alternate with periods of numbness and poverty.
The dryness and dullness through which your patient is now going are not, as you fondly suppose, your workmanship; they are merely a natural phenomenon which will do us no good unless you make a good use of it.
Nigeria’s central bank has restricted the availability of foreign exchange for milk imports in a move aimed at increasing local production.
The policy is likely to prove ineffective unless accompanied by steps to improve domestic agriculture.
Six companies are exempt because, the central bank says, because they are supportive of the policy of “backward integration” to raise Nigerian milk output.
The restrictions are “misguided”, argues Ebenezer Seun, private wealth executive at Barino Investments in Lagos. “The government is restricting imports to incentivise backward integration when the local capacity is very low and the infrastructure behind it has not been developed yet.”
That development can’t be achieved quickly, and in the meantime, there will be an effective oligopoly of milk products, which will mean higher prices and worsening infant malnutrition, Seun says.
Increased prices for rice after foreign currency for imports was banned in 2015 prove the point, Seun says.
“Limiting imported food supply cannot magically make local supply increase in a situation of ineffectual policy and a harsh operating environment.” The new restrictions will give authorized milk importers the opportunity to increase prices, while unauthorized importers will source more expensive currency on the parallel market, increasing final consumer prices, Seun says. Cattle yields This policy can be effective if other factors like the ease of doing business and infrastructure deficiencies are taken into consideration, says Moses Ojo, chief economist at PanAfrican Capital Holdings in Lagos. He expects that a significant increase in the local production of dairy products will contribute to a decline in inflation in the medium term.
Nigeria targets raising its milk production by 10% to 550,000 tonnes in the next 12 months.
The main problem in doing so, Ojo says, is the low yield of Nigerian cows, linked to genetic composition and feeding practices. The target can be met if those issues are addressed, he says.
Conflicts between farmers and herders in northern and central Nigeria limit productivity. Limiting foreign reserves for milk imports does not address that fundamental issue, Ojo says.
One source of the conflict is the effect of global warming on northern grazing reserves, which has resulted in desertification and pushed pastoralists southwards. “A sustainable solution has to be provided for the scourge of desertification,” Ojo says. This, he argues, should include efforts to persuade herders to embrace ranching rather than the current nomadic system of cattle rearing. Seun at Barino Investments says that effective land rights and identity systems are part of the solution.
“If livestock were tagged properly and ownership can be easily tracked, instances of cattle rustling would easily be reduced.” Identity systems might also prevent blind reprisal attacks based on ethnicity, he says. Perpetrators could be identified and prosecuted, so ending a recurring cycle of violence based on vague ideas about the identities of attackers. Defined land rights would allow collective purchase of land for ranches, providing a path out of the nomadic system, he says. Bottom Line: Limiting currency for milk imports will do little to raise domestic production unless accompanied by reforms to raise cattle yields through ranch-based farming.
According to the World Bank President David Malpass, the AfDB “lends too quickly”, thus aggravating the countries’ debt problems. “Untrue and unfounded,” retorted the pan-African institution.
At a World Bank/International Monetary Fund (IMF) forum held in February in Washington, David Malpass cited the activities of the Asian Development Bank (ADB), the African Development Bank (AfDB), and the European Bank for Reconstruction and Development (EBRD), criticizing them for a “tendency to lend too quickly and thereby aggravate the problem of country debt”.
His criticism of the AfDB specifically concerned Nigeria and South Africa, and he called for “greater coordination among international financial institutions to coordinate lending and maintain high standards of transparency”.
A statement that goes “against the spirit of multilateralism”.
The pan-African institution did not let the criticism go without a response.
On 13 February, it issued a press release denouncing the “misleading and inaccurate” statements, which, it said, “calls into question the integrity of the African Development Bank, undermines our systems of governance and wrongly insinuates that we operate according to different World Bank standards. The very notion runs counter to the spirit of multilateralism and our collaborative work”.
The World Bank went on to say, “has much larger [credit] operations in Africa than the African Development Bank,” citing that the Bretton Woods institution has approved $20.2 billion in financing in 2018, compared to $10.1 billion from the AfDB.
The AfDB pointed out that Nigeria and South Africa have outstanding loans from the World Bank for fiscal year 2018 of $8.3bn and $2.4bn respectively, and $2.1bn and $2bn from the AfDB.
“Our Bank recognizes and closely follows the upward trend in debt. However, there is no systemic risk of over-indebtedness,” she added.
“The lending, policy and advisory services of these development institutions in their respective regions are often coordinated and offer better value for money to developing countries compared to other sources of financing,” the AfDB statement said, adding that its AAA status enables it to obtain financing on very competitive terms and to offer favourable conditions to its regional member countries, whose substantial financing needs “remain vitally important”.
Close collaboration The media release also stated that in terms of transparency, “our institution was ranked 4th most transparent institution in the world by the 2018 Publish What You Fund report”.
As a parting shot, the AfDB referred to the issue of inter-institutional coordination, stating its operations were managed “in close collaboration with its sister international financial institutions (notably the World Bank and the IMF).”
“We believe that the World Bank could have explored other platforms [than this public statement] to discuss debt problems and the functioning of the multilateral development banks,” the statement concluded before once again castigating Malpass for making “false and inappropriate” statements.
According to analysts from the Morocco-based firm Dataprotect, sub-Saharan African banks are particularly vulnerable to cyberattacks (bank card fraud, phishing, intrusions, etc.), mainly due to a lack of qualified technicians and investment in cybersecurity.
While cybercrime is estimated to cost Africa €3.5bn, compared to €528bn worldwide, this does not at all mean that Africa fares better in handling cybersecurity challenges than other continents. According to analysts from the Moroccan firm Dataprotect, founded by Ali El Azzouzi, the opposite is actually true.
They examined the cybersecurity environment of 148 banks from the eight UEMOA member states and three Central African countries, including Gabon, the Congo and the Democratic Republic of Congo. Twenty-one banks directly or indirectly participated in the survey entitled “Banking Fraud in sub-Saharan Africa.”
More than 85% of these financial institutions reported that they have already fallen victim to at least one cyberattack resulting in losses, and some faced recurrent attacks. Thirty percent of these cyberattacks involved bank card fraud, while one-third involved phishing, i.e., emails sent with the intention of tricking people into divulging their personal information.
The third most common target of cyberattacks, accounting for 24% of all cases, is core banking, meaning viruses and intrusions affecting information systems. In addition, the banks are impacted by information leakage, identity theft, money transfer fraud and fake check scams.
Increasing, yet still insufficient, investment “Clearly, African banks are dealing with professional criminals,” said Ali El Azzouzi’s teams, which estimate that for the area covered by the survey, only 6% of incidents are detected by cybersecurity staff at the financial institutions. Even when incidents are detected, they are not systematically disclosed by the institutions concerned, thereby making the financial impact of cyberattacks on the continent hard to assess.
The estimated losses of the banks reporting financial information concerning cyberattacks amount on average to €770,000 over the past few years. However, Dataprotect analysts suggest that each computer infected by malware costs companies €9,000 on average. “This amount can increase fast if the attack is not contained,” they said.
Eighty-five percent of the banks surveyed by Dataprotect said they invest at least €500,000 a year to address cybersecurity threats, while 50% reported investing between €100,000 and €500,000 a year. An Orange Cyberdefense report published in 2018, “African investment in cybersecurity,” forecasted that the African cybersecurity market would grow from €1.5bn in 2017 to more than €2.2bn in 2020.
A mainly outsourced segment Although on the rise in recent years, cybersecurity investment remains very low given the losses sustained. According to Dataprotect’s report, “Cybersecurity investment must be proportional to the information risk incurred by the business. Companies in the financial sector are most at risk.”
From an operational perspective, 55% of financial institutions outsource their cybersecurity needs, arguing that doing so allows them to focus on their core business. Outsourcing also resolves the issue of finding and hiring qualified technicians, a problem faced by more than 85% of the banks surveyed.
The report underlined that “cybersecurity experts are often reluctant to work for a company in which they are professionally isolated and have no advancement opportunities in the field” and added that only 20% of the institutions surveyed are taking the matter seriously and addressing it from all angles.
While vigilance does not protect businesses completely, it does prevent the vast majority of intrusions. The Dataprotect report concludes that the remaining 80% of institutions “are operating blindly in a high-risk area and, once attacked, they will suffer the most losses.”
The Morocco-based information security firm currently operates in more than 35 countries and has over 500 clients, including 100 banks, in Africa, Europe, the Middle East and Asia. The company reported revenue of more than 110 million dirhams (€10m).
Africa’s “cloak-and-dagger” market is growing. Heads of state, opposition members, businesspeople: no one is safe from hackers and taking protective measures against them is a tall order. We take an in-depth look at this highly profitable shadow war.
The building doesn’t look like much. Wedged between the Gabonese presidential staff car park and the compound wall bordering the boulevard de la République in Libreville, nothing sets it apart from the surrounding buildings other than, perhaps, a tangle of antennas perched atop the roof. No visitor to the oceanside presidential palace, whether a tourist or a regular, particularly notices the three-story building, which appears to be innocuous.
A few hundred yards away, the palace’s esplanade draws the eye. Further out, administrative buildings swallow up the worker bees of the Gabonese Republic, but nothing is remarkable about the antenna-laden building. In this “cloak-and-dagger” palace, it’s all about keeping a low profile.
As it happens, the off-white exterior conceals the president’s interception service, SILAM, run by French national Jean-Charles Solon.
A former military man, Solon previously worked for the General Directorate for External Security (Direction générale de la sécurité extérieure – DGSE), France’s intelligence agency, but today he has a career as a full-fledged Gabonese civil servant and is considered to be Libreville’s master of wiretapping.
Although theoretically he works under the supervision of the General Directorate of Special Services of the President (Direction générale des services spéciaux de la présidence), led by Brice Clotaire Oligui Nguema, in reality he is completely independent.
Each day, memos are sent in sealed envelopes to Gabon’s head of state, Ali Bongo Ondimba, whose office is just around the corner. According to our sources, Solon is well equipped and handles everything from wiretap transcripts, text message and WhatsApp conversation interceptions, and email and social media surveillance.
SILAM has benefitted for a long time from French intelligence expertise, first from the External Documentation and Counter-Espionage Service (Service de documentation extérieure et de contre-espionnage – SDECE) and then the DGSE. Now, private experts associated with the French intelligence service have taken the reins, such as the company Amesys (which has since become AMES and Nexa Technologies) and more top-secret firms like Ercom and Suneris Solutions.
Personalised service Back in the day, a software program from Amesys known as Cerebro kept SILAM’s spy operations running. Cerebro was a different version of the technology marketed by the French in Libya during Muammar Gaddafi’s rule and in Morocco circa 2010.
Ercom and Suneris Solutions have a leading position in the African market, especially in the sub-Saharan region. Ercom, which has notably equipped Mali and Senegal, specialises in communications and mobile device security, while Suneris Solutions’ expertise lies in – drumroll please – intercepting communications. Both companies are based southwest of Paris in Villacoublay, not far from the French army’s Special Operations Command (Commandement des opérations spéciales – COS). They serve as the (discreet) commercial showcases of French surveillance technology.
In Villacoublay, service is personalised. According to a source from the sector, “We demonstrate certain technologies during salons or visits, and then we adapt the solution on offer according to a given client’s needs.” At Suneris, the Homeland division – named after the eponymous American spy thriller television series – is the company’s nerve centre.
The division’s 40 employees, all of whom have a secret-defense security clearance, are working to develop wiretapping systems for foreign clients, with clients such as Côte d’Ivoire, Gabon and Mali, according to a former employee questioned by investigative journalist Olivier Tesquet, who published a piece on the topic for Télérama magazine.
These masterminds have already produced a few gadgets worthy of a spy thriller, from fake radio repeaters capable of intercepting phones to a car that can “extract data.” From there, it’s up to sales professionals to push these intrusive trinkets in places like Prague, Dubai, Paris and Dakar.
Making deals at Milipol According to a security salon regular, “Clients want to buy something that has a proven track record. They’re not looking for an experimental gadget.” For Africa, the two must-see events are Milipol Paris, held in November, and ISS World Middle East and Africa, held in March in Dubai.
In France, everything happens in a hushed atmosphere where military personnel, entrepreneurs and middlemen intersect.
Ercom’s stand extols the virtues of its secure phones, used by the likes of French President Emmanuel Macron. Nexa Technologies has a surveillance van on display for a cool €5m. Suneris Solutions keeps a lower profile. However, the French no longer have the market all to themselves.
Back in Libreville, in the hallways of SILAM, the boss may be a Frenchman, but his subordinates are Israeli. For several years now, Israeli companies have dominated the surveillance market in sub-Saharan Africa. It’s difficult to name them all. One of the most well-known and another exhibitor at Milipol Paris, NSO Group, has a prominent position, with significant strongholds in Kenya and Côte d’Ivoire.
Herzliya, a coastal neighbourhood in northern Tel Aviv known as Israel’s “Silicon Valley of espionage,” is home to a dense collection of intertwined companies: Mer Group (Congo, Guinea, Nigeria and DRC, where it outfits the Agence nationale de renseignement), Verint Systems and Elbit Systems (South Africa, Angola, Ethiopia, Nigeria, etc.).
Tsahal and Mossad Beyond being financially backed by the US, the main asset the Israelis have is their strong ties with the army and intelligence service. Former members of Tsahal’s Unit 8200 (specialising in cyberwar) and ex-spies are well established in Herzliya.
One of them, Shabtai Shavit, the head of Athena GS3 (a subsidiary of Mer Group), served as the director of Israeli intelligence agency Mossad from 1989 to 1996 and knows the African continent particularly well given that he fostered relations between his agency and that of Zaire under Mobutu Sese Seko and later that of Cameroon.
And the Israelis have plenty of other representatives. Businessman Gaby Peretz, who was born in Morocco and now runs AD Consultants, is very present in the country. “Ad Con” is one of the main ambassadors of Israeli technology in Burkina Faso, Burundi, Cameroon, the Central African Republic, Chad, Gabon, Niger, Nigeria, Rwanda and Senegal.
Didier Sabag, a Franco-Israeli national originally from Casablanca, heads up Sapna Ltd, which operates in the Central African Republic, Benin, Guinea-Bissau and Morocco on behalf of Herzliya’s suppliers.
In Côte d’Ivoire, Stéphane Konan, a former cybercrime expert at the ministry of the interior there, helped bring behemoth NSO Group and other Israeli companies into the ministry of the interior and ministry of defence under Hamed Bakayoko, as well as the president’s office, with prefect Vassiriki Traoré directly putting President Alassane Ouattara and his brother Birahima Ouattara into touch with these players.
Contact list Recently, NSO Group secured the services of a French diplomat, Gérard Araud. The former French ambassador to Israel (from 2003 to 2006) explained that he “advises the company on protecting human rights and privacy.”
However, the company doesn’t exactly have a good reputation. Since 2016, it has been criticised for developing a spyware called Pegasus which allows users to spy on phones. It can trace a phone’s GPS location, read messages and track calls (text messages, emails, WhatsApp, Telegram, Skype, etc.), retrieve contact list information and activate microphones and cameras on devices.
According to Amnesty International, this technology has helped surveillance missions against human rights advocates and opposition members in Rwanda, Morocco and Uganda.
These three companies deny the allegations, although Paul Kagame admitted the fact that Kigali has “always conducted intelligence gathering operations.” In November 2019, the Rwandan president said, “That’s how all countries operate. It’s a way to keep tabs on our enemies and those who support them.”
According to a cybersecurity expert, “Everyone wants to be equipped to carry out surveillance on criminals and terrorists. The problem is that not everyone agrees on the definition of ‘terrorist’.”
NSO Group contented itself to announce that its spyware is subject to the granting of a licence from the Israeli authorities. The business is legal since it complies with export law. Its French competitors have advanced the same narrative: in France, each contract is subject to the approval of the interministerial commission on dual-use goods.
The only problem is that the deliberations of this body, which brings together the office of the prime minister and the ministries of foreign affairs, the interior and defence, as well as the intelligence service, are classified. “If we don’t sell our technology, the Israelis or others will,” said a source knowledgeable about the sector.
France dethroned “The Israelis are everywhere. They even managed to equip Saudi Arabia! It’s pretty much impossible to bypass them,” said a source familiar with the market in Dubai. Nevertheless, some players are able to defend their position. The British and Danish nationals behind BAE Systems succeeded in gaining a foothold in South Africa, Algeria, Morocco and Tunisia.
In addition, the English and Germans at Gamma Group landed contracts in Kenya, Nigeria, South Africa, Angola, Egypt and Morocco, while Trovicor, acquired by French player Nexa Technologies, is well established in Egypt, Ethiopia and Tunisia.
Lastly, the Italians at Hacking Team have set up shop in Egypt, Ethiopia, Morocco, Nigeria, Uganda and Sudan, while South Africa’s VasTech has operations or had them in the past in Libya and Algeria.
According to a French player in the sector, “France has been sitting on its laurels. For a long time we controlled the main communication entry points in Africa, but we were intercepting data en masse without really analysing them. The Israelis have gotten ahead of us.”
This is especially true in Côte d’Ivoire, a country that Tel Aviv’s expertise quickly won over and in which Israel has found its groove, both financially and politically. “That gave them the possibility of installing wiretapping systems that could reach Lebanese communities so they could find out whether or not they were financing Hezbollah,” said an expert.
The Thales behemoth According to the same expert, “The Israelis are developing solutions at a much faster pace than us. They have dozens of players whereas, in France, we prefer to put everyone under the same behemoth. That slows us down.” The “behemoth” our source is referring to is none other than Thales, which recently acquired Ercom and Suneris Solutions.
Bumped out of its top spot in Côte d’Ivoire by the Israelis, Thales is trying to defend its leading position in Senegal, where the United States has established facilities.
On 6 November 2018, French Minister of Foreign Affairs Jean-Yves Le Drian celebrated the opening of a school in Dakar specialised in training African officials in cybersecurity. France’s largest wiretapping centre in West Africa is located in Rufisque, a city in the Dakar region, and it was equipped by. . . Thales.
Thales and the technology used by the DGSE have a lot going for them, as echoed by intermediaries such as the former Minister of Defence Charles Millon, Suneris’ envoy. The presence at the highest level of Franco-African diplomacy of former DGSE employees Franck Paris, now Macron’s “Mr Africa,” and Rémi Maréchaux, the Quai d’Orsay’s Director for Africa, is also an undeniable asset.
But it isn’t enough. “Today, the French aren’t always able to work on their own,” our source said. “In the Sahel, the Americans and the Chinese call the shots.”
A telling example: in May 2019, it was the eyes and ears of the United States, via one of its satellites, that enabled the commander of the French special forces to initiate a hostage recovery operation in Pendjari National Park.
Another worrying sign is that Malian President Ibrahim Boubacar Keïta recently decided to collaborate with Chinese partners, who he said are less stingy about sharing information than Paris.
Chinese threat Meanwhile, some diplomats are concerned about Russia’s progress ever since the company PROTEI made its ambitions public during the Russia-Africa Summit in Sochi in October 2019. Already present in Tunisia (via Tunisie Telecom) and Sudan (via MTN), the company markets products developed by Russia’s Federal Security Service (FSB). According to a market player in the Gulf region, “The Russians are increasingly present in Dubai, where there’s a lot of interest in Africa.”
“We’re watching the Russians from afar, but the real threat comes from the Chinese, who are already doing whatever they want in Algeria,” said a French entrepreneur. In a West African country, Chinese operator Huawei controls the communications network and no port can be opened to set up wiretapping without informing them first. “That doesn’t surprise me,” responded a source. “A few years ago, the machines at DGSE in Paris were partly outfitted with Chinese equipment!”
An African diplomat tempered: “The French and the Americans regularly warn us about China, saying that they put cookies into their systems and listen in on our communications. But, in this field, who doesn’t do that?”
In August 2019, a Wall Street Journal investigation described how Huawei used its networks in Zambia and Uganda (where opposition leader Bobi Wine claims to have been spied on) to help local authorities conduct surveillance on their opponents. The Chinese firm denied the allegations.
The Ugandan government confirmed its ties to Huawei and explained that the company’s technicians work with the police and the intelligence service for national security purposes.
Back in January 2018, Beijing was accused of spying on the African Union’s headquarters in Addis Ababa. The outcome: the Belt and Road Initiative, a series of infrastructure networks that Beijing wants to create between Europe, Africa and Asia, and that is particularly troubling to the West.
Facial recognition Huawei and its compatriot ZTE Corporation (present in Ethiopia) are especially implicated in these scandals. Both companies have been working around the clock to equip their clients with surveillance systems (including facial recognition cameras in Morocco, Algeria, Egypt, Côte d’Ivoire, Rwanda, Kenya and South Africa).
However, is there a dark side to what China presents as a win-win partnership? According to an expert, “The Chinese build and manage infrastructure based on fibre optic networks.As a result, they have the technical capability to spy on everything that goes through these networks.” A diplomat from the Sahel described the dilemma Africa faces: “None of our countries are able to perform an adequate amount of surveillance without outside help. Whether we partner with Westerners or others, we have no choice but to entrust someone else with it.”
One thing is certain: whether the technology comes from the French, the Russians or the Chinese, no one manages to be fully protected. According to an entrepreneur from the sector, “If you want to enter a network, a phone or a computer, all you have to do is pay good money. No one is completely secure.” Including the most informed users.
In 2018, the phone of Jeff Bezos, head of Amazon and owner of The Washington Post, was hacked after a virus infected his phone through a WhatsApp conversation with Saudi Arabia’s Crown Prince Mohammed bin Salman. Several dozen gigabytes of data were stolen and an investigation is currently ongoing to determine if the leak is connected to the assassination of Jamal Khashoggi, a reporter at the newspaper.
Since then, WhatsApp (like Apple shortly before it) has announced a system update that supposedly protects users against hacking. Nevertheless, as our source pointed out, “It’s never-ending. The second Apple announces its new system, the Israelis will have already found the loophole!”
Well aware of the surveillance capabilities of major companies in the sector, Africa’s heads of state try to make their phones as secure as Fort Knox. Every leader is geared up and takes extra precautions to prevent the ever-looming risk of being tapped. We take a look at the phones used by Africa’s presidents and politicians’ practices.
In West Africa, some leaders have been won over by French technologies.
French presidents Jacques Chirac, Nicolas Sarkozy and François Hollande used a Teorem, an ultra-secure clamshell phone with physical buttons created by Thales. However, using it requires a certain amount of patience, and Sarkozy hated it for that reason.
Recently, the French company acquired Ercom and added another jewel to its collection: CryptoSmart technology, developed in partnership with Samsung, which protects communications and mobile data. Emmanuel Macron uses the system, a fact that Ercom’s marketing department has not let go unnoticed. The France’s President has a Samsung Galaxy S7 with a touch screen, equipped with a tamper-proof encryption key and a data protection chip. Orange Cyberdéfense is behind this black box-like system, whose data can be destroyed remotely if the phone is lost or stolen.
Other political figures prefer to use cheaper alternatives such as Hoox, a phone developed by the French company Bull and later acquired by Atos (priced at around €2,000 [$2,200]), Sectera Edge from US-based General Dynamics (priced at under €3,000), BlackPhone, designed by US-based Silent Circle (priced at around €550) and GranitePhone by Archos (priced at around €800).
From texts to Telegram BlackBerry products have also been a big hit in Africa, with Rwanda’s President Paul Kagame and Senegal’s President Macky Sall reportedly loyal users of the brand, just like Togo’s Faure Gnassingbé, who was one of the first presidents in French-speaking Africa to communicate via text messaging some 15 years ago.
While Guinea’s Alpha Condé, who never leaves the house without his three or four phones, made the switch from classic text messaging to WhatsApp and eventually to Telegram without a hitch, other heads of state from the pre-independence generation have opted for more “radical” solutions.
Cameroon’s Paul Biya, the Republic of Congo’s Denis Sassou-Nguesso, Mali’s Ibrahim Boubacar Keïta and Djibouti’s Ismaïl Omar Guelleh can almost never be reached on their mobile phones, which they use very selectively.
Côte d’Ivoire’s Alassane Ouattara puts his complete trust in an old Nokia model while also keeping an additional phone by his side. One of his close allies and former counterparts, Sarkozy, did the same during his presidential campaigns. Or maybe it was his alias, Paul Bismuth. . .
Backdoors Just like these heads of state, most of the continent’s political figures have had to switch from one technology to another to shield themselves against prying ears. Over the past few years, conversations starting with “Hello, can we talk?” and ending with “Yes, of course, but not on this line” have become extremely common in the African political scene.
Opposition members, thinking rightly or wrongly that their local phones are being tapped, have been using WhatsApp for a long time now. “It’s for security reasons,” said one of them.
However, an expert we consulted smiled as he told us that this sense of security is an “illusion. Most governments have acquired technologies that are able to circumvent the app’s security protocols (Facebook bought it in 2014). It’s more complicated than retrieving a traditional text message, but it’s doable. There are backdoor points of entry into the system.”
More cunning than the others, a (very) senior official in Central Africa divulged his secret to us: he has switched to Telegram.
Created by Russian developers and today based out of Berlin, the app built its reputation around strict data encryption. As a result, quite a few political figures prefer it over WhatsApp. “That’s bogus,” said our expert, amused. “Both apps have the notorious backdoors.”
The alternative: Signal Nevertheless, the most knowledgeable experts, i.e., those familiar with the security sector and spy games of every sort, are increasingly using Signal. Brought into the spotlight by the famous American whistle-blower Edward Snowden, the app was developed by Open Whisper Systems, a company from San Francisco which is entirely funded by donations and supported by the Signal Foundation, a non-profit organisation.
As our expert put it rather vividly: “WhatsApp and Telegram are like locked cars on the side of the road, whereas Signal is like an armoured car inside of a tunnel. Hackers can still get in, but it’s going to cost them a lot.”
(Cyber surveillance: a new market, with old clients) part 1
From communication interception technology to physical security, Cameroon’s state security market is entirely in the hands of Israelis.
It wouldn’t be a stretch to call it “Little Tel Aviv.”
The Israelis practically feel at home in the neighbourhood of Bastos in Yaoundé.
Four-wheel drive SUVs with tinted windows abound and the air is rife with rumours about the presence of advisors and/or spies within Paul Biya’s circle.
Abraham Avi Sivan, the Cameroonian president’s former security advisor who died in 2010, was a regular there.
Eran Moas, Etoudi Palace’s current securocrat, and his wife are also frequently spotted in the neighbourhood. Sivan, Moas and their spouses even founded an ape sanctuary in Cameroon.
Indeed, Biya and Israel have close, long-standing ties. The Cameroonian president has been wary of the French intelligence service ever since the attempted coup d’état that nearly overthrew him in 1984.
He thinks that his predecessor, Ahmadou Ahidjo, was the right-hand man of Jacques Foccart and the External Documentation and Counter-Espionage Service (Service de documentation extérieure et de contre-espionnage – SDECE).
Israel’s imprint on security in Yaoundé Determined to side-line the French, Biya turned to Israel on the recommendation of the United States. This is how he met Sami Meyuhas, who had worked in Zaire under Mobutu Sese Seko, alongside Shabtai Shavit, who led the Israeli intelligence agency Mossad from 1989 to 1996.
With Shavit (who currently runs Athena GS3, a subsidiary of Mer Group) in Tel Aviv, Meyuhas in the sub-region, and Sivan and former Israeli general Mayer Heres in Yaoundé, the Israelis gradually transformed Paul Biya’s security apparatus.
Their first order of business was to create the Rapid Intervention Battalion (Battalion d’intervention rapide – BIR), now led by Heres.
Then, in Yaoundé, they installed various antennas and technology enabling the interception of telephone and electronic communications.
Sure enough, several buildings in Bastos are outfitted just like the presidential palace roof.
The French have had to deal with this reality. To this day, Cameroon’s security market is considered “inaccessible.”
East African countries should brace themselves for a second round of invasion by the desert locusts in the next one to two months, Kenya’s Ministry of Agriculture has warned.
The swarms of locusts, which have spread to seven East African countries, have been laying eggs along their migratory paths expected to hatch between March and April.
“Hoppers have between three to six weeks before they fly. We have a plan in place and we have mobilised resources running up to June this year,” Kenya’s Cabinet Secretary for Agriculture Peter Munya told The EastAfrican.
Addressing donors and representatives of affected countries in New York last week, United Nation’s Food and Agriculture Organisation (FAO) Director-General Qu Dongyu said the locusts had spread to the northern edges of Uganda and Tanzania, and called for greater and faster action to prevent a humanitarian crisis in the region.
Rwanda’s Meteorology department has projected that the desert locusts could land in the Eastern Province within two weeks, and the government has appointed a task force from the Ministry of Agriculture and Disaster Management to deal with the looming invasion.
According to FAO, the locust invasion has affected Kenya, Uganda, Tanzania, Ethiopia, Somalia, Ethiopia and Eritrea.
Mr Munya said the Kenyan government has already procured 600 additional sprayers to commence training at Gilgil’s National Youth Service on February 13, to reinforce teams already on the ground. They will be deployed on February 16.
They will “spray the locusts at the nymph stage before they fly, once the eggs hatch. We are also increasing the aerial spraying and surveillance to 20 planes,” said Mr Munya.
There are fears that a second round of invasion will hit Kenya’s food growing regions such as the North Rift.
In Uganda, the government has set aside $4.5 million as a contingency fund to fight the locusts, and Tanzania, which has detected swarms in its northern border areas close to Mount Kilimanjaro, has hired three planes to spray them.
Kenya’s Ministry of Agriculture has allocated $2.3 million towards aerial and ground control operations, and the FAO has appealed for $76 million in emergency aid to tackle the locust threat regionally.
Uganda’s Ministry of Agriculture last month requested contingency funds of $1.35 million for aircraft fuel, pesticides and other supplies.
Analysts at Africa-focused advisory firm StratLink said the invasion represents an unprecedented threat.
“We assess that the immediate risks to food security and agricultural output remain limited, since most commercial farmers have already harvested their crops. However, if the swarms invade key food growing regions, we fear that this could affect the new planting season.”
The International Organization for Migration reports despite Yemen’s brutal civil war, tens of thousands of desperately poor Africans continue to cross the Gulf of Aden each year into the conflict-ridden country in hopes of reaching Saudi Arabia and finding work.
Nearly five years of civil war in Yemen has killed thousands of civilians, shattered the economy and left millions of people on the verge of famine. The United Nations considers Yemen the world’s worst humanitarian catastrophe.
Despite this disastrous situation, migrants from the Horn of Africa remain undeterred in their determination to reach Yemen and then to Saudi Arabia and a hoped-for better life.
Last year, the International Organization for Migration reports more than 138,000 people crossed the Gulf of Aden to Yemen. This is more than the 110,000 migrants and refugees who crossed the Mediterranean to reach Europe during the same period.
IOM spokesman Paul Dillon says most of the migrants making the dangerous journey to Yemen are Ethiopians from the rural Oromia, Amhara and Tigray regions.
“While tragedies along the Mediterranean routes are well documented, our staff bear witness daily to the abuse suffered by young people from the Horn of Africa at the hands of smugglers and traffickers exploiting their hopes for a better life,” he said. “Not only has migration along the Eastern Route not been reduced by years of conflict in Yemen, migrants appear undeterred by the Gulf’s strict immigration policies for undocumented migrants.”
Dillon says most of the migrants are unaware of the dangers they will encounter in Yemen. Besides conflict, he says they are at risk of being kidnapped and tortured for ransom and exploited and trafficked by criminals.
The IOM says establishment of legal pathways for migration offers the best and most effective way to protect migrants from abuse. It says an agreement last year between Saudi Arabia and Ethiopia that allows 100,000 Ethiopian workers to travel legally to Saudi Arabia for work has been successful and the agency calls for it to be extended.