He will therefore have to find cash forsubsidies, whether from domestic fiscalresources or international aid.

The donor community – which was des-perately worried about the possibility ofa Wade third term – will be keen to helpthe new government of a country that isseen as a lynchpin of democratic stabil-ity in West Africa. But budgets are tightand generalized subsidies are regardedwith deep scepticism by the IMF andother key partners. Meanwhile, the stateschool system is in near paralysisbecause teachers, unpaid for months,have spent much of the academic yearon strike. This has worsened the impactof youth unemployment.

Dealing with the big issues of principlewill be less demanding. Sall has stressedthe importance of restoring basic gover-nance standards, accountability and abalance of power between the key insti-tutions. (Chatham House 27 ⁄ 3) Falling

behind p. 19408

SIERRA LEONELand Deals Stir Unrest

Lack of regulation means localcommunities stand to lose a lot.

Foreign land investment is on the risein Sierra Leone and, as with many ofits neighbours, the government wants

more companies to come in to boostthe economy and spur much-neededagricultural development in rural areas.Sierra Leone ranked 180 out of 187countries on the UN human develop-ment index in 2011.

The country’s Investment and ExportPromotion Agency (SLIEPA) advertises‘‘over 4.3m ha of cultivatable landavailable’’, high local demand for staplefood crops and opportunities for theproduction of biofuels for the globalmarket.

According to Sierra Leone’s Ministryof Lands, around 70% of arable land isavailable for investment, outside ofprotected forest reserves. ‘‘Foreign land

World Bank

New Loans

Gabon: The World Bank has discussed anew four-year (2012–2016) Country Part-nership Strategy (CPS) for Gabon. TheUS$250m funding for Gabon during thefour-year period will notably support criti-cal reforms in public financial managementand key economic sectors.

It will more specifically seek to improvedevelopment outcomes in six areas:

Improving governance;

Improving efficiencies and transparency inthe management of the budget;

Improving the country’s management of itsdebt and its mining resources;

Improving the investment climate and sup-porting the growth of the private sector;

Ensuring the adoption of a long-term planfor the transparent management of thecountry’s natural resources; and

The production of an in-depth analysis(study) of the country’s social safety netand its health system. (worldbank.org 3 ⁄ 4)Ghana: The World Bank has approved anInternational Development Association(IDA) interest-free credit of US$30m forGhana to kick-start a new Public PrivatePartnership (PPP) centred on infrastructuredevelopment. It will combine the skills andresources of both the public and privatesectors. The Bank’s support is for the firstphase in a series set to close a critical fund-ing gap and to leverage urgently neededprivate sector investment from 2012–2016.Specifically, phase one seeks to improve thelegislative, institutional, financial, fiduciaryand technical framework to generate apipeline of bankable PPP projects. (world-bank.org 27 ⁄ 3)Mauritius: The World Bank will supportkey reforms to both the public and privatesectors through two Development PolicyLoans. A loan of US$20m for public sectorreform aims to strengthen programmes thatsupport and empower poor people, stream-line trade regulations and processes, andimprove performance of the civil service. Acomplementary $15m will support the gov-ernment’s efforts to foster the growth and

viability of private enterprise, improveaccess to finance, and promote ICT and e-Government. (worldbank.org 27 ⁄ 3)Mozambique: The World Bank will pro-vide $110m to help boost the country’smining sector and simplify business regu-lations. The money will also be used toboost economic reforms to help the coun-try join the Extractive Industries Trans-parency Initiative (EITI), an internationalbody that promotes transparency in oil,gas and mining. (� AFP, Maputo 27 ⁄ 3)Rwanda: The World Bank is providingtechnical and financial assistance tostrengthen and connect existing pro-grammes that protect poor and vulnerablepeople into a single system with coordi-nated management and expanded cover-age. An estimated 115,000 households, orabout half a million people, stand to ben-efit.

The Support to Social Protection System(SSPS-1) Development Policy Grant ofSDR 26.1m is the first in a series of threeWorld Bank operations designed to supportthe – Rwanda’s growing effort to addresschronic poverty and cushion poor peoplefrom the adverse impacts of economic andclimatic shocks through a larger and moreefficient social protection system as envis-aged by the 2011 National Social Protec-tion Strategy. (worldbank.org 20 ⁄ 3)Sao Tome e Principe: The World Bankapproved an IDA $4.2m grant to supportthe first in a series of three single-trancheoperations under the designation of Gover-nance and Competitiveness DevelopmentPolicy Operations, which aims tostrengthen the institutional framework tomitigate the effects of and build resilienceto internal and external shocks, raise theefficiency and transparency of public expen-ditures, and improve the policy environ-ment to promote competitiveness andemployment opportunities. (worldbank.org30 ⁄ 3)Senegal: The World Bank’s Board of Exec-utive Directors has approved an additionalIDA credit of $10m for the NutritionEnhancement Project II (NEP), which has

reached more than 1m children under agefive with low-cost high-impact measures toimprove nutrition and promote healthygrowth. The programme has brought downunderweight malnutrition rates in interven-tion areas to 11%, compared to thenational average of 15%. (worldbank.org29 ⁄ 3)Seychelles: The World Bank has discusseda new $21m Country Partnership Strategy(CPS), the country’s first comprehensivedevelopment strategy with the interna-tional financial institution in nearly twodecades. The new three year strategyfocuses on reducing vulnerability to eco-nomic shocks and providing the basis forlong term sustainable development, asoutlined in the Seychelles Medium-TermNational Development Strategy 2013–2017. It will focus on competitiveness, jobcreation, and protecting the poor fromexternal shocks. It will also help strength-ening public sector management. (world-bank.org 3 ⁄ 4)Tanzania: The World Bank has approvedfunding of $220m to support the Produc-tive Social Safety Net Programme, whichwill bring temporary labour-intensive publicworks employment and cash transfers tohouseholds that most need assistance, aswell as advice and support on savings. Tan-zania is trying to establish an efficient socialsafety net system that aims to help 1.5mvulnerable people in the country’s poorestrural and urban households to receive asteady income, achieve food security, andinvest in their children’s future. (world-bank.org 15 ⁄ 3)The Bank also approved an IDA credit of$100m as direct budget support to improveTanzania’s investment climate and promoteshared growth through sound publicfinance management. (worldbank.org 15 ⁄ 3)Togo: The World Bank approved an IDAgrant of $14m for Togo’s CommunityDevelopment and Safety Net Project (PDC-plus), to provide poor communities greateraccess to basic socio-economic infrastruc-ture and to set up a national social safetynet system. (worldbank.org 22 ⁄ 3)

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investments are a good thing,’’ saysWilliam Farmer, director of surveysand lands in the Ministry of Lands.‘‘Civil society makes a lot of noiseabout land-grabbing. But if the invest-ment is well-planned then it can createemployment and improve lives.’’

The US-based policy think-tank theOakland Institute’s 2011 country reporton Sierra Leone counts 15 large-scaleland deals totalling 500,000ha. Thiswas published before the largest-yetrecorded deal in 2012 with the ChineseHainan Natural Rubber Industry Groupwhich signed a US$1.2bn deal with thegovernment in February to lease135,000 ha for rubber and rice planta-tions.

The Hainan group has promised toplant 35,000 ha of rice for sale on thelocal market, establish a rubber-pro-cessing factory and create approxi-mately 100,000 jobs. Rubberplantations will stretch over 100,000ha,across three districts - Moyamba, Ton-kolili, and Port Loko.

But as more and more companies flockto the country to lease large tracts ofland, murmurs of protest and unrestare cropping up among local popula-tions who are unhappy with the waythe deals are done; and civil societygroups are growing increasingly con-cerned that foreign land deals are notproducing the win-win scenarios theyhad hoped for.

The problems arising are the same as inmany other developing countries: thepower imbalance between negotiatingparties and the lack of regulationmeans local communities can lose a lotthrough land deals, says Joseph Rahall,director of Green Scenery, an NGOworking on environment and humansecurity issues in Sierra Leone.

Kortumahun village chief BockarieJuana says he was not involved in nego-tiations on the land lease with the com-pany. He told IRIN he received moneyfor his land, but was given no documen-tation such as a copy of the land lease ora receipt for the amount paid.

There are currently no laws regulatinglarge land deals in Sierra Leone. TheMinistry of Agriculture has producedguidelines suggesting a land lease pay-ment of $5 per acre per year ($12.36per hectare per year) to landownerswho agree to give up their land for alease period of up to 50 years, with anoption to renew for another 21 years.But Rahall says the amount is far toosmall.

‘‘Even where companies pay the fullamount, the government is taxing thepeople 50%,’’ he says. ‘‘Half of thecompany’s payment goes to the District

Council, the traditional leader and tothe central government.’’ It is not pos-sible for former landowners to surviveon the amount of money they are givenper acre. The landless farmers get theworst end of the deal, as they lose theland they farm and do not get anycompensation.

Land tenure reform must take placebefore large land deals can benefit localcommunities, says UNDP. A draft landreform policy is currently under reviewby parliament which UNDP hopes willlead to laws to regulate the practice.(UN analysis service, IRIN 20 ⁄ 3)

IN BRIEFAlgeria: The country’s parallel economy andtax evasion costs the state colossal sums andundermines development. Nearly half ofAlgeria’s 35,000 registered importers are ona national blacklist of swindlers and taxevaders and cannot engage in foreign tradeor bid for public contracts. They are alsodeprived of tax advantages.

Trade Minister Mustapha Benbada saysthe black market accounts for half the rev-enue made by Algerian businesses. Overthe past three years, unbilled transactionshave accounted for €1.55bn. The true fig-ure may be closer to €10bn since 2009,and experts estimate that the parallel econ-omy accounts for between 20 and 40%percent of GDP.

They note that businesses are forced to buyraw materials as well as finished goods fromthe black market. As a result, large sums ofmoney circulate outside the banking systemto the detriment of the economy.

Benbada acknowledged, however, that theblack market ‘‘is socially useful as it allowstens of thousands of families to make a liv-ing.’’ (� AFP, Algiers 14 ⁄ 3)Burundi: Public sector offices were mostlyclosed on March 28th as government work-ers and shop owners went on strike to pro-test against high living costs after thegovernment more than doubled prices ofelectricity and water. Unions organised thestrike after the government refused theirdemands to reverse a 124% rise in electricitycharges and a 266% increase in water tariffs,imposed last September. (voxafrica.co.uk28 ⁄ 3)The trade union confederations and civilsociety groups, which called for the strike,are seen as enemies by the government. Agovernment spokesman described them onlocal radio as troublemakers and accusedcivil society groups of collaborating witharmed groups. (Radio Netherlands World-wide 27 ⁄ 3)Despite the establishment of anti-corruptionagencies, Burundi is facing a deepening cor-ruption crisis that jeopardises prospects forlasting peace and stability. Burundi: A Deep-ening Corruption Crisis, (http://www.crisis-group.org) the latest report from theInternational Crisis Group, highlights theneo-patrimonialist practices that underminegood governance and threaten development.(ICG 21 ⁄ 3)

Republic of Congo: Around 14,000 peopleare homeless in Congo’s capital, Brazzaville,two weeks after munitions in an army bar-racks exploded killing 223 people, wounding2,500 and destroying large parts of the city(ARB Political Series p. 19211). (UN Inte-grated Regional Information Networks 23 ⁄ 3)Cote d’Ivoire: The International Fund forAgricultural Development (IFAD) hasgranted US$22.5m to help the countryimprove food security and revenues for ruralworkers. The project will lead to sustainabledevelopment in the context of the post-crisisenvironment in the country’s three Northernregions - the Savannah, the Valley of Band-ama and Zanzan. (PANA, Abidjan 16 ⁄ 3)Equatorial Guinea: Equatorial Guinea haswarned France that French firms wouldface serious consequences if Paris did notscrap an arrest warrant for the son ofPresident Teodoro Obiang Nguema. Frenchmagistrates probing alleged graft by Afri-can leaders have sought the warrant forTeodorin Nguema Obiang Mangue, follow-ing searches at his upmarket Paris resi-dence.

According to the French Foreign ministry,France was Equatorial Guinea’s third expor-ter and sixth importer in 2010, with bilateraltrade topping $600m. Leading companiesdoing business with Malabo include thebank - Societe Generale, Air France, FranceTelecom, oil heavyweight Total and publicworks giant Bouygues.

The anti-corruption watchdog, TransparencyInternational (TI) brought the charges. (�AFP, Malabo 29 ⁄ 3)Ethiopia: The Ministry of Agriculture(MoA) has suspended leasing land to localand foreign investment companies while itconducts a review. After its assessment itwill resume land provisioning.

Since it began leasing land the directoratehas taken a total of 3.6m hectares of landsin Benishangul Gumuz, Gambela, Oromiyaand in some parts of Southern Nations,Nationalities and Peoples’ State’ regions.

The ministry has been providing investorswith 100,000 to 500,000 hectares of landbut, according to documents, most investorsdid not use the lands granted for the statedpurpose. Instead a number of complaintsshowed that investors embarked on aggres-sive land grabbing, which had resulted indestroying the environment and forcinglocals from their villages. (The Reporter,Addis Ababa 17 ⁄ 3)Morocco: The government announced in lateMarch that it would restrict pay for protest-ing employees. The decision met with wide-spread discontent. Trades unions describedthe action as illegal. The Moroccan constitu-tion explicitly ensures the right to protest.The government, on the other hand, believesthe action is line with the global principle of‘‘pay in return for work’’. (Magharebia.com4 ⁄ 4)Sudan: Khartoum has approved the interimstrategy to alleviate poverty. It includesboosting good governance, increasing insti-tutional capacity, achieving the MillenniumDevelopment Goals with regard to healthand education, providing fresh water, devel-oping human resources, encouraging eco-

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nomic growth and creating employmentopportunities. (Suna, Khartoum 22 ⁄ 3)Uganda: Human Rights Watch criticised theUgandan government for banning an activistgroup, Activists 4 Change (A4C), behind theanti-government protests over rising foodand oil prices. A4C is a coalition of civilsociety and opposition groups which initi-ated a series of ‘‘walk-to-work’’ protests in2011 against the high cost of living. Securityforces clamped down heavily on the protests.(� AFP, Kampala 5 ⁄ 4)Zambia: Former Transport and Communi-cations Minister, Dora Siliya, has beenarrested on charges of abusing her office inconnection with a tender for a radar systemat Lusaka’s international airport.

Siliya, a close ally of former presidentRupiah Banda, is alleged to have directedthe cancellation of a duly awarded tenderfor the supply, delivery, installation andcommissioning of the Zambia Air TrafficManagement Surveillance Radar System toFrance’s Thales Air System SA, costing thegovernment US$365,000. She is accused ofsubsequently accepting a free offer fromAnglo-Italian joint venture Selex System In-tegrati SPA for the repair of a radar head atthe airport, without following procedure.

Siliya, together with Henry Banda, thefugitive son of the former president, is alsolinked to the sale of fixed-line operatorZamtel to LAP Green of Libya. That$257m transaction was reversed soon afterthe new government came into power.LAP Green is challenging the reversal incourt. (� AFP, Lusaka 2 ⁄ 4) Cleanergovernment? p. 19446

BUDGETS

MOROCCOBudget 2012

(Dirhams 10 = £0.74 ⁄ €0.90 ⁄ $1.17)

Drought and the Eurozone crisisimpact on the new government’sexpansionary plans.

The Moroccan parliament on April12th adopted a 2012 budget that trimsthe public deficit but continues recentefforts to reinforce social spending asthe country struggles through a finan-cial crisis.

The budget, adopted four months late,sets spending at Dirhams (D) 346.8bn(€31.5bn, $41.5bn) and revenue atD314.5bn. It foresees a cut in the pub-lic deficit to 5% of GDP in 2012 (over6% in 2011), as the previous govern-ment splurged on subsidies, notably onfood, to defuse a growing protestmovement inspired by the Arab Spring,said AFP (12 ⁄ 4).

The budget, the first by the new moder-ate Islamist government which tookover late in 2011, includes D 2.5bn forthe creation of a social security fund to

help increase coverage of the publichealth care system.

Finance Minister Nizar Baraka saidrecently that the country’s economywould likely grow by around 3% in2012 instead of the 4.2% included inthe budget, due to a drought and thedebt crisis in the eurozone, which isMorocco’s biggest trade partner.(� AFP, Rabat 12 ⁄ 4 2012)

As the budget was passed, outside par-liament hundreds of unemployed pro-testers demanding government jobsclashed with police. Long seen as ahaven of stability and relative prosper-ity in North Africa, this close US allyhas a rough year ahead. Its budget isoverstretched, its farm fields drought-stricken, its credit rating is wobbly, andeconomic crisis is hobbling its closesttrading partners in Europe, even asprotests by disgruntled Moroccans areon the rise, Associated Press reported(14 ⁄ 4).

Agriculture and Tourism in Trouble

‘‘The main engines of the Moroccaneconomy [agriculture and tourism] arein the process of running out ofsteam,’’ said Najib Akesbi, an econo-mist with the Hassan II Institute ofAgronomy in Rabat. Morocco remainsreliant on agriculture, which makes up15% of GDP and is almost entirelyrain-fed. In a report from mid-March,the US Embassy estimated that thetotal cereal harvest would not exceed3.2m tons, a sharp drop from 8m tonsin 2011.

Tourism, which makes up at least10% of GDP, was down across theboard in 2011 amid the financial crisisin Europe. The biggest drops werenights spent by French and Spanishvisitors, 16 and 25%, respectively,which make up the bulk of Morocco’stourists.

These pale compared to the cata-strophic drops experienced by Egyptand Tunisia in the wake of the ArabSpring, but come at a bad time forMorocco. The figures help explain therage of tour operators when the newIslamist Justice minister made a recentdig at non-pious visitors. Speaking at aQuranic school in Marrakech, Must-apha Ramid complimented the sheikhfor his work in a city that ‘‘peoplecome from all over the world to spendtime sinning in and being far fromGod,’’ he was quoted as saying in thepress.

‘‘It is economic suicide in a time of cri-sis,’’ stated an angry editorial in theFrench-language daily Le Matin (12 ⁄ 4).‘‘We are shooting ourselves in the footwhen we attack tourists – it’s irrespon-sible and dangerous.’’

Exports to Europe and remittancesfrom Moroccans working abroad havealso been hurt by the crisis there.

The budget was based on an oil priceof $100 a barrel, a level that may betoo conservative, Said Hirsh, Mideasteconomist with Capital Economics toldBloomberg.com (12 ⁄ 4) and could endup costing the government more as itsupports subsidies. The new plan allo-cates D46.5bn for government subsi-dies.

‘‘The budget is expansionary – bigincreases in subsidies, recruitments –but no real effort has been put intofiscal reforms,’’ said Zouhair AitBenhamou, a Moroccan blogger whoclosely watches the country’s economyand writes on the ‘‘Moorish Wanderer’’blog. ‘‘Tax loopholes have not beenclosed, the moratorium on agriculturaltax still benefits only a few wealthyfarmers and the income tax falls heavilyon middle classes.’’

The budget raised taxes on alcohol forthe first time since 2010 by 12% forbeer and 43% on other alcoholic bever-ages. The budget also establishes a new‘‘solidarity tax’’ of 1.5% on profits ofcompanies whose annual profits areD50 to 100 m - aimed at addressingsocial inequalities. (Sources as referencedin text)

NIGERIABudget 2012

(Naira 100 - £0.41 ⁄ $0.63 ⁄ €0.49)

The figures are higher than thePresident wanted.

Nigeria’s parliament on March 15thapproved a $31bn budget for 2012 andthis figure was signed off by PresidentGoodluck Jonathan a month later onApril 13th even though he had initiallysought a much lower spending plan.

The Naira (N) 4.9 trn ($31bn, €23.7bn)budget is up from N4.75 trn initiallyproposed by Jonathan. The budget alsoraises the oil benchmark price to $72per barrel compared to $70 proposedby Jonathan - key since revenue earnedabove that price is put into a govern-ment savings account.

It maintained Jonathan’s proposed oilproduction estimate of 2.48m barrelsper day – a figure some analysts callhigh since Nigeria has been producingbetween 2 and 2.4m bpd recently. InFebruary it supplied 2.14m barrels ofcrude, according to the InternationalEnergy Agency.

The budget plan also bets on 7.2%growth in the economy, an inflationrate of 9.5% and an exchange rate of

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