A running joke in Africa is that most of its people have no concept of time. I vaguely remember organizing a focus group for my PhD, set for a specific time and date, and no one showing up. ‘They are not here because they are on “African Time”,’ my Ghanaian colleague laughed. ‘Go knock on the doors of their offices, and they’ll probably come in the afternoon.’ Sure enough, they did.
Sometimes I think our view of Africans’ perception of time extends – quite unfairly –to other somewhat unrelated situations. Take the Kenya Airways flight I took to Monrovia just over a week ago from Accra. The flight arrived late from Nairobi in Accra, was delayed further in Accra, and ended up arriving in Liberia really late. As we waited to be escorted off of the plane, one man – A Brit based in East Africa somewhere, I believe – decided to speak out loud, amongst other grumbling passengers. ‘This is the last time I take this bloody airline,' he said. ‘They leave when they want and arrive when they want. Next time, I’ll go through Brussels or Amsterdam.’ But would he say the same thing today? Because boy, what a difference a week can make.
On Saturday, my Kenya Airways return flight from Monrovia to Accra (where I am currently grounded), which left about two hours late, was completely full.
And there was no one complaining about it being late.
There was no one complaining about the typically-shocking food.
There was no one complaining about Kenya Airways as an airline.
In fact, everyone seemed happy to be in the air. Because a perpetually erupting volcano in Iceland, which has grounded European travel completely, has suddenly changed many people’s perception of the airline: it is a shining star, an airline that can do no wrong. One gentleman I spoke to, who was scheduled to travel through Brussels where he was supposed to transfer on to a connecting flight to Toronto, seemed quite upbeat about the Accra-Johannesburg-Dakar-Washington DC trip, a voyage which spanned three days, he had managed to sort out as an alternative. Countless others were no doubt jubilant over taking Kenya Airways in a southeasterly direction, further away from their North American destinations, into airspace unaffected by volcanic ash, to Nairobi, linking to South Africa, and finding their way back West. Every Kenya Airways flight not going to Europe is no doubt full with experimental travellers. Maybe people are flying from Nairobi to China and trying their luck getting on a flight to Vancouver or Seattle or LAX.
Who would have thought that travelling in Africa would be so coveted? Even those who believe that Africans have no concept of time are forced to admit, for the time being at least, that Kenya Airways is not only ‘The Pride of Africa’ but the envy of the airline world.
Monday, 19 April 2010
Friday, 5 March 2010
Managing Expectations
You can see it now. All of the NGOs applauding the Ghanaian Government’s move to double mineral royalties, from 3% to 6%, which should take effect this year. This is indeed something which is long overdue. It is no secret that African countries have achieved very little in the way of economic development through leasing their mineral-rich lands to international mining houses. The great disparity between the sector’s miniscule contributions to national GDPs and the value of the product they are exporting is testament of this. But the decision of the Ghanaian Government to do this now certainly raises eyebrows – or at least it should.
Of course, the move to change the royalty payment to 6%, though perhaps significant in practice, will entail only a slight amendment to extant legislation. At present, and as stipulated in the Mining Act, mining companies are required to pay between 3 and 6% as a royalty payment. As they are not charities, all pay 3%, with the exception of Newmont Ghana’s planned Akyem Mine, which, when it finally opens, will pay royalties in the range 3.25% as compensation for being situated in a – albeit contested – gazetted forest reserve.
But why make this amendment now, and not 10 years ago? Has it really taken the government this long to realize that the existing arrangement of 3% generates next to nothing economically for the country, or is it because of something else? It is certainly far more disadvantageous for the government to make such a change now than it would have been, say, a decade ago or even five years ago. All of mineralized sub-Saharan Africa has been partitioned to multinational companies in the past 10-15 years, and quite rapidly for that matter. Significantly, for Ghana, with gold, the principal mineral extracted in the country, being ubiquitous in the region, there is concern – or there at least should be – that, once the new mineral royalty rate takes effect, international mining houses will simply abandon their exploration activities and relocate elsewhere, such as Mozambique or Mali, where the investment climate is comparatively more attractive economically.
The claim made by the Ghanaian Government that the move to modify the mine royalty rate stems from its desire to ‘boost revenues from the sector’ is purely a facade: it certainly did not become enlightened about the implications of a 3% royalty rate overnight. It is rather, and quite worryingly, as result of an confidence, which seems to resonate in many branches of the government, about the perceived viability of other sectors of the economy. Notably, the Atta Mills NDC-led government is convinced that it will net something from what has become a debacle with Vodafone, which now holds a 70% stake in Ghana Telecom. It is working to unravel what it claims was an unlawful deal forged between the previous NPP government and the company. Some allege the deal was consummated rapidly before the 2008 elections in order to compensate for finances siphoned by the previous regime.
But the biggest reason why the government is exuberating confidence is the belief that the country’s economic woes will be resolved in record time, courtesy of revenues brought in from oil. Oil could indeed change the face of Ghana forever – for the better – but it would require the implementation of a comprehensive policy recipe that hitherto has failed to materialize in sub-Saharan Africa. Thus, the government’s continued belief that offshore drilling, which is scheduled to commence in late-2010, will catapult Ghana’s economy along a new development trajectory entirely is one concern. A more significant concern relates to what appears to be a belief that revenues from oil will be an instant cure-all – or, more specifically, the projection of this message on to an expectant public. The overhyping of oil discoveries in the local media has created great expectations in Ghana. Every one of its citizens will be paying close attention to how the current government manages oil revenues in the months to come. This could be serious because it has already created the impression that the economic benefits will be instantaneous.
NGOs and community groups, therefore, should view the adjusting of mineral royalties with some trepidation. Whilst ten years ago, such a move could have set an important precedent in sub-Saharan Africa, doing so today could prove fatal for the Ghanaian economy.
Of course, the move to change the royalty payment to 6%, though perhaps significant in practice, will entail only a slight amendment to extant legislation. At present, and as stipulated in the Mining Act, mining companies are required to pay between 3 and 6% as a royalty payment. As they are not charities, all pay 3%, with the exception of Newmont Ghana’s planned Akyem Mine, which, when it finally opens, will pay royalties in the range 3.25% as compensation for being situated in a – albeit contested – gazetted forest reserve.
But why make this amendment now, and not 10 years ago? Has it really taken the government this long to realize that the existing arrangement of 3% generates next to nothing economically for the country, or is it because of something else? It is certainly far more disadvantageous for the government to make such a change now than it would have been, say, a decade ago or even five years ago. All of mineralized sub-Saharan Africa has been partitioned to multinational companies in the past 10-15 years, and quite rapidly for that matter. Significantly, for Ghana, with gold, the principal mineral extracted in the country, being ubiquitous in the region, there is concern – or there at least should be – that, once the new mineral royalty rate takes effect, international mining houses will simply abandon their exploration activities and relocate elsewhere, such as Mozambique or Mali, where the investment climate is comparatively more attractive economically.
The claim made by the Ghanaian Government that the move to modify the mine royalty rate stems from its desire to ‘boost revenues from the sector’ is purely a facade: it certainly did not become enlightened about the implications of a 3% royalty rate overnight. It is rather, and quite worryingly, as result of an confidence, which seems to resonate in many branches of the government, about the perceived viability of other sectors of the economy. Notably, the Atta Mills NDC-led government is convinced that it will net something from what has become a debacle with Vodafone, which now holds a 70% stake in Ghana Telecom. It is working to unravel what it claims was an unlawful deal forged between the previous NPP government and the company. Some allege the deal was consummated rapidly before the 2008 elections in order to compensate for finances siphoned by the previous regime.
But the biggest reason why the government is exuberating confidence is the belief that the country’s economic woes will be resolved in record time, courtesy of revenues brought in from oil. Oil could indeed change the face of Ghana forever – for the better – but it would require the implementation of a comprehensive policy recipe that hitherto has failed to materialize in sub-Saharan Africa. Thus, the government’s continued belief that offshore drilling, which is scheduled to commence in late-2010, will catapult Ghana’s economy along a new development trajectory entirely is one concern. A more significant concern relates to what appears to be a belief that revenues from oil will be an instant cure-all – or, more specifically, the projection of this message on to an expectant public. The overhyping of oil discoveries in the local media has created great expectations in Ghana. Every one of its citizens will be paying close attention to how the current government manages oil revenues in the months to come. This could be serious because it has already created the impression that the economic benefits will be instantaneous.
NGOs and community groups, therefore, should view the adjusting of mineral royalties with some trepidation. Whilst ten years ago, such a move could have set an important precedent in sub-Saharan Africa, doing so today could prove fatal for the Ghanaian economy.
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