Natznet Tesfay, head of Africa forecasting at Exclusive Analysis, anticipates the role of the extractive industries in forthcoming elections in Kenya, reviews the rise of industrial action in South Africa, and discusses security concerns for companies in Niger
Elections in Kenya, due to be held in March 2013, will significantly increase risk of violent protests and ethnic violence, particularly in major cities and the Rift Valley. Armed militias, reactivated in the 2007-08 post-election violence, have yet to be demobilised. Voting will likely occur along ethnic lines, and dissatisfaction with results is likely to lead to killings of Luo, Kikuyu and Kalenjin ethnic groups, on levels equal to or surpassing those seen in 2007-08.
Grievances with extractive industries are likely to become rallying points ahead of elections, and there is an increased risk of protests at mining concessions as local politicians seek to be seen as championing the cause of aggrieved communities. On 25 July 2012, local leaders in Kitui, including MPs and the water minister, threatened to block the operations of China's Fenxi Mining Industry Group amid reports they had no experience in operating mines. Also, around Turkana, where Tullow Oil confirmed an oil discovery in March 2012, presidential candidates have provoked local ethnic rivalries, raising risks of inter-communal and election-related violence in the area.
Partisan violence around the elections is increasingly likely to reach levels seen in 2007-08, which cost businesses nearly $1bn in disruptions. Candidates are likely to mobilise along ethnic lines, despite mechanisms built into the 2010 Constitution to minimise ethnic politics, such as the reforms ensuring greater institutional autonomy for the police and judiciary and measures to include marginalised community representatives in government.
On 24 August, government accused local politicians of inciting inter-ethnic violence that led to the death of 52 people in the Tana River Delta. In order to secure the presidency, a candidate must secure five out of the eight provinces; this cannot be done relying on one ethnicity alone, hence competition for ethno-political alliances in the presidential race will likely be more intense.
Although Prime Minister Odinga, an ethnic Luo, is currently the favourite to win in 2013, he still faces strong opposition from Kikuyu (Kenyatta and Musyoka) and Kalenjin (Ruto) opponents, who have united in an unofficial grouping, the G7 Alliance.
The ongoing escalation of industrial action is a threat to President Jacob Zuma's chances of re-election as party president in the December African National Congress conference. Mr Zuma and his close ally, police minister Nathi Mthethwa, have come under criticism for the shooting of 44 people at Lonmin's Marikana mine. Rival factions and firebrand leaders within the ANC have called for the resignation of both Mr Zuma and Mr Mthethwa. Mr Zuma is unlikely to resign and we still consider him the strongest contender for the party presidency in December and the national presidency in 2014. But the spread of violent and protracted industrial unrest is likely to undermine his chances.
In order to mitigate these risks, Zuma is increasingly likely to make concessions to the labour federation the Congress of South African Trade Unions (COSATU), which plays one of the king-maker roles at the ANC conference. COSATU has come under pressure from some of its supporters who question its association with industry and the ruling party. This has allowed rival unions, such as the Association of Mineworkers and Construction Union to recruit among its membership.
In order to rekindle COSATU's support, Zuma will aim to demonstrate the benefits to mine workers of COSATU's alliance with the ANC. He is likely to step up the enforcement of existing regulations on mining firms. In a speech on 22 August, he warned that mining firms could lose their licences if they did not speed up the delivery of housing. Other risks include fines for non-compliance particularly for smaller firms and further strengthening of the regulations on mine safety and remuneration.
Mr Zuma is also likely to appease his critics by co-opting rival ANC faction leaders with less business friendly views than his own, such as sports minister Fikile Mbalula. It is however unlikely that Mr Zuma's government will reverse its rejection of mine nationalisation or allow the powerful former ANC youth league leader, Julius Malema, who championed this cause, to return to the ANC.
In the unlikely event that Mr Zuma is not re-elected as ANC president, he will probably be ousted as national president before the 2014 elections. Deputy President Kgalema Motlanthe will likely succeed him in this scenario and as a former union leader himself, Mr Motlanthe is more likely to protect COSATU's interests and implement similar policies to what we have outlined for Mr Zuma above. Although Mr Motlanthe has not yet declared his interest in the ANC presidency, we assess he is now more likely to do so. Mr Motlanthe already enjoys the support of powerful anti-Zuma groups, such as the ANC Youth League and a growing number of COSATU affiliate unions.
On 6 August, security forces arrested four armed militants in Yassene, bordering northern Mali, en-route from Mali to Niamey to allegedly carry out attacks including kidnappings. This occurred less than a week after Nigerien President Mahamadou Issoufou's announcement that the Malian crisis is likely to spill over to Niger and that the security forces should be prepared for militants trying to launch terror attacks in Niger.
Al-Qaeda in the Islamic Maghreb (AQIM) militants are already active in Niger. On 9 August, Mauritanian online media released a video showing five of six French nationals kidnapped by the group. Four of the hostages, kidnapped in September 2010 at the Imouraren mine in Arlit, in the north of Niger, are employees of French firm Areva and its subsidiary Satom.
The risk of abduction and attack against foreign operations are high, particularly for the developing oil sector based in the Agadez region close to the border with northern Mali. AQIM is highly likely to increase its operations in the Yassene, Arlit and Agadez regions in the north as a way of pressuring the Nigerien government to withdraw its support for any future military intervention in Mali. The nine oil exploration contracts awarded in July to five oil companies, including Australia's International Petroleum are at risk of severe delays in commencing operations. The uranium and energy sector, which includes operators such as France's Areva, Algeria's Sonatrach and Canada's TG World and China National Petroleum Corporation are also at severe risk of terror attacks.