strengthening the civil society perspective

Strengthening the Civil Society Perspective Series II: China and Other Emerging Powers in Africa

Emerging Powers in Africa InitiativE

Strengthening the Civil Society Perspective Series II: China and Other Emerging Powers in Africa

About Us The Emerging Powers in Africa Initiative, established in 2008 by Fahamu – networks for social justice, is the premium forum on the African continent that promotes debate and knowledge through a civil society dialogue. Aimed at understanding the comparative impact and engagement of emerging powers in Africa on issues of social justice struggles, the principal objectives of the programme are: • To nurture an African perspective on the emerging powers in Africa • To enable research to be undertaken on the political, social, economic and cultural effects of emerging actors engagement with Africa • To develop informed discussion and advocacy in Africa and the developing South on the emerging actors in Africa • To develop long-term cooperation between researchers, academics, media and activists in Africa and emerging actors • Assisting in developing collaborative partnerships between African and the emerging powers CSO/social movement organisations • Ensuring that south-south relationships are developed to benefit all citizens • Enabling civil society and social movement activists to critically assess the positive and negative impact of the emerging actors in Africa so that the rights of ordinary citizens around political, economic and social governance issues are protected

The Emerging Powers in Africa (EMPA) Initiative and Fahamu are not responsible for any copyright infringement or plagiarism as and where it may appear in the following reports. The editors of the publication ensured to their best of their knowledge that where such infringements occurred that this was attended to by the project leaders and authors who guaranteed that it was resolved. Therefore in the event that there are copyright issues still evident in the reports, sole responsibility for this rests with the authors.

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Contents 1 million houses?: Angola’s national reconstruction and Chinese and Brazilian engagement 7 Comparative African perspectives on the trade relations and practices of transnational telecommunications corporations of China and South Africa in Nigeria 30 Comparative study of investment practices in the extractive industries, and its environmental and social impact: Comprehensive comparative analysis between China and South Africa in the Democratic Republic of Congo 66 A comparative analysis of the commitment of the Chinese & South Africans to CSR and R2P in Nigeria’s telecommunication sector 97

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China and Other Emerging Powers in Africa

Introduction There has been a growing body of literature over the past several years aimed at enhancing and strengthening networks, understanding and collaboration between civil society actors in Africa and counterparts in the emerging power countries. Fahamu’s Emerging Powers in Africa (EMPA) Initiative has played a significant role in these efforts by initiating its own projects to further the overall goal of the programme, which is to inform and nurture African perspectives on emerging power activities in Africa. In line with this the EMPA Initiative commissioned four research policy reports in June 2010 following the successful completion of the first round of commissioned reports that was undertaken in 2009, culminating in an electronic publication available on the Fahamu website. Understanding that attention towards China’s deepening engagement with Africa should not overshadow the activities of other emerging powers in Africa, including India, Russia, Brazil and South Africa, the four research policy reports sought to develop an African perspective by strengthening the civil society voice in the discourse surrounding the engagement between Africa and these emerging powers. To this end, the research projects were themed around comparative African perspectives on China and other emerging powers in Africa by providing seed funding to African civil society organisations and activists to undertake research that can contribute to the emerging scholarship on the footprint of the emerging actors in Africa. We would like to thank the authors, as well as our reviewers who participated in a blind peer review process. Finally, our thanks to Oxfam Novib for providing financial support that made this project possible.

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1 million houses? Angola’s national reconstruction and Chinese and Brazilian engagement Sylvia Croese, Independent Researcher based in Angola

Executive Summary The purpose of this paper is to contribute to an understanding of the prospects for fulfilment of Angola’s National Urbanism and Housing programme for the period 2009-2012. It does so by providing an insight into the workings and management of Angola’s post-war national reconstruction and the main domestic actors involved. With a particular focus on housing, it outlines some of the contributions of China and Brazil to the country’s national reconstruction. It concludes by identifying some of the constraints and opportunities presented by the programme. Oil-backed loans were an important source of external financing for Angola during its civil war. When the war came to an end in 2002, international concern was mounting about the lack of transparency with regard to the management of the increasing oil revenues of the country and prospects for development. Decades of war had resulted in millions of internally displaced people, large mined areas and the destruction and degradation of most of the country’s physical, economic and social infrastructure and services. Conditions were particularly critical in the cities, especially the capital Luanda. During the war, little had been undertaken in terms of urban planning and development, formal land allocation and registration or infrastructure and housing maintenance. As a result, the majority of the inhabitants came to live in informal settlements in peri-urban areas of the city. Between 2004 and 2008, Angola experienced double digit GDP growth as a result of increased oil production combined with high oil prices on the international market. In the same period, loans with a total value of over US$15 billion were reportedly extended to the country, the largest being oil-backed. These gave rise to the introduction of the term ‘Angola mode’, designating loans for infrastructure development whereby the repayment is made in terms of natural resources. From 2002 to 2007, China, followed by Brazil, were fundamental partners in Angola’s reconstruction as expressed in loans and infrastructure projects. However, the creation of parallel entities to manage confidential projects obscured the official division of the state’s roles and responsibilities. Generally, the management of funds remained characterized by a lack of transparency and the price paid by people that were evicted as a result of the urban development projects was high. By 2007, the Angolan government had initiated a series of housing projects and approved an official Housing Policy, a Framework Law on housing and the establishment of a Housing Fund with a view of guaranteeing the universal right to housing. In the run-up to the legislative elections of September 2008, the ruling party MPLA announced a plan to build one million houses throughout the country by 2012 ‘through state initiatives and public-private partnerships’. Consequently, it approved a National Urbanism and Housing Programme for the period 2009-2012. The Ministry of Urbanism and Housing and the GRN were appointed as key institutions for the execution of this programme.

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Meanwhile, Chinese-funded and GRN-managed housing projects as well as additional financing were entering the stage. However, when in 2009 the impact of the sharply declining oil prices hit the Treasury with full force the one million houses goal was reformulated, transforming the majority of the houses to be built by government into self-help built houses. In July 2010 it became clear that the government had accumulated arrears worth US$6.8 billion to companies that had executed projects of public investment. Calling for a more rigorous observance of the procedures related to public expenses and overall management of public finance, a number of new laws on budget execution and procurement were announced. In the same period of time, Angolan President dos Santos secured new loans from both China and Brazil. So far, concrete public information on the actual progress made on the objectives of the National Urbanism and Housing Programme is extremely hard to come by and fundamental questions with regard to land, construction material and local capacity remain unanswered. Although the GRN is currently being dismantled, its responsibilities seem to be passed directly or indirectly to the state oil company, Sonangol, instead of (strengthening) the relevant state institutions. Overall, it seems that the country finds itself at a crossroads. Significant inroads have been made regarding reconstruction, but most of the investment has been geared towards the creation of physical infrastructure. Because of the increased use and reliance on foreign contractors such as China and Brazil, major opportunities for development have been missed. The adoption of legislation and plans such as the National Urbanism and Housing Programme indicates that the government is aware of a need to tackle problems in this area. However, problems related to the state’s administrative, technical and financial capacity to deliver in accordance with the country’s needs and realities have yet to be solved. Crucial in this regard is an improvement in the management of the allocation, transfer and registration of land and access to credit. As oil revenues are expected to increase again and Brazil and China have already confirmed the extension of new loans, new opportunities are presented to the Angolan government. However, if it is serious about meeting its objectives and policies for post-war development and housing and truly benefitting from its partnership with emerging powers like Brazil and China, structural change in the management of national reconstruction is needed.

Acknowledgements Field research for this study was carried out between June and November 2010, but benefitted from insights gained through previous research and consultancies. The work is based on a fact-finding methodology, through the study of literature, media records, legislation and government plans covering the period 2001 to 2010. Validation and cross-checking of information took place on the ground or with relevant informants from the private and non-governmental sector as access to information through formal interviews with government or private sector representatives, proved very difficult. Findings of the paper were presented during the Fourth National Angolan Civil Society Conference, held on 16-17 November in Huambo, Angola and during the international conference ‘China in Africa: challenges and opportunities for Angola’ organised by the University of Durham, Centro de Estudos e Investigação Científica (CEIC) of the Catholic University of Angola (UCAN) and the South African Institute of International Affairs (SAIIA), held on the 31st of January 2011 in Luanda, Angola. The author extends her gratitude to FAHAMU for financially supporting the realization of this study and Development Workshop Angola for giving access to its CEDOC housing and land database

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of media records dating back to 2001, as well as its legislation archive. She also thanks Development Workshop and other reviewers for kindly providing comments to draft versions of this paper.

Introduction Amongst the many challenges faced by the Angolan government in the reconstruction of the country since the end of the civil war in 2002 is the lack of decent housing for the majority of the rapidly growing Angolan population, particularly in the country’s urban centres. In Angola, all land belongs to the state but during the war little was undertaken in terms of urban planning and development, formal land allocation and registration or infrastructure and housing maintenance. The last few years have seen a rise in government revenues as a result of an oil-boom and oilbacked credit lines from emerging economic powerhouses such as China and Brazil. Oil-backed loans had been an important source of external financing during the war. After the war, they enabled the Angolan government to pursue its own model of development without having to abide to Western rules regarding transparency of its oil accounts. In the first period of national reconstruction from 2002 to 2007, most of the funds were used to finance infrastructure projects. However, the management of these funds remained characterized by a lack of transparency and the price paid by people that were evicted as a result of urban development projects was high. From 2007 onwards, housing became part of the government’s reconstruction agenda with the adoption of a Framework Law on housing in 2007 and a National Urbanism and Housing Programme in 2009. This Programme was based on the government pledge to build one million houses in all the country’s provinces by 2012. This time, the global economic and financial crisis, which hit the country through plummeting oil prices, revealed a major debt to construction companies. In the same period, the government reformulated the objectives of the housing programme and called for more rigour in the management of public investment funds. Presently, half of the projected timeline of the Housing Programme has passed. The purpose of this paper is to contribute to an understanding of the prospects for fulfilment of the programme. It does so by providing an insight into the workings and management of Angola’s national reconstruction and the main domestic actors involved. With a particular focus on housing, it outlines some of the contributions of China and Brazil to the country’s national reconstruction. It concludes by identifying some of the constraints and opportunities presented by the programme.

Towards national reconstruction From war to peace The outbreak of civil war in the transition to independence and the accompanying mass exodus of the Portuguese settler community plunged Angola into a deep economic crisis. Military assistance from the Soviets and Cubans was crucial for the MPLA (Popular Movement for the Liberation of Angola) to seize power and proclaim the Popular Republic of Angola on November 11, 1975. Upon independence, the MPLA adopted Marxism-Leninism as its official ideology and installed a system of centralized planning to manage the economy.1 However, war continued as rivalling liberation movements FNLA (National Liberation Front of Angola) and UNITA (Union for the Total Independence of Angola) did not give up on their claims to power and received external assistance that enabled them to continue fighting, while UNITA also took hold of the diamond mining industry. Meanwhile, the MPLA government was building up a massive external debt, eventually reaching more than US$11 billion in 1995. 1 Tony Hodges (2004), Angola: anatomy of an oil state, p. 9.

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Rescheduling arrangements were negotiated with its main creditor, the former Soviet Union, but also with Brazil and Portugal as well as Western multilateral donors. Access to further opportunities for debt reduction was not possible, as the government did not come to an agreement with the IMF on an adjustment programme. As a result, oil-backed loans contracted on behalf of the state by the state oil company Sonangol, became ‘virtually the only form of external financing available to the government since the early 1990s’. In order to finance its imports, the government resorted to loans from international commercial banks and export credit agencies that were repaid with oil deliveries. By 2000, oil-guaranteed debts amounted to US$4.99 billion, or 47% of total external debt.2 Meanwhile, the implementation of a series of reforms had begun, introducing a multi-party system in 1991 and a number of economic liberalization programmes throughout the 1990s. In 2002, Angola’s war finally came to an end with the death of UNITA leader Jonas Savimbi and the signing of peace accords. Yet, international concern was mounting about the lack of transparency with regard to the management of the increasing oil revenues of the country and prospects for development.3 According to the IMF, by the end of the war Angola’s financial situation was ‘very weak’ as a result of weak monitoring of oil revenue flows and the absence of public expenditure management controls. On average, between 1998 and 2002, 36% of government expenditure was off budget and 11% could not be accounted for at all and probably disappeared into what is referred to as the ‘bermuda triangle’ between Sonangol, the Treasury and the National Bank. Although real GDP growth was on the rise as a result of the oil boom, poverty was rife and the IMF considered Angola to face ‘a serious humanitarian crisis’.4 Indeed, the Angolan government faced a gigantic challenge to rebuild the country. In 2003, it ranked at the bottom of the UNDP Human Development Index, taking up a 164th place out of 175 countries.5 Decades of war had resulted in millions of internally displaced people, large mined areas and a destruction and degradation of most of the country’s physical, economic and social infrastructure and services. Data from 2001 indicate that only 33% of the population had access to piped water and less than 59% of the population had access to basic sanitation.6 Conditions were particularly critical in the cities, especially the capital Luanda, to which many people fled during the war looking for safety and economic survival. Coupled with high fertility rates, in thirty years the population of Luanda grew from 738.000 in 1978 to 5.823.200 in 2008.7 This put tremendous pressure on the city’s infrastructures and services, contributing to the creation of informal systems to provide for the population’s necessities, such as housing. See Figure 1. Most of the formal housing stock in the country dates from colonial times, which until independence was reserved for the Portuguese while the indigenous population was forced to build informally outside the city centre.8 After independence, most of this stock was occupied illegally and later confiscated and rented out or sold by the Angolan state through the State 2 Hodges (2004), p. 162-164. 3 See the reports of Human Rights Watch (2001), A crude awakening: The role of the oil and banking industries in Angola’s civil war and the plunder of state assets, IMF (2002), Angola: Staff Report for the 2002 Article IV Consultation, Global Witness (1999), All the president’s men: The devastating story of oil and corruption in Angola’s privatised war and (2002), The oil diagnostic in Angola: an update. 4 IMF (2003), Angola: Staff report for the 2003 Article IV Consultation. 5 UNDP (2004), Human Development Report 2004. 6 INE (2001), Inquérito de Indicadores Múltiplos 2001. 7 Cain (2002), Urban poverty and civic development in post-war Angola and DW (2005), Terra. Reforma sobre a terra urbana em Angola no período pós-guerra. 8 Paul Jenkins, Paul Robson and Allan Cain (2002), Local responses to globalization and peripheralization in Luanda, Angola, p. 118.

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Figure 1: Urban population growth Angola

Source: Cain (2004), p. 90.

Secretariat for Housing for symbolic prices. Virtually no construction took place during the war, apart from some state-led residential construction in Luanda and the provinces of Benguela and Kwanza Sul. Also, some initiatives were developed to organize informal settlements.9 However, little was undertaken in terms of actual urban planning and development, formal land allocation and registration or infrastructure and housing maintenance. As a result, land and houses were acquired or built through informal mechanisms. In Luanda, the majority of the inhabitants came to live in informal settlements in peri-urban areas of the city where they built their houses in accordance to their means. In these areas, most of the families depend on the informal sector for their survival.10

Oil for development By the end of the war, the international community proposed to discuss and finance the reconstruction of Angola at a donor conference on the condition that the government would improve transparency in the management of its oil revenues and that reconstruction would be guided by poverty reduction strategies and IMF-monitored economic and financial reforms.11 However, oil offered the key to an alternative model of development.

9 Sita José (2005), Políticas habitacionais. Situação do quadro habitacional em Angola. 10 See on this topic eg. Development Workshop (2005). 11See Fernando Pacheco (2006), The role of external development actors in post-conflict scenarios. The case of Angola. Angola does have a poverty reduction strategy, which was elaborated by the Ministry of Planning and adopted by the Council of Ministers in 2003, but there was little ownership of this plan by the Angolan government as it was largely a result of external pressure. However, the majority of the indicators that were part of the plan can be found in the government’s bi-annual programmes.

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Between 2004 and 2008, Angola experienced double digit GDP growth as a result of increased oil production combined with high oil prices on the international market. The country’s GDP grew ten times between 1997 and 2008, reaching nearly US$85 billion.12 The extractive industries, dominated almost entirely by the oil-sector, account for over half of the country’s GDP: 59% and 80% of government revenues in 2008.13 In the same period, loans with a total value of over US$15 billion were reportedly extended to the country, the largest being oil-backed.14 This gave rise to the introduction of the term ‘Angola mode’, designating loans for infrastructure development whereby the repayment is made in terms of natural resources.15 China was a key factor in the establishment of this model by being the first to offer Angola large loans under very favourable terms in order to finance infrastructure projects. Other traditional partners such as Portugal (Angola’s former colonizer) and Brazil (the first country to officially recognize Angola upon independence) also remained important and increasingly took part in the reconstruction of the country by extending credit to the government. From 2002 to 2007, China, followed by Brazil, were fundamental partners in Angola’s reconstruction as expressed in loans and infrastructure projects. Currently, according to the Chinese ambassador to Angola, Zhang Bolun, more than fifty state-owned companies and four hundred private companies are involved in Angola’s reconstruction.16 Reported figures regarding the number of Chinese in Angola range from 40.000 to 70.000, or even 200.000 depending on the amount and size of projects being implemented at particular points in time. The Brazilian embassy estimates that in 2008 about 40.000 Brazilians lived in the country, which is also a fluctuating number. According to the Association for Brazilian Companies and Executives in Angola (Aebran) more than 50 Brazilian companies had installed themselves in the country.17 However, the management of these funds and the projects carried out through Chinese and Brazilian funds have not gone unscrutinized.

Managing national reconstruction 2002-2007 The first post-war government programme for the period of 2003-2004, elaborated by the Government of Unity and Reconciliation (GURN) led by the MPLA, identified the following objectives for the country’s reconstruction: the consolidation of the peace process and promote national reconciliation; combating hunger and poverty and promotion of social stability through macro-economic stability, the improvement of social services, economic infrastructures, the promotion of economic growth and the enhancement of national human resources; capacity building of state institutions and ensuring state administration and justice in the entire national territory; the creation of conditions to carry out general elections.18 In practice, the main focus of reconstruction was the rehabilitation of the country’s physical infrastructure. This meant that people who had come to live in areas now earmarked for development needed to be evicted and relocated. To this effect a ‘relocation department’19 was 12 World Bank, Angola data sheet (http://data.worldbank.org/country/angola) 13 Government of the Republic of Angola (2010), Relatório de Fundamentação do OGE 2010 revisto. 14 See annex 1 for an overview of Non-concessional borrowing by Government of Angola since 2004. 15 Vivian Foster et. al. (2008), Building bridges: China’s growing role as infrastructure financier for sub-Saharan Africa, p. x. 16Angonotícias, Mais de 50 grandes empresas estatais chinesas envolvidas na reconstrução do país (19 November 2010), see http://www.angonoticias.com/full_headlines.php?id=29415 17 O Estado de S. Paulo, Angola atrai cada vez mais brasileiros (12 October 2008), see www.estadão. com.br 18 GURN (2002), Programa do Governo para o período 2003-2004, p. 10. 19 Decree 57/01 of 21 September.

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created, managed by an Office that had been set up in 1998 to implement and oversee Special Works, better known as the GOE (Gabinete de Obras Especiais). This was followed by the approval of an Emergency Housing Plan in November 2001.

China Most of the infrastructure projects initiated around this time were financed and executed by China. China was relatively new to Angola as diplomatic relations between the two countries were only established in 198320 but in 2002, China Construction Bank and Export-Import (EXIM) Bank funded a number of projects in Angola with a value of over US$150 million. In 2004, the countries agreed on a US$2 billion credit line negotiated under a ‘Strategic Public-Private Partnership Framework Agreement’.21 This credit line came to constitute the main source of funding for Angola’s Public Investment Programme for the period 2004-2006, financing over 100 contracts in the areas of health, education, energy and water, agriculture, transport, social communication and public works.22 Up to 30% of the value of each project had to be subcontracted to local Angolan companies.23 In 2004, a National Reconstruction Office, better known as the GRN (Gabinete de Reconstrução Nacional) was set up in order to create a mechanism that was ‘able to systematically and permanently accompany the most fundamental national reconstruction projects’.24 The President, José Eduardo dos Santos, appointed his military advisor General Helder Vieira Dias, alias ‘Kopelipa’, as its director. The GRN came to manage another credit line that became available in 2005 from a private entity called the China International Fund (CIF). This institution is part of a larger holding, Beiya International Development, also referred to as the ‘88 Queensway Group’, that is the Hong Kong address of over thirty companies linked to the group. Its mission is to ‘aim at South-South cooperation’ and in this context it has provided at least US$2.9 billion to Angola for infrastructure reconstruction.25 The World Bank has published estimates as high as US$9.8 billion.26 However, it is difficult to track these numbers as the GRN operates separately from the state’s official structures and is only accountable to the President. Moreover, a list of national reconstruction projects negotiated between Angola and Chinese companies published in a government resolution of 2006, classified all these projects as confidential under the country’s State Secrets Law (Law 10/02). This list contained twelve infrastructural projects as well as five technical studies and included projects that were 20 See for background on this matter Steven Jackson (1995). China’s Third World Foreign Policy: The case of Angola and Mozambique, 1961-93. 21 Resolution 31/04 of 15 November. 22 Alex Vines and Indira Campos (2008), Angola and China. A pragmatic partnership, p. 5-7. 23 Resolution 21/05 of 22 July. 24 Decree law 6/04 of 22 October. 25 CIF homepage website, see http://www.chinainternationalfund.com/. The CIF also strives ‘to consider win-win situation as the key criterion while pursuing profits, to sincerely share experiences and achievements of China ’s economic reforms with developing countries, to explore a new framework for Chinese enterprises to expand overseas and to introduce laudable concepts and worth-learning ideas from other developing countries into China’. Although the majority of the 88 Queensway Group’s activities are concentrated in Angola, by 2005 it was also active in Argentina, Congo-Brazzaville, and Venezuela. Since 2007, the Group has expanded its global operations and is now active in Africa, Latin America, Southeast Asia, and the United States. See L. Levkowitz, M. McLellan Ross and J. R. Warner (2009), The 88 Queensway Group. 26 World Bank (2007), International Development Association Interim Strategy Note for the Republic of Angola, p. 50.

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already announced to be funded through CIF and managed through the GRN, such as the rehabilitation of three railway lines and the construction of a new international airport.27 In 2007, two additional EXIM Bank loan agreements were signed. One for US$500 million to finance complementary works resulting from the first credit line and a second for another US$2 billion to be spent on integrated infrastructure, roads and transportation. Now totalling US$4.5 billion, the loan was to be repaid over 17 years, including a grace period of five years with an initial interest rate of Libor + 1.5% (reduced to 1.25% in 2007) through oil (10.000 barrels/ day in the first two years and 15.000 thereafter). This amount is likely to have increased in the meantime due to the fall in oil prices.28 Chinese funding introduced Angola to large scale and relatively cheap infrastructure development. However, rumours about the alleged mismanagement of Chinese funding had been around since the approval of the first EXIM Bank credit line. In reaction to these allegations, the Ministry of Finance started to publish data on its website with regard to the execution of projects funded by the loans.29 Yet, opacity around the CIF loans increased with the creation of the GRN and the nondisclosure of details around CIF projects. This did not hide the delays in the execution of announced CIF funded projects and in January 2008, it was reported that the Angolan government had reduced its estimates of the funds provided through the CIF credit line by two-thirds.30 This has led some to argue that ‘if there was any truth in the figures published by the World Bank, either cuts took place because CIF was unable to raise the capital it had promised, even before the government announced the reductions, or because a large part of the GRN expenditure was off-budget’.31

Brazil Relations between the Angolan and Brazilian government have been strong since independence, when Brazil was the first country to recognize Angola. The partnership that developed is in a sense a prelude to Angola’s current ‘strategic partnership’ with China as it too was motivated by pragmatic considerations on both sides and characterized by an exchange of ‘oil for development’. In 1980, an Agreement for Economic, Scientific and Technical Cooperation was signed between the two countries and renewed twice, in 1995 and 2001. Already in 1984, agreements between the two countries started to include oil-backed loans with the approval of a contract for the construction of the Capanda hydroelectric dam. The Brazilian construction company Odebrecht became the main contractor for this project, which initially was budgeted at US$900 million.32 During the 1990s Brazil extended credit lines to Angola to the value of about US$1 billion. When in 1995 the Angolan government was at the height of its debt, an agreement was negotiated which allowed Angola to pay back its debt with oil and in turn receive 45% through new credits for the export of Brazilian goods and services.33 27 Resolution 61/06 of 4 September. See annex 2 for an overview of the list of contracts signed. 28 Ana Alves (2010), The oil factor in Sino-Angolan relations at the start of the 21st century, p. 12. 29 See the website of the Angolan Ministry of Finance for details on the projects, http://www.minfin.gv.ao/docs/dspProjGov.htm 30 Financial Times, Infrastructure: Big projects fall behind schedule (23 January 2008), see http://www.ft.com/cms/s/0/58079b3a-c897-11dc-94a6-0000779fd2ac,dwp_uuid=8735dcb2be8a-11dc-8c61-0000779fd2ac.html#axzz15LBO5WjY 31 Vines et. al. (2009),Thirst for African oil. Asian national oil companies in Nigeria and Angola, p. 53. 32 Cunha (2002), As relações econômicas Brasil-Angola (1975-1988), p. 153-154. 33 O Estado de S. Paulo, Lula promete dar crédito e abrir mercado para Angola (4 November 2003), see www.estadão.com.br

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During a visit of the Angolan president to Brazil in 2005, an extension of Brazil’s credit line was negotiated reaching US$580 million under the Brazilian National Banks’ Programme Export Finance Programme (PROEX), partly in order to finance the conclusion of the Capanda dam but also the construction of roads, water and power networks. Another US$750 million, to be disbursed by the Brazilian Development Bank (BNDES), was approved in 2006.34 The construction of the Capanda dam had allowed for the entry of Odebrecht into the country in 1984. In 1995, Odebrecht became the main contractor for a project of a publicprivate partnership between the Provincial Government of Luanda and the Brazilian company Prado Valladares Group, named EDURB (Empresa de desenvolvimento urbano de Luanda). This project was implemented in an area south of the capital, called Luanda Sul (Luanda South). It aimed ‘to improve living conditions in the city and to meet the immense unmet needs of lowincome and displaced communities’ by creating three new districts: Talatona, Novos Bairros (New Districts) and Morar (To Live).35 The project included land allotment and the installation of infrastructure such as water, electricity, public illumination, roads, drainage and sewerage systems and won the Dubai international award for best practices in 2000.36 Making use of some the areas identified in the Luanda Sul project, Odebrecht was also contracted to build low-cost houses for the people to be relocated under the auspices of the GOE. According to the company, in 2005 it had built 3.300 houses in Zango and 2.000 in Sapú (areas located in the municipality of Viana and Kilamba Kiaxi). After an extension in 2006, another 5.000 were to be built as well as the installation of infrastructure for 12.000 houses in Zango.37 These extra houses were meant for people to be evicted from areas where infrastructural projects of ‘social impact’ were expected to be implemented under another programme for the relocation of populations (Programa de Realojamento das Populações), to be coordinated by the GOE and financed with Brazilian credit.38 This second phase was reportedly valued at US$18 million.39 Nowadays Luanda Sul is more famous for its high-end compounds in the Talatona district of the area. As the main contractor for the project, Odebrecht introduced Angola to the concept of ‘gated communities’ and a suburban lifestyle by constructing the country’s first residential compound Atlântico Sul which eventually included 108 houses, as well as Angola’s first shopping centre, Belas Shopping, inaugurated in 2007, followed by a residential and business complex, Belas Business Park. In 2007, an agreement was reached on the extension of a US$1 billion credit line for the export of Brazilian goods and services of which US$500 million would be disbursed in 2008 and US$500 million in 2009 through the BNDES. This loan would have to be repaid in ten years at Libor + 2.25% through oil (20.000 barrels of oil/ day).40 It must be noted that contrary to the EXIM Bank loans, information on the management and execution of projects carried out with Brazilian funds has not been made publically available. Although the management of projects funded by Brazil captured less direct attention compared to those Chinese funded, they also did not always achieve the desired outcomes. For instance, while the high-end part of the Luanda Sul project was widely admired, citizens relocated to the low-cost houses built by Odebrecht complained about the procedures used 34 Resolution 80/6 of 6 October, also see World Bank (2007), p. 51. 35 UN-Habitat, see http://mmc.habitat.org.ua/modul2/pract1/pppp0593.htm 36 Government of Dubai, see http://www.dubaiaward.ae/web/WinnersDetails.aspx?s=31&c=9 37 Odebrecht Angola, Social Report 2007-2008. 38 Dispatch 8/07 of 13 April. 39 Jornal de Angola, Zango vai realojar mais três mil famílias (11 June 2005). 40 Memorandum of Understanding Brazil-Angola 2007, see website Brazilian Ministry of Foreign Affairs http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/2007/10/18/acordosassinados-por-ocasiao-da-visita-do

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for relocation, the inferior conditions of the houses that were allocated to them and the lack of continued accompaniment and support by the authorities.41 Thousands of families affected by evictions, demolitions and relocations during this period of time did not receive houses at all and evictions were often carried out using intimidation and violence, excessive use of force, insufficient notice and inadequate compensation, while failing to offer opportunities for information and consultation.42

Managing national reconstruction 2007-2010 4.1 Putting housing on the agenda In 2004, the Angolan government adopted a new urban and territorial planning law (Law 3/04 of 25 June) and a new land law (Law 9/04 of 9 November) which stipulated a period of three years for the legalization of informally occupied land43 and it was only after this that it started preparing for the elaboration and revision of legislation with regard to housing.44 In the meantime, as a result of the oil-boom and reconstruction programme, a huge influx of foreign companies and workers entered the country. Prices skyrocketed as the shortage of houses on the market increased, especially in the city centre, and a lack of local capacity to produce, import or transport raw materials made costs for construction extremely high. This gave rise to a highly lucrative rental, real estate and (informal) land market, making Luanda the most expensive city for expats in the world.45 In this context, the government initiated a series of social and low-income housing projects such as the relocation projects managed by the GOE discussed above. Other rather ad-hoc housing projects included the Nova Vida (New Life) and Aldeia Nova (New Village) project. The first phase of the Nova Vida project was launched in 2001 by the Angolan government through the Ministry of Public Works to meet the housing needs of public servants by building 2.400 houses. The government contracted the South African company Group Five to carry out the work and the Angolan company Imogestin for the management and commercialization of the project. Aldeia Nova started in 2003 in the province of Kwanza Sul as an agro-industrial project developed by the Ministry of Public Works in partnership with the Israeli firm LR Group. The project entailed the construction of kibbutz-like villages to house a total of 600 families of demobilised soldiers. To distribute the output produced in the villages, the government set up the national food distribution network PRESILD (Programa de Reestruturação do Sistema de Logística e de Distribuição de Produtos Essenciais á População) in 2006. Odebrecht was contracted as the company leading the construction, management and import of products of the Nosso Super (Our Super) supermarkets, built throughout the country as a part of this network. 41 Unpublished study on the Zango project by Patrícia Carlos (2005). 42 See Human Rights Watch (2007), They pushed down the houses. Forced evictions and insecure land tenure for Luanda’s urban poor. Also refer to Amnesty International (2003), Mass forced evictions in Luanda. A call for a human rights based housing policy and Amnesty International (2007), Angola: lives in ruins. Forced evictions continue. 43 For a background discussion, refer to Clover (2005) or DW (2005). 44 The government did also create a National Institute for Housing in this year, in order to promote and execute the government’s housing policies (Decree 12/04 of 9 March). 45 To date, the rental and real estate market continue unregulated by Angolan law, perhaps because for many it has provided a very lucrative source of income (eg. houses acquired under government schemes after independence or bought on the private market could now be rented out or sold for multiple times the original price paid). At the time of writing, it was expected that new legislation on urban rental and real estate mediation would be approved in 2011.

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The objective of the Aldeia Nova project, which served as a pilot-project for future replication in other parts of the country, was to ultimately reach food self-sufficiency. The project benefitted from financial support through a revolving oil-backed credit line of US$750 million for public sector operations extended through Luminar Finance Ltd, a ‘leading provider of credit facilities and financing solutions for some of the world’s fastest growing countries’ and part of the LR Group.46 Both projects encountered numerous challenges. For instance, Group Five eventually pulled out of the country after suspected irregularities in the execution of the Nova Vida project.47 The project management company Imogestin was criticized for not being objective in the allocation of houses, while the government complained about having invested in houses that became the object of speculation. Therefore, for the second phase of the project announced in 2006, a Chinese company was contracted and the government raised the prices of the houses, limiting itself to the financing of external infrastructure only. 48 In the case of the Aldeia Nova project, critics point out that the centralized management of the project was never economically viable or sustainable and that the cost of installing each family ($30.000) was disproportionally high.49 Meanwhile, the government has announced the privatization of the Nosso Super supermarkets that are part of the PRESILD chain. In 2006, an official Housing Policy was approved. At the time, with a population of about 15 million people, the government estimated the formal national housing deficit to be around 878.000 houses.50 With a view of guaranteeing the universal right to housing, the policy document identifies the following intentions and needs for intervention: • the improvement of informal settlements (musseques); • the construction of social houses (for the youth and for veterans) and urban rehabilitation; • the creation of new urban spaces; • better management and regulation of the housing supply in the cities; • the implementation of a financial system for housing; • the mobilization of resources for the implementation of the housing policy; • a definition of the responsibility of the government for the implementation of the housing policy on the short, medium and long term.51 A Framework Law on housing was approved by the National Assembly in September 2007, and presented as a means to ‘discipline the unorganized expansion of cities and villages and promote new and dignified spaces for urban housing in accordance with the rules for territorial planning’. To this effect, the Law identified four different housing types: urban or rural houses; social houses; market-rate houses; and self-built houses. It also established the existence of a Housing Fund that was meant for ‘all public, private and cooperative entities that promote the construction of social houses and for citizens in general’.52

46 See Luminar Finance website, http://luminar-finance.com and World Bank (2007), p. 50. 47 Engineering News, Group Five staff under suspicion in Angola corruption case (8 June 2006), see http://www.engineeringnews.co.za/article/group-five-staff-under-suspicion-in-angola-corruptioncase-2006-06-08 48 Jornal de Angola, Projecto Nova Vida abre portas a todos (8 April 2010), see http://jornaldeangola. sapo.ao/20/0/projecto_nova_vida_abre_portas_a_todos 49 Monde Diplomatique, Angola’s kibbutz (11 June 2008), as published by Agence Global. 50 GURN (2006), Programa Geral do Governo para o Biénio 2007-2008, p. 23. Naturally, unofficial estimates are much higher. 51 Resolution 60/6 of 4 September. 52 Law 3/07 of 3 September.

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4.2 One million houses In the run-up to the legislative elections of September 2008, the MPLA announced a plan to build one million houses throughout the country by 2012. This was followed by the identification of over 100.000 hectares of state reserves in nearly all provinces of the country, some to be used by the respective Provincial Governments and some by the GRN.53 After the MPLA won the elections with a 82% majority, the President publicly reiterated the government’s plan on World Habitat day which was held in Luanda in October 2008. At the time, Angola’s housing commitment was officially referred to in the following way: ‘[..] to build new homes and real estate projects in order to achieve the 1 million houses goal, through state initiatives and public-private partnerships [..]’.54 Institutionally, the Ministry of Urbanism and Housing should be the main entity responsible for the execution of this project. However, in the preceding years this Ministry had gone through various changes. Starting as the Ministry of Urbanism and Environment in 2003, it was turned into the Ministry of Urbanism and Housing in 2008 while a separate Ministry of Environment was created.55 Also, as shown above, the Ministry had not been the only entity involved in housing and urban development as the Ministry of Public Works, the GOE, the GRN and public-private partnerships involving provincial administrations such as EDURB also played a role. The Working Group created to elaborate an Executive Housing Programme, was coordinated both by the Minister of Urbanism and Housing and the head of the GRN, which is an indication of the importance of this entity.56 In March 2009, the National Urbanism and Housing Programme for the period 2009-2012 was approved. However, at the time there did not seem to be a budget for the Programme yet as the Resolution, which approved the Programme, called for the Ministries of Economy and Finance to support the conclusion of the provisional budget for the National Housing Programme and a mechanism for the financing of the National Housing System.57 Despite the lack of a defined budget, National as well as Provincial Commissions were established for the implementation of the Housing Programme.58 The National Commission was to be coordinated by the Prime Minister, assisted by the Minister of Urbanism and Housing as well as the head of the GRN. For the technical and administrative execution of the housing programme, the President installed a Technical Central Coordination Group of the Commission, to be coordinated by the Minister of Urbanism and Housing.59 For the financial execution of the 53 Decrees 80-112/08 of 26 September. 54 Government of the Republic of Angola (2008), Programa de Governo 2009-2012, p. 73. 55 Subsequently, after the adoption of a new constitution in February of 2010, the Ministry of Urbanism and Housing and the Ministry of Public Works would be brought together to form the Ministry of Urbanism and Construction. 56 Grupo de Trabalhos para a elaboração do Programa Executivo Habitacional do Governo (Dispatch 27/08 of 4 November). Members included the economic advisors of the President and the Prime Minister and representatives of the Ministries of Planning, Finance, Public Works, Administration of the Territory and the Ministry of Environment 57 Programa Nacional de Urbanismo e Habitação para o período 2009-2012 (Resolution 20/09 of 11 March). 58 Criação Comissão Nacional para a Implementação do Programa Nacional de Urbanismo e Habitação (Dispatch 9/09 of 31 March). members included the Ministers of the Ministries of Public Works, Finance, Administration of the Territory, Interior, Industry, Commerce, Transport, Environment, Media, and Energy, as well as the Secretary of the Council of Ministers, the Secretary of State for Water, the Secretary of State for Rural Development as well as the Economic advisors of the President of the Republic and the Prime Minister. 59 Regulamento Grupo Técnico de Coordenação Central da Comissão para a Implementação do Programa Nacional do Urbanismo e Habitação (Dispatch 7/09 of 14 May). The Commission was

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Housing Programme another Technical Group was appointed, coordinated by the Minister of Finance.60 All in all, over thirty high-ranking officials were involved in the Commissions created on the national level. In April 2009, a National Conference on Housing was held in Luanda, which affirmed the State’s role as ‘a guide, organizer and regulator of the National Urbanism and Housing Programme’.61 However, it now turned out that of the 1 million houses, 685.000 would in fact have to be constructed through ‘self-help building’ (autoconstrução).62 Only 115.000 houses would be constructed by the government, while 120.000 would have to be constructed by the private sector and 80.000 through cooperatives.

China

Parallel to the steps taken as described above, Chinese-funded and GRN-managed projects were entering the stage which enabled plans to take shape for the creation of new cities around Luanda and the country-wide construction of houses (although the Brazilian architect Oscar Niemeyer confirmed also having received an invitation from the Angolan government to develop a proposal for a new capital to house 2 million inhabitants63). To this effect, the President decreed the creation of state reserves for the construction of three new cities within the capital metropolitan region; Dande, Cacuaco and Luanda, as well as an area for state-led self-help building in Capari, all north of the existing capital of Luanda.64 In June 2007, a Memorandum of Understanding was signed by the head of the GRN, General Kopelipa, and the president of the CITIC Group, a Chinese state-owned company, for the construction of the first phase of a social housing project in Luanda’s Kilamba Kiaxi municipality, 20 km south-east of the city centre. Valued at US$3.5 billion, the project is the largest of its kind China has ever contracted abroad.65 In the first phase, starting in April 2008, 409 buildings, 20.000 apartments, as well as kindergartens, primary and secondary schools and water and electricity infrastructures were to be built. The second phase, to kick off in 2012 would be focused on the construction of service related infrastructure such as hospitals, clinics and health centres, banks, fuel stations, police stations, churches, etc. The third phase foresees the construction of a total of 70.000 apartments.66 Other Chinese funded projects were announced during this period of time, including the construction of an ‘Ecological New City project’, in Dundo, located in the province of Lunda Norte with a value of RMB 4.7 billion (about US$ 700 million). According to the company contracted to execute the project, Pan-China, the project ‘integrates the ecological environment and social development’. Occupying an area of 414 km², it foresees the construction of ’28.000 apartments units, a shopping centre, office building, hotels, hospitals, clinics, gyms, attributed a long list of functions and had to report back directly to the President on a monthly basis, starting with a timetable of the activities and its corresponding budget. 60 It is quite mysterious why the (after the elections in 2008 created) Ministry of Economy, previously identified as responsible for concluding the provisional budget, does not feature in any of these Commissions. 61 Conclusions and recommendations of the National Housing Conference (Resolution 77/09 of 7 September). 62 Interestingly, the government had already adopted a Law on state-led self-help building just after independence in 1978, but this law never seems to have been implemented. 63 Macau Hub, Architect Oscar Niemeyer wanted for project in Angola (31 March 2007), see http:// www.macauhub.com.mo/en/news.php?ID=3774 64 Decrees 62-65/07 of 13 August. 65 People’s Daily, Chinese company launches US$3.5 bln housing projects in Angola (2 September 2008), see http://english.people.com.cn/90001/90776/90884/6491378.html Also see CITIC website, www.cici.citic.com 66 Angonotícias, Nova Cidade do Kilamba Kiaxi beneficiará 120 mil pessoas (9 April 2010), see http:// www.angonoticias.com/full_headlines_.php?id=27204

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senior secondary schools, primary schools, kindergartens, outdoor auxiliary infrastructure works, etc.’ 67 Currently, the first phase containing 5.000 apartments is under construction.68 The government also announced projects for the construction of social houses in the district of Camama, in Luanda’s municipality of Kilamba Kiaxi and the upgrading of the municipality of Cazenga. This last project was already projected in 2006 in the list of confidential projects mentioned earlier. This time, financing came from the China Development Bank (CDB). A framework agreement was signed between the CDB and the Angolan government in August 2008 for the extension of a US$1.5 billion credit line directed at the infrastructure sector, as well as agriculture, transport and telecommunications.69 Contracts were subsequently signed with a Chinese consortium including Huaxi Group and Haishan International Construction for the first phase of the construction of houses in Camama. The project was reported to cover the construction of 145.000 houses with an initial investment of about US$174 million.70 The contracts for the upgrading of Cazenga were awarded to the same companies, as well as China Railway Construction Corporation (CRCC), totalling a value of over US$134 million.71 This project envisages the transformation of the densely populated municipality from a ‘suburban to an urban area with dignified services and houses’ and includes the construction of 20.000 houses in the first phase of the project.72 Another agreement was signed between the Angolan government and the Industrial and Commercial Bank of China (ICBC) in 2009. Totalling US$2.5 billion, it is reportedly directed at funding local urban infrastructure development,73 but to date no further details are available as to the disbursement or use of this loan.

Brazil

In September 2009, a resolution was adopted that approved the Nossa Casa (Our Home) project, with a total estimated investment of over US$148 million dollars to be implemented over the period of 2009 to 2010 with resort to the national financial market. This project aimed to make construction material of ‘better material and an acceptable price’ available to the population, in order to facilitate self-help building. The government had pledged that it would seek to make construction material available to all the 685.000 families in both urban as well as rural parts of the country that would have to build their own house for accessible prices. PRESILD, the national food distribution network managed by Odebrecht, was authorized to develop this project.74

67 See Pan-China website, http://202.108.135.136/www/EnglishSite/NewsInfo0002.html and http://202.108.135.136/www/EnglishSite/Pan-ChinaOverseasAGL.html 68 Jornal de Angola, Mais casas são construídas na urbanização do Dundo (7 April 2010). 69 Angop, Governo angolano e Banco de Desenvolvimento da China analisam cooperação (23 September 2008), see http://www.portalangop.co.ao/motix/pt_pt/noticias/economia/Governoangolano-Banco-Desenvolvimento-China-analisam-cooperacao,c3289365-36c6-47dd-b967893f9ec4418e.html 70 Chinaview, Chinese companies start construction of Angola’s housing projects (18 December 2009), see http://news.xinhuanet.com/english/2009-12/18/content_12664180.htm and Macauhub, Chinese consortium to build 145,000 social houses in Angola over two years (18 December 2009), see http:// www.macauhub.com.mo/en/print.php?pageurl=/en/news.php?ID=8630 71 Presidential Decree 161-164/10 of 30 July. 72 Jornal de Angola, Presidente coloca primeira pedra para requalificação do Cazenga (8 November 2010), see http://jornaldeangola.sapo.ao/20/0/presidente_coloca_primeira_pedra_para_ requalificacao_do_cazenga 73 Asian Banker, Interview with Jiang Jianqing, chairman of Industrial and Commercial Bank of China, March 16th, 2010, see http://www.asianbankerpublication.com/A556C5/Update.nsf/0/7D118 499498A3641482576EE0018E786?OpenDocument (published 25 March 2010). 74 Resolution 76/09 of 7 September.

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4.3 Towards meeting the goal? As outlined in the previous sections, from 2006 onwards housing became a part of the government’s national reconstruction agenda and a concrete ambitious goal was set to be reached by 2012. In his end of the year speech of 2009, President dos Santos announced a new era to allow “the tackling of problems that weren’t handled before in the context of earlier phases of consolidation of peace and national reconciliation and national reconstruction”.75 Indeed, a ‘Third Republic’ of Angola came into being with the adoption of a new constitution in February 2010. This Constitution enshrined the right to housing and quality of life (article 85). However, the Constitution also strengthened the position of the President and ruled out earlier announced presidential elections.76 As the global crisis started to hit the country in 2008 through sharply declining oil prices it found itself scrambling for funding. By the beginning of 2009, the impact of the lower prices hit the Treasury with full force and it was around this time that the one million houses goal was reformulated, transforming the majority of the houses to be built ‘through state initiatives and public-private partnerships’ into self-help built houses. Later that year, a US$1.4 billion Stand-by Agreement with the IMF was announced to restore macro-economic balances and rebuild international reserves.77 Just how bad things really were became clear in July 2010, when the Ministry of Finance issued a communiqué on the debt contracted between September 2008 to August 2009 by the Angolan state in the wake of the global financial and economic crisis. It confirmed that the government had accumulated arrears worth US$6.8 billion to companies that had executed projects of Public Investment.78 The amount including the last four months of 2009 reached US$9 billion. To try to deal with this situation the government announced a plan to pay the biggest chunk of the outstanding arrears by August of that year. The government’s most important creditors were Chinese, Brazilian and Portuguese companies.79 Calling for a more rigorous observance of the procedures related to public expenses and overall management of public finances, the Ministry also announced a number of new laws on budget execution and procurement in order to put an end to what it called ‘irregular practices exercised by government institutions as well as companies’.80 In the same period of time, President dos Santos secured new loans from both China and Brazil. In June, he visited his counterpart in Brazil after which a US$1 billion credit line was announced (making Angola the largest beneficiary of Brazil’s Export Trust Fund).81 In November, 75 Portalangop, Íntegra do discurso do Presidente José Eduardo dos Santos, see http://www. portalangop.co.ao/motix/pt_pt/noticias/politica/2009/11/53/Integra-discurso-Presidente-JoseEduardo-dos-Santos,d8280b3f-0a30-4656-91c4-ec75aef3c3c5.html (28-12-09). 76 The new Constitution instated a presidential-parliamentary system. The main changes resulting from this system are related to the position of the President of the Republic and the creation of an Executive Power. The post of Prime Minister has ceased to exist. For the President to exercise the Executive Power, he was initially assisted by a Vice-President and three Ministers of State: one for civil, one for military and one for economic affairs. Meanwhile, in October 2010 by presidential decree the Ministry of State for Economic Coordination has returned to being a regular Ministry and as a consequence the Minister had to step down as Minister of State. 77 IMF, IMF Executive Board approves US$1.4 billion stand-by agreement, Press release 09/425 (23 November 2009), see www.imf.org 78 Government of the Republic of Angola (2010). Memorando. Situação da Regularização dos Atrasados Internos de 2008 e 2009 Respeitantes ao Programa de Investimentos Públicos e seu Impacto Económico (2 July 2010), Paragraph 17. 79 A list of companies that received payments between April and August 2010 for a total value of about US$ 1 billion has been published on the website of the Ministry of Finance. 80 Jornal de Angola, Ministério das Finanças esclarece que dívidas estão a ser pagas (20 July 2010). 81 O País, Crédito de mil milhões de dólares e dez acordos entre Angola e o Brasil (25 June 2010), see

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China’s vice-president visited Angola after the confirmation of a loan of US$500 million as part of a new EXIM Bank package of US$6 billion for infrastructure projects was reported by the press in July.82 What will change in practice to manage these loans in a way as to avoid the recurrence of irregular practices is unclear. However, a notable development is that in September 2010, the President announced the end of the GRN. In May, he had already replaced General Kopelipa with vice-minister of Urbanism and Housing António Teixeira Flor as he had appointed the General Minister of State under the new government created after the adoption of a new Constitution in February. Now he announced that the management and commercialization of the housing projects run by GRN would be transferred to Sonangol Imobiliária (Sonip), a subsidiary of the state oil company that manages its real estate.83 Other infrastructure projects involving roads, railways and the rehabilitation of social infrastructure would be transferred to other relevant entities. In the words of the President, the GRN had exercised “a central and fundamental role in the context of national reconstruction”,84 but apparently now its time was up. In one of the latest government reshuffles, the Minister of Urbanism and Construction José Ferreira was substituted by a former director of the Sonangol subsidiary Sonils (Sonangol Integrated Logistic Services), Fernando Fonseca, in a bid to start “a new era of more responsible and transparent management of the public good”.85 Meanwhile, project announcements and signing ceremonies with construction companies reported by the state press abound. The biggest new project announced so far is the construction of 100.000 houses in all 18 provinces of the country by the Israeli company LR Group, the company involved in the Aldeia Nova project.86 It has been reported that LR would make US$1 billion dollars available to finance the construction of these houses.87 However, some of the early confidence displayed in statements by the former Minister of Urbanism and Housing, José Ferreira, that even more than one million houses were expected to be built by 201288 has worn off. In August 2010, during the last meeting of the National Housing Commission, the Angolan president even admitted that, “the financial crisis had led to the delay of the execution of some programmes”.89 However, concrete public information on the actual progress made on the objectives of the National Urbanism and Housing Programme is extremely hard to come by. It must also be noted that most of the projects, such as the Kilamba Kiaxi project under construction by CITIC, were started before the creation of the Programme. The Kilamba Kiaxi project is presented by the government as a modern, integrated and inclusive project where low as well as middle income families will have access to all social infrastructure and services. In an interview with the director of the National Institute for http://www.opais.net/pt/opais/?id=1929&det=13779&mid= 82 Reuters, China Export-Import Bank lends Angola $500 mln (9 July 2010), see http://af.reuters.com/ article/topNews/idAFJOE6680JK20100709 83 On the workings of Sonangol, refer to Soares de Oliveira (2007). 84 Jornal de Angola, Imobiliária da Sonangol gere novas centralidades (28 September 2010), see http://jornaldeangola.sapo.ao/20/0/imobiliaria_da_sonangol_gere_novas_centralidades 85 Jornal de Angola, Mudanças no Executivo vão dar força à nova era (30 November 2010). 86 Angop, Construtora anunica construção 100 mil casas sociais (19 March 2010), see http://www. portalangop.co.ao/motix/pt_pt/especiais/reconstrucao-nacional/2010/2/11/Construtora-anunciaconstrucao-100-mil-casas-sociais,e5bc104d-78db-44af-bdda-861a69fa692b.html. 87 Interview with former Minister of State for Economic Coordination Manuel Nunes Júnior, ‘Saímos mais fortes da crise’, in magazine Exame (20 September 2009). 88 Jornal de Angola, Vamos eliminar os musseques (6 April 2010). 89 PortalAngop, Íntegra do discurso do Presidente da República (5 August 2010), see http:// www.portalangop.co.ao/motix/pt_pt/noticias/politica/2010/7/31/Integra-discurso-PresidenteRepublica,a66e513f-fff5-4472-b6de-6af444d5e8e5.html

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Housing, the type of construction used for former social housing projects such as Zango is termed “discriminatory” and no longer in line with the government’s objective of “congregating and uniting”. 90 However, at this point it is not clear who is expected to inhabit these houses, how access to the houses will be organized or how citizens will be able to access financing to purchase or rent these units. To date, the Housing Fund created through the Framework Law on housing in 200791 seems empty. According to the government it will be fully functional in 2011, but so far no commercial banks have adhered to it. Informed sources from the private sector do not expect this to happen anytime soon, unless the state would have enough funds of its own to compensate banks for the interest rates of between 8% and 24% they can charge on the open market.92 With regard to self-help building, the government had pledged that it would offer plots of land at low prices, construction material at accessible prices, different kinds of models for construction as well as infrastructure and technical assistance on the ground.

However, so far the following questions remain unanswered: How many plots of land have been allocated and equipped with basic infrastructure for the purpose of self-help building. According to the director of the National Institute for Housing in an interview published in March 2010, the local administrations of a number of provinces had already proceeded with the demarcation and distribution of plots while in other provinces areas were still being demined. However, in Luanda no allotment had taken place yet.93 Indeed, various informants confirmed that because of the demand for land in Luanda plots are generally sold without infrastructure and often informally, without abiding by the official procedures. Also, it was only in July 2010 (around the time of the Ministry of Finance communiqué) that the Ministry of Urbanism and Construction announced the launch of public tenders for the development of the land reserves identified for the execution of the National Housing Programme.94 This raises doubts as to how previously announced contracts and projects have been negotiated.

How construction material will be made available at accessible prices. 700.000 construction kits containing material for self-help housing were announced to be available in February 2010 but ever since, press reports on the kits have slowly disappeared.95 Because of the financial problems of the government it seems that no continuation has been given to this part of the programme.

What the local capacity is to deliver infrastructure and technical assistance on the ground. In fact, the issue of the state’s capacity to deliver infrastructure or the local administrative 90 Jornal de Economia e Finanças, Não haverá especulação na venda de terrenos (17 November 2009). 91 Its financial, functional and organizational structure was defined in 2009 through Decree 54/09 of 28 September. 92 See for a study on housing finance in Angola, Development Workshop (2010), Access to Housing Finance in Africa: exploring the issues. No. 11 Angola. 93 Novo Jornal, Luanda está mais atrasada do que as províncias (19 March 2010). 94 Jornal de Angola, Concurso público para breve (15 July 2010), see http://jornaldeangola.sapo. ao/20/0/concurso_publico_para_breve. 95 Jornal de Angola, Autoconstrução dirigida já tem material (5 Feburary 2010), see http:// jornaldeangola.sapo.ao/14/16/autoconstrucao_dirigida_ja_tem_material

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capacity to manage the allocation, transfer and registration of land rarely features in the government’s housing discourse while this constitutes one of the major obstacles towards realizing its objectives in a sustainable manner. To date, inhabitants of social housing projects built in the first phase of national reconstruction are still deprived from basic services such as electricity and running water. Figures from the first nation-wide survey held since the war from 2008-2009 indicate that as much as 90,9% of the urban population lives in inappropriate conditions, 57,9% of the urban population against 22,8% of the rural population has access to drinking water and little over half of the entire population (59,6%) to basic sanitation.96 Land and property legalization processes remain unclear and bureaucratic, largely due to a lack of local administrative capacity. For instance, only in 2010 did the Provincial Government of Luanda initiate the process of property registration for people that since 2001 had been relocated to social houses in projects located in the municipality of Viana in Luanda.97 In this context, it will be interesting to see how the role of Sonip in the management and commercialization of social housing projects formerly run by GRN will play out. Overall, it seems that the country finds itself at a crossroads. Significant inroads have been made regarding reconstruction, but most of the investment has been geared towards the creation of physical infrastructure. However, as cited earlier, amongst the objectives for Angola’s reconstruction in the first post-war government programme was ‘the combat against hunger and poverty and [...] the improvement of social services, economic infrastructures, the promotion of economic growth and the enhancement of national human resources’. The increased use and reliance on foreign contractors such as China and Brazil means that major opportunities have been missed in building up and creating linkages through the promotion of local industries and the support to national companies, which in other countries represent a fundamental source of employment. The need to change this has started to be mentioned publically by government officials. For instance, during the last meeting of the Ministerial Conference for Economic and Commercial Development between China and Lusophone countries, the Minister of Economy said in relation to the Chinese credit lines that, “as reconstruction advances, it is necessary to introduce readjustments that will make cooperation more efficient [...] and strengthen the benefits for Angolan companies”. With regard to housing, the adoption of legislation and plans such as the National Urbanism and Housing Programme indicates that the government is aware of a need to tackle problems in this area. However, by basing its policies on the aim of ‘disciplining the unorganized expansion of cities and villages and promoting new and dignified spaces for urban housing’, it does not take into account the country’s current realities, capacities or the sustainability of projects resulting from such policies. A fundamental change in the current approach is needed for the government to be able to meet the objectives and legal obligations it has taken upon itself. In this regard, its partners Brazil and China could provide valuable lessons with regard to the management of urban development, based on their experiences with participatory planning or on how to take environmental issues into account. These lessons could present ways for Angola to truly benefit from Brazilian and Chinese engagement in the country’s reconstruction. 96 INE (2010), Inquérito Integrado sobre o Bem-Estar da População 2008-2009. 97 Angop, Governo Luanda garante entrega de novos títulos de direito superfície em um mês (26 August 2010), see http://www.portalangop.co.ao/motix/pt_pt/noticias/sociedade/2010/7/34/Governo-Luandagarante-entrega-novos-titulos-direito-superficie-mes,37aabbe4-906e-4fe4-83a3-9c93f51cf006.html

1 million houses?

Conclusion Angola’s oil resources have given the government an important tool for leverage in managing its post-war development through oil-backed loans. This resulted in significant investments in the country’s physical infrastructure, in which Chinese and Brazilian credit and companies played a fundamental role. However, in the period of 2002 to 2007, the creation of parallel entities such as the GRN to manage confidential projects funded by private entities such as the CIF, obscured the official division of the state’s roles and responsibilities. Overall, the management of national reconstruction projects contributed to a lack of accountability and transparency and coupled with the global economic and financial crisis to the building up of massive debt. With regard to housing, it was only from 2007 onwards that specific policies and programmes came to be adopted. However, as a result of the financial situation of the government, the majority of the one million houses that were initially to be built through ‘state initiatives and public-private partnerships’ under the National Urbanism and Housing Programme 2009-2012 are now earmarked for self-help building. Also, new rules to install a more rigorous management of public finances and the public good were announced as part of the start of ‘a new era’. At the same time, the new Constitution adopted in February 2010 that heralds this era, allows for an increased centralization of power in the presidency. Although the GRN is currently being dismantled, its responsibilities seem to have been passed directly or indirectly to the state oil company, Sonangol, instead of (strengthening) the relevant state institutions. Halfway through the timeline of the Housing Programme, little public information is available on the details of its execution and organization, particularly with regard to self-help housing. Meanwhile, problems related to the state’s administrative, technical and financial capacity to deliver in accordance with the country’s needs and realities have yet to be solved. Crucial in this regard is an improvement in the management of the allocation, transfer and registration of land and access to credit. As oil revenues are expected to increase again and Brazil and China have already confirmed the extension of new loans, new opportunities are presented to the Angolan government. However, if it is serious about meeting its objectives and policies for post-war development and housing and truly benefitting from its partnership with emerging powers like Brazil and China, structural change in the management of national reconstruction is needed.

Bibliography Alves, Ana Cristina (2010). ‘The oil factor in Sino-Angolan relations at the start of the 21st century’, South African Institute of International Affairs. Occasional paper no 55 China in Africa project. Available at http://www.saiia.org.za/occasional-papers/the- oil-factor-in-sino-angolan-relations-at-the-start-of-the-21st-century.html Amnesty International (2003). Angola: Mass forced evictions in Luanda – a call for a human rights based housing policy, AI Index: AFR 12/007/0. Available at http://www.amnesty.org/en/library/info/AFR12/007/2003 Amnesty International (2007). Angola: Lives in ruins. Forced evictions continue, AI Index: AFR 12/001/2007. Available at http://www.amnesty.org/en/library/info/AFR12/001/2007 Cain, Allan (2002). ‘Urban poverty and civic development in post-war Angola’, in Preparing for Peace Workshop on Future Swedish and Norwegian Development Cooperation with Angola, Chr. Michelsen Institute Report R 2002:8.

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Cain, Allan (2004). ‘Livelihoods and the informal economy in post-war Angola’, in Supporting sustainable livelihoods, Pretoria: Institute for Security Studies, pp. 87-101. Carlos, Patrícia (2005). Unpublished study on the Zango project (obtained through DW). Clover, Jenny (2005). ‘Land reform in Angola: establishing the ground rules’ in: Chris Huggins and Jenny Clover (eds), From the ground up: land rights, conflict and peace in Sub-Saharan Africa, African Centre for Technology Studies and the African Security Analysis Programme of the Institute for Security Studies. Cunha, Sílvio Humberto dos Passos (2002). ‘As relações econômicas Brasil-Angola (1975-1988)’, in Caderno CRH, Salvador (36), pp. 137-164. Development Workshop (2001-2010). CEDOC Land and Housing media records archive. Development Workshop (2005). Terra. Reforma sobre a terra urbana em Angola no período pós-guerra: pesquisa, advocacia e políticas de desenvolvimento (Land. Urban land reform in Angola in the post-war era: research, advocacy and development policies), Luanda: DW. Development Workshop (2010). Access to Housing Finance in Africa: exploring the issues. No. 11 Angola, Overview of the housing finance sector in Angola, commissioned by Finmark Trust, Luanda: DW. Foley, Conor (November 2007). Land rights in Angola: poverty and plenty, HPG Working Paper, London: Overseas Development Institute.Foster, Vivian, et. al. (2008), ‘Building bridges: China’s growing role as infrastructure financier for sub-Saharan Africa’, World Bank and Public-Private Infrastructure Advisory Facility. Global Witness (1999). A crude awakening: The role of the oil and banking industries in Angola’s civil war and the plunder of state assets, London: Global Witness. Global Witness (2002). All the president’s men: The devastating story of oil and corruption in Angola privatised war, London: Global Witness. Government of the Republic of Angola (2001-2010). Diário da República. Government of the Republic of Angola (2008). Programa de Governo 2009-2012 Government of the Republic of Angola (2010). Relatório de Fundamentação do OGE 2010 revisto, Luanda: Ministry of Finance. Government of the Republic of Angola (2010). Memorando. Situação da Regularização dos Atrasados Internos de 2008 e 2009 Respeitantes ao Programa de Investimentos Públicos e seu Impacto Económico, Luanda: Ministry of Finance (2 July 2010). GURN (2002), Programa do Governo para o período 2003-2004 GURN (2006), Programa Geral do Governo para o Biénio 2007-2008 Hodges, Anthony (2004). Angola: anatomy of an oil state, Oxford: James Currey. HRW (2001). The oil diagnostic in Angola: an update, Human Rights Watch: New York and London. HRW (2007). They pushed down the houses. Forced evictions and insecure land tenure for Luanda’s urban poor, Human Rights Watch: New York. INE (National Institute of Statistics) (2001). Inquérito de Indicadores Múltiplos 2001 INE (National Institute of Statistics) (2010). Inquérito Integrado sobre o Bem-Estar da População 2008-2009 (IBEP -Integrated Study of the Well-Being of the Population), Luanda: Ministry of Planning. IMF (2002). Angola: Staff Report for the 2002 Article IV Consultation, International Monetary Fund: Washington DC (March). IMF (2003). Angola: Staff report for the 2003 Article IV Consultation, International Monetary Fund: Washington DC (July). Jackson, Steven (1995). ‘China’s Third World Foreign Policy: The case of Angola and Mozambique, 1961-93’ in The China Quarterly 142, pp. 388-422. Jenkins, Paul, Robson, Paul and Cain, Allan (2002). ‘Local responses to globalization and peripheralization in Luanda, Angola’, in: Environment and Urbanization 14 (1), pp. 115-127.

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Levkowitz L, McLellan Ross M and JR Warner, The 88 Queensway Group, US–China Economic and Security Review Commission, 10 July 2009, available at http://www.uscc.gov/The_88_Queensway_Group.pdf Odebrecht Angola, Social Report 2007-2008.Pacheco, Fernando (2006). The role of external development actors in post-conflict scenarios – The case of Angola. Centro de Estudos Sociais (Centre for Social Studies) No. 258. Available at http://www.ces.uc.pt/publicacoes/oficina/258/258.pdf Sita José (2006). ‘Políticas habitacionais. Situação do quadro habitacional em Angola’, in: A juventude face à reconstrução e ao desenvolvimento do país. Anais da IX Jornada Técnico-Científica, Luanda: Fundação Eduardo dos Santos. Soares de Oliveira, Ricardo (2007). ‘Business success, Angola style: postcolonial politics and the rise and rise of Sonangol’ in: Journal of Modern African Studies 45 (4), pp. 595-619. United Nations Development Programme (UNDP) (2004). Human Development Report 2004. Cultural liberty in today’s diverse world. Vines, Alex and Campos, Indira (2008). ‘Angola and China. A pragmatic partnership’, Chatham House, Working paper presented at a CSIS conference “Prospects for improving US-China-Africa relations”, December 5, 2007. Available at http://csis.org/files/media/csis/pubs/080306_angolachina.pdf Vines, Alex, et. al. (2009). ‘Thirst for African oil. Asian national oil companies in Nigeria and Angola’, A Chatham House report. Available at http://www.chathamhouse.org.uk/publications/papers/view/-/id/768/ World Bank (2007). International Development Association Interim Strategy Note for the Republic of Angola. Report No. 39394-AO (April 26, 2007).

Online and printed press: Angop, Angonotícias, Asian Banker, Chinaview, Engineering News, Financial Times, Jornal de Angola, Jornal de Economia e Finanças, Macauhub, Monde Diplomatique, Novo Jornal, O Estado de São Paulo, O País, People’s Daily, Reuters.

Further online sources: Website of the China International Fund, CITIC, IMF, Luminar Finance, Ministry of Finance of the Republic of Angola, Ministry of Foreign Affairs of the Federative Republic of Brazil, PanChina, UN-Habitat, World Bank.

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Annex 1: Non-concessional borrowing by Government of Angola since 2004 Lender and date

Credit limit

Purpose

Terms and Conditions Interest rate

Paid services and commitment commission

Guarantee

Contract of Petroleum supply

LR Luminar Finance Limited, Israel (No date provided)

US$750 millionrevolving

Operations in the public sector

Libor + 1.5%

Management commission (US$10,000 yearly up to the final reimbursement) expenses of preparation and negotiation (US$50,000) Immobilization commissions (0,5% per year, paid quarterly)

Credit Insurance Hermes Germany (No date provided)

Eur 150 million

Public project investment

Euribor + 1,25%

Installation commission Ministry of (1% flat) Management Finance commission (1% flat)

Deutsch Bank, Spain November 2003

US$500 million


Libor + (1% to 5%)

Installation commission Ministry of (1% flat) Management Finance commission (1% flat)

Export Import Bank US$40 million of India August 2004

5 contracts for the supply of equipment for Moçâmedes Railway

1.75%

China EximBank March 2004

US$ 2 billion


Libor 3 months + 1.5%

Management Contract of commission (0.3%) petroleum Installation commission supply

Portugal-Cosec November 2004

Eur 300 million


Euribor + (0.4% to 0.6%)

Managament commission (0.1%)

China Fund 2005

US$ 9.8 billion

Projects managed by government


Management commission 0.3% Immobilization commission 0.3%

Export Import Bank, Korea December 2005

US$ 31.4 million

Rehabiliation project of cotton in Sumbe

0.60%

Management commission (0.10% above each disbursement)

Santander Bank, Spain March 2005

Eur 100 million


Libor 6 months + (1-1.5%)

Management Ministry of commission (0.5% flat) Finance Variable insurance premium Commitment commission (0.25% flat)

Fortis Bank, Spain September 2005

Eur 250 million


Libor 6 months + (0.75-1%)

Management commission (2% flat) Variable risk commitment commission (0.5% flat)

Ministry of Finance

Brasil Proex

US$580 million


Libor

Managament commission (0.5%) Immobilization commission (0.5%)


Brazilian Development Bank 2006

US$ 750 million


Libor + 1%

Management commission 1% Immobilization commission ( 0.5%), to be confirmed


Export Import Bank of India July 2006

US$ 10 million

Acquisition contract of 599 tractors “SAME”


Management commission (0.5% per year) Immobilization commission (0.5% flat)

Ministry of Finance

Source: Ministry of Finance in World Bank (2007), p. 50-51.

Ministry of Finance

Ministry of Finance

Ministry of Finance

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Annex 2: List of contracts signed between the Government of the Republic of Angola and companies of the People’s Republic of China, in the sphere of National Reconstruction Projects

Specification

Rehabilitation of the City of Luanda

Rehabilitation works in the City of Luanda in five municipalities, namely Kilamba Kiaxi, Rangel, Ingombota, Cazenga and Sambizanga

Improvement of the infrastructure of CazengaCariango

Construction of main drainage channels and pipes and infrastructure works in the municipalities of Cazenga-Cariango and related works

Construction of a drainage system and improvement of infrastructure in Precol and Suroca

Construction of main system for the improvement of infrastructure in Suroca and Precol and related works

Construction of drainage system (central) and Construction of the main pipeline system and infrastructure works diversions and improvement works at the Rua Senado at the Rua Senado da Câmara, Rio Seco and Maianga da Câmara, Rio Seco and Maianga Project of piped water distribution and supply

Renovation of 300km of water pipes, 300 stand-points, 2800 valves, 30.000 water meters, 13 pumps and 5 control stations

Construction of 215.000 residences in 24 cities of 18 provinces

Construction of 215.000 housing units with a total construction area of 31.436.709 m²

Rehabilitation of the road Luanda-Sumbe-Lobito

Rehabilitation works on a length of 497km including the reconstruction of the roads, bridges and ditches

Rehabilitation of the roads Malanje-Saurimo and Luena-Dundo

Rehabilitation works on a total length of 1107km including the reconstruction of the roads, bridges and ditches

Rehabilitation of the Luanda Railway Line

Rehabilitation works on a length of 444km, including the reconstruction of roads, bridges, ditches and related installations

General rehabilitation of the Benguela Railway Line

Rehabilitation works on a length of 1547,2km, including the the reconstruction of roads, bridges, ditches and related installations

General rehabilitation of the Moçâmedes Railway Line

Rehabiliation works on a length of 1003,1km, including the reconstruction of roads, bridges, ditches and related installations

New International Airport Luanda

EPC contract, preparation, supply and construction of a new airport including carport, cargo areas and related buildings

Studies and technical projects: Project for the construction of houses

Project for the construction of 215.000 housing units in a total construction area of 31.436.709m²

Infrastructure improvement works

Project for improvement works on five public infrastructures

General and urban planning for the New City of Luanda

General planning for a new city including proposals for urban management and development and planning

General and urban planning for the administrative centre of Luanda

General planning for the administrative centre including ministerial buildings, Supreme Court, Parliament, House of the President, etc.

Landscape project for Luanda

Landscape project for the administrative centre of Luanda

Source: Resolution 61/06 of 4 September

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Comparative African perspectives on the trade relations and practices of transnational telecommunications corporations of China and South Africa in Nigeria Christiana Charles-Iyoha, Centre for Policy and Development (PolDeC)

Acknowledgements Centre for Policy and Development are grateful to Fahamu and Oxfam Novib for funding this study. We also appreciate the confidence you reposed in us coupled with the opportunity to undertake this study and contribute to the existing body of knowledge on China and Nigeria; and South Africa and Nigeria. This study has further enhanced our capacities so we appreciate your contribution to both this study and our capacity enhancement. Also we would like to acknowledge the invaluable contribution received from the interviewees during this period. Their willingness to share information on China and Nigeria as well as Nigeria and South Africa was very commendable. So also are the questionnaire respondents who willingly and patiently filled out the questionnaires administered. Their contributions alongside data sourced from other secondary sources formed a major part of this study. We also express our profound gratitude to the Trustees and staff of PolDeC who stood by us to ensure this project was concluded in record time. Finally and most importantly, we are grateful to God for His mercies upon us all throughout the duration of this activity.

Abbreviations BNC South Africa Nigeria Bi-National Commission CCECC China Civil Engineering Construction Corporation CGWIC China Great Wall Industry Corp CSR Corporate Social Responsibility Huawei Huawei Technologies Co., Ltd. ICASA Independent Communications Authority of South Africa ILO International Labour Organisation IOD In-orbit delivery NCC Nigeria Communications Commission NigComSat Ltd Nigerian Communication Satellite Ltd. NITDA Nigeria Information Technology Development Agency NITEL Nigeria Telecommunications Ltd NLC Nigeria Labour Congress PolDeC Centre for Policy and Development TVC Television Continental WACS West Africa Cable System ZTE Zhongxing Telecommunications Equipment Corporation

Executive Summary This study, a comparative analysis on the trade relations, investment and corporate social responsibility (CSR) practices of Chinese and South African transnational corporations (TNCs) in Nigeria attempted a sector-wide look coupled with a comparative African perspective towards investments of both China and South Africa in Nigeria.

practices of transnational telecommunications

The study traced the advent of the exponential growth in volume of trade between Nigeria and the two countries in question to the last decade when new bilateral ties were introduced. The inauguration of the South Africa Nigeria Bi-National Commission (BNC) in 1999 coupled with the plethora of bilateral economic agreements with China opened the floodgate of a steady flow of strategic foreign direct investments from China and South Africa culminating in Nigeria becoming an investment destination for foreign direct investments (FDIs) from China and South Africa. Particularly interesting and emphatic to this study are the array of investments in the telecommunications sector from both China and South Africa in Nigeria. Fuelled by both the liberalisation of the sector and the conducive bilateral economic environment, it has been a progressive take over of the sector in both services provision and equipment manufacturing and vendoring. Findings for this study are based on interviews with trade advocates, government officials, staff of some of the telecommunications transnational corporations operating in Nigeria, quantitative and qualitative data sourced from one thousand questionnaires administered in sampled communities in the six geo-political zones of Nigeria and Abuja. Lagos State was assigned a lump share of the questionnaires on account of population size and the fact that the state is a microcosm of Nigeria. Additional qualitative and quantitative data was sourced from secondary data such as newspaper reports, publications, seminar papers and on-line resources from a number of websites. The study concludes by noting that the increasing volume of trade between Nigeria and China, and South Africa and Nigeria on the other hand is skewed in favour of China and South Africa as South African TNCs have the lead market share in Nigeria. Secondly, there is a progressive inflow of their nationals in Nigeria. On the other hand, Nigerians and Nigerian businesses do not receive the same treatment in these countries. A case in point is the MainOne Cable Company that was repeatedly denied landing licenses by the Independent Communications Authority of South Africa, (ICASA). Apart from MainOne, the South African authorities have also been accused of blocking other potential Nigerian investors due to its policy of taking majority stakes in any foreign company that expresses interest to invest in the country. Additionally, the TNCs have not only contributed to the development of the telecommunications sector but to the overall development of Nigeria through their various CSR initiatives. Albeit in small measures these CSR initiatives could grow if Nigeria takes a pro development negotiating position based on enhanced negotiation capacity and a willingness to drive development through trade.

Introduction In the October 2010 edition of Stand Up Nigeria, a monthly comedy show featuring several Nigerian comedians on Television Continental (TVC), a Nigerian comedian by the name Bash joked that China wants to take over Nigeria. He noted that China has a town inside Nigeria. Additionally, the Chinese are dominating the Nigerian music sector considering that a popular Nigerian musician goes by the name African China. He also commented on the influx of cheap phones that sell for two thousand Nigerian Naira in Nigerian markets. These phones have all sorts of gadgets ranging from cameras, blue tooth, television and television antennae and in some cases, 3G functions. However, the lifespan of these phones are short. The comedian concluded on the note that China was about producing one stop refrigerators with air conditioners and warned people to be careful in patronising such products.1 This may be a joke but to a large extent speaks to the depth of Chinese business penetration in Nigeria. Practically every geographical area of Nigeria as well as economic sector is host to

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formal and informal businesses in about every sector; owned by the Chinese and managed by the Chinese in Nigeria at the micro, medium and macro levels. According to Professor E. Olawale Ogunkola, although Nigeria and China established diplomatic ties in 1972, the floodgates of Chinese investments into Nigeria were not released until the last decade. Diplomatic visits between the leaders of both countries culminated in a plethora of bilateral economic agreements in several sectors of the economy such as agricultural development, infrastructure development, tourism, culture, education as well as activities in the extractive industry. 2 This was reiterated at the opening ceremony of the first Lekki Construction Machinery Exhibition at Lekki in Lagos. The Chinese Ambassador to Nigeria Mr. Deng Boqing informed stakeholders and other people present at the event that the value of trade between Nigeria and China attained a new peak of $3.67bn in the first half of 2010. He noted that Nigeria is China’s second largest trading partner in the world, and that exports from Nigeria to China stood at $702m at the end of June 2010. He further explained that the $3.67bn total value not only indicated a rise of 41.8 per cent over the 2009 figures (when the world experienced the global financial crisis) but was also higher than the previous peak value of $7.2bn recorded for the entire pre-global financial crisis era of 2008. According to him, the $702m export value figure represents an increase of 324 per cent over the corresponding figure of $7.2m recorded in 2009 after being on the rise for two consecutive years. Boqing also added that the Beijing Summit on China Africa Cooperation resulted in Nigeria and China agreeing to establish and develop the Lekki Free Zone in 2006, adding that to date it had attracted over 60 Chinese companies that have invested in the zone.3 China Civil Engineering Construction Corporation (CCECC) is involved in a number of civil construction projects in Nigeria at the federal and state levels. CCECC won the $529 million contract to rehabilitate the Nigerian railway system in 1995, and was awarded a tender to build 5,000 housing units for athletes participating in the eighth annual All-Africa Games in Abuja.4 CCECC also built the Nigeria Communications headquarters building5 in Abuja and is presently working on the proposed rail track on the new Lagos Badagry Expressway that connects Nigeria and the Republic of Benin6 as well as the Lekki Free Trade Zone7 in Lagos. Similar to patterns of Chinese investments in other African nations, Chinese TNCs are also involved in the extractive industry, in the case of Nigeria, crude oil as in Angola and Sudan; and mining of minerals as in Zambia and the Democratic Republic of Congo. Small-scale Chinese investments litter the informal sector with ‘Chinatowns’ becoming a significant landmark in major Nigerian cities like Lagos and Kano. Additionally, Nigeria imports a wide array of manufactured goods ranging from electronics, textiles, clothing items, jewellery, household appliances, shoes, hair extensions, wigs and toys from China.

Nigeria and South Africa South Africa and Nigeria established formal diplomatic relations on 21 February 1994. In 1998, the Olusegun Obasanjo administration in Nigeria and the Thabo Mbeki administration in South Africa strengthened the relationship with the inauguration of the Bi-National Commission (BNC) between both countries8. The volume of trade between Nigeria and South Africa is also experiencing geometric progression with a leap from $16.5 million (about N2.4 billion) in 1999 to over $2.1billion (about N315 billion) in 2009 in favour of South Africa9. For instance the number of South African companies operating in Nigeria are far in excess of the Nigerian firms operating in South Africa. Close to a hundred South African companies,


including leading telecommunications giant MTN, MultiLinks/Telkom, Clickatel, Broll, West Africa Cable System (WACS), Multi-Choice and power company Eskom, are operating in Nigeria. Unlike the Chinese whose main interest is oil and the huge market Nigeria has for its manufactured goods and services, the South Africans came in primarily to invest in a market large enough for goods and services. Also, the growth in the trade volume has been attributed to the establishment of the South Africa-Nigeria Bi-national Commission. However, the emphasis here is on in the telecommunications sector. To say that Nigeria’s telecommunications landscape is awash with Chinese investments is an understatement. In the formal telecommunications sector, three Chinese telecommunications giants; China Great Wall Industry Corp (CGWIC), Huawei Technologies Ltd (Huawei) and Zhongxing Telecommunications Equipment Corporation (ZTE) dominate at the federal level with a number of signed memorandum of understandings between the federal government of Nigeria and the Chinese government in the deployment of rural telephony services, upgrade of NITEL’s services, technical aid centre and surveillance infrastructure and training. In Akwa Ibom state, two Chinese firms, China Electronics Corporation and China Jinshilin Techno, signed on to handsets manufacturing in the state government owned Akwa Ibom Science Park managed by Ibom Science Park Company Limited10. Visibly present and in control of the telecommunications services sector, South Africa’s MTN Nigeria controls about 50% of mobile telephony services in Nigeria11 while MultiChoice Nigeria has over five hundred thousand subscribers12. Only recently, West Africa Cable System, a South African promoted submarine cable was granted a landing license by the NCC. The reverse was however the case when MainOne Cable Company was repeatedly denied a landing licence by (ICASA) 13. MultiLinks/Telkom is in the big league in Nigeria. India, a long term trading partner of Nigeria has only recently joined China and South Africa in this money spinning sector of the Nigerian economy through Bharti Airtel Limited that acquired Zain Africa in June 2010. Not much can be said now about Airtel Nigeria, the name by which the company operates in Nigeria. It is however significant to note that India entered the sector big as Zain, now Airtel is one of the top three mobile telephony and data services providers in Nigeria.

Methodology A strategy meeting was held to ascertain the volume of trade between China and Nigeria as well as South Africa and Nigeria. Additionally, the strategy meeting ascertained the number of Chinese and South African transnational firms in Nigeria with emphasis placed on the telecommunications sector. Findings from this study are based on interviews with trade advocates, government officials, staff of some of the telecommunications transnational corporations operating in Nigeria, quantitative and qualitative data sourced from one thousand questionnaires administered in sampled communities in the six geo-political zones of Nigeria and Abuja. Lagos State was assigned a lump share of the questionnaires on account of population size and the fact that the state is a microcosm of Nigeria. Of the one thousand questionnaires administered, nine hundred and fifty four were returned. Some questionnaires were not fully completed, a factor responsible for missing data in the analysis. Additional qualitative and quantitative data was sourced from secondary data such as newspaper reports, publications, seminar papers and on-line resources from a number of websites. A total of twelve people were interviewed either by email, phone or in person. While email interviews were structured, the phone interviews were both structured and semi-structured. Oral interviews on the other hand took on structured, semi structured and non-structured formats. This is because each response dovetailed to fresh ideas and therefore fresh questions

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came up. The questionnaires were administered in sampled communities in Lagos State, Port Harcourt in Rivers State, Umuahia in Abia State, Sokoto in Sokoto State and Abuja. The questionnaires were developed to assess the investment practices (in terms of quality of services provisioning as well as voice, MMS, SMS, and data tariffs) and corporate social responsibility practices of the South African telecommunications giants - MTN Nigeria, Multi Choice Nigeria and Multilinks/Telkom. The questionnaires took the form of a series of questions and statements with which respondents were asked to agree/disagree/strongly agree/strongly disagree etc. In some instances, respondents were assisted in filling out the questionnaires. Data was analysed using Statistics Package for Social Sciences (SPSS)17, a tool used for statistical analysis. The descriptive statistics give accurate and explicit data collected. The statistical instruments used in the package to analyse are Mean, Standard Error, Range, Variance and Standard Deviation. These instruments were used to analyse the questions of corporate social responsibility (CSR), service delivery and tariffs. The total number of questionnaires administered was 1000 for MTN Nigeria, Multilinks/Telkom and Multichoice Nigeria. The key question analysed below shows a box that contains the data and the bar chart gives a pictorial description of the analysis.

Findings Three of China’s Transnational Telecommunications Firms, China Great Wall Industry Corp (CGWIC), Zhongxing Telecommunications Equipment Corporation (ZTE) and Huawei operate in Nigeria. While Huawei and ZTE have physical offices and personnel in Abuja, Lagos and a number of other Nigerian cities, CGWIC operates in China where the firm both produces the satellites and launches them into orbit.

China’s Transnational Telecommunications Firms China Great Wall Industry Corp (CGWIC) established in 1980 it is a state-owned hardware manufacturer and the sole organization authorized by the Chinese Government to provide satellite in-orbit delivery (IOD) services, commercial launch services and aerospace technology applications. As the platform for international cooperation for China’s aerospace industry, CGWIC is engaged in the internationalized development of China’s aerospace industry. In 2005, CGWIC won a $311 million contract from the Nigerian government to manufacture and launch the NigComSat-1 communications satellite. China supported the Nigerian government’s purchase with a $200 million credit facility from EXIM Bank of China and in May 2007, the NigcomSat1 was launched. Unfortunately, NigcomSat1 was reportedly lost in orbit and attracted quite some controversies as to whether it actually went missing in orbit or was parked somewhere on account of technical challenges associated with the solar panel. Nevertheless, the Nigerian Federal Ministry of Science and Technology, Nigerian Communication Satellite Ltd. (NigComSat Ltd.) and CGWIC signed a contract in Beijing for the IOD of NigComSat-1R satellite on March 24, 2009. NigComSat-1R is based on the DFH-4 satellite platform developed by China Academy of Space Technology (CAST). Fitted with a total of 28 transponders (8 Ka-band, 14 Ku-band, 4 C-band and 2 L-band), the satellite will be positioned at a longitude of 42.5°E over the equator, and will have a design life span of 15 years. It will replace the NigComSat-1, which failed in orbit in November 2008 due to solar array anomaly. The contract stipulates that NigComSat-1R will be launched in the fourth quarter of 2011 from Xichang Satellite Launch Center (XSLC) on LM-3B/E launch vehicle14.


Huawei, a leader in providing next generation telecommunications network solutions for operators around the world established operations in Nigeria in 1999. A key player in the Nigerian telecommunications market, Huawei introduced Next Generation telecommunications technology to Nigeria in November 2004. Huawei, a strategic partner of MTN Nigeria uses its EnerG GSM solution to enhance network coverage; support the dual-band BTS of 900/1800 MHz co-site deployment and half rate technologies to increase system capacity of MTN Nigeria. At one time Huawei was also V-mobile’s (now Airtel) mainstream equipment vendor. In 2004, Huawei migrated Starcomms’ IN and SMS system to enable Starcomms to grow its subscribers’ base from less than 80, 000 to 200,000, an increase of more than 200%. In August 2006, Multi-Links chose Huawei to deploy its industry-leading BTS and core network softswitch and install a CDMA2000 1X network in Lagos, Abuja, PHC, Kano, Ibadan, and Kaduna in order to provide reliable networking capabilities for the benefits of its customers. Visafone which first launched its services on 22nd February 2008 also contracted Huawei to deliver the 3G CDMA 1X/ EV-DO solution, which enabled Visafone to grow its active subscribers to 800, 000 in less than five months15. Huawei is also a vendor to Globacom, Nigeria’s second national carrier.16 Additionally, Huawei provides and maintains the closed circuit television used by the Nigeria Information Technology Development Agency (NITDA)17. Huawei also signed a memorandum of understanding with the Federal government of Nigeria to deploy telecommunications services in rural areas. The US$ 200 million memorandum of understanding towards the Phase II rural telephone network was signed in April 200518 between President Hu Jintao of China and President Olusegun Obasanjo of Nigeria while on a state visit to China.19 ZTE is China’s largest listed telecommunications equipment manufacturer and wireless solutions provider specialising in offering customised network solutions for telecom carriers worldwide. The company develops and manufactures telecommunications equipment for fixed, mobile, data and optical networks, intelligent networks and next generation networks. ZTE cornered the following juicy contracts in Nigeria: • The first phase of the national rural telephony to bring a rural network to 110 local government regions in Nigeria was awarded to ZTE Corporation, Huawei and ASB Fixed. • Phase II of the National Rural Telephony Programme (NRTP) worth US$95 million that involves deploying over 250,000 lines covering 138 cities in the twelve states of northern Nigeria using CDMA2000 1xEV-DO technology to enable high speed voice and data communication. • Establish a handset manufacturing facility and an exhibition and training centre in Abuja, the Nigerian capital, to train local telecommunications employees as part of the agreement20. A $470 million (N70.5 billion) contract to mount a security communication network in Nigeria. The project, billed to build the National Public Security Communication System on GoTa (Global Open Trunking Architecture) would cover the 36 capital cities in Nigeria and the Federal Capital Territory, Abuja. The project would also provide 100,000 terminals, including GoTa terminal, fixed wireless terminal, data card and normal handsets, training of more than 50 police officers (to introduce e-police system that would enable staff of the Nigerian Police to receive and send emails from any location in the country, using email/push mail system and mobile mail system), and more than 30 engineers to operate the system. The GoTa system involves wireless video surveillance services, six surveillance centres will be built in 12 zones of Nigeria with 2000 wireless digital cameras installed21.

35

36


Transnational Telecommunications Firms of South Africa MTN Nigeria is part of MTN Group, Africa’s leading cellular telecommunications company. With coverage in all thirty six states and Abuja, and a subscriber base of about 30.8 million, Nigeria’s largest mobile operator has also increased its market share in the country to 49.6%.22 Multilinks/Telkom: Telkom acquired a 75% majority stake in MultiLinks for $410 million in 2007. Multi-Links became a wholly owned subsidiary of Telkom SA in January 2009 and have since invested substantial sums of money in expanding network coverage. MultiLinks, was licensed by the Nigerian Communications Commission (NCC) to operate and provide telecommunications services deploying CDMA (Fixed Wireless) technology. It commenced operations on the 8th of December 1997 as the pioneer operator in the deregulated telecommunications industry in Nigeria. In May 2006, the company was licensed by the NCC to provide and operate Unified Access Service in Nigeria. Its scope of operations was thereby expanded to include provision of Digital Mobile Services, Fixed Telephony Services, International Data Access Services and National Long Distance Services, an indigenous telecommunications firm.23 MultiLinks/Telkom has an extensive reach in Nigeria with services in Lagos, Port Harcourt, Abuja, Kaduna, Kano, Katsina, Lokoja, Owo, Ondo, Zaria, Abaji, Suleja, Akure, Akwanga, Warri, Sapele, Bauchi, Benin, Jos, Jere, Abeokuta, Ejigbo, Gbongan, Ibadan, Ijebu-Ode, Ikire, Ile-Ife Ilesha, Ilorin, Ogbomosho, Okene, Osogbo and Sagamu. Famous for its voice, internet and data services, MultiLinks/Telkom once won the best Nigerian Fixed Telecom Operator24. MultiChoice Nigeria is a joint venture with MultiChoice Africa, chaired by Adewunmi Ogunsanya. 25

Trade Relations Dr. Jonathan Aremu, Consultant to ECOWAS on Common Investments Market as well as President/Chairman of Council to the Institute of Financial and Investment Analysts, Nigeria postulates that China’s trade relations with Nigeria is a tripartite one. China trades with Nigeria at the multilateral level through the World Trade Organization (WTO), at the bilateral trade level through various memorandum of understanding in different sectors of the economy and through the China/Africa trade agreements26. South Africa on the other hand invests in Nigeria on a bilateral level and has since the inauguration of the South Africa Nigeria Bi-National Commission expanded trade relations with Nigeria27. South Africa also imports crude oil from Nigeria.

Investment Practices In the words of Dr. Aremu, the investment practices of the Chinese telecommunications TNCs is the new economic scramble for Africa with the intent to not only further exploit the natural resources of Africa but also commit Africa to the use of their supposedly low cost technologies and equipment that sometimes come in the form of equipment donation with the ultimate goal of being completely tethered to their telecommunications firms. Dr. Aremu also cautioned on the use of such technologies and equipment that come free or are highly subsidized, as users would eventually pay the real values of such technologies and equipment in the long run28. Prof Alaba Ogunsanwo further reiterates the views of Dr. Aremu in his assertion that though China emphasizes economic cooperation and a political non-interventionist policy, the objective of all such economic cooperation is an enabling environment for accessing natural resources at little or no cost for their industries back home and also the required platform for selling their goods and services, if not outright dumping. He further explained that the Chinese TNCs simply replicate existing labour practices in Nigeria which explains why they are casualising


and contracting staff in Nigeria.29 Also lending voice to this viewpoint is Professor Ogunkola of the University of Ibadan, Nigeria. Ogunkola posits that Chinese investments in African countries including Nigeria are concentrated in sectors strategic to China’s interests and in the case of Nigeria, in the extractive industries where Chinese firms have invested billions of dollars. Additionally, China’s investments are carried out largely by state-owned enterprises or joint ventures with subsequent FDIs accompanied by Chinese workers, and large amounts of supplies sourced directly from China. He however noted that this is not universally the case. In response to complaints by Nigeria and South Africa, the Chinese Ministry of Commerce encouraged its companies to increase investment spending in developing countries, aiding technology development and personnel training. Similarly and specifically, in response to complaints by Nigeria’s Minister of Science and Technology, Huawei Technologies Nigeria Limited, a Chinese FDI has established a training centre in Nigeria to train 2000 telecoms engineers per annum. Ogunkola further asserts that Chinese investment financing in African countries including Nigeria is offered with a relatively large grant element coupled with the fact that investment loans are offered without conditionalities. Nevertheless, the Chinese do not fail to extract extremely generous terms for its investment outside its resource seeking activities. For example, Nigeria offered incentives including no expatriate quota, full repatriation of capital and profits in addition to other generous incentives that may minimize benefits of Chinese FDI in Nigeria such as employment and foreign exchange conservation30. In the case of TNCs from South Africa, the major reason for investing in Nigeria is the quest for new markets within Africa beyond Southern Africa and Nigeria with its teeming population fit the picture. Secondly, the telecommunications TNCs took advantage of both the absence of such services and the quest for FDIs by the Obasanjo regime. MTN Nigeria in less than five years of operations in Nigeria was posting profits that attracted VODACOM to the market. However, VODACOM beat a hasty retreat after the take over of ECONET Wireless and made a return in the bid for NITEL. Investment practices are tilted more in favour of profits than accessing natural resources for home consumption in South Africa. Also, the TNCs are privately owned and in some instances enter into joint ventures with Nigerian stakeholders as in the case of MTN Nigeria and MultiChoice Nigeria. The primary motive is therefore profit. This explains why their TNCs invest in infrastructure development, human capacity building, quality services provisioning and targeted visible community development projects that endear them to their subscribers. MTN paid $285m for one of four GSM licenses in Nigeria in January 2001 and has since then invested over US$1.8 billion in building mobile telecommunications infrastructure in Nigeria. MTN has steadily deployed its services across Nigeria. MTN is also taking advantage of its coverage in the 36 states and Abuja to extend rural telephony services to 850 villages across Nigeria. MTN is investing $40 million US dollars into this project31. It is however significant to note that MTN Nigeria alongside ECONET Wireless of Zimbabwe refused to introduce per second billing. Fierce competition from GLOBACOM, an indigenous mobile telephony services operator eventually forced both operators to introduce per second billing. Even at that, subscribers were charged for migrating them from per minute billing to per second billing. That was then. Nigerian subscribers are wiser and have learnt to mobilize against high tariffs. Telkom acquired MultiLinks for $410 million in 2007 with a 75% acquisition and has since then invested substantial sums of money in expanding network coverage32. MultiChoice on the other hand claims to have invested more than N13 billion (US$100 million) in Nigerian content since entering the market in 1994. Other areas of investment include the direct employment of over 300 Nigerians to deliver products and services, and other indirect jobs along the value chain, including providing employment for more than 1

37

38


000 Nigerians through their Enterprise Development initiatives. Doctors’ Quarters in 2005, the first Nigerian drama series premiered to DStv audiences, Big Brother Nigeria (2006), which set records in the Nigerian TV industry as the first homegrown reality program screened 24 hours daily to a continental audience on DStv, Edge of Paradise in 2006, game shows Temptation Nigeria, Deal or No Deal Nigeria and the popular talk show Moments with Mo; a new Nigerian drama series focussed on the glamour and power of Nollywood, Tinsel, debuted in 2008. These are in addition to the airing of Nigerian movies on the famous Africamagic channel.33

Corporate Social Responsibility Activities The corporate social responsibility terrain in Nigeria is beleaguered with a chequered history of what form corporate social responsibility (CSR) activities should adopt. This is a fall out of the oil producing communities’ protest against government and oil multinationals in the extractive industry. Though the multinationals claim some form of CSR in these communities, indigenous people and other development stakeholders consider CSR activities mere tokenism in comparison to the irreversible damage oil exploitation has done to their farmlands and waters. This is further heightened by the gaping lack of basic social services provisioning in the oil communities. Secondly, major CSR initiatives are targeted at filling in the gaps of basic socio-services provisioning such as water bore holes, school buildings, scholarships, community power generating sets, community health/maternity centres left out by government. However, some of these initiatives also get hijacked by local contractors. CSR in Nigeria is therefore assumed to be and specifically targeted at basic social services provisioning and in some cases economic empowerment through micro credit schemes. This is further reinforced by the Nigerian government’s attempt to legislate on CSR, requesting that companies operating in Nigeria commit 3.5% of their gross profits for CSR activities. The bill is currently under discussion at the National Assembly. 34

Chinese TNCs Chinese CSR initiatives in Africa, Nigeria inclusive, are characterized by equipment giveaways and Overseas Development Assistance (ODA) through infrastructure development. For instance, Huawei’s donation of modern digital equipment (worth about USD2.7 million) to enhance fibre optic wide band transmission on the NITEL network, and increase as well as improve voice and data traffic along the Lagos, Enugu and Port Harcourt route culminated in the inauguration of a Dense Wave Division Multiplexing (DWDM) project by NITEL. This helped to boost NITEL’s transmission capacity. Significantly, this gift came a few months after China and Nigeria signed a memorandum of mutual cooperation and understanding on the development of telecom infrastructure. Though regarded as an incentive, Zeng Yong, DWDM Project Manager at Huawei’s Nigerian office, says that the donation is to “solve the problem that there is not enough bandwidth on backbone network.” “As an important and reliable partner of NITEL’s,” Huawei want to help the incumbent operator become a successful player in the industry with sustainable growth. However, he also stated that it was Huawei’s way of expressing appreciation to NITEL for awarding them a previous contract to build 250,000 digital lines through Lagos, which is projected to generate n1.5 Billion a month. 35 In August 2004, Huawei invested USD 7 million to establish a multi-product training centre in the Capital of Nigeria and has trained over 150 professionals for Nigeria.36 Also when Nigeria hosted the Africa preparatory committee meeting to World Telecommunications Development Conference in June 2005, Huawei demonstrated businesses friendship by sponsoring one of the dinner events of the conference at the NICON Hilton hotel, Abuja. 37


South African Telecommunications TNCs The South Africans probably took advantage of Nigeria’s experiences with privately and government owned MNCs in the extractive industry and decided to play safe by integrating easy to be seen, yet publicly acclaimed, CSR initiatives. This perhaps explains the numerous awards to MTN Nigeria on account of its CSR initiatives in Nigeria. MTN Nigeria administers its CSR projects through the MTN Foundation (MTNF) that partners with other organisations. Initiatives in health referred to as the Medical Support Project are in partnership with existing public health institutions: • haemodialysis centres at the General Hospital, Onitsha, Anambra State, University Teaching Hospital, Ado-Ekiti; Ekiti State and Benue State University Teaching Hospital, in Makurdi, Benue State. • six state-of-the-art mammography centres in government-owned hospitals, in the six geopolitical zones of the country, to enable women screen their breasts for cancer.38 • The Learning about Living project to help inform and engage young people in Nigeria on issues around sexual health, HIV and AIDS, maternal morbidity and gender violence. A partnership with OneWorld UK, key Nigerian health NGOs and Butterfly Works in the Netherlands.39 • MTN’s medical assistance to The Ademola Aminu family in the form of corrective heart surgery in India to one of their twin babies40 The education and infrastructure component of MTN’s CSR includes: • The Universities Connect project that provides digital libraries for the Universities of Lagos, Ahmadu Bello Zaria, Nigeria, Nsukka and Benin. • The School Connect project that has provided digital libraries to public schools in Lagos, Kaduna , Enugu, Rivers , Kwara and Abuja, the federal capital territory. Other beneficiaries include Bauchi, Cross Rivers, Ogun, Imo, Niger and Ekiti. • The Science and Technology Scholarship Scheme that has already provided scholarships to 500 students in tertiary institutions across the country. The beneficiaries each receive N200, 000 every year until they graduate. • The Economic Empowerment Portfolio incorporates a partnership with the Lady Mechanic Initiative (LMI) to rehabilitate and empower disadvantaged young women by providing them with skills in the auto care industry. • The MILK F.L.O.W (Fulanis Living Optimally Willingly) empowers nomadic cattle rearers in Plateau, Bauchi and Kaduna States, through the sale of improved quality and quantity of milk. With an enhanced and steady source of income, the cattle rearers will adopt an increasingly sedentary lifestyle willingly, which will facilitate their access to education, healthcare and other much needed amenities. A direct partnership with a private sector organisation, Integrated Dairy Farms (IDF) provides the cattle rearers with equipment and expertise in cross breeding techniques and animal husbandry as well as veterinary drugs. In addition to this, cattle rearer co-operatives are provided with Friesian bulls for breeding to foster enhanced milk production. The partnership with IDF ensures that there will be a ready market for the milk produced by the cattle rearers. • The MTNF Habitat for Humanity Low Cost Housing Project addresses poverty and homelessness through the provision of simple, decent and affordable houses to low-income earners. MTNF in collaboration with HFH partners built 100 housing units. • Committed to building 600 low cost housing units in blocks of 100 units each in the six geo-political zones, which will be sold to Nigerians in the low income bracket through a mortgage. 41

39

40


• Multi-Links Telkom donated the sum of N6 million for the building of classroom blocks in two rural communities in Osun State to the State Governor, Prince Olagunsoye Oyinlola in April 2009.42 Multi-Links Telkom also donated medical equipment valued at about N6 million to the Paediatrics Department of the University of Ilorin Teaching Hospital CSR: Multilinks Telkom donates medical equipment to UITH43 MultiChoice’s corporate social responsibility spans the education sector (centred around the NEPAD e-schools demonstration project); the health sector (support to the Sickle Cell Foundation) and the continued inclusion of local content from Nigeria’s movie industry in its bouquets. In complying with The Adopt a School initiative introduced by the Lagos state government, MultiChoice adopted a school in the Ikorodu division of Lagos and have pledged $175,000 to the school. MultiChoice Nigeria collaborated with the Sickle Cell Foundation of Nigeria, a non governmental and non-profit making organisation dedicated to the care and control of Sickle Cell Disorder in Nigeria to film short clips of anaemic sufferers discussing the disorder and the impact it has on their lives for airing on terrestrial television. The goal is to broaden the reach of the message for the introduction and coordination of services relevant to the management and control of the disorder. Additionally, MultiChoice Nigeria donated a Toyota Avanza car to the Foundation as well as a complete DStv package for the Surulere centre in Lagos. The one hundred and eighty one MultiChoice Resource Centres in schools across the country that provide input into education through the depth and breadth of DStvs educational and documentary programming and the valuable skills sharing initiatives aimed at building skills in the Nigerian film industry, provide training to some of the Nigerian industry’s most promising stars and investments in training to equip the interns with multi-camera, studiobased drama skills for the projects M-Net is producing in Nigeria.44


Data Analysis MTN Descriptive Statistics N

Range

Minimum

Maximum

Mean

Std. Deviation Variance

Statistic

Statistic

Statistic

Statistic

Statistic

Std. Error

Statistic

Statistic

Age

548

3.00

1.00

4.00

1.7719

.02925

.68476

.469

Sex

481

1.00

1.00

2.00

1.4324

.02261

.49593

.246

Marital

373

4.00

1.00

5.00

1.5710

.03192

.61646

.380

Location

551

4.00

1.00

5.00

2.9347

.03686

.86513

.748

How many MTN lines do you own?

537

21.00

1.00

22.00

1.1322

.04133

.95770

.917

Why do you own more than one?

43

4.00

1.00

5.00

3.0233

.18674

1.22452

1.499

How would you rate MTN Nigeria’s services?

545

2.00

1.00

3.00

2.0899

.02468

.57617

.332

How would you rate MTN’s intra tariffs for calls (within the network)?

543

2.00

1.00

3.00

1.6924

.03148

.73354

.538

How would you rate MTN’s inter tariffs for calls (to other networks)?

545

2.00

1.00

3.00

2.1872

.03527

.82349

.678

How would you rate MTN’s intra tariffs for SMS and MMS?

546

2.00

1.00

3.00

1.4597

.02885

.67405

.454

How would you rate MTN’s inter tariffs for SMS and MMS?

540

20.00

1.00

21.00

1.8685

.04854

1.12788

1.272

How would you rate MTN’s tariffs for data services?

520

2.00

1.00

3.00

1.8346

.03579

.81623

.666

Have you ever participated in any of MTN’s promos?

522

2.00

1.00

3.00

1.9310

.01143

.26110

.068

Please state which one

32

5.00

1.00

6.00

3.9688

.32838

1.85758

3.451

Did you win any prize?

37

1.00

1.00

2.00

1.8378

.06143

.37368

.140

What did you win?

8

4.00

1.00

5.00

2.6250

.65295

1.84681

3.411

How would you rate MTN’s corporate social responsibilities services in Nigeria?

539

2.00

1.00

3.00

2.0742

.02252

.52277

0.27

Are you a beneficiary of MTN’s CSR?

466

1.00

1.00

2.00

1.9678

.00819

.17669

.031

Which one?

7

2.00

2.00

4.00

2.2857

.28571

.75593

.571

Would you discontinue the use of your MTN SIM or data card for any reason?

526

2.00

1.00

3.00

1.8593

.01841

.42221

.178

Valid N (listwise)

0

41

42


1. Respondents age The respondents of the age group 30-49 have the highest frequency of 293 and a percentage of 51.4%. This implies that this age group are in the working class, therefore economically strong to maintain their MTN lines. The age group of 15-29 are young adults that are either in school or are just starting their careers. They are not economically buoyant to maintain their lines since they are economically dependent. The age group of 50-69 and 70 and above are senior citizens, which means the GSM lines are not a top priority for them.

Age

Valid

Missing

15-29

Frequency

Percent

Valid Percent

Cumulative Percent

195

34.2

35.6

35.6

30-49

293

51.4

53.5

89.1

50-69

50

8.8

9.1

98.2

70 /above

10

1.8

1.8

100.0

Total

548

96.1

100.0

System

22

3.9

570

100.0

Total

How would you rate MTN’s intra tariffs for calls (within the network)?

Valid

Missing Total

Modest

Frequency

Percent

Valid Percent

Cumulative Percent

255

44.7

47.0

47.0

High

200

35.1

36.8

83.8

Very High

88

15.4

16.2

100.0

100.0

Total

543

95.3

System

27

4.7

570

100


2. Respondents rating of MTN Nigeria services MTN Nigeria’s services are rated ‘Good’ with 360 respondents and a percentage of 63.2%. 117 respondents rated MTN services ‘Excellent’ amounting to 20.5%. This implies that services are impressive and reliable.

How would you rate MTN’s intra tariffs for SMS and MMS?

Valid

Missing

Total

Frequency

Percent

Valid Percent

Cumulative Percent

Modest

351

61.6

64.3

64.3

High

139

24.4

25.5

89.7

Very High

56

9.8

10.3

100.0

Total

546

95.8

100.0

System

24

4.2

570

100

43

44


3. Respondents rating of MTN’s intra-tariffs for calls A number of 255 respondents rated intra-tariffs calls ‘Modest’ giving a percentage of 44.7% while 200 respondents rated intra-tariff calls ‘High’ giving 35.1%. The difference between the respondents that rated ‘Modest’ and ‘High’ is as a result of services such as MTN Prolink, MTN Happylink, MTN Bizlink, MTN Smartlink, MTNXtra cool and MTNXtraconnect. These services have different tariff rates within the network.

4. Respondents rating of MTN inter-tarrif calls The inter-tariff calls is rated ‘Very High’ 245 respondents and a percentage of 43.0%. This means a call from MTN to other networks is expensive. The respondents that rated ‘High’ and ‘Modest’ are 27.5% and 25.1% respectively. How would you rate MTN’s inter tariffs for calls (to other networks)?

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Modest

143

25.1

26.2

26.2

High

157

27.5

28.8

55.0

Very High

245

43.0

45.0

100.0

Total

545

95.6

100.0

System

25

4.4

570

100.0


5. Respondents rating of MTN intra-tariffs for SMS and MMS 351 respondents rated intra-tariff for SMS and MMS ‘Modest’ giving a percentage of 61.6%. The implication is that SMS and MMS within the network are affordable to subscribers. How would you rate MTN’s intra tariffs for SMS and MMS?

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Modest

351

61.6

64.3

64.3

High

139

24.4

25.5

89.7

Very High

56

9.8

10.3

100.0

Total

546

95.8

100.0

System

24

4.2

570

100

45

46


6. Respondents rating of MTN inter-tariff for SMS and MMS The inter-tariff rates for SMS and MMS from MTN to other network is relatively cheap. It was rated ‘Modest’ with 212 respondents and a percentage of 37.2%. While 205 respondents rated it ‘High’ 36.0%. The difference between ‘Modest and ‘High is about 1.2%, there is almost an equilibrium, which is seen in the bar chart below. This means that SMS and MMS rates from MTN to other networks is dependent on the network being sent to. How would you rate MTN’s inter tariffs for SMS and MMS?

Valid

Missing

Frequency

Percent

Valid Percent

Cumulative Percent

Modest

212

37.2

39.3

39.3

High

205

36.0

38.0

77.2

Very High

122

21.4

22.6

99.8

21.00

1

.2

.2

100

Total

540

94.7

100.0

System

30

5.3

570

100.0

Total

7. Respondents rating of MTN tariffs for data services The data services of MTN was rated ‘Modest’ with 223 respondents and a percentage 39.1%. In comparison to respondents that rated ‘Modest’, respondents that rated it ‘High’ and ‘Very High’ were 160 and 13 respectively. This implies that MTN data services in terms of tariff is on the average and services are relatively reliable. How would you rate MTN’s tariffs for data services? Frequency Valid

Missing Total

Percent

Valid Percent

Cumulative Percent

Modest

223

39.1

42.9

42.9

High

160

28.1

30.8

73.7 100.0

Very High

137

24.0

26.3

Total

520

91.2

100.0

System

50

8.8

570

100.0


8. Rating of MTN corporate social responsibilities The corporate social responsibilities services of MTN is rated good with a large number of respondents of 389 of 570, with a percentage of 68.2%. This means that the CSR activities of MTN are recognized and fill some basic social vacuum. How would you rate MTN’s corporate social responsibilities services in Nigeria? Valid

Missing

Frequency

Percent

Valid Percent

Cumulative Percent

poor

55

9.6

10.2

10.2

Good

389

68.2

72.2

82.4

Excellent

95

16.7

17.6

100.0

Total

539

94.6

100.0

System

31

5.4

570

100.0

Total

9. Rating of beneficiaries of MTN’s CSR A total number of 451 respondents giving a percentage 79.1% rated MTN CSR ‘Good’. Though MTN’s CSR is recognized and their activities are applauded, there are a huge number of people who are not beneficiaries of their CSR. The number of respondents of 15 and percentage of 2.6% are beneficiaries from the five states where this questionnaire was administered. Are you a beneficiary of MTN’s CSR?

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Yes

15

2.6

3.2

3.2

No

451

79.1

96.8

100.0

Total

466

81.8

100.0

System

104

18.2

570

100.0

47

48



10. Respondents who would want to discontinue MTN SIM and data card About 422 respondents with a percentage of 74.0% would continue the use of their MTN SIM and data card services. This is on account of the services the respondents enjoy. Though 2.6% respondents state a probability of discontinuing, 5.6% of respondents say they will discontinue. Would you discontinue the use of your MTN SIM or data card for any reason?

Valid

Missing

Frequency

Percent

Valid Percent

Cumulative Percent

Yes

89

15.6

16.9

16.9

No

422

74.0

80.2

97.1

Probably

15

2.6

2.9

100.0

Total

526

92.3

100.0

System

44

7.7

49

50


Data Analysis MULTILINKS/TELKOM Descriptive Statistics N

Minimum

Maximum

Mean

Std. Deviation

Age

78

1.00

3.00

1.7821

.47393

Sex

77

1.00

2.00

1.4675

.50222

Marital

30

1.00

3.00

1.4000

.56324

Location

78

3.00

3.00

3.0000

.00000

How many multilinks/telkom lines do you have?

75

1.00

2.00

1.0133

.11547

Why do you own more than one?

1

2.00

2.00

2.0000

.

How would you rate Multilinks/Telkom services?

76

1.00

3.00

2.0526

.32227

How would you rate Multilinks/Telkom intra tariffs for calls(within the network)?

78

1.00

3.00

1.0897

.32973

How would you rate inter tariffs for calls (within the network)?

78

1.00

3.00

1.2564

.54501

How would you rate Multilinks/Telkom intra tariffs for SMS and MMS?

77

1.00

3.00

1.1429

.42035

How would you rate Multilinks/Telkom inter tariffs for SMS and MMS?

76

1.00

3.00

1.2237

.50593

How would you rate Multlinks/Telkom tariffs for data services?

77

1.00

3.00

1.1169

.42840

Have you participated in any of Multilinks/Telkom promos?

75

1.00

3.00

1.9600

.25680

Please state which one?

4

1.00

1.00

1.0000

.00000

Did you win any prize?

3

1.00

1.00

1.0000

.00000

What did you win?

2

1.00

1.00

1.0000

.00000

How would you rate Multilinks/Telkom corporate social responsiblities services in Nigeria?

77

1.00

3.00

1.9870

.30321

2.00

2.00

2.0000

0

1.00

2.00

1.9730

.16327

Are you a beneficiary of Multilinks/Telkom CSR?

73

Which one?

0

Would you discontinue the use of your Multilinks/Telkom line or data card for any reason?

74

Valid N (listwise)

0

1. Age of Respondents. The age group of 20-30 are the highest respondents who subscribe to DStv; its percentage is 41.2%. This is followed by the age group 31-40 with a percentage of 38.8%. This means that the two age groups are more inclined to DStv services and enjoy them. In comparison to them age 41-50/60 and above scored 9.5% and 1.0%, implying that they are less interested in DStv services; except for a few preferences. Age Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

20-30

121

41.2

45.5

45.5

31-40

114

38.8

42.9

88.3

41-50

28

9.5

10.5

98.9

60 and above

3

1.0

1.1

100.0

Total

266

90.5

100.0

System

28

9.5

294

100.0


51

52


2. Respondents rating of DStv channels watched often A substantial number of respondents, 69 with a percentage of 23.5% watch AfricaMagic while 59 respondents with a percentage of 20.1%. watch Supersport. The bar chart gives a clear pictorial view of the channels the respondents watch often. State the DSTV channels you watch often?

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

African Magic

69

23.5

27.7

27.7

African Magic Plus

1

.3

.4

28.1

African Magic Yoruba

1

.3

.4

28.5

Animal Planet

4

1.4

1.6

30.1

Al jazeera

6

2.0

2.4

32.5

BBC

9

3.1

3.6

36.1

Channel O

1

.3

.4

36.5

CNN

37

12.6

14.9

51.4

Crime & Investigation

1

.3

.4

51.8

Discovery channel

4

1.4

1.6

53.4

Discovery world

1

.3

.4

53.8

E- Entertainment

7

2.4

2.8

56.6

ESPN

2

.7

.8

57.4

Fashion TV

1

.3

.4

57.8

History Channel

3

1.0

1.2

59.0

MTV Base

5

1.7

2.0

61.0

MNET Series

6

2.0

2.4

63.5

National Geographic Channel

3

1.0

1.2

64.7

NN24

2

.7

.8

65.5

Supersports

59

20.1

23.7

89.2

Style Network

1

.3

.4

89.6

TBN

8

2.7

3.2

92.8

Zone Reality

3

1.0

1.2

94.0

MITV

1

.3

.4

94.4

Universal Channel

1

.3

.4

94.8

AIT

1

.3

.4

95.2 100.0

Others

12

4.1

4.8

Total

249

84.7

100.0

System

45

15.3

294

100.0


3. Respondents rate why they watch these channels There are various reasons why respondents watch these channels. A percentage of 25.2% and a frequency of 74 watch the channels for entertainment purposes. A frequency of 55 with a percentage of 18.7% watch for educational reasons. The other reasons are for sports, personal preference, news, religion, and commercial purposes. Why these channels? Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Entertainment

74

25.2

31.4

31.4

Sports

37

12.6

15.7

47.0

News

28

9.5

11.9

58.9

Religion

2

.7

.8

59.7

Education

55

18.7

23.3

83.1

Commercial purposes

2

.7

.8

83.9

Preference

37

12.6

15.7

99.6

16.00

1

.3

.4

100.0

Total

236

80.3

100.0

System

58

19.7

294

100.0

53

54


4. Respondents rating of benefits derived from DStv services Respondents say the benefits they derive from DStv are ‘Access to timely information’ with a frequency of 121 and a percentage of 41.2%. This is followed by ‘Program content’ with a percentage of 17.7%. Other benefits they derive are as follows, ’24 hours service’, ‘Clear view’ and ‘Commercial services’ What benefits do you derive

Valid

Missing Total

Access to timely information

Frequency

Percent

Valid Percent

Cumulative Percent

121

41.2

50.2

50.2

Program content

52

17.7

21.6

71.8

Clear view

16

5.4

6.6

78.4

24 hour services

49

16.7

20.3

98.8

Commercial services

3

1.0

1.2

100.0

100.0

Total

241

82.0

System

53

18.0

294

100.0


5. Respondents rating of DStv Subscription The respondents generally affirmed that DStv subscription is ‘Very Expensive’ with a frequency of 96. This is followed by other respondents rating it as ‘Expensive’ with a frequency of 90 and other respondents rating it as ‘Moderate’ with a percentage of 24.5%. Rate DSTV subscription

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Expensive

90

30.6

34.6

34.6

Very Expensive

96

32.7

36.9

71.5

Moderate

72

24.5

27.7

99.2

4.00

1

.3

.4

99.6

5.00

1

.3

.4

100.0

Total

260

88.4

100.0

System

34

11.6

294

100.0

55

56


6. Respondents rating of DStv services The services of DStv are rated ‘Excellent’ by a frequency of 122 out of 294 respondents. While 109 respondents rate it ‘Good’, 29 respondents rate their services ‘Average’ and 2 respondents rate it ‘Poor’. This implies that services are excellent and subscribers enjoy the quality. How would you rate their services?

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Good

109

37.1

41.3

41.3

Excellent

122

41.5

46.2

87.5

Average

29

9.9

11.0

98.5

Poor

2

.7

.8

99.2 100.0

5.00

2

.7

.8

Total

264

89.8

100.0

System

30

10.2

294

100.0


7. Respondents rating of DStv corporate social responsibility While 2.4% respondents are aware of DStv CSR activities, 84.4% respondents are not aware.

Are you aware of any corporate social responsibilities services? Valid

Missing

Yes

Frequency

Percent

Valid Percent

Cumulative Percent

7

2.4

2.7

2.7 100.0

No

248

84.4

97.3

Total

255

86.7

100.0

System

39

13.3

294

100.0

Total

8. Responses as to discontinue DStv services for another alternative The percentage of respondents that will not discontinue DStv services for another alternative is 68.0% with a frequency of 200. While a percentage of 17.9% state they will discontinue. A percentage of 0.7% is on the probability stance. This evidently means that service is good and there is no strong alternative that can match DStv. Will you discontinue for another alternative? Frequency Valid

Missing Total

Percent

Valid Percent

Cumulative Percent

Yes

52

17.7

20.5

20.5

No

200

68.0

78.7

99.2

Probably

2

.7

.8

100.0

Total

254

86.4

100.0

System

40

13.6

294

100.0

57

58


Conclusion While similarities may exist in terms of trade relations, there is a great deal of difference in investment practices. China has a reputation of providing services, infrastructure and equipment as well as supposedly soft loans ahead of the full take off of the investment. These loans however also cost the host economy a good deal of natural resources. Nigeria is a case in point as well as Angola and Sudan. An emerging worrisome trend is that projects are either half completed, abandoned, or delivered below standard. The rehabilitation of the Nigeria railways, the failed NigcomSat1 and, the closure of the multi million dollar ZTE’s handset factory in Abuja45, coupled with the fact that rather than manufacture, the plant was assembling, alongside the casualization of staff, and the national rural telephony projects that the federal government has contracted to private telephone operators46. All of these projects cost Nigeria huge sums of money in loans for access to natural resources that civil society and other development stakeholders are not querying. It is particularly worrisome because of China’s non-interventionist stance that ultimately excludes room for queries, monitoring and evaluation of project performance and loans repayment monitoring. The question that begs to be answered is, is China in any way entrenching corruption that the West had said no to in Africa at the expense of access to much needed natural resources in China? Angola and Sudan are glaring case studies in addition to Nigeria. Labour practices also suggest investment for access to natural resources and not necessarily job creation, human capacity development, genuine infrastructure development and technology transfer. According to Hauwa Mustapha and Mr. Denja Yaqub of the Nigeria Labour Congress (NLC), ‘China is notorious on labour rights. They are against International Labour organization (ILO) conventions. They further posit on the need for caution and restraint when Nigeria signs bilateral agreements with China. On the part of the NLC, they explained that NLC tried to help MTN Nigeria staff in establishing a trade union but the attempt was not successful, as there seemed to be an unwritten code that forbids unionisation in MTN Nigeria. Speaking on casualisation and contract staff, both Hauwa and Denja opined that both China and South Africa’s TNCs are guilty of this. They concluded on the note that these practices do not foster investment.47 However, China is a major trading partner of Nigeria and will continue to invest in Nigeria for major reasons. • Nigeria is home to and has an abundant supply of crude oil, a much needed raw material in China. • China’s concessionary soft loans and ODA for infrastructure development offered to Nigeria and other African countries for access to much needed natural resources is an irresistible incentive by Nigeria and other Africa nations that are China’s trade partners.For example in the case of the NigComSat-1 contract, China was the only nation to make a bid on time, in budget, and up to the Nigerian government’s desired standards in addition to providing the loan for the purchase. • Nigeria’s population size is a huge market for manufactured goods from China. Additionally, the present economic challenges accommodate cheap and substandard imports from China for the low-income group. • In separate interviews with Engr. Titi Omo-Ettu48, Prof. Ogunsanwo49, Dr. Aremu50, a recurring decimal is the point that Nigeria usually negotiates for short term benefits and two possible reasons account for this. The personal gains in office factor and the need for a project, an infrastructure to speak for the person’s tenure irrespective of the quality,


relevance and sustainability of such projects and infrastructure. They are however of the opinion that trained and competent negotiators committed to Nigeria’s development be included in government’s negotiating teams in order to get the best deals for Nigeria. • China’s non-interventionist political approach appeals to not only the Nigerian polity but the general African polity who want to be in control and not tethered to the dictates of Washington et al. • The influx of Chinese firms in Nigeria and other African countries where China trades provides employment to the teeming population of the unemployed in Africa. Mr. Deng Boqing said that over 40,000 Nigerians worked in Chinese business communities, with some in senior management positions, adding that it had been a great contribution to the economy of Nigeria. Additionally, in the words of Oma Cobham Nsa51, Nigerians work albeit as shop assistants in Chinatown and the numerous Chinese owned shops across the country. South Africa is also committed to long-term investment in Nigeria and is working hard at improving areas of contention such as the very humiliating process of getting visas at the South Africa High Commission. Additionally, the manner in which Nigerian nationals and businesses are treated is an issue of concern that has been raised at high governmental levels with South Africa pledging to ease out the bottlenecks associated with these issues. While bilateral relations have yielded enormous benefits for South African entrepreneurs with investments in Nigeria, there are little or no opportunities for Nigerians to do real business in South Africa. A strong case making the rounds in the telecommunications sector is the repeated refusal of ICASA to grant MainOne a landing licence when its South African equivalent WACS got a similar licence from NCC. Significantly, MTN is one of the members of the WACS52 consortium while its close rival in the Nigerian telecommunications sector, Globacom owns substantial stakes in MainOne. In terms of corporate social responsibility activities that are more grass root oriented, South African TNCs, MTN Nigeria in particular through the MTN Foundation have more to offer Nigerians than the Chinese TNCs. While MTN Nigeria impacts directly by providing essential services such as the MTN rural telephony project, the pro-poor housing project, the medical support initiatives and indirectly through such promotional programs as who wants to be a millionaire, MTN West Africa Project Fame and the MTN Family Game, the Chinese TNCs on the other hand may argue that they provide the equipment support that makes the South African TNCs functional therefore they are also socially responsible. Therefore for Nigeria and other African partners of China to derive maximum benefits from this asymmetrical economic romance, African governments and negotiators need to take full advantage of the opportunities offered when the bilateral agreements are being discussed by insisting on key development infrastructure into the agreements before they are signed. Also when negotiating with them, Chief Eddie Ugbomah advised that patience and evaluation of long-term benefits is required to get the best deal. Citing the instance of negotiating royalties to be paid to producers of Nigerian films, Ugbomah recalled ‘we plumped for $2, 500 per film but Multichoice refused. Mind you, they were paying $4, 000 for films from East African countries. We felt we were undervalued and we made ourselves clear on that issue’. Expectedly, negotiations stalled between Multichoice and Nollywood. But other less patient members went behind and negotiated a new deal that left Nigerians producers poorer by $1, 000, but richer in terms of mileage. The contractual agreement stipulated that $1, 500 was to be paid for each Nigerian film shown on Multichoice’s popular channel, Africa Magic, a channel devoted entirely to anything Africa, especially cultural. Ugbomah however did not relent in advocating increased royalties and perhaps because of his loud and incessant complaints in the media Multichoice has since upped the royalties to Nollywood. Now they pay upwards of N200, 000 for each film screened by Africa Magic.53

59

60


Recommendations • Re-evaluate all projects and infrastructure implemented under existing MOUs at the WTO level, China/Nigeria bilateral economic agreements level and the Africa China levels. • Negotiate technology transfer that should be implemented at all costs into all trade agreements with partners. For instance, major deals like the satellite purchase from China, Huawei, ZTE and Alcaltel Shangahi’s rural telephony contracts should have contained strong enforceable statements on technology transfers. • Nigeria should commence an urgent negotiating capacity enhancement program that takes full cognizance of the country’s short term, mid term and long term appropriate, relevant development needs and challenges for all categories of economic agreements negotiators. • Develop and maintain a pool of seasoned economic agreement negotiators who understand specific country and specific trade agreement terrain as well as the immediate and longterm development needs of the people of Nigeria. • Develop and maintain a pool of seasoned development and infrastructure project monitors who can ignore any incentives to turn the other way when monitoring projects for real development needs and not personal gains. • Policy and project consistency should be maintained. Agreements should not be discarded and projects abandoned when a successor takes over. Rather, such policies and projects should be re-evaluated for completion if the need actually arises. • Speedily balance the trade between Nigeria and China • Intensify security at border posts to ascertain what comes into Nigeria from China and what goes to China from Nigeria. • Additionally, Nigeria should take advantage of the most favoured nation treaties in its economic relations with WTO member states and other trade bodies.

Challenges A major challenge was accessing the relevant officials to interview coupled with accessing information from officials and staff of the following organisations: Huawei, MTN Nigeria and ZTE, Nigeria Communications Commission, the South Africa Nigeria Bi-National Commission and the Chinese embassy in Lagos. Huawei and ZTE insisted on letters that would be vetted from China before they could talk to any representative of PolDeC. Also, the fact that civil servants in Nigeria are as a rule not allowed to make public comments affected how much information we could source from government officials at low and middle level cadres. Funding constraint also restricted PolDeC’s staff from being on ground in communities outside of Lagos State. A major challenge was working with field staff who also could not interpret the questions and therefore had to be trained, albeit informally.

Appendix Questionnaire Centre for Policy and Development (PolDeC) is a non-profit, non-political and non-governmental development organization committed to promoting focused and appropriate development through advocating for effective and implementable development policies and initiatives. PolDeC in conjunction with FAHAMU is implementing a project on the trade relations,


investment practices and corporate social responsibility practices of China and South Africa’s telecommunications transnational corporations in Nigeria. Please note that information received would be treated with confidentiality.

Please Provide Answers to the Following Questions 1. Age Bracket :

15 – 29 30 – 49 50 – 69 70 and above

2. Sex: Male

Female

Transgender

3. Marital Status: Single Married Separated

Divorced

4. Location: 5. How many Multilinks/Telkom lines do you own? 6. Why do you own more than one? 7. How would you rate Multilinks/Telkom service? Poor Good Excellent 8. How would you rate Multilinks/Telkom intra tariffs for calls (within the network) Modest High Very high 9. How would you rate Multilinks/Telkom inter tariffs for calls (to other networks) Modest High Very high 10. How would rate Multilinks/Telkom intra-tariffs for SMS and MMS? Modest High Very high 11. How would you rate Multilinks/Telkom inter tariffs fro SMS and MMS? Modest High Very high 12. How would you rate Multilinks/Telkom tariffs for data services? Modest High Very high 13. Have you ever participated in any of Multilinks/Telkom promos? 14. Please, state which one? 15. Did you win any prize? 16. What did you win? 17. How would you rate Multilinks/Telkom corporate social responsibilities services in Nigeria? Poor Good Excellent 18. Are you a beneficiary of Multilinks/Telkom CSR? 19. Which one? 20. Would you discontinue the use of your Multilinks/Telkom line or data card for any reason?

Questionnaire Centre for Policy and Development (PolDeC) is a non-profit, non-political and non-governmental development organization committed to promoting focused and appropriate development through advocating for effective and implementable development policies and initiatives. PolDeC in conjunction with FAHAMU is implementing a project on the trade relations, investment practices and corporate social responsibility practices of China and South Africa’s telecommunications transnational corporations in Nigeria. Please note that information received would be treated with confidentiality.


20 - 30 31 – 40 41 – 50 60 and above

2. Sex: Male

Female

Transgender

3. Marital Status: Single Married Separated 4. Location:

Divorced

61

62


5. Do you subscribe to Multichoice DStv?

Yes No

6. Rank the following reasons for subscribing to DStv Agree

Strongly Agree

Disagree

Strongly disagree

Entertainment Sports News Religion Education

7. State the DStv channels you watch often? 8. Why these channels? 9. What benefits do you derive from DStv services? a:Access to timely information b: Program content d: 24 hours services e: Commercial purposes

c: Clear view

10. Rate the DStv subscription fees? Expensive Very expensive Moderate 11. What challenges have you encountered so far with using DStv services? 12.

a: inconsistent subscription on account of financial constraints b: inconsistent subscription on account of free content from other cable stations c: No free stations d: No credit facilities e: Power failure f: Low literacy levels in navigating channels with the remote control g: slow response to faulty equipment

13. How would you rate their services? Good Excellent

Average

Poor

14. Have you benefitted from any DStv promotional ? Yes No 15. If yes, which one? 16. Are you aware of any of their corporate social responsibilities services? Yes No 17. If yes, which one? 18. Will you discontinue for another alternative? Yes No

Questionnaire Centre for Policy and Development (PolDeC) is a non-profit, non-political and non-governmental development organization committed to promoting focused and appropriate development through advocating for effective and implementable development policies and initiatives. PolDeC in conjunction with FAHAMU is implementing a project on the trade relations, investment practices and corporate social responsibility practices of China and South Africa’s telecommunications transnational corporations in Nigeria. Please note that information received would be treated with confidentiality.


15 – 29 30 – 49 50 – 69 70 and above

2. Sex: Male

Female

Transgender

3. Marital Status: Single Married Separated 4. Location:

Divorced


5. How many MTN lines do you own? 6. Why do you own more than one? 7. How would you rate MTN Nigeria’s service? Poor Good Excellent 8. How would you rate MTN’s intra tariffs for calls (within the network) Modest High Very high 9. How would you rate MTN’s inter tariffs for calls (to other networks) Modest High Very high 10. How would rate MTN’s intra-tariffs for SMS and MMS? Modest High Very high 11. How would you rate MTN’s inter tariffs fro SMS and MMS? Modest High Very high 12. How would you rate MTN’s tariffs for data services? Modest High Very high 13. Have you ever participated in any of MTN’s promos? 14. Please, state which one? 15. Did you win any prize? 16. What did you win? 17. How would you rate MTN’s corporate social responsibilities services in Nigeria? Poor Good Excellent 18. Are you a beneficiary of MTN’s CSR? 19. Which one? 20. Would you discontinue the use of your MTN SIM or data card for any reason?

References 1. October 2010 edition of Stand Up Nigeria, a monthly comedy show featuring several Nigerian comedians on Television Continental (TVC) 2. Ogunkola E. O. (2008) Nigeria-China Trade and Economic Relations Centre For Trade & Development Initiatives, University of Ibadan, Ibadan, NIGERIA 3. Onyeche Emmanuel Friday, 3 Dec 2010 ‘Nigeria, China trade volume hits $3.67bn in six months ‘ http://www.punchng.com/Articl.aspx?theartic=Art201012031564198accessed on Friday 4 December 2010 4. Mthembu-Salter G (2009) Elephants, Ants and Superpowers: Nigeria’s Relations with China , OCCASIONAL PAPER NO 42 , China in Africa Project , by The South African Institute of International Affairs (SAIIA) 5. ‘New Corporate Headquarters Commissioned by President Obasanjo’, NIGERIAN COMMUNICATIONS COMMISSION Newsletter November/December 2006 6. Rasheed Bisiriyu Nov 12, 2010 FUNDS, ROAD CONSTRUCTION MAY DELAY $3BN LAGOS LIGHT RAIL – INVESTIGATION http://www.nigerianbestforum.com/ generaltopics/?p=74533 7. Onyeche Emmanuel Friday, 3 Dec 2010 ‘Nigeria, China trade volume hits $3.67bn in six months ‘ http://www.punchng.com/Articl.aspx?theartic=Art201012031564198 accessed on Friday 4 Dec 2010 8. South Africa, Nigeria Bi-National Commission: A scorecard Thursday, 12 November 2009 23:00 Nigerian Compass 9. Envoy lauds Dangote’s investment in South Africa’s cement firm http:// thenationonlineng.net/web3/business/industry/19178.html 18/11/2010 00:00:00

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64


10. A ragba-Akpore Sonny Akwa Ibom, Chinese firms in ultra low cost handset deals http://www.guardiannewsngr.com/compulife/article01 11. www.huawei.com accessed on Thursday, September 9, 2010 12. Interview with Mr. Segun Fayose of MultiChoice Nigeria on 13. P rince Osuagwu Dec 21, 2009 Between ICASA, NCC in African telecom devt http:// www.vanguardngr.com/category/technology/mobile-week-with-gsm/ 14. w ww.cgwic.com/In-OrbitDelivery/CommunicationsSatellite/Program/NigComSat-1R. html accessed on September 9, 2010 15. www.huawei.com accessed on September 9 2010 16. Interview with Mr. Charles Ikoabasi of Globacom on 7 September 2010 17. Interview with Dr. Moses Ubaru of NITDA on 7 September 2010 18. L .Chinedu Arizona-Ogwu ‘Rural Telephone Project: A Workpiece In Pieces http:// www.nigeriansinamerica.com/articles/2329/1/Rural-Telephone-Project-A-WorkpieceIn-Pieces/Page1.html accessed on 9 September 2010 19. http://market.huawei.com/hwgg/focac/social.html 20. h ttp://wwwen.zte.com.cn/en/press_center/news/200505/t20050510_156267.html accessed on 9 September 2010 21. I dowu Samuel :tribune http://www.cn-c114.net/575/a548350.html accessed 2 December 2010 22. T radeInvest Nigeria Staff Fri, 12 Mar 2010 10:40 MTN increases market share to 49.6% http://www.tradeinvestnigeria.com/news/439631.html accessed on 3 December 2010 23. http://www.multilinks.com/aboutus.html accessed 2 December 2010 24. IT & Telecom Digest, Vol 083, November 2008, pg 35 25. http://www.multichoice.co.za 2 September 2010 26. Interview with Dr. Jonathan Aremu on 8 October 2010 27. I nterview with a Nigerian Official of the South Africa, Nigeria Bi-National Commission on 2 September 2010, and South Africa, Nigeria Bi-National Commission : A scorecard Thursday, 12 November2009 23:00 Nigerian Compass 28. Interview with Dr. Jonathan Aremu on 8 October 2010 29. Interview with Professor Alaba Ogunsanwo 30. Ogunkola E. O. (2008) Nigeria-China Trade and Economic Relations Centre For Trade & Development Initiatives, University of Ibadan, Ibadan, NIGERIA 31. http://www.mtnonline.com/index.php/about.html 32. http://www.multilinks.com/aboutus.html 33. http://www.multichoice.co.za 34. Chandranayagam Daniel, Nigeria Legislating CSR,March 2, 2009 35.

http://www.csrdigest.com/2009/03/nigeria-legislating-csr/

36. T he great African telecoms equipment giveaway - who stands to benefit?Issue no 242 http://www.balancingact-africa.com/news/en/issue-no-242/top-story/the-great-africantelecoms-equipment-giveaway-who-stands-to-benefit 37. www.huawei.com accessed on September 9 2010 38. C hristiana Charles-Iyoha who facilitated the African Women ICT Tent at the Conference 39. D eke Mimi : http://www.vanguardngr.com/2010/11/foundations-model-combatsacute-renal-failure/ 40. http://uk.oneworld.net/article/archive/9789 41. Y usuff MoshoodYusuff Moshood 3 March 2010http://allafrica.com/ stories/201003040410.html Daily Independent (Lagos)


42. http://www.mtnonline.com/index.php/economic-portfolio.html 43. http://www.itrealms.com.ng/2009_07_01_archive.html I 44. E meka Aginam Oct 12, 2010 (UITH)http://www.vanguardngr.com/2010/10/csrmultilinks-telkom-donates-medical-equipment-to-uith/ 45. M ulti Choice Africa Stakeholder Report 2010 and http://www.multichoice.co.za Interview with Etim Imisim of Development Newspaper, Abuja and http://www. balancingact-africa.com/news/en/issue-no-337/telecoms/zte-handset-factory-closesshop-in-nigeria, accessed 25 Nov 2010 46. ( Lagos) 12 January 2009 Nigeria: FG Hands Over Rural Telephony Project to PTOs http://allafrica.com/stories/200901130066.html accessed on 47. Separate interviews with Hauwa Mustapha (2 November 2010) and Denja Yaqub of the Nigeria Labour Congress (5 November 2010) 48. Interview with Engr Titi Omo-Ettu on 9 November 2010 49. Interview with Professor Alaba Ogunsanwo on 13 September 2010 50. Interview with Dr. Jonathan Aremu on 8 October 2010 51. Interview with Mrs. Oma Cobham Nsa, Executive Director, Save Nature Foundation, Kano, on September 8 2010 52. T radeInvest Nigeria Staff Fri, 12 Mar 2010 10:40 MTN increases market share to 49.6% http://www.tradeinvestnigeria.com/news/439631.html accessed on 3 December 2010 53. Interview with Chief Eddie Ugbomah on August 2010 by Mike Jimoh, a journalist with the Sun Newspapers contracted by PolDeC to speak with Chief Ugbomah.

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Comparative study of investment practices in the extractive industries, and its environmental and social impact: Comprehensive comparative analysis between China and South Africa in the Democratic Republic of Congo Franck Kamunga Cibangu, Droits Humains Sans Frontieres- Republique Democratique du Congo Pierre Isaack Thsibangu, Jacques Tshibwabwa, Dénise Nzeba Tshimanga

Acronyms ACGT Agence Congolaise des Grands Travaux AU African Union AFDB African Development Bank A.N.R Agence Nationale des Renseignements C.C.D.M Congo Dong Fang International Mining C.M.I.C.O Corporate Mining International Congo C.C.C.L3 Code Civil Congolais Livre 3 C.O.M.I.LU Compagnie Minière de Lubumbashi CHIN China N.G.O Non Governmental Organisation GECAMINES Générales des carrières et des Mines DRC Democratic Republic of Congo FEC Federation of Congolese Companies FARDC Forces Armées de la République Démocratique du Congo SADC Southern African Development Community EITI Extractive Industries Transparency Initiative FDLR Forces Démocratiques de Libération du Rwanda J.V Joint venture EIA Environmental Impact Assessment MONUC Mission des Nations Unies pour le Congo (UN Mission for Congo) MIBA Minière de Bakwanga (Mining of Bakwanga) MONUSCO Mission des Nations pour la stabilisation et la Consolidation de la paix au Congo PAD President Administrator Delegate SA South Africa SENGAMINES Minière de SENGA SENGA

Introduction The global powers competition has been shifting for the last decade and the question raised in this study attracts special attention for all players in the development sector in the Democratic Republic of Congo (DRC) and deserves substantial analysis to provide all stakeholders with better understanding of both Chinese and South African investments in the extractive industries in the DRC. As per on the ground experiences, the emerging information and communication technology progress in China requires a huge investment in extractive industries in Africa and the acquisition of necessary resources in exchange for its expertise in infrastructure and commodities trading in the global market.

comparative analysis between China and South Africa

African political leaders are yet to make a challenging choice between their own capacity to explore their natural resources for social development, their sovereignty as states and the obligations set up by their traditional donors to fit governance and human rights standards. In this highly politically sensitive environment, the better choice has appeared for them to exchange their needs for unconditional aid and indebtment with Chinese economic growth and investments in infrastructure that may also increase their popularity despite huge claims for transparency and social accountability from other stakeholders. Within the African continent, South African economic growth and industrialization also requires an important opening up to the global market in extractive industries and exploitation of strategic minerals including cobalt, zinc, copper, diamonds etc, and the DRC has offered an operational space through a large Bilateral Commission between the two governments facilitated by SADC development policy. Since 2002, after the 1997 and 1998 consecutive wars and the signature of the Global and Inclusive Agreement between Congolese Government and armed groups facilitated by South Africa, the two countries have developed important bilateral development cooperation and strong diplomacy. In respect to this process, there has been an incredible increase in South African investment in the extractive industries in the DRC especially in Katanga province with the Governor Moise Katumbi Tshiapwe and in the diamond sector in Kasai Oriental province. Therefore our main question in this study will be on the conformity of these important investments to international labour standards in the global market and the corporate social responsibility vis-à- vis the local communities and their environment.

I. Research objectives This study has 4 main policy oriented objectives: • Provide an in-depth understanding of the impact of Chinese and South African investments in the extractive industries, and its environmental and social impact in the Democratic Republic of Congo; • Evaluate how the Congolese Government is responding and ensuring a better coordinated response to the engagement within the extractive industries and its environmental and social impact on the local communities; especially in Katanga and Kasai Oriental provinces; • Observe the effect this cooperation has for Congolese communities - in particular how the DRC engagement with China and South Africa helps or harms development at the grass roots level; • Determine a set of recommendations that could be useful for strengthening bilateral and multilateral continental institutions (including the AU, SADC, ECOWAS and other Regional Economic Communities) in stimulating an African strategy in Africa’s engagement with emerging powers in Africa.

II. Research Methodology Given the nature of this research program, we have used the following methodologies: • Data collection from the existing contracts and agreements between the Chinese and South African governments and private traders involved in investment in the DRC and their Diaspora; • IMF and World Bank review proposals to the DRC on Chinese contracts with regard to the HIPC program;

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• Young scholars discussion forum and mentoring on South African and Chinese trade and investment in the DRC; • Data analysis from different perspectives with human rights oriented focus (economic; social and cultural rights), civil society reports and employees remarks; • Interviews have been conducted with current and former workers of some South African and Chinese extractive industries in Katanga and Kasai Oriental provinces, and field discussions with students and young researchers interested in this field within the University of Lubumbashi and Official University of Mbuji Mayi. This process had taken in account the qualitative and quantitative approach by interviewing decision and policy makers, political, social and religious leaders; and common people on the ground. • The interviews have been conducted anonymously by a group of ten interviewers per province including students from the University of Lubumabshi and Official University of Mbuji Mayi living in the areas, social sciences researchers from civil society and academics involved in this field and with proven experience in conducting this kind of data collection analysis. The Katanga group was coordinated by Ir. Alex Tshibangu Bitumbilu, and the one in Kasai Oriental by Mme Cecile Mbombo Biadiakulengela. For personal reasons, the members of the groups have requested to remain anonymous.

Results • The impact of Chinese and South African trade and investment in the extractive industries, and its environmental and social impact in the Democratic Republic of Congo are better understood; appropriate policy measures formulated; opportunities and challenges clearly identified; • A comprehensive and systematic evaluation is done on how the DRC, South African and Chinese governments are responding and ensuring a better co-ordinated response to their engagement towards their trade and investment in the extractive industries, and its environmental and social impact in the Democratic Republic of Congo; • A clear and comparative observation is done on the effect of these trade and investment on the Congolese communities - in particular how the DRC’s engagement with China and South Africa has helped or harmed development at the grass roots level; • Practical, useful and realistic recommendations are set for strengthening bilateral and multilateral continental institutions (including the AU, Regional Economic Communities) in stimulating an African strategy in Africa’s engagement with emerging powers in Africa.

III. Time frame and work plan This study was commissioned for 6 months with a mid term report submitted to the Fahamu office in Cape Town South Africa in August 2010. We therefore provide a brief description of the different activities undertaken before preparing this final report and the study findings: Activities

Timeline

1

Data collection and field visits

25thJune – 25thJuly 2010

2

Interviews

25th July - 30th August 2010

3

Data analysis and comparison process

1st September - 15th November 2010

4

Final Report writing and results submission

15th November - 15th December 2010

IV. Ethical Consideration The ethical dimension in community-based research is an essential part of the strong commitment from the researchers in this study and constitutes a code of conduct for efficient and independent findings in the field. The following considerations have been kept in mind and respected while conducting this study:


Voluntary character for participation: no participant was forced or obliged to participate in any part of this research and participants were also free to withdraw from the research at any stage or stop an interview 1 No harm to participants: all researchers were instructed to ensure that no physical or psychological harm was done to the participants as a result of this study 1 Anonymity and confidentiality: all information gathered during this study were dealt with confidentially and permission from the participants were obtained for all information to be shared publicly 1 Not deceiving the subjects: participants were informed concerning the aim, purpose and procedures of the study and were not deceived in any way1

V. Conceptual remarks As per general practice, this study will be using some concepts in its analysis and addressing different issues relating to the social and environmental impact of both Chinese and South African investments in the extractive industries in the DRC. While recognizing the ambiguity and extremely expended definitions depending of the context in which the study is being conducted, we are providing below our understanding shared with some previous researchers in this field.

1. Governance, corruption and transparency “Governance, corruption and transparency are recurring conceptual themes of this study. ‘Governance’ is defined as “the process of decision-making by the government and the process by which decisions are implemented (or not implemented)”. Klomp and de Haan further define good governance to be in place when “government is accountable, transparent, responsive, effective and efficient, and follows the rule of law, thereby assuring that corruption is minimized”. Francisco and Pontara note that “weak governance implies a breakdown in one or more parts of the structure created by the complex relationships between a country’s institutions and traditions. One of the most harmful symptoms of such a breakdown is widespread corruption”.”2 “In terms of corruption or non-transparency, the conceptual starting point for this study is Bardhan’s definition, where corruption equals “the use of public office for private gain, where an official (the agent) entrusted with carrying out a task by the public (the principal) engages in some sort of malfeasance for private enrichment which is difficult to monitor for the principal”. Treisman notes that different theories associate this with particular historical and cultural traditions, levels of economic development, political institutions, and government policies”. It is a challenge to quantify the impact of corruption. Mauro notes that although most economists would probably agree that efficient government institutions foster economic growth, the magnitude of these effects has yet to be measured”. Moreover, in the interviews, the research team also used the principles of EITI, as an operational indicator of the transparency concept.” 3

2. Corporate Social Responsibility (CSR) “Corporate Social Responsibility (CSR) is a contested concept. McWilliams et al note that “numerous definitions of CSR have been proposed and often no clear definition is given,

1 The Bench Marks Foundat., SADC Research, Corporate Response in the Diamond mining in mining industry in Botswana, 2009, pg.13 2 Jansson, J.; Burke, C. and Jiang, W. (2009). “Chinese Companies in the Extractive Industries of Gabon & the DRC: Perceptions of Transparency”. pg. 2 3 Jansson, J.; Burke, C. and Jiang, W. (2009). “Chinese Companies in the Extractive Industries of Gabon & the DRC: Perceptions of Transparency”. pg. 3

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making theoretical development and measurement difficult”4. Husted and Allen further note that “there is no consensus definition; in fact, CSR has suffered numerous and contradictory characterizations”.”5 The main issues in corporate social responsibility include governance, environmental management, stakeholder engagement, labor standards, employee and community relations, social equity, responsible sourcing and human rights respect from both national and international players. In response to the moral argument, “Friedman states that it would be wrong for corporates to engage in social activities, since these fall beyond their scope of expertise and their societal role. He notes that “on the level of political principle, the imposition of taxes and the expenditure of tax proceeds are governmental functions. We have established elaborate constitutional, parliamentary and judicial provisions to control these functions, to assure that taxes are imposed so far as possible in accordance with the preferences and desires of the public”.”6

3. Civil Society The role of civil society in relations between China, South Africa and the DRC is briefly touched upon in this study and it is therefore important to identify a workable definition of the concept. “Civil society can be defined in many ways, as outlined for example by Foley and Edwards. Two major ambiguities around the concept concerns firstly whether or not market actors are to be seen as part of civil society, and secondly whether it is possible to fully distinguish the boundaries between the organizational entities state, market, civil society and family. For this study, the concept ‘civil society’ refers to civil associations of all kinds; faith-based organizations, social movements/advocacy groups, community groups and charity organizations. This definition excludes market actors, media actors and academics but includes economic associations such as trade unions and chambers of commerce.”7

IV. About the researchers Franck Kamunga: Project Leader Franck Kamunga is a Human Rights Lawyer and Stanford University Fellow on Democracy, Development and Rule of Law, lecturer at the Faculty of Law, University of Lubumbashi Extension of Mbuji Mayi, Former Coordinator of the Africa Democracy Forum, Expert on Great Lakes Region, and currently Executive Director of Droits Humains Sans Frontieres in the DRC. He holds a postgraduate diploma in Democracy and Diversity from IDASA in Cape Town and New School University of New York, Governing for Development from the Institute for Development Policy and Management at the Antwerp University in Belgium and specialization on Forced Migration at the Refugee Studies Centre, Oxford University in the UK. He holds a Bachelor in International Public Law and International Relations from the University of Kinshasa in the Democratic Republic of Congo and several postgraduate studies in peace building, human rights and management and development. He has more than 10 years research and publication experience on migration, development, human rights in Africa especially on aid effectiveness with the OECD and UNECA (UN Economic Commission for Africa) in Addis Ababa, CODESRIA in Senegal, Human Sciences Research Council in South Africa, Global Development Network in Cairo and United States Institute of Peace. He is one of the rare African researchers to be highly involved in the comparative research on China as an emerging economic power with regard to the Northern traditional Donors IMF; World Bank etc. 4 McWilliams, Abagail; Siegel, Donald S. and Wright, Patrick M. (2006). “Corporate Social Responsibility: Strategic Implications” in Journal of Management Studies, Issue 43:1, January, pg 1 5 Jansson, J.; Burke, C. and Jiang, W. (2009). “Chinese Companies in the Extractive Industries of Gabon & the DRC: Perceptions of Transparency”. pg. 4 6 Idem , pg. 4 7 Jansson et al , Idem pg. 4


Isaack Pierre Tshibangu Pierre is a lecturer at the Centre Universitaire de Mbuji Mayi and an experienced researcher at CODESRIA for more than 10 years. He has published several articles and books and currently runs the Publishing and Research Program at the Regional Research and Training Centre on Nonviolent Conflict within the University of Kinshasa. He has a very strong publishing record on development and gender in the DRC including the analysis of political and economic governance. Within the student and young scholars community, Jacques has successfully mentored their involvement in this discussion and study for up to five years and continues to support their contributions and comprehension in this process. His presence in this project will bring a new insight and a strong contribution to its success. This will also make sure that the strong mentoring for young scholars and students required in this study is fully taken care of and the sustainability aspect of their recommendations is also part of the recommendations in the concluding remarks.

Mme Denise Nzeba Tshimanga Mme Denise is a social science researcher and gender specialist in the DRC. Currently she is the Executive Director at the Regional Centre Research and Education on Nonviolent Conflict in partnership with the International Centre on Nonviolent Conflict in Washington DC, USA. She has been involved in China and DRC contract monitoring and evaluation from the Human Rights perspectives for 3 years and participated in the Intergovernmental Bilateral Commission between DRC and South Africa since 2006 as a civil society representative. She has a very sound knowledge and understanding of the surrounding economic and social implications, necessary tools for the success of this ongoing research program.

I. Chinese Extractive Industries in the DRC

I. I. D R Congo socio political background The DRC is a vast territory, with a surface area of nearly 3,460,000 square kilometers, an estimated population of around 70 million and a complex diversity of over 400 ethnic groups, full of natural resources including diamonds, gold, coltan, cassyterites, oil, copper, cobalt etc. Since 1994 after the Rwanda Genocide and cross borders refugees movement, the situation has substantially degraded in permanent ethnic, aggression and civil wars between rebel and internal armed groups from the East to the North of the country. Millions of victims have died, private properties and infrastructure destroyed transforming the army and polices forces into massive human rights violators and population enemies. Since December 2002 in Sun City, South Africa all armed groups and ruling authorities had signed a Global and Inclusive Agreement for a three year transitional period which had lead to the 2006 first democratic elections after 40 years of dictatorship with the late president Mobutu, replaced by the late President Laurent Désiré Kabila, father to the Joseph Kabila the current President of the DRC. The establishment of democratic institutions after the 2006 general elections had commanded at the same time, several reforms in the justice and security sector, as well as in the business environment for investors. However, the Democratic Republic of Congo has been one of most challenging countries in terms of consolidating Democracy, Governance and Rule of Law for several years in Africa after 40 years of dictatorship with the late President Mobutu and up to 10 years of armed conflict and illegal exploitation of natural resources by armed groups fuelling rebellions all over. From the last first democratic elections in 2006 after a long period of political transition with very remarkable interventions of South Africa through its Electoral Commission and SADC cooperation, most of the emerging economic powers are now being involved in bilateral or multilateral cooperation for development interest.

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The main traditional partners providing aid to development include the IMF, World Bank and European Union with aid conditionality; good governance, respect for human rights and debt sustainability strategies didn’t seem to meet the DRC officials expectations after such a troubled political period. In this environment and taking in account the need for new elected political leaders to expose their realisations and contributions to the reconstruction of the country; and the new emerging economic powers interested in the DRC’s natural resources, more flexible and ready to collaborate without too much conditionality, the choice was clear. China agreed to contribute to the DRC’s infrastructure, roads, schools, hospitals against natural resource exploitation in the mining sectors for about 9.5 billion US $ and South Africa set up an Inter-Ministerial Bilateral Commission to discuss and share all sectors of cooperation and investment between the two countries and a large investment in electric energy sector. This situation had substantially affected the HIPC program (Highly Indebted Poor Countries) and Debt Release process with the Paris Club and the IMF and WB on the DRC and pushed the country to the Chinese aid contract review several times, while the South African investments were kept as internal affairs between governments, far from interference. The Chinese agreement with the Congolese government through the “ Cinq Chantiers “ has therefore attracted large migration movements from other Chinese small and medium business in private sectors irrespective of the nationality. Hundreds of Chinese small shops all around the city of Kinshasa and provinces selling all kind of commodities has also created a hostile impression from the local communities working in the same sector with northern countries imported products much more expensive.

I. 2. DRC -China agreement and the IMF and WB dilemma

As with most of the African countries, one of the main challenges to economic growth and development has been the high level of corruption and mismanagement of national resources by political leaders and unfair trade deals within the mining sector in the DRC. Having been under a long process for its external debt release from the World Bank, IMF, the DRC agreement with China for about 9.5 billion dollars in infrastructure in exchange of the exploitation of natural resources conceived a new indebtment putting the country in a more complex situation and large economic crisis while being considered as the best way to avoid all conditionality from northern donors and a little difference to ensure their reelections in 2011. Civil society organizations such as ASADHO, Droits Humains Sans Frontières, the National Assembly, the IMF and the World Bank and other stakeholders had voiced loudly and requested the review of this agreement because of inequity and lack of transparency in the negotiation process by the Congolese government and the Chinese delegation. Most of the allegations leading to the need for this review were mostly linked to the conformity to the 2002 and 2003 reviewed Mining Code regulations established jointly by the World Bank and National Experts to harmonize the Congolese national legal frameworks in business investments. Lack of transparency, clear policy, and inefficiency in these negotiations had also emerged from large discussions in the DRC review process. The main dilemma at this point was to make a choice between the debt release process underway with the Paris Club and the new deal with China against the will of most of the traditional northern donors or accept a joint review process to harmonize the points of view and finalize a more equitable agreement which would not compromise the previous engagements. This is a process that took place with one of the largest contractors, the SICOMINES in the mining sector in the DRC.


I.3. The Sicomines – DRC agreement

Our field study has demonstrated clearly that SICOMINES is one of the largest contractors actually in the DRC from the Chinese last 9 billion deal in infrastructures and mining sector. Since the 22nd April 2008, the Government of the DRC had signed an agreement with a group of Chinese companies (SICOMINES) comprising SINOHYDRO and China Railway Engineering Corporation (CREC), named Sino -Congolese Joint Venture. The Sicomines had offered to provide infrastructure investments to the DRC including roads, hospitals, schools construction etc, in exchange for mineral concessions in Katanga province. According to this agreement, the SICOMINES will have 68% of the shares, whereas the Congolese party through the GECAMINES will only have 32 % in this exploitation. The Chinese EXIM Bank was in charge of providing the first amount of money in total amount of US$ 9 billion. An amount of US$ 6 billion was dedicated to transport and social infrastructures in new roads totaling 3,600 km, rehabilitation of another 3,000 km as well as the construction of several hospitals and two universities. The rest of US$ 3 billion would be used in mining infrastructure investments and devoted to the joint venture’s concessions in the province of Katanga. “According to the contract, the allocated concessions Dima, Dikuluwe and Mashamba contain 10.6 million tons of copper and 626,619 tons of cobalt of which 6.8 million tons of copper and 427,000 tons of cobalt are confirmed deposits. The remaining 3.8 million tons of copper and 200,000 tons of cobalt are probable findings.” 8 This agreement constitutes an important contribution to the Congolese infrastructure investments and progress after decades of fragility and degradation all over the country. However the following critiques have been formulated to emphasize the review: • Transparency in the negotiation process • Technical competency of the Congolese delegates to the negotiations • Fairness of this agreement vis -à -vis of the Congolese party • The need for Congolese debt sustainability for a total amount of 11 billion US $ • Lack of participation and large consultation from other stakeholders in the DRC Despite the review process undertaken and the recommendations to the Congolese party, the agreement is being implemented and large numbers of Chinese companies are operating in several locations around the country but mainly in Katanga province being the main mining part of the DRC. The Congolese civil society had also voiced to have a more clear understanding of the content of this deal since the country was still struggling with the IMF and World Bank through the Paris Club agreement for its debt release. For most of stakeholders in the DRC, this decision had appeared as political arrangement to enrich a certain class of politicians involved in corruption than a pro poor decision to tackle the development of the country. Inequity, lack of consultation and participation from other stakeholders were also part of the challenges but was fortunately clarified in the National Assembly when the opposition Members of the Parliament called for public explanation from the Government. However this was seen as a great opportunity for the ruling coalition to expose their realizations in infrastructure to the population and look for more support and an additional mandate to complete the process of the Cinq Chantiers. The IMF and World Bank reviews have helped the DRC to equilibrate the agreements and make things clearer on the ground with follow up from both sides.

I.4. The MIBA - INDO AFRIQUE MINING Ltd agreement

On 5th May 2006, in Kasai Oriental province, there was another agreement between MIBA ( Minière de Bakwanga) represented by the PAD Gustave LUABEYA TSHITALA and COSMAS 8 Ibidem pg.44

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SHUNGU TSHIOFU, deputy Administrator General and a Chinese firm named INDO AFRIQUE MINING Ldt, located in Hong Kong, China Resources Building, represented by Mr HIREN BHANU, President. MIBA is the main Congolese producer of industrial diamonds situated in the city of Mbuji Mayi in Kasai Oriental. This decision was motivated by the need of improvement of its production process and new investment in equipment after a large crisis period in this sector and as response to the Mining code N° 007/2002 of 11th July 2002 obligations. According to this Agreement, the INDO AFRIQUE MINING Ltd will have 49 % of the shares and MIBA will detain the 51% within the diamond exploitation and all commercialization processes. For this study our main focus will not be on the evaluation of the implementation of these agreements; but to measure the social and environmental impact on the local communities and the respect of their employees fundamental rights according to the Congolese legal framework and international standards on corporate social responsibility. This will therefore make the originality and efficiency of this study contribute to policy makers in the country and other previous studies conducted in the field. In Katanga province, our focus will be on the following private and public Chinese companies: Congo Dong Bang Mining (CDM, Kolwezi and Lubumbashi), Congo Loyal Will Mining: usine de traitement de Lubumbashi, Jia Xing Kolwezi and Lubumbashi exploitation unit, Song Hua exploitation mining Lubumbashi, China Railway Group Limited and Sinohydro Corporation. In Kasai oriental Province, we’ll focus on the Minière de Bakwanga (MIBA) and INDO AFRIQUE MINING Ltd and look at the social and environmental impact of their investments and their employees and local communities fundamental rights as well. In conclusion, we believe that this was an opportunity for both China as a new emerging economic power to invest massively in the mining sector in the DRC and increase its exports and imports and for the DRC to take advantage of Chinese aid flexibility and capital offers to improve its economic stability, mining sector exploitation and exchanges. However the most important remains the impact of these investments on the daily lives of the common Congolese in need of livelihood, education, health care facilities etc and his environment as a citizen in his community, the pollution from the industries machineries, the cutting of the trees providing oxygen for roads construction, the usage of the fertile lands for agriculture in local economy etc.

South African Investments in the extractive industries in the DRC The available data from the Global Trade Atlas and the current South Africa and DRC Trade and Investment Chamber of Commerce show clearly that South Africa is among the top traders in the DRC and the second after China with more then 600 million $ US a year since 2007. The « Grande Commission Mixte D R C -South Africa » is in place for more than five years and there are very important bilateral trade agreements between the two countries which had led to the establishment of a new SA-DRC Trade and Investment Chamber of Commerce. Symbolically, this is a sign of a common interest between the two countries and the business community to engage in vast development cooperation especially in the mining sector. Given our interest in this study on the extractive industries, our attention will focus on this sector and we’ll specifically look at the hydro electric investments in Inga I and II as in Katanga province extracting electric energy, as well as some of the previous investments in diamond sectors in Tshibwe with SENGAMINES, Oryx and De BEERS with the MINIERE DE BAKWANGA and SENGAMINES in Boya, Bena Tshimungu in Kasai Oriental.


II.2. Diamond sector investments The D R Congo is one of Africa’s largest diamond producers, despite the fact that most of the diamond business and exploitation is artisanal and in the informal sector. In mid-2004 the Kimberley Process had decided to strike the country off its list of certifiable diamond producers accusing it of dealing in blood diamonds thus resulting in the DRC ceasing exports of diamonds especially with consecutive civil wars in 1997 and 1998 and all rebel groups operating in Eastern Congo. The main commercial diamond producer in DRC is la Miniere de Bakwange (MIBA), which was a joint venture between Belgian company Sibeka and the DRC government, which owns 80%. The South African De Beers was holding a 20% in Sibeka (Belgian Umicore the remaining 80%), and markets about one third of the country’s diamonds. In September 2004, South Africa’s De Beers signed a confidentiality report with Oryx Natural Resources as part of a due diligence exercise for the possible development of Sengamines diamond concession in the Democratic Republic of Congo. De Beers has started surveying the area which is expected to have significant potential and requires an estimated US$200 million to be brought into production. In September 2004 BRC Diamond Corporation received confirmation of the title for 13 Prospecting Research Permits (“PRs”) for diamonds in the Lubao district of the Democratic Republic of the Congo. The properties, which represent a surface area of approximately 4,900 km2, are located in Kasai-Oriental, historically the largest diamond-producing region of the DRC. Some of these areas are highly prospective diamond opportunities, which have never been systematically explored by either the DRC government or other foreign investors in the country. Since 2003, Southern Era has secured an excellent portfolio of exclusive diamond exploration permits covering 13,614 square kilometers located within the diamond-rich Kasai Province of the DRC. The majority of permits lie within a ‘kimberlite emplacement corridor’, underlined by Achaean basement granite-gneiss of the Congo Craton, which extends from the DRC southwest into the renowned diamond producing Lunda Norte Province in neighboring Angola. This kimberlite emplacement corridor is considered the world’s most prospective and largest new exploration opportunity. However the exploitation made in Tshibwe , the territory of Boya by Sengamines with south African De Beers investments and Oryx, has been quiet impressive up to 2006 when the government of the DRC decided to start the mining contract review process because of the international suspicions relating to security issues and the UN Panel of Experts on illegal exploitation of the natural resources in the DRC. Having talked to the Big Chief of Bena Tshimungu, Mr. KABONGO MBUYI MONJI and the notables of the area and local community, there has not been any equitable compensation for the exploitations and billions of dollars from their lands. They are facing serious problems of access to health facilities because there is no hospital in the area and no school for the thousands of children living in the area. Very few have been given employment opportunities given their level of education keeping them in the daily job of creuseurs « diggers » in their communities. There was a promise to offer clean water facilities in the village of Boya and the surrounding community, which became eternal dreams. The company was definitely obliged to close due the decision of the DRC Government to resign the mining contract opening up a joint public and private company operating in the same area.

III. Stakeholders evaluation of the social and environmental impact Several studies have demonstrated that resource extraction has many impacts on the social and environmental diversity of the DRC and it appears quiet difficult to quantify the environmental

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degradation or the social price local communites are paying through the exploitation of their fertile soil and all kinds of consequences on the biodiversity of the country. In Eastern Congo, the mining business process has affected very impotrantant and strategic national parks and wildlife reserves such as Kahuwi -Biega and the Okapi Wildlife reserves, which are world heritage sites especially with artisanal mining from local communities. In the concerned areas of our research which include Katanga and Kasai Oriental provinces, extractive mining has caused serious damage to both local communities and their environment by creating erosion, heavy silting of water and the high risk of contamination of mercury and cyanide when the tailings are often dumped in the water. Most of the employees complain of not having a proper policy for their medical insurance and long term impact of the exposure in mines and pollution for several hours on a daily basis, lack of knowledge of the Congolese labour legal framework and the employer legal obligations vis-à-vis the local community despite the fact the the investment in local development projects is an obligation for the extractive industry investors in the country. Fundamental human rights violations of the employees and the local communities have also been raised during our fieldwork with the target groups. Child labor has also been remarked and quiet largely reported as major challenges to the national legal framework since it is being tolerated also in the local community as a source of income for those who do not have a second choice. This study is mainly trying to evaluate the social and environment impact of the described investments from China and South Africa with different stakeholders including community leaders, politicians, academics, students and employees of these companies working in the field. Our research team using qualitative and quantitative data and interviews in these different parts of the country will provide below the figures and results of the fieldwork. This will focus mainly on two provinces including Kasai Oriental and Katanga with the an overview of the situation in North and South Kivu dominated by armed conflicts and illegal exploitation of natural resources by rebel groups and international firms exposed in the UN Experts Panel on the illegal exploitation of natural resources in the DRC.

III.I. Community questionnaire 2010 Instructions: This questionnaire was prepared by a group of Experts including Me Franck KAMUNGA, Jacques TSHIBWABWA, Pierre Isaack TSHIBANGU and Mme Dénise NZEBA TSHIMANGA inspired by the Bench Marks Foundation 2009 corporate social responsibility report, to evaluate the social; economic and environmental impact of the Chinese and South African extractive industries in the DRC. The scale 1-5 is made to give you the facility to give your statement easily. Please indicate your opinion of each item by making the block under the appropriate number with an X honestly. To guarantee the quality of the content and confidentiality, these interviews have been conducted anonymously. 1. strongly disagree (if you believe the statement almost never applies to the company) 2. Disagree (if you believe the statement does not really apply to the company) 3. neither agree or Disagree (Not sure if the statement applies or not) 4. Agree (The statement applies to the company) 5. Strongly Agree (The statement is highly applicable to the company)


Respondent details 1

N°

2

3

4

5

Community Lands Rights 1

Local Community members are aware of their lands rights and all due compensations from the mining company

2

All communities benefit from the royalties

3

Community members are happy with the negotiated royalties Community Health and Safety

4

The company takes all necessary measures to ensure it does not impact negatively on the mental and physical health of the surrounding community

5

The company provides medical services for surrounding community

6

The company takes necessary precautions to ensure safety or ensure appropriate measures are taken to redress injuries to persons harmed from the environmental hazards

7

The company has appropriate policies in place to protect the environment and take urgent measures where degradation has occurred

8

The company has best practices and procedures to, prevent pollution and reduce resources and energy use in each stage of the production

9

The company reports orally and in writing on its community impact in an accessible way to the local community

10

The company has a consultative structure with the local leadership and implement development programs including schools, roads, medical facilities etc

11

The company communicates its business plan and negotiates just and equitable economic settlement and provides adequate compensation to the indigenous community where applicable

Sustainable development, environnent and social dimension

Human Rights and resources extraction policies 12

The company upholds the integrity of all human beings in the local community, their dignity, cultures and doesn’t engage in activities leading to human rights violations or abuses

13

The company receives approval from the local community and leadership before starting its prospection or production activities in a transparent way and provides trainings and employment opportunities to the local community

14

The company has a strategy whereby mutually agreed compensation for extraction of resources is made to all national, local and indigenous communities for the acquisition of the their assets

15

The company respects the DRC national legal framework and does not discriminate on the basis of gender, race, ethnicity, origin, disability, culture, age, religion, sexual orientation or political opinion

III. 1. The Province of Katanga

Our focus has been on the following companies: INGA I and II, Congo Dong Bang Mining (CDM, Kolwezi and Lubumbashi), Congo Loyal Will Mining (Lubumbashi), Jia Xing (Kolwezi and Lubumbashi) , Song Hua exploitation mining Lubumbashi,China Railway Group Limited and Sinohydro Corporation. The questionnaire and the interviews were initially prepared and conducted in French and explained to the interviewees in swahili if needed before the collection of the data presented below in each province. We have selected 250 interviewees per province using the same questionnaire, including interviewees from the public sector and corporate employees, academics, trade unions, NGOs and the local community. In this province we’ve selected the cities of Lubumbashi and Kolwezi

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as pilot. Each graphic represents one specific question as stated in the table above for 250 respondents. Question 1: Local Community members are aware of their lands rights and all due compensation from the mining company

Analytical comment: From the 250 respondents, 72,8 % from the South African investments and 58% from Chinese are confirming not being aware of their lands rights and all due compensation which makes the process of claiming quiet complex and impossible. Around 10 to 25 persons, which constitute about 4 to 10 % of the respondents confirm being aware of such information and the kind of compensation they claim from the extractive industires operating in their community. Question 2: All communities benefit from royalties

Analytical comments: On this particular question, it appears to be a logical consequence of the previous figures and respondent findings. 145 (SA) to 203 (Chin) confirm not benefiting as a community of the compensation and royalties provided by the companies to the community Chiefs who usually use them as personal donations. The general view of the respondent is to have a community project with an impact on the whole community rather than providing a car, cash or food etc. Around 5 to 8 % of the community and other stakeholders confirm having seen or benefited from the royalties and are mostly close to the community leadership.


Question 3: Community members are happy with the negotiated royalties

Analytical comments: The same scenario has been remarked within communities and other stakeholders when it comes to being happy with the negotiated royalties. Most of the time, there is no proper negotiation between the communities and the companies. The community leaders take what is prepared for them and do not have alternatives since the agreements have been already been signed with the government authorities. Between 203 to 22O of the respondents are not happy with the negotiated royalties and the procedures used in this process, which constitute over 81,2 % (SA) and 88 % (Chin) of all respondents. 2% are happy with the Chinese negotiated royalties while 4,8 % are happy with the South African companies negotiated royalties. The rest are not aware, or somehow agree etc Question 4: The company takes all necessary measures to ensure it does not impact negatively on the mental and physical health of the surrounding community.

Analytical comments: A total of 49,6 % of the respondents estimate that SA companies are not taking necessary measures to address the physical and mental health of the local community including employees where 71,6 % incriminate the Chinese companies. Only 3,6 % agree with this statement for Chinese companies and 14,4 % agree with SA companies.

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Question 5: The company provides medical services for the surrounding community

Analytical comments: This question has an immediate relation with the previous and the same respondents have expressed the same concerns about the SA and Chin companies not investing in medical services within the communities where they operating, 49 % (SA) and 71 % (Chin). Most of the respondents think that its necessary for investors in their community to provide at least a medical facility as a development project benefiting all community members. Question 6: The company takes necessary precautions to ensure safety or ensure appropriate measures are taken to redress injuries to persons harmed from the environmental hazards

Analytical comments: From the respondents 81,2 % totally disagree with this statement about SA companies and 88 % don’t agree for the Chinese companies in their communities. They estimate that they usually work at their own risk and don’t have clear medical insurance for their families depending on a case-by-case basis.


Question 7: The company has appropriate policies in place to protect the environment and take urgent measures where degradation has occurred

Analytical comments: A total of 53,6 % of the respondents disagree with this statement on the appropriate policies to take care of the environmental degradation by SA companies in Katanga; and the 70,8 % disagree also for the Chinese companies. It is important to mention at this particular point the fact that South African policies in this area are in place and clearly stated in the Agreements especially with provincial Government in Kataga but the implementation has been partial. For Chinese companies there is a huge problem of socialization with the local communities, language and cultural barriers that make communication difficult in the work place. Question 8: The company has best practices and procedures to prevent pollution and reduce resources and energy use in each stage of production

Analytical comments: On the question relating to the energy protection and the pollution policy, 81,2% (SA) and 89,6 % (Chin) of the respondents disagree with the statement and confirm that not much has been done to avoid pollution in the local community or its impact on the employees. Both water in rivers and agriculture production surrounding the production areas are being affected. Electricity and water are being used to the maximum with no conservation policy and there are very few cases of solar power being produced when the DRC has almost 9 months of full solar per year.

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Question 9: The company reports orally and writing on its community impact in an accessible way to the local community

Analytical comments: The 76,8 % (SA) and 90 % (Chin) have explained that they are not getting any reports from the companies on the impact of their investments on the local community and there is no clear policy on this particular point. They sometimes call upon the community when they are providing gifts to the Chief or the leadership of the community. Sometimes when there is a development project in the community, it is not sustainable. They have no idea how much their soil is producing and how much should be spent on their development initiatives. Question 10: The company has a consultative structure with the local leadership and implement development programs including schools, roads, medical facilities etc

Analytical comments: The findings from this question provided us with a very different observation. A total of 76,8 % disagree on SA companies having a consultative structure with local community and investing in schools, hospitals etc; when only 9,2 % disagree about the Chinese companies. We clearly understand that this is directly linked to the large SICOMINES deal with large investment in infrastructure through the Cinq Chantiers in the DRC. 77,2 % confirm that some of Chinese companies have a consultative structure and invest in schools, roads, medical facilities etc.


Question 11: The company communicates its business plan and negotiates just and equitable economic settlement and provides adequate compensation to the indigenous community where applicable

Analytical comments: Most of respondents report that only government authorities at national or provincial levels are getting information on these businesses plans from the extractive industries and local communities just observe things happening and don’t have the power to ask for this information. They accept what is being provided to them is a gift and not a legal obligation. 77,2 % disagree with the statement in regard to SA companies and 82 % disagree in regard to Chinese companies. Only 4 % (Chin) and 12 % (SA) agree with the statement and confirm that adequate compensation is being paid to the local community. Question 12: The company upholds the integrity of all human beings in the local community, their dignity and culture and doesn’t engage in activities leading to human rights violations or abuses

Analytical comments: On human rights and human dignity, physical integrity, respect for cultural diversity, there has been good progress from both parties. Only 13,6 % disagree with the statement from the SA side and 28,4 % from the Chinese side. 68,4 % agree or strongly agree that SA extractive companies respect human dignity, human rights and cultural diversity of the local community but still have much to do. A total of 59,2 % also agree or strongly agree on the Chinese companies efforts on this issue. They all confirm that this has also been a strong commitment with regular reports from international and national human rights organisations.

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Question 13: The company receives approval from the local community and leadership before starting its prospection or production activities in a transparent way and provides training and employment opportunities to the local community

Analytical comments: For the SA companies only 8,8 % disagree with this statement and confirm that most of these companies after having a deal with the national or provincial public authorities, come to talk to the local leadership and provide them with professional training and employment opportunities and 72 % report the opposite for Chinese companies. They are complaining that Chinese companies bring all senior staff from China and only provide very basic jobs to the local community with the professional training compromising their investment sustainability when they decide to go back. 72 % strongly agree or agree with this statement for SA companies and only 10 % agree or strongly agree for the Chinese companies. Question 14: The company has a strategy whereby mutually agreed compensation for extraction of resources is made to all national, local and indigenous communities for the acquisition of their assets

Analytical comments: A total of 50,4 % of the respondents disagree with this statement and believe that local and indigenous communities never find a way to recover or acquire their assets from SA companies and 69,2 % for the Chinese companies. Most of the strategies and agreements are made far away with the national authorities. Only 22 % (SA) and 13,6 % (Chin) agree or strongly agree with the statement. Much has to be done to make progress and have in place an integrated policy and help the local communities in the acquisition of their assets after extractive exploitation.


Question 15: The company respects the DRC national legal framework and does not discriminate on the basis of gender, race, ethnicity, origin, disability, culture, age, religion, sexual orientation or political opinion

Analytical comments: In terms of respect for national legal frameworks and discrimination policies, we have also realised that good progress has been made. Only 9,6 % of the respondents disagree with the statement for SA companies and 18 % for the Chinese ones. 82 % agree or strongly agree that SA extractive companies in the DRC respect the mining code and do not discriminate for any of the above reasons. 66,8 % are also supportive of the Chinese companies policy regarding respect of legal frameworks and non discrimination on race, age, religion, ethnic origin etc. However they’ve expressed some reservations for both Chinese and South African companies for not knowing much of the general legal frameworks in the DRC.

III. 2. Province of Kasaï Oriental

For the Kasai Oriental province our focus has been on the following companies involved mostly in the diamond sector: SENGAMINES, MIBA, De Beers and INDO AFRIQUE MINING Ltd. The same questionnaire was used in Kasai Oriental with the same number of interviewees and different target groups as in Katanga. Each graphic represents a specific question from 1-15 and a total of 250 people. A group of 10 persons have been involved in this field interview and have contacted current and former employees of these companies, local community leaders and local public authorities in sub groups of two each per interview. Question 1: Local community members are aware of their land rights and all due compensation from the mining company

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In Kasai Oriental, most of the MIBA and de Beers production are down due to the recent global economic crisis and things are still pending. 52 % of the respondents for SA companies disagree with this statement and Bakwanga community in Mbuji Mayi complain of being neglected by national authorities that have provided de Beers this contract. In Tshibwe Boya, the chief and local community are not aware of their due compensation. 48 % for the Chinese don’t to MIBA production. However 18 to 19 % for both Chinese and South African companies agree and support the gifts provided in terms of cash, food and fuel to the local community leadership. But the only primary school started by the SENGAMINES in 2004 in Boya city has never been finalized and the few materials are still detained by the Big Chief Kabongo wa Mbuyi Monji. Lack of coordination brought infighting between MIBA and SENGAMINES and high political interference leading to the closure of this industry. Question 2: All communities benefit from the royalties

Analytical comments: A total of 64,8 % (SA) and 80,4 % (Chin) strongly disagree and confirm that their communities don’t benefit from the little royalties provided directly to the Chief of the community leadership out of common interest development projects. Between 4 and 10 % strongly agree but the important remark is that they are closer to the local community leadership. It appears necessary to have a clear policy on this process and involve other stakeholder’s consultation with public authorities. Question 3: Community members are happy with the negotiated royalties


Analytical comments: From all the respondents 76 % (SA) and 60 % (Chin) are not happy with the negotiated royalties because they’ve never been at the same table with the national or provincial public authorities when the agreements are signed or negotiated. They are claiming a more coordinated and organized process. 4 % (Chin) to 10 % (SA) are happy but most of them are former employees or current employees of these companies. Question 4: The company takes all necessary measures to ensure it does not impact negatively on the mental and physical health of the surrounding community

S

Analytical comments: From the 250 respondents, 63,6 % (SA) and 72 % (Chin) strongly disagree with the statement and confirm that most of the water in the river Lubilanji for example is polluted by MIBA and its partners. Many people living in the Kanshi zone and Boya are getting diarrhea, typhoid and several diseases due to lack of clean water. Only 4 % (SA) and 7,6 % (Chin) strongly believe that there is effort by both companies within the operational areas. In Boya for example, the respondents confirmed that SENGAMINES had managed to have clean water dug within their compound and could extract very clean water and provide access to their employees working in the mines but not the whole community. Question 5: The company provides medical services for the surrounding community

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Analytical comments: About the access to medical services to the surrounding community, people are mostly supportive of the South African extractive industries through SENGAMINES or MIBA where local employees and their families have been provided with medical services in their own clinics or at affiliated hospitals. MIBA has Hopital Bonzola and Cliniques MIBA. Only 27,6 % disagree (SA) where 68 % regret the Chinese companies policy in terms of access to medical services even for the employees in the private and artisanal mining sector. Question 6: The company takes necessary precautions to ensure safety or ensure appropriate measures are taken to redress injuries to persons harmed from the environmental hazards

Analytical comments: Most of the respondents respond that they’ve lost family members in the MIBA and SENGAMINES exploitation including the Chinese INDO Afrique Mining without getting appropriate compensation and some have become disabled and can’t work anymore. The policies in place are only favourable to the employers and not many precautions are taken. 58 % (SA) and 75,2 % (Chin) strongly disagree and 4 to 5 % of the respondents report receiving necessary equipment and support when injuries occur but claim that they are not appropriate and adequate. Question 7: The company has appropriate policies in place to protect the environment and take urgent measures where degradation has occurred

Analytical comments: On the environment policies, 45,6 % (SA) and 72,8 % (Chin) disagree with the statement and report that MIBA and its partners exploitation have caused erosion in the Mbuji Mayi city and few measures have been taken to repair this. However the Chinese


working in the infrastructure are destroying trees and ecosystems without clear policies on its replacement while benefiting from the Congolese minerals. 3 to 8 % agree that there were some actions taken and were plans to take care of environmental protection and reparation where degradation occurs despite the fact that this is a legal obligation for investors in the mining sector. Question 8: The company has best practices and procedures to prevent pollution and reduce resources and energy use in each stage of production

Analytical comments: For 31,2 % (SA) and 48,8 % (Chin), there are no best practices and procedures to prevent pollution and reduce resources and energy use in the production stages. MIBA has been functioning 24hours on electricity and SENGAMINES used mostly electricity and fuel. Solar power and other sources of energy could be developed and appropriate policies agreed upon with public authorities. 13 % (SA) and 18,8 % (Chin) report having seen provisions in the agreements and some best practices in this sector but ask for a follow up process and collaboration with the local community on the ground. Question 9: The company reports orally and in writing on its community impact in an accessible way to the local community

Analytical comments: About reporting to the local community on the company impact, 76,8 % believe that SA companies don’t have a policy in place to expose whatever they do and contribute to the improvement of the lives of the local community, and 88 % refer to the Chinese ones. They all complain about the communication mechanisms between local community and extractive industries. Under 5 % of the respondents confirm the existence of such policies and mechanisms and we believe this is a very crucial issue. There is a National Bureau for the visibility of the Cinq chantiers and most of the publicity is made on TV when more than 70 % of the population doesn’t have access to electricity.

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Question 10: The company has a consultative structure with the local leadership and implements development programs including schools, roads, medical facilities etc

Analytical comments: There is a huge difference on this question since China is largely investing in infrastructure in the DRC and this might have influenced the respondents on its visibility on the ground. 68 % are against this statement in regard to the SA companies when only 18,8 % report the opposite for the Chinese. 53,2 % strongly agree or agree that Chinese extractive industries build schools, hospitals, roads etc in Kasai Oriental when only 8 % confirm the same for the South African’s. Being a member of SADC, there should be a common SADC policy on Southern African extractive industries and their social responsibility with regard to local community’s development process. Question 11: The community communicates its business plan and negotiates just and equitable economic settlement and provides adequate compensation to the indigenous community where applicable

Analytical comments: Most of the respondents don’t believe in an equitable economic settlement or in a clear communication policy on their businesses plan. However they are more supportive to the MIBA, INDO AFRIQUE process but not for SENGAMINES with its very high political influence from the national public authorities, which makes cooperation and collaboration difficult on the ground. 40,4 % (SA), 43,2 % (Chin) strongly disagree or simply disagree when 58,4% (SA) and 56,8 % (Chin) agree with the statement and ask for more follow up mechanisms.


Question 12: The company upholds the integrity of all human beings in the local community, their dignity and cultures and doesn’t engage in activities leading to human rights violations or abuses

Analytical comments: On the issue of human integrity and human rights 24 % (SA) and 40 % (Chin) disagree with this statement in Kasai Oriental suggesting that most of the time both companies do respect their culture, human dignity and do not engage in activities leading to human rights violations. One of the main remarks for Chinese companies is that they are bringing with them large families and friends who engage in other small-scale businesses selling commodities, food, sugar, breads etc legally prohibited to foreign investors. Up to 47 small Chinese shops have been identified in Bakwa dianga and SIMIS main markets. Between 20 to 21 % have reported positively on this regard and believe much effort has been made to fulfill the fundamentals. Human Rights Organisations’ should play an important role in collaboration with the Ministry of Justice and Human rights. Question 13: The company receives approval from the local community and leadership before starting its prospecting or production activities in a transparent way and provides training and employment opportunities to the local community

Analytical comments: From the 250 respondents 47,6 % (SA) et 64 % (Chin) strongly disagree or only disagree and report that most of the time the common practice is to inform their local community and leadership after having signed agreements with the national authorities. Local community and leadership mostly receive the very employment opportunities according to their capacity and not through professional training offered by the companies. 52,4 % (SA) and

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10 % (Chin) strongly agree or agree that there is some kind of consultation at the provincial and local level. The most important point is that a large difference is made favorably of the South African companies. Local community leadership of Bakwanga in Mbuji mayi and the Big Chief Kabongo Mbuyi wa Monji in Boya confirm having been in touch with Geoffrey and Graham of SENGAMINES and De Beers several times. Therefore, we believe important attention needs to be paid to a common consultation process from the national to the local level. Question 14: The company has a strategy whereby mutually agreed compensation for extraction of resources is made to all national, local and indigenous communities for the acquisition of their assets

Analytical comments: There has been a clear understanding that in these two pilot provinces, the DRC does not have a clear and comprehensive policy on compensation at all levels. Most of the consultations and interviews we’ve had are showing that national authorities and Governors of provinces are the ones taking full advantage in this process having the political power with them. 85,2 % (SA) and 86,4 % (Chin) strongly or simply disagree with the statement. 12,8 % (SA) and 13,6% (Chin) strongly agree or simply agree. This reveals a serious issue and lack of coordination and participative policy on the different responsibilities and kind of compensations deserved by local, provincial and national authorities. Question 15: The company respects the DRC national legal framework and does not discriminate on the basis of gender, race, ethnicity, origin, disability, culture, age, religion, sexual orientation or political opinion


Analytical comments: An important appreciation has to be made with regard to discrimination and respect for fundamental human rights and human dignity. 38,8 % (SA) and 38 % (Chin) strongly disagree of simply disagree. Most of the respondents have mentioned the issue of gender in the recruitment process declaring that most of the tasks in these industries require the use of strong physical force and women are somehow discriminated. This needs to be redefined in the recruitment policy. 61,2 % (SA) and 62 % (Chin) strongly agree or simply agree that these companies respect the DRC national legal framework and do not discriminate on the basis of gender, race, ethnicity, origin, disability, culture, age, religion, sexual orientation or political opinion. This research has the advantage of providing grounded information and perceptions of the concerned communities who feel disadvantaged and exploited for the last decades and their expectations from the corporates operating on their soil but at the same time giving voice to these communities to express their views freely for a better future and coordinated policies with their political authorities. Together with Vivier and Boudler, we strongly believe that local communities have the right to determine their own futures, not to have it decided for them by corporations and that this is extremely important and fundamental. By providing these results and findings, we also expose the gap between corporate expectations in investing their funding in these communities, the viewpoints of both their employees and local leadership, perceptions and needs of all stakeholders in this process. Our research teams have also revealed the local community responsibility in their own future where in some areas like Boya in Bena Tshimungu, up 200, 000 $ US had been paid to the Kasai Development « KADEV » by SENGAMINES between 2004 -2005 to build their own primary school in vain. Mainly policy oriented, this study is also offering a baseline for policy makers and corporates to review their social responsibility efficiency and make appropriate adjustments to fit their engagements regarding local sustainable development and environmental obligations. The following recommendations have been formulated as objectively as possible to provide suggestions on a way forward after an independent analysis of the findings and reliable data.

Recommendations This study intends to provide practical recommendations to the government of the DRC, African Union and other regional economic bodies such as SADC, ECOWAS in order to fulfill an efficient contribution to the success of the Millennium Development Goals through an equitable and just cooperation taking in account the social responsibility of the investors in the extractive industries in the DRC. After this substantive analysis and field work with the affected communities, the following recommendations are reflective of their views and our orientation for policy makers and other stakeholders in the development sector:

To the Government of the DRC:

The Government of the DRC should take a lead role in the sustainable development of the mining sector and ensure local communities in Kasai Oriental, Katanga and other provinces and social responsibilities of the investors in the extractive industries are taken care of, respecting the international agreed standards within national legal frameworks using the current OHADA regulations; The Government with other stakeholders in the mining sector in the DRC (e.g. mining companies, community groups, trade unions and NGOs) should set up realistic strategies for

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effective community engagement as an important part of the sustainable development process of CSR and the development of their communities through clear and accessible channels of regular communication and transparent cooperation at all levels. All public and private corporates operating even in Joint Ventures with Congolese companies in these two pilot provinces (Kasai Oriental and Katanga) or other provinces should provide their communication channels at all levels to avoid suspicion and social tensions; The Government of the DRC in collaboration with Chinese and South African extractive industries operating on the ground and other stakeholders and SADC should build the capacity of local community leaders corporate social responsibility and set up joint monitoring and evaluation bodies and mechanisms with Human Rights NGOs to ensure the extractive industries investors meet their obligations and do not engage in activities leading to the violation and abuse of the rights of local communities on the ground; The Government should finalize the necessary reforms engaged in the justice and security sectors to ensure an effective and sustainable peace process in Eastern Congo and respect for human rights and rule of law, great foundations for sustainable development and long term foreign investments.

To the African Union and SADC:

The African Union and the SADC should involve the mining companies operating in the region in an open discussion on their social responsibilities based on international standards, protocols and agreements and set up a joint regional evaluation and monitoring body and mechanisms for effective governance; The AU and SADC should harmonize the regional legal frameworks for extractive mining sector investments respecting the social and environmental policies for both states and corporates at all levels and ensuring precautions are taken to persecute those engaging in illegal practices on the ground and that compensation is paid to the victims;

To the mining companies and local communities

They should build a constructive and permanent dialogue between the mining companies and the local community and leadership to avoid any kind of tension leading to conflicts and massive human rights violations; The mining companies should assist the local community by providing professional capacity building, employment opportunities and help identify markets and implement creative development projects with effective social and environmental impact on the community; The mining companies should operate in a transparent way and be accountable to the local community where the exploitation is taking place and use international standards and global labour best practices; The local communities should take the leading role in identifying community income generating projects and collaborate with the mining companies in setting up a joint agreement for their implementation, and provide companies with all necessary information and support they need to succeed in their operations.

Conclusion In conclusion of this important study of the social and environmental impact of the Chinese and South African extractive industries in the DRC, we would like to recognize the fact that there has been some efforts made by both parties in making an impact on the communities where they operate.


However, one of the main challenges for both parties and investors has been lack of effective channels for constructive dialogue between different stakeholders, which constitute an important part in building up an efficient corporate social responsibility practice in this sector. The national legal framework in the DRC with the Code Minier has not created an enabling environment for such dialogue taking in account the large scale of corruption, lack of governance and respect for human rights and rule of law, impunity and the delay in security sector reforms by the Government of the DRC. At the regional level, it is more than important to mention the lack of strong regional engagement from the African Union or SADC in building regional standards and appropriate policies dealing with corporate social responsibility and environmental protection against pollution and all forms of degradation due to the prospecting, exploitation or manufacturing in the extractive industries in the region. We believe more evidence based and policy oriented research need to be conducted and more open forums need to take place at local, national and regional levels with all stakeholders for more practical and realistic common solutions in this sector. We do recognize at the same time the fact that some constraints have not allowed us to have a countrywide view and perceptions, however we strongly believe that the study in these three regions do provide an overview of the situation on the ground and give the opportunity to offer important and essential suggestions and recommendations for the way forward with other colleagues and institutions engaged in this sector. Lets then join our hands together and move forward for a better world and build progressively an enabling environment for sustainable development in our region for future generations to have a better future.

References DRC constitution 2006 Code Congolais des Investissements Code Minier congolais Jansson, J.; Burke, C. and Jiang, W. (2009). “Chinese Companies in the Extractive Industries of Gabon & the DRC: Perceptions of Transparency”. Available at: http://www.ccs.org.za/wp-content/uploads/2009/11/Chinese_Companies_ in_the_Extractive_Industries_of_Gabon_and_the_DRC._CCS_report_ August_2009.pdf McWilliams, Abagail; Siegel, Donald S. and Wright, Patrick M. (2006). “Corporate Social Responsibility: Strategic Implications” in Journal of Management Studies, Issue 43:1 The Bench Marks Foundation, Policy Gap 5, SADC Research, Corporate Social Responsibility in the Diamond Mining Industry in Botswana 2009 UNDP (2009). “Country Stats: DRC” in Human Development Report. Accessed 23.06.2009 Weissman, Stephen R. (2002). “U.S. Role in Lumumba Murder Revealed” on AllAfrica.com. Carayannis, Tatiana (2003). “The complex wars of the Congo: towards a new analytic approach” Schatzberg, Michael G. (1997). “Beyond Mobutu: Kabila and the Congo” in Journal of Democracy United Nations Security Council (2002). “Final report of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo”. S/2002/1146 Potocole d’Accord MIBA -INDO AFRIQUE Mining Ltd , 5th May 2006 International Crisis Group (2008). “Conflict in Congo”.

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Available at http://www.crisisgroup.org/home/index.cfm?id=2829&l=1 Social Accountability in Africa : Practionners ‘experiences and lessons , Mario Claasen and Carmen Alpin-Lardies n Idasa 2010 Rapport sur les violations des droits des ouvriers dans les en-treprises chinoises au Katanga, RDC : « Cas des entreprises Jiaxing Mining, Congo Dong Fang International Mining et Lida Mining » et sur les déséquilibres du contrat minier RDC et Consortium Chinois , Action against impunity for human rights February 2010 Hart, Terese; Mwinyhali, Robert (2001). “Armed Conflict and Biodiversity in Sub-Saharan Africa: The Case of the Democratic Republic of Congo”. Biodiversity Support Program. www.worldwildlife.org. http://www.worldwildlife.org/bsp/publications/search.cfm?pubno=143. tails1

commitment of the telecommunication sector

A comparative analysis of the commitment of the Chinese & South Africans to CSR and R2P in Nigeria’s telecommunication sector Professor Isaac Olawale Albert, fspsp and Ms. Doyin Oluseyi Ighalo, Peace and Conflict Studies Programme, Institute of African Studies, University of Ibadan, Nigeria

Background Since the end of the Cold War in the late 1980s, social justice issues form a critical element in the evaluation of the quality of relationship between states. Hence, as states relate with one another certain things are expected of them. This research paper calls attention to two of these responsibilities. First and foremost, states and political regimes are expected to identify with international morality by protecting the fundamental rights of their citizens, avoiding a working relationship with “rogue states”, and working bilaterally or multilaterally with other members of the international community to protect citizens living under state terrorism. In dealing with one another in an increasingly globalized economy, states do not only relate directly. More often these days, the relationship between states and the relationship between states and people is mediated by the activities of multinational economic organizations. Thus, multinational economic organizations are also expected to give attention to corporate social responsibilities in their dealings with the communities in which they do business. No other international instrument commits states to human rights questions as the “Responsibility to Protect” (R2P) principle, which was passed by the UN in 2005.1 R2P, which is framed in the context of preventive diplomacy, has three componential aspects. The first component of this principle has to do with the obligation of states to protect their populations from genocide, war crimes, crimes against humanity and ethnic cleansing. The second pertains to the responsibility of the international community to assist other nations in upholding this responsibility, while the third has to do with the fact that the international community has a responsibility to use the appropriate diplomatic, humanitarian, and peaceful means to protect vulnerable populations. If states are manifestly failing — that is if they are unable or unwilling to protect their population from these crimes — and if peaceful means are inadequate, R2P requires that the international community should be prepared to take collective action (including the application of coercive means) in a timely and decisive manner through the Security Council to protect vulnerable people and victims. In other words, R2P which draws from international humanitarian, human rights, and refugee law for its legal foundation requires that states should not be indifferent towards civilian populations at risk of widespread and systematic atrocities.2 The second social justice issue has to do with the global expectation that multinational businesses (the most prominent and controversial symbols of western capitalism3) should

1 ICISS, The Responsibility to Protect: Research, Bibliography, Background: Supplementary Volume to the Report of the International Commission on Intervention and State Responsibility, Ottawa, Canada: International Development Research Centre, 2001. 2 Naomi Kikoler, “Responsibility to protect”, Keynote paper presented at the International Conference: ‘Protecting People in Conflict and Crisis: Responding to the Challenges of a Changing World’” organized by the Refugee Studies Centre and Humanitarian Policy Group, September 2009 p.1. 3 D. Litvin, Empires of profit: Commerce, conquest and corporate responsibility, New York: Texere, 2003 p. xi.

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pursue the goals of corporate social responsibility (CSR) as part of international moral standards. CSR explains and modulates the ethical behaviour of a corporate organization towards society. It has to do with how business concerns manage their political and social interactions with host governments and host communities — two critical stakeholders — in ways that minimize exposure to different forms of risks within the business environment. Whereas business organizations would ordinarily prefer to focus their interests exclusively on profits, CSR initiatives expect them to give equal attention to people and the planet both of which must be equally protected, most especially from the possible adverse effects of business. Hence, CSR is “a tool for promoting trust, safeguarding the business environment without having to operate behind heavy security cordons, and as a strategy for protecting the bottom line through actions that leave stakeholders with little choice than to collaborate with the firm as a way of protecting their own interest”.4 In this research study, we evaluate the activities of some Chinese phone companies and MTN (South Africa) in Nigeria using the parameters of R2P and CSR. To what extent have these enterprises factored issues relating to R2P and CSR in their political and economic engagement with Nigeria and Nigerians? How does this affect the way Nigerians perceive citizens of these two countries? What are the gaps to be filled in the relationships that exist and how do we fill them? In attempting to provide answers to these questions, our project has focused exclusively on the participation of these enterprises in Nigeria’s telecommunication sector — particularly mobile telephony. Two aspects of the industry are particularly highlighted: (i) the provision of mobile phone lines and (ii) the sale of mobile telephones. What role do these Chinese and South African enterprises play in the industry and in what ways do they fulfil or fail to fulfil the responsibilities that the principles of CSR and R2P would necessitate into their operations in Nigeria? This study is unique in the sense that scientific research on mobile telephony in Nigeria, as in other parts of the Africa continent or the developing world, is relatively limited to date.5 Yet, the fact remains that the licensing and launch of the provision of GSM services in Nigeria in 2001 has been a significant contribution to the growth of liberal democracy in Nigeria in the sense that it has given all and sundry freer access to information and has augmented the rate and reach of communication. Researching this sphere of contemporary society is very important for as Castells et al. observe “we know a good deal about Norway because of the quality of Norwegian research in this field, while we know little about Nigeria because of the scant reliable evidence on this important country”6. Existing works on how Chinese and South African enterprises engage the issues of CSR and R2P are typically macro-level. The kind of micro-level analysis done in the present work is not common. It is also very difficult to find any comparative work on how the Chinese and South Africans operate in the mobile telephony business in Africa.

Elements of CSR and R2P On a general note, CSR has to do with the obligation of corporations to move beyond their main goal of making profit to give a helping hand to their workers, customers, shareholders and members of the communities in which they do business. However, Garriga & Melé7 argue

4. Stephen Ademola Faleti, “Corporate social responsibility initiatives of selected multinational oil companies in the Niger Delta, Nigeria”, thesis submitted to the University of Ibadan (Nigeria) in partial fulfillment of requirements for the award of degree of Doctors of Philosophy (Peace and Conflict Studies), University of Ibadan, Nigeria, January 2010 p. 10. 5 R. Bertolini, Telecommuniction services in Sub-Sharan Africa, Frankfurt am Main: Peter Lang, 2002; J. Donner, “Research approaches to mobile use in the developing world: A review of the literature”, The Information Society, 24(3), 2008 pp.140-159. 6 M. Castells et al., Mobile communication and society: A global perspective, Cambridge, MA: MIT Press, 2007 p. 4. 7 Elisabet Garriga and Domenec Mele, “Corporate social responsibility: Mapping the terriroty”, Journal of Business Ethics, Volume 53 Numbers 1 and 2, 2004 pp.51-71.


that CSR could be understood from two angles: the economic angle and the ethical angle. The economic problematizes CSR as something that is done by firms for profit. In this context, the encompassing ideal is profit-making, and embarking on corporate social responsibility is seen as just another means by which firms secure larger profits against the competition. On the other hand, the ethical angle posits that the relationship between business and CSR is embedded within ethical frames beyond the profit motive. In this case, the main idea behind CSR is that business has an obligation to work for social betterment. This ethical obligation is emphasized in several works on CSR.8 Carson & Kosberg,9 nevertheless, opine that it would be wrong to assess CSR purely from the angle of business ethics. They argue that it makes better sense to approach the issue from the angle of mutual dependence between business and society. Just as business can benefit from a society in diverse ways, a society can also benefit from business. Equilibrium is achieved when corporate social supply satisfies social demand. Hence both business and society have responsibilities towards each other.10 In this regard, one could say that part of the responsibility of society is to make business feel a sense of welcome and acceptance, and not to pursue a deliberate policy of total or parasitic dependence on largesse from business. However, welcome and acceptance are to be taken for granted. They are not rights, but privileges, and what guarantees them is the commitment of business to welfare and improvement of society. Where business activities result in the stunting of social welfare, then society is bound to resist such activities if it is to survive and enjoy a meaningful sense of being. The foregoing shows that it is more difficult for scholars and organizations to agree on the length and breadth of the obligation that business owes society. It is in light of this difficulty that the concept of CSR is considered to be at an embryonic stage and, indeed, contestable.11 As such, many definitions of CSR are not of much help, although we do not by any means wish to dismiss definitions. Rather, we believe that useful definitions are those that consider the concept of CSR in terms of its elements. Some of these elements are captured in the definition provided by the European Commission. It presents CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis”.12 (underline not in the original) In other words, CSR is not forced on any firm and it can be delivered in a variety of ways as a firm interacts with its stakeholders. As a developing economy, Chinese businesses have traditionally focused on profits while relegating their social and environmental efforts to the background. However, the Chinese Company Law was amended in January 2006 to include clauses about corporate responsibility to society and the public interest, spearheading accelerated CSR awareness in the country. In addition to this changing regulatory environment at home and increasing pressure abroad, the Chinese’ attitudes to Corporate Social Responsibility are gradually changing, and foreign multinational corporations with experience of more sophisticated CSR environments are

8. K.M. Saether and Ruth V. Aguilera, “Corporate Social Responsibility in a Comparative Perspective”, in Crane, A., et al. (eds.), The Oxford Handbook of Corporate Social Responsibility. Oxford: Oxford University Press, 2008; A. Habisch, Jan Jonker, Martina Wegner, R. Schmidpeter (eds.), Corporate Social Responsibility across the Europe. Heidelberg: Springer, 2005; R.H. Gray, D.L.Owen and K.T.Maunders, Corporate Social Reporting: Accounting and accountability (Hemel Hempstead: Prentice Hall, 1987; C.B Bhattacharya, Sankar Sen and Daniel Korschun, “Using Corporate Social Responsibility to Win the War for Talent,” MIT Sloan Management Review, 49 (2), 2008, 37-44; 9. S.G. Carson and N. Kosberg, Etisk forretning: Bedriftens samfunnsansvar. Oslo: Cappelen akademisk forlag, 2003. 10 R.L. Daft, Organization theory and design (7th ed.). Mason, Ohio: South-Western College Publishing, 2001. 11. D . Windsor, “The future of corporate social responsibility”, International Journal of Organizational Analysis, 9(3), 2001, 225. 12. European Commission, European Multistakeholder Forum on CSR: Final Report, 29 June 2004, p. 3, http://ec.europa.eu/enterprise/policies/sustainable-business/files/csr/documents/29062004/ emsf_final_report_en.pdf.

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helping to shape the movement. A survey carried out in 2008 shows that Chinese companies spend an average of 1 percent of their revenue on CSR-related activities but this was largely for “developing government relations,” rather than the kind of charity that their host communities in the developing world expect.13

The Responsibility to Protect (R2P) is based on two key principles and three core elements. The first principle is that a state has the responsibility to protect its population as a part of the commitment to global peace and security. The second is that where a population is confronted with serious harm, and the state in question is unwilling or unable to halt or avert it, the responsibility to protect those people lies with the international community. The three core elements give better meanings to these two principles. The first is that states and the international community have the responsibility to prevent atrocity crimes, and to fulfil this responsibility requires taking action to address both the root causes and direct causes of internal conflict and other man-made crises putting populations at risk. Second, states and the international community have the responsibility to react during situations of compelling human need with appropriate measures, including the use of force. Finally, states and the international community have the responsibility to rebuild in the aftermath of atrocities. This may mean providing assistance with recovery, reconstruction and reconciliation as well as seeking to address the causes of the conflict.14 The UN General Assembly revisited issues relating to R2P in July 2009. This was the first time it would fully engage the doctrine since the adoption of the 2005 World Summit Outcome Document. On 21 July 2009, the UN Secretary-General Ban Ki-moon presented his report “Implementing the Responsibility to Protect” to the General Assembly after which the President of the General Assembly scheduled an “informal interactive dialogue” on 23 July, followed by a formal plenary debate on 23, 24 and 28 July. What emerged was a clear commitment from the vast majority of member states to the prevention and halting of atrocity crimes. Observing that R2P is grounded in the UN Charter, human rights treaties and, international humanitarian law, member states were united on restricting R2P’s scope to the four crimes of genocide, war crimes, ethnic cleansing and crimes against humanity. One area in which some member states disagreed is the issue of the use of force in any circumstance.15 Of the two countries that are of interest to us in this study, while South Africa is committed to R2P, China’s commitment to the doctrine is half-measured. China is one of the nations opposed to the use of force clause. China recognizes the use of force in the last resort to protect populations from mass atrocities but argues that this must be made possible only with the Security Council serving as the authorizing body and that troops can be deployed only after the UN has obtained the consent of the affected country.16 China maintains a policy of non-interference to the states it interacts with. Both R2P and CSR seem to be related in their commitment to protecting vulnerable citizens and helping to meet some of their basic needs. R2P has to do with the obligation of states to protect citizens while CSR has to do with the obligation of corporations to protect their stakeholders. However, while the former is made enforceable by international law, the latter is voluntary but then enforceable by means that are commonly utilized in social processes, 13. Nancy Zhang, “Chinese firms’ attitudes toward CSR changing”, Shanghai Daily 29 September 2008, http://www.shanghaisunrise.com/Events/Chinese_firms__attitudes_toward_CSR_changing. html 14. ICISS, The Responsibility to Protect: Research, Bibliography, Background: Supplementary Volume to the Report of the International Commission on Intervention and State Responsibility, Ottawa, Canada: International Development Research Centre, 2001. 15. GCR, Implementing the Responsibility to Protect, The 2009 General Assembly Debate: An Assessment, Ralph Bunche Institute for International Studies, The CUNY Graduate Center, http:// globalr2p.org/media/pdf/GCR2P_General_Assembly_Debate_Assessment.pdf. 16. See Sarah Teitt, “China and the responsibility to protect”, Asia-Pacific Centre for the Responsibility to Protect, The University of Queensland, Brisbane, Australia, 19 December 2008 page 10, http:// www.r2pasiapacific.org/images/stories/food/china_and_r2p.pdf, accessed 16 August 2010.


including civil society mobilization. As regards CSR, it is even possible for a community or groups within it to take the issue to court and ask for redress in cases of systematic deterioration of life and the environment on account of the activities of business. And it is known that in connection with these two bodies of protective practice, state commitments to treaties have implications for corporate approaches in relating to individuals and groups in the places where business activities are carried out. We also take liberties with the R2P principle, and we would rather argue that there is the need for us to go beyond protection that covers only atrocity crimes. People need to be protected from structures of disempowerment as well, for it is clear that suchdisempowerment, executed over the course of years, often results in situations of dire human suffering akin to the outcomes that result from atrocity crimes. R2P, rather than being an emergency mode of operation invoked by governments and the international community in view of weighty issues like genocide and ethnic cleansing, is a principle that adequately extends to the duty of everyday protection that governments and big business, which often operates in collusion with governments, owe citizens. And we believe that big multinational businesses are as likely as states to provide R2P or to institute and oversee its diminishment. In this study, what is important for us is to find out the extent to which the activities of the some Chinese phone enterprises and MTN (South African) in Nigeria reflect the protection traditions of CSR and R2P.

Research Methods As observed earlier, this project focused on two related issues. The first is sale of mobile telephone handsets by the Chinese in Nigeria. These phones consist of two types: (i) genuine but cheap phones manufactured in China most probably for the poor nations of the world and (ii) fake Nokia, Samsung and other ‘cloned’ phones shipped into Nigeria from China. The second issue studied in the research relates to the sale of telephone lines (SIMs) by the South Africanowned MTN in Nigeria. It has been established in the study that an MTN SIM card in a cheap Chinese phone allows Nigerians better access to information and this is highly appreciated by all and sundry. In this context, both the Chinese phone distributors and MTN can be said to be making significant contributions to the realization of both CSR and R2P in Nigeria. Both help to improve the chances of Nigerians’ access to information. It would be recalled that denial of access to information has been one of the ways by which political oppression was promoted in Nigeria up to 1999.17 This study was organized within a multidisciplinary framework. Both structured and unstructured interviews were conducted in Lagos, Port Harcourt and Abuja, these cities being the main hubs of business activities relating to the telecommunication sector in Nigeria. However, both the Chinese and South African enterprises targeted by this study operate under different conditions in the country. In the process of our interviews, it was easy to reach the agents of MTN both physically and through the websites of MTN and MTN Foundation. We got all the information needed. On the other hand, it was difficult to clearly identify the Chinese behind the sale of genuine and fake Chinese phones in Nigeria. The time allotted to this project was not long enough to give us access to Chinese interviewees. The best we could do was to interview the Nigerians who serve as the agents to the local (Nigerian-based) and foreign Chinese firms dealing in phones. The Nigerian wholesale and retail dealers preferred to talk to us about their activities than link us directly with the Chinese behind their business. The information provided by these people, however, supplied the hunch for following up certain issues on the internet within Nigeria and Ghana. Five focus group discussion sessions were held: one in Lagos, Port Harcourt and Abuja respectively and two with the Peace and Conflict Studies Students of the Institute of African 17. I.O. Albert et al (eds.), Urban Management and Urban Violence in Africa, Ibadan: IFRA, 1994. Volumes 1 and 2; I.O. Albert (ed.), Praxis of political concepts and clichés: Essays in honour of Dr. Mu’azu Babangida Aliyu, Ibadan: Bookcraft Publishers Limited, 2010

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Studies, University of Ibadan on issues relating to both the Chinese and South Africans in Nigeria. Six hundred questionnaires were also administered in the three cities, with the distribution being 200 per city. In addition to these means of data elicitation, some Nigerians who own mobile telephones and telephone lines were interviewed on what they feel about these Chinese and South African companies in the telecommunication sector. The data obtained from these sources were integrated during our data analysis and report writing.

Evolution of diplomatic and trade ties The Chinese: Africa is the least developed continent in the world. This partly manifests in terms of the continent’s deficiencies in physical infrastructure. This contributes significantly to low levels of industrialization and diversification, social welfare and standard of living, trade and investment on the continent. The deficit in this respect is quite enormous “even relative to low-income countries”.18 Africa’s infrastructure deficit is most pronounced in the power sector and this problem is directly related to the low industrial production level in the continent.19 The communication sector (mobile telephony, international telephony, and internet dial-up service) is equally problematic for industrial growth. Hence, Freemantle and Stevens argued that “Africa needs help” if it is to be set on the path of catching up with the other developing nations of the world before setting for itself the goals of catching up with the first world. It goes without saying that this debacle of underdevelopment is the ultimate cause of the violence that is rampant on the continent. This means that any assistance to bridge this deficit is in itself a major work in the area of R2P. It is interesting to note that China leads the world today in recent bilateral support for infrastructure financing and construction in Africa. For example between 2003 and 2007, China provided a total of almost USD16bn to Sub-Saharan Africa (SSA) compared to the USD8.2bn provided by the World Bank.20 The investments serve two core goals. First and foremost, it makes it possible for China to unlock natural resources across the continent. Secondly, the projects provide a pressure-valve for excess Chinese capacity in engineering, construction and mechanical equipment.21 How does it all affect Nigeria? The first point to be made in this respect is that the Chinese infrastructure investments in Africa are not evenly spread across the continent. The focus is more on where the Chinese can easily gain access to natural resources which they need for their industries at home. In return, they provide technical services, which they have in surplus at home to the countries that urgently need them. In other words, the Chinese target projects of mutual benefit in Africa.22 While the Chinese projects in other African countries are relatively small, their operations in Nigeria are huge. They concentrate two-thirds of their African investments in Nigeria, Angola, Ethiopia and Sudan as shown in the table below:

18. Simon Freemantle and Jeremy Stevens, “New partnerships poised to grow Africa’s commercial infrastructure”, Economics, Johannesburg: Standard Bank, 15 October 2010 p. 1. 19. Wand Naude and M. Matthee, “The significance of transport costs in Africa”, Policy Briefs No. 5, New York: United Nations, 2007. 20. Simon Freemantle and Jeremy Stevens, “New partnerships poised to grow Africa’s commercial infrastructure”, Economics, Johannesburg: Standard Bank, 15 October 2010 p. 4. 21. Erik Meyersson, Gerard P. Miquel, and Nancy Qian, “The rise of China and the natural resource curse in Africa”, Brown University, Harvard Academy, April 7, 2008. http://siteresources. worldbank.org/INTMACRO/Resources/June5&62008MGConferencePAPERQIAN.pdf. 22. Erik Meyersson, Gerard P. Miquel, and Nancy Qian, “The rise of China and the natural resource curse in Africa”, Brown University, Harvard Academy, April 7, 2008. http://siteresources. worldbank.org/INTMACRO/Resources/June5&62008MGConferencePAPERQIAN.pdf.


Fig. 1: Chinese Infrastructure investment in Africa, 2001-2007 (USD bn) S/N

African Country

Chinese Investment

1

Nigeria

USDbn 5.44

2

Other African countries

USDbn4.48

3

Angola

USDbn 3.2

4

Ethiopia

USDbn 1.6

5

Sudan

USDbn 1.28

Source: Compiled from Simon Freemantle and Jeremy Stevens (2010 p.5).

The People’s Republic of China and Nigeria established formal diplomatic relations on February 10, 1971. Before and after this period, there were some challenges. The inability of Nigeria to establish a smooth relationship with China in the early 1960s was due to Nigeria’s opposition to communism, which was the political doctrine of China. Chinese Premier Zhou Enlai’s 10-country trip to Africa in late 1963 excluded Nigeria.23 China was soon drawn closer to Nigeria under the leadership of Deng Xiaoping who shifted China’s foreign policy from indirect political and ideological support to direct support for various national liberation movements. As a prominent state fighting against white-led regimes in Southern Africa and a supporter of the liberation struggle in South Africa, Nigeria strengthened its diplomatic relations with China and this boosted trade between the two countries though marginally, because Taiwan remained the favoured trading partner at the time. At the invitation of the Premier of the Northern Region of Nigeria in the 1960s to take advantage of thriving cotton production in the region, Chinese investment helped to shape the early days of textile manufacturing in Nigeria. This notwithstanding, trade links between Nigeria and China remained insignificant until the visit of a former Premier of the State Council Li Ping in 1997. This high-level visitation led to the signing of several protocols between the two countries on subjects covering investment protection, enhanced cooperation in electricity and steel production, and even the oil industry. Nigeria and China had to expand their trade relations as the latter turned from a net exporter of crude oil to the second-largest importer of crude oil in the world in 1993 due to its economic growth. Gulf-of-Guinea countries like Nigeria, which produce sweet, low-sulphur crude and offer massive markets open to international investment, were particularly attractive to the Chinese.24 Utomi observed that as “China secured various joint-venture contracts with Nigerian oil companies, often in exchange for low-interest loans and targeted development projects, the volume of trade rapidly increased from 1.3 billion Nigerian naira in 1990, to 5.3 billion in 1996. Most of this growth was attributable to the oil sector, with a small fraction emanating from the importation of cheaply manufactured Chinese goods and products”. Sino-Nigeria relations expanded under the regime of Olusegun Obasanjo. The regime inherited a collapsed infrastructure, industrial base and economic system from the military that could hardly be refurbished by Nigerians alone. Obasanjo asked for international assistance and the Chinese came in with different forms of proposals. One of the first major projects to be contracted to the Chinese by the regime was the construction of the Abuja All-Africa Games village. The project was contracted to the China Civil Engineering Construction Corporation (CCECC) in 2000 to build some 5,000 housing units for international athletes participating in the eighth annual All-Africa Games. The project provided the onerous opportunity for the Chinese to showcase their expertise and increasing cooperation with Africa in a high-profile international setting. 23. Pat Utomi, China in Africa, Washington DC: Center for Strategic and International Studies, 2008 June 4 pp. 39-48, http://csis.org/files/media/csis/pubs/080603_utomi_nigeriachina.pdf. 24. Alex Vines, Lillian Wong, Markus Weimer and Indira Campos, Thirst for African Oil Asian National Oil Companies in Nigeria and Angola: A Chatham House Report, London: Royal Institute of International Affairs, August 2009 pp.7-28.

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The interest of China and Nigeria to work together was further boosted by the launching of the Forum on China-Africa Cooperation (FOCAC)—a programme designed to boost economic and social development for Africa and which saw three high-profile ministerial meetings between 2000 and 2006. By 2006 Chinese President Hu Jintao and Prime Minister Wen Jiabao visited Africa several times with Nigeria as a major port of call. This paved the way for the Hong Kong Chinese, who entered the Nigerian market earlier than other Chinese, as well as businessmen from the traditional mainland, to start establishing new manufacturing ventures for export and local markets at a time when Nigerian manufacturing was uncompetitive and collapsing into a state of deindustrialization. With time, state governors started to follow the example set by the federal government. They, too, led trade delegations to China seeking investments, aid and development partnership and this was how the Chinese spread around the country. The Chinese are today heavily involved in the Nigerian economy and the sectors in which Chinese state owned enterprises can be found in the country include oil exploration, quarrying and mining, manufacturing, agriculture, building and construction, lumbering, timber and saw mills among many others. Trading, which is emphasised in this study is in fact one of the least important but most visible of these economic activities.25 The Chinese are today now in both wholesale and retail business in Nigeria. In Lagos, they occupy almost all the floors of a 21-storey “Great Nigeria House” along Martins Street, a business hub of the city. The Chinese merchants here sell assorted Chinese products, especially clothing items and accessories. They are also very visible at the popular Balogun market in Lagos. They occupy the space from Martins Street up to Tinubu Square selling all types of goods from China.26 Nigerian traders buy these products on the wholesale from the Chinese merchants, and retail them to their customers. The Chinese also have a special market at Ojota known as “China Town”. The goods offered for sale here, which are all Chinese in origin, range from generating sets to textile materials, jewellery, electronics, carpets, wristwatches, plastic products, assorted items of clothing, cutlery and motorcycles. One particular area in which the Chinese seemed to have made the biggest impact in Nigeria is the sale of motorcycles, which are in very high demand in the country on account of the problems with public transportation. These Chinese motorcycles include brands such as Sanyang, Jincheng and Bajaj Boxer. They are in great demand in major cities such as Lagos, Abuja, Port Harcourt, Aba, Onitsha, Kaduna, Uyo, Calabar and Benin. These motorcycles sell so cheap that the other brands that Nigerians were familiar with before the Chinese “invasion”, such as the Japanese trio of Honda, Yamaha and Suzuki, are literally out of the market. There is no doubt that China’s activities in Nigeria are of mutual benefit. As Ogunkola and others have observed, these Chinese companies receive incentives from the Nigerian state in various ways. What is required, as in every other case of such bilateral economic relations, is for Nigeria to become more careful with the engagement, to ensure that it does not become too dependent on Chinese initiative and largesse so that it can make its own decisions among the comity of nations.27 The South Africans: On account of apartheid in South Africa, which was finally dismantled in 1994, independent Nigeria maintained a hostile policy towards the country for more than thirty years. The two countries established diplomatic relations in mid-1994 following the end of apartheid. The relationship between the Mandela regime in Pretoria and Nigeria suffered a setback in 1995 following the death sentence passed on the Nigerian writer and environmental activist Ken Saro Wiwa and eight others. Mandela appealed to Nigeria’s military head of state, 25. For detailed information on this see E. Olawale Ogunkola et al, “Nigeria-China Trade and Economic Relations”, Ibadan: Trade Policy Research and Training Programme (TPRTP), Department of Economics, University of Ibadan, Ibadan, NIGERIA, Dec. 2008, http://www.paknigeria.org/pdfs/30_Nigeria-China_Trade_and_Economic_Relations_Final_Report.pdf 26. Emmanuel Uffot, The Rush for Chinese Products, Newswatch, 27 October 2008, http://www. newswatchngr.com/index.php?option=com_content&task=view&id=183&Itemid= 1. 27. Biodun Alao, “Banking in Nigeria and Chinese economic diplomacy in Africa”, Occasional Paper No. 65, South African Institute of International Affairs, July 2010.


General Sani Abacha, to spare the lives of the writer and his colleagues. But this was not heeded. Following the execution of Ken Saro Wiwa and the others on November 10, 1995, Mandela called for international sanctions against the Abacha government. Though the South African leader later dropped this demand, deferring to the OAU, which was reluctant to impose sanctions against a member state, the military regime in Nigeria saw South Africa as an enemy nation.28 The relationship between the two countries entered a golden age with the enthronement of civil rule in Nigeria in 1999 as a result of which President Olusegun Obasanjo replaced General Abdulsalami Abubakar as Nigeria’s Head of State. In his inauguration speech, Obasanjo invited the international community, which had isolated Nigeria for many years of military dictatorship to restore relationships with the country. The South African government whose interests had become fused with those of South Africa’s capitalist elite in both the domestic and continental arena 29 took immediate advantage of this call to promote its expanding business interests on the African continent. Nigeria boasts the largest market population in Africa, and its oil wealth, poor manufacturing sector and technological handicaps make it a place for profitable trade for firms aiming to do business on a global scale. There was the need, however, for a framework that would provide stimulation for South African businesses to seize the opportunity offered by the market in Nigeria. The New Partnership for Africa’s Development (NEPAD) championed by both President Mbeki and President Obasanjo was later to grease the process of protecting South African interests in Nigeria. NEPAD views the private sector as the propelling force of African economies. It explicitly promotes the development of the private sector, privatization, free trade, financial liberalization, labour flexibility, and foreign direct investment in Africa, and encourages removal of all barriers to trade and investment among African countries.30 Like China, South Africa needs access to Nigeria’s raw materials to service its industries. It also needs markets for her products and so has leveraged on these interests to increase its commitment to NEPAD. Two interesting events took place in 1999, which both South Africa and Nigeria have utilized for consolidating relations between them. The first was the bilateral agreement on trade and investment that was signed in that year, aimed at increasing the amount of trade and investments between the two countries.31 A major highlight of this agreement is that the South Africans operating in Nigeria would be protected on a range of issues including from any possible future nationalization of their investments.32 The two governments also agreed on eradicating double taxation. The implication of this is that South African companies operating in Nigeria would not have to pay tax on profits repatriated home. This was meant to serve as an incentive for more South African companies to invest in Nigeria. The second development was the establishment of the South Africa-Nigeria Binational Commission in October 1999 to increase the amount of trade and investment between the two countries. The Commission meets twice a year and a major outcome of the initiative is the South Africa-Nigeria Chamber of Commerce whose aim is to identify investment opportunities in Nigeria for South African corporations.33 So successful were all these initiatives that trade 28. “Relations with African States”, http://countrystudies.us/south-africa/83.htm 29. Shawn Hattingh, “South Africa’s Role in Nigeria and the Nigerian, Elections”, http://mrzine. monthlyreview.org/2007/hattingh260607.html. 30. Adel Ezeoha and Chibuike Uche, “South Africa, NEPAD and the African Renaissance,” ASC Working Paper 64, University of Nigeria, 2005; Ishmael Lesufi, NEPAD and South African Imperialism, Johannesburg: Jubilee South Africa, 2006. 31. Bangumzi Sifingo, “South African High Commissioner to Nigeria Comments on Business Relations,” African Business Journal Issue 13, February-May 2003. 32. Aziz Pahad, “Briefing on the Incoming Nigerian State Visit,” Union Buildings, 5 May 2002. 33. Jessica Lutchman, John Daniel, and Sanusha Naidu, “South Africa and Nigeria: Getting Closer All the Time,” HSRC Review 2.4 (2004): 10-11.

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between South Africa and Nigeria jumped from $11 million in 1994 to more than $11 billion in 2005 and the number of South African firms doing business in Nigeria has increased from just four in 1999 to hundreds in 2007.34 These South African companies in Nigeria include MTN, Standard Bank, First Rand, Imperial, Johncom, Massmart, Nampak, and Sun International. The Palms shopping centre in Lagos, the largest mall in sub-Saharan Africa, is managed by a South African company, Broll, and most of its stores — Game, Shoprite, NuMetro, Nandos — are South African brands. Entech, a South African engineering firm, is leading a $3 billion redevelopment of Lagos’s Bar Beach and Victoria Island waterfront. Another South African firm, Group Five, is building a power station in the Niger River delta. Tinapa, the largest tourism project in the country, is a joint venture between Standard Bank, Broll, and Southern Sun — all South African firms. Standard Bank has also just swallowed Nigeria’s IBTC bank. Businessday, a leading financial daily in Lagos has Johnnic Communications, a South African media giant, as a partner. DSTV/Multichoice, another South African company, captured 95% of the satellite-TV subscription market in Nigeria as early as the 1990s.35All these companies are big players in Nigeria’s economy. South Africa’s exports to Nigeria include machinery, electrical equipment, appliances, wood, paper, waste, prepared foodstuffs, beverages, plastics, rubber, chemicals, and base metals. On the other hand, oil makes up 97% of Nigeria’s exports to South Africa. Commenting on the terms of trade between the two countries Shawn Hattingh observed that: Because of this, South Africa’s exports to Nigeria have the potential to grow dramatically. Conversely, Nigeria’s export products to South Africa consist of a single raw material, in the form of oil. Its oil exports to South Africa are unlikely to increase dramatically over the next few years; and its export products are also unlikely to diversify. This translates into an unequal situation between South Africa and Nigeria; in which South Africa is in fact the dominant partner in terms of trade relations. Indeed, if one excludes oil, which is imported to meet the petrol-guzzling demands of South Africa’s elite class, Nigeria is, in fact, exporting hardly anything to South Africa and is certainly not exporting any value-added manufactured goods.36 The Chinese and South African firms targeted by this study have something in common by the pattern of their investments in Nigeria. They both have taken advantage of the lacuna left by the Europeans and Americans, who were wearied by the endless years of military dictatorship in Nigeria, and did not know how to engage the country after the 1999 transition to civil rule. Unlike the western investors that prefer to focus only on oil, the Chinese and South Africans have diversified their investments. They have taken risks, which western investors would not have been willing to take and it has paid off at the end of the day. 37

The Chinese and South Africans in Nigeria’s telecommunication sector It has been established above that the Chinese and South Africans participate in different aspects of the Nigerian economy. For easy comparison, this study focuses on the telecommunication sector in which the two of them are well established and visible. The telecom sector is regarded as the most vibrant in the Nigerian economy in terms of the need for systems that facilitate 34. Leonard Lawal, “South Africa goes shopping”, September 27 2007: 9:51 AM EDT, http://money. cnn.com/2007/09/26/news/international/south_africa.fortune/?postversion=2007092709. 35. Leonard Lawal, “South Africa goes shopping”, September 27 2007: 9:51 AM EDT, http://money. cnn.com/2007/09/26/news/international/south_africa.fortune/?postversion=2007092709. 36. Shawn Hattingh, “South Africa’s Role in Nigeria and the Nigerian, Elections”, http://mrzine. monthlyreview.org/2007/hattingh260607.html. 37. Leonard Lawal, “South Africa goes shopping”, September 27 2007: 9:51 AM EDT, http://money. cnn.com/2007/09/26/news/international/south_africa.fortune/?postversion=2007092709.


exchange of information for the vast population of the country.38 This sector was also chosen for our study because it touches on the capability of Nigerians to exchange information, which is an essential feature of any democratic governance. We are also interested in the telecommunication sector because at this time in the history of Nigeria the sector is at a crossroads. Unlike in other parts of the world, Nigeria has for the past ten years found it difficult to have an effective land phone system; it also has no wireless telephone system and largely depends on a mobile phone system. The mobile phone system is dominated by foreigners and thus provides an opportunity to Chinese and South African MNCs to expand their market share. The first step towards giving Nigeria a comprehensive communication policy was taken by the administration of General Sani Abacha in 1995. The dismal human rights records of the regime and the hostility of members of the international community to the regime made Abacha shelve the implementation of the policy. Following the death of the Nigerian dictator, his successor General Abdulsalami Abubakar attempted to revive the policy in 1998 but many of its provisions had become outdated, overtaken by events or required further modifications (Arzika, 2000). The administration was also distracted by mounting pressures from within and outside Nigeria for the military to hand over power to civilians. This made the burden of crafting a new national telecommunications policy to fall on the administration of President Olusegun Obasanjo who was sworn into office in May 1999. By October 1999 the new policy had been launched and was reviewed by the Telecommunications Sector Reform Implementation Committee (TSRIC) in February 2000, after which a final policy was published in May of the same year.39 By the time the military handed over to President Olusegun Obasanjo in 1999, the only telecommunication company in Nigeria dealing with the provision of phone lines was NITEL.40 The government-owned company was very inefficient and could not stand the competition that followed the deregulation of the Nigerian economy, and particularly the privatization of the telecommunication sector in Nigeria’s fourth Republic. Though it had an estimated installed base of 650,000 lines across 800 switches covering the whole of Nigeria, only half of these lines were operational. Much of NITEL’s equipment was old and obsolete, while the modern equipment it acquired was poorly maintained.41 The poor performance of the company also gave it credibility problems before consumers. NITEL collapsed as the Obasanjo administration granted Nigerians access to mobile phones. All efforts to revive the company failed to produce any tangible result. Commenting on the misfortune of the company, Titi Omo-Ettu, an Engineer and President of the Association of Telecommunications Companies of Nigeria (ATCON), observed that: …it all seems a far cry from days of old when NITEL was at its pomp, bestriding the industry unchallenged. Days when all we had were land lines, poor connectivity and low coverage and when telephone cost an arm and a leg.42 With the telephony field opened up in this way, NITEL could not survive in the face of stiff competition from the big operators of the Global System for Mobile Communications (GSM). The MTN Group, Africa’s leading cellular telecommunications company, started operations 38. Chikodi Okereocha, “Plight of marginal operators”, Tell, August 30, 2010 p.4 cover story. 39. Hassan Omowunmi, Oluwaranti Niran and Isola Oluseyi, “Evaluation of Nigeria’s telecommunications policy”, Journal of Mobile Communications, 3(1), 2009, p.2. 40. See A.V. Smith-Hillman and T.W. Braithwaite, “Learning to swim with sharks: Caribbean and African telecommunications regulatory experience under monopoly conditions”, Info, 6(5), 2004, pp. 308-317. 41. Andre Wills, Geoff Daniels, Nigeria Telecommunications Market A Snap Shot View, African Analysis, April 2003, p.3.http://www.africaanalysis.co.za/NigeriaTelecomsWhitePaper.pdf. 42. Cited in Andre Wills, Geoff Daniels, Nigeria Telecommunications Market A Snap Shot View, African Analysis, April 2003, p.6

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in Nigeria on May 16, 2001 thus becoming one of the first three GSM networks to start operations following the globally lauded Nigerian GSM auction conducted by the Nigerian Communications Commission earlier in the year. The other two networks were Econet and NITEL (which rebranded as Rose). Of the three, MTN recorded the fastest growth and as Wills and Daniels have noted, the company “raised the stakes considerably in the market… with the other operators currently struggling to focus their operations”.43 The company embarked upon a very strong branding strategy that eventually proved very successful. It launched full commercial operations beginning with Lagos, Abuja and Port Harcourt and gradually expanded to all parts of Nigeria. As the company observed on its website, it now: …provides services in 223 cities and towns, more than 10,000 villages and communities and a growing number of highways across the country, spanning the 36 states of Nigeria and the Federal Capital Territory, Abuja. Many of these villages and communities are being connected to the world of telecommunications for the first time ever… The company’s digital microwave transmission backbone, the 3,400 Kilometre Y’elloBahn was commissioned by President Olusegun Obasanjo in January 2003 and is reputed to be the most extensive digital microwave transmission infrastructure in all of Africa.44 By 2003, there were an estimated 1.9 million active mobile phone subscribers in Nigeria with 54% of them being MTN customers. 39% of the market went to Econet while only 7% belonged to the Nigeria-owned NITEL.45 MTN Nigeria expanded so rapidly that within a short time it expanded its network capacity to include a new numbering range with the prefix 0806. This made it to be the first GSM network in Nigeria to have adopted an additional numbering system, having exhausted its initial subscriber numbering range 0803. The other companies that soon joined MTN include Airtel (former Vmobile, Celtel Zain in that order), Etisalat, Globacom, Cisco, Intercellular, Visaphone, Multilinks, Nigerian telecommunications limited (NITEL), Mtel, Rainbownet, Reltel, Starcomms, VGC communications amongst others. The growth in mobile telephony in the country has been so rapid that Nigeria has been rightly described in various fora as “one of the fastest growing GSM markets in the world”. Nigeria which was in the period before 2001 classified as one of Africa’s most under-served telecommunications markets became one of the world’s fastest growing telecommunications markets by 2006 as is evident in the table below:

Fig. 2: Total connected lines and teledensity from December 2001 to March 2006

Source: Hassan Omowunmi, Oluwaranti Niran and Isola Oluseyi, “Evaluation of Nigeria’s telecommunications policy”, Journal of Mobile Communications, 3(1), 2009 p.2

43. Andre Wills, Geoff Daniels, Nigeria Telecommunications Market A Snap Shot View, African Analysis, April 2003, p.4. http://www.africaanalysis.co.za/NigeriaTelecomsWhitePaper.pdf. 44. About MTN Nigeria, http://www.mtnonline.com/index.php/about.html. 45. Andre Wills, Geoff Daniels, Nigeria Telecommunications Market A Snap Shot View, African Analysis, April 2003, p.4. http://www.africaanalysis.co.za/NigeriaTelecomsWhitePaper.pdf.


The mobile phone companies registered in the country contributed to this global image of Nigeria differently as shown in the following table on the rating of the leading GSM companies in Nigeria by 2009:

Fig. 3: Nigeria Mobile Telecom Operator 1st Quarter 2009 Source: Jidaw Systems Limited, “Telecom

Business & Providers in Nigeria”, http://www.jidaw.com/telecomproviders.html

How did the Chinese come into the telephony sector? The Chinese first attempted to gain inroads into the Nigerian telecommunication sector in 1997 when the Federal Government signed a memorandum of understanding with the Chinese government under which Chinese vendors ZTE, Huawei and Alcatel Shanghai Bell were to provide telephone services to 110 local government headquarters in rural areas. According to the Former Minister of Communications Femi Anibaba, NGN64 billion (USD514.5 million) was invested on this project and the second phase of this rural telephony project was due to be completed before the end of 2007. But the project failed as it could not compete with the mobile telephony revolution that took off in 2001. Consequently, the Obasanjo administration failed to install almost all of the 12.20 million rural phones it pledged. Hence at the initial stage of the mobile telephony revolution in which South Africa played an active role, the Chinese were nowhere to be found. But the Chinese carefully followed the expanding business with a view to finding the right space for themselves. The opportunity soon came. When mobile telephony was introduced to Nigeria in 1999, it excluded the poor. To acquire an MTN SIM card, for example, one needed about $150 as the lines were largely sold in the black market due to high demand. In a country where the minimum wage then was barely more than $50, the cheapest Nokia phone (from the western world) was sold for about $300. This made the use of mobile phones a status symbol in Nigeria. The Chinese seized this opportunity to start shipping to Nigeria original Nokia phones produced at cheaper rates in China. When they noticed that some Nigerians could still not afford these cheaper phones, they started to come in with substandard phones sold at prices that Nigerians could now easily afford. Then came another problem, which the Chinese phone companies exploited for expanding their economic interests: poor functioning of the telephone networks due to oversubscription. The statistics from the Nigerian Communications Commission (NCC) show that the use of

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mobile telephony in Nigeria expanded beyond any official projection within a short time. For example, compared with just about 450,000 working lines from NITEL in 2001, by August 2004, the GSM operators had recorded over seven million subscribers. The expansion continued. As all of these companies confronted the huge Nigerian market, they continued to sell more and more phone lines to subscribers not minding the size and quality of their facilities. This led to different forms of system failures. For days, some of the networks failed to work or at best provided poor services. Nigerians soon found a solution to the problem: acquiring more than one mobile phone line in the hope that when one network was not performing the other would. This meant that an average user should have at least two phone lines: usually one MTN and another network. Carrying two or three phones around soon became a big burden for many Nigerians. The Chinese quickly rose to the occasion by introducing to the Nigerian market double-SIM phones. Nigerians, not only the poor but also the rich at the initial stage, were very happy about this. Thus, a rich Nigerian would acquire an authentic phone and support it with a Chinese phone. The two phones make it possible for him to have three lines. To make the phones more attractive to the rich who might not want to use them because of their outward appearance, the Chinese improved the outward appearance of the phones they shipped into Nigeria while at the same time ensuring that the price was cheap. For example, a Chinese company known as Techno flooded Nigeria with its double-SIM phones in 2009. The highly portable and welldesigned phone was sold for less than $100. It came in a flashy casing, accompanied by a black leather designer wristwatch bearing the name of the company. A Nigerian roadside mechanic who bought the phone in March 2009 brandished the wristwatch and phone at us in August 2010 during the course of our fieldwork to show that what the Chinese sells is not as bad as some people claim. He commented thus: “It is not a bad deal to use a phone and wristwatch bought for N10, 000 for a year and still have them in this excellent state.”

Perception Survey This section contains the results of the data analysis for the study. The administered questionnaire was divided into three sections. The first section is on demographic profiles of the respondents. The second section is related to the commitment of Chinese and South Africans to CSR in the Nigeria Telecommunication sector while the last section dealt with the commitment of Chinese and South Africans to R2P in the Nigeria’s Telecommunication sector. The Statistical Package for Social Sciences (SPSS) was used to analyze the data set. Thus, a frequency distribution is used to describe findings from the sample. A total of 600 questionnaires were administered and only 470 were usable for analysis. The respondents selected were from three states, namely, Lagos (Lagos State), Port Harcourt (Rivers State) and Abuja (FCT). The following table shows the location of the respondents: Where do you stay/live presently?

Valid

Missing Total

Lagos Port Harcourt Abuja Total System

Frequency

Percent

Valid Percent

CumulativePercent

169 129 150 448 22470

36.0 27.4 31.9 95.3 4.7 100.0

37.7 28.8 33.5 100.0

37.7 66.5 100.0

Most of our respondents (96.8%) fall within the age bracket of 25 to 45 years old. This means that they are young people. Concerning their educational qualification, more of the respondents have “OND/NCE” certificates — 127(27%) followed by those that have “WASC/GCE/SSSE” certificates — 118(25.1%) while those in the third largest group have primary school leaving certificates — 109(23.2%). The least number of respondents as shown below have “Ph D” certificates — 7(1.5%):


What is your highest educational qualification?

Valid

Primary school leaving certificate WASC/GCE/SSSE OND/NCE HND/BSC MSC PHD Total

Frequency

Percent

Valid Percent

Cumulative Percent

109

23.2

23.2

23.2

118 127 93 16 7 470

25.1 27.0 19.8 3.4 1.5 100.0

25.1 27.0 19.8 3.4 1.5 100.0

48.3 75.3 95.1 98.5 100.0

More than 56% of the respondents were MTN users while the remainder was distributed among other mobile lines like Glo, Airtel, Etisalat, etc. The comatose NITEL owned by the government was not at all reflected in the responses. About the factor that informed the respondents’ choice of mobile phones, affordability came first (32.6%), followed by brand of phone (26%) and durability (24.5%). The majority of the respondents use mobile phones within the price range of “N1,000-5,500” naira (212; 45%), followed by those within the price range of “N5,500-11,000” naira (151; 32.1%). Only 24 of the respondents (5.1%) could afford expensive phones. This is reflected in the following table: What price range of mobile phone in Naira do you use?

Valid

1,000 – 5,500 5,500 – 11,000 11,000 – 20,000 20,000 and above Total

Frequency

Percent

Valid Percent

Cumulative Percent

212 151 83 24 470

45.1 32.1 17.1 5.1 100.0

45.1 32.1 17.7 5.1 100.0

45.1 77.2 94.9 100.0

The respondents’ choice of phone has correlation with their monthly income below. Only few of them earn more than sixty thousand Naira ($400) a month. This means they are all midincome earners by Nigerian standards. We sought to know from the respondents the aspects of the telecommunication sector in Nigeria where South Africans and the Chinese feature most and we got the following responses: In which particular sector of the communication industry is the presence of South African company most felt? Valid

Sales of telephone line Production/Sales of phone Production/Sales of phone accessories Internet service Other Total

Frequency

Percent

Valid Percent

Cumulative Percent

294 32

62.6 6.8

62.6 6.8

62.6 69.4

42 85 17 470

8.9 18.1 3.6 100.0

8.9 18.1 3.6 100.0

78.3 96.4 100.0

In which particular sector of the communication industry is the presence of Chinese company most felt? Valid

Sales of telephone line Production/Sales of phone Production/Sales of phone accessories Internet service Other Total

Frequency

Percent

Valid Percent

Cumulative Percent

31 292

6.6 62.1

6.6 62.1

6.6 68.7

114 24 9 100.0

24.3 5.1 1.9 100.0

24.3 5.1 1.9 100.0

93.0 98.1 100.0

Most of the respondents are aware that South Africans are better known for the sale of telephone lines while the Chinese are known for selling phones. The respondents generally considered acting responsibly or ethically as the topmost CSR

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driver in Nigeria (86.8%) followed by responsibility towards customers’ expectation (73.4%), and the next was responsibility to develop communities in which the firms operate (69.8%). Asked to shed more light on the above, respondents observe that Nigerians are going through too much economic hardship and would therefore appreciate firms that make life more comfortable for them. Having been defined for them by our field assistants, most of the respondents claim to be familiar with CSR activities of both the MTN and the Chinese phone sellers. MTN can be easily identified with several entertaining programmes on the television. The company is also said to have the habit of sponsoring school programmes. On the other hand, the Chinese only sell cheap phones and this is considered to be a CSR activity. Both the Chinese and South Africans were said by some of our respondents to have CSR initiatives: How has Chinese/South African CSR initiatives been made known to you and possibly the community? Valid

MTN from South Africa sponsors different programmes on TV, in schools, ect Chinese engage in sales of phone Both Chinese and South African participation in the oil sector Others Total

Frequency

Percent

Valid Percent

Cumulative Percent

248

52.8

52.8

52.8

139 69

29.6 14.7

29.6 14.7

82.3 97.0

14 470

3.0 100.0

3.0 100.0

100.0

We sought to know from the respondents the value to attach to CSR and the responses are provided in two tables below. The majority (300; 64.5%) agreed that CSR is largely a public relations issue. 335 (71.3%) of them considered it to be a profit-making initiative. In both cases, the respondents do not necessarily see it in terms of business ethics. To what extent do you agree or disagree that social responsibility is largely a public relation issues? Valid

Strongly Disagree Disagree Neutral Agree Strongly Agree Total

Frequency

Percent

Valid Percent

Cumulative Percent

36 61 31 303 39 470

7.7 13.0 6.6 64.5 8.3 100.0

7.7 13.0 6.6 64.5 8.3 100.0

7.7 20.6 27.2 91.7 100.0

To what extent do you agree or disagree that social responsibility is vital to the profitability of any company? Valid

Strongly Disagree Disagree Neutral Agree Strongly Agree Total

Frequency

Percent

Valid Percent

Cumulative Percent

326 50 21 335 38 470

5.5 10.6 4.5 71.3 8.1 100.0

5.5 10.6 4.5 71.3 8.1 100.0

5.5 16.2 20.5 91.9 100.0

On whether or not the Chinese have anything that could connect them with the CSR principle, 424 of the respondents (90.2%) said No. On the other hand, 335 respondents (75.5%) answered the same question in the affirmative for the South Africans. What are the CSR projects with which the South Africans could be identified? 69.8% of the respondents observed that South Africans (MTN) provide scholarships to Nigerian schools, sponsor football games, and support schools. The respondents were asked to assess the impact made to livelihood by both the Chinese and South Africans. Though they had earlier claimed that the South Africans contribute more to CSR, the majority of the respondents seemed to have contradicted themselves by claiming


that the Chinese made more impact. 335 (71.3) considered the impact of the Chinese to be high. On the other hand, majority of the respondents (185; 39.4%) consider the impact of the South Africans to be low. How much impact has Chinese company been able to make in livelihood? Valid

No impact at all Low impact Moderate impact High impact Full impact Total

Frequency

Percent

Valid Percent

Cumulative Percent

26 50 21 335 38 470

5.5 10.6 4.5 71.3 8.1 100.0

5.5 10.6 4.5 71.3 8.1 100.0

5.5 16.2 20.6 91.9 100.0

How much impact has South African company been able to make in livelihood?

Valid


Frequency

Percent

Valid Percent

Cumulative Percent

144 185 89 35 17 470

30.6 39.4 18.9 7.4 3.6 100.0

30.6 39.4 18.9 7.4 3.6 100.0

30.6 70.0 88.9 96.4 100.0

On the other hand, both the Chinese and South Africans were said to have made low levels of impact on personal safety in Nigeria. “Personal safety” meant direct investment on policing. While 201 (42.8%) consider the Chinese to have made low impact, 204 respondents (43.4%) considered the South Africans to have made low impact, as well. On the other hand, the Chinese were said to have made high impact to human dignity in Nigeria while the South Africans have made low impact on human dignity. The following tables speak to the issue: How much impact has Chinese company been able to make in human dignity? Valid

Missing Total

No impact at all Low impact Moderate impact High impact Full impact Total System

Frequency

Percent

Valid Percent

Cumulative Percent

25 49 21 338 36 469 1 470

5.3 10.4 4.5 71.9 7.7 99.8 2 100.0

5.3 10.4 4.5 72.1 7.7 100.0

5.3 15.8 20.3 92.3 100.0

How much impact has South African company been able to make in human Valid


Frequency

Percent

Valid Percent

Cumulative Percent

144 184 89 36 17 470

30.6 39.1 18.9 7.7 3.6 100.0

30.6 39.1 18.9 7.7 3.6 100.0

30.6 69.8 88.7 96.4 100.0

Data Discussion: Perspectives on CSR and R2P At this stage, we seek to make meaning of all the data we have presented so far in the context of the other available data and evidence. All of this is done to address our original research question: How far have the Chinese and South Africans been committed to CSR and R2P principles in their participation in telecommunication business in Nigeria? At this stage, we try to reconcile what CSR and R2P mean globally and how Nigerians perceive it. However, our assessment of the two principles would lean more in the direction of what Nigerians consider

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to be their priorities. In other words, this aspect of the paper will feature a micro-analysis of the two concepts. A second look at the existing publications on CSR and R2P suggests that the two concepts are related in their ultimate goal which is to protect the interest of the underclass. CSR has to do more with business ethics while R2P has to do with international political morality. But both seek to “protect”. Given the fact that Nigeria is not a rogue state which R2P principles would encourage nations of the world not to do business with, our application of this concept to Nigeria would therefore yield resemblances with the practice of CSR. In the process of protecting the interests of communities, stakeholders, customers and the environment, CSR is partial to those who might otherwise not have been able to adequately cater for themselves. This is almost similar to what R2P is all about. It is all about protecting the interest of the vulnerable in a society. Whereas CSR deals more with the interest of individuals and small groups, R2P is more about protecting a people or nation. But both have to do with “protection”. Approached from this angle, the fact remains that both MTN and the Chinese phone sellers in Nigeria have contributed in no small measure to protecting the interest of the marginalized in the Nigerian society. The Nigerian state is not a welfare state and so does not care about the poor social conditions of the non-elite. The telephone lines provided by MTN since 2001 and the cheap phones provided by the Chinese have helped significantly in empowering the poor in Nigerian society. First and foremost, the introduction of mobile telephony to Nigeria in 2001 was a major victory over the consistent efforts of Nigerian leaders to suppress the people’s freedom of information. The military used denial of access to an effective telephony system to oppress and suppress the people. As noted earlier, the only functioning telephone system in Nigeria prior to the mobile telephony revolution was NITEL. It was not only too expensive for the poor, it could only provide inefficient service for those that could afford its use but more importantly a tool in the hands of military coup plotters. All the coups in the country were facilitated by the cutting off of NITEL lines by the plotters so as to block the free flow of information about the security situation of the country. Once the coup plotters had stabilized their illegal regimes, they would restore the lines. This is no longer possible in Nigeria as many Nigerians (including loyal military officers that could counter such illegitimate change of power) now have mobile telephones through which they can contact one another against anybody that tries to take over political power illegally in the country. It is in this respect that we consider the telecom revolution that started in 2001 to be a major contribution to the expansion of Nigeria’s democratic space. Nigerian democracy owes a lot to the Chinese and South Africans and not just only to President Obasanjo in this respect. Nigerians describe mobile telephony as “Nigeria’s only dividend of democracy” to deride the poor performance of their leaders in the other sectors since the 1999 transition to civil rule. The use of mobile phones has significantly reduced information asymmetries in Nigeria, enabling users to access arbitrage, market or trade opportunities that they otherwise would have missed out on. It is necessary to say that mobile telephony has contributed significantly to the expansion of business opportunities in the country. It is now easy for people to conduct their businesses by telephone. Rural farmers now have better access to their urban-based customers and vice versa. Different communities have devised different strategies for bettering their access to this means of expanding their business. An Igbo trader in Lagos told us that mobile phone network access in his village is low. So a member of the community built a wooden platform that was raised to a level that could enable him to gain connectivity. The other villagers now go to make their calls by climbing his platform. The story was also told to us in Ibadan of a village that does not have electricity supply. Some members of the community bought generators that they use for helping the community members to charge the batteries of their phones at a fixed rate. By so doing, many Nigerian communities take advantage of the entrepreneurial opportunities offered by mobile telephony.


Mobile telephony has generated a lot of employment opportunities for Nigeria since it started in 2001. A study conducted in this respect shows that most of the GSM operators, who operate by the roadside either selling recharge cards or doing payphone business, are educated youth with a mean age of 29 years. The study revealed that 71.3% of the total respondents had no job before the introduction of the GSM business. Hence, the author of the study observes that, “the deregulation of the telecommunication sector has indeed reduced urban unemployment among the youth in the study area”.46 She notes further that the profitability analysis showed that “GSM business was profitable both in the short and long runs with a gross margin of N73,452 net returns on N36,627 and a mean income of N86,105”.47 The generated employment is for a wide array of stakeholders: both skilled and unskilled labour. MTN provides job opportunities for a broad spectrum of Nigerian college graduates. Since the 2001 mobile telephony revolution in Nigeria, several thousands of Nigerians that would have hitherto been unemployed now sell phone recharge cards by the roadside. Some run “phone shops”. These “umbrella telephone operators” who are found on the streets of Nigerian cities and villages rent their phones to those without phones at “pay-as-you-go” rates (they pay per minutes). It is interesting to note that Fasoranti’s research was limited to those who do GSM business by the roadside. It did not cover the millions of Nigerians formally employed by the mobile companies. It did not include the equal number of people dealing in phones and phone software. To this end, both the Chinese and South Africans could be said to be making significant contributions to poverty alleviation in Nigeria through their business activities. Though not readily available to us, the fact remains that the Nigerian state derives huge taxation revenue from the operations of MTN. Those who bring Chinese phones to Nigeria must also have been paying some taxes to the government. This must have had a positive impact on the revenue-generating capacity of the government. All these constitute good indicators of CSR and R2P. It is now time to differentiate between the commitment of the Chinese and South Africans to CSR and R2P. The two of them have different levels of commitment to the principles. Whereas MTN pursues CSR (and by implication R2P) as a goal, the Chinese do not in any way pretend to have anything to do with it though our respondents at the end of it all feel that the Chinese are doing more than the South Africans in this respect. In one of the focus group discussions we had on the matter at the University of Ibadan, a doctoral student said “…though we have many churches and mosques in Nigeria it is well known to everybody that Nigerians are not that religious otherwise you would not have so much criminality in the society. Similarly, MTN is not as committed to CSR as it officially celebrates itself. We feel more comfortable with the Chinese who are no pretenders”. What our research has clearly shown is that whereas the South Africans (MTN) are committed to what could be described technically as CSR, the Chinese (phone dealers) are actually not. On account of its CSR activities, MTN won over 30 awards from 2005 to 2008 covering support services in the areas of family health, manpower development, efficient service provisioning, endowments, educational development, environmental protection, Millennium Development Goals, etc.48 The foregoing notwithstanding, our respondents concluded that MTN engages in CSR or R2P not necessarily to pursue social justice goals but merely to expand its business. Nigerians criticize the company for charging too much for unsatisfactory services and in this reasoning 46. See M.M. Fasoranti, “The influence of the deregulated tele-communication sector on urban employment generation in Nigeria”, Research Journal of Social Sciences, 5, 2010, p. 6. 47. M.M. Fasoranti, “The influence of the deregulated tele-communication sector on urban employment generation in Nigeria”, Research Journal of Social Sciences, 5, 2010, p. 6. 48. See Appendix 1.

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its customers consider what it commits to CSR as merely “coughing out” what it takes from Nigerians by force which it could not have taken from fellow South Africans. Within this reasoning, our informants consider MTN’s CSR from two angles: “crumbs from the table of a shylock”49 and “ploys to get more unsuspecting preys”. One of our respondents described MTN’s CSR initiatives to be “propaganda against competitors” while yet another considers it to be a case of “taking from the poor to enrich the rich”. The conclusion from all this is that MTN has indeed done many CSR projects for which it won several laurels but the ordinary Nigerian does not regard these achievements so highly as to consider them as a basis for criticizing the Chinese. In fact, they would rather identify with the Chinese than with the South Africans. The Chinese make it possible for the existing asymmetry in the use of mobile phones to be removed. This to them is the real CSR not “a handout”. On the other hand, the high charges of MTN limit how freely they can use their cheap Chinese phones. When the South Africans and the Chinese are placed side by side, Nigerians feel that the Chinese have done more in the direction of protecting the interest of the people. While MTN kept its permanent tab on making more profit, the Chinese target the same goal but strategically get closer to the people by helping to meet their immediate unmet needs. This is significant in a society in which the people feel abandoned by the state and are exploited by other (political and business) interests. For example, the point was made above that the Chinese make it possible for the poor in Nigerian society to have access to phone batteries that last longer at reduced prices. They produce “condoms” which phones wear so that that when they fall or drop in water they are still prevented from damage. They produce and sell phone accessories that make it possible for damaged phones to be easily repaired rather than thrown away. What the rest of world considers to be CSR or R4P might not appeal to the underclass that is still struggling to meet basic human needs. For example, Governor Babatunde Fashola of Lagos State is considered to be one of the best performing Governors in Nigeria today. One of his acclaimed achievements is the renewal of Lagos first and foremost by clearing the city of garbage, beautifying it by planting flowers and removing street boys from most of the communities. As part of his project to make the city better organized, he held a “town hall” meeting with the motorbike riders in the State on August 26, 2010 during which he laid down some new rules for the operation of commercial motorbikes in the State. Reacting to the outcome of the meeting, Mr. Fidelis Nnanyelugo, a street trader at Idumota had this to say: This is our place of business and we need a lot of things from government. For instance, there is no streetlight and toilet here, because our landlords did not provide such facilities. We all make use of a pay public toilet whenever nature calls. We will appreciate it if the government can provide streetlight, toilet and potable water for us. That would be more beneficial to us than planting flowers and painting the streets.50 (Italics added.) To Mr. Nnanyelugo and his likes, what Fashola considers to be an achievement is not. The point that the trader was trying to make is that the planting of flowers is not the first need of the subaltern class. “Protection” to Lagosians like him has to do with the provision of basic human needs. Hence, a company that plants flowers in Lagos as part of its CSR might not get as much credit among the grassroots people as would accrue to a company that is building toilets, providing streetlights and water. On the other hand, the elite who already have these basic facilities in their homes and offices would better appreciate what the Governor is doing: “it makes some parts of Lagos to now look like London; the streets are romantic”. It was in a 49. A senior manager of MTN blames this image of MTN on the cost of its recharge cards. He argued on the other that the company still produces the best services in Nigeria and that it is difficult to do business in Nigeria at the cheap rate expected by Nigerians in terms of the terrible infrastructure, erratic power, and corrupt bureaucrats in the country. 50. Paul Adunwoke, “We need streetlight, water, toilet not planting of flowers – Nnanyelugo”, The Guardian, August 29, 2010 Citylife, p.3.


perspective such as this that one of our respondents who described MTN’s CSR initiatives as “taking from the poor to enrich the rich” asked us: “How many poor people’s children has MTN ever helped. All the awards are won by their friends.” Reminded of the many European leagues, other international games and personality programmes that MTN sponsors on television, the respondent asked us: “Who told you I can afford DSTV cable channels to be able to watch any of those programmes? We the poor take more interest in hearing the results of the games while the privileged in the society like you watch them. But MTN pays for the matches with our recharge cards. Is that not sufficiently annoying?” A major complaint against MTN is that it sometimes provides bad services. This issue was visited in a report produced by Adewusi, a senior account manager at the UK office of MRM Worldwide, a full service direct and interactive marketing solutions agency. She is currently doing research on the growth of marketing and strategy in Nigeria and has observed that: MTN was one of the first companies to bring mobile telephony to Nigeria, offering us the promise of a better than average service. Just over four years later, the reality is MTN may have been one of the first to enter the market, and it may even be the market leader, but it sure isn’t delivering anything above or even average. But while MTN may be the leader today, as history has proven, it could easily lose its lead. It is so easy to slip from the number one position when you stop paying attention to your customers’ real needs and instead become more focused on increasing your market share, as is currently the case with MTN trying to get coverage of the whole country (quantity versus quality)…Today MTN needs to ask whether it can cover the whole market and at the same time offer quality service. If it can’t do both, then what gives, and at what cost? What does it gain by having coverage all around the country but a bad brand image? ... I say the market doesn’t need any more adverts or gimmicks; it just wants good service. Using Lagos as a reference point, you’d be hard pressed to find a Nigerian that hasn’t heard of MTN. 51 A report by Shawn Hattingh of the International Labour Research and Information Group (ILRIG) in Cape Town confirms this popular opinion of Nigerians that MTN exploits them. Amongst many other things, the report observes that, “indeed, MTN charges the highest rates in the world for cellular phone calls in Nigeria”.52 Some MTN officials interviewed blame this problem on the lots of money the company had to pay to Nigerian government before being granted an operating licence in Nigeria. The other problem is lack of basic infrastructure such as power supply in the country. Some of respondents consider the above excuses by MTN to be inadequate for explaining its high charges in Nigeria. It was argued, for example, that Nigeria is not the only country with the problem of power supply, and that the market population of Nigeria should have compensated for what the country does not have in regular power supply. For example, a Professor of Demography at the University of Lagos argued that it is far cheaper to use MTN in Ghana than MTN Nigeria but the demography of the two countries makes this difficult to understand. It is also argued that the length of time spent by MTN in Nigeria is long enough to have enabled it to recoup whatever bribes it claimed to have given Nigerian state officials before being granted licence to operate in the country. It is in this context that the company is rated as a “shylock”. Unfortunately, Nigeria does not have a government that can protect the people against the company as would have been expected under the principle of R2P as advanced in this paper.

51. Alero Adewusi , “MTN: Quality versus quantity”, Brandchannel, July 31, 2006, http://www. brandchannel.com/brand_speak.asp?bs_id=143. 52. Shawn Hattingh, “South Africa’s Role in Nigeria and the Nigerian Elections”, http://mrzine. monthlyreview.org/2007/hattingh260607.html.

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The Flip Side… The paradoxical findings indicating that Nigerians support the Chinese that do not have any CSR project in the mobile telephony business as against the South Africans that have a robust one, shows largely that the debate around the desirability of CSR is not a settled one. While many scholars have written in support of CSR but merely differ on how the goal should be realized, there are a few people that find it difficult to see its desirability and would have given the Chinese a pass mark as Nigerians seemed to have done here. Milton Friedman, in his article titled “The social responsibility of business is to increase its profits”, rejected how some corporations celebrate CSR. He particularly accuses those advocating it of “preaching pure and unadulterated socialism”, and also of being “unwitting puppets of the intellectual forces that have been undermining the basis of a free society”.53 He raised two interesting arguments in this respect. The first is that it was not the responsibility of business to attend to social issues in society. Appealing to typical neo-classical trickle-down economics, he argued that the main goal of business is profit making. His position along this line is that when a business is profitable, benefits would accrue to all associated with it. However, he argued further that if a business notices that it can increase its profits by supporting some social cause such as education or community development, it would be wise to do so. In this case, CSR becomes a profit-making venture. His second argument is that business executives neither have the mandate nor the competence to make sound decisions on social responsibility. To him, the spending of corporate funds on social responsibility constitutes nothing but an imposition of additional taxes on the business owners. The main point that Friedman was trying to make is that a firm is not necessarily criticized for not having a CSR policy. Such a firm might have taken such a decision because it does not meet its profit making objectives. The above position seems excusable insofar as it realizes that firms may use CSR as part of their profit-making drive. But that is half the story. We still have to consider the views that people hold of businesses in relation to CSR. Nigerians have concluded that MTN sponsors CSR projects for profit making. On the other hand, it could be said that the Chinese do not engage in a formal CSR project because it does not count in their profit-making calculations. But the Chinese sell at lower prices and by so doing make themselves socially responsible to Nigerians. The next issue to be considered is whether a people that sell fake products can be said to be socially responsible or committed to R2P? The answer is no! Dealing in fake products is a critical issue in transnational organized crimes. There is nothing wrong in the Chinese selling cheap genuine phones produced in China (whether Nokia or any other western brand or the specialized Chinese brand such as Tecno). However, it is criminal for the Chinese to bring fake mobile handsets into the country or teach Nigerians (as we were told) to produce these fake phones and their accessories. Such an act would amount to a violation of CSR and R2P principles and must be condemned not only because it injures the companies whose products are being counterfeited but more importantly because these fake products could have harmful effects on the people using them. In addition, we were told during our fieldwork that most Chinese products in Nigeria are substandard if not fake. The Standard Organization of Nigeria has been responding to this kind of complaint for a long time. For example the organization in October 1996 threatened to drag China to the World Trade Organization if the situation was not immediately corrected. China denied the allegation of dumping substandard goods in Nigeria but argued that it was often Nigerian businessmen of dubious disposition who actually ordered these inferior goods.54 53. Milton Friedman, “The social responsibility of business is to increase its profits”, In Olen, J. & Barry, V., eds. Applying ethics, Belmont, California: Wadsworth, 1993, p. 162. He gives this debate a better push in Milton Friedman, Capitalism and Freedom, University of Chicago Press, 2002 where he characterized CSR as a “fundamentally subversive doctrine” in a free society. 54. Pat Utomi, China in Africa, Washington DC: Center for Strategic and International Studies, 2008


That fake Chinese goods still come into Nigeria is to suggest that the Chinese government condones the exportation of these fake products and on the other hand it shows that corrupt Nigerian officials facilitate the entry of the goods into Nigeria. The matter should be examined from these two angles. At this juncture, let us state that the issues involved here are not CSR issues but R2P concerns. Substandard products endanger lives and diminish the quality of life. Constant use of such products could result in the formation of inferior tastes within a society, and the long-term effects could be quite deleterious. Since these are electronic products, the health implications of their substandard quality both on the short and long term are serious issues of concern. Some of our interviewees expressed some misgivings against MTN on issues bordering on negative business ethics though different from the picture painted of the Chinese above. Though not a financial institution, the company was severally alleged to have “sales promotions” through which Nigerians are “swindled”. The company asks its subscribers to send text messages at high cost in order to enter lotteries that offer huge prize winnings. It is argued that by the time 100,000 subscribers send such messages to the special code generated for these “promotions”, the company would have covered the cost incurred for the “fictitious packages” and then begin to record huge profits thereafter. This rather makes the overstretched MTN clients become more stressed out.

Conclusion This paper calls attention to the role of the Chinese and South Africans in Nigeria’s telecommunication sector with focus on mobile telephony. It discusses how the Chinese have made a significant contribution to the supply of cheap phones to Nigeria and how MTN has played a lead role in the supply of mobile phone lines to the people. The paper moved from there to examine the contributions of these telecommunication companies to the attainment of the goals of CSR and R2P in Nigeria. The main finding of the paper is that both the Chinese and South Africans are in Nigeria to do business. Hence both have concentrated on the objectives of profit making but in the process recorded some unexpected outcomes that could count as CSR and R2P. Their involvement in mobile telephony has significantly helped to promote popular political participation and suppress political oppression because it has guaranteed more open access to information. MTN has been engaged in some CSR activities for which it got many prizes but the main objective of these projects is to make profit rather than promote social justice. On the other hand, MTN charges its highest rates in the world in Nigeria and this results in Nigerians considering it to be a shylock despite the many awards it has won over the years from governmental and non-governmental agencies. On the other hand, the Chinese do not expend any of their earnings on CSR projects in Nigeria, and thus could be said not to have been interested in either CSR or R2P. But the people are thankful to the Chinese for giving them access to cheap mobile phones. In all, both the Chinese and South Africans have made significant contributions to Nigeria. What is left is for the missing gaps to be filled up. First and foremost, the government of China has to address the rate at which fake Chinese products are coming into Nigeria. Though Nigerians appreciate these cheap products, they are harmful and do a great harm to the image of China. It presents China as a country that condones transborder organized criminality. Nigerians are comfortable with buying genuine Chinese phones but are taking a great risk buying the fake ones made in the name of manufacturing companies in Europe. Nigeria also needs to invest more in ensuring that fake Chinese products are not imported into the country. If China allows the fake goods to leave its shores and Nigeria does not allow them to come in, those engaged in this kind of business would be deterred. MTN also needs to work on its image. Many Nigerians consider the company to be a shylock that has perfected several strategies for exploiting the people. Its charges are considered to be too high, its “sale promotion” programmes are considered to be fraudulent, and its CSR projects are seen as favouring the rich more than the June 4 pp. 39-48, http://csis.org/files/media/csis/pubs/080603_utomi_nigeriachina.pdf.

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poor. The company could profit a lot by doing research into the kind of projects that would further endear it to Nigerians. In this study, we have considered some of the realities of CSR and R2P in Nigeria, with our attention given to the telecoms industry in the country. What is salient in our study is our emphasis on how big multinational businesses are surrogates for the governments of their home country. Their activities are very visible in the host communities, and it is what they achieve for the people of the host communities that really counts as CSR or R2P at the end of the day. It is not enough to launch projects if those projects do not satisfy the real needs of the people. Many multinational companies operate with the logic that what works in their home countries or in the west will work elsewhere. Paradoxically, as we have pointed out, MTN’s full array of CSR projects has not endeared it to the generality of Nigerians. This is because of its failure to do business in such a manner as to win the trust of the people. Its exorbitant charges and sales promotions that are entirely formats for it to earn stupendous profits have come under criticism from many Nigerians. It is in this light that the company has to reorganize, for the people in the Nigerian market are wise to the sales tricks that now characterize MTN’s operations in the country. Whatever the business management and marketing books say, the people are the ones to decide what counts as CSR. The failure of R2P in the Nigerian telecoms industry is a signpost of the general condition of political and social life in the country. MTN can get away with its marketing tricks and exorbitant charges because the Nigerian authorities could not care less. In point of fact, MTN claims that the high fees it had to pay for a licence to operate in the country account for its harsh pricing regime in the country. Even though the matter has been raised again and again in public conversations and debates, neither MTN nor the government has shown any willingness to change things for the betterment of life for the people. The same factors and conditions are evident in the importation of substandard mobile phones into the country from China. The Nigerian government and the Chinese manufacturers and dealers are not concerned about the hazards that confront the many Nigerians who use substandard phones. The consumers find themselves at the receiving end, without protection, with nobody to appeal to. There is in all of this a further comment on the nature of civil society in Nigeria. Consumer protection is virtually absent in Nigerian civil society. Regulators and advocacy agencies have not lived up to the challenge of ensuring that the right kind of CSR and R2P are provided for consumers. Part of the problem obviously is that civil society here is hampered by the myriad problems of divisions and distractions in the harsh polity. There is a multitude of things to fight for, and particular debates get muffled by the bigger issues of the day. It is on this note that we conclude that CSR and R2P, in the sense in which we use the latter concept as an umbrella term for the broad protection that people deserve from governments and big businesses, are things that index the kind of social and political condition obtaining in a given society. Good CSR and R2P practices index a good social and political condition of life.

APPENDIX 1 MTN Awards & Accolades 1. LASG, Lagos Health Family Merit Award – 2005 “Best Corporate Organisation” 2. The 2005 Thisday Award for Corporate Socially Responsible Company of the Year 3. Rotary Club (of Gbagada South District 9110 Nigeria) Award for Excellent Contribution to Corporate Social Responsibility and Manpower Development in Nigeria 3rd September, 2005 4. 2006 GSM Association Award – Best Mobile in the Community Initiative 5. University of Lagos Governing Council – 2006 Endowment Award 6. City People Magazine – 2006 Humanitarian of the Year Award


7. Award from Rumukurushi community in Rivers State 8. University of Lagos MBA Students Association – Outstanding Achievers Award in Education 2006 9. Hearts of Gold Children Hospice – Hearts of Gold Award (HOGA 2006) for Outstanding Contribution to Humanitarian Services 10. Lagos State Government – 2006 Best Health Merit Award 11. International Community Commitment Award from alumni of Comprehensive High School, Aiyetoro, MD/DC/VA Chapter, USA (2006) 12. Society for Environment Youth Development Initiatives Pivot Award to MTN 13. Hope World Wide Star Award in recognition of your contribution to the social development of Nigerian communities (2007) 14. National Health Council Award for outstanding contribution to the Health sector in the country, 11 January 2007 15. Red Ribbon awards on HIV/AIDS (2007) 16. Women Development & Law Centre award for contributions to women empowerment, February 2007 17. L etter of appreciation and Certificate of Participation on Adopt-a-School Programme received from the Federal Ministry of Education (dated 22nd May 2007) 18. A ward by Brotherhood Society of the Deaf - “Philanthropist Assistance” - 2nd July 2007 19. Winner, Telecommunications Category - Social Enterprise Reports & Awards (SERA) 2007 for implementing people-focused CSR programmes 20. Institute of Chartered Secretaries and Administrators Award for Corporate Social Responsibility (2007) 21. “ National Daily Awards 2007” presented to MTN as distinguished (CSR) award of the year 2007 in recognition of her commitment to CSR ideals and for the sustenance of the MTN Foundation which has concretized the “Give Back to Society” concept 22. A ward from Lagos State Min. of Education with School Buggie TV show to MTN Nigeria PIVOT OF YOUNG PEOPLE’S DEVELOPMENT AND CONTRIBUTIONS TO EDUCATION. THE BEST IN THE CATEGORY AT THE 2007 GRAND FINALE 23. T he Environment Reinvestment Award presented by ‘People That Shape Our Environment ‘ to MTN Foundation in recognition of your distinguished service in the field of Environmental Protection & Sustainable Development (2008). 24. 1 1th City People Awards for Excellence Corporate Socially Responsible Company of the year 2008 MTN 25. C ivil Society on HIV/AIDS in Nigeria (CiSHAN) Oyo State Chapter in recognition of your charitable gestures towards Humanity in Oyo State, Nigeria. 17th April, 2008 CISHAN DAY 2008 26. A lumni Award for Infrastructural Development of ABU Zaria presented to MTN for contribution to infrastructural development of ABU Zaria. April 2008 27. T he Rose of Sharon Foundation Award for Dedicated Contribution Towards The Less Privileged 2008 28. MTN Winner – (SERA) Most Socially Responsible Company in Nigeria – August, 2008 29. MTN Winner – Telecommunications Category SOCIAL ENTERPRISE REPORT & AWARDS (SERA) for implementing people-focused CSR Programmes – August, 2008 30. MTN Winner – Telecommunications (SERA): Most Socially Responsible Company in Nigeria. August 2008 31. K ing’s College Old Boys’ Association in appreciation for the Foundations support as the biggest corporate sponsor for 2006 / 2007 presented to MTN Foundation at the 99th anniversary of the founding of the college on Sat. 20th September, 2008

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32. Merit Award in recognition of sponsorship presented by MEGLEY Nursery and Primary School Itire-Ikate (2008) 33. Winner Best Initiative in Support of the MDGs Africa Investor Investment Awards 2008 34. 2006 GSM Association Award – Best Mobile in the Community Initiative 35. Lagos State Government – 2006 Best Health Merit Award 36. City People magazine – 2006 Humanitarian of the Year Award 37. The 2005 Thisday Award for Corporate Socially Responsible Company of the Year 38. University of Lagos Governing Council – 2006 Endowment Award Source: http://www.mtnonline.com/index.php/testimonials.html

Emerging Powers in Africa Initiative Fahamu- Cape Town Established in 2008, the Emerging Powers in Africa Initiative initiated by Fahamu – networks for social justice, is one of the few forums that promotes a Pan-African CSO perspective on the increasing footprint of China, India, Brazil, South Africa and other southern actors engagements across the continent. Through the promotion of debate and advocacy as well as serving as a knowledge hub, the programme is aimed at understanding the comparative impact and engagement of the emerging Southern powers in Africa on issues of social justice struggles. www.pambazuka.org/en/category/emplayersnews/