Global Witness’s latest report exposes the fact that President Joseph Kabila sold mining royalties to a close friend, writes Shannon Ebrahim.
Johannesburg - A bombshell landed on my desk this week - Global Witness released its latest report exposing the fact that President Joseph Kabila of the Democratic Republic of Congo sold mining royalties from his country’s most profitable mining project last year to his close friend. That friend is Israeli billionaire mining magnate Dan Gertler.
On the surface it may not sound that shocking, but when the value of those royalties is estimated to be $887 million (R12.8 billion), then that is something to write home about.
These types of deals were how DRC President Mobutu Sese Seko made his billion-dollar fortune over his 32-year reign from 1965 to 1997.
How is it possible that an African country which ranks near the bottom of the UN Human Development Index, and has one of the lowest rates of GDP per capita in the world, can afford to give one of the president’s friends almost a billion dollars? Well it can’t, but the people have no say in where the royalties from Congo’s mines end up.
Under regular circumstances mining royalties are supposed to go to the country’s state mining company Gecamines, and are supposed to be used to develop the country - in the DRC roads, schools and hospitals.
Let’s put it in perspective - $887m is more than the DRC’s annual health spending. In an era when the DRC lacks even basic X-ray equipment in many of its hospitals, a billion dollars towards the effective functioning of the nation’s hospitals would have gone a long way.
But why the secretive deal last year, whereby the royalty rights of the country’s most profitable mining project, which is owned and operated by London-listed giant Glencore, are handed over to an offshore company in the Cayman islands called African Horizons? African Horizons is part of Israeli billionaire Dan Gertler’s Fleurette Group.
It’s all very simple according to Global Witness - it is all about funding an election campaign. Since May this year, the international NGO watchdog has been warning that off-the-books sales of the DRC’s natural resources rights could be used to finance a political campaign. Now the pieces of the puzzle seem to be falling into place.
What suggests that Global Witness may have hit the nail on the head in suggesting it is all about election financing is the fact that it previously revealed how Gertler used offshore companies to secure lucrative mining deals in the DRC, whereby a portion of the proceeds of one such deal was directed into a DRC Treasury election account ahead of the 2011 elections. That election was won by Kabila, but marred by irregularities and claims of fraud.
So if there is already a past trail of money being diverted from mining deals to the government’s election account, then it is not such a stretch to believe it could be happening again, whether for an election campaign or self-enrichment. What is clear is that every month the incumbent remains in power there is more money from mining royalty rights that are being diverted to his friend Gertler’s African Horizons.
Gertler’s Fleurette Group has hit back, saying that African Horizons royalty right will fall away in early 2019. But whether that is the case or not, the money continues to flow in massive amounts and provides every incentive to continue postponing the elections.
Kabila was supposed to have relinquished power by December 19 this year, having served his two terms in office, but he has consistently pushed the date forward, with the poll now scheduled for April 2018.
When I asked a senior government representative some months back why the government was delaying the elections schedule, his answer was that the people of the DRC didn’t care about elections, and that their primary concerns were their everyday needs such as food and shelter.
It seemed odd to me at the time that in a country as highly politicised as the DRC, with a plethora of opposition political parties, a top official could suggest that the people didn’t care about their right to vote. Given the massive pro-democracy demonstrations and protests in September and earlier this year, which saw scores of demonstrators killed, I don’t buy the argument that the people don’t care.
After the mayhem of September’s demonstrations, the government banned any future demonstrations against Kabila, but the opposition has continued to call for rolling demonstrations and mass action. In an effort to calm the rising political tensions, Kabila named opposition leader Samy Badibanga as Prime Minister on Friday. What matters from here on in is for the people of the Congo to support the rise of a leader who will stop looting Gecamines’ coffers for their own advantage, and start to build the country.
* Ebrahim is Group Foreign Editor.
The Sunday Independent