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close this bookThe Courier N 130 Nov - Dec 1991 - Dossier: Oil - Reports: Kenya - The Comoros (EC Courier, 1991, 96 p.)
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View the documentThe convention at work
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The convention at work

ACP-EEC Committee of Ambassadors - Stabex problems on the agenda

The Committee which met in ACP House in Brussels on 11 October had Stabex transfers for 1990 on the agenda and discussions revolved around the Community offer and what the ACPs actually felt should be transferred.

ACP Ambassadors maintained that the Community should be transferring ECU 1240.7 million for 1990, an amount which they claimed represented their total losses in export earnings that year.

The Community offered ECU 483.7 million under the present Convention ECU 100 million of it from the unspent balance of Sysmin, but the ACPs deemed this inadequate and called on the Community to bear in mind ‘its obligations to the ACP Group’ and find further financing to complete the transfers. The request was repeated at a press conference during which, in the absence of the Chairman, the Ambassador of Gabon, Raymond Chaste (Mauritius) announced that the Community offer was only 38.99% of the estimated amount and less than 50% of all Stabex resources since the system was first set up. The ACPs asked for an extraordinary conference of ministers to be convened to ‘take steps to do something about the inadequacy of the resources, given that a similar situation could very well arise in 1991’.

The Community was sorry about the situation, but thought it had done all it could within the framework of the Convention. It was not possible to find extra resources within the present framework. The President of COREPER undertook to report the situation to the Community Ambassadors, but told the ACPs that the chances of the Community offer being improved were in fact non-existent and that it was highly unlikely that an ACP-EEC conference of ministers could be held during the Dutch Presidency because the Council timetable was so overloaded.

EDF

The Commission has taken the following financing decisions (5th, 6th and 7th EDF) following a favourable opinion from the European Development Fund Committee.

Ethiopia: A grant of ECU 3 750 000 of emergency aid as a contribution to humanitarian organisations’ assistance programmes for refugees and the victims of drought and fighting.

Botswana: A grant of ECU 2 800 000 and a special loan of ECU 4 000 000 to protect wildlife in northern Botswana.

Zaire: A special loan of ECU 10 000 000 from the 5th EDF plus a grant of ECU 9 500 000 and a special loan of ECU 15 000 000 from the 6th EDF for the road section of the APEK project.

Equatorial Guinea: A 6th EDF grant of ECU 5 070000 for the protection and rational utilisation of forestry resources.

Mozambique: A grant of ECU 650 000 as emergency aid to be implemented immediately to help victims of the troubles.

ACP States: A grant of ECU 650 000 as emergency aid to be implemented immediately to help with the campaign to control epidemics in the ACP States.

AD ACP States: A grant of ECU 650 000 to open immediately an emergency global commitment to cope with emergencies in the ACP countries.

All ACP States: A further grant of ECU 650 000 as emergency aid to be implemented immediately to help with the campaign to control epidemics in the ACP States.

The Commission took the following financing decision (7th EDF) after the EDF issued a favourable opinion in a written procedure completed on 2 August.

Angola: An ECU 2000000 grant of emergency aid to help with humanitarian organisations’ assistance programmes for the victims of famine and fighting.

All ACP States: An ECU 6000000 grant for the CDI’s 1991 budget.

Gambia: An ECU 14 500 000 grant for a development programme for the North Bank, Upper River and Western divisions.

Burkina Faso: Grants of ECU 1 739 247.85 (5th EDF), ECU 4 760 752.15 (6th EDF) and ECU 13 850000.00 (7th EDF) to rehabilitate the road from Koup to the Togolese frontier.

All ACP States: A 7th EDF grant of ECU 2 760000 for ACP countries to attend the Universal Exhibition in Seville in 1992.

Seychelles: Grant of ECU I 000 000 to consolidate the development of handicrafts.

Lesotho: An ECU 44 000 000 grant (ECU 34 000 000 from the national indicative programme and ECU 10 000 000 from the regional programme) for the project to build the Muela HEP station as part of the Highlands Water Project.

Mozambique: A 6th EDF grant of ECU 13000000 to improve rural telecommunications.

Regional (SADCC): A 6th EDF grant of ECU 500 000 to provide SADCC with technical assistance with its fauna, forests and fisheries.

All ACP States: A 7th EDF grant of ECU 3 684 000 for the 1991 budget of the Technical Centre for Agricultural and Rural Cooperation.

Madagascar: A 5th EDF grant of ECU 2 750 000 for a craft development programme.

All ACP Sates: A 7th EDF grant of ECU 3 000 000 to enable ACP countries to attend meetings of the ACP-EEC Joint Committee and Council.

All ACP and OCT: A 7th EDF grant of ECU 2 000 000 as a global commitment authorisation to finance attendance at international trade and tourist events from the national indicative programmes.

All ACP and OCT: A 7th EDF grant of ECU 40 000 000 as a global commitment authorisation to finance (expedited procedure) technical cooperation, trade promotion and tourist schemes.

All ACP and OCT: A 7th EDF grant of ECU 30 000 000 as a global commitment authorisation to finance (expedited procedure) multiannnal microproject programmes.

All ACP and OCT: A 7th EDF grant of ECU 15 000 000 as a global commitment authorisation to finance (expedited procedure) relief for returned refugees and displaced persons.

AD ACP and OCT: A 7th EDF grant of ECU 15 000 000 as a global commitment authorisation to finance (expedited procedure) cultural schemes.

Niger: A 7th EDF grant of ECU 12000000 to develop the Niamey-Say national highway (56 km).

EIB

Jamaica: ECU 4 million in support of small and medium-sized enterprises

The European Investment Bank is providing ECU 4 million in support of small and medium-sized enterprises in the industrial, agro-industrial, mining and tourism sectors in Jamaica. The funds are made available under the Third Lomonvention in the form of

- a global loan of ECU 3 million from the Bank’s own resources for 15 years at 5.7% (after deduction of an interest rate subsidy from the European Development Fund) to the National Development Bank Limited (NDB) for on-lending to small and medium-sized companies, and - a conditional loan of ECU I million from risk capital resources provided for under the Convention and managed by the EIB, to Jamaica Venture Fund Limited (JVF) for making equity participations in small and medium-sized enterprises.

From a previous EIB global loan granted under the Third Lomonvention NDB financed 18 smaller scale industrial and tourism ventures.

Kenya: ECU 20 million in support of small and medium-sized enterprises

The European Investment Bank is providing ECU 20 million to finance investments by small- and medium-sized enterprises in the industrial, agro-industrial, mining and tourism sectors in Kenya.

The funds are provided to the Republic of Kenya under the Fourth Lomonvention in the form of a global loan for 12 years at 5.05%, after deduction of an interest rate subsidy from the European Development Fund. The Central Bank of Kenya, on behalf of the Government, will make available the proceeds of the loan to banks and other financial institutions for on-lending to small and medium-sized private-sector companies.

This is the first EIB loan in Kenya under the Fourth Lomonvention which entered into force on September 1991. Total EIB lending in Kenya under the Third Lomonvention (1986-91) amounted to ECU 76 million, of which ECU 7 million were loans from risk capital from EDF resources provided for under the Convention and managed by the EIB.

Mauritania: ECU 25 million for an iron ore mine

The European Investment Bank is lending ECU 25 million under the fourth Lomonvention for developing an open-cast iron ore mine in Northern Mauritania:

- ECU 10 million from risk capital resources provided for under the Convention, are made available in form of a conditional loan for 18 years at 3% to the Islamic Republic of Mauritania. The Government will advance the proceeds of the loan in form of a convertible shareholders advance to the Soci Nationale Industrielle et Mini (SNIM), a semipublic company in which the State holds a majority.

- ECU 15 million from the Bank’s own resources are going to SNIM for 15 years at 5.05% after deduction of an interest rate subsidy from the European Development Fund.

The project is expected to cost ECU l55 million and comprises mainly handling equipment, crushing and stockpiling facilities, a power line and road and rail links for transport of the mine’s output to the export harbour.

This brings total EIB lending for this project to ECU 30 million following a first loan of ECU 5 million from risk capital resources granted earlier this year still under the Third Lomonvention, before the Fourth Lomonvention entered into force on l September 1991. Additional funding is also expected to come from Caisse Centrale de Cooperation Economique (France), the African Development Bank and the World Bank Group.

Nigeria: ECU 48 million for palm oil production

The EIB announced two loans totalling ECU 48 million for financing palm oil milling and refining facilities in southeastern Nigeria.

The funds are advanced under the Third Lomonvention in the form of: - an ECU 45 million loan from the Bank’s own resources, for 18 years at 5.7% after deduction of an interest rate subsidy drawn from European Development Fund resources; the funds will be made available to the Federal Republic of Nigeria for on-lending, via the Nigerian Agricultural and Cooperative Bank (NACB), to Akwa Palm Industries Ltd (API).

- a conditional loan of ECU 3 million from risk capital resources managed by the EIB, for 25 years at I %, to NACB which will use the proceeds of the loan for underwriting additional capital in API and three other palm oil companies.

Total investment costs of the palm oil production development programme are estimated at ECU 260 million; the Commission of the European Community and the World Bank are participating in its financing alongside the EIB.

This is the ElB’s fifth financing operation in Nigeria under the Third Lomonvention, following global loans of ECU 30 million to New Nigerian Development company and ECU 50 million to the Nigerian Industrial Development Bank for financing small and medium-size industrial projects, an ECU 45 million loan to Lagos State Water Corporation in 1988 for improving water supplies in the Lagos metropolian area and the first loan of ECU 43 million to NACB in 1989 for financing palm oil production.

Zaire: ECU 19 million for an electricity scheme in Zaire

The European Investment Bank is lending ECU 19 million for the improvement and extension of the electricity transmission and distribution network in the Kivu region in eastern Zaire, near the border with Rwanda and Uganda. The scheme covers the installation of transmission and distribution lines and substations.

The funds from risk capital resources provided for under the Lomonventions and managed by the EIB are granted in the form of a conditional loan for 15 years at 2%, to the Republic of Zaire, for on-lending to the Soci Nationale d’Electricit

The scheme is costed at ECU 40.8 million and will be cofinanced by the Caisse Centrale de Cooperation Economique (France).

Zimbabwe: ECU 18 million for an electricity scheme

The European Investment Bank is lending ECU 18 million to the Zimbabwe Electricity Supply Authority (ZESA) for the extension of the electricity transmission and distribution network in Zimbabwe. The scheme comprises transmission and distribution lines and the installation of new, and overhaul of existing, substations in the northern and central regions.

The loan has been granted under the Fourth Lomonvention for 18 years at 5% after taking into into account an interest rate subsidy from the European Development Fund. Last year the EIB contributed ECU 8 million towards financing the first stage of this project.

The scheme, costed at ECU 70.5 million and expected to be completed by mid-1994, is part of ZESA’s long-term plans for extending and re-inforcing the national power system estimated at some ECU 148 million.

EMERGENCY AID

Zaire

Following the recent events in Kinshasa and elsewhere in Zaire the Commission decided on 26 September to make an initial emergency aid allocation for the capitalts inhabitants.

The aid, worth ECU 100 000, is in the form of medical equipment and will be channelled through the medical NGO ‘Mcins sans Frontis’.

In addition, the Commission is proposing to open a credit line of ECU I 000 000, a formal decision on which is imminent. It would be used for emergency humanitarian operations still to be determined. These operations will be carried out by the Commission’s usual partners (the Red Cross, UN agencies and NGOs).

Ethiopia, Somalia, Sudan and Rwanda

The Commission has granted emergency food aid for ICRC (International Committee of the Red Cross) programmes in Ethiopia, Somalia, Sudan and Rwanda.

The aid comprises 3 650 tonnes of cereals, 2 000 tonnes of vegetable oil and the sum of ECU 4 million for the purchase of other products and the payment of transport costs within the countries. The overall value of the aid is ECU 6.4 million.

The ICRC programmes are aimed at helping:

- 300 000 displaced ex-servicemen in Ethiopia and 200 000 Sudanese refugees; - 300 000 displaced persons in southern Somalia;

- 60 000 displaced persons in Rwanda; - 85 000 people in the south of Sudan, who are being supplied via an air bridge.

ETHIOPIA

EC fact finding mission

On 20 August 1991 the EC fact-finding mission to Ethiopia met with Ethiopian President Mr Meles Zenawi. Prime Minister Mr Tamirat Layne, Minister of Foreign Affairs Mr Seyoum Mesfin and the personal adviser of the President Kassu Elaia were also present at the meeting. The EC delegation consisted of the Nertherlands Minister for Development Cooperation Mr J.P. Pronk, the Secretary of State for Foreign Affairs and International Cooperation of Portugal Mr Durao Barroso, the Vice-President of the European Commission Mr Manuel Marin and Mr Gaston Stronck of the Luxembourg Ministry of Foreign Affairs, representing the Secretary of State for Foreign Affairs, Foreign Trade and Development Cooperation.

The President provided the EC delegation with an overview of political events in Ethiopia since May 1991. He drew attention to the National Conference (Addis Ababa, 1-5 July 1991) which was attended by a large number of former resistance movements. The National Conference adopted a charter which will serve as a constitution for the coming 2 1/2 years until elections are held. The charter stresses the importance of peace, democracy and respect for human rights.

The Eritrean Popular Liberation Front (EPLF) attended the National Conference as an observer. In two years time a referendum will be held in Eritrea in order to allow the Eritrean people to decide on Eritrea’s future relationship with Ethiopia. President Meles expressed his hope that the Eritrean people would choose to remain part of Ethiopia. Eritrea and Ethiopia, he said, need each other. The President however acknowledged the possibility that Eritrea would become an independent state. He said that, for the sake of peace, Ethiopia would not oppose the wishes of the Eritrean people.

The human rights situation in Ethiopia was discussed at length during the meeting.

President Metes admitted that many members of the previous regime, like officials from the Party, the Secret Service and the army, had been detained. However, he said, these people were treated well and were allowed visits from family friends, humanitarian organisations and diplomats. The detainees, he said, will be put on trial individually. For this purpose independent inquiry commissions will be established. The government will thereafter not be involved in the trials any more. The President stressed that officials of the former regime with purely technical, rather than policy-making responsibilities had not been detained. Indeed, two ministers from the former government, who were regarded as technicians, had been released.

The economic policy of the new Ethiopian government, had not yet been finalised. The President, however, did not expect much difficulty in reaching consensus on a new economic policy.

It was in any case to be expected that the following issues would be addressed:

Agriculture: Large parts of Ethiopia are affected by drought and environmental degradation while the population pressure in some areas is high. A policy will have to be formulated which will attach priority to food production and food security in particular in the regions which have been affected by civil war. Some state farms will be closed while others will be maintained in order to avoid capital losses. Land reform, leading to private ownership of land, may be possible in some areas taking into account the necessity to provide access to land to poorer and small farmers in particular. Important decisions on these issues will, however, be postponed until after the elections.

Industry: Government policy will be to encourage private investment and avoid government intervention. Privatisation will, however, have to take place gradually.

External trade: The government will stimulate foreign trade which will largely be left to private entrepreneurs. The exception to this will be trade in coffee and sugar which will remain under the supervision of the government authorities. Foreign exchange regulations will remain necessary as long as export income does not meet the need for foreign exchange for essential imports. In this context, Mr Marin explained the rules of the Stabex fund from which Ethiopia may benefit. Furthermore he stated that a clear economic policy is a prerequisite for the resumption of structural support under the LomII Convention and the start-up of the LomV indicative programme. Mr Marin furthermore stated that increased structural food aid and SlPs would depend on progressive financial liberalisation.

HAITI

Community aid suspended

In the wake of recent events in Ha, Manuel Marin, Vice-President of the Commission with special responsibility for development cooperation confirmed that all forms of cooperation with the country were suspended with immediate effect. More particularly, the programming of aid under the Lomonvention has been frozen.

According to Mr Marin, ‘the Fourth Lomonvention, to which Ha has just acceded, is designed to offer the country a framework for cooperation, but also for stability. The Community cannot now remain passive in response to the toppling of the democratically elected Haitian Government. I have therefore decided to suspend, forthwith, the programming of aid to Haiti under the LomV Convention until such time as legitimate, democratic government has been restored’.

During a visit to Brussels which included, in particular, a meeting with President Delors and Vice-President Marin, the Haan President, Bertrande Aristide welcomed the decision taken by the Commission which fits in with the embargo policy directed against the new Haitian regime. During a press conference, President Aristide, who also visited ACP House, declared that only a strict embargo could bring about the removal of the military from power, and the restoration of legal authority in the country. He added that the struggle he was leading went beyond his own country and his own people; it was a struggle for the triumph of democracy, so that what was happening today in Ha could not happen tomorrow, elsewhere.

The Republic of Ha recently became a member of the ACP Group having acceded to the Fourth Lomonvention. Under this Convention, Ha will be able to benefit from approximately ECU 120 million in programmable grants during the period 1991-1995 to which could be added other sums and benefits provided for under the Convention.

FISHERIES

EEC-Guinea Bissau fishing agreement

European vessels now have the following fishing possibilities in Guinea Bissau’s territorial waters.

- Shrimp trawlers with freezing facilities: an annual average of 11 GRT per month.

- Fish and cephalopod trawlers with freezing facilities: an annual average of 6000 GRT per month.

- Tuna vessels with seine nets and freezing facilities: 20 vessels.

- Tuna vessels with canning facilities and surface long liners: 12 vessels.

The agreement provides for financial compensation of ECU 12 000 000, payable in two equal annual instalments. It is to be paid into an account opened with a financial institution or any other organisation which Guinea Bissau designates and the sole responsibility for allocating it lies with the Guinea Bissau Government.

The fishing possibilities may be increased by successive amounts of 1000 GRT (per month, annual average), in which case the financial compensation goes up pro rata.

In the coming years, the Community will also be contributing ECU 850 000 to Guinea Bissau’s scientific/technical programme designed to improve the knowledge of this country’s exclusive economic zone and the running of the marine biology laboratory. The amount will be made available to the Government and paid into an account named by the national authorities.

Both parties agree that improving skills and staff in the sea fishing sector is vital to the success of their cooperation and so the Community will be easing Guinea Bissau nationals’ path in establishments in the Member States and providing them with two-year awards for study and practical training in the various scientific, technical and economic aspects of fishing.

These awards, the total cost of which may not exceed ECU 550 000, may also be used in any State linked to the Community by a cooperation agreement. At Guinea Bissau’s request, part of that amount may be converted to cover the cost of attending international fisheries meetings or courses, run fisheries seminars in Guinea Bissau or improve the administrative structures of the Fisheries Ministry, in which case payments will reflect spending.

INDUSTRY

4th EEC-Central Africa Industrial Forum

The Commission of the European Communities runs an EEC-Central Africa industrial forum every year. The fourth such event, in Libreville on 25-28 November, is an opportunity for European businessmen to go to just one place to meet a large number of potential partners from 11 countries of Central Africa.

The main idea is to encourage medium-and long-term cooperation between African and European partners by attracting flows of finance, techniques and other essentials to specific industrial projects in Central Africa The forms of cooperation in view are, primarily, contracts of partnership or the relevant industrial collaboration - technical assistance with management and marketing, staff training, maintenance and rehabilitation of industrial plant and sub-contracting - although such things as supplying industrial units, equipment and materials, transferring technology and granting licences and franchises may also be involved.

The African delegations comprise top civil servants, heads of industrial promotion organisations and a large number of promoters from the public sector and representatives of financial institutions. The majority of the European participants are businessmen and representatives of professional federations in the financial sector. The Yaoundorum (1989) was attended by 181 Europeans and 359 African promoters.