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COVID-19: Uganda Must Take Robust Measures to Defeat the Coronavirus Pandemic

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The coronavirus pandemic will end but without strong public services, Uganda will remain vulnerable to the next epidemic, pandemic or extreme climate event. The health, water and sanitation and all other sectors must be transformed into robust, life-enhancing government services.

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COVID-19: Uganda Must Take Robust Measures to Defeat the Coronavirus Pandemic
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The onset of the COVID-19 pandemic has challenged the public service infrastructure as never before. We commend the government for the efforts it has made to limit the contagion. In particular, we commend health service personnel for their tireless round-the-clock monitoring, testing and treatment of those affected by the disease.

I appreciate the 300 water points rolled out by the National Water and Sewerage Corporation and Kampala Capital City Authority on Friday 27 March. NWSC must be funded to enable them to continue to offer handwashing points in urban areas.

It is heartening to observe the positive public response to the Ministry of Health guidance and directives. I join the President of Uganda in emphasising that the contagion can only be stopped if we collectively practice physical distancing, frequent handwashing and avoiding touching our faces. These are the only preventive measures possible. There is no cure available so far.

The Director of the World Health Organisation, which is at the forefront of the fight against the pandemic, has described lockdowns as “extreme social & economic restrictions”.

In Uganda, our first confirmed case of COVID-19 was detected on 21 March 2020. As of Friday 3 April, Uganda had 48 confirmed cases. It is not easy for public servants and it is not easy for the ordinary citizen, but if we continue to cooperate, the pandemic will end. Uganda is among the countries with fewer than 100 cases and we stand a good chance of overcoming this crisis if we make the right policy choices now.

We agree with the WHO that the lockdown provides a window of opportunity to curb and finally defeat the disease but also to prevent a resurgence of infections once the lockdown is lifted. We believe it is necessary to “Refocus the whole of government on suppressing and controlling Covid19”, as Dr Tedros Ghebreyesus, Director-General of the WHO, has advised.

The World Health Organisation, which is at the forefront of the fight against the pandemic, has described lockdowns as “extreme social & economic restrictions”

We agree that “on their own, these measures will not extinguish epidemics”. We adopt the recommendation that, to be effective, the lockdown must be accompanied by measures aimed at strengthening the health service. It is our view that Uganda’s response to this pandemic can lay the foundations for a healthier and better-prepared country.

In everything we do, we must prioritise the safety of the health workers at the frontline. We therefore propose that they are provided with daily transport, risk and other duty-facilitating allowances, as well as personal protective equipment (PPE). In his address to the nation on 31 March, the President reported that health workers in upcountry facilities are avoiding suspected COVID-19 cases because they lack protective gear. This is unfortunate and must be addressed immediately at all Regional Referral Hospitals. It was shocking to hear in the Presidential Address on Friday 3 March that Uganda only has 10 per cent of the PPE required at this time.

We also support the call by some members of Parliament to pay health workers a motivational allowance, on time and during this crisis, not in arrears.

It may not be possible in the short term to expand, train and deploy our healthcare and public health workforce as recommended but the recruitment process can begin. The news that hundreds of healthcare workers are being recruited at all levels is welcome. Hopefully, the majority are clinicians and nurses.

What is possible in Uganda in the short-term is to continue efforts to “find, isolate, test, treat and trace” those who may have been exposed to the virus and who together with their families are at risk. Of the 48 cases, nearly all were incoming travellers and contacts of travellers arriving mostly from Dubai, 15 from the United Kingdom, three from the United States, one from Kenya. By 28 March, only three confirmed cases were not incoming travellers. We wish them all an easy recovery.

Uganda is among the countries with fewer than 100 cases and we stand a good chance of overcoming this crisis if we make the right policy choices now

In the two weeks prior to the airport closure, 2,661 high-risk travellers entered the country. Also, there are others that had not been identified before Dubai emerged as a high-risk country. Less than 1,000 of these people have been quarantined and tested. It would help to offer amnesty to the hundreds remaining to encourage them to come forward. The security services need only be deployed if there is further failure to cooperate after the amnesty is announced. In any event, the forces should endeavour to treat citizens with the respect they deserve. Wanton violence of the type we have seen contributes nothing to disease control and undermines faith in the government to lead us out of this crisis.

As has been noted, the more tests done, the greater the number of positive diagnoses. While we appreciate the donation of testing equipment from the WHO and Jack Ma, we note that we remain vulnerable as long as our capacity to test depends on donations. We recommend that Uganda seeks short-term measures to find funds for test kits. The public needs to be informed whether all the tests being used are WHO-approved. There is some concern about the potential for false negative results and, being a “fragile State” that is receiving multiple donations, we need assurance that all equipment is up to par.

Regional Referral Hospitals, and Naggulu and Mulago Specialised Hospitals, have been tasked with the management of COVID-19 cases. The input of the Uganda Medical Association, whose members are at the frontline of this battle, is required in signing off those entities equipped to take on the task. This will ensure healthcare workers at those designated facilities have adequate equipment, drugs and PPE. It is hoped that funds will be made available to provide testing facilities in hospitals outside Entebbe.

Wanton violence of the type we have seen contributes nothing to disease control and undermines faith in the government to lead us out of this crisis

Biosafety professionals should be involved in setting up any quarantine sites outside hospital settings to avoid healthcare-associated infections after the pandemic passes. The same should apply to General Hospitals and all Health Centre IVs if the need arises. Regional quarantine and treatment centres are needed to ensure everyone has a good chance of survival wherever in the country they may live as transporting patients across the country puts health workers at risk. Moreover, disinfection of markets, taxi parks and, where possible, other public places should take place before the lockdown is lifted.

Funding the fight

To fund the interventions we request that money currently allocated to Ministries, Departments and Agencies for non-essential activities be reallocated to increasing the number of tests carried out per day and providing transport and PPE for health workers. For example, fuel expenditure saved by grounding government vehicles and cancelling bench-marking trips, conferences, and treatment abroad for ailments that are treatable in Uganda, should also be reallocated to the health sector. Above all, we should minimise waste; expenditure on advertising in the media, printing official bulletins and so on, is not a priority. As WHO recommends, the way forward is “find, isolate, test, treat & trace”.

Most challenging, however, is the third recommendation from WHO: “Expand, train & deploy your health care & public health workforce”. Currently, we have five hospital beds per 10,000 people, 200 intensive care units and less than one (0.9) doctor per 10,000 people. To further complicate matters, other affected countries will seek to import our doctors to combat COVID-19 in their countries. The United States has already invited work visa applications from doctors. The US has 25.9 doctors per 100,000 people but 300,000 COVID-19 cases. Robust interventions on our part will serve in the current crisis and during any future health crises.

As WHO recommends, the way forward is “find, isolate, test, treat & trace”

The immediate sizeable source of funds would be the suspension of the Lubowa Specialised Hospital Project targeting health tourists. The total project cost is Sh1.4 trillion ($379 million). After the first payment of Sh327 billion ($87million), there remains a balance of Sh139 billion. These funds are needed to provide primary healthcare, intensive care and emergency care for Ugandans. (The existing budget for the 41 hospitals to be built in 39 districts is Sh1.3 trillion.) The reallocation from Lubowa Hospital should take place as soon as possible and should the lender decline, the rest of the loan should be cancelled.

Easing the Economic Impact of COVID-19

The majority of Ugandans are employed in the informal sector. In fact, 83 per cent of non-agricultural workers are in the informal sector (World Bank Databank). The majority of workers (75.2 per cent) are classified as being in “vulnerable employment” (Human Development Report 2019, UNDP). What this means is they do not have health insurance and are unlikely to have savings or any other form of social safety net. For the fishermen and small traders who pay annual licence fees, Uganda Revenue Authority could consider extending the validity of those licences to take account of trade lost during the pandemic.

Borrowers from the Youth Livelihood Programme and the Women’s Entrepreneurship Programme present a problem. The 83,000 participants in the government-funded loan schemes such as the Youth Livelihood Programme were already having difficulties making repayments and the majority defaulted. During this time we request that the government suspends the pursuing of defaulters and resumes collections when normal work resumes.

Those in debt to micro-finance companies can be assisted by freezing interest accumulation during the lockdown and extending repayment periods once work resumes. Boda boda riders who have bought their motorcycles on credit fall into this category.

Formal Small and Medium Enterprises face similar loan repayment challenges and require similar consideration. The Bank of Uganda has the responsibility to use those mechanisms as are within in its powers to maintain economic stability. It should ensure that SMEs are not forced out of business by enabling banks to extend repayment periods for loans. In this connection, borrowers forced to default should not be penalised and listed by the Credit Rating Bureau.

Both the formal and informal sectors increasingly use digital means to do business. To reduce the use of potentially infectious money, and to make transactions more affordable, we request that the government lift the OTT tax (excise duty on over-the-top services). The government is also urged to reach an agreement with Telcos to further reduce their rates for all telephony.

Mortgages and rent

Without work, the informal sector and struggling SME owners may be unable to pay rent and may face eviction. Bear in mind landlords too may rely on the rent to repay building loans and cater for their families. Therefore, for those in the informal sector we request that the government works out an arrangement with landlords to grant a month’s grace period for those forced to default on rent. The government could take on the debt for the period of the lockdown. For those in the formal sector, the government should consider guaranteeing the rent and mortgage payments and later recover them from salary or from the National Social Security Fund (NSSF) savings of the tenant. Moreover, the NSSF Act needs to be amended to give members access to their savings during emergencies in future.

Utilities

Payment of electricity and water bills will become more difficult in the days ahead. The National Water and Sewerage Corporation has explained that it is unable to waive water charges because it too must meet its obligations to employees and suppliers.

What is needed are subsidies for consumers in difficulty. Two options are possible for a fixed period: a VAT waiver on water and electricity or selective subsidies through Yaka credits and water credits for those most in need. It should be possible to apply online or to regional offices and be granted these credits according to criteria agreed upon between the government and the utilities providers.

Social protection of the most vulnerable

We note the relief being distributed to the vulnerable in Kampala and Wakiso districts. It is true that many urban dwellers have been suddenly deprived of incomes and require support. However, rural people in vulnerable employment are also affected by the lockdown through loss of income. Many depend on roadside markets between towns and cities, traffic which no longer exists.

The elderly are the most vulnerable because globally fatalities have been most prevalent among this demographic and also because their caregivers will be unable to provide for them as before. Yet many of the elderly are themselves caregivers to grandchildren and employers of farm workers. The government has already compiled a list of the aged to which it pays a monthly grant. This Senior Citizens’ Grant is vital in keeping the rural economy afloat and for children being cared for during this time and therefore it must be paid in full and in a timely manner.

The incapacitated and those whose caregivers are themselves incapacitated by illness will need to be added to the list of the vulnerable as will the unemployed who will lose caregiver support. Nearly all Ugandans are at risk of financial disaster if they were to become seriously ill. The Human Development Report states that 75 per cent of Ugandans are at risk of catastrophic expenditure – expenditure which wipes them out financially – were they to require surgery. COVID-19 may not require surgery but in the worst cases (should they appear) it will require intensive care. With a reported 200 ICU beds nationally and most probably all occupied, the situation is dire.

In the absence of public transport, a special public transportation plan for patients and expectant mothers travelling to hospitals and medical centres should be put in place. The beginnings have been difficult as travel passes have not been easy to obtain. We propose hiring and branding vehicles for delivering COVID-19 patients to health facilities. The modalities can be worked out by the Joint Task Force. People Power Co-ordinators will be available to assist in locating those who require transport to health facilities.

The 21 per cent of people living in poverty forms a large part of the vulnerable section of the population. Undernourishment (caloric intake below minimum energy requirements) has been steadily rising for the last 14 years, from 29 per cent to 41 per cent. We have been advised by the Ministry of Health that people have a better chance of surviving COVID-19 infection if they are adequately nourished. To exclude them from the lockdown-affected persons requiring assistance is unfair and counter-productive as they are more likely to succumb to infection.

Disaster preparedness

We cannot afford not to be prepared for other disasters. The shortage in medical masks, respirators, gowns and goggles caught Uganda unprepared yet this was forecast by the World Health Organisation on 27 February.

A resurgence of the desert locust plague in the region was forecast to begin in early May. A swarm entered Amudat district for the second time on 3 April. If it grows, there will be food shortages.

Extreme climate events such as mudslides this rainy season cannot be ruled out either. Our preparedness should reflect the seriousness of the situation and funds set aside to deal with any eventualities. A government statutory contingency fund must be put in place with immediate effect.

On an individual level, to increase food security, owners of uncultivated land are requested to either plant staple foods or allow food to be planted on their land during this rainy season. This arrangement would be limited to this season that is coinciding with the lockdown period.

Funding the safety net

To fund the social safety net, it will be necessary for the government itself to get debt relief on the national debt. Currently over 65 per cent of revenues goes towards debt payment. While we appreciate the World Bank’s call for suspension of debt repayments to development partners and offer of a loan package to finance the campaign against COVID-19, this is not a time to acquire more debt. Lenders are aware that Uganda is a fragile state and, therefore, negotiations for debt cancellation to enable us to provide a social safety net must go ahead and they must succeed. The absence of a social safety net is the direct result of ill-advised development policies.

Long-term interventions: Rehabilitation of the Health Care System

People Power has long argued that the stagnation in health and other services must be addressed as a matter of urgency, not in 2022 or in 2026 but now. This pandemic will end but without strong health and other public services, we shall remain vulnerable to the next epidemic, pandemic or extreme climate event. So we would like all interventions to go beyond the COVID-19 pandemic to cater for future needs.

The health, water and sanitation and all other sectors must be transformed into robust, life-enhancing government services.

Health expenditure

Our expenditure on health decreases nearly every year. That trend must be reversed. We must go from spending 6 per cent of GDP on the health service to spending the 15 per cent we signed up to in the Abuja Declaration.

Not surprisingly, a review of the hospitals around the country reveals that the majority have faulty equipment. To finance a health service that meets national requirements, the health insurance scheme that has been in the pipeline for over a decade needs to be rolled out.

We must go from spending 6 per cent of GDP on the health service to spending the 15 per cent we signed up to in the Abuja Declaration.

We need to develop the capacity to manufacture items for clinical use, e.g. protective gear for health workers. We have the capacity. In 2019 young Ugandans developed life-saving and cost-saving bio-medical equipment. All are important because of the nationwide shortage of medical equipment especially in rural areas. Olivia Koburongo and Brian Turyabagye developed the Mama-Ope smart jacket for digital pneumonia diagnosis. In 2018 Phyllis Kyomuhendo invented M-Scan a portable ante-natal ultrasound device. Brian Gitta and colleagues developed a bloodless malaria test (Winner of the Africa Prize for Engineering Innovation, founded by the Royal Academy of Engineering in the UK); we often cannot afford reagents used to test blood. In 2014 Dr Chris Nsamba developed an incubator for premature babies which he donated to the government. It is in use at Mukono Health Centre IV whereby last year it had saved the lives of 243 critically ill babies. Uganda has one of the highest rates of premature deaths in the world.

In 2019 young Ugandans developed life-saving and cost-saving bio-medical equipment

However, Dr Nsamba failed to get any government funding although a government agency later claimed to have sponsored the development. The government should make a firm commitment to support local innovators by buying their products while following procurement rules to give all innovators a competitive chance.

Water and Sanitation

Only 18 per cent of the population has access to basic sanitation services with which to keep themselves and their homes healthy. Of every 100,000 deaths, 31 are related to unsafe water and poor sanitation and hygiene services. Of every 100,000 deaths, 159 are caused by household and air pollution (Human Development Report 2019, UNDP).

In the long term, there needs to be an investment in the water sector that meets the needs of the 82 per cent without access to basic sanitation services.

We are grateful for the government’s transparency in admitting that the limited water supply to homes has been caused by “poor planning and implementation of programmes over the years”. As a result, the water and environment sector now needs at least nine times the present level of funding every year for the next 12 years to meet national development targets (Budget Monitoring and Accountability Unit Briefing Paper 30/19, Ministry of Finance, June 2019).

Environment

During the lockdown many will struggle to get fuel for cooking. Under normal circumstances, less than 1 per cent of Ugandans has access to clean fuels and technologies for cooking. Apart from being unsustainable environmentally, the daily search for firewood, like the daily trip for water, takes away time children would otherwise have spent in school, acquiring skills to innovate for our survival as a people.

Human Development

We have an opportunity to reflect on the type of nation we want to be. Are we willing to invest in our human development and well-being or will we forever belong to WHO’s category of “the most fragile and vulnerable countries”?

Human development costs money. We will only see a change if we manage our resources better, this goes both to government and to the population. We must eliminate non-essential expenditure; expenditure on salaries of political appointees and on electioneering – cash handouts in return for votes. We must eradicate waste; last year vehicles were bought at a cost of $5.5 million for the Commonwealth Parliamentarians Conference. It was said that they would thereafter be used for government work but they have not been surrendered to the pool for use in fighting COVID-19. The recent budget proposals for the desert locust emergency, especially by the ICT ministry, show that we have not learned this yet.

As a Nation, we need to reflect on the wisdom of splintering the country into tiny entities paying salaries for MPs, and public service but remaining financially unable to maintain decent health centres, hospitals or roads, or to deliver quality education in most local government institutions.

As individuals, each one of us must have as much integrity as we expect from our leaders. In the last four years, Uganda lost Sh28 billion in the Youth Livelihood Programme. An audit of a sampling of Youth Livelihood Project groups which received loans found that 64 per cent were non-existent (representing 71 per cent of the value of the loans). Another 25 per cent had embezzled the funds. This means that repayments were not available for re-lending to new Youth Interest Groups.

We must never again be found without sufficient medical facilities. We must never again find ourselves lacking water with which to wash our hands and prevent disease.

The physical environment in which we live and work can and must be transformed. Unsanitary working conditions in markets and other public places must be addressed beginning with the NWSC/KCCA handwashing points which we expect will become a permanent feature.

We must never again find ourselves lacking water with which to wash our hands and prevent disease.

A durable solution to the broken public transport system is needed, especially in cities and towns. This pandemic has taught us that public transport is a public good that must be supplied, regulated, maintained and sanitised by the government. Supplementary systems are well and good, but the primary responsibility for public transport lies with the government.

On behalf of the millions of People Power foot soldiers across the country, I call upon the government of Uganda and all Ugandans to reflect and consider the proposals I have laid out here.

For God and My Country.

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Robert Kyagulanyi Sentamu, AKA Bobi Wine, is the Member of Parliament for Kyadondo East and leader of Uganda’s People Power Movement.

Politics

No War, No Peace: Life and Death in Eritrea

Thirty years after Eritrea gained independence from Ethiopia, there has hardly been any meaningful development in this small nation in the Horn of Africa. On the contrary, the government’s authoritarian policies have undermined democracy and forced young people to flee the country.

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No War, No Peace: Life and Death in Eritrea
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Eritrea was an Italian colony from 1890 to 1941. Following the defeat of Italian forces by the Allied Forces during World War Two, Britain occupied Eritrea until its federation to Ethiopia in 1952. However, by 1962 Emperor Haile Selassie had annexed Eritrea, declaring that it was part of Ethiopia, and in this way ending the federation.

In 1961, a year before the annexation, the Eritrean Liberation Front (ELF) started an armed struggle for independence from Ethiopia. The armed struggle continued for 30 years against successive Ethiopian regimes until 1991, when the Eritrean People’s Liberation Front (EPLF), who had replaced the ELF, defeated the Ethiopian forces in Eritrea. Eritrea became formally independent following a United Nations-supervised referendum in 1993.

From the beginning, the EPLF (now the People’s Front of Democracy and Justice – PFDJ)’s strategy for achieving liberation and national unity was for it to dominate all social, political, and economic spaces. The PFDJ implemented a highly centralised and opaque two-track system of administration: an unseen, powerful inner circle of elites; and public structures that projected an image of egalitarian self-sufficiency. This centralised and opaque model of governance continues today.

Since liberation, PFDJ has banned all opposition parties and treats all non-mass-movement organisations (i.e. independent civil society) with suspicion; hence there are no independent national civil society organisations in the country. Without any consultation, the PFDJ has nationalised all land; it has established a unitary form of government, and it has changed the administrative boundaries within the country. Despite these totalitarian tendencies, in 1994, the PFDJ, as the Provisional Government of Eritrea, set up the Constitutional Assembly to draft the Constitution. The task was completed in 1997. But the Constitution remains unimplemented.

Border dispute

In 1998, hostilities and war between Eritrea and Ethiopia resumed over border demarcation issues, particularly in the town of Bademe. By December 2000, the two countries signed the Algiers Peace Agreement and established the Eritrea Ethiopia Border Commission (EEBC) to determine the limits of their shared border.

The EEBC delivered its border decision on 13th April 2002, placing the town of Bademe, the flashpoint of the border conflict, on the Eritrean side. The Ethiopian government contested the allocation of Bademe to Eritrea. Therefore, a situation of “no war, no peace” ensued between the two countries as President Isaias Afewerki refused any dialogue on the issue because the parties had agreed that the decision of the EEBC was final and binding.

President Isaias Afwerki, who is also the chair of the PFDJ, took advantage of the strained relationship with Ethiopia to:

  1. indefinitely postpone the implementation of the 1997 Constitution as well as the general elections;
  2. arrest and disappear dissenters, especially University of Asmara students and the members of the government known as G15 who promoted a democratisation process (2001);
  3. close the independent media and arrest journalists (2001);
  4. abolish the Eritrean National Assembly (i.e. the Eritrean Parliament) (2002);
  5. maintain a high level of militarisation of the country.

To maintain a high level of militarisation, the government vertically integrated the National Service to the National Development Programme (i.e. the Warsay Yikaalo National Development Programme) and to Education. This integration allows the Eritrean government to move students into the National Service and the National Development Programme from high schools (i.e. Grade 12) and indefinitely extends the period of service of the conscripts, hence taking full control over the working population.

In 1998, hostilities and war between Eritrea and Ethiopia resumed over border demarcation issues, particularly in the town of Bademe. By December 2000, the two countries signed the Algiers Peace Agreement and established the Eritrea Ethiopia Border Commission (EEBC) to determine the limits of their shared border.

Through the integration of the National Service into the Warsay Yikaalo National Development Programme and Education, the government has limited the citizenship rights of conscripts who while in service cannot: legally obtain a mobile phone or SIM card; get or renew a business licence; access land; and access travel documents and exit visas. Deserters or objectors are denied any rights and cannot access state services. Thus, the official Eritrean concept of citizenship is intrinsically linked to conscription and the fulfilment of National Service duties.

The National Service is a combination of military training and civil service, working for little pay in non-military activities such as agriculture, the construction of roads, houses and buildings and mining. The Warsay National Development Programme relies on the deployment of te National Service (Warsay) and defence personnel (Yikaalo) as a labour force. The programme operates under the umbrella of the Ministry of Defence.

Since 2003, the government has closed the University of Asmara (the only university in the country). It has also required that all Eritrean students complete Grade 12 at the Sawa military training camp. Students who have not completed their final year of secondary school at Sawa and have not sat for the National School Certificat, cannot access college education. The PFDJ has replaced Asmara University with regional colleges, which are administered jointly by an academic director and a military director.

National Service conscripts work for an indefinite period on development projects, the administration of ministries and local authorities, as well as in PFDJ-owned businesses. Such work is carried out for very little pay and in conditions that a UN Commission of Inquiry on Human Rights in Eritrea described as “forced labour”.

The Eritrean authorities’ control over the people includes the restriction of movement both internally and externally. Therefore, all Eritreans aged five and above cannot leave the country without an exit visa. The government will not issue an exit visa to any Eritrean above the age of five, irrespective of their situation (i.e. family reunification, health, etc.)

The government’s control over the Eritrean people is a political, social and economic process of deprivation and human rights violations for which it refuses to take any responsibility. It is systematically impoverishing the population. Therefore, Eritrean youth face having to choose between the life of slave labour or exile. They describe their situation as slavery: “[The] situation in Eritrea and long time ago with slaves is the same. We build the houses of the elites without money. We work on farms of government officials for no money. If you are educated, they deploy you to anywhere…for a short time, you can tolerate it…but this is for life.”

Faced with accusations of human rights violations, the government reverts to “threat” mode. It labels any reference to human rights violations as “lies” and “ploys” of its enemies to undermine the state. The PFDJ Head of Political Affairs, Mr Yemane Gebreab, dismissed the findings of the Commission of Inquiry on Human rights by saying: “….[it is] really laughable……There is no basis to the claims of the Commission of Inquiry…”

The Eritrean authorities’ control over the people includes the restriction of movement both internally and externally. Therefore, all Eritreans aged five and above cannot leave the country without an exit visa.

In addition to taking control over the working population, the government also took control of the economic sectors, including finance, import and export, transport and construction. It has achieved control over the economic sphere through a process of unfair competition with private business, facilitated by the fact that it does not pay taxes and does not comply with labour, environmental, and other regulatory requirements. Also, as the regime has control over the working population, it has unlimited access to a large pool of free labour, effecting a net transfer of the workforce away from the private sector. This policy of moving human resources to labour sites identified and controlled by the government has crippled the private sector, especially the agricultural industry, which still relies to a large extent on subsistence farming.

The government’s control and domination of the economy have not increased economic activity or productivity. The economy is stagnating, further weakening the private sector and restricting economic opportunities for Eritreans.

Notwithstanding PFDJ’s rhetoric, Eritrean youth experience the state as an albatross around their necks. They understand the state in terms of spy networks; as a human rights violator curtailing civil, political, and economic rights and as the as the source of torture and deprivation. They see it as the source of all restrictions and deprivations. This is the reason why they flee the country.

Peace Agreement with Ethiopia and its aftermath

In April 2018, the Ethiopia Prime Minister Abiy announced the acceptance of the EEBC decision, in particular the allocation of the flashpoint town of Bademe to Eritrea. In this way, he started a process that led to the signing of the Ethiopia Eritrea Peace Agreement in July 2018, thus ending two decades of “no war, no peace”. The land borders opened to much jubilation in 2018. However, by April 2019, the Eritrean government had closed them all. So far, the only achievements of the Peace Agreement are the reopening of embassies and telecommunication lines and the resumption of flights.

The signing of the Peace Agreement immediately raised expectations that there would be a normalisation of relations between the two states. It also raised expectations regarding reforms within Eritrea that would lead to a reduction in the number of Eritrean youth fleeing the country. Soon after the signing of the Peace Agreement, the Eritrean Catholic priest Aba Teklemichael pointed to the sweeping reforms implemented by Prime Minister Abiy in Ethiopia, and urged the Eritrean government to also undertake necessary reforms in Eritrea and to democratise the government. By Easter 2019, the Eritrean Catholic bishops were also calling for a constitutional government and the rule of law. They also encouraged the government to release political prisoners and start a process of reconciliation within the country. However, to date there have been no reforms in the country, a state of affairs confirmed by the UN Special Rapporteur on Human Rights in Eritrea who at the start of this year reported that she had: “ ……no tangible evidence of a meaningful and substantive improvement in the situation of human rights in Eritrea”.

The signing of the Peace Agreement immediately raised expectations that there would be a normalisation of relations between the two states. It also raised expectations regarding reforms within Eritrea that would lead to a reduction in the number of Eritrean youth fleeing the country.

The ongoing peace process is not transparent; it has mostly remained an elite political level agreement unable to deliver on the economic front or to resolve the issue of Bademe as both Prime Minister Abiy and President Isaias Afewerki have marginalised the Tigray People’s Liberation Front (TPLF) for political motives. The Eritrean government has increasingly identified the Tigray State and the Tigray People’s Liberation Front (TPLF) as an existential threat to Eritrea, thus justifying the maintenance of a high level of militarisation. Consequently, Eritrean youth continue to flee the country. In 2018, UNHCR ranked Eritrea as the ninth-largest refugee-sending state in the world.

Ailing health sector

The totalitarian agenda of the Eritrean government did not spare the health sector either. The task of reconstructing the Eritrean health system after the liberation struggle and following the 1998-2000 Eritrea-Ethiopia border war was monumental. It was an undertaking that the late and former Minister of Health Saleh Meki undertook with passion, commitment, and zest from 1997 to 2009 when Ms Amina Nurhussein replaced him.

In his efforts rebuild the Eritrean health system, Saleh Meki sought to establish strategic partnerships with critical international health institutions, private practitioners, faith-based organisations, such as the Catholic Church, as well as professional members of the Eritrean diaspora. The former Minister of Health carried on with his efforts despite the enormous pressure to conform to the dictates of President Isaias Afwerki, and the concerns generated by the closure of international non-governmental organisations, as well as the restriction of movement imposed on all organisations working in the country. Against all the odds, he re-established the medical school known as the Orotta Medical School.

Saleh Meki died on 2nd October 2009. Soon after his death, all the medical missions of international organisations that he had worked so hard to bring to Eritrea ended. By 2011 the Eritrean Government forced the closure of all private medical clinics. And, by 2018 a total of 29 Catholic health facilities providing maternal and child health support and serving some of the more remote communities in the country were closed. The seizure and closure, of the Catholic health facilities was carried out in complete disregard to the health and safety of the patients, most of whom were left to fend for themselves.

There was no clear justification for the closure of the private health facilities. However, the closure of the Catholic health facilities was justified as an enforcement of the 1995 Proclamation to standardise and articulate religions institutions (Proclamation No 73 of 1995). The Proclamation prohibits religious bodies from engaging in social and welfare services. This position is contested by all faith-based organisations, especially since there was no consultation in the development of the law. The Eritrean Catholic bishops’ communication with the government on the seizure and closure of their health facilities point out that the facilities operated by abiding with all the requirements of the Ministry of Health.

Poor COVID-19 response

The closure of health facilities has reduced the number of available beds and the overall capacity of the health system. Hence, Eritrea, with a score of 0.434, was ranked 182nd out of 189 countries by the 2019 Human Development Index. The low Human Development Index combined with a hospital bed capacity of 7 beds for 10,000 people, and no available data as to the number of health professionals (i.e. doctors and nurses) available per 10,000 people, suggests that the situation might be even more dire. And the poor connectivity of the country (i.e. mobile phones, internet, broadbands) means that the country’s capacity to deal with pandemics such as COVID-19 is low.

The low capacity of the Eritrean health system to deal with the COVID-19 pandemic was also of concern to the diaspora Eritrean Healthcare Professionals Network (EHPN), which urged the Eritrean government to immediately implement the World ealth Orbanization (WHO) and Centre for Disease Control (CDC) guidelines and advisories to contain the pandemic. EHPN expressed concern that the country lacks the necessary prerequisites to implement hygiene measures because: “There is a shortage of water, disinfectants, laboratories that carry out diagnostic tests and medical professionals, including nursing and technical staff. There is also a lack of functioning intensive care units with adequate ventilation equipment needed to properly treat patients. The reality is that many Eritreans will not be able to seek and obtain medical treatment in their homeland or neighbouring countries. In short, the Eritrean health system is not adequately prepared for COVID 19.”

Fears regarding the poor state of the Eritrean health system were further heightened when the Eritrean government refused COVID-19 emergency supplies donated by the Chinese billionaire Jack Ma and his Alibaba Group. Mr Hagos “Kisha” Gebrehiwet, the head of Economic Affairs in the ruling PFDJ, justified the rejection of Jack Ma’s donation by saying that it was unsolicited.

The government’s willingness to reject donations has, however, launched a COVID-19 appeal among citizens. The appeal is remarkable for the lack of information as to how the funds raised will be used. There is no single COVID-19 emergency response bank account designated for the appeal; hence, in the diaspora, funds are collected in different foreign bank accounts set up by Eritrean embassies. Consequently, there is a real danger that the funds will never enter the country and will disappear into the government’s opaque offshore financial system. Also, there is no information as to how the Ministry of Health will use the funds. Reports by Eritrean human rights activists say the appeal is coerced, confirming the lack of transparency and accountability of the fundraising process.

There is also no transparency in the COVID-19 data that the Eritrean government is providing. It reported the first four COVID-positive cases on the 21st and 23rd of March. One patient was an Eritrean national resident in Norway, and the other three positive patients were Eritrean nationals returning from Dubai. Because of these events, by 26th March, the government banned all commercial passenger flights for two weeks. It also closed schools. And, by 1st April, it imposed COVID-19 lockdown measures.

Fears regarding the poor state of the Eritrean health system were further heightened when the Eritrean government refused COVID-19 emergency supplies donated by the Chinese billionaire Jack Ma and his Alibaba Group. Mr Hagos “Kisha” Gebrehiwet, the head of Economic Affairs in the ruling PFDJ, justified the rejection of Jack Ma’s donation by saying that it was unsolicited.

The lockdown measures did not include the closure of the Sawa military training camp or the release of political prisoners. The government has recently released 27 Christian prisoners, who were imprisoned without charge or trial for as long as sixteen years. Their release is conditional on their family lodging their property deeds with the government as a guarantee that the people released will not leave the country.

While maintaining a strict lockdown, the Eritrean government has allowed mass gatherings to celebrate the graduation of the 33rd round of Sawa military training camp graduates as well as the transfer of Grade 12 conscripts to the facility.

From 1st April to 18th April, the Eritrean government reported 39 COVID positive cases, all linked to Eritreans visiting or returning from their travels. Then, for two months, there were no new cases reported. After that, the number of COVID-positive cases increased, and by the 12th of October, Eritrea reported a total of 414 COVID-positive patients and 372 recoveries.

Though the government makes repeated references to quarantine centres, it has not shared a list of the centres, their location or capacity. It is also not reporting the daily number of COVID tests. Nor has it reported any COVID-related deaths or any community transmission of the virus. It continues to attribute all the new COVID cases to Eritreans returning through “irregular land and sea routes” from Ethiopia, Sudan, Djibouti and Yemen. But there is no explanation as to why so many nationals are travelling despite the government’s strict lockdown procedure that prohibits all movement between towns and that restricts te movement of any vehicles, including buses and taxis, which require movement permits. Such permits are not easy to obtain.

Finally, there are only five incidents of Ministry of Information reporting the number of individuals tested or in quarantine:

  1. 3,000 quarantined – 8th May 2020;
  2. 5,270 quarantined – 3rd June 2020;
  3. 7,158 nationals returned through irregular land and sea routes. Not clearly stated but the implication is that they were all quarantined – 14th June 2020;
  4. 18,000 citizens allegedly returned through irregular land and sea routes. This movement occurred in the last four months. Again, not clearly stated but the implication is that they were all quarantined – the 12th October 2020;
  5. 41,100 tests – 12th October 2020.

In a recent report, the Eritrean Ministry of Information asserted that the rate of COVID infection in the country was “a paltry 0.02%”, based on one (1) positive result during 4659 random tests done in Asmara”. The data shared by the government (41,100 tests and 414 COVID-positive cases) suggests that the rate of infection is just 1 per cent.

The COVID lockdown in Eritrea, like in other countries, has brought economic activities to a standstill. The difference between Eritrea and other countries is that the Eritrean economy was already on its knees before the lockdown and the Eritrean government has not made any attempt – beyond extorting donations from its citizens – to alleviate the suffering of the people with economic support packages. Consequently, Eritreans are hungry and desperate and have started to ignore strict lockdowns. They are on the streets selling all kinds of goods. Women are out in the streets, making tea and cooking food for sale. Family and friends describe Asmara, the capital city, as full of mobile tea shops.

In a recent report, the Eritrean Ministry of Information asserted that the rate of COVID infection in the country was “a paltry 0.02%”, based on one (1) positive result during 4659 random tests done in Asmara”. The data shared by the government (41,100 tests and 414 COVID-positive cases) suggests that the rate of infection is just 1 per cent.

The Eritrean Afars have, through the Red Sea Afar Human Rights Organisation (RSAHRO), issued a press statement, describing their situation under lockdown as a: “… siege imposed by the Eritrean regime on the citizens of the region.”. They warn of the danger of hunger in their area. They also describe confiscation of boats, camels and supplies by the military, closed health centres, unprepared quarantine centres, as well as lack of medical supplies. The human rights organisation also accuse General Tekle Manjus of confiscating trucks of emergency food sent from Asmara for distribution among the Afar.

The Afar coastal area is not the only area in danger of hunger. The information from Eritrea is that hunger is very real all over the country. The government media and social media accounts do not report the danger of hunger or any of the difficulties that the people are facing during this COVID-19 emergency. Their postings give the impression that Eritrea is doing just fine.

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The Search for a Puppet Chief Justice

The emotional energy invested in controlling the recruitment of the next Chief Justice could turn out to be a source of great frustration when administrative fiat and bench-fixing do not deliver the anticipated results.

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The Search for a Puppet Chief Justice
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Anxiety over who will replace Chief Justice David Maraga exploded into the public domain on Friday, October 16, 2020, when a member of the Judicial Service Commission (JSC) alleged a plot to delay the recruitment process. Macharia Njeru, one of the two representatives of the Law Society of Kenya (LSK) to the JSC, claimed in a public statement that the Chief Justice and a few others were “hellbent on derailing the orderly recruitment of his successor and leaving the institution of the Judiciary in a crisis of leadership”.

LSK immediately dissociated itself from Macharia’s position and asserted that the “state capture of the Judiciary and the Judicial Service Commission would not be executed through its representatives”.

The parliamentary Justice and Legal Affairs Committee had earlier failed to prevail on Justice Maraga to take early terminal leave, and subsequently published a proposal to change the law on when to begin recruitment of a new Chief Justice. The Chief Justice will officially retire on January 12, 2021, when he turns 70, but he is expected to take leave on December 15, 2020.

Powerful individuals in the country’s politics cannot wait to see Justice Maraga’s back because of his surprising show of spine. On September 1, 2017, the mild-mannered and soft-spoken jurist led a four-judge majority of the Supreme Court to annul the presidential election in a decision that reverberated across the globe. Last month, Justice Maraga advised the President to dissolve Parliament for failing enact laws to increase representation of women in national elected leadership on the strength of a High Court declaration and six petitions.

Between the two monumental decisions, the Chief Justice has called out the President over judiciary budget cuts, disregard for court orders and verbal attacks on the institution he leads.

Justice Maraga’s name conjures up odium and foreboding in state organs at the executive and legislative levels, expressed through punitive budget cuts in the Judiciary, disregard of courts’ authority, and derisive rhetoric. None of these backhanded actions have brought the politically powerful any satisfaction, hence the abiding desire to find a more user-friendly Chief Justice.

Vacancies in the Judiciary can only be advertised fourteen days after they open up, according to the law, which means that the Chief Justice, who also chairs the JSC, plays no role in recruiting his successor. Previously, individuals in the presidency unsuccessfully sought to influence who becomes Chief Justice since the Constitution of Kenya, on its promulgation in 2010, retired Justice Evan Gicheru in February 2011. At the time, President Mwai Kibaki nominated the Court of Appeal’s Justice Alnashir Visram for Chief Justice without inviting applications or conducting interviews. He was countermanded by the newly-constituted JSC, which then conducted one of the most brutal public interviews for the position before choosing civil society icon and law scholar Willy Mutunga.

Justice Maraga’s name conjures up odium and foreboding in state organs at the executive and legislative levels, expressed through punitive budget cuts in the Judiciary, disregard of courts’ authority, and derisive rhetoric.

Dr Mutunga’s transparent recruitment freed him from the usual baggage that would accompany a political appointment to lead the transformation of the judiciary into an independent, publicly accountable institution [Full disclosure: I was communication advisor in the Office of the Chief Justice from 2011 to 2015]. By the time Dr Mutunga chose to retire a year early in June 2016, he had trebled the number of judges to increase efficiency, built confidence and secured the highest funding ever for the institution. He also ring-fenced decisional independence that would enable courts to act as a check on executive and legislative power.

After the Supreme Court upheld the 2013 presidential election, an internal corruption investigation in the Judiciary sucked the institution into a confrontation with the National Assembly, which petitioned the President to appoint a tribunal to investigate six members of the JSC. A five-judge High Court bench neutered the tribunal before it could sit and presented the first contest between Dr Mutunga and President Uhuru Kenyatta.

President Kenyatta would play possum with a list of 25 judge nominees presented to him by the JSC, first appointing 11 and then keeping the other 14 in abeyance for a year. An amendment to the law to require the JSC to send the President three names from which he could choose the Chief Justice was struck down on account of unconstitutionality.

When Dr Mutunga wanted to retire, the President declined to meet him, and the Speaker of the National Assembly refused to respond to his request to address Parliament. By the time interviews for Dr Mutunga’s replacement began in September 2016, the Executive was disoriented and unable to muscle its substantial vote strength in the JSC for a single candidate.

Although the presidency nominates two non-lawyers as members of the JSC in addition to the Attorney General and a nominee of the Public Service Commission, thus controlling 36 per cent of the vote, the Judiciary has five members – the Chief Justice as chair and one representative each for the Supreme Court, the Court of Appeal, the High Court and the magistrates – and has 45 per cent voice. The Law Society of Kenya’s two representatives – 18 per cent – provide an important swing vote for the Executive or the Judiciary whenever there is no consensus.

Justice Maraga of the Court of Appeal emerged as the dark horse in the three-month search for the Chief Justice on the strength of his electoral law jurisprudence. Earlier attempts to name Supreme Court judge Jackton Ojwang as acting Chief Justice were abandoned. Justice Ojwang trailed fellow Supreme Court judge Smokin Wanjala, Kenyan-American law professor Makau Mutua, and constitutional law expert Nzamba Kitonga.

When Dr Mutunga wanted to retire, the President declined to meet him, and the Speaker of the National Assembly refused to respond to his request to address Parliament.

The Supreme Court’s annulment of the presidential election in September 2017 produced voluble complaints from President Kenyatta, who threatened unspecified action against the Judiciary. The independence of the Judiciary, represented in the person of the Chief Justice, has clearly rankled President Kenyatta and his supporters. He subsequently began a systematic reorganisation of the Executive’s representatives to the JSC by picking a judiciary insider, Court of Appeal president, Kihara Kariuki, to replace Attorney General Githu Muigai. Even before the terms of public representatives Winnie Guchu and Kipng’etich Bett were midway, he recalled them and replaced them with Prof Olive Mugenda and Felix Koskey. And then he declined to gazette the re-election of Mohammed Warsame as Court of Appeal representative to the JSC. Judge Warsame was finally seated without re-taking oath courtesy of a court decision that obviated the need for his election to be gazetted. He joined the judiciary column led by the Chief Justice, Deputy Chief Justice Philomena Mwilu, who had been elected to represent the Supreme Court, and Justice David Majanja, who represents the High Court.

Fears have been rife that the election of the magistrates’ representative to replace Chief Magistrate Emily Ominde in December and the replacement of LSK woman representative Mercy Deche could provide an opportunity for the Executive to support pliant candidates, in addition to Macharia Njeru.

It is likely that urgent attempts to start the Chief Justice’s recruitment could exclude the two representatives of the magistrates and the LSK, thus denying the panel two critical voices. Voting strength in the JSC could also be significantly altered if some of the commissioners apply for the Chief Justice’s position. For one, it is not clear if the 62-year-old Deputy Chief Justice Philomena Mwilu, who already represents the Supreme Court in the JSC, will act as chairperson of the commission once Justice Maraga leaves.

Although voting is an important factor in choosing the next Chief Justice, qualification is probably more important. And the public scrutiny candidates are subjected to, complete with court oversight when required, means that a naked attempt to install a puppet would backfire.

Political horse-trading with Parliament is a necessity for nominees to the position of Chief Justice and Deputy Chief Justice to be confirmed during vetting. Often, politicians view the Chief Justice’s position as one of the spoils to be traded during ethno-regional deal-making. So far, the Chief Justice’s position has been occupied by a kaleidoscope of Kenyans – including many ethnic and religious colourations.

The law only provides for the Deputy Chief Justice to act as Chief Justice “[i]n the event of the removal, resignation or death” and only for a period not exceeding six months pending the appointment of a new one. It remains to be seen if legal experts will argue that retirement is not equivalent to removal, resignation or death. Should Justice Mwilu also throw her hat in the ring for the top job, she would not be able to cast a vote as a JSC member.

Another JSC member who has to weigh between voting and chasing the job is 66-year-old Justice Kihara Kariuki, believed to be a front-runner to succeed Chief Justice Evan Gicheru in 2011 but has bided his time, rising to President of the Court of Appeal before accepting to serve as Attorney General. Meanwhile, Justice Mwilu has been embroiled in petitions seeking her removal from office since the Supreme Court annulled the presidential election. Two years ago, the Director of Public Prosecutions and the Director of Criminal Investigations launched a highly publicised effort to arrest and charge her with corruption before the High Court discharged her and advised that complaints against her be first have been processed through the JSC. Justice Mwilu has since tied the JSC in legal knots over the involvement of the Attorney General and one other member in hearing the complaint against her, claiming that they have shown bias.

Although the Constitution allows a Chief Justice to serve for a maximum of 10 years, the practice so far has been to choose individuals who are close to the retirement age, with the effect that those chosen preside over only presidential petitions from one election cycle before they reach the retirement age of 70. If appointments continue to be short-term to limit the pain individuals can inflict on the institution, candidates in their mid-60s appear to be chosen to navigate the 2022 election and leave before the 2027 one.

Although voting is an important factor in choosing the next Chief Justice, qualification is probably more important. And the public scrutiny candidates are subjected to, complete with court oversight when required, means that a naked attempt to install a puppet would backfire.

Although the Supreme Court’s Justice Smokin Wanjala gave a good showing at the 2016 interviews and was ranked second, his age – 60 – means that if appointed, he would hold the job for 10 years. Law scholar Makau Mutua, 62, who was ranked third in the 2016 interviews for Chief Justice, could also give the job another try, as would former Attorney General Githu Muigai, who would similarly be hampered by fears of serving out the 10 years in the post.

The Executive’s frustration with the Judiciary has been expressed as blame for the slow pace of corruption cases, where the courts are criticised for not pulling their weight to deliver quick convictions. The most evident sign of frustration has been the President’s refusal to appoint 41 individuals nominated by the JSC as Court of Appeal and High Court judges. The law does not permit the JSC to reconsider its nominees after the names have been submitted to the President, except in the case of death, incapacity or withdrawal of a nominee. Last week, judge designate Harrison Okeche died after a road traffic accident before he could be sworn in because the President has not published the names as expected. It remains to be seen how the JSC responds.

Chief Justices chair the Judicial Service Commission, and preside over the Supreme Court, which decides the presidential election petitions. Besides the very constrained and collegial power in these two sites, the Chief Justice also exercises administrative power in empanelling High Court benches for constitutional references, and posts judges – powers shared with the President of the Court of Appeal and the Presiding Judge of the High Court.

A Chief Justice cannot direct judicial officers – from the lowliest magistrate to the Supreme Court judge – on how to decide a matter. Much of the power she or he wields is moral and symbolic. The emotional energy invested in controlling the recruitment of the next Chief Justice could turn out to be a source of great frustration when administrative fiat and bench-fixing do not deliver the anticipated results for those seeking a puppet Chief Justice.

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African Continent a Milking Cow for Google and Facebook

‘Sandwich’ helps tech giants avoid tax in Africa via the Netherlands and Ireland.

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Algorithmic Colonisation of Africa
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Google’s office at the airport residential area in Accra, Ghana, sits inside a plain white and blue two-storey building that could do with a coat of paint. Google, which made more than US$ 160 billion in global revenue in 2019, of which an estimated US$ eighteen billion in ‘Africa and the Middle East’, pays no tax in Ghana, nor does it do so in most of the countries on the African continent.

Google Street View of the building registered as Google's office in Accra

Google Street View of the building registered as Google’s office in Accra

It is able to escape tax duties because of an old regulation that says that an individual or entity must have a ‘physical presence’ in the country in order to owe tax.  And Google’s Accra office clearly defines itself as ‘not a physical presence.’ When asked, a front desk employee at the building says it is perfectly alright for Google not to display its logo on the door outside. ‘It is our right to choose if we do that or not’. A visitor to the building, who said she was there for a different company, said she had no idea Google was based inside.

Facebook is even less visible. Even though practically all 250 million smartphone owners in Africa use Facebook, it only has an office in South Africa, making that country the only one on the continent where it pays tax.

Brick and mortar

The physical presence rule in African tax laws is ‘remnant of a situation before the digital economy, where a company could only act in a country if it had a “brick and mortar” building’, says an official of the Nigerian Federal Inland Revenue Service (FIRS), who wants to remain anonymous. ‘Many countries did not foresee the digital economy and its ability to generate income without a physical presence. This is why tax laws didn’t cover them’.

Tax administrations globally have initiated changes to allow for the taxing of digital entities since at least 2017. African countries still lag behind, which is why the continent continues to provide lucrative gains for the tech giants. A 2018 PriceWaterhouseCoopers report noted that Nigeria, Africa’s largest economy, has seen an average of a thirty percent year-on-year growth in internet advertising in the last five years, and that the same sector in that country is projected, in 2020, to amount to US$ 125 million in the entertainment and media industry alone.

‘Their revenue comes from me’.

William Ansah, Ghana-based CEO of leading West African advertising company Origin 8, pays a significant amount of his budget to online services. He says he is aware that tax on his payments to Facebook and Google escapes his country through what is commonly referred to as ‘transfer pricing’ and feels bad about it. ‘These companies should pay tax here, in Ghana, because their revenue comes from me’, he says, showing us a receipt from Google Ireland for his payments. During this investigation we were also shown an advert receipt from a Nigerian Facebook ad that listed ‘Ireland’ as the destination of the payment.

Like Google, Facebook does not provide country-by-country reports of its revenue from Africa or even from the African continent as a whole, but the tech giant reported general revenue of US$ sixty billion as a whole from ‘Rest of the world’, which is the world minus the USA, Canada, Europe and Asia.

Facebook revenue by user geography

Facebook revenue by user geography

Irish Double

The specific transfer pricing construction Google and other tech giants such as Facebook use to channel income away from tax obligations is called an ‘Irish Double’ or ‘Dutch Sandwich’, since both countries are used in the scheme. In the construction, the income is declared in Ireland, then routed to the Netherlands, then transferred to Bermuda, where Google Ireland is officially located. Bermuda is a country with no corporation tax. According to documents filed at the Dutch Chamber of Commerce in December 2018, Google moved US$ 22,7 billion through a Dutch shell company to Bermuda in 2017.

Moustapha Cisse, Africa team lead at Google AI

Moustapha Cisse, Africa team lead at Google AI

An ongoing court case in Ghana — albeit on a different issue — recently highlighted attempts by Google to justify its tax-avoiding practices in that country. The case against Google Ghana and Google Inc, now called Google LLC in the USA, was started by lawyer George Agyemang Sarpong, who held that both entities were responsible for defamatory material against him that had been posted on the Ghana platform. Responding to the charge, Google Ghana contended in court documents that it was not the ‘owner of the search engine www.google.com.gh’; that it did not ‘operate or control the search engine’ and that ‘its business (was) different from Google Inc’.

Google Ghana is an ‘artificial intelligence research facility’.

Google Ghana describes itself in company papers as an ‘Artificial Intelligence research facility’. It says that its business is to ‘provide sales and operational support for services provided by other legal entities’, a construction whereby these other legal entities — in this case Google Inc — are responsible for any material on the platform. Google Ghana emphasised during the court case that Ghana’s advertising money was also correctly paid to Google Ireland Ltd, because this company is formally a part of Google Inc.

Rowland Kissi, law lecturer at the University of Professional Studies in Accra describes Google’s defence in the Sarpong court case as a ‘clever attempt’ by the business to shirk all ‘future liability of the platform’. Kissi is cautiously optimistic about the outcome, though: while the case is ongoing, the court has already asserted that ‘the distinction regarding who is responsible for material appearing on www.google.com.gh, is not so clear as to absolve the first defendant (Google Ghana) from blame before trial’. According to leading tax lawyer and expert Abdallah Ali-Nakyea, if the ‘government can establish that Google Ghana is an agent of Google Inc, the state could compel it to pay all relevant taxes including income taxes and withholding taxes’.

Cash-strapped countries

Like most countries, especially in Africa, Nigeria and Ghana have become more cash-strapped than usual as a result of the COVID 19 pandemic. While lockdowns enforced by governments to stop the spread of the virus have caused sharp contractions of the economy worldwide, ‘much worse than during the 2008–09 financial crisis’, according to the International Monetary Fund, Africa has experienced unprecedented shrinking, with sectors such as aviation, tourism and hospitality hardest hit. (Ironically, in the same period, tech giants like Google and Facebook have emerged from the pandemic stronger, due to, among others, the new reality that people work from home.)

With much needed tax income still absent, many countries have become even more dependent on charitable handouts. Nigeria recently sent out a tweet to ask international tech personality and philanthropist, Elon Musk, for a donation of ventilators to help weather the COVID 19 pandemic: ‘Dear @elonmusk @Tesla, Federal Government of Nigeria needs support with 100-500 ventilators to assist with #Covid19 cases arising every day in Nigeria’, it said. After Nigerians on Twitter accused the government of historically not investing adequately in public health, pointing at neglect leading to a situation where a government ministry was now begging for help on social media, the tweet was deleted. A government spokesperson later commented that the tweet had been ‘unauthorised’.

Cost to public

The criticism that governments often mismanage their budgets and that much money is lost to corruption regularly features in public debates in many countries in Africa, including Nigeria. However, executive secretary Logan Wort of the African Tax Administration Forum ATAF has argued that this view should not be used to excuse tax avoidance. In a previous interview with ZAM Wort said that ‘African countries must develop their tax base. It is only in this way that we can become independent from handouts and resource exploitation. Then, if a government does not use the tax money in the way it should, it must be held accountable by the taxpayers. A tax paying people is a questioning people’.

‘A tax paying people is a questioning people’

Commenting on this investigation, Alex Ezenagu, Professor of Taxation and Commercial Law at Hamad Bin Khalifa University in Qatar, adds that in matters of tax avoidance by ‘popular multinationals such as Facebook and Google, it is important to understand the cost to the public. If (large) businesses don’t pay tax, the burden is shifted to either small businesses or low income earners because the revenue deficit would have to be met one way or another’. For example, a Nigerian revenue gap may cause the government to increase other taxes, Ezenagu says, such as value added tax, which increased from five to seven and a half percent in Nigeria in January. ‘When multinationals don’t pay tax, you are taxed more as a person’.

Nigeria has recently begun to tighten its tax laws, thereby following in the footsteps of Europe, that last year made it more difficult for the digital multinationals to use the ‘Irish Double’ to escape tax in their countries. South Africa, too, in 2019 tailored changes to its tax laws in order to close remaining legal loopholes used by the tech giants. These ‘could raise (tax income) up to US$ 290 million a year’ more from companies like Google and Facebook, a South African finance source said. With US$ 290 million, Ghana’s could fund its flagship free senior high school education; Nigeria could fully fund the annual budget (2016/2017 figures) of Oyo, a state in the south west of the country.

Interior view of the Facebook office in Johannesburg, South Africa

Interior view of the Facebook office in Johannesburg, South Africa

Waiting for the Finance Minister

Nigeria’s new Finance Act, signed into law in January 2020, has expanded provisions to shift the country’s focus from physical presence to ‘significant economic presence’. The new law leaves the question whether a prospective taxpayer has a ‘significant economic presence’ in Nigeria to the determination of the Finance Minister, whose action with regard to the tech giants is awaited.

In Ghana, digital taxation discussions are slowly gaining momentum among policy makers. The Deputy Commissioner of that country’s Large Taxpayer Office, Edward Gyamerah, said in a June 2019 presentation that current rules ‘must be revised to cover the digital economy and deal with companies that don’t have traditional brick-and-mortar office presences’. However, a top government official at Ghana’s Ministry of Finance who was not authorised to speak publicly stated that, ‘from the taxation policy point of view, the government has not paid a lot attention to digital taxation’.

He blamed the ‘complexity of developing robust infrastructure to assess e-commerce activity in the country’ as a major reason for the government’s inaction on this, but hoped that a broad digital tax policy would still be announced in 2020.” Until the authorities get around to this, he said he believed that, ‘Google and Facebook will (continue to) pay close to nothing in Ghana’.

Comment

Google Nigeria did not respond to several requests for interviews; Google Ghana did not respond to a request for comment on this investigation. Neither entities responded to a list of questions, which included queries as to what of their activities in the two countries might be liable for tax, and whether they could publish country by country revenues generated in Africa. When reached by phone, Google Nigeria’s Head of Communications, Taiwo Kola Ogunlade, said that he couldn’t speak on the company’s taxation status. Facebook spokesperson Kezia Anim-Addo said in an email: ‘Facebook pays all taxes required by law in the countries in which we operate (where we have offices), and we will continue to comply with our obligations’.

Note: The figure of eighteen billion US$ as revenue for Google in ‘Africa and the Middle East’ over 2019 was arrived at as follows. Google’s EMEA figures for 2019 indicate US$ 40 billion revenue for ‘Africa, Europe and the Middle East’ all together. According to this German publication, Google’s revenue in Europe was 22 billion in 2019This leaves US$ eighteen billion for Africa and the Middle East.

This article was first published by our partner ZAM Magazine.

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