Home Blog Page 728

“Is there any hope for Africa?”

0

hopeShould we despair over Africa?

In March 2004, Nicholas Kristof, the noted columnist for the New York Times declared in frustration,  “Africa is a mess. It is the only continent that has gotten poorer over the last four decades and its  famous for civil wars, genocide and mindboggling corruption. Is there any hope for Africa?” Kristof was commiserating over the fate of Chad, at the time the “the site of Africa’s latest heartbreak.”

In March 2014, just a hop and a skip on Chad’s southern border is the Central African Republic (CAR), the site of Africa’s latest heartbreak. Chad 2004 is CAR 2014. For the past year, the people of CAR have been facing a nightmare of unspeakable horror. United Nations Secretary-General Ban Ki-moon was so disheartened by the ongoing “ethno-religious cleansing” in CAR that he recently declared, “The international community failed the people of Rwanda 20 years ago… And we are at risk of not doing enough for the people of the CAR today… Ethno-religious cleansing is a reality. Most members of the Muslim minority have fled. We cannot just continue to say ‘never again’. This, we have said so many times…” A year ago, in the town of Yaloke, less than 150 miles from CAR’s capital Bangui, there were an estimated 30,000 Muslims with 8 mosques. Today, according to Human Rights Watch, there are fewer than 500 Muslims and one mosque left.  Is there any hope for (Central) Africa?

In March 2014, just a hop and a skip on Central African Republic’s eastern border is the world’s newest country of South Sudan, which is in the throes of communal warfare.  The conflict that erupted four months ago in South Sudan when President Salva Kir dismissed his vice president Riek Machar and accused him of treason has resulted in the deaths of thousands of innocent civilians and displacement of one million, a fifth of which are refugees in neighboring countries. UNICEF reports that among the displaced population nearly 380,000 are children.

In April 2014, according to the UN Mission in South Sudan (UNMISS), a massacre occurred in Bentiu in the north of the country when  “the anti-government [Machar’s] forces entered the mosque, separated individuals of certain nationalities and ethnic groups and escorted them to safety, while the others were killed. More than 200 civilians were reportedly killed and over 400 wounded. At the Catholic church, SPLA in Opposition soldiers similarly asked civilians who had taken refuge there to identify their ethnic origins and nationalities and proceeded to target and kill several individuals.”  UNMISS also reported that some rebels took to local radio to “broadcast hate messages declaring that certain ethnic groups should not stay in Bentiu, and even calling on men from one community to commit vengeful sexual violence against women from another community.”

In April 1994, Hutu extremists who opposed a 1993 ceasefire agreement for power sharing between Hutus and Tutsis in Rwanda launched their “final war” to “exterminate the [Tutsi] cockroaches.’ The “akazu” extremists set up their own radio station (Radio Mille Collines) and broadcast hate messages and read out the names of people to be killed and directed militias known as the Interahamwe and Impuzamugambi to commit atrocities. Nearly a million Rwandans died in that genocide.

Is there hope for “Hopeless Africa”? Is hype hope in Africa?

In 2007, Kristof got a partial answer to his question. Maybe there is hope for Africa. He wrote, “when African countries have enjoyed stability and sound policies, they have often thrived. Indeed, the fastest-growing country in the world from 1960 to 2001 was Botswana (South Korea was second, and Singapore and China tied for third). More and more African countries are now following the Botswana model of welcoming investors and obeying markets. Aside from Rwanda, countries like Mozambique, Benin, Tanzania, Liberia and Mauritius are among those trying to build a future on trade more than aid.”

The so-called African leaders have also been wind bagging about an “African Renaissance”, the “African Century”, the “Dawn of Africa”, and “Africa Rising” to panhandle the West and squeeze some cold hard cash from the multilateral lending institutions. (The renowned (French) Senegalese scholar and academic Cheikh Anta Diop was the first to talk and write about an  “African Renaissance”, “rising Africa”, etc.,  in a series of essays back in 1946, but today’s Africa’s kleptocratic leaders have appropriated his ideas without even giving lip service credit to Diop.) Some media commentators have even suggested that the emerging economic powerhouses of BRIC (Brazil, Russia, India and China) may soon have to admit Africa and become BRICA.

In 2008, The Economist magazine gave lip service to the possibility of hope for Africa. “Despite the persistence of Africa’s natural and man-made horrors, the latest trend is cheeringly positive,” proclaimed The Economist. However, in 2000, The Economist had commiserated in despair with the headline, “Hopeless Africa?” “Since January, Mozambique and Madagascar have been deluged by floods, famine has started to reappear in Ethiopia, Zimbabwe has succumbed to government-sponsored thuggery, and poverty and pestilence continue unabated. Most seriously, wars still rage from north to south and east to west… These acts are not exclusively African—brutality, despotism and corruption exist everywhere—but African societies, for reasons buried in their cultures, seem especially susceptible to them. “In 2013, The Economist declared that much of Africa is out of the woods and sought to “paint a picture at odds with Western images of Africa. War, famine and dictators have become rarer. People still struggle to make ends meet, just as they do in China and India. They don’t always have enough to eat, they may lack education, they despair at daily injustices and some want to emigrate. But most Africans no longer fear a violent or premature end and can hope to see their children do well…” Does 2014 mark the end of hope and the beginning of a new era of despair in Africa? 

Hope’s on the ropes in 2014 Africa  

In March 2011, I wrote a commentary about the referendum and anticipated creation of South Sudan later that year in a piece entitled, “Referendum for Sudan, Requiem for Africa.” I am heartbroken by the reality and possibility of secession anywhere in Africa. I felt at the time, “It is the best of times in the Sudan. It is the worst of times in the Sudan. It is the happiest day in the Sudan. It is the saddest day in the Sudan. It is referendum for the Sudan. It is requiem for Africa.” When African countries unyoked themselves from colonialism in the 1960s, their future seemed bright and limitless. Independence leaders thought in terms of Pan-Africanism and the eventual political and economic unification of Africans. They aspired to attract Africans in the Diaspora into an ever expanding “global African community”. Pan-Africanism represented a return to African values and traditions in the struggle against neo-colonialism, imperialism, racism and the rest of it. Its core value was the unity of all African peoples.

Above all, the founding fathers of post-independence Africa all believed in the dream of African unity, not merely emancipation from colonial misrule. They understood the enormous challenges the continent faced, but they were undeterred in the pursuit of a more perfect union among African countries. Ethiopia’s H.I.M. Haile Selassie, Ghana’s Kwame Nkrumah, Kenya’s Jomo Kenyatta, Tanzania’s Julius Nyerere, Guinea’s Ahmed Sekou Toure, Zambia’s Kenneth Kaunda and Egypt’s Gamal Abdel Nasser and others were all declared Pan-Africanists.

On the occasion of the establishment of the permanent headquarters of the Organization for African Unity (OAU) in Addis Ababa on May 25, 1963, H.I.M. Haile Selassie made the most compelling case for African unity: “We look to the vision of an Africa not merely free but united… We know that there are differences among us. Africans enjoy different cultures, distinctive values, special attributes. But we also know that unity can be and has been attained among men of the most disparate origins, that differences of race, of religion, of culture, of tradition, are no insuperable obstacle to the coming together of peoples. History teaches us that unity is strength, and cautions us to submerge and overcome our differences in the quest for common goals, to strive, with all our combined strength, for the path to true African brotherhood and unity…”

Pan-Africanism is dead. The pursuit of African unity has proven to be more elusive than the quest for the Holy Grail.  African unity today is African political fragmentation as the continent heaves under seismic ethnic fissures. Tribalism and ethno-nationalism are the “neo-ideologies” sweeping over Africa. Africa’s thug-tators are furiously beating the drums of ethno-nationalism and blowing the horns of religious discord all over the continent just to cling to power and corruptly enrich themselves and their cronies.  In many parts of Africa today pride in “ethnic identity”, “ethnic purity,” “ethnic homelands”, ethnic cleansing and tribal chauvinism have become fashionable. In Ethiopia, tribal politics has been repackaged in a fancy wrapper called “ethnic federalism” and used to segregate the Ethiopian people by ethno-tribal and linguistic classification in grotesque regional political units called “kilils” (reservations) or glorified apartheid-style Bantustans or tribal homelands. Nigeria has been immersed in ongoing conflict between “original inhabitants (indigenes)”  and “settlers”  since that country  took a turn to the “democratic path” in 1999. Discrimination and violence against “Nigerian settlers” in their own country has resulted in the loss of tens of thousands of lives.  In Ivory Coast, an ideological war was waged over “Ivoirite” (“Ivorian-ness”) and its proponents argued that the country’s problems are rooted in the contamination of genuine Ivorian identity by outsiders who have been allowed to freely immigrate into the country. The Red Horseman of Tribalism and Ethnic Chavinism haunts the African continent today.

The audacity of hope and rapacity of despair in Africa

Does Africa’s destiny hang in the balance between the audacity of hope and the rapacity of despair? Is Africa condemned to a future of civil wars, genocides and crimes against humanity? Does Africa’s hope lie in strings attached multilateral loans and aid, colossal debts and predatory foreign investors? Is Africa doomed to become the permanent object of charity, sympathy and pity for the rest of the world? Is Africa floating on a sea of hope or drowning in an ocean of despair? Is it true what they say about Africa that though “brutality, despotism and corruption exist everywhere—but African societies, for reasons buried in their cultures, seem especially susceptible to them.” Is there something buried deeply in the African ethos (character), logos (logic of the African mind), pathos (spirit/soul) and bathos (African narrative of the trivial into the sublime) that makes Africans extremely susceptible to the triple deadly cancers of brutality, despotism and corruption? Is Africa the infernal stage of Dante’s “divine comedy”?: “Abandon all hope, you who enter [live] here [in Africa].”

On the road to hope

Nelson Mandela dreamt that to reach his “beautiful South Africa”, his people must follow “two roads  named Goodness and Forgiveness.” To reach the “Beautiful Africa”, I believe Africans must take long walks on the twisting unmarked trails and dirt paths of truth and reconciliation before getting onto the highways, expressways and freeways of hope. If “all roads lead to Rome”, I believe only three arterial roads lead Africans to the heart of  “Beautiful Africa.” I would call the roads Rule of Law, Respect for Human Rights and Accountability. It is the rule of law that will shield the people from the corruption and abuse of predatory thugs palming themselves off as “leaders”.  When corrupt and criminal African leaders respect the human rights of their people, wars, civil strife and genocides will come to an end. When African leaders and institutions are held accountable to the people in a free and fair election and before an independent judiciary, then governments will fear the people.

Despair or repair Africa

There are some who say Africa is the Humpty Dumpty of the world and that neither the king’s men nor horses could put her back together. In 1963, in his inaugural speech at the Organization of African Unity, H.I.M. Haile Selassie said, “Today, Africa has emerged from this dark passage [of colonialism]. Our Armageddon is past.” Africa may have “emerged from the dark passage of colonialism”, but neocolonialism and globalization still cast long dark shadows of over Africa. Is Africa’s “Armageddon past”? Is Africa’s apocalypse now?  Behold South Sudan, Central African Republic, Rwanda, Democratic Republic of Congo, Sierra Leone, Liberia, Mali, Chad, Sudan, Somalia, Zimbabwe, Ethiopia…!

In 1963, in a speech given at the United Nations, H.I.M. Haile Selassie, answered the question “Is there hope for Africa?” He said there will be only war, and no hope for Africa and the world, “…until the philosophy which holds one race [tribe, ethnicity, religion, language, region] superior and another inferior is finally and permanently discredited and abandoned: That until there are no longer first-class and second class citizens of any nation; That until the color of a man’s skin [tribe, ethnicity, religion, language, region] is of no more significance than the color of his eyes; That until the basic human rights are equally guaranteed to all without regard to race [tribe, ethnicity, religion, language, region]; That until that day, the dream of lasting peace and world citizenship and the rule of international morality will remain but a fleeting illusion, to be pursued but never attained;… Until bigotry and prejudice and malicious and inhuman self-interest have been replaced by understanding and tolerance and good-will; Until all Africans stand and speak as free beings, equal in the eyes of all men, as they are in the eyes of Heaven; Until that day, the African continent will not know peace [or have hope]…” [Brackets added.]

Such were the prophetic words of the man who single handedly made possible the establishment of the Organization of African Unity, the very first continental organization dedicated to the pursuit of a more perfect union among Africans. It is a tragic irony and a low down shame that H.I.M. Haile Selassie, one of the greatest African and world leaders of his time,  is denied the simple dignity of a memorial statute on the grounds of the African Union in Ethiopia because the ruling regime in Ethiopia continues to rabidly oppose erection of any symbol that honors him.

My answer to the question, “Is there hope for Africa?” is a simple one. Africa is blessed with an abundance of hope and its youth are the fountainhead of Africa’s hope. As I have written before, Africa is a continent of “Afr-I-Cans” and “Afr-I-Cannots”. Africa is a continent of Cheetahs (the youth, the movers and shakers), and Hippos (the old generation, who sit on their behinds and complain) as George Ayittey likes to say. The Cheetahs spring with hope. The Hippos struggle on the rope. The “Hippo Generation” leaders and elites of post-independence Africa remain as “unscrupulous, impulsive and corrupt” as ever. “Their cupidity and short-sightedness has blighted the fortunes of post-colonial Africa for several decades.” The Cheetah generation of today is on the move and they are  “aggressively seizing back control of their continent and leading the African people back on the journey to socio-economic redemption,” declared Ayittey. Africa’s hope is not reflected in shiny glass edifices of corruption built by thug-tators or in the blings that adorn the necks of crony capitalists.

For those who want an answer to the question, “Is there hope for Africa?”, I say look into the eyes of Africa’s young people ; probe their minds and listen to their heartbeats. They are Africa’s only hope. It is on the wings of their dreams that Africa will one day soar above ethnic divisions, religious dissensions and linguistic confusion. So I say to “Africa’s hopes” in the poetic words of Langston Hughes,  “Hold fast to dreams,/ For if dreams die/ Life is a broken-winged bird,/That cannot fly.” Or soar!

As Africa’s youth dream of the “Beautiful Africa” of tomorrow, I shall rhapsodically cherish my own pipe dreams (daydreams). I have a pipe dream that one day the benighted leaders of Africa will be enlightened; the rule of men in Africa will one day give way to the rule of law; multiparty democracies in Africa will one day replace single party thugogracies; transparency and accountability will one day root out venality in Africa; political brinksmanship and gamesmanship in Africa will one day be transformed into multiethnic, interdenominational and interreligious partnership; dictatorship will one day be consigned to the dustbin of history by African statesmanship.

I have a pipe dream (daydream) that one day the African Union will live out the true meaning of its creed that it “shall promote and protect human rights in accordance with the African Charter on Human and Peoples Rights and other relevant human rights instruments.”  I have a pipe dream that useless organizations such as the Pan-African Parliament, the Economic, Social and Cultural Council, the Peace and Security Council, the New Economic Partnership for Africa’s Development and the African Peer Review Mechanism, among others,  will one day magically transform themselves into useful organizations to serve the people of Africa. I have a pipe dream that  the African Court on Human and People’s Rights will one day become a reality.

Above all, I have a pipe dream that one day in Africa government wrongs will be redressed by human rights; and that African governments will fear their people and the people will forever  cast off their fear of their governments. Such are the pipe dreams (daydreams) of a utopian Ethiopian for Africa.

Hope is for the hopeful, not the hopeless. “Despair is only for those who see the end beyond all doubt. We do not.” J.R.R. Tolkien

Professor Alemayehu G. Mariam teaches political science at California State University, San Bernardino and is a practicing defense lawyer.

Previous commentaries by the author are available at:

http://open.salon.com/blog/almariam/

www.huffingtonpost.com/alemayehu-g-mariam/

Amharic translations of recent commentaries by the author may be found at:

http://www.ecadforum.com/Amharic/archives/category/al-mariam-amharic http://ethioforum.org/?cat=24

 

South Africa Celebrates 20 Years of Democracy

0

indexSouth Africa (27th April 2014) is celebrating 20 years of democracy. This will obviously be a reflective moment about its make-up, its successes and developments, its setbacks, and most importantly its hopes.

There is a continually forgotten part of these 20 years of democracy being African foreigners in South Africa who are pushed to the margins of that reflectiveness. Many of the immigrant communities in South Africa, do not claim any special place but a place to be remembered in their existence, contributions and extension of friendship in many ways with South Africa in its time of struggle and its efforts to build itself as a democratic and developmental state.

As the Somali community in South Africa and surely not South Africans in democratic terms!, we trust Africa will wake up its potentialities and stand united, whom Nelson Mandela and Nkrumah hoped for a united Africa for. As for us, we forge ahead to integrate with local societies and define ourselves in this massive land of opportunities.

I think one way is to involve the local community through transfer of entrepreneurship in which we intent making business with. Workshops can be organized around to help local business men and women to sustain/scale like we do and learn from them also (two ways).

We exchange and share strategies, experiences and make them get involved in entrepreneurial skills that most of us possess and in that way the feel their businesses are not marginalized and out dated. Because these threats are a product of fear and not necessarily ignorance as it is usually stated.

I always share this sentiment with our colloquies/other foreigners and say to them if we were in our countries and we feel our interests are threatened, we would have re-acted perhaps without killing but the reaction would have been there. So, let’s involve the local businesses/communities and in that way we can achieve the safest results for our people.

I have given the problem & the opportunity a lot of thought and hope that my idea will motivate government departments, civic organisations, financial institutions and other interested stakeholders to take action using some of the ideas provided in this well articulated and written article by Saeed Furaa.

The article has been published by the great Pan African magazine, The Thinker, a South African thought leader magazine 2014.

You may download the full magazine and the article at:

http://www.thethinker.co.za/resources/Thinker%2059%20full%20mag.pdf

Thank you

Saeed Furaa,

Social Entrepreneur, Freelance Journalist

Johannesburg

Somaliland:Gafadhi: Spoiler or Contender ?

0

 

Hassan Mohamed Ali, famously known as Gafadhi By Goth M Goth SomalilandPress.comHassan Mohamed Ali, famously known as Gafadhi By Goth M Goth SomalilandPress.com
Hassan Mohamed Ali, famously known as Gafadhi By Goth M Goth SomalilandPress.com

At a time when everyone thought that KULMIYE’s warring party members may have finally buried the hatchet and made peace, an even more serious problem has cropped up last week when Hassan Mohamed Ali, famously known as Gafadhi, officially threw his hat into the ring, announcing his candidacy to challenge Mohamed Kahin- the incumbent first deputy chairman of the ruling party.

For months, KULMIYE has remained on the political death row, desperately hoping for some kind of reprieve. The party was so disorganized and beset by multiple factional disagreements that almost brought to its own demise but thanks to the recent pain-staking agreement hammered out amongst the warring factions that ultimately gave the party what appeared to be a temporary reprieve from the death sentence.

After months of intense political wheeling and dealing behind the curtain,

KULMIYE assured the party’s rank and file that the cohesion and unity of the party leadership was finally restored, according to the party chairman, Musa Bihi. KULMIYE is however no stranger to political squabbles and troubles but what makes this one more stranger is the timing of Gafadhi’s announcement of candidacy to run against the much-revered first deputy chairman of the ruling party, Mohamed Kahin.

Gafadhi, the leader of the failed Rays party, and his supporters officially joined KULMIYE with much enthusiasm and excitement at the beginning of February 2013.

The question that needs to be asked here is why Gafadhi really wants to be a candidate at this moment in time when he was privy to almost everything that transpired in the party boardroom including the incredible time and effort invested in resolving the thorny and sensitive issues that nearly brought the party to its knees? At no time did Gafadhi utter a word, in public or in private, in the past that he will enter the race. The announcement of his candidacy came as a bolt from the blue.

While Gafadhi has every right to be a candidate for every post including the highest post of the land, the president of the Somaliland Republic, the timing of his announcement begs the question: why, in particular, does he want to run against Mohammed Kahin at this point in time when the party’s thorny and complex issues were amicably resolved after a marathon of talks? Why now, and not before?

Since Gafadhi was a party leader himself, why did he not contest for the chairmanship position of KULMIYE?  More interestingly, if Gafadhi is as ambitious as he would like us to believe, why did he not try to seek the party’s presidential nomination? And why did he not challenge the other deputy chairmen of the party?

Until Gafadhi answers these hard questions, he will not be considered as a credible contender in the eyes of the public but rather as someone who is simply spoiling for a fight with Mohamed Kahin based on a myopic inter-clan rivalry and competition. If that’s not the case, then the public would like to hear why Gafadhi opted to run against Mohamed Kahin and not other party bigwigs.

The former Interior Minister of the defunct UDUB party, Ismail Adan Osman, who apparently has an axe to grind with the chairman of KULMIYE, Musa Bihi, did not hesitate to quickly put his weight behind Gafadhi as soon as he officially announced his candidacy for the position of the first deputy chairman of KULMIYE. Ismail even went further. He literally threatened that if the party fails to entertain Gafadhi’s request to run against Mohamed Kahin, they will leave the party and form their own splinter group which he called DALRAYS.

This kind of message will not gain any traction among grassroots activists and will most certainly not elevate Gafadhi’s voice in the debate and possibly his candidacy in the race. While he is still a far cry from a front runner, he could become a spoiler.

It’s ironic that most of the angry men in today’s KULMIYE party happen to be the newly signed up members who are either from defunct parties like UDUB or whose political parties failed to qualify for the top three national parties as stipulated in the Somaliland constitution.

Gafadhi and Ismail are both politically ambitious men and would be well-advised to think hard before taking a leap into the unknown. They should rise above the petty politics and march in lockstep with the party line.

KULMIYE is not, by any stretch of the imagination, out of the woods yet. Gafadhi may be an angry man but he is an honourable man, too. He could be reigned in but there are more dangerous spoilers waiting in the wings that would jump into the race like a wrecking ball at the last minute.

In the meantime, KULMIYE’s leadership should leave the door open for dialogue and understanding among all candidates and resolve differences of opinion through civil discussion.

Jamal Madar

London, United Kingdom

adammadar@yahoo.com

DNO International Has Significant Upside Potential

0

DNOAbove Photo President Silanyo with top DNO Executives

Initiation Summary

DNO International (DTNOF) is an independent E&P company, geographically focused on the Middle East and North Africa with operations in Yemen, the Kurdistan region of Iraq, Tunisia, Oman, Ras Al Khaimah and Somaliland. This initiation on the company discusses the key factors to be bullish on the company with a one year time horizon and a potential 100% upside. The trigger factors include the company exploration and production plan, the potential for exports outside Kurdistan and the forward valuations.

Company Overview

DNO is a Middle East and North Africa (MENA) focused E&P listed on the Oslo Stock Exchange and the OTC exchange in the United States. The Company holds stakes in oil and gas blocks in various stages of exploration, development and production both onshore and offshore in the Kurdistan region of Iraq, the Republic of Yemen, the Sultanate of Oman, the United Arab Emirates, the Tunisian Republic and Somaliland.

DNO International revenue has grown at a CAGR of 27.8% in the last five years from $148 million in 2009 to $505 million in 2013. This growth has been achieved as a result of successful exploration programs, resulting in significant production growth over the years. As of December 2013, DNO International had a company working interest production of 39,170boepd.

I however believe that the biggest part of growth for the company is yet to come with proven and probable reserves of 520mmboe as of December 2012 (last reserve statement reported). I will discuss the reasons later on the factors that will propel growth over the next 1-2 years.

DNO International has 20 assets in six countries. However, 90% of the company’s assets are in the Kurdistan region of Iraq. The coverage will therefore focus on the assets in Iraq and the growth potential from the assets.

Financial Overview

This initiation will discuss the company’s forecasted financials later. I will throw some light on the company’s current fundamentals. I believe this is important as the company’s growth largely depends on high level of capital expenditure. A strong financial position will ensure robust financial flexibility for DNO International to fund its growth.

As mentioned before, DNO International clocked revenue of $505 million for the year ended December 2013 and this is the highest level of revenue clocked by DNO International. The EBITDA for 2013 was $340 million, translating into a healthy EBITDA margin of 67%. The company income statement looks attractive with revenue CAGR of nearly 28% and robust EBITDA margin.

I will focus a bit more on the cash flow and the balance sheet as high growth company can easily get into the debt trap. For the year ended December 2013, DNO International reported operating cash flows of $294 million, which is higher than the 2012 operating cash flow of $269 million. More importantly, the EBITDA cash conversion ratio is healthy at 86% and this is a positive point to note. With positive operating cash flows, the company has been able to fund its capital expenditure (partially) through internal accruals. It is also heartening to see (from a financial perspective) the company maintain a strong cash balance of $275 million as of December 2013.

From a leverage perspective, the numbers are equally good with DNO International having a debt of $238 million as of December 2013. This implies a debt to EBITDA of 0.7 and EBITDA interest coverage of 16.8. DNO therefore has high financial flexibility and it can take more debt on its books for expansion with ease. This also points to the fact that the company is well managed.

While talking about growth, it is important to discuss the capital expenditure. DNO International’s capital expenditure has increased from $45 million in 2010 to nearly $300 million in 2013. For 2014, the company plans a capital expenditure of nearly $460 million. The important thing to observe here is that the company’s capital expenditure has directly translated into high revenue and operating cash flow growth over the years. This speaks volumes about the management credibility and efficiency.

Management

I have already mentioned few important points in the financial section, which speaks volumes about a good management. A high EBITDA cash conversion, sound balance sheet management and effective conversion of capital expenditure to revenue and cash inflows underscores the management credibility.

Talking about excellent financial management, Mr. Haakon Sandborg is the company’s vice president and CFO. Mr. Sandborg has 30 years of experience in the oil industry and in banking. I believe it is his competence and expertise that has resulted in DNO International having sound fundamentals. As higher production makes DNO International cash rich further, the fundamentals will only get better under Mr. Sandborg over sight.

Two other key figures I would like to mention in the management team are Mr. Tore Lilloe (VP – Exploration) and Mr. Trond Myrseth (VP – Operations). Both gentlemen have over 30 years of experience each in the oil & gas industry and are the key pillars in a sound management team. The expertise of this team is reflected in the company’s high impact exploration program over the last few years. The results have been phenomenon in terms of exploration success and I believe that this is likely to continue.

The competency of the management is also reflected from the point that DNO International was one of the earlier movers into the resource rich region of Kurdistan and is also among the earliest in terms of commencing production.

In short, DNO International has a sound management team with many years of experience behind them. This team has the potential to turn DNO International into a large exploration company.

I must mention here that the equity markets have responded to the positive developments in the company and the stock has surged by 106% in the last 16 months. I certainly do believe that there is immense upside potential even from current levels and I will back my conviction with numbers.

Revenue And EBITDA Estimates

While the past looks excellent, what will make the stock move from these levels is the way forward for the company in terms of production growth, export growth and exploration success. I have specifically mentioned exports growth as this will be the game changer for DNO International in 2014 and beyond.

Production Growth

DNO International’s biggest asset is the Tawke asset in Kurdistan, which holds over 700mmboe of reserves. The Tawke asset also happens to be one of the biggest reserves in the Kurdistan region of Iraq. DNO International holds 55% stake in the Tawke asset, Genel Energy holds 25% and the Kurdistan Regional Government owns the remaining 20%.

The Tawke asset already has a wellhead capacity of 155,000bopd and DNO International plans to increase the wellhead capacity of 270,000bopd by the end of 2014.

http://userupload.gurufocus.com/452833187.jpg

More importantly, DNO International expects production to ramp up to 200,000bopd from the Tawke asset by the end of 2014. A 55% stake in the asset would imply a production share of 110,000bopd for Tawke by the end of 2014. This production growth, as compared to the company’s current production share of 39,170bopd, will be phenomenal and will impact valuations drastically.

Export Resumption

Going back to 2012-13, exports from Kurdistan region or Iraq was halted due to differences on payment between the Iraq government and the autonomous region of Kurdistan. This implied that DNO International sells oil in the local market, which is at a lower price than the price in international markets. For 2013, the revenue and EBITDA did take a hit due to exports being halted.

The scenario has changed in 2014 and the likely resumption of exports will boost revenue and EBITDA growth for DNO International. Baghdad has claimed preliminary accord in oil talks with Kurdistan and I believe that there will be a resolution relatively soon as halt in exports will hit Iraq as well as Kurdistan. Turkey, which needs Kurdish oil for growth, has also been active in helping the Iraq government and Kurdistan regional government to reach a resolution.

The second important factor, which will help exports, is the completion of a new Kurdistan export pipeline from Tawke to Fish Khabur. As the image below shows, this pipeline will help deliver oil to Fish Khabur (bordering Turkey). The exports from Tawke will not be an issue. The pipeline has a current export capacity of 100,000bopd and it is planned that the pipeline export capacity will be ramped up to 200,000bopd by the end of 2014.

http://userupload.gurufocus.com/1924676282.jpg

Revenue and EBITDA assumption

I have assumed that the total production from Tawke will be 100,000bopd for 2014. This is conservative considering the fact that DNO International expects to ramp up production to 200,000bopd by the end of 2014. Assuming that the first half of the year is only local sales and the second half of the year witnesses exports (on resolution of the dispute), the total revenue estimate for 2014 works out to be $1.5 billion for company’s share of 55,000bopd (55% Tawke stake).

The local sales have been assumed at $60 per barrel and the exports have been assumed at $90 per barrel, which is also at a discount to current global prices. The assumptions are therefore conservative. I have also considered an EBITDA margin of 70% for 2014 and this translated into an EBITDA of $1.0 billion. If exports do resume in the second half of 2014 (very likely), the revenue and EBITDA growth will be stellar. This will result in a strong stock upside and a 100% upside in one year time looks likely.

I must mention that the 2015 estimates can be more robust as it can be a year of full exports and can trigger meaningful stock upside. A one year time horizon is good to discount the potential positives of 2015.

Valuation

It would be interesting to look at forward valuations as it will back the story of strong upside in the stock price over the next one year. As per the estimates, an EBITDA of 1.0 billion for 2014 and a current EV of $3.4 billion will result in an EV/EBITDA valuation of 3.4.

This looks extremely attractive when compared with other companies operating in the Middle-East. Genel Energy (GEGYF) currently trades at an EV/EBITDA valuation of 13.9. Another player, Gulf Keystone (GUKYF) needs to ramp up production before talking about its valuation estimates.

DNO International is therefore best placed in the Kurdistan region of Iraq to grow meaningfully over the next few years. Once the export resumes, the stock can gain strong upside momentum.

Risk Factors

One of the primary risk factors to the assumption is the geo-political risk, which is largely present in the Middle-East. I believe that this risk is discounted in the stock valuation. However, any escalation of tension in the Middle-East can further impact valuation and upside.

The second risk factor is the non resumption of export from Kurdistan to Turkey. While the probability of this might be low, it still remains a risk. In a scenario of no exports, I expect the revenue for 2014 to be in the range of $1bn to $1.2 billion. This still looks robust as bump up in production offsets the no export scenario to some extent. The primary point is that the production growth will result in robust revenue growth in any scenario.

Conclusion

DNO International has corrected from n all time high of $4.16 to $3.46. This correction has largely been on the back of profit booking after an over 100% rally in the last 16 months. Delay in the resolution of exports matter has also contributed to the correction. As exports resume, DNO International will see strong stock uptrend.

DNO International also has a strong exploration program lined up for 2014. I believe that a significant jump in 2P reserves during the year will also contribute to the stock upside besides the production growth. Assets such as Peshkabir and Tawke Jurassic can potentially add 375mmboe to 2P reserves in 2014.

http://userupload.gurufocus.com/1075229268.jpg 

Overall, DNO International has significant positives lined up for 2014 and 2015. The stock can double in all probability over the next one year.

Somaliland:We are Holding Six Suspects in Connection with Recent Botched Jail Break-Prison Boss

0

Hirane

By Goth Mohamed Goth

The Head of Somaliland Custodial corps Brigadier General Mohamed Farah Hirane has for the first time spoken on the recent attempt Jail break revealing that they had in custody six suspected accomplices who are being investigated for smuggling in firearms.

The prison chief in an interview with SLNTV reporter Mr. Hamze Ali BulBul also thanked the public for the vigilance and in assisting law officers in the apprehension of the fugitives, adding that investigations are still on going and that the CID department have made headways in the investigations on how a firearm was able to be smuggled into the otherwise high security prison.

Gen Hirane added “We are currently holding a number of people who are suspected of aiding and abetting the convicts and as of now I can tell you the suspects are been questioned, we hope they choose to cooperate, we will have the answers we need, the answers we demand sooner than later. He has also directed authorities to increase security at prisons across the country.

So far, there is no indication that any Department of Corrections workers helped the inmates with their escape, but investigators are still looking at any possibilities of an inside job but if that was the case then the prison chief has some questions to answer.

Last week four convicts using smuggled in weapons killed one prison guard and seriously wounding two other during an attempted prison break, two whom were charged with Terror related crimes while the other two were convicted pirates.

Most of the inmates at the prison run by Somaliland custodial corps and the United Nations Office on Drugs and Crime (UNODC) are serving time made piracy and terror related charges with roughly 12 of the Hargeisa prison’s inmates being members of Al Shabab.

Ironically, pirate prisons may also be generating new security risks. Pirates in Hargeisa and Bosaso are held in the same facilities as members of Al Shabab, the Somali group with ties to Al Qaida, and juveniles are housed alongside adults. That means there’s a very real risk that impressionable, disillusioned young men could be radicalized.

SomalilandPress.com

Somaliland: Democracy Held Aloft

0

It is  win-win for all around to cement our national unity, ward off fragmenting intrusions, foster peaceful coexistence, establish cordial relations with one another, foster partnerships with useful entities, uphold the norms and values in democracy that wholly mould into our culture and faith, and to maintain all of the above till death do us apart.

The Republic of Somaliland is on the side of democracy, freedom of the press and the protection of the basic tenets of the rights of the individual. There is plenty of proof for this assertion: the existence and support of multi-party system, the financial and administrational assistance accorded to the Somaliland electoral system and related bodies, the conduct of freely run municipal council elections, the proliferation and respect of independent media outlets in Somaliland, the constant upgrade of Somaliland judicial organs, human rights bodies, living conditions of prison inmates, and the remarkable achievements in almost all spheres crucial to the socio-economic development of the people of Somaliland.

There are plenty of instances in which the Constitution of the Republic of Somaliland establishes the weight it places on the protection of the rights of the individual, peaceful co-existence, freedom of expression and association within the realms of the national and international laws and the inviolability of the dignity and personal reputation of the individual.

The Constitution of the Republic of Somaliland, guarantees that the political system of the Republic of Somaliland shall be based on peace, co-operation, democracy and plurality of political parties. The Constitution also affirms that at no time should the Republic of Somaliland turn its back to the universal declaration of human rights (1948) or the United Nations Charter – although we are not a member of this august body at present.

 

The law respects its subjects equally no matter the political and socio-economic status of the concerned party. It does not respect one side and turn its back on the other. One is guilty only when proven so beyond a reasonable doubt by a competent court of law.

 

It is the responsibility of state security apparatii that they do not only hunt out and put criminal elements in society behind bars, but, similarly, to protect us from one another before anything damaging or untoward happens. They are fully mandated to look for and douse out any underworld fires, look out for criminal activities in the offing or that this or that has the makings of one or incendiary in nature and enough to ignite events and actions that can result in bodily or material damage to others. Put in another way, the security forces can preempt crimes before they happen same as they contain them afterwards.

 

Preemptive measures are useful and welcome in that they: (a) limit extra-judicial indictment and damage to the reputation and dignity of targeted individuals;  (b) protect the perpetrator from possible retaliation acts from the families and friends of persecuted individuals; (c) encourage parties involved to revert to the courts of law; and (d) discourage further disrespect for law and order in order to reassure citizens that taking the law into one’s hands is never a viable option in disputes.

 

It is now become something of a vogue in Somaliland that we deliberately misinterpret the freedoms that the Somaliland Constitution granted us: the freedom to form associations of mutual interest, to speak up one’s mind, to practice religion, to form partnerships, to do business, and son and so forth.

 

Some of us so conveniently forget that we can do none of the above if there was collateral damage to the rest of us. That is what protecting us from one another means. The Constitution is on the side of good deeds, good intentions and healthy outlook and practice in life.

 

That is what Article 24, paragraph 3, in the Constitution underlines in bold double-stroke: Every person shall have the right to have his dignity, reputation and private life respected.

 

In regard to above, it is a gross dereliction of duty if the state permitted the systematic, consistent, persistent, greed-driven, highly damaging persecution of citizens in the hands of other citizens posing as ‘independent’ reporters, law-abiding, free-to-associate citizens, and the like – when, in practice, they are anything but that. Not to mistake a wolf for a lamb – and vice versa.

 

The recent Haatuf issue – an apt illustration of the central argument in article – was, if anything, a case of overstated ambitions and misguided intentions, on the one hand, and, on the other, a simmering iron rod let to cool in the open too longer than necessary to outlast its usefulness.

 

Finally, it should be reiterated here that the government and people of Somaliland are truly bound by law to remain impartial and objective to each other and to national objectives in strict adherence to the Constitution of Somaliland and their oft stated goal.

 

Jimale Madar “Somalilander”

 

Djibouti: More than 14 months of Post-Election Political Crisis …

0

ODDH

PRESS RELEASE

Djibouti, April 26, 2014

In Last 14 months the regime has used all means at its disposal to stifle popular protest initiated by the opposition coalition, USN (Union for National Hi). Unprecedented challenge following the legislative elections of 22 February 2013.

Over 14 months of repression, intimidation, arrests, imprisonment, illegal custody, predatory investments warrant, harassment, arbitrary   and torture for many opponents, opposition activists, human rights defenders and ordinary citizens.

More than 14 months until the publication of the final results of the voting office by office of Friday, February 22, 2013 by the people of Djibouti and the International Community (see European Parliament resolution on the situation in Djibouti in July 2013). A 1st in the history of the Republic! Unheard of even in the dark days of colonization.

After 14 months of post-election political crisis political dialogue has stalled. No crisis in perspective.

I.                    During these 14 months of repression multifaceted faculty has paid a heavy price

  1. Deaths in prison Mahamoud Rayaleh E., Professor of French

The death in custody of Mr Mahamoud Rayaleh Elmi, a professor of French Public High School Balbala and engaged citizen, on the night of August 28 to 29, 2013, the conscience of all citizens of Djibouti. His body was removed from the hospital morgue General Peltier and put underground in the cemetery of PK12 in haste by employees Highways Djibouti under the supervision of the police without the presence of any member of his family and friends. ODDH The request the establishment of an independent commission of inquiry to shed light on the circumstances of death.

  1. Revocation of 62 teachers

The decision to dismiss 62 teachers, most of whom are teachers, all staff, is effective in violation of all administrative procedures and the status of civil servants since April 3, 2014. Their only crime remains their societal and union involvement, advocates human rights and suspicion proximity rightly or wrongly opposition. Among teachers dismissed include:

  • Farah Abdillahi Miguil, trade unionist and President ODDH
  • Moussa Youssouf Abdi, a founding member of the Collective “Save the National Education”
  • Omar Ismail Omar, one of the founding members of the Collective “Save the National Education”

II.                 More than 14 months’ imprisonment for three sheiks and leaders USN

It was February 25, 2013 qu’Abdourahman Barkat God, and Bashir Suleiman Abdurahman Guirreh Meidal Guelleh were then placed orders warrant before being sentenced arbitrarily and unfairly severe penalties (2 years in prison and five years’ deprivation of civil rights). Their   only real crime remains their commitment against the exploitation of poverty,   exploitation of tribalism, the introduction of the crime as a cardinal virtue of the republic, the resignation of the judiciary … and yet be convicted for his political commitment constitutes a violation of Article 25 of the International Covenant on Civil and Political Rights policies ratified by the Republic of Djibouti.

III.              Removal of citizenship and extradition secret to Somaliland a Djiboutian citizen

Mohamed Daher Robleh, self employed, was arrested and held incommunicado for a week in the premises of the SDS (political police) in July 2013. During his detention, he was subjected to torture, humiliation and abuse. On September 2, 2013, he was stripped of his Djiboutian nationality by a Presidential Decree. It’s Wednesday, February 12, 2014 at 14:30 he was arrested at his home again by the police without a warrant. For more than 72 hours he was detained at the Crime Branch Police and February 15, 2014 around 15:30 he was secretly extradited to the border of Somaliland.

The ODDH calls for public authorities to respect the fundamental rights and freedoms of teachers and union activists in accordance with international standards ratified by Djibouti.

 

The ODDH recommends to comply with the constitutional provisions on the protection of citizens, respect for fundamental freedoms, the African Charter on Human and Peoples’ Rights, the International Covenant on Civil and Political Rights as well as ‘the Universal Declaration of Human Rights.

 

The ODDH calls for public authorities to release all political prisoners and the opening of a respectful and fair political dialogue to overcome the unprecedented crisis.

 

Act for democracy, dignity and justice.

The President of the ODDH

Farah Abdillahi Mi

 

Somaliland: Jeeni-yere warns Galayd group against insurgency acts

0

By M.A Egge

The people of Taleeh have been cordially advised to shun the Galeydh and Ina Issa duo hence desist from their aims of acts of insurgency.

They were likewise re-assured that their peace and stability would not be rendered as under by the insurgent Khatumoist movement since the national security apparatus was at place.

Both the advice and assurance were made by Hargeisa Regional Governor Mohamed Mohamud a.k.a. Jeeni-yare in an exclusive interview with DMG over the week.

Governor Jeeni-yare further told our sister paper Dawan, “That so called meeting cannot be held”, and underscored, “will not be hold”.

He was irked by the fact that the secessionist project fueled by the enemies of the land was again trying to put their objectives into action after severally flopping, something that perturbs the whole populace.

He clarified the fact that the Khatumoists had no tangible powers to turn tables on the political status of the country neither were they capable of making any impact in the Sool region of Taleeh.

He urged the area residents to be vigilant and do their utmost best to be solidly united hence keep the Khatumoists at bay.

He scoffed at claims that the Khatumoists had abrogated Garad Jama’s Chieftaincy.

“They have no mandate to defrock him for the Garaad inherited his sultanhood,” said Governor Jeeni-yare, testifying to the natural heirdom in local chieftaincy.

He said that Galaydh and company were only out to seek spoils of havoc which would only set back development.

In the recent months, Ali Galaid who happens to be an MP in Mogadishu has expressed mixed sentiments that only add confusion on his political motives. One time he is against Mogadishu and what it stands for the and the next he sponsors a motion to curtail SL/Somalia talks, and then next he hints of coming back to his country of origin only to go public hinting monkey games!

Completely way out of normal political and personal integrity of a supposedly educated man with a long streak of high executive and political posts!

Somaliland:Do not listen to inciters, urges Dilla’s Administrators

0

Dilla,_Awdal2By M A EGGE

Local administration of Dilla District in Awdal region moved strongly to condemn the decision taken by a section of Elders that negates the joint resolutions of regional border demarcation agreed upon in a bid to promote harmonious inter-communal co-existence between the two communities residing in Awdal and Gabiley regions.

Recent administrative borders demarcated for the communities who are at loggerheads over Ged-diqsi area that falls between Gebiley and Awdal regions and is strategically passed by Elberdale road network.

The head of Dilla administration Ibrahim Haji Abdi accompanied by the Deputy Administrator for the District and the District secretary Abdillahi Mohamud Hussein and Arab Abdillahi Obsiye respectively have jointly criticized the stand adopted by communal elders in counteracting the common approach advanced by the administration of Awdal and Gabiley that have amicably resolved grassland dispute between the two warring communities a week earlier.

The chairperson of Dilla administration who was speaking to DMG by phone on Friday from Borama town has termed the elders’ latest move as one amounting to ‘hate speech and incitement of communities that have initially abided to the recommendations of the inter-regional resolutions’.

“The complete about turn taken by sectional communal elders is intended to retrigger communal dispute over pastoral land whose border dispute was earlier resolved by regional administration”, charged Ibrahim Haji Abdi.

Abdi reasoned that the elders were inciting the neighboring communities by criticizing the joint approach taken by regional administration of Awdal and Gabiley that have finalized the differences to the satisfaction of all.

Hussein while commenting on the issue called upon local residents not to listen to elders who use the internet in fuelling discord over an issue whose fate was amicably resolved through mutual consent of all warring factions.

Somaliland:Gafadi’s candidature against reconciliatory accords- Warfaa

0

DSCN2797By M A EGGE

A member of the House of Representatives who also doubles as Vice-chairman of the ruling party’s central committee has strongly opposed the declaration of interest of Mr Gafadi in vying for party’s supreme committee’s which he said is against the goodwill resolutions reached  by the conciliatory committee.

Hon. Mohammud Jama Warfaa has termed the candidature of Hassan Gafadhi as a wrong move that negates the unity of the party in addition to contravening the negotiated democracy modeled by the reconciliation commit after bickering and infighting among the top party’s elites.

The parliamentarian while speaking to DMG over the week called upon Gafadhi to reconsider his interest after the later declared interest in the national first Vice chairperson’s positions.

Mr. Warfa feared that if the candidature of Gafadhi is commenced then internal conflicts and renewed bickering would be witnessed to the detriment of party’s unity and cohesiveness.

The National Delegates Conference is schedule to take place from tomorrow the 28 of April 2014 at Maansoor Hotel and elections of positions are not earmarked to feature among the agendas to be tabled in the national convention.

Do not listen to inciters, urges Dilla’s Administrators

Local administration of Dilla District in Awdal region moved strongly to condemn the decision taken by a section of Elders that negates the joint resolutions of regional border demarcation agreed upon in a bid to promote harmonious inter-communal co-existence between the two communities residing in Awdal and Gabiley regions.

Recent administrative borders demarcated for the communities who are at loggerheads over Ged-diqsi area that falls between Gebiley and Awdal regions and is strategically passed by Elberdale road network.

The head of Dilla administration Ibrahim Haji Abdi accompanied by the Deputy Administrator for the District and the District secretary Abdillahi Mohamud Hussein and Arab Abdillahi Obsiye respectively have jointly criticized the stand adopted by communal elders in counteracting the common approach advanced by the administration of Awdal and Gabiley that have amicably resolved grassland dispute between the two warring communities a week earlier.

The chairperson of Dilla administration who was speaking to DMG by phone on Friday from Borama town has termed the elders’ latest move as one amounting to ‘hate speech and incitement of communities that have initially abided to the recommendations of the inter-regional resolutions’.

“The complete about turn taken by sectional communal elders is intended to retrigger communal dispute over pastoral land whose border dispute was earlier resolved by regional administration”, charged Ibrahim Haji Abdi.

Abdi reasoned that the elders were inciting the neighboring communities by criticizing the joint approach taken by regional administration of Awdal and Gabiley that have finalized the differences to the satisfaction of all.

Hussein while commenting on the issue called upon local residents not to listen to elders who use the internet in fuelling discord over an issue whose fate was amicably resolved through mutual consent of all warring factions.

https://mail.google.com/mail/images/cleardot.gif