South Africa said Saturday that it had halted plans to extradite former Mozambican finance minister Manuel Chang to his home country in a tussle over where he could stand trial for alleged fraud.
Chang has been held in South Africa since December at the request of US authorities over alleged involvement in $2 billion of fraudulent loans to Mozambique state firms.
South Africa in May said that it had decided to send Chang back to Mozambique, rather than comply with a competing US extradition claim.
But South Africa’s new justice minister Ronald Lamola said in a statement that Chang’s proposed move to Mozambique had been stopped as “the previous decision may not be legally permissible.”
Lamola said that it would be wrong to extradite Chang as he had immunity status in Mozambique and he had not been charged with any crimes there.
In court papers, the department of justice described the earlier decision as “irrational, and inconsistent with the constitution.”
The department added that extraditing Chang to Mozambique was against international treaties signed by South Africa.
The US, which says the loan scheme defrauded US investors, in May expressed its anger over South Africa’s decision to send Chang back to Mozambique.
The charges against Chang relate to loans taken out by the Mozambique government when he was finance minister between 2005 and 2015.
National debt crisis
When the hidden debt was revealed, Mozambique was plunged into the worst financial crisis in its history.
The US alleges that at least $200 million was spent on bribes and kickbacks in a vast fraud and money laundering scheme, including $12 million for former minister Chang.
In the US, Chang faces charges of conspiracy to commit electronic fraud, financial security violations and money laundering.
Mozambique has also accused Chang of taking kickbacks, but critics say he would never face justice in the country.
In May, a former Credit Suisse banker pleaded guilty in the US to conspiracy to launder funds over the case.
Two others have been arrested in Britain, along with a third person arrested in New York.
Lamola said South Africa would not oppose an application from a Mozambican non-profit group to review Chang’s extradition.
Mozambique itself has arrested several other suspects linked to the scandal, including the son of ex-president Armando Guebuza, and senior intelligence officials.
The secret loans — which totalled around $2 billion — were taken out by the government between 2013 and 2015 and were supposed to finance a tuna-fishing fleet and a maritime surveillance project.
Civil society groups say the loans from international banks were illegal and that impoverished Mozambicans must not be burdened with years of hefty repayments.
Chang, who was arrested at Johannesburg airport, has denied any wrongdoing.
What’s in it for Africa at the 2019 UN Climate Change Conference in Spain?
The highpoint of the COP25 for Africa is the “Africa Day”, which is slated for December 10
African delegates will seek to push for changes at the 2019 annual United Nations Climate Change Conference, COP25, which officially kicked off on Monday, December 3, in Madrid, Spain.
About 29,000 visitors are expected at the conference that holds from 2 to 13 December 2019, including 50 heads of state. The U.N. Secretary-General António Guterres underscored the meeting’s urgency, saying that the climate crisis could soon reach the “point of no return.”
At COP25, delegates from 197 countries are expected to nail down some details left open by the 2015 Paris climate accord, including how carbon-trading systems and compensation for poor countries with rising sea levels will work.
Being signatories to the Paris Agreement, nearly all African countries have shown commitments to enhance climate actions by putting practical measures and building resilience in order to curb greenhouse gas emissions.
Like the previous COP summits, the African Development Bank (AfDB) is present in Madrid to support regional member countries through its support to the African group of negotiators and through advocacy to make Africa’s voice heard in the global stage.
The highpoint of the COP25 for Africa is the “Africa Day”, which is slated for December 10, and will focus on concerted global action on climate change to attain a new Africa.
The conference was originally scheduled to be held in Brazil and then Chile, but the election of President Jair Bolsonaro and the protests in Santiago changed those plans. Spain agreed to host last month.
South African airways to go into business rescue
South Africa’s minister of Public enterprise, Pravin Ghordan, has declared the government’s resolve to “rescue” national carrier, South African Airways.
The move comes after a week of speculation on the airline’s future, which is loss-making and has been unable to raise funding to continue operations.
It is proposed that the government will give the airline an extra $137 million with a second tranche of the same amount to come from existing lenders.
The failing airline which has not made a profit since 2011, has lost more than $2 billion over the past 13 years and experience some internal turbulence last month, when staff went on strike over plans to cut a fifth of its workforce.
“It must be clear that this is not a bailout. This is the provision of financial assistance in order to facilitate a radical restructure of the airline,” Pravin Gordhan says.
SAA, which has not made a profit since 2011 and has depended on government bailouts, suffered an employee strike last month, forcing it to cancel hundreds of flights and pushing it to the brink of collapse.
Outlining what is expected from the process – described as the “optimal mechanism” to restore confidence in SAA as it seeks a future equity investor, Gordhan says the 2 billion rand provided by existing lenders will be guaranteed by the government and repayable in future budgets.
The government, via the national treasury, will provide another 2 billion rand in a “fiscally neutral manner” with the full recovery of capital and interest on existing debt not impacted by the rescue proceedings.
In a business rescue process, a specialist administrator takes control of a company with the aim of rehabilitating it to improve its chance of survival, or securing a better return for creditors than they would receive from liquidation.
“This initiative demonstrates that the government will undertake the necessary bold steps in order to reposition its assets in such a way that they do not continue to depend on the fiscus and thereby burden taxpayers” , Gordhan adds.
South Africa’s competition watchdog orders data rate cuts
South African telecommunication behemoths, Vodacom Group and MTN Group could face prosecution if they do not agree with the country’s Competition Commission in the next two months to lower data prices.
A data services inquiry was launched in August 2017, in response to a request from the country’s minister of economic Development, Ebrahim Patel, following complaints from users about high data costs.
“What we found is that there is anti-poor pricing and we see it not only in tariffs but in data bundles as well. The prices for lower bundles are more expensive than higher bundles and there is no persuasive explanation [from the mobile operators] for this,” according to James Hodge, the Competition Commission’s chief economist.
In its final report, the Commission recommends that the two mobile operators must independently reach an agreement with the competition watchdog on substantial reductions on tariff levels, especially prepaid monthly bundles, within two months.
Patel, who is currently the minister of trade and industry says:
“If we want to grow the economy, we need to lower data prices.
“Within policy reflection, we have spoken about economic growth that is inclusive of young people and rural people. When data discriminates against poor people, it goes against public policy.”
Preliminary evidence suggests that there is scope for price reductions in the region of 30% to 50%.
In addition to the imposed rate cuts, the mobile operators must also reach an agreement to cease ongoing partitioning and price discrimination strategies that may facilitate greater exploitation of market power and anti-poor pricing. The final report found there is a “duopoly between MTN and Vodacom” highlighting that data prices from these two market leaders are cheaper for users who have contracts than for prepaid customers. “The majority of prepaid customers are poor and have to buy daily or hourly data bundles”, says Hodge.
The report came down heaviest on the high costs of prepaid data bundles- to access 1GB prepaid from MTN, customers would have to pay R149, while an hourly data bundle costs R30.
For Vodacom prepaid customers, 1GB costs R149, while an hourly 1GB data bundle costs R12. These bundles expire after an hour.
Hodge says it is clear that MTN and Vodacom don’t charge these excessively high data prices in other countries where they operate.
“There are strong indications that there is exploitative pricing [in South Africa],” he adds.
In response, both players have blamed the government for its failure to release mobile spectrum, highlighting a ‘significant difference in opinion’ between the Competition Commission and ICASA on a number of issues that are critical to data prices in South Africa.
This difference of opinion, Vodacom says, is most apparent reviewing mobile data prices in relation to the allocation of spectrum to local mobile operators.
Addressing mobile data prices, ICASA states that South Africa’s prices are neither extremely high nor very low in relation to other African countries or compared with countries that are more similar to South Africa in terms of their size and level of development.
When put in further context with data on speeds and LTE coverage, it is clear that customers in South Africa are benefiting from a much higher quality of access than those in other African countries, says Vodacom.
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