CAF ban on Togo must be condemned

I watched the just-concluded African Cup of Nations football tournament in Angola. Before the games started, the Togolese team fell into an ambush by a secessionist group (FLEC) as the team was travelling by road from Congo Brazzaville to Cabinda (an Angolan enclave wedged between the two Congos), where they were going to play. The driver of the team bus and two Togolese died.

As a result of this tragedy the Togolese contingent went back home to bury their dead and the country’s government thereafter decided to pull out the team from the competition in Angola. That was the sad end of Togolese participation in the competition but not the conclusion of the tragedy. To compound Togolese injury, the Confederation of African Football (CAF) suspended Togo from the next two tournaments for pulling out of this year’s tournament in Angola on the orders of the Togolese government. I do not know the authorities of African football but definitely their decision is insensitive and unjust. Whereas it is true that FIFA and CAF rules stipulate that there should not be government interference in football administration, nevertheless football associations are subject to the authority of their national governments. The Togolese government made a decision and then Togolese football, not the Togolese government, is punished. It should not be left to the Togolese alone to fight this injustice, all Africans; all people should oppose this unjust decision until it is changed.

Oil

In the last few months, a lot has been written and said in the media about oil, and rightly so. There are important matters in any country on which there must be national consensus, for example the development of natural resources such as oil.
Unfortunately this is not so in Uganda. The development of oil is still at the stage where mistakes made elsewhere can be avoided. What, for example, is the balance of rights and responsibilities between the government, the companies and the country and who carries the risks? What does the country get from the sale of Tullow/Heritage shares to the Italians or Chinese? How does government control transfer pricing by oil companies? Richard Murphy, formerly of KPMG, explains how transfer pricing can be done by oil companies: “The first is ‘loading of costs’: ‘For a lot of oil concessions, there is a cost-sharing agreement of some sort (between the company and the state). In these agreements there is the “cost oil” and then there is the “profit oil”. This means that the oil company is allowed to recover all costs of developing oil up to the point that it breaks even. Then the “profit oil” is split between the company and host country.

So there is the obvious opportunity to load company costs on to the “cost oil” and therefore reduce the “profit oil”. Thus the company reduces the amount it has to pay to the host country’.
There are three ways companies can “overload” their costs. “The first is to overcharge for physical assets supplied, the second is to make a service charge, and the third is to make a financial charge,” Mr Murphy says. If the company is transferring exploration equipment into a country, it might over-price it when it comes in. Secondly it might load costs onto the price of services supplied from outside the country.

Has government established how one of the companies involved in exploration has allegedly up to now spent around $ 600 million before commercial production?

The writer is the FDC Deputy Secretary for Research and Policy