SOUTH AFRICA: Special report on widening poverty gap

NIGERIA: Obasanjo sacks head of state oil company

ABUJA, 3 November (IRIN) - The head of the state company which oversees
Nigeria?s oil industry was on Monday relieved of his job by President
Olusegun Obasanjo. No reason was given for the dismissal, which was
announced in a terse government statement.

Jackson Gaius-Obaseki was appointed group managing director of the
Nigeria National Petroleum Corporation (NNPC) after Obasanjo won a
four-year term in 1999. He has been replaced with Funso Kupolokun, who until
his appointment, was a special assistant to Obasanjo on petroleum
industry matters.

Speculation had been rife for weeks about the imminent fall of
Gaius-Obaseki, who is blamed for the fuel shortages that have gripped Africa?s
leading oil producer intermittently over four years.

Despite the existence of four government-owned refineries with
installed capacity to meet domestic needs, Nigeria has depended on fuel imports
since Obasanjo took office because the ill-maintained refineries had
never functioned at more than 30 percent capacity. Yet, the government
admits more than US $400 million had been spent on their maintenance
during the period.

On Friday Obasanjo declared he suspected sabotage by interest groups
involved in fuel imports for the failure of the refineries to work at
full capacity and the country?s continued dependence on imported fuel.

Calls for Gaius-Obaseki to be sacked reached a crescendo in September
after he told a national daily that the NNPC had spent 224 million naira
(US $1.7 million) to maintain two suites at the Abuja Hilton Hotel for
him in the past four years.

Gaius-Obaseki further outraged the public by declaring that staying in
the hotel was a sacrifice he had to make for the nation as the expended
amount was inadequate to build him befitting accommodation.

Another key change in the oil industry also announced on Monday was the
appointment of Edmund Daukoru as Obasanjo?s special adviser on
petroleum and energy. Daukoru, a former head of NNPC, replaces Rilwanu Lukman
(the former secretary general of the Organisation of Petroleum Exporting
Countries) who resigned from his position on 1 November.

Apart from managing Nigeria?s 57 percent stake in six joint ventures
with oil transnationals that account for more than 95 percent of the
country?s daily oil output of over two million barrels, the NNPC also
manages operations including refining and distribution of fuel and stakes in
natural gas plants.

Though oil exports account for more than 95 percent of Nigeria?s export
income, impoverished communities in the Niger Delta region that
produces almost all of the country?s oil accuse the government-transnationals
partnership of denying them access to the wealth produced on their
land.

Restiveness in the region in recent years has resulted in thousands of
deaths through ethnic violence, violent disruption of oil operations by
armed militants and massive pipeline fires caused by sabotage.

World's largest home textiles fair seeks greater participation from the Middle East

Region among the three fastest growing markets for new trends in home décor in the world

Dubai, November 3, 2003
Messe Frankfurt, the leading global trade fair organizer, has announced that the Heimtextil Frankfurt 2004 will be held from January 14 to 17, 2004 in Frankfurt, Germany. Speaking at a press conference held in Dubai today (Monday, November 3, 2003), Dr. Geert Böttger, Vice President, Textile Fairs, Messe Frankfurt, the organisers of the fair, said that he expects the event to be a meeting ground for industry professionals from around the world, especially from the Middle East, the Subcontinent and the Far East, as these are markets where the demand for home and household textiles is growing the fastest. Mr. Tejinder Singh Khurana, senior committee member of Dubai Textile Merchants Group (TEXMAS), also spoke at the press conference and confirmed the participation of textile merchants from the UAE in the forthcoming fair.

"For thirty four years now Heimtextil in Frankfurt has been the industry's largest international meeting-point for home and contract textiles," said Dr. Böttger. "The fair has proved to be an optimum forum at which contacts can be made and innovations shown and viewed. It presents contemporary styles of living that point the way for retailers, wholesalers and crafts people."

Stressing on the international profile of the fair, Dr. Böttger pointed out that in 2003, 81 per cent of the exhibitors featured in Heimtextil Frankfurt came from outside Germany, with large groups participating from the European Union countries, the rest of Europe, Asia, North America, Central and South America, Africa and Australia. Of the total number of visitors to Heimtextil Frankfurt 2003, almost 50 per cent were from outside Germany, with the Middle East being represented by an estimated 1500 trade visitors. The numbers are almost three times higher than the 580 visitors from the region, recorded in 1999.

The Middle East textile industry has, over the years, registered strong presence at the fair, with many exhibitors showcasing their products regularly in past fairs. Considered to be the most strategic textile centre in the Middle East, the industry posts an annual turnover of US$ 4 billion. Besides the regional trade, the UAE textile industry serves a market of 1.4 billion spread across the CIS countries, Africa and the sub-continent. The construction of a Dhs. 200 million Dubai textile City is set to further consolidate Dubai's status as the textile capital of the region.

In keeping with the growth in regional industry's markets and the substantial rise in the number of visitors to the fair from the region as well as from the rest of Asia, the continent is represented by the third largest exhibition space at the event, after Europe and Germany.

"The organisers of trade fairs and exhibitions have the mission of being both the mirror and the motor of the industry," added Dr. Böttger. "We see ourselves as service providers to the textiles sector world-wide, bringing supply and demand together in an optimum way. We have worked on the further optimisation of the fair concept, with the aim of adapting Heimtextil to meet the needs of the market."

Heimtextil Frankfurt 2004 will showcase home décor trends and styles for 2004-2005, as defined by the leading global trend's researcher Gunnar Frank from the Netherlands. There will be four major colour themes, green, exotic red, classic yellow and brocanterie blue, for the show, which will combine into Heimtextil's signature line 'contrast in harmony'. The idea is for manufactures to combine the themes individually, introducing contrasts as they please and thus defining their own unmistakable style.

"In the future, home making will be an 'affair of the heart' because, by designing the rooms of my home, I will be able to give expression to my own wishes and feelings. Thus, the look of a home in the future will depend greatly on the 'personality' of the individual concerned," said Gunnar Frank, official trend researcher for Heimtextil Frankfurt 2004. "That is the first factor. Subsequently, consumers look to the market for orientation. They refer for instance, to fairs such as the Heimtextil, because they want to be up-to-date, to change things and, in particular, to set new accents in their own four walls, which emphasise their individuality. In deciding the trends for Heimtextil Frankfurt 2004, I have tried to assure that both these factors receive equal focus."

The event will feature ten product groups that include 'deco and style' for decorative fabrics and draperies, 'sit and feel' for furniture fabrics, 'sun and shadow' for sun protection and shade products, 'floor and more' for floor coverings, 'wall and décor' for wall coverings, 'sleep and dream' for bedroom décor, 'kitchen and culture' for dining and kitchen design and 'fresh and splash' for bathroom interiors, as well as a special section for interior designers that is titled 'atelier and design' and a section for household technology, service and trade publishers, titled 'service and technology'.

This will be the 34th subsequent year that the fair is organised in Frankfurt. Since its inception in Frankfurt, the fair has spread to numerous locations worldwide and is now held through the year in Japan, Russia and India, besides its home city. The Frankfurt event, which is primarily a trade fair, will be followed by Heimtextil Sunday, on January 18, 2004, when the exhibition halls will be open to the general public.

Feture - KM Special

SOUTH AFRICA: Special report on widening poverty gap

JOHANNESBURG, 3 November (IRIN) - South Africa has made significant
gains since the advent of democracy in April 1994. However, the country
still faces serious problems. The most significant one - apart from the
impact of HIV/AIDS - is the lack of economic and social rights for a
large sector of the population.

Research undertaken by a project team in the office of President Thabo
Mbeki, assisted by the Department of Social Development, has attempted
to capture the essence of the problem.

Their report, titled "Towards A Ten Year Review", seeks to quantify the
performance of the state in its constitutional obligations to its
citizens, and its progress in redressing apartheids injustices.

While the government's performance in provision of health, education
and other basic services has been commendable, the report notes that "two
economies persist in one country".

"The first is an advanced, sophisticated economy, based on skilled
labour, which is becoming more globally competitive. The second is a mainly
informal, marginalized, unskilled economy, populated by the employed
and those unemployable in the formal sector," the report said.

During a recent talk at the annual conference of the Black Management
Forum, Mbeki reportedly likened the "two economies" in the country to a
double-storey house "without a connecting staircase".

"Despite the impressive gains made in the first economy, the benefits
of growth have yet to reach the second economy, and with the enormity of
the challenges arising from the social transition, the second economy
risks falling further behind if there is no decisive government
intervention," the report warns.

The 10 year review argues that "the central economic challenge for the
next decade, to help address the negative impact of the social
transition - with far-reaching social and political implications - is to ensure
much higher rates of growth and employment creation".

Between 1995 and 2002 the number of people classified as unemployed,
according to the narrow definition of those actively seeking work, had
risen from just over 1.9 million to over 4.2 million - an increase of
over 2.3 million.

The department of labour says the national official unemployment
average is 30.5 percent or 4.8 million people. However, the department uses a
strict defenition for unemployed, which independent researchers have
disputed, and some have pegged the general unemployment figure as high as
40 percent.

SOCIAL GRANTS

The extension of social grants has been trumpeted by the government as
a major achievement, following the systematic scrapping of apartheid
era legislation aimed to place whites above other citizens in terms of
accessing state assistance.

According to Statistics South Africa, in 1995 about 28 percent of
households and 48 percent of the population were living below the poverty
line. In 1999 just under 33 percent of households were living below the
poverty line - most of them were defined as African (black indigenous
South Africans).

This is an indication of the impact that the exclusion from the broader
economy, through apartheid job reservation legislation, and the
prejudicial nature of state assistance, has had on black communities, analysts
say.

Since 1994 the state's expenditure on social grants has increased from
R10 billion (about US $1.4 billion) in 1994 to R34.8 billion (about US
$5 billion) in 2003.

Similarly, there has been a concurrent increase in beneficiaries as the
state attempts to address the legacy of apartheid. In 1994 some 2.6
million people benefited from direct social grants, while in 2003 that
figure had ballooned to 6.8 million.

The 10 year review notes that "overall, social grants have the
potential of reducing the number of individuals in poverty from 42 percent to
24 percent. Although great progress has been made in registering
recipients, the full impact of these grants will only be realised when all
eligibles are registered".

The government has admitted that many South Africans eligible for
social grants are unable to access them as they lack the necessary identity
documents, proving their citizenship, to do so.

As with social grants, public works programmes are a key intervention
which allows the state to address, in part, the poverty of individuals
and asset poverty (houses, infrastructure) of communities.

"Expenditure on public works programmes has increased almost tenfold
since 1998 ... employing a total of 124,808 people since 1998. However,
most of these jobs were temporary," the review notes.

Some 3,407 permanent jobs were created by public works projects between
1999 and 2002 and a further 141 permanent jobs were created by the
first half of the 2002/03 financial year.

"Research indicates that public works programmes vary in their
efficiency of transferring income to the poor with the average expenditure per
worker varying between R27,242 [US $3,928] in Limpopo [province] to
R6,515 [US $939] in the Eastern Cape [province]," the review said.

It added, however, that "while increasing provision of assets to the
community, [public works programmes] are not as efficient as income
grants in alleviating income poverty".

EDUCATION, AN ESCAPE FROM POVERTY?

Literacy rates have increased from 83 percent in 1996 to 89 percent in
2001 for the general population, while literacy rates for the 15 to
24-year-old age group have risen from 83 percent to 96 percent over the
same period. "Which is exceptionally high for any nation," the 10 year
review notes.

The report added that "while significant progress has been made, there
is evidence that discrimination in employment still exists.
Unemployment and other social ills are still disproportionately higher for blacks
and women, and there is still a gender-based premium in earnings".

Many black South Africans are now better educated, but this has not
necessarily translated into better jobs. While studies have shown that the
better educated an individual, the better off they are, in South Africa
it is not only those without skills and education who struggle to find
employment.

Research by the Centre for the Study of African Economies (CSAE), based
at the University of Oxford in the UK, notes that in South Africa race
and unemployment are linked.

Evidence from Ghana, Uganda and South Africa was collected for the
report which questioned whether investing in education reduced poverty.

The report notes that in "Uganda and Ghana, education plays an
important role in access to certain types of employment, whereas in South
Africa, the issue is access to employment [overall]".

"In South Africa, racial differences in unemployment incidence cannot
simply be dismissed as a problem of the poorer productive
characteristics of the African, coloured and Indian groups relative to whites," the
CSAE said.

"While a substantial part of the race gap in the incidence of
unemployment in the mid-1990s was explained by inter-group differences in
observed characteristics, there remained a residual that could not be
explained in this way. The residual may be due to employer discrimination or
to racial differences in unmeasured determinants such as the quality of
education," it added.

Another report from the CSAE, titled "Race and the Incidence of
Unemployment in South Africa" takes the point further.

It says "an empirical model fitted to predict individuals' probability
of unemployment shows an important role for race, education, age,
gender, home-ownership, location, and numerous other variables, all of which
have plausible explanations".

But it is "the large race gap in unemployment" which "might represent
labour market discrimination against blacks".

A recent survey by the Human Sciences Research Council of South Africa
(HSRC) found that while university graduates have a distinct advantage
in the country's competitive labour market, some historical hurdles
remain.

"Africans, women and those who studied at historically black
universities still have the greatest difficulty finding employment," the HSRC
found.

It conducted a survey of 2,672 university graduates who obtained their
first degree between 1990 and 1998.

The study revealed differences along racial lines. "About 70 percent of
white graduates found employment immediately, compared with 43 percent
of Africans, 42.2 percent of coloureds and 47.6 percent of Asians. A
higher proportion of graduates from historically black universities (65.4
percent) experienced periods of unemployment compared to graduates from
historically white universities (34.65 percent)," the report said.

KEY CHALLENGES FOR THE FUTURE

A comparison of public opinion polls provides important direction as to
the concerns uppermost in the minds of South Africans, of all race
groups.

In 1994, 67 percent of those polled believed job creation to be the
"most important problem" facing the country. While in 2002 the number of
people who believed job creation was the "most important problem" had
risen to 84 percent.

Likewise, in 1994 just 9 percent of respondents were concerned about
poverty, by 2002 that had increased to 28 percent of respondents.

The government's performance in providing safety and security,
education and health care seems to have been given a nod of approval. In 1994,
34 percent of respondents were concerned about education, but by 2002
that had dropped to 15 percent.

South Africa will celebrate 10 years of democracy in April 2004, during
which time the electorate will go to the polls once more for
presidential and legislative elections.

The lack of social and economic equality for a large section of the
population is set to be a key election issue.

Institute for Democracy in South Africa (IDASA) executive director Paul
Graham told IRIN that "in general the figures are pointing to a
continued high level of inequality between the wealthy and the poor".

"The data does suggest that there's de-racialisation among the wealthy.
But poverty levels certainly have not improved and when we do our
research, which asks people what they think the main public issues are, jobs
comes up as the key issue," he said.

IDASA research indicated that "about 80 percent of people in the
country see [economic inequality] as the key issue that government should be
doing something about". With regard to peoples' perception of
government performance around key issues, "the general view is that this is the
area where government has done the worst, I think about 9 percent
believe government has done a good job in terms of job creation," Graham
noted.

"People who were poor 10 years ago have not been able to escape the
poverty trap. Government's rejoinder is that the social security net and
availability of services to the poor has improved, and there's some
evidence in that regard, [the roll out of] houses, potable water and so on.
But the problem for people is that they don't feel they are able to get
themselves out of the poverty trap, they need work," Graham added.

The debate in South Africa was moving away from the undisputed facts
around poverty and more toward finding solutions.

"I think over the elections there's going to be a substantial debate
over macro solutions to these micro problems, how one actually changes
the structural problems of South Africa. I do get the impression of
increasing interest in Brazil and the policy formation of the new president
of Brazil in an attempt to see whether there are ways in which the
state can be more proactive. Instead of merely creating an investment
climate - which is largely policy at the moment, fiscal discipline,
liberalisation of the policy arena etc," Graham noted.

Research has shown that with an average growth rate of 2.8 percent, net
employment grows at a rate of 2.1 percent. South Africa's economy grew
by 3 percent in 2002 up from 2.5 percent the year before, said a UN
Economic Report on Africa 2003.

But the issue remains how to raise growth to higher levels. "And more
specifically, the rate of investment from the current 16 percent to 17
percent of GDP," the 10 year review noted.

Graham said the "only way to change [unemployment trends] is if the
growth rate is running between 5 percent and 6 percent. Which we have not
had over the last few years. Also [while there has been economic
growth] we have had jobless growth, in fact there's been some shedding of
jobs".

To address poverty it was necessary to "address the asset base of the
poor, political power of the poor and income security of the poor".

"The political power issues have been partially addressed. The asset
base areas such as land, education, tenure of housing, are being
addressed, but those are slow processes. [With regard to] income security,
government has been good about providing a social security net, which is
not yet being accessed by everybody, and the other area is jobs, jobs,
jobs - and that is not happening," he concluded.