September was a bad month for Nhial Bol, editor and owner of Sudan’s The Citizen newspaper. Shut down by the national government Bol had to move printing from Khartoum to the Ugandan capital of Kampala, nearly 2,000 kilometers away, and completely restructure his company.

The newspaper business has never been easy in a country strangled by war, dictatorship and a complex ethnic and political make up and The Citizen has been through a myriad of troubles before, including forced closures and censorship.

And like most of the other few South Sudanese-owned and orientated papers Bol has struggled in the South’s narrow, post-conflict economy to get a good advertising base for the paper, well trained journalists and some kind of a decent readership.

But Bol is passionate about getting information and news to his people, who had been deprived of such access by decades of war. A well-known maverick figure in the South’s capital Juba, he is confident that his new plans to adjust the way his newspaper works will mean that it will slowly also become lucrative. 

Shut down

On September 1, The Citizen and fellow South Sudanese paper Sudan Tribune received letters from Khartoum’s National Press Council (NPC) announcing that their printing licenses had been revoked.

Bol and Sudan Tribune’s editor and owner William Ezekiel were told they had to move head offices to Khartoum, hire at least 10 NPC-approved journalists each — a financial death knell — and fire those already on their books if they wanted to be able to print in Khartoum again.

The editors said they believed the real reasons for the shut down were political; they had both been accused of being over-critical of the Khartoum government in the past. Media watchers agreed.

“Khartoum is using the NPC as a tool,” said Richard Mogga, the Juba representative for the Association for Media Development in South Sudan. He added that the action was strongly against the spirit of the 2005 North-South peace deal that ended more than 20 years of civil conflict.

Under the accord, the South was given its own semi-autonomous government, meant to use its share in Sudan’s oil revenues to start putting infrastructure in place and encourage economic growth. The media and civil society in both the North and South was supposed to flourish in the liberal atmosphere of peace and promised democratization. 

Whatever the cause of the closure, the papers bled money every day of it. Ezekiel estimated a total loss of up to $300,000 during his five days off print and in weeks before when complete print runs were seized almost every morning by Khartoum’s security men.  

For Bol, it was the final straw. He had already lost thousands of dollars in advertising through previous shutdowns that had let clients down. Censorship often meant The Citizen’s hottest political news and editorial was removed, lowering sales. “There were times I was selling only 1,000 copies. They even took photos out,” Bol said.

He traveled to Kenya and Uganda and negotiated a new printing contract with Kampala’s major daily, The Monitor, which also owns its own press. The new deal provided Bol with a solution to Khartoum’s strictures. But printing will be more expensive and getting the paper into the South will involve new complex logistics.

“Now we will only print twice a week. We will bring 4,000 copies by land and 1,000 by air,” Bol said, adding that he will also have to double the price of the paper to 2 Sudanese Pounds in order to make up for higher transport costs. He has also lost his Khartoum market and has dropped his print run from 7,000 copies an issue to 5,000.

In Khartoum he was printing daily and Bol knows fewer issues will mean less advertising overall, possibly less interest from advertisers generally for spots in the bi-weekly and a decline in readership.

“But we will improve the quality and the size of the paper,” Bol said. He is also planning on including longer features and informative articles hoping to draw in more readers. “We will also include a lot of opinion and editorial. We are going to be even more critical of the regime than before,” he said cheerfully.

The Sudan Tribune is also planning something similar, but less drastic. Ezekiel was given back his license and will continue to print in Khartoum but will also sign a deal with the printing house that produces the Nairobi Star tabloid to print in Kenya as well. South Sudan will be supplied from there. It is a difficult way to run a paper, but Ezekiel said he cannot afford to rely just on Khartoum.

Bol also wants to wean his paper off its dependence on the Internet. All of the South’s papers are bulked up with articles cut from the World Wide Web, pasted together with bleary photographs.

Many of the pilfered articles are of not much interest to average southern Sudanese, which means that the papers often lack focus or a sense of integrity. For example, one paper recently printed a plagiarized iPod care guide for its war ravaged readership that mostly has no access to electricity. Because all the papers do it, they often also end up being near-identical reads except for the fiery editorials.

“The educated are looking for more analysis and wider and better news,” said Stephen Tut, old media hand and editor of Post, a South Sudan magazine. But he understands that the cut-and-paste culture is partly a result of a lack of funds and under-trained journalists in the southern papers. Like other magazines, his is fully funded by a western non-governmental organization interested in supporting democratic change and media rights.  

Some aid and development agencies with “softer” pursuits in the South — governance and rule of law as opposed to increasing bore holes — have proved keen direct supporters of magazines and papers.

They also pay for expensive supplements on the benefits of democracy or condom use or on any of a range of other contemporary issues. It seems like a good deal: the agency gets to tell its donors it has encouraged free and fair elections, safer sex and other noble goals and the paper gets quick cash and educative material.

But Bol is serious about not allowing The Citizen to rely on this kind of income, although his first Kampala-printed edition ran a UNICEF insert that earned him $500, because, as he pointed out, “It encourages editors to just search for donors. Nobody is focusing on the newspaper.”

New business

Together with a new printer, Bol said he will adopt a leaner approach to the paper, by shutting down his main office in Khartoum and firing most of his staff that cost him $8,000 a month on salaries, even though with the South’s intensively protectionist labor rules he will have to pay some $30,000 in pay-offs. He is also looking for buyers to take over up to 50% of the paper.

But Bol is most excited about plans to get to the root of his — and the rest of the southern papers’ — problem.

“We have collected letters of interest from papers here. We are looking for a loan of $600,000 to buy a second-hand printing press,” Bol explained. Juba’s branch of the Kenya Commercial Bank is looking for 18% interest but Bol thinks with the buy-in of three or more local papers he will be able to pay back up to $50,000 a month.

Few copies of any of the South’s papers are sold outside of Juba. The South’s extremely low literacy rate — a joint United Nations and government report put it at 15% — is partly to blame as is the widespread use of Arabic rather than English in the larger towns that are usually former garrisons controlled by Khartoum during the war.

But sheer geography — the under-populated South is the size of Turkey — and a very poor road network also form major challenges. One town within easy reach and on the bus route from Uganda to Juba has already proved good for sales.

Bol is planning a distribution network for The Citizen that other papers can also buy into. Transporting the papers in bulk will make the effort worthwhile and slowly encourage readership.

Buy me

The Juba Post reached international fame in 2006 when the British Broadcasting Service (BBC) website picked up the ‘Man Marries Goat’ story that became one of the BBC’s most read stories that year.

The first issue had come out on January 9, 2005, the day the North-South peace deal was signed. The paper did much of its important growth and training with donor money. But it then struggled through a sudden loss of this cash source and now survives off advertising in the 3,000 copies of each edition printed. However, it has been hard to cover printing costs of $450 per run and editor Charles Rehan admitted the paper has a hand-to-mouth existence. Flying the papers from the Khartoum printer costs another $500 per edition.

The bulk of advertising is not from the small private sector. Most of the ads are from non-governmental organizations and United Nations agencies looking for local staff. Luckily for the Juba Post, NGOs are happy to pay $1,000 for a full page spread large enough to include requirements for the job on offer. Regulations for institutions like the government and World Bank force them to advertise for construction and other contractors and these ads also drum up important income for the paper.

But these kinds of institutions often come with large bureaucracies that take months to clear payments often from as far away as New York. The paper has lost staff and lacks flexibility because of the associated cash flow problems, Rehan said.   

But according to the editor, the private sector is just not orientated towards advertising. The South’s post-peace business community wants to make profits as quickly as possible in case war breaks out again, he said, and is not interested in investing in increasing awareness of their brands. And there is just not enough business for competitive thinking to have kicked in, he added. Large international companies, like Zain, that could easily afford the advertising seem to not think it is worth their while to bother with the southern papers’ small print runs.

“We need a bigger business community here to make that work,” Rehan said, although he also admitted that the Juba Post’s donor money origins may also be why the paper’s marketing is so weak. 

Other problems are also encountered in the hunt for advertising cash. “Advertisement in Sudan is associated with corruption. We are not using the right language and we don’t take bribes (from officials placing adverts),” Bol said.

Rehan also admitted that part of the problem could be exposure. All of the South’s papers — not just the Juba Post — are underexposed. While few of the papers could afford to do a serious advertising campaign, it is less understandable why it is so difficult to find a paper. Only a handful of shops sell all the papers every day.

Rehan thinks the time could be ripe now that traffic jams have begun to develop in the South’s capital to begin a new technique. “We have found three boys and they are going to sell the papers on the streets on commission,” he said.

But to Paul Jimbo there is nothing wrong with the business environment, young and raw as it may be: the papers are just not working hard enough. He works as a journalist for the Southern Eye — a colorful Ugandan-printed paper — but is also paid on commission for any adverts he finds.

And it is clear where the money is. Jimbo has just signed an agreement with one of Juba’s numerous new hotels for $14,000. He has come up with an imaginative idea, familiar to many readers in the region: the Southern Eye will do a two-page puff piece on the hotel and in exchange its owners will buy a series of ads.

When there is an especially interesting front page on the paper, Jimbo will start knocking on doors, offering front page banners and full color ads to run next to the headline, unheard of behavior in Juba but lucrative.

The content of the paper is similar to the others, but the Southern Eye looks familiar to Southerners who have spent time in neighboring Kenya or Uganda during the war years, a group that includes most of the educated. This professional look may be partly why the paper does better on the advertising than the others even though it is irregular in its appearance in Juba.

“There are more hotels now so there is more competition; they are keen to advertise,” Jimbo said. He pointed out Juba’s newest acquisitions, huge billboards. “There’s money to be made,” he laughed. “You just have to see it and try.”

Who is really profiting from Algeria’s oil revenues? This question is fueling a heated public debate in the country. Former political officials, economists, and even political parties are questioning the state’s management of the country’s exchange reserves, estimated in June at $126 billion thanks to increases in oil revenues. “Why are exchange reserves being invested in banks in the US?” some wonder, and “Who is really managing these reserves?” Many are nagged by suspicions that the money deposited in American banks might not be sheltered from the mortgage and financial crises in the US.

Smail Goumeziane, former Minister of the Economy, recently added fuel to the fire. “Politically, is it just to finance the Americans’ military activities?” he asked, “And economically, is it fair to finance the budget of a country that subsidizes agribusiness giants in order to artificially dope their competitiveness, so that they have an unfair advantage over the numerous small-scale farmers in the third world? Socially, is it just to contribute to the financing of American technological research when this sector suffers from serious organizational setbacks and lack of resources in Algeria?”

Up to 70% of Algeria’s exchange reserves are currently invested in sovereign deeds or treasury bonds abroad. These investments generate a surprisingly low interest rate of 2%.

In most regions, revenues generated by natural resources are assigned to regulate exchange rates, especially in oil-producing countries. With the price of oil surpassing all former thresholds, and Algeria’s exchange reserves swelling, public debates over the management and investment of exchange reserves have become more urgent than ever. In seven years, Algeria has seen oil revenues rise from $10 billion in 2000, to $80 billion in 2006, to nearly $100 billion at the end of 2007, to close to $130 billion halfway through 2008. The state has centralized more than $42 billion in a special Revenue Regulation Fund (Fonds de Regulation des Recettes, or FRR). But Algerians wonder why such sums of money are being invested in US banks for interest rates not exceeding 3%?

Goumeziane has stated that the state only uses the profits earned on oil and natural gas for purely structural reforms. But many Algerians see no productivity in this domain, and grow increasingly frustrated with the lack of visible benefits, while Algerian youth, 75% of the population, face rising unemployment and bleak prospects.

America’s mortgage and financial crisis has not fazed the Bank of Algeria (BA), which recently dismissed the risk an international crisis could pose to the portion of exchange reserves invested in US banks. The BA has stated that the risk on this part of the exchange reserves “is a good guarantee for the creation of currency at the internal level,” adding, with little elaboration, that the Bank is investing reserves “in conformity with international norms,” in order to “be able to intervene at any moment on the exchange markets.” It further elaborated that Algeria will continue to reconstitute its exchange reserves so as to face monetary crises, and guarantee the level of real exchange of the national currency.

Another dark cloud menacing Algeria’s ‘petrodollars’ relates to the currency of their investments. On this point, the Bank of Algeria seems to proceed prudently, at least according to the declarations of its Governor Laksasi, who said that “a portion of the reserves in dollars was converted, at an opportune moment, into euros.”

M. Lamiri, an Algerian economist and international consultant, said that oil revenues invested in American treasury bonds are safe from the crises flogging the global economy. “These investments in state bonds are insured by the US. Algerian investments are not in danger,” he predicted. However, he reproached the low interest rate that applies to these colossal sums. “It earns a maximum of 4% annually while it could earn up to 12.7% a year in a country like Norway,” he said.

Are there better prospects for investing Algeria’s swelling exchange reserves? The state has shot down the notion that a sovereign fund could potentially yield more profits on oil money and President Abdelaziz Bouteflika stamped a categorical ‘no’ onto the subject. “Some have suggested that we embark on the adventure of a sovereign fund in order to secure a higher return on our exchange reserves abroad. I feel that the country continues to have an enormous need for capital, for the development of the national economy,” Bouteflika expressed  in September.

The country’s premier promised that new construction projects will be launched as part of a new program for developing the national economy, starting in 2009. These projects will draw on the wealth created by the investment of exchange reserves.

But Algerians wondering which financial policies will ensure the investment of exchange reserves are profit-making. They hope to find an answer fast, before they are stuck with a far more uncomfortable question: Where did all the oil money go?

Libya’s telecommunications sector has seen rapid growth over the past several years, culminating in the creation of a third mobile operator.

During its third congress of 2008, the Libyan government gave the green light to various Libyan companies to materialize a new series of large-scale projects. The Libyan Fund for Economic and Social Development is now authorized to create a third mobile telephone operator, while the National Organization of Scientific Research has obtained authorities’ approval to sign a contract to launch a Libyan satellite for remote sensing purposes.

Improving infrastructural facilities is essential in accomplishing these large-scale projects, and the government plans massive investments in infrastructure over the next ten years. International groups like Alcatel, Siemens, Ericsson and Nokia have already begun operating in Libya, and developments are offering improved opportunities for small and medium-sized businesses to access the internet and IT. The government is investing as much as $15 million in setting up an information network to link up Libyan banks. 

The public and private sectors have much at stake in advancing facilities and services related to new information and communication technologies. Foreign oil companies, in particular, require adequate infrastructures to be able to carry out their projects.

Outperforming expectations

In spite of low expectations during the launch of telecommunications sector in Libya in 1995, it has swiftly developed and adapted to local needs. The first mobile operator, Al Madar, has benefited from the iron will of the Libyan General Company of Post Offices and Telecommunications (GCPOT) to promote this sector, giving citizens the opportunity to access not just mobile, but also information and communications technologies.

In 2004, equipped with its experience with the first GSM operator, GCPOT launched a second mobile telephone company, Libyana. Such step-by-step policy-making demonstrates that Libya has proceeded with prudence in this domain, aiming to assure quality service and performance based on state-of-the-art technology and a viable economic yield.

Libyana and Al Madar, who currently share access to the more than 2 million subscribers in the country’s market, have been able to keep up with new technologies and respond effectively to the needs of the local market. The objective now is to commission 9 million telephone lines, 2 million fixed and 7 million mobile, for Al Madar and Libyana by the end of 2008.

The creation of new lines is a necessary accompaniment for the technical progress being made in the domain, and will allow Libyan service providers to benefit from and deploy state-of-the-art technologies. Libyana, for instance, recently launched its third generation service, offering subscribers communication by sound and image, reception of Internet service at 384kb per second, television and transmission of MMS.

Al Madar plans to evolve by luring in a wider portion of the public with lower priced subscriptions, to compete with Libyana. Al Madar recently mutated into Al Madar Al Jedid as a sign of its will to transform and become more competitive, through enlarging its field of activity and subscriber-base.

Going WiFi

In another indication that the government is pushing for the sector’s development, in April 2008 Libya Telecom and Technology, the country’s principal provider of Internet access services, signed an accord with Alcatel for a WiMAX project that aims to bring coverage to the majority of the country’s regions and is scheduled to take off some time later this year.

Moreover, at a meeting of the General Libyan Council of Planning, the government announced that its 2008 development program includes a provision to cover the entire Libyan territory with a mobile telephone network, as well as to extend the fixed telephone network by adding around 1.5 million new lines.

The economic success of the two mobile operators Al Madar and Libyana has stimulated the state to consider listing them on the stock exchange, with the aim of allowing the greatest number of Libyan citizens to benefit from their dividends. In addition, the communications sector in Libya directly contributes to the financing of the state treasury, in coordination with a new angle to diversify the country’s sources of revenue.

Developments like the addition of a third operator and 3G services point to a promising future for telecommunications in Libya. The quick pace of developments also augers well for the sector’s ability to keep up with ever-changing technologies. The population and the country’s development have a lot to gain.  

As Morocco moves forward to meet tourism development targets for 2010, the decisive liberalization of the kingdom’s air transport is beginning to bear fruit. Tourism arrivals registered a year-on-year rise of 14% in 2007, according to the Ministry of Tourism, bringing a total of 6.72 million visitors to the developing country. Building up its tourism industry is a top priority for this destination, which is a mere two hour flight from major European cities like Paris and Madrid.

Morocco and the European Union signed an Open Skies Agreement in 2006, paving the way for growth in the underdeveloped Moroccan air transport sector as well as heightened competition for its national carrier, Royal Air Maroc (RAM). Competition from low-cost European airlines is already bringing Morocco closer to achieving its goal of 10 million tourist arrivals by 2010, but some are worried about the effect of competition on local carriers.

Although the conclusion of the agreement gave rise to initial concerns about allowing European low-cost operators to compete with local carriers, most in the industry agree that the overall impact has been largely positive. The local air transport industry has capably adapted to the heightened competition, with the launch of two local low-cost carriers, AtlasBlue (a low-cost subsidiary of the national carrier RAM) and Jet4You. These companies are both striving to remain competitive in local markets, as well as to capitalize on the new access to European markets.

“The liberalization of air transport in Morocco is very positive for Morocco,” said Karim Baina, vice-president of Jet4You. “We have seen immediate results. There was a boom in air transport and in the number of clients, passengers, and tourists who come and discover Morocco. When the lock on air transport was removed, this led to the creation of new operators like Jet4You. It led, as well, to greater supply in Morocco. By raising the supply, this has allowed us to lower prices on tickets and thus to make Morocco a more attractive tourist destination, both in terms of fares, and in terms of visibility for European consumers.”

Decade of reforms

Since Mohamed VI ascended to the throne nearly a decade ago, the kingdom has pushed through a number of free-market reforms, including the liberalization of finance, banking and trade. It has also emphasized social reforms, for instance by reworking the Moudawana to improve women’s rights and organizing historical forums to address the former regime’s human rights abuses that had been never been publicly acknowledged. Such reforms testify to a modern, more open Morocco. This Morocco is eager to advance to international standards of political and economic practices, and to become more business-friendly in the eyes of foreign investors and trade partners. Its courage in confronting the economic risks of globalization head-on have been paying off, with soaring levels of foreign direct investment and a boost in tourism indicators.

Air transport liberalization dates back to 2004, when Transportation Minister Karim Ghellab laid out his plan to triple the availability of international air transport. King Mohammed VI expressed his support for the strategy in a royal letter, where he stated, “As we had highly recommended, the project to reform the map of the skies has just been put into effect. This will allow not just for the sector’s liberalization, but also for reducing transport costs, greater fluidity and the appropriate coordination between issuing markets and tourism zones.”

In 2006, after a successful lobbying campaign for a single comprehensive agreement with the entire European bloc, Morocco became the first non-EU country to conclude a complete aviation agreement with the EU. The Open Skies Agreement abolished restrictions and limits regarding passenger transport between the EU and Morocco, by both Moroccan and European carriers.

This agreement was a major achievement for the kingdom, as in the absence of one comprehensive agreement, Morocco would have been forced to spend years renegotiating bilateral accords, some of which date back to the 1950s, with each individual EU member. The Open Skies Agreement swept away air transport barriers between Morocco and the entire realm of its number one trade and tourism market, Europe.

One year after the conclusion of the Open Skies Agreement, more new aerial routes were opening in Morocco than in any other country in the world. They now link untapped tourist markets in Europe to seductive destinations like Marrakech and Agadir. Within the European market, the industry has seen a notable rise in traffic between the UK and Morocco: according to the Ministry of Transport, 359,000 passengers travelled between these two countries in 2005, up 62% from 223,000 in 2003. Three British carriers began operating regular and charter flights between the London/Manchester and Marrakech/Agadir regions since 2004. Already popular routes like Paris-Casablanca and Paris-Marrakech are reinforced by the entry of new carriers who create a higher volume of supply to accommodate increasing numbers of tourist arrivals. The multiplication of routes between Morocco and Europe also strengthens North-South relations and business links.

A sky full of new players

Since 2004, 22 new foreign companies have begun offering regular flights to and from Morocco, though European companies are not the only carriers flocking here. In addition to 19 new European companies, including low-cost powerhouses like RyanAir and EasyJet, MENA providers like Libya’s Buraq Air, Ettihad of the UAE and Turkish Airlines have also initiated regular flights to and from the kingdom. Air Arabia, the MENA region’s largest low-cost carrier, just announced plans to set up a new hub in Rabat planned for opening in 2009, featuring a fleet of Airbus A320 aircraft.

Passenger traffic rose 16.5% between 2006 and 2007, and the National Office of Airports (ONDA) has overseen infrastructure improvements throughout the country to accompany the opening of skies above Morocco. The Casablanca and Marrakech airports, the two largest, recently each received a new terminal, while a $880 million investment between 2004 and 2007 targeted other projects including Tangier, Essaouira and Dakhla.

Another provision of the Open Skies Agreement calls for the improvement of security and safety procedures, although one security expert, who spoke on condition of anonymity, pointed out vulnerabilities and ineffective security in the airports. Attacks like 2004’s suicide bombings targeting foreign symbols are the most significant threat to tourism development goals, and the security provisions of the Open Skies Agreement had better bring standards up to international levels.

But in the end, Morocco remains a relatively peaceful, business-minded tourist destination with broad appeal to tourist-issuing markets in both Europe and the Middle East. The country has boldly wagered its future on its ability to attract tourists, although some argue the state risks too much in making economic development dependent on such a fickle industry. No doubt a more diversified economy would be better protected from market fluctuations.

But with a wager this big, the country is making every effort to ensure a smooth evolution towards systematic goals, whose horizons of 2010 and 2012 are suddenly not so far away. The liberalization of the air transport sector has already paid off by raising the number of tourist arrivals, improving the quality of services through allowing in new competition and bringing the country’s airports and servicing fleets up to speed. Morocco’s regional neighbor Tunisia is following in its footsteps, and entered into talks towards its own Open Skies Agreement with the European Union in September.

The liberalization of air transport in Morocco has been, up until now, a well-coordinated effort with a perceivable immediate impact. However, rising oil prices and a downturn in the global economy could pose significant challenges to the air transport sector and to global tourism over the next few years. Already, flights are becoming more expensive as fuel prices hover around the $100/barrel mark, and air companies are forced to add fuel charges to normal passenger fares to absorb extra costs. If European economies continue to suffer the fallout from the worsening financial crisis in the US, the next few years could mean stagnation or decline in the numbers of tourists travelling from Europe to Morocco. When 2010 has passed and the country considers its next round of strategic development plans, it may well apply the same kind of goal-oriented mobilization of both private and public sectors to stimulate other cornerstones of the economy, like the services sector.