Karim El Bar
(Originally published on The Financial Gazette)
With European Parliamentary elections around the corner, both parties in Italy’s coalition government have taken the opportunity to burnish their anti-establishment credentials. The target: Emmanuel Macron. The reason: colonialism and migration.
Luigi Di Maio, Italy’s deputy prime minister and leader of the populist 5 Star Movement, said: “If people are leaving today it’s because European countries, France above all, have never stopped colonising dozens of African countries.”
“If France didn’t have its African colonies, because that’s what they should be called, it would be the 15th largest world economy. Instead it’s among the first, exactly because of what it is doing in Africa,” he said, adding that many African countries “use French currency and pay for the French deficit.”
Di Maio was referring to the CFA Franc, two interchangeable currencies used in 14 former French colonies in Central and West Africa. They are pegged to the Euro and backed by the French treasury – but only in return for holding half the foreign currency of participating countries. France says this provides financial stability and credibility, critics say it hinders economic development. Most of the current migrants come from countries that do not use the CFA Franc, such as Eritrea.
Italian interior minister Matteo Salvini, leader of the far-right League party that forms the other half of Italy’s governing coalition, waded in with his own two cents: “The migrant problem has many causes. In Africa, some take away wealth from the people and the continent. France is certainly among them. Italy isn’t.” Shifting focus to the Middle East, he said : “In Libya, France has no interest in stabilising the situation because it has oil interests opposite to those of Italy.”
Paris summoned the Italian ambassador, but was diplomatic enough not to publicly bring up Rome’s own colonial past. Italy was one of seven European countries with territories in Africa, controlling at its peak modern-day Eritrea, Ethiopia, Somalia, and Libya, starting in 1886 and ending in 1945.
If there was one person who most personifies Italy’s scathing critique of France, it would Iskandar Safa; a French businessman of Lebanese descent who made his own empire on the African continent.
Iskandar Safa is the CEO of Privinvest Group, a company he founded with his brother Akram in the 1990s. According to their website, Privinvest specialises in naval and commercial ships and mega yachts. They have subsidiary holdings in the UK, France, Germany, Greece, and Abu Dhabi. Its research and development program focuses on marine renewable energy.
As for Safa himself, he was born in 1955 in Beirut into a Maronite Christian family. He obtained a degree in Civil Engineering at the American University in Beirut in 1978, followed by an MBA from INSEAD in France in 1982. He worked for a few years in Saudi Arabia before taking over Constructions Mecaniques de Normandie, a French shipyard. Within two years he turned around a business that was on its last legs into a successful company. In 2007, he set up Abu Dhabi Mar in collaboration with Al Ain International, buying them out in 2011. Privinvest is now one the largest ship-building companies in Europe and the Middle East.
On 30 December 2018, former finance minister of Mozambique Manuel Chang was arrested in a South African airport on his way to Dubai. On 2 January 2019, Lebanese citizen and Privinvest lead salesman Jean Boustani was arrested in New York. The next day, three former Credit Suisse bankers were also arrested in London: Andrew Pearse, Surjan Singh, and Deletina Subeva. This international wave of arrests was provoked by a $2 billion loan to Mozambique that almost tore apart its economy as it took on more debts than it could manage.
According to a US indictment, over $2 billion was lent by Credit Suisse and another bank, later revealed to be Russia’s VTB, to three state-owned Mozambican companies between 2013 and 2016. Privinvest played a key role passing money between them and Safa was allegedly at the heart of the deal, having previously sold the country military and surveillance equipment through Privinvest. Reuters reported that Mozambique kept the loans off the books, but in 2016 admitted to undisclosed lending, Furious, the IMF suspended hundreds of millions of dollars in aid and foreign donors and investors fled, resulting in a full-blown currency collapse and a default on sovereign debt. The country still has not recovered from the resulting debt crisis.
The money was supposed to be spent on maritime projects, with Privinvest supplying material and training relevant to exploring new off-shore gas deposits as well as helping establish a tuna fishing fleet. The three companies that received the loans were in fact fronts for Chang and the others to enrich themselves to the tune of $200 million between them. E-mails show the parties openly discussing bribes.
Angola has found itself in a similar situation. Luanda in recent times has turned a cold shoulder to Lisbon, and instead warmed to Paris. Part of this shift was a deal signed in September 2016 with Privinvest. It was worth $495 million and was to provide 17 patrol boats and technology transfers so that Angola could build its own naval vessels in the future. Privinvest would work with a state-owned company run by Angola’s ministry of defence.
The problem was two-fold: firstly, Angola only has around 1,000 sailors and little ship-building experience, making the deal suspicious; and secondly, the country was in dire financial straits. Reports at the time said that the deal was very similar to the one signed with Mozambique.
Business as usual?
In 2015, Abu Dhabi MAR was contracted to build four Sa’ar 6-class corvette warships for the Israeli Navy. The €430 million deal was signed with German company ThyssenKrupp, which sub-contracted the work to the Lebanese and Abu Dhabi-owned company. Neither Lebanon nor the UAE recognise the state of Israel.
Safa was previously involved in the release of French journalist Roger Auque from Hezbollah militants and obtaining information about the captured Israeli pilot Ron Arad who was held by the same group. These links with Israel have made him the subject of intense scrutiny in Arabic-language media.
Despite this, Privinvest’s chickens are coming home to roost. In her book “Fighting Corruption is Dangerous,” former Nigerian finance minister Ngozi Okonjo-Iweala recounted a meeting between herself, the Nigerian president, chief of naval staff, and two representatives from Privinvest. The admiral was adamant that Nigeria’s naval infrastructure needed updating and Privinvest said it would borrow $2 billion in loans that would be guaranteed by the Nigerian government.
Okonjo-Iweala said the proposal meant Nigeria would have to shoulder all the risk, and that such a large loan would have to be approved by the National Assembly. The deal was not signed, and Okonjo-Iweala had no regrets. She said: “The reality of what we had saved the government by rejecting the Privinvest proposal was made clear… after I learned of the problems faced by Mozambique… through a contract with none other than Privinvest.”
While Safa’s future may still be in the balance, his past has already proven that Italy had a point.