"Part of the reason why poverty still persists in our continent is governments inability to work in a bi-partisan manner with the opposition to confront the many problems facing us as a continent. In almost all the advanced democracies a government in power works or listens to the opposition in matters of national importance such as education, defence, energy and the economy. However in Africa such matters are always hijacked by the ruling government to the detriment of the nation and its people". Lord Aikins Adusei

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Wednesday, February 3, 2010

I Was Not Bought By De Beers - Masire


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Recently, a local newspaper headlined a number of accusations and innuendos with regard to past connections between my otherwise private business affairs and individuals associated with De Beers Company.
If these allegations were simply a challenge to my own reputation, I would be content to follow the friendly advice of some to withhold comment, in the sure knowledge that my legacy will ultimately be measured by history and by our maker.
But, given our culture of accountability, I have concluded I would be shirking my social responsibility if I failed to address those allegations that are of undoubtedly wider concern. Where it has been suggested that my private affairs may have compromised the public interest they cease to be mine to ignore.
I therefore wish to take this opportunity to reassure Batswana that the modest support that was extended to my farming business by De Beers associates 25 years ago, in the form of helping me recruit a manager for my farm in Ghanzi, did not in any way materially compromise government's subsequent bilateral dealings with the company. In this respect I have in my memoirs already attempted to place on record my own experience and perceptions about the said dealings. Alongside additional existing literature, I believe these reflections go some way toward documenting the rational for the policies we have pursued in seeking to maximise the benefits of developing our mineral sector, including reconciling our different interests that have existed between us and De Beers in the past, as well as the collective safeguards which were put in place by government as a whole to safeguard the national interest from the possibility of any arising potential for conflict of interest.
What I can here briefly add is some explanation of the nature of the support I did then receive. As I have stated on a number of occasions, when I became President in 1980. I quickly discovered that I ceased to have control over my own time and thus could no longer actively attend to my farming interests. It was in this context that I welcomed an offer by Louis Nchindo of De Beers, as the company then had its own extensive agricultural interests in the region, to assist me in recruiting a manager for the farm that I was then struggling to maintain in Ghanzi. A loan programme was thus also put into place to finance the said individual's employment. In this regard it should be noted that I provided collateral through the sale of my own properties. While this was a private business arrangement it was never a secret.
With the perfect vision of hindsight, I would not now enter into such an arrangement. Beyond the fact that it would not conform to today's more rigorous guidelines for good governance, which I fully embrace, its outcome was also an object lesson for me in the pitfalls of trying to manage a commercial farm by remote control. In the end I had to cut my losses by leasing my properties until I finally retired from public office. Here I am reminded of the adage - "While good judgment comes from experience, experience is often the product of bad judgement."
Another allegation which has arisen is that De Beers used its money to somehow "buy me out the Presidency" through the purchase by one of its subsidiaries of debenture shares in my family company GM5. Given that this transaction occurred after I had already left office, which in turn came many years after I had taken a decision to step down sometime before the 1999 election, this allegation simply does not add up.
Also without substance is the allegation that the above two instances could have had any impact on the efforts by my own administration, much less that of my successor, to move forward where we could in promoting the local cutting and polishing of diamonds.
It is a matter of public record that we moved forward in these efforts notwithstanding the fact that De Beers then had its reservations about the initiative. It was in this context that my administration thus ensured the establishment of the cutting factories in Molepolole and Serowe, which notwithstanding their limited initial success provided a basis for future progress.
What I find even more desperate is the attempt by the newspaper to try to further impugn the reputation of our overall efforts based on cherry picked statements attributed to sections from David Magang's memoirs.
Here it may be noted that it was I, as the then President of the Republic, who appointed and retained Magang as Minister of Mineral Resources and Water Affairs during the final years of my administration. This, of course, came after I had previously appointed him to other Cabinet portfolios. In each case I did so in the fully justified belief that he was capable of discharging the important duties with which he was entrusted.
Here it may be further noted that there is nothing exceptional about the fact that he did not always see eye to eye with me or other Cabinet colleagues. As a Parliamentary democracy my administration, like those that came before and after it, was compelled to work as a team whose decisions were ordinarily taken by consensus.
In such a system the decisions taken by any President acting on the advice of Cabinet are, moreover, based on recommendations submitted by senior officials and other stakeholders, as routed through the Minister appointed to look after any particular area, including that of diamond mining and sales. Had there ever been a vast division between Magang and myself in this respect, it is a simple matter of logic that I would have had no reason to retain him in the said portfolio, where I left him on my retirement.

Did De Beers cheat Botswana? – The Masire Factor

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When David Magang sat down to write his memoirs, he certainly could not complain that his career had left him short of material.

The former Minister of Mineral Resources and Water Affairs, who has waged a protracted battle for diamond beneficiation against De Beers, had a front row seat at some of the most questionable goings on between the diamond mining giant and the Botswana government.

“I racked my brains to understand why government was so submissive in its dealings with De Beers. Was this the result of our being in awe of them?

simply because they were DE Beers? If so then we were the only ones of our kind who were so subservient. Namibians for instance, after independence immediately began to bend De Beers to their will,” says Magang in his autobiography “The Magic of Perseverance.”

Magang feels strongly that Botswana diamonds were not harnessed to full effect so that Batswana could derive maximum benefit.

“All in all, De Beers were doing very little by way of ploughing back the colossal benefits
they were reaping from our diamonds,” he says.

As a Bachelor of Laws graduate who cut his teeth defending diamond smugglers, Magang was a new breed of cabinet minister who was not awed by the workings of the diamond industry.
He however could not find his feet as the minister responsible for diamond mining.

“Botswana diamonds were a cloak-and-dagger affair, couched in a form of confidentiality usually associated with sting operations by secret service operatives,” he says.

The fact that he did not have the support of the then President Sir Ketumile Masire did not help his predicament.

“I became the laughing stock of cabinet, being derided as “the only man in all of Botswana who dare advocate beneficiation. President Quett Masire for one said to me during one of our discussions in his office in 1996/97 that Botswana, once a poor country, was now what it was because of De Beers discovery of diamonds, in effect local beneficiation would be a slap in the face to De Beers. In correcting the president, I said it was not De Beers who had lifted us economically; it was our own God-given resources.

The De Beers top brass knew that although I was the Minister of Mineral Resources, I had no clout; my own colleagues had isolated me and so De Beers directors bypassed me at will and went straight to my superiors. So,every time I held meetings with them, they would already have seen the president and the Minister of Finance, and when I took a stance that countered theirs, they would simply say, “But the president is already in accord with our viewpoint, and so is the Vice President. If they had had the cheek, they might as well have denounced me as a nonentity.”

Curiously, about that time, President Masire’s company, GM Five, was highly indebted and was being helped out by De Beers to stay afloat. Sunday Standard can reveal that De Beers provided financial aid to Masire from as early as his first term in office right up to his last term.

De Beers through one of its directors Peter Layden, former Debswana Managing Director, Louis Nchindo, and a South African lawyer, Len Fisher, who had handled the De Beers patent dispute with GE years before, helped put together a financial bailout plan for Masire, who was facing financial difficulties on the eve of the 1984 elections.

As part of the rescue plan, De Beers procured an expatriate farm manager for GM Five (a company in which former president is both owner and chairman). De Beers also helped secure a P 186 228 bank loan for GM Five from Barclays Bank. In his second term in office, GM Five owed De Beers close to P 1 million.

Sometime around September 1987, GM Five asked De Beers to reduce the total amount owing of P805 910 by the costs associated with the farm manager of P164 466 and the amount paid directly to Barclays of P186 228 leaving a net amount owing of P455 216. GM Five proposed to round the figure up to a round P500 000.

As part of the deal, De Beers placed a moratorium on the repayment of the loan (P500 000) for a period of five years. There after the loan would be repaid over five years in equal annual installments. At the time, the loan was to be paid; De Beers funded a consultancy by University of Natal and Markdata director, Professor Lawrence Schlemmer to help the Botswana Democratic Party (BDP) win the 1999 elections.

The consultancy recommended that Masire should step down to pave way for new blood (Festus Mogae).

Masire, however, could not step down allegedly because GM Five was heavily in debt. De Beers stepped in and put in more money into GM Five.

The Sunday Standard can reveal that De Beers helped set up a ghost company called Clairemont Corporation in Panama which they used to transfer close to P 4 000 000 to former president Ketumile Masire’s company, GM Five, under the pretext that they were buying into the company.

A fictitious sale of shares between GM Five and Clairemont Corporation was staged to help transfer P 3 700 000, which would be used to settle GM Five debts.

Proceeds from the fictitious sale were used to settle GM Five’s loans with Standard Chartered Bank, National Development Bank, Botswana Agricultural Marketing Board and other sundry liabilities. De Beers maintain that the whole scheme was put together by former Debswana Managing Director Louis Nchindo and they did not benefit anything out of it.

The diamond mining giant this week confirmed bailing out Sir Ketumile. In a written response, De Beers spokesperson, Chipo Morapedi, stated that “while it is difficult to comment on the specific sequence of events that occurred more than 25 years ago, it is true that, given the company’s investments and experience in managing farms at the time, we were able to provide management assistance and a loan facility to former President Sir Ketumile Masire.”

The statement from De Beers further said, “The purpose of the loan was to help the then head of state by relieving him of the burden of debt and providing him with resources for the farm to be independently managed and so enabled him to attend to the duties of his office and matters of national interest. Louis Nchindo put the idea to Sir Ketumile and also recommended the assistance to the company. This was done in his capacity as an employee of the company at the time. In the present day and age, the De Beers family of company’s operates in a completely different environment with clear policy guidelines governing donations and for disclosure.”

Masire, however, maintains that Botswana fared very well in its dealings with De Beers through the Minerals Policy Committee (MPC) which comprised four negotiators. They were three Permanent Secretaries and the Attorney General.

In his book, “Very brave or very foolish”, Masire maintains that our negotiating approach – the MPC as the negotiators working under a mandate from Cabinet - served us well. De Beers tried to take advantage of us in various ways such as selectively giving information to politicians who were not part of the negotiating team. However, we retained a disciplined approach and were, I think, quite successful,” he says.

Magang, however, holds a different view.

“One would have expected them to take a tenaciously hard-line stance against De Beers, to interrogate them vigorously as to why our diamonds were not being harnessed to full effect so that we could derive maximum benefit from our highly prized resources. In my view it was short–sighted to content ourselves with mining only.”

Magang was also pushing for the parallel sale of Botswana diamonds outside the De Beers Central Selling Organization. He championed a window of at least five or 10 percent of our diamonds to be sold in the open market, so as to test and gauge the true market prices. This was rejected by De Beers “principally because government and I were not on of one accord.

Independent advice from other diamond industry leaders like Jack Lunzer was ignored. “I explained my “five percent window for marketing” presentation to HE (Ketumile Masire), who was quite receptive,” says Lunzer. Lo and behold, two hours later H.O (Harry Oppenheimer) and Julian (Ogilvy-Thompson) arrived in Gaborone in their jet, to be followed by NFO (Nicky Oppenheimer) piloting his helicopter. They were driven straight to State House and all subsequent talks of the five percent died a very
natural death.”

Masire, on the other hand, states that “the question arose, of course, as to whether we should find an alternative buyer to the CSO for at least a part of the production of Debswana mines. One argument was that we could then have an independent indication of what we might get for our diamonds. But as we looked around, we found that almost everyone had some kind of relationship with De Beers, whether as an associate or a fierce competitor.

Source: Southern Africa Resource Watch

Corruption forces US to suspend Kenya school funding

School students in Kenya
Huge numbers of children were enrolled after 2003

The US has suspended $7m of funding for free primary schools in Kenya until fraud allegations are investigated, the US ambassador in Nairobi has said.

Michael Ranneberger says "credible action" must be taken on claims that 110m shillings (£900,000; $1.4m) were siphoned off a free-education fund.

The US move comes a month after the UK government pulled out of the project.

Kenya is ranked as East Africa's most corrupt country by campaign group Transparency International.

The US has been pushing for reform in Kenya since deadly violence swept the country after an election in 2007.

Although the violence was primarily political and ethnic, US officials have highlighted underlying causes such as corruption and weak institutions.

Future 'in the balance'

Mr Ranneberger demanded an independent audit of the free-schools programme.

"Those culpable for the fraud should not only be sacked - they need to be prosecuted and put behind bars," he said.

"The US shares the deep concern of Kenya's development partners and the Kenyan people regarding the continuous revelations of large-scale corruption."

He reiterated demands for wider changes in the country, saying "the reform agenda and the future of this country hangs in the balance".

Kenya introduced free primary education in 2003 - and schools were quickly swamped as more than one million children were enrolled who had never been to school before.

Unicef says the primary school population jumped from 5.9 million in 2002 to 7.6 million in 2005.

Most of the funding for primary education comes from government coffers.


BBC

GHANA:Former President Kufuor’s Boys Demanded 5% Kickback …On Oil Deals


NO WONDER GHANA IS STILL DEADLY POOR 52 YEARS AFTER INDEPENDENCE

051018163942 Corruption

US oil giant, Anadarko International Oil Company, has blown the whistle on the shape of how oil exploration licenses were awarded under the NPP government, saying they and their partners, Hess, were asked to part with 5% of their stake to, ‘an unknown Ghanaian party,’ as a condition for being awarded the South Deepwater Tano block for oil exploration.


“We were informed that if we made such a strong bid, it would overcome a previous demand by then Chairman of GNPC, Stephen Abankwa, that we carry an unknown Ghanaian party for five percent (5%) something neither Hess nor Anadarko can do, given that we are both subject to the US Foreign Corrupt Practices Act and other related US legislation,” Anadarko revealed.


Anadarko, who had put up an individual bid, alongside Hess and others, stated in a protest letter to the Minister of Energy, Dr. Joe Oteng-Adjei that the above demand, was made of them after they were encouraged by GNPC to combine their individual bids for a joint one.


The revelation was contained in a confidential letter dated February 24, 2009 and signed by Ian J. Cooling, Vice President, Business Development of Anadarko.


According to Anadarko, together with Hess, they subsequently submitted a combined bid, “but were shortly thereafter informed by Chairman Abankwa that if we did not accept the third-party carry of five percent (5%) another company, the Norwegian company Aker, had already agreed to do so and would be awarded the block.”


Anadarko said it was later informed by the then Minister of Energy, under the John Kufuor administration that the block had been awarded to another company, without telling them about how the bids fared.


“There was no transparency whatsoever in the entire bid process,” Anadarko charged, adding that “We never received a formal written notification that our bid had failed, and it was to our dismay that we learned later that Aker, had indeed been awarded this extremely complex, deepwater block.”


It was from the press and other sources, according to Anadarko, that they “learned that the Aker bid also included a third party for five percent (5%).”


ELECTIONS The US oil giant asserted that “We were upset and seriously considered at that time alerting the highest levels of the US Government and asking their intervention, but the Ghanaian Presidential election was upon us and we decided that this issue might perturb the democratic process, which we strongly support.”


The license for the block was awarded to Aker under a petroleum Agreement signed on October 24, 2008 about six weeks to the presidential and parliamentary elections. On the same day, a Service Agreement was signed between Aker ASA and CHEMU Power Ltd., a company owned by an offshore company called CHEMU Capital BVI.


Martinus Brandal, Senior Partner and President, signed on behalf of Aker ASA, while Nik Amarteifio, Executive Chairman of CHEMU, signed on his company’s behalf.


Anadarko called on the new minister to review the bid procedure and processes for the award of the block, which they believed would turn the tide in their favor.


“Now that the election is over, we are confident that you, Mr. Minister, will wish to review the bid procedures and processes of the award of Ultra Deepwater Tano Block. After such review, you will undoubtedly notice that the combined bid of Hess and Anadarko, two world-class deepwater operators with such a strong combined bid, would have been in Ghana’s best interest,” Anadarko asserted.


The company that had the five percent carried interest was Chemu Power, owned by Nik Amarteifio and Dr. Charles Mensa, both close pals of former President John Agyekum Kufuor.


DR. CHARLES MENSA


Dr. Charles Mensa was appointed by the President to serve as Chief Executive Officer of Volta Aluminium Company (VALCO) during his tenure as President. Charles Mensa sparked controversy some years back when as Chairman of the University of Cape Coast Council, he conferred an Honorary Law Doctorate on then President Agyekum Kufuor, at a time when the University had no Law Faculty.


Dr. Mensa is a founder of the Institute of Economic Affairs, a governance think- tank.


NIK AMARTEIFIO Nik Amarteifio is a bosom friend of former President Kufuor, he is also the man who brought Telenor to replace Telekom Malaysia. Telenor, according to a recent government investigation criminally run down Ghana Telecom.


Kufour’s government paid Telenor a whopping $600,000 for the business plan they used to secure a Ghana Telecom management contract in response to an international advertisement inviting strategic investors to partner Ghana Telecom. Eventually, Telecom Malaysia sued the government in an international arbitration and walked away with a handsome compensation.


Nik was appointed by former President Kufuor to serve on the board of Bank of Ghana, and was rumoured to be the President’s ear on activities at the Central Bank of Ghana.


Nik’s offshore investments, which stretch from Channel Islands in the UK to his equity stock option in Canada are under investigation by The Enquirer.


STEPHEN SEKYERE-ABANKWA Mr. Stephen Sekyere-Abankwa, who was appointed by President Kufuor to serve as GNPC Board Chairman, remains a very close pal of the former President Kufuor. He is rumoured to have served as a quiet financial advisor to the former President.


Mr. Abankwa, is currently the Managing Director of Prudential Bank Ltd in Ghana.


During the Ghana@50 celebrations, the Office the President guaranteed about $10 million for him and his partners to secure a loan facility from the Social Security and National Insurance Trust (SSNIT) to construct residential accommodation. By press time yesterday, Mr. Abankwa and his group had still not been able to pay up the loan they took from workers pension contribution. Interest on the loan has reached about 4 billion Cedis.


MOSES BOATENG When Energy Minister, Dr. Joe Oteng-Adjei, referred the Anadarko letter to the then Managing Director of GNPC, Mr. Moses O. Boateng for his response, he gave the minister what could at best be described as half-truths in a letter dated March 9, 2009.


Mr. Boateng stated, for instance, that “In terms of financial and technical capabilities the two companies were found to be almost at par and GNPC would be indifferent as to which of them was eventually awarded the block.”


This assertion is not supported by the facts as a cursory glance at the track record of Aker ASA, Anadarko, Hess and Chemu, would leave no one in doubt that the two US companies, Anadarko and Hess are streets ahead of their Norwegian and Ghanaian counterparts in their technical and financial capabilities as well as all other departments of the oil industry.


Again, in a table that purported to compare the terms of the Hess-Anadarko and Aker ASA applications for the Tano Deepwater, Mr. Boateng was not forthright with the minister. He actually, matched the raw bid of Hess-Anadarko against the negotiated terms under the Aker ASA – Chemu Power agreement.


This obviously was to misrepresent to the new minister that the bid of the latter was better.


However, a review of the Petroleum Agreement signed with Aker ASA, revealed that contrary to the requirements of the Petroleum Exploration and Production Law, PNDC Law 84, the company neither registered nor incorporated a company under the laws of Ghana.


That Agreement was ratified by Parliament on November 5, 2008. But Aker ASA, got Aker Ghana Limited incorporated on October 29, 2008 with certificate of incorporation number, CA-51,646, to commence business on October 30, 2008.


Aker ASA sought to assign its interest to Aker Ghana Limited, as a means of regularizing the agreement. However, by a letter dated December 30, 2009 the Energy Minister, declined the request, since the original agreement was invalid.


According to him, “The assignment you have requested is legally impossible in view of the underlying failure of compliance with the law.”


The minister, by a copy of that letter advised GNPC to reimburse Aker ASA with costs incurred in acquiring data, since such data acquired belonged to GNPC. He notified Aker ASA that it was going to reactivate negotiations which had commenced previously with the Anadarko/Hess application.


The relevant clauses under Section 23(15) of the Petroleum Exploration and Production Law PNDC Law 84, states that a contractor (foreign company):


“which is not an incorporated company in Ghana under the Companies Code, 1963 (Act 179) shall (a) register an incorporated company in Ghana under the provisions of the Companies Code, 1963 (Act 179) to be authorized to carry out solely petroleum operations in respect of which a petroleum agreement or petroleum sub-contract has been entered into under this Law and such signatory shall be a signatory to any petroleum agreement;”


“(b) maintain an office or establishment in Ghana to carry out petroleum operations and shall have in charge of such office or establishment a representative with full authority to act and to enter into binding commitments on behalf of the contractor or sub-contractor, as the case may be; and, continues with subsection (c) that:


“In respect of such petroleum operations, open and maintain an account with a bank in Ghana.”


Companies, such as Kosmos Energy, Tullow Oil, Anadarko, Sabre Oil and Gas Holdings have all registered their companies under Ghana’s Companies Code, to facilitate their compliance with the law before entering into petroleum agreements for their blocks.


THE NORWEIGIAN CONNECTION


One shocking revelation from the GNPC boss to the Minister was that in awarding the South Deep Water Tano block to Aker ASA, they were influenced by factors such as “The Norwegian Government’s Support to Ghana in restructuring the oil and gas industry together with their support for training of Ghanaian staff” The GNPC boss further noted that “the keen interest of the Norwegian Ambassador in GNPC affairs became a plus in favor of Aker”


According to Mr. Boateng, one other consideration for awarding the field to Aker ASA was the fact that “.there were relatively too many American companies in the basin namely, Kosmos, Hess, Anadarko and Vanco,” but “There were only two European companies - Tullow and Vitol, the decision was to spread and therefore favored Aker.”


The above has generated a geo-political controversy as to whether the Norwegian government twisted the arms of the previous government in awarding the field to Aker.


Observers say the mention of the interest of the Norwegian Ambassador is akin to the controversial role played by the British Ambassador to Ghana in the sale of Ghana Telecom to Vodafone, a British telecom giant.

Southern Sudanese in Need of Food Aid Soar to Over 4 Million


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In southern Sudan, the emergency food situation has gone from bad to worse – much worse.

The U.N. World Food Program says the number of people in southern Sudan needing food aid has quadrupled – up from about one million in 2009 to over four million this year.

WFP Southern Sudan Coordinator Leo Van Der Veldon, who’s in the regional capital of Juba, says there are two main factors in the deteriorating situation.

“One is the drought. The drought is not only here in South Sudan, but also it’s affected Kenya, parts of Uganda and Ethiopia. And the second factor is inter-tribal conflicts. Both had an effect on the high food prices,” he says.

He says the conflicts have gotten worse because fighters are now armed with automatic instead of traditional weapons. The violence results in the displacement of many people, affecting how and where the WFP distributes aid.

Here comes the rain

The rainy season is approaching southern Sudan, which could complicate matters.

Van der Veldon says parts of the region “become one big swamp in the rainy season and the roads are then completely blocked.”

As a result, the WFP is prepositioning food in regional warehouses, so the aid will not have to be transported great distances to get to those in need.

He says, despite current conditions, the WFP is not expected to continue the aid to such large numbers throughout the year.

“No, hopefully not. What we foresee now is that they really need the assistance just before the harvest, two months before the harvest for the general(ly) food insecure. The severe(ly) food insecure will get another four or five months of assistance as well.”

The harvest season in southern Sudan is due in October and November.

Source:VOA

Guinean Panel Absolves Camara of Massacre


Finding contradicts a U.N. investigation that says Captain Camara bears 'individual criminal responsibility' for the massacre

Guinea's military leader Capt. Moussa Dadis Camara (file photo)
Photo: AP

Guinea's military leader Capt. Moussa Dadis Camara (file photo)

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A panel of inquiry in Guinea says exiled military leader Moussa Dadis Camara was not responsible for the killing of protesters at a September opposition rally.

The finding, released Tuesday, contradicts a United Nations investigation that said Captain Camara bore "individual criminal responsibility" for the massacre, in which more than 150 people were killed.

The Guinean panel blamed the killings on Lieutenant "Toumba" Diakite and members of the country's presidential guard.

Witnesses have placed Diakite at the Conakry soccer stadium where soldiers opened fire on pro-democracy demonstrators September 28. The soldiers also allegedly raped more than 100 women that day.

Diakite has been in hiding since he shot Captain Camara December 3. He told French radio that he attacked Camara because the military leader wanted to assign him full blame for the massacre.

Before he was shot, Camara denied responsibility for the incident, putting the blame on rogue soldiers in Guinea's army.

Camara is now in Burkina Faso, recovering from his gunshot wounds. Last month, the captain agreed not to return home as part of a deal to establish a transitional government in Guinea.

The country has been under military rule since December 2008, when Camara and a group of officers seized power after the death of President Lansana Conte.

The political deal calls for the new government to hold elections in June. Guinea's acting military leader, General Sekouba Kontate, has called on troops to support the new administration.

Some information for this report was provided by AP, AFP.

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