22 Jan

Zimbabwe President Seeks to Woo Lenders by Paying Loan Arrears

Zimbabwe is committed to repaying arrears to external lenders so that it can resume support programs with institutions such as the International Monetary Fund and end years of isolation from global capital markets, said the country’s president.

Emmerson Mnangagwa, the 75-year-old who took over as leader of the southern African country in November after the military pressured Robert Mugabe into resigning, said one of his priorities is reintegrating his country into the global financial system.

The economy has halved in size since 2000, credit lines from most lenders have been withdrawn and infrastructure has crumbled.

 Zimbabwe owes about $9 billion to lenders such as the World Bank and African Development Bank and has fallen behind in payments, with arrears recently amounting to about $1.8 billion.
If his bid to revive the economy is to succeed, Mnangagwa will need access to billions of dollars of support.
“There are limitations to engaging with Bretton Woods institutions — the limitations are as a result of our arrears with those institutions but they are giving positive indications that they would want to accommodate us,” he said in an interview in his office in the capital, Harare, last week.
“We shall recommit ourselves to paying our debts, our arrears. I believe that they will embrace us in the same manner they are embracing other countries.”
Re-engaging with international lenders would be a first step for the Zimbabwean government, which is also considering a debut international bond sale so that it can invest in infrastructure.
“If this succeeds, we would really need a substantial injection into our economy, in particular into the productive economy,” he said.
“Basically a capital injection into capital projects. Infrastructure development is what we want: dams, roads.”
Still, the Zimbabwean leader demonstrated little appetite for cutting costs in the manner that the IMF and other lenders have urged.
The country’s more than 500,000-strong civil service accounts for about 90 percent of budget expenditure, crowding out investment in much-needed projects such as restoring the capital’s water supply and fixing its roads.
To read the full article, click here.
18 Jan

Lourenco Proves He’s No One’s Puppet in Angola

Shortly after becoming president of Angola in September, Joao Lourenco did something completely unexpected: he stopped at a red light.

The incident prompted thousands of social-media users to praise the 63-year-old former army general for abiding by the law.

In October, Lourenco waited in line at a KFC restaurant to buy a burger, and then this month, photos surfaced of him and his wife Ana Dias strolling on a beach in the capital, Luanda.

Few predicted the sharp contrast in leadership style with his predecessor, Jose Eduardo dos Santos, who rarely left the pink presidential palace from where he ruled Africa’s second-biggest oil producer for almost four decades.

When he did emerge, hundreds of soldiers swarmed the city center to allow his convoy to move swiftly through the pot-holed streets, leaving traffic paralyzed for hours.

“He’s been a very positive surprise,” said Soren Kirk Jensen, an independent Angola expert. “There’s been a profound change of style, from a completely closed style to a completely open one.

More importantly, he’s initiated much-needed economic reforms by addressing dysfunctionalities in the way the market works due to unnatural monopolies that happened to be controlled by certain families.”

When Lourenco won nomination as the candidate of the ruling Popular Movement for the Liberation of Angola last year, analysts discounted a policy shift, saying his power would be limited by the party and the Dos Santos family and its allies.

Lourenco’s decision to reappoint 13 out of 18 provincial governors he had inherited from Dos Santos just two days into his new job seemed to confirm that suspicion.

Corruption Fight

But in a state of the union speech on Oct. 16, Lourenco stressed that he was serious about campaign promises to fight corruption and end state-run monopolies in a country that ranks among the world’s 20 most corrupt, according to Berlin-based Transparency International.

The first high-profile official to be removed was central bank Governor Valter Filipe, a lawyer Dos Santos appointed the previous year.

To read the full article, click here.

17 Jan

Africa: Data On Canadian Immigrants From ‘Shithole’ Countries Might Surprise Trump

Defenders of Donald Trump say his “shithole countries” remark regarding people from Africa, Haiti and other nations was just Trump being Trump – the president may have used salty language, but it’s really just his way of saying the United States should have a merit-based immigration system like Canada’s.

A generous interpretation of Trump’s comments are that immigrants from certain so-called “shithole” countries — African nations, Haiti and El Salvador — are not typically highly skilled or economically self-reliant, and if admitted would need to depend on the state.

In fact, Trump apologists — and the president himself — might be surprised by what the economic data says about immigrants who come to Canada from the “shithole” countries.

John Fredericks, who was Trump’s campaign chair in Virginia, told CNN that immigrants from those countries “come into the United States and they do nothing to increase the prosperity of the American worker.

They lower wages or go on welfare and extend our entitlement system … . Australia and Canada have a merit-based system. You know why they do that? Because they want to bring people into their country who are going to enhance the prosperity of their citizens.

Trump himself tweeted a similar sentiment.

The conclusion we are expected to make, it seems, is that if the United States was to adopt a purely merit-based system, immigrants would not come from these countries — they would come from countries like Norway, and immigrants from these Norway-like countries would not put pressure on blue-collar U.S. workers because they would be highly skilled and, more importantly, they wouldn’t be a drain on the system because they would be economically self-reliant.

A merit-based system

Canada offers an opportunity to take a look at this hypothesis because our points-based immigration system screens immigrants on merit to a large degree. So when we screen immigrants on merit, who do we let in and how do they do?

To read the full article, click here.

17 Jan

Cape Town’s day zero moves forward again, less than 100 days until taps shut off

Patricia de Lille confirmed that day zero will now happen earlier than predicted, on April 21 2018. This means that just 95 days remain until the taps are shut off.

The news comes after a spike in water usage hit the municipality. After a positive week previously, consumption has jumped from an average of 578 million litres per day to 618 million litres per day.

A heatwave doesn’t exactly help the situation (nor does fighting with your own government), but de Lille also pointed out that less residents are meeting the usage targets of 87 litres per day, per person. Just 39% of citizens kept within their limits, a slump of 15% from seven days ago.

The Mayor issued a rallying call for the City, and assured inhabitants that everything possible is being to help avert the taps being turned off. However, Capetonians must keep saving water:

“Today I want to call on all Capetonians to do more to save water. There are only 95 days left before we reach Day Zero.”

“Day Zero has moved a day closer this week to 21 April 2018. Day Zero is when the City will be forced to turn off most of the taps and every resident will have to queue for 25 litres of water per day.”

The only way Cape Town can avoid Day Zero is if every single resident saves water. But this is not the case. For each day that Cape Town uses more than 500 million litres, the city moves closer to Day Zero.

The only way Cape Town can avoid Day Zero is if every single resident saves water. But this is not the case. For each day that Cape Town uses more than 500 million litres, the city moves closer to Day Zero.

“Dam levels have dipped to 28,7% percent this past week – down by one percentage point. Only about 18,7% of this water is usable as the last 10% is difficult to abstract from the dams.”

“The City has ramped up pressure management to drive down consumption – aiming to stretch our water supply past the winter rainy season.”

To read the full article, click here.

17 Jan

Mauritius Battens Down as Cyclone Heads for Island Nation

Mauritius closed its main airport and stock exchange as the Indian Ocean island nation braced for the arrival of a cyclone packing winds of up to 120 kilometers per hour.

Tropical cyclone Berguitta is situated about 300 kilometer (186 miles) northeast of Mauritius and heading toward it at a speed of about 7 kilometers per hour, the country’s meteorological services said in a statement on its website.

The storm is forecast to make landfall overnight, it said. “Berguitta represents a direct threat to Mauritius,” the service said.

The tropical cyclone is the third this month to form in the south-west Indian Ocean. Tropical Cyclone Ava battered the island of Madagascar on Jan. 5, leaving at least 42 people dead and 150,000 others displaced, according to country’s disaster-management office.

The Red Cross activated its disaster response team for Mauritius and La Reunion, a French-administered island 227 kilometers southwest of Mauritius that is also threatened by the storm.

“This dangerous cyclone puts at risk hundreds of lives in Mauritius and La Reunion,” it said. “Our teams in both countries are prepositioning relief items to support communities who may need food, shelter and first aid services.”

Mauritius’s Sir Seewoosagur Ramgoolam International Airport was shuttered from 7 a.m., state-owned Airports of Mauritius said Wednesday in an emailed statement.

The Stock Exchange of Mauritius said Tuesday it would remain closed Wednesday if the storm warning was upgraded to Class III.

SBM Holdings Ltd., owner of Mauritius’ second-biggest lender, switched off automated teller machines from 8 p.m. on Tuesday, citing the weather.

Source: https://www.bloomberg.com/news/articles/2018-01-17/mauritius-shuts-down-as-cyclone-warning-upgraded-to-class-3

16 Jan

Miraa exporters to Mogadishu boycott trade over high prices

Miraa exporters serving the Mogadishu market have started a boycott on the trade citing high farm gate prices. Nyambene Miraa Traders Association (Nyamita) Chairman Kimathi Munjuri said the traders resolved to boycott buying the twigs to force farmers to lower the prices.

According to Mr Munjuri, a 100kg sack of miraa is now selling at Sh160,000, up from at least Sh20,000 during the rainy season. This means a 1kg bundle (bunda) of the medium quality miraa is selling at Sh1,600.

The high prices are due to low supply caused by the dry spell that started early December.“Only traders serving other parts of Somalia shipped their commodity on Monday night. Traders who export to Mogadishu feel that it is not sustainable to buy 100kgs at Sh160,000 because buyers cannot afford it.

TRADERS MEET

He said the traders met in Eastleigh on Sunday and resolved that they would not buy miraa from farmers. “This means about 30 tonnes of miraa has not been delivered to Mogadishu,” Mr Munjuri said.

Mr Joseph Muturia, a member of the Miraa report implementation committee, said the premium quality miraa known as ‘Mbaine’ is selling at Sh6,000 a kilo while ‘kisa’ is retailing at Sh4,000.

“I currently sell miraa locally because residents understand the quality of this type of miraa,” Mr Muturia said. Mr Josiah Mugo, a miraa consumer, said he could no longer afford to chew daily after prices spiked from mid-December.

“A small bundle (surba) of the best quality khat is now retailing at more than Sh400 from Sh150 last month. I am considering shifting to muguka but its quality is not good. I am now chewing occasionally so as not to stretch my budget,” Mr Mugo said.

BOYCOTT FUTILE

However, Nyamita termed the move by the traders as futile saying the miraa prices are determined by market forces.

To read the full article, click here. 

15 Jan

Glencore Shrinks Job of Billionaire Copper Head Amid Congo Probe

Glencore Plc reduced the role of its billionaire head of copper, Aristotelis Mistakidis, shaking up the business after a review in the Democratic Republic of Congo raised questions about accounting and management.

Mistakidis, one of Glencore’s largest shareholders and a key lieutenant of Chief Executive Officer Ivan Glasenberg for more than a decade, will lose control of industrial copper operations including mines and focus on the trading side of the business, according to people familiar with the plans.

Responsibility for Glencore’s copper assets will move to Mike Ciricillo, who now oversees copper smelting and refining, the people said, declining to be identified as the appointment isn’t yet public.

The shake-up reduces Mistakidis’s responsibilities after he and two other executives resigned from the board of Glencore’s Katanga Mining Ltd. in Congo in November. A review by Katanga led to a restatement of its financial reporting, and a commitment from Glencore to restructure the management of its own copper business.

Close Relationship

Mistakidis, whose holding in the company is valued at about $2.5 billion, is a key part of Glencore. He’s the third-biggest shareholder among management and helped lead the company’s ascent from a scrappy trader to a diversified commodities giant and the world’s third-biggest copper miner.

For years Mistakidis, better known as “Telis,” had run both the marketing and producing sides of the copper business, a testament to his record as a trader and close relationship with Glasenberg.

Ciricillo, who ran Freeport-McMoRan Inc.’s copper operations in Congo prior to joining Glencore in 2014, takes on the new role at a critical time for the Swiss commodity giant. Glencore plans to grow global copper production by about 25 percent to 1.64 million metric tons by 2020, largely through the resumption of operations at Katanga.

To read the full article, click here.

12 Jan

South African Steinhoff Unit Mulls Early Redemption of Bonds

Steinhoff International Holdings NV said one of its South African units is considering an early redemption of all notes in issue as the global retailer struggles to stay afloat amid an accounting scandal.

Steinhoff Services Ltd.’s redemption of securities issued under a 15 billion-rand ($1.2 billion) bond program will require pricing supplements to be amended and restated, the Frankfurt- and Johannesburg-listed company said in a statement after the market closed on Thursday. The necessary approvals will have to be obtained, Steinhoff said, without giving more detail.

The parent company’s woes began on Dec. 5 when it said it had uncovered accounting irregularities and that Chief Executive Officer Markus Jooste was resigning. Thereafter its bond yields spiked and its share price lost most of its value. Banks started to withdraw lines of credit and regulators from South Africa to Europe began to investigate. The stock fell 3.7 percent to 6.50 rand as of 9:36 a.m. in Johannesburg, extending its decline this week to 26 percent.

To raise liquidity the retailer has started parting with some assets it built up in a two-decade acquisition drive. French retailer Carrefour on Thursday said it acquired a 17 percent stake in Showroomprive from Steinhoff’s Conforama for 79 million euros ($95 million), while last week Steinhoff’s Austrian unit, Leiner Immobilien, sold its flagship store in Vienna for 60 million euros. Other measures to shore up finances include Steinhoff selling its Gulfstream 550 jet, while Jooste has been auctioning his racehorses.

With Steinhoff also having issued debt internationally, the European Central Banksaid earlier this week it had disposed of the company’s securities after they were downgraded to junk.

Pending Lawsuits

Steinhoff Services, the vehicle the retailer uses to sell listed bonds on the Johannesburg Stock Exchange, has 12 notes in issue, according to data compiled by Bloomberg. Those securities amount to a total of 7.6 billion rand in debt. More than half of those sales took place last year with Steinhoff Services having sold 4.83 billion rand of bonds in 2017. It has three notes valued at a total of 1.4 billion rand maturing in 2018.

To read the full article, click here.

11 Jan

Boiling a frog: Ramaphosa’s patient battle for the soul of the ANC

Cyril Ramaphosa’s dramatic election as president of the African National Congress (ANC) last month has raised as many questions as it has answered. Since he defeated rival Nkosazana Dlamini-Zuma at the 18 December party conference, South Africa has effectively had two centres of power: Ramaphosa as ANC president, Jacob Zuma as state president.

There are rumours some members are pushing for President Zuma’s departure before the 2019 elections when he will have to retire. This would pave the way for Ramaphosa to become state president. From there, he could enact reforms, take control of policy matters, and put his stamp on government.

However, with the party so finely balanced between pro-Ramaphosa and pro-Zuma factions, this possibility cannot be counted on and would have to be handled very delicately. The National Executive Committee’s (NEC) top six positions, for instance, are evenly split. Ramaphosa has only a slender majority in the broader NEC and other sub-bodies.

This means that although Ramaphosa has succeeded in the tough feat of becoming ANC president, for now, he will still have to engage in numerous trade-offs with Zuma allies going forward. At the same time, he will also have to manage some surprise policies imposed by the state president ahead of the conference, such as the promise to provide free higher education for the poor.

Also on his plate are a set of radical policies championed by Zuma allies and adopted at the conference. These include increasing the government’s shareholding in the Reserve Bank to 100% and expropriating land without compensation.

This will all add to the already tough challenges of ensuring economic stability, restoring credibility, and overhauling state-owned enterprises. The upcoming 2019 elections add a further sense of urgency.

For the moment, Ramaphosa will have to navigate these hurdles dragged down by almost half the party. However, President Zuma has notably had some of his authority stifled by recent rulings.

To read the full article, click here.

11 Jan

Africa: How Africa Can Ride On the Cryptocurrency Wave

ANALYSIS

Nairobi — Cryptocurrency to most people and institutions in Africa is a very big, and daunting word. Like all new technologies, the concept of digital currencies remains an abstract idea to a lot of people, ushering in change and attempts to alter the status quo.

But the truth is change happens, whether we are ready or not. Those who take advantage of the change wave, stand to benefit as early adopters.

The opportunity to once again take charge of our own destiny has been presented to us as Africans. The question now is not about cryptocurrency, the question is what are we going to do to harness the full power of this opportunity?

In the beginning of trade in Africa, we travelled across lands, and water to trade amongst ourselves. The farmers from the west had cocoa; the nomads from the north had camels and other resources. Each measured the value of their goods or service and agreed on the exchange. “Trade by batter was born”

Then gold came, and other valuable resources so people started using this as a form of trading, then we had promissory notes, which were convertible based on the value of gold, or silver the issuer of the gold had in their vault. All these evolved into what we now call money today, and the unit of that money we derive from either the dollar, euro, pound even yen at the minute.

Cryptocurrency has landed at our doorstep and it’s a scary thought. Let me first define cryptocurrency.

Cryptocurrency is defined as a digital asset designed to work as a medium of exchange, using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.

To read the full article, click here.