13 Dec

ANC Will Lose Power With Wrong Leaders, Makhura Says

The premier of South Africa’s richest province warned the ruling African National Congress will lose its majority and extend an economic slump if it elects the wrong leaders this weekend.

“If it doesn’t give South Africa the leadership that will win public confidence, not only is the ANC going to lose 2019 elections, but the country will be in a much longer protracted economic disaster, with deep pain for ordinary people,” David Makhura, the 49-year-old premier of Gauteng, said in an interview at Bloomberg’s Johannesburg offices on Tuesday. “We have got to get a team of leaders who understand that South Africans are fed up with corruption and also fed up with an economy that is not performing.”

While Makhura didn’t directly name his preferred candidate, the overwhelming majority of ANC branches in Gauteng, which includes the capital, Pretoria, and the nation’s financial hub, Johannesburg, back Deputy President Cyril Ramaphosa, 65, for party leader. Makhura said he has confidence in the province’s choice for leaders.

More than 5,000 ANC delegates, including Makhura, will converge in Johannesburg from Dec. 16 to elect a successor for President Jacob Zuma as leader of the ANC and to be its presidential candidate for the 2019 elections. The party faces a critical moment to regain public and business confidence and pull Africa’s most-industrialized economy back from a downturn that has seen unemployment surge to 28 percent and poverty increase, Makhura said.

Branch Support

The majority of Gauteng delegates are pinning their hopes on Ramaphosa to restore confidence in an economy that was downgraded to junk this year amid political and policy uncertainty under Zuma. Former African Union Commission Chairwoman and Zuma’s ex-wife, Nkosazana Dlamini-Zuma, 68, is his main rival.

While Ramaphosa has spoken of the need to stamp out corruption and boost the economy through “inclusive growth,” Dlamini-Zuma is supported by senior party officials who propose policies that include expropriating land without compensation and increasing the share of mines that need to be owned by black South Africans. Ramaphosa is preferred by most investors.

To read the full article, click here.

13 Dec

Africa’s Biggest Company Is Ready to Fix Its Tencent Problem

Naspers Ltd. Chief Executive Officer Bob Van Dijk said Africa’s largest company will consider “structural options” if the value gap with its stake in Tencent Holdings Ltd. persists.

Naspers has a 33 percent stake in Shenzhen, China-based internet giant Tencent, valued at about $158 billion, while Naspers itself has a market value of about $112 billion. The discount is “too high,” and has been accelerating in the past 20 months, Van Dijk said Tuesday in New York. Leaving aside Tencent, analysts place Naspers’ asset value at more than $180 billion, said Chief Financial Officer Basil Sgourdos.

Africa’s largest company by market value is considering using tools such as depositary receipts to access new pools of capital that are otherwise restricted to trade on the Johannesburg Stock Exchange, Sgourdos at the investor presentation. Naspers will also consider listing some underlying businesses to unlock further value, he said.

In October, veteran emerging-markets investor Mark Mobius said it should buy back Naspers stock. While repurchases could make sense when the company has more financial flexibility, right now it is focused on spending on expanding its businesses and on acquisitions, Sgourdos said.

Capital Outflows

The value gap with Tencent has widened in line with capital outflows from South Africa, where Naspers has its primary listing, Van Dijk said. It will be close to “impossible” for Naspers to move its listing from the Johannesburg Stock Exchange, which has also been protecting the company from hostile takeovers, he said.

Van Dijk has resisted pressure to sell Naspers’ holding in Tencent, a suggestion that has surfaced over the years.

The Cape Town-based company, which also owns Africa’s largest pay-TV business and newspapers, has been focusing on e-commerce and is now among the world’s largest investors in the space, backing ventures from Mail.Ru Group Ltd. in Russia to iFood in Brazil.

Naspers plans to accelerate the “path to profitability” of its e-commerce businesses and sees potential for initial public offerings of companies in its portfolio, Van Dijk said.

To read the full article, click here.

12 Dec

Liberia Council of Churches Urges NEC to Implement Court’s Mandate

Monrovia — The Liberia Council of Churches (LCC) has commended all major stakeholders in the election process and the Government of Liberia for ensuring that a smooth transition of political powers is carried out.

The Council in a release signed by its President, Bishop Kortu Brown said the citizens of Liberia have grown over the years exercising political maturity and Liberians have continue to demonstrate a good posture of saying no to violence and yes to peace by going to the polls and demonstrating their actions by voting for political candidates of their choice.

The Council noted that it acknowledges the pathway of petitioners to seek legal redress through the Court system on the conduct of the October 10, 2017 elections and also the matured manner in which the Supreme Court of the Republic of Liberia has acted making sure that the due legal process was followed.

“The Council says that the citizens of Liberia have grown over the years exercising political maturity and our government making sure that a smooth transition of political powers is carried out.”

“Liberians have continue to demonstrate a good posture of saying no to violence yes to peace, by going to the polls and demonstrating their actions by voting for political candidates of their choice. This Council highly commends and encourages every Liberian to continue the pathway of peace.

“The Council acknowledges the pathway of petitioners to seek legal redress through the Court system on the conduct of the October 10, 2017 elections and also the mature manner in which the Supreme Court of the Republic of Liberia has acted making sure that the due legal process was followed,” the LCC noted.

It further noted that it recognizes the seriousness, time and effort the Supreme Court exhibited in hearing the appeal of the petitioners in the case Liberty Party versus the National Elections Commission on alleged fraud in the October 10, 2017 Presidential elections; adding that the ruling of the Supreme Court of the Republic of Liberia on Thursday, December 7, 2017, has given hope to the Liberian people and thanked the entire Bench for the high level of maturity and judicial expedition of the process.

To read the full article, click here.

04 Dec

Nigeria: No Cause for Alarm Over Terror Attack Alert – Govt

Abuja — The federal government yesterday calmed frayed nerves over the latest travel advisories by some Western countries alerting on impending attacks in Nigeria.

It assured Nigerians of adequate security measures to thwart any possible terror attack in the Federal Capital Territory (FCT) and the 36 states of the federation.

In a statement he issued yesterday, the Minister of Information and Culture, Alhaji Lai Mohammed, said there is no cause for alarm despite the latest travel advisories by some Western countries.

He said security agencies in the country have not let down their guard, despite the fact that there has been no terror attack in the FCT since the Buhari administration assumed office.

Mohammed stated: “We know that the terrorists, who have been massively degraded and put on the run, have been looking for soft targets to attack. This is the nature of terrorism all over the world, as can be seen in recent attacks in the UK, France and Egypt, among others.

“That is why the Nigerian security agencies have continued to be on the alert, even if their efforts have been largely unobtrusive so as not to disrupt the daily activities of the citizenry,” he said, adding: “Such efforts are routinely stepped up during religious festivals”.

The minister assured that the federal government will continue to take adequate measures to protect the lives and properties of citizens and non-citizens alike, even as the military remains unrelenting in ensuring that the terrorists neither regroup nor regain the capacity to carry out organized attacks.

He said the federal government’s sensitization campaign on security, with the punch line, “if you see something, say something”, would be stepped up on national radio and television.

Accordingly, he advised citizens to be security conscious and to report suspicious people and object to the security agencies. Govt Needs To Tighten Our Borders – Ladaja

Meanwhile, a presidential aspirant on the platform of the All Progressives Congress (APC), Ibrahim Abubakar Ladaja, has urged the federal government to tighten its borders and create an enabling environment to discourage migration.

To read the full article, click here.

30 Nov

EU Pledges Increased African Investments to Slow Migration

European Union leaders pledged to increase investments in Africa to assist development and help stem the arrival of thousands of migrants who are desperate to flee poverty.

Speaking at a gathering of heads of states of the continents in Ivory Coast’s commercial capital, Abidjan, European Council President Donald Tusk said Wednesday the bloc was “ready to do more” to create jobs and economic opportunities for Africa and its people.

“We have to be ambitious,” Antonio Tajani, President of the European Parliament, said at the same gathering. “There needs to be a true Marshall Plan for Africa.”

The two-day meeting in Ivory Coast takes place as the EU plans to make 8 billion euros ($9.5 billion) available to improve migration control from the Middle East and Africa. In September, the European Parliament adopted a separate 4.1 billion euro plan for Africa that’s meant to generate 44 billion euro in investment and address root causes of migration.

Solutions to Africa’s problems “require significant financial resources, much more than what African resources alone can afford,” Ivory Coast President Alassane Ouattara said. “Our appeal will be for the growth of investments from Europe, public and private.”

Europe is grappling to stem the biggest wave of asylum seekers since World War II, as anxiety over the issue is stoking populism and drives electoral gains by far-right parties from France to Hungary.

Libya Slaves

The plight of African migrants was highlighted this month by videos of what the International Organization for Migration described as slave markets in Libya, scenes that are dominating the summit’s talks.

Leaders and officials of the EU, AU and United Nations met Wednesday with Libyan Prime Minister Fayez Mustafa Al-Sarraj to find solutions for this “atrocious and unbearable situation,” French President Emmanuel Macron told reporters.

Libya agreed to allow access to its territory for the parties to evacuate the camps “where these barbaric scenes” have been identified and to speed up the repatriation of migrants to their countries of origin, he said.

Governments across the two continents will reinforce cooperation to dismantle trafficking networks and their funding mechanisms while the EU may help to pay for the repatriation of migrants to their countries of origin.

A lasting solution to illegal migration will require that Libya solve its political crisis, Macron said. “It is indispensable to reconstitute a durable state and a political balance as part of the roadmap that has been decided,” he said.

Source: https://www.bloomberg.com/news/articles/2017-11-29/eu-pledges-increased-african-investments-to-slow-migration

30 Nov

Chaos Threatens Key Leadership Vote for South Africa’s ANC

Leadership disputes have ended up in court in three of the nine provinces — KwaZulu-Natal, the Free State and North West — while the party’s national officials stepped in to avert a lawsuit challenging the outcome of its internal election in the Eastern Cape province.

Court challenges, allegations of vote rigging and outbreaks of violence — South Africa’s ruling party is in disarray less than three weeks before it’s scheduled to choose a new leader to replace President Jacob Zuma.

The struggle for power has spawned such disorder that some analysts question whether the African National Congress can hold a credible election at the Dec. 16-20 conference in Johannesburg in what’s shaping up to be the most hotly contested internal vote since Nelson Mandela led the party to power in 1994.

“If all these legal disputes are not sorted out by the time the conference takes place, they will be transferred to the conference itself,” said Mpumelelo Mkhabela, a political analyst at the University of Pretoria’s Center of Governance Innovation. “There is a risk that after the conference, some people challenge its legality and the decisions that have been taken.”

Seven candidates are vying to replace Zuma as ANC leader and become the party’s presidential candidate in 2019. Only Deputy President Cyril Ramaphosa and Nkosazana Dlamini-Zuma, the former chairwoman of the African Union Commission and Zuma’s ex-wife, appear to have a realistic chance of winning.

Most party branches in the Northern Cape and Western Cape nominated Ramaphosa for the post, while Dlamini-Zuma received overwhelming backing in the Free State. The other six provinces will announce their preferences over the next few days.

On Wednesday, the high court in Bloemfontein in the Free State ordered that the province’s conference, which was due to take place this weekend, can’t be held until 29 branch meetings are rerun. The court said 29 of these meetings were irregular and unconstitutional.

To read the full article, please click here. 

15 Nov

Kenya’s Economy Could Face a Bleak 2018

Kenya is facing an economic storm in 2018 in the aftermath of two disputed elections. Saddled with the triple threat of austerity measures to pay for those votes, slowing credit growth and new accounting rules for banks, Kenya now risks missing the government’s forecast for 6 percent economic growth next year, according to lenders including Nairobi-based Stanbic Bank Kenya Ltd. Investec Bank Ltd. strategist Chris Becker says expansion could slow to as little as 1 percent.

“With growing headwinds, there is no longer any room for complacency,” said Ronak Gopaldas, an independent analyst, formerly at FirstRand Ltd.’s investment banking unit in Johannesburg. The new administration should “refocus its attention to the economy, which has been on the back-burner for the better part of the year,” he said.
The country’s Treasury has already cut this year’s growth target to 5 percent from 5.9 percent as the protracted election furor damped investment and a drought curbed farm output.
Now key indicators for East Africa’s largest economy, the regional hub for multinationals including IBM Corp. and Toyota Motor Corp., are flashing warnings signs, with the latest Purchasing Managers’ Index, a measure of private-sector activity, falling to a record low and bank loans growing the slowest in more than a decade.

After a court annulled an Aug. 8 election, Kenya held a rerun of the vote on Oct. 26, that was boycotted by the main opposition coalition. President Uhuru Kenyatta’s Jubilee Party also won the second ballot, which is now being challenged in the Supreme Court.

The nation’s 2.6 trillion-shilling ($25.1 billion) budget was amended to include “austerity measures” for the current fiscal year to accommodate unplanned expenditures such as the rerun of the election, Treasury Secretary Henry Rotich said in September. The Treasury has revised its 2017-18 budget deficit forecast to 8.5 percent of gross domestic product from 6.8 percent. The government recorded a 9.2 percent shortfall in year through June 2017.

Read more: Kenya’s Economy Could Face a Bleak 2018

13 Nov

African Economic Growth Rides on Wireless Rails

A telecommunications boom is lifting an industry and a continent.

In Kenya, hundreds of thousands of people are rising out of poverty as mobile-money services turn subsistence farmers into business people. A similar dynamic drives Ethiopia, the fastest-growing economy in Africa, where the gross domestic product is forecast to climb 8 percent in 2019. Borrowing costs in Ghana plummeted almost 2.5 percentage points during the past 12 months amid an unprecedented gain in GDP that’s been led by the growth of the telecom industry.

From the Atlantic to the Indian Ocean, hand-held phones are letting people become their own ATMs, increasing economic activity by enabling payments for food, travel, school and business. Wireless communication is driving economic growth in sub-Saharan Africa much as the railroad did in the 19th-century U.S., accounting for almost a tenth of global mobile subscribers and a growth rate that’s beating the world.

The transformation is reflected in the more than 1,300 publicly-traded companies that make up corporate Africa. The value of communications firms increased during the past five years to 25 percent of the total market capitalization of African companies, up from 16 percent, according to data compiled by Bloomberg. Materials and energy, the natural-resources benchmarks that defined the region since its colonial days, diminished to a combined 18 percent from 27 percent during the same period.

Read more here: African Economic Growth Rides on Wireless Rails

31 Oct

Private equity: Consumer staples a prominent theme for investors

Africa’s consumer-driven sectors, which includes agribusiness and food production, attracted strong interest from private equity investors in the first half of 2017, according to recent data by the African Private Equity and Venture Capital Association (AVCA).

Private equity firms typically try to improve the financial results and prospects of the companies in which they buy a stake, in the hope of reselling the business to another firm or cashing out via an initial public offering (IPO). The value created is then passed on to the investors in the fund.

“Consumer staples (including investments in the African packaged food industry) saw a rise relative to 2016. Telecoms and materials also showed an increase in terms of deal values as a result of a handful of large transactions in the first half of 2017,” says AVCA in its latest African Private Equity Data Tracker report.

The total value of disclosed private equity investments over the period was $1bn, with the median deal size about $15m. Some 68% of the total deal value was from private equity transactions between $100m and $250m in size.

Tapping into Africa’s agribusiness and food opportunity

One prominent agribusiness transaction during the period was an investment by Sahel Capital, managers of the Fund for Agricultural Finance in Nigeria (FAFIN) and CardinalStone Capital Advisers (CCA), in Crest Agro Products, an integrated cassava processor based in Nigeria’s Kogi State.

Cassava is a woody shrub with an edible root resembling a large sweet potato. It is widely grown in many parts of Africa, predominantly by small-scale farmers. Although cassava roots can be processed into a variety of products – including cassava flour, starch, ethanol and glucose syrup – the crop has not been a great commercial success in the continent.

Crest Agro’s aim is to become a major producer of food-grade cassava starch for industrial users in Nigeria and the broader West Africa sub-region. There is a strong demand for starch in the fast-moving consumer goods, brewing and pharmaceutical sectors. It is expected that as the Nigerian middle class grows and more companies look to enhance their ability to source raw materials locally, this demand-supply gap will widen substantially.

A major food-industry deal during the first half of 2017 was the tie up between Africa-focused private equity firm Helios and Barcelona-based multinational GBfoods, to create GBfoods Africa. The new entity has acquired assets from different African companies, including brands such as Jumbo (bouillon), Gino and Pomo (tomato paste), and Jago (milk powder and mayonnaise), as well as Bama (mayonnaise) distribution rights for Africa.

Read more: How We Made It in Africa

25 Oct

Pension funds – should they be financing infrastructure in Africa?

Infrastructure as an asset class can provide a distinct addition to African pension and investment portfolios and is increasingly being considered.

In principle, the asset class presents a compelling natural “fit” to the longer-term liability profile of most pension funds given the investment horizon of most infrastructure investments, with the primary appeal of this asset class being the potential to deliver a predictable cashflow stream over time.

The World Bank places an approximate US$93bn a year into infrastructure on the continent, a third of which is for maintenance of existing infrastructure, while its Infrastructure Action Plan FY 2012-2015 proffers important guidance as to what African institutional investors can factor into their considerations in terms of defining infrastructure, and in-turn, identifying strategic benefits in allocating to this asset class. It further identifies three important themes to which African institutional investors can draw upon:

1. Ripple effects such as an ICT application that generates data on sector performance with spill over effects in sector accountability and governance, a regional power project that has ripple effects beyond the host country, or a rural infrastructure package that boosts agricultural productivity with ripple effects on rural income and development;

2. Bottlenecks, which are investments that unlock the volume, cost, and quality of economic activity such as a law on competition that opens up the potential of private sector investments, or a source of clean water, for example, that provides for women to participate in economic activity, and;

3. Missing links, which are infrastructure investments that interconnect two markets/areas such as a bridge within a region or a cross-border power interconnector, international road corridors, or fibre-optic links in a region, to name a few examples.

Salient features of this asset class would be investments that have attributes of inelastic demand, economy of scale and a long useful life. A typical example of an infrastructure investment with such attributes is a toll-road concession.

Read more: Pension funds – should they be financing infrastructure in Africa?

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