What next for Kenyan Policy on Somalia?

Tags

Al-Shabaab, Ethiopia, Jubaland, Kenya, Mogadishu, Nairobi, Somali, Somalia

Reflex Eco Group – Africa News

by  Kennedy Opalo (Kenyan journalist)

This Blog is sponsored by http://www.reflexecogroup.com

For two years it almost seemed too good to be true. Kenya had invaded Somalia and occupied Kismayo, a key Al-Shaabab-held city in southern Somalia without carnage visiting the capital Nairobi. The group instead opted for sporadic attacks against churches and police installations in the border regions of North Eastern and Coast. A few explosions rocked the capital, but these were never spectacular. Indeed, some of them appeared to have been motivated by local business rivalries and not some revenge mission by the Somali Islamist group Al-Shaabab. Within Somalia, the African Union Mission in Somalia (AMISOM) mission made quick gains that left Al-Shaabab backpedaling. With a few exceptions, the Al-Shaabab was reported to have been severely weakened and on the run. Before the recent uptick in bombings, Mogadishu was slowly becoming a reasonably peaceful boomtown.

And then Westgate happened. At around noon on September 21st three groups of armed men (and allegedly at least one woman) stormed the upscale mall in Nairobi and started shooting indiscriminately. Several hours after the attack started Al-Shaabab claimed responsibility via twitter. A day later, the Islamist group gave an alleged list of the gunmen, all men between the ages of 20-27. Six were from the US, two from Somalia, and one each from Kenya, the UK, Finland and Syria. More than 36 hours after the attack began at least 69 people had been confirmed dead, including one gunman and two Kenyan officers. A visibly incensed President Uhuru Kenyatta condemned the attacks, and reassured Kenyans of a swift response to punish the perpetrators. Just a few minutes earlier Al-Shaabab had claimed responsibility for the attacks, terming them a retribution for Kenya’s invasion of Somalia in 2011. The Kenyan Defence Forces, under Operation Linda Nchi, invaded Somalia following sporadic kidnappings and attacks along the Kenya Somalia border. The forces still remain in Somalia under the command of AMISOM.

So how will Kenya respond? There will be both short-term and long-term responses to the daring terrorist attack. The likely short-term response holds more risk, and may even jeopardize the strategic objectives of the long-term response.

Understandably, in the short-term there is going to be considerable public pressure for a swift military response from the government. In the coming weeks the government’s response will likely involve both domestic crackdowns in suspected Al-Shaabab havens in Kenya (most likely in Nairobi, the Coast and North Eastern regions) and military operations against Al-Shabab targets within Somalia.

Crackdowns within Kenya will come with a lot of risk. Depending on how they are carried out, the government could end up walking right into Al-Shaabab’s trap by alienating Kenyan Muslims and ethnic Somalis who make up the majority of residents in Coast and North Eastern regions of the country that border Somalia.

Ethnic Somalis (both Kenyan and Somali nationals) also make up the majority of residents in Eastleigh, a district of Nairobi that has in the past witnessed government crackdowns targeting cells linked to the Al-Shaabab militant group.

Kenyan security forces must therefore proceed with extreme caution to ensure that as few innocent civilians as possible are arrested or roughed up by security forces in any operations within the country. A repeat of reported cases of police brutality in North Eastern following the murder of army officers by gunmen would be a terrible mistake. It is also vital that the government stresses the unity of all Kenyans of all ethnic extractions against terror attacks. Any victimization of ethnic Somalis must be met with swift punishment.

Military operations within Somalia will likely involve significant cooperation with Mogadishu, pro-AMISOM militia in Jubaland, AMISOM and the US and may not be completely under the control of Nairobi. I suspect that Nairobi might push for a more aggressive hunt for the leaders of Al-Shaabab, including Samantha Lewthwaite a.k.a. the “white widow,” a British national that is rumored to have been the mastermind of the Westgate Mall attack. Lewthwaite, the widow of London 7/7/2005 suicide bomber Jermaine Lindsay, is suspected to be on the run in Mombasa, Kenya with her four children. Crucially, any military operations in Somalia must be informed by analysts’ observation that it might be the case that Al-Shabaab is a group on the decline that is just lashing out to maintain relevance.

In the long-run, Nairobi will most likely push for a more robust Somali solution to the security crisis posed by the lack of a functional state in its backyard. Top on the agenda will be the strengthening of the security apparatus in the administration of Jubaland, the Somali state that is on the border with Kenya (For a detailed analysis of the situation in Jubaland see here). The creation of Jubaland has long been a goal of the Kenyan government as a buffer against the chaos that has been Somalia for the last two decades. Despite obvious objections from Mogadishu, Nairobi has never publicly denounced this policy goal. The brazen attack in the capital creates even more need for a strong buffer region that can help the Kenyan security forces to deal effectively with a terrorist group that appears desperate and willing to do just about anything to remain relevant. The success of this policy will depend on Mogadishu’s ability to veto it, and support from Ethiopia and AMISOM.

Ethiopia, Djibouti, Somaliland, Puntland and Kenya all have reasons to support the creation of Jubaland, or in general, a more decentralized state in Somalia. Kenya, Djibouti and Ethiopia remain wary of a potential rise in Somali nationalism and any irredentist attempts that might follow to unite all lands that make up the so called Greater Somalia – which would include the Ogaden in Ethiopia, North Eastern region of Kenya, and Djibouti. This is not a crazy fear. Mogadishu once attempted this in the late 1960s in a botched operation (in the Shifta and Ogaden wars) that ultimately led to a military coup and the rise of Siad Barre to power (See Laitin, 1976 [gated]). Ethiopia has the most to worry about regarding this potential risk. The Ogaden remains at the periphery of the Ethiopian state, giving the Somali population lots of reasons to rebel against Addis Ababa.

In the recent past Kenya has experienced an increasing level of integration of the Somali elite into the Kenyan state. Prominent Kenyans of Somali extraction include the leader of Majority in the National Assembly, the Foreign Minister, the Industrialization Minister, the head of the electoral management body (IEBC), among others.

Furthermore, many Somalis both Kenyan and from Somalia have in the recent past made significant investments in Kenya, most notably in the real estate sector. A lot of the investments have been means of laundering money got from illicit activities (some say including piracy). Indeed the governor of the Central Bank of Kenya is on record to have said that he could not account for billions of shillings in the economy. With an estimated total of only 20,000 mortgage accounts, most of the Kenya’s real estate boom has so far been financed by cash.

Yes, a lot more needs to be done for the average Kenyan of Somali extraction in North Eastern region, but the Somali elite in Kenya have every reason to not rock the boat and remain wedded to Nairobi. This same elite has so far tacitly supported Nairobi’s policy regarding the creation of an autonomous region in Jubaland.

The powerful imagery of a picture that went viral showing a Kenyan police officer, who also happens to be an ethnic Somali, carrying a baby while shielding three adults as they ran for safety at Westgate is hard to miss.

A domestic outcome of the Westgate attack will likely be greater scrutiny of the police and intelligence forces. The Kenyan police have been exposed in the past for having looked the other way in exchange for bribes to allow gun-runners to do their thing along the country’s highways. President Kenyatta will likely call for a cleaning of house both at Vigilance House and at the NSIS headquarters. All security agencies will likely see closer scrutiny from the political class and calls to pull up their socks. The minister in charge of internal security, Joseph Ole Lenku, probably has his days numbered on the job.

The quest for greater security will be completed by the proliferation of small arms and light weapons in the country on account of civil wars and general insecurity in the border regions with Uganda, South Sudan, Ethiopia and Somalia. According to a 2012 a study by the Small Arms Survey and the Kenya National Focus Point on Small Arms and Light Weapons, there are between 530,000 and 680,000 firearms in civilian arms across the country. The government must tighten its disarmament operations. Westgate has shown that AK-47s are not just the weapons of cattle rustlers, bank robbers and carjackers.

Will the reforms succeed? Very likely. The Kenya Revenue Authority is a testament to the fact that when it matters, the Kenyan government can reform key state institutions. The security sector is need of just such a reform drive. Insecurity is on the rise across the country, both from common criminals and organized gangs and terrorists. The Kenyan leadership appreciates that insecurity is not just bad in terms of risk to human lives. It is also bad for business.

If Mr. Kenyatta’s first term is to achieve even a modicum of success, the security sector must be reformed.

In all likelihood the president’s quest for a successful first term will outrank a few officers’ venal machinations within the administration. Police ineptitude in dealing with common petty and not-so petty crime creates loopholes for spectacular attacks like Westgate. Reform will therefore need to go beyond capacity building within the Special Forces and dedicated anti-terror units.

For regular Kenyans, life in Nairobi will never be the same again. It is almost impossible to imagine that things that most only read in the news could happen right at home; that a Saturday afternoon at the mall could turn into a ghastly massacre. It will take time before the capital, and the nation, finds its new normal, if at all it does.

So far Kenyans’ resiliency has been outstanding. People showed up in their thousands to donate blood. Buses in Nairobi lowered their fares to take people to blood donation points. More than 40 million Shillings has so far been raised through MPesa for affected victims. Never before in my life have I felt or seen this level of patriotism from fellow Kenyans.

I hope it sticks. Especially because the country will need it in the next few weeks and months as the government formulates and effects a response to the Westgate Mall attack.

Related articles

• Kenya needs a new Somalia policy (sakunian.wordpress.com)
• A Suicide bomber in Central Somalia Killed more than 20 People (daniboy8935.wordpress.com)
• Al-Shabaab Takes ‘Last Gasps’ in Ethiopia (ipsnews.net)
• Somali Suicide Bomber Targets AU Peacekeepers (profarmsmusic.wordpress.com)
• Al-Shabab jihadists recruit Somali youth in Minnesota (cofda.wordpress.com)
• At least 16 killed, 30 injured in suicide bomber attack in Somalia (panarmenian.net)
• At least 16 killed, 30 injured in suicide bomber attack in central Somalia. (somaliswisstv.com)
• New museum featuring Somali culture and art opens in Minneapolis. (somaliswisstv.com)
• Somalia aims to dissolve al-Shaabab (worldbulletin.net)
• Suspicion over Norwegian’s role in Kenya mall attack (edition.cnn.com)

On the quality of higher education (and human capital development) in Africa

Tags

Africa, African Development Bank, Arab Maghreb Union, Association of African Universities, East Africa, East Asia, Germany, Human capital, IBM, Kenya, Liberia, Makerere, Nairobi, Pan African University, Southern Africa, Tanzania, Tertiary education, Times Higher Education World University Rankings, United States, Vocational education, World Bank

Reflex Eco Group – Africa News

by  Kennedy Opalo (Kenyan journalist)

This Blog is sponsored by http://www.reflexecogroup.com

According to The Times Higher Education World University Rankings 2012-2013, the highest ranked university in Africa, the University of Cape Town, is 113th in the world. The ranking system employs 13 performance indicators that take into account universities’ core functions, including “research, knowledge transfer and international outlook.” Among the leading 400 world academic institutions, there are only four from Africa, all in South Africa. As a region, Africa only has 35 scientists and engineers per million inhabitants, compared with 168 in Brazil, 2,457 in Europe and 4,103 in the United States. The region is clearly behind as far as knowledge production and dissemination is concerned, producing only 1.1 percent of the world’s scientific knowledge, despite comprising more than 13 percent of the global population.

At barely over 8 percent, Africa’s gross enrollment in tertiary institutions of learning is the lowest of any region in the world (UNESCO, 2011). The average enrollment rate for developing countries is 23 percent, and that for advanced countries is 74 percent. Africa’s poor showing in the higher education sweepstakes is both a cause and effect of the region’s poor economic environment. The massive cuts in higher education funding in the wake of the structural adjustment programs of the 1980s and 1990s, even as enrollment more than tripled between 1991 and 2005, have had an adverse impact on quality. And in turn, the lack of high quality tertiary level education has starved the region of high skills needed for efficient allocation of factors of production thereby stunting improvement in productivity, high value addition and research and development. Africa devotes less than 1 percent of its GDP to research and development.

Data from 33 countries for which it is available show that tertiary education financing in the region has declined from a high of US $6,800 per student per year in 1980 to just about $981 in 2005. Over the same period the World Bank decreased its education lending from 17 percent in 1985-89 to just 7.5 percent currently (this is despite the fact that the World Bank nearly doubled its education lending between 2008 and 2009). The decline in public funding in the face of increasing demand for higher education has led to the proliferation of private universities of dubious standards and a bias towards perceived “soft” fields. In 2004 a meager 28 percent of students were enrolled in perceived “hard” disciplines in the sciences and engineering.

A 2008 study of 12 countries showed an increase in public universities from 113 to 188 between 1995 and 2008. Over the same period private universities ballooned from 14 to 107. This rapid increase in the number of universities in the region has not been matched by an increase in the number of trained teaching staff or facilities such as laboratories, libraries, and the like. Indeed, most of the new universities have tended to specialize in vocational subjects that require very little capital and human resource investment. To put it mildly, there is a great mismatch between the region’s development needs and the type of graduates it produces each year.

The shortage of skills permeates nearly all skill levels, and could get worse as the region’s economy continues to grow over the next two decades. The case of Kenya is illustrative. The country has an ambitious plan to be the information and communication technology (ICT) hub of Eastern Africa (dubbed the “Silicon Savannah”) complete with a proposed $10 billion techno-city (Konza City) situated about 60 kilometres southeast of Nairobi. Already ICT multinationals, including IBM, Microsoft, Google and Intel, have their regional headquarters in Kenya. All this sounds good, except the lack of local skills. IBM’s research lab in Kenya has had to source for top talent among graduates in computer science, electrical engineering, mathematics, and data scientists from American universities. There is still a shortage of required skills among graduates of Kenyan universities. Quality assurance is also lacking, as recent news reports of “theses for hire” have demonstrated.

As the Kenyan case suggests, the lack of sufficient investment in high quality tertiary education has adversely impacted Africa’s ability to realize its economic potential. A 2005 study showed that a one-year increase in the higher education stock of the region could boost growth rate by about 0.63 percentage points. This adds up to an overall increase in income by about 12 percent over five years. For the region to take off economically there is need for greater investment in quality higher education that will train workers for the 21st century economy. But improving the quality of higher education in the region will be a very costly affair. On their own, the region’s countries lack both the resources (on account of their small economies) and demand (on account of their population sizes) to justify the types of investments required. This is where regional cooperation comes in.

Cross-border educational exchanges are not new in Africa, and go back to the pre-independence era. For generations non-Senegalese francophone students have studied in Senegal, seen as a cheap way of getting quality education at par with diplomas from France. Uganda, with East Africa’s top university, Makerere, hosts legions of Kenyan students, eager to avoid congestion and high costs back home. South Africa, with its many quality institutions is also a preferred destination for students from across the continent. These historical cross-border exchanges have led to the formation of regional associations of higher education – the francophone Conseil Africain et Malgache pour l’Enseignement Superieur (CAMES); Inter-University Council of East Africa (IUCEA); Southern African Regional Universities Association (SARUA); and inter-university cooperation under the Arab Maghreb Union (AMU). Continent-wide, the 208-member Association of African Universities (representing 45 countries) is the umbrella organization of the region’s institutions of higher learning.

These associations need to be strengthened and empowered as drivers of regional harmonization of higher education both to facilitate cross-border inter-university mobility of both teachers and students and guarantee quality assurance. As a 2007 World Bank report aptly noted, “regional quality assurance networks are particularly relevant to Africa because of human resource constraints.” On this score the European Higher Education Area provides a possible model. The just over 10 years old Bologna process is working towards ensuring inter-university mobility (in terms of courses, qualifications, and periods of study) as well as a uniform quality assurance standard. In the African context, a continent-wide area of higher education is infeasible because of language and logistical constraints. However, sub-regional areas of higher education, based on the existing associations, provide a possible avenue to invest in a few good institutions of higher learning that can have a demonstrative effect on national institutions as well set high standards of learning. The associations themselves can also serve as certification bodies to ensure a uniform quality assurance standard (see here).

The announcement in late July 2013 of the creation of a new US $154.2 million multinational science, innovation and technology Pan African University (PAU) in the next five years is therefore welcome. (The African Development Bank (AfDB) has pledged a $45 million grant towards the effort.) PAU will be structured around existing institutions of higher learning across Africa’s five sub-regions. Basic sciences, technology and innovation will be based in East Africa; earth and life sciences including health and agriculture in West Africa; governance, humanities and social sciences in Central Africa; water and energy sciences including climate change in North Africa; and space sciences in Southern Africa.

Thus far, discussions over regional integration of systems of higher education have tended to view tertiary institutions as tools for regional economic and political integration – be it in East Africa, Europe or East Asia. However, the creation of stronger regional areas of higher education – especially in a region like Africa – can also be an economically efficient way of facilitating greater investment in higher education to match the demands of a 21st century economy. It is encouraging that current trends signal a move in this direction. University systems in Africa’s sub-regions would be a good place to start.

I conclude with a caution. The rapid increase in the number of public and private universities in Africa over the last two decades has come at the expense of other post-secondary institutions of learning such as polytechnics (this shift has occurred to a lesser extent in francophone Africa than anglophone Africa). In many countries governments have simply converted polytechnics and other constituent colleges into fully-fledged universities. This trend is worrying, especially given the fact that the vast majority of high school leavers on the continent do not make it to university. The low quality of high school education in the region (as demonstrated by the recent mass student failures in Liberia and Tanzania) is yet another reason why these “bridge” tertiary institutions are needed, both to prepare students for university and to impart valuable skills for those that do not eventually make it to university.

The rush to invest in university education should not distract from the fact that vocational post-secondary institutions, such as polytechnics, are an important component of human capital development, even in advanced countries as is the case in Germany (with its impressive “dual system” of training codified in the Vocational Training Act of 1969). As African economies move from dependence on primary commodities to manufacturing and technology, there will be need for skilled workers at all occupational levels. Doing away with vocational post-secondary institutions will only serve to further inhibit the development of adequate and relevant human capital to match the increased demand for skilled workers.

Related articles

• In the news (indigotrust.org.uk)
• Despite growth reports, Africa mired in poverty (eurekalert.org)
• The Political Economy of Brain Drain and Brain Gain – Part l (spyghana.com)
• Despite Growth Reports, Africa Mired in Poverty (yubanet.com)
• Investment and Economic Development in Africa: An Investor’s Perspective. (malawiace.com)
• Tertiary education would be indeed supported. (manisalex.wordpress.com)
• Elders in Africa (fullmoonafrica.com)
• The West Didn’t And The East Won’t Make Africa Rich…We Can’t Run Away From Doing Our Own Heavy Lifting (nakedchiefs.com)
• Africa grain experts to explore the continent’s potential as the next frontier in global grain supply at 5th African Grain Summit (appablog.wordpress.com)
• Five reflections on Africa’s higher education in science (scidev.net)

How REITs help small investors earn from real estate

Tags

investing, Investment, Kenya, Nairobi, Office REITs, Real estate, Real estate investment trust, REIT

Reflex Eco Group – Kenya News

By Joshua Masinde (Local journalist)

 

Investing in real estate has become the vehicle of choice for many Kenyans.

And with the proposed introduction of the Real Estate Investment Trusts (REITs) on the stock market, low income earners will now have an opportunity to own shares in large property firms and reap dividends from the booming housing sector.

However, the cost of owning property in the country is set to remain high, locking most Kenyans out of home ownership as REITs do not address the issue of affordable access to home ownership.

The concept behind the REITs was to open up the lucrative real estate sector to the investing public and give it an opportunity to own shares in property companies, but not necessarily to lower the cost of home ownership.

According to Contrarian Investment analyst Mika Davis, REITs facilitate one to diversify their investment portfolio into the property industry through the Nairobi Securities Exchange (NSE).

“They (REITs) offer strong prospects of capital gains and high dividend income. Real estate prices have more than tripled in Kenya in the period between 2000 and 2010, outperforming other asset classes such as stocks and bonds,” Mr Davis argues.

TYPES

The different types of REITs that retail investors can take advantage of include equity REITs, mortgage REITs, and hybrid REITs. The equity REITs earn income for investors through collection of rent while mortgage REITs offer loans to property developers or investors through financial instruments secured by mortgages or real estate.

Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages.

However, analysts say the REITs option is prone to several risks, including mismatch between the rising property prices relative to household incomes, which are growing at a snail’s speed. This could lock many people from purchasing property or accessing rental units in what could slow down investors’ earnings.

“Despite the surge in property prices, people’s personal incomes have not grown in tandem, therefore there is a strong possibility of a correction in property prices in Kenya as potential investors become priced out of the market,” Mr Davis notes.

MONITOR DEBT LEVEL

Investors are also expected to monitor the level of debt on a REITs books as this can result in low dividend pay-outs in case of a high interest market. The possibility of defaults by tenants and low occupancy rates in houses also pose a significant risk to this sector.

Analysts contend that this is a good idea for opening up the industry for further development through enhancing the liquidity of the otherwise illiquid property assets and also opening up the industry to retail investors seeking higher returns.

However, this does not offer an option of extending affordable home or property ownership to most of the people yearning to own homes.

According to a 2008 study by Vista Capital on the viability of the introduction of the REITs, this investment vehicle alone opens up the sector for additional financial instruments but falls short of enabling the average Kenyan to own property.

Although it provides an opportunity for the players in the sector to raise funds to finance huge property projects and earn shareholders dividends, it lacks the ability to make property ownership at the middle and low-end of the market less painful.

LIMITED ABILITY

“Retirement benefits schemes as well as many individuals are already investing in property, but many are limited in their ability to do so in that they cannot afford direct investments that are not liquid,” says the Vista Capital study.

Due to the illiquid nature of the property market because of the lengthy process involved in settling a transaction, it would be easier for investors to earn income by selling their REITs stocks, as is the case with share trading on the NSE.

“REITs will be trading on the NSE every day. You can wake up today and decide to sell your REIT shares, something you can’t do with an illiquid assets like a plot or a house,” Mr Davis says.

The entry requirements for one to own a REIT will be lower compared to the entry into the real estate sector through direct purchase of property or land.

For instance, for one to venture into real estate, say within the Nairobi metropolitan area, one needs at least Sh5 million or go for debt.

But through the REITs, an investor can own shares in properties in different parts of the country and also properties of different types like rental, commercial, or industrial.

REITs are expected to list on the exchange through an initial public offering (IPO) where investors buy units of the company. Property firms must pay 90 per cent of their income as dividend and invest in the real estate sector should they list on the NSE under the REITs.

With anticipated higher levels of participation of the property sector in the capital markets, both financing and property development could become more competitive, thereby aiding in reducing development costs that could also be passed on to those intending to own homes.

BIGGEST BENEFICIARIES

Sector players, however, say the biggest beneficiaries for this investment scheme are the large property developers and/or financiers of the funds.

They argue that the housing sector should be given additional incentives to help the government to meet one of the goals of its development blueprint, Vision 2030, to make affordable homes available to most Kenyans.

According to The Mortgage Company’s managing director, Ms Carol Kariuki, the REITs, apart from proving an additional investment option for retail investors, it will also provide liquidity in the market and offer developers tax incentives with no direct benefit to most of those who do not have access to affordable housing.

The idea to exempt real estate developers from corporate tax was one of the main objects in the development of the REIT regulation but only if 90 per cent of net income is given to shareholders.

“If this was to be passed on to most of the Kenyans who want to own property, then affordable housing would be a reality in Kenya,” Ms Kariuki said, noting that this could lessen the pain of the more than 92 per cent of Kenyans who cannot afford mortgages at the current interest rates.

Related articles

• Crown Castle’s REIT move indicative of industry trends, experts say (bizjournals.com)
• REITs On The Street: The Bargain Basket Is Growing (thestreet.com)
• Time To Invest In REIT ETFs? (etfdailynews.com)
• How to make money investing in real estate (business.financialpost.com)
• How to make money investing in real estate – Consult with a Vancouver Mortgage Broker (adilvirani.ca)
• International REITs: Look to Asia for Yield (investorplace.com)
• Should You Consider Buying a Data Center REIT? (fool.com)
• International REITs: 3 British Buys (investorplace.com)
• How to make money investing in real estate – Consult with Bruce Coleman, Vancouver Mortgage Broker (cminfo.ca)
• How mREITs Make Money (And 2 Keys for a Stable Dividend) (fool.com)

Striking Out: How Kenya’s Unions Have Gone from Hero to Zero

Tags

Kenya, Kenya National Union of Teachers, Mwai Kibaki, Nairobi, Tom Mboya, Trade union, Uhuru Kenyatta, William Ruto

Reflex Eco Group – Africa News

by Abdullahi Boru (Columnist of ThinkAfricaPress)

http://thinkafricapress.com/

 

Nairobi, Kenya:

The July teachers’ strike in Kenya started with a roar and ended with a whimper. Calling for improved salaries and allowances, 200,000 defiant teachers, largely under the banner of the Kenya National Union of Teachers (KNUT), went on strike for almost a month, but when it all ended, their union leaders were seen by many to have capitulated to government pressure.

During the strike, the government employed a whole host of tactics to end the allegedly illegal civil action. They cut deals with the post-primary school teachers union (KUPPET) to undermine the primary school teachers union, blackmailed teachers by threatening stop their salaries, and criminalized the trade union’s leaders on charges of contempt of court.

In the end, the unions compromised on a deal with Deputy President William Ruto. This came as a disappointment for some teachers who had been engaged in the civil action, but perhaps all the more worrying was the way in which the events revealed the harsh realities faced by labour unions in Kenya more broadly today. Once formidable workers’ unions have been emasculated, the general public seems indifferent – if not contemptuous – of them, and, politically-speaking, ‘union’ has become a dirty word.

Moreover, the willingness to compromise and the disunited front on display in the strike may have set an unforgiving precedent for future union-government engagements.

 

The decline of the unions

In the period leading up to Kenyan independence in 1963, unions provided one of the most significant platforms for agitating for the rights of Kenyan workers, and even contributed to the nationalist movement by providing a forum for political debate.

Led by the likes of charismatic independence leader Tom Mboya, worker’s unions were effectively used as means of pursuing decolonization. When other leaders were detained and political parties banned during the state of emergency declared in the wake of the Mau Mau rebellion in 1952, Mboya continued to use his extensive network within the global labour movement in order to spotlight the colonial atrocities in Kenya and call for independence.

Fast-forward to now, however, and unions are no longer the vibrant social movements they once were. They are divided internally and, together, fail to present a united front in the fight for workers’ rights. Despite the poor working conditions faced by almost all low-income workers, unions have failed to coalesce and organize around big issues.

Their electoral leverage has also declined considerably, and the new generation of union leaders appears more inclined to cosy up to politicians than push the workers’ agenda. This is partly due to governments’ success in making life difficult for recalcitrant unions through the arrest of union leaders, its failure to provide protection from employers firing workers for joining unions, and the criminalization of nearly all strikes.

In fact, revealing just how far their stock has fallen, the very word ‘union’ has become stigmatized in political discourse and even in much of the popular press. The Nation’s usually mild-tempered journalist Macharia Gaitho, for example, referred to Wilfred Sossion, the leader of the Kenya National Union of Teachers (KNUT), as “the new face of labour militancy” in an opinion piece, despite the fact that there was nothing particularly ‘militant’ about the way the union demanded the government honour its contractual obligations.

 

Corporate takeover

Both inside and outside government circles, criticism of the teachers’ strike has tended to have been articulated in the language of business, expressing the widespread notion that the market is the antidote to poor governance and all social ills. According to this line of thinking, problems are rarely systemic, but rather the result of pesky inefficiencies that can be fixed with better data, the right technology, and smarter corporate methods.

Despite its unpopularity in many areas, in Kenya, ‘corporate-speak’ is mainstream, certainly in government. A deep faith in corporate-style governance was inaugurated by former president Mwai Kibaki – himself an economist and one of the most successful businessmen in Kenya – and under current president Uhuru Kenyatta, this philosophy has only deepened. In fact, in Kenyatta’s cabinet, the most prized qualification for appointment seems to have been corporate experience, exemplified by the appointment of Adan Mohamed, a Harvard graduate and former Barclays managing director, to the position of Cabinet Secretary for Industrialization and Enterprise Development.

The assumption amongst many senior government officials then is that the market is a panacea for all troubles, and that unions are a mortal enemy in this project in that they aim to distort the market and reward inefficiency. But this market-led mindset falls down when not all government services are responsive to the rigours of business, and is particularly dangerous in a troubled economy with a limited social safety net. This makes the decline of unions all the more worrying.

 

Who represents workers?

The terminal weakening of workers’ unions removes a crucial bulwark against the state’s authoritarianism and workplace discrimination. Kenya generally prides itself on a vibrant media, active civil society, growing middle class and its new constitution. Yet the media in the last election failed to ask some critical questions, and if such spaces for alternative voices continue to shrink, the government and corporations will have ever more limited incentives to listen to the vulnerable and marginalized.

If the teachers’ union, one of the strongest and one whose workforce provides such a critical service, could be forced into submission so easily, it follows that smaller unions such as the health workers union could be dismissed with even less protest.

In an era when multi-national corporations with dubious labour records flock to Kenya, the need for vibrant and effective workers’ unions has never been more crucial.

Related articles

• Striking Out: How Kenya’s Unions Have Gone from Hero to Zero (sakunian.wordpress.com)
• KNUT shelves planned teachers strike after meeting Uhuru (capitalfm.co.ke)
• TSC finally releases teachers’ July pay (capitalfm.co.ke)
• The need for unions (sakunian.wordpress.com)
• Kambi blocks agency fees for non-union teachers (capitalfm.co.ke)
• B.C. teachers back in court seeking damages from government (vancouversun.com)
• Kenya’s Ruto flies for Hague trial (bbc.co.uk)
• B.C. teachers seek damages from government as latest court battle begins (macleans.ca)
• B.C. teachers seek damages from government (globalnews.ca)
• Kenya debates leaving the ICC (bbc.co.uk)

Africa Focused News

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Africa, Angola, Bank of Ghana, Beijing Capital International Airport, BRIC, Cameroon, China, China Development Bank, China-Africa Development Fund, Congo, DHL, Diamonds, DR Congo, East Africa, Equatorial Guinea, Ethiopia, Germany, ghana, International Finance Corporation, Ivory Coast, Kenya, Made in Ghana Solo Exhibition, MoneyGram, Nairobi, Nigeria, Oil, Sierra Leone, South Africa, Sudan, Tanzania, Uhuru Kenyatta, West Africa, World Bank, Zambia

REPORT OF LAST WEEK (from 19/08/13 to 23/08/13)
by Dario Galluccio – This Blog is sponsored by http://www.reflexecogroup.com

Ghana: Non-traditional export to hit 5.0 billion dollars
The Ministry of Trade and Industry (MOTI) is to increase the country’s non-traditional export from the current export value of 2.64 billion dollars to 5.0 billion dollars by 2017. This will enhance the Gross Domestic Product to increase the national income. The country also aims at generating considerable number of jobs and incomes, which will be translated into improved standard of living and welfare of the people to consolidate the middle-income status.
Mr Gerald Nyarko-Mensah, Director of Export Trade of MOTI said the strategy formed part of the national strategy for the non-traditional export sector from 2013 to 2017.
He said the country needs an investment capital of 600 million dollars to implement the National Export Strategy document, which among other things, would build the capacities of the Ghana Export Promotion Authority and the Metropolitan, Municipal and District Assemblies to enable the country achieve the goal. He also said the country would no longer depend solely on the export commodities but would over the period invest in fresh and processed fish, vegetable oils, root crops, grains and legumes, natural rubber and products of the creative arts.
Mr Nyarko-Mensah said the strategy would put Ghana on the global map as a world class exporter of competitive products and services to reduce poverty promote sustainable environmental development and improve the balance in spatial and regional development. He indicated that the strategy would strengthen and resource export development related institutions to ensure that the export culture is imbibed nationwide so that every district would be able to have at least one significant commercial viable agro-based export product.

Ghana: World Bank says economy is expected to grow
Mr. Jean Phillipe Prosper, the Vice-President of the International Finance Corporation for sub-Saharan Africa, Latin America and the Caribbean, says the current glitch in government’s finances is only temporary as the country’s economy is expected to continue its growth in the coming months. Government is aiming to cut the fiscal deficit from 12 percent of Gross Domestic Product in 2012 to 9 percent in 2013, through a combination of revenue and expenditure measures.
“Africa is turning heads around the world, while developed countries still find their footing after a devastating crisis and emerging markets in other parts of the world face new challenges after years of torrid growth. Ghana is leading the way. Ghana’s growth in the first decade of this century averaged more than six percent. Today that growth is even higher and expected to continue,” he said.
The World Bank has provided about US$10billion in funding to the government of Ghana since it joined the Group in 1957; with most of the funds coming from the Bank’s facility for the world’s poorest nations — the International Development Association (IDA). About US$8billion of the total funding came as grants and interest-free credits to the government.

Kenya: President Kenyatta arrives in China on first state visit
President Uhuru Kenyatta arrived in Beijing on Sunday morning on his first State visit to China, which will focus on growing Kenya’s business and investment with the East. African ambassadors accredited to China greeted President Kenyatta and First Lady Margaret Kenyatta on arrival at Beijing Capital International Airport. They told him Kenya’s agenda of seeking transformational projects in infrastructure, technology, agribusiness and finance resonated with the continent. Discussions this week with Chinese President Xi Jinping and other government officials, as well as the China business community will focus on investments mainly in infrastructure, energy, technology and protecting Kenya’s wildlife. President Kenyatta will also press for greater market access for Kenyan exports.
He said his visit would cement and deepen the strategic partnership between Kenya and China.

East Africa: China tops Kenya’s FDI sources
China has become Kenya’s biggest FDI source with 474 million U. S. dollars invested in the East African country, as a result of the development of bilateral trade and economic cooperation, according to Chinese Ambassador to Kenya Liu Guangyuan.
Statistics from the Chinese Embassy in Nairobi show that the bilateral trade has boomed in recent years with an annual surge of 30 percent to 2.84 billion U. S. dollars. China has become the second largest trade partner to Kenya.
Meanwhile, Kenya has become more and more popular with Chinese tourists, whose arrivals hit 40,000 in 2012 and are expected even higher in years to come.

Ghana ranked 10th export country to China
Ghana has been ranked second after Nigeria as an ECOWAS country whose exports is in higher demand by China. It was however ranked 10th among sub-Sahara African countries that export to China.
Angola, South Africa, Congo, DR Congo and Zambia were the top five countries that China imported from. The rest were Sudan, Equatorial Guinea, Nigeria, Cameroon and Ghana.
According to Ecobank Research, sub-Saharan Africa has emerged as China’s biggest bilateral trade partner. The export trade rose to $1.2 billion last year, up from $945 billion in 2008.
Ghana’s exports to China reduced from 2008 to 2012. The country mainly exports minerals and cocoa to one of the fastest growing economies in the world. China has increased its investments in Africa in mining, energy, construction and manufacturing. However, there is an increasing move towards investments in the services sector particularly finance and tourism.

Ethiopia hails Dangote’s investment in cement plant
Nigeria’s Dangote Group has seen rapid expansion across the continent and has received yet another commendation, this time by the Ethiopian government, after the establishment of a new cement plant in the East African country.
The commendation, conveyed through a letter, acclaimed the effort of the President of the conglomerate, Aliko Dangote and promised to provide the enabling atmosphere for the success of the venture.
Dangote Cement had launched a 2.5 million metric tonnes per annum plant in Mugher, Adaberga District in Ethiopia with a pledge by the company to ensure that it was completed on schedule.
Dangote, Africa’s richest man, has pledged to spend up to $15 billion pursuing investment opportunities around the continent in the next 4-5 years. He earlier revealed that his company has invested approximately $8 billion in an oil refinery and another $2 billion in fertilizer in Nigeria alone, aside other billion dollar investments outside the country.

Nigeria: Apex Bank launches $1.2m MSME fund
The central bank of Nigeria has launched a N220 billion ($1.2 million) Micro, Small and Medium Enterprise (MSME) development Fund to fill the vacuum accessed in the small business sub-sector. The Fund, which would be given to Micro Finance Banks (MFBs) and Micro Finance Institutions (MFIs) to strengthen their operations (the credit component, the guarantee component and the refinancing component for the sector to work) will provide wholesale funding requirements in their operations and ensure that the un-served and under-served clients in Micro, Small and Medium Enterprises (MSMEs) sub-sector are now covered.
The fund was set up in accordance to Section 6.10 of the revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria which stipulates that “a Microfinance Development Fund shall be set up, primarily to provide for the wholesale funding requirements of MFBs/MFIs.”
The development fund will be available for disbursement as from next year. 60 percent of the fund has been earmarked for the provision of financial services to women entrepreneurs. This is as a result of the challenges they faced in accessing financial services in Nigeria.
Special consideration will also be given to institutions that will provide financial services to graduates of the CBN’s Entrepreneurship Development Centers (EDCs).

Kenya: from nowhere plans East Africa’s first Oil exports
Kenya is headed to become the first oil exporter in East Africa, moving in less than five years from being a have-not nation to the regional leader in cutting reliance on energy suppliers such as Royal Dutch Shell Plc.
After Tullow Oil Plc (TLW) discovered oil last year, Kenya is set to start shipments in 2016, overtaking neighboring Uganda, where Tullow found crude more than seven years ago. The U.K. explorer plans to start pumping in Kenya as soon as next year, Chief Operating Officer Paul McDade said in an interview. Kenya’s deposits may top 10 billion barrels, according to the company, more than three times the U.K.’s remaining reserves.
Oil will allow Kenya to “diversify export earnings and act as a catalyst for infrastructural spending, especially on the transport network,” Phumulele Mbiyo, regional head of macroeconomic research at Nairobi-based CfC Stanbic Bank Ltd., a unit of Standard Bank Group Ltd., said . “The shilling is expected to benefit from inflows of foreign exchange and reduced spending on fuel imports.”

Sierra Leone: Diamond exports sees 43% increase in H1
African diamond exporter, Sierra Leone says it shipped out diamonds worth $102 million in the first half (H1) of the year, a 43 percent rise as compared to the $71 million gained from exports during the same period last year. According to the country’s National Mineral Agency (NMA), the increase – which provided the government with a tax windfall in excess of $5 million – was largely influenced by the improved level of productivity from its major diamond miner, Koidu Holdings and further highlights the growing advancement in channeling diamonds through the government.
“At the end of the first half of 2013, exports exceeded those of 2012 by 42.95 percent, an improvement of $30.71 million,” Ibrahim Mohmed, who oversees the diamond sector at the NMA, told. “The total diamonds exported amounted to 331,471 carats valued at $102 million,” he added.

Kenya: International acquisition of local firms profit entrepreneurs
Recent acquisition of Kenyan companies by foreign multinationals will provide multi-billion-dollar windfalls for local entrepreneurs, experts reveal.
Findings suggests that several billionaire entrepreneurs are selling their stakes in local companies to foreign firms eager to tap into the East African market and have a preference for acquisition as a faster and cost efficient medium of entry into the region.
According to Business Daily, sporadic deals in the past year have attracted multinationals from across Africa, Asia and Europe with concluded acquisitions involving firms such as Fina Bank, Mercantile Insurance, Kenya Data Networks (KDN) and Swift global. Other potential buyout deals include that of AccessKenya, Scangroup, KenolKobil, CMC Holdings, and Resolution Insurance.
Analysts have noted that most agreements are aimed at generating capital for cash-strapped firms or at providing expertise in resource and operational management to ensure sustainable business development for the growing economy.

Ghana: Trade between Ghana-Germany is pegged at €1.25b for 2013
Trade between Ghana and Germany currently stands at €1.25 billion as at the end of March 2013. This was made known by President John Mahama last week when he hosted the outgoing German Ambassador to Ghana, Dr. Renate Schimkoreit.
Germany is one of Ghana’s biggest trading partners in the European Union.
According to President Mahama, Germany has given Ghana €132 million out of the total portfolio of €184 million support pledge it made for the period between 2012 and 2015, reports the Ghana News Agency.
Germany’s funding in Ghana has been in major areas such as renewable energy, health, agriculture, land administration project among others.

Nigeria: To Sign $3.7bn coal project deal with Chinese firm
Nigeria’s president, Goodluck Jonathan says nothing stops the country from exploiting its abundant coal reserves for quality power generation if properly harnessed.
“Nigeria is endowed with abundant coal reserves of the required quality necessary for power generation. And so there is no reason why we should not exploit that sector.”
Nigeria’s coal reserve is put at about 360 metric tonnes.
The president also stressed on the importance of the solid mineral sector and the need to harness it in order to create jobs, wealth and increase the foreign direct investments in the economy.
During the workshop, HTG-Pacific Energy Consortium and Ministry of Mines and Steel Development signed a $3.7 billion deal for a coal to power project at Ezimo Coal Block in Enugu State and a 1,000 megawatts coal power generating plant. The MoU represents the first step to building plants that will generate additional 1200 mega watts of electricity to the national grid.
Nigeria’s Minister of Power, Prof. Chinedu Nebo, said a greater part of the funds required to carry out the project will be borrowed from foreign banks.

Africa: Standard Bank will open offices in Ethiopia, Ivory Coast 
Standard Bank, Africa’s biggest lender by assets, is poised to open up representative offices in Ethiopia and the Ivory Coast, it merged earlier this week. Banks first open representative offices in the targeted countries before setting up shop and opening up a branch network offering a suite of their products.
By the time Standard Bank decides to go full steam ahead and start full-suited operations in the two countries, the lender would have increased its African operations to 20. It currently has operations in 18 African countries.
The lender is paying more attention to Africa because it is planning to take advantage of opportunities that will be proffered by the growing middle class in the continent. Standard Bank has disposed of its operations in the United Kingdom, Russia and Argentina to focus on the African continent.
In the past couple of years, Ethiopia has been seen as having great prospects for foreign banks. This is in view of the fact that it is Africa’s second most populous country.

Ghana: DHL to expand in Africa
Leading international express and logistics company, DHL Express has stated that it will continue to invest in Sub-Saharan Africa. To strengthen its 32-year relationship with Ghana, DHL’s Sub-Saharan Africa Managing Director, Charles Brewer last Friday met key stakeholders, customers, employees and the media to explain the company’s future direction.
“Despite the current global economic uncertainty, DHL expects the African region to deliver,” said Mr. Brewer.
He also said “As we see the continent ‘surge’ as a result of sector investment, increased consumer spending and economic activity, the future is still bright for the continent. Ghana is an attractive market for us and with the GDP growth rate 7 percent presents a major opportunity. The opportunity for us is to expand our footprint within the country and service semi-urban and rural areas so that anyone-from a student to a small business- can access our network and the over 220 countries and destinations that we serve.”

Ghana: 1st Made in Ghana exhibition in Nigeria
The first ever Made in Ghana Solo Exhibition to be hosted in Nigeria, which is part of efforts aimed at strengthening the bi-lateral trade relations between Ghana and Nigeria as well as introducing Ghanaian manufacturers to the largest market in Africa was declared launched in Accra by the President of Ghana Manufacturers Association, Nana Owusu Opare. The press briefing which was held in the boardroom of First Atlantic Bank; the major sponsor of the program, was said to be the first solo exhibition platform that will be strictly for Ghanaians to showcase their products in Nigeria.
First Made in Ghana Solo Exhibition which is under the theme: “Promoting Ghana’s Export Potentials To West Africa’s Largest Market” was put together by Vintage Visions, Ghana.
The exhibition is expected to take place at the LTV. Ikeja, Lagos, from 2nd of September to 7th.

Nigeria: Nigerians abroad, biggest investors
Nigerians abroad have been identified as the biggest investors into the country’s economy, which is seen as one of the fastest growing in Africa.
The chairman, House of Representatives Committee on Diaspora, Hon. Abike Dabiri-Erewa disclosed this at the just concluded Nigerian Diaspora Direct Investment Summit in London where she urged the Nigerian government to ensure that Nigerians abroad are given the necessary support needed to have a smooth inter-business transactions in their various countries of abode.
Moreover also the Secretary to the Government of the Federation (SGF), Senator Anyim Pius Anyim, has lauded the contributions of Nigerians abroad to national development, saying, ” Remittances of over $21 billion in the last one year, appears the highest so far in Africa.

Kenya: Kidero signs Sh90 billion deal with investors
Nairobi Governor Evans Kidero has signed deals worth Sh90billion with Chinese investors to be used for infrastructure development. Speaking in China yesterday, Kidero said that he had held a fruitful meeting with the executive chairman of China Investment Bank, on the prospects of funding the urban re-generation of Eastlands housing estates, Nairobi’s transport system and nine transport corridors to open up traffic in the county.
“The China Investment Bank is willing to invest in Nairobi county. Its chairman Hu Huai Bang will soon visit Kenya,” he said. He said some Chinese investors want to fund the second phase of the Digital Traffic and Security Control where cameras will be installed in 253 major junctions in Nairobi from Mowlem area in Embakasi West to Karen. We also got commitments for the health care sector where statistics show that there are 7.6 million hospital visits per year in Nairobi while there are 83 hospitals, clinics and dispensaries. This will be upgraded to digital imaging systems,” Kidero said.

Nigeria: MoneyGram, eTranzact sign money transfer deal
International money transfer company, MoneyGram, has finalised agreements with electronic transaction and payment platform, eTranzact’s PocketMoni, that will allow accessibility to Nigerian mobile users all over the world.
PocketMoni – which works on all GSM networks the partnership – would enable customers carry out their transactions with ease, without having to face the often “touted inconvenience” of funds transfer.
The companies said the deal which would allow 24/7 access to money transfer transactions is a step in building a comprehensive suite of mobile services.
The Regional Director for North West Africa MoneyGram International, Mr Francois Peyret noted that the partnership was another effort aimed at driving the cashless policy directive of the Central Bank of Nigeria (CBN).

Ghana: Reserve stands at $5.7billion
Dr Kofi Wampah, the Governor of the Bank of Ghana (BoG), has announced that Ghana’s external reserves stood at $5.7 billion as of August 20, 2013.
This translates into more than three months of import cover, meaning that the country’s external reserves can pay for more than three months of imports.
Dr Wampah added that the current reserve level was an appreciation of the one recorded last month; in july the country’s external reserves were $4.9 billion but rose to the current level due to the various gains chalked up in the economy over the period.
The governor attributed those gains to the numerous interventions the government introduced into the economy, such as the Eurobond and improvement in the energy sector.

Ghana: To save $279 million from crude oil revenue
Ghana has been able to save close to $279 million from revenue earned from crude oil export for the first half of 2013. This is contained in the Ghana Petroleum Funds report on the country’s earnings from crude oil export since it started exporting crude.
According to the report, $77 million will be set aside for future generations in the Heritage Fund, while $202 million has accrued to the Stabilisation Fund to cushion the country in times of crude oil price volatility.

Africa: CDB invests $2.4 Billion in infrastructure projects
China Development Bank (CDB), the largest policy lender in the country, has invested over $2.4 billion in Africa’s infrastructure development, the bank’s president, Zheng Zhijie, has revealed.
According to the president, the bank, through its wholly owned subsidiary fund, China-Africa Development Fund, has financed several economy-enhancing projects in mineral resources development, power generation, agriculture and machinery manufacturing across 30 African countries, and has also offered loans worth a reported $18.9 billion.
With the economic crisis threatening Europe and parts of North America and a quest to find cost friendly markets for trading and business development, western countries have started turning their attention towards African nations, with predictions that the continent will be the next region to enjoy an economic boom. Top economic giants including the US, UK, Japan, Russia, France and Germany are all pushing for investment opportunities in the fast growing continent, but China seems to be leading the pile.
In 2009, China became Africa’s biggest trading partner, with trade deals from $10 billion in 2000 to over $200 billion this year, thereby outdoing the US.

Nigeria: IFC invests N60bn in infrastructure development
International Finance Corporation, IFC said it has invested 25 per cent, about N60 billion of its 2012 total investment in Nigeria on infrastructure. Vice President, Sub-Saharan Africa, Latin America and The Caribbean, Jean Philippe Prosper stated this in Lagos while interacting with news men during his visit to Nigeria.
He said that IFC has invested a total of $1.5bn in Nigeria within the organization’s last fiscal year that ended in June, 2013.
According to him, the infrastructure and natural resources sector got 25 per cent, about N60bn, while manufacturing and agribusiness got 25 per cent. The financial markets got N120bn about 50 per cent of the total investments.

Tanzania: Dar es Salaam Business prospects attract Singaporeans
Prospective investors from Singapore are in the country to explore business opportunities, thanks to President Jakaya Kikwete’s recent tour of the Asian nation. The visiting Singaporeans have expressed interest to invest particularly under the Export Processing Zones Authority (EPZA) managed Export Processing Zone (EPZ) and Special Economic Zone (SEZ) programmes.
The arrival of the strong business delegation from Singapore is linked to President Kikwete’s tour of Japan and Singapore early last June to lure prospective investors from the highly industrialised Asian nations.

Angola: To urge diversification amid stable oil prices
Angola, Africa’s largest oil producer after Nigeria, needs to cut its reliance on crude to buffer the economy as prices for the commodity are set to remain stable over the next three years, a central bank official said.
The economy is forecast to expand 6.5 percent this year and between 7 percent and 8 percent in 2014, while oil trades at about $106 a barrel, Antonio Andre Lopes, a vice-governor of the Banco Nacional de Angola, said. Crude oil makes up 97 percent of the country’s exports and 80 percent of tax revenue.
“The price of oil is a big threat so we need to diversify the economy to mitigate this,” Lopes said. “However, the economy is getting better and I think the oil price will be stable.”
The government is seeking to increase lending from banks to businesses in industries including construction, mining and agriculture as the southwest African country recovers from a 27-year civil war that ended in 2002.
Angola’s $116 billion economy is forecast by the World Bank to expand 7.2 percent this year. Crude oil has gained 12 percent in New York in the past six months and was trading as high as $104.72 a barrel today.

Ghana can generate power for West Africa
Alhaji Inusah Fuseini, Minister for Lands and Natural Resources says Ghana has the potential to establish power-generation plants to feed the West African sub-region.
He said investment in relatively cheap gas-fired power plants through gas that would be made available by the Ghana Gas Company ‘would significantly enhance the competitiveness of products of Ghanaian companies and facilitate the generation of the targeted 5,000KV by 2016 for export to countries in the sub-region.’
Alhaji Fuseini made the observation when Mr. Kimihiko Inaba, Executive Director of Japan External Trade Organization (JETRO) led a three-man South Africa-based team comprising himself, Mr. Yasuto Suzuki, Deputy General Manager of Toshiba and Mr. Nozomu Sasaki, General Manager of Mitsubishi Corporation to pay a courtesy call on the minister. The three-member JETRO delegation is currently in Ghana to explore investment opportunities particularly in the natural resource and power generation sectors in a bid to boost investment of Japanese companies in Ghana.

Ghana: BoG issues 7-year bond
The Bank of Ghana on Thursday, 22th of August, issued its first seven year Government of Ghana bond. Proceeds from the 100 million Ghana Cedi bond is expected to be used to settle maturing debts as well as finance some infrastructure projects. This is contained in the Government of Ghana’s Securities Calendar from July till the end of the year.
A total of 1.7 billion Ghana Cedis will be raised this month from short and long dated instruments. This will bring to a total of 14.7 billion Ghana Cedis of debt instruments raised by government this year.
The Central Bank will also issue a 600 million Ghana Cedis bond next month. Another seven year bond will be issued in November

Tanzania: Vodacom will invest $124m for network expansion
Tanzania’s largest mobile network operator, Vodacom, said it is investing 200 billion shillings ($124 million) to develop and grow its business in Tanzania, but complained that rising taxes could stifle the sector.
Vodacom spent 230 billion shilling ($142 million) last year to build over 890 network sites.
Vodacom hopes the service expansion will help pull more subscribers despite stiff competition from the likes of Airtel Tanzania, India’s Bharti Tigo Tanzania, Millicom International Cellular and Zantel.
Telecommunications is the fastest growing business sector in East Africa and the government is determined on getting a bigger share of revenues. However, taxation in East Africa’s second-largest economy had become difficult for mobile phone operators.

South Africa: Gold Fields acquires Barrick’s interests in Western Australia
JSE-listed gold miner, Gold Fields, said it had acquired Barrick Gold’s interests in Yilgam South Assets in Western Australia for $300 million. Gold Fields’ purchase of these assets will give the South African gold miner an extra 452.000 ounces in yearly gold production. The transaction will also offer the gold miner 2.6 million standby ounces for $115 an ounce and 1.9 million reserve ounces.
It has been disclosed that Gold Fields may pay for these assets in cash or partly in shares offered to Barrick Gold. If Gold Fields opts for cash payment for these assets, it may use its money generated in Australian operations. It may also use money from its bank facilities. And perhaps obtain funds from the capital markets.
The purchase is dependent on a number of conditions being met, one of them being the approval by the South African Reserve Bank for the transaction. The deal will have to get the blessing of Australia’s Federal Treasurer. Lastly, the Western Australian Minister for Mines will also have to put his signature to the transaction.
Barrick Gold is the world’s biggest gold producer which has been struggling in recent years.

Nigeria: Shekau’s death excites BRIC investors
According a report published in Forbes the death of Abubakar Shekau, the leader of the Boko Haram insurgency, is making foreign investors look favourably towards investing in Nigeria. Such investors are said to be frustrated by the low level of profit they are currently making from the BRIC nations of Brazil, India, Russia and China.
The report said success in cracking down on security threats in the Niger Delta is also changing the security situation for the better. And while terrorist disruption recedes, money keeps flowing into Nigeria.
In the last six months, U.S. corporations like Procter & Gamble PG -have committed at least $700 million to build new factories and agricultural facilities in the country while the Nigerian government itself announced a $1 billion fund to nurture the local software industry, which officials think can ultimately capture $20 billion a year from rivals like India.
Forbes also said Nigeria was one of the world’s four best-performing markets last year with a 35.45 per cent gain and is the biggest and most dynamic frontier economy in Africa, with a GDP at par with global capitals like Hong Kong and Singapore.
Moreover the Nigerian economy is growing at an annualised rate well above six per cent, faster than any of the top-tier emerging markets.

Ghana: First seven year bond oversubscribed by 170 percent
The country’s quest to raise funds for development through the issuing bonds has received massive interest from investors. The Government of Ghana through the Ministry of Finance and Economic Planning sold its first seven-year bond and it was over-subscribed by 170%.
Government received GH¢ 270 million Ghana cedi offers from local and foreign investors but took GH¢102 million cedis. It would be paying those who participated in the bids, an interest or a yield of 17.5%. Most of the bids that government is likely to accept are from local investors.
Proceeds from the bond, would be used to finance infrastructure projects and settle some maturing debts. Government is however expected to receive the money by next Monday, 26th of August. Some analyst says this would encourage some corporate institutions as well as government agencies like Volta River Authority (VRA) to issue long-term bonds to finance their operations.

Related articles

• President Kenyatta arrives in China on first State visit (capitalfm.co.ke)
• From Indian Ocean to Uganda: China will build Kenya’s new rail line (csmonitor.com)
• Why China is investing $5 billion in Kenya’s infrastructure (smartplanet.com)
• Ties with Kenya ‘not just about resources’ (chinawatch.washingtonpost.com)
• Kirubi joins Uhuru’s business entourage in China (capitalfm.co.ke)
• Africa Attracting Technology Firms (voanews.com)
• China’s Trade with Ghana Eclipsed that of the US (atlantablackstar.com)
• Uhuru says China to help Kenya combat poaching (capitalfm.co.ke)
• Ghana-US trade equals $817m in first-half 2013 (ghanabusinessnews.com)
• IFC to Expand Nigeria Investments to $2 Billion by 2014 – Bloomberg (bloomberg.com)

Africa Focused News

Tags

$1billion, Africa, Eurobond, Fina Bank Group, Foreign direct investment, Gambia, ghana, Ivory Coast, Liberia, Nigeria, Rwanda, Sierra Leone, South Africa, West Africa, World Bank, Zimbabwe

REPORT OF LAST WEEK (from 05/08/13 to 09/08/13)

by Dario Galluccio

Ghana: Gold Fields Ghana invests US$2.8m in infrastructure projects

Gold Fields Ghana, one of the country’s leading mining companies has invested over US$2.8million in infrastructure projects in some communities in the country. The company said the projects are currently at various stages of execution.
Some of the projects the company has invested in this year include, connection of electricity to Tarkwa-Nsuaem Municipal Education office, the construction of 8 Seater WC facility at Huniano, supply of furniture to various schools in Tarkwa-Nsuaem Municipal and Prestea/Huni-Valley District Assemblies, and the extension of Small Town Water Supply Systems in New Atuabo and Pepesa. The rest include, the construction of Community Center at Kyerekyerewere, construction of Early Childhood Development Center at Huni – Valley, Tarring of 3km Samahu-Pepesa Road (Phase 3) and the 1.5km UMAT Junction-Brahabobom Road and Construction of JHS at Pepesa.

West Africa: Experts discuss ECOWAS rail project

‘Today’s meeting is to discuss the initial arrangements needed to bring full realization of the proposed West Coast Speed-Rail Project,’ the Country’s Representative of Hammcobtb Engineering International Incorporation-Canada, said in a statement to welcome delegates from ECOWAS countries including, Ghana, Nigeria, Togo, Benin and Côte d’Ivoire.
Broadly the project is to transform the Region’s transportation system by launching new high speed passenger and goods rail services. It is also to facilitate major industrialization of countries, improve transportation of agricultural produce, and create immediate political awareness for further economic emancipation of the people.

Nigeria: Foreign Direct Investment now U.S.$8.9 billion

The Minister of Foreign Affairs, Ambassador Olugbenga Ashiru, Thursday told the members of the National Working Committee (NWC) of the Peoples Democratic Party (PDP) that the foreign direct investment (FDI) into Nigeria rose significantly to $8.9 billion at the end of 2012.
The amount, he said was far higher than the $6.1 billion realised by the country in 2010. He also said at the end of 2012, Nigerians in the Diaspora contributed over $15 billion to the economy. Also, the minister of foreign affairs told the PDP NWC members that there were over 9,500 Nigerians in foreign prisons.
Giving accounts of his stewardship, Ashiru cited the United Nation’s World Investment Report, which stated that the total FDI into Nigeria was $8.9 billion. This, he said was far above the 2010.

Rwanda: Nigerian Bank acquires a 70 Percent stake in Fina Bank

Balivada Rao, the managing director of Fina Bank Rwanda, a subsidiary of the Kenyan-based lender, confirmed the development in a phone interview on Thursday, saying the deal was subject to regulatory approvals. Rao said the buy-out would greatly benefit both the bank and its clients in terms of products and service delivery.
“GTBank is a well capitalised, technologically advanced and customer-focused bank. So, once they acquire the 70 per cent stake, they will enable us roll out better products and services and put us in a better position to get funding from foreign development finance institutions,” explained Rao. The deal is worth about $100m (Rwf65.1b). Rao said GTBank was a key player in the West African market, where it operates in Nigeria, Ghana, Gambia, Sierra Leone, Liberia and Ivory Coast, as well as in the United Kingdom. At the end of 2012, the bank had a total asset base of $11.1b, shareholder funds of over $1.8b and earned $558.9m profit after tax. GTBank is listed on both the Lagos and London stock exchanges.
If the deal is approved, GTBank will join a list of other West African banks, including Ecobank and Access Bank, which have ventured into the region to tap into its fast-growing economies and immense opportunities, especially in oil and gas.
Fina Bank Group has total assets of $338m. Its loan book was $184m in the first quarter of this year. The bank operates 38 branches across Kenya, Uganda and Rwanda.

Ghana: $1 billion Eurobond cash will arrive on August 7th

Government is set to receive the Eurobond cash of $ 1 billion on August 7, 2013. It follows a successful bond sale which was over subscribed.
‘The cash comes in nine days from the deal. The deal was done on the 25 July, 2013 and per the deal which is Trade day plus nine working days, it then falls on 7 August, Deputy Finance Minister Kweku Ricketts Hagan said. With a 10-year grace period, the bond will mature on August 7, 2023, he added.
Out of the $1 billion raised, $300 million is expected to be used for the refinancing of expensive domestic debt. $250 million will also be used to retire part of the $750 million Eurobond which was floated in 2007. Ricketts Hagan stated that $300 million will also be invested in capital projects, which are self-financing.

Zimbabwe: Mining sector in dire need of FDIs

Governement has to be consistent in its polices to attract Foreign Direct Investments (FDIs) in the mining sector, permanent secretary for Economic Planning and Investment Promotion Desire Sibanda has said. Sibanda said FDIs remained a key ingredient for rapid economic growth but there was competition globally for investment inflows.
“Competition for FDI is fierce on the continent and is expected to intensify. It is therefore critical to note that the policies and approach to attract FDI has to be smart. There is need to demonstrate policy consistency and stability,” said Sibanda.
He also said the country’s mining sector was in dire need of investments, especially its infrastructure.
“What has been undermining Zimbabwe’s rich mineral wealth have been challenges such as inadequate infrastructure development, perceptions of corruption to unfair licensing practices, political risks and the high capital costs associated with establishing or expanding a mining venture,” he said.
“To attract more FDIs, Zimbabwe needs to improve the doing business indicator,” he said.
Sibanda said the turbulent political environment in the last decade and poor perception of the country from potential investors had negatively impacted on the country’s economic growth. He said government recently floated a US$32 million tender for an aeromagnetic mineral exploration exercise in the Eastern Highlands to determine the quantity of minerals.
“The exploration will help to comprehensively determine the extent of the country’s mineral wealth and have adequate information to lure investors,” said Sibanda. “Plans are in place to set up an exploration company to identify mineral deposits throughout the country.” He said the mining sector continued to grow and this was attributed to positive performance in diamonds, chrome, nickel, platinum and palladium.

Ghana: Ghana Water and Ghana Urban merger complete

Transitional arrangements for the merger of the Ghana Water Company Limited (GWCL) and the Ghana Urban Water Limited (GUWL) into a single national utility company have been completed with the introduction of a new administration to manage the company. The new administration is to be headed by a managing director, two deputies and chief managers who will head the various regional offices of the company.
Before the merger, the two companies had been solely responsible for water services in urban areas throughout the country. To facilitate the government’s plans of merging the two companies, a 14-member committee was inaugurated to oversee the reform of the water sector.

Africa: West Coast High Speed rail project consultants meet beneficiaries

Consultants working on the 1,178 kilometre West Coast High Speed rail for the West African sub region Sunday presented technical details of the project to representatives of the beneficiary countries in Accra. The work, which has received the sanction of ECOWAS, will start from Nigeria through Benin, Togo, Ghana and end in Cote d I’viore.
The consultants of the project, HammcoBTB Engineering International Incorporated of Canada, met with representatives from Ghana, Benin, Togo, Cote I’dviore and Nigeria to brief them on the extent of work. Ghana has already expressed interest, but it is left with the commitment from the governments of Benin, Ivory Coast and Nigeria for the commencement of work.

South Africa: Nedbank posts solid interim results

South Africa’s fourth biggest bank, Nedbank, on Tuesday said it had posted a solid set of results in the six months to June this year, thanks to strong revenues derived from fees. But the lender’s share price remained unchanged on the JSE’s early trade as these results were said to be in line with expectation.
A subsidiary of Old Mutual, Africa’s biggest insurance company and an international wealth manager, Nedbank posted a 13 percent surge in interim profits.
Profits were made better by the company’s robust growth in revenues from fees, with headline earnings a share soaring to 831 cents during the period under review.
In the six months to June this year, Nedbank announced a half year dividend of 390 cents. This is 15 percent higher than the previous comparable period. Nedbank is also in a tactical joint venture with West Africa’s Ecobank, which has opened the JSE-listed lender to many Africa countries.

South Africa: Delta’s property portfolio will surge after acquisitions

Delta Property Fund is poised to inject a huge chunk of the R2 billion ($203 million) it plans to raise for acquisitions of buildings across South Africa. The firm, which leases office complexes to the South African administration, believes prospects are great in renting office space to government.
Bronwyn Corbett, the CFO of Delta, identified Telkom SA, electricity utility, Eskom, and ports-to-rail utility, Transnet, as state-owned companies that had all the likelihood to be its customers. The firm is going to obtain money for these acquisitions through debt markets in the wake of good financing rates, Corbertt said. Delta is set to escalate the worth of its real-estate collection to R7 billion ($710 million) in 2017. The portfolio will surge from R4.4 billion ($447 million) as demand for government offices increases. The firm rents almost 75 percent of its office complexes to government ministries and state-owned firms with nine-year-long leases.

South Africa: Nedbank allies with Bank of China for deals and trade

South Africa’s Nedbank Ltd said on Tuesday it had entered into an alliance with Bank of China to target trade and investment between Africa and the world’s second-largest economy.
“The alliance will provide Nedbank with access to new clients and new markets, and will facilitate both parties’ lending, trade finance and transactional banking businesses across Africa,” Nedbank CEO Mike Brown said in a statement.

Ghana: Subsidies on all petroleum products to be scraped by end of year

Consumers of Petroleum products should by the end of this year be prepared to pay the real price of petroleum prices on the world market. This is because government is working to completely remove subsidies on all petroleum products.
Government has already taken off subsidies on petrol, diesel and LPG, but is still subsidizing the other products, like Premix , Kerosene and marine gas oil. Edward Bawa who speaks for the Energy Ministry said the subsidy removal has been necessitated because the targeted poor was not benefiting even though it had a huge impact on government expenditure.

Ghana: Banks increase assets

Total assets of the banking industry as at the end of June 2013 increased to GH¢30.6 billion compared to GH¢24.6 billion in June 2012.
This was driven mainly by advances which accounted for 44.7 percent of the total assets.
Dr. Kofi Wampah, Governor of Bank of Ghana (BoG), who made this known at the close of a Monetary Policy Committee (MPC) meeting in Accra, said the asset growth was mainly funded by deposits which recorded an annual growth of 13.3 percent to GH¢20.4 billion at the end of June 2013. He also said Non-Performing Loans (NPL) ratio in the banking industry decreased to 12.8 percent in June 2013 from 13.2 percent in June 2012, adding that the ratio, excluding the loss category, also declined to 4.7 percent from 5.9 percent in the same period.
Meanwhile, Dr. Wampah said Annual growth in private sector credit slowed to 33.5 percent in nominal terms at the end of June 2013 from 39.0 percent in June 2012. “Similarly, annual growth of real private sector credit was 20.1 percent in June 2013 down from 27.0 percent in June 2012,” he added.

Nigeria: Bourse records stellar performance

The Nigerian bourse continued its march towards new heights and outperformed other African markets by the end of July 2013.
Nigerian equities, among the best performing markets in 2012, have recorded a growth of about 35 percent by the end of July 2013. It managed to outperform other major African markets such as South Africa, Egypt, Zambia, Mauritius and Kenya. It trailed only Ghana, which achieved an impressive return of around 61 percent. During the same period, Mauritius, South Africa and Egypt posted returns of 7.9 percent, 5.2 percent and 7.9 percent, respectively.
In the first seven months of 2013, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) has increased from 23,488.79 to 38,424.34 points. Its market capitalization has also surged from N7.476 trillion ($46.8 billion) to 12.169 trillion ($76 billion). Compared to the same period last year, the Nigerian market rose by 63 percent.
Market analysts believe that the Nigerian market will be able to maintain its positive momentum and continue to attract investors in remaining part of the year. The market is expected to benefit from result announcements by major companies in the second quarter of this year. Even though bearish trend prevailed in June, the market still offers attractive returns in under-priced stocks.

Africa: World Bank commits record US$14.7 billion

World Bank Group committed a record US$14.7 billion to support economic growth in Africa in the 2013 fiscal year (July 2012 to June 2013). The move is also intended to help improve the development prospects of the continent despite uncertain economic conditions in the rest of the global economy.
In a report from the bank Mr Makhtar Diop, World Bank Vice President for the Africa Region, said: ‘The region has shown remarkable resilience in the face of a global recession and continues to grow strongly.’
‘Africa is at the centre of the World Bank Group 2030 goals of ending extreme poverty and promoting shared prosperity, in an environmentally, socially, and fiscally sustainable manner’, he added.
The World Bank Group continued its strong commitment to Africa by approving US$8.25 billion in new lending for nearly 100 projects in the fiscal year under review. These commitments include a record $8.2 billion in zero-interest credits and grants from the International Development Association (IDA), the World Banks fund for the poorest countries. This is the highest level of new IDA commitments by any region in the banks history, the report said.

Ghana: Abokobi Rural bank posts over 500 % profit

The Abokobi Area Rural Bank, a pioneer rural bank in Ghana, made a whopping 519.99 per cent increase in profit before tax in 2012 after it plummeted into a loss in 2010. The bank closed the financial year with a profit position of GH¢306,108.00 from GH¢58,868.00 in 2011, which the ARB Apex Bank, the umbrella body of rural banks, had attributed to effective and efficient management of its resources.
In the near future, the bank intends to open more branches, expand its microfinance programme, repackage its Susu scheme, provide mobile banking service, intensify loan recovery and build the capacity of its staff

Ghana: ‘Banks Must Issue Public Bonds’

The First Deputy Governor of the Bank of Ghana (BoG), Millison Narh has raised concerns over the lack of interest by private financial institutions to issue public bonds in the country. He said findings of the bond market committee revealed more privately placed bonds than public listed bonds on the market.
He said bond issuance plays a critical role in resource mobilization by providing medium to long-term funds in financing investment. He also attributed the lack of willingness on the part of private users to issue public bonds to transparency, transaction cost, micro-economic uncertainty and lack of clear guidelines on corporate bond issuance.

South Africa: Old Mutual boosts offer to UK advisers

Africa’s biggest life insurer, Old Mutual, is set to boost services its Swedish subsidiary, Skandia, offers to financial advisers in the United Kingdom (UK). This emerged after Old Mutual on Wednesday said it had signed a 20-year contract with International Financial Data Services (IFDS) to achieve this.
IFDS is UK’s leading supplier of investor-recordkeeping services and systems to the UK domestic and to the European “offshore” market.

South Africa: Reserves rise in July

The Reserve Bank’s dollar-denominated holdings of gold and foreign assets rose in July from June, amid a rising gold price and currency fluctuations. The Bank said its dollar-denominated holdings of gold and foreign assets rose by $340m to $47.319bn in July‚ from US$46.979bn in June.
The Bank said the increase in the gross reserves mainly reflected valuation adjustments emanating from the significant increase in the dollar price of gold and the fluctuation of the dollar against major currencies.

Africa: Job-hungry graduates moving to Africa to avoid menial jobs in UK

Ambitious graduates are increasingly moving to Africa in a bid to avoid menial jobs in Britain, new research has revealed. The number of university leavers seeking employment in Ghana and other English speaking African countries has almost doubled in the last three years.
While managerial salaries are generally lower than those in the UK, graduate positions in West Africa’s thriving financial and property markets are “significantly” more plentiful. Competition is also less fierce, with African employers receiving an average of 15 applications for every graduate job, compared to around 85 in Britain.

West Africa: To be Africa’s fastest growing region in 2014

The African Development Bank’s (AfDB) lead Research Economist, John Anyanwu, said that West Africa would be the fastest-growing region in Africa between 2013 and 2014, with 6.7 per cent and 7.4 per cent economic growth rate.
He said: “West Africa is expected to continue its rapid growth with rates of 6.7 per cent in 2013 and 7.4 per cent in 2014, thereby becoming the fastest-growing region of the continent in the period under review.
“Growth in the region is not only driven by oil and mineral sectors but also by agriculture and services and on the demand side often by consumption and investment.”
Commenting on the continent, he said that in 2012, growth performance varied widely, adding that oil-exporting countries achieved significantly higher Gross Domestic Product (GDP) growth than oil importers.
Anyanwu said that Nigeria’s average growth was expected to continue growing by between 6.7 per cent and 7.3 per cent in 2013 and 2014 respectively, while that of Ghana and Côte d’Ivoire would likely exceed eight per cent and nine per cent respectively during the period under review.
In East Africa, he noted, most countries such as Rwanda, Tanzania, Ethiopia and Uganda, were on a solid growth path of between five per cent and seven per cent during the projection period. According to him, growth in Kenya, with no major post-election turmoil, is expected to amount to 4.5 per cent in 2013 and to accelerate to above five per cent in 2014. He said that the Sudanese economy was affected by the secession of South Sudan but would witness moderate growth and some acceleration in 2014.
In Central Africa, Anyanwu said that the GDP would likely grow by 5.7 per cent in 2013 and 5.4 per cent in 2014 with above average growth in Chad and in DRC.
On Southern Africa, he said: “The GDP is expected to grow by around four per cent in 2013 and to accelerate to 4.6 per cent in 2014, while Angola, Mozambique, Zambia and Botswana growth will remain buoyant.
The report forecast average growth on the continent at 4.8% this year and 5.3% next year.

Ghana: Mine workers threaten strike

The Ghana Mine Workers Union (GMWU) of the Trades Union Congress (TUC) has sternly cautioned the Labour Commission not to interfere in matters relating to the payment of their salaries.
They noted that their position to deal directly with the Fair Wages and Salary Commission (FWSC) and government to address the huge salary disparities is intact. The GMWU warned that it would embark on an industrial action if the Labour Commission attempts to prevent their migration onto the Single Spine Salary Structure (SSSS).
The General Secretary of GMWU, Prince William Ankrah noted that “there will be serious repercussions on the labour front if the Labour Commission puts any impediment in our effort to directly jaw-jaw with government on salary inequalities.”
“As a union, we will not tolerate any lukewarm approach of having our grievances resolved by the labour commission but will rather seek to present our case by ourselves to the FWSC, as well as government,” he said.
He added “we will therefore not countenance any attempt to foil our resolve to have our salaries streamlined by government to reflect those currently on the Single Spine Salary Structure.”

Kenya: Old Mutual continues with Africa expansion plan

In an effort to support its growth in the rest of Africa, Old Mutual, Africa’s biggest insurance company, says it is in search of more “suitable targets” to acquire.
According to the insurer, its incorporation, and that of its subsidiary, Mutual & Federal (M&F), in the rest of Africa is currently being executed as the first phase in an attempt forge the amalgamation of its entire property & casualty unit into the Johannesburg-based Old Mutual Emerging Markets (OMEM) business.
Old Mutual made this disclosure shortly after stating that it is ready to lay out its insurance offering in East Africa’s second biggest micro-finance firm, Faulu Kenya. This was after it bought a controlling stake in Faulu, which is based in Nairobi, for an undisclosed sum.
Ralph Mupita, CEO of Old Mutual Emerging Markets, recently told reporters in Johannesburg that this acquisition will give Old Mutual exposure to over 400, 000 Faulu clients.
At the time the deal was announced, Mupita said the acquisition permitted Old Mutual a smooth entry into the mass market.
Old Mutual said the money used to buy the stake in Faulu will come from the R5 billion ($506 million) the firm recently said is earmarked for acquisitions in Africa.
Faulu is the first deposit-taking micro-finance firm to be given the go ahead to operate in Kenya by the Central Bank of Kenya (CBK). The Kenyan insurer has a distribution network that spreads across Kenya with over 100 branches. Its market is equal to the one that is served by Old Mutual’s Mass Foundation business in South Africa.

Africa: ‘Adopt progressive industrial policies’

Economic development on the African continent would continue to be impeded if leaders do not address the lack of progressive industrial policies, a new report has indicated.
The Aspire West Africa report said major barriers to the growth of businesses include inefficient logistics, the lack of adequate housing for companies and families, the lack of medium and long-term financing, as well as weak private sector and malfunctioning institutions.
It said leaders have not evolved efficient long-term plans to make businesses competitive. Dr. Lucy Surhyel Newman indicated that businesses could gain immensely if they work together.
“There are several reasons why firms in Africa should adopt business integration strategies because they will be able to market their products to billions of consumers and be able to use the technical know-how of neighbouring countries to upgrade production.” She said regional conflicts, corruption, bureaucracy and the lack of viable business networks often hinder the process of integration.
Dr. Newman called on policy makers to focus on restructuring industries to become competitive in external markets instead of attempting to establish business conglomerates in particular sections of the continent. Authur Hubert, Chief Executive Officer (CEO) of Interplast Ghana, also asserted that African countries could deliver quality products in conducive environments.

Zimbabwe: Telecel licence extended for 20 years

Egypt’s cellphone operator, Orascom Telecom, on Wednesday disclosed that Telecel Zimbabwe, its majority-owned subsidiary, has had its mobile business license extended by 20 years. However, Orascom failed to disclose if it had consented to Zimbabwean government’s request that it reduce its shareholding in the operation to at least 40 percent.
Telecel Zimbabwe parted with $137.5 million for the renewal of the contract to operate in the country for another 20 years.

Ghana: To seek more concessionary loans for projects
The Minister of Trade and Industry, Mr Haruna Iddrisu, has said the government is seeking more concessionary loans to finance some key projects in the country.
The projects include infrastructure, energy, construction of health facilities in the Western and Central regions, building of commercial markets, reconstruction of the Ghana Trade Fair Centre, road construction in the Western and Eastern corridors and the establishment of industrial zones (parks).
The minister, who said this in an interaction with a number of business groups and companies in Turkey during his recent visit to that country, added that the government would also welcome public-private partnership (PPP) arrangement to execute those projects, since that formed part of the key policies of the government to get projects done faster.
The minister and his entourage met with Mr Nihat Ergün, Minister of Science Industry and Technology of Turkey, MNG, officials of the Ankara Chamber of Industry, officials of the Ministry of Food Agriculture and Livestock, Agricultural Machinery and Equipment Test Centre (TAMTEST) and officials of the Ministry of Food, Agriculture and Livestock, National Food Reference Laboratory.
In his meeting with Mr Ergün, the minister recalled the healthy relationship between the two nations and noted that Ghana was interested in improving and strengthening the relation between the two countries to boost and increase trade.
Mr Iddrisu urged the two countries to work together to be able to increase trade between the two nations from the current $500 million to $1billion per annum.

Related articles

• FDI – Nigeria First in Africa for a Second Year (mpoverello.com)
• Ghana drops to 5th largest receiver of FDI in Africa – UN (ghanabusinessnews.com)
• Gold Fields builds new block for Bagri School (modernghana.com)
• Mills’ reverence for Parliament was exceedingly significant – Ablakwa (modernghana.com)
• Nigeria’s Foreign Direct Investment Now $8.9bn (naijainvest.com)
• War Against Malaria Reaches Ghana – Thanks to ECOWAS, Cuba and Venezuela (youthandeldersja.wordpress.com)
• Experts discuss ECOWAS rail project (ghanabusinessnews.com)
• Ghana gets two positions on ECOWAS Commission (modernghana.com)
• Ghana places 5th as the largest receiver of FDI in Africa (spyghana.com)
• Common Currency By January 2015 (theinvesmentman.wordpress.com)

Mining in Kenya

Tags

Balala, Extractive Industries Transparency Initiative, Kenya, Kwale, Mining, Nairobi, Najib Balala, Rare earth mineral

Reflex Eco Group – Kenya news

by Kennedy Opalo (Kenyan journalist)

Najib Balala, cabinet secretary for mining, says the new Mining Bill is ready. The bill will be forwarded to the Cabinet for approval before publication. Balala gave hints of its contents, which include the establishment of the following:

• National Mining Corporation (NMC) – Investment arm of the government in the mining sector. It will hold interests on behalf of the government in mining companies.
• National Mineral Certification Laboratory
• Minerals and Metals Commodity Exchange
• Minerals Sovereign fund
• A 10% free carry interest

At the presser, Mr. Balala also revoked allegedly irregularly issued mining licenses between January and May of this year.

I like the ideas of the NMC, the certification laboratory and the sovereign fund. I hope the certification lab also includes a program to boost the skills set of government officials in the mining ministry – geologists, valuers, financial experts, etc. As I have written before, African governments remain at a disadvantage when dealing with mining companies that far exceed them in capacity. As a result, more often than not they end up not getting the best of deals, all things considered. For instance, Kenya will only get about 5% in royalties from its massive recent rare earth minerals find in Kwale County.

Also, the fund will be great. As long as it is transparently managed and does not become another NSSF, which is currently a cash cow for well connected individuals.

But the proposed bill also has the ludicrous requirement that mining companies get verification from the government 21 days before publishing any information on mineral discoveries. I see mischief in this. If the intention was to ensure that mining companies do not engage in speculative manipulation of the public why doesn’t the government just have a rule that those who mislead the public on mineral discoveries will be fined?

Given the revenue implications of mineral discoveries and extraction – the central government must share revenue with county governments – the central government geologists ought not be the sole final deciders on the value of discoveries. And if the government insists on pulling through with the proposed directive then county geologists must also have access to the information from mining companies before it is approved for release by the government.

ImageTo put it mildly, so far Nairobi has not been transparent about mineral deals. I hope that when the bill gets to parliament MPs will ensure that at the very least it meets minimum standards of transparency required for the proper management of the nation’s mining sector – including membership in the Extractive Industries Transparency Initiative, EITI.

 

Related articles

• Balala undermined us in revoking licences – traders (capitalfm.co.ke)
• Balala revokes 31 mining lincenses (nation.co.ke)
• Man at the centre of Sh500m maize case caught up in mining licence controversy (nation.co.ke)
• Kenya revokes mining licences (bbc.co.uk)
• Kenya cancels mining licenses; gold royalties double (mining.com)
• Kenya mulls minerals commodity exchange (africareview.com)
• Kenya to Form State-Owned Company for Stakes in Mining Projects – Bloomberg (bloomberg.com)
• Kenya revokes new mining licences (news.com.au)
• Kenya revokes new mining licences, hikes royalties (foxnews.com)
• Mining licences were issued in a rush, says Balala (nation.co.ke)

Africa Focused News

Tags

Africa, AGOA, Alluminium, Angola, Barack Obama, Brazil, Brong Ahafo Region, Burundi, Congo, DuPont Pioneer, East Africa, Ecobank, Ethiopia, Eurobond, Fitch, ghana, Hauwei, India, Japan, Kenya, Mondelez, Mozambique, Nairobi, Nigeria, Rwanda, Singapore, South Africa, sugar, Tanzania, Thailand, Uganda, Upper West Region, Vivo Energy, William Ruto

REPORT OF THE LAST WEEK (from 29/07/13 to 02/08/13) 

by Dario Galluccio

Ghana: Eurobond to fund 157 road projects

A part of the $1 billion raised from the international capital market in New York on Thursday will fund one hundred and fifty seven road projects; additionally, the government will use part of the money to build infrastructure in all the new 46 districts. 

To be precise a Deputy Minister of Information and Media Relations, Mr Felix Ofosu Kwakye, said $284 million from the money would be used to fund road projects and other projects captured in the 2013 budget. He mentioned the Apam-Akam road in the Central Region, the Fian-Wahabu road in the Upper West Region, the Goaso-Kukuom road and the Berekum town roads in the Brong Ahafo Region as some of the projects that would be funded from the money. The deputy minister said general infrastructure, including clinics, schools and offices, would be executed in all the new 46 districts.

Ghana: Japanese investors explore opportunities in Ghana

Dr Omani Boamah, Minister of Communication, received a 20- member Japanese delegation, so he has pledged Government’s commitment to deepen relations with Japan. The minister said the two countries have enjoyed fruitful working relations in the past and expressed the hope that this would continue as Japan has expressed its resolve to support Ghana’s Information and Communication Technology (ICT) sector. 

The delegation is in the country to explore investment opportunities in the areas of ICT, Energy, Transport and other sectors of the economy.

Mr Takeshi Hata, NEC Corporation Manager for Europe, Middle East and Africa and a member of the delegation, expressed the desire to provide ICT expertise to the GMSD. He lauded Ghana for its strides especially in the areas of good governance and economic stability. The delegation is in Ghana following the investment opportunities President John Dramai Mahama presented at the 5th Tokyo International Conference on African Development.

Tanzania: Bank M assets expand, hit half trillion

Bank M Tanzania, the fastest growing bank in the market, has marked its sixth anniversary with a big bang as its total assets hit the half a trillion mark.

The bank, which opened its doors on July 27, 2007, celebrated its sixth anniversary on Saturday, with 532bn/- assets. “We are marking six years of growth, growth in all aspects”, the bank’s Deputy Chief Executive Officer, Ms Jacqueline Woiso.

She said during the past six years, the bank has grown in terms of not only balance sheet but also profitability, citing this year’s impressive performance. The bank has in seven months of operations posted a profit of 9.13bn/-, indicating that the 2013 will be a highly profitable year for the bank.

The bank, priding itself as among the fastest growing financial institutions in the domestic market, has grown geometrically from the balance sheet of mere 31.19bn/- at the end of 2007, to 67.59bn/- in 2008 and 106.51bn/- in 2009. The bank assets swelled to 193bn/-, 310bn/- and 421bn/- in 2010, 2011 and 2012, respectively.

India, Nigeria: To enhance economic partnership

Utility service provider, Umeme, is targeting the capital markets to raise over $170 million (about Shs438 billion) to finance its investments.

The energy utility firm last week said it needs to make significant investments worth $440 million (about Shs1.1 trillion) in the next five years, part of which will be raised during the this season.

Kenya: New infrastructure to ease city traffic

The government says it has finalized plans to upgrade the city’s infrastructure to ease traffic congestion and improve the living conditions of the residents. Addressing at St James ACK Buruburu, Deputy President William Ruto said key stakeholders in the Nairobi County met last week to map out ways of implementing the ambitious project that will see at least 100,000 new and modern housing units constructed for the low income earners.

“We want to transform the city within the next three years and we have already identified development partners with whom we intend to roll out the project in Ziwani, Mbotela, Bahati ,Maringo and other estates in Nairobi’s Eastland’s suburb,” he said.

He revealed that the government had developed a road map to ease traffic congestion in major city routes to reduce the time workers lost while commuting to their duty stations.

The Deputy President added that the government had introduced a Railway Development Levy to revive and improve the rail network in the capital.

Ghana: Benefits from Cuba relations

Mr Kwesi Quartey, Deputy Minister for Foreign Affairs over the weekend said government benefits from her bilateral relations with the Cuban government especially in the area of health and education. Mr Quartey said thousands of African students have received medical and educational support in Cuba and had returned to the continent to help their communities.

South Africa: H&M signs lease for store

South African weekly Sunday Times said in an article re-run on daily Business Day’s website that the Swedish retailer has signed a lease for a store in a mall that is due to open in 2015 in Johannesburg.

An H&M spokeswoman, which has yet to open a store in Africa, said South Africa is one of many markets it finds interesting but declined to comment further. The company opened its first store in the southern hemisphere in Chile earlier this year.

Sunday Times, which is part of the same media group as Business Daily, did not disclose its sources. H&M was also searching for suitable store locations in Cape Town, it reported.

H&M’s biggest rival, Zara owner Inditex (ITX.MC), opened its first Zara store in Africa, in South Africa, in 2011.

Ghana: Fitch rates Ghana’s Eurobond B+

Fitch has rated Ghana’s newly issued $750 million Eurobond B+. The rating is in line with Ghana’s ‘B+’ Long-term foreign currency Issuer Default Rating, on which the Outlook is Negative, Fitch said in an email July 26, 2013.

>Fitch on February 15, 2013 revised Ghana’s Outlook to Negative, affirming it ‘B+’. It was to reflect the country’s worsening trend in public finances. During 2012 Ghana’s fiscal deficit widened to 12.1% of GDP in the run up to the December election, the ratings agency said.

Ratings agency, Moody’s also rated the ten-year bond ‘B 1’.

This second sovereign Eurobond was issued last week with a coupon of 7.875%.

Nigeria: Ecobank will exceed $310m agricultural sector loan

Ecobank Nigeria says it plans to grow its agricultural sector loan to over N50 billion ($310 million) by 2014. Citing it’s policy to support the growth and development of the industry. Ecobank Country Head, Agric and Export Finance, Abel Ajala, said the bank had introduced “concessionary interest rates” for its agriculture financing scheme.

He added that the bank has developed a robust agriculture and export unit operated by high quality professionals to ensure for an easy risk assessment of loans and adequately provide measures to guarantee beneficiaries utilize funds diligently.

The reason behind the bank’s focus on the sector, according to Mr Ajala, stemmed from its need to checkmate the impending food crisis on the continent, noting that the pan-African bank’s support cuts across the entire agricultural value chain.

Ethiopia: Hauwei sign $700m mobile network deal

Ethiopia has signed a $700 million mobile phone deal with China’s Huawei Technologies to improve the telecoms infrastructure in the country. The agreement, which is half of a $1.6 billion project split between Huawei and ZTE is expected to double phone users in the country to 56 million.

Ethiopia’s Minister of Communications and Technology, Debretsion Gebremichael stated that “this deal will deliver 4G high-speed broad band network. Although our target is 40 million, now including 3G, we will get to 56 million by 2015”, he said.

World Bank posits that Africa’s rapidly expanding telecoms industry has come to symbolize its economic growth, with subscribers across the continent increasing from a mere 25 million in 2001 to 650 million in 2012.

Before now, Telecoms in Ethiopia was considered a monopoly with only Ethio Telecoms as its only mobile phone operator in a country of more than 80 million people. The new deal with the Chinese firm is expected to boost the sector.

According to the minister, other operators like South Africa’s MTN Group have been granted operation licenses.

Ghana: Singapore consolidates trade ties

Investors from Singapore have strengthened bilateral trade ties with their Ghanaian counterparts following the signing of a Memorandum of Understanding (MoU) and the opening of its Overseas Centre in Accra.

The Singapore investors are in the country by courtesy of their external trade facilitating agency, the International Enterprise (IE) Singapore, and were led by the Singapore Senior Minister of State for Trade and Industry and National Development, Mr Lee Yi Shyan.

The IE Singapore’s Accra Overseas Centre aims to boost economic collaboration by accelerating trade and investment cooperation in the ECOWAS sub-region focusing on the logistics and oil and gas consumer sectors. Also, the Singaporean investors are focusing on infrastructure, oil and gas and the manufacturing sector to help drive the growth of the Ghanaian economy.

Mozambique: Thailand seeks to double trade

Mozambique and Thailand have agreed to a series of measures to strengthen bilateral cooperation. The accords cover technical cooperation, diplomatic visa exemptions, hydrocarbon development, economic cooperation and tourism. Currently, trade between the two countries stands at 180 million US dollars a year. These new measures could see trade double over the next five years.

The signing of the accords in Maputo on Monday followed the arrival of the Prime Minster of Thailand, Yingluck Shinawatra.

The Prime Minister will also visit Tanzania and Uganda before returning to Thailand to attend the new session of parliament on Thursday.

Ghana: To create 2.3 million jobs in Aluminium sector

Ghana is set to create more than 2.3 Million jobs under the Integrated Aluminium Project, which has been described as the key to growing the economy with a capital injection of about $8 billion. Under the Integrated Aluminium Project, an Aluminium refinery is to be constructed to refine the rich bauxite deposit at Nyinahin into alumina, would then be processed into aluminium by VALCO, and sold to the several downstream industries as aluminium ingot and billet.

It is believed the project hold the key to transforming Ghana’s economy by bringing in benefits, far more than the nation currently receives from oil.

The Nyinahin mine with bauxite deposit of 700MT, valued at $17.5billion , is estimated to create about 98,000 jobs whiles the aluminium refinery expected to produce about 350metric tones of alumina, will generate about 19,000 jobs.

Ghana: First Rand still interested in acquiring a bank

South Africa’s biggest finance group, First Rand says it is still interested in acquiring a bank in Ghana despite failing to take over Merchant bank.

This is because Ghana remains a priority for the group’s expansion drive.

The Social Security and National Insurance Trust (SSNIT) last month announced that it was unable to reach an agreement with First Rand over Merchant Bank’s sale. The Trust added that it is now looking for new suitors for the Bank.

Kenya: Brazilian entrepreneurs ready to invest

The businessmen, representing multi-billion dollar operations, included oil and gas company Queiroz Galvao, aerospace conglomerate Embraer Defense & Security, diversified engineering, construction and chemicals outfit Odebrecht, manufacturers Randon and Agropeucaria Foletto & Alimentos, the globe’s largest private rice farmer.

An executive from Argentinian agriculture products firm Rizobacter, which is looking to expand to Kenya, accompanied the Brazilians who held an exhibition in Nairobi this week as part of their exploration of business opportunities in Kenya.<

The entrepreneurs are keen to use Kenya as a major regional hub and launching pad for their enterprises in this part of the world.

Nigeria: To attract N480 billion investment for sugar production

In line with the country’s desire to grow the industrial sector, the Minister of Industry, Trade and Investment, Olusegun Aganga, has said the country attracted $3 billion (about N480 billion) investment into the sugar sector since the implementation of the National Sugar Master Plan (NSMP). The approval of the NSMP by the Federal Executive Council (FEC) on the 19th September 2012 had raised the country’s profile, making it to rank among the top five exporters of sugar in Africa.

Aganga also noted that the gains made through the development of the manufacturing sector had led to a reduction on the country’s dependence on oil and gas, saying N305 billion was generated from non-oil export within the first quarter of 2013.

NSMP has stimulated investments of $3 billion thus far. NSMP is targeting the production of 1.7 metric tonnes of sugar; creation of 117,181 direct jobs; generation of 411.7 megawatts of electricity; total forex saving of up to $565.8 million annually from savings from sugar production and fuel importation.

Ghana: To list Eurobond on local exchange

Ghana will list the second Eurobond it secured this week on the country’s local bourse next month, says the chairman of the governing council of the Ghana Stock Exchange (GSE), Dr Sam Mensah. Speaking in New York after Ghanaian finance officials concluded the Eurobond sale, Dr Mensah said the decision will give local investors an opportunity to actively trade in the bond as well as helping to boost the development of the GSE.

South Africa: Mondelez ventures into South African market

Food group Mondelez International has announced that it will start business operations in South Africa. A possible competition in South Africa’s food and beverage sector seem likely as it has been controlled by JSE-listed Tiger Brands and AVI. Mondelez manufactures Cadbury sweets and chocolates, Oreo biscuits and Stimorol.

This news comes shortly after another the world’s second biggest clothing retailer, Hennes & Mauritz (H&M), announed that it is poised to set up shop in Johannesburg, South Africa. Last week, it was reported that H&M will open up a new shop in the Mall of Africa in Johannesburg and plans are already afoot to open another in Cape Town’s V&A Waterfront.

Nigeria: To begin online business registration

Nigeria is a step closer to launching its global online business registration platform, as it moves closer to divesting from the oil and gas sector. The soon-to-be-launched platform will allow Nigerians living in the diaspora or foreigners planning to register their businesses in Nigeria to register their businesses in Nigeria from any part of the world within the next two months.

Nigeria’s Minister of Industry, Trade and Investment, Olusegun Aganga confirmed this at the 2013 Ministerial platform in Abuja on Tuesday, saying, “Global online business registration will take off in two months’ time. This will ensure that anyone can register their businesses in Nigeria from any part of the world and also make payment without necessarily coming to Nigeria.”

Studies have found that the creation of new businesses is a significant indicator of the level of economic growth and development of a country; in addition to the job creation and wealth generation that come with it.

The country’s foreign direct investment currently stands at $7 billion.

East Africa: Uganda builds new refinery, Kenya upgrades

Plans to construct a new refinery in Uganda and upgrade an existing one in Kenya are already afoot, according to an oil and gas analyst. Jeffrey Kerr, the managing oil and gas analyst for GlobalData, said this has led to an amazing corporation between Kenya, Uganda, Congo, Rwanda and Burundi and improved relations between the countries.

Kerr added that government delegates from these countries and three global oil firms have agreed to corporate in the erection of this 30 mbd refinery in Hoima, Uganda.<

The construction of the new refineries in Uganda and the improvement of an existing one in Kenya has been prompted by estimates that the need for “aggregated” processed oil products in East Africa could more than double in 2025.

Ethiopia: FDI to Ethiopia second best in Africa

Japan says the fact that Ethiopia achieves 1 billion dollar Foreign Direct Investment (FDI) flow in to the country shows how focused the government is to develop the sector.

Hiroyuki Kishino, Ambassador of Japan to Addis Ababa, says Ethiopia has given priority to food security, infrastructure development, human resource development and FDI to make significant transformation as part of its 5 year strategic plan. The Ambassador takes the development of the FDI to show the progress happening saying in just a couple of years Ethiopia’s FDI grows from 300 million dollar to 1 billion dollar, which he labeled as significant upward spiral.

FDI is expected to facilitate technology transfer in the industry sector, bring in huge capital and machineries, create employment opportunities and increase global market share.

Ghana: Bank of Ghana stays policy rate at 16%

The Bank of Ghana (BoG) has maintained the policy rate at which it lends to commercial banks at 16 per cent for the third quarter of the year. This was after it assessed economic activities in the country and policies put in place to prevent prices of goods and services from rising constantly.

The Monetary Policy Committee of the bank, chaired by the Governor, Dr Henry Kofi Wampah, told that the bank was satisfied with the policies put in place by the government to check increases in general price levels, hence the decision to maintain the rate at 16 per cent.

Angola: Be promoted to list of middle-income states

According to a United Nations (UN) official, Angola, Africa’s biggest oil producer behind Nigeria, may be promoted to a list of middle-income countries that get better terms from international lenders such as the World Bank.

“Angola will make it to the middle-income category because it has a growing economy, the government is moving toward the right direction and it has the financial capacity to invest,” the director of the UN Africa Division for Least Developed Countries, Tesfachew Taffere, said.

Angola, a member of the Organisation of the Petroleum Exporting Countries, wants to diversify its $114bn economy away from crude, which makes up almost all of its exports and 80% of tax revenue. Middle-income status will help it rebuild from a 27-year civil war that ended in 2002 by gaining access to risk and credit guarantees that lower the cost of public investments containing private funding.

South Africa: DuPont Pioneer acquires 80% stake in a seed company

DuPont said that it completed its purchase of an 80 percent stake in South Africa-based competitor Pannar Seed Limited, giving the chemical and agricultural giant an opportunity to expand its reach throughout Africa.

DuPont said the acquisition of Pannar by DuPont Pioneer, its agricultural seed unit based in Johnston, Iowa, would allow it to tap into Pannar’s insight into Africa while giving the U.S. firm access to the company’s corn genetics that have been specifically tailored for the region. Pannar would be able to use Pioneer’s genetics library and corn breeding and biotechnology work.

Financial terms of the deal were not disclosed.

Ghana: Vivo Energy adds Shell Ghana Limited to its group

Vivo Energy, the company formed by Vitol, Helios Investment Partners and Shell to distribute and market Shell-branded fuels and lubricants across Africa, has acquired a majority shareholding in Shell Ghana Limited.

The company, which will be renamed Vivo Energy Ghana, will be headed up by Fred Osoro as Managing Director. He will take over from Vincent Richter, the former acting Managing Director

Christian Chammas, CEO of Vivo Energy, said: ‘Ghana is an important market and a growing economy which is set to benefit from significant developments in the energy sector. We are acquiring a business with great potential; a long history in Ghana, a high calibre workforce and a large and diversified customer base. Vivo Energy is looking forward to serving our Ghanaian customers and investing in the business, to ensure it realises its full potential under Fred Osoro’s leadership.’

The Shell brand has been in Ghana for 85 years and Shell has been the leading marketer of fuels and lubricants. Vivo Energy Ghana has a storage capacity of 8,300m³ and 124 retail stations with the majority offering Shell Cards and convenience retail stores. Over the years, the company expanded its portfolio by acquiring Texaco in 1988. Vivo Energy Ghana employs 134 people but the business provides indirect employment to over 1,000 people. The company is recognised as the leader in the oil industry especially championing and setting standards for safety in sales and distribution.

Africa: Obama works to extend AGOA

The Obama administration has indicated that it is working with the United States Congress to extend the Africa Growth & Opportunity Act (AGOA) programme, which is set to expire by 2015.

Florizelle Liser, Assistant U.S. Trade Representative for Africa in the Office of the United States Trade Representatives, stated: ‘We recognize that AGOA can do so much more. We have to look at how we can fulfill its promise and potential, and as AGOA is extended, we want to make sure that Africans are in a position to compete in the global economy.’

The African Growth and Opportunity Act (AGOA) was enacted in 2000 and permits 39 eligible African countries to export most products duty-free to the United States.

AGOA aims to promote economic development and better integrate African economies into the world trading market. Additionally, it intends to create a platform for governments, the private sector and civil society to expand business links and build trade capacity between the United States and Africa.

Total exports under AGOA have risen more than 300 percent since the programme began.

Though 84% of the United States’ AGOA imports were petroleum products, its non-oil imports from sub-Saharan Africa amounted to $4.7 billion in 2012 more than a 250% rise since AGOA’s start.

Ethiopia: Hailemariam confers with Kenyan investors

Prime Minster Hailemariam Desalegn meets Kenyan business delegation at his office to look into interest of Kenyan investors wanting to invest in Ethiopia. They are here to see the opportunities for themselves to decide their involvement in investment. Mr. Hailemariam explains how Kenya and Ethiopia are working to integrate their economies after a special economic agreement signed recently to ease business transaction between the two neighborly countries.

The electric transmission line, the road and rail lines under development are evidences of the ambitions between these two countries, and businesses in both countries can benefit from such developments, Hailemariam remarks.

Nigeria: Airtel and FirstBank launch mobile payment platform<

Telecommunication service provider, Airtel Nigeria has partnered FirstBank Plc to launch Firstmonie Talkmore, a mobile payment service platform, for the country’s citizens. The platform, which was made official after the signing of an MoU on Tuesday, in Lagos, will allow subscribers on the Airtel network to send and receive money, buy airtime, pay bills and carry out other forms of transactions without owning a bank account. And the mobile operator has stated its confidence that the innovation will revolutionize the mobile payment industry

The partnership, according to both firms, is the first major collaboration between leading operators in the nation’s telecom and banking industries and follows a recent partnership between Airtel and the bank’s insurance company, FBNLife Insurance, on the unveiling of PAD14Life.

Tanzania: Investors exhibit high appetite for treasury bills

Despite the end of month obligations, the twelve-month Treasury Bills auction that the Bank of Tanzania (BoT) conducted on Wednesday was oversubscribed by 63.6 per cent. According to the auction results, the total amount tendered jumped to 237.34bn/- against 145bn/- sought by the central bank at an average interest rate of 14.18 per cent.

However, despite the oversubscription, the government ended up taking only 210.32bn/-. It is common that most investors fulfil end of month obligations including the disbursement of tax, salary and other statutory payments, cutting down the share of investments in the government papers. But the situation was contrary and the auction was oversubscribed, a sign of excessive liquidity in the market. The bank report states further that there was a higher appetite for 364-day bills but there was no appetite for 35 day.

Rate of return has been one of the major determinants in drawing attention of investors’ appetite on the treasury bills auction although in some past tenders, little changes were noticed despite hiked interest rates leading to under subscription.

Commercial banks have remained to be the giant investors in government securities, contributing over 60 per cent of the total market share. Pension Funds, insurance and few micro-finance institutions firms are among the key investment players in the instruments.

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