JOHANNESBURG (Reuters) – South Africa’s net gold and foreign exchange reserves were at $40.654 billion in December, up slightly from $40.471 billion in November, Reserve Bank data showed on Friday.
Gross reserves also edged higher to $45.787 billion from $45.14 billion previously. The forward position, which represents the central bank’s unsettled or swap transactions, dropped to $1.424 billion in December versus $2.106 billion.
(Reporting by Stella Mapenzauswa; Editing by Himani Sarkar)
A captured pirate was brought before Alexander the Great. “How dare you pillage the sea?” asked Alexander. “How dare you pillage the whole world?” the pirate replied, and continued: “Because I do it with only one ship, I am called a ‘thief,’ you, doing it with hundreds of ships, are called an ‘emperor.”– Noam Chomsky
In the early 1990s, commercial foreign fishing vessels and trawlers began working off the Somali shore, invading sovereign waters and exclusive economic zones. Not only did they displace local fishermen, but the illegal over-fishing by these foreign companies severely depleted the fish stock and greatly reduced the long-term health of Somalia’s fisheries through over-exploitation. Greedy international fishing companies with illegal fishing technologies, in an eventual case of reverse irony, “pirated” Somali fishing stocks for illegal profit. Estimates place the foreign fishing poaching at $300 million USD every year, an astronomical sum considering that this occurred for over a decade. Put in scale, if only one year’s worth of the illegal poaching was returned to Somalia, the GDP would rise by over 5%. While poachers were moving in from Europe and Asia, European ships also went to Somali waters to illegally dump toxic industrial waste, another major violation of international law. The UN Environmental Program reports that the nuclear waste dumped on territorial shorelines caused sickness and disease in Somali coastal cities, and killed off the little fish that were left. These disenfranchised fishermen, left only with their boats and nautical expertise in the Gulf of Aden, would soon become the notorious pirates of Somalia.
For Somalis who live in coastal communities, the pirate economy is a considerable source of employment and income: there is a need for crews directly involved in the hijackings, and a local ground crew to guard captured moored ships. Among this exercise are entire administrative, legal, and financial teams, a network of financiers and shareholders, and guards to police the territory in which the pirates reside.
Interviews with former pirates suggest that typical crew men make between $30,000-$75,000 USD per haul, with a $10,000 bonus for the first man to board the ship, as well as bonuses for other displays of initiative. This is an astounding sum considering that the 2012 GDP per capita in Somalia was $128 in current USD. Pirates also face heavy fines for bad behavior, such as non-consensual sex or mistreating other crew members, which carries a $5000 fine and dismissal.
Between 2004 and the first quarter of 2009, Somali piracy rose from 3% to 60% of the global total of piracy attacks, with revenue growth almost quadrupling from 2008 to 2009. Somalia, like other states where piracy occurs, lacks the capacity to patrol its waters; thus Somali pirates have equal advantage to other pirates in terms of access to un-patrolled coastlines, and yet Somali pirates remain disproportionately successful on a global scale.
And uniquely, these huge gains are not made in Somalia’s territorial waters, but in international territory, with some attacks reported as far as 600 nautical miles from Mogadishu, where the presence of armed guards, unregulated security measures, and international navies act as a powerful and permanent deterrent to pirates from other countries. This unique capacity demonstrates that the assumption that piracy simply exists due to weak statehood in protecting territorial waters does not fully explain the pervasiveness and huge growth experienced by the Somali pirate enterprise.
Somali pirates view themselves as the protectors of their territorial waters, with group names like “National Volunteer Coastguard of Somalia,” arguing that their ransoms are taxes levied in absentia of their defunct government. At the same time, supporting the ransom system and their Robin Hood enterprise is not a sustainable solution either: Somali pirates’ astounding capacity for growth and entrepreneurship suggest that increased revenues will result in better arms and equipment, increasing the likelihood of further attacks.
As ransom demands continue to rise, by the time Somali piracy becomes unaffordable the power of the pirate enterprise will be impossible to contain, let alone eliminate. This burden will be borne by the shareholders, crew members, and global consumers who depend on the 90% of world trade which is now moved by ocean. The problem must not be approached from the outside through militant suppression, or through the path of least resistance in paying a ransom. The situation demands a new and creative approach; using power structures that exist locally in pirate and traditional systems to build a government that meets the needs of both the local and international community from the ground-up.
Somali people do not identify themselves through a sense of nationhood, but a sense of kin, an indigenous six-thousand-year-old framework of social organization that was forged by the harsh terrain and nomadic lifestyle demanded by the barren Horn of Africa. As kinship emerged as the most effective form of social ordering in this environment, the clan acted as the largest unit of political organization, and legal and political institutions sprang from this system. The 400-year-old history of peaceful cohabitation among these clan polities demonstrates the efficacy of this form of governance. The centrally bureaucratic and non-personal structure of the state system is the polar opposite of the political realities and imagination of self in Somalia. The model of the nation-state, and forcing these clans together though imported institutions will never be realistic solution for Somalis.
The presence of pirates and other autonomous regions in Somalia signifies that there has been a shift in the modern political conception of authority and sovereignty: why is local authority less legitimate than authority granted by the international community?
Though mainstream political discourse assumes that self-governance could never facilitate order between members of different social groups, the relative stability piracy offers provides support for cooperative relationships between clans. Despite ubiquitous potential for conflict, pirates rarely fight, steal, or deceive each other. In Somalia, cooperation has always been essential for survival- especially today.
The pirate’s appropriation of the clan-system of leadership demonstrates that to some degree, state-building is possible in Somalia as long as people work with the way authority is recognized in the Somali imagination. Somalia’s history of fourteen failed foreign interventions demonstrates that traditional Western state structures are imperfect and do not comply with indigenous customs and institutions. However, the continued attempts to establish a centralized polity demonstrates that central governance is the type of entity the West is most comfortable dealing with.
Current political thinking assumes that Somalia is a failed state; therefore the logic infers that at one point Somalia was a state, which it never was- in reality, “Somalia” as a nation exists purely as fantasy and is perhaps one of the greatest untruths ever sold.
And if piracy is due to failed statehood, then the automatic conclusion is that the solution to piracy is statehood. This logical framework is at the heart of foreign policy towards Somalia and characterizes the nature of every intervention that has occurred. However, UN satellite maps of pirate activity indicate no clear relationship between political stability in post-state Somalia and the emergence of piracy. The presence of pirates in Somalia demonstrates that the failure does not lie in the condition of a failed state, but instead the imagination of failed statehood itself.
These repeated representations of the ‘failed state’ work to legitimize the concept, despite the inherent limitations and flawed assumptions that obscure its utility. And at the heart of this is Western universalism, as the construction of the failed state dichotomy finds its foundation on the West’s fixed standard of what they perceive to be a successful state: democratic, centralized, and transparent. It is at its core an imposition of political ideologies put forth through the humanitarian pretensions of the failed state rhetoric. Until this is understood, the international community’s disregard that alternative models of governance can succeed will continue to impede our larger goals of world peace and stability.
LAGOS (Reuters) – Nigeria’s overnight lending rate eased marginally to 0.75 percent on Wednesday from 1 percent in the last five weeks after the central bank refunded cash set aside by banks to buy dollars.
Traders said the impact of the refund and anticipated injection of additional cash from November budgetary allocations to states and local government also helped to reduce cost of borrowing among banks.
However, the secured open buy-back (OBB) — the rate at which lenders can borrow from the interbank market using treasury bills as collateral — held flat at 0.5 percent it has traded in the last five weeks, far below the central bank’s benchmark rate.
Traders said about 300 billion naira additional funds are expected from the budget disbursal before the close of business on Wednesday.
They said although market liquidity dropped to around 230.5 billion naira on Wednesday from 400 billion naira on Friday, it was expected to rise again helped by the refunds and possible budget disbursals.
“We expect the cost of borrowing to stay flat for the rest of the year as most businesses wind down and tidy their books for the financial year ending,” another dealer said.
The Nigerian money market reopens next Tuesday.
(Reporting by Oludare Mayowa; Editing by Raissa Kasolowsky)
LUANDA (Reuters) – France’s Total has signed an memorandum of understanding with Angola’s Sonangol, a first step to opening fuel stations in the southern African nation, Total told Reuters on Wednesday.
Angola, the continent’s second biggest oil exporter, said in October it is reorganising its oil sector and state-owned Sonangol, but details about the changes have been sparse.
Total, the largest foreign oil company producing in Angola, said the MOU was signed by chief executive Patrick Pouyanné on Monday and paves the way to a network of Total-branded stations in Angola.
“In a first phase, products would be obtained through Sonangol,” said a Total spokesman.
Sonangol has a refinery in Luanda that produces 56,000 barrels per day.
The state-owned company said in a separate statement the agreement could represent an investment of hundreds of millions of dollars, with benefits both immediate and long term.
“This action, via a consolidated partnership between the two companies, embodies the government’s strategy to liberalise trade in the sector,” Sonangol said.
Total said it will give more detail once the shareholder agreement with Sonangol is signed.
Angola’s finances have suffered as a result of a sharp slide in oil prices since mid-2014 as oil output represents 40 percent of its gross domestic product.
Sonangol is under pressure to show how it is boosting the downstream potential in Angola, which is a major producer of crude, but does not refine enough to meet its own fuel demand.
(Reporting by Herculano Coroado; Writing by TJ Strydom, editing by William Hardy)
ABUJA (Reuters) – South African mobile phone operator MTN will have to pay a $3.9 billion fine imposed by Nigeria for failing to disconnect users with unregistered SIM cards by Dec. 31, a source in the Nigerian telecommunications regulator said on Wednesday.
Nigeria’s telecoms regulator had cut the fine from an initial $5.2 billion after weeks of lobbying by Africa’s biggest mobile phone company to get it reduced.
“Appropriate action will be taken,” should MTN fail to meet the deadline, the source said, asking not to be named and giving no further details.
MTN said this month it would challenge the decision in court.
Nigeria has been pushing telecoms firms to verify the identity of subscribers amid worries unregistered SIM cards were being used for criminal activity in a country facing the insurgency of militant Islamist group Boko Haram.
The fine came months after Muhammadu Buhari swept to power in Africa’s biggest economy following a campaign in which he promised tougher regulation and a fight against corruption.
(Reporting by Felix Onuah; Writing by Ulf Laessing, editing by William Hardy/Keith Weir)
LUSAKA (Reuters) – Zambia was plunged into a blackout on Tuesday affecting almost the whole of the country, the state power utility Zesco Ltd said.
“Almost the whole country except for Southern and Western province has experienced a power failure but we are yet to establish what has caused it,” Zesco spokeswoman Bessie Banda told Reuters.
Most of Zambia was affected by a power blackout on Dec. 11 because of a technical fault and supply was restored only the following day.
The southern African country, the continent’s second biggest copper producer, has been grappling with power shortages related to a searing drought as levels in the Kariba dam, which provides much of the nation’s electricity, drop.
Zambia’s Konkola Copper Mines (KCM), owned by Vedanta Resources, said after the Dec. 11 blackout it would suffer slight output losses.
An electricity shortage and weaker copper prices due to slower growth by top consumer China have threatened output and jobs in the mining industry, with the slow-down putting Zambia’s currency on the back foot against the dollar.
(Reporting by Chris Mfula; Writing by Ed Stoddard and Richard Balmforth; Editing by Kevin Liffey)
JOHANNESBURG (Reuters) – South African stocks rose to a more than two-week high on Tuesday, bolstered by bargain hunters and a recovery in oil prices from its lowest level in more than a decade, while the rand dipped in holiday-thinned trade.
The benchmark Top-40 index rose 1.2 percent to 44,900.59, while the broader All-Share index rose by the same margin to 49,780.33.
“What we are seeing is a bit of buying before the close of the quarter,” said Sanlam Private Investments’ portfolio manager David Peacock. “Some stocks were oversold, so now we are seeing some nibbling [back].”
A recovery in oil prices from 11-year lows as investors unwounded some of their bearish bets on the battered commodity also helped boost stocks such as petrochemicals company Sasol, which rose by 2.61 percent to 393 rand.
Other gainers included Africa’s largest mobile operator MTN, which gained 4.53 percent to 141.16 rand, while its rival, Vodacom added 2.34 percent to 151.72 rand.
Among the losers was Tiger Brands, which fell 1.81 percent to 318.00 rand.
Trade was light, with 153 million shares changing hands on the stock market, according to preliminary bourse data, well below the average of 183 million shares.
On the forex market, the rand weakened in shallow, range-bound trade following its brief relief rally ahead of the holiday season.
Trade is expected to be subdued for the remainder of the year as most domestic market players are on holiday, and with no major economic news to provide direction for the rand.
By 1523 GMT the rand had weakened 0.49 percent to 15.1700 per dollar compared to 15.1030, where it closed overnight in New York.
“We expect the rand to hover around R15/$ for the rest of the year,” said NKC African Economics analyst Bart Stemmet. “We see risks to the rand at its current levels to be balanced.”
Government bonds were weaker, with the benchmark paper due in 2026 adding 9 basis points to 9.445 percent.
(Reporting by Nqobile Dludla and Thekiso Lefifi; Editing by Ed Stoddard)
CAIRO (Reuters) – Egypt’s central bank will tighten import regulations from January in a bid to support local manufacturing and better preserve its dwindling foreign currency reserves.
Egypt, which depends on imports, has faced a currency crisis since a 2011 uprising drove foreign investors and tourists away. Hard currency reserves have more than halved $16.4 billion since then.
The decision excludes imports of medicine, foods, and other essential goods such as wheat.
The central bank said it aimed to “strengthen the national economy and promote local products, enhancing their competitiveness against foreign products,” in a statement on Tuesday.
Egyptian manufacturers have been pushing for stricter regulations to stop importers putting artificially low values on customs bills to avoid duties, a widespread practice that makes it difficult for local products to compete on price.
Egypt had imports worth $60.8 billion in 2014/15, compared with exports worth $22.1 billion, said Beltone Financial economist Ziad Waleed.
“They are just fine-tuning the present regulations amid the foreign currency shortage. This definitely could increase the pressure on importers,” he said.
The statement said that banks should obtain documents for imports directly from foreign banks, instead of obtaining them from the clients as is the practice currently. This is to stop any manipulation of receipts by importers, the Egyptian customs authority said on Tuesday.
Importers will also have to provide 100 percent of the cash deposit on letters of credit for imports instead of the current 50 percent.
“The central bank is trying to use all available measures to try to limit imports and this could limit the import of luxury goods, but it is not the key solution that would solve the foreign currency shortage,” Waleed said.
Egypt’s central bank has been rationing dollars and keeping the currency artificially strong at 7.7301 through weekly dollar auctions, giving priority to imports of essential goods.
(Reporting by Asma Alsharif and Ehab Farouk, editing by Louise Heavens)
LUSAKA (Reuters) – Zambia, Africa’s second largest copper producer, will in the first quarter next year introduce a new sliding mineral royalty tax that will be adjusted depending on metal prices, a government spokesman said on Tuesday.
Zambian royalty taxes will range between 3 percent and 9 percent depending on the global price of metals, presidential spokesman Amos Chanda said.
(Reporting by Chris Mfula; Editing by Joe Brock)
ABUJA (Reuters) – Nigeria will review all its mining licences as its wants to overhaul a largely unproductive sector dominated by artisan miners, the mining ministry said on Monday.
The West African nation wants to lower dependency on oil production as crude prices tumble and boost output of solid minerals that contribute only 0.34 percent to GDP, according to official data.
Africa’s largest economy has some gold and iron deposits but little seismic data exists as the government has focused on oil exploration in the past decades.
To make a sector 80 percent dominated by artisan miners more efficient, mining minister Kayode Fayemi said all licences would be reviewed by March 1, according to a statement.
“We will work with stakeholders to review existing licenses and bring them up to date where there are issues,” he said in the statement, his first policy comments since taking office last month. “The period from today to 1st March 2016 should be considered an amnesty period to allow regularisation of papers.”
He said Nigeria had 44 known minerals including gold, iron ore, bitumen, zinc, tin and coal but authorities needed to get better data before deciding on a policy focus.
Nigeria has attracted few foreign investors to the mining sector due to a lack of roads, corruption and weak regulation.
(Writing by Ulf Laessing; Editing by David Evans)
