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South African investment firm RMB Holdings to buy stake in Mall of Africa developer

3 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African investment firm RMB Holdings Ltd. plans to expand its portfolio by buying a stake in unlisted Atterbury, builder of the Mall of Africa, one of the largest shopping venues in the country.

RMB Holdings Limited, which holds a 34 percent stake in FirstRand, the largest banking group by value in Africa’s most industrialised economy as its only major asset, said on Tuesday it will buy 25.01 percent of Atterbury.

Although it did not put a price on the cost of investment for Attebury, RMB Holdings said in the statement it would fund the deal through preference shares.

RMB Holdings said in a statement it aimed to use Atterbury to spearhead its retail and industrial property business.

The Mall of Africa, which opened its doors last week, targets consumers in Midrand a middle-class suburb north of the commercial hub of Johannesburg.

“We thought it was a missing element of our overall portfolio,” RMB Holdings Chief Executive Herman Bosman told Reuters, referring to property investments.

Shares in RMB Holdings fell 4.60 percent on the bourse by 1358 GMT, as stocks tumbled across the board tracking a sell-off in emerging markets.

 

(Reporting by Tanisha Heiberg; Editing by James Macharia)

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Coca-Cola looks to expand its investment in The Ivory Coast

3 May 2016 Comments (0) Africa, Business, Featured

Coca Cola Ivory Coast

Coca-Cola has invested more money into its already substantial holdings in The Ivory Coast.

The multinational giant that is Coca-Cola is no stranger to emerging markets and has never been afraid to take its eponymous leading brand to new shores. Africa is actually not a new market for Coca-Cola, as the company has promoted and sold its carbonated drinks on the continent for some time. However, with the Ivory Coast showing particularly robust economic growth, Coca-Cola has decided to increase its level of involvement with the West African nation.

Rather than simply viewing the country as a revenue stream of sales, Coca-Cola now intend to invest in the Ivory Coast as a source of production for both raw materials and fruit juice. It is a move that makes logistical and economic sense.

Improving company image

Through the sponsorship of football tournaments, heavy advertising and socially responsible welfare projects, Coca-Cola has already established itself as a familiar brand name across Africa, and the Ivory Coast is no exception. In fact, the capital city of Abidjan has been home to Coca-Cola’s headquarters for export in West Africa for several years. This office oversees export to 11 African nations and Coca-Cola brands are popular across West Africa. The recognition of the brand has been strengthened by co-operative efforts with major aid organizations that have helped Coca-Cola establish a reputation of responsibility.

At a time when sugary, carbonated drinks are being heavily criticized in the west, it has been hugely beneficial to attach the Coca-Cola name to programs such as the Fresh Water Program that was launched in conjunction with the USAID in 2005. This program sought to help provide greater access to clean, running water for communities from Western, Eastern and Sub-Saharan Africa. In 2007, Coca-Cola upped its investment in the program, making the joint enterprise worth $10 million.

Coca Cola Africa Foundation

Coca Cola Africa Foundation

As many of the products are youth driven, it has also made economic as well as humanitarian sense to target young people for particular support. Coca-Cola developed its own body, The Coca-Cola Africa Foundation, to help provide funding and support for projects like HOPE worldwide that support vulnerable children in impoverished African regions.

Even a cynic would have to admit that such funding is beneficial, regardless of whether the motive is altruistic or for public image. But the reality is that the people within The Ivory Coast and surrounding nations are still very poor and national, economic growth is needed to help them work their way out of this poverty.

Opening up new opportunities

It is therefore a significant step forward, when a company with the reach of Coca-Cola announces that it will be looking to include local resources as part of its production chain. This opens up potentially huge streams of income for local farmers and other agricultural workers.

The Ivory Coast is one of the main producers of pineapples in Africa and as recently as 2014, Coca-Cola launched its Minute Maid brand of juice drinks on the continent. The president of Coca-Cola Eurasia & Africa, Nathan Kalumbu, confirmed that the company would be investing in the fruit farming of The Ivory Coast and looking to produce significant amounts of its juice there.

The Ivory Coast’s President, Alassane Ouattara, has greeted the news positively and states that he hopes such investment will lead other corporations to treat the nation with “some confidence.”

In addition, to the commitment to pineapple juice and other fruit products, Ouattara hopes that Coca-Cola’s investment will provide income to other areas of Ivorian industry. It is a hope that looks to be realized, as Mr. Kalumbu confirmed that Coca-Cola would be looking to source other raw materials for its products inside The Ivory Coast.

After all, the country is the world’s largest producer of the Kola Nut, which was traditionally a major ingredient in the drink. Although, the nut is not commonly used in most Cola production today, there is no reason why it could not be used to produce much of Africa’s supply of the drink as it was only replaced in many markets due to more readily available alternatives.

The Ivory Coast stands to reap a large reward from Coca-Cola’s commitment, to expand, within Africa and according to Kalumbu; this commitment will total a staggering $17 billion between 2010 and 2020.

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IMF sees sub-Saharan Africa growth near two-decade low in 2016

3 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Economic growth in sub-Saharan Africa will likely slow this year to its weakest in nearly two decades, hurt by a slump in commodity prices, the Ebola virus outbreak and drought, the IMF said on Tuesday.

In its African Economic Outlook, the Fund said the region would likely grow 3 percent this year – the lowest rate since 1999 – after expanding by 3.4 percent in 2015.

Growth was seen recovering to 4 percent next year, helped by a slight recovery in commodity prices, and the Fund said it was still optimistic about the region’s prospects in the longer term.

“However, to realise this potential, a substantial policy reset is critical in many cases,” the Fund said.

Affected countries needed to contain fiscal deficits as the reduction in revenue from the commodities sector was expected to persist, it added.

Major oil exporters Angola and Nigeria were hardest hit by the slump in commodities prices, as were Ghana, South Africa and Zambia, the report said.

Guinea, Liberia, and Sierra Leone were only gradually recovering from the Ebola epidemic, while several southern and eastern African countries including Ethiopia, Malawi and Zimbabwe were suffering from a severe drought, the IMF added.

On the upside, Côte d’Ivoire, Kenya and Senegal would see growth of more than 5 percent, mostly “supported by ongoing infrastructure investment efforts and strong private consumption,” the report said.

“The decline in oil prices has also helped these countries, though the windfall has tended to be smaller than expected, as exposure to the decline in other commodity prices and currency depreciations have partly offset the gains in many of them,” it added.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Andrew Heavens)

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Nigeria to begin exploratory oil drilling in Chad Basin by October

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria plans to begin exploratory drilling in search of oil in the northeastern Chad Basin region by October, the head of the state oil company has said.

Emmanuel Ibe Kachikwu, who last year said Africa’s biggest crude exporter may be on the verge of a significant oil find in the Lake Chad area, said in a statement on Sunday that seismic studies were ongoing.

“Drilling activities will commence by the last quarter of 2016,” the Nigerian National Petroleum Corporation (NNPC) chief, who is also minister of state for oil, was quoted as saying in the statement issued by the state oil company.

Africa’s biggest economy has been hit hard by the sharp fall in global oil prices because it relies on crude exports for around 70 percent of government revenue.

NNPC spokesman Garba Deen Muhammad said exploration in the region was intended to “add value to the hydrocarbon potentials of the Nigerian inland basin, provide investment opportunities, boost the economy as well as create millions of new jobs”.

 

 

(Reporting by Camillus Eboh and Alexis Akwagyiram, editing by David Evans)

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Faso Soap: A weapon against malaria?

2 May 2016 Comments (1) Africa, Business, Featured

faso soap

A soap created by two students in Burkina Faso holds promise as an affordable way to fight the devastating disease.

As malaria threatens millions of people in Africa, a mosquito-repellent soap invented by two students in Burkina Faso may help prevent infection.

Faso Soap could be tested and produced if a crowd funding campaign launched in April is successful.

The “Save 100,000 Lives” campaign hopes to raise $113,000 to test and manufacture the soap. The goal is to save 100,000 lives in the Democratic Republic of the Congo, Tanzania, Ghana, Nigeria and Uganda, through malaria prevention by 2018.

Gerard Niyondiko of Burundi and Moctar Dembele of Burkina Faso created Faso Soap when they were students at the International Institute for Water and Environmental Institute in Ouagadougou, the capital of Burkina Faso.

Prize-winning invention

It was the first project from the African continent to win the $25,000 grand prize at  University of California Berkeley’s Global Social Ventures Competition in 2013, beating 650 entries from 40 countries.

Globally, more than three billion people live in areas at risk for malaria, mostly in poor tropical and sub-tropical regions.

Africa is hardest hit by the debilitating disease. An estimated 430,000 people die from malaria each year and 90 percent of the deaths occur in sub-Saharan Africa, mostly among children under five years old, according to one U.S. official.

Sheila Paskman, chargé d’affaires at the U.S. Embassy in Liberia, said a child dies from malaria every two minutes in Africa, where the disease is also responsible more than half of all school absences. “The disease costs the continent billions each year in health costs and lost productivity,” she said.

Africa most vulnerable

According to the Centers of Disease Control and Prevention, Africa is most vulnerable for a variety of reasons: A predominant species, Plasmodium falciparum, is most likely to cause death; the climate allows transmission to occur year round; and scarcity of resources hinders malaria control.

Nigeria, Burkina Faso, Sierra Leone, Mozambique and the Democratic Republic of the Congo are hardest hit by the disease.

In other areas of the world, such as parts of South Asia and Latin America, malaria is less likely to cause death but can still result in severe illness and incapacitation, according to the CDC.

Eradication and control efforts include insecticide-treated mosquito nets, indoor insecticide spraying campaigns, and community education campaigns.

Officials cite progress

While the disease remains a serious problem, eradication efforts are paying off.

Since 2000, malaria death rates have fallen by 60 percent, and new cases have dropped by more than one third globally, according to the World Health Organization. In Africa, death rates dropped by more than 65 percent overall and among children less than 5 years old.

Faso Soap could be another weapon in the arsenal fighting malaria.

Niyondiko said the soap is made from Shea butter, lemongrass oil and other ingredients.

Soap is accessible, affordable

He said Faso Soap can repel mosquitoes for several hours after use and could especially offer protection in the early evening when people are still outdoors and mosquitoes appear.

The team hopes to engage in partnerships with large soap producers and distributors to create a product that is competitive with conventional soap.

The French Association for Research Against Infectious Diseases in Africa is collecting the donations. So far, the project has raised more than $42,000 from 464 contributors.

Now working with social entrepreneurs Lisa Barutel and Franck Langevin in Burkina Faso, Niyondiko said the aim is to provide an accessible and affordable product for people who may not be able to afford anti-mosquito products or nets.

“Soap is a commodity product and not going to add other additional costs to the population” as they will buy soap in any case, Niyondiko said.

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Ivory Coast president calls for break-up of power, water monopolies

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Ivory Coast will break up its long-standing electricity and water monopolies and introduce competition to reduce prices amid growing public concern over price increases, President Alassane Ouattara said.

The government decided in June last year to increase electricity prices by 16 percent over three years to keep pace with production costs.

Under the arrangement electricity prices were scheduled to increase by 5 percent in January. But some customers saw rates rise by as much as 40 percent, according to a government investigation, prompting Ouattara to cancel the January increases and call for a more competitive industry.

“This situation reminds us of the need to open up the water and electricity sectors to competition,” Ouattara, a former senior International Monetary Fund official, said in a Labour Day speech on national television on Sunday.

“It is competition that will lower the price of electricity. I appeal to all those who wish to invest in that sector,” he said.

The West African nation has emerged from a decade of political turmoil and civil war as one of the continent’s rising stars economically, with growth averaging around 9 percent for the past four years.

However, critics of the government complain that most Ivorians have not benefited from the new-found prosperity.

During his re-election campaign last year Ouattara promised to make economic growth more inclusive.

The Companie Ivoirienne d’Electricite (CIE), majority owned by Africa-focused public utilities manager Eranove Group, has supplied electricity to the Ivory Coast since 1990 under an agreement with the government. The deal, which puts CIE in charge of the distribution of power to homes and businesses, is not due to expire until 2020.

It is unclear how the utility markets will be liberalised or if it can be done before the agreement between CIE and the government ends in 2020.

But it is likely to be a major issue in French-speaking West Africa’s biggest economy where power producers are struggling to keep pace with growing consumption.

Demand for electricity is rising by some 10 percent a year, and the energy minister said last year that $20 billion of investment is needed in the industry over the next 15 years.

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South Africa’s petrol pump price to increase in May

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – The retail price of petrol in South Africa will increase by nearly 1 percent from May 4, while the price of wholesale diesel will largely remain steady, the energy department said on Monday.

The price of petrol will increase by 12 cents to 12.74 rand per litre in the commercial hub of Gauteng province, while diesel will go down by 1 cents to 10.52 rand per litre, the department said in a statement.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Alison Williams)

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Afroplan: 21st Century Coupons

1 May 2016 Comments (0) Africa, Business, Featured

afroplan

Afroplan is a new online and mobile platform that connects users in Cote d’Ivoire, Senegal and Togo with grocery store chains to learn about discounts and promotions in real-time.

Big-box grocery stores are still a relatively new phenomenon in developing countries. Until just a few years ago, the vast majority of citizens living in even the metropolitan areas of such countries did their grocery shopping in locally-run markets filled with locally or regionally sourced foods. With the increase in chain grocery stores around the world, shoppers are adapting to the “one-stop-shop” mentality, including the concept of discounts and promotions.

Coupon Cutting in the Digital Age

Afroplan is a new mobile and online platform created by Cletus Razakou, a young Ivorian-Togolese digital expert and app developer. Afroplan bridges the gap between retailers and consumers by allowing users to input their personal data, such as location and material interests, and alerting them when a near-by retailer has a discount on a relevant item. While currently present only in three West African nations, a region home to 37 or 13% of Africa’s commercial centers, Afroplan is available on all smartphone platforms.

Users are able to input all varieties of material interests, from specific food items to the latest tablet, and are able to make informed choices about the right time to buy. Razakou was frustrated by the lack of communication between retailers and consumers regarding promotions, and realized that if a platform were created where retailers and consumers could alert one another about promotions, more Africans would benefit from these bargains.

This not only benefits consumers, but benefits retailers: many stores experience financial losses due to the expiry of food-products or to the fast turnover of tastes and preferences in material goods. Stores are now able to inform a broader range of consumers about potential savings while ridding themselves of soon-to-be-obsolete stock.

Benefits for All

The platform works through a two-pronged approach: the first is that supermarkets and other retailers are charged a flat fee to post individual promotions. The second is that sellers can purchase specialized advertising space to reach a broader range of consumers, including those who have not specifically listed a product as one of their interests. This is not only beneficial for the app as a money-making scheme, but is beneficial to retailers: the more specialized advertising they purchase, the more people see their products, and the more people will be interested in purchasing a discounted item, even if they had not listed it as a preferred item. In this way, retailers are able to expand their consumer base by creating a culture of desire while preventing losses incurred from expired and unsold products.

Of course, users benefit as well: they are now able to make informed choices about how to best-spend their hard-earned money. Consumers are able to choose from eight categories of goods: fashion, home decor, electronics, beauty, telephones, infant/baby, food, and overstock items.

Initial Challenges

Creating an app for an emerging industry is not without its challenges. Razakou said that the main challenges during this process were financial. It was challenging, Razakou said, to publicize the platform to potential clients (stores) and users in an efficient manner in all three countries, because they had not yet received investments from clients. Fortunately, Afroplan’s initial success indicates that financial barriers may no longer be prohibitive for expansion.

The Future of Bargaining?

Afroplan is an interesting, innovative approach to discount consumption. Connecting users in real-time to see the latest discounts is a new way to encourage consumption in West Africa, and, for those living in areas with supermarkets that opt to work with Afroplan, could lead to substantial savings on big ticket items. Unlike shopping at a local African market, buyers are not generally able to bargain in a supermarket, which takes the power away from the consumer. Afroplan gives shoppers some modicum of power when supermarkets are growing in popularity and number. No longer do citizens of Senegal, Togo and Cote d’Ivoire have to choose between the convenience of a one-stop-shop and the potentially low prices of shopping at good-specific markets.

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Ellen Johnson-Sirleaf: Africa’s First Female Head of State

30 April 2016 Comments (0) Africa, Featured, Leaders

Ellen Johnson-Sirleaf

Ellen Johnson-Sirleaf, Africa’s first female head of state and the rebuilding of the post-war economy of Liberia.

Ellen Johnson-Sirleaf, Africa’s first female head of state has led a remarkable life; after spending time imprisoned and exiled, she rebuilt her country after a turbulent decade of civil war. In 2010 Newsweek listed her as one of the top ten leaders in the world and in 2014 she was named the 70th most powerful woman in the world by Forbes magazine.

Sirleaf was born in 1938, in Monrovia, Liberia. After marrying at 17, she had a thorough education, which started with her studying at the College of West Africa in 1955. She then moved to the USA and completed her Master of Public Administration in 1971 from Harvard’s prestigious John F Kennedy School of Government. Shortly afterwards, she returned to her homeland.

Driven Twice into Exile

Sirleaf’s return to Liberia was eventful but also troubled. In 1971 she briefly took up office of the Assistant Minister of Finance under William Tolbert before resigning over a disagreement regarding government spending.  She served as Finance Minister from 1979-1980 until the bloody military coup in 1980 where Tolbert and all but four of his ministers were executed by firing squad. She was offered a role under the new leadership but fled the country later that year after publicly criticizing the new regime.

Exile was a frustrating time for Sirleaf; she lived in the USA and Kenya before returning to Liberia for two unsuccessful presidential elections in 1985 and 1997. Times were very hard in Liberia: there was peace for only two years before civil war broke out again, leading to the destruction of much of the infrastructure and a death toll of nearly 200,000. Sirleaf fought with the dictator Charles Taylor, whom she initially supported, and was imprisoned for treason. Fortunately, after international pressure and public outcry she only served seven months of a ten year sentence and was exiled once again from her homeland.

Sirleaf stood for the presidency in a contested general election

Ellen Johnson-SirleafThe end of the civil war in 2003 marked Sirleaf’s return to the country and her rise to real power and prominence. A transitional government was established with Sirleaf serving as Head of the Governance Reform Commission. She then stood for the presidency in the hotly contested general election of 2005. Sirleaf managed to best the popular candidate, footballer George Weah, and secure the leadership. Sirleaf later went on to win a second term in office in 2011. She accepted the Nobel Peace Prize just four days before announcing running for a second term, the timing of which was heavily criticized by her opponents.

During the last decade in power, Sirleaf has been credited with much of Liberia’s recovery. The country she inherited was devastated by a decade of civil war; hospitals had been destroyed, teachers and academics had fled the country and an entire generation had missed out on an education. Agriculture had ground to a halt and basic amenities such as electricity and clean water were not available to many Liberians. Her priority became restoring education, and in 2007 she made education free and compulsory for all elementary aged children.

A “zero tolerance” policy on corruption ineffective

Over the last ten years, Sirleaf has also successfully negotiated the write-off of nearly $5bn in foreign debt, allowing Liberia to borrow again from foreign banks, which has kick-started the economic recovery of one of the most impoverished countries on the planet. However her “zero tolerance” policy on corruption has been criticized for being ineffective, with government corruption still rampant in Liberia.

Her Nobel Peace Prize in 2011, for her dedication to women’s rights, was the culmination of years of fighting for equality at home, and abroad. Sirleaf described it as, “the recognition of my many years of struggle.” Her promotion of tolerance and equality has been a hallmark of her presidency. Despite strong prejudice in West Africa on LGBT issues, Sirleaf has been praised for resisting proposed changes to the law that would criminalize homosexuality further. She stated that, “the status quo in Liberia has been one of tolerance and no one has ever been prosecuted under that [current] law.” Sirleaf has stood almost alone in refusing further criminalization and oppression of the LGBT community, against mounting pressure from the media and Liberian lawmakers.

Liberia still has a long way to go

Despite her best efforts, Liberia still has a long way to go. The Ebola crisis of 2014 illustrated how ill equipped the healthcare system and infrastructure was when faced with such a major outbreak of disease. More people died in Liberia than any other country, amassing a total death toll of over 4,500. Critics have also chastised her for not doing enough to battle unemployment, whilst claiming the restoration of some basic amenities have been lacking in the post-war decade.

After decades of fighting for justice and equality for Liberia, she has spent her presidency re-building a war-torn nation. Whilst she has her critics, few could question her unwavering dedication to the country. She has endured exile, imprisonment, and grave risks to her life for the future of the Liberian people. Liberia still faces many challenges; however its future is undoubtedly brighter as a result of Sirleaf’s leadership and commitment to the nation.

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South Africa’s trade balance swings to 2.92 bil rand surplus in March

29 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s trade balance swung to a 2.92 billion rand ($206.10 million) surplus in March from a revised 1.27 billion rand deficit in February, the national revenue agency said on Friday.

Exports were up by 6.3 percent to 96.13 billion rand on a month-on-month basis, while imports rose by 1.6 percent to 93.22 billion rand on a month-on-month basis, the South African Revenue Service said in a statement.

($1 = 14.1678 rand)

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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