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We Cash Up aims to be the PayPal of Africa

20 April 2016 Comments (0) Africa, Business, Featured

Cedric Atangana

With e-commerce on the continent poised for growth, We Cash Up develops an innovative platform to enable online purchases on phones.

Hoping to ride a wave of innovative online technology and mobile adoption in Africa, the startup We Cash Up has set its sights on becoming the Pay Pal of the continent.

Cedric Atangana, co-founder and CEO of the Marseille-based company Infinity Space, said its We Cash Up network will aim to provide online purchasing power for Africans who do not have bank accounts.

Atangana said as many as 800 million Africans are excluded from internet commerce because they do not have bank accounts. At the same time, most of them have mobile phones.

His solution? A mobile network that enables users to make secure payments via their phones.

A network of businesses and buyers

Small businesses and stores that participate in the network are both a point of deposit and a point of withdrawal so We Cash Up does not have to develop an expensive new infrastructure to manage cash transactions.

We Cash Up says one key feature of We Cash Up is that its developers found a way to communicate across mobile money systems in 54 African countries that enables transactions across borders.

Infinity Space also developed an artificial intelligence that tracks the behavior of mobile users in order to identify risky or fraudulent transactions, the company said.

Infinity Spaces is also developing a We Shop Up platform for participating merchants.

The company operates as a virtual team. Atangana is based in Marseille while other team members work from Kenya or Cameroon.

African e-commerce faces challenges

Atangana sees vast potential both for merchants and buyers and internet use grows in Africa.

Experts agree that the potential to expand e-commerce in Africa exists but it faces key challenges. For example, e-commerce giants including Kalahari and Mocality have invested in Africa and then retrenched after failing to achieve profitability.

Wealthier Africans have not embraced online shopping, for example, because of concerns about fraud. At the same time, many African cultures value their vibrant and plentiful physical marketplaces over online shopping.

Cross-border differences inhibit scaling efficiencies and require duplication of services. The logistics of delivery are complicated.

E-commerce expected to increase

At the same time, the continent appears poised for growth in e-commerce as spending power increases along with internet access. One study predicts e-commerce, now a tiny fraction of the economy, will grow by 40 percent annually during the next decade.

Atangana believes We Cash Up can tap into that growth and change attitudes about online shopping.

Atangana, who holds a degree in engineering from Polytech Marseille, founded Infinity Space in Cameroon in 2010. The company operated in Nairobi, Kenya before Atangana moved its current headquarters to France.

He and Infinity Space chief marketing officer Marcelle Ballow Bekono were named to Forbes list of top 30 African entrepreneurs under 30.

We Cash Up has received several awards in startup competitions, including $20,000 at the 2014 Google Pitch Night.

Friends lacked bank accounts

He said he got the idea for We Cash Up after he had to help friends who did not have credit cards make online purchases.

On separate occasions, he said, friends in Cameroon and Kenya were unable to participate in developer competitions because they could not provide banking details.

“Indeed, one of the conditions for registration was to provide bank details or the majority had no credit card. And it has been very frustrating for me,” he said. “The idea of this project is born from our desire to help these people.”

Atangana said very few similar services are currently available and they seldom cross borders.

Account Nickel offers prepaid cards to people who do not have bank accounts but operates only in France. MPesa is a leading mobile payment platform in East Africa while telecom operators offer prepaid services in other countries.

But Atangana has a bigger vision of mobile e-commerce across international borders.

“This is the Airbnb financial system,” Atangana said.

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Kenya KCB Group to manage and may buy closed Chase Bank

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

NAIROBI (Reuters) – Kenya’s KCB Group has been appointed to manage Chase Bank and could buy a majority stake in the closed lender whose branches will reopen next week, the central bank said on Wednesday.

The Central Bank of Kenya said in a statement that an understanding had been reached with KCB on “modalities to reopen Chase Bank Ltd in the next few days and the eventual acquisition of a majority stake in the bank.” It said KCB would carry out due diligence to inform its decision on taking a stake.

Central Bank of Kenya Governor Patrick Njoroge told a news conference he had received nine indications of interest in the mid-sized lender that was put into receivership this month.

 

 

(Reporting by Duncan Miriri; Writing by Edmund Blair; Editing by George Obulutsa)

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South Africa’s rand weakens as oil price retreats

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

JOHANNESBURG (Reuters) – South Africa’s rand weakened against the dollar on Wednesday, in line with a pullback in commodity currencies as the global oil price fell one more.

The rand fell to 14.3750 versus the dollar earlier in the session, and was trading at 14.3015 by 0656 GMT, 0.2 percent lower than Tuesday’s New York close.

Commodity-linked currencies such as the rand reversed the previous day’s gains as a recovery in crude oil prices stalled after a workers’ strike which had cut output ended in Kuwait.

The rand had touched a near five-month high of 14.1900 on Tuesday in the wake of improved global risk sentiment linked to better oil prices.

“Commodities are off their highs from yesterday and trade softer so far; this has seen the rand get back above 14.3500 with more resistance at 14.4000/4100 likely to attract offers first up,” said Standard Bank trader Oliver Alwar.

Traders and analysts said the rand could take further direction from domestic CPI data due out at 0800 GMT, with analysts polled by Reuters expecting the main year-on-year number to ease to 6.3 percent from 7 percent.

Government bonds also weakened, and the yield for the benchmark instrument due in 2026 rose 4 basis points to 8.925 percent.

The stock market looked set to open slightly down, with the

Top-40 futures index down 0.5 percent by 0656 GMT.

 

(Reporting by Tanisha Heiberg; Editing by Stella Mapenzauswa)

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Sinosteel cedes half its chrome claims in Zimbabwe to state

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

HARARE (Reuters) – China’s Sinosteel Corp Ltd’s business in Zimbabwe has ceded half its mining claims to the government, complying with Harare’s demands to chrome producers to give up some of their claims, a company official said on Tuesday.

The Southern African nation holds the world’s second largest deposits of chrome, which is smelted to produce ferrochrome, a raw material used in the making of stainless steel.

Zimbabwe’s mines minister last year asked Sinosteel’s Zimasco and Zimbabwe Alloys, which owned 80 percent of all chrome mining claims, to release some ground for distribution to new investors. The companies were owned by Anglo American until 2006.

The government has previously said it wants to redistribute some claims to several local investors as part of its black economic empowerment drive and would not pay compensation.

Zimasco held 45,900 hectares of claims before giving up half to the government, Clara Sadomba, the company’s general manager for administration told Reuters.

“It is accurate regarding Zimasco in that we have indeed ceded 50 percent of our chrome claims to the government,” said Sadomba.

Zimbabwe Alloys officials would not say whether they had also given up some of the company’s claims.

Zimbabwe holds more than 950 million in chrome reserves, according to ministry of mines data.

In 2014 Zimbabwe produced 260,000 tonnes of high-carbon ferrochrome, which was 2.3 percent of global output. Zimasco produced 68 percent of Zimbabwe’s ferrochrome in 2014.

 

(Reporting by MacDonald Dzirutwe; Editing by Alexander Smith)

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Mugabe looks to nationalize Zimbabwe’s diamond industry

19 April 2016 Comments (5) Africa, Business, Featured

Robert Mugabe

Zimbabwe’s longtime President, Robert Mugabe, has announced the state will seize all of the nation’s diamond mines.

Zimbabwe’s controversial President, Robert Mugabe, has announced a massive change to the country’s diamond mining industry, in that all assets will now be state owned. In a move that is a throwback to his socialist roots, Mugabe claims that foreign mining companies have profiteered for too long off one of the nation’s most valuable commodities and he will ensure that the nation now reaps the rewards from its diamonds.

Mugabe gave an interview in early March to the state broadcaster ZBC, during which he expressed his anger at what he sees as foreign companies plundering Zimbabwe for a precious, natural resource. Mugabe claimed that, in doing so, foreign companies made around $15 billion in profits, while Zimbabwe itself had only earned $2 billion in the same period of time and, as such, the diamond rich region of Marange would now be a “state monopoly”.

The Marange diamond fields were only discovered in 2006 but by 2013 they were producing an astonishing 16.9 million carats of diamonds, which is akin to 13% of the world’s rough diamond supply. However, this output has dropped significantly due to reluctance by companies to invest in deeper exploration. Industry group Kimberly Process states that in 2014 Zimbabwe’s diamond production was around 4.7 million carats.

While it is understandable that Mugabe may feel the country needs to earn a greater proportion of the wealth that the Marange region is host to, issues of corruption and internal theft are perhaps as large a problem as outside sources. As far back as 2012, South Africa’s former President Thabo Mbeki warned that Zimbabwe was losing much of its diamond wealth to a “predatory elite” within its own nation.

Illegality plagues Zimbabwe’s diamond industry

The NGO Partnership Africa Canada (PAC), which monitors conflict minerals in Africa, produced a damning report in 2012 that stated government ministers in Zimbabwe were the ones becoming rich off the back of stolen diamonds. Corruption and theft were so rife that the organization said, “The scale of illegality is mind-blowing” and the investigation named former mines minister Obert Mpofu as having amassed an unaccountable fortune since mining began. Mpofu was said to have been spending $20 million “mostly in cash” over a 3 year period.

If high level government figures are the very people denying the state treasury of its rightful income from Marange’s diamond mines, then will a state owned monopoly make much difference? While Mugabe has angrily pointed the finger of blame abroad, it remains to be seen whether those now in charge of the state’s new body, Zimbabwe Diamond Consolidated Company, can ensure that the profits from diamond minds find their way to the rightful government coffers.

What is certain is that the foreign companies who have been mining in Zimbabwe will not take Mugabe’s orders without a fight. China has developed closer trade agreements with Zimbabwe in recent years and the Chinese-run mining company Anjin Investments has already challenged Mugabe’s ruling at the High Court. The early indications are that the courts might well side with the mining companies as the largest mine, Mbada Diamonds, has already won its case at the High Court and been given full control of its assets.

Whether this is a ruling that Mugabe’s government will accept and adhere by is an entirely different question. While some voices have expressed concern over how this dispute could affect trade between China and Zimbabwe, Mugabe himself dismissed such worries, saying, “I don’t think it has affected any of our relations at all…I told President Xi Jinping that we were not getting much from the company, and we didn’t like it anymore in this country.”

Zimbabwe diamond mine

Zimbabwe diamond mine

Where does Zimbabwe’s diamond industry go from here?

If the government of Zimbabwe overcomes the legal challenges, maintaining the $1 billion worth of Chinese trade despite seizing Chinese interests, and eradicates the corruption that has plagued the mining industry thus far, then it would obviously earn considerably more money. However, these are a sequence of unlikely outcomes given the manner in which the move has come and given the history of the mining industry in Zimbabwe.

There is the additional concern that potential investors in other mining projects within the country could be put off by this recent announcement regarding diamonds. John Turner, head of the mining group at law firm Fasten Martineau says, “To the extent that private firms were looking at Zimbabwe thinking they were ahead of the curve, this may give them pause for though.”

Any concerns outside of Zimbabwe have not appeared to weaken the resolve of Mugabe or his government. They insist that the problem lies with theft from abroad and moreover that recent mining has actually been illegal, as the mining companies had not renewed their licenses.

Amid conflicting claims and ongoing lawsuits, who emerges as having control over the lucrative Marange diamond mines over the next few months will be of interest to many parties and people both in and outside of Zimbabwe.

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Tripling of South African bond buying signals new faith in rule of law

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

JOHANNESBURG (Reuters) – A tripling of South African bond sales this year on Monday added to signs that investors’ faith in its institutions has been somewhat restored following a court ruling against President Jacob Zuma and the appointment of a former finance minister.

Securities exchange figures showed foreign investors bought a net 30 billion rand ($2 billion) worth of South African debt in 2016, compared with 10 billion in the same period last year.

The Treasury is flush with cash after a $1.25 billion 10-year bond sale this month was two times oversubscribed, and bond yields have recouped heavy losses in December after Zuma fired his finance minister, raising fears of political interference.

Benchmark yields, which spiked to a record 10.38 percent after Zuma briefly replaced Nhlanhla Nene with a virtually unknown politician, have since recouped nearly 140 basis points, a third of which was after the ruling against Zuma.

Sentiment, helped by Zuma bringing back Pravin Gordhan as finance minister, improved further after the Constitutional Court found that the president was wrong to ignore an order to repay state funds used to upgrade his Nkandla home.

“Having Pravin Gordhan back in control, and having this noise around Nkandla and Jacob Zuma, is showing the market that South African institutions are still strong,” Investec fixed income portfolio manager Vivienne Taberer said.

Analysts said markets were also cheered by a backlash against the Gupta family and its businesses. South Africa’s four big banks cut ties with a Gupta-owned investment company over criticism that the family has undue influence with Zuma.

“Government and state owned enterprises can get about their constitutionally mandated activities, less encumbered by predatory actions of (the) president and his allies,” BNP Paribus Securities South Africa analyst Nic Borain said.

“We expect markets – especially the bonds, currency and banks – to track the ebbs and flows of Jacob Zuma’s fortunes.”

Added to that, signals from the central bank and Treasury that they will pursue prudent policy have seen South African assets leading emerging market gainers, boosted by signs that the U.S. may not hike interest rates as quickly as expected.

Recent economic data out of China, a major consumer of emerging market commodities, has also lessened worries over a slowdown in the world’s second largest economy.

“If this environment, where we see the Fed not really doing much and being cautious over the balance of this year, continues and we continue to see reasonable data coming out of China … then this constructive risk environment can continue for the next three or so months at least,” Investec’s Taberer said.

The litmus test for assets will be whether credit rating agencies decide to downgrade debt. A cut from Moody’s would mean a loss of its investment grade status and possible ejection from the prestigious World Government Bond Index (WGBI).

“Such an ejection would represent possibly the most dramatic outcome of a ratings downgrade and should be South Africa’s biggest cause for concern,” Citadel chief strategist Adrian Saville said.

 

(By Stella Mapenzauswa. Editing by James Macharia and Louise Ireland)

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Dubai Islamic Bank aims to open in Kenya before year-end: sources

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

DUBAI/NAIROBI (Reuters) – Dubai Islamic Bank (DIB) plans to be operating in Kenya before the end of 2016, despite the Kenyan authorities’ moratorium on issuing new banking licences, according to sources familiar with the matter.

The largest Islamic bank in the United Arab Emirates will start operating at a time when Kenyan banks have come under closer scrutiny from the regulator because of increasing bad debts, prompting officials and analysts to conclude the sector is ripe for consolidation.

Three medium-sized and small banks have been taken over by the regulator since August last year, with the latest, Chase Bank Kenya, taken over earlier this month after a run on deposits.

In November the central bank placed a moratorium on the licensing of new commercial banks in an attempt to bring stability to an industry that has more than 40 banks.

But DIB had been in talks with the regulator before then, meaning a decision on its licence would not be affected by the moratorium, the sources said.

DIB is now awaiting the final go-ahead from Kenya’s central bank, said the sources, as it has already been granted outline approval for a commercial banking licence having planned to open in Kenya last year, only to find the process had taken longer than expected.

In a statement the central bank said on Monday it was processing an application for a banking licence from DIB Bank Kenya, without elaborating.

A separate source at the central bank said DIB was one of a couple of banks expected to start operations in the country this year.

No one at DIB responded to a request for comment.

DIB has already recruited staff for its Kenyan operation, which will initially comprise three branches offering consumer, corporate and treasury services, the sources said.

Kenya will not be DIB’s first foray overseas. It holds stakes in banks in Pakistan, Sudan, Jordan, Bosnia and late last year raised its stake in Bank Panin Syariah, the Indonesian sharia-compliant lender, to 39.6 percent, according to a presentation on the bank’s website.

It would become the third Islamic lender to operate in Kenya, where Muslims account for about 10 percent of the population of some 44 million.

 

(By Tom Arnold and Duncan Miriri. Editing by Greg Mahlich)

 

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Shell says theft from its Nigerian oil pipeline network fell in 2015

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

LONDON (Reuters) – Theft of crude oil from the pipeline network of Shell’s Nigerian subsidiary fell to 25,000 barrels per day (bpd) in 2015, the company said on Monday, roughly 32 percent less than the previous year.

The number of sabotage-related spills on the SPDC network also declined to 93 in 2015, compared with 139 the previous year, Shell said in its annual sustainability report.

It attributed the decrease to divestments in the Niger Delta and increased surveillance and security by the Nigerian government, but said theft and sabotage were still responsible for around 85 percent of spills from SPDC operations.

President Muhammadu Buhari has said theft siphons as much as 250,000 bpd of crude of its roughly 2 million bpd of production and last week promised to crack down on groups responsible for pipeline attacks.

Still, the issue has continued to plague the country. Shell currently has a force majeure in place on Forcados crude oil exports following an attack on a subsea pipeline in February, while Italian oil major ENI reportedly declared force majeure on Brass River exports late last week.

 

(Reporting by Libby George and Karolin Schaps; Editing by Mark Potter)

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Folorunsho Alakija: A portrait of a billionaire

18 April 2016 Comments (1) Africa, Featured, Leaders

Folorunsho Alakija

Businesswoman, fashion designer and even a marriage counselor; Folorunsho Alakija won’t be retiring any time soon.

Folorunsho Alakija is not only the second richest woman in Africa but she has also been listed as one of the most powerful 100 women in the world by Forbes magazine. This is a businesswoman who takes diversified interests to a quite remarkable level, as Alakija is not only involved in oil mining and fashion design but has even written books on marriage counseling and started up her own ministry.

So how did this 64 year old Nigerian woman end up in such a position of wealth and influence?

Folorunsho Alakija: “Many have asked how I got to where I am”

Alakija arrived into the world on July 15th 1951, born into a large family in which her father had an incredible 52 children. Alakija and one of her sisters were sent to school in the United Kingdom at the age of 7 and remained there for 4 years.

Although she returned to Nigeria for her high school education, Alakija made her way back to the UK as a young adult where she studied to be a secretary and also took up a fashion design course at the American College in London and the Central School of Fashion.

Alakija began her first job in 1970, working as a secretary for Sijuade Enterprises and then 4 years later moved on to become the Executive Secretary to the Managing Director of First National Bank of Chicago (now First City Monument Bank).

From this point on, determination, hard work and the confidence to take risks are what saw Alakija’s career go far beyond her formal qualifications. While she did not have a degree, diligence and natural talent helped her carve out increasingly senior roles in the corporate world. Within two years of joining the bank, Alakija was promoted to the Head of Corporate Affairs and subsequently rose further into the company hierarchy by becoming Office Assistant to the Treasury Department.

While many people would have been happy to continue such a progression in the corporate world, Alakija wanted to use her creativity and took a gamble by leaving the security of her career to launch her own fashion house in 1983. The Rose of Sharon House (originally named Supreme Stitches) was an almost immediate success and made Alakija a household name in Nigeria as she promoted traditional prints and Nigerian styles in her clothing.

A move from the finance sector into fashion design might seem unusual, but Alakija’s massive success has been built upon her willingness to take calculated risks and in 1991 she made another bold move into yet another arena.

“A truly family business”

In 1991, Alakija ventured into the oil industry and although her prospecting license was not granted until 1993, it was the move that would turn a successful career into one that made billions. Alakija’s company Famfa Oil acquired 60% of a lucrative block of coastal oil that came to fruition in 1996 when Texaco (now Chevron) approached her to broker a deal. Negotiations lasted 3 months, but at the end of it Alakija had a deal with a multinational oil company and Famfa Oil became a juggernaut in African business. Famfa is, as Alakija states, a “family business” in that her husband of 40 years is the chairman and their four sons are the Executive Directors.

Having been happily married for four decades and being a devout born-again Christian, it is perhaps unsurprising that Alakija is saddened by the world’s increasing divorce rates. What might be more surprising about a billionaire businesswoman is that she decided to try and address this by writing a book on marriage counseling and by regularly giving speeches around Nigeria to try and help provide advice on how to make marriage work.

“A burning desire to help the less privileged and needy”

Helping people is something that is important to Nigeria’s richest woman and her huge financial clout has meant that she is able to do a lot more than write books. In 2008, The Rose of Sharon Foundation was launched to allow Alakija to invest in the futures of widows and orphans in Nigeria. Scholarships and interest-free loans aim to help those with very little prospects have a chance at changing their own fortunes.

There have been 9,000 medical and engineering scholarships thus far and in addition to this work, Alakija has provided 21 clinics for treating tuberculosis across the country, 21 science laboratories and is in the process of designing the building of two schools that will bear the name of her foundation.

Alakija’s career has been extraordinary by any standards and yet with her foundation, public speaking and the ministry she launched in 2004, there is no sign of her slowing down any time soon. And it is her religion that she insists is behind her success and her passion to keep working and promoting her belief in her faith. Although many people might look to her ingenuity, brave decision making and talent, Alakija says “Though many have claimed that I have become their role model, I assign all the glory to God.”

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StanChart eyes growth from African companies with broader horizons

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

NAIROBI (Reuters) – Growing African businesses looking to sell their products and services beyond the continent present a growth opportunity for Standard Chartered, the bank’s chairman said on Friday.

The group has operations in 16 African nations, including Kenya, and offers services via correspondent banks in 22 more markets in Africa, where sliding commodities prices have put the brakes on previously strong growth.

Rival Barclays has responded by reducing its exposure to Africa, but StanChart takes an alternative view.

“We see Africa as an opportunity to invest rather than exit or divest,” Standard Chartered Chairman John Peace told Reuters in Nairobi, adding that the Internet and other technology is linking more African companies to global trade.

“You can run a business, not just a large corporation but a medium-size business, here in Kenya and be connected to the world,” he said. “Banks, therefore, have a duty to be able to support that connectivity and that is what we are trying to do.”

The World Bank cut its 2016 growth forecast for sub-Saharan Africa this week to 3.3 percent, from a previous estimate of 4.4 percent, citing the drop in commodities prices.

Commodity exporter South Africa and oil producer Nigeria have been hit hard. But Kenya, an oil importer now enjoying cheaper crude prices, has kept annual growth around 6 percent.

Peace said that Standard Chartered’s wealth-management products were finding customers in nations such as Kenya.

“We certainly, as part of our new strategy globally, emphasise the opportunity we have in retail, the opportunity we have in private banking and wealth management, and I think that is true in Kenya and in Africa,” Peace said.

Standard Chartered has not, however, been immune to the commodities slide and has adjusted its risk profile accordingly.

“We tightened our risk tolerance, recognising that things are going to remain choppy for the foreseeable future,” said Peace, who has said that he wants to retire from his post at the end of this year.

 

 

(By Duncan Miriri. Editing by Edmund Blair and David Goodman)

 

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