MENU

Business
Category

StanChart launches mobile banking push in Africa as rivals retreat

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

LONDON (Reuters) – Standard Chartered is to launch its mobile and online banking platform in eight African countries, its consumer banking chief for the region told Reuters, as the lender seeks to grow in Africa at a time when some European banks are retreating.

StanChart will launch the service for its 1 million customers in Botswana, Ghana, Kenya, Nigeria, Tanzania, Uganda, Zambia and Zimbabwe in the first half of 2016, the bank’s regional head for retail banking Jaydeep Gupta said.

“Africa’s populations are moving quickly to embrace mobile banking and local banks have made material investments on the digital side, so to protect and grow our market share we are investing,” he said.

Gupta said StanChart hopes to grow long-term retail banking revenues in Africa by three to four times the pace of the region’s growth in economic output.

The bank’s strategy stands in contrast to European rivals who have beat a rapid retreat from Africa in recent years, stung by plunging commodities prices and weaknesses in African currencies.

Barclays said on March 1 it was seeking to sell its African business as part of a plan by new Chief Executive Jes Staley to simplify the bank’s structure.

The International Monetary Fund on May 3 cut its 2016 growth forecast for sub-Saharan Africa by 1 percentage point to 3 percent, the lowest level in 15 years and half the average over the last decade.

The tough environment has seen bank stocks in Africa plunge and lenders in countries such as Kenya and Zambia fail.

StanChart is nonetheless expanding its physical presence in the region, adding 10 branches in the Nigerian capital of Lagos as part of a strategy to focus on Africa’s capital and top-tier cities which Gupta said account for roughly 80 percent of consumer banking revenues.

Gupta declined to put a figure on the bank’s Africa investment. Africa accounts for 10 percent or around 8400 of the lender’s total employees, and StanChart made a net loss in the region of $32 million in 2015 on rising bad loans, according to company data.

Former Barclays chief executive Bob Diamond is also optimistic about the region and is bidding on his former employer’s African unit, even as his investment vehicle Atlas Mara reported a $2 million loss for the first quarter as its African banking investments struggled. [nL5N18N0XB]

StanChart’s Gupta, like Diamond, advocate looking beyond Africa’s short term economic woes.

“Africa is a multi-speed market with some countries such as Kenya bounding ahead while others like Zimbabwe and Nigeria remain challenging, but we see attractive long-term growth opportunities for the continent,” Gupta said.

 

(By Lawrence White. Editing by John O’Donnell, Greg Mahlich)

 

Read more

Bidvest foods spin-off Bidcorp valued at $5 bil in market debut

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

JOHANNESBURG (Reuters) – South Africa’s Bidvest listed its food services business as Bid Corporation (Bidcorp) on the Johannesburg Securities Exchange on Monday, with the shares opening trade at 270 rand to value the company at around 90 billion rand ($5 billion).

Bidcorp, which supplies pubs, restaurants and hotels in Europe, South America and Asia, is the largest primary listing on the JSE since Vodacom in 2009, the stock exchange said.

Bidvest, whose business also spans pharmaceuticals, car showrooms and shipping, announced in February it planned to spin off and separately list its food business, its biggest division, in South Africa. It had previously said the business should be separated because its value was not reflected in the company’s share price.

Plans to list the food business in London were abandoned in 2014 and private equity buyout bids for it were rejected three years earlier

The separation will position the food business for a new phase of both internal and acquisitive growth, said Bidcorp Chief Executive Bernard Berson before he opened trading in Johannesburg by blowing a ceremonial kudu horn.

Bidvest shares dropped 68 percent as Bidcorp started trading, settling around 118.42 rand by 1213 GMT to value what remains of Bidvest at around 38 billion rand, while Bidcorp had risen to 280.84 rand.

The listing splits the group into what is more or less a South African corporation in Bidvest and global food player in Bidcorp, Cratos Capital senior trader Ron Klipin told Reuters.

“It’s certainly unlocking some short-term value for Bidvest shareholders,” said Avior Capital Market analyst Mark Hodgson.

($1 = 15.7968 rand)

 

(Reporting by Zimasa Mpemnyama and TJ Strydom; Editing by Greg Mahlich)

Read more

Botswana’s economy to return to growth this year

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

GABORONE (Reuters) – Botswana’s economy will return to growth this year after contracting in 2015 as water and electricity supply stabilise, the central bank said on Monday.

Consumer prices in the southern African country will remain within the bank’s target of between 3 and 6 percent, the Bank of Botswana’s Kealeboga Masalila said at a conference.

Botswana’s economy contracted 0.3 percent in 2015 due to a sharp fall in mining output as global demand for commodities sank and a severe drought pushed up inflation.

 

(Writing by Mfuneko Toyana; Editing by Joe Brock)

Read more

The World Bank names Mauritius as Africa’s top business destination

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

business mauritius

An annual report from the World Bank has picked out Mauritius as the best place to conduct business in Africa, so just how has the island nation achieved this?

Mauritius has been named as Africa’s most business friendly country by the annual “Doing Business” report from the World Bank. The report seeks to help potential investors (and governments) identify how easy it is to create startups and investment opportunities across the globe. While Africa as a continent does not fare particularly well, Mauritius came in at number 32 on the global list, which made it the comfortable winner in Africa.

The top 5 African nations showed a diverse geographic spread, with Rwanda, Botswana, South Africa and Tunisia following, in that order, on the heels of Mauritius. A quick glance at Africa’s worst performing nations would provide no surprises, as Eritrea propped up a bottom 5 of the DRC, Central African Republic, South Sudan and Libya.

Any nation struggling with armed conflicts and political unrest is not going to provide the ideal base for creating new business opportunities, so while the bottom of the table comes as no surprise, what is it about Mauritius that has seen it take the top position?

Stability, simplicity and low taxes

Mauritius is first and foremost a fairly safe country. Not only does it not suffer from the unrest of many African nations, but it has low crime rates, and a small population which is governed by what the Economist Intelligence Unit called Africa’s only “full democracy” back in 2011. While this may no longer be fair to other nations, it is clear that Mauritius is a society with low levels of corruption and good personal safety.

Prime Minister's Office in Mauritius

Prime Minister’s Office in Mauritius

In addition to this, the Mauritian government has gone out of its way to reduce the amount of red tape involved in starting up a business. This ongoing strive to create a business-conducive atmosphere is highlighted by the 2014/15 changes to building permit rules, in which the process was streamlined to allow new ventures to start running as quickly as possible.

It now only takes 14 days to register a property, and 3-6 days to start up a new business. To help ensure the wheels on each sector of the economy run smoothly, the government has also invested heavily in education. The net result of this focus is that Mauritius has the highest rate of literacy in Africa, at 86%.

South Africa’s high commissioner to Mauritius, Nomvuyo Nokwe, told South African media that not only had Mauritius made it simple to register new businesses but that its development of education was also key. Nokwe stated, “It has highly skilled professional people…it’s made doing business easy, because you have [educated] people to work for you.”

Perhaps one of the most significant aspects to Mauritius’ burgeoning business growth, and yet one with some controversy, is its low taxation. The Africa 2016 Wealth Report referred to the huge growth in millionaires in Mauritius, but this included many from other nations who had moved there. The report found that “Mauritius was the top performing African country for millionaires during this period, with growth of 160 per cent…company and personal income tax rates are only 15 per cent, with no inheritance or capital gains tax.”The controversy around this is that some feel the nation is just a tax haven for the wealthy, and moreover that much of the money coming into the country is simply passing through. There are concerns around the rich, from nations like Kenya, using Mauritius for tax purposes, as its income tax rate is an attractive 15%.

Does the economy match the reputation?

Dipolelo Moime, chief executive of business risk consultancy Legato Services, believes it is more innovation that has attracted outsiders, saying, “Mauritius is continually reinventing and reforming itself massively to ensure the country is as business-friendly as possible, in order to attract multi-national corporations.”

Despite this, the issues around money just passing through cannot be ignored. There is an entire business strategy known as “The Mauritius Route”, which describes how investors in India use the island nation as a conduit to connect them to Indian markets. In fact, 39.6% of foreign direct investment to India, between 2001 and 2011, made its way via Mauritius.

However, this money does not pass through Mauritius in a vacuum, and the banking and legal processes it utilizes are legitimate businesses which create revenue streams for the host nation.

As things stand, Mauritius is not one of Africa’s largest economies, but the World Bank report did not base its findings on GDP, it based them on how easy it was to set up a new business in a nation, how well developed infrastructure was, and how attractive a destination was for new investment. In these measures, Mauritius must warrant its ranking.

As of 2016, Mauritius can boast the highest per capita GDP in Africa, with a 2016/17 predicted GDP growth of 5.7%. In addition, the nation’s stock exchange is widely regarded as one of the best in Africa and is worth over $7 billion. These figures are for a nation of only 1.2 million inhabitants.

Most significantly, the government is not resting on its laurels. The Mauritian government has drawn up a blueprint to diversify the economy, and invest in new industries, while continuing to develop existing ones. “Green growth” is at the forefront of plans to maximize the nation’s coastlines, with a goal of 8-9% economic growth per annum, which will ultimately lead to Mauritius being a high income status nation by 2025. The plans have worked thus far, so investors from far and near will be watching with interest.

Read more

South Africa’s AMCU union launches strike at Sibanye’s Kroondal mine

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

JOHANNESBURG (Reuters) – Workers began an indefinite strike at Sibanye Gold’s Kroondal platinum mine in South Africa on Friday to demand transport because they were being attacked after working night shifts, their union said.

“The company doesn’t want to provide transport for its employees and these are basic conditions of employment,” Joseph Mathunjwa, president of South Africa’s Association of Mineworkers and Construction Union (AMCU) told Reuters.

AMCU is the main union at the Kroondal mine located in the Rustenburg platinum belt and has about 7,000 workers.

Sibanye’s spokesman James Wellsted said the gold and platinum producer would seek a court order to stop the strike because it was negatively affecting output.

“With metal prices being low for AMCU to now go on strike over issues that are being dealt with is irresponsible. This poses a threat of to the viability of the mine,” he said.

AMCU led a record and sometimes violent five-month wage strike at three major platinum producers in 2014.

Unions and platinum companies are expected to start wage talks in the next few weeks.

Sibanye acquired the Kroondal mine when it bought Aquarius Platinum in October last year for $295 million.

 

 

(Reporting by Zandi Shabalala; Editing by James Macharia)

Read more

Anglo American appoints Bruce Cleaver CEO of De Beers

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

(Reuters) – Global mining company Anglo American Plc said it appointed Bruce Cleaver as chief executive of its diamond mining unit De Beers Group, after previous CEO Philippe Mellier decided to step down.

De Beers, the world’s largest diamond producer by value, will remain part of Anglo American’s operations even after a radical restructuring of the latter, in the belief that surging Chinese and Indian demand for diamonds will outstrip dwindling supply.

Cleaver, previously group director of strategy and business development, will take over the role on July 1, the company said.

Cleaver, 51, was first appointed to De Beers’ board in 2008 and served as its co-acting CEO in 2010 prior to Mellier’s appointment.

Anglo American has an 85 percent stake in De Beers.

 

(Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Anupama Dwivedi and Sunil Nair)

Read more

South African retailer Foschini posts 18% profit jump

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

JOHANNESBURG (Reuters) – South African clothing retailer Foschini Group reported an 18 percent rise in full-year profit on Thursday, boosted by last year’s acquisition of British chain Phase Eight.

Foschini, which is expanding outside South Africa as consumer spending tightens in its home market, said that headline earnings per share (EPS) rose to 1,056 cents for the year to March 31, from 898 cents the previous year.

Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

“The group’s overall gross margin has improved from 47.3 percent to 49.7 percent, mainly as a result of the higher Phase Eight clothing margin,” the company said.

South African clothing retail relies heavily on in-store credit cards, but more stringent affordability measures in Africa’s most advanced economy led to a slowdown in the second half of the reporting period, Chief Financial Officer Anthony Thunstrom told Reuters.

Foschini has instead focused on increasing cash sales, which accounts for less than half of turnover excluding Phase Eight but was boosted to 58 percent by the British retailer, making the group less vulnerable to the credit cycle, Thunstrom said.

The company said it plans to open at least 50 more Phase Eight stores this financial year.

Sales also benefited from the inclusion of the British retailer and rose 31.2 percent to 21.1 billion rand ($1.4 billion). Excluding Phase Eight, the increase was 11.6 percent.

The retailer extended its push into the northern hemisphere, buying British high street chain Whistles in March, as consumers in South Africa rein in spending because of higher interest rates, rising energy costs and unemployment at more than 25 percent.

Foschini has been the best performer among South Africa’s listed fashion retailers this year, with its shares rising more than 17 percent, against a 6 percent decline for larger rival Mr Price.

Shares in Foschini were up 2 percent at 141.85 rand by 1357 GMT, paring gains of more than 3 percent before the release of its annual results.

($1 = 15.5615 rand)

 

(Reporting by TJ Strydom; Editing by Susan Fenton and David Goodman)

Read more

African Union insurance arm to boost disaster cover to $1.5 bln

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

LUSAKA (Reuters) – The African Union’s insurance arm will increase its disaster cover to $1.5 billion by 2020 from $179 million currently following one of the continent’s worst droughts in decades, a senior executive said on Thursday.

Drought has ravaged much of southern Africa this year and Malawi’s government said on Wednesday half its population is in need of food aid due to the prolonged dry period.

African Risk Capacity (ARC) now plans to expand insurance coverage against drought, floods and cyclones to more than 150 million Africans in disaster risk in 30 countries.

“The idea is to make sure that when trouble comes, the resources are available on time,” ARC Director-General Mohamed Beavogui told Reuters. “If I know that drought might happen and what the magnitude is, I can plan for it.”

Niger, Senegal, Gambia, Mali, Malawi, Mauritania and Kenya have already bought insurance from ARC while Zimbabwe, Burkina Faso and Madagascar are expected to buy drought cover in the next month, Beavogui said.

ARC plans to introduce a tropical cyclone insurance later this year and flood insurance in 2017. The impact of climate change is resulting in more severe droughts, floods and cyclones across Africa, Beavogui said.

Last year, Senegal received a payout of over $16 million from ARC after paying a premium of $3 million following a poor agricultural season due to severe drought in 2014.

The G7 Summit in Germany last year adopted an initiative on Climate Risk Insurance which aims to increase access to cover against the impacts of climate change for up to 400 million of the most vulnerable people in developing countries by 2020.

 

(Reporting by Chris Mfula; Editing by Joe Brock)

Read more

ArcelorMittal South Africa says Saldanha steel plant will keep operating

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

JOHANNESBURG (Reuters) – ArcelorMittal South Africa’s Saldanha plant will keep operating, its chairman said on Wednesday, after the facility was placed under review earlier this year due to low steel prices and rising costs.

The plant, north of Cape Town is the newest in the company’s fleet and was opened in 1998 to focus specifically on steel exports, but low steel prices and high electricity and transport costs made it unprofitable last year.

“As the board, we are comfortable that we will have a Saldanha that is a good, healthy, performing business for a long period,” said ArcelorMittal South Africa Chairman Mpho Makwana.

The weaker rand and a pickup in West African steel demand have since ensured the plant’s viability, said acting Chief Executive Dean Subramanian.

South Africa’s currency lost about a quarter of its value from end of May last year until now, providing relief to some of the nation’s exporters.

Subramanian and Makwana were speaking at the release of report on ArcelorMittal’s contribution to South Africa’s economy, which also stated that the plant was responsible for 16 percent of the steel produced in Africa’s most industrialised country.

ArcelorMittal will start maintenance at Saldanha in August, which Subramanian said would increase the plant’s life by up to five years.

 

(Reporting by TJ Strydom; Editing by James Macharia)

Read more

In Dubai, child’s play is good business

25 May 2016 Comments (0) Business, Featured, Middle East

Fairytales Dubai

Two Emirati women combine family with entrepreneurship to launch Fairytales, an indoor play area for young children.

Basma Al Fahim and Fatma Al Madani wanted to spend more time with their young children. But to them, that didn’t mean staying at home all day like many of their fellow Emirati women.

Instead they launched Fairytales, an indoor play area for young children in Dubai. For the two friends, business innovation began with family.

Al Madani had left a seven-year career in government to focus on raising her two young daughters while Al Fahim, who has two young sons, had already launched several successful businesses when they opened Fairytales in December.

Arabian Business recently recognized Al Fahim and Al Madani for their entrepreneurship.

The play center is a new idea in the United Arab Emirates, where most women stay home to take care of their children and only 14 percent of the workforce is women, mostly younger women who have been able to attain an education as the federation of emirates modernizes.

Inspiring creativity, growth

Unable to obtain bank financing for their project, the two women funded the business themselves from their savings.

“The concept was inspired by our children,” Al Madani said, noting that their children were playing pirates and fairies while the two women held their first brainstorming session in the same room.

“They reminded us of how we played as kids’’ before digital devices came along, she said. That sparked the goal of creating an environment that stimulates the child’s imagination and intellectual growth.

Their priorities as mothers – education, healthy food, and safety – became priorities for their business, according to Al Fahim, who had already started a fashion brand, an events company, and a beauty salon.

Teach social responsibility

At Fairytales, their goal to spark the imagination and creative thinking of each child as well as to instill social responsibility among the children, who are up to age eight.

They donated more than 200 children’s books during a local donation campaign on behalf of young cancer patients in Dubai Hospital on World Cancer Day.

The two also took part in a Happy Hearts project, organized by The Happy Box in Dubai, which sent more than 600 handmade cards to orphans in India.

Basma Al Fahim and Fatma Al Madani

A serial entrepreneur

Al Fahim brought significant business experience to the venture as founder and managing director of Eventra Events, an event-planning agency.

After studying marketing at Zayed University, she moved to Dubai and worked in digital and brand marketing. Coming from a prominent business family, she wanted to set a pioneering example for young Emirati women.

Her family’s conglomerate is the Al Fahim Group, whose activities include support for development of oil and gas fields, luxury cars, hotel management and investments. She chairs the company’s employment committee.

Events business succeeds

She opened the events business in 2010, bringing a fresh approach to events ranging from corporate gatherings to weddings to exhibitions. Today, Eventra is a premier event management company in Dubai.

Al Fahim went on to open The Dollhouse, a beauty salon with what she described as a “super chic” atmosphere and attention to detail and glamour.

After establishing The Dollhouse, she also launched Sirkaya, a fashion line that has become a well-known brand in Dubai.

After starting Eventra with three employees, she said she now has more than 100 working on her different ventures.

Advice for young entrepreneurs

She said she has many more business ideas. Growth plans keep her motivated.

“When I say growing I mean improving,” she said.

Al Fahim encouraged young Emirati entrepreneurs to pursue their dreams by having confidence in themselves and focusing on key goals.

“Keep your mind positive,” she said. “Train your brain to think positively to attract the right energy in your life.”

Read more