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South African unemployment hits record high, dents ratings hopes

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

By Mfuneko Toyana

PRETORIA (Reuters) – South Africa’s unemployment hit its highest level on record in the first quarter, official data showed on Monday, clouding the country’s efforts to convince the major ratings agencies not to downgrade its credit.

Moody’s late on Friday left its rating unchanged, giving the rand currency a lift on Monday morning in reaction. Finance Minister Pravin Gordhan said he aimed to show the other big ratings agencies that the country was on the right economic track ahead of their own reviews in the coming weeks.

But the statistics agency dealt Gordhan’s hopes a blow later on Monday when it said unemployment had risen to 26.7 percent in the first quarter – the highest level since the labour force survey began in 2008.

The rand dropped sharply on the news and was down more than 2 percent against the dollar late in the afternoon.

South Africa, one of the world’s biggest metals producers, has been hit by a slide in commodities prices which has come on top of widespread labour unrest in the mining industry.

President Jacob Zuma said the economy should be able to “weather the storm” as he unveiled initiatives aimed at accelerating growth including a private and public sector fund for small businesses after meeting business and labour leaders on Monday evening.

“We remain optimistic that we will be able to weather the storm, especially if we continue working together in this manner,” Zuma said in a late night television broadcast.

Earlier Gordhan warned against complacency after Moody’s appeared to give Africa’s most industrialised economy some breathing space.

Hastily reappointed as finance minister in December after Zuma rattled investors by inexplicably replacing his predecessor with a little-known politician, Gordhan warned that a global downturn meant South Africa was on its own in tackling its economic woes.

“We can’t be positive. All we can do is work as hard as we can to convince people out there that we are a country that is capable of solving its problems,” Gordhan told reporters at a public finance management conference in Johannesburg.

“We need to find new and innovative ways to search for new engines of growth, to find new ways of igniting growth and creating the jobs that our people desperately require,” he said.

The wobbly economy has raised the stakes ahead of local elections on Aug. 3 which analysts say will be the sternest political test that the ruling African National Congress has faced since coming to power in 1994.

“Today’s employment figures are very grim, but tell us little that we didn’t already know about South Africa’s troubled labour market. The political impacts may be more significant,” said Africa analyst at Capital Economics John Ashbourne.

Gordhan plans to hold meetings with Fitch and Standard & Poors in the next couple of weeks after Moody’s had said the country was “likely approaching a turning point after several years of falling growth.”

Moody’s left its rating of South Africa’s debt at Baa2, two levels above sub-investment grade, citing risks to implementation of structural and fiscal reforms.

The Treasury in February forecast tepid growth for Africa’s most industrialised economy of just 0.9 percent in 2016 from a previous forecast of 1.7 percent and compared with estimated growth of 1.3 percent in 2015.

(Additional reporting by Stella Mapenzauswa in Johannesburg; Writing by James Macharia; Editing by Ed Stoddard and Hugh Lawson)

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Bassita helps fund social change through clickfunding

9 May 2016 Comments (3) Business, Featured, Middle East

Bassita

Bassita is an Egyptian startup company that created click funding, a new way for charities and campaigns to source funding.

If you have never heard of clickfunding before, then it’s probably because this highly innovative form of fund raising was only created 2 years ago. In 2014, an Egyptian startup company called Bassita was launched, and with it the concept of clickfunding was born. The name of the company comes from an Arabic word that means “simple,” and the idea of clickfunding is to make the creation of funds as simple as possible.

The clickfunding model works through the culture of social media, in which people constantly share and like articles, videos or images with other people. What Bassita does is create a short video highlighting a campaign or promoting a cause and a sponsor agrees to a certain number of shares or likes that must be met for it to then fund the campaign.

This means that people can directly help push a project toward being funded simply by clicking a “like” on Facebook or by sharing the video online. Co-founder, Alban de Ménonville states that, “It’s easy for the cybernaut – by clicking on an appealing project, she’s helping to fund change that is good for her community or society.”

This provides people with the opportunity to feel a connection to campaigns that they like and to feel that even a small action, such as sharing a video, can be a part of a genuine change.

bassita website

Clicking for change

The idea sounds so simple that it seems strange that nobody had thought of it before. But this is often the case with new ideas that become rapidly popular and important. A few years ago, the idea of crowd funding might have sounded like people asking for handouts, and yet businesses all across the world have successfully used the model. Social media has become increasingly political and major uprisings such as the Arab Spring were intrinsically linked to the use of outlets such as Facebook and Twitter. To harness the huge amount of activity that social media generates and to use viral videos in a fashion that generates real financing for important projects seems sure to succeed. After all, the overhead costs are small and the commitment of users is nothing more than clicking on “share” or “like.” The very first campaign that Bassita made a video for was a huge success. On September 1st, 2014, they created a video for a Baraka Optics campaign, which aimed to provide 1,000 underprivileged workers in Egypt with eyeglasses. Baraka Optics had agreed to fund this if Bassita got 10,000 views on Youtube, a target that was quickly met.

Since this opening campaign, Bassita has teamed up with UNICEF to help provide 1,000 new clean water connections to homes in Upper Egypt. In order to extend the way in which users can be involved, Bassita created a points-based system in which the target was 1.5 million points. People provided 1 point for viewing the video, 2 points for liking it, 3 points for sharing or re-tweeting it and 5 points for commenting on the video or tweeting about it.

There is a unique nature to these campaigns in how they give any person a chance to play a small role in helping to bring about positive changes. Ménonville said, “The clickfunding model can change the world. More than one million people are giving their clicks to help those who do not have access to water! Yes, our clicks count.”

Bassita’s UNICEF video was viewed 2 million times on Facebook within 3 days of being uploaded and the 1,000 water connections are already being built.

The men behind the clicks and the road ahead

The two men who created the Bassita idea are both French nationals who relocated to Cairo to launch their scheme. Alban de Ménonville and Salem Massalha felt that Africa provided a great opportunity for a young business and as Massalha is of Egyptian origin, the North African country became their new home. In an interview with Popout magazine, Ménonville said, “What we’ve managed to do in Egypt in one year is unthinkable in France, for example. Our team comes from diverse backgrounds, and that is our strength.”

As with many new ideas that become ubiquitous, the men behind the clickfunding idea believe that it will become a global concept that simply adapts its campaigns in relation to the different issues facing various places. Bassita has already won a Young Innovators Award and a 2015 Orange Prize for African Social Ventures.

Then in April of this year they won funding of 60,000 Egyptian Pounds from Injaz’s Startup Egypt prize. The future for clickfunding looks extremely promising and the team behind it all truly believes it can revolutionize advertising and ways in which we engineer social and environmental change. When asked about the Injaz award, co-founder Salem Massalha said, “This prize brings us one step closer to changing the world.”

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Shell says Nigerian output continuing despite reports of militant threat

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

LONDON (Reuters) – Shell said on Monday that oil output was continuing at its oil fields in Nigeria despite local media reports of a militant attack near its Bonga facilities.

Media reports said the company was evacuating workers because of threats from militants.

“Our operations at Bonga are continuing,” a spokesman for Shell Nigeria Exploration and Production Company (SNEPCo) said in a statement, adding that it will continue to monitor the security situation in its operating areas and take all possible steps to ensure the safety of staff and contractors.

 

 

(Reporting By Libby George; Editing by David Goodman)

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South Africa’s AngloGold Ashanti posts free cash flow in Q1

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

JOHANNESBURG (Reuters) – AngloGold Ashanti Ltd posted a free cash flow in its first quarter compared with an outflow last year due to cost and debt cuts, Africa’s biggest bullion producer said on Monday.

“We generated significant free cash flow again despite the lower gold price, which shows the continued success of our self-help measures to reduce debt by improving margins,” said Srinivasan Venkatakrishnan, chief executive officer, AngloGold Ashanti.

The company, which has 17 mines in nine countries, said free cash flow in three months to March-end reached $70 million from an outflow of $40 million in the first quarter of 2015.

Adjusted gross profit edged up to $210 million at the end of March from $209 million in the same period last year.

AngloGold said it cut debt and costs during the quarter, resulting in cash flow, benefiting weaker local currencies against the dollar.

South African miners sell their commodities in dollars while paying costs in rand, boosting margins when the exchange rate weakens against the greenback.

Production in the quarter fell 7 percent to 861,000 ounces compared with the same period last year, due to planned reductions from Obuasi, Tropicana and Morila mines, and unplanned output drop in Kibali joint venture.

 

(Reporting by Zandi Shabalala; Editing by Sherry Jacob-Phillips)

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Bamboo – Africa’s Green Gold?

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

Bamboo poles

Bamboo farming could provide many African states with a green and lucrative industry.

If you asked the average person on the street to name a country that they associated with the bamboo plant, it’s unlikely you would hear many answers other than China. However, Africa has extensive bamboo reserves that the continent could reap huge rewards from.

What makes the prospect of harvesting the continent’s bamboo reserves particularly exciting is that the benefits offered are not solely economic. While the bamboo would indeed provide a veritable gold mine of revenue to many nations, it is also an opportunity to try and slow down the deforestation that threatens Africa’s myriad environments.

Sustainable, clean profits?

The issue of deforestation is obviously not confined to Africa, but many African countries are particularly at risk from the environmental impact that the practice brings. Cutting down large areas of forest contributes to a cycle of drought and pollution, especially as it leads to soil erosion which has been a primary factor in some of the disastrous famines that the continent has faced.

What makes bamboo so much better? According to Dr. Chin Ong, a retired professor of environment science, bamboo holds soils together, utilizes less water than trees and offers a greater overall package. Ong told the New York Times, “You want firewood; you want to reduce erosion, to maintain the water supply, generate cash and employment. Bamboo comes the closest — it gives you the most things.”

Bamboo is technically a grass, which means after a harvest it regrows and does so quickly. In fact bamboo can grow an astonishing meter per day, and it absorbs almost twice the amount of CO2 that is taken in by a tree.

A crop that is rapidly replenished, reduces pollution levels and does not damage the fertility of soils when harvested is clearly an environmentalist’s dream.

But do the numbers add up on the commercial side? The short answer is yes.

The International Network of Bamboo and Rattan (INBAR) is an intergovernmental body that works with the UN and has valued the global bamboo trade at $60 billion.

Thus far, 18 bamboo growing African states have joined INBAR as they look to make the most of their natural resources without devastating the local eco-system to do so. According to the United Nations Environmental Program (UNEP), bamboo has over 2,000 uses and China claims that if the plant is processed, this number rises to 10,000!

Despite such a glowing profile, the industry has yet to really take off in the majority of the 36 African nations where it grows. Adal Industrial PLC is a company trying to raise awareness and interest to help develop Africa’s bamboo farming. CEO Adane Berhe summed up the current problem facing the bamboo trade in Africa when he spoke to CNN saying, “The farmer who has bamboo is rich, but he doesn’t know it.”

Ethiopia takes the lead

Bamboo cooperative members in Ethiopia

Bamboo cooperative members in Ethiopia

One African nation that is investing in the industry is Ethiopia. Not only is Ethiopia rich in bamboo, with 2.47 million acres of it untapped, but due to widespread deforestation, the government has taken drastic steps to promote sustainable harvests and green industries.

The government has banned producing charcoal from hardwoods and has welcomed investment from China and other nations seeking to grow the bamboo trade.

INBAR now has an office in Addis Ababa and local people and small farmers have embraced the opportunity.

State Minister for Agricultural and Rural Development, Mitiku Kassa says, “Ethiopia has the resources, the investment, a rapidly-developing manufacturing industry and a strong demand for our bamboo products…The expansion of Africa’s bamboo sector has begun.”

As Ethiopia’s bamboo industry begins to grow, the hope is that other nations take note and follow their lead. The early signs are promising as the membership to INBAR continues to expand with new African members; there is patently interest in what the plant has to offer.

China has already offered investment in Ghana and a recent bamboo project there opened up 1,500 jobs.

The chief research scientist at the Forestry Research Institute in Ghana, Andrew Akwasi Oteng-Amoako told IPS news, “We anticipate a revival of investment interest in Ghana’s bamboo industry in the near future thanks to Ethiopia’s success.”

With recent government decrees from Rwanda and Nigeria on the importance of looking into utilizing bamboo resources, the future of Africa’s “green gold” looks promising.

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South Africa’s rand weakens, focus on U.S. jobs report

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

JOHANNESBURG (Reuters) – South Africa’s rand weakened against the dollar in thin trade early on Friday as investors positioned for a U.S. jobs report that is likely to provide clues about the Federal Reserve’s monetary policy intentions.

At 0705 GMT, the rand traded at 15.0550 versus the dollar, 0.6 percent weaker from Thursday’s New York close.

“Trade remains jittery and liquidity thin, so it is not going to take much to send the market running again,” Rand Merchant Bank analyst John Cairns said in a note.

“…The monthly (payrolls) release no longer has the importance that it had a year back but still remains the single most important global economic indicator for the markets.”

A strong number could encourage the Fed to raise rates sooner, lending some support to the dollar.

On the stock market, the Top-40 index was down 0.67 percent, while the broader all-share fell 0.44 percent.

In fixed income, the yield for the benchmark government bond due in 2026 was up 1 basis point at 9.195 percent.

 

(Reporting by Zimasa Mpemnyama; editing by John Stonestreet)

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Solar power hits the road in Uganda

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

Kayoola bus

A government-backed motor company introduces the continent’s first sun-powered bus.

With its abundant sunshine and growing need for efficient public transportation, Africa seems like a natural place for solar-powered vehicles. Now that idea will be tested with the introduction in Uganda of the continent’s first solar-powered bus.

The bus, called the Kayoola, is the brainchild of Paul Isaac Musasizi, chief executive officer of the government-owned Kiira Motors Corporation of Uganda.

Uganda has “non-stop sun,” Musasizi said. “No other countries manufacturing (solar) vehicles are on the equator like Uganda. We should celebrate that and make it a business.”

Powered by solar panels on the roof

He said the 35-seat bus could travel 50 miles. It is powered by two batteries. One battery is connected to solar panels on the roof; the other is charged electrically for longer trips and night journeys. It takes only one hour to charge each battery, according to Musasizi.

Kiira has produced a prototype of the Kayoola and ran a test drive in February in Kampala.

The prototype cost $140,000 to produce but the company said the price tag would be about a third of that amount – $45,000 – with mass manufacturing.

Ambitious solar vision

The bus is one part of Musasizi’s larger vision for a solar-powered automobile industry in Uganda, including service stations that have solar pumps to charge cars instead of selling them gasoline.

He wants Uganda to follow the lead of Morocco – which recently switched on the world’s largest solar power plant – in developing solar farms to power vehicles and other everyday devices.

He noted that efficient transportation is essential to the Ugandan economy.

“Without proper transportation, we cannot have a good economy.”

The Ugandan government funds Kiira through the Presidential Initiative on Science and Technology. The small company currently has 32 people on staff.

Company seeks investment to grow

Musasizi said he also hopes to attract private investors who are interested in green technology. He would like to grow the company to 200 employees in five years and produce 50 buses a year.

Uganda has been planning to develop an auto industry since 2007 after students and staff from Makerere University visited the Massachusetts Institute of Technology to study innovation.

Kiira plans to start manufacturing automobiles in 2018.

The auto industry is part of Vision 2040, a blueprint for Uganda’s economic development launched late last year by Prime Minister Ruhakana Rugunda. Rugunda said the government would support Kiira until the company is able to put vehicles on the market.

Kiira plans to produce sedans, pickups and crossovers, starting with production of 305 automobiles in 2018 and growing to 60,000 per year in 2039.

Nigeria also boosts auto production

Nigeria is also seeking to grow its auto manufacturing, primarily to replace imported cars with locally produced vehicles. Nigeria plans to assemble 500,000 autos annually for the next five years compared to production of 10,000 vehicles in 2014.

International automakers including Nissan, Ford and Honda, as well as local manufacturers are gearing up to increase production. The government has granted licenses to 36 manufacturers.

First solar bus operates in Australia

Meanwhile, solar vehicles remain a rarity globally; Australia, China, Austria and the United States have developed solar vehicles while India is working to launch solar-powered transport.

Australia began operating the world’s first solar-powered bus in 2007.

The Tindo as the bus is named after an indigenous word for sun, operates in Adelaide. It uses 100 percent solar power that it receives from a photovoltaic system at Adelaide’s central bus station rather than from solar panels on the bus. The bus can carry up to 40 people, including 25 seated.

While Uganda is not the first country to develop solar vehicles, Musasizi hopes the country will become a leader in the field.

“Our passion for automobiles will help us develop solar motor technology,” he adds. “I’m hoping we will become known as the innovation hub for solar transportation technology in the world.”

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Egypt says foreign reserves rise to $17.011 bln at end-April

4 May 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s net foreign reserves rose to $17.011 billion at the end of April, the central bank said on Wednesday.

Reserves stood at $16.561 billion at the end of March.

Egypt had roughly $36 billion in reserves before an uprising in 2011 overthrew Hosni Mubarak and ushered in a period of political turmoil that scared away tourists and foreign investors, key sources of foreign exchange.

Last month the United Arab Emirates pledged $4 billion to Egypt, half in investments and the rest as a central bank deposit to support cash reserves.

 

(Reporting by Asma Alsharif; editing by John Stonestreet)

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International Marrakech Air Show 2016: Bigger Than Ever

4 May 2016 Comments (1) Business, Featured, Middle East

Marrakech Air Show 2016

The Marrakech Air Show is an international aerospace exhibition and conference, attracting businesses from the industry and worldwide spectators.

On Saturday, the fifth biennial International Marrakech Air Show (IMAS) concluded in stunning style. With every year that passes, it seems that this marquee event becomes ever more important. This year saw in excess of 200 industry leading companies take part and covered more than 70,000 sq. meters of exhibition space. While dazzling aerial displays on the final day are what capture the public’s imagination, the real impact of the event is realized through the forging of new business ties amongst the elite of the aeronautics world. This global exhibition is internationally recognized as being one of the top events on the international aerospace and defense (A&D) calendar, attracting industry leaders and international spectators.

The opening ceremony was kicked off in a traditional fashion by the Moroccan marching band. Afterwards, the Royal Moroccan flag and the International Marrakech Airshow flag were flown in tandem over the airfield by military helicopters. This was followed by a breathtaking display from The Royal Moroccan Army’s Aerobatics team who piloted F16 fighters and concluded the ceremony. The gravitas of the occasion was underscored by the attendance of Moroccan Head of Government, Abdelilah Benkirane.

Attendees and Spectators

Exhibitors included Civil Aviation, Spaceflight, Military Aviation, Defense Technology (from land, air and sea) and Research and Defense authorities from around the globe. There were both static and air exhibitions which included industry leaders and national representatives.

Marrakech Air Show 2016 conferenceKey attractions among the static displays were Dassault Aviation’s Rafale and a long-range Falcon 900LX which required a six-man exhibition team to staff the aircraft and show off its capabilities. Also prominently displayed was a U.S. Air Force C-130J Hercules, from the Ramstein Air Base in Germany. This Behemoth stood out as a symbol of partnership whilst promoting regional security throughout the African continent.

Aerobatic display teams from Italy, the UAE, Spain, The USA and the Royal Moroccan Air Force put on stunning shows for eager onlookers, competing over style and inflight capabilities to battle for pre-eminence in their field. The Italian aerobatic team, Frecce Tricolori, performed at the IMAS for the first time ever. They put on a particularly striking display in traditional Italian colors: red, green and white.

US and Moroccan bonds

With the US contingent of the show boasting 15 participating companies, and as one of the show’s largest exhibitors, it shows how important this region is to the US aerospace and defense industry. Among the companies representing the US were Boeing, FLIR, Lockheed Martin and Pratt & Whitney who were organized by Kallman Worldwide in collaboration with government agencies including the departments of Commerce, Defense and State. “The growth of the show and the expansion of military and commercial aerospace infrastructure in Morocco says a lot about the long-term opportunities for our exhibitors here,” said Kallman Worldwide CEO, Tom Kallman.

Not Just an Air Show

In reality, The International Marrakech Air Show is much more than just an air show. It’s an invaluable business and networking occasion for a variety of entities. This year saw exhibitors specializing in fields such as aircraft construction, satellite systems, avionics and onboard components, propulsions engineering, weapons systems, land defense armaments and many more. Senior government representatives from forty countries came to rub shoulders with specialist firms, legislators and aeronautics giants.

In the aeronautics sphere, Morocco has become the strategic gateway between Africa and the rest of the world. Commercial air travel is becoming increasingly more viable and popular for African citizens; authorities and private enterprises are both maneuvering to meet this demand. Additionally, African governments are increasingly looking to invest in defense capabilities and associated infrastructure. Big business opportunities beckon and the Marrakech Air Show is designed to facilitate the process.

In recent years, the Moroccan aeronautics sector has seen rapid growth of between 15-20% per annum. Firms such as Boeing, Lockheed Martin, Airbus, Bombardier and a host of others now maintain a permanent presence within Morocco’s borders. In total, more than 120 world class aeronautics organizations now operate in the country. The success of the airshow has helped demonstrate to businesses that Morocco is the premier platform from which to service new markets in the region.

Ultimately, The International Marrakech Airshow 2016 was as a resounding success. The event delivered on two fronts, firstly as a thrilling spectacle of modern aviation, and secondly as a vehicle by which business and aeronautics can flourish, bringing benefits not just to Morocco but to the entire continent.

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SABMiller, Coke agree concessions with South Africa over bottling merger

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

JOHANNESBURG (Reuters) – SABMiller and Coca-Cola have agreed concessions with the South African government to win approval for a deal to combine their soft-drink operations, the companies said on Wednesday.

The concessions, agreed with the South African Ministry of Economic Development, include a three-year freeze on layoffs and the companies investing 800 million rand ($54 million) to support small South African businesses.

SABMiller, which is in the process of the being taken over by larger rival Anheuser-Busch InBev, agreed in November to team up with Coke to create Africa’s largest soft drinks bottler, Coca Cola Beverages Africa.

The business will have annual sales of $2.9 billion and ambitions to corner the fast-growing market on the continent.

The all-equity deal was given a preliminary approval in December by South Africa’s Competition Commission, which said it could go ahead on several conditions including Coca-Cola Beverages Africa limiting jobs cuts to 250 and making sure it buys cans, glass, sugar and crates from local suppliers.

The Commission investigates deals for any antitrust issues and recommends remedies to the Competition Tribunal, which makes a final ruling. A Tribunal hearing on the proposed deal is due to start next Monday.

South Africa has a history of taking its time over approving deals, partly because regulators have a public interest mandate to safeguard jobs in addition to an antitrust mandate to protect competition.

“I am very happy that we have reached this agreement and hope we now have a clear path to the conclusion of this transaction,” said SABMiller Chief Executive Officer Alan Clark.

Coca-Cola Beverages Africa will account for 40 percent of all Coke volumes sold in Africa, serving 12 southern and eastern African countries. It will be headquartered in South Africa, its largest market.

The deal would also hand Coke an extra 20 brands, including sparkling soft drink Appletiser, whose fruit juice concentrate is sourced from South African producers.

Coca-Cola and SABMiller agreed to maintain and grow Appletiser production operations to serve the domestic market and use as a base from which to export elsewhere in the world.

The Gutsche family, Coke’s South African bottling partner, will also be a shareholder in the Coca-Cola Beverages Africa.

($1 = 14.6759 rand)

(Reporting by Tiisetso Motsoeneng; Editing by Mark Potter)

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