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07-APR-2014 Snapshots from South Africa and Its role in Africa's Economy
The folks at Jaguar-Land Rover very kindly invited me to Johannesburg
this weekend, with the promise that we would get to drive their entire
suite of Jaguars and Range Rovers around the Kyalami race track. The
Jaguar simply purred. We stayed at the Fairway Hotel and Golf Resort
which transpired to be in the epicentre of the Afrikaner heartland in
Johannesburg. On Friday night, we found ourselves in a happy hour with
Africa’s white tribe. It was a curious experience and a very tribal
one. I kept saying to my companions that I wanted to make a
documentary. As we were driving extremely fast between cameras, I
noticed how much cheaper the cost of living appeared in South Africa
when compared with Kenya. I admit the analysis might not be empirical
but I am certain its the case.
It is widely expected that a rebasing of Nigeria’s GDP will see
Nigeria overtake South Africa as Sub Saharan Africa’s largest economy.
Writing this from Johannesburg having driven a very fast Jaguar at a
very fast speed on South Africa’s roads, I could not help but marvel
at South Africa’s infrastructure which is simply ‘’leaps and bounds’’
of anywhere else south of the Sahara. The manufacturing sector is also
far more advanced. South Africa is a big beast on the conti- nent
notwithstanding a softness around recent growth.
President Jacob Zuma and the Africa National Congress will be facing
an election very shortly and a number of pundits expect the ANC vote
to fall below 60 per cent for the first time. President Zuma has been
entangled in a series of scandals and argues that South Africans have
never had it so good. Therefore, the recent fall off in support is due
in part to the fact that ANC have been so successful that the
electorate have now set exceedingly and impossibly high expectations.
Interestingly South Africa inc. is taking a much more forward position
across the continent. The South African rand has been a global proxy
for risk, its a practically knee jerk reaction. If the world looks a
more dangerous place, people the world over just sell the rand. And
similarly, folks buy the rand when folks feel confident about the
world. The rand fell about 20 per cent in January 2013 through
February 2014, it has rebounded sharply in the last two weeks. I think
the adjustment lower in the rand is set to prove quite supportive for
SA exports. The rand appears to have snapped a more than 12 month down
trend and that is a constructive forward indicator. The South Africa
all share index closed at a record high on Friday and is +5.83 per
cent this year.
President Zuma has intervened and apparently decisively on the side of
President Kabila in the Eastern Congo. Zuma and the AU had of course
been unable to land in Libya when seeking to negotiate with Muammar
Therefore, Nigeria rebasing or not, South Africa pays a heavy- weight
role in Sub Saharan Africa and its economy has stabilised and
The Brussels summit confounds low expectations to produce agreements on security and migration but fails again on trade
Law & Politics
However, in a year replete with African summits in China, India and
the United States.
Kenyan President Uhuru Kenyatta, looked relaxed, despite a spat with
Brussels over a visa for his head of security, Edward Mbugua.
Not everyone was happy to see each other. Spanish media focused on a
clash between Equatorial Guinea’s Teodoro Obiang Nguema Mbasogo and
Spain's Prime Minister Mariano Rajoy Brey. They had been seated
together on the Lusophone table at the banquet on 2 April summit
dinner but Rajoy declined to break bread with Obiang and was moved.
More diplomatic Eurocrats turned down the volume on political matters
and extolled the business and security side of relations. The summit
produced a 63-clause declaration, as well as special provisions for
continental cooperation on migration and mobility set out over the
next three years. Peace and security were the key issues.
President @PaulKagame is to light a torch which will burn for 100 days
- the length of time the genocide lasted
Rahul Gandhi, leader of India's ruling congress party, waves from the stage at a rally in Delhi. Photograph: Kevin Frayer/Getty Images [Its curtains for the dynasty]
Law & Politics
The Red Line and the Rat Line Seymour M. Hersh on Obama, Erdoğan and
the Syrian rebels @LRB
In 2011 Barack Obama led an allied military intervention in Libya
without consulting the US Congress. Last August, after the sarin
attack on the Damascus suburb of Ghouta, he was ready to launch an
allied air strike, this time to punish the Syrian government for
allegedly crossing the ‘red line’ he had set in 2012 on the use of
chemical weapons.＊ Then with less than two days to go before the
planned strike, he announced that he would seek congressional approval
for the intervention. The strike was postponed as Congress prepared
for hearings, and subsequently cancelled when Obama accepted Assad’s
offer to relinquish his chemical arsenal in a deal brokered by Russia.
Why did Obama delay and then relent on Syria when he was not shy about
rushing into Libya? The answer lies in a clash between those in the
administration who were committed to enforcing the red line, and
military leaders who thought that going to war was both unjustified
and potentially disastrous.
Obama’s change of mind had its origins at Porton Down, the defence
laboratory in Wiltshire. British intelligence had obtained a sample of
the sarin used in the 21 August attack and analysis demonstrated that
the gas used didn’t match the batches known to exist in the Syrian
army’s chemical weapons arsenal. The message that the case against
Syria wouldn’t hold up was quickly relayed to the US joint chiefs of
staff. The British report heightened doubts inside the Pentagon; the
joint chiefs were already preparing to warn Obama that his plans for a
far-reaching bomb and missile attack on Syria’s infrastructure could
lead to a wider war in the Middle East. As a consequence the American
officers delivered a last-minute caution to the president, which, in
their view, eventually led to his cancelling the attack.
For months there had been acute concern among senior military leaders
and the intelligence community about the role in the war of Syria’s
neighbours, especially Turkey. Prime Minister Recep Erdoğan was known
to be supporting the al-Nusra Front, a jihadist faction among the
rebel opposition, as well as other Islamist rebel groups. ‘We knew
there were some in the Turkish government,’ a former senior US
intelligence official, who has access to current intelligence, told
me, ‘who believed they could get Assad’s nuts in a vice by dabbling
with a sarin attack inside Syria – and forcing Obama to make good on
his red line threat.’
The joint chiefs also knew that the Obama administration’s public
claims that only the Syrian army had access to sarin were wrong. The
American and British intelligence communities had been aware since the
spring of 2013 that some rebel units in Syria were developing chemical
weapons. On 20 June analysts for the US Defense Intelligence Agency
issued a highly classified five-page ‘talking points’ briefing for the
DIA’s deputy director, David Shedd, which stated that al-Nusra
maintained a sarin production cell: its programme, the paper said, was
‘the most advanced sarin plot since al-Qaida’s pre-9/11 effort’.
(According to a Defense Department consultant, US intelligence has
long known that al-Qaida experimented with chemical weapons, and has a
video of one of its gas experiments with dogs.) The DIA paper went on:
‘Previous IC [intelligence community] focus had been almost entirely
on Syrian CW [chemical weapons] stockpiles; now we see ANF attempting
to make its own CW … Al-Nusrah Front’s relative freedom of operation
within Syria leads us to assess the group’s CW aspirations will be
difficult to disrupt in the future.’ The paper drew on classified
intelligence from numerous agencies: ‘Turkey and Saudi-based chemical
facilitators,’ it said, ‘were attempting to obtain sarin precursors in
bulk, tens of kilograms, likely for the anticipated large scale
production effort in Syria.’ (Asked about the DIA paper, a
spokesperson for the director of national intelligence said: ‘No such
paper was ever requested or produced by intelligence community
Last May, more than ten members of the al-Nusra Front were arrested in
southern Turkey with what local police told the press were two
kilograms of sarin. In a 130-page indictment the group was accused of
attempting to purchase fuses, piping for the construction of mortars,
and chemical precursors for sarin. Five of those arrested were freed
after a brief detention. The others, including the ringleader, Haytham
Qassab, for whom the prosecutor requested a prison sentence of 25
years, were released pending trial. In the meantime the Turkish press
has been rife with speculation that the Erdoğan administration has
been covering up the extent of its involvement with the rebels. In a
news conference last summer, Aydin Sezgin, Turkey’s ambassador to
Moscow, dismissed the arrests and claimed to reporters that the
recovered ‘sarin’ was merely ‘anti-freeze’.
The UK defence staff who relayed the Porton Down findings to the joint
chiefs were sending the Americans a message, the former intelligence
official said: ‘We’re being set up here.’ (This account made sense of
a terse message a senior official in the CIA sent in late August: ‘It
was not the result of the current regime. UK & US know this.’) By then
the attack was a few days away and American, British and French
planes, ships and submarines were at the ready.
The officer ultimately responsible for the planning and execution of
the attack was General Martin Dempsey, chairman of the joint chiefs.
From the beginning of the crisis, the former intelligence official
said, the joint chiefs had been sceptical of the administration’s
argument that it had the facts to back up its belief in Assad’s guilt.
They pressed the DIA and other agencies for more substantial evidence.
‘There was no way they thought Syria would use nerve gas at that
stage, because Assad was winning the war,’ the former intelligence
official said. Dempsey had irritated many in the Obama administration
by repeatedly warning Congress over the summer of the danger of
American military involvement in Syria. Last April, after an
optimistic assessment of rebel progress by the secretary of state,
John Kerry, in front of the House Foreign Affairs Committee, Dempsey
told the Senate Armed Services Committee that ‘there’s a risk that
this conflict has become stalemated.’
The full extent of US co-operation with Turkey, Saudi Arabia and Qatar
in assisting the rebel opposition in Syria has yet to come to light.
The Obama administration has never publicly admitted to its role in
creating what the CIA calls a ‘rat line’, a back channel highway into
Syria. The rat line, authorised in early 2012, was used to funnel
weapons and ammunition from Libya via southern Turkey and across the
Syrian border to the opposition. Many of those in Syria who ultimately
received the weapons were jihadists, some of them affiliated with
al-Qaida. (The DNI spokesperson said: ‘The idea that the United States
was providing weapons from Libya to anyone is false.’)
By the end of 2012, it was believed throughout the American
intelligence community that the rebels were losing the war. ‘Erdoğan
was pissed,’ the former intelligence official said, ‘and felt he was
left hanging on the vine. It was his money and the cut-off was seen as
a betrayal.’ In spring 2013 US intelligence learned that the Turkish
government – through elements of the MIT, its national intelligence
agency, and the Gendarmerie, a militarised law-enforcement
organisation – was working directly with al-Nusra and its allies to
develop a chemical warfare capability. ‘The MIT was running the
political liaison with the rebels, and the Gendarmerie handled
military logistics, on-the-scene advice and training – including
training in chemical warfare,’ the former intelligence official said.
‘Stepping up Turkey’s role in spring 2013 was seen as the key to its
problems there. Erdoğan knew that if he stopped his support of the
jihadists it would be all over. The Saudis could not support the war
because of logistics – the distances involved and the difficulty of
moving weapons and supplies. Erdoğan’s hope was to instigate an event
that would force the US to cross the red line. But Obama didn’t
respond in March and April.’
There was no public sign of discord when Erdoğan and Obama met on 16
May 2013 at the White House. At a later press conference Obama said
that they had agreed that Assad ‘needs to go’. Asked whether he
thought Syria had crossed the red line, Obama acknowledged that there
was evidence such weapons had been used, but added, ‘it is important
for us to make sure that we’re able to get more specific information
about what exactly is happening there.’ The red line was still intact.
The foreign policy expert told me that the account he heard originated
with Donilon. (It was later corroborated by a former US official, who
learned of it from a senior Turkish diplomat.) According to the
expert, Erdoğan had sought the meeting to demonstrate to Obama that
the red line had been crossed, and had brought Fidan along to state
the case. When Erdoğan tried to draw Fidan into the conversation, and
Fidan began speaking, Obama cut him off and said: ‘We know.’ Erdoğan
tried to bring Fidan in a second time, and Obama again cut him off and
said: ‘We know.’ At that point, an exasperated Erdoğan said, ‘But your
red line has been crossed!’ and, the expert told me, ‘Donilon said
Erdoğan “fucking waved his finger at the president inside the White
House”.’ Obama then pointed at Fidan and said: ‘We know what you’re
doing with the radicals in Syria.’ (Donilon, who joined the Council on
Foreign Relations last July, didn’t respond to questions about this
story. The Turkish Foreign Ministry didn’t respond to questions about
the dinner. A spokesperson for the National Security Council confirmed
that the dinner took place and provided a photograph showing Obama,
Kerry, Donilon, Erdoğan, Fidan and Davutoglu sitting at a table.
‘Beyond that,’ she said, ‘I’m not going to read out the details of
The American decision to end CIA support of the weapons shipments into
Syria left Erdoğan exposed politically and militarily. ‘One of the
issues at that May summit was the fact that Turkey is the only avenue
to supply the rebels in Syria,’ the former intelligence official said.
‘It can’t come through Jordan because the terrain in the south is wide
open and the Syrians are all over it. And it can’t come through the
valleys and hills of Lebanon – you can’t be sure who you’d meet on the
other side.’ Without US military support for the rebels, the former
intelligence official said, ‘Erdoğan’s dream of having a client state
in Syria is evaporating and he thinks we’re the reason why. When Syria
wins the war, he knows the rebels are just as likely to turn on him –
where else can they go? So now he will have thousands of radicals in
A US intelligence consultant told me that a few weeks before 21 August
he saw a highly classified briefing prepared for Dempsey and the
defense secretary, Chuck Hagel, which described ‘the acute anxiety’ of
the Erdoğan administration about the rebels’ dwindling prospects. The
analysis warned that the Turkish leadership had expressed ‘the need to
do something that would precipitate a US military response’. By late
summer, the Syrian army still had the advantage over the rebels, the
former intelligence official said, and only American air power could
turn the tide. In the autumn, the former intelligence official went
on, the US intelligence analysts who kept working on the events of 21
August ‘sensed that Syria had not done the gas attack. But the 500
pound gorilla was, how did it happen? The immediate suspect was the
Turks, because they had all the pieces to make it happen.’
Turkey’s willingness to manipulate events in Syria to its own purposes
seemed to be demonstrated late last month, a few days before a round
of local elections, when a recording, allegedly of Erdoğan and his
associates, was posted to YouTube. It included discussion of a
false-flag operation that would justify an incursion by the Turkish
military in Syria. The operation centred on the tomb of Suleyman Shah,
the grandfather of the revered Osman I, founder of the Ottoman Empire,
which is near Aleppo and was ceded to Turkey in 1921, when Syria was
under French rule. One of the Islamist rebel factions was threatening
to destroy the tomb as a site of idolatry, and the Erdoğan
administration was publicly threatening retaliation if harm came to
it. According to a Reuters report of the leaked conversation, a voice
alleged to be Fidan’s spoke of creating a provocation: ‘Now look, my
commander [Erdoğan], if there is to be justification, the
justification is I send four men to the other side. I get them to fire
eight missiles into empty land [in the vicinity of the tomb]. That’s
not a problem. Justification can be created.’ The Turkish government
acknowledged that there had been a national security meeting about
threats emanating from Syria, but said the recording had been
manipulated. The government subsequently blocked public access to
Barring a major change in policy by Obama, Turkey’s meddling in the
Syrian civil war is likely to go on. ‘I asked my colleagues if there
was any way to stop Erdoğan’s continued support for the rebels,
especially now that it’s going so wrong,’ the former intelligence
official told me. ‘The answer was: “We’re screwed.” We could go public
if it was somebody other than Erdoğan, but Turkey is a special case.
They’re a Nato ally. The Turks don’t trust the West. They can’t live
with us if we take any active role against Turkish interests. If we
went public with what we know about Erdoğan’s role with the gas, it’d
be disastrous. The Turks would say: “We hate you for telling us what
we can and can’t do.”’
President Obama displayed some bravery in staring down his more
recalcitrant Allies like Prime Minister Erdogan
Prime Minister Erdogan
At that rally, attended by thousands of Ugandans, Museveni said gays
deserve to be punished severely because homosexuality is “criminal and
it is co cruel.”
As the authorities searching for missing Malaysia Airlines flight
MH370 raced to investigate a series of potential black box 'pings' in
the Indian Ocean, a senior official has reportedly claimed that the
plan was "steered" around Indonesian airspace.
A senior Malaysian government source reportedly said the Boeing 777
curved north of Indonesia after it dropped of Malaysian military
radar, according to further analysis of tracking data from
It apparently avoided Indonesia and its airspace altogether before
turning again towards the southern Indian Ocean. The source told CNN
such a route may have been taken intentionally in order to avoid radar
"We have an acoustic event. The job now is to determine the
significance of that event. It does not confirm or deny the presence
of the aircraft locator on the bottom of the ocean," Houston said,
referring to each of the three transmissions.
"No matter how the official narrative of this turns out," it seemed to
Heidi, "these are the places we should be looking, not in newspapers
or television but at the margins, graffiti, uncontrolled utterances,
bad dreamers who sleep in public and scream in their sleep." ---
Thomas Pynchon, Bleeding Edge
Moscow told Washington, officially, it has no intention of "invading"
Ukraine. And Washington told Moscow that, for all the demented
rhetoric, it does not want to expand NATO to either Ukraine or
In my humble opinion, the US cannot pivot to Asia and to Ukraine/Russia.
“America is clearly right up against the front door of China,” the
Global Times said in its editorial.
“You cannot go around the world and redefine boundaries and violate
territorial integrity and sovereignty of nations by force, coercion
and intimidation, whether it’s in small islands in the Pacific, or
large nations in Europe,” Hagel said while in Japan.
Hagel called China a “great power” and said that with such power
“comes new and wider responsibilities as to how you use that power.”
Absentee Bouteflika dominates Algerian presidential poll
At a packed sports hall in western Algeria, portraits of President
Abdelaziz Bouteflika gaze down on supporters rallying for his
re-election. But the leader himself, weakened by a stroke a year ago,
is a no-show.
Throughout campaigning for the April 17 polls, Bouteflika has remained
mostly out of the public eye apart from brief television appearances,
as he has done since falling ill.
His absences, and his health, have raised doubts about what will
happen after the election in an OPEC oil exporter that supplies a
fifth of Europe's gas, and plays a significant role in the Western war
on Islamist militants.
For now, Bouteflika is campaigning by proxy.
On Thursday, state television showed him greeting the Emir of Qatar,
and talking and joking in French with U.S. Secretary of State John
Kerry, his longest public appearance in a year.
"They are preparing for what comes next. The struggle to see who will
succeed will resume after April 17," said one diplomat.
"Look at the neighbourhood around us, make a comparison," Sellal said.
"Algeria is like an island of peace."
President Bouteflika meets with US Secretary of State
Bashir orders release of political detainees, relaxing restrictions on
parties & media
Bashir directed authorities in the states and localities across Sudan
to enable political parties to carry out their activities inside and
outside their headquarters without restrictions except those dictated
by the law.
He also pledged to enhance press freedom so that it can play its role
in the success of the national dialogue unconditionally as long they
abide by the norms of the profession.
Political detainees who have not been found to be involved in criminal
acts will be released, Bashir added.
The Sudanese leader also stressed the government’s commitment and
willingness to allow rebels to participate in the national dialogue
and vowed to give them adequate and appropriate safeguards to attend
and depart safely afterwards.
Bashir said in his keynote address before the summit that the meeting
is the first step to jumpstart the comprehensive national dialogue
process and start a new phase of Sudanese political life to agree on
primary principles to conduct the dialogue as well as discuss and
propose solutions to construct a new social contract that would bring
about Sudanese renaissance and peace.
South Africa All Share Bloomberg +5.83% 2014 [record Highs]
South Africa’s ruling African National Congress faces its
toughest-ever election on May 7 as some voters expected quicker
improvement in their lives 20 years after the end of apartheid, party
Treasurer General Zweli Mkhize said.
The 102-year-old movement that took power in 1994 faces the
“challenges of incumbency,” Mkhize, 58, said in an April 3 interview
at Bloomberg’s Johannesburg office. He also cited voter concern about
corruption among public officials.
“There is also a whole mismatch between expectations and the reality
of the availability of resources,” Mkhize said. “The question is:
‘After 20 years, how can I still be living in a shack?’”
The continent’s biggest economy is battling a 24.1 percent
unemployment rate, a fifth of its 53 million people lack formal
housing and 2.3 million households don’t have proper toilets. There
have been more than 100 protests this year by people demanding better
delivery of housing and basic services.
After winning more than 60 percent in every vote since 1994, the ANC’s
support has dropped by 10 percentage points to 53 percent in the past
year, according to an opinion poll conducted by Ipsos in October and
November. Five years ago, the ruling party won 64.8 percent of the
ballots, compared with 21.3 percent for its nearest rival, the
“We believe the ANC has got enough support to win the elections and to
win the elections decisively,” Mkhize said.
Dollar versus Rand 3 Month Chart INO 10.54360 [The Rand is at 3 month highs]
Egypt Pound versus The Dollar 3 Month Chart INO 6.9743
Egypt EGX30 Bloomberg +11.73% 2014 [-11.492% since 25th March]
7,524.12 -176.99 -2.30%
Nigeria All Share Bloomberg -5.2% 2014
Nigeria’s economy surpassed South Africa’s as the largest on the
continent after the West African nation overhauled its gross domestic
product data for the first time in two decades.
The size of the economy is estimated at 80.3 trillion naira ($491
billion) for 2013, Yemi Kale, head of the National Bureau of
Statistics, said in a report released in the capital, Abuja. That
compares with the World Bank’s 2012 GDP figures of $262.6 billion for
Nigeria and $384.3 billion for South Africa.
While Nigeria’s economy has grown by at least 6 percent a year since
2006, according to the World Bank, the most recent poverty survey by
the NBS shows that 61 percent of Nigerians were living on less than a
dollar a day in 2010, up from 52 percent in 2004.
The jump in the official GDP figure ranks Nigeria as 26th biggest
economy in the world, up from 33rd before the rebasing, Kale said
GDP for 2013 in Africa's top oil producer was 80.22 trillion naira, or
$509.9 billion, the Nigeria Bureau of Statistics said, up from the
42.3 trillion estimated before the rebasing.
The new figure shrank Nigeria's debt-to-GDP ratio to 11 percent for
2013, against 19 percent in 2012, statistics chief Yemi Kale told
reporters in the capital of Abuja.
Most governments overhaul GDP calculations every few years to reflect
changes in output, but Nigeria had not done so since 1990, so sectors
such as e-commerce, mobile phones and its prolific "Nollywood" film
industry - now worth 1.4 percent of GDP, Kale said - had to be
factored in to give a better picture.
Nigeria's annual GDP growth for 2013 is expected to come in at 7.41
percent after the rebasing, compared with about 6.5 percent in 2012,
South Africa, by contrast, is seen as one of few African destinations
where the rule of law safeguards investments.
By every measure, South Africa has a more sophisticated, developed and
diversified economy, with advanced financial markets, while Nigeria
relies heavily on oil. But investors say South Africa cannot afford to
"South Africa was historically the 'go-to' country for investment in
Africa. However, the reality is that other regions are increasingly
asserting their economic voice," said Roelof Horne, a portfolio at
Investec Asset Management in Cape Town.
Ghana Stock Exchange Composite Index Bloomberg +11.11% 2014
Zambia 12-Month Yields Rise to Four-Year High on Bank Measures
Yields on 364-day securities rose 98 basis points, or 0.98 percentage
point, to 16.48 percent, the highest since October 2009.
The central bank in Africa’s second-biggest copper producer increased
the minimum statutory reserve ratio for lenders to 14 percent from 8
percent and raised its key lending rate to a record high last month.
The kwacha retreated 9.5 percent this year, the worst among 24 African
currencies tracked by Bloomberg after Ghana’s cedi. A weaker currency
pushes up inflation in the land-locked country that imports items from
fuel to groceries.
“The central bank is seeking to help stabilize the Zambian kwacha in
order to ensure that inflation is within its target rate,” Mwiya
Musokotwane, a Lusaka-based analyst at African Life Financial Services
, said by e-mail today. “As liquidity generally rises again, banks are
likely to migrate assets to government securities. This will likely
lead to increased auction participation, given that yields are
At its two previous auctions, the central bank sold 186 million kwacha
of the 1.2 billion kwacha offered. The currency weakened 0.2 percent
to 6.13 per dollar by 3:51 p.m. in Lusaka.
Money raised in a planned Eurobond will probably help the government
meet its funding requirements and reduced buying of local notes will
only become problematic if tax revenues don’t meet needs, said
Zambia's decision to increase electricity prices by almost 29 percent
for mining companies is likely to hit operations in Africa's second
largest copper producer, the Chamber of Mines of Zambia said.
The bulk power supply agreement tariffs between state power company
Zesco and Copperbelt Energy Corporation were increased this week to
6.84 cents per KWh from 5.31 cents per KWh. [ID:nL5N0MU4O0]
"Mining companies will not be able to absorb this cost, especially the
high cost producing companies. The tariff increase is not sustainable
at all," said the Chamber of Mines of Zambia, which represents the
Standard & Poor’s today affirmed Zambia’s creditworthiness at B+/B
with a negative outlook and Fitch Ratings on March 21 held its rating
at B, five levels below investment grade. Officials from the Finance
Ministry and Bank of Zambia are on a U.S. and European roadshow to
market the country’s second international debt sale, where it may seek
as much as $1 billion.
Zimbabwe’s economy shrank by 49 percent between 2000 and last year, he
said. “The biggest contributor to that loss is de-industrialization,
since most companies have closed.”
Zimbabwe’s economy is suffering from a slump in consumer spending and
will probably be beset by deflation in coming months, according to the
country’s Finance Ministry.
Sales of consumer goods fell by as much as 30 percent in February, the
ministry said in its February Treasury State of The Economy Report,
which was obtained by Bloomberg News. Revenue collection also fell by
10 percent in the month from the same period the year earlier to $248
The decline in consumer spending is “reflecting intensification of the
liquidity crisis in the economy,” the ministry said. “Deflationary
pressures experienced during February will continue to affect the
economy in 2014, due to an extending negative output gap.”
The government of President Robert Mugabe, in power since 1980, is
trying to revive an economy that was 49 percent smaller last year than
it was in 2000, according to ZimTrade, a government agency that
promotes trade and investment. A failed land reform program that began
in 2000 and more than a decade of political disputes slashed exports
and deterred investment.
While the value of exports rose 10 percent in January, the latest
month for which figures were provided, to $278.1 million, imports were
$487.5 million, a 16 percent decline from the month earlier. Fifteen
metal and engineering companies closed during the month, according to
“Mineral output remained depressed during the month of February,” the
Consumer prices fell by 0.49 percent in February from the year earlier
after advancing 0.41 percent in January.
Government spending on recurrent costs has “crowded out” possible
expenditure on capital projects, with only four percent of expenditure
going to capital projects. In February, 58 percent of government
expenditure was on employment costs, it said.
Bob Diamond’s Atlas Mara to Buy Stake in Rwandan Lender
Mr Diamond sees the investment in Botswana and Rwanda as only the
start of his Africa adventure. "This is the beginning," he said in an
interview from Kigali. "Watch the space." via @FT's @Katrinamanson
Here's How to Unlock Africa's Economic Potential By Jim O'Neill
In the past year, I've visited Nigeria three times -- more than I've
traveled to any other country except the U.S. I mentioned this to an
audience on my most recent trip, saying I wasn't sure what it meant:
Am I a leading, coincident or lagging indicator? Maybe I was just
there for the power outages -- they shield me from the latest news
about Manchester United. (Don't ask.)
Of course I aspire to be a leading indicator -- and I'm hopeful
Nigeria and much of the rest of Africa will demonstrate my
farsightedness. It's hardly a sure thing, but Nigeria really does have
the potential to be a spectacular economic success.
I laid out some reasons for this hope when I nominated the country as
one of the "Next 11" emerging economies -- countries with lots of
people and untapped economic promise, capable of following the path
cut by the BRIC nations (Brazil, Russia, India and China). More
recently, I've drawn particular attention to four of the 11, the MINT
countries: Mexico, Indonesia, Nigeria and Turkey.
This weekend Nigeria rebased its figures for gross domestic product,
adding in previously uncounted industries such as telecoms and
information technology. On this new basis, the country's GDP was
roughly $500 billion in 2013 -- making Nigeria's economy the biggest
True, even on this new measure, Nigeria accounts for only around 0.5
percent of global GDP. The whole of Africa has an annual output of
only perhaps $2 trillion, comparable to India or Russia. But the
region is growing well and its potential is impressive. Nigeria's
government has set the goal of becoming one of the world’s 20 biggest
economies by 2020. I think that's too soon to be likely, but I think
Nigeria could be one of the top 15 by 2050.
In this scenario, remembering that Nigeria by then will be home to
roughly 20 percent of Africa's people, the country's growth would
power the whole continent. By the middle of this century, Africa's
economy would be close to 10 times bigger than it is today. That kind
of growth would lift a huge number of Africans out of dire poverty and
introduce them to the prosperity that other regions take for granted.
It can be done, but it shouldn't be assumed. African policy makers
should be asking whether the recent improvement in the region's
economy and the rising interest of foreign investors is thanks to
them, or thanks to a decade of strong commodity prices and
staggeringly supportive monetary policies in the U.S. and other
advanced economies, causing investors to search far and wide for
decent returns. The external environment has already turned less
friendly. China's growth is slowing, commodity prices have eased, and
the U.S. Federal Reserve is scaling back its bond purchases. For
Africa, as for other developing economies, this puts the focus back on
Investors, contrary to what you may have heard, distinguish between
countries that rise to such challenges and those that don't. The
recent strength of financial markets in India and Indonesia reflects,
in part, a recognition of those countries' efforts to deal with
worsening external imbalances and rising inflation.
After many years of very strong performances, Nigeria's stock markets
have been weak lately. This may be nothing more than a correction, but
the feud between the government and Lamido Sanusi, the well-regarded
governor of the Central Bank of Nigeria, sure hasn't helped. (Sanusi
was suspended after he made allegations of mismanagement and
misconduct at the state-owned oil company, where billions of dollars
in revenues appear to have gone missing. Just this week a court
awarded him damages in a harassment suit he brought against the
In the longer term, demography is likely to dominate -- along with
three other factors: first, the ease with which modern technologies
(such as mobile telecoms) can be brought to bear; second, the
willingness of ambitious young Africans to travel abroad for education
in elite universities in Europe and the U.S., then return to seek
opportunities at home; and third, the striking energy, ingenuity and
creativity that so many Africans -- not just the well-traveled --
bring to their work.
These things, vital as they may be, need the backing of better
governance. Here's a modest suggestion for African ministers,
officials and heads of business: Turn up to meetings on time. That
kind of thing isn't hard and makes a good impression.
Next, find ways to make economic policy institutions more independent,
transparent and honest. This goes double for central banks. Make it a
priority to promote trade with neighboring countries and with the rest
of the region, rather than letting old animosities hold this back.
International trade is one of the best ways to succeed, and the
continent can easily make big wins here. And finally -- maybe most
important of all -- promote better basic education. A well-educated
elite isn't enough.
I do some work for Teach for All, a network of social enterprises that
aims to widen educational opportunity. At the recent Nigerian Economic
Summit, a Teach for Nigeria initiative was announced. That was good to
hear. No nation or region can achieve its potential if its children
are denied a decent education. Don't worry too much about commodity
prices. They won't decide Africa's future.
The Nairobi All Share retreated 0.425% to close at 142.79.
The Nairobi NSE20 retreated 39.00 points and fell through the 4,900
level to close at 4869.75.
Equity Turnover was 640.38m.
Safaricom, EABL, KCB and Equity Bank traded 84.115% of the total volume today.
N.S.E Equities - Commercial & Services
Safaricom was the most actively traded share at the Securities trading
18.909m shares worth 235.89m [36.835% of the total volume traded at
the Securities Exchange] and firmed 0.403% to close at 12.45.
Safaricom is +14.746% in 2014 and as Investors correctly anticipate
muscular FY Earnings and a Fat Dividend, we should the price slice
through the record closing High of 12.55 from 21st March this year and
the price is within 0.796% of that. I have a Price Objective of 13.50
ahead of or coincident with the Release of the Full Year Earnings.
Kenya Airways which took delivery of its 1st @Boeing Dreamliner over
the weekend, a delivery which is proving cathartic for the share
price. The Dreamliner is part of a radical Fleet Turnaround. Kenya
Airways via these new Aircraft deliveries will save about 20% off its
fuel Bill, will incur lower maintenance costs and it allows Kenya
Airways to dramatically re ignite its brand. Kenya Airways firmed
0.77% to close at 13.15 and that makes it a six session Rally that has
seen Kenya Airways rise more than 6% over 6 sessions. Kenya Airways
traded 287,900 shares. Key Chart Resistance is at 14.50 where Kenya
airways unloaded Supply via a Rights Issue. I expect a break through
14.50 Resistance and a move to at least 20.00 by Q4 2014.
Car and General was highticked 6.45% to close at 33.00 on just 100 shares.
Scangroup retreated 4.73% to close at 45.25 and traded 8,800 shares.
Scangroup is now oversold.
N.S.E Equities - Finance & Investment
Kenya Commercial Bank traded 3rd at the Securities Exchange and closed
unchanged at 46.00 with 1.308m shares worth 60.421m changing hands.
KCB Group trades on a PE Ratio of 9.544. KCB's trading range today was
a tight 46.00-46.25 signalling strong Buyers are prowling at 46.00.
Equity Bank firmed 0.79% to close at 32.00 and traded 1.877m shares
worth 60.112m. Equity Bank trades on a PE Ratio of 8.913.
COOP Bank ticked 0.25% easier to close at 19.95 and traded 765,800
shares. COOP Bank is +12.394% in 2014.
Centum firmed 1.37% to close at 36.75 and traded 82,500 shares.
Transcentury retreated 5.45% to close at 26.00 and traded 79,500 shares.
N.S.E Equities - Industrial & Allied
EABL traded 2nd at the Exchange and retreated 1.893% to close at
259.00 and traded 701,200 shares worth 182.237m. EABL sits 18.264%
above its 52 week closing Low from End February this year. The share
has been churning at these levels since March but I expect a gradual
move back to unchanged for the Year, which level is 11.034% above
current trading levels.
BAT was the biggest Loser at the Exchange and was marked down 9.39% to
close at 521.00 on just 500 shares.
KenolKobil traded 1.438m shares and closed unchanged at 10.10.
KenolKobil is seeing an uptick in volumes of late and is unchanged in
2014. I would have thought that it remains in Play at the right price.
Total Kenya closed unchanged at 25.25. Total Kenya released strong FY
2013 Earnings last week, where FY Turnover expanded +29.082%, FY
Profit After Tax was 1.312277b versus a loss of [202.142m] the
Previous year and the Full Year Dividend was hiked 200%. Total Kenya
has rallied 9.78% since that earning release last week.
Kenya Power firmed 2.02% to close at 15.10 and traded 287,800 shares.
KPLC had 2 Buyers for every Seller at the Closing Bell.
KenGen eased 5 cents to close at 11.75 and traded good volume of
1.125m. Investors have been defensive all year ahead of a supersized
call on shareholders later this year.