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Satchu's Rich Wrap-Up
Tuesday 11th of March 2014

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Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

The Latest Daily PodCast can be found here on the Front Page of the site

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17-FEB-2014 :: STAYING AHEAD OF THE CURVE A Presentation I made to @Oracle

I am looking forward to being in London this weekend for The
Homecoming Revolution Event

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Join us on Sat 15th or Sun 16th March 2014 at Olympia @Angel1Jones

It was Angel Jones @angel1jones, the Founder of @HomecomingRev who
came and found me in my Office one afternoon.

Her Tagline on Twitter ''Ex-advertising chick. A Yippie (Yuppie + Hippie)''

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Many top African companies flying into London this weekend @Homecomingrevolution

Macro Thoughts

Home Thoughts

"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

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In her letter, Rometty called data a natural resource. "In its exponentially increasing volume, velocity and variety, data is becoming a new natural resource," she said.
Law & Politics

"It promises to be for the 21st century what steam power was for the
18th, electricity for the 19th and hydrocarbons for the 20th. This is
what we mean by enterprises, institutions and our planet becoming

"Traditional computing systems, which only do what they are programmed
to do, simply cannot keep up with big data in constant motion,"
Rometty said. "For that, we need a new paradigm. These new systems are
not programmed; rather, they learn, from the vast quantities of
information they ingest, from their own experiences, and from their
interactions with people."


The Information Century has arrived.

"Information. What's wrong with dope and women? Is it any wonder the
world's gone insane, with information come to be the only real medium
of exchange?"
-- Thomas Pynchon, Gravity's Rainbow

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PYONGYANG North Korea (@AP) -- supreme leader Kim Jong Un won with the unanimous approval of his district 100% turnout
Law & Politics

The Hermit Kingdom The Star November 2010


FAR away in distant lands lies the Hermit Kingdom. This land is ruled
by The House of Kim and its capital is Pyongyang. The first and
'Eternal' President was Kim Il-sung and his successor Kim Jong-il
whose designated successor is Kim Jung-un. They all have had tiny
little hands like the Elves in the Elves and the Shoemaker.And this
country has nuclear weapons and on its border with its neighbour South
Korea sit 25,000 American soldiers

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Unfair to paint China as a colonialist in Africa
Law & Politics

The African continent, with its fast growth of the past decade, is a
future wonderland for prosperity that will benefit foreign investment
and entrepreneurs. Strangely, rumours have been circulating that
target China as a "villain" who is plundering Africa for its energy
resources. That's a big lie. The real story about China and Africa is
one of a long-lasting friendship based on mutual benefit and support.

Friendly relations go back several decades. China's signature aid
project, the Tanzania-Zambia railroad, is a symbol of that strong

For half a century, China has offered full and unswerving support to
African nations in their fight against colonialism and apartheid as
well as for independence.

Today, those ties are even stronger, with the political relationship
having been upgraded to a strategic partnership. This was articulated
in 2006 by then Ethiopian premier Meles Zenawi, who noted that China's
principle of sovereign equality and non-interference constituted the
foundation of mutual trust between the two regions.

For half a century, China has offered full and unswerving support to
African nations in their fight against colonialism and apartheid as
well as for independence. Africa, an important group in the UN system,
has stood behind China as it sought to safeguard its interests in
various fields.

Africa has become one of the pillars in Beijing's pursuit of
sustainable economic development; China is the biggest trading partner
and one of the key investors in Africa. Since the 1990s, China-African
economic co-operation has morphed from one of mainly economic
assistance to a complex model of co-operation in trade, investment,
finance and technology.

Annual bilateral trade in 2012 topped US$200 billion while China's
investment stood at US$21.23 billion. Meanwhile, African investment in
China - from sovereign funds in South Africa, Nigeria, Gabon, Angola
and others - has surpassed US$10 billion.

More than 2,000 Chinese companies have invested in over 50 African
countries in areas ranging from finance, aerospace and manufacturing,
to logistics and real estate, in addition to traditional sectors like
agriculture, mining and infrastructure construction.

It's true that Africa is one of the key suppliers of energy resources
to China and investment in its energy resources is rising. China now
imports over one third of its petroleum from Africa. However, it must
be emphasised that China's imports of oil are much less than those by
the US and Europe; and, China is doing its utmost to help build up
manufacturing capacity in Africa, knowing very well that this is key
to sound economic development. South African President Jacob Zuma has
said that " China has never engaged in any colonialist activities in
Africa. The relationship between Africa and China is by no means a
colonialist one."

As relations have become closer, so more reports have appeared in the
Western media supposedly exposing China's misdeeds, claiming for
example that China's aid feeds corruption, Chinese companies are
violating African people's human rights, and, Chinese investments prop
up dictators. These allegations can't be further from the truth.

The first thing that rattles Western countries is the principle of
China providing aid with no political strings attached. This is a
clear demonstration of China's long-held policy of non-interference in
other countries' internal affairs.

US professor Deborah Brautigam, the author of The Dragon's Gift, has
said that China's aid and investment actually inhibits corruption in
recipient countries because the funds are directly transferred to
companies instead of going into government coffers, as is the practice
of World Bank-financed projects and others.

Take Angola, for example. China needs petroleum and Angola needs
infrastructure. A bilateral co-operation programme has been designed
to address exactly those needs, with China importing Angolan oil while
helping the nation build roads, housings, schools and hospitals with
funds from both the proceeds of oil sales and long-term, low-interest
loans from Chinese banks.

Another example is Zimbabwe, whose economy has been ruined by Western
nations' embargoes and isolation for political reasons. Meanwhile,
China has given assistance to Zimbabwe, proving a great help to that

Secondly, both state-owned enterprises and private companies that
invest in Africa take their social responsibilities seriously,
contrary to what is reported in the Western media. The most prominent
contribution they make is the provision of jobs for local people.

In Sudan, for instance, a Chinese company was contracted to help build
the Merowe Dam; that project alone employed more than 16,000 local
workers. A refinery project involved 1,100 local employees, with half
in training while the other half worked.

Thirdly, China's aid and investment is very much tailored to the
economic development strategy of African countries. Sudan used to be
an oil-importing country and now, with China's help, it has become an
oil exporter with both upstream and downstream capacity in
exploration, extraction and refinery.

Another example is Niger, one of the world's least-developed
countries, whose economy had been in poor shape for a long time even
though it has abundant reserves of uranium ore. Why? Because the
uranium mines were exclusively in the hands of a French company that
artificially kept the prices low. With Chinese companies coming in,
the situation has now changed in favour of Niger; not only is uranium
ore fetching a better price, but Niger is also building up its
infrastructure at a quicker pace.

The most important difference between China's aid and investment in
Africa and colonialism is that the latter was forced upon African
countries while China's activities are based on the needs of Africa
and the principle of sovereign and business equality.

The counsel general of Nigeria in Hong Kong once said that the reason
they want to do business with China is because they can sit down and
talk on an equal footing. That was not possible in the colonial days.

Zambian author Dambisa Moyo has said that the roughly US$1 trillion in
Western aid to Africa over the past half a century has brought more
harm than good.

History is a mirror as well as a teacher. This mirror reflects China
in the right perspective, as long as we view its aid and investment
activities in Africa without colonialist bias.

He Yafei is vice-minister of the Overseas Chinese Affairs Office of
the State Council


Let there be no doubt that Chinese Demand for Africa's Commodities
took an egregious Demand [for Africa's Commodities] versus Supply
Disequilibrium back into Equilibrium. By locking in Supply for Term,
China unwound the ''Hand to Mouth'' Nature of Africa's Economy. Term
Contracts unlocked Credit and added Financial Capacity to Africa. The
Africa GDP versus China Emergence Correlation is indisputable.

Clearly, The West has woken up to the Chinese Advance and still holds
a Trump Card with which to tilt the African Pitch, that Card being
Hard Power plain and simple. Furthermore, given the Extrapolation that
Chinese Demand for African Commodities will continue to grow whilst
the US' is shrinking, one could argue persuasively that the Pivot to
Asia detours through Africa. If you are considering ''distant blockade
operations'', I am sure the US and its Allies will be looking at
blockading or maintaining a Gatekeeper Status over African Exports to

The China Africa Relationship is fluid. I think China appreciates it
needs to shape perceptions. Just visit the CCTV Bureau in Nairobi to
gain affirmation of that Fact.

We exist in interesting times.

Aly-Khan Satchu

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Soviet leader Josef Stalin used to shrug off critics by his favorite Central Asian saying: "The dogs bark; the caravan moves on."
Law & Politics

Russia's hard-eyed president, Vladimir Putin, is following the same
strategy over Ukraine and Crimea.

Putin swiftly moved his knight into the empty chess square of Crimea,
thereby regaining full control of one of Russia's four strategic port
regions: Sevastopol, Murmansk, St Petersburg and Vladivostok.

Sevastopol, now firmly in Moscow's hands, is Russia's sole gateway to
the Black Sea, Mediterranean, and Mideast. The vast, co-shared
Russian-Ukrainian Sevastopol naval base was a shaky, awkward
arrangement doomed to eventual failure.

Semi-autonomous Crimea, over 60% ethnic Russian, will hold a
referendum on 16 March to decide to remain in Ukraine or rejoin
Russia. A referendum is clearly the answer to the whole Ukraine-Russia

Ukraine has been a corruption-ridden failed state since it separated
from Russia in 1991. This writer has long suggested that partition of
Ukraine into Western and Russian-oriented halves is the sensible
solution, with Crimea returning to Russia.

Putin asks if Western-backed Kosovo can go independent of Serbia, why
can't Crimea break its links with Kiev?

The temporary attachment of majority ethnic Russian Crimea to Ukraine
in 1954 after 250 years of Russian rule was unnatural, a ticking time
bomb. It has now exploded, triggered in part by the West's successful
effort to overthrow the elected but corrupt government in Kiev of
Viktor Yanukovich.

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"The situation in Ukraine is extremely complex, and what is most urgent is for all sides to remain calm and exercise restraint to avoid an escalation in tensions," China's foreign ministry on Monday cited Xi as telling Obama.
Law & Politics

America's ambassador in Kiev said the US would refuse to recognise
next Sunday's "so-called referendum" in Crimea, and said Washington
would take further steps


Escalating Crisis in Ukraine: Obama Comes Out Against
Self-Determination for Crimea


Does Russia have an Africa Command? No, but Washington does.

Is Russia surrounding the US with military bases? No, but Washington
has used the NATO organization, whose purpose disappeared 23 years
ago, to organize western, eastern, and southern Europe into an empire
army with forward bases on Russia's borders. Washington is determined
to extend the boundaries of a North Atlantic Treaty Organization to
Georgia in central Asia and to Ukraine on the Black Sea. Both Georgia
and Ukraine are former constituent parts of both Russia and the Soviet

Washington is doing the same thing to China and Iran. Washington is
working to establish new air and naval bases in Philippines, South
Korea, Vietnam, Thailand, Australia, with which to block the flow of
oil and other resources into China. Iran is surrounded by some 40 US
military bases and has US fleets standing off its coastline.

The Snake @Aiww and The Encirclement


Among those warning of the risk of a worsening of the crisis was
former James Baker, the last US Secretary of State who served during
the Cold War.  "I would say we are in a Cold War light already and we
don't need to move further down that road because it could lead to
some serious problems in the heart of Europe," he said.


C.Africa pays state wages for first time in 6 months


Bangui (Central African Republic) (AFP) - State officials in the
Central African Republic were paid their first wage for six months on
Monday, a small sign of normality in a country that has been paralysed
by war for over a year.

On Monday, huge lines of state employees, impatient for their first
pay packets since September 2013, formed outside the major banks in
the capital Bangui.

"Better one month than nothing. We're barely living," paramedic Jean
Nguelebo told AFP.

"If the government makes the effort, we may be able to get one or two
more months -- if the treasury allows."

French President Francois Hollande said that state employees' salaries
would be paid quickly via agents in other countries during a visit to
Bangui on February 28.

Civil servants queue in front of a bank in order to get paid after
a month of wage arrears in Bangui on March 10, 2014 


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Law & Politics

Oscar Pistorius, now in the second week of his trial for the murder of
Reeva Steenkamp, has cried and prayed, and has become physically ill
in the courtroom in Pretoria, and has covered his eyes and his ears,
doubled over. On Monday, a security officer put a bucket next to
Pistorius, who vomited into it repeatedly, according to press reports,
as the pathologist Gert Saayman described how Ranger bullets, like the
one shot into Steenkamp's brain, open "like petals on a flower" after
entry. This ammunition design used to be sold under the name Black
Talon, until the line was taken off the market; its reputation was
such that surgeons worried about cutting their fingers on the sharp,
shattered edges when they operated on gunshot victims. Pistorius had
fired three times through a closed door in his bathroom that led to
the toilet, hitting Steenkamp, who was inside, in her skull, her right
arm, and her right hip. Saayman, who conducted her autopsy, said that
either of the two lesser wounds could have killed her, too, from the
loss of blood if nothing else. There were even smaller injuries where
she was cut by wooden splinters--pieces of the door that the bullets
propelled into her body. And a bullet passed through the skin between
her thumb and forefinger on its way to her head; she may have had her
hands over her own ears. What sound would she have been trying to shut

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.3866
Dollar Index 79.79
Japan Yen 103.27
Swiss Franc 0.8786
Pound 1.6642 Sterling fell as Bank of England Deputy Governor Charlie
Bean said further strength in the currency may hamper the U.K.'s
economic recovery
Aussie 0.9027 The Aussie dropped 0.5 percent to 90.23 U.S. cents after
advancing to 91.33 cents on March 7, the strongest since Dec. 11.
India Rupee 60.685 The rupee climbed 0.3 percent to 60.6850 per dollar
as of 9:42 a.m. in Mumbai, according to prices from local banks
compiled by Bloomberg. It touched 60.6038 earlier, the strongest level
since Aug. 12. The currency has rebounded 13.4 percent from a record
low of 68.845 on Aug. 28.
South Korea Won 1064.00
Brazil Real 2.3462
Egypt Pound 6.9607
South Africa Rand 10.7479

The Aussie tumbled 14 percent in the past 12 months, the worst
performer of 10 developed-nation currencies tracked by Bloomberg
Correlation-Weighted indexes, amid signs of a slowdown in China. The
euro gained 6.9 percent, while the dollar declined 0.6 percent.

The Bloomberg Dollar Spot Index rose for a second day amid speculation
the world's biggest economy is building momentum. The gauge, which
tracks the greenback against 10 major counterparts, advanced 0.1
percent to 1,017.75. It fell to as low as 1,012.27 on March 7, the
least since Dec. 11, before reversing losses after a U.S. jobs report.

Dollar Index 3 Month Chart INO 79.79


Euro versus the Dollar 3 Month Chart 1.3866


Dollar Yen 3 Month Chart INO 103.27


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Commodity Markets at a Glance WSJ

Gold 3 Month Chart INO 1340.64

Bullion for immediate delivery rose as much as 0.3 percent to
$1,344.02 an ounce and traded at $1,342.29 at 11:50 a.m. in Singapore.
Prices posted a fifth weekly gain last week, climbing to a four-month
high of $1,354.87 on March 3, as conflict between Ukraine and Russia
worsened, boosting haven demand.

Bullion advanced 11 percent this year even as the Federal Reserve,
which next meets March 18-19, announced a $10 billion reduction to
bond buying at each of its past two meetings, leaving purchases at $65
billion. Ukraine began military drills as Russian forces tightened
their hold on the Crimean peninsula.

Crude Oil 3 Month Chart INO 101.16 [Its a structural Sale above 100.00]

WTI for April delivery was at $101.03 a barrel in electronic trading
on the New York Mercantile Exchange, down 9 cents, at 1:15 p.m.
Singapore time. The contract dropped $1.46 to $101.12 yesterday, the
lowest close since Feb. 14.

Emerging Markets

Frontier Markets

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"Somalis, your religion has been attacked, your land divided, your resources looted directly and indirectly through the puppet government - our victory lies in Jihad (holy war)," Godane said in a recorded message

Godane said landlocked Ethiopia had invaded Somalia in pursuit of
access to Somalia's Indian Ocean coastline. The two countries fought a
war in 1977-78.

"Ethiopia will fail as it has failed in the past and the Muslims will
be much stronger," Godane said.

His last public statement came in September when al Shabaab claimed
responsibility for a deadly raid on a luxury shopping mall in the
Kenyan capital Nairobi.

Somali gunmen tossed grenades into busy restaurants and executed
well-heeled shoppers as punishment for Kenya's military involvement in
Somalia. At least 67 people died.

"The aim of the (foreign) invasion is to divide the remaining Somalia
between Kenya and Ethiopia under the cover of the establishment of
Somali states," Godane added, a reference to the creation of a federal

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Shooting in Juba, talking in Addis Africa Confidential

As the African Union discusses sending a stabilisation force to South
Sudan, there is a glimmer of hope in Addis Ababa, where a new
committee from all sides is due to meet on 7 March to tackle the
political differences within the governing Sudan People's Liberation
Movement. This is the first time that President Salva Kiir Mayardit
has accepted that the roots of the crisis lie within the SPLM, rather
than in the claims of a coup attempt by his former Vice-President,
Riek Machar Teny Dhurgon. The new initiative, with Ethiopia and South
Africa as mediators, came on 5 March, the day after the
Inter-Governmental Authority on Development (IGAD) talks stalled,
though participants had agreed to resume on 20 March.

That same day, five government soldiers (and by some accounts far
more) were killed after shooting broke out at the main barracks in
Juba near the University, adding to the pressure on regional mediators
and on those advocating an AU stabilisation force, for which Burundi,
Djibouti, Ethiopia, Kenya and Rwanda have promised troops.

The Juba shooting appeared to be an isolated incident but added to the
climate of violence and uncertainty. On the previous day, Defence
Minister Kuol Manyang Juuk had promised any Sudan People's Liberation
Army troops who had defected to Commander Riek's so-called South Sudan
Resistance Movement that they could be screened and reintegrated into
the SPLA. Nuer politicians had visited defectors who had taken refuge
in the base of the United Nations Mission in South Sudan (UNMISS) and
told them the same thing, we understand.

Some of the dissidents then turned up at the barracks to collect their
wages, say government and army sources. When they were told they would
have to go to the frontline in Greater Upper Nile, they started
shooting the officers paying the wages and set fire to the office.
Some have been living in the UNMISS camp, along with thousands of
other displaced people, and making regular sorties to collect their
pay while waiting for Riek to come and 'liberate' Juba, said one
source in the city. This could be one reason for the government's
quarrel with the UN. Another will be the weapons found en route to
Bentiu on 6 March in a UN convoy designated as relief food.

Both government and the opposition fighters have broken the 23 January
cessation of hostilities agreement, both use child soldiers and both
have committed atrocities. However, the rebels, especially the
rampaging White Army over which Riek appears to have little control,
have been especially relentless and targeting civilians throughout
Greater Upper Nile. The government has been holding back militarily,
for now.

The soaring toll of death and displacement together with worsening
economic conditions caused by the loss of about a third of the
country's 245,000 barrels a day in oil production are prompting civic
activists and churches to push for a political settlement. There is a
huge longing for peace throughout a country still reeling from the
crisis. Juba has been getting back to normal. 'People are working
harder, with a new seriousness', said one local businessman. Many in
the capital complain that Western governments - especially the Troika
of Britain, Norway and the United States - have not spoken out loudly
enough against Riek's armed opposition.

The causes of the military chaos run deep. Salva's 'big tent' policy
welcomed all the militias in the country, mainly backed by Khartoum,
into the fold. As many SPLA veterans retired, the result was a
national army where ex-militia were most numerous. Soldiers from
Riek's Nuer ethnic group formed about 60-70% of the new national army.
Yet many South Sudanese believe this policy saved the new country by
protecting it from the greatest danger, destabilisation by Khartoum's
Islamist regime.

Both wings of the army went on the rampage. For example, the
destruction of Bor happened in two stages, AC has learned. Firstly,
Peter Gatdet Yaka's fighters attacked specific targets, including all
buildings linked to former Jonglei State Governor Kuol Manyang,
foreign-occupied buildings (including the mainly Ugandan market
stalls) and the property of pro-government people, Dinka or Nuer. Then
the SPLA recaptured the town and levelled most of the rest, looting as
they went. By the time Episcopal Archbishop Daniel Deng Bul Yak and
Archbishop of Canterbury Justin Welby arrived there in early February,
there was little left 'except bodies', lamented one witness.

The tradition of respecting church property was broken. Adults and
children have been massacred inside churches, women raped and
kidnapped. People have telephoned family to be answered by a stranger:
'I just killed your relative'.

Elderly retired Catholic Bishop Vincent Mojwok Nyiker protected all
ethnic groups in his house during the first two rebel attacks on
Malakal. As the third attack began on 21 February, most people fled
the town and he was persuaded that he would be killed if he remained
as the White Army was now targeting Shilluk and respecting no one. He
had to wade through neck-deep water, helped by priests and young
people, to reach an island, with bullets hitting the water around him.
They walked and slept for nights in the bush before crossing the river
at Melut and arriving in Renk.

Many feel that Riek has no place in the 'interim government' now
openly talked about. Both Riek and Salva say they would refuse to
serve together in government. Yet the Southern culture of forgiveness
is deep: 'No one is permanently guilty', said one South Sudanese
analyst. Even Riek's return is not impossible.

Yet Riek would be unacceptable without Salva. Deng Alor and other
dissidents want both men to stand down. They argue for an interim
government led by an independent figure who would prepare fresh
elections but not stand in them. As war weariness grows, such an
arrangement could look increasingly attractive to South Sudanese.

The River Nile Juba


Demonstrators demanded the resignation of UN South Sudan envoy Hilda Johnson


More than 1,000 people have protested in South Sudan's capital, Juba,
accusing the UN of arming rebels.

On Friday, the government said its troops had intercepted weapons in a
UN convoy marked as carrying food.

The UN denied the arms were destined for rebels, but acknowledged it
made a mistake transporting them by road.

The UN has about 8,000 peacekeepers in South Sudan, the world's newest
state where conflict broke out in December between government and
rebel forces.

In January, South Sudan's President Salva Kiir accused the UN of
running a "parallel government" in his country - a charge it denied.

South Africa All Share Bloomberg +2.82% 2014


Dollar versus Rand 3 Month Chart INO 10.74955


Egypt Pound versus The Dollar 3 Month Chart INO


Picture: #Sisi meets today with senior Senegalese officials in #Cairo.


Egypt EGX30 Bloomberg +17.66% 2014


Nigeria All Share Bloomberg -4.90% 2014


Ghana Stock Exchange Composite Index Bloomberg +12.68% 2014


Ghana: the most fragile of all? FT Subscriber


The discovery of oil and a rising consumer class had investors
positive about Ghana's growth story, holding up the west-African
country as one of the frontier markets to invest in. But the recent
broad sell-off in EMs has changed the mood about the country and
exposed a slate of problems in need of resolution.

The yield on Ghana's benchmark $1bn bond due in August 2023 shot up to
over 9.8 per cent at the end of February before cooling to just above
9 per cent, as EMs recovered from their rout at the beginning of the
year. Over the past few days, the yield has been on the rise again.

"The recent recovery I think has more to do with market sentiment than
Ghanaian fundamentals," said Antoon de Klerk, portfolio manager at
London-based Investec Asset Management. "It is worth noting that the
Ghana rally coincided with a broader emerging market spread rally."

Indeed, Ghana has been cherry-picked as a potential struggler in the
new world of tightening monetary policy in developed markets. Ratings
agency Standard & Poor's recently listed the country among the three
EMs most vulnerable to shifting capital flows, alongside crisis-hit
Ukraine and Turkey.

The Ghanaian cedi was the second worst performing African currency out
of 24 tracked by Bloomberg over the past 12 months, weakening 25 per
cent against the US dollar. It was stronger only than the New Sudanese
pound and a lot weaker than the more liquid South African rand which
lost 14.4 per cent of its dollar value.

Currency weakness helped drive annual inflation to 13.8 per cent in
January (second only to Belarus and Venezuela in Bloomberg's global

Capital Economics forecasts economic growth of 6 per cent this year
and next. That sounds impressive but it masks an economy in decline:
between 2000 and 2013 average growth was 7.2 per cent, according to
Trading Economics, peaking at an annualised 19 per cent in June 2011.
Capital's forecast contrasts with the finance ministry's estimate of 8
per cent.
The IMF expects growth this year of 5.5 per cent. It expects growth
momentum to weaken further and inflationary pressures to continue, and
has called for urgent measures to address macro-economic imbalances.

Slower growth is due partly to weaker prices of commodities such as
gold, of which Ghana is the world's second-biggest producer after
South Africa. Oil revenues - the country began exporting crude in 2010
- haven't been as strong as budgeted.

But management of the economy has also played a part. Ghana is running
twin deficits: a fiscal deficit equal to 10.9 per cent of GDP, and a
current account deficit of 13 per cent of GDP.

That makes it "a highly leveraged growth bet," says De Klerk. "They
are borrowing a lot, leveraging up the country and betting on growth.
They've managed phenomenal growth rates, but things are becoming

Investors in frontier markets such as Ghana, says De Klerk, should
balance a desire for fiscal prudence with a recognition of the need to
invest in infrastructure. For that reason, fiscal deficits of between
4 and 5 per cent were largely acceptable.

Ghana isn't in a crisis yet, but if growth drops to 5 per cent or
below and the fiscal deficit remains, there'll be "real trouble," De
Klerk warns.

Ghana has other problems of its own making. For example, says Shilan
Shah at Capital, only a small amount of the money it has borrowed has
been used for investment.

Too much of public spending goes on public sector pay, which takes
nearly 70 per cent of the budget. The government of president John
Mahama - unencumbered, like some in the fragile five, by the prospect
of an approaching election - has announced a wage and hiring freeze in
a demonstration of fiscal constraint. But doubts remain over how far
Accra will go. Shah points out that wages were boosted in the run-up
to elections in December 2012. "Although there is no poll, cutting the
wage bill will be politically extremely difficult," Shah says. The
next election is due in 2016.

In any event, tightening the purse strings may only rein in consumer
spending, which makes up 60 per cent of GDP. A freeze on public sector
pay, double digit or high single digit inflation coupled with a rise
in interest rates may serve to only dampen economic growth.

Nor will growth be helped by the central bank's response to tapering
at the Fed. As the cedi joined the sell-off in EM currencies, the bank
brought in capital controls and raised its already high interest rate
by 2 percentage points to 18 per cent a year.

The government has also promised to boosts its coffers through a rise in taxes.

Once all this feeds through, growth could slow even further over the
next couple of years. Because of how geared the economy is, growth
rates below 6 per cent for any extended period of time would pile
significant pressure on the country.

Raising revenues is problematic and not growth supportive, says De
Klerk. Ghana may emerge from its economic slump, but it is in a tough

A lot rides on commodity prices, though they will have to rise
significantly to provide much relief. Gold has received some support
from the still developing crisis in Ukraine, as investors withdraw to
safe-haven assets: it has gained more than 7 per cent over the past
month. If tensions ease, however, bullion will lose support,
especially as interest rates look set to rise in the west.
Last year, gold plunged 28 per cent, breaking a more than decade-long
bull market.

Oil has received a similar boost from the rise in geopolitical
tensions. But with the US economy becoming more energy self sufficient
because of shale, oil would also lose support if tensions recede.


Aly-Khan Satchu | March 11 5:44am | Permalink

The Recurrent Expenditure Component of African Budgets are the
Achilles of Africa's Renaissance. Ghana is going to get crunched and
worse. Aly-Khan Satchu Nairobi

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Cairo's loss is big boost for Nairobi
Kenyan Economy

WHILE the Arab Spring was intended to improve the lot of citizens, an
unintended consequence of political upheaval has been the loss of
Cairo as a regional business capital.

Nairobi in Kenya has been the beneficiary, according to Peter Welborn,
chairman of Knight Frank Africa.

"Cairo used to be a strategic location for businesses, but it's no
longer acceptable. Regionally, Johannesburg is a key capital city, and
Nairobi is now the capital of East Africa, so to speak.

"From Southern Africa and up the east coast there are no other cities
regarded by business as being key capitals until you cross the
Mediterranean. We've lost Cairo."

Mr Welborn said that in Nairobi four years' worth of office supply had
been taken up in the past 18 months.

"We've seen regional headquarter occupiers take strategic buildings in
conjunction with their existing operations in Johannesburg.

"Nairobi is a key area to invest in -good tenant demand, good
occupiers, an English legal system and a land registry which is really
well organised so you can understand tenure. It is also stable."

Outside Nairobi, he said Kampala, in Uganda, offered good strategic
opportunities in retail and office space on the back of oil and gas,
while in Tanzania, Dar es Salaam looks set to prosper from the largest
gas field discovered in the world to date.

Mozambique, too, is beginning to attract attention. "Maputo is based
at the southern end of the country but there are plans to undertake
big strategic developments in the north, again related to oil and gas.

"Tenure is an issue, but like anything, when you have the right local
joint venture partner, those issues can be overcome. When you have
minerals and dollars, that often is the driving factor in ensuring
development takes place," said Welborn.

In West Africa, Nigeria was first choice for many global companies,
but Welborn said the operating environment made some companies blanch.

"For them, the second port of call is Accra in Ghana, where again a
number of strategic occupiers are looking to establish a West African
regional presence in an environment they find more acceptable than

The common thread is minerals and investment. Mr Welborn was quick to
accentuate the positives, for governments, citizens and real estate.

"The mineral reserves are eye-watering. If the political situation in
the majority of African countries could be organised, the local people
could enjoy the fruits of the global values of those minerals.

"But political instability is a key issue in many African countries,
and the minerals are not being extracted to the benefit of the people.

"They're looking to come into Africa to invest in real estate and
build buildings for investment. Up till now we've seen $3bn to $5bn a
year for infrastructure projects, but the first phase of opportunities
for investment in residential or offices is just starting," said Mr
Welborn. "This is the time for Africa."

Some economies were coming out of recession, and the minerals sitting
in Africa ought to be a key driver in those countries to take the
capital cities into the next millennium.

As an example, Mr Welborn said the United Arab Emirates (UAE) signed a
deal with Conakry, Guinea, to buy more than five billion tons of
bauxite to ship back to the UAE and refine in its second aluminium

Welborn said the deal was to last nine years, and could be worth up to
$7bn in total.

"If you think of what that amount of money can do to an economy of
that size, it's mind-boggling. That's just one mineral in one country.
I think that's a real positive, but in Africa, unfortunately, history
doesn't bode well.

"When you invest in infrastructure for hundreds of millions of
dollars, you need political stability. You don't need a change of
government, or a change in rules and ownership. These are huge risks."

To mitigate the higher risk, Mr Welborn said the most important
element for multinationals was having a trusted local joint-venture
partner to work with.

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The View of Nairobi from the 8th Floor
Kenyan Economy

Dear @KKombani read your Potboiler #denofinequities in one sitting
last night with Thanks


Page 22.

When it rains, all Hell breaks loose. Hundreds of thousands of
Nairobians, in a sudden, unexplained and irrational fear of rain,
scuttle off work early to form a maddening stream of panicky human
traffic. The Result is a quagmire of rushing bodies. In the downpour,
pedestrians get knocked down, cars smash into each other, humans
collide, bodies splash into the puddles with their belongings still
clutched in their soaked hands...It is a scene straight out of the
Tower of Babel.

Kenya: Uhuru's Salary Cut Good, but More Needed 10 March 2014 , By Aly
Khan Satchu, Source: The Star


I was reading an article in the venerable Wall Street Journal on
Friday morning. The article was touching on the recent weakness of a
number of African currencies and I quote:

"I command the resurrection of the Cedi! In the name of Jesus!"
preached evangelist Nicholas Duncan-Williams of a mega church called
Action Chapel, recently.

Then he addressed Satan: "Take your hands off the central bank!"

In Ghana, the Cedi lost 11 per cent against the dollar in the first
two months of 2014. Some radio personalities blamed the free fall on
the devil,

"These dwarfs, the black magic is what has made the Cedi lose value,"
Anita Desooso, a political organiser for the ruling National
Democratic Congress told private radio station Adom FM.

The article concluded that "compounding these pressures from afar is a
problem of Africa's own making: big budget deficits."

The Ghana Cedi has been in freefall for a while, The Zambia Kwacha is
at a record Low, The South African Rand has fallen over 20 per cent in
the last 12 months. The Kenya Shilling has outperformed its African
peers, in fact.

I responded to the article

The Achilles Heel of the African resurgence is the recurrent
expenditure [salaries] component of their budgets. Essentially,
government in Africa is fabulously expensive and its productivity
shockingly low. As our economies grow and Africa is seeking to
accelerate its convergence [its happening about that let there be no
doubt], African governments are beginning to load their balance
sheets. The train wreck risk whilst a residual one might grow because
I have yet to see or meet an African politician who is prepared to
take a scalpel to the cost of delivering Government in Africa.

Then on Friday I learnt that President Uhuru Kenyatta and Deputy
President William Ruto will take a 20 per cent pay cut while members
of his cabinet will see their pay reduced by 10 per cent with
immediate effect. Kenyatta said a new policy will restrict foreign
journeys to only the most essential. Kenya is spending close to $4.6
billion (Sh397.4 billion) in salaries leaving only $2.3 billion
(Sh198.7 billion) for development, Kenyatta said. Just consider that
Figure of $2.3b for development. Its not very much, is it?

"We need to deal with this monster if we are to develop this nation
otherwise sooner or later we will become a nation that only collects
taxes to pay ourselves," Kenyatta said.

The President is sending the right signal through the noise but he has
to wield a scalpel,now.

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"The slice of our national cake devoted to development expenditure would continue to dwindle if we do not contain the pressure of wages," Kenyatta said. "It is time to put the monster to rest and we wish to lead by example."
Kenyan Economy

The government spends about 55 percent of annual tax revenue paying
public workers, Kenyatta said. That amount is on track to increase to
64 percent of government income in two years if left unchecked, Ruto
said at the same event.

Construction of Lamu Port berths set for June - KPA -


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Elephants Know How Dangerous We Are From How We Speak
Kenyan Economy

The elephants in the Amboseli region are so aware of this that they
can even distinguish between Ma, the language of the Maasai, and other
languages, says a team of researchers, who report their findings today
in the Proceedings of the National Academy of Sciences.

The results add to "our growing knowledge of the discriminatory
abilities of the elephant mind, and how elephants make decisions and
see their world," says Joyce Poole, an elephant expert with
ElephantVoices in Masai Mara, Kenya.

Indeed, previous studies have shown that the Amboseli elephants can
tell the cattle-herding, red-robed Maasai apart from their
agricultural and more blandly dressed neighbors, the Kamba people,
simply by scent and the color of their dress.

The elephants know too that walking through villages on weekends is
dangerous, as is crop raiding during the full moon.

Intriguingly, when the Amboseli elephants encounter a red cloth, such
as those worn by the Maasai, they also react aggressively. But they
employ a different tactic when they catch the scent of a Maasai man:
They run away. Smelling the scent of a Kamba man, however, troubles
them far less.

"They have very clear behavioral responses in all of these
situations," says Karen McComb, a behavioral ecologist at the
University of Sussex, in the United Kingdom. "We wondered if they
would react differently to different human voices."

The Amboseli elephants were also sufficiently tuned in to the Maasai
language that they could tell women's and boys' voices from men's,
seldom turning tail in response. "Maasai women and boys don't kill
elephants," Shannon points out. Nor were the elephants tricked by the
man's altered voice; when they heard it, they left at once.

"The elephants' decision-making is very precise," McComb says, "and it
illustrates how they've adapted where they can to coexist with us.
They'd rather run away than tangle with a human predator."

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Kenya Shilling versus The Dollar Live ForexPros 86.508
Kenyan Economy

Nairobi All Share Bloomberg +3.95% 2014


Nairobi ^NSE20 Bloomberg +0.36% 2014


4,943.57 +36.85 +0.75%

Every Listed Share can be interrogated here


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by Aly Khan Satchu (www.rich.co.ke)
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March 2014

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