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Putin brings a box of ice-cream as gift for Xi Jinping
Law & Politics
HANGZHOU, September 4. /TASS/. Russia’s President Vladimir Putin has
brought a box of Russian ice-cream as a gift to his counterpart
Chinese President Xi Jinping. At the beginning of the bilateral
meeting the Russian president recalled how Chinese businessmen during
a meeting in Vladivostok told him the Chinese love Russian ice-cream.
"I have promised to you to bring some ice-cream," Putin said. "I have
brought for you a box of it as a gift."
Xi Jinping thanked Putin for the ice-cream: "Thank you very much for
the gift, for the tasty ice-cream," he said. "In my every trip to
Russia I always ask to buy for me Russian ice-cream. And then, at
home, we eat it. You have the best cream, and it makes it so tasty. I
like it very much. Thank you for this courtesy.".
As China and Japan scramble for Africa, Africa's challenge is to maximise investment Mail and Guardian
Law & Politics
Japan led the world in formalising its engagement with Africa by
launching Ticad in 1993. China (and the European Union, incidentally)
only climbed on the bandwagon in 2000 when Focac was born in Beijing.
Several other countries or regions, like India, Turkey, South Korea
and South America have followed suit.
Yet, despite its head start, Japan has fallen behind China in the new
scramble for Africa. As Elizabeth Sidiropoulos and Neuma Grobbelaar of
the SA Institute of International Affairs pointed out in an article
last week, Japan from the start had a similar approach as China had,
focusing on infrastructure development and putting little, if any,
emphasis on political conditionality – the Western preoccupation which
alienated many African recipients of its aid.
“Yet, [Japan] has not benefited among African countries from this fact
at the political level. It has been seen as part of the West, and
China’s strong diplomatic outreach to Africa with its emphasis on
South-South has made a greater impact since 2000,” write Sidiropoulos
Abe brought about 75 business leaders with him to Nairobi where he
said ‘the partnership connecting Japan and Africa has entered, really,
a mutually beneficial stage.’ He launched the Japan-Africa Public and
Private Economic Forum as a permanent forum in which Japanese and
Chinese business leaders would also meet every three years to advance
Sidiropoulos and Neuma see Ticad 6 as evidence of Abe’s more assertive
foreign policy generally, in part as a response to Xi flexing his
muscles by demanding exclusive rights to several islands and sea
lanes, also claimed by Japan and several other countries, in the South
and East China Seas.
Abe did make an oblique pitch for Africa’s support in this dispute
when he said that Japan wanted to work with Africa to ensure the sea
lanes connecting them were kept free, open and peaceful, and governed
by the rule of law. This seemed to be a reference to China’s rejection
of international arbitration of these disputes.
Law & Politics
TICADVI the sixth iteration of the Tokyo International Conference on
African Development (TICAD-VI) Summit was held at the Kenyatta
International Convention Centre in Nairobi, Kenya on 27-28 August
2016. This was the first time ever a TICAD Summit was held in Africa
since its inception in 1993 and that of itself made it a Big Deal.
Prime Minister @AbeShinzo said "At long last and exactly as promised
#TICAD has come to Africa"
The Japanese Prime Minister pledged $30b over the next 3 Years and said
"Throughout the Continent I cannot but think we are witnessing a
"This is an investment that has faith in Africa's future," he said.
"Let us advance together, Africa and Japan...The Future abounds with
blazes of bright colours"
Japan, of course, trails China which recorded total trade with Africa
of about $179 billion in 2015 versus Japan's approximately $24 billion
and given the level of geopolitical contestation between the two, a
lot of commentary tends to be seen through that prism of geopolitical
competition. Japan does not need to compete in every country in Africa
because for China the votes at the UN are critical whereas for Japan
UN votes does not carry the same import. So I expect Japan to pick its
African Spots. And if you think about it The Indian Ocean is an
appendage of the South China Sea.
"Japan bears the responsibility of fostering the confluence of the
Pacific and Indian Oceans" said the Prime Minister.
So I do foresee Japan [alongside the US and India] seeking to contain
and triangulate China in the Indian Ocean.
Another issue post Fukushima is Japan's Energy Security. Here too I
expect Japan to seek a serious Foothold in the nascent East African
Energy supplies which run from Mozambique through Tanzania up to Kenya
and inland. Japan's Energy Security is a key Issue. Interestingly if
you look at the Japanese Investments, there are concentrated in
Energy, Ports, logistics, and what I would call choke-points.
What I have found is that once Japan Inc makes the decision [and it
can be frustrating getting to that Decision Point] then They are all
The President of the World Bank Jim Yong Kim said that his message to
investors at #TICAD6 is ''get in on the deal now invest in Africa''
The Japanese have in my opinion made the decision to get in the deal
now. That can only be a good thing for Africa.
'Foreign firms attacked' as Ethiopia protests continue
Protesters in Ethiopia have attacked foreign businesses, according to
the owners of a flower firm, as demonstrations in which rights groups
say hundreds of people have been killed continued.
The Dutch company said crowds of people in the Oromia and Amhara
regions torched flower farms as they targeted businesses with
perceived links to the government. Flowers are one of the country's
Esmeralda Farms said its 10 million euro ($11.1m) investment went up
in smoke this week in Bahir Dar city and that several other
horticulture companies were also affected.
Remco Bergkamp, assistant manager at Esmeralda Farms in the
Netherlands, told Al Jazeera that the company would probably leave
Ethiopia, rather than rebuild the farm.
"The situation is not stable enough to run a business. You just don’t
know where the country is headed," Bergkamp told Al Jazeera.
05-SEP-2016 :: Policy Making Errors Getting Creamed by the Markets @TheStarKenya
The news that Nigeria’s economy shrank by 2.1 per cent during the
second quarter versus a corresponding period last year following on a
0.4 per cent decline in the first quarter confirmed that the country
is now in a recession. President Buhari maintained an artificial
exchange rate from May 2015 through June this year of around 197 to
199 nairas versus the dollar. Since June, the official rate has been
allowed to float and was last at 315. The markets evidently still
feel this is not the right level and this is confirmed by the fact
that the black market rate is 423. Inward investments into Nigeria
have crashed and one certain thing is that the West African state
slows down further. Nigeria which only recently was being feted as the
biggest economy in sub-Saharan Africa (no longer) and the number one
destination for foreign investors is currently no longer a destination
except for those who are trapped and cannot fashion an exit. is is a
debacle plain and simple.
The president failed to seize the moment in May last year when his
political capital was so elevated it was off the charts and he could
have devalued the naira on time. This policy making failure has
imperilled his entire presidency. I agree Buhari has been very bold in
his anti-corruption efforts but the truth of the matter is that he is
playing golf with just one club. Its like watching someone trying to
drive with a putter and yet seemingly no-one except the previous
central bank governor Lamido Sanusi is prepared to tell him. I thought
of introducing myself to him at TICADV1 but then I too found him
austere (and no more than 140 pounds). It is clear that we will look
back and see the forex failure as defining his presidency.
South Africa which has so far skirted a recession but is skating on
thin ice, has seen a renewed catfight break out over the National
Treasury. If Pravin Gordhan is removed from the Treasury (and
President Jacob Zuma’s allies are doing their level best), the rand
will crash and burn, reverses suffered at the local elections has not
led to a moment of political introspection in the once revered ANC but
led to a renewed effort by Team Zuma to own the Treasury. Last week we
learnt a number of fund managers had pulled the plug on Eskom,
“We pulled the plug on Eskom too yesterday,” Rune Hejrskov, senior
money manager at Jyske Bank AS a Denmark-based company said ursday in
e-mailed comments to Bloomberg.
“I could easily see more lenders follow suit. We see issues on lending
going forward and more governance issues.”
The negative spillover effects of this Catfight are there for all to
see. The South African rand is back on the down move and you can
imagine what the departure of Gordhan will do to it. South Africa has
regained its top dog position in SSA (the rand has fallen less than
the naira) but the economy is now in dangerous territory. I sometimes
wonder whether President Zuma is actually trading forex [and the rand
from the short side] and laughing all the way to the bank
The commodity tailwind that filled Africa’s sails is nowhere to be
felt. In fact, it is clear that the commodity markets have permanently
re-priced lower. is is a reality that not all of our policy makers
Two closely run and now contested elections in Zambia (result
President Edgar Lungu, leader of PF, won 50.35 per cent of the vote,
against 47.67 per cent for Hakainde Hichilema of the UPND and now
being contested in the court) and Gabon where results released by
election officials showed Ali Bongo won by just 1.57 per cent. Bongo
won 95.5 per cent of the vote in one of the country’s nine provinces -
the Haut-Ogooue - results from the province showed a turnout of more
than 99 per cent, compared with a nationwide turnout of 59.46 per
cent. Closely contested results always represent a clear and present
danger in Africa.
Closely contested elections combined with economic policy making
errors represents the most potent of toxic mixes.
Investors in Africa need to tread very carefully and gingerly just
like investors in bank stocks at the Nairobi Securities Exchange have
How Nigerian govt caused economic recession - Emir Sanusi
He gave the warning while delivering a paper entitled, “Nigeria In
Search Of New Growth model” at the 15th meeting of the Joint Planning
Board and National Council on Development Planning.
The Emir also spoke extensively on the nation’s economic recession.
Here is his full speech at the event:
I will start by going back to the past, not just Nigeria, but Africa.
Let’s ask ourselves what were the key drivers of growth in Africa, and
what has changed since this golden decade Africa had.
Africa Golden Decade was basically the decade of the 2000s. Africa
moved from the previous decade, where it was a hopeless continent, to
a new decade that we have one type lifting all story of Africa rising.
This rise in Africa across the world was one of stories of sadness,
poverty, famine and hunger to a continent that was full of potentials;
where there were opportunities for investments; where capital markets
All of a sudden people heard countries like Nigeria, Kenya, Ethiopia,
Ghana, etc. when previously these were supposed to be a basket case in
The first pillar of this growth was clearly shifting terms of trade,
which as we all know in developing economics, can be a mirage.
By 2008, one barrel of oil would buy you one Sanyo flip telephone as
against 19 barrels of oil to buy the same phone earlier. That gives an
idea how well the terms of trade have shifted.
Let’s go to the second pillar of growth in Africa in that decade,
which was debt.
Between 2002 and 2008, the levels of debt to GDP (gross domestic
product) in African countries and what they became after the Paris
Club, HIPC debt reliefs and so on. Nigeria was at 50 per cent debt to
GDP and came down to literally 5 per cent or so.
This happened across all Africa in the form of debt forgiveness, debt
relief, debt restructuring and so on. What this did was that it freed
up government balance sheets and in that decade of Africa rising, the
countries went back on a borrowing binge.
So, we have these two pillars – rising commodities prices, and we
monetise oil revenue, we will be able spend money. We were able to
borrow because the balance sheets could accommodate more debts.
Where did all these debts go? Did it go to roads, power, refineries,
or infrastructure? No. The new borrowings were simply recycled into
much higher recurrent expenditures. What that did was that it helped
sustain a consumption boom. And GDP was growing, largely driven by
In Nigeria, for example, our public sector wage bill went up from N443
billion in 2005 to N1.7 trillion in 2012.
Economics is a science. It is not a perfect science. But, over decades
and decades and centuries, people have seen that there are certain
things that, when you do, will lead to certain consequences.
If you take a brand new car and give a driver who doesn’t have a
license to drive it and you have an accident, you really can’t say you
were surprised, unless you are some kind of idiot.
And the funny thing is, you did not have to stop borrowing. All you
had to do was borrow the right amount and apply them to the right
purposes. It doesn’t matter whether they were consumption spending or
investment demand, GDP will grow. So, make a choice.
As a country, we made a choice. We wanted votes, popularity or
palliatives, so long as people are getting high minimum wage, we keep
quiet about all other things that were happening in the economy that
we should be talking about.
Today, we are in a new reality. This is what they call the new normal
in Africa. And we have a two speed Africa. If we look at the new IMF
World outlook, you will see something interesting. Non-commodity
Africa will be the fastest growing part of the world, even higher than
emerging Asia, whereas commodities Africa (countries like Nigeria and
Angola) are among the lowest growing parts of the world, at the rate
of Europe and Latin America. And we can’t explain why.
But, think of a country like Ethiopia and then Meles Zenawi, the late
Prime Minister. Ethiopia keeps growing year after year at 11-12 per
cent. And what did Meles do? The simple things we have been saying for
decades and decades and decades. This is a country that came out of a
What is it that works?
What is it that these non-commodities African countries have done that
we have not done?
First, take a model that is investment-driven, rather than consumer or
At the very top, you have Ethiopia, Uganda, Rwanda, Ghana, Kenya and
Egypt. Those at the bottom are Angola and Nigeria.
And if you talk today in Africa, they will think Nigeria and Angola
are the richest countries, because they are oil producing. But, the
truth is that we are the worst performers, in terms of investments to
If you look at the other countries that do not have oil, look at what
they have done.
If you have a high investment to GDP, you will deliver high growth
that is also inclusive. If you continue working on consumption and
rent-seeking model, your growth is not inclusive, which is why in
Nigeria, you have, over the past two decades, increasing income
It is very easy to be very rich based on rent.
So, the first thing I will like to say is that there are many voodoo
economists parading around. And many of them are not economists. They
are demagogues. They tell poor people, anyone that says devalue the
Naira wants you to pay a high price. It is arithmetics. It is not
economics. Many of the arguments I see in newspapers, sometimes I feel
like writing back, and I will remember I am an Emir and I am not
Even this one I am giving this lecture, maybe someone would say:
“Emir, stop giving these kinds of lectures.”
That you have someone who writes what you call a brilliant economic
paper, and he is telling you that if you devalue the currency prices
would go up. Is that economics or arithmetics? It is arithmetics!
If you ask your boy in Primary 3, if the dollar costs N150 today, and
tomorrow it costs N300, what would happen to prices? He will tell you
prices will double. He can calculate. One times 300 is two times one
times 150. That is not economics. That is arithmetics.
Who is advising the government? I have asked that question before. I
want to know so I can talk to the adviser.
We did not have money. Oil prices had collapsed. Niger Delta Avengers
were blowing up oil wells. The scarce dollars we had, we were selling
cheaply, subsidizing people.
The economy has quadrupled in nominal terms since 2005. Our population
has grown by 40 million since 2005, but capital expenditure has not
changed. $0 million more people, but we don’t have more power, roads,
schools, hospitals houses, etc. Where are these 40 million people
going to be? The Niger Delta creeks and Sambisa Forests?
Our economy, at least in part, created terrorism by simply not
creating the opportunities for these young people. If you think the
Niger Delta or Boko Haram or other insurgents or something are the
issue, let me give you another number.
We have over 160 million Nigerians today. The median age is 19. In the
next 20 years, we are going to have at least 80 million Nigerian men
and women between the ages of 20 and 40. Maybe in the next generation
you can start doing something about it. You can start family planning
or something. But, these ones have been born, and we have to prepare
for them. Those of us who are alive now, we have to prepare for what
we are going to do with these 80 million young people. We can’t kill
them. And if we do not expand the earnings and production base of the
economy through wise investment and very difficult, but appropriate
decisions, we will end up in a classical Malthusian situation, where
the resources cannot support the population and we start having wars
Per capita income in Kenya is $1,388. In Nigeria, it is $2,943. So, on
paper, Kenya is half as rich as Nigeria. So, how much is Kenya able to
raise as tax revenue per capita? $232. How much was Nigeria raising in
2014-2015? $117. Now, how much was Kenya spending as development spend
per citizen? $129. How much was Nigeria spending? $17.
Kenya Reintroduces Interest Rate Caps Abandoned in 1991 @Business
Kenya’s government published an amendment to its banking law
regulating how much lenders can charge for loans, yet failed to give
more details on how the legislation that comes into effect on Sept. 14
will be implemented.
President Uhuru Kenyatta approved the law last month, reintroducing
interest-rate limits that were done away with in July 1991. The
amended Banking Act requires lenders to peg credit costs at 400 basis
points above a benchmark central bank rate and also compels financial
institutions to pay interest of a minimum of 70 percent of the same
rate on deposits.
“We are still in this period of ambiguity and a lack of clarity,” said
Aly-Khan Satchu, chief executive officer of Rich Management, a
Nairobi-based adviser to companies and wealthy individuals.
“It’s not a positive situation really. There are a number of key
issues that are outstanding: the base rate, who’ll set it, what it is,
among a number of other issues.”
Barclays Bank of Kenya, Co-Operative Bank of Kenya, CFC Stanbic Ltd.
and KCB Group Ltd. are among lenders that have said they’ll reduce
borrowing costs to 14.5 percent, pegging their rate on the Central
Bank Rate that was maintained at 10.5 percent at the last monetary
policy meeting in July. They extended loans at a weighted average rate
of 18 percent in June, according to the most recent statistics from
the central bank, compared with 15.7 percent a year earlier.
The new law says the base rate will be “set and published” by the
central bank, without elaborating. Lenders must also disclose all
charges and terms related to loans before granting credit.
Non-compliant financial institutions could be fined at least 1 million
shillings ($9,878) and chief executive officers could be liable to
prison terms of no less than one year if found guilty of contravening
Six of 11 listed banks closed lower on Friday, with I&M Holdings Ltd.
down 8.9 percent to 82 shillings while the nation’s biggest lender by
market value, Equity Group Holdings Ltd., dropped 3.7 percent to 26.50
Telecommunications provider Safaricom Ltd. is in talks with partner
banks and the regulator on lowering interest paid on micro-loans
disbursed through mobile phones, CEO Bob Collymore said in an
“We are not sure the degree to which those limits apply to the two
products,” he said, referring to credit extended by KCB and Commercial
Bank of Africa or CBA, through its platform. “Having said that,
there’s always a desire to reduce interest rates.”
CBA’s mobile-phone loan product, known as Mshwari, disbursed 40
billion shillings in credit by end-2015 while KCB, Kenya’s biggest
lender by assets, extended 7 billion shillings through phones,
according to Safaricom.
Kenyatta may be taking a risk a year before he seeks a second term in
presidential elections, especially if the law stalls the $61 billion
economy, which until now has been expanding at a faster pace than the
sub-Saharan African average.
“My impression remains that this was a very populist decision,” Satchu
said. “I suspect the government wants to send a very strong message
and there is still more negotiation to come around how to implement
A Picture of Vladimir Putin meeting with Prince Mohammed Bin Salman Al
Saud as part of the G-20 Summit in Hangzhou and then Chatter that
Saudi Arabia and Russia had agreed to work together to stabilise Crude
Oil prices were a trigger for a more than 5% rally in the Price of
crude Oil. Gains were being pared as i file this with Crude Oil last
trading at just over +1.00%
Putin said he’d like OPEC and Russia to agree to an output freeze.
The Nairobi All Share retreated -3.28% to close at 129.65 a 35 month
low. A great deal of the downdraft in the All Share today was because
Safaricom turned ex-dividend and the price retraced -7.79%
The Nairobi NSE20 eased 16.59 points to close at 3171.28 and remain
above its 2016 low of 3,116.82 reached on August 30th.
Equity Turnover clocked 607.600m.
N.S.E Equities - Commercial & Services
Safaricom's Books closed Friday for 2 dividends [the special dividend
of 68 cents and the annual dividend of 76 cents = 1.44]. Safaricom
marginally overshot the 1.44 to close -7.79% easier at 18.40 and
traded 5.363m shares worth 98.757m. Heavy International Buying in the
month of August lifted Safaricom to a record closing High of 21.25 on
seven occasions in August. After this technical retracement, I fully
expect the share price to target 22.50 before year End. Revenues from
M-Shwari and KCB M-Pesa are less than 1% of total revenues and not
TPS Serena Hotels traded 895,000 shares [0.49% of its shares] worth
15.215m and closed unchanged at 17.00. TPS Serena has slumped -32% in
2016 but its egregiously oversold and H1 16 Earnings provided a
glimmer of a Turn-Around [gentle, admittedly].
N.S.E Equities - Finance & Investment
Standard Chartered rallied +4.188% to close at 199.00 and traded 3,200
shares. The Markets have been quite efficient in repricing the Bank
shares with StanChart being impacted the least and essentially because
its existing business is largely inside the Interest rate corridor.
Equity Group was the most actively traded share at the Exchange today
and closed unchanged at 26.50 and traded 15.047m shares worth
398.748m. Equity is -33.75% through 2016 on a price basis and given
the nature of its Loan Book, quite heavily impacted by the Interest
Centum rallied +3.45% to close at 37.50 and traded shares as high as
39.75 +9.66% and limit up during the Session. Centrum traded 459,100
shares. Centum is -19.35% in 2016.
The Business Daily Newspaper reported that ''A National Bank customer
has asked the High Court to shut down the lender’s Islamic banking
wing while demanding Sh3.7 billion compensation over a loan repayment
dispute. Tulla Reserve Supplies Limited has sued the lender for
allegedly changing the terms of a Sh145 million loan it took under the
lender’s National Amanah, a move the grains supplier says has led to a
loss of business worth Sh3.7 billion''
National Bank slumped -6.42% to close at a fresh multi-year low of
6.55 and was trading at limit down 6.30 -10.00% during the session.
National Bank has slumped -58.41% Year To Date.
Sanlam previously called Pan Africa Insurance Co slumped limit down
-9.52% to close at 28.50. Sanlam is -50.833% in 2016
N.S.E Equities - Industrial & Allied
KenGen rebounded +5% to close at 6.30 and traded 65,900 shares. Buyers
exceeded Sellers by 1,910% signalling this rebound will gain more
traction. KenGen has been egregiously oversold and has room to rebound
Trans-Century rallied a further +5.34% to close at 6.90 marking a
+53.33% rally since 26th August. The Positive Catalysts for this sharp
rally were firstly the news that Kuramo has agreed to acquire
TransCentury’s shares at a 538 per cent premium to the then market
price of 4.50 and secondly the better than expected H1 16 Earnings.