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Friday 07th of October 2016 |
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The Falcon cannot hear the Falconer The Second Coming BY WILLIAM BUTLER YEATS Africa |
Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity.
Surely some revelation is at hand; Surely the Second Coming is at hand. The Second Coming! Hardly are those words out When a vast image out of Spiritus Mundi Troubles my sight: somewhere in sands of the desert A shape with lion body and the head of a man, A gaze blank and pitiless as the sun, Is moving its slow thighs, while all about it Reel shadows of the indignant desert birds. The darkness drops again; but now I know That twenty centuries of stony sleep Were vexed to nightmare by a rocking cradle, And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born?
Home Thoughts
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Foreigners in London 'Horrified' by May's Immigration Vision Law & Politics |
Nevertheless, it’s clear that the premier has interpreted the U.K.’s 52 percent to 48 percent referendum outcome as an anti-immigration message that gives her a mandate to bring in stringent measures to cut down on the numbers coming into the country. She aims to cut net annual immigration to below 100,000 from more than 300,000 currently.
Conclusions
Inward Immigration has crossed the Threshold in many developed Countries. That is clear.
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Saudi Arabia's Post-Oil Plan Off to a Rough Start in Year One @Business Emerging Markets |
The first year of Saudi Arabia’s drive to reduce its oil dependence may end with the opposite result.
A flurry of cost-cutting measures will likely push the non-oil economy into recession, analysts say. That means that any overall growth in 2016 will be largely due to record crude output.
Efforts to manage the fallout from cheap oil gathered steam over the past two weeks. Policy makers have suspended bonuses and trimmed allowances for government employees. Ministers’ salaries were cut by 20 percent. The central bank also said it’s injecting about 20 billion riyals ($5.3 billion) into the banking system to ease a cash crunch.
Austerity will help Saudis reduce a budget deficit that reached 16 percent of gross domestic product last year. But it will also likely exacerbate the economic slowdown as consumption falls. A Bloomberg survey shows overall growth at 1.1 percent this year, with Capital Economics and BNP Paribas both predicting the first contraction since 2009.
“The hits to households are getting bigger and bigger,” said Jason Tuvey, Middle East economist at Capital Economics in London.
The growing pessimism about Saudi Arabia’s short-term outlook highlights the challenge facing Deputy Crown Prince Mohammed bin Salman, the architect of economic policy, as he seeks to prepare the kingdom for the post-oil era without provoking a backlash from a population accustomed to state largesse.
Even before announcing his so-called Vision 2030 in April, the government had raised the prices of fuel and utilities. It’s also weighing plans to cancel more than $20 billion of projects, people familiar with the matter have said. The International Monetary Fund expects the budget shortfall to drop below 10 percent of GDP in 2017.
National Commercial Bank, the kingdom’s biggest lender by assets, said in a report on Wednesday that third-quarter corporate earnings “are expected to be on the negative side.” “The weak outlook” has also deterred companies from going public.
Policy makers are trying to soften the blow of austerity. The central bank ordered lenders to restructure loans that Saudis can no longer afford. In an interview with Bloomberg News in April, Prince Mohammed said the government is developing a mechanism to provide cash to low- and middle-income Saudis who rely on subsidies.
The likely contraction in the non-oil GDP this year breaks a long streak during which its share of the overall economy increased steadily to more than 55 percent in 2015, according to official data. Growth, however, was fueled by public spending that relied on revenue from hydrocarbon exports to invest in infrastructure projects and create government jobs for Saudi nationals.
That made the spending cuts all the more painful. While the non-oil GDP grew 0.4 percent in the second quarter this year after contracting in the previous three months, private-sector activity was flat.
“With cuts to government spending and fiscal reforms, we don’t see growth coming from anywhere in the non-oil sector this year,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Prince Mohammed in April acknowledged the short-term challenges to growth. “We don’t expect it in the early years because they are years of reform, but after the years of reform we will expect very high growth,” he said.
His plan targets increasing the number of nationals seeking private-sector jobs to 50 percent by 2020, compared with a “regional benchmark” of 40 percent. The kingdom also aims to sell stakes in several state-run entities.
While structural reforms will have long-term benefits, their impact in the near term will be “tough,” said Simon Williams, HSBC Holding Plc’s chief economist for central and eastern Europe, the Middle East and North Africa.
The benchmark Tadawul All Share Index is down 20 percent this year, the third-worst performer among more than 90 global indexes tracked by Bloomberg. The MSCI Emerging Markets Index has climbed 14.8 percent.
Mohamed Abu Basha, Cairo-based vice president of research at investment bank EFG Hermes, said he expects non-oil GDP to contract in the third quarter and “probably” in the last three months of the year. “The recent decision to freeze wage raise next year will obviously impact more 2017 growth –- sentiment wasn’t already that great,” he said by e-mail.
Higher oil prices would help, but “$50 per barrel still isn’t enough,” said Williams of HSBC. “Earnings at that level don’t bring the economy back to life, they only slow the pace of deterioration."
Frontier Markets
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Schaeuble Says G-20 to Focus on Africa as Political Risks Grow Africa |
German Finance Minister Wolfgang Schaeuble said his country will lead a push among the world’s biggest economies to improve living conditions in Africa, as concerns about migration increase political tensions in Europe.
Speaking at a panel discussion in Washington before meetings of international finance chiefs, Schaeuble said Germany will promote investments in Africa when it takes the helm of the Group of 20 nations at the end of this year.
“The continent of major concern, for political reasons and for economic reasons and instability as well, is by far Africa,” he said.
His remarks follow Chancellor Angela Merkel’s comments this month to German newspaper Die Zeit, where she said that a stable Africa is “strategically” important for Europe.
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+ 15. African borrowing levels surge anew - FT.com Africa |
Between 2000 and 2011, the median ratio of general government debt to gross domestic product of 18 major sub-Saharan countries fell from 80 per cent to 30 per cent, according to data from Fitch Ratings, thanks to a wave of debt forgiveness and restructuring under the “heavily indebted poor countries” initiative of the IMF and the World Bank.
Ethiopia, Cameroon, Angola and Ivory Coast alone were excused $20bn of debt principal between them, according to data collated by Fitch.
As a result, the median debt servicing cost of the 18 countries tumbled from 14.4 per cent of government revenues in 2001 to a low of 4.8 per cent in 2011.
However, a fresh wave of borrowing by sub-Saharan nations has this year pushed average debt to GDP ratios back above 50 per cent for the first time since 2005. This figure is likely to hit 51.4 per cent this year and 53.3 per cent in 2017 in the 18 countries rated by Fitch, the agency says, as shown in the first chart.
Debt servicing costs have also risen sharply, despite the concessional nature of almost two-thirds of the fresh lending (stripping out loans to South Africa) and an era of low global interest rates. They are likely to reach 9.1 per cent of government revenues this year, the highest level since 2004, and 9.9 per cent in 2017, Fitch says.
“Caution is really needed now [in terms of debt ratios]. There is no clear trend of stabilisation,” said Jan Friederich, a senior director in the sovereigns and supranationals group at Fitch.
“It is a concern,” said Yvonne Mhango, sub-Saharan economist at Renaissance Capital, an emerging markets focused invested bank, who argues that part of the reason sub-Saharan Africa sailed through the global financial crisis of 2008-09 largely unscathed was its low debt levels.
However, Ms Mhango said many African countries were now having to battle a separate crisis caused by low commodity prices while also coping with an increased stock of debt.
“We have seen countries delay fiscal consolidation at a time when it should be a priority,” she added.
Mr Friederich said there were two drivers behind the rise in African debt levels: the commodity slump, which had led to a “sharp decline in fiscal revenues among exporters”, and a reliance by some countries on infrastructure investment to fuel economic growth.
In September, Ghana sold a $750m Eurobond that will be partly used to fund capital projects, even though the government’s debt servicing cost-to-revenue ratio, at 27.7 per cent, is already the highest among the 18 sub-Saharan countries rated by Fitch, as the second chart shows.
Central government capex will exceed 10 per cent of GDP this year in Rwanda, Uganda, Lesotho, Mozambique and Ethiopia, according to Fitch.
But although debt-funded infrastructure investment “will help remove constraints on long-term growth,” Mr Friederich said, “its benefits may not fully materialise until governance and business environments improve”. As a result, the “near-term impact on sovereign debt ratios will be negative”.
“These countries really should have better roads, bridges, schools, all kinds of infrastructure. But the problem is that the return on these investments in terms of GDP growth isn’t strong enough to stabilise the debt ratio,” he added.
In reality, overall public spending on infrastructure is likely to be higher still than the official data suggest, given that some of it will be channelled through state-owned enterprises.
In other countries, like Ghana, the problem is excessive use of debt to fund government payrolls.
Elevated debt servicing costs, which already account for more than 10 per cent of central government revenues in Nigeria, Zambia, Kenya, Uganda, South Africa and Gabon, as well as Ghana, are likely to be storing up further problems.
“Rising debt servicing costs are an obstacle to fiscal consolidation among sub-Saharan African sovereigns, and larger or unchanged deficits will lead to further increases in public debt, pushing debt ratios higher,” Mr Friederich said.
Fitch forecasts that the debt/GDP ratio will increase in each of the 18 countries covered by Fitch, bar the Seychelles, between 2012 and 2017. The largest increases are expected to be in Mozambique (60 percentage points), Zambia (37pp) and Cape Verde (36pp), as the last chart shows.
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Exxon Is Hit With Fine From Chad Five Times Country's GDP @Business Africa |
Exxon Mobil Corp. was ordered to pay a record $74 billion fine in Chad for underpaying royalties in the central African nation where the company has been drilling for 15 years, according to a court document.
The fine is about five times more than Chad’s gross domestic product, which the World Bank estimates at $13 billion. The High Court in the capital, N’Djamena, announced its ruling Oct. 5 in response to a complaint from the Finance Ministry that a consortium led by Exxon hadn’t met its tax obligations. The court also demanded the Texas-based oil explorer pay $819 million in overdue royalties, according to the document.
The penalty exceeds the $61.6 billion financial blow BP Plc incurred after the Deepwater Horizon disaster in 2010 killed 11 rig workers and fouled the Gulf of Mexico with crude for months, and is more than 70 times larger than the $977.5 million Exxon was ordered to pay fishermen and other victims of the 1989 Valdez oil spill in Alaska. Chad is unlikely to collect most of the fine, said Jeffery Atik, who teaches international law at Loyola Law School in Los Angeles.
“Nobody is going to cooperate outside of Chad in enforcing this judgment,” Atik said in a telephone interview. “This leaves Exxon exposed to possibly losing everything it has inside Chad but that’s such an extraordinary number, I can’t imagine the assets they have there are worth that much.”
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Ethiopian protesters ramp up attacks on foreign firms @FT Africa |
Ethiopian anti-government protesters are escalating attacks on foreign investors as anger grows over the regime’s crackdown on demonstrations, in which hundreds of people have been killed.
Activists torched a Turkish textile factory and attacked a mine owned by Aliko Dangote, Africa’s richest man, damaging trucks and machinery on Tuesday, days after more than 50 people were killed when police fired tear gas and rubber bullets to disperse protests at a religious festival. The US embassy in Addis Ababa said an American woman died on Tuesday when her vehicle was struck by rocks thrown by Ethiopians on the outskirts of the capital.
The violence comes after a wave of protests this year that were originally triggered over a land dispute in the Oromia region of central and southern Ethiopia. They have since escalated into broader demonstrations against the autocratic government and spread to other regions, threatening the stability of one of Africa’s best-performing economies.
Addis Ababa has responded with force — activists accuse security forces of firing live ammunition on unarmed demonstrators and say hundreds have been killed in the protests.
Washington has called the government’s approach to the unrest “self-defeating,” while the EU on Wednesday called for the authorities to address the “wider aspects of the grievances”.
Activists and analysts say the attacks on foreign firms are becoming increasingly co-ordinated.
More than two dozen foreign companies, including flower farms and other agribusinesses have suffered millions of dollars in damage in recent weeks, according to Verisk Maplecroft, a UK-based consultancy.
Juan Carlos Vallejo, co-owner of Esmeralda Farms, pulled out of the country after his business was attacked several weeks ago.
“Right now, everyone is really scared,” he said. “We never expected something like this to happen. I don't think anyone is going to want to invest here any more.”
Ethiopia has been one of Africa’s star performers, recording 10 per cent annual growth and attracting tens of billions of dollars in foreign investment over the past decade thanks to a carefully planned, state-led development and industrialisation policies.
But it is also a tightly controlled society, with the Ethiopian People’s Revolutionary Democratic Front — which has governed with an iron grip since 1991 — and its allies controlling all the seats in parliament.
Dissent is swiftly repressed and the political opposition was severely weakened by a government crackdown — during which scores of people were also killed — after disputed 2005 elections.
“We have made clear that Ethiopia’s prosperity depends on the ability of its government to maintain a stable and predictable investment climate and to expand political space,” a western diplomat said.
The current protests began in Oromia region last November over plans to expand Addis Ababa into Oromo lands. The initiative was shelved but the government’s aggressive response to the protests saw them spread to northern areas, which are dominated by the Amhara ethnic group.
Both the Amhara and Oromo are frustrated by the political dominance of the Tigray minority, which makes up 6 per cent of the 100m population, analysts say. The Oromo and Amhara comprise some two-thirds of Ethiopians.
Awol Allo, an Ethiopian law lecturer at Keele University, said foreign investors were being targeted because “they are seen as the source of legitimacy for the government.”
“The government has to attract foreign investment to keep the economy growing and has to provide land and services cheaply,” he said. “People are taking out their anger on investments by foreigners to undermine the government.”
The government has sought to play down the protests, blaming overseas agitators and criminal elements.
Analysts say the Tigray-dominated regime has maintained its grip in part by keeping the larger ethnic groups divided. But they add that now the Oromo and Amhara have united in their opposition to the government, it will be hard for the authorities to appease them without making significant concessions.
However, Rashid Abdi, an analyst at the International Crisis Group, said some ministers, and the Tigray-controlled military, are loath to do this.
“The protests have now reached a serious level, a different scale,” he said. “We should not exaggerate and say the government is going to keel over tomorrow, but it portends future trouble unless they get a grip. What’s worrying is that so far they haven’t.”
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May 2015 ''The revolutionary contingent attains its ideal form not in the place of production, but in the street'' Africa |
PAUL Virilio (born 1932) is a French cultural theorist and urbanist.
In his book ‘Speed and Politics’ he says: “The revolutionary contingent attains its ideal form not in the place of production, but in the street, where for a moment it stops being a cog in the technical machine and itself becomes a motor (machine of attack), becomes in other words a producer of speed.’’
As we look around the world today, we can see a battle for the ‘street’ from the streets of Bujumbura to the streets of Baltimore. In November last year, I wrote about Ouagadougou’s signal to sub-Saharan Africa and concluded that: We need to ask ourselves how many people can incumbent shoot stone cold dead in such a situation – 100, 1000, 10000?
This is another point: there is a threshold beyond which the incumbent cannot go. Where that threshold lies will be discov- ered in the throes of the event.
Therefore, the preeminent point to note is that protests in Burkina Faso achieved escape velocity.
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The official death toll from the Bishoftu disaster stands at 52. This is an extraordinary number. Africa |
Even taken at face value, this makes the deadly stampede one of modern Ethiopia’s bloodiest episodes. But we can’t take anything at face value. This is a country where information is tightly controlled, and where casualty counts are routinely underplayed by government spin doctors.
Other reports, from rights groups, suggest we should take that official death toll and double it. Still others, from activist organisations, say we should multiply it by 10. Whatever the truth – and we may never have an exact reckoning – far too many people died in Bishoftu on Sunday when an ordinary religious festival turned into a bloodbath.
One suspects, however, that the fate of the dead protesters is not the Ethiopian government’s primary source of grief. The lives of perceived political opponents are cheap, after all: the death toll from this latest round of political unrest, which began in November 2015, has so far claimed at least 500 lives, and this is a conservative estimate.
Instead, the government is mourning something altogether more precious to it: the precipitous erosion of its authority, which grows more fragile with every new round of demonstrations.
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An artist's impression of the 67-storey Hass Towers, which real estate developers Jabavu Village Ltd and White Lotus Projects are constructing in Nairobi's Upper Hill. Kenyan Economy |
It will include the 45- storey Hilton Nairobi set to be completed in 2020
The Sh11 billion twin towers building, whose construction has begun in Nairobi’s Upper Hill, is scheduled to be completed by 2020.
Developers of the property were thrown into the limelight earlier in the week when Hilton Worldwide announced that it would be setting up its third shop under a franchise agreement with its owners.
When complete, Hass Towers will be one of the largest and most modern properties in Nairobi’s Upper Hill area and will be located about 200 metres from The Montave – another upmarket mixed development.
property financed by Dubai investors. Both are expected to reaffirm Nairobi’s position as Africa’s prime real estate investment city. The 67- storey Hass Towers is set on a three-acre plot and will dwarf other buildings in Nairobi, including the 43-storey complex that Chinese firm Avic is building in Westlands and the recently completed UAP Towers.
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Chandaria Industries is set to build a Sh5 billion tissue paper manufacturing factory in Tatu Industrial Park expected to double its production capacity. Kenyan Economy |
The firm has leased 29 acres of land at Tatu City, a residential and commercial real estate development, where it will set up the factory within the next four years.
Chandaria, which already has another factory that produces a range of tissue and hygiene products, expects the new facility will entrench its market dominance. The firm currently produces 1,200 tonnes of hygiene products every month.
“It (factory) will be in addition to our existing manufacturing facility and headquarters in Ruaraka,” group chief executive Darshan Chandaria said Thursday during the signing of the lease with Tatu City.
“The new facility will be built on 29 acres and will employ at least 1,000 people. We will increase our tissue paper manufacturing capacity by at least double our existing capacity.”
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