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Is Africa getting into a 'debt trap' with China? @AJEnglish @AJInsideStory #FOCAC2018
China is Africa's largest trading partner and has already spent tens
of billions of dollars in investment and loans - with the promise of
much more to come.
From roads and railways to ports, the Chinese government is backing
large-scale projects across Africa as part of its so-called Belt and
The leaders of more than 50 African countries have been in Beijing for
a two-day summit.
China's President Xi Jinping offered $60bn in new financing deals. But
what are the long-term financial risks?
Presenter: Laura Kyle
Dan Wang - Economist Intelligence Unit analyst
Lahcen Haddad - Morocco's former tourism minister and MP
Aly-Khan Satchu - CEO of investment advisory firm Rich Management Ltd
Source: Al Jazeera News
US 'Weaponizing' Dollar And Turkey Will Not Be Last to Be Targeted - Economist: via @SputnikInt
Turkey's President Erdogan has hit back at the White House for using
the dollar against the Turkish currency and urged countries of the
world to challenge the dollar's global dominance in trade. Sputnik
spoke to political and economic analyst Aly-Khan Satchu, who says the
US has been "weaponizing" the dollar.
On Sunday, President Recep Tayyip Erdogan described the US as behaving
like "wild wolves" and said Ankara would pursue non-dollar trade
transactions with Russia and other countries in a bid to bypass the
dollar's global dominance.
The lira has plunged after the US targeted the Turkish currency as
part of a row over a US pastor, Andrew Brunson, who was arrested in
October 2016 over aiding an organization led by Islamic preacher
Fethullah Gulen, who Ankara believes was behind the attempted coup in
July that year. Gulen is living in exile in the US.
According to Nairobi-based political and economic analyst Aly-Khan
Satchu,the Trump administration is being increasingly belligerent in
its foreign policy.
"The dollar is a weapon and Trump is relishing his financial warfare
strategies," Mr. Satchu told Sputnik.
"We have exited a period 'when the living was easy' and the world was
awash with a golden flood of dollar liquidity. Many policy-makers
imbibed the 'Kool-Aid' and believed in this 'new normal'," Mr. Satchu
"Now we are reverting back to the status quo ante, the tide has now
reversed. President Erdogan's voodoo economics worked in the time of
the golden flood of liquidity but under today's less benign conditions
no-one except die-hard Erdogan-supporting Turkish nationalists is
prepared to throw good money after money gone bad on the basis of
Erdogan's hocus pocus monetary policy," Mr. Satchu told Sputnik.
"I am not sure if the weaponization was by design or by accident but
what is crystal clear is currencies like Turkish lira — which has
fallen 42.5 percent year to date are the equivalent of offering you an
opportunity to pick up pennies in front of a freight train (the
dollar)," Mr. Satchu told Sputnik.
"I have listened to so many folks rail against the dollar's hegemony
and for eternity. Gaddafi and Saddam spring to mind and both ended up
dead. It is not possible for Erdogan to bend the arc of monetary
policy making to his will and if he continues down this path, the
Turkish economy will continue to crater and we can see very clearly
where cratering economies end like Venezuela and Argentina," Mr.
Satchu told Sputnik.
"Erdogan is a mercurial politician but he reminds me of a man walking
around a tinderbox with a match in his hand. He is endangering himself
and his legacy is in peril," Mr. Satchu told Sputnik.
He said Donald Trump may be universally unpopular but his foreign
policy was a success for US interests.
'Trump's Aggressive Foreign Policy…Working A Treat'
"Trump's aggressive foreign economic policy is the signature success
of this administration. It is highly effective — look at Venezuela to
see its most extreme output. Iran is in a similar bind. China is in
retreat notwithstanding some bravura talk. Trump can keep it up. It's
working a treat," Mr. Satchu told Sputnik.
Mr. Satchu said the only politician who had managed to stave off a
currency attack from the dollar was Malaysia's Mahathir Mohammed in
The dollar has been the world's dominant currency ever since the 1944
Bretton Woods agreement, when it replaced the gold standard, and Mr.
Satchu said it would remain all-powerful for a long time.
"For the foreseeable future, I do not see gold, the (Chinese) RMB, or
crypto replacing the dollar. It's not going to happen in our
lifetimes," Mr. Satchu told Sputnik.
So who could be the next target for the US's ire?
South Africa, Beware!
Mr. Satchu said if politicians around the world are not wary of
upsetting the US now then they are "asleep at the wheel".
"South Africa strikes me as an example of a country that should be
worried, very worried," said Mr. Satchu, hinting at Trump's recent
tweets in which he has come out in support of white farmers who he
claimed have had their farms seized and been subjected to "mass
Ironically in 1986 the US Congress passed legislation proposing
economic sanctions against apartheid-era South Africa, but it was
vetoed by the Republican President Ronald Reagan. In the end
Republican senators voted to override the veto and the sanctions
helped bring the collapse of the apartheid regime.
View of Lothagam North Pillar Kenya, built by eastern Africa's earliest herders around 5000 years ago, researchers say. @CNN
Kenya's arid, gullied Lothagam Valley is a throwback to a very distant
past. Now, the region is the site of a discovery that has the
potential to change how the world views ancient societies and the way
A team of researchers from Stony Brook University and the Max Planck
Institute for the Science of Human History have discovered a massive,
elaborate cemetery in the region that is the largest and oldest in
Eastern Africa. Here, temperatures can rise to 40 degrees Celsius (104
Fahrenheit), and the vast, rocky landscape can look like a desert
planet from the "Star Trek" movies -- or Mars.
"This discovery challenges earlier ideas about monumentality," said
Elizabeth Sawchuk of the Department of Anthropology, Social &
Behavioral Sciences at Stony Brook University in New York.
[The End of] Halcyon Days @TheStarKenya
From Latin Alcyone, daughter of Aeolus and wife of Ceyx. When her
husband died in a shipwreck, Alcyone threw herself into the sea
whereupon the gods transformed them both into halcyon birds
(kingfishers). When Alcyone made her nest on the beach, waves
threatened to destroy it. Aeolus restrained his winds and kept them
calm during seven days in each year, so she could lay her eggs. These
became known as the “halcyon days,” when storms do not occur. Today,
the term is used to denote a past period that is being remembered for
being happy and/or successful.
Chinese President #XiJinping keynote speech at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation (#FOCAC) in Beijing on Monday. China News
Law & Politics
September has just set in Beijing, bringing with it refreshing breeze
and picturesque autumn scenery. And we are so delighted to have all of
you with us, friends both old and new, in this lovely season for the
reunion of the China-Africa big family at the 2018 Beijing Summit of
the Forum on China-Africa Cooperation (FOCAC).
Over a month ago, I paid my fourth visit to Africa as the Chinese
President, which was also my ninth visit to this land of great
promise. During the last visit, I once again saw an Africa that is
beautiful and richly endowed, that is full of dynamism in development,
and I learned about first-hand the African people's ardent hope for a
better future. I concluded the visit even more convinced that Africa's
development has great potential, that this great continent is full of
hope, that China-Africa friendship and cooperation have broad vistas,
and that China and Africa can forge an even stronger comprehensive
strategic and cooperative partnership!
As an ancient Chinese scholar once observed, "Only with deep roots can
a tree yield rich fruit; only filled with oil can a lamp burn
-- China values sincerity, friendship and equality in pursuing
cooperation. The over 1.3 billion Chinese people have been with the
over 1.2 billion African people in pursuing a shared future. We
respect Africa, love Africa and support Africa. We follow a "five-no"
approach in our relations with Africa: no interference in African
countries' pursuit of development paths that fit their national
conditions; no interference in African countries' internal affairs; no
imposition of our will on African countries; no attachment of
political strings to assistance to Africa; and no seeking of selfish
political gains in investment and financing cooperation with Africa.
We hope this "five-no" approach could apply to other countries as they
deal with matters regarding Africa. For China, we are always Africa's
good friend, good partner and good brother. No one could undermine the
great unity between the Chinese people and the African people.
In doing so, China follows the principle of giving more and taking
less, giving before taking and giving without asking for return. With
open arms, we welcome African countries aboard the express train of
China's development. No one could hold back the Chinese people or the
African people as we march toward rejuvenation.
To quote a Chinese saying, "The ocean is vast because it rejects no rivers."
Third, let us build a China-Africa community with a shared future that
delivers happiness for all of us. Making lives better for our people
is what we aim to achieve in growing China-Africa relations; so we
need to make sure our cooperation delivers real benefits to us both in
China and in Africa.
First, China will launch an industrial promotion initiative
Second, China will launch an infrastructure connectivity initiative.
Third, China will launch a trade facilitation initiative.
Fourth, we will launch a green development initiative.
Fifth, we will launch a capacity building initiative.
Sixth, we will launch a health care initiative.
Seventh, we will launch a people-to-people exchange initiative
Eighth, we will launch a peace and security initiative.
To make sure that these eight initiatives are implemented on the
ground, China will extend US$60 billion of financing to Africa in the
form of government assistance as well as investment and financing by
financial institutions and companies. This will include US$15 billion
of grants, interest-free loans and concessional loans, US$20 billion
of credit lines, the setting up of a US$10 billion special fund for
development financing and a US$5 billion special fund for financing
imports from Africa. We encourage Chinese companies to make at least
US$10 billion of investment in Africa in the next three years. In
addition, for those of Africa's least developed countries, heavily
indebted and poor countries, landlocked developing countries and small
island developing countries that have diplomatic relations with China,
the debt they have incurred in the form of interest-free Chinese
government loans due to mature by the end of 2018 will be exempted.
The future of China-Africa relations lies in our young people. Many of
the measures in the eight initiatives I just outlined are designed to
help young people in Africa. These measures will provide young
Africans with more training and job opportunities and open up more
space for their development. Last October, I wrote back to the
exchange students of the Institute of South-South Cooperation and
Development. Most of them were from Africa. I encouraged them to make
the best of what they have learned, aim high, and keep working hard to
promote China-Africa cooperation and South-South cooperation. I
believe they have new roles to play and new accomplishments to make in
"The red rising sun will light up the road ahead." I am confident that
the baton of China-Africa friendship will be passed from one
generation to the next and that China and Africa, working together,
will build an even more vibrant community with a shared future. The
day will surely come when the Chinese nation realizes its dream of
national renewal and Africa realizes its dream of unity and
Brent Crude via @TCommodity
Brent for November settlement dropped as much as 35 cents, or 0.5
percent, to $77.82 a barrel on the ICE Futures Europe exchange. Prices
on Tuesday edged up 2 cents to $78.17. The global benchmark crude
traded at a $8.81 premium to WTI for the same month, near the widest
since June 20.
Mirrors on the ceiling, The pink champagne on ice
If volatility spikes, positions are going to be reduced en masse. Or
to put it another way and to borrow the lyrics from the Eagles Hotel
Mirrors on the ceiling,
The pink champagne on ice
And she said “We are all just prisoners here, of our own device” Last
thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
“Relax,” said the night man,
“We are programmed to receive.
You can check-out any time you like,
But you can never leave! “
What is clear is that we are at the fag-end of this party.
"Just because beer is cheap, it doesn't mean you should drink": sage words from @edwardcropley on Africa's Chinese credit habit @Breakingviews
Just because beer is cheap, it doesn’t mean you should drink. Africa
has for years been drunk on cheap Chinese credit, a habit that has led
to waste and even sovereign default. China is now preaching sobriety,
but neither Africa’s borrowers nor their lender are showing much
appetite for restraint.
China and Africa are logical partners. Filling a gap left by Western
commercial lenders, who were too expensive, and multilateral agencies,
who were too slow, China’s government and banks have lent at least
$136 billion to the continent this century, providing Africa with
much-needed capital, and Beijing with vital natural resources.
The cash has built airports, ports and railways from Cape Town to
Cairo, creating jobs. But it has also led to expensive projects, and
ultimately bankruptcy and accusations by campaign groups such as
London-based Jubilee of “debt-trap diplomacy” by Beijing. Angola has
already restructured the $42 billion – more than a third of its GDP –
that John’s Hopkins University reckons it owes Beijing, according to
Reuters. Ethiopia and Zambia have also said they need to do the same.
President Xi Jinping seems to want change. On Monday, while pledging a
further $60 billion over the next three years, he warned countries
against “vanity projects”.
Nor are the borrowers showing much evidence of sobriety. As it paid
out the final chunk of a $918 million bailout in April, the
International Monetary Fund told Ghana, a modest cocoa, gold and oil
producer, to rein in its borrowing. In a meeting with Xi in Beijing,
President Nana Akufo-Addo announced a 100-year infrastructure bond
worth $50 billion, roughly 100 percent of its GDP. The next hangover
may be even worse.
Accra's share market is poised for a massive boost in liquidity Wednesday when shares start trading in MTN Group Ltd.'s local unit. @business
While MTN sold only about a third of the shares available in the
initial public offering, the 1.1 billion cedis ($238 million) raised
is still more than three times larger than the next biggest Ghana IPO.
The sale attracted thousands of individual investors and vastly
increases the number of shares available for buying and selling.
“It’s been exciting because investors have been crying for such
blue-chip stocks to be on the market,” Nana Kofi Agyeman Gyamfi, a
senior analyst at Accra-based Bora Capital Advisors Ltd., said by
phone. “The IPO got a lot of retail investors, some of whom sold
stakes in existing shares just to have enough money to buy MTN. It
will lift the gloom on the market because of past four years’ poor
Africa’s largest mobile-phone company sold 1.5 billion shares in its
Ghana unit at 75 pesewas each, a large addition to potential volumes
on a market where 323 million shares were traded in the whole of 2017,
according to data from the bourse. Of the 128,152 new shareholders who
bought stock in MTN Ghana, 127,653 are retail investors. The exchange
had 976,068 investors in equity and debt securities last year.
biggest news of the day broke, Chinese telling Kenyan Govt to relook at the commercial viability of SGR, media houses just gloss over it or missed it completely @kachwanya
Yesterday on #presspass, they were talking about whether media has
covered the debt issue well but today when the biggest news of the
day broke, Chinese telling Kenyan Govt to relook at the commercial
viability of SGR, media houses just gloss over it or missed it
Huh it seems Chinese did not agree to give Kenyan Govt the loan to
continue with SGR..."agreed to do feasibility study from Mombasa to
Kisumu " Transport CS ...simply put even Chinese is now telling
Kenyans to reconsider if the SGR is worth wasting another
Yeah ....Media is calling whatever Kenya got from China
..."Goodies"....Naah @KTNKenya ,it is not Goodies, they are loans,
which we have to pay back, part of the reason why Kenyans are now
forced to pay more through the VAT introduction on the petroleum
Kenya Plans to Court @Ryanair @easyJet to Boost Beach Tourism @business
“We are developing a strategy to encourage low-cost carriers from the
U.K. to fly here,” Najib Balala said in an interview in the Indian
Ocean city of Mombasa on Tuesday. “I will be looking to start
discussions with Ryanair and easyJet.”
Kenya expects visitor numbers to climb by 18 percent this year,
boosted by improved security, infrastructure such as a new railway and
global hotel brands expanding there, Balala said. In 2017, the number
of arrivals grew 10 percent to almost 1 million tourists, according to
the Kenya National Bureau of Statistics.
Kenya Airways Plc, sub-Saharan Africa’s third-biggest, will introduce
direct flights to U.S. later next month, and plans to add as many as
20 new destinations in the next five years.
The Big Set Piece Event in China otherwise known as the 2018 Beijing
Summit of the Forum on China-Africa Cooperation (#FOCAC) has come to
''Friends'' began the Chinese President ''September has just set in
Beijing, bringing with it refreshing breeze and picturesque autumn
scenery. And we are so delighted to have all of you with us, friends
both old and new, in this lovely season for the reunion of the
China-Africa big family at the 2018 Beijing Summit of the Forum on
China-Africa Cooperation (FOCAC)''
I have alway enjoyed Linguistics ever since I started reading Noam
Chomsky and what was noticeable was a linguistic inflexion in Xi
Jinping's comments. He of course replaced his Propaganda Chief and the
linguistic adjustment might be in part a result of that Personnel
''The future of China-Africa relations lies in our young people'' and
''I am confident that the baton of China-Africa friendship will be
passed from one generation to the next and that China and Africa,
working together, will build an even more vibrant community with a
President Xi Jinping seems to want change. On Monday, while pledging a
further $60 billion over the next three years, he warned countries
against “vanity projects”
Cheng Tao, a former head of the Chinese Foreign Ministry’s Africa
division and previously China’s ambassador in Mali and Morocco, said
it was unfair to blame China for supporting governments accused of
“An African friend told me, our government is extremely corrupt. How
come you’re still involved with them? Our government has asked the
Chinese government to build a bridge and a hospital, but the Chinese
government shouldn’t help them,” he said, without naming the country.
“I told him - you voted for this government. It’s the only government
we can deal with. But the bridge and the hospital are not built for
the president or officials, but are for the common people. So I think
this is another perspective that can be considered when looking at
''biggest news of the day broke, Chinese telling Kenyan Govt to relook
at the commercial viability of SGR, media houses just gloss over it or
missed it completely'' said @kachwanya
None of Leaders carried a Pen or Paper in any Photographs I saw but I
think they have been hearing something that they probably not to keen
The Markets remain on a Knife-Edge.
The Indian Rupee is at a record Low, The Indonesian Rupiah is at a 20
Year Low, The Argentine Peso and the Turkish Lira have fallen off the
South Africa reported that it slid into into a Recession as economic
activity declined by 0,7% in Q2:2018 q/q after a 2,6% decline in
The Rand about which I wrote this on August 27th
Traders might consider buying 1 Year Maturity One Touch ZAR Puts with
a 17.00 strike.
I think the Rand is at risk of a precipitous, asymmetric downside move
as far as 17.00 to the Dollar. Traders might consider buying 1 Year
Maturity One Touch ZAR Puts with a 17.00 strike.
The Rand was smashed into smithereens and was last at 15.5393.
President Nana Akufo-Addo announced a 100-year infrastructure bond
worth $50 billion, roughly 100 percent of its GDP. There is 0 chance
of such a Sale being made and that leaves wondering whether he is
ill-informed or deluded.
MTN market cap. It's plummeted from almost $14bn to less than $9bn
since #Nigeria hit it with $10bn of backdated-tax claims and
FX-transfer penalties in the past week.
The Nairobi All Share closed -1.71 points to close at 165.63
The Nairobi NSE20 fell 26.76 points to close at 3152.17
Equity Turnover clocked 498.634m.
N.S.E Equities - Agricultural
Limuru Tea bucked the downside market price action and traded 127,100
shares [5.3% of its shares] worth 69.905m all at 550.00 +10% the daily
maximum. Limuru Tea reported a FY 2017 EPS loss of [9.22] but this
share is not about Earnings but about the NAV [net Asset Value.
N.S.E Equities - Commercial & Services
Safaricom eased -1.7699% to close at 27.75 and traded 5.44m shares
worth 151.516m. Medium Term Investors should stay bright eyed and
bushy tailed if we correct any lower. Safaricom is the most widely
held Kenyan share and can import volatility when EM and Frontier
markets are skittish as they are now. 26.00 looks optimal from an
Nation Media slid -2.515% to close at 77.50 a 19 month low which is
just -5.16% away from a 15 Year Low.
N.S.E Equities - Finance & Investment
Equity Group corrected -1.64% to close at 44.75 and traded 3.275m
shares worth 146.986m. The Banks have been under sell-side Pressure
since there has been no substantive modification in the Rate Cap and
International Investors downsize in front of what they view as an
adversarial approach to the IMF at a time when an IMF safety Net is
worth its weight in Gold in perception terms.
N.S.E Equities - Industrial & Allied
KenGen closed unchanged at 6.55 and traded 1.080m shares.