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More often than not, train transport is neither the most logical nor
efficient way to move goods, and traffic remains dwarfed by maritime
volumes.
If the definition of insanity is doing the same thing and expecting a
different result, what are we to make of China’s plans to build a Silk
Road railway through the heart of Asia?
After all, those who think steel tracks are the best way to shift
goods from the Pacific to the Atlantic have been able to use the
Trans-Siberian Railway since 1916. In practice, the efficiency,
flexibility, volumes and logistical simplicity of maritime freight
have won out again, and again, and again.
That’s even been the case in the past five years, when President Xi
Jinping’s One Belt, One Road infrastructure initiative encouraged rail
operators to splurge on subsidies and incentives like free advertising
on Chinese state television to promote the overland route.
Thanks to China and Russia’s heavy endorsements, east-west container
traffic over the Trans-Siberian Railway’s three main routes has surged
to 278,000 twenty-foot-equivalent units in 2017 from 43,900 TEUs in
2014. Still, that’s less than half of the 480,000 TEU increase in
traffic that shipping lines achieved over the same period, amid a
once-in-a-generation crisis for the industry. Meanwhile, total
maritime volumes on east-west routes hit 15.9 million TEUs last year,
equivalent to almost 60 Trans-Siberian Railways.
There are fairly fundamental reasons for this. It takes about 15 grams
of diesel to move one metric ton of freight a kilometer along U.S.
railways, based on figures cited by logistics operator CSX Corp. That
sounds pretty good until you consider that a vessel capable of
carrying the same ton a kilometer by sea needs only about 8 grams, and
the fuel oil it consumes costs about a third less than rail diesel.
Combined with the almost infinite capacity of the seas compared with
easily congested rail routes, ocean freight almost always wins out.
Even in the short hop between the U.K. and France, shipping dominates,
with 2.9 million freight units going by boat compared with 1.5 million
through the Channel Tunnel in 2015. The maritime advantage only
increases as distance rises:
Still, one of the biggest factors is likely to be the opaque but
significant subsidies available to anyone prepared for a spin on the
tracks. Those available from parts of the Chinese government can range
between $1,000 and $7,000 for each 40-foot shipping container,
according to a March report by the Center for Strategic and
International Studies. That’s an exorbitant level of support when you
consider the cost of moving the same box from Shanghai to Rotterdam
hardly ever breaks north of $2,000.
It’s a tribute to the romance of rail travel that whenever a train
inaugurates a new path along the 12,000 kilometer-odd corridor between
China and Europe it’s greeted not with reflections on the route’s
obvious inadequacies but by dragon dancers, media scrums and
breathless plaudits.

Pakistani Prime Minister Imran Khan failed to secure a major public
commitment of financial support on his first state visit to China,
with leaders from both countries appearing cautious despite promising
to strengthen their “all-weather” partnership.
During his election campaign earlier this year, the
cricket-star-turned-politician Khan and his Pakistan Tehreek-e-Insaf
(PTI) party questioned the viability of the roughly $62 billion worth
of planned Chinese-backed infrastructure projects that form the
“China-Pakistan Economic Corridor” (CPEC), a stance that caused
consternation in Beijing. Last month, Pakistan cut the size of a
railway project by $2 billion amid fears of the debt burden it would
bring.
Yet there does not appear to have been any major revision to the
countries’ partnership in the wake of Khan’s visit, which was Friday
to Monday. A joint statement released on Sunday said, “Both sides
dismissed the growing negative propaganda against CPEC and expressed
determination to safeguard the CPEC projects from all threats.”
However, the Chinese Foreign Ministry suggested that it will adapt the
nature of its support to Pakistan, with Vice Foreign Minister Kong
Xuanyou telling reporters that the CPEC will “tilt in favor of areas
relating to people’s livelihoods,” according to media reports. Khan’s
election platform called for greater emphasis on poverty alleviation
efforts rather than infrastructure development.

In front of me, cutting across the trail, marched a column of black
ants. “Blow,” said Ant Kaschula, my guide at Gonarezhou National Park
in the southeast of Zimbabwe. Intrigued, I put my lips together and
blew as if it were my birthday and the insects were candles. They
hissed back at me, a defensive mechanism to ward off predators. We
watched them hastily re-converge and continue back to the nest, each
carrying a bounty of termites in their clutches.

“The most I’ve had is 19,” Kaschula continued, as he picked up one
insect that looked particularly heavily laden. He shook it above his
open palm. Termites sprinkled down; we counted 23. “It’s a record,” he
said, his eyes shining.

This is what safari is all about, surely. Not wedged in the back of a
vehicle target-fixated on predators, hoping to see the flickering ears
of a sleepy lion in the inconvenient shadow of a tree. The Swahili
word safari means “journey” and on foot is the best kind. Matabele or
hissing ants can be more scintillating than the Big Five, I swear.
That said, the guide must be dazzling. Kaschula is one of the
best—brimming with bush knowledge and boy-scout wonder. Once, when it
rained, we took shelter under a tree and he pulled out of a pocket
shredded baobab wood for us to chew, soften, stretch and plait into
bookmarks. At other times he mimicked the squeaks of a distressed
mouse to attract carnivores—from dwarf mongoose to wild dog—who I
witnessed come bounding towards our hiding places. When we saw bull
elephant, we moved closer in, using the bush as cover and staying
upwind. They were oblivious. Crouched behind the very tree an elephant
moved towards to start stripping, I could smell its sweat. When it
spotted us, Kaschula soothed it by impersonating the rumbling sound
they make.

Gonarezhou is an extraordinary undiscovered place, north of the border
with South Africa, marked by the “great grey-green, greasy Limpopo
River, all set about with fever-trees”, as Rudyard Kipling described
it. Managed in partnership with the Frankfurt Zoological Society, this
national park is a rare positive story in the world of underfunded
conservation and overfunded poaching. There are estimated to be more
than 11,000 elephants here, a record since counting began in the
mid-1970s; that translates to one of the highest densities of these
animals on the African continent. The authorities are now considering
reintroducing rhino. “What’s the secret?” I asked Hugo van der
Westhuizen, Gonarezhou’s committed director-general. “The community,”
he replied. “I spend a lot of my time under the shade of trees talking
to people. When I leave here, I hope they say, ‘They were good
neighbours. They were willing to listen.’ That, of course, is the only
way forward.”

The magic of the place is not the volume of game, but the volume of
tourists. Nobody is here—in an area more than three times the size of
the Maasai Mara. We left the sandy banks of the winding Savute River,
hiking along game trails used for hundreds, probably thousands of
years, Kaschula said, following patterns of hooves and paw prints
intermittently heaped by dung and droppings. The trail took us up the
Chilojo Cliffs, made up of layers of pink sandstone. Catching my
breath at the top, I looked out across the forested landscape. There
wasn’t a man-made sign of life. Instead, I noticed the frisky wind,
the feathered cloud formations, the faraway escarpments, and heard the
descending notes of a spectacled weaver followed by a melancholic
tropical bulbul, and the loopy whistle of a pearl-spotted owlet, all
punctured by an aggressive male impala whose rutting noises sounded
more like a monster. Even in the flat, fading light, the bark of the
gigantic baobabs had a polished metallic sheen.

To see the boundaries of the park, Van der Westhuizen and I took off
in a canary-yellow single-engine Super Cub. We coursed the charging
Runde River, flanked by gigantic trees—African ebony, Nyala berry and
wild mango—before banking through a gorge and skimming over the
floodplain to soar above cliff faces and sculpted rock formations. The
sense of space was immense. “There are few protected areas of this
size left in Africa,” van der Westhuizen said, “and they’re the best
shot we’ve got to safeguard biodiversity.”

Zimbabwe is ready to be discovered again. And for the first time in 37
years, it is ordinary people who might be setting the tone for the
future. Last November, Robert Mugabe, one of Africa’s longest serving
leaders, stepped down. There was a dance party in the streets of the
capital, Harare. Some who I met on this trip said it was the most
important day of their lives. There is hope now, but also fear to
hope. Everyone has a story.

Karen Paolilla lives in the Savé Valley Conservancy in a house she and
her gallant French husband built, full of books on aviation and faded
photographs, set on the high banks of the Turgwe river. They are
visited daily by troops of baboons and droves of snuffling bush pigs.
The animals are wild but habituated, she says—and she’s named some,
such as Winnie and Wolfgang the warthogs and Squiggle the Slender
mongoose. She’s most famous for a pod of hippos she has been saving
for the last 25 years—through drought and violent farm invasions,
standing up to men armed with machetes, even guns.

We walked together along the river at dusk. The hippos rose out of the
water as we approached, gaping as Paolilla called out their names.
Their eyes trained upon us, their ears twitching away water droplets;
one mother showed us her baby. Paolilla seems to be the hippo
whisperer. She might not have a degree in animal behaviour but she has
studied this family so long that researchers are interested in her
observations, such as witnessing weaning at two-and-a-half years, 50
per cent longer than the books say. She’s watched hippos and
crocodiles groom each other, scoffing at the idea that the two species
are adversaries.

I drove north up to the Chimanimani Highlands, a range of quartzite
mountains rich in prehistoric gold and diamond deposits, with a high
plant diversity and endemism. In between the peaks, grassland is
strewn with lichen-splattered white sandstone crags, sloping east to
Mozambique. From the top of Binga, the highest mountain, you can see
the blue of the Indian Ocean.

I explored the area with Collen Sibanda, a Rastafarian passionate
about politics, with a penchant for cycads, who swears like he has a
tic. Sibanda pointed out blooming protea, tree orchids, the Msasa
trees known for their red flush of leaves, and the critically
endangered Munch’s Cycad, which grows up to five metres. We found the
“cave squeaker”, a tiny frog that gave away its location by its call,
a shrill whistle. Thought to be extinct, it was rediscovered last year
after not being seen for half a century.

Taking shelter from a shower, we crouched beneath an overhang at
Bailey’s Folly. Above us, there were paintings of fantastically
endowed figures, perhaps fertility symbols. Sibanda didn’t know when
they were drawn but there is rock art in Zimbabwe dating back 20,000
years. “I don’t think anybody knows these paintings are here, except
me,” he said. Earlier he had shown me a ritualistic clay pot buried in
the earth. We splashed our faces with the rainwater inside and made a
wish. His was for better times. If the politics falters again, he told
me he will leave the country: “I’ve lost the last 20 years of my life.
I won’t lose any more time.”

Wet through and hungry, I retired to the comfort of Lord Tyrone
Plunket’s Rathmore Estate, which looks out at the very peaks I’d just
climbed. With a twinkle, the very tall, slightly awkward, ravishingly
eloquent Plunket called himself “an anachronism” without me having to
point it out. And then he called me “a quaintrelle”, which, after
looking it up in the dictionary, I cached, before I looked up another
word, “equerry”, when he told me his uncle had been one.

Plunket’s recently deceased uncle and aunt have a special place in
Zimbabwean history. Robin (from whom he inherited the farm and title)
and the fiercely activist Jennifer were early members of the Capricorn
Africa Society and campaigned hard against white minority rule in what
was Rhodesia—not popular behaviour among colonials. Jennifer founded a
women’s chapter of the organization and drove a Land Rover called
Kalahari Kate donated by the writer Laurens van der Post.

As I sat drinking mead around a crackling log fire in a drawing room
filled with books about local birdlife and national politics, Plunket
spoke about others who had come before me—back in the day when
Rathmore had been a refuge for blacks and whites to discuss openly the
future of Rhodesia. Politicians, writers and journalists visited, such
as Ndabaningi Sithole, the founder of the Rhodesian liberation
movement, and his colleague Herbert Chitepo, later assassinated;
Leopold Takawira, who died in prison, as well as the country’s first
black judge, Enoch Dumbutshena. Some say it was the company the
Plunkets kept that allowed their estate to be spared during the wave
of land seizures; Jennifer used to take Mugabe food parcels in prison
in the 1960s when he was jailed by the British-appointed Prime
Minister Ian Smith.

In Harare, Plunket introduced me to Raphael Chikukwa, head curator at
the rather forlorn, infrequently visited National Gallery. But
Chikukwa has plans. He called the effort of an “African pavilion” at
the Venice Biennale in 2007 “very questionable” and is determined to
get everyone thinking about Africa not as a continent anymore. “We’ve
been slowed down in Zimbabwe, working without art materials for a long
time, instead doing printmaking, and using found objects and local
soapstone for sculpture. The creative community never gave up. Now we
have another chance and we have much to do.”

The lack of resources was felt across the country and those memories
are still raw. At Tony’s Coffee Shop in the Bvumba Mountains, east of
Harare, this war-weary, gentle, talented pastry chef serves me
featherweight cheesecake, balanced by a dense cup of hot chocolate.
Ingredients weren’t always easy to come by, Tony Robinson said, but in
24 years he never shut shop for that reason. The kitchen equipment may
be rudimentary, but the bone china is splendid—inherited wedding gifts
of his parents, some from farmers who had fled, other pieces from junk
shops. As he spoke, he sometimes had tears in his eyes.

On a previous visit to the country, I remember bank notes worth
100,000,000,000,000 Zimbabwean dollars. I didn’t even know how to
pronounce that figure (100 trillion?). Everyone bartered and smuggled,
or both. Even up till a few months ago, Robinson said he knew parents
paying school fees in goats.

Now there’s investment, aid and loans available. The infrastructure is
improving. Direct flights are slated to start from Europe. The
visionary African Parks, a private, non-profit organization with a
reputation for rigorous park management, is taking on Matusadona
National Park, almost guaranteeing a positive future there in tourism.
Safari operator Great Plains Conservation has opened three lodges on
the former Sapi hunting concession and there are other new camps, as
well as notable renovations, such as Singita’s Pamushana Lodge built
on the exceptional Malilangwe Wildlife Reserve, bordering Gonarezhou.

On my last night I headed to Lake Kariba, where Bumi Hills Safari
Lodge, one of Beks Ndlovu’s properties, had also just had a shot of
investment. Ndlovu was one of the region’s first black safari
operators when he founded African Bush Camps more than 10 years ago.
But business was so slow he was forced to diversify into Zambia and
Botswana. “I was waiting to transfer back to Zimbabwe when things
turned around,” he says. “That’s now.”

Lake Kariba is for me a symbol of carefree old Zimbabwe. The world’s
largest man-made lake, created by the damming of the Zambezi in the
1950s, became a popular weekend destination for travellers—to hire a
houseboat, cruise between the Zambezi escarpment and the Matusadona
Range, and watch the sun go down with that otherworldly light so
emblematic of this place.

Binoculars in hand, I looked out at the still blue waters punctured
only by the long snouts of crocodiles; there was a panicked
guinea-fowl flapping low over the water, followed by four serene
sacred ibis in formation, as a pair of fish eagles took flight against
the unclouded sky. In the harbour, there are boats abandoned by
farmers long gone, but also some newly launched vessels. And out on
the water a regatta was in full sail, the first time, locals said,
they had seen such an event. It felt like fresh winds a-blowing.

But it is what’s not changed, as much as what’s changing, that gives
reason to return to Zimbabwe. For the wildlife, the wilderness and the
persistent sense of wildness—from the hot dry lowveld to the rugged
peaks, schists and faults of the highlands, to the deep basalt gorges,
which the Zambezi tosses and tumbles through to create Victoria Falls;
and for the resolute people—including some of the best naturalists and
guides in Africa—whose hopes may have risen and been dashed, time and
again, time and again, but still they hope, because they cannot not.

“In spite of, or perhaps because of the last 20 years, there might be
even more passion and imagination and determination here,” Ndlovu says
of his fellow Zimbabweans. “The human spirit has actually become
stronger.”

The United States said on Friday it will temporarily allow eight
importers to keep buying Iranian oil when it re-imposes sanctions on
Monday aimed at forcing Tehran to curb its nuclear, missile and
regional activities.
China, India, South Korea, Japan and Turkey - all top importers of
Iranian oil - are among eight countries expected to be given temporary
exemptions from the sanctions to ensure crude oil prices are not
destabilised.
The restoration of sanctions is part of a wider effort by US President
Donald Trump to force Iran to curb its nuclear and missile programs as
well as its support for proxy forces in Yemen, Syria, Lebanon and
other parts of the Middle East.
"Today the enemy (the United States) is targeting our economy ... the
main target of sanctions is our people," Mr Rouhani said.
In May, Trump exited Iran's 2015 nuclear deal with six powers and
Washington reimposed first round of sanctions on Iran in August.
The deal had seen most international financial and economic sanctions
on Iran lifted in return for Tehran curbing its disputed nuclear
activity under UN surveillance.
US Secretary of State Mike Pompeo said on Sunday the penalties set to
return on Monday "are the toughest sanctions ever put in place on the
Islamic Republic of Iran."
However, Iran's clerical rulers have dismissed concerns about the
impact of sanctions on the country's economy.
"This is an economic war against Iran but... America should learn that
it can not use the language of force against Iran... We are prepared
to resist any pressure," Mr Rouhani said.

Hence, the Trump Administration is in the difficult position of
wanting to tighten the screws on Iran, while at the same time avoiding
an oil price spike.
So, as the November 5th date loomed for countries to eliminate oil
imports from Iran, the Trump Administration blinked.
Last week the Trump Administration announced that it would grant
waivers to eight countries to allow them to keep importing Iranian
crude oil for now. T
he waivers allow these countries another 180 days to phase out their
purchases of Iranian crude oil. In my opinion, this was a move aimed
at avoiding an oil price surge just prior to this week's elections.

Syria, seat of an Islamic Caliphate. Syria, site of the Middle East’s
newest liberal democracy. Syria, socialist paradise. Syria, a corrupt
and murderous dictatorship that practices genocide. Syria, a failed
state. Syria a state that is too strong. Syria, soon to be partitioned
into ethnic enclaves. Syria, a pawn of Iran. Syria, a tool of Russia.
Syria, a haven for terrorists that threaten our friends and way of
life. Syria, where Saddam sent his fabled WMDs. In other words: Syria
is whatever you want it to be. Syria, if it exists, apparently only
exists to satisfy your desires, where you get to freely confuse where
you think the world ought to go, with where it is going.

James Dean was an iconic American actor, who tapped into the universal
yearning and angst of nearly every adolescent human being with a raw
connection that has surely not been surpassed since. In one of his
most consequential films, Rebel without a Cause, two players (read,
teenage boys) decide to settle a dispute (read, teenage girl) by way
of near-death experiences. Each speeds an automobile towards a cliff.
A simple rule governs the challenge: the first to jump out of his
automobile is the chicken and, by universally accepted social
convention, concedes the object in dispute. The second to jump is
victorious, and, depending on context, becomes gang leader, prom king,
etc.

Buzz, the leader of a local gang, agrees to a “Chickie Run.” Both race
stolen cars towards the edge of a cliff.  The first to eject out of
his car is branded a “chickie.”

Prime Minister Justin Trudeau apologized to the Tsilhqot'in community
for the hanging of six chiefs more than 150 years ago. He rode into
the valley on a black horse, symbolizing the ones the historic chiefs
rode into what they believed were peace talks.

According to Bank of America Merrill Lynch, in “Red October” a
conventional 60/40 portfolio of U.S. stocks and Treasury bonds lost
5.3 percent, the worst monthly return since February 2009.
Hedge funds, in particular, bled heavily. Reporting from 278 funds
shows that the Barclayhedge Hedge Fund Index lost 2.71 pct, its worst
month since January 2016 and the second worst in at least five years.
It was enough to wipe out all year-to-date gains, putting the index
down 1.54 pct for the year.
Some sub-indices fared even worse. Preliminary data shows the Emerging
Markets Index slumped 4.02 pct, taking year-to-date losses to 11.25
pct, and the Equity Long Bias Index fell 4.38 pct.
The MSCI world equity index fell 7.57 pct, its worst month since May
2012; the S&P 500 fell 6.94 pct, its worst month since September 2011;
and the MSCI emerging equities index fell 8.8 pct, its worst month
since August 2015.
Figures from the Washington-based Institute of International Finance
estimated investors pulled a gross $17.1 billion out of emerging
stocks in October, making it the worst month since the ‘taper tantrum’
in May 2013 and the fourth worst month since its records started in
2005.
The MSCI world equity index fell 7.57 pct, its worst month since May
2012; the S&P 500 fell 6.94 pct, its worst month since September 2011;
and the MSCI emerging equities index fell 8.8 pct, its worst month
since August 2015.
Figures from the Washington-based Institute of International Finance
estimated investors pulled a gross $17.1 billion out of emerging
stocks in October, making it the worst month since the ‘taper tantrum’
in May 2013 and the fourth worst month since its records started in
2005.

Euro 1.1403
Dollar Index 96.38
Japan Yen 113.33
Swiss Franc 1.0054
Pound 1.3047
Aussie 0.7213
India Rupee 72.975
South Korea Won 1123.13
Brazil Real 3.7258
Egypt Pound 17.9150
South Africa Rand 14.1932

The dollar has also benefited from rising Treasury yields, while its
status as a haven has seen it gain from the outbreak of the U.S.-China
trade war.

Long believed to have been domesticated in Central America some 4,000
years ago, cacao has a more interesting story than previously thought.
When did humans first start cultivating chocolate? It's not just a
candy conundrum: the question has long interested both biologists and
anthropologists who wonder how and why cacao became so important to
ancient Mesoamerican civilizations such as the Maya and Aztecs, both
of whom cherished chocolate so much they used it in religious rites
and as currency.
Archaeological evidence has pointed to the first use of cacao in
Mesoamerica about 3,900 years ago. Traditionally, archaeologists have
assumed that Mesoamericans were the first not just to use cacao, but
to cultivate it.
Now, new research published in Communications Biology suggests that
cacao was first domesticated around 3,600 years ago—and not in
Mesoamerica.
The ancient Maya tradition of chocolate-making still thrives in
Antigua, Guatemala. Fourth-generation chocolatiers at Chocolate D'
Taza harvest, roast, grind, and dry the chocolate by hand during a
four-day process.
In their hunt for the origins of domesticated cacao, researchers
analyzed the genomes of 200 cacao plants, then sussed out how each
subspecies was related. As they worked, they looked for a telltale
sign of domestication: genetic differentiation.
When a plant is domesticated, people select for desirable
characteristics, breeding it over and over and correcting for things
like size and taste. As a result, the genes of a domesticated plant
don’t have as much variety as those of its wild relatives.
One likely candidate early domestication was Criollo—the world’s most
coveted variety of cacao—which was cultivated by the ancient Maya. The
extremely rare variety of chocolate (it makes up just 5% of the world
chocolate crop) is beloved by candy fans who love its deep and complex
flavor, and students of cacao know that Criollo trees found in Central
America are markedly different from the ones found in the Amazon
basin. (Can GMOs save chocolate?)

The rigs are returning and wildcatters are getting excited again after
a years-long hiatus during the oil-price slump. From majors like Total
SA to independents like Tullow Oil Plc, companies are snapping up
exploration rights and doing deals.
“When you go for business development, trying to acquire licenses or
make partnerships in West Africa, you can sense the competition,”
Gilbert Yevi, senior vice president of exploration and production for
Sasol Ltd., said in an interview in Cape Town. “It’s like a new
California gold rush.”
Just a year ago Africa’s upstream was a very different story. At the
continent’s biggest oil and gas conference, crude seemed like it may
just hold at $50 a barrel over the long term. Beyond the activity of
Africa-focused explorers like Tullow in Ghana, exploration activity in
most countries was in a rut.
But as Africa Oil Week returns to Cape Town on Tuesday, nations
throughout the continent are planning to sell exploration licenses or
move ahead with major projects.
And the prize -- for both companies and countries -- could be huge.
There could be at least 41 billion barrels of oil and 319 trillion
cubic feet of gas yet to be discovered in sub-Saharan Africa,
according to a 2016 U.S. Geological Survey report.
In 2018, the number of oil and gas rigs in Africa reached a three-year
high, according to Baker Hughes. There are more prospects to come as
the Republic of Congo, the newest member of the Organization of
Petroleum Exporting Countries, offers both onshore and onshore blocks.
Cairn Energy Plc is moving forward with its project in Senegal, the
largest offshore oil find of 2014, which is expected to produce
100,000 barrels a day. “It has completely changed the potential for
Senegal in a very positive way,” CEO Simon Thomson said in an
interview. “It shows what can happen through the drillbit, through
exploration.”
Exxon Mobil Corp. is targeting western and southern Africa for the
world’s next big bonanza, recently bought a stake in a frontier
exploration block offshore Namibia. The company is also expected to
spend hundreds of millions in Mozambique with partner Rosneft Oil Co.
PJSC and other explorers on blocks won in 2015.
Mozambique will see $156 billion in tax revenue from Exxon’s onshore
liquefied natural gas project, according to the company. The
supermajor is planning the most capacity of any LNG facility planned
in the north of the country.
Total and Eni SpA are also nearing production sharing deals for oil
and gas in Ivory Coast, two people familiar with the matter said Nov.
1. Both companies signed separate contracts for offshore oil
exploration in Algeria last week.
For all the excitement, Sasol’s Yevi did strike some notes of caution.
In past booms, the African oil industry has fallen into a number of
traps. The first is approving projects quickly enough to ensure they
don’t miss out on the benefits of a period of higher prices. “If the
cycle is not long, sometimes we only catch the tail end of it in
Africa,” he said.
To successfully develop its natural resources, Africa needs to the
capability within governments and regulators to control how the
capital is spent, Yevi said.
“You have to be able to take that oil money and redirect some of the
windfall of the activity into other sectors,” he said. “The momentum
is there, the development of the newly found fields you can see a
number of new oil provinces cropping up.”

Frontier Markets

Markit #PMI: 3 economies now with sub-50 readings from 0 in June. Not
good for growth prospects. Sep outcomes: #Ghana at 49.2 (from 51.8 in
Aug); #Kenya at 52.7 (from 54.6); #Nigeria at 56.3 (56.1);
#SouthAfrica at 48.0 (47.2); #Uganda at 54.2 (52.1); & #Zambia at 48.6
(49.0).

Providing internationally comparable data for 21 participating
countries, the Revenue Statistics in Africa 2018 report finds that the
average tax-to-GDP ratio was 18.2% in 2016, the same level as in 2015,
which represents a strong improvement from 13.1% in 2000.
The third edition of Revenue Statistics in Africa, released in Paris
during the 18th International Economic Forum on Africa, shows that
tax-to-GDP ratios varied widely across African countries, ranging from
7.6% in the Democratic Republic of the Congo to 29.4% in Tunisia in
2016.
Six countries -Mauritius, Morocco, Senegal, South Africa, Togo and
Tunisia- had tax-to-GDP ratios greater than or equal to 20% in 2016.
In comparison, the average tax-to-GDP ratio for Latin America and the
Caribbean was 22.7% and 34.3% for OECD countries in 2016.

On average, someone attempts a coup in the Comoros once every two
years, according to The Economist. There’s no sign of bucking that
trend.
On October 28, the governor of Anjouan island, who’s also a prominent
opposition leader, was formally indicted by the state prosecutor.
Arrested in the island’s capital of Mutsamudu, Abdou Salami Abdou
faces charges of undermining national unity, participating in an
insurrection movement and complicity in murder and rebellion, acts
which he is alleged to have committed against the government of
President Azali Assoumani.
Reports of Abdou’s indictment prompted a call to prayer by youth in
the town of Vouvouni, located on the island of Grande Comore, which
serves as the seat of government for the Indian Ocean archipelago.
Security forces attempted to disperse the prayer gathering, but were
forcibly resisted by the congregants.
The charges against Abdou follow a period of unrest on Anjouan island.
On October 15, Comoros soldiers were deployed to Mutsamudu to disperse
members of Abdou’s Juwa party, the largest opposition entity in the
Comoros, which established protest camps in the streets of the city’s
Old Quarter.
Protesters engaged security forces in running battles down Mutsamudu’s
narrow streets, prompting the closure of local business, the
suspension of public transport and the imposition of a dusk-to-dawn
curfew.
After the deployment of additional military assets to the city, the
armed protesters retreated from the Old Quarter. At least two people
were killed, four injured and dozens more arrested in the multi-day
standoff.
Calm has returned to Mutsamudu, and public and business services have
resumed, but a curfew remains in effect between 10pm and 6am.
Despite calling for an end to violence on the island he administers,
Abdou was nonetheless detained on claims that he incited the armed
uprising.
Abdou is now the second Juwa party leader to face prosecution by the
Assoumani administration since judicial proceedings against former
Comoros president Abdallah Sambi on charges of corruption.
Abdou, Sambi and the wider Juwa party have emerged as the primary
critics of Assoumani’s constitutional reform programme, with which the
president has enacted a string of legislative measures that centralise
power in the office of the executive.
In the controversial July constitutional referendum Assoumani extended
presidential term limits, reduced the political powers of the
Constitutional Court, diluted the authority of the semiautonomous
governments administering the country’s key islands and — most
controversially — terminated a constitutional tenet that guaranteed
that the presidency of the archipelago rotated among its islands every
five years.
Abdou and his Anjouan administration have pledged to resist
implementing the mandated reforms, claiming that they would bring a
return to political instability in the Comoros, which has faced as
many as 20 unconstitutional power grabs, both successful and
unsuccessful, since it gained independence from France in 1974.
The European Union has called for opposing parties to denounce
violence and agree to dialogue, and the African Union is attempting to
mediate a resolution to the political impasse.
But discussions have broken down. The Third Way Collective, a
coalition of Comoros civic groups, has formally withdrawn from
participation in the dialogue process. The opposition withdrew from
talks in late September after they accused Assoumani of acting in bad
faith by failing to release political prisoners and by dissolving the
islands’ administrative councils amid the dialogue process.
Assoumani and the Juwa party signed an agreement on October 24 that
denounces the use of violence. In terms of the deal, Assoumani must
release all political prisoners and grant immunity to all those
involved in the recent uprising in Mutsamudu. In return, armed
opposition supporters must desist from further violence and relinquish
all weapons to the military.
A ceremony for the weapon handover process and the granting of
immunity was planned but, by October 29, had not yet been held.

Dollar versus Rand 6 Month Chart INO 14.1932
http://quotes.ino.com/charting/index.html?s=FOREX_USDZAR&v=d6&t=c&a=50&w=1

Egypt Pound versus The Dollar 3 Month Chart INO 17.9150
http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

Dangote said: “I was in another forum recently and when the Ghanaian
president was asked why the AfCFTA has not been signed by Nigeria and
he pointed at me, he said they should ask me.
Dangote argued that Nigeria is not against the AfCFTA either, pointing
out that the regional economic block needs to function properly before
a continent-wide agreement can prosper.
“We created the Economic Community of West African States in 1975, but
today, it is not working. To take our cement to Ghana today, we pay 38
taxes: 13 in the Benin Republic, 15 in Togo and 10 in Ghana. These
increases our cost by 28 per cent,” Dangote added.
The billionaire decried the neglect of critical stakeholders in other
African countries in the build-up to the signing of the agreement.

Ghana Stock Exchange Composite Index Bloomberg +6.34% 2018
http://www.bloomberg.com/quote/GGSECI:IND

"2018 has been a remarkable year for ExxonMobil in Mozambique," the
company's country manager Jos Evens said after signing three new
exploration and production concession contracts (EPCCs) for areas off
the country's long coast in early October.
ExxonMobil is part of a consortium with big hitters including Eni,
China's CNPC, and Galp of Portugal. It expects to be able to move
forward to FID without needing to sell any LNG outside of its own
consortium. "We expect sufficient interest from the affiliate buyers
to launch the project and support the financing," spokesperson Julie
King told Reuters in July.

China is hosting a trade show in Shanghai for companies from more than
130 countries, including Kenyan traders and horticultural farmers, the
presidency said in a statement emailed Sunday from the capital,
Nairobi. China is using the fair to showcase its willingness to open
its market to other nations, according to the statement.
Kenya will halt Chinese tilapia imports from Jan. 1 that it says are
undercutting domestic production, the Nairobi-based Daily Nation
newspaper said Oct. 31, citing its Fisheries Service. The ban amounts
to a “trade war” and China may respond in a manner similar to its
reaction when U.S. President Donald Trump imposed tariffs on Chinese
goods, the newspaper quoted Ambassador Li Xuhang as saying.
China is Kenya’s biggest trading partner, according to data compiled
by Bloomberg. The East African nation’s exports to China amounted to
$167 million, while imports were $3.78 billion. The Asian nation
accounted for 17.2 percent of Kenya’s trade with the world, the Kenyan
president’s office said.
Kenyatta asked China to give African goods preferential access similar
to trade deals with Europe and the U.S. and to support the continent’s
producers to meet its sanitary and phytosanitary standards, according
to the presidency.
Many African nations have duty- and quota-free access to the U.S.
through the Africa Growth and Opportunity Act, and so-called Economic
Partnership Agreements with the European Union.
“Africa needs a reduction, or an elimination of tariffs,” if exports
into mainland China are to increase, Kenyatta said in a speech at the
fair.

“The onset of the short rain season, which so far seems quite positive
for the agrarian sector, could help GDP growth recover in the fourth
quarter of 2018,” said Jibran Qureishi, the economist for East Africa
at Stanbic Bank.

Par Value:                  0.50/-
Closing Price:           39.75
Total Shares Issued:          3702777020.00
Market Capitalization:        147,185,386,545
EPS:             5
PE:                 7.950

Equity Group Holdings Q3 2018 results through 30th September 2018 vs.
30th September 2017
Q3 Investment securities 158.574780b vs. 127.744264b +24.135%
Q3 Loans and advances to customers (net) 288.381425b vs. 265.449149b
Q3 Total assets 560.385386b vs. 518.248176b +8.131%
Q3 Customer deposits 402.245441b vs. 368.801489b +9.068%
Q3 Total shareholders’ funds 90.671064b vs. 90.134283b +0.596%
Q3 Net interest income 29.474661b vs. 27.490878b +7.216%
Q3 Total operating income 49.304302b vs. 48.746488b +1.144%
Q3 Total operating expenses [26.895801b] vs. [28.011827b] -3.984%
Q3 Profit/ [Loss] before tax and exceptional items 22.408501b vs.
20.734662b +8.073%
Q3 Profit/ [Loss] after tax and exceptional items 15.828467b vs.
14.638606b +8.128%
Q3 Basic and diluted EPS 4.17 vs. 3.87 +7.752%
Q3 Net NPL 16.181105b vs. 10.707012b +51.126%

The Kenya Shilling is uppermost in most Folks minds. The Shilling
depreciated by 0.8% against the US Dollar during the month of October
to Kshs 101.8 from Kshs 101.0 at the end of September. The Kenya
Shilling after last months correction remains positive versus the
Dollar for the year, one of very few currencies in Africa and the
World to have achieved such an outcome. We tend to be fixated on the
Dollar rate but its worth looking at a Trade-weighted Index and what
you will see is that the Shilling has in fact appreciated sharply
against all its Peers. There is a Theory that we would be better
served by a weaker currency but I don't subscribe to that theory
essentially because there is no elasticity in our exports. A weak
currency has not been a Catalyst for a flood of Exports. In fact, I
would posit, we are better off with a strong Shilling because our
Import to Export Ratio is around 3 to 1 and therefore we are better
off keeping a lid on prices via a strong currency. Ever since I can
recall, Folks have been arguing the Shilling was overvalued and I have
found that many of these Models simply do not account for the
''Carry'' [the positive interest rate differential earned when you
hold Kenyan Assets] component. The Latest Trigger for the spike in
conversation around the Shilling was the IMF who said

The IMF urged the central bank to allow “greater exchange-rate
flexibility,” given well-anchored inflation expectations and adequate
reserves, saying this would boost the shilling’s role as a potential
shock absorber.

The IMF reclassified the shilling from “floating” to “other managed
arrangement” to reflect the currency’s limited movement due to
periodic central bank interventions. The currency, which has the
fourth-best performance globally, is also overvalued by about 17.5
percent, it said.

The central bank reiterated its position on the shilling’s value,
saying the currency reflects its true and fundamental value.

“Our calculations support the view that there is no fundamental
misalignment reflected in our exchange rate,” it said in an emailed
response to questions.

Today, if you scan Sub-Saharan Africa you will note many dual currency
regimes all of which are interfering with the Free markets. Here in
Kenya you can exchange your money at a 50cents bid offer Spread. Sure
the Central Bank [and I rank their Foreign Exchange operations as an
''Outlier'' when you compare it to any other central Bank on the
Continent] probably smooths lumpiness but that is prudent and
sensible. If you are aware of a lumpy trade, it certainly makes sense
to spread it out because after all Participants have access to
enormous amounts of Leverage in the FX markets and Kenya does not fold
infinite FX reserves. I have always enjoyed parsing the linguistics
and in this respect the characterisation of “other managed
arrangement” is wrong on the facts as I see them.

The Finding that the Shilling is 17.5% overvalued is also alarmist and
not borne out by the facts. Such a devaluation would ''Cry havoc''
with our Debt-to-GDP Ratios.  The International Monetary Fund raised
its assessment of the chance of Kenya’s external debt distress to
moderate from low due to increasing refinancing risks and narrower
safety margins in East Africa’s biggest economy. The Washington-based
lender estimates Kenya’s total public debt will peak at 63.2 percent
of gross domestic product this year and gradually decline over the
medium term. This compares with 58 percent in 2017 and 53.2 percent in
2016, when the nation ramped up infrastructure projects. There is an
argument that we need to be tapping Euro denominated Eurobond
borrowing and not just dollar denominated debt.

The Central Bank is sitting on the highest hard currency reserves in
its history. Remittances have surged by 71.9% y/y to USD 266.2 mn in
June 2018 from USD 154.9 mn in June 2017. Remittances are the most
important source of Forex bar none. Our single biggest expense Item is
of course Crude Oil and you will have noted that since the Istanbul
incident, the crown Prince has been finessing the price lower to
release some of the pressure in what remains a pressure cooker. Of
course, the markets would appreciate a more aggressive GOK cost
cutting program. The Key levels are from 2011 and are 105.00-107.00.

In the matter of the shilling I would prefer to be long than short and
I beg to differ with the august and venerable IMF in this matter.

Make no mistake that the ''mission console'' [''The specialist is
monitoring data on his mission console'' Don Delillo's The Angel
Esmeralda] is in the hands of the CEO, wherever he might be
physically. I gently ribbed Bob about how Michael Joseph had been
kicking back [in his absence], cracking jokes and informing us about
when Bob finally started listening to him was when Safaricom finally
got its skates on. Bob, who had obviously watched everything via a
Live Feed, spoke of ''Little'' Michael and his team, finessing the
story of how Michael and a little team first started out in the
Norfolk Towers. They are clearly very close.

Safaricom is a conviction Buy at Fridays closing Price of 24.50.