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Macro Thoughts

Home Thoughts

"It was going to be one of Rabbit's busy days. As soon as he woke up
he felt important, as if everything depended on him. It was just the
day for Organizing Something, or for Writing a Notice Signed Rabbit.
It was a Captainish sort of day."~A.A.Milne #ThursdayThoughts
#leadership

“There’s no single truth about any event. You and I would both have
completely different accounts of what happened here this morning. So
that very much comes into life writing.” —Penelope Lively

One month after the murder of Washington Post columnist Jamal
Khashoggi, and one year after the infamous Ritz-Carlton roundup, Saudi
Arabia’s brash young heir to the throne is giving scarce ground in his
drive to snuff out doubts about the viability of his rule.
Crown Prince Mohammed bin Salman’s fate was in sudden doubt last
month, as the outcry over the killing of Khashoggi, his most prominent
critic in the West, reached a fever pitch in the US capital.
Rival Turkey, smelling blood, leaked a steady drip of salacious
details to the press, building public suspense while hosting the
American CIA chief and Secretary of State for private discussions as
to the level of incriminatory information in its possession.
US President Donald Trump, at first receptive to the Saudi narrative,
changed his tune and even suggested the crown prince could be behind
the killing.
The Saudis admitted to the murder, but not to any role played by the
de facto ruler of the kingdom.
Barring Turkish evidence linking the crown prince directly to the
murder, the 33-year-old appears to be on track to continue plowing his
way to the throne of the oil kingpin.
The Saudi crown prince’s staying power is inextricably linked to his
influential regional backers.
Israeli Prime Minister Benjamin Netanyahu has in recent days argued
for “stability” in Saudi Arabia amid the condemnations of the crown
prince. “The larger problem is Iran,” he said in his sparse public
comments on the affair.
According to The Washington Post, the Israeli premier went further in
private, telephoning senior White House officials to stress that MBS
was a “strategic ally.” Egyptian President Abdel Fattah el-Sisi
reportedly did the same.
Then there is the will of the crown prince himself. The favorite son
of King Salman, best known for kidnapping the Lebanese prime minister,
embarking on a devastating military campaign in Yemen, and imprisoning
women’s rights advocates, has shown no sign he is willing to
relinquish his power.
“I don’t think MBS is going anywhere,” said Jones. “He’s got a big
ego. He’s not the kind of person to go down without a fight.”
The crown prince’s way out “depends on the what he can give to
Turkey,” said Cesurhan Taş, vice president of the Sahipkıran Center
for Strategic Researches in Ankara.
“Turkey may seek to negotiate the Saudis’ positions against Turkey in
the Gulf and Middle East. Maybe lifting sanctions on Qatar,” he said.
Ankara, Jones says, will likely seek to avoid crossing the tipping
point where the Saudi monarchy sidelines the crown prince as a
liability.
“I don’t think the Turks want MBS to go because you want the person
you have leverage over. If the Turks have incriminatory info, they
have an advantage.”

Roads were lined with Saudi flags and images of the king and his son
Crown Prince Mohammed bin Salman, when they arrived in the central
region of Qassim late on Tuesday. Distinguished figures greeted them
and children offered flowers.
The tour is the latest public outreach by the 82-year-old monarch,
apparently intended to shore up the power of Prince Mohammed, known as
MbS, who has taken over day-to-day rule but whose international
reputation was battered in the month since Khashoggi was killed in the
Saudi consulate in Istanbul.

Serene is one of the world's largest private superyachts.
Built by Italian shipyard Fincantieri with interior design by Reymond
Langton Design, Serene was delivered to its owner in August
2011.[1][2] At delivery, she was one of the 10 largest yachts in the
world with an overall length of 133.9 m (439 ft 4 in) and a beam of
18.5 m (60 ft 8 in).[3]
The ship was built for Russian vodka tycoon Yuri Shefler for $330m.[4]
In the summer of 2014, Bill Gates leased the yacht for US$5 million
per week.[5]
In 2015, while vacationing in the south of France, Prince Mohammed bin
Salman of Saudi Arabia bought the vessel for approximately 500 million
Euros.[6]

President Assad, with his Russian, Iranian and Lebanese allies,
resisted the regime changers in Syria. IS, which was a Sunni and Saudi
blade, has been eviscerated. Iraq, which was once firmly in the Saudi
camp, is now aligned with Iran completely. Qatar is lost (see the
intercept article which refers to a plan headlined “Control the yield
curve, decide the future” a plan to construct the ‘’Big Short’’ on
Qatar -  e crown prince of Abu Dhabi should have spoken to me because
I could have told them how to do it). Saudi Arabia and its allies UAE,
Bahrain, Kuwait are caught in an ever tightening Shia pincer.  The
paranoia in the palaces in Saudi Arabia is real and existential.

“There is no concept of zero probability in military strategy,” Syrian
Army political bureau head Brig.-Gen. Hasan Ahmad Hasan told Russia’s
Sputnik News. “We cannot say that this probability has been reduced to
zero, because we are talking about open skies, extended borders,
various technologies... Therefore, I cannot say that in the end there
will not be such a probability, however, the probability of this
aggression achieving its goals has been minimized.”

Russia delivered the launcher, radar and command and control vehicle
of the advanced air-to-surface missile system to Syria in early
October. The delivery was a response to the downing of a Russian
reconnaissance plane by Syrian air defenses during an Israeli air
strike on Iranian targets during the previous month.

Euro 1.1350
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Japan Yen 113.92
Swiss Franc 1.0073
Pound 1.3040
Aussie 0.7250
India Rupee 72.675
South Korea Won 1127.85
Brazil Real 3.7602
Egypt Pound 17.9065
South Africa Rand 14.1785

Frontier Markets

“Free bobi wine!” say the graffiti outside his recording studio in
Kamwokya, a poor district of Kampala, Uganda’s capital. On August 13th
the pop star-turned-politician (pictured above) was arrested and, he
says, beaten and tortured by soldiers. Though he was released after
two weeks, treason charges still hang over him.
His real crime is being popular. Born Robert Kyagulanyi, Mr Wine
speaks for many of Kampala’s roughly 1.5m slum dwellers. “If
parliament cannot come to the ghetto,” he said after his election as
an mp, “the ghetto will come to the parliament.”
Mr Wine is part of a broader trend in which upstart politicians with
support among the urban poor are rattling governments. They include
Kenya’s main opposition leader, Raila Odinga, and Nelson Chamisa of
Zimbabwe’s Movement for Democratic Change (mdc). In South Africa
Julius Malema of the Economic Freedom Fighters has been gaining ground
by promising to seize white-owned land.
The past few years have also seen widespread protests by city folk.
Witness the “Black Friday” demonstrations in Lusaka (Zambia’s capital)
in 2013 and “Red Friday” marches in Accra (Ghana’s) in 2014, or the
post-election riots in Kenya last year.
The rise of urban discontent and young opposition leaders partly
reflects a youth bulge. The median age in Africa is 19.5, whereas its
leaders’ average age is 62. It also arises from Africa’s idiosyncratic
urbanisation, whereby cities are growing fast but opportunities in
them are not.
In 1960, 15% of Africans lived in cities, about the same as in Europe
in the 1600s. Today the share is 38%. By 2030 it will surpass 50%.
Africa’s urban population is expanding at a rate of 4% per year, twice
the global average. Yet urbanisation is not bringing Africa the
prosperity it brought to other continents. In Europe and East Asia the
growth of cities was driven by migration from the countryside, as
workers swapped fields for factories. African urbanisation is mostly a
result of natural population growth. For example, in Maputo,
Mozambique’s capital, just 12% of the population rise is accounted for
by migration from rural areas. Since there are few manufacturing jobs,
most of the growing urban labour force is absorbed by the informal
economy. That is one reason why urbanisation in Africa does not reduce
poverty as much as it does in other continents.
Another reason is the woeful way cities are organised. More than 50%
of urbanites live in slums. Fully 40% lack flushing toilets. Many
capitals still rely on out-of-date planning laws, leading to haphazard
building and needlessly expensive rent.
The neglect, paradoxically, is rooted in democracy. From the end of
colonial rule until 1991 no incumbent government was replaced via a
peaceful election. Policy-making had an “urban bias”. Since the
greatest threat to autocrats was a coup, and most coups started in
cities, leaders tried to buy off urbanites. This meant, for example,
favouring (urban) consumers of food over (rural) producers by keeping
prices low.
Much changed as democracy flowered in the 1990s, and rulers switched
to winning support in the populous countryside. In a study of 27
countries, Robin Harding of the University of Oxford found that the
advent of democratic elections is associated with increased access to
primary school and healthier children, but only in rural areas. Other
studies show skewed spending on rural roads and on farm subsidies.
Urbanites have many reasons for being less likely than rural voters to
back those in power. They have better access to news and can be
organised more easily by activists. Using polls taken in 28 countries
Mr Harding has found that city dwellers are on average five percentage
points more likely to oppose the government than rural voters are.
This is true even after controlling for age, gender, education and
whether voters share the ethnicity of the country’s leader.
Politicians mindful of urban unhappiness perhaps stand a better chance
of success. Mr Wine’s music evokes slum life. In one song he protests
against the heavy-handed arrest of street traders. In another he sings
about kikomando, a humble snack of chapati and beans eaten by the
poor. He slips naturally into Luyaaye, a street slang. By contrast,
Yoweri Museveni, the 74-year-old Ugandan president who won just 31% of
the vote in Kampala in 2016, sprinkles his speech with rustic idioms.
Young urbanites call him “Bosco”, after a character in an advert, a
country bumpkin who comes to the city and stumbles down escalators
with his bicycle.
Such politicians hope to emulate Michael Sata, perhaps the most
successful African populist. Sata, who was Zambia’s president from
2011 until his death in 2014, coupled an appeal to his ethnic Bemba
group in the countryside with a pro-poor message in cities. During
electioneering he spoke in the vernacular. He launched campaigns from
informal markets, not plush hotels. One of the first things he did in
office was to order town clerks to stop harassing street vendors.
Elsewhere vendors have been less lucky. Some of the most violent
incidents have taken place in Zimbabwe, where thousands of street
traders in mdc strongholds have been arrested in operations
co-ordinated by the ruling party, Zanu-pf.
Incumbents are also trying more subtle ways to quell urban unrest. In
Mozambique cities run by opposition parties are starved of public
funds. In Botswana the ruling party has appointed extra unelected
councillors to cities where the opposition has polled well. In Uganda
Mr Museveni has transferred many powers from the opposition-led city
council to his appointees.
Yet at some point the size of the urban voting bloc will become too
big to ignore. In countries where more than half the people live in
cities, urbanites are only a little less satisfied with democracy than
rural voters are (see chart), suggesting that politicians do
eventually take more notice of city dwellers’ interests. But for now,
in countries such as Uganda, where three-quarters of people still live
in rural areas, politicians will make mainly half-hearted attempts to
please those in cities.
In October Mr Museveni toured downtown Kampala, promising to shower
traders’ associations with cash. Mechanics at Kisekka market, an
unruly hub for spare parts, waved dutifully. “He’s the best president
in the world,” gushed one man in a ruling-party t-shirt. Then he
leaned closer, whispering: “Actually we hate Museveni. We love Bobi
Wine.”

What’s clear is that a very young, very informed and very connected
African youth demographic [many characterise this as a ‘demographic
dividend’] – which for Beautiful Blaise turned into a demographic
terminator – is set to alter the existing equilibrium between the
rulers and the subjects, and a re-balancing has begun.

When Zimbabwean President Emmerson Mnangagwa appointed a comparatively
youthful, Cambridge-trained economist as finance minister in
September, he gave him an almost impossible task: repay billions of
dollars in debt and ignite a stagnating economy.
Mthuli Ncube, 55, quickly moved to impose a two percent tax on
electronic transactions in a bid to raise $700 million a year, mainly
from the dominant informal sector. The impact was immediate --
inflation surged and people were forced to stand in lines for
everything from fuel to consumer goods, evoking memories of the
economic collapse in 2008 when Robert Mugabe was president. Mnangagwa
promptly said the measure would be reconsidered.
“They put us on the streets and made us hustle for money when they
killed the economy,” said Nick Wasara, a 25-year-old fruit and
vegetable seller in Harare, the capital. “Now every plan they have to
fix Mugabe’s mess puts more pain on us. It’s pain on top of pain. That
tax thing was too much, but you know the next plan will be too much
again. We only suffer.”
While Mnangagwa’s rowback may have been a political necessity, it
leaves Zimbabwe with the same problem it has had for a decade -- how
to raise money to pay arrears to lenders so it can restart the aid
programs needed to breathe life into the economy. Under Mugabe
sub-Saharan Africa’s second-biggest industrial sector collapsed and a
quarter of the population emigrated out of economic necessity.
Ncube’s tax triggered inflation as businesses, both formal and
informal, insisted on cash when there isn’t any. The result, in a
country that abandoned its own currency in favor of the greenback in
2009, is that electronic dollars trade at a discount to hard cash. The
government’s so-called bond notes, which it insists have the same
value as dollars, are worth even less.
According to the Zim Bollar Index, a Twitter account that tracks the
exchange rates, 3.25 bond notes are needed to buy one dollar in cash
on the black market, while a vendor will insist on $3.35 in electronic
dollars for every paper unit. Official inflation, at 5.4 percent, is
accelerating at its fastest pace in eight years.
Over 98 percent of payments are made by card or mobile phone,
according to the Finance Ministry -- mainly because cash notes are
hard to find. Banks ration cash from counters and most automated
teller machines have been empty for months.
“The market has said these currencies aren’t at par, and I don’t want
to argue with the market,” Ncube said in a speech in London last
month, when he called bond notes an experiment that will have to be
scrapped at some stage.
Ncube represents a break with the past as Mnangagwa, a 76-year-old who
was Mugabe’s right-hand man for half a century before falling out with
him last year, has vowed to fix the economy.
He’s unlikely to get much public support.
“You can see Porsches on the streets, but for us, the people, we must
hustle for a dollar here, a dollar there,” said Wasara, a high-school
graduate.
Ncube is an academic and former vice president of the African
Development Bank with few political connections. He replaced Patrick
Chinamasa, a veteran politician who repeatedly missed deadlines to
repay Zimbabwe’s debt and oversaw national finances during a period
when the government couldn’t pay its teachers and soldiers on time.
Last month, Ncube said Zimbabwe will clear $2 billion in arrears to
the AfDB within a year in a bid to restart aid programs. Still, the
country’s total external debt is $7.4 billion, $5.6 billion of it in
arrears. Its budget deficit for the first nine months of the year was
$2.5 billion, compared with a target of $715 million.
There is “debilitating distrust in the government and the country’s
financial system,” Jee-A van der Linde, an economist at NKC African
Economics in Paarl, South Africa, said. “Dollar hoarding and panic
buying are likely to persist as long as quasi currency instruments
continue to lose value against the dollar.”
AfDB President, Akinwumi Adesina, told journalists in Johannesburg
this week that while Zimbabwe is making progress, its economy and
relations with lenders are still a way from being repaired.
Ncube’s choice is stark: repay arrears in the hope of winning aid, or
pay for essential imports such as the $100 million a month needed to
forestall shortages of fuel.
The signs aren’t good. The coal supplier to the main thermal power
plant has been placed under administration and one of the biggest gold
miners has halted production at three operations because of a
foreign-exchange shortage.
While Mnangagwa’s decisions to trim the cabinet and pick a respected
finance minister are good signs, Van der Linde isn’t optimistic that
Ncube can engineer a quick economic turnaround.
“The odds are stacked against him, that’s for sure,” he said.

Zimbabwean banks urged the government to introduce wide-ranging
reforms amid signs the country is facing an economic crisis
reminiscent of a hyperinflationary spiral a decade ago.
Finance Minister Mthuli Ncube is preparing to announce the 2019 budget
later this month. He’s juggling a ballooning budget deficit,
foreign-exchange shortages that are fueling inflation, and an
inability to raise foreign loans because of $5.6 billion of debt
arrears.
The fiscal shortfall, which was more than triple the amount budgeted
in the nine months through September, is the country’s greatest source
of economic instability, the Bankers Association of Zimbabwe said in a
submission to the Finance Ministry seen by Bloomberg and verified by
the ministry.
The deficit is being financed by domestic borrowing and an overdraft
at the central bank -- essentially printing money, it said.
“It is important that comprehensive fiscal consolidation and austerity
measures be put in place to reduce the fiscal deficit and control
money supply growth,” the BAZ, which represents the country’s lenders,
said in the statement.
Secretary for Finance George Guvamatanga declined to comment on the
proposals as they are “market-sensitive issues.”
The BAZ’s key proposals include:
Reducing government support for state-owned companies and privatizing
some of them
Consolidating domestic debt with a longer repayment period
Restricting the sale of Treasury bills only to finance productive expenditure
Eliminating or reducing subsidies
“The above reforms will be associated with significant costs of
adjustment and in particular the pain of adjustment, with potential
for social unrest, unless delicately and comprehensively addressed,”
the BAZ said.
While it’s still far from estimated 500 billion percent it reached in
2009, Zimbabwe’s inflation rate has more than doubled to 5.4 percent
since Robert Mugabe was toppled as president a year ago. Ncube said on
Thursday price growth accelerated even further last month.

Deficit ballooned to $2.5 billion in nine-month period

Following are the budget numbers Ncube presented to lawmakers Thursday
in the capital, Harare.

Actual amount (Jan.-Sept.)      Targeted amount (Jan.-Sept.)
Revenue         $3.8 billion    $3.36 billion
Expenditure     $6.27 billion   $4.07 billion
Deficit         $2.5 billion    $715.4 million

White South African men are reportedly being excluded from a
government-partnered youth employment initiative program, according to
a new report. The Youth Employment Service ("YES") government job
website has the goal of helping South Africans who have been
unemployed for more than six months. The program has been endorsed by
the National Development Plan 2030, which intends on eliminating
poverty and reducing inequality within the next 12 years in the
country.
The website reportedly requires applicants to be in accordance with
the Black Economic Empowerment ("BEE") definition of black. They are
also required to be between the ages of 18 and 34 and citizens of
South Africa. BEE is a program launched by the South African
government whose aim is redressing inequalities in the nation by
giving South African citizens who are black economic privileges that
are not available to white people. The program also includes colored
and Indian people.

The YES website states:

“YES is a business-driven initiative which is breaking new ground by
pioneering a partnership with government and labor, in collectively
tackling a national plan to build economic pathways for black youth.
Please note we are currently only registering candidates between the
ages of 18 and 34, who are currently unemployed and must be black (as
per the B-BBEE codes definition).”

Dollar versus Rand 6 Month Chart INO 14.1785
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 17.9065
http://quotes.ino.com/charting/index.html?s=FOREX_USDEGP&v=d3&t=c&a=50&w=1

The roadshow, which is being organised by Citi and Standard Chartered,
will run from Nov. 12 for three days and be attended by Nigerian
Finance Minister Zainab Ahmed.

The African Development Bank (AfDB) is close to approving a $600
million loan package for Ghana’s cocoa regulator, Cocobod, which will
allow it to build warehouses to stockpile beans and protect itself
against price falls, the bank’s president said.
Akinwumi Adesina said the financing would support initiatives planned
by Ghana and neighbouring Ivory Coast, the world’s two top growers,
that aim to give them more control over global prices.
“The last time the price of cocoa collapsed, Ghana lost $1 billion.
Ivory Coast lost over $1 billion. We must be smarter than that,”
Adesina told journalists late on Tuesday on the sidelines of an
investment forum in Johannesburg.
The AfDB has committed $150 million to the deal with bank syndication
providing the remaining financing. He did not name the banks.
“If you have to constantly sell your beans, you don’t control
anything. You just dispose of them. You’re essentially a market price
taker,” Adesina said. “So that needs to change in terms of the volumes
you are actually putting into the market.”
Once the Ghana deal is approved, he said the bank would move onto a
separate proposal submitted by Ivory Coast.

Cape Town-based Allan Gray’s Africa bond fund has managed to outdo its
peers this year and protect itself against the selloff buffeting
emerging markets largely by buying local debt in Nigeria, Egypt and
Ghana.
The $430 million Africa ex-South Africa Bond Fund, the biggest with a
focus solely on the continent, returned 2.8 percent through the first
three quarters of the year. That compares with an 8.2 percent loss for
the J.P. Morgan GBI-EM Diversified Index, against which the fund is
benchmarked
Allan Gray began the year by cutting its exposure to African sovereign
Eurobonds, the thinking being that yields had fallen too low given the
buildup of external debt by governments. That strategy worked, with
spreads widening around 200 basis points to 550 over U.S. Treasuries
from the beginning of the year.
It instead focused on local-currency bonds, particularly those in
Egypt, Nigeria and Ghana, where it could get yields of above 15
percent. Bonds denominated in nairas, cedis and Egyptian pounds
accounted for 43 percent of the portfolio at the end of September.
More recently, Allan Gray’s money managers have increased their
exposure to Eurobonds again as yields have become more attractive. It
also bought MTN Group Ltd.’s dollar notes after they sold off
following a multi-billion-dollar dispute with Nigerian authorities
over taxes and dividend transfers out the country.
It “now appears to be headed for an amicable resolution,” money
managers Nick Ndiritu and Mark Dunley-Owen said in a fund report for
investors. “We took advantage of the uncertainty to increase our
holdings to just over 5 percent of the fund at about 7 percent
yields.”

In a house in central Dakar three Chinese men stand behind a glass
screen. The wall is stacked high with pills, teas and powders covered
with Chinese symbols and pictures of healthy models. There is
something for everyone. Teas for kidney problems, creams for aches,
pills for infertility and four claiming to help men with impotence.
“It’s a revolution,” proclaims Aliou Ndiaye, who started working at
the Chinese medicine shop three years ago. It now has four branches in
Dakar. Senegal’s capital also has several smaller outlets and
practitioners. “Many people are curious but I’m still sceptical,” says
Ibrahim Sy, a taxi driver, who says his mother was cured of leg pain
with tea.

Here in the East African Rift Valley, the 2,000 mile-long volcanic
trench that’s slowly ripping the continent apart, acacia-speckled
hills roll gently toward the horizon, eventually giving way to
towering escarpments, caustic soda lakes and one of Africa’s biggest
concentrations of wildlife. Less than a mile away lies the boundary of
Hell's Gate National Park, a protected area that is home to herds of
buffalo, zebras, giraffes, and more than 100 species of birds—as well
as to an ancient gorge that’s said to resemble the gates to the
underworld.

Otieno, a geologist with Kenya’s state-owned power company, KenGen,
contemplates the view in a hard hat and a fluorescent yellow vest.

Immediately below us lies Olkaria IV, the newest of four geothermal
power plants in the area. Otieno points out the infrastructure: the
meandering stacks of pipes carrying boiling-hot water and steam from
wells bored deep into the volcanic terrain; the building in which
twin, steam-powered turbines generate 70 megawatts each; the
transformers that step up the voltage of that electricity and inject
it into the national grid, and the cooling towers that prepare the
spent geothermal fluid for re-injection into the earth.

Today, despite two decades of robust economic growth, sub-Saharan
Africa remains the most under-electrified region on Earth, with an
estimated 600 million people who still lack power. The 48 countries in
the region, excluding South Africa, together have less than half the
generating capacity of Spain. In Kenya in 2010, 33 million people
lacked electricity in their homes.

But by 2016, according to the most recent World Bank data, that number
had fallen to less than 22 million—even as the country added another
seven million people to its population, now around 51 million. The
percentage of Kenyans with access to electricity nearly tripled during
that period, from 19 percent to 56 percent.

The government’s goal is universal access by 2020. No country on Earth
has made more rapid progress lately than Kenya toward that key
developmental milestone.

A key reason is the rapid expansion of geothermal power generation.
Geothermal electricity, mostly produced here in Olkaria, now accounts
for 28 percent of Kenya’s grid capacity, and its importance is only
set to grow. It’s relatively clean and low-carbon, and in the long run
it’s relatively cheap. And unlike other renewable sources such as
solar, wind, and even hydro, geothermal is available year-round and
around the clock. On some days right now, half the power used in Kenya
comes from inside the earth.

“The reliability of geothermal plants is very high because steam is
not affected by the vagaries of weather,” says John Omenge, until
recently head of geo-exploration at Kenya’s Ministry of Energy. “This
is the main reason why we’ve increased our geothermal focus. It has
become our source of baseload power.”

Soaring demand for electricity comes from rich and poor alike. In
Kibera, an informal settlement of several hundred thousand people,
jury-rigged live wires protrude like spiderwebs from mud- and
corrugated iron shacks—powering hair salons, video game parlors, and
pubs frequented by men watching English Premiere League football.

The country currently gets five percent of its generation capacity
from other renewables such as wind and solar—a figure that’s set to
increase with the opening this year of a 310-megawatt wind farm,
sub-Saharan Africa’s largest, near the shores of Lake Turkana.

That’s the context for the country’s push to develop its exceptional
geothermal resources. Geothermal plants aren’t pristine: carbon
dioxide, methane, and hydrogen sulfide all bubble out of the hot
water. But one kilowatt-hour of geothermal power, according to World
Bank data, emits roughly one-sixth to one-ninth of the carbon emitted
by coal.

 Today Kenya is the largest geothermal power producer in Africa and
the ninth largest in the world, with an installed capacity of more
than 650 megawatts and plans to expand well beyond that.

Drilling a geothermal well costs around $6 million—but in the long run
geothermal energy is relatively cheap.

Best known for its rock formations, the park is also home to herds of
large mammals and more than 100 species of bird.

After powering the turbines at Olkaria, geothermal steam is condensed
to liquid, and most of it is reinjected into the ground. But some is
used to fill the azure and mineral-rich pools at the Olkaria
Geothermal Spa, a Hell's Gate tourist attraction

Closing Price:           7.15
Total Shares Issued:          6243873667.00
Market Capitalization:        44,643,696,719
EPS:             1.2
PE:                 5.958

Wartsila Oyj’s East African unit won two engineering, procurement and
construction contracts to develop grid-connected solar farms in Kenya,
each with a capacity of 40 megawatts.
Construction is expected to begin next year, according to George
Oywer, a business development manager at Wartsila Eastern Africa Ltd.
The East African nation, which has an electricity supply deficit, is
boosting production from renewable sources including wind and
geothermal as it cuts reliance on expensive diesel-powered plants.
There are about 15 utility-scale solar projects announced in Kenya
with a total capacity of 526 megawatts, according to Bloomberg New
Energy Finance.
Wartsila said one of its project in Kesses, about 290 kilometers (180
miles) northwest of the capital, Nairobi, is owned by Alten Renewable
Energy Developments BV and financial close is expected by March 2019.
“This will be our first solar project in the eastern Africa region,”
Oywer said by phone. “Renewable energy is the next frontier.”
While Oywer declined to say how much the plants will cost, it takes an
average $1 million dollars (874,889 euros) per megawatt to develop
projects of that size.
The second plant is planned for the coastal Lamu region. The developer
is negotiating a power-purchase agreement with Kenya Power Plc and the
project should be connected in June 2020, he said.
Wartsila has an option to take as much as a 19.9 percent stake in that
farm, he said.

 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
 I beg to differ with the august and venerable IMF in this matter

ARM has been exploring a sale since at least October 2017. The
company, part-owned by CDC Group Plc, was placed in administration in
August after failing to find a strategic investor to help it manage
debts of 14.4 billion shillings ($141 million).
Aliko Dangote, Africa’s richest man and the owner of Dangote Cement,
said in an interview with Bloomberg on Tuesday that the company is in
talks about a potential acquisition of a company with operations in
Kenya and Tanzania. While he didn’t identify the company, ARM has
assets in both countries, as does Switzerland-based LafargeHolcim Ltd.
Dangote Cement first signaled its interest in ARM last year and
renewed its attention after management of the company was handed over
to PricewaterhouseCoopers LLP’s Kenyan unit, said two of the people.
Other parties that considered bids included Germany’s HeidelbergCement
Ag and LafargeHolcim, with the former still keen on the business, the
people said.

Market Capitalization: 5,327,668,110