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Macro Thoughts

It was the Queen Elizabeth II who gave currency to the Latin phrase
Annus horribilis [which is a Latin phrase, meaning "horrible year"].
It is complementary to annus mirabilis, which means "wonderful year";
however, annus mirabilis is a traditional term, while annus horribilis
is of relatively recent coinage. The expression was brought to modern
prominence by Queen Elizabeth II in a speech to Guildhall on 24
November 1992, marking the 40th anniversary of her accession, in which
she described the year as an annus horribilis.

''1992 is not a year on which I shall look back with undiluted
pleasure. In the words of one of my more sympathetic correspondents,
it has turned out to be an annus horribilis''

The reason this Latin Phrase popped into my mind is for Most Investors
2018 was a terrible year. According to Charlie Bilello In 2018, more
than any year in recent history, the overwhelming majority of asset
classes are down. In a table of 15 asset classes ranging from stocks
to bonds to REITs to Gold and Commodities, only one is higher: $ Cash.
From the crypto currency markets which fell into a Tail-spin first and
in January through to the Trump bump which metasized into a Trump
Slump [It was blindingly obvious to everyone that Trump was making a
fatal political mistake by cloaking himself in the righteousness of
the markets and the Dow Jones] , practically every asset you care to
name capitulated. The World went from high tide surfing on a golden
wave of practically free and limitless dollars to a World where the
Tide is now out.

“You only find out who is swimming naked when the tide goes out. “
said Warren Buffett, the Sage from Omaha.

Emerging Markets have been a ''Train smash'' and Africa has
underperformed Emerging Markets. The continent’s stocks and bonds have
performed worse than those of all other emerging-market regions in
2018 [Paul Wallace Bloomberg].  The selloff has left equities in
nations such as South Africa, Egypt, Nigeria and Kenya at or near
their cheapest levels in years. And the yields of Eurobonds issued by
governments have soared to a point last seen in early 2016,

The best Trade in 2018 was in fact to hold Dollar Cash, which makes
perfect sense when you consider that the US FED dialled up interest
rates to 2.25%-2.50% and dialled down their balance sheet. Many Folks
have been seized with the prospect of replacing the King Dollar from
Venezuela's Maduro and his ''Petro'' crypto currency to many others
too various to mention. However, what is clear is that the defining
theme in 2018 was the Dollar. Dollar Cash.

Interestingly, You would have been in the top percentile of returns
world wide had you bought Kenyan Shillings or Egyptian Pounds at the
start of 2018, invested the proceeds in 1 Year Treasury Bills [Egypt
or Kenya] and cashed it all in now. The Kenya Shilling has confounded
nearly all predictions and appreciated versus the Dollar and the
Egyptian Pound has held steady. Sifting the Signal from the Noise is
no easy Feat and You will recall the Noise around the Shilling was a
screech many times in 2018.

The Questions that Investors need to ask themselves are the following?
How much higher will the FED dial up rates? The markets are signalling
not much more. Powell [who has incurred Trump's wrath] predicted two
more quarter point hikes in 2019. A lot hinges on this outlook. Where
do we sit on the Tariff War graph? What happens if China catches a
cold? What is the China Africa feedback loop going to look like? Does
the 2018 Trend have further to run?

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. The markets world-wide exited its
‘’halcyon days’’ on Friday. Stephen King (author of horror,
supernatural fiction, suspense, science fiction, and fantasy) tweeted,
‘’How much did the Dow drop today? 666 points. Let me say it
again:666. Coincidence? I think not’’

There are no more ‘’Quaaludes’’ and policy makers will no longer be
able to pop them. ‘’In prescribed doses, Quaaludes promotes
relaxation, sleepiness and sometimes a feeling of euphoria. It causes
a drop in blood pressure and slows the pulse rate. These properties
are the reason why it was initially thought to be a useful sedative
and anxiolytic It became a recreational drug due to its euphoric
effect’’.

Home Thoughts

The specialist is monitoring data on his mission console when a voice
breaks in, “a voice that carried with it a strange and unspecifiable
poignancy”.
He checks in with his flight-dynamics and conceptual- paradigm
officers at Colorado Command:
“We have a deviate, Tomahawk.”
“We copy. There’s a voice.”
“We have gross oscillation here.”
“There’s some interference. I have gone redundant but I’m not sure
it’s helping.”
“We are clearing an outframe to locate source.”
“Thank you, Colorado.”
“It is probably just selective noise. You are negative red on the
step-function quad.”
“It was a voice,” I told them.
“We have just received an affirm on selective noise... We will
correct, Tomahawk. In the meantime, advise you to stay redundant.”
The voice, in contrast to Colorado’s metallic pidgin, is a melange of
repartee, laughter, and song, with a “quality of purest, sweetest
sadness”.

The Earth is seen off the lunar horizon in this telephoto view taken
by the astronaut Bill Anders from the Apollo 8 spacecraft on December
24, 1968. On Earth, 240,000 miles away, the sunset terminator crosses
Africa. The South Pole is in the white area near the bottom end of the
terminator. North and South America are under the clouds. As the crew
was in the middle of their fourth lunar orbit, Anders looked out of
window 5 and exclaimed "Oh, my God! Look at that picture over there!
Here's the Earth coming up. Wow, is that pretty!" He and Commander
Frank Borman shot several images of the event, with this one becoming
the most famous, known as Earthrise.

Yosemite covered in snow ❄️ | Photography by Christian Schaffer @earthescope
https://twitter.com/earthescope/status/1076520650246742016

Our fantastic civilization has fallen out of touch with many aspects
of nature, and with none more completely than night. Primitive folk,
gathered at a cave mouth round a fire, do not fear night; they fear,
rather, the energies and creatures to whom night gives power; we of
the age of the machines, having delivered ourselves of nocturnal
enemies, now have a dislike of night itself. With lights and ver more
lights, we drive the holiness and beauty of night back to the forests
and the sea; the little villages, the crossroads even, will have none
of it. Are modern folk, perhaps, afraid of the night? Do they fear
that vast serenity, the mystery of infinite space, the austerity of
the stars? Having made themselves at home in a civilization obsessed
with power, which explains its whole world in terms of energy, do they
fear at night for their dull acquiescence and the pattern of their
beliefs? Be the answer what it will, to-day’s civilization is full of
people who have not the slightest notion of the character or the
poetry of night, who have never even seen night. Yet to live thus, to
know only artificial night, is as absurd and evil as to know only
artificial day.

It was dark, pitch dark to my eye, yet complete darkness, I imagine,
is exceedingly rare, perhaps unknown in outer nature. The nearest
natural approximation to it is probably the gloom of forest country
buried in the night and cloud. Dark as the night was here, there was
still light on the surface of the planet. Standing on the shelving
beach, with the surf breaking at my feet, I could see the endless wild
uprush, slide, and withdrawal of the sea’s white rim of foam.

Now as at all times I can see in the mind's eye,
In their stiff, painted clothes, the pale unsatisfied ones
Appear and disappear in the blue depths of the sky
With all their ancient faces like rain-beaten stones,
And all their helms of silver hovering side by side,
And all their eyes still fixed, hoping to find once more,
Being by Calvary's turbulence unsatisfied,
The uncontrollable mystery on the bestial floor.

Christmas hath a darkness
    Brighter than the blazing noon,
Christmas hath a chillness
   Warmer than the heat of June,
Christmas hath a beauty
   Lovelier than the world can show:
For Christmas bringeth Jesus,
   Brought for us so low.

Earth, strike up your music,
   Birds that sing and bells that ring;
Heaven hath answering music
   For all Angels soon to sing:
Earth, put on your whitest
   Bridal robe of spotless snow:
For Christmas bringeth Jesus,
   Brought for us so low.

The snowed-over Khunjerab Pass, at 4,934 meters, stands eerily silent
on a freezing late autumn morning.
On the Pakistani side, a wooden house serves as a small customs office
fronted by “the highest ATM in the world” – though you try a foreign
credit card at your peril. The Chinese side boasts an intimidating,
metal-plated James Bond-esque structure with no humans in sight.
This is ground zero of the China-Pakistan Economic Corridor (CPEC),
the point where the revamped, upgraded Karakoram Highway – “the eighth
wonder of the world” – snakes away from China’s Xinjiang all the way
to Pakistan’s Northern Areas and further south to Islamabad and
Gwadar, on the Arabian Sea.
From here it’s 420 kilometers to Kashgar and a hefty 1,890 km to
Urumqi, the capital of Xinjiang. But going south is where the fun
really begins.
it’s a crazy carousel.
Psychedelic Pakistani trucks, Chinese container road warriors – some
trying to subdue the Khunjerab without chains on their tires – packed
minivans plying the Hunza-Xinjiang route, Silk Road motels, the smell
of curry interfacing with the best apricot juice in the world,
roadside butchers, shacks advertising themselves as “Silk Road
Investment & Credit Society Ltd,” many a Pak China Gateway Hotel,
checkpoints consisting of a roadside table and a bunch of papers kept
from flying away by pebbles, stashes of yuan crisscrossing rupees and
dollars and messy, multi-level “people to people exchanges.”

Last week, the Times said it had reviewed a confidential plan about
China’s military projects in Pakistan under the Belt and Road.
According to the proposal, a special economic zone under the BRI’s
China-Pakistan Economic Corridor will be created to produce fighter
jets while navigation systems and other military hardware will be
jointly built at factories in Pakistan. That reveals how the world’s
second-largest economy “is for the first time explicitly tying a Belt
and Road proposal to its military ambitions,” the Times said.
In response, Lijian Zhao, deputy chief of mission at the Chinese
embassy in Islamabad, took to Twitter to protest the newspaper’s
claims. He called the Times’ report “Western propaganda” and
emphasized that the bilateral economic corridor was purely economic in
nature.
Beijing, last year, formally launched its first overseas military base
in Djibouti. Sri Lanka’s Hambantota port, which is under control of
China Merchants Port Holdings, and a deep-sea port in Pakistan’s
Gwadar region are widely speculated to be potential bases for China’s
navy.
“Most people working in military circles knew there was a security
dimension to [the BRI] so this [New York Times report] is just a
confirmation at best,” said James Chin, director of the Asia Institute
at the University of Tasmania. It’s impossible, he added, for a
country to separate military power and economic power when it is
striving for greatness.
“Going forward, I think China will still play up the BRI as trade and
prosperity but I think more and more people will be suspicious and
mobilize the public against the BRI,” Chin warned. “In the end, BRI
could end up as a logistical route to sell China-made stuff and
nothing else.”

For two years, they tried to tutor and confine him. They taught him
history, explained nuances and gamed out reverberations. They urged
careful deliberation, counseled restraint and prepared talking points
to try to sell mainstream actions to a restive conservative base
hungry for disruption. But in the end, they failed.

For President Trump, the era of containment is over.

One by one, the seasoned advisers seen as bulwarks against Trump’s
most reckless impulses have been cast aside or, as Defense Secretary
Jim Mattis did Thursday, resigned in an extraordinary act of protest.
What Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.)
once dubbed an “adult day care center” has gone out of business.

Trump will enter his third year as president unbound — at war with his
perceived enemies, determined to follow through on the hard-line
promises of his insurgent campaign and fearful of any cleavage in his
political coalition.

Often he erupts. “Freaking idiots!” he calls his aides. Except he uses
a more pungent word than “freaking.”

For two years, Mr. Trump has waged war against his own government,
convinced that people around him are fools. Angry that they resist his
wishes, uninterested in the details of their briefings, he becomes
especially agitated when they tell him he does not have the power to
do what he wants, which makes him suspicious that they are secretly
undermining him.

Now, the president who once declared that “I alone can fix” the system
increasingly stands alone in a system that seems as broken as ever.
The swirl of recent days — a government shutdown, spiraling scandals,
tumbling stock markets, abrupt troop withdrawals and the resignation
of his alienated defense secretary — has left the impression of a
presidency at risk of spinning out of control.

As the president vents, he constantly rattles off what he sees as
underappreciated accomplishments. “Look what I did for Mexico and
Canada,” he has told allies. “Look what’s happened with terrorism.”

Always impulsive, the president increasingly believes he does not need
advisers, according to people close to him. He is on his third chief
of staff, third national security adviser, sixth communications
director, second secretary of state, second attorney general and soon
his second defense secretary. Turnover at the top has reached 65
percent, according to the Brookings Institution.

You might quibble over the numbers, but the trend is harder to ignore.

The surprise vote sparked the largest crash of any major currency in
modern history. Their positions may have benefited from Farage’s
actions, as premature concessions he made before the votes were
tallied that night helped drive the pound to its highest mark all
year, just hours before it plummeted. The false sentiment made bets
against the British currency cheaper and more lucrative.

Some hedge funds, which made small fortunes in a matter of hours
betting the same way as Farage’s pals, had a good idea the concessions
were misleading because they’d hired Britain’s best-known polling
firms to provide near hour-by-hour voting data, via secret exit polls,
according to a Bloomberg investigation published in June. Farage has
said he had access to the results of one such poll that night, run by
his party’s polling firm, Survation, which showed Leave had won.

 Farage has denied having any personal financial interest in the vote,
aside from a £1,000-bet he made at a professional bookmaker for
campaign publicity. He also has said he did not intentionally drive
the pound up ahead of the crash. Farage, who called Prime Minister
Theresa May's negotiated agreement with Brussels “the worst deal in
history,” has publicly spoken of late about a possible return to the
front-line of British politics. He didn't respond to detailed requests
to comment for this article, though he viewed them and shared some of
their contents with associates.

In addition to the world of supporters around Farage regularly making
or taking big bets, add one more gambler he was in touch with that
night: Damian Lyons Lowe, the owner of Survation. He also was a key
political operative and adviser to Farage as well as the man who,
according to Farage, tipped him about the private hedge fund poll.
Lyons Lowe declined to comment for this story, but in an interview
with the Financial Times in June, he denied giving Farage specific
data from that poll.

Six sources familiar with Lyons Lowe’s betting record say he has a
history of gambling on politics—in the very contests in which he’s
polling.

Another close Farage associate, who also was with him on the night of
the referendum, was watching how financial and betting markets were
responding to the day’s events. George Cottrell was a young UKIP
activist who ran Farage’s private office. In a July 2017 interview
with the Daily Telegraph he boasted that he’d made a “six-figure sum”
during the evening of June 23 and early hours of June 24. “At 10pm, I
couldn’t believe I was still getting 9/1 [odds for a majority leave
vote],” he told the newspaper.

“We were in our campaign office and I was tracking all the major stock
indices, the dollar and pound currency markets,” Cottrell said,
according to the Telegraph. “When it got to 3 a.m., I was getting my
managers out of bed to get me another 50 grand on here, another 50
grand there, to short sterling.” Cottrell, the son of a British
aristocrat, said he lost most of his winnings betting on a horse the
next day.

Euro 1.1390
Dollar Index 96.77
Japan Yen 111.10
Swiss Franc 0.9935
Pound 1.2670
Aussie 0.7063
India Rupee 70.14
South Korea Won 1124.55
Brazil Real 3.9041
Egypt Pound 17.878
South Africa Rand 14.5229

“But it is a curve each of them feels, unmistakably.It is the
parabola. They must have guessed, once or twice -guessed and refused
to believe- that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

Frontier Markets

Anti-government demonstrations in Sudan over rising food prices have
led to deadly clashes between state security forces and protesters in
what may be the biggest popular challenge yet to the 29-year rule of
Sudanese president Omar al-Bashir. The protests, which started in the
eastern city of Atbara on Wednesday over a government decision to
raise the price of bread, have spread to at least three other cities,
including the capital Khartoum. Amnesty International said on Friday
that at least nine people had been shot by security forces, while
local journalists reported on Saturday that as many as 28 may have
been killed. The authorities also arrested 14 leaders of an opposition
coalition, Reuters reported. The violence follows similar protests in
Khartoum in 2013 and in January this year over deteriorating economic
conditions but the latest demonstrations are the most significant to
date, analysts said. “This is the biggest urban challenge to face
Bashir’s government since it came to power, the scale of the protests
is unprecedented,” said Mohammed Osman, an independent analyst, by
phone from the capital Khartoum. “It is very hard to see how the
regime can survive this wave unscathed.” Mr Bashir took office in a
military coup in 1989 and has used his control of the army to closely
rule the country ever since. Accused by the US of sponsoring terrorism
in the 1990s, Mr Bashir has survived a 20-year US trade embargo, an
international arrest warrant for war crimes committed in Darfur and
the secession of half of the country in 2011 but the country’s
economic decline appears to be undermining his control. The economy
has been starved of foreign currency since South Sudan gained
independence, taking with it three-quarters of the country’s oil
production. US sanctions were lifted in 2017 but have done little to
affect the trade deficit. The value of the Sudanese pound has
plummeted by 85 per cent against the dollar this year and inflation is
running at almost 70 per cent, rendering normal life virtually
impossible for many of Sudan’s 40m people. Recommended Analysis Sudan
Sudan’s economy struggles to shake off pariah status In October, the
government, which is trying to rebuild trading relationships with the
west, introduced a swath of economic reforms but each will take time
to have effect and the population’s patience with Mr Bashir’s
administration is wearing thin. While the trigger for the unrest was
economic, much of the anger on display on the streets of the capital
is political, with many protesters chanting anti-government slogans,
Mr Osman said. Amnesty International condemned the use of deadly force
against protesters. “Opening fire on unarmed protesters cannot be
justified,” Seif Magango, deputy director for east Africa, said in a
statement. “The government must address the root cause of the rapidly
deteriorating economic conditions in the country instead of trying to
prevent people from fully exercising their right to protest against
the growing hardships they are facing,” he said. The government did
not respond to a request for comment. On Friday, a government
spokesperson defended the state’s response and said peaceful
demonstrations had been derailed by “infiltrators”, according to local
press reports.

Given the fragility of the food markets, Maputo might well be a shot
across the bows of many regimes, who have yet to secure access to
sufficient food at sufficiently low prices for their people. Failure
to execute on this front, surely imperils many.

When you visit the Democratic Republic of Congo, you discover right
away that Congolese people are deeply interested in politics. Along
the pavements in major cities like the capital, Kinshasa, or
Lubumbashi in the southeast, you will see crowds of people standing
around during the day, studying newspapers spread out on the ground.
The bystanders are too poor to buy, but they read with intensity.
These gatherings are common enough to have earned a name: parlements
debouts, or “standing parliaments.”

Kabila is supported by his presidential guard and by his National
Intelligence Agency, with its nationwide informer network (the latter
a disagreeable fact of life that visitors to the DR Congo soon
encounter). The regime’s soldiers and police have already opened fire
at several opposition marches, adding more casualties to the thousands
who have died since Kabila refused to step down. The UK-based
organization Freedom from Torture reports that another 2,000 people
have been arrested since 2015. Dr. Denis Mukwege, the legendary
Congolese physician who just received the Nobel Peace Prize for his
work healing thousands of women and girls who were raped during the
chronic violence in eastern DR Congo, has said the December 23 vote
will be “a parody of an election.”

So far, most mainstream US media coverage has been worse than usual.
Joseph Kabila hired a well-connected Washington lobbying firm, Sanitas
International, which orchestrated interviews for American reporters
who parachuted into the country, and the resulting articles portrayed
Kabila with some sympathy (what was his favorite movie?), and even
implied that his stand-in candidate, a nonentity named Emmanuel
Ramazani Shadary, actually has a chance to win fairly. The Kabila
interviews (in The New York Times, The Washington Post, and on
National Public Radio) also treated the DR Congo election as a mildly
amusing sideshow in a distant backwater. (Meanwhile, the permanent
Bloomberg news correspondents in Kinshasa prove that fair, thorough
coverage is indeed possible.)

Today, a key figure is an Israeli billionaire, Dan Gertler, who
partners with President Kabila to continue to drain the DR Congo of
its cobalt, copper, and diamonds. Gertler is so brazenly corrupt that
even the Trump administration had to impose targeted economic
sanctions on him this past June for “corruption and misconduct.”

But Joseph Kabila and Dan Gertler are not rogue criminals, stealing on
their own. A prominent New York–based hedge fund, Och-Ziff Capital
Management, paid $100 million in bribes to pass on to Kabila and
another Congolese official; in 2016, the United States fined the fund
$412 million. Gertler is still connected to Glencore, an Anglo-Swiss
giant listed on the London Stock Exchange, and Glencore in turn has
relied on big banks like Citigroup and Bank of America to keep its
vast commodity-trading and mining businesses humming along. If
Glencore cut off mining royalty payments, Kabila could not maintain
his presidential guard and his spy network, and he would have to jump
on the next plane out of the country.

The 30-year-old Huawei has grown into a multinational corporation with
a sprawling presence. It serves more than a third of the world’s
population in 170 countries and regions, with 2017 revenues of
USD$92.55 billion. More than a fourth of that comes from the
Europe-Middle-East-Africa region, and from its first reach into Kenya
in 1998 the Chinese brand expanded to at least 40 African nations.
That’s by design, because a key principle of Huawei’s strategy was to
build into developing countries.

That means more than phones, even as Huawei blew past the expensive
Apple in South Africa earlier this year and is making a run for
Samsung. It’s building a warehouse in Johannesburg, the first such
dedicated space on the continent for the firm. It’s planning an
electronics assembly plant for Angola and is investing nearly $2
billion in the country’s telecom network. It has Huawei offices from
Mauritania to Mauritius, and has rolled out its solar-powered
RuralStar towers in remote areas of Algeria, Ghana and Nigeria.

While Huawei’s been building its name in Africa for 20 years, the
company is looking to the future. By 2025, it anticipates 40 billion
smart devices and 100 billion connected “Internet of Things” devices.
It expects 100 percent of businesses to be cloud-based, and 86 percent
to use artificial intelligence (AI). From billions of herd animals to
millions of connected cars, the 5G network that it’s building delivers
a new “global economic vision” alongside its Belt and Road plans, and
alongside its existing products and services across African nations.

By 2012, a U.S. investigation led to Huawei being shut out of the
country’s market for, as former Foreign Policy writer John Reed put
it, being seen as “basically an intelligence agency masquerading as a
tech business.”

By 2013, security experts warned of potential surveillance societies
in Ethiopia, Zambia, Zimbabwe and beyond, with implications beyond the
continent. Those fears have only grown: In January 2018, a security
briefing on the 5G network in the U.S. warned that it must stay ahead
of Chinese influence. The documents appeal to U.S. investigative
agencies including the FBI to monitor the Huawei risk.

SAHARANPUR, India — India’s most influential guru joined thousands of
believers four years ago as the temple’s first stone was set in the
ground.
It was a glorious day for its builders, the Gupta brothers, the sons
of a local shopkeeper who had risen, almost magically, to become one
of the richest families a world away in South Africa.
The three brothers had flown back on their private jet to start work
on the temple, a 125-foot monument of pink sandstone and white marble
that would tower over the tiny place where their father used to ride
his bicycle to pray every day.
but one morning last month, as the sun struggled to break through the
smog in Saharanpur, their hometown in India’s north, the giant yellow
crane raising the temple stood still — in limbo, like the brothers
themselves.
The Guptas are now in self-imposed exile in Dubai, evading arrest in
South Africa, where they stand at the center of a scandal that has
already brought down the nation’s president and exposed staggering
amounts of corruption in the once-legendary party of Nelson Mandela.
They began by selling shoes in South Africa and swiftly became central
figures in the nation’s post-apartheid history, outsiders who broke
into the very pinnacle of political power. Seemingly overnight, they
joined the ranks of South Africa’s most influential families, playing
a leading role in one of the biggest dramas after the end of
apartheid: Who is getting rich, and how?
Mr. Mandela’s election as president in 1994 set off a scramble by
leaders in his party, the African National Congress, to amass wealth.
The early ones succeeded through ties with rich white South Africans.
Many others turned to the brothers from Saharanpur.
The Guptas found eager partners at all levels of the A.N.C., from
bureaucrats to a sitting president, Jacob Zuma, according to dozens of
interviews by The New York Times, as well as government investigators,
international auditors, emails from a Gupta company, financial records
and court documents.
Seizing on a chance encounter with a South African official in India
decades ago, the three brothers cultivated ties to the governing party
so expertly that it became difficult to draw the line between their
business empire and the president’s office.
They made one of Mr. Zuma’s sons a business partner, enabling them to
buy a coal mine through government intervention and set up a media
business that the president helped guide himself, according to
officials, company emails and people involved in the ventures. The
president responded in kind, handing them control over strategic
cabinet selections and the boards of state-owned enterprises.
The Guptas recruited other senior A.N.C. officials by giving them
secret cuts of lucrative contracts from the state’s utility and rail
companies, government investigators say. They acted as fixers for
multinational companies, like the German software giant SAP, which
paid them kickbacks in return for government business, documents show.
“The Guptas were so egregious and big-time that they are a story on
their own,” said R.W. Johnson, a historian of South Africa. “But the
thing that amazes is that this is only 20 years on from an African
nationalist revolution, and here are all these guys happily selling
their country down the river.”
As with other outsiders, including big corporations like KPMG, the
Guptas helped undermine the nation’s democratic institutions. And like
generations of foreigners before them, they took their windfall out of
Africa, moving it to Dubai and India through a maze of dubious, and at
times illegal, transactions, officials say.
They flew everywhere: across oceans in their own planes, to their own
helipad here in Saharanpur, to Hindu temples in the Himalayas.Even in
far-flung rural corners of South Africa, they found A.N.C. officials
ready to divert money meant to help the poor.
Far more than a gift to their hometown and a testament to their humble
beginnings, the $28 million Shivadham Temple is now being investigated
by the Indian authorities as the cornerstone of an elaborate scheme to
launder “illicit money” from the Gupta fortune in South Africa.
“It’s a 1,000 percent lie,” Mr. Gupta said in his first extensive
interview since fleeing South Africa. “I’ll kill the person and I’ll
kill myself before I use a cent for this kind of a thing.”
But he nurtured grand ambitions. One day, Mr. Gupta called over his
oldest son, Ajay, to recount a newspaper article on the war between
Iran and Iraq. The price of rice had skyrocketed there because, he
told his son, all the traders had left the countries.
“But somebody is going in,” Ajay recalled his father saying. “He’s
getting this advantage because there’s no competition.”
In the 1980s, few people in Saharanpur left to seek their fortunes in
places like China, Russia or South Africa. Most went to big cities
like New Delhi, or to Britain or Canada.
But to people who knew the family, the father’s mind-set reflected
that of the family’s caste, the Banias, or traders. The brothers spoke
proudly of their background, explaining why they were such good
businessmen.
So Ajay, who had already set up a computer import business in New
Delhi, followed his father’s advice and went looking for opportunities
in Russia, China and Singapore.
The middle brother, Atul, went to South Africa in 1993, right before
it became a democracy. He kept going back, despite his family’s
misgivings.
“He alone was the bullish one,” Ajay recalled. “He loved the place.”
The Guptas hired or became business partners with the sons of powerful
A.N.C. politicians, like Mr. Zuma’s son Duduzane, and Tshepiso
Magashule, the son of Ace Magashule, the party’s current secretary
general.
It fell to the youngest of the Gupta brothers — the friendly and
easygoing Rajesh, nicknamed Tony — to keep the sons happy. They went
to nightclubs together and hung out in the family’s compound in
Johannesburg.
The politicians’ sons flew first class to Dubai and India, staying in
the best rooms at high-end hotels, all at the Guptas’ expense,
according to emails from a Gupta-owned company leaked to South African
news organizations and examined by The Times. One December, they
joined the Gupta family on an extended vacation to Delhi, Dubai, New
York and Venice, the emails show.
The Guptas also gained great influence over the president and his affairs.
According to witnesses in the government inquiry into the Zuma years,
the Guptas had a say in choosing ministers, or even offered positions
to candidates directly.
When Mr. Zwane was appointed Mr. Zuma’s mining minister in 2015 — one
of the most important positions in the government — other politicians
and industry officials were taken aback. He had been unknown on the
national stage, and had no experience in mining.
But the Guptas knew him well. As agricultural minister in Free State
Province, he had spearheaded a dairy project that, instead of helping
poor black farmers, enriched A.N.C. politicians and their business
allies.
The Guptas, who had a stake in the project, sponsored a trip to India
for Mr. Zwane and his church choir, according to the Gupta company
emails. They paid for his first-class flight to Dubai and his stay at
a five-star hotel.
Then, as soon as he became mining minister, Mr. Zwane went to
extraordinary lengths to help the brothers land a mining deal.
The Guptas, along with Mr. Zuma’s son as their business partner, had
been trying to buy a troubled coal mine from Glencore, the Swiss
commodities giant. Glencore had rejected the family’s offer until Mr.
Zwane, as mining minister, got directly involved.

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But now the time is approaching for the establishment of the first
Addis Ababa Stock Exchange. A one page template issued by the Office
of the Prime Minister recently indicated that the government was
planning to establish a capital market by 2020.

The paper cited poor financial infrastructure, limited financing and
poor financial inclusiveness as the major impediments in the finance
sector. The government plans to develop a road-map for introducing a
trade financing instruments including capital market. Increasing loans
to the private sector by 20 percent annually and ensure its fair
disbursement and expanding credit registry to micro finance
institutions are the key areas that will be addressed in 2019,
according to the document.

The targets set to be accomplished by 2020 are enhancing the use of
modern financial technology, establish a system enabling e-commerce
and digital financing and introduce capital market.

Prime Minister needs to execute real quick on the economic front but
if he levels the playing Field, a whole Troop of folks will be looking
to pile in. That Troop will include the Ethiopian Diaspora, Foreign
Investors and I am sure our very own Safaricom who must have already
presented the Prime minister with a copy of the MIT research on M-Pesa
which con- firmed access to mobile-money services increased daily per
capita consumption levels of two percent of Kenyan households, lifting
them out of extreme poverty.

Kenya runs the risk of losing control of the Port of Mombasa if it
should default on loans from state financial institution China Exim
Bank, according to a new report from Kenya's auditor general. The
terms of a $2.3 billion loan for Kenya Railways Corporation (KRC)
specify that the port's assets are collateral, and they are not
protected by Kenya's sovereign immunity due to a waiver in the
contract.

KRC accepted the multi-billion-dollar loan in order to build the
Mombasa-Nairobi standard gauge railway (SGR), with construction
services provided by China Roads and Bridges Corporation (CRBC), a
division of state-owned conglomerate China Communications Construction
Company (CCCC).

"The payment arrangement agreement substantively means that the
Authority's revenue would be used to pay the Government of Kenya's
debt to China Exim bank if the minimum volumes required for [rail]
consignment are not met," auditor F.T. Kimani wrote. "The China Exim
bank would become a principle over KPA if KRC defaults in its
obligations."

In addition, any dispute with China Exim Bank would be handled through
an arbitration process in China, not in Kenyan courts. The auditor
general expressed concern that the port authority had not disclosed
these arrangements in its financial statements.

Kenyan concerns about the transfer of a strategic seaport to China
have precedent elsewhere. In December 2017, Sri Lanka handed control
of the newly-built port of Hambantota to a Chinese operator in order
to satisfy part of its significant debt to Chinese lenders.

 Central Bank is sitting on the highest hard currency reserves in its
history. Remittances have surged by 71.9% year on year to $266.2M in
June 2018 from $54.9M 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.

Nairobi All Share Bloomberg
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Every Listed Share can be interrogated here
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