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Satchu's Rich Wrap-Up
Monday 03rd of December 2018

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0930-1500 KENYA TIME
Normal Board - The Whole shebang
Prompt Board Next day settlement
Expert Board All you need re an Individual stock.

The Latest Daily PodCast can be found here on the Front Page of the site

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Incredibly stunning view of mount Ololokwe from Samburu national reserve. @Lepalai #MagicalKenya #BeautifulNorth #Samburu

Incredibly stunning view of mount Ololokwe from Samburu national
reserve. While beauty is in the eye of the beholder, scenes like this
are bound to take your breath away with their awe-inspiring beauty.
@Lepalai #MagicalKenya #BeautifulNorth #Samburu

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US, China agree to trade war ceasefire, more talks @AFP
Law & Politics

US President Donald Trump and China's Xi Jinping agreed Saturday to
suspend any new tariffs in the escalating trade war between the
world's two largest economies, even if huge existing duties will
remain in place.
White House said an increase of tariffs from 10 to 25 percent due to
kick in on January 1 would now be put on hold, providing room for
intense negotiations.
The agreement, hashed out over steak in the Argentine capital Buenos
Aires, lowers the temperature in a conflict that has spooked world
The two leaders, who were in Buenos Aires for a summit of the G20
countries, called it "a highly successful meeting," the White House
"The principal agreement has effectively prevented further expansion
of economic friction between the two countries and has opened up new
space for win-win cooperation," said Chinese Foreign Minister Wang Yi.
Under the agreement, Trump is shelving a plan to raise existing
tariffs of 10 percent to 25 percent from the start of next year.
However, the truce is only partial.
Some $50 billion worth of Chinese imports already face 25 percent
tariffs while the 10 percent tariffs, which target a massive $200
billion in goods, will also remain in effect.
Meanwhile, China has targeted $110 billion worth of US imports for tariffs.
If there is any further retaliation, Trump has warned, he will slap
punitive duties on the remaining $267 billion in Chinese goods coming
to the United States.
And Saturday's truce also contained an ultimatum.
The White House made clear that the 10 percent tariffs would still
leap up to 25 percent if China doesn't meet US demands in 90 days.
These include China stopping a host of trade barriers, intellectual
property theft and other actions that Washington say make fair trade
Tough negotiations lie ahead, but Trump was upbeat.
"This was an amazing and productive meeting with unlimited
possibilities for both the United States and China. It is my great
honor to be working with President Xi," he said in a statement.
Trump and Xi expressed optimism the moment they and top aides sat down
in Buenos Aires at a long hotel table adorned with flowers.
"Only with cooperation between us can we serve the interest of both
peace and prosperity," Xi said.
The meeting -- featuring a menu of sirloin steak, caramel rolled
pancakes and Argentine wine -- went on longer than scheduled.
And while it may have been tacked on to the end of two days of G20
diplomacy, it was in many ways the main event of the weekend.
German Chancellor Angela Merkel, who was also attending the G20, spoke
for many when she urged progress.
"We all realize that we are indirectly influenced by the fact that
Sino-American economic relations are not running as smoothly as a
world order needs," she said.
On the US side at the dinner, Trump was accompanied by advisers such
as Larry Kudlow and Treasury Secretary Steven Mnuchin, who are widely
seen as wanting a deal.
But hawkish advisers like Peter Navarro and US Trade Representative
Robert Lighthizer were also present. Navarro's inclusion in particular
was a surprise as he has harshly criticized China, accusing its
leadership of duplicity.
Trump, as often in his diplomatic dealings, appears to consider his
personal chemistry with Xi the most important factor in the success of
the negotiations.
He has prided himself on building a good relationship with the Chinese
leader, even though he acknowledges it may have trouble surviving the
growing crisis.
"He may not be a friend of mine anymore but I think he probably
respects me," Trump said in September.
At the dinner, however, he was more upbeat, saying that his ties to Xi
were "a very primary reason" for considering a deal possible.

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03-DEC-2018 :: #G20 and the Global Economy
Law & Politics

The G20 in Buenos Aires was extraordinary, The Optics were off the
charts, it was Netflix level cinema. Putin fresh off his Kerch Strait
interdiction high-fived the Crown Prince of Saudi Arabia. The Wall
Street Journal [was reporting at about the same time] on a Highly
classified CIA report which said that the Saudi crown prince sent 11
messages to a top aide who oversaw the hit squad in the hours around
Khashoggi’s murder.  Prince Mohammed “personally targeted” Khashoggi
and “probably ordered his death.” It added: “To be clear, we lack
direct reporting of the Crown Prince issuing a kill order.” We picked
up the Audio of a conversation President Macron speaking with the same
Crown Prince

In the audio, it is possible to make out the prince saying “Don’t
worry”, to which @EmmanuelMacron responds “I am worried”
MbS: "Don't worry."
Macron: "I do worry. I am worried."
MbS: inaudible "That's right"
Macron: "I told you."
MbS: "Yes, you told me."
Macron: "You never listen to me."
MbS: "No, I listen of course."
Macron: "Because I told you..."
MbS: "It's OK"
Macron: "I am a man of my word."

Japan's Prime Minister Abe congratulated President Trump on his
historic mid-term victory. That 14 second Video is just priceless for
Potus's reaction. Potus himself was under the Mueller Hammer and his
one time Fixer Michael Cohen singing like a Canary. There were so many
more details, the Group Photo and the positioning. This was drama
unfolding in real time at a whole another level.

Of course, the big Set Piece Event was inn fact the meeting between
President Trump and China's ''core leader'' President Xi Jinping. As
per Zerohedge, Trump and Xi ate grilled sirloin steaks paired with a
malbec from the Argentine winery Catena Zapata. The Dinner ran over by
sixty minutes and everyone broke out into spontaneous applause after.

 China Xinhua News reported ''Xi, Trump agree that China and the
United States "can and should" ensure the success of their relations''

The White House - President Trump stated: “This was an amazing and
productive meeting with unlimited possibilities for both the United
States and China. It is my great honor to be working with President

President Trump and President Xi have agreed to immediately begin
negotiations on structural changes with respect to forced technology
transfer, intellectual property protection, non-tariff barriers, cyber
intrusions and cyber theft, services and agriculture. Both parties
agree that they will endeavor to have this transaction completed
within the next 90 days. If at the end of this period of time, the
parties are unable to reach an agreement, the 10% tariffs will be
raised to 25%.

Howard French said The fentanyl - provisionally - is the only real
development here.

''Very importantly, President Xi, in a wonderful humanitarian gesture,
has agreed to designate Fentanyl as a Controlled Substance, meaning
that people selling Fentanyl to the United States will be subject to
China’s maximum penalty under the law.''

So where are we? Its been a brutal 2018 in most markets and for the
first time in Eternity holding $ cash was probably the best trade of
them all. The FED dialled up interest rates and started to dial down
their balance sheet. China's markets bled, Emerging Markets got
walloped, Commodities too, Frontier markets suddenly found the tide
was out. Subsequently and in November, we have seen a nascent rebound
in ''riskier''' assets with the Rand for example rebounding over 8%
and posting its best month in more than 30 years. After unremitting
pressure from the White House, Powell dialled down his hawkish

Investors will of course expect a rebound on Monday, a relief rally,
as it were. How long it will last is Anybody's Guess.

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President Trump stated: "This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi."
Law & Politics

Very importantly, President Xi, in a wonderful humanitarian gesture,
has agreed to designate Fentanyl as a Controlled Substance, meaning
that people selling Fentanyl to the United States will be subject to
China’s maximum penalty under the law.

On Trade, President Trump has agreed that on January 1, 2019, he will
leave the tariffs on $200 billion worth of product at the 10% rate,
and not raise it to 25% at this time. China will agree to purchase a
not yet agreed upon, but very substantial, amount of agricultural,
energy, industrial, and other product from the United States to reduce
the trade imbalance between our two countries. China has agreed to
start purchasing agricultural product from our farmers immediately.

President Trump and President Xi have agreed to immediately begin
negotiations on structural changes with respect to forced technology
transfer, intellectual property protection, non-tariff barriers, cyber
intrusions and cyber theft, services and agriculture. Both parties
agree that they will endeavor to have this transaction completed
within the next 90 days. If at the end of this period of time, the
parties are unable to reach an agreement, the 10% tariffs will be
raised to 25%.

It was also agreed that great progress has been made with respect to
North Korea and that President Trump, together with President Xi, will
strive, along with Chairman Kim Jong Un, to see a nuclear free Korean
Peninsula. President Trump expressed his friendship and respect for
Chairman Kim.

President Xi also stated that he is open to approving the previously
unapproved Qualcomm-NXP deal should it again be presented to him.

President Trump stated: “This was an amazing and productive meeting
with unlimited possibilities for both the United States and China. It
is my great honor to be working with President Xi.”

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Robert Mueller is a strategic mastermind cornering a gang of simpletons watched by a peanut gallery of gawkers & hecklers
Law & Politics

The man pulling at the many loose ends of this loosey-goosey business
is working methodically in ways that are only clear in hindsight
Robert Mueller is a strategic mastermind cornering a gang of
simpletons watched by a peanut gallery of gawkers & hecklers

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12-NOV-2018 :: Erdogan whose normal modus operandi is one of bluster and braggadaccio has played this macabre murder on Turkish soil with finesse
Law & Politics

In fact, President Erdogan whose normal modus operandi is one of
bluster and braggadaccio has played this macabre murder on Turkish
soil with finesse and a little like Yehudi Menuhin played the violin.
It’s been a virtuoso performance from a geopo- litical perspective.
The drip-drip feed has meant closure has been all but impossible for
the House of Saud or is it the House of Salman? Erdogan’s rebound from
zero [you will recall the currency was crashing around his ears not
too long ago and he was in serious ‘’cold Turkey’’] to hero has been

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Mueller demolished that fiction. But the endgame has only just started @NewYorker
Law & Politics

it seems virtually certain that Trump’s fate will ultimately be
determined in the political arena rather than the courts.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1346
Dollar Index 97.197
Japan Yen 113.477
Swiss Franc 0.9979
Pound 1.2768
Aussie 0.7365
India Rupee 70.025
South Korea Won 1112.82
Brazil Real 3.8667
Egypt Pound 17.94
South Africa Rand 13.7172

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July 2nd 2018 These 90 or so days represent the most consequential arrival of an African Politician on the African Stage since Mandela walked out of prison

appointed the 12th Prime Minister of Ethiopia  on 2 April 2018. He
grew up in a Muslim family (Ahmed Ali, his Oromo father; Tezeta Wolde,
his mother) and with Oromo Muslim and Christian grandparents. He is
evidently a Virilian and Gladwellian Figure.

“To create one contagious movement, you often have to create many
small movements first.” “Look at the world around you. It may seem
like an immovable, implacable place. It is not, With the slightest
push—in just the right place—it can be tipped.”—Malcolm Gladwell .

He has been Prime Minster for 90 days. During those 90 days, he has
criss-crossed the country, ended a state of emergency, released
thousands of political prisoners, thawed relations with Eritrea [29
Mar 2018 HE Abiy Ahmed @PM_AbiyAhmed - It is time. Lets build a wall
of love between #Ethiopia & #Eritrea], bagged a $1b from the UAE,
announced a dramatic economic about-turn. In matters language and
linguistics, he has tapped into a ‘’Nelson Mandela’’ 1994 mood. These
90 or so days represent the most consequential arrival of an African
politician on the African stage since Mandela walked out of prison
blinking in the sunlight and constructed his ‘’rainbow nation’’.

I was watching the France-Argentina game and the arrival of Kylian
Mbappe on the world stage at the tender age of 19. I recalled watching
the Whirling Dervishes of the Mevlevi order on a night of a full moon
in Konya, Turkey. I thought what they all have in common with Abiy
Ahmed. It’s all about speed and velocity. Paul Virilio terms it
‘dromology’, which he defined as the “science (or logic) of speed“. He
notes that the speed at which something happens may change its
essential nature, and that which moves with speed quickly comes to
dominate that which is slower.

“Whoever controls the territory possesses it. Possession of territory
is not primarily about laws and contracts, but first and foremost a
matter of movement and circulation.”

Virilio argues that the traditional feudal fortified city disappeared
because of the increasing sophistication of weapons and possibilities
for warfare. For Virilio, the concept of siege warfare became rather a
war of movement. Abiy Ahmed has moved at lightning speed, the old
guard is like ‘’the traditional feudal fortified city’’.

He said “The ppl of Tigray are still begging for a drop of water; TPLF
(the party) is not the people of Tigray”.

On the same day he said, “we are in debt, we have to pay back but we
can’t. And secondarily, we aren’t able to finish projects we have
started” and announ- ced his economic Pivot. Of course, the downside
risk of all this infrastructure is plain to see and Sri Lanka and the
tale of its Hambantota Port is now a cautio- nary Tale. FX reserves
were at less than a month’s worth of imports and something needed to
be done. Expectations are high.

The 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.

Abiy Ahmed’s first 90 days have been as remarkable as the less than 90
minutes of France’s Mbappe’s performance on Saturday.

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Why is once-peaceful Tanzania detaining journalists, arresting schoolgirls and killing opposition leaders? @washingtonpost

Over the past month, Tanzanian politics has been making international
headlines. Journalists representing the Committee to Protect
Journalists were detained in Dar es Salaam, the country’s commercial
capital. The government expelled pregnant girls from school. Paul
Makonda, the regional commissioner for Dar, announced plans to round
up LGBT people. Eventually, the rest of the government distanced
itself from Makonda, but the damage was done. Donors have withdrawn
aid. The European Union and the United States condemned these human
rights abuses.

What’s going on? Since 1961, Tanzania has been ruled by the same
party, Chama Cha Mapinduzi (CCM). While it has never been a democracy,
Tanzania had been better known as a safari tourism destination and as
a donor darling. How have things become so repressive so quickly?

The answer lies in the 2015 election of John Magufuli as president.
Since then, opposition politicians have been arrested, harassed and
beaten. TV offices have been raided and newspapers suspended. Regime
critics — journalists, business executives, opposition politicians,
student leaders — have been kidnapped, forced into exile or
assassinated by “unknown assailants.” Some have never been seen again.
Much more violence outside Dar es Salaam hasn’t been reported, even in
the Tanzanian press.

Tanzania’s president has delegated the government’s repression to
local officials

Much of this violence has been kept quiet because it has been local.
Magufuli’s autocratic enforcers are a cadre of local officials. On
paper, the 26 regional commissioners and 139 district commissioners
are nonpartisan appointees who oversee elected local governments and
policing functions. In practice, they are party loyalists or former
military officers. They exploit their oversight role, often violently,
to deal with local problems that might challenge the president.

That role is especially significant in Dar es Salaam. Regional
Commissioner Makonda, seen as Magufuli’s apprentice, does much of the
government’s dirty work. The government has shied away from open
repression, which could lead to losing international aid and moderate
voters’ support. Through local officials, Magufuli can use violence —
while still being able to distance himself from an “unruly local
official” when necessary.

Makonda’s crackdown on LGBT people followed this formula. But this
time, Magufuli’s closeness to Makonda undermined his plausible
deniability. Tanzanians see regional and district commissioners as the
president’s hands at that level. Makonda’s threats were allowed to
stand for more than a week to send a message. International
disapproval forced the foreign affairs minister to issue a statement
disavowing him.

Nevertheless, hundreds of LGBT people are still in hiding. They knew
the censure was lip service. Tanzanians see Makonda’s actions as a
more reliable sign of the president’s wishes than an international

Why has this president escalated the government’s violence and repression?

This president’s control over his party and the voters is shakier than
that of his predecessor, Jakaya Kikwete. Magufuli’s nomination as the
candidate of the ruling party, CCM, took everyone by surprise. He won
despite not having broad support. What’s more, Magufuli faces an
unprecedented threat from opposition parties. CCM may have never lost
a presidential election, but it has lost many local elections. In
2015, opposition parties won control of most urban local governments.
This was no small loss. Local government is highly important,
providing education, health care and water. Opposition local
governments are the only examples Tanzanians have ever had of
opposition politicians with real power. The result is a threat to CCM:
Why vote for the devil you know if another party can demonstrably run
a city of 200,000 or even 5 million people?

My research explores the strategies CCM uses to manage these local
opposition threats. Between 2015 and 2018, I conducted hundreds of
interviews with voters, politicians and officials in both CCM and
opposition areas. I find that regional and district commissioners take
a more active and violent role in areas where the opposition runs
local governments. They make it difficult for opposition governments
to effectively deliver public services, thereby simultaneously
punishing those who voted for the opposition and discrediting
opposition parties.

These commissioners increasingly operate with unchecked power. This
month, Iringa’s regional commissioner unilaterally removed the
opposition mayor, Alex Kimbe, from his post under suspicion of
corruption. Kimbe, a popular and often defiant local figure, has been
arrested frequently on spurious charges. They have also been
implicated in attacking civilians — something the ruling party tries
to keep hidden. For instance, opposition MP Zitto Kabwe revealed that
authorities and herders had clashed in his region of Kigoma, allegedly
leaving more than 100 dead. After Kabwe made the allegation,
authorities charged him with sedition.

Outside Dar es Salaam, most government violence is directed at
opposition parties and their supporters. CCM has paid dozens of
opposition councilors to switch sides since 2016. In Morogoro, a
“swing” city, one opposition councilor was assassinated in 2018 after
refusing to switch. After these councilors switch sides, new elections
are required — and are often quite violent. Regional and district
commissioners in the regions of Iringa, Arusha and Mbeya ordered the
arrest, violent harassment and torture of opposition politicians and
supporters during such campaigns.

Magufuli, a devout Christian, is keen to win over the party’s
increasingly evangelical base. Constantine Manda, a doctoral
researcher at Yale, argues that Makonda’s actions against LGBT people
are intended to convince voters of Magufuli’s socially conservative
agenda. That’s why commissioners are ordering the arrests of LGBT
people and sex workers across the country; why Makonda banned
pornography in Dar es Salaam; and why the Tandahimba district
commissioner and others ordered pregnant schoolgirls arrested.

Until now, few outside Tanzania have paid any attention to the
commissioners’ repressive or violent actions. But no more. Makonda and
Magufuli are too closely linked for the president to escape
responsibility. Politics in Dar is also more visible because of the
heavy journalistic, diplomatic and NGO presence.

This week Magufuli declared that he prefers Chinese aid, which comes
with no conditions — suggesting that Western governments’ traditional
tool to pressure governments to protect human rights may no longer
work. Will increased scrutiny have any consequences, or will
repression continue in earnest now that the mask is finally off?

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Africa's Cities Opening Doors to the World Overview @WorldBank & @UKaid

The low development trap
— Africa’s urban economies are limited to nontradable goods and services
Crowded, disconnected, and thus costly — Africa’s cities are limited
to nontradables by urban form
Closed for business, out of service: The urgency of a new urban
development path for Africa

African cities are crowded, disconnected, and costly.
Typical African cities share three features that constrain urban
development and create daily challenges for residents:
Crowded, not economically dense — investments in infrastructure,
industrial and commercial structures have not kept pace with the
concentration of people, nor have investments in affordable formal
housing; congestion and its costs overwhelm the benefits of urban
Disconnected — cities have developed as collections of small and
fragmented neighborhoods, lacking reliable transportation and limiting
workers’ job opportunities while preventing firms from reaping scale
and agglomeration benefits.
Costly for households and for firms — high nominal wages and
transaction costs deter investors and trading partners, especially in
regionally and internationally tradable sectors; workers’ high food,
housing, and transport costs increase labor costs to firms and thus
reduce expected returns on investment.
55% African households face higher costs relative to their per capita
GDP than do households in other regions — much of it accounted for by
housing, which costs them a full 55 percent more in this comparison
African cities are 20 percent more fragmented than are Asian and Latin
American ones
472 million Urban areas in Africa comprise 472 million people. That
number will double over the next 25 years as more migrants are pushed
to cities from the countryside. The largest cities grow as fast as 4
percent annually.
African cities are closed to the world. Compared with other developing
cities, cities in Africa produce few goods and services for trade on
regional and international markets
To grow economically as they are growing in size, Africa’s cities must
open their doors to the world. They need to specialize in
manufacturing, along with other regionally and globally tradable goods
and services. And to attract global investment in tradables
production, cities must develop scale economies, which are associated
with successful urban economic development in other regions.
Such scale economies can arise in Africa, and they will — if city and
country leaders make concerted efforts to bring agglomeration effects
to urban areas. Today, potential urban investors and entrepreneurs
look at Africa and see crowded, disconnected, and costly cities. Such
cities inspire low expectations for the scale of urban production and
for returns on invested capital. How can these cities become
economically dense — not merely crowded? How can they acquire
efficient connections? And how can they draw firms and skilled workers
with a more affordable, livable urban environment?
From a policy standpoint, the answer must be to address the structural
problems affecting African cities. Foremost among these problems are
institutional and regulatory constraints that misallocate land and
labor, fragment physical development, and limit productivity.
Since the 1980s, much of the growth in developing countries has
depended on the expansion of exports through industrial production and
higher technology. Unlike nontradables, tradable goods and services
face elastic global demand. They may also allow for agglomeration
economies, which increase returns to employment (box 1). Rapidly
growing cities require growth in employment — and the returns to
expanding employment are highest in tradable sectors.
Because of manufacturing’s importance in entering regional and global
markets, one can look at the share of manufacturing in GDP to see
whether an urbanizing economy is opening its doors to the world — or
closing them. For example, we compare the structures of non-African
and African economies during periods when the urbanized share of the
population rises to 60 percent. Based on a cross-section of African
and non-African economies, the comparison shows that Africa’s cities
are indeed trapped in the production of nontradables for local
markets. As the African economies attain 60 percent urbanization,
their share of manufacturing in GDP stays flat (or somewhat falling)
at about 10 percent. In contrast, the manufacturing share of the
non-African economies rises from 10 percent to nearly 20 percent
(falling back only when urbanization exceeds 60 percent).
Why have African urban economies remained local? Two reasons stand
out. One, paradoxically, is natural resource development. Such
development can create a high demand for nontradable goods and
services. As growth in the natural resource sector raises factor
prices, this sector crowds out others — notably manufacturing (figure
2). Countries that depend heavily on natural resource exports tend to
sprout urban economies dominated by nontradable services (“consumption
cities”). This syndrome is known as Dutch Disease.
What is an urban agglomeration economy, and how does it arise from
economic density? A simple case is the reduction of transport costs
for goods: When suppliers are close to their customers, shipping costs
decline. In the late nineteenth century, four fifths of Chicago’s jobs
were compactly located within four miles of State and Madison Streets
— near residences and infrastructure (Grover and Lall 2015). And in
the early 1900s, New York and London were manufacturing powerhouses
because factories were built there to access customers and transport
services. Many agglomeration benefits increase with scale: Each
doubling of city size increases productivity by 5 percent, and the
elasticity of income with respect to city population is between 3
percent and 8 percent (Rosenthal and Strange 2004).
Certain public goods — like infrastructure and basic services — are
cheaper to provide when populations are large and densely packed
together. Firms located near each other can share suppliers, lowering
input costs. Thick labor markets reduce search costs, giving firms a
larger pool of workers to choose from. And spatial proximity makes it
easier for workers to share information and learn from each other.
International evidence shows that knowledge spillovers play a key role
in boosting the productivity of successful cities.
Cities in Africa are not delivering agglomeration economies or reaping
urban productivity benefits; instead, they suffer from high costs for
food, housing, and transport. These high costs — rising from
coordination failures, poorly designed policies, weak property rights,
and other factors that lower economic density — lock firms into
producing nontradable goods and services.
Many Sub-Saharan African cities share three characteristics that
constrain economic development and growth. Two appear directly in the
cities’ physical structures and spatial form: They are crowded with
people and dwellings, and they are disconnected by a lack of transport
and other infrastructure. Finally, and in Part because they are
disconnected, cities are also costly. Indeed, they are among the
costliest in the world, both for firms and for households — not least
because of their inefficient spatial form.
African cities are crowded in that they are packed with people who
live in unplanned, informal downtown dwellings to be near jobs. Why?
The immediate reason is that the urbanization of people is not
accompanied by an urbanization of capital (box 2). Housing,
infrastructures, and other capital investments are lacking. Across the
region, housing investment lags urbanization by nine years (Dasgupta,
Lall, and Lozano-Gracia 2014).
Africa’s cities feel crowded precisely because they are not dense with
economic activity, infrastructure, or housing and commercial
structures. Without adequate formal housing in reach of jobs, and
without transport systems to connect people living farther away,
Africans forgo services and amenities to live in cramped quarters near
their work. Often informal, these downtown districts are likely to
lack adequate infrastructure and access to basic services. It is true
that, within Africa as in other developing regions, population density
is generally and strongly correlated with indicators of livability.
For example, access to services is higher for African households in
urban areas than in rural ones (Gollin, Kirchberger, and Lagakos
2016). But this relative advantage does not imply that cities are
livable enough. Across Africa, 60 percent of the urban population is
packed into slums — much higher than the 34 percent seen elsewhere
(United Nations 2015a)
or example, in both Harare, Zimbabwe and Maputo, Mozambique, more than
30 percent of land within five kilometers of the central business
district remains unbuilt. This land near the core is not left unbuilt
by design in African cities, as it can be in well- developed downtowns
such as Paris (which reserves 14 percent of downtown land for green
space, making densely populated districts more livable). Instead,
outdated and poorly enforced city plans, along with dysfunctional
property markets, create inefficient land use patterns that no one
intended. The downtown lacks structures — despite being crowded.
In Dar es Salaam, 28 percent of residents live at least three to a
room; in Abidjan, 50 percent (World Bank 2015a, World Bank 2016). And
in Lagos, Nigeria, two out of three people dwell in slums One factor
in the crowding of Africa’s cities is their lack of capital
investment, which for the past four decades has remained relatively
in the region, at around 20 percent of GDP. In contrast, urbanizing
countries in East Asia — China, Japan, the Republic of Korea — stepped
up capital investment during their periods of rapid urbanization.
Between 1980 and 2011, China’s capital investment (infrastructure,
housing, and office buildings) rose from 35 percent of GDP to 48
percent, while the urban share of its population rose from 18 percent
to 52 percent between
1978 and 2012. In East Asia as a whole, capital investment remained
above 40 percent of GDP at the end of this period.
In 1968, when countries in the Middle East and North Africa region
became 40 percent urban, their per capita GDP was $1,800 (2005
constant dollars). And in 1994, when countries in the East Asia and
Pacific region surpassed the same threshold, their per capita GDP was
$3,600. By contrast, Africa, with 40 percent urbanization, today has a
per capita GDP of just $1,000
Connections among people as a function of population near the city
center: Nairobi, Kenya is more fragmented and less well-connected than
Pune, India
Africa’s generally low levels of urban capital investment also appear
in the assessed worth of building stock. For example, the total
economic value of buildings in Dar es Salaam is estimated at around
US$12 billion (Ishizawa and Gunasekera 2016), or just less than three
times the city’s share of GDP. Even lower are the estimated values for
Nairobi, Kenya ($9 billion) and Kigali, Rwanda ($2 billion). Compared
with cities in Central America, African cities have low replacement
values for their built-up area, built-floor area, and population.
Thus, Nairobi has the highest replacement value per square kilometer
among the four African cities studied, yet it is just 60 percent of
the value of Tegucigalpa, which has the lowest among six Central
American cities.
In Nairobi, for example, commercial and industrial structures explain
55 percent of the total value of building stock — even though these
structures occupy just 4 percent of the city’s area. Residential
development is urgently lacking.
While the lack of capital by itself might not always pose an obstacle
to economic growth, African cities also are disconnected in that they
are spatially dispersed. Structures are scattered in small
neighborhoods. Without adequate roads or transport systems, commuting
is slow and costly, denying workers access to jobs throughout the
larger urban area. People and firms are separated from each other and
from economic opportunity. And because urban form is determined by
long-lived structures that shape the city for decades — if not
centuries — cities that assume a disconnected form can easily become
locked into it.
The lack of connections among neighborhoods means that African cities,
compared with developed and developing cities elsewhere, show both
lower exposure and higher fragmentation in connections among people
living near the city center.
• Low exposure means that people are disconnected from each other. At
a given distance (usually 10 kilometers), they cannot interact with as
many people as in a city with higher exposure.
• High fragmentation means that within a specified area, population
density varies widely: Its peaks are scattered, not clustered in a way
that could promote scale economies. Fragmentation increases
infrastructure costs, while it lengthens travel times among homes, job
sites, and businesses.
According to a new study of 265 cities in 70 countries that controls
for total population and per capita GDP, average exposure near the
center is 37 percent lower in African cities than in Asian and Latin
American cities, while African cities are 23 percent more fragmented
(Henderson and Nigmatulina 2016). The contrast between Nairobi, Kenya
and Pune, India illustrates these differences (figure 3).
One pattern that explains the low exposure and high fragmentation of
African cities is their relative lack of new development near the
center. New construction is not clustered to make capital more
concentrated and increase economic density. Instead, it tends to push
the boundaries of the city outward. In urban development language,
this kind of building-out represents either expansion or leapfrog
development; opposed to both is infill, which makes cities denser.
In Nairobi, the average journey-to-work time is one of the longest for
15 global cities studied (IBM 2011). Part of the reason is that
walking accounts for a large share of commuting — in Nairobi about 41
percent (UNEP and FIA Foundation 2013). But even if more city dwellers
could afford transport by car or minibus, commutes would remain
impractical for lack of roads. In eight representative African cities,
roads occupy far lower shares of urban land than in other cities
around the world.
The spatial fragmentation of Africa’s cities prevents firms from
reaping both scale and agglomeration benefits. It prevents scale
economies by reducing workers’ access to jobs, constraining firm size:
Africa’s urban firms employ 20 percent fewer workers on average than
comparable firms elsewhere (Iacovone, Ramachandran, and Schmidt 2014).
In addition, spatial fragmentation hinders agglomeration economies by
preventing job market pooling and matching and the transfer of skills
and knowledge — a special concern in light of African cities’ low
human capital endowments.
In sum, the ideal city can be viewed economically as an efficient
labor market that matches employers and job seekers through
connections (Bertaud 2014). The typical African city fails in this
matchmaker role.
Africa’s higher urban living costs appear in rents, food prices, and
prices for other goods and services. City dwellers pay around 35
percent more for food in Africa than in low-income and middle-income
countries elsewhere: a premium that looms larger given the high share
of African household incomes that goes to food. Even higher
differentials apply to urban housing (55 percent higher in urban areas
of African countries, relative to their income levels) and transport
(42 percent higher in African cities than cities elsewhere, including
vehicle prices and transport services). Overall, urban households pay
20 to 31 percent more for goods and services in African countries than
in other developing countries
The informal, often colorful minibus systems that dominate collective
motorized transit in most African cities are far from cost-efficient:
The buses’ low load factor (passenger capacity) prevents them from
realizing scale economies. For the poorest urban residents especially,
the cost of vehicle transport in some cities is prohibitive, as
measured in a study from 2008 (figure 8). The need to walk to work
limits these residents’ access to jobs.
unit labor costs are three times higher in Djiboutiville, Djibouti,
than in Mumbai, India and 20 percent higher in Dar es Salaam, Tanzania
than in Dhaka, Bangladesh.
Urban plans are largely ineffective in Africa. One reason is that they
are divorced from reality:

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South Africa All Share Bloomberg -14.86% 2018

Dollar versus Rand 6 Month Chart INO 13.7172


Egypt Pound versus The Dollar 3 Month Chart INO 17.94


Nigeria All Share Bloomberg -19.27% 2018


Ghana Stock Exchange Composite Index Bloomberg -1.00% 2018


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I The Road

The first time we saw the road was the day the Air Kenya Bombardier
circled the airstrip at the Samburu National Reserve, where elephant
conservationist Ian Douglas-Hamilton was running his research station.
We saw it again on the day we went up in Douglas-Hamilton’s Cessna, to
search for fresh carcasses. And we saw it up close on the day we paid
a visit to a Turkana village, whose men had been recruited by Chinese
construction workers to slaughter as many of the matriarchs as they

“The poachers are living out in the bush in gangs of between two and
10,” we were told by Francis Lorot, the only villager brave enough to
go on-record. “An elephant can take pain, sometimes up to 40 bullets
before she dies. The killers are scared to death, because they are not
experts. An expert can kill with one bullet.”

In villages like this across central and northern Kenya, we learnt,
men with no experience in elephant killing could earn a $55 sign-up
fee, the equivalent of a labourer’s monthly salary. The fee was
exclusive of meals and AK47 bullets, while the ivory split was
dependent on the size of the tusks. When an elephant was killed, Lorot
told us, a call was put through via cellphone to a middleman in
Archer’s Post, Isiolo or Wamba. The middleman, always a local, would
hire a taxi for the day and direct it to the point on the road closest
to the kill. Only the tusks would be packed into the taxi, “no meat”.
After enough tusks had been accumulated in his secret warehouse, the
middleman would get ready to make his move.

“Then they’re taken to the Chinese,” said Lorot, “or to Nairobi.”

And so on that day, a Tuesday in June 2011, we were left in no doubt
that the catalyst in our story—the chief protagonist—was this very
same road. Back then, the state-owned Chinese construction company was
close to completing the 505-kilometre stretch that would connect
Isiolo in central Kenya to Moyale in the north. The stretch, which cut
through the acacias and doum palms of the lava plains, was a new link
on the Trans-African Highway that was supposed to make good on the
long-deferred dream of “Cape Town to Cairo”. Beyond Moyale and the
Ethiopian border, the stretch was destined to tack on to another
critical link, the 197-kilometre run from Hawassa to Ageremariam,
which would in turn complete the Addis Ababa-Nairobi-Mombasa corridor.

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Kenyan Debt Remains Sustainable Despite @IMFNews Warning, @HKRotich Says @business's @adengat
Kenyan Economy

Kenya’s borrowing remains manageable, its treasury secretary said,
looking to quash concerns after the International Monetary Fund raised
its assessment of the country’s risk of debt distress to moderate.
The East African nation’s nominal debt-to-gross domestic product is
still sustainable at 55 percent, far lower than the IMF’s upper
threshold of 74 percent, while the net value of the debt is less than
half of GDP, Henry Rotich told a conference Sunday.
The IMF analysis shows Kenya’s debt is sustainable, although the risk
of distress “has moved from low to moderate” in exceptional
circumstances, Rotich said in the capital, Nairobi. “But this is based
on extreme shocks, like if growth falls to almost zero, if the country
faces high interest rates or a sharp depreciation of the currency.”
“These are the conditions under which the debt can move to moderate
risk,” he said. “But Kenya is not a high-risk country.”
Focus on Kenyan debt has intensified since it more than doubled in the
past six years to 5.15 trillion shillings ($50.2 billion). The IMF
announced its risk revision in October and warned the borrowing is
raising fiscal vulnerabilities and increasing interest payments.
Rotich attributed recent rises in debt to infrastructure spending and
said the government is addressing the issue, targeting a fiscal
deficit of 3 percent by 2022. The deficit peaked at 8.9 percent in the
2016-17 financial year.
”We have continuously implemented fiscal consolidation and plan to
access private sector resources through public private partnerships to
fund infrastructure development going forward,” he said.
The IMF also judged Kenya’s shilling at least 17.5 percent overvalued
and no longer floating -- an assessment disputed by the central bank.
Rotich said stability in the currency, one of Africa’s best-performing
this year, is helping keep debt at sustainable levels.
”Our market is flexible; if you want foreign currency you go to the
market and get it,” he said in a separate interview. “No one is
managing the currency, so as is typical in a free market, there can be
no over-valuation or undervaluation.”

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.@SafaricomPLC share price data
Kenyan Economy

Closing Price:23.75 Market Cap: $9.283b EPS:1.38 PE:17.210

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Kenyan Government issued a 20-year infrastructure bond (IFB1/2018/20) at a coupon rate of 11.95% @CytonnInvest #cytonnreport
Kenyan Economy

accepted yield coming in at 12.2% This is attributed to the saturation
of long-end offers, leading to a relatively flat yield curve on the
long-end, making Treasury rely on the short-term treasury bills to
meet its domestic borrowing target. We are of the view that the
Government will need to offer more incentive for the long-term bonds
by increasing the yields to attract investors.

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Every Listed Share can be interrogated here
Kenyan Economy

Kenya: Off-grid Solar Access Project for Underserved Counties
@WorldBank @WorldBankKenya

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by Aly Khan Satchu (www.rich.co.ke)
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December 2018

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