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Wednesday 27th of November 2019 |
25-NOV-2019 :: Oil is the Purest Proxy and is at an 8 week high. Law & Politics |
@Maryam_Rajavi who tweeted ''The whole issue is that the Velayat-e Faqih regime is on its last leg'' This alliance of Pompeo, the ''MAGA'' Tweet Army, Maryam Rajavi and the MEK is just not credible its incredible. Of course, ''ARAB'' NATO which includes the Kingdom of Saudi Arabia, the GCC and Israel is a lot more credible and they are surely guiding the Inferno however if a civil war is ignited in the Shia crescent and the nature of the hybrid warfare indicates this is the direction of travel, the implosion will engender catastrophic consequences which will be impossible to manage and which surely will imperil ''ARAB NATO'' itself. Oil is the Purest Proxy and is at an 8 week high.
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After @WeWork @SoftBank Startup Bookkeeping Draws Scrutiny @business International Trade |
In early 2018, the founders of Chinese artificial intelligence startup SenseTime Group Ltd. flew to Tokyo to see billionaire investor Masayoshi Son. As they entered the offices, Chief Executive Officer Xu Li was hoping to persuade the head of SoftBank Group to invest $200 million in his three-year-old startup. A third of the way into the presentation, Son interrupted to say he wanted to put in $1 billion. A few minutes later, Son suggested $2 billion. Turning to the roomful of SoftBank managers, Son said this was the kind of AI company he’d been looking for. “Why are you only telling me about them now?” he asked, according to one person in the room. In the end, SoftBank invested $1.2 billion, helping to transform SenseTime into the world’s most valuable AI startup. The young company’s valuation hit $7.5 billion this year. That investment model is now under fire after Son, 62, boosted the equity in office-sharing startup WeWork only to see it plummet as investors balked at enormous losses and troublesome governance. Indeed, SoftBank has participated, along with other investors, in scores of fundraisings that have added a total of more than $150 billion to the value of private companies, according to Bloomberg calculations. Among its deals are the world’s top two startups—ByteDance Inc. valued at $75 billion and Didi Chuxing Inc. at about $56 billion. In some cases, SoftBank’s involvement in multiple funding rounds helped drive up valuations that resulted in paper profits for Son’s company. The WeWork fiasco raises questions about such numbers. The co-working startup’s valuation crested at $47 billion this year with SoftBank’s investment, then plummeted to $7.8 billion in a bailout engineered by Son. WeWork is slashing jobs and scaling back operations. “WeWork is not just a mistake, it is a signal of weakness in the whole model,” said Aswath Damodaran, a professor of finance at New York University’s Stern School of Business, who has written four books on valuing businesses. “If you screwed up that valuation so badly, what about all of the other companies in your portfolio?” SoftBank said WeWork is an exception rather than a symptom of broader problems, and it has learned from the experience. Since unveiling his $100 billion Vision Fund in 2016, Son has become the most active tech investor on the planet, pouring money into more than 80 companies. That helped create a bumper crop of unicorns, more than 300 startups priced at $1 billion or greater, according to the research firm CB Insights. What’s not as well understood is the incentive Son has to keep valuations rising. When SoftBank buys shares in a startup and then invests again at a higher valuation, Son says he has made a profit. That is legal under accounting standards, but SoftBank receives no money. The only change is that SoftBank has boosted the value of its original stake from, say, $1 billion to $2 billion by raising the value of the startup. In SoftBank’s income statements and return calculations, at least some of the additional $1 billion can be counted as profit. “My brain and my heart, almost everything about myself is focusing on Vision Fund” “They pump up valuations to get higher returns to look good to investors,” says Eric Schiffer, chief executive officer of Patriarch Organization, a Los Angeles-based private equity fund. “That kind of fundraising apparatus is essentially unicorn porn.” SoftBank said its accounting complies with all standards and is consistent with widely accepted practices. As for startup valuations, it said it is not determining them on its own and invests with experienced firms such as Sequoia Capital and Temasek Holdings Pte. “Our valuations have been validated by more than 120 sophisticated investors who’ve invested alongside and after us,” Navneet Govil, chief financial officer of SB Investment Advisers, the entity that manages the Vision Fund, said in a statement. SoftBank said it has a rigorous internal process for setting valuations, and it books profit on any increase in valuation only after taking into account future cash flows and public market proxies, as well as private market funding prices. SoftBank’s auditors at Deloitte & Touche check those calculations, and the Vision Fund’s limited partners have their own auditors, including staff from Duff & Phelps and Ernst & Young, who vet the final figures. “Our valuation process is robust and reviewed quarterly by independent auditors,” Govil said. “We believe our performance is strong. In just two and a half years, Vision Fund 1 has already had seven IPOs, $4.7 billion of realized gains, $11.4 billion in cumulative investment gains and returned $9.9 billion to our limited partners.” Today’s accounting rules may be ill-suited to an era of unprecedented speculation on unicorns. Under the International Financial Reporting Standards (IFRS) that SoftBank uses, companies have wide latitude to determine how much they think portfolio companies are worth—and therefore how much profit they report to investors. It’s unclear whether any company has tried to determine paper profits for tech startups on the scale SoftBank is now using. “I don't believe we’ve ever seen an attempt to record this magnitude of income with respect to unquoted equity investments,” said Robert Willens, a tax expert in New York. Son’s bookkeeping has allowed him to claim his average internal rate of return far outpaces those of other investors. This month, as SoftBank took a hit from WeWork, Son defended his investment approach. “There are 5,000 venture capitals globally and average IRR is 13%,” he said. “Our return is about twice as big as this.” Son’s confidence in his own acumen led to the creation of the Vision Fund in 2017, which at the time was more than 10 times the size of any venture capital fund. He was seeking to repeat the success of his most celebrated investment—a $20 million bet on China’s Alibaba Group Holding Ltd. that turned into stock now worth more than $120 billion. With Abu Dhabi’s Mubadala and Saudi Arabia’s Crown Prince Mohammed bin Salman backing the Vision Fund, Son began a blitzkrieg of deals in 2017. He invested more than $35 billion across about 100 companies, according to research firm Preqin. Among the biggest were multi-billion-dollar fundings of WeWork and Didi Chuxing, the Chinese ride-hailing giant modeled after Uber Technologies Inc. In December, a SoftBank-led group invested $9 billion in Uber, including buying stock from existing shareholders. SoftBank began including financial results for the Vision Fund during the fiscal year that ended in March 2018. Total operating profit including a related Delta Fund was 303 billion yen, or less than $3 billion. That surged to 1.26 trillion yen the following year, making it the most profitable unit at Son’s company and accounting for more than half the parent company’s operating income. With Son’s energy directed at startups, SoftBank spun off the domestic telecom business that had made it famous and generated cash for his early investments. “My brain and my heart, almost everything about myself is focusing on Vision Fund,” Son told investors in May. But the profits SoftBank booked were mostly on paper. In the first fiscal year, unrealized gains on investment valuations accounted for essentially all the stated income for the Vision and Delta funds. In the most recent fiscal year, unrealized gains on valuations amounted to 1 trillion yen, while realized gains—like the sale of India e-commerce giant Flipkart to Walmart Inc.—totaled less than 300 billion yen. WeWork underscores the risks of that approach. SoftBank first took a stake in August 2017 at a valuation of $21 billion. It then invested another $3 billion in November 2018 at a $45 billion valuation and later agreed to a $1.5 billion warrant at $47 billion. As Son reported results this May, he highlighted WeWork as an example of portfolio companies heading for IPOs. When the deal fell apart, SoftBank took a 498 billion yen hit. SoftBank Vision Fund said it never took profits from WeWork by marking it all the way up to $47 billion. It kept the shares on its books at about half that price. It still had to take that down by about 75%, which led to the loss. Venture capital and private equity firms are mostly private so they don’t need to report quarterly profits to public shareholders, and their limited partners are typically focused on returns when portfolio companies cash out through IPOs or acquisitions. SoftBank doesn’t reveal specific valuation changes for each of its portfolio companies in a quarter, typically only naming a few winners or losers. Investors putting money in alongside SoftBank are at times affiliates, like Grab, Didi and Alibaba. “If I’m an investor, I want to know how they are coming up with these numbers. Otherwise, you can’t believe any of the valuations,” said NYU’s Damodaran. “The more they talk about accountants the less I would trust the numbers.” SoftBank concluded that under IFRS rules the Vision Fund must count valuation changes as income because its primary business is investing, and SoftBank Group must incorporate that income in its books because the Vision Fund is a consolidated subsidiary. One person close to the company said the resulting profit figures are almost meaningless, but there is no better accounting method given the current rules. “I’m not an accountant or a lawyer, but presenting this as income doesn’t make any sense,” said Ilya Strebulaev, a professor of finance at Stanford University’s Graduate School of Business whose research suggests the latest, post-money valuations typically overvalue startups by about 50%. Adding to the complexity is that startup stakes are sometimes transferred between SoftBank Group and the Vision Fund, which have different shareholders. The price at which those assets are shifted has implications for profits on either side. After WeWork, other deals are coming under scrutiny. SoftBank invested in Didi Chuxing in 2015 with the Chinese company’s valuation at about $6 billion. It then put more money in about once a year as Didi’s valuation climbed to $56 billion. But Didi has run into trouble since the fundraising two years ago. Chinese regulators have cracked down on ride-hailing services for drawing migrant workers into big cities and hurting taxi drivers’ incomes. Two passengers were killed after using its car-pooling service, prompting a government suspension. In addition, investors have grown skeptical about ride-hailing after the roughly 35% slump in Uber’s shares since its May IPO. Uber’s drop means SoftBank should probably mark down Didi by at least the same margin, said one person who has worked on deals with SoftBank. The Japanese company would also have to look at its investments in other ride-sharing companies such as Grab Holdings Inc. in Southeast Asia, the person said. Didi declined to comment. A Grab spokeswoman said there has been no change in its valuation and it has diversified beyond ride-hailing. SoftBank took a loss in its most recent earnings report on its Uber stake, but made no mention of the other ride-hailing firms in its portfolio. It did cut the estimated value of its stakes in Didi and other ride-hailing services in the most recent quarter, according to one person close to the company. SoftBank said it can’t disclose the loss or gain on every portfolio company each quarter. SoftBank said Didi is an example of how it is not responsible for propelling startup valuations because Silicon Valley’s Silver Lake Management invested alongside SoftBank at the same price. Toyota Motor Corp. and Booking Holdings Inc. then bought shares at a higher valuation. In the U.S., food-delivery firm Doordash Inc. struggled to distinguish itself from rivals and hadn’t hit the $1 billion unicorn mark until SoftBank invested in the company last year. Then in just over a year, Doordash’s valuation went from $1.4 billion to $12.6 billion this May. When SoftBank reported earnings the next quarter, it highlighted Doordash as one of the main contributors to its operating income. Perhaps SoftBank’s most controversial deal after WeWork is an Indian startup called Oyo that was founded six years ago by teenager Ritesh Agarwal. It aimed to bring reliable quality to the country’s chaotic lodging industry. Oyo staff help hoteliers upgrade everything from furniture to bedding and toiletries and the hotel or guest house gets a bright red Oyo sign as a seal of approval, encouraging travelers to book. Oyo takes a cut of roughly 25%. While SoftBank backed Oyo from its early days, some people close to the company worry that Son’s relationship with Agarwal is similar to his ties to WeWork co-founder Adam Neumann and that he may be making similar mistakes. The Vision Fund put $250 million into Oyo in 2017 and led a $1 billion funding round last year, which pushed the Indian company’s valuation to $5 billion. Son encouraged Agarwal to expand into markets such as China and the U.S. and to buy properties, including the Hooters Casino in Las Vegas for $135 million. Stephen Givens, an M&A lawyer in Tokyo, argues that Oyo’s business model resembles WeWork’s, a tech-inflected real estate business that has expanded far beyond its initial concept. “Oyo made sense in a place like India,” he said. “But moving into the U.S. and buying real estate is a big risk.” Even as SoftBank ran into trouble with WeWork, it helped push up the valuation of Oyo with an unusual funding round. In October, the Japanese company and Agarwal together chipped in, raising the valuation to $10 billion. SoftBank touted the startup as a bright spot when it took the writedown for WeWork, booking a valuation gain of 590 billion yen on 25 investments, of which Oyo was the only one named. “If you screwed up that valuation so badly, what about all of the other companies in your portfolio?” Yet it turned out that Agarwal, now 26, had borrowed $2 billion to finance his share of the purchase from financial institutions, including Japan’s Mizuho Financial Group Inc., people familiar with the matter have said. Son himself personally guaranteed the loans to Agarwal, according to another person familiar with the matter. Mizuho declined to comment. In addition, two earlier investors in Oyo were Didi and Grab, the ride-hailing companies backed by SoftBank. That raises the question of whether money used to boost their valuations was then reused to hike the value of another SoftBank investment. SoftBank did not disclose Son’s personal role in the deal or the bank loans to Agarwal. Ultimately, the Vision Fund decided it wouldn’t mark up its Oyo stock to the $10 billion valuation because the latest funding did not include independent investors. In a statement, Oyo said it is grateful for the support of investors including the Vision Fund. “We are a well-run company with a healthy balance sheet and a strong focus on business economics, and the same can be seen in the continued momentum we’ve seen in reducing our net losses,” it said. “We have great business relationships with both Didi and Grab since late 2017 and early 2018 when the fundraising had not happened.” Analysts trying to make sense of SoftBank’s valuations have been frustrated by what they view as a lack of transparency in such cases. SoftBank doesn’t discuss in detail the standards by which it values a particular startup or accounts for such gains as profit on its income statement. “SoftBank has offered little visibility into how they value their investments,” says Jefferies Group senior analyst Atul Goyal. Masafumi Takeno represented Japan on the IFRS Foundation committee that developed materials explaining how to use valuation guidelines. He said companies have broad discretion to determine asset values and disclosures. “The rules are pretty loose and permissive,” he said. For years, Son has expressed frustration that investors don’t see the value of his business. In presentations, he will often focus in on how SoftBank’s market capitalization is below the value of its assets, including publicly traded stocks like Alibaba. In February, he opened an event with a slide that showed: “25 – 4 = 9?” The point he was making is that SoftBank held assets worth 25 trillion yen—including a 12.5 billion yen stake in Alibaba—and had only 4 trillion yen in debt. Yet investors bestowed a value of 9 trillion yen on SoftBank, a discount of more than 60%. “It’s just beginner math,” Son said. “This is too cheap.” The SoftBank discount narrowed after that presentation with the help of a stock buyback and the impending IPOs for companies like Uber. On its website, Son’s company ran daily calculations of assets minus debt to show what the share price should be. But with the WeWork implosion, SoftBank’s market cap has dropped back below 9 trillion yen and the discount has widened again to more than 60%. The stock has dropped 30% since its April peak, though it’s still up 15% for the year. Shares reversed morning gains on Tuesday and dropped almost 1%. “Markets are telegraphing that the trust is gone,” said NYU’s Damodaran. “Masa needs to rebuild that.”
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08-JAN-2018 :: The Crypto Avocado Millenial Economy. Commodities |
The ‘’Zeitgeist’’ of a time is its defining spirit or its mood. Capturing the ‘’zeitgeist’’ of the Now is not an easy thing because we are living in a dizzyingly fluid moment. Paul Virilio has said 'Wealth is the hidden side of speed and speed the hidden side of wealth' and he is not wrong. Last Year the Economist Richard Thaler was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to behavioural economics and clearly behaviour is having an outsize influence on Economics. Malcolm Gladwell defined a tipping point as "the moment of critical mass, the threshold, the boiling point".The book seeks to explain and describe the "mysterious" sociological changes that mark everyday life. Gladwell stated: "Ideas and products and messages and behaviors spread like viruses do". You will recall in late April 2017, Avocado prices had doubled and reached the highest in data going back 19 years. The jump in demand in recent years has been dramatic. American per-capita consumption was 6.9 pounds in 2015, versus 3.5 pounds in 2006. My Point is that the Millenials discovered the virtues of Avocado, the behaviour spread like a 'virus' and Boom prices sky-rocketed. Prices have retraced some since those 2017 highs. The Avocado Price surge is an example of the new c21st Millennial Economy but there are many other examples.
Emerging Markets
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The monetary authority sold dollars on the spot market twice on Tuesday as the real weakened to an all-time low @markets. Emerging Markets |
The monetary authority sold dollars on the spot market twice on Tuesday as the real weakened to an all-time low following comments from Economy Minister Paulo Guedes that a weaker currency isn’t a problem. Campos Neto said at an event in Brasilia on Tuesday evening that the foreign exchange market was “dysfunctional” when the central bank decided to intervene and stressed that the bank’s actions do not change the long-term trend of the currency. He added that Brazil is “well prepared” to face turbulence, with large foreign reserves and stressed the separation between currency and monetary policy.
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the dollar rose as high as 4.2770 reais before closing at its low of the day around 4.2330. @Reuters Emerging Markets |
That high of 4.2770 reais was almost 1% higher than the dollar’s previous peak, reached in 2015 when Brazil was mired in one of the worst recessions in its history. “Today we had a very atypical movement; the exchange rate became dislocated, with gaps in liquidity,” central bank President Roberto Campos Neto said at an event promoted by newspaper Correio Braziliense. “If tomorrow we think there are dysfunctional moves, that Brazil’s exchange rate is behaving unlike other countries’ and there are liquidity gaps in the market, we will intervene again just like we did today,” he said. Market participants said the real’s slump on Tuesday was triggered by comments from Economy Minister Paulo Guedes the evening before that he was not worried about its weakness and that a weakening exchange rate is a natural consequence of falling interest rates.
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Geingob secured 87% of the presidential ballot in 2014, while Swapo won 80% support in the parliamentary vote @BBGAfrica Africa |
While neither are realistically at risk of losing their majority, their margins of victory are likely to narrow. Geingob will square off against seven challengers. His main rival is dentist Panduleni Itula, a member of the ruling party who took advantage of a loophole in the electoral laws to run as an independent. He secured the endorsement of three other opposition party leaders and could attract some support from Swapo’s support base. Geingob, who trained as a teacher and holds a master’s degree in international relations from the New School for Social Research in New York, served as prime minister and trade and industry minister before replacing Hifikepunye Pohamba as president in 2014. A chronic drought sent Namibia’s economy into a downturn in 2016 and the International Monetary Fund sees a third consecutive annual contraction this year. The government has increased borrowing to offset a slowdown in revenue, and the ratio of public debt to gross domestic product has surged to 49% from 23% five years ago. More than 10% of the population of 2.6 million live in abject poverty and unemployment is rampant, while ongoing drought has left more than 700,000 people in need of food aid and prompted Geingob to declare a state of emergency. Support for the ruling party has also been dented by a scandal that saw Justice Minister Sackeus Shanghala and Fisheries and Marine Resources Minister Bernhard Esau quit after media reports emerged that they’d awarded quotas to one of Iceland’s biggest fishing firms in exchange for bribes. The reports alleged that Geingob had known about the scandal since 2018, an allegation he denies. Esau and Shanghala denied wrongdoing. Polling stations are due to open at 7 a.m. local time and close at 9 p.m., with 1.36 million people registered to cost ballots. Fifteen parties have fielded candidates for the 96 seats in the National Assembly.
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Exclusive: Sudan militia leader grew rich by selling gold @Reuters Africa |
KHARTOUM (Reuters) - Late last year, as President Omar Hassan al-Bashir’s hold on power weakened, one of Sudan’s most feared militia leaders lashed out against the government of his long-time ally and benefactor. In a speech to cheering troops, militia chief Mohamed “Hemedti” Hamdan Dagalo sympathised with the thousands of protesters who had poured onto the streets in December demanding food, fuel and an end to corruption. He hit out at officials “who take what isn’t theirs.” “There are some people who are doing great harm, and they are the officials, not the poor,” he raged. After years of loyally supporting Bashir, Hemedti took part in the military coup that toppled the leader in April and is now a senior figure in the transitional government that is preparing the ground for elections in three years’ time. Under the constitution, members of the transitional government aren’t allowed to engage in private business activity. Now a Reuters investigation has found that even as Hemedti was accusing Bashir’s people of enriching themselves at the public’s expense, a company that Hemedti’s family owns was flying gold bars worth millions of dollars to Dubai. Current and former government officials and gold industry sources said that in 2018 as Sudan’s economy was imploding, Bashir gave Hemedti free rein to sell Sudan’s most valuable natural resource through this family firm, Algunade. At times Algunade bypassed central bank controls over gold exports, at others it sold to the central bank for a preferential rate, half a dozen sources said. A central bank spokesman said he had no information about the matter. Airway bills and invoices, reviewed by Reuters, give a rare glimpse into Algunade’s dealings - a closely-guarded secret in a country where two thirds of the population live in poverty. The documents, covering a four-week period from the end of last year, show Algunade sent around $30 million of gold bars to Dubai, around a ton in weight. In the past, Hemedti has spoken openly about owning gold interests, most recently in an interview with the BBC in August. “I’m not the first man to have gold mines. It’s true, we have gold mines, and there’s nothing preventing us from working in gold,” he said then. But in response to Reuters’ questions for this article, Hemedti’s office denied any link between the commander and Algunade. In a separate interview, Algunade’s general manager, Abdelrahman al-Bakri, said the firm is owned by Hemedti’s brother Abdelrahim, who is also the deputy head of Hemedti’s Rapid Support Forces (RSF). Nevertheless, Bakri maintained there was no connection between Algunade and Hemedti and his RSF, which has evolved from a militia in Darfur to Sudan’s most powerful paramilitary group. “Algunade is as far as can be from the RSF,” he told Reuters at the firm’s heavily secured headquarters. He showed Reuters registration documents that named Abdelrahim as the company’s owner. Reuters was unable to contact Abdelrahim. Bakri acknowledged that Algunade exported gold to Dubai in late 2018 but said it had done so at the request of Bashir’s intelligence agency. He denied the firm sold gold to the central bank at a preferential rate. Hemedti’s grip on Sudan’s vital gold trade illustrates the scale of the challenge to rescue an economy broken by decades of mismanagement, corruption and war. His career began as a militia man in western Darfur, where rebels took up arms against Khartoum in 2003. Bashir mobilized several militia to quell the revolt and, in the conflict that followed, some 300,000 people were killed and two million more driven from their homes. The government disowned “outlaw” fighters who murdered civilians, but the International Criminal Court issued an arrest warrant for Bashir for war crimes and the United States imposed further economic sanctions against his government. In Darfur, Hemedti earned a reputation as a ruthless commander and a loyal servant to Bashir. The president called him “Hemayti,” meaning “my protector.” After Hemedti seized the goldmines of Darfur’s Jebel Amer mountain region, Bashir allowed him to hold onto the prize. “He became the new king of Jebel Amer and its gold,” said Amjad Farid, a politician and pro-democracy activist. “For Bashir, he was his loyal boy, his protection force.” Hemedti and his militia took full control of the Jebel Amer mines in 2017 - the year the United States began lifting economic sanctions against Sudan. He faced few obstacles as he expanded his operations from Darfur to South Kordofan and other regions of the country. Algunade traded with poor, artisan miners who used toxic mercury to extract gold, at grave risk to their health. The leftover soil, known locally as “Karta,” was trucked to Algunade’s plants where it was treated with cyanide to harvest the remaining ore. These practices have sometimes brought Algunade into conflict with local people. In October, people in the town of Talodi, South Kordofan, set fire to the Algunade plant, accusing the firm of plundering their gold and polluting their soil. “This gold belongs to us and this is our land, handed down by our grandfathers. Why should we give the gold to Algunade? We burned the factory to stop pollution and to stop them stealing our gold,” said miner Haroun Abdallah. Algunade’s general manager, Bakri, said the “citizens of South Kordofan should say thank you very much to Algunade” for all it had done for the area. He estimated the attack on the facility caused damage of about $6 million. A global campaign against the use of mercury in gold mining and other industries led to a United Nations treaty, the Minamata Convention on Mercury, which will prohibit the manufacture, import and export of products containing mercury by 2020. Sudan’s Energy and Mining Minister Adil Ibrahim told Reuters his country would comply with the agreement. The convention does not extend to cyanide, however. “Cyanide is more serious because it seeps into the earth, and can be washed by rain, and it kills so many animals and seeps into drinking water and affects vegetation in the area,” said Anwar al-Haj the chair of Sudan Democracy First Group, a non-governmental organization which advocates for democracy. It published a report in 2018 that asserted a link between the use of hazardous chemicals in mining and increased miscarriages, birth defects and deaths. Energy and Mining Minister Ibrahim said the government would help miners find alternatives to mercury, but cyanide use would continue because, if handled properly, it isn’t harmful. Sudan’s central bank is supposed to oversee gold exports, but two current and one former government official and several industry sources told Reuters that Bashir sometimes allowed Hemedti to circumvent this rule. The former president let Algunade sell gold as it liked, these people said, because Hemedti’s RSF militia was a useful counterweight to generals in the regular military whom Bashir perceived as a threat to his rule. The export documents and invoices reviewed by Reuters, covering a four-week period from the end of 2018, showed Algunade doing business with one counterparty in Dubai, a company called Rozella. Contacted by Reuters, Rozella confirmed the firm had dealt with Algunade. A company official said transactions between the two companies took place over a period of three months in late 2018. Algunade’s general manager Bakri told Reuters that Rozella was the only firm Algunade dealt with in Dubai. Under the arrangement with Bashir, Algunade would hand some of its export earnings to the state, to pay for the government’s fuel and wheat purchases, government officials said. Algunade’s general manager, Bakri, confirmed that some of the proceeds of gold sales were used to buy fuel. He said Algunade bypassed the central bank only for three months in late 2018, at Bashir’s request. A senior government official, however, told Reuters, “there were no official records showing that Algunade gave money” to the state. This official said Hemedti used proceeds from gold exports “to buy weapons for Bashir and himself.” He estimated that Hemedti pumped millions of dollars into buying weapons and vehicles for the RSF that roams the streets with rocket-propelled grenades and machine guns mounted on jeeps. Asked if revenues from Algunade’s gold sales were used to buy weapons, Bakri maintained there was no connection between the firm and the RSF or Hemedti. Hemedti’s office declined to comment beyond denying any link between the commander and Algunade. The head of Sudan’s gold exporters’ union Abdel Monem al-Siddiq said that even when Algunade sold its gold to the central bank as it was supposed to, it received a preferential rate - a claim Algunade’s general manager Bakri rejected as “fake news.” With tens of thousands of soldiers, the RSF is Hemedti’s power base. It is deployed across the country to protect gold mines and strategic buildings. Thousands of its fighters have fought for Saudi Arabia and the United Arab Emirates in Yemen’s civil war. Hemedti’s fighters are deeply loyal. “The leader sometimes takes the time to talk to us militiamen by telephone. We will always support him,” said one fighter, declining to be named because he wasn’t permitted to talk to the media. He said he was paid $20,000 to fight in Yemen for six months. Many of his countrymen live on less than $10 a month. Energy and Mining Minister Ibrahim faces a big challenge to reform the gold industry. He said successive ministers failed to ensure concessions were awarded fairly and transparently, leading to corruption. “It’s a mess,” he added. Finance Minister Ibrahim Elbadawi, who estimated Sudan needs up to $5 billion in international support, said the government will push to end monopolies in sectors including gold mining. Algunade’s general manager Bakri insisted Algunade doesn’t have market dominance. For many Sudanese, Hemedti and his firm are symbols of the country’s repressive past and economic inequalities. One gold trader told Reuters how he stood up during an industry conference recently to complain that Hemedti’s gold business had become too dominant. Two days later, he said, police hauled him to the prosecutor’s office for questioning about his comments. His account couldn’t be independently confirmed. At the gold souk in downtown Khartoum, a large sign advertising Algunade blazes above rows and rows of idle jewellery shops. Few Sudanese can afford to buy these days, said shopkeeper Mohammed Awad. When asked if gold exports had harmed his business, another trader pointed to the Algunade sign above him and said: “We hope that Hemedti will change his ways and keep the gold inside the country.”
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DRC: Tshisekedi @fatshi13 wants control of the security services @TheAfricaReport Africa |
The Congolese president intends to overhaul of his security system – with one objective: to take back control of the services still run by followers of Joseph Kabila. DRC president Félix Tshisekedi is “seriously” considering overhauling his security system, according to our sources in the presidency. It comprises the Garde Républicaine and the Garde Rapprochée – which also protects his family, his property and strategic sites such as airports and public television. Like the army and the intelligence units of the Agence Nationale des Renseignements, these services are still run by people close to former president Joseph Kabila. Ilunga Kampete, who is under European Union sanctions, is the head of the Garde Républicaine, and Josué Kasongo Ntenki leads the Garde Rapprochée. President Tshisekedi is gradually integrating his loyalists into the latter structure, such as Freddy Mpindi, former president of the youth league of Tshisekedi’s party, the Union pour la Démocratie de le Progrès Social. Others are reportedly being trained abroad. “Only when he feels his safety is assured will he be able to take on Kabila,” says a source close to the President, referring the directorships of the national mining company Gécamines and the railway company Société Nationale des Chemins de Fer du Congo.
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Murder by translation Two @UN investigators were killed in cold blood in 2017, their deaths filmed and shared online. @tortoisemedia @t_mcconnell investigates Africa |
In the video of their deaths, Zaida Catalán and Michael J. Sharp are shepherded, shoeless, through scrubby forest. The two United Nations investigators, whose job it was to recommend human rights abusers and arms embargo busters for sanctions, were killed on a Sunday afternoon in March 2017 in Kasai, a southern region of the Democratic Republic of Congo that is larger than the United Kingdom but with barely a stretch of unpotholed paved road. They are accompanied by at least 13 men: some wear red bandanas, some carry 12-gauge shotguns, others hold knives. Sharp talks in French; Catalán is silent. The two are ordered to sit on the ground facing each other. A few moments later, Sharp is shot at close range, then Catalán. She stumbles to her feet and runs a few paces before falling. Then two men take turns using a knife to cut off Catalán’s head. The film, which surfaced two weeks after the killings, abruptly ends. Catalán, 36, a Swede, and Sharp, 34, an American, were members of the Group of Experts, a UN Security Council-mandated team of six investigators monitoring war crimes in Congo. Catalán’s expertise was in humanitarian issues, while Sharp, the group’s leader, specialised in armed groups. Two and a half years later the killings remain unsolved, but slowly the layers of deliberate deceptions, false accounts, face-saving cover-ups and callous disregard – both in Congo and at the UN – have begun to dissolve, the tale of a deadly ambush by murderous rebels giving way to something closer to the truth, and far darker. A forensic team in white hazmat suits disinterred the bodies close to the village of Moyo-Musuila. Although there was little doubt they were indeed those of Catalán and Sharp, identification was hampered by the absence of Catalán’s head. An autopsy later found that she had bled to death after being shot multiple times, and was subsequently decapitated. Sharp was also killed by multiple gunshots, including to the head. Catalán and Sharp are the first – and so far only – UN investigators to be killed in the line of duty anywhere in the world, and Kinshasa was eager that blame should fall on a Kasai-based insurgency known as Kamwina Nsapu that was challenging central authority and irritating the president. ix weeks after their deaths, officials in Kinshasa held a press conference, where they revealed the existence of the 6min 17sec video, shot on a mobile phone, of the killings. “The images speak for themselves,” the then information minister Lambert Mende said after playing it for the journalists. “It is not our soldiers that we see in the video executing the two UN workers but the terrorists of the Kamwina Nsapu militia.” After the video’s release, the government moved quickly to prosecute some of those who appear in the video and a prize witness named Jean Bosco Mukanda quickly came forward claiming to have seen the murders, providing testimony implicating local Kamwina Nsapu leaders. By June a military tribunal in Kananga had taken up the case. The government’s simple story, which it laid out at the trial with Mukanda’s ready testimony, was that Catalán and Sharp naively wandered into a conflict, were waylaid by Kamwina Nsapu bandits, robbed and killed. Despite stepping down in December – reluctantly and two years late – he remains powerful, the puppet master to his co-opted successor Félix Tshisikedi. Parliament and the judiciary are still stacked with his allies and loyalists and it is Kabila’s, not Tshisikedi’s, presidential portrait that still hangs on walls around the country. Congo’s most tenacious oppositionist, Étienne Tshisekedi (father of Félix), was born in Kananga and made Kasai his stronghold as he opposed first Mobutu, then his successor, Laurent Kabila (father of Joseph), and finally Joseph Kabila. In retaliation, Kasai has suffered even more abject neglect than the rest of the country, leaving its residents deeply impoverished. As the date for the 2016 elections loomed and Kabila sought avenues to stay in power, an attempt was made to co-opt an influential traditional leader in Kasai for political gain. But the move went awry and the chief, known as Kamwina Nsapu, was killed, triggering the insurgency that bears his name. Violent confrontations saw soldiers armed with assault rifles and heavy weapons battle villagers carrying shotguns and knives. Even by Congolese standards the scale of violence was “alarming and unusual”, said Ida Sawyer of Human Rights Watch. Scores of mass graves were filled with the remains of Kamwina Nsapu fighters, or civilians suspected of supporting them, and villages were burned. Around 5,000 people were killed and, at the height of the upheaval, a million and a half people were forced from their homes. Jason Stearns, at New York University’s Congo Research Group and one of Sharp’s predecessors as coordinator of the Group of Experts, told me that the Congolese army’s extreme brutality in Kasai was “unprecedented” even by the standards of a military well-known for its excesses. “You have this local, ragtag militia group that protested against the Congolese government and in response the army goes in and responds with extraordinary and often indiscriminate violence. This was obviously very organised: there were orders given to deal with this in the way they dealt with it.” At the moment the shooting starts at least one man darts away in surprise while others appear prepped and act efficiently. “One thing that’s clear from the video is that this was an organised hit,” said Stearns. “This was not some guys at a roadblock who all of a sudden got upset.” The video’s audio track, too, contains evidence. Kamwina Nsapu is a local movement and its members speak a local language called Tshiluba yet in the video, two men off-camera speak French and Lingala – a language commonly spoken in the capital and among the security forces – and bark orders in broken Tshiluba, sometimes sounding as if they are talking on a phone. “That’s a big deal,” Stearns said. “It would be strange for outsiders to be involved in this militia.” As investigators, Catalán and Sharp kept meticulous records, including an audio recording of a meeting with a Kamwina Nsapu elder in a Kananga hotel the day before their murders. Transcripts produced independently by the UN and French broadcaster Radio France Internationale (RFI) show that a crucial exchange was mistranslated: the elder warns the investigators against travel to a town called Bunkonde, since he cannot ensure their safety there. Instead, Catalán and Sharp are told: “You can arrive in Bunkonde, there is nothing … You will pass without problems.” Their translator, Thomas Nkashama, fixer José Tshibuabua and guide Betu Tshintela collude in the deceit. The next morning Catalán and Sharp headed for Bunkonde, and their deaths. According to a former colleague, Catalán and Sharp’s main focus in Kasai was not in fact army atrocities and mass graves, but Kamwina Nsapu’s practice of recruiting children and drugging them for battle. However, the attention on mass graves in the weeks before their visit meant there was “a misperception” about their presence in Kasai, one that may have proven deadly. Subsequent investigations by some UN officials, RFI and others have revealed that those responsible for misleading Catalán and Sharp during the hotel meeting had all worked for Congolese intelligence and security services. “All the people who lied to the experts during that recorded interview were linked in some way with the intelligence service,” RFI’s Sonia Rolley told me. Documents show that Tshibuabua was a member of the Agence Nationale de Renseignements (ANR), Congo’s national intelligence agency, and a cousin of Tshintela, who had also worked for the agency, while Nkashama was a member of the country’s pervasive immigration-cum-security service, the Direction Générale de Migration (DGM). All three were in touch with local army commander Colonel Jean de Dieu Mambweni. The meeting was a set-up. “It appears they were deliberately tricked,” Sawyer said. “All of the research we have conducted indicates government involvement, a plot planned by the intelligence services to portray Kamwina Nsapu as terrorists,” and to shift the narrative of atrocities from the army to the militia. But gradually something approaching the truth is coming into focus. In late 2017, during a ten-month adjournment, Tshibuabua and Nkashama – the fixer and translator at the hotel meeting – were taken into custody by Congolese security services (whether to put them on trial or protect them from questioning was unclear as Petit was denied access to them.) Months later the one-time star prosecution witness, Mukanda, was himself arrested after prosecutors scrutinised his phone records, then, in December, Colonel Mambweni was also taken into custody on suspicion of organising the murders. All four have been charged with involvement in the killings.
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Billionaire Says Congo Is Now More Attractive Than Chile for Copper Mines @markets. Africa |
Chile’s worst civil unrest in decades means the Democratic Republic of Congo is a more attractive proposition for mining investment, according to billionaire Robert Friedland. While Chile, the world’s top copper producer, seeks measures to quell the social unrest that exploded last month, the election of President Felix Tshisekedi earlier this year has improved the prospects in Congo, Friedland said at the Mines and Money conference in London on Monday. Ivanhoe Mines Ltd., founded by Friedland, is developing the world’s second-largest copper-mining project in Congo, with production due to start in 2021. “There is a new sheriff in town,” said Friedland, referring to Tshisekedi. Chile is now a “terrible place to invest in mining, while Congo is a really great place,” he said. Over more than two decades, mining investor Friedland and his small team have made some of the biggest mineral discoveries in the world. In addition to unearthing Africa’s largest copper deposit, other projects include building the Oyu Tolgoi copper-and-gold mine in Mongolia’s Gobi Desert and discovering the Voisey’s Bay nickel deposit in Canada, which he sold in 1996 for more than $3 billion. Ivanhoe is also developing a platinum mine in South Africa. “You have my sympathies,” said Friedland, commenting on investors in Chile. The billionaire is well known for making controversial comments. His statement drew the ire of the Chilean government, which touted the South American nation’s track record. “The person who expresses this opinion doesn’t know Chile,” Mining Minister Baldo Prokurica said in a voice mail. “Chile has a long history of a stable mining investment climate and one month of complex issues can’t erase that.” Congo also has its own issues to address. Companies mining and buying copper and cobalt from Congo must do more to fight corruption and child labor in the country, the Organisation for Economic Co-operation and Development said earlier this month. Friedland “is comparing us with Congo, which has a history of instability and of not respecting the rules of the game,” Prokurica said. “Chile is a serious country with clear and permanent rules.”
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09-SEP-2019 :: Emmerson Mnangagwa who was eulogising Mugabe as a Revolutionary Icon has failed and is frankly as untenable as his erstwhile Mentor. Africa |
Mario Vargas Llosa in his book, The Neighborhood which was a book about Peru in the time of Fujimori and the The Doctor Vladimiro Montesinos wrote’’Something bigger than you and me power. You don’t fool around with power my friend’’ Jonathan Moyo said. “And, meanwhile, the people forgot the vision of the liberation struggle. The people were saying, ‘What good is liberation without food?’ And this is the point. Mugabe started well but then presided over the immiseration of his country. Gross Domestic Product per capita has shrunk by a third since the 1980s [IMF]. We are grateful to all those iconic leaders who liberated our continent of which Mugabe is one but at what price? Fighting for independence is not the same as building an economy which provides opportunity for all its citizens. As some African leaders laud Mugabe today, @PastorEvan- Live argues: “There can be no mixed feelings, misconceptions or complications about Robert Muga- be’s legacy. He presided over the destruction of millions of people’s lives over a span of 37 years.”
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"They are not going back to same old, same old ways of the past, the wild west kind of banditry," Patrick @njorogep told a news conference. @ReutersAfrica Africa |
“They are not going back to same old, same old ways of the past, the wild west kind of banditry,” Patrick Njoroge told a news conference. Lenders have promised not to jerk up rates dramatically, saying the economic conditions do not warrant charging very high rates of more than 18% or so. “Banks will abide by the law,” Joshua Oigara, the chairman of the Kenya Bankers Association, said in a statement issued earlier this month after the cap was removed. In February, the industry adopted a new banking charter, which requires lenders to be transparent and to be guided by a customer’s risk profile while pricing credit, Njoroge said. “They need to be more ethical. They should stay away from short-term gains; the focus on ... this quarter’s returns, what is my bonus?,” Njoroge said. Banks used to charge the bulk of their customers a flat rate, only offering discounts to the most liquid blue-chip companies, stoking consumer anger and bringing about the cap on rates. They did not also consider a customer’s positive credit history in pricing loans, only acting on the information when it was negative to deny loans. Policymakers cut the benchmark lending rate for the first time in more than a year on Monday, saying a tightening stance by the Treasury had created room for easing. [nL8N2853DI] The economy is expected to grow by 5.9% this year compared with 6.3% last year, Njoroge said.
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