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Satchu's Rich Wrap-Up
Wednesday 18th of December 2019

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Macro Thoughts

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"Come, come, whoever you are" @theabhayk

“Come, come, whoever you are,
Wanderer, worshipper, lover of leaving—
it doesn’t matter,
Ours is not a caravan of despair.
Come, even if you have broken your vows a hundred times
Come, come again, come.”

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Love is a fire that burns unseen - by Luis de Camoes

Love is a fire that burns unseen,
a wound that aches yet isn't felt,
an always discontent contentment,
a pain that rages without hurting,

a longing for nothing but to long,
a loneliness in the midst of people,
a never feeling pleased when pleased,
a passion that gains when lost in thought.

It's being enslaved of your own free will;
it's counting your defeat a victory;
it's staying loyal to your killer.

But if it's so self-contradictory,
how can Love, when Love chooses,
bring human hearts into sympathy?

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I am reading HOMELAND By Fernando Aramburu @nytimes

“Homeland” is the story of two families in a Basque village. It
toggles back and forth in time, illuminating the enmity between
members of multiple generations and hinting at a once and future
closeness. Although it hinges on a particular ekintza, or attack, by
members of the paramilitary organization Euskadi Ta Askatasuna (ETA),
its true protagonists are the matriarchs of these families, spiteful
Miren and grief-stricken Bittori, as well as their daughters, Arantxa
and Nerea. It is these women who make things happen. The men who kill
and are killed are mere “jellyfish” in the wash of history. Fernando
Aramburu’s gift lies in the links between action and reaction: the
moment Bittori understands she’s been snubbed on purpose at the
village butcher’s when her husband has been marked as an ETA target,
or the aftermath of the argument between Miren and Arantxa about the
nature of the violence, when Miren’s husband, “staggering with sorrow,
tried to stop his daughter and his grandchildren” from leaving the
house (to no avail, as the mother and daughter won’t speak to each
other for five years).

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"It's been a long time since I've read a book that was so persuasive and moving, so intelligently conceived.' Mario Vargas Llosa

Miren and Bittori have been best friends all their lives, growing up
in the same small town in the north of Spain. With limited interest in
politics, the terrorist threat posed by ETA seems to affect them
little. When Bittori’s husband starts receiving threatening letters
from the violent group, however – demanding money, accusing him of
being a police informant – she turns to her friend for help. But
Miren’s loyalties are torn: her son Joxe Mari has just been recruited
to the group as a terrorist and to denounce them as evil would be to
condemn her own flesh and blood. Tensions rise, relationships
fracture, and events race towards a violent, tragic conclusion . . .
Fernando Aramburu’s Homeland is a gripping story and devastating
exploration of the meaning of family, friendship, what it’s like to
live in the shadow of terrorism, and how countries and their people
can possibly come to terms with their violent pasts.

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How Britain voted at the 2019 general election... by age @YouGov
Law & Politics

18-24 year olds:
Lab - 56%
Con - 21%
Lib Dem - 11%

70+ year olds:
Con - 67%
Lab - 14%
Lib Dem - 11%

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As rage spreads, time to ask what India voted for
Law & Politics

it is time to ask what Indians voted for just seven months ago in the
general elections. Indians gave a historic landslide victory to Prime
Minister Narendra Modi, who was elected for a consecutive second term
with a rare single-party majority.
Such an electoral feat has not been seen in India since the 1970s.
With 303 seats out of a 545-seat parliament, Modi and his party, the
BJP, dominate India’s political landscape. Ideally, this should have
led to political stability, economic progress and assure an
international standing for India that it has long deserved. But eight
months on, the economy is in shambles, its international reputation is
diminishing, students are up in arms and several states are in
turmoil. Protests over the new citizenship law have spread to the six
states in the North East, the capital city of New Delhi, the most
populous state of Uttar Pradesh, West Bengal and Maharashtra.

In an election rally in the state of Jharkhand on Sunday, Prime
Minister Modi tacitly blamed Muslims for the spreading protests and
said “those spreading the fire can be identified by their clothes.” He
said this on a day when police officers in the national capital of
Delhi were beating up students from a premier university that is known
for hosting largely Muslim students. Video images sent out by the
students show the police entering the Jamia Milia University’s library
to fire tear gas shells and beat up students.

By the end of 2018, months before the general elections were due, it
was clear that India’s economy was in a mess. Its economic growth has
crashed, industrial production and private consumption is down and
unemployment was at its highest in 45 years. Food price inflation is
now in double digits while household incomes have shrunk. The prime
minister’s 2014 slogan that “achche din (Good days) are coming”, has
been abandoned even by his party. However, the prime minister has
rarely spoken about the failing economy, if at all. On most days he is
heard assuring citizens that India will have a US$5 trillion economy
by 2024. However, no one seems to know how India will climb out of its
current economic morass to hit that target. Economists say that at
conservative estimates, India needs to grow at a rate of at least 11%
to hit that target. As per the latest quarterly figures, India’s
growth rate, under a new calculation method that is suspected by major
international agencies, is at 4.5%.

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02-DEC-2019 :: Economic growth has now fallen for six consecutive quarters
Law & Politics

The GDP figure is the weakest recorded under Prime Minister Narendra
Modi, who first swept to power five years ago promising to take
India’s economy to new heights and create millions of jobs every year.

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The Indian Ocean Spy Map of Jan Van Linschoten, Amsterdam, 1596 @DalrympleWill
Law & Politics

Van Linschoten secretly copied Portuguese sea charts while acting as
Secretary to the Archbishop of Goa. He published these in Amsterdam
after escaping from Goa. 1/2

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1137
Dollar Index 97.28
Japan Yen 109.44
Swiss Franc 0.9806
Pound 1.3110
Aussie 0.6847
India Rupee 71.07
South Korea Won 1168.56
Brazil Real 4.0717
Egypt Pound 16.026
South Africa Rand 14.4225

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16-DEC-2019 :: Saudi Aramco's $1.96 trillion

Aramco raised $25.6bn in the biggest-ever IPO, selling shares at 32
riyals each and valuing the company at $1.7tn, overtaking Microsoft
and Apple as the most valuable listed company in the World. At the
latest valuation of $1.96 trillion, Aramco is a whisker shy of Crown
Prince Mohammed bin Salman's Target of $2 trillion set some four years
ago.  At $2tn, it is worth more than technology giants Apple [which is
2nd and worth $1.19 trillion] and Microsoft, and bigger even than the
top five oil companies — ExxonMobil, Total, Royal Dutch Shell, Chevron
and BP — combined. The Saudi Stock Exchange Tadawul has elevated to
the seventh largest exchange in the world after the successful listing
and the Post IPO Pop in the price. “It’s a great day for Saudi Arabia
and the leadership of Saudi Arabia and for the people of Saudi Arabia.
It’s a D-Day for Aramco, it’s a day of reckoning and vindication,”
Energy Minister Prince Abdulaziz bin Salman told Reuters in
Madrid.Prince Abdulaziz predicted investors who didn’t buy into the
offering would be “chewing their thumbs” after missing out.“I know he
is proud,” his half-brother and oil minister, Prince Abdulaziz bin
Salman, said in a TV interview after the shares were successfully
allocated last week. “He made us all proud because he took good
decisions. These decisions, you have seen it now, have brought us a
4.6 times over-subscription.”@Amena__Bakr tweeted [The] General mood
in Saudi Arabia with regards to the Aramco IPO from people I spoke to
can be summarized in 3 words: vindicated, triumphant, relieved.
Notwithstanding some churlish International commentary
''At every turn, the crown prince and his advisers have sought to
determine the price of the offering rather than leave it to the
market: wealthy Saudi families have been pressured to buy shares;
banks have had to issue loans to retail investors; funds in the
kingdom and regional allies, including Abu Dhabi, were asked to
bolster the sale after plans to market the listing globally were
abandoned. The size of the original stake had to be scaled back to 1.5
per cent'' [Financial Times].The comments by the Financial Times
counterintuitively speak to the sharp and smart moves by the Saudi
This is a singular triumph for the Kingdom, The Crown Prince and his
Team. It was precisely correct to limit the supply of shares [1.5%] in
order to maintain a structure where Demand outstripped Supply. This is
Lesson 101 in the business of IPOs. It was precisely correct to sell
shares into strong Hands. Your own Nationals and Sovereign Wealth
Funds from the Neighbourhood represent Strong Hands. Affording
leverage versus a security with a proposed $ dividend of 3.75% is a
risk adjusted No-Brainer for the Banks. It would have been plain
irresponsible to have done anything differently. Why on Earth would
you sell more shares than the market could absorb into International
Markets where Short Sellers would have a ''Boondoggle'' That would
have been a little insane. The Saudi Authorities have captured the
bulk of the value addition from the listing.  Limiting transaction
Fees to below $70m was also clever business and I am sure has been a
Catalyst for some of the churlish commentary by those who were
salivating at the prospect of hundreds of millions dollars of fees.
This was optimal stewardship of the public Purse, plain and simple.
Furthermore, selling shares in your home market and catapaulting the
Tadawul to the seventh largest Exchange in the World is also optimal.
No Country in the World is truly sovereign unless it has ownership of
its own capital markets. The Kingdom has parlayed itself into the
bulge-bracket via the Aramco listing. That is a significant
achievement and a crystallising of a One-Off opportunity.
@DaniloOnorino was  quoted as follows  “This is the Ferrari of the oil
companies” and if you want to buy this Ferrari, You need to go to
Riyadh and that's the final overarching point.

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"Most likely no," @PaulKagame said at the #DohaForum when asked whether he'd be seeking a fresh mandate. @Bpolitics

“I want to have some breathing space but given how things are and how
they have been in the past, I have made up my mind where I am
personally concerned, that it is not going to happen next time.”
Kagame, 62, has won international acclaim for stabilizing the
coffee-producing nation and transforming its economy. Rwanda has one
of the fastest-growing African economies, with expansion expected to
be 8.5% this year.
Still, human-rights groups including Amnesty International have
repeatedly accused his government of cracking down on political
opponents and the media.
Western values, such as democracy, should not be forced on Africa
because they are not the silver bullet for the continent’s problems,
and leaders there should only be answerable to their electorate,
Kagame said.
“Term limits don’t mean one thing everywhere or every time,” he said.
“However, this doesn’t justify what some African leaders have done.
Some people can spend longer time in office and it is justified and
others it is not. Some leaders make it look like it’s the choice of
the people and it is not and where it happens it should be respected.”

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Lord says I shall one day rule Zimbabwe - @nelsonchamisa @NewZimbabweCom H/T @cobbo3

MDC leader Nelson Chamisa says the Lord Jesus Christ has spoken and
assured him he shall one day rule Zimbabwe.
Chamisa told MDC supporters, relatives and friends of late
Vimbai-Tsvangirai Java at the late Glen View South MP’s memorial
service in Harare Saturday that it was only a matter of time that the
calling shall come to pass.
“The Lord has spoken to me lately that one day I will lead this
country. I do not know when or how this will happen but he has spoken
to me over this issue,” said the Harare pastor and politician.

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Drought Adds to Debt Leaving Zambia and Zimbabwe in the Dark @economics

Drought has plunged millions of Zambians and Zimbabweans into darkness
as hydro-power dams drain, and their governments’ debt is making
matters worse.
Rolling electricity blackouts lasting 18 hours a day have choked the
two economies. Ballooning debt has left them unable to afford to
import enough power to help cushion shortages.
Even if they could, the region’s biggest supplier, Eskom Holdings SOC
Ltd., doesn’t have enough capacity to keep the lights on in its home
market, South Africa.
The power crises in the three countries has exacerbated economic
strain. Zimbabwe’s gross domestic product is expected to shrink this
year, Zambia is on course for the slowest expansion in more than two
decades and South Africa is staring down a second recession in as many
The downward spiral has been years in the making, as cash-strapped
electricity utilities failed to replace aging plants and build new
ones fast enough to keep up with demand, according to Kay Walsh,
managing director at Nova Economics Ltd. in Stellenbosch, near Cape
The drought has only magnified the problem, she said.
“Everything has come to a head at a very unfortunate time, but the
problems had been brewing,” Walsh said. “They can’t actually afford to
replace their capacity. It’s either a sharp increase in tariffs or
it’s got to be funded by the taxpayer.”
Turbines at Kariba, the world’s biggest man-made reservoir, could be
forced to shut completely after water levels dropped to the lowest
level in 23 years, and continue to fall. A disastrous scenario for
both economies.
Electricity prices will need to rise, Walsh said. That would add to
inflation woes -- Zimbabwe’s consumer prices surged an estimated 481%
last month, and in Zambia price growth is at a three-year high.
Historically, the two countries have relied on cheap electricity from
Kariba. As populations have grown and more people are connected to the
grid, governments didn’t raise tariffs enough to afford to build new
production capacity.
Borrowing more to pay for plants will be difficult. Zambia’s sovereign
debt will reach 96% of gross domestic product next year, while
Zimbabwe can’t take on more debt until it settles its arrears with
international lenders.
Zimbabwe more than tripled power tariffs in October and will need to
act again, while Zambia has warned that an announcement on prices is
That Zambia “is in a debt-induced crisis implies that very few
external, and some domestic, suppliers of electricity are willing to
guarantee additional supply without onerous demands which Zambia is
unlikely to satisfy,” said Grieve Chelwa, a senior economics lecturer
at the University of Cape Town.
“So the sum total of this has made the situation worse now than before.
People including Brown Liamba, a 30-year-old who owns a printing shop
in Lusaka, Zambia’s capital, would rather pay higher prices for
electricity if it meant more reliable supply.
It will still cost less than the fuel he has to buy to run a generator.
“If that’s the only option to sort out the load-shedding, and me
running my business, I’d rather pay double,” he said, using a regional
term for rolling blackouts.
Even with higher prices, the power deficits in Zambia and Zimbabwe
won’t disappear overnight. It will take at least a couple of years for
hydro-power dams to recover.
And small businesses like Liamba’s that account for the bulk of
economic activity in the two nations will continue to struggle.
“The impact is going to be substantial,” Chelwa said. “Electricity, is
the lifeblood of any economy.”

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Vanillanomics @BW

First, we needed a 4x4 of some sort, along with a driver willing to
chance roads that are sometimes passable, sometimes not. The man we
found struck us as the quietly skeptical sort, but after a few hundred
rutted kilometers, any hesitations he'd been suppressing hardened into
emphatic certainties.
“The only people who drive on this road,” he told our photographer and
me, via our translator, “are people who want to kill their cars.”
Yet he gamely pushed ever deeper into Madagascar's tropical north,
until our mud road descended a hill and was swallowed by a wide river.
It was the end of the line for the driver. He seemed relieved.
Somewhere on the other side of that water, dozens of farmers would
soon converge upon a regional vanilla market in the village of
Tanambao Betsivakiny. Growers would negotiate with buyers working on
behalf of exporters and international flavoring companies, and
together everyone would hash out a collective, per-kilogram price for
the crop.
Most buyers would pay cash on the spot, and the farmers would hand
over several tons of green, freshly harvested vanilla beans.
Those humble beans, whose essence is associated with all that's bland
and unexciting, have somehow metamorphosed, butterfly-style, into the
most flamboyantly mercurial commodity on the planet.
In the past two decades, cured vanilla beans have been known to fetch
almost $600 per kilogram one week, then $20 or so the next.
Northeastern Madagascar is the world's largest producer of natural
vanilla, so every boom and every bust slams this region like a
tropical storm. When prices peak, cash floods the villages. When
prices fall, it drains away.
Madagascar was largely integrated into global trade centuries ago. The
island is bigger than France, with cultural traditions that vary by
region, unique biological treasures, and a developing tourism economy.
The capital, Antananarivo, is full of laborers, lawyers, bureaucrats,
bankers, artists, entrepreneurs, intellectuals—everything a 21st
century city of 1.5 million needs.
Yet Madagascar is also one of the poorest countries on the planet. You
see and feel its disparities most sharply in its more remote pockets,
including in the vanilla-growing region of the northeast.
The extreme isolation of those communities, their dominance over the
international supply, the dramatic changes they undergo during price
swings—all of it has turned this part of the country into a
semicontained observation lab that exposes both the genius and the
insanity of globalized commerce.
Visiting one of the seasonal auctions where vanilla enters the global
marketplace seems a logical first step to try to understand it all.
So we really needed to cross that river.
The water didn't look too deep; we spotted people wading out toward
the other side, carrying baskets on their heads. We took off our
shoes, rolled up our pants, and stepped in.
The riverbed was lined with fiendishly slippery, cannonball-size
boulders. We plotted a slow, wobbly course to the other side. On the
far bank, someone told us the market was still a two-hour trek away.
It was mostly uphill, naturally. When the spiraling dirt road
plateaued, we found ourselves on the weedy edge of a village. A couple
of young men with motorbikes accepted the equivalent of a couple of
dollars for rides to shave a good half-hour off the trek.
If our arrival was accompanied by a whiff of self-congratulation, it
dissipated as soon as we saw the farmers. Most had been walking far
longer than we had, in flip-flops, with huge sacks of beans hanging
from sticks balanced across their shoulders.
Some of the bags weighed more than 40 kilograms. And for the farmers,
this was the easy part. They'd spent months in the fields, closely
monitoring their vines for any sign of a bloom. When they found a
vanilla orchid in flower, they rushed to hand-pollinate it. Each
flower's fertilization period lasts only a few hours each season; if
they missed that window, the plant wouldn't produce beans.
Then, as the beans matured on the vine, the farmers hand-stamped the
pods with a personalized, Braille-like marking (the horticultural
equivalent of a cattle brand), so thieves would have difficulty
passing them off as their own if they tried to sell them.
The farmers slept in the fields at night, machetes by their sides,
guarding their plants through rain, heat, and the buzz of malarial
mosquitoes. For many of them, an entire year's income depended on this
It would take place in a simple wood-slat structure about three times
longer than the village's typical single-family residence. For most of
the year the building was the local schoolhouse. The furnishings
consisted of a table, scattered chairs, and a rectangular chalkboard.
Outside, hanging under the eaves, was a portable hook scale.
One at a time, the farmers entered the hut and emptied their bags of
beans onto the floor. Government-authorized inspectors sifted through
the beans, making sure they were all suitably large and ripe. They
rebagged the beans and clipped the sacks to the scale outside, then
logged the weight of each farmer's harvest in a ledger.
In the dirt yard outside the hut, several dozen men stood in tight
circles, watching the weigh-in. They were the buyers, or collectors,
as they're called here. Most had arrived that morning, using rafts to
get their motorcycles across the river we'd forded.
The regional markets follow an established protocol, the men
explained. After the weigh-ins, the farmers gather together and come
up with a per-kilo asking price, then write that figure on the
chalkboard. The collectors stare at the number for a while, then
huddle up.
They rub out the farmers' price and scribble a counteroffer. This
back-and-forth is repeated until the figures match. When that happens,
the buyers divvy up the beans, collecting however many tons each has
agreed to buy.
The process can take a day or a week. If this one stretched into
tomorrow, most of the farmers and collectors planned to search for a
friendly villager with a little extra floor space where they might
curl up and sleep.
The year before, at a market much like this, one collector had gone
rogue, forgoing the chalkboard system and negotiating directly with a
village chief behind closed doors.
When news of the man's attempt to sidestep the protocol spread to the
other collectors, he was chased through the village, apprehended, and
This particular sale featured no spectacular foot chases or citizen's
arrests. But it had plenty of unexpected intrigue and deception. The
business is cruel, humane, comic, tragic, ingenious, and flat-out
insane, often at the same time.
As we struggled to untangle the drama playing out, we began to suspect
that our original goal—to try to understand the vanilla trade—should
be secondary.
It seemed more important to simply observe this whole business in a
particular way: with a sustained appreciation for how incredibly wild
global trade, at its most elemental level, actually is.
Vanilla orchids are native to Mexico, and for a few hundred years
after the Spaniards first brought the flowers back to Europe, no one
could get the beans to grow anywhere else.
In 1836 a Belgian horticulturalist figured out why: They emerge from
the flower only after it's pollinated by one of two rare species of
bees native to Mesoamerica.
Five years after that discovery, a young slave named Edmond Albius
from the island of Réunion (then called Bourbon) realized he could
hand-pollinate the orchids by carefully manipulating the male and
female parts of the plant.
His ingenuity transformed vanilla into a cultivatable crop, and small
plantations began popping up all over the world. The orchids seemed to
grow especially well in Madagascar, 500 miles due west of Réunion in
the Indian Ocean.
Vanilla, in its essence, is an adventure story.
For the next 150 years, vanilla played it straight, drawing little
attention to itself. By the 1980s, Madagascar was producing about 30%
of the world's supply.
Government controls kept prices tethered pretty tightly, to around $50
or $60 per kilo for cured beans. “You had some fluctuations, maybe $10
up or down, but it was pretty stable,” says Craig Nielsen, co-owner of
Nielsen-Massey Vanillas Inc., a flavor company based in Illinois and
the Netherlands that's dealt in the beans since 1907.
“Then, under pressure from the World Bank, which they owed a lot of
money to, Madagascar was forced to abandon those price controls in the
That's when vanilla started to shed its inhibitions. Prices dipped for
a year or two. Then, in 2000, a powerful cyclone flattened the
northeastern part of the country. It takes three years for a newly
planted orchid to produce beans, so harvests waned for the next few
years, causing prices to spike, then collapse.
International buyers reported that local exporters were asking about
$600 a kilo for cured vanilla on a Monday and roughly $20 by that
Warehouses were stuck with beans they couldn't sell for anything close
to what they'd paid for them, and a couple of the biggest, most
well-established vanilla dealers in the country went out of business.
For the past four years, prices have been riding high again, flirting
with the $600 mark in 2018 and rarely falling below $400 since. (The
going rate this fall was about $420 per kilo.)
The spike is sometimes attributed to a 2015 announcement by Nestlé SA
that the company would use only all-natural vanilla in its products
instead of imitation flavoring. Other companies followed suit. The
true impact of the decision is a matter of debate.
In the past year, consumers have sued numerous food and beverage
companies, Nestlé among them, claiming that some if not most of their
vanilla flavoring still comes from sources other than beans.
Spencer Sheehan, a New York attorney who's filed suits against more
than 25 companies, contends that the flavor is often derived from the
“other natural flavors” generically cited in the ingredients lists of
various products.
The plaintiffs are seeking monetary damages, but none of the suits has
yet received class-action status from a judge. Regardless of the
validity of those suits, few in the industry say demand for natural
vanilla has changed enough to protect prices from another dip.
Almost everyone thinks a significant price plunge is a matter of when, not if.
Because northeastern Madagascar is so impoverished when vanilla prices
aren't high, banks and other financial institutions don't open a
branch near many villages. Farmers are more likely to bury cash under
their houses than to put it into an account.
The market demands that drive the exaggerated price swings are wholly
separate from their lives; almost no one here actually uses vanilla,
which is viewed as a product only foreigners consume.
The impermanence of cash flow, along with the near-complete disconnect
from forces moving the market, means the farmers view international
commerce from a much different angle than outsiders might.
“Consequently, money in northeastern Madagascar is not perceived as a
straightforward, interest-based sum accumulating over time in an
orderly fashion,” according to a study published last year in American
Ethnologist, the journal of the American Ethnological Society.
Annah Zhu, the author of the report, wrote that money in the
vanilla-growing region is instead treated as a “volatile material that
comes and goes, imbuing the region with fantastical undertones of
alternating abundance and dearth.”
That sporadic abundance has generated a new genre of local
storytelling, almost folkloric in nature, that catalogs local examples
of financial decadence. It's called vola mofana—roughly translated as
“hot money” spending—and the tales that illustrate the concept are
difficult to verify but easy to repeat.
It's said that one vanilla farmer was observed buying the entire
supply of mangoes from a roadside stand; he paid the vendor 10 times
the asking price, then joyfully smashed every piece of fruit on the
People say chameleons have been spotted skittering wild through
villages with money glued to their backs. One vanilla farmer reputedly
boiled all his money in a pot and ate the soggy, globular mass.
We heard about farmers who had smoked cash, rolling tobacco in it as
if the bills were cigarette papers. Zhu, in her journal article,
reported that at a festival, a man stepped up to a carnival booth,
bought a handful of rings to toss at a cluster of bottles, turned
around, and threw every ring in the opposite direction.
“This is how you play with money!” he yelled.
I wasn't sure whether to believe these stories or not. Most were said
to have happened several years ago to people who've since faded into
And most of the farmers we met seemed frugal, intent on building
wealth rather than squandering it. Yet almost everyone has a story
like this to tell.
Zhu acknowledges some might be more legend than fact, but their
pervasiveness makes them meaningful. Her point in gathering and
repeating the tales wasn't to dismiss the vanilla farmers and
collectors as simpletons dazed by the sudden collision of the modern
and the traditional.
Vola mofana stories, she says, don't describe an awkward phase of
Madagascar's economic development; rather, the profligacy they recount
can be considered a “tactical weapon” deployed by residents against
the “erratic, nonlinear development that characterizes globalization
By treating money so cavalierly—either literally or figuratively—the
vanilla farmers diminish the power the modern economic order can exert
upon them. Actions that seem to defy logic actually “reflect and often
resist the magicalities inherent in modern forms.”
A translation: Maybe it's not the farmers and collectors who've gone
off the rails when confronting the modern economic system; maybe
what's crazy is the modern system.
“We couldn’t buy vanilla for three days, until the government printed
more money and sent it up here. It was crazy”
Farmers are sometimes told that if they produce better beans, the
market will reward them with higher prices. But that's not how it
If a crop is projected to be weak and scraggly, buyers get antsy,
eager to secure whatever they can get, as soon as they can. The
farmers try to satisfy the demand, picking beans earlier than they
otherwise might, and the auction dates tend to slide forward.
Sometimes an early black market emerges, with beans trading hands
under the table before the official markets commence. Prices drive
upward, and the beans—picked too soon, with less flavor than mature
ones—often turn out to be even worse than predicted.
When the crop is expected to be healthy, all of that is turned upside
down. The farmers feel less pressure to pick their beans early; they
allow the vanilla to mature on the flower and develop a richer flavor,
and prices generally tend to stay lower. It's what market economists
call a “perverse incentive.”
“The worst vanilla, by far, that I've ever seen in my life was the
stuff that sold for $650 a kilo,” says Josephine Lochhead, president
of Cook Flavoring Co., a family business in California that's been
dealing in vanilla for more than a century.
“And the farmers think, Gee, I've worked on these beans for six
months, sleeping in the fields through rain, babying them, and this
year's beans are much better than last year's beans—so shouldn't I get
more money for them than for the terrible beans I grew last year?”
The way money moves, traveling from the accounts of billion-dollar
corporations and into the hands of the farmers, also follows a logic
of its own.
Madagascar's largest currency denomination is the 20,000-ariary note,
worth a little more than $5. It went into circulation in 2017, a year
after vanilla prices shot toward the lofty heights where they yet
The previous year, when the 10,000-ariary bill was the biggest to be
had, international buyers scrambled at harvest time to get their hands
on all they could find.
They rushed to the big banks in Antananarivo and bounced around the
branches of the northeast, only to be turned away.
Lochhead was one of those buyers. She couldn't figure out what was
going on until she saw local reps from McCormick & Co. arrive. The
American spice giant had anticipated a price spike and acted faster
than anyone else, she recalls, withdrawing ariary by the crateful from
banks in the capital, then reinforcing its stash at smaller branches.
“No one else could get any,” Lochhead recalls. “We couldn't buy
vanilla for three days, until the government printed more money and
sent it up here. It was crazy.”
Whenever the price of vanilla spikes and international executives are
confronted by Madagascar's infrastructural precariousness, they ask
themselves, Why are we subjecting ourselves to this? Wouldn't it be
easier to get our vanilla from someplace else?
New vanilla cultivation projects have been introduced nearly
everywhere orchids naturally thrive. But vanilla is stubborn. It likes
to grow among other plants, and if you try to create a huge, easily
managed, monocultural plantation, certain fungal diseases tend to
spread quickly.
“We've started farms in Fiji, in Indonesia, and we have one in Papua
New Guinea,” Lochhead says. Those farms have worked, to a certain
extent. “They just don't work as well.”
In the Netherlands, teams of horticulturalists embarked in 2012 on a
pilot project to cultivate vanilla in greenhouses. Earlier this year
they ran out of funding and concluded their crop wasn't financially
Connoisseurs describe vanilla from Indonesia as earthy and smoky; from
Uganda as chocolaty; from Tahiti as fruity and flowery; from Mexico as
hinting of clover and nutmeg. But the Malagasy stuff tastes like what
people expect from really good vanilla: rich, sweet, creamy. Those
subtleties might help explain, to a fractional extent, why Madagascar
dominates the trade.
A much bigger reason is cheap labor. Since Madagascar let the free
market take over, the country's share of world vanilla production has
risen to 80% or more, according to industry experts.
The broader price swings are partly responsible for that growth.
Vanilla beans are delicate and incredibly labor-intensive, and no part
of the planting, pollinating, cultivating, and curing process has been
Each vanilla bean will be touched by human hands hundreds of
times—perhaps thousands—before it's exported.
It's a perfect illustration of the globalized economy's heat-seeking,
laser-guided ability to stretch a resource to the limit. For those
arguing that globalization is unreasonable and exploitative, the
vanilla farmers of Madagascar have become a problem to solve.
Various nongovernmental organizations have introduced campaigns to
raise wages, stamp out child labor, and direct more profits to the
farmers and villages carrying the industry on their back. Many flavor
companies have gotten on board, too, creating the Sustainable Vanilla
When the beans are bringing in hundreds of dollars per kilo, many
countries in desirable latitudes can afford to deploy that much labor.
But what about when prices tank?
Wages in the other vanilla-producing countries are 10 to 15 times
higher than in Madagascar, where the legal minimum wage for
agricultural workers is 18¢ an hour.
In those other places, vanilla plantations would hemorrhage money
during downturns. “No one will invest in that,” Lochhead says. “How
can you compete with Madagascar, where people work for $1 a day?”
In northeastern Madagascar there's widespread suspicion that
middlemen—the collectors and local exporters—are sponging up more than
their fair share of the cash flowing into the region.
This year, Lochhead devised a plan to try to work around them. She and
a former vanilla farmer named Dylan Randriamihaja formed a cooperative
consisting of 63 farmers from four villages.
Throughout the growing season, Randriamihaja visited the farmers,
monitoring their techniques, making sure they complied with organic
standards, and checking the quality of the beans.
The plan was that after harvest, the co-op members would take their
beans to one of the little regional markets. The collective,
negotiated price would still apply to their crop, but Lochhead would
pay a premium of about 2% above the going rate, and they'd direct all
of their beans to her.
Lochhead would get as many as 15 tons of beans she could trust were
organic and of high quality; the farmers in turn would pocket more
money from her than they'd get from a collector.
What's more, Lochhead wouldn't have to pay any collectors a commission
for negotiating the sale, and—because Randriamihaja had an exporting
license—the two of them could ship the beans overseas themselves.
Lochhead and Randriamihaja sent an assistant to the market where the
co-op farmers gathered—the same one, across the river and up in the
hills, that we visited.
He'd oversee the sale and haul the beans back to Sambava, the city
closest to the remote vanilla markets and the capital of the
international trade.
That was the plan, anyway. But the vanilla trade did what it often
does to a well-thought-out plan: It wrecked it. Or, rather, a
mysterious man in a red hat wrecked it.
While the collectors milled around the market, Marcel Sama walked
among them, sweating under a fierce sun. He was the emissary sent to
the market by Lochhead and Randriamihaja, and he called the members of
their co-op together for a meeting behind the auction building, away
from the others.
He explained to them that he expected the collective sale price at
this market to be close to $55 per kilo for the raw, uncured beans.
(Raw vanilla beans generally sell for about one-seventh or one-eighth
of what cured ones do, partly because beans shrink during the curing
Some of the farmers grumbled; they'd been hoping for a little more.
Sama let them talk out their frustrations until the meeting ended in
smiles and backslaps.
The weigh-in was finishing up, and negotiations were about to
commence. Two young men grabbed two packed rice sacks from the cargo
racks of their motorbikes and hoisted the parcels onto a pile of
bagged beans.
They gently draped two jackets over the bags, as if to hide them, but
everyone knew they were full of cash. The men told us they'd hauled
the money to the market on behalf of Symrise AG, a multibillion-dollar
German flavor and fragrance company, which buys more Madagascar
vanilla than anyone else.
Another collector, a man in a red baseball cap and an olive green
jacket, lingered at the perimeters of the market, keeping a lower
profile as the other buyers began to discuss their collective bid.
Most of them agreed that a bid of about $55 per kilo was fair. Sama
was happy to hear it. But then the man in the red hat piped up, saying
he'd be willing to pay $62 per kilo.
Sama couldn't believe it. It was too much. If the bid held, the co-op
would have to pay its farmers about $65 per kilo—20% more than
Lochhead had paid for several tons of beans a few days earlier at
another market.
Some of the other collectors indicated they might be willing to go
higher than $55, but this bid seemed excessive. And the unbendable
custom of the market is that all beans must sell at the same price.
The man in the red hat indicated that this wouldn't be a problem: He
would buy the entire inventory at $62 per kilo, if the farmers agreed.
Even the members of the co-op couldn't resist such an offer.
There was just one thing. The money, the man explained, was still in
offices on the other side of the river. It would take him several
hours to get all of it hauled out to the market hut.
As it was already afternoon, he asked them to give him until the next
morning, when he'd return with the cash, first thing. It was a deal.
Some of the farmers spent that night sleeping next to their beans, to
make sure nothing was stolen.
The next morning, all of the farmers reconvened. But the man in the
red hat was nowhere to be found. Hours ticked by. He didn't return.
“This,” she said, pulling a moist brown pod from the pile, “is the
perfect vanilla bean. How much does he have?” Olivier wouldn't say
By the next day we had rejoined Lochhead and Randriamihaja in Sambava.
Sama called them to say the false bid had thrown everything off.
Negotiations had started anew.
The farmers were now angry—and empowered. They'd observed some
collectors seriously considering matching the bogus bid the day
before, and their baseline asking price was no longer $55 per kilo.
When a few collectors agreed to the $62, Lochhead and Randriamihaja
bowed out. The cooperative farmers sold their beans to others.
“It's frustrating, because the farmers can say our co-op didn't offer
them a good price,” Randriamihaja said. “But I think they will come
back to us. We will try again.”
The man in the red hat had been a saboteur, he guessed. But who sent
him? Rumors floated around the market that the man worked for an
exporter that didn't want cooperatives limiting its access to beans.
“I think he probably was sent by a big company, just to upset the
market,” Randriamihaja speculated. “It has happened before, several
times. They want to ruin our reputations.”
In 2019 about 400 companies were licensed to export vanilla from
Madagascar, and many are small and relatively new. Randriamihaja, who
got his license three years ago, is one of those up-and-comers.
Some people, particularly the established exporting companies, argue
that some of these inexperienced dealers are diluting Madagascar's
market with low-quality, poorly cured beans. They support ongoing
government initiatives to cut the number to as few as 40 licensees.
“They say it's for quality reasons, but that doesn't make sense to
me,” Randriamihaja said. “Those big companies are handling 600 tons a
year, so how can they control the quality of that? We do something
like 15 tons a year. We can provide a good, quality bean, because
we're controlling them every day, through every step of the process.”
Lochhead nodded in agreement. To her, the license reduction scheme
felt like a power play. “It's a racket,” she said. “A big boys' club.”
She and Randriamihaja now needed another way to get vanilla beans.
They spent the next two days going to villages in search of vrac, the
term for beans that have been partially cured.
 Vrac can be stored for longer periods than raw beans, and some
farmers like to deal in it because it can provide income in the months
after the harvest.
Inside a one-room hut of split bamboo, Lochhead and Randriamihaja
found an 80-year-old man named Farlahy Gilbert. He looked as thin and
wizened as the beans he spread out for them to inspect.
Lochhead cast a critical eye on his supply. She lifted a couple of the
oily beans to her nose. “Ooh,” she said, wincing. “There's mold.
That's bad. Smell it.”
Gilbert fetched another batch and poured it out for them. “It looks
pretty wet,” Lochhead said. She guessed it was about 40% moisture.
Gourmet vanilla vrac should be 32% to 35%. “Tell him to get this out
in the sun,” she told Randriamihaja.
Their next stop was a hut right across the road, where a 34-year-old
farmer named Be Olivier lived. “Now this is workable,” Lochhead said,
kneeling down in front of the vrac the farmer had spread out on a
coffee table for inspection.
Her flowing white dress pooled around her legs, and she closed her
eyes as she inhaled the sweet, heavy scent. To her, this was the best
part of her business: the direct, sensory pleasure when things went
“This,” she said, pulling a moist brown pod from the pile, “is the
perfect vanilla bean.” She admired it, smiling, for an extended
moment. “How much does he have?” she asked.
Olivier told them he had plenty to sell, but he wouldn't say exactly
how much. “They will never tell you that,” Randriamihaja said. They
feared theft.
By any international standard, Olivier was living in poverty, without
running water or reliable electricity. But high vanilla prices had
allowed him to accumulate some enviable assets in recent years.
He'd grown up in a hut made of palm thatch and moved to one of split
bamboo; now his walls were made of solid wood planks.
And unlike most of the village's huts, his had two rooms. Where once
his floors were bare earth covered by rugs, now he walked on smooth,
red-painted boards.
The chairs in the living room had cushions on them. And he had a
television, powered by a single solar panel balanced on the peak of
his corrugated roof and connected to the village's only satellite
When we asked Olivier to verify the spelling of his name, he motioned
to his 7-year-old daughter, who'd been watching from a bed in the
adjoining room. He'd recently enrolled her in school, and when she
spelled out his name for us, he smiled with undisguised pride. She was
mastering things he'd never thought possible for himself.
Randriamihaja could relate. He grew up in a crowded hut with six
sisters and three brothers, the children of vanilla growers.
Tiny fingers were valuable when handling delicate flowers, and he
worked the fields for years. His parents rarely collected cash for
their beans; more often, they'd trade them to visiting Chinese and
Indian merchants for items such as blankets and sugar.
As the vanilla market opened up in the mid-1990s, Randriamihaja
encountered more international buyers.
A combination of curiosity and ambition drew him toward them. Slowly,
to complement the Malagasy and French he spoke, he taught himself to
read, write, and speak English.
He'd practice with the few tourists he met at the Orchidea Hotel in
Sambava. A natural conversationalist unafraid of throwing himself into
new experiences, he decided his future might lie in the tourism
He traveled to Antananarivo, completed courses there, and returned to
start a business as a guide.
The work was inconsistent, mostly because only the most intrepid
tourists made it to his corner of the country, and after a few years
he decided to return to the business he'd grown up in.
He started farming and curing his own vanilla beans, selling them to
local exporters. Five years in, he got a call from the proprietor of
the Orchidea Hotel. An American was in town, he was told. She was
interested in vanilla, and she needed help.
It was 2015, and Lochhead was midway through her first visit to
Madagascar. For years she'd been buying its vanilla from afar, but she
wanted to immerse herself in a trade she'd also been born into, to
experience it directly and connect herself to its source.
Things weren't going well: She was battling stomach bugs, and the
niece who'd accompanied her was holed up in the hotel, shivering
through a bout of malaria. Lochhead had hoped to explore the
possibility of dealing more directly with locals in purchasing her
beans, but she was in no condition to explore anything. “I was kind of
overwhelmed,” she remembered.
Randriamihaja met her at the hotel, and they jelled. He became more
than just a guide to the local industry, getting his exporting license
later that same year and turning into something more like a partner.
He listened to her frustrations and searched for solutions. When she
said she needed a more reliable source of certified organic vanilla,
he organized the cooperative and trained its members to make sure they
followed the certification standards.
Although the cooperative ended up selling its beans to other buyers
this year, both he and Lochhead viewed that disappointment as a
learning experience.
Not too long ago, he took the leaders of the cooperative to a regional
bank branch to show them how the banking system works.
He opened an account for the group and, over the course of multiple
visits, showed them how money could be electronically transferred from
one account to another.
“They didn't trust it at first,” Randriamihaja said. “It was very hard
to convince them. But after the leaders saw that the money really was
in there, that it wasn't a trick, and that they could get the money
anytime, they were OK with it. So this is how we will pay them from
now on.”
Recently, Randriamihaja boarded a plane and flew beyond the shores of
his island for the first time. He traveled all the way to the U.S. to
visit Lochhead's vanilla production facility in Paso Robles,
Calif.—his turn to plunge into an entirely foreign landscape.
From Los Angeles, he made his way north. He came to the banks of the
Santa Clara River, crossed it, and ventured back toward the coast.
Everything was exotic: the five-lane freeways, the baseball stadiums,
the wineries, the arrow-straight rows of asparagus and cabbage
stretching to the horizon. It was the adventure of his life, and it
changed him.
Now, back in Madagascar, he was overseeing a team that was curing
several tons of beans Lochhead had recently bought. The workers spread
the beans on drying racks in his yard.
At the front of his house, outside a guard station, an American flag
now flew beside the one from Madagascar. In his office a stereo played
country and western music. Randriamihaja wore a T-shirt that, against
an outline of a map of America, said, “This Is Chevy Country.”
It would be difficult to come up with a more on-the-nose illustration
of how globalization colors all it touches. But in Randriamihaja's
office, the colors blur and bleed into one another. Is the image of
him—in that T-shirt, listening to that music, under that flag—an
example of how local cultures get subsumed by more dominant ones?
Or is it a reflection of how one man celebrates the connections that
have permanently broadened his perspectives?
It's both things at once, sort of like the poster Randriamihaja
displays on the wall behind his desk. It advertises a campaign by the
International Labour Organization to stamp out child labor in the
vanilla fields. He backs that program and the intentions behind it.
But he admitted his perspective is blurred by mixed feelings.
“I guess they could say I was a victim of child labor,” he said. Was
it exploitation or opportunity? You could make a strong argument
either way, he said. “To me, I was just helping my parents.”
Above us, the clank of hammers threatened to drown out the country
music coming from the stereo speakers. On the roof, workers were busy
adding another story onto Randriamihaja's house.

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Zambia has legalised the production and export of cannabis for economic and medicinal purposes, the government's chief spokeswoman said @ReutersAfrica

Zambia has legalised the production and export of cannabis for
economic and medicinal purposes, the government’s chief spokeswoman
said on Monday, becoming the latest country to shift its position on
the drug to give its finances a boost.
The approval for the export of cannabis was granted at a special
cabinet meeting on Dec. 4, spokeswoman Dora Siliya said in a
statement. It was not clear from the statement if the use of cannabis
for medicinal purposes in Zambia had been legalised.
The southern African country joins a host of nations that have
legalised, or are considering legalising cannabis to some degree, as
attitudes towards the drug slowly change and investments in its
medical benefits grow.
Zambia’s motivation is rooted in a hefty fiscal deficit and growing
debt burden. Growth in external debt to $10.5 billion at the end of
2018 from $8.74 billion a year earlier has raised fears the country is
headed for a debt crisis.
Zambia cut its 2019 growth forecast in September because bad weather
had hit crop production and electricity generation while the
International Monetary Fund has said growth is likely to remain
subdued over the medium term.
Zambian opposition Green Party President Peter Sinkamba, who has been
advocating the export of cannabis since 2013, said the move could earn
Zambia up to $36 billion annually.
“Depending on how properly this is done, this could just change the
face of Zambia’s economy,” Sinkamba told Reuters. “This could be a
blessing or a curse, like diamonds and gold, depending on the policy
Siliya said the government had directed the ministry of health to
coordinate the issuance of the necessary licences while a technical
committee made up of ministers from a range of departments would come
up with guidelines.

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Moody's Investor Services downgraded Nigeria to negative and we learnt that Foreign Investors are propping up the Naira to the tune of NGN5.8 trillion ($16 billion) via short-term certificates.

Everyone knows how this story ends. When the music stops, everyone
will dash for the Exit and the currency will collapse just like its
collapsing in Lusaka as we speak.
Nigeria matters and it has not posted positive GDP growth above its
population growth for a number of years. Essentially Baba Go Slow’s
Nigeria is in reverse gear

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Angola retrieves more than $5 bln in stolen assets amid crackdown on graft @ReutersAfrica

The money, including $3 billion stolen from the sovereign wealth fund,
had been siphoned off by corruption and money-laundering, state news
agency ANGOP quoted Queiroz as telling an international conference in
Abu Dhabi.
Queiroz did not give specific details about how the money was stolen.
“We have argued insistently that these important resources should be
returned unconditionally to the countries from which they were
illegally withdrawn in order to be used to improve the quality of life
of our populations,” Queiroz was quoted as saying, adding that some
countries could do more to help.
An anti-corruption drive has accelerated in Africa’s second-biggest
oil-exporting country since 2017, when Joao Lourenco became president,
ending the nearly 40-year grip on power by Jose Eduardo dos Santos.
The government wants to erase the influence of the ex-first family,
recover lost assets and privatise state firms.

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VodafoneGroup targets Africa's unbanked with ambitious plans for M-Pesa @FinancialTimes

Vodafone plans to transform its M-Pesa African mobile payments service
into a financial platform spanning the continent as it seeks to unlock
the value of one of the world’s largest fintech networks.
M-Pesa, launched in Kenya a decade ago as a peer-to-peer mobile money
service for people without a bank account, has grown into Africa’s
largest payments service.
A push to offer more sophisticated financial and ecommerce services
could open the door to a stake sale to highlight the business’s value.
Nick Read, who took over as Vodafone chief executive in 2018, has laid
the ground to separate the company’s huge tower business into an
independent company, a move that has lifted the company’s flagging
stock price by about 10 per cent.
Analysts see M-Pesa, like the towers, as an under-exploited asset on
Vodafone’s balance sheet.
Shareholders attribute it little value because they regard it as a
small part of a mature telecoms company rather than as a pioneering
fintech business.
While it only accounts for 3.5 per cent of revenue at Vodacom,
Vodafone’s African arm, applying a valuation in line with other
payment technology companies — roughly 20 times earnings — would make
M-Pesa worth as much as $1.5bn, three times its current implied value.
Expanding its range of products and its geographic scope could
significantly boost its value.
Vodafone’s strategy is to expand M-Pesa’s business rapidly in the
seven African countries where it already operates as well as in new
markets such as Ethiopia, where the British company has no telecoms
“I believe we can turn it into Africa’s largest unbanked bank,” Mr
Read told the Financial Times.
“To achieve this, we need to explore strategic technology partnerships
and work with key financial institutions. I believe there is the
opportunity to roll out M-Pesa into other countries where we do not
have existing mobile operations when the platform is further
M-Pesa was launched in 2007 by Safaricom, the Kenyan telecoms company
jointly owned by Vodafone and the Kenyan government.
Named after the Swahili word for money, the basic transfer service
quickly took off in a market with limited banking infrastructure.
Kenyans could suddenly use mobile phones to send money to friends,
relatives and merchants at the click of a few buttons.
As basic phones were replaced by feature phones and then smartphones,
M-Pesa’s functions expanded to include the ability to pay for
everything from electricity and rent to air fares.
Now used by two-in-five Kenyans, the system provides the payments
backbone to a multitude of digital services. Safaricom expects M-Pesa
to account for more than half its revenue within four years, up from
just over 30 per cent currently.
The service has been launched in six other African markets, including
Tanzania, Egypt and Ghana, and the customer base is growing across the
Their numbers rose 12 per cent to 37m in the year to the end of March,
while revenues were up 21 per cent to €750m. More than €10bn is
processed over the M-Pesa platform every month.
It has not all been plain sailing. Launches in countries including
India, Afghanistan, Romania, Albania and South Africa failed to work
and the service was closed down.
And in Kenya, Safaricom has been forced to allay concerns that M-Pesa
could be caught up in tensions between the US and China — Safaricom
and Vodafone migrated the M-Pesa customer base to Huawei’s Mobile
Money Platform in 2015.
A year ago US authorities issued a “denial order” that prevents
international companies from working with Huawei. Vodafone had to pull
phones made by the Chinese company, which use Google’s Android
operating system, from its 5G launch in the UK.
However, Safaricom has played down any prospect of a ripple effect on
M-Pesa from Huawei’s woes.
“They have been a very competent and very close partner of ours for a
very many years and I hope they continue to be,” Bob Collymore,
Safaricom chief executive until his death this summer, told investors
in May.
“Our policy as a company is not going to be driven by Donald Trump . .
. We will make independent decisions, similarly I believe the
government of Kenya is making decisions, which are independent of
America-China geopolitics.”
Collymore is to be replaced with Safaricom’s first Kenyan CEO, Peter
Ndegwa, who will join from Diageo next year.
Any move to disrupt M-Pesa would have a dramatic effect on the Kenyan
economy. Joshua Oigara, head of the Kenyan bank KCB Group which is a
partner of Safaricom for M-Pesa, estimates that about a quarter of
Kenya’s gross domestic product is processed over the platform.
M-Pesa is already used to pay salaries, book bus tickets and settle
invoices in most of its markets.
In Kenya it has expanded into more advanced financial services
including small loans, supply chain finance, insurance and a growing
number of in-store and ecommerce services.
Mr Oigara said data generated by M-Pesa users would be key to
introducing credit scores to African markets.
The business does not have an open goal, however. Banks including
Standard Chartered have identified Africa as a potential growth market
while other telecoms companies, including South Africa’s MTN, France’s
Orange and India’s Airtel, have launched rival payment services.
There were 135 live mobile money services across sub-Saharan Africa
and 122m active accounts at the end of 2017, the most recent data
available, according to global mobile phone trade body the GSMA.
Well-funded Silicon Valley players have also targeted the region. San
Franciscan lenders Branch International, backed by Visa, and Tala,
which counts PayPal as an investor, have both launched in sub-Saharan
And other telecoms companies, notably Orange, have targeted banking as
a new growth area both in Africa and Europe. A rapid expansion of
M-Pesa over the next 12 to 18 months could become a similar growth
driver for Vodafone.
“The future of telecoms businesses like Safaricom is using M-Pesa to
go into more ecosystems beyond telecoms,” said Mr Oigara, highlighting
financial services, education and healthcare as industries that could
be further stimulated as mobile payments grow on the back of
“You can capture the value of the transactions which is really what
the business is today.”

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@Safaricomplc share price data here

Closing Price:           30.00
Market Capitalization:        1,201,962,840,000
EPS:             1.58
PE:                 18.987

HY Mpesa Revenue 41.97b vs. 35.52b +18.2%
MPESA has sustained robust growth in the period recording a YoY growth
of 18.2% despite the impact of the slow-down in the gaming industry.
The growth was driven by 12.4% YoY increase in 30 day active MPESA
customers to 23.61 million and a 7.8% YoY growth in monthly usage per
customer to 13 chargeable transactions per month.
The company added 2.6 million active MPESA customers with MPESA now
accounting for 33.8% of service revenue further accelerating
displacement of traditional voice and messaging services.
Excluding gaming revenue grew 20.9% YoY and chargeable transactions
per customer per month grew 17.5%.

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Kenya launches freight service on Chinese-built extended railway that connects hinterland @globaltimesnews

Kenya on Tuesday launched the Nairobi-Naivasha Standard Gauge Railway
(SGR) cargo service and an inland container depot (ICD) that are
expected to revolutionize transport of bulk cargo to the east Africa
nation's hinterland and neighboring countries.
Kenyan President Uhuru Kenyatta and Chinese State Councilor Wang Yong,
were among dignitaries who graced the launch of the SGR phase 2A
freight service and dry port located in the resort town of Naivasha.
"Today, we mark the commencement of the freight train services to the
Naivasha Inland Container Depot; thus making an unequivocal statement
that we as a people are ready to ascend," said Kenyatta during the
launch in Nairobi.
The freight service launch came after the Nairobi-Naivasha SGR
passenger service was inaugurated on October 16 this year.
The 120km Nairobi-Naivasha railway is an extension of the
Chinese-built modern railway that connects Kenya's coastal port city
of Mombasa to the capital Nairobi. The Mombasa-Nairobi SGR was
launched in 2017.
Kenyatta said the commencement of freight transport along the
Nairobi-Naivasha SGR corridor that is part of the proposed
Mombasa-Nairobi-Kisumu/Malaba SGR project, will stimulate investments
and economic growth in the Kenyan hinterland.
"We equally remain hopeful that other economic and commercial ventures
will be established along the line, which together will trigger the
creation of productive employment, and in the process reduce poverty
and inequality across the whole country," said Kenyatta.
He said that operationalization of the SGR phase 2A freight service
and Naivasha's dry port will boost Kenya's status as a transport and
logistics hub while enhancing regional integration.
Kenyatta said that two trains will on a daily basis serve the Naivasha
ICD while two shipping lines had already committed to delivering their
bulk cargo directly from the port of Mombasa to Naivasha.
Chinese State Councilor Wang Yong, also the special envoy of Chinese
President Xi Jinping, congratulated Kenya for the launch of the new
freight transport service.
He said the full launch of the Nairobi-Naivasha SGR services marked
another milestone in the history of railway construction in Kenya and
Africa in general. It also marked another major achievement of the
China-Kenya and China-Africa cooperation on the Belt and Road
Initiative (BRI).
Wang said the project has showcased the mutual benefits and shared
development through China-Africa cooperation, adding that China will
adhere to the principles of sincerity, real results, affinity and good
faith, and the approach of upholding justice while pursuing shared
interest in China-Africa cooperation.
"We will continue to promote Sino-Kenyan cooperation such as facility
connectivity within the framework of BRI to build a closer
China-Africa community of shared destiny," said the envoy.

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@KenyaAirways issues a profits-warning statement. @RichEconomics

Although revenue improved in the year, profitability was constrained
by increased competition, which, in turn, increased pressure on
pricing in order to remain competitive.

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by Aly Khan Satchu (www.rich.co.ke)
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December 2019

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