Items filtered by date: Saturday, 11 November 2017

The Republic of Benin (Benin) has become the 17th Member State of Africa Finance Corporation (AFC), Africa’s premier infrastructure development finance institution.

Hon. Romuald Wadagni, Minister of Economy & Finance, formally acceded to AFC membership by signing the Letter of Adherence on 7 November, 2017. Benin, therefore, joins the list of Francophone African States that are currently AFC member countries. These include: Chad, Cote d’Ivoire, Djibouti, Gabon, Guinea-Bissau, and Guinea-Conakry.

This development augurs well for the peaceful coastal nation, which serves as an economic gateway to several other West African economies. Benin is economically stable, maintaining an average GDP growth rate of 5% over the past five years. Such fundamentals create a natural support system for viable infrastructure investment.

Andrew Alli, President and CEO of AFC commented: “We are happy to welcome the Republic of Benin to the membership of AFC. Benin is strategically located. Through this partnership, we believe that Benin will be able to realise its full potential as an important corridor for economic activities in West Africa. With the right infrastructure; taking into consideration regional economic flows, the country is well positioned to significantly service all its neighbouring countries. As a member of AFC, Benin will have access to AFC’s technical expertise and financial resources in the development, financing and execution of infrastructure projects in the Transportation, Power, Telecommunications, Natural Resources, and Heavy Industries sectors.”

Hon. Romuald Wadagni also commented on the announcement: “We are excited at the prospects of partnering with AFC to drive infrastructure development in Benin and across West Africa. As is well known, investments in infrastructure are directly linked to economic development. Our membership in AFC bodes well for the country and the entire West African region.”

Published in Economy

South Africa's Gupta family used HSBC Holdings PLC bank accounts in Dubai to transfer millions of dollars through companies that have been linked to suspected kickbacks for the sale of Chinese locomotives, according to documents reviewed by The Wall Street Journal.

The documents show money moving among three United Arab Emirates-based firms in January and February 2013 through HSBC accounts while one of the firms was receiving payments from a Chinese rail company with a contract to sell locomotives to a South African state-owned enterprise.

One of the documents, a spreadsheet of bank transactions, shows that the transfers among U.A.E.-based firms were made in dollars and cleared by HSBC in New York.

The spreadsheet and other documents cited in this article were among a trove of emails, bank statements and other documents that appear to have been obtained from Gupta-controlled companies earlier this year. The documents have buttressed longstanding suspicions among many South Africans that the powerful business clan leveraged its connection to President Jacob Zuma and other government officials to amass great personal wealth.

They also underscore the risks for banks of processing potentially illicit money flows.

HSBC said it is determined to keep criminals out of the financial system. It said it "has been reviewing its exposure to the Guptas for some time, and has closed a number of accounts for associated front companies wherever we have found them."

"This is inherently challenging because those who seek to launder money are often extremely sophisticated, hiding behind legitimate companies, layers of front companies, connected parties and individuals that have controlling interests in the subject companies," HSBC said.

South Africa's amaBhungane Centre for Investigative Journalism published documents in June showing the Guptas were involved in arranging the contacts between CSR Zhuzhou Electric Locomotive Co., a subsidiary of China's state-owned CRRC Group, and South African rail-and-port operator Transnet. It said the documents present evidence Gupta family companies received kickbacks of around 20% on three locomotive deals from CSR and other CRRC subsidiaries.

CRRC Group didn't respond to a request for comment.

South African police and prosecutors have said they are investigating allegations of wrongdoing by people and companies with ties to the Guptas, including potential kickbacks from international companies.

The Guptas, who didn't respond to a request for comment for this article, have previously denied wrongdoing. Atul Gupta, who leads the family's businesses, has said without elaboration that "there is no authenticity" to the documents, which have been dubbed #GuptaLeaks in South Africa. Mr. Zuma has also denied wrongdoing.

The possible role of U.K. banks in Gupta-related business was raised in October by Peter Hain, a former cabinet minister and a member of the U.K.'s House of Lords. At the time, the U.K. financial regulator said it had already asked two banks named by Lord Hain, HSBC and Standard Chartered PLC, to review possible Gupta-related business.

Standard Chartered said it shut down some accounts linked to the Guptas in 2014 after an internal investigation.

In a letter sent last week to U.K. Treasury chief Philip Hammond and seen by the Journal, Lord Hain accused HSBC of sanctioning money laundering. He alleged that accounts with U.K.-based HSBC in Dubai and Hong Kong were used for Gupta money transfers out of South Africa. He told Mr. Hammond that some of the transactions had been flagged as suspicious by HSBC staff, but "I am informed that they were told by HSBC UK to ignore it."

HSBC denies that it sanctioned money laundering. HSBC has spent billions of dollars improving its financial crime-fighting systems and hired thousands of compliance staff since paying $1.9 billion in 2012 to settle U.S. allegations of money laundering and sanctions breaches. Under the terms of a five-year deferred prosecution agreement, part of that settlement with the Justice Department, it must raise its standards to an agreed level or face an extension of the agreement, additional conditions or criminal prosecution.

The transactions in the #GuptaLeaks spreadsheet could draw scrutiny from U.S. authorities, since they are listed as having been made in dollars and cleared by HSBC in New York.

The Federal Bureau of Investigation is examining funds involving Gupta-linked businesses that may have traveled through the U.S. financial system, and the role any U.S. companies may have played, according to people familiar with the matter.

The spreadsheet shows a total of $2 million moving from two U.A.E. companies--Century General Trading FZE and JJ Trading FZE--to a third U.A.E. company, Global Corporation LLP, in January and February 2013.

The three companies appeared to be controlled by the Guptas, according to correspondence and financial data in the #GuptaLeaks documents. Century General Trading and JJ Trading didn't respond to calls seeking comment. Global Corporation couldn't be reached for comment.

Other #GuptaLeaks documents show that Century General Trading had another lucrative stream of revenue at the time. In October 2012, Chinese rail company CSR signed a 2.69 billion rand ($190 million) deal with South African state-owned Transnet for 95 locomotives. As part of the deal, CSR pledged to pay 20% of its proceeds, or 537.3 million rand, to Century General Trading, according to a table setting out the payments the firms were to receive from the Chinese company.

Transnet said it is investigating the procurement processes for the locomotive deals. Emails from the months preceding the deal show that the Guptas and companies they controlled were involved in arranging the agreement. One email chain from January 2012 shows that CSR directors forwarded a letter to the Transnet chief executive seeking participation in the locomotive tender to several employees and executives at Gupta-owned companies.

The transactions processed via HSBC accounts in early 2013 are part of much-larger money flows due to JJ Trading and Century General Trading in the years to come. One document states that by 2015, the two companies were entitled to 5.27 billion rand in payments from CSR, as the Chinese company went on to win two more tenders with Transnet, for 100 and 359 locomotives, respectively. The funds from the later deals, between 20% and 21% of the total proceeds, had been promised to JJ Trading, according to the document.

It is unclear how payments after February 2013 were processed. The JJ Trading and Century General Trading accounts with HSBC were shut down in 2014.

 

Published in Bank & Finance

A U.S. citizen accused of attempting to subvert President Robert Mugabe’s government was released from Zimbabwe’s maximum security jail on Friday, a day after the High Court ordered her to be freed on bail, Reuters witnesses said.

Judge Clement Phiri ruled on Thursday that there was a “patent absence of facts” in the state’s case against 25-year-old Martha O‘Donovan, whose arrest last week centered on accusations she insulted 93-year-old Mugabe in a Twitter post.

She denies the accusation.

Reuters witnesses saw O‘Donovan leaving prison in a United States embassy vehicle. O‘Donovan and her lawyers did not speak to reporters waiting outside Chikurubi Maximum Prison on the outskirts of Harare.

State prosecutors accuse O‘Donovan of writing a Twitter post in October calling Mugabe a “selfish and sick man”.

The government has since last year been targeting activists and government critics who use social media to speak out against Mugabe, cash shortages in banks and a foreign currency crunch that has caused a sharp rise in prices.

Amnesty International said it feared O‘Donovan would not be the last to be arrested in the government’s “clamp down on social media platforms”. 

Activist pastor Evan Mawarire, whose #ThisFlag movement last year organized the biggest stay-at-home demonstration in a decade, is on trial on a charge of subversion. He faces a separate trial for a similar offence.

 

- Reuters

Published in Telecoms
Saturday, 11 November 2017 05:48

Chinese companies keep investing in Ethiopia

As Ethiopia strives to become the manufacturing hub of Africa, more and more Chinese companies are showing an interest in investing in the east African country.

The latest Chinese company that will soon establish a presence in Ethiopia is the Wuxi No. 1 Cotton Mill, which is part of the Guolian Development Group and one of the largest textile manufacturers in China, according to the Ethiopian Investment Commission (EIC).

The company has signed an investment agreement with the Ethiopian government to establish an integrated textile industry in Ethiopia's second largest city Dire Dawa, some 446 km east of Ethiopia's capital Addis Ababa.

According to the EIC, Chinese companies, with close to 379 projects that were either operational or under implementation in 2012-2017 period, are on top of Ethiopia's investment landscape, both in number and financial capital. Among these companies, 279 were operational in Ethiopia with projects that worth over 13.16 billion Ethiopian birr (over $572 million) during the reported period, while the remaining 100 are under implementation.

In terms of employment creation, Chinese companies have created more than 28,300 jobs in various sectors in Ethiopia during the reported period, of which over 19,000 were created in Ethiopia's manufacturing as it is the leading sector in attracting companies from China.

In a statement sent to Xinhua, the EIC indicated that the Wuxi No. 1 Cotton Mill and the Guolian Development Group will bring state-of-the art manufacturing technology, knowhow and excellence accumulated over a span of 100 years to Ethiopia.

Noting that the company currently has a weaving capacity of 26,000 tons of yarns and 30 million meters of gray fabrics yearly, the EIC expects Wuxi No. 1 Cotton Investment Company to play a big role in Ethiopia's ambition in putting its export industry in the map.

As part of the investment agreement, which was signed in Wuxi city in China on Nov 2 between the EIC and officials of the company, the Wuxi No. 1 Cotton Mill has agreed to invest in a large scale and integrated fabric mill and spinning plant in Dire Dawa, targeting the export market.

The Ethiopian government also envisages that high profile companies, such as Wuxi No.1 Cotton Mill which is said to be known for supplying leading global brands where 75 percent of its products are mainly exported to Europe, America, Japan, and Southeast Asia, will help push Ethiopia to be the leading player in Africa's apparel and textile manufacturing sector.

Abebe Abebayehu, Deputy Commissioner of the EIC, believes the arrival of such investors in the country will help Ethiopia realize its target.

"This investment would contribute immensely to our government's vision to build a sustainable, vertically integrated and export-oriented, apparel and textile manufacturing hub in Ethiopia. Indeed, our vision is to make Ethiopia the leading manufacturing hub in Africa," the statement quoted Abebayehu as saying.

According to the EIC, in addition to creating direct employment opportunities and boosting Ethiopia's foreign exchange reserves through exports, this investment is expected to create significant backward and forward linkages in the country's fast growing textile and garment industry.

In a bid to create better market opportunities for large scale cotton production in the country, the project plans to purchase raw materials such as cotton from local sources, it was noted.

 

- Xinhua News

Published in Business

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