Exactly two months after the official launch of the logo and name of the proposed national carrier, Nigeria Air, the Federal Government has suspended the project.
The Minister of State for Aviation, Hadi Sirika, disclosed this via his official twitter handle (@hadisirika) on Wednesday after the end of the weekly Federal Executive Council (FEC) meeting in Abuja.
Sirika said the decision to suspend the project, which he described as tough, was strategic and had nothing to do with politics or pressure from stakeholders.
“I regret to announce that the Federal Executive Council has taken the tough decision to suspend the National Carrier Project in the interim.
“All commitments due will be honoured. We thank the public for the support as always,” Sirika said.
On July 18, the Nigerian government had officially unveiled the name and logo of the country’s new carrier at the Farnborough International Public Airshow in London, United Kingdom.
The new national airline, which was expected to takeoff on December 24, would be private sector-led and driven through Public Private Partnership (PPP) arrangement, with the government owning not more than five percent equity and zero interference, according to Sirika.
Early this month, the Nigerian Civil Aviation Authority (NCAA) said the proposed December take off of Nigeria Air was still feasible as it could still issue necessary operational certificates before the end of the year.
South Africa’s Constitutional Court has passed down a judgment that makes it legal for adults to cultivate and smoke marijuana in their homes.
The court – the country’s highest – ruled that the right to privacy was violated by prohibiting the possession, purchase or cultivation of cannabis for personal consumption by an adult in a private dwelling.
The case was pursued by various parties, including a Cape Town lawyer, Gareth Prince, who is a practising Rastafarian. It was opposed by, among others, the country’s ministers of Justice and Constitutional Development, Police and Health; the country’s National Director of Public Prosecutions and the NGO Doctors for Life International.
The Constitutional Court’s judgment is to be applauded for doing away with the moralistic and paternalistic assumption that marijuana use by adults in private is always wrong and unhealthy. South Africa joins a number of countries that have taken a similar step, among them Canada and Portugal.
But there are still lots of uncertainties that need to be cleared up before South Africans can use marijuana without fear of prosecution. One of these is that the country’s laws will have to be brought into line with the judgment.
What the court found
In making its ruling, the Constitutional Court considered several issues. These included privacy, health concerns and the status quo in other parts of the world.
Delivering the unanimous judgment, Deputy Chief Justice Raymond Zondo stated that “the right to privacy entitles an adult person to use or cultivate or possess cannabis in private for his or her personal consumption”. And, he added,
to the extent that the impugned provisions criminalise such cultivation, possession or use of cannabis, they limit the right to privacy.
The court also examined the medical evidence that was used when the case was first brought to a lower court – the Western Cape High Court – as well as evidence from a 2002 case about the religious use of marijuana. It found no persuasive medical evidence that dagga in small amounts was harmful to users, particularly compared to the harm resulting from use of alcohol. Nor was there proof that marijuana use caused violent or aggressive behaviour or that its use led to the use of more potent or dangerous drugs.
The Constitutional Court noted that the personal consumption of small quantities of marijuana had been decriminalised or legalised in many other democratic countries.
The State failed to prove that the existing limitation of privacy was reasonable and justifiable. The relevant legal provisions that criminalise personal, private use of dagga by adults were declared unconstitutional and invalid. That order was suspended for 24 months. This will give parliament time to rectify the constitutional defects.
In the interim, the court ordered, adults who use, possess or cultivate cannabis in private for their own personal consumption are not guilty of contravening these provisions.
The personal consumption exception has been widely celebrated. But it raises various practical difficulties.
First, it’s less than clear under what circumstances the personal consumption exception will apply. According to the Constitutional Court, police officers will have to determine this on a case by case basis. To do so, they’ll need to consider factors such as the quantity of cannabis in the person’s possession and whether they can give a satisfactory account of their possession.
Uncertainty relating to how the exception is to be enforced in practice is problematic. It may even mean that the exception violates the so-called principle of fair warning. This rule requires criminal law provisions to be clearly formulated so those subject to them know ahead of time what they may and may not do.
Second, while the Constitutional Court judgment confirms the Western Cape High Court’s findings in many respects, it also differs in important ways. Significantly, the Constitutional Court held that there was no persuasive reason for the High Court to confine its declaration of invalidity to marijuana use in a home or private dwelling.
The Constitutional Court envisages instead that, provided dagga is used “in private and not in public”, it is protected by the right to privacy, even if the adult in question is not at home or in a private dwelling. It uses the example of someone who has cannabis in their pocket for private consumption, and then steps outside their home or dwelling. Provided the cannabis remains in their pocket and is for personal use, it still falls within the constitutional protection.
This seemingly broadens the exception proposed by the High Court. But once again, it remains to be seen how the courts will interpret the distinction between public and private use in practice.
Another aspect of the High Court judgment the Constitutional Court refused to confirm relates to the order declaring that provisions prohibiting the purchase of cannabis were invalid. The Constitutional Court argued that allowing people to purchase marijuana would amount to sanctioning dealing in cannabis.
This aspect of the judgment raises a legitimate practical concern: how is an adult user of cannabis supposed to acquire the marijuana they’re allowed to use in private if they don’t buy it from a dealer of some sort (which the Constitutional Court explicitly says is illegal)?
The user could grow their own. But they would need to obtain the seeds or buy them from someone else – who is, by definition, a dealer. The judgment’s implication seems to be that to exercise one’s (constitutionally-protected) right to use marijuana in private, one must inevitably act illegally since any purchase of marijuana and related products makes one an accomplice to dealing in cannabis.
A total of 22.4 million smartphones were shipped in Africa during the second quarter of this year (Q2 2018), according to the latest insights from International Data Corporation (IDC).
The global technology research and consulting firm's Quarterly Mobile Phone Tracker shows that Africa's smartphone shipments increased 9.8% quarter on quarter (QoQ) and 6.0% year on year (YoY) in Q2 2018.
The market's buoyant performance was spurred by the growing popularity of low-end to mid-range devices. Transsion brands continued to lead the continent's smartphone space in Q2 2018, accounting 35.4% of shipments. Samsung followed in second place with 23.2% share.
By contrast, the feature phone market was down 1.1% QoQ and 5.8% YoY in Q2 2018, but – with shipments totaling 31.4 million units – these devices still constitute a 58.3% share of Africa's overall mobile phone market as they cater to the needs of the continent's huge low-income population (mainly in rural areas) by providing basic mobile communications that are priced very competitively. Telco and Itel continued to lead feature phone category in Q2 2018 with a combined unit share of 59.9%, followed in third place by HMD on 9.0%.
Looking at the overall picture, the region's combined mobile phone market totaled 53.8 million units in Q2 2018, with shipments up 3.2% QoQ but down 1.2% YoY. The continent's two biggest markets – Nigeria and South Africa – saw a marked improvement in the performance of their overall mobile phone markets, posting YoY growth of 13.0% and 25.0%, respectively.
"The Nigerian economy remains stable and has begun to show signs of steady improvement in terms of consumer demand for mobile phones," says Arnold Ponela, a research analyst at IDC. "The country saw smartphone shipments of 2.7 million units in Q2 2018, up 15.8% YoY, with strong marketing support from telecom operators for most brands proving instrumental. However, ongoing currency issues and falling consumer purchasing power suggest Nigeria is not set for a sustained surge in smartphone shipments."
South Africa remains the continent's most developed telecommunications market, with smartphone shipments up 17.4% YoY in Q2 2018 to total 3.4 million units. "Numerous new entrants to the South African market are now offering affordable smartphones that boast very similar features to the leading brands," says Ponela. "As such, we expect the country's migration away from feature phones to continue at a progressive pace. This transition from feature phones to smartphones is reflected by the fact that the market continues to be dominated by low-end to mid-range devices priced below $150."
IDC's research shows that 4G LTE networks are spreading their reach in Africa, with shipments of 4G LTE devices increasing 11.8% QoQ in Q2 2018 to constitute 62.6% of the smartphone market. "Despite a drop in the prices of entry-level 4G phones, 2G and 3G mobile devices remain far more economical, making it difficult for operators to migrate clients over to newer technologies," says Ramazan Yavuz, a research manager at IDC. "Price sensitivity means that many African consumers prefer to stick with 3G phones, and this is likely to continue until 4G devices fall to a price point where they are affordable to a much larger segment of the continent's consumer base."
Looking ahead, IDC expects Africa's overall mobile phone market to grow 2.6% QoQ in Q3 2018, with overall shipments to increase slightly through 2018, leading to YoY growth of 0.4% for the year as a whole. "IDC predicts that 5G phones will reach the market in 2020, when rollouts of 5G networks will start in select African countries," says Yavuz. "However, demand for feature phones is unlikely to be impacted significantly as these devices will continue to serve a purpose in areas with no LTE coverage."
To deploy global investment on a significant scale Africa needs to develop the domestic conditions to absorb the much higher levels of global real estate investment currently considering Africa.
Typically, African real estate accounts for around 0.5% of large global funds’ commitment. That said, most of the global real estate funds that have invested in Africa, have sustained reasonable returns at a portfolio level over the last two decades. This has meant that most have stayed and that most have also either maintained or increased their allocation over the years. “This has built familiarity with – and confidence in - the continent,” says Adeniyi Adeleye, Executive Real Estate, Africa Regions, for Standard Bank.
The next big step is to increase the level at which these global funds’ commit to the continent.
The biggest challenge to achieving this is not so much global appetite or confidence but rather, “the ability of African markets to deploy or sustainably absorb this capital,” explains Mr. Adeleye.
Most of the continent’s leading markets have fundamental real estate demand and supply imbalances meaning that they present a largely attractive long-term investment outlook. As such, demand for real estate investment opportunities has remained consistent in most of Africa’s larger markets despite commodity price induced volatility challenges.
“Despite macro-challenges, most investors who made a commitment to the continent over the last two decades have stayed, managing volatility by seeking to evolve from short-term to more permanent real estate investment structures,” says Mr. Adeleye.
Standard Bank has supported significant evolution in the funding of real estate development on the continent. Private equity seeking alpha during the heady pre-economic crisis days appears to be giving way to longer-term funding structures.
“Private real estate funds seeking to evolve into Real Estate Investment Trusts (REITs) aim to draw on pension funds or other sources of institutional capital, for example, and are proving to be more effective in Africa’s longer-term real estate investment cycle, which typically requires much more patient structures,” says Mr Adeleye.
Yet the scale for growth going forward is much larger.
Encouragingly, policy and market conditions on the ground in Africa are shifting in the right direction. One of the keys to increasing investment in African real estate is to unlock capital in local markets. Even though some of the larger markets on the continent have regulatory or structural constraints that limit investments to unlisted real estate securities, “real estate investment, with its long and stable return profiles, still represents a fantastic opportunity to deploy local savings for broader investment and economic growth,” explains Mr. Adeleye.
Financing real estate investment requires low and predictable interest rates. In many African jurisdictions, local interest rates have been both high and volatile. This has meant that, traditionally, African real estate investment has focused on top end, global quality, opportunities that will attract hard currency funding. Today, however, leading African markets are rapidly developing the road, rail and digital telecommunications infrastructures linking their economies to the global economy. The industrial, retail and service sectors that these infrastructure ecosystems enable is making middle and lower end real estate opportunities more attractive to investors.
In short, “as African markets develop rational globally-linked and market-relevant infrastructure, real estate investors have to fund fewer of the ancillary infrastructure (roads, power, services) that have historically made middle and lower end opportunities unattractive in Africa,” says Mr. Adeleye.
Africa’s heavy focus on backward processing in agriculture (the continent’s biggest sector and traditional mainstay) also represents a significant opportunity for real estate investment – on two fronts. Firstly, the physical infrastructure required to develop a beneficiated agricultural export sector presents a real estate investment opportunity in its own right. Secondly, and arguably more importantly, “exporting beneficiated goods will limit the imported inflation endemic to raw commodity exporters,” explains Mr. Adeleye.
“If interest rates in African markets can be sustainably brought within the 10% to 14% range, we’ll see an explosion of middle and lower end real estate opportunities as these suddenly become justifiable – to both global and local investors,” he adds.
China’s heavy investment in African infrastructure at the government to government level as well as private investment in businesses unlocking the continent’s industrial and beneficiated agricultural export opportunities is deepening Africa’s ability attract and deploy much higher levels of both global and local real estate investment.
Standard Bank combines in-country presence and insight, a multi-jurisdictional view and capability across 20 African markets with an established presence in all leading centres of global capital and real estate investment. “Observing, advising, managing and growing Africa’s real estate sector enables us to recognise the scale of the opportunity that awaits those markets able to create the conditions to deploy significantly higher proportions of the world’s real estate investment capital,” says Mr. Adeleye.