Junk status. Downgrades. Inflation. Recession. Fuel price hikes. These are terms South Africans are exposed to on a daily basis. The reality is that there's a great deal of uncertainty about the economy, which means that consumers need to consider their financial wellbeing.
Of course, reducing your debt and other financial commitments is an important first step to improving your situation. In this regard, Lance Krom, founder and managing director of cellphone contract comparison engine Phonefinder.co.za, says it's important to consider the implications of making a 24-month financial commitment.
Since a cellphone is an indispensable tool in modern society, many people believe that a contract is an unavoidable monthly expense. While that may be true, Krom says there are a few important points to consider before signing, as this commits you to paying what can be a not-so-inconsequential amount of money every month for two years.
“It's important that your decision makes economic and practical sense in the long run,” says Krom. To ensure that's the case, he says it's important to consider the following factors...
The largest cost component of a cellphone contract is normally the phone finance. “We all have our brand preferences and love to get the latest model, but it's important to make a rational choice as it can mean a difference in price of a few hundred rand every month,” explains Krom.
“Before signing a contract, ask yourself if you need all the features and functionality offered in the phone you're considering. You'll likely find that you'd still be capable of communicating effectively with a more affordable model,” he adds. “Don't fall into the trap of paying more for specs that you'll never use. This can save you thousands of rands over the term of your contract.”
It's also important to consider the insurance implications, continues Krom. “More expensive phones attract higher insurance premiums, which add to your monthly costs.”
2. Match your usage to a plan
Make sure the contract plan you select offers the best mix of voice minutes, data and messaging to meet your monthly usage needs.
“If you've been on prepaid and are thinking of switching, consider your historical usage patterns. If you use more data, find contracts that offer the biggest bundles, with fewer voice minutes,” suggests Krom. “By closely matching your usage patterns to a contract you won't waste your money on SMS bundles that you'll never use.”
This process is also important to ensure you don't exceed your data and voice limits every month, as buying out of bundle can be more costly in the long run.
3. Compare options contract
Comparing contracts across all local telecoms providers can save you money, states Krom. “In the past this was a tedious manual process, but technology has simplified things with price comparison engines.”
An independent, free-to-use comparison engine like Phonefinder lets users search over 2,000 available contract options using multiple criteria, including handset manufacturer, network service provider and price range. “This makes it incredibly easy for consumers to find the best cellphone contract deal based on their specific preferences, and one that meets their budget,” explains Krom.
4. Understand the contract
Every cellphone provider has different cancellation policies, which generally come with penalties and additional costs. “This not only makes it essential that you understand the financial commitment you're making, but makes the decision to purchase a contract you can afford, now and over the next 24 months, so important,” states Krom. So, before signing, read the fine print and ask the right questions to understand exactly what it is you're signing up for.
5. Migration options
Even if you do your due diligence, you may find that your needs or circumstances change midway through your contract. If that happens, it's important to know upfront what your migration options are.
“Some providers allow upward and parallel migrations at no additional cost,” says Krom. “This is helpful if your contract no longer meets your requirements due to a change in usage patterns. In this case, migrating to a plan that offers more (upward), or a plan that costs the same (parallel) but has a different allocation of voice, data and messages, can save you money.”
Certain providers also offer downward migration, which allows subscribers to move from a more expensive plan to one with a lower monthly subscription, without the need to cancel. “There is usually a migration fee, but this can be less than cancellation fees and costs, making it a better option if it's available,” concludes Krom.
An Uber driver Abdoulie Jagne, has been arrested in Georgia, U.S., after he was accused of raping a 16-year-old female passenger earlier in the week. The 58-year-old Jagne, who was arrested on Thursday, was booked into the Gwinnett County Jail in north central Georgia.
Authorities told Fox 5 Atlanta that Jagne could face more charges. The teen told police she had been drinking at a bar with friends on Sunday night, WSB-TV Atlanta reported.
One of the girl’s friends then called an Uber ride for her, and that’s when Jagne picked her up, authorities told the station. The driver allegedly committed the crime after stopping the vehicle along an unincorporated road. The girl told police she was dropped off at a nearby apartment complex, where she started banging on several doors, seeking help.
Police found the teen to be intoxicated, with her pants around her ankles, Fox 5 Atlanta reported. She was transported to a nearby hospital for treatment. Uber officials told the paper that Jagne had worked for the company for a couple of months. They released the following statement. “What’s reported here is horrifying beyond words. Our thoughts are with the rider and her family during this time. This driver has been permanently removed from the app.”
The Central Bank of Nigeria (CBN) is working toward the eventual replacement of the ATM PIN code with biometric identification.
The announcement was made at a recent Nigeria Electronic Fraud Forum, where Dipo Fatokan, of CBN, stressed the need to step up to the more secure biometric standard.
“Your [ATM] PIN and account details are not supposed to be disclosed to a third person,” he said, but added that cardholders who are illiterate or incapacitated often must share this information in order to use an ATM.
Biometric ID is the logical solution to this problem because, “There is no way you can give your finger to a third party.” No firm date was given for the shift to biometric ID, which CBN views as an essential element in the bank’s efforts to stop banking fraud.
Fatokan acknowledged that the high cost of biometric hardware means that migration will take time, “but I am sure we shall get there soon.”
South Africans are fond of debating whether public or private sector failings are the bigger problem. It does not take too long to realise that they are really talking about race.
This is evident as the country faces an unusual scandal – one involving a private company called Steinhoff. The multinational furniture company is in trouble after German investigators began looking into it, for allegedly doctoring financial information to mislead the markets.
This was not the first time fingers were pointed at a private company. Auditors KPMG have been accused of unethical practice on behalf of the Gupta family who are linked to President Jacob Zuma and are accused of using money to influence government appointments and policies. Media conglomerate Naspers is also facing corruption accusations. Its subsidiary MultiChoice is accused of paying large sums to the formerly Gupta-owned television channel ANN7 in the hope of influencing government decisions.
But Steinhoff stands out because it does most to shake the confidence of one side of the argument and to get the other claiming it is vindicated. For much of the past few years, corruption has been seen almost exclusively as a public sector problem. Attention has focused on Zuma and his relationship with the Guptas. The private sector (Gupta-owned firms excepted) has, by default, been painted as a corruption-free zone.
The KPMG and Naspers cases may involve prominent private firms, but are seen by the national debate as yet another sign of the Guptas’ baleful influence. The villains remain the same and so does the problem: public sector corruption.
Steinhoff is a different matter entirely. The state plays no role at all and the company is a pillar of the private economy. Its leadership is overwhelmingly white and its attitude to the post-apartheid government seems to range from indifference to scepticism.
No wonder that its failings have been gleefully seized upon by people who insist that private sector corruption is as big a problem as its public equivalent. Or that many of the people who usually insist that public corruption is the problem have reacted to Steinhoff with shock.
On the surface, this sounds like the standard debate in most democracies over the past few decades in which one side favours letting business do as it pleases and the other wants it to be reined in by the state. But, in a country in which whites remain dominant in private business while blacks largely control the government, it is really about the country’s racial divides.
Colour of merit
Apartheid was underpinned by strong beliefs in white superiority – these don’t simply melt away because political rules change. People are used to seeing one racial group in skilled jobs, giving orders to the other: inevitably, this becomes seen as natural and so being white is associated with merit, being black with lacking it.
Since 1994, when policies promoting black advancement in business and the professions were adopted, this is often expressed in the view that black people in senior positions are there because they were given a free pass by the system, not because they deserve it.
This way of thinking also shapes attitudes to government and business. For those used to the racial pecking order of the past, government is run by people who hold posts because they are black, not because they are competent. Business continues to be run mainly by people who were judged to be competent in the past and who are therefore assumed now to be honest and to know what they are doing. Calls to assign more government functions to businesses or business people are often a way of saying that white people or black people approved by them should be running the country.
This attitude is particularly evident in how people in the suburbs react to private monopolies or dominant corporations.
Government departments are almost always associated with waiting in long lines for surly officials who have no idea what they are doing. In most cases, this is a caricature; in some, the Department of Home Affairs passport office for example, it is flat wrong. But similar long waits, indifference to customers and incompetence at the dominant digital television corporation or one of the mobile phone companies is accepted cheerfully as normal business practice.
Delighted black voices
Black people are perfectly well aware of these attitudes. This is why those who insist that the private sector is as bad if not worse than its public equivalent are almost always black. And why many black voices are delighted at what has happened at Steinhoff because it shows that a pillar of white business can behave at least as badly as black government.
It also explains why many white people have reacted to Steinhoff with such shock – and why Steinhoff happened in the first place.
The editor of the country’s leading business daily, Tim Cohen, has pointed out that Steinhoff’s failings should not have been a surprise since several market analysts warned a while ago that something was amiss and were ignored. He offered some explanations but, given the realities described here, the most likely answer is that no-one believed the specialist nay-sayers because they assumed that a major white-owned company must know what it is doing and that the critics must have an axe to grind.
Cohen also ran into trouble on social media for suggesting that reduced capacity at state regulators allowed Steinhoff to happen. Predictably, black people felt (wrongly in his view) that they were being blamed for white business failings.
There is another explanation for the regulators’ inaction. It is that they were not eager to look into a large white-owned company because they feared that this would be seen as yet another case in which incompetent black people wanted to bully competent whites. It is standard in the South African debate that any attempt by government, however mild, to intervene in business is branded a threat to the market economy so it would hardly be surprising if regulators feared this.
Correcting wrong perceptions
The Steinhoff scandal would do South Africa a huge service if it made the point that corruption and mismanagement have nothing to do with race. It would also help if it alerted everyone in the marketplace to watch as carefully over private companies as they do over government departments.
But, given how entrenched racial attitudes are, it is more likely that it will be dismissed as a once-off freak by those who assume that white led business is always competent and as further evidence of white prejudice by black people reacting to the label often stuck to them. If that happens, some private businesses will continue to get away with behaviour which would never be tolerated in government.
Steinhoff International Holdings NV (SNH.JO) has said that it will have to restate its 2016 financial results as part of its scrutiny into its European segment's 2017 balance sheet assets.
The "2016 consolidated financial statements can no longer be relied upon," the South African retailer said. Steinhoff added that it is taking the necessary steps to address audit issues at the group.
Last week Steinhoff shares tumbled after it disclosed possible accounting irregularities and that its chief executive, Markus Jooste, had resigned.
Zambia’s government has just banned the imports of some farm produce as a way of promoting the growth of the agriculture sector. The Conversation Africa’s Samantha Spooner asked Calestous Juma about the impact this will have on African countries and their agricultural sectors.
Which African countries are the biggest importers of fruit and vegetables and how much do they rely on to meet local demand?
In 2013, the import value of all fruit and vegetable categories for the African region was about $1.2bn. However, the trade tends to be localised in countries that have poor infrastructure. They have short shelf lives so it’s important to get them to the market quickly. Consumers are also discerning and avoid buying produce on the edge of being spoiled. Many of them may not have refrigeration at home so are selective in what they buy.
Poor infrastructure means that countries such as Nigeria end up being major tomato importers because they can’t keep up with the demand. Over the last 12 months Nigeria imported 189.5 tons of tomato paste. This is despite the fact that they have states with ample land for growing tomatoes close to major urban centres such as Lagos.
The importance of investing in infrastructure, as I argue in The New Harvest, has significant implications for food production, storage and distribution.
But poor infrastructure isn’t the only driver of imports, especially of fruit. Other factors such as taste, widely available variations among nations – like India – in fruit production, and seasonal availability are important forces behind the globalisation of the fruit trade.
Advances in freight technology and expansion of shipping have also made it possible for exporters to achieve economies of scale that out compete local producers. China, for example, is emerging as a major fruit exporter partly because of its world class capacity in shipping and logistics.
Is banning imports a good way to boost the local agricultural sector? Has it worked elsewhere?
Banning imports is a blunt tool for stimulating local production. It often triggers unnecessary trade reprisals unless there’s evidence of health concerns. And they’re a poor substitute for measures such as investments in local infrastructure that would enable local producers to compete favourably.
But it’s also important to take into account the political context that leads to bans. Countries like Zambia, for example, don’t have a long agricultural tradition and are under pressure to protect the emerging sector.
Zambia historically specialised in mineral exports and relied on food imports from neighbouring countries and international markets. It sought to diversify it’s economy when global copper markets tanked late last century and the economy collapsed. As a recent entrant into the green vegetable export market, Zambia has previously faced phytosanitary barriers to its exports.
Given the circumstances it’s clear why the government would want to protect local producers. But the ban is unlikely to result in the desired outcomes except to provide relief for existing producers. Bans are usually not permanent and so do serve as incentives to encourage new investment that may take a long time to show results.
Are international trading rules inclusive enough to accommodate a country’s different needs and pressures?
While I think bans don’t work in many cases, international trade rules cannot operate well without any consideration for their implications on ordinary people.
International trade can be designed as a positive-sum game. And it should be. But it will continue to be challenged when it carries the seeds of irreparable loss of livelihoods. Of course we need international trade, but it needs to be guided by different ethical stands such equity so countries are not pushed into continuous conflict because of the fear of being excluded from the global market.
4. What impact does importing agricultural produce have on local agricultural sectors?
Imports are not necessarily bad in themselves. They are part of a global system that’s theoretically built on the principle of reciprocity. This includes the expectation of reasonable balance of trade between the partners. Quite often bans are motivated by imbalances in trade relations.
Banning imports simply because one is seeking to protect local agriculture – and without just cause – is generally a poor approach to achieving food security. In many cases, imbalances in agricultural trade exist because African countries haven’t made the necessary investments – such as storage facilities and capacity building in international trade practices – that allow them to become important players in the global economy. Therefore, imports and suppressed local production tend to reinforce each other.
Even when countries increase production they still have to contend with the challenges of breaking long-term import contracts or violating international trading rules.
5. Have other African countries introduced similar bans?
Many countries tend to introduce bans to reduce the amount of foreign exchange used for imports, not necessarily to stimulate local production. When foreign exchange earnings improve they tend to reverse the bans. This often affects those local businesses that may have thought the bans would benefit them.
It’s therefore important to first put in place policies and incentives that promote local production. Their effective implementation often makes the need to introduce bans unnecessary.
Nigeria has previously imposed bans on imports. One example was barley. This helped to stimulate the use of sorghum to produce beer. But the motivation was foreign exchange management, not necessarily to promoting innovation in brewing.
In another Nigerian case, foreign exporters of wheat stifled efforts to introduce bread that was made with 40% cassava. The government didn’t ban wheat imports but a bill put to the legislature to require the blend was starved of support and defeated. Such is the power of food import lobbies.
In this case the initiative would’ve stood a better chance of success if it had found a way to extend benefits to those who were likely to lose from reduced wheat imports. It’s such losers who become the sources of resistance to new ideas, as I argue in Innovation and Its Enemies.
6. Apart from banning imports, what should African countries be doing to grow their agricultural sectors?
Banning imports may protect a few existing producers but in the long run it should not be considered as a tool to grow the agricultural sector. The focus should be on laying foundations for agricultural productivity, starting with infrastructure and working up the value chain to developing agro-industries.
Without reliable roads, power supply and irrigation there is little chance that Africa will radically transform its agriculture. Much effort is going into scientific research, which is commendable. But the gains from productivity will have little impact if produce can’t reach the market because of poor infrastructure and a lack of competence in logistics.
And more than anything else Africa needs agricultural engineering. Today Africa exports less food than Thailand. The immediate goal should be to learn how Thailand became an agricultural force and apply the lessons to regional trade.
Africa will become a more serious international player when it can trade effectively with itself. It’s like the world of football. Those countries that don’t have strong regional leagues tend to shine in the first rounds of the World Cup tournament then they flounder.
The Russian Export Center (REC) is created as a state specialized institution to support Russian export to foreign markets. It has a group of companies that provides comprehensive financial and non-financial support to Russian export-oriented companies and industries in the single window format.
One of the key tasks is to interact with relevant ministries and departments in the sphere of improving and developing foreign trade of the Russian Federation to Europe, Latin America, Asia and Africa.
In this interview, Peter Fradkov, General Director of the Russian Export Center (REC), discusses some aspects of Russian trade operations, strategies and challenges as well as future plans in the direction of Africa during a recent meeting with Kester Kenn Klomegah, an independent researcher and a policy consultant on African affairs in the Russian Federation and Eurasian Union.
Here are the interview excerpts:
Q: Could you please tell us about the Russian Export Center and why it was established as a subsidiary of Vnesheconombank in 2015?
A: In recent years, Russia has been making every effort to avoid the "raw-materials" export model and focus on developing export-oriented industries. The launch of the Russian Export Center was a key step towards the development of a full-fledged national export support system. Previously, the exporter had to apply to various authorities on different issues. In the course of time it became clear that it was necessary to create a "one-stop-shop" for exporters to receive a full range of services and support their products in foreign markets.
The reason behind creating a Russian Export Center within Vnesheconombank, based on the mandate of Vnesheconombank as a development institution, was the need to unite the Center, the EXIAR insurance agency and Roseximbank in one group in order to offer our customers a full range of financial and non-financial services, to provide Russian exporters with ample tools for entering foreign markets.
Q:With a focus on South Africa, is there any possibility for it to be used as a gateway to reach the market of southern African region? Do you also plan to develop or localize production centers and cooperate or compete with other foreign producers there?
A: Let me address the last question first. It is unlikely that upon entering the South African market, Russian companies will pursue any competition objectives. On the other hand, they are not afraid of competition, as Russian industrial products, primarily machinery, are quite competitive and can occupy positions not only in the market of South Africa, but also in other African countries.
Russian manufacturers have a number of specific competitive advantages. Let's take, for example, agricultural machinery. The main advantage of Russian products as compared to the counterparts by major foreign manufacturers is a lower price and almost the same level of capacity, quality and useful life. Moreover, the cost of operation, including maintenance, repairs, etc. is often lower than that of the foreign competitors worldwide. Considering the fact that Africa has 60% of the world's resources of untreated but agriculturally suitable land, we recognize remarkable opportunities for supplies of agricultural machinery, fertilizers, plant protection products and other solutions to improve the efficiency of agricultural activities in African countries.
Besides, a number of Russian companies operating in South Africa, such as Rosatom, Rostselmash, and Renova are implementing educational programs to train local specialists for the subsequent operation and maintenance of equipment, facilities or plants built with Russian support. This is an important contribution to the social development of the African country.
As for the plan to establish production there, it is a very interesting form of cooperation, which the Russian companies are now considering. And what matters here is that a reliable partner has to be chosen. In this context, cooperation with local and foreign producers in South Africa looks very promising The Russian Export Center takes an active part in the development of state support measures to create a service and repair infrastructure for Russian companies operating abroad, the launch of which is scheduled for the next year. The Republic of South Africa offers good conditions for the creation of joint manufacturing facilities and opportunities for them to enter the markets of the South African Customs Union (SACU) and the Southern African Development Community (SADC) countries in the future.
Q: Do you also think there is a lot of potential in terms of raising trade and economic cooperation between the African continent and Russia? Doing business in Africa is not easy but what kind of approach do you envisage to adopt?
A: Today, African countries are taking an increasingly active part in the global political and economic space. The Soviet Union made a significant contribution to the social and economic development of African countries by building large industrial and infrastructure facilities and helping to establish national education and health care systems. However, in the 1990s the Russian-African relations came virtually to a standstill. At present, Russia's foreign trade turnover with Africa is about 12 billion US dollars, which is a rather modest achievement. Nevertheless, the African continent remains a rather promising market for Russian industrial goods.
When working with exporters, we are witnessing increasing understanding that Africa is a new global market with a population of more than 1 billion people, with great potential for economic growth and, accordingly, consumption.
On the other hand, I can't recall of any special difficulties, inherent to the Russian-African business partnership. Perhaps, I should point out a still insufficient awareness of the real economic opportunities, market conditions and specific counterparts in African markets by Russian businesses and, accordingly, poor awareness of capabilities of Russian partners incumbents by Africans.
As I already said, what really matters for Russian companies is to find potential partners and distributors. Many companies do not possess competencies for searching foreign partners. Any successful project which came to exist had very often a spontaneous nature and was forged due to some historical experience, exhibitions or some other events. And we haven't undertaken any focused effort based on modelling of business processes to find dealers and distributors. Russian Export Center actively engages in tackling this issue in order to reconcile consistently supply and demand with each other.
Q: What are your key focus, products and services? Would you also focus on big companies and who are your potential clients? And what about medium-size enterprises?
A: Customers of the Russian Export Center include representatives of very different industries: machine building, agro-industrial complex, IT, chemicals, pharmaceuticals, and many others. Our customers cooperate with countries in Asia, CIS, Africa, South America and Europe. The important thing is Russian Export Center deals with both major businesses and small and medium-sized exporters. Of course, the goals and opportunities of these companies vary. The medium- and small-sized exporters e.g. submit inquiries relating to non-financial support, search for partners, analysis of foreign markets, educational services in the field of exports. The major players are more interested in financial and insurance support. Russia is a big country, so we pay special attention to working with regions. According to data for 2016, a significant proportion of REC customers (about 70%) accrued exactly to the regional companies. And it comes without surprise since the vast majority of manufacturing companies are located in the regions. We are pleased to witness a higher interest shown by the regional companies in entering African markets, most of these companies represent small and medium businesses.
Q: So, what are the key challenges here with regard to the latest economic developments which are faced by other foreign players on the African continent now?
A: Currently, lots of countries worldwide are intensifying efforts to get a foothold in Africa. Russia has traditionally and historically built very good, trust-based relations with the African continent. At the same, I should notice that trade and economic relations with many countries do not meet the achieved level of political relations. Trade turnover could be much more sizable in terms of both quality and numbers and both sides could experience such growth.
Reinforcement of positions of Russian exporters in Africa requires creation of certain conditions. The main one of them is penetration into the market. We are often faced with discriminatory barriers, which are there not because we are from Russia, but because we have just not thought about how to remove these barriers. For example, in some African countries we deal with the fact that European or American companies have to pay really low customs dues or do not have to pay them at all, while we often have to pay away 20-40 % custom duties, for example, for cars or cement. The government authorities, both intergovernmental commissions and the Russian Export Center, are primarily concerned with removing barriers for Russian exporters and opening up foreign markets for them.
Q: What do you hope to achieve over the long term in the market in Africa? Describe the African market and say your final words to your potential clients who are located in different countries and regions in Africa?
A: Global goal of the Russian Export Center is to create favorable conditions for the growth of Russian exports. Being a key state institution for export support, the Government of Russia has set important tasks before us. This year we are to involve more than 6.5 thousand new companies in export activities and also support export deliveries worth at least $ 20 billion.
The world of today has gone global, and without the integration of world trade into the processes business scaling would be impossible. Our primary task is to gradually change the thinking of Russian entrepreneurs, who are often skceptical about entering foreign markets, including African ones. Secondly, we strive to promote the image of Russia as a producer of diverse and high-quality products. For this purpose, the Russian Export Center has launched a program to promote Russian goods and services under a single country brand "Made in Russia". And in this context, Africa is a very important partner for us, though not an easy one.
Currently, the REC Group which includes EXIAR and Roseximbank has developed a comprehensive line of financial and non-financial instruments for the support of Russian companies in foreign markets operating or going to enter the African markets. In my opinion, the key products are financing of goods supplies (including, credits to the buyer or the buyer's bank), insurance of export contracts and international investments, issuance of guarantees.
The potential customers in Africa should be aware that the beneficiaries and consumers of these governments support measures are not just our exporters since we additionally arrange financing for supply of products and take other special support measures which are in fact assumed by the Russian state. Thus, the Russian Export Center aims to reach a mutually beneficial, long-term cooperation with our African partners.
Credit: Kester Kenn Klomegah