The Central Bank of Nigeria (CBN) has authorized the use of Renminbi (RMB) instead of dollar by Nigerians to import some specific goods from China to achieve maximum benefit in the recent $2.5 billion currency swap pact signed by both countries.
This was disclosed at a press briefing organised by the apex bank at the end of the Bankers Committee meeting held in Lagos yesterday.
According the committee, importers of Chinese equipment, machineries and goods are expected to obtain invoices in RMB instead of dollar for settlement which would ultimately cut down transaction cost and make importation cheaper for Nigerians playing in that market segment.
The committee said the arrangement would go a long way to strengthen the nation’s external reserve which is currently put at $48 billion.
Specifically, a member of the Bankers’ Committee and the Chief Executive, Stanbic IBTC Bank, Demola Sogunle, said: “CBN and the Bankers Committee are to start encouraging importers to receive invoices in Renminbi instead of dollars.
One of the incentives will be that a percentage spread will be given to any importer that is bringing a Renminbi invoice for settlement instead of bringing a dollar invoice.
If you bring Renminbi invoice, the benefit is that it is going to be cheaper for the importer in coming to CBN to get foreign currency which, in this case, will be Renminbi.
“The importer will actually bring lesser amount of naira.
If he goes ahead to buy with the same supplier based in China and collect invoice in dollars, it will cost the importer slightly more in terms of the naira amount he will use to get the foreign currency.
“We have got almost $48 billion in external reserve, because we trade a lot with China.
If we are able to continue to bring in machinery and equipment, without depleting our dollar reserve, the external reserve will not be under threat.
So with the Renminbi in place instead of dollar, based on this swap deal, we are in a very good position. So importers are encouraged to bring in invoices in Renimbi instead of dollars. “
The Chairman of International Chamber of Commerce Nigeria (ICCN) and Regional Coordinator, Sub-Saharan Africa, Babatunde Savage, has reiterated the urgent need for restructuring of government’s spending in favour of capital expenditure in view of the huge infrastructure deficit confronting the nation.
Savage, who spoke at the 19th yearly general meeting of the chamber in Lagos, noted that the relatively low performance in capital budget, which hovered around 60 per cent as at December 2017, when compared with the almost 100 per cent implementation of recurrent expenditure is not development friendly.
He said the trend of unspent capital allocations, which are usually returned to the treasury, is a product of delayed budget approval processes, hence the need to revisit this issue for the good of the economy.
According to him, it is a widely held view that the private sector is the engine of growth and poverty reduction, as well as one of the most powerful catalysts for the transformation of the economic structure of countries.
“Businesses thrive when supported with well-conceived regulatory policies and good corporate governance practices in line with global best practices.
Corporate governance, to me, is all about how an organisation is managed- its corporate and other structures, its culture, its policies, and the ways in which it deals with its various stakeholders.
“It is concerned with structures and processes for decision making and with the control and behavior that support effective accountability for performance outcomes/results”, he added.
On the future outlook, Savage said the global economic growth prospects have improved modestly due to stronger United States’ growth expectations, exit of some large economies from recession and rising commodity prices.
According to him, with the sustained recovery in oil prices, strengthening commodity prices, rising aggregate demand, rebound in investment as a result of improvements in investor’s confidence and accommodative monetary policy, which confronted the global economy in 2017, there were signs of moderate growth and improvement.
“We would expect increased diffusion effects of oil sector growth in 2018, through budgets and government spending; oil sector procurement, wage and CSR growth and oil sector support for the external sector.
“With the gradual recovery from recession, stability in exchange rates, inflation under control, we certainly have reasons to be optimistic.
Oil prices have surged to $60-70pb beyond 2017 expectations, offering Nigeria some respite and suggesting a better economic outlook in 2018. Adopting the highest standards of corporate governance to achieve long-term value for all is now imperative”, he added.
Brothers who founded firm five years ago expect 10m customers to make $1bn of rides
Climbing into taxis to convince their notoriously sceptical drivers to sign up for a new service might not sound the best way to celebrate graduating from high school. But for Markus Villig, who was just 19 at the time, it was all part of trying to get his start-up Taxify off the ground with his older brother and co-founder Martin.
Few drivers agreed to join the service. “All I had was a lot of drive. I had wanted to start a tech company since whenever. It was extremely difficult to get them to sign up,” Markus, 24, says.
Five years later, however, Taxify is firmly established as Europe’s leading ride-hailing competitor to the likes of Uber and Lyft. Confirmation of Taxify’s success came in May when a $175m investment led by the German carmaker Daimler made it Europe’s latest unicorn, a start-up company valued at more than $1bn. It follows in the footsteps of other start-ups founded by Estonians such as Skype and TransferWise.
First known as mTakso, Taxify started as a pure aggregator of taxis. Success came after a pivot of the business.
“We started based on our personal problems. Tallinn is not too big a city and we had over 30 taxi companies but they all had only 30-50 cars so it was very hard to get one,” says Martin, 39, who has started and run other businesses.
It brought in ratings and credit card payments for convenience and started by signing up companies and then single drivers. But growth was still frustratingly slow, and so the brothers decided to take the plunge into the private hire business and start their own ride-hailing service.
Taking on the tech giants
“We told taxi companies: unless you change your strategy you will die. But the problem is that most companies are dinosaurs. So we moved on to individual drivers and had more success but it was still fairly slow. The big growth only came when we moved on to private hire drivers,” says Markus.
Taxify has tried to take business from other companies and says it has done so with a promise of better pay for drivers and cheaper fares for passengers. It thus takes a smaller margin for itself, but the brothers argue they gain a lot back by being more efficient than competitors. This year they are expecting more than $1bn of rides with about 10m passengers in 25 countries throughout Europe, Africa and Australia.
We realised the need for ride-sharing platforms is significantly bigger in Africa. In Europe car penetration is high, public transport is good. In Africa, in most cases, this doesn’t apply at all
The second stage of their strategy had been to focus on eastern Europe, looking at neighbouring Latvia and Finland first and then Lithuania. But as its external funding increased it started looking further afield both in Europe, to cities such as London and Paris, but also to Africa where the brothers had spotted a gap.
“We realised the need for ride-sharing platforms is significantly bigger in Africa. In Europe car penetration is high, public transport is good. In Africa, in most cases, this doesn’t apply at all,” says Markus. Taxify is present in cities such as Accra, Dar es Salaam, Nairobi, Lagos, Cape Town and Kampala.
Martin says Taxify’s strategy is to first head for a country’s capital city and once that is up and running head for the second, third and fourth cities. Much of its growth in the next few years — it is aiming to be in several hundred cities, up from the current 40 — will come from existing countries.
Starting up in a new country is not easy, especially as Uber or other services have often arrived there first. Markus says: “The thing in this space is that as we started many years after Uber most markets already have competition. Definitely the early days are hard because we don’t have as many cars. But because we are providing a better deal, we get more people coming to us.”
A protester at a recent demonstration against Uber, one of Taxify's rivals. One of the battles for ride-hailing apps is regulation.
One of the battles for ride-hailing apps is regulation. Taxify has been kept out of London by strict taxi licensing rules for some time. Both brothers, however, go out of their way to praise the city for regulating not just the drivers but also ride-hailing platforms. “Platforms in the past have been too sloppy. That is why TfL [Transport for London, the regulator] is very cautious because they had a bad experience. We were one of the platforms hit by that,” says Markus.
For now the money being ploughed into the company gives the brothers a chance to play in what Markus calls “the biggest tech playground currently”. Taxify’s latest investment round included Daimler, the owner of Mercedes-Benz, the Chinese ride-hailing app Didi Chuxing, which was already an investor, plus one of the founders of TransferWise.
“The industry is so great that there’s room for us to grow 100 times from here. We could go public, we could get acquired,” says Markus.
Martin butts in to say that demand for ride-sharing could rise globally 10-fold in the next decade. “That is why we see there is so much potential ahead and so much funding. It’s still too early to sell out. We can have such a big impact.”
Harare — Parliament backed down Monday from its demand for former president Robert Mugabe to answer questions related to diamond mining operations during his time in office.
In what would have been his first public appearance since being ousted last November, parliament had wanted to question Mugabe about his claim that the state had been deprived of at least $15 billion in revenue by mining companies operating in the eastern Marange diamond fields.
The legislative committee's pursuit of Mugabe had been condemned by a fledgling opposition party linked to the veteran leader.
Mugabe had twice failed to appear before the Temba Mliswa chaired mines committee of parliament and was given a final chance to do so on Monday.
However, the committee said in a statement it had now recused the 94-year-old former leader after consultations with the Speaker.
The committee did not give any more details.
"The former President, His Excellency Cde RG Mugabe, was unable to attend at the appointed hour and the committee was due to meet to consider summoning him as a measure of last resort but after consultations with the Honourable Speaker, he was recused from attending," said Mliswa in a statement.
He also condemned the refusal by home affairs minister Obert Mpofu to appear before the committee.
"In the same vein the non-appearance by the Former Head of State His Excellency Cde RG Mugabe to answer questions on the missing $15 billion diamond revenues, heightens the perception that both may have been complicit on this issue.
"Closure on the alleged missing $15 billion diamond revenues is possible if the former President clears the air on the context he made the assertion that the country lost such amount. The Ninth Parliament must pursue the matter to its logical conclusion."
A parliament official privy to the issue had told News men in May that it was unlikely Mugabe would appear before the committee because this was opposed by influential politicians in President Emmerson Mnangagwa's ruling Zanu PF party.
Mugabe said in March 2016 the country was robbed of wealth by diamond companies including joint ventures between Chinese companies and the army, police and intelligence services.
He later expelled those firms last year and replaced them with a state-owned diamond company.
The Mugabe-backed National People's Front (NPF) accused Mliswa's committee of abusing parliamentary procedures through what he called a "fake process aimed at obfuscating debate around the abuse of diamonds and diamond revenue through illegal mining activities by Zimbabwe's Security ministries."
In a statement, NPF wondered why the committee had not quizzed the military over its involvement in diamond mining at Marange.
"The activities of the parliamentary portfolio are meant to exonerate President Emmerson Mnangagwa and Vice president Constantino Chiwenga from allegations of looting diamonds by creating a sideshow involving the former president."
Eskom's current load shedding due to the impact of protest action by workers will add to the weakness of the South African economy which is already battling, Economist
"Load shedding is unfortunate, because South Africa already has serious economic problems. Load shedding will take away consumer and business confidence as South Africans are already struggling to make ends meet," said Schüssler.
"Investors have pulled out of South Africa and continue to do so. South Africa has so many protest actions. It really hurts the economy."
He believes it will be harder for the local economy to catch up on whatever pace it loses now, due to the impact of load shedding. It would also make it harder for the country to avoid going into a recession.
"South Africa is sending out a message that we have severe interruptions in economic activity, and that we are not quite as open for business as we'd like to advertise," said Schüssler.
"We are creating a reputation of not implementing what we claim we will do. We say we will create a certain number of jobs and that we are open for business, but then Eskom implements load shedding."
'Totally irresponsible and grossly negligent'
"If this is the way Eskom's new management wants to run the power utility, then they must not be surprised that we are having load shedding and blackouts. In my view, it is totally irresponsible and grossly negligent of them to operate the national energy supplier in this way. This is very serious," said Blom.
He thinks Eskom's management could even be held personally liable for losses due to load shedding.
"They knew what was coming and know how vulnerable the situation is. We are heading for dark days and if Eskom wants to bully its workers and bully analysts critical of its management, the public should act as watchdogs," said Blom.
Earlier this year, Fin24 reported Blom as warning that load shedding could likely be expected this winter. Eskom subsequently denied that possibility.
"Eskom will remain vulnerable until it sorts out the labour and coal issues - which will not be soon. Furthermore, I hear of plant breakdowns," said Blom.
Google has announced that it will open an artificial intelligence (AI) research center in Africa, its first on the continent.
The Silicon Valley giant said that the new research hub will open in Accra, Ghana, later this year, announcing the move in a blog post published on Wednesday. “We’re committed to collaborating with local universities and research centers, as well as working with policy makers on the potential uses of AI in Africa,” Google’s blog post said.
Accra, located in the west of Africa, joins cities including Paris, New York and Tokyo, as well as Google’s Mountain View headquarters, in hosting an AI research center.
While the decision is the first of its kind for Google in Africa, the company has had offices on the continent for the past decade. It already operates a digital skills training program that it believes can ultimately benefit 10 million Africans. In addition, Google runs a separate initiative called Launchpad Accelerator Africa that it says supports 100,000 developers and over 60 technology startups in Africa.
But, Accra isn’t the only city in Africa positing itself as a tech hub. Ethiopian capital Addis Ababa and Rwandan capital Kigali are both known for their credentials in tech development, for example. Meanwhile, Kenya has been singled out by Microsoft founder Bill Gates for its “pioneering” innovation of digital payments platform M-Pesa.
Ghana likely appealed to Google because of the quality of its education system and other feeder institutions, Lucy James, associate consultant with Control Risks’ Africa team, told CNBC via telephone on Thursday. The search company is focussed on “drawing in local talent and there’s no shortage of that in Ghana,” she said. Ghana also enjoys relative political stability, James explained. Meanwhile, it’s neighbor Nigeria — the continent’s largest economy which also promotes business center Lagos as a burgeoning tech hub – is more prone to civil unrest.
Nonetheless, the choice may seem unusual given that Ghana ranks 12th for Sub-Saharan Africa in the World Bank’s latest Ease of Doing Business index. Rwanda, Kenya and South Africa – another of the continent’s big economies – all come in the top five by comparison.
But, Ghana’s pro-business government and entrepreneurial society may have contributed to its selection. People in Ghana share the “sense that you can disrupt something and make a difference,” James said.
Barclays Africa Group Ltd. may halve the number of top jobs at its South African retail and business bank as it reorganizes after its British parent cut its stake, according to a person familiar with the matter.
The Johannesburg-based lender started talks to consult executives on a plan that may result in the reduction of top management roles in the unit to 12 from 27 to flatten the company’s management structure, the person said, asking not to be identified because the matter is private. Once the consultation process is completed, the jobs will be advertised and executives who aren’t selected will be considered for employment elsewhere in the company, the person said.
Barclays Africa is reverting to the Absa Group name and revamping its strategy after Barclays Plc cut its controlling stake to below 15 percent to trim back its international operations. Chief Executive Officer Maria Ramos is embarking on a second round of top management changes after announcing in April that she is refocusing the company around four main divisions -- retail and business banking, corporate and investment banking, rest of Africa, and wealth management and insurance.
The South African retail and business banking division “is the first to commence a process of overhauling its structure” so that it fits with an organizational culture built around entrepreneurial drive and accountability, while “restoring market leadership in our core businesses,” Barclays Africa said in an emailed response to questions. “The aim is to create businesses that are agile” and collaborate well, it said, declining to comment further until the process is complete.
On the Payroll
The lender is seeking to double revenue from its business in the rest of the continent to 12 percent, while regaining market share among consumers in South Africa, where the retail and business banking unit accounts for more than half of the group’s earnings. Arrie Rautenbach, the CEO of the retail and business bank, will keep his job, the person said.
Plans to cut the number of executive jobs come a month after Deputy CEO David Hodnett, who in May last year was put in charge of the retail bank, resigned before completing a two-month sabbatical. Each person affected by the changes could remain on the bank’s payroll for up to three months before making a decision to either stay with the company or move on, the person said.
Craig Bond, the CEO of partnerships, joint ventures and strategic alliances, stepped down on Thursday after choosing to take early retirement, according to an internal memo, which was seen by Bloomberg News. Bond decided the time had come to “pass on the baton to new leadership,” it said.
The Costs Challenge
Barclays Africa’s operating expenses rose 2.9 percent faster than revenue growth in 2017 as the lender struggled to boost income amid an anemic South Africa economy and unemployment at a record high. Gross domestic product shrank 2.2 percent in the first quarter of this year from the prior three months as Jacob Zuma’s scandal-ridden tenure came to an end, with Cyril Ramaphosa replacing him as president in February. The central bank expects the economy to expand 1.7 percent this year.
“The economy is weak, so getting top-line growth is going to be difficult,” especially in the retail-banking business, said Adrian Cloete, an analyst at PSG Wealth in Cape Town. “It makes sense that they look at their costs.”
Shares in Barclays Africa declined 2.1 percent as of 10 a.m. in Johannesburg, in line with a 2.2 percent drop in Standard Bank Group Ltd., the largest lender in Africa, and a 2 percent drop in Nedbank Group Ltd. Barclays Africa in March said it will control costs while predicting improvements in loan and deposit growth.
Beijing - Global carmakers touted their latest electric and SUV models in Beijing on Wednesday, as China promises a more level playing field in the world's largest auto market where domestic vehicles are making major inroads.
Industry behemoths like Volkswagen, Daimler, Toyota, Nissan, Ford and others are displaying more than 1000 models and dozens of concept cars at the Beijing auto show.
Thousands of Chinese auto enthusiasts are expected to wander the halls of the mega exhibition centre this week, with electric cars and gas-guzzling sport-utility vehicles grabbing the spotlight.
Joint ventures imperative for automakers
Nissan presented its first Made in China electric car produced for Chinese consumers, the four-door Sylphy Zero Emission, with a drive range of 338km.
"The new Sylphy Zero Emission is the next step in our electrification strategy for China," said Jose Munoz, Nissan's chief performance officer, adding that the company will unveil 20 electrified models over the next five years.
Auto executives may have their minds on the boiling trade war between Beijing and Washington, with every twist and turn fanning fears that it could bring their plans for China to a screeching halt.
But last week Beijing announced it will liberalise foreign ownership limits in the sector, a move seen as a possible olive branch to President Donald Trump, who has railed against China's policies in the sector.
China currently restricts foreign auto firms to a maximum 50% ownership of joint ventures with local companies.
The changes will end shareholding limits for new energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022.
Foreign automakers who account for more than half of vehicle sales in China have cautiously welcomed the changes, with VW saying it has "strong" local partners in their joint ventures.
"This will have no impact on our JVs. But the overreaching principle is important. Hopefully, liberalisation will as well help for fair competition, and having a level playing field," Jochem Heizmann, CEO of Volkswagen Group China, told reporters.
The show comes as China's market hits a transition period -- the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types.
Chinese consumers are following their American peers toward SUVs while policymakers in Beijing push an all-electric future.
Ride-sharing is also on the up. On Tuesday Didi - China's answer to Uber - announced it had joined forces with some 30 partners, including Renault and Volkswagen, to develop vehicles and products specifically tailored for ride-sharing.
Accounting for some 28.9-million car sales in 2017, the Chinese market could soon match those of the European Union and United States combined.
General Motors sold over four million cars here last year, more than in the United States. Volkswagen sold more than three million, roughly six times its home market.
But domestic firms are outselling foreign firms in the SUV segment.
In the electric car market the figures are even more lopsided, as Beijing has heaped money on projects to dominate what it sees as the future.
At the auto show, the domestic upstarts have a separate exhibition hall mostly to themselves, 124 of the 174 electric car models on display are homegrown.
Government subsidies help consumers purchase the green cars, while policymakers are planning a quota system to force producers to build electric vehicles, with plans to one day phase out gas vehicles altogether.
Volkswagen announced Tuesday investments of $18-billion in electric and autonomous vehicles in China by 2022.
"China is our second home," recently installed chief executive Herbert Diess said at a Beijing press conference, with its market set to be "the biggest" worldwide for electric cars.