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Feb 03, 2015

South African food group, AH-Vest, has acquired a tomato-processing factory from food retailer, Tiger Brands, for an undisclosed sum, it emerged on Monday.

The factory is situated in Duiwelskloof, Tzaneen in South Africa’s Limpopo Province, where more than 60 percent of South Africa’s tomatoes are produced.

The Johannesburg Stock Exchange (JSE)-listed food company produces under the brand name of All Joy in South Africa and some neighbouring countries.

South Africa has experienced a major shortage of tomato paste over an extended period of time and as a result of this AH-Vest has had to rely on imported products. This has not only had a certain negative impact on the economy, but it has also been costly for the company.

AH-Vest is in the process of acquiring new state-of-the-art equipment through Rossi Catelli to increase its capacity. This acquisition will guarantee the supply of quality tomato paste for All Joy and will benefit loyal customers that have supported the group for more than 25 years.

 

Source: Ventures Africa Online

Feb 03, 2015

Samsung South Africa has confirmed the local availability of the Galaxy A3 and Galaxy A5, the first smartphones in its A series. The range is said to be the slimmest in the company's smartphone portfolio. The devices feature refined metal-body designs and are 6.9 mm and 6.mm thin, respectively. The Galaxy A3 is priced at ZAR 4,999, and the Samsung Galaxy A5 is priced at ZAR 6,499.

Feb 03, 2015

Michael Mwapembwa remembers vividly the day two well dressed, Chinese men approached him in Arusha, a remote town in Tanzania, for business partnership. 

At first he was hesitant. "What if these 'strangers' steal my business ideas and then run away," he posed. He took time, and reflected upon the proposal. Having perennially suffered from shortage in capital, and at times unreliable markets, Mwapembwa opted to work with the two new business friends. 

What had started as a small, sole proprietorship trade is today a business to reckon with. It has expanded almost 10 times, employing more than 15 people. "We serve our electronics customers beyond Arusha to the cities of Dar es Salaam and Dodoma. We are now considering setting up other branches in Kenya, Uganda, Zambia and Rwanda," he said. Mwapembwa says the "two foreigners" did not only inject in more funds to run the electronics shop, they opened up his mind, and made him think and act like a "real" businessman. "Who knew I will one day think of doing business beyond Arusha?" 

The Arusha businessman represents a few Africans who have beaten the odds, and went ahead to forge strategic partnerships with foreigners, particularly the Chinese, to enhance the growth of their businesses. This is unlike a majority, who still think the Chinese population in Africa, which now stands at more than a million, have come into Africa to not only take away their jobs, exploit their resources but also outcompete them in the businesses they do. 

"It is the kind of thinking all of us must shed off. Africa was once considered a dark continent. Now, with the streaming in of investments from China, we ought to take advantage of them, and open up Africa for more foreign businesses," said Lydiah Cherotwo, an activist in Eastern Uganda. 

Paradigm shift

The call for cooperation is what is revolutionizing trade in Nairobi and Mombasa, the key cities in Kenya. Indeed, my recent tour of Nairobi's River Road, Kirinyaga Road and Tom Mboya Street paints a picture of China in Africa. One that glitters with Chinese wares, particularly mobile phones, garments and radio sets. 

"We have established strong ties with Chinese companies. They supply us with these electronics at affordable rates and in a timely manner. In some cases, we are even allowed to get the goods and pay for them later," said Kimani Mwaurah, a mobile phones wholesaler in Nairobi. 

Mwaurah says the changing market needs in Kenya as a whole due to tough economic times have forced consumers to have a high affinity for cheap Chinese gadgets. For instance, he says mobile phones would cost as little as $15. In a continent where power connection is at less than 20 percent of homesteads, electricity supplies erratic and costly, the mobile phones, if fully charged, last for even five days. "These are the most important advantages of the Chinese-made mobile phones besides majority of them being twin sims," said a 31-year-old Mercy Wairimu, a student at the University of Nairobi. 

Ms Wairimu hopes that one day, China will set up multiple mobile phones-making factories in Africa so as to cut on the time taken in ordering, packaging and importing the gadgets from China. "Such a step will create a lot of employment opportunities. As you all know, most of the youths in Africa are well schooled but lack decent jobs. The move will also open up Africa, making it to export some of the surplus products to other countries," she said. 

A learning process

Instead of Africans complaining that the Chinese are coming over to take over their jobs, or businesses, former Nigerian Central Bank governor Sanusi Lamido Sanusi, in an opinion in the Financial Times in 2013, observed that time is ripe for Africa to see China as a competitor, and therefore treat it as such for the betterment of the continent's economy. 

But it is not just in businesses where Africans ought to draw some synergy with China. One other critical area is in the labor market, says Kenyatta University Lecturer Emmanuel Barasa. "The Chinese work ethic is worth emulating. They are ever diligent, extremely hardworking people." He cites an American missionary in Beijing, who in 1985 noted that Chinese people often worked from dawn to dusk, seven days a week. 

Indeed, in his book The Chinese Are Like That, Carl Crow noted, "If it is true that the devil can only find work for idle hands, then China must be a place of very limited satanic activities." This Chinese trait of being unselfish and hardworking continues today in Africa. 

The classic case was in the construction of the Thika Superhighway in Kenya, where the Chinese firms working on it would work day and night, Monday to Sunday. It is the kind of culture many African firms are now adopting, to boost production.  "It is the unselfish thinking blended with hard work that has given China a global reputation of having a stable and industrious work force," said Mr Barasa.

"Whether working in the fields or in the factories, Chinese accept work as a necessity. They are willing to do more, go beyond the minimum," notes Janepher Doya, a Chinese culture specialist. Going forward, experts say Chinese multinationals operating in Africa should intensify trainings so as to ensure there is no clash in cultures between the two regions. 

 

Source: Global Times

Feb 03, 2015

West African countries launched on Monday a project on easy and standard registration of medicines produced in the sub-region. "It will help to streamline the regulatory assessment for new drug applications and reduces the time and resources needed for drug development in the sub-region," said Ghana's Health Minister Kwaku Agyemang-Mensah.

He launched the West Africa Medicines Registration Harmonization Project during a meeting a high-level meeting of the 15-member Economic Community of West African States (ECOWAS) in Accra. "Today marks yet another milestone in the realization of the ECOWAS protocol," asserted Mensah. "As a region, we share a common burden in terms of mobility and mortality."

The minister said the move will offer significant benefit to the pharmaceutical industry and public health care. A three-day meeting of health ministers and heads of all national medicines regulatory authorities from ECOWAS member states kicked off earlier Monday.

They are expected to discuss the African Union Model Law for National Medicine Regulatory Authorities. The officials will adopt a common standard that will allow each country the power to register medicines that can be used across the sub-region.

Health officials have been working on developing the common registration procedure for close to five years. Joseph Yileh Chireh, the chairman for Ghana's Parliamentary Select Committee on Health, told the meeting they are ready to give legal backing to the process.

"After the harmonization, there will be the need for proper legislation to be done and what we want to do is to get engaged with all the people ahead of that," he said.

Sybil Ossei Agyeman Yeboah, an official with Essential Medicine and Vaccines at the West African Health Organization (WAHO), underlined the importance of the move. "Normally, when medicines are being registered, it takes long time for the registration process to go, sometimes as long as three years for a process that can take a few months," she told The Anadolu Agency.

"Each country has a standard of registration and you have to tune in to what they require of you anytime," Yeboah said. She noted that registration of new drugs among ECOWAS member states usually runs in long delays due to logistical challenges.

"If one country takes one year or two [to register], it means somebody in another country cannot have it," Yeboah said. "That is where counterfeit draws in because people need it but it has not been registered," added the official.

"We will have a common document translated in three languages so that when Ghana registers, there will be confidence and trust developed," she told AA. "This is because when Ghana registers a medicine, we know Ghana will take time because they are not registering for only the Ghanaian market but for all the 365 million people in the fifteen member states," she added.

The three-day meeting is attending by officials from the African Union, World Bank and the New Partnership for Africa's Development (NEPAD), an AU strategic framework for pan-African socio-economic development.

 

Source: Anadolu Agency

Feb 03, 2015

Randgold Resources is looking at the development of a third underground mine at its Loulo-Gounkoto gold mining complex in Mali while at the same time expanding its footprint elsewhere in the region, chief executive Mark Bristow said inside the country on Monday.

According to the press release Bristow, who is leading a group of international investors on Randgold’s annual tour of its West and Central African operations, said a feasibility study on an underground mine at Gounkoto had been completed and the findings will be published alongside the company financial results later in February.

At the moment Loulo-Gounkoto boasts reserves of 8 million ounces of gold and Randgold targeted production of 640,000 ounces at the site. Randgold has been operating in Mali for almost 20 years.

The Senegal-Mali shear zone has the capacity to rival Ghana’s Obuasi

The complex, which already ranks among the largest and most mechanized of its kind in Africa according the the company, is targeting to increase gold production from its existing Yalea and Gara underground mines and the Gounkoto open pit mine this year. The underground operations represent some 60% of the ore feed to its mills.

"Regardless of the potential Gounkoto underground mine, subject to the gold price remaining at current levels, the complex is forecast to up its profitability from its existing mining activities through increased production and reduced unit costs on the back of higher grades, improved recoveries and the benefits of its ongoing capital projects," Bristow said.

“We believe the Senegal-Mali shear zone, which hosts Loulo-Gounkoto, is one of the most prolific gold regions in Africa, with the capacity to rival Ghana’s Obuasi, and we are continuing our hunt for more multi-million ounce gold deposits there. We’re also expanding our presence in the area through joint ventures with junior miners who have promising early-stage projects,” Bristow said.

Randgold Resources ADR's trading on the Nasdaq (LON:RSS, NASDAQ:GOLD) has gained 45.6% in just the last three months affording the company a $8 billion valuation.

Apart from expansion at Loulo-Gounkoto, big things are expected of Randgold's Kibali mine in the Democratic Republic of Congo which boasts reserves of 12 million ounces and a rapid ramp-up in production.

Development in West and Central Africa has turned Randgold into one of the fastest growing gold miners in the world, moving it up the ranks over the past couple of years to become the sixth most valuable gold counter.

Feb 03, 2015

State-owned development funds from Norway and Britain have teamed up to build more power plants in sub-Saharan Africa, the funds, Norfund and CDC, said on Tuesday.

Under the deal, Norfund will buy 30 percent of power company Globeleq Africa from minority shareholders, while CDC will take a direct 70 percent interest, which it has owned so far through the Actis Infrastructure 2 Fund. 

The deal is expected to closed by June. “Norfund and CDC aim to bring more projects to the construction phase... If successful, the new strategy will result in over 5,000 MW of new generating capacity,” the partners said in a statement.

CDC and Norfund said they will focus their activities in sub-Saharan Africa, where only about 32 percent of population have access to electricity. Globeleq Africa has eight power plants in Ivory Coast, Cameroon, Kenya, South Africa and Tanzania with a total gross capacity of 1,095 megawatts (MW). It has already secured deals to develop more power plants in Ivory Coast and Cameroon.

Norfund, which also has a partnership with Norwegian hydropower producer Statkraft, has invested about $700 million in power projects, including in Africa.

 

Source: Reuters

Feb 03, 2015

QNB has been confirmed as the most valuable banking brand in the Middle East and Africa, according to the annual survey carried out by Brand Finance and published by The Banker Magazine, an affiliate to the international acclaimed Financial Times newspaper.

Highlighting the extent of its top performance in 2015, QNB witnessed the value of its brand increase to QR9.476bn ($2.603bn). This represents a 44 percent increase on the 2014 levels and importantly saw QNB rise to 79th place globally in the rankings of the World’s Top 500 Banking Brands. This improvement of 22 places on the rankings is testament to the combination of continuing robust financial performance and successful international expansion of a brand that now operates in more than 26 countries across 3 continents.

Commenting on the achievement, Yousef Darwish, General Manager, Group Communication, said: “To be considered the most valuable banking brand in the Middle East and Africa is a significant geographical achievement. Over the course of the last 12 months, QNB has gained approximately QR2.9bn ($792m) to our brand value and this is more than any other bank in the industry.”

“We have come a long way from our brand value of approximately QR2.5bn ($703m) in 2010 but there is still a great deal of work to be done if we want to achieve our future vision of becoming a MEA Icon by 2017. The importance of our brand and how it is perceived by our diverse range of stakeholders is paramount across our domestic and international network of operations and this prestigious accolade from Brand Finance proves that we are making impressive progress”.

David High, Brand Finance CEO, said: “QNB’s vision to become an iconic brand across the Middle East and Africa is clearly bearing fruit. It is the most valuable bank brand in the region and is pulling ahead of the field, having added more brand value this year than any of its regional rivals. Now ranked 79th globally, the QNB brand is clearly gaining traction worldwide and in due course it could become an iconic bank brand not just in the Mideast and Africa but globally” 

 

Source: The Peninsula

Feb 02, 2015

Nigeria and Kenya frequently feature as the top investment destinations in Africa, with Nigeria being the clear front runner. Investors, however, are starting to view East Africa as a combined investment region that could rival the West African giant, using Kenya as a sturdy stepping stone to the wider East African region. 

While Nigeria dwarfs Kenya in terms of both population and GDP (see below), comparing the EAC (East African Community) as a whole tells a slightly different story.  

Having rebased its GDP for the first time in 2014, Nigeria’s GDP is now at US$521 billion, an increase of 89% over pre-basing estimates. The rebasing also revealed a more diversified economy than previously thought, with significant increases in the contribution of the services sector, manufacturing, construction, and water and electricity.  

While Kenya’s GDP is estimated at a much smaller US$44 billion, the EAC’s GDP is estimated at a healthy US$123 billion.  

GDP Growth

Nigeria’s real GDP grew by 7.4% in 2013, up from 6.5% the previous year and on top of strong growth for the past decade.  

The biggest contributors to GDP came from the non-oil sector with real GDP growth of 8.3% and 7.8% in 2012 and 2013, respectively. Agriculture, particularly crop production, trade and services continue to be the main drivers of the non-oil sector growth. On the other hand, the oil sector growth performance was not as impressive with -2.3% and 5.3% estimated growth rates in 2012 and 2013 respectively.  Poor growth in 2013 was a consequence of supply disruptions arising from oil theft and pipeline vandalism, and by weak investment in upstream activities. 

Looking at East Africa, most countries in the region are expected to achieve growth rates over 6% in the short term. Growth will be chiefly driven by the agricultural, mining, tourism and industrial sectors. Rwanda, Tanzania and Uganda) are forecast to maintain growth of around 7% in the next two years; while Burundi is forecast to grow between 5% and 6% over the same period. Major oil and gas discoveries have been made in Uganda and Tanzania with the potential of transforming those economies to middle-income status in the future.

Kenya, the largest economy in the region, achieved real GDP growth of 4.7% in 2013, an increase of its annual average growth of 3.7% between 2008 and 2012.  Its 2013 figure fell short of government’s estimate of 6% as tourism (the second-largest source of foreign exchange) slumped over security concerns amid deadly attacks by al-Shabaab militants at the West Gate mall in Nairobi. 

While agriculture still accounts for almost a third of Kenya’s GDP, the sector grew by a mere 0.6% while the industrial and services sectors posted growth rates of 4.0% and 4.5%, respectively.  Kenya’s short-term growth prospects are bright with GDP forecasts in the region of 5-6% per annum, with the primary drivers being private-sector investments and increased exports. Services, specifically finance, ICT and construction, will be at the core of GDP growth. In addition the recent discoveries of oil and gas in Kenya could boost Kenya’s economy even further over the coming decade.

Regional integration

Kenya has the edge over Nigeria when it comes to regional integration. Widely acknowledged as the most effective regional bloc in Africa, the EAC launched its own common market in 2010 for goods, labour and capital, with the goal of creating a common currency and eventually a full political federation. In 2013 a protocol was signed outlining plans for launching a monetary union. This signalled the beginning of a decade-long process that is expected to culminate in an EAC single currency and the East African Monetary Union (EMU) in 2023 if all goes according to plan. 

The East Africa region is, however, not new to conflict and security concerns which could hinder progress, thereby changing the economic trajectory of this region. The recent peace and security issues in Kenya, Somalia and South Sudan, and political tensions that have grown in Burundi due to the run-up to 2015 elections are just some of the challenges faced by the member states that could deter investments in the region.

West Africa as a whole is also moving towards integration, though more slowly, and Nigeria is a leading member of the Economic Community of West African States (ECOWAS). In 2013, ECOWAS agreed on a Common External Tariff (CET), effective early 2015, which will result in the most-favoured nation import tariff (MFN) being reduced from 12.0% to 11.5%. This is widely viewed as a milestone given the earlier controversies and disagreements amongst ECOWAS member states since negotiations began in 2004. Reducing the MFN import tariff should facilitate improved trade, and deepen economic co-operation and integration in the region.

 

Sources:

Malimu Museru, Senior Analyst, RisCura 

African economic outlook

The World Bank database

Doing business by the World Bank

 

 

Feb 02, 2015

Standard Bank Group Limited (SBG) announced today in a stock exchange release that it had signed the closing documents with Industrial and Commercial Bank of China Limited (ICBC) to cement the completion of the disposal of a 60% stake in Standard Bank Plc on 1 February 2015. 

Headquartered in London, Standard Bank Plc has operated as a wholly owned subsidiary of Standard Bank London Holdings Limited, which is in turn controlled by SBG. Post completion, the joint venture, with operations in London, New York, Singapore, Dubai, Tokyo, Hong Kong and Shanghai, will focus on the global markets business and provide trading services in commodities, foreign exchange, interest rates, credit and equities to clients worldwide. 

The transaction proceeds receivable by SBG will be finalised after a post completion audit of Standard Bank Plc, and total gross proceeds of approximately USD 690 million are expected.  SBG has ensured that the joint business has sufficient financial resources to support the growth inherent in its joint business plan by making a capital injection of USD 300 million in January 2015, after receiving necessary approvals, to address losses incurred by Standard Bank Plc in 2014, inter alia from aluminium exposures in China. 

It is the group’s intention that the proceeds of the transaction will be deployed in furthering the group’s growth strategy in South Africa, and across the African continent, subject to necessary approvals.

Ben Kruger, Chief Executive of SBG, stated: “ICBC is a long-standing strategic partner of SBG, and we are excited by the unique opportunity this transaction offers to our people and our clients. The new business unlocks the potential and capacity of our Global Markets business as part of China's leading banking group, while also recognizing the unique African focus and expertise of our investment banking and transaction platforms. The joint venture will continue to support all trading requirements of SBG’s existing customers with full and uninterrupted access to all distribution channels as they partner with SBG to finance growth and development on the African continent.”

David Munro, Chief Executive, SBG Corporate and Investment Banking, said: “This transaction further strengthens SBG’s powerful relationship with ICBC. China and Africa have an increasingly important shared role in the future of the global economy, and this partnership brings together ICBC’s financial and global reach, with SBG’s deep expertise in Africa, to the benefit of our mutual and prospective clients. SBG’s Africa strategy will create increased flows for the Global Markets business as African corporates increasingly demand access to international markets and international corporates demand access to African opportunities.

Feb 02, 2015

The past few years have seen several malls come up in suburbs in Nairobi, Kenya's capital as Kenyans' love for shopping soars.

Both low-income and high-ends suburbs have not been spared, with developers competing to construct the facilities that have taken the East African nation by storm. And as the malls take over Nairobi, the trend is slowly switching to the internet, where on-line malls are gaining space and currency.

According to operators of Kilimall, Kenya's premier on-line shopping mall, Kenyans are frequenting the virtual shop as much as they are going to the physical malls.

"We are a premier on-line shopping mall, not only in Kenya but across Africa. Through us, local merchants can distribute their products throughout the region. In this way, their businesses are able to grow exponentially because demand for their products rise due to a wide brand presence," Kilimall's marketing director Kariuki Maina said on Friday.

Through the platform which started in July 2014 and hosts hundreds of different goods from more than 50 merchants, added Maina, users are able to access the widest variety of products, both from local and international merchants, at fair prices.

He noted the on-line mall was started to offer Kenyans the benefits of e-commerce. "Prices of goods and commodities are rising. E-commerce greatly reduces the product chain, keeping prices competitive. Technology is advancing in Kenya at a high rate, and so Kenyans are looking for shopping convenience. We came in to offer this quality and convenience," said the director.

He said the on-line mall has a vision to empower 40 million Kenyans with high quality, affordable products and services, support 100,000 local businesses and provide employment opportunities to 500,000 Kenyans through their systems.

"Other e-commerce players are basically retailers, that is, they source for products from traders then sell at a profit. We're a platform that gives traders professional service where they can manage their shops. Each merchant has his own unique back-end where they can be able to track their shops' activities in real- time." said Maina on the difference of Kilimall from other e- commerce platforms in the country.

"The other key difference is that we have a series of off-line locations where customers can interact with our team and our products," he added. To shop at the mall, one visits the site then chooses what he or she needs from an array of different products displayed. They include dryers, kitchen appliances, spectacles and electronic items like mobile phones and tablets.

"Each merchant ensures we have some of their stock on our site. Once a customer makes an order, our support team verifies it and the preferred drop-off location. Then the product is picked by our logistics team from the warehouse and delivered to customer drop- off location. The standard delivery time is from 15 minutes to a maximum of 48 hours anywhere in Kenya," explained Titus Kisangau, Kilimall's public relations and communications manager.

Kisangau said Kenya remains green as far as e-commerce is concerned. "A lot remains to be exploited though there are dozens of e-commerce players presently. However, in around two years, the industry will reach the competitive point. We are ready for the growth because we have a unique business model. We're a platform that supports an ecosystem."

Maina and Kisangau noted with many Kenyans turning to the internet to perform various functions, on-line shopping will soon become the way to shop.

"One day on-line shopping will overtake the conventional shopping in Kenya. In the developed countries, we have seen traditional retailers being brought down by e-commerce based companies. The trend won't be any different in Kenya and Africa. Traditional shopping is still fun but it's getting more and more uncomfortable with longer working hours, traffic jams and insecurity,"said Maina.

There are over 15 million internet subscriptions in the East African nation, according to the Communication Authority of Kenya, with the number rising by about 5 percent every quarter. Some of the companies in Kenya selling their products on Kilimall are Baus Optical, Panasonic, LG, Mobile World, Techno, Solar-way, Clarins Barbershop and Spa, among others.

Kilimall is working on a system that will see customers' goods and services delivered almost in real-time. According to Collins Okatch, Kilimall's Platform and IT Director, the mall will soon introduce an Unmanned Aerial Vehicle Quadcopter to serve customers.

"The project is a research on how we can use the gadgets to respond to emergency, deliver products and do security surveillance. We've already developed prototypes capable of delivering 3 kg packages to up to 10 km," said Maina. "Legislation on the use of unmanned aerial vehicles is, however, still a bit vague, but we're working closely with all stakeholders to ensure our project operates within the law," he added.

 

Source: China Economic Net

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