JOHANNESBURG (Reuters) &#8211; South Africa has signed an extradition treaty with the United Arab Emirates, the justice minister said on Thursday, raising the prospect of the Gupta brothers, friends of former president Jacob Zuma, returning to face corruption charges.
The Indian-born brothers &#8211; Ajay, Atul and Rajesh &#8211; have been accused of using their ties with Zuma to siphon off billions of rand in state funds and of inappropriately influencing cabinet appointments.
The Guptas are believed to be in Dubai where they own property and businesses and police have issued an arrest warrant for Ajay Gupta over a corruption case.
The Guptas and Zuma, who have repeatedly denied wrongdoing, could not be reached for comment.
Justice Minister Michael Masutha told Reuters that treaties on extradition and legal assistance had been signed with his counterpart Sultan Saeed Al Badi on Tuesday in Abu Dhabi.
“I will not at this stage comment on individual matters,” Masutha said when asked about the Guptas.
A long-awaited inquiry into allegations of inappropriately influencing government decisions, known locally as “state capture”, opened last month with witnesses testifying that the Gupta brothers tried to bribe or threaten them.
The Guptas left South Africa earlier this year around the time Zuma resigned under pressure from his own party.
Activists, opposition politicians and members of the ruling African National Congress have been calling for an extradition treaty to be agreed with the UAE so the Gupta brothers can be ordered to return to South Africa.
“This means the infamous Guptas are fast running out of places to hide as they can now face extradition to finally answer for state capture,” said Natasha Mazzone, Democratic Alliance shadow minister on state companies.
Reporting by Joe Brock and Ed Stoddard; Editing by Richard Balmforth

South Africa signs extradition treaty with UAE that could target Gupta brothers, what you need to know…

By Gavin Young, CEO, Bridgestone South Africa
If you can find the right approach, there are big opportunities in manufacturing, even in South Africa. To realise them, though, manufacturers will have to up their game.
On the face of it, the prospects for manufacturing in South Africa continue to look bleak. Absa’s Purchasing Managers Index, which measures sentiment in the manufacturing sector only, slumped again recently, and growth forecasts are being revised downwards. Eskom had to cut electricity supplies recently owing to strike action, but a stable power supply is one of the prerequisites for successful manufacturing.
Figures like these—and there are many others—spell out the brutal economic realities with which we must come to terms if any vestige of Ramaphoria is to survive. Getting our manufacturing sector growing again is clearly a priority if we are to begin pushing back the tide of joblessness that fundamentally threatens our social stability.
Bridgestone has been manufacturing tyres in South Africa for 90 years, so you could say we have earned our stripes. We have a large investment in plant in this country, and we need to find ways to keep it profitable, and even to expand it. Like everybody else, we want to participate in the growth shown by emerging markets, but we face the same challenges of an unreliable supply of skills from a failing educational sector, a volatile currency, and an investment climate that is uncertain at best.
For us the opportunity is particularly clear because mobility receives a higher share of wallet in emerging markets as compared to the First World, and is highly aspirational. 
We have been doing some hard thinking about how to work around these challenges, and some of our conclusions might be of value to manufacturers or would-be manufacturers in other sectors.
Understand your customers. Basic, but your success depends on how well you understand what customers want. Manufacturers tend to spend less time on this and more on streamlining their processes. We are devoting a lot of energy to understanding our customers and then how to respond to their needs. Holding stock is too expensive, so we have to be able to do shorter runs in order to get the right product to the right outlets at the right time.
Specialise. Our company is a case in point. We are one of two manufacturers of truck and bus tyres in Africa, and we also make tyres for the SUVs and luxury vehicles this market increasingly prefers. Close relationships with the relevant car manufacturers gives us a good baseload on which to build.
However, because we have a relatively large number of vehicle models and a small market, we have had to get very good at being able to change over our lines quickly. This is in contrast to the typical manufacturing strategy of long production runs and thus large economies of scale.
Our truck and bus business provides us with the capability to supply product to other African countries. As those consumers climb up the aspiration curve to their first BMW or SUV, we will be well-placed to go with them. As regards tyres (and vehicles) at least, we think South Africa is a good case study for how the rest of the continent will develop. In this sense, specialisation is the recipe for expansion. 
Build ecosystems. We are lucky enough to be part of a global company, and we have learned to use that to our advantage. Because of our small market and the need for relatively small runs, we find it’s better to source tyres for ordinary sedans from our facilities in Europe, where high volumes yield great economies of scale. In return, they tend to rely on us to make and supply tyres for the relatively small numbers of SUVs in those markets.
There is no reason why manufacturers that are not from the same group should not craft a similar kind of approach, playing to each other’s strengths. The trick is to identify these convergences.
We are also investigating practical but highly innovative ways of addressing the lack of the right skills, but our initiatives are not yet ready to be revealed.
Manufacturing in South Africa does have a potentially bright future, but to realise it will require us all to do some very hard thinking. Manufacturers need to invest in plant and keep on investing but these investments have to be highly focused or they will go nowhere.

OpEd: Finding the right approach to the big opportunities in manufacturing

By Oulie Keita, ONE campaign regional representative for Francophone Africa.
Africa has been blessed, not only with natural resources but also an abundance of youth, yet we fail to adequately invest in them. At least 60% of Africa’s young people are under the age of 30 but unemployment continues to rear its ugly head leaving frustrated youth so desperate that they are migrating in droves for better opportunities abroad despite the dangers of slavery and drowning in the Mediterranean sea.
The reality is that there has been a migration boom in recent years. Thousands of unemployed youth are leaving, yet they are Africa’s greatest resource. We need to tap into this resource and invest in them if we are to succeed in addressing developmental challenges facing the continent, particularly in the Sahel G5 countries, which consists of Mali, Niger, Burkina Faso, Chad and Mauritania.
With around 80% of people aged under 34 in Mali, Niger, Burkina Faso, Chad and Mauritania, the Sahel is a contributor of the continent’s youth boom while being one of the poorest and most fragile regions of the world. The region is at the forefront of Africa’s opportunities and challenges. If the right investments in education, employment and empowerment of the young people are made today, the development of the region could see continental and global growth surge. Yet, despite efforts to improve conditions in the region, the situation continues to deteriorate. It faces extreme poverty, rapid population growth, fragile governance, corruption, extreme climate and insecurity.
While Africa’s population is set to increase to 2.5 billion by 2050, the Sahel Region is the driver of Africa’s youth boom yet it remains one of the poorest and most fragile areas in the world.
As we celebrate Africa Day, ONE campaign appeals for African Leaders to commit and act upon the African Union Demographic Dividend road map. Leaders should double down on efforts to create jobs, increase the quantity and quality of education spending and create opportunities at home by rooting out corruption, and investing in job-creating sectors, as echoed by the African Union and Nelson Mandela.
“The region is at the forefront of Africa’s opportunities and challenges. If the right investments in education, employment and empowerment of the young people are made today, the development of the region could see continental and global growth surge” &#8212; Mandela
We need to guide our youth through quality education and channel them in the right direction. Former South African president Nelson Mandela believed strongly in the power of young people and their role to harness positive change in Africa. We need to honour his legacy.
In recent years, the youth have been pushed to the edge as unemployment continues to escalate. Of Africa’s 420 million youth, aged between 15-35, one-third are unemployed and discouraged, another third are vulnerably employed, and only one in six has a steady paid job.
Despite efforts to improve conditions in the Sahel region, the situation continues to deteriorate as it faces extreme poverty coupled with a rapid population growth, a fragile leadership, corruption, extreme climatic conditions and insecurity.
Our leaders need to act and change its approach to the Sahel Region to ensure sustainable development. For many decades, tackling extreme poverty has been neglected, but now is the time to make it a priority. Countries need to come together and commit to policy reforms, while scaling up investment in youth and projects to deliver on the changes needed. This will in turn mean that Sahel G5 countries need to sit at the table and participate in finding solutions, while also committing to the objectives. Actionable long-term strategies will be vital for investing in our youth to eradicate poverty and curb migration. Joblessness is a headache affecting most of Africa.
For us to tackle these challenges, the Sahel G5 countries must be included in all stages of the decision-making and implementation processes, and create an equal partnership between all stakeholders. A true equal partnership between African and partner countries, with the Sahel G5 countries at the driver’s seat and their priorities placed at the forefront; because shared benefits mean shared responsibilities.
Tackling poverty in the Sahel and creating the conditions for inclusive, sustainable development will ensure the prosperity and the stability of the region and beyond.

OpEd: Investing in youth needs to be a priority for Africa

<a href="https://www.cta.int/en/about-cta">By Michael Hailu, CTA Director.</a>
As the impacts of climate change and conflicts threaten progress towards addressing global hunger, we need to apply new thinking in agriculture. Agricultural innovation can strengthen the resilience of agri-food systems and offer adaptation strategies to mitigate the impacts of climate change.
At CTA, the Technical Centre for Agricultural and Rural Co-operation, we believe that investment in the right innovations in agriculture will help to catalyse development.
Youth, digitilisation and climate resilience are CTA’s priority intervention areas in its refreshed strategic plan, 2018-2020, which, are critical to driving progress towards the Sustainable Development Goals. All three are in line with the The European Consensus on Development, based around the 5 Ps: people, planet, prosperity, peace and partnership.
African, Caribbean and Pacific (ACP) countries have identified youth employment as a key determinant factor for sustainable development. An empowered workforce starts with the engagement of youth and youth organisations. At CTA we have learned how to harness the vitality and spirit of youth. Through our ‘Agrihack’ contests we have offered many young entrepreneurs a step-up to becoming the next generation agribusiness leaders driving change in the agricultural revolution.
Many of these ‘agripreneurs’ bring ICT solutions to age-old problems. In the digitalisation of agriculture, we see smallholder farmers being offered new ways to improve their livelihoods. The implications for productivity, reduction of food waste and even gender equity are enormous and CTA is now considered a guiding force in this area.
Digitalisation is also at the heart of climate-smart agriculture. Many solutions that can help agricultural systems to adapt and mitigate the effects of climate change have emerged. The challenge is in the delivery of these solutions to farmers that need them the most. CTA therefore focuses on the development of partnerships to guide the implementation of climate-smart agriculture.
We will achieve nothing without such partnerships, and so, I look forward to continuing our important work together with the support of the ACP Group of States and the European Union.

OpEd: How a focus on youth and women entrepreneurship can benefit agribusiness, livelihoods and create jobs

JOHANNESBURG (Reuters) &#8211; South African President Cyril Ramaphosa’s multi-billion dollar plan to turnaround the economy will do little to lift the country’s sluggish economic growth rate, ratings agency Fitch said on Tuesday.
“South Africa’s latest economic plan is unlikely to deliver a significant boost to economic growth,” said Fitch, which rates Pretoria’s foreign and local currency debt at subinvestment, adding that rand’s recent plunge would also hinder the plan.
“The plan does include measures that could support growth, but many relate to long-standing policy ideas that have been slow to implement,” Fitch said of the plan announced by Ramaphosa on Friday to pull the economy out of recession.
Reporting by Mfuneko Toyana; Editing by Ed Stoddard

Fitch_Flickr

Why Fitch thinks South Africa’s #StimulusPackage is unlikely to boost growth in the country’s economy

By Karen Mwendera and Methil Renuka from Forbes Africa
From November 7-9, Africa Inc. will convene in South Africa’s Gauteng Province, the continent’s seventh largest economy, for the inaugural Africa Investment Forum (AIF).
An initiative of the African Development Bank (AfDB), it was announced in May in Johannesburg by AfDB President Akinwumi Adesina with Gauteng premier David Makhura.
“It will be the continent’s first-ever investment market place,” said Adesina, formerly Nigeria’s minister of agriculture.
“South Africa is open for business again, and as Gauteng, we are ready to host the forum on behalf of not only South Africa, but for Africa,” said Makhura, calling the forum “the Davos of Africa”.
A platform to close the investment gap, Adesina called it a game-changing initiative.
READ MORE: The Investment Hotspot
“It cannot be business as usual, it must be business unusual,” he said.
With Africa’s population set to be two billion by 2050, its development needs will require an estimated $600-$700 billion per annum. So accelerated development will be the forum’s focus.
“The forum will be 100% transactional. There will be no political speeches. The only thing allowed will be transactions, transactions and transactions,” said Adesina. In attendance in November will also be African heads of state who will be present as the CEOs of their countries.
In a sit-down interview with FORBES AFRICA, the AfDB president shared more about new investments, and the bread baskets and Silicon Valleys of Africa:
How will AIF take Afro-optimism and the African growth story further? 
African economies have been growing relatively well in a very difficult global environment. Despite the global economic downturn, in 2016, they grew at roughly 2.2%; in 2017, they grew at 3.6%. In 2018, they are projected to grow at 4.1%. And that’s still above the global average.
So Africa’s head is above the water. But it’s more than about keeping your head above the water that matters, it is about how fast you can swim. I think Africa needs to swim fast and needs a lot of oxygen to do that. And that means a lot of firepower in terms of capital to close the infrastructure gap. To be able to drive millions of people out of poverty, Africa should be growing at double digits.
To be able to do that we have to deal with the problem of lack of electricity, make sure there is a lot more investment to allow trade to happen. Africa could contribute a lot more be it is rail, ports, national highways or aviation. It has to change lives on the ground and quiet honestly when people ask if I am an Afro-optimist, I am a very proud African. Africa is a beautiful place and has tremendous potential so we shouldn’t always just talk about the potential because nobody eats potential. We have to unlock that potential. So that is what the Africa Investment Forum is all about. Be it oil, gas, minerals or agricultural commodities, Africa is awash with rich resources.
The question is how to turn them into real dividends with significant amounts of revenue that allows a better quality of life for the people. For that, you need to deal with the infrastructure deficit. We used to say it is about $15 billion. But that has changed. The AfDB recently released the African Economic Outlook report and the deficit is anywhere between $67 billion to $107 billion every year, so which means we must do a faster job pulling capital together because the rest of the world is not waiting.
How long will it take to close that gap? 
I think within the next decade. But it’s going to take a lot of work…
What about the youth dividend; what are the future industries? 
Africa is at the very top in fintech and mobile money… but as we look at new types of industries, we have to look at them in the context of the fourth industrial revolution… I get excited when I see the youth in Africa well-educated, they are all on social media, know how to use apps, which means they already have a leg up. So the key is how to re-tool them to operate in that kind of a new economy. The AfDB is doing that in three ways already. First is we signed up a joint program with Google and Microsoft to help develop young talented Africans in computer technology. We as a bank are already investing in technology parks in Cape Verde, Angola, Kenya, Senegal, Rwanda. These are technology parks where you can have the ICT industries emerge; almost like trying to create the Silicon Valleys of Africa.
When it comes to the new economy, you have to start early. We have a program trying to create 250 coding centers in Africa where you get people with computational knowledge to do coding services that can help in this new world we are moving towards. We are also investing in universities for science and technology across Africa to create this new scientific human capital…We need to give African youth the skills they need for the jobs of the future, not for the jobs of yesterday.
What then are the new wealth generators? 
If you look at where the money is going in Africa, it’s not actually going into oil, gas and natural resources. Most of the foreign direct investment (FDI) is going into the service industry, at least 64%, and also the financial services sector; maybe about 27% goes into the manufacturing sector. So these are the big sectors where you see a lot of FDI. But there are two sectors very important for me. 
One is ICT, because this is going to be the driver of the economy. It’s very important for countries to invest heavily in the ICT industry to give their countries the platforms they need in the knowledge economy.
The second is the food and agriculture industry. Africa has a lot of oil and gas, but nobody drinks oil, nobody smokes the gas. Food is the future. The size of the food and agriculture industry in Africa is going to be $1 trillion by 2030 in Africa. This is where the wealth is supposed to come from. Unfortunately, in Africa, we always walk past gold. Just imagine you are seeing gold, and you see it as dirt and don’t recognize it. That’s the power agriculture has… The food business is the biggest business. Agriculture is not a development sector, it’s not a social sector, it’s a wealth-creating sector. Agriculture is a business and Africa needs to fully unlock that potential. If you look at the amount of arable land left to feed nine billion people in the world by 2050, it is not in Europe, Latin America, Asia, or the US, it’s in Africa – 65% is right here. What Africa does with agriculture will determine the future of food for the world.
How will Africa’s billionaires and capitalists help achieve these goals? 
If you look at the high-networth-individuals in Africa, the majority of them make their money on this continent, and that’s already a strong signal. Aliko Dangote makes his money in Africa. 
So we are going to get them involved on the Africa Investment Forum because it is trying to send a message to the world that we have African businesses that are viable businesses making money and doing well on the continent; so putting capital to help them expand can help them become global multi-national companies…
And investing in African entrepreneurs? 
The issue for entrepreneurs is finding them, nurturing them and then putting the financial backing behind them to thrive. Africa has a lot of young people. Every day, I wake up I read about a young person doing so well. So the best investment that Africa can make is to put its capital at risk on behalf of its young people. Because when you see a young person walk into a financial institution, all you see is risk, risk, risk. We have to change that and try and see creativity, innovation and entrepreneurship. So that way we can put your money at risk to make them more creative, more innovative and unleash their entrepreneurship capacity. That is why at AfDB, we have a program helping to invest in the early-stage businesses of young people. Mark Zuckerberg and Bill Gates didn’t just get there, somebody had to believe in them.
We have a program set up with the European Union called Boost Africa to invest in young people. The other thing we are doing is helping unleash entrepreneurship in the food and agriculture industry. The bank has a program targeted at getting young graduates, medical doctors, engineers… who are all going to agriculture as a business. Last year, AfDB invested over $860 million in that program for about eight countries. Going forward, we expect to invest $1.5 billion dollars every year in that program for the next 10 years. 
I really think unless we change the mindset, the labor composition of the agricultural sector and create a new dynamic group of entrepreneurs in the food industry, we only will have old people left. Every university in Africa has to make entrepreneurship compulsory.

#AfricaInvestmentForum: A Marketplace Coming To Africa

JOHANNESBURG (Reuters) &#8211; The Johannesburg Stock Exchange (JSE) wants to increase the minimum capital amount required for a primary listing and is considering stricter rules on secondary listings as it seeks to improve corporate governance.
Africa’s biggest securities exchange published its proposals in a public consultation paper circulated on Wednesday, aiming to ease investor concerns about listed companies following recent high-profile corporate scandals.
The paper proposes increasing the capital amount required for a primary listing from 500 million rand ($34 million), but did not suggest a new minimum level.
On secondary listings, the exchange could limit which jurisdictions would be suitable.
“The intention would be for the JSE to create a pre-approved list of foreign exchanges with regulatory regimes with which the JSE is comfortable,” JSE says in the consultation paper. “This approach is followed by peer global exchanges such as the Australian Stock Exchange and the Toronto Stock Exchange.”
The Johannesburg exchange is already crafting tighter disclosure rules for companies with listed debt instruments, announced in May, as part of efforts to improve corporate governance and increase transparency.
It has been hit by scandals including that of retail group Steinhoff International. Steinhoff’s shares crashed last December after the group revealed “accounting irregularities” and its CEO quit, prompting a JSE investigation into whether the group broke the exchange’s disclosure rules.
The consultation will conclude on Oct. 22.
“Depending on the nature of the comments received in response to this paper, it may be appropriate to convene a colloquium to discuss the improvement of governance,” JSE’s Chief Executive Nicky Newton-King said in a statement.
($1 = 14.6883 rand)
Reporting by Patricia Aruo; Editing by Susan Fenton

The JSE is considering stricter rules on listings, here’s why

Press Release
➢ WITH “ROOM2RUN,” AfDB LAUNCHES SECURITIZATION MARKET FOR MULTILATERAL 
DEVELOPMENT BANK SECTOR 
➢ TRANSACTION IS IN DIRECT RESPONSE TO G20 ACTION PLAN FOR MDB BALANCE SHEET OPTIMIZATION 
➢ AfDB COMMITS TO REINVEST FREED UP CAPITAL INTO NEW AFRICAN INFRASTRUCTURE 
LENDING, MAKING ROOM2RUN ONE OF THE LARGEST IMPACT INVESTMENTS EVER 
➢ TRANSACTION IS SUPPORTED BY NEW EUROPEAN UNION GUARANTEE TOOL (EUROPEAN FUND FOR SUSTAINABLE DEVELOPMENT)
OTTAWA, Canada, 18 September 2018 — The African Development Bank (AfDB), the European Commission, Mariner Investment Group, LLC (Mariner), Africa50, and Mizuho International plc today announce the pricing of Room2Run, a US $1 billion synthetic securitization corresponding to a portfolio of seasoned pan-African credit risk. Room2Run is the first-ever portfolio synthetic securitization between a Multi-Lateral Development Bank (MDB) and private sector investors, pioneering the use of securitization and credit risk transfer technology to a new and previously unexplored segment of the financial markets.
Structured as a synthetic securitization by Mizuho International, Room2Run transfers the mezzanine credit risk on a portfolio of approximately 50 loans from among the African Development Bank’s nonsovereign lending book, including power, transportation, financial sector, and manufacturing assets. The portfolio spans the African continent, with exposure to borrowers in North Africa, West Africa, Central Africa, East Africa, and Southern Africa. Mariner, the global alternative asset manager and a majority owned subsidiary of ORIX USA, is the lead investor in the transaction through its International Infrastructure Finance Company II fund (“IIFC II”). Africa50, the pan-African infrastructure investment platform, is investing alongside Mariner in the private sector tranche. Additional credit protection is being provided by the European Commission’s European Fund for Sustainable Development in the form of a senior mezzanine guarantee.
“Room2Run gives us fresh resources to invest in the projects Africans need most,” said Akinwumi Adesina, President of the African Development Bank Group. “Africa has the most promise, the greatest natural resources, and the world’s youngest population. But we also have the world’s most persistent infrastructure deficits. The African Development Bank has the strategy to address these infrastructure finance gaps—and Room2Run gives us the capacity to make it happen.”
Structured as an impact investment, Room2Run is designed to enable the African Development Bank to increase lending in support of its mission to spur sustainable economic development and social progress. In connection with Room2Run, AfDB has committed to redeploy the freed-up capital into renewable energy projects in Sub-Saharan Africa, including projects in low income and fragile countries.
“On the Impact scale, Room2Run is off the charts,” said Dr. Andrew Hohns, Lead Portfolio Manager and head of the Mariner Infrastructure Investment Management team. “Room2Run answers the call of the G20 for private sector participants to step in and facilitate development finance, providing a template for attracting significant private sector capital into urgently needed projects in developing economies.”
Raza Hasnani, Head of Infrastructure Investment at Africa50 commented, “Room2Run provides an innovative and commercially viable solution to the African Development Bank’s risk management and lending objectives, while paving the way for commercial investors to support and benefit from the growth of infrastructure on the continent. Africa50 is very pleased to participate in this landmark transaction, which is in line with our mandate to drive increased investment in infrastructure in Africa, and to create pathways for long-term institutional capital to flow into this space.”
Room2Run enjoys the support and participation of the European Commission with an investment from the European Fund for Sustainable Development, in the form of a senior mezzanine guarantee. “Only a few days after announcing our renewed Alliance with Africa for sustainable investments and jobs, I am very happy to announce that we are, together with the African Development Bank, launching Room2Run,” commented Neven Mimica, the European Commissioner for International Cooperation and Development. “This initiative is a perfect example of what we are doing to support investments in African low income and fragile countries through the External Investment Plan. Through Room2Run we provide 
an additional protection to investments in the field of renewable energy. Through our Guarantee, investments under Room2Run will translate into extending supply to many people currently without electricity whilst creating much-needed new jobs.”
Room2Run also directly responds to calls by the G20 that MDBs use their existing resources to full capacity, as articulated in the 2015 G20 MDB Action Plan to Optimize Balance Sheets, as well as calls for greater MDB efforts to crowd-in private investment. The G20 has called on MDBs to share risk in their non-sovereign operations with private investors, including through structured finance, mezzanine financing, credit guarantee programs, and hedging structures.
The Government of Canada has been a global leader in advocating for MDBs to use their existing resources more efficiently and to mobilize private capital for global development. The goal of the G20 MDB Action Plan to Optimize Balance Sheets is to catalyze significant new development financing from the MDBs throughout the real economy in key development regions. “Attracting more private capital into global development efforts is critical to building economies that work for more and more people around the world,” said Bill Morneau, Canada’s Minister of Finance, “that’s why Canada and our G20 partners have been calling on multilateral development banks to use their existing resources as efficiently as possible, and to look for new ways to attract more private capital. We are pleased to see the African Development Bank come forward with a transaction that directly responds to both of these objectives. Room2Run is an innovative solution to a long-standing challenge.”
Juan Carlos Martorell, Co-Head of Structured Solutions at Mizuho International, adds, “Compared to other synthetic securitizations, a major achievement of Room2Run has been to ensure that ratings agencies, and in particular S&amp;P, reflect the merits of the risk transfer into their rating assessments for multilateral development banks. AfDB’s leadership through this transaction has now set the stage for broader adoption of the instrument throughout the MDB community.”

AfDB, Mariner Investment Group, and Africa50 price landmark $1 billion impact securitization

JOHANNESBURG (Reuters) &#8211; South Africa’s headline consumer inflation slowed to 4.9 percent year-on-year in August from 5.1 percent in July, data from Statistics South Africa showed on Wednesday.
On a month-on-month basis, inflation contracted 0.1 percent in August after rising from 0.8 percent in July.
Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, fell to 4.2 percent year-on-year in August from 4.3 percent in July, while on a month-on-month basis was flat at 0.0 percent from 0.6 percent.
Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia

SA’s headline consumer inflation slowed to 4.9 percent year-on-year in August, what you need to know…

HARARE (Reuters) &#8211; Zimbabwean opposition lawmakers walked out of President Emmerson Mnangagwa’s state of the nation address to parliament on Tuesday, signalling their lingering bitterness after losing a disputed July 30 presidential and parliamentary election.
Members of Parliament from the Movement for Democratic Change (MDC) that is led by Nelson Chamisa heckled Mnangagwa when he started reading his speech before filing out.
Chamisa &#8211; who is not a member of parliament and lost a court challenge to Mnangagwa’s win last month &#8211; maintains that he was cheated of victory by the electoral board and says the 76-year-old president lack legitimacy.
After leaving parliament, the MDC lawmakers broke into song denouncing the ruling ZANU-PF party. “As the MDC we cannot sit there and be addressed by a person who does not even respect the rule of law,” MDC national chairperson Tabitha Khumalo told Reuters.
ZANU-PF’s chief whip in parliament Pupurai Togarepi described the lawmakers’ conduct as unfortunate, adding: “We hope that over time they will come to their senses, it’s not about grandstanding but building the country together.”
Mnangagwa, who has previously called for unity among political parties to help rebuild the shattered economy, said the elections were now in the past.
“The election period is decisively behind us. It is now time for us as members of parliament and political leaders to exert our efforts towards delivering promises we made to the electorate,” Mnangagwa said in his speech.
The president promised to bring a series of bills to parliament, including on giving more power to Zimbabwe’s 10 regions, revamping the process of registering companies and creating a one-stop investment agency.
A mining amendment bill passed by parliament in June, which removed clauses requiring foreign mines to list their shares on the local stock market, would be brought back to the assembly to fix “inadequacies” and provide for online registration of mining rights and titles.
Mnangagwa, who came to power in November after Robert Mugabe was removed in a coup, faces the huge task of ending Zimbabwe’s international pariah status and fixing an economy afflicted by high unemployment and foreign currency shortages.
He told lawmakers that his government had negotiated $500 million in foreign credit facilities, some of which would be disbursed to companies this week.
Mnangagwa, however, said the country would not immediately re-introduce its own currency that was dumped in 2009 after it was made worthless by hyperinflation of 500 billion percent.
Editing by James Macharia and David Stamp

Here’s why Zimbabwean opposition lawmakers walked out of President Mnangagwa’s #SONA

JOHANNESBURG (Reuters) &#8211; South Africa’s highest court on Tuesday allowed the private use of marijuana, upholding a lower court’s ruling that found the criminalisation of cannabis was unconstitutional.
Activists who include members of the Rastafarian movement and traditional healers greeted the ruling with loud applause. They have held marches over the years to demand that the law be changed to allow people to smoke ‘weed’, which is called ‘dagga’ in South Africa.
Several government departments, including the health and justice ministries, oppose its legalisation and warn of harmful effects.
But in a unanimous judgment read by Deputy Chief Justice Raymond Zondo, the Constitutional Court decriminalised home consumption, saying “the use of cannabis must be for the personal consumption of the adult”. The ruling also approved growing marijuana for personal consumption.
Rastafarian Garreth Prince and former Dagga Party leader Jeremy Acton brought the case asking the High Court to allow for the home use of marijuana.
Jules Stobbs and Myrtle Clarke‚ known as the “Dagga Couple”, joined the case, and asked the court to strike down laws banning the use‚ cultivation and sale of marijuana.
He added that it would not be a criminal offence for an adult person to use or be in possession of cannabis in private for their personal consumption in private.
However, the judgement did not specify the amount that can be used by an adult in private use.
“This must be determined by parliament,” he said.
Parliament is now expected to amend the laws that criminalise cannabis following the court ruling.
Activists had argued that the criminalisation of dagga use and possession is a violation of the right to equality, dignity, and freedom of religion.
There was no immediate comment from the departments over the country’s top court ruling on Tuesday.
Reporting by James Macharia; Editing by Matthew Mpoke Bigg

South Africa’s ConCourt decriminalises the private use of marijuana, here’s why…

JOHANNESBURG (Reuters) &#8211; South Africa’s President Cyril Ramaphosa said on Monday there would be no mass layoffs of public sector workers as his government considers various ways to pull the economy out of a recession that has rattled the rand and investor confidence.
The economy slipped into recession in the second quarter for the first time since 2009, data showed in August, a stinging blow to Ramaphosa’s pledge to revive the economy and reduce record-high unemployment after a decade of stagnation.
In June, the National Treasury said it was considering layoffs and early retirement packages for staff in the public sector to avoid breaking its pledge to cut spending after unions clinched above-inflation wage increases.
“The mass retrenchment of public sector workers is not under consideration,” Ramaphosa said at trade union federation Cosatu’s electoral conference in Johannesburg.
“The context of slow economic growth and weak revenue collection means that expenditure on other critical things will suffer &#8230; but we need to address this in a way that does not put the livelihoods of public sector workers at risk.”
The contraction in the economy sent the rand tumbling and triggered warnings from ratings agency Moody’s that the country would struggle to increase revenue and deliver on a promise to cut spending and public debt.
South Africa needs faster economic growth to reduce its 27 percent unemployment rate and alleviate poverty and inequality, both of which stoke instability.
The ruling African National Congress has made repeated pledges to improve the economy. Unemployment is a key concern for voters ahead of elections next year.
Reporting by Mfuneko Toyana; Editing by James Macharia

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JOHANNESBURG (Reuters) &#8211; South African union Solidarity said it will sign a three-year gold sector wage deal with AngloGold Ashanti on Monday along with Association of Mineworkers and Construction Union (AMCU), without providing further details of the agreement.
Gold producers have argued that above-inflation wage hikes have been adding to the cost burden in the bullion industry, which has been hit by depressed prices and labour unrest.
Solidarity, AMCU and UASA have previously declared a dispute with the remaining firms involved in the negotiations, Harmony Gold, Sibanye-Stillwater and smaller producer Village Main Reef, after talks deadlocked. [nL8N1VK5N8]
The National Union of Mineworkers (NUM), the largest union in the bullion sector and also involved in negotiations, declared a dispute last month with Minerals Council, which is representing gold producers in the wage talks. [nL8N1VC3XL]
When unions declare a dispute, they usually have to go through conciliation talks with the companies concerned mediated by an authority such as the Commission for Conciliation, Mediation and Arbitration (CCMA).
Negotiations with the remaining companies under the auspices of the CCMA will continue on Thursday, Solidarity added.
Reporting by Tanisha Heiberg; Editing by Sunil Nair and Sherry Jacob-Phillips

What you need to know about SA unions’ three-year wage deal with AngloGold Ashanti 

WASHINGTON (Reuters) &#8211; The U.S. government will not lift sanctions against Zimbabwe until the new government of President Emmerson Mnangagwa demonstrates it is “changing its ways,” a senior U.S. economic official told a congressional panel on Thursday.
Manisha Singh, the U.S. Assistant Secretary of State for Economic and Business Affairs, told a House of Representatives hearing there were 141 entities and individuals in Zimbabwe, including Mnangagwa and former president Robert Mugabe, that are currently under U.S. sanctions.
“Our pressure on Zimbabwe remains in place. We are trying to use this pressure to leverage political and economic reforms, human rights observations,” Singh said.
“We want to see fundamental changes in Zimbabwe and only then will we resume normal relations with them,” she added.
Mnangagwa was sworn in as Zimbabwe’s new president on Aug. 26 after the Constitutional Court confirmed his July 30 election victory, dismissing a challenge by opposition leader Nelson Chamisa.
Mnangagwa has called for the lifting of U.S. sanctions against officials from the ZANU-PF ruling party, top military figures and some government-owned firms, which were imposed during Mugabe’s rule for it called violations of human rights and democracy.
The EU lifted most of its sanctions in 2014, but has maintained those against Mugabe and his wife Grace.
The July ballot was touted as a crucial step toward shedding the pariah reputation that Zimbabwe gained under Mugabe as well as securing international donor funding.
Rep. Karen Bass, a Democrat from California, said Zimbabwe was “trying to reach out to us now and I want to know where we are with that.”
“We are always open to conversations. We are open to a demonstration from the government that it is changing its ways, that it is observing human rights,” Singh added.
Reporting by Lesley Wroughton, editing by G Crosse

U.S. will not lift sanctions against Zimbabwe until the African country does this…

JOHANNESBURG (Reuters) &#8211; Moody’s stable outlook on South Africa’s credit rating means there is little chance of a downgrade this year, the ratings agency said on Thursday, but warned that a commitment to fiscal consolidation would be key to maintaining its rating.
The agency, the last of the top three ratings firms to have Pretoria’s long-term foreign-currency debt in investment grade, however said a recovery in South Africa’s economic growth will be slow and less than the Treasury’s estimate of 1.5 percent for 2018 after a surprise contraction in the first two quarters.
South Africa entered recession for the first time since 2009, data showed last week, undermining President Cyril Ramaphosa’s efforts to revive the economy after years of stagnation under former president Jacob Zuma.
Lucie Villa, Moody’s lead analyst for South Africa, said the rising share of government revenue that South Africa spends on debt servicing was a concern for Moody’s, but that she expected some fiscal adjustment in the October budget statement.
“Growth is going to be below 1 percent, to what extent it’s difficult to say,” Villa told the agency’s annual Sub-Saharan Africa conference, referring to this calendar year.
“South Africa has a stable outlook, &#8230; there is little chance of a rating action,” Villa said, in response to a question about whether Moody’s would downgrade the country’s sovereign rating at a review scheduled for next month.
Moody’s has previously said the slide into recession would exacerbate fiscal and monetary challenges. It said weaker-than-expected economic data was “credit negative”.
Villa said two ratings strengths for South Africa was that its government debt had a long maturity and that relatively little of the debt was foreign-currency denominated.
“It’s very important what announcement will be made (at the October budget statement), &#8230; what we think is going to be critical is the wage bill, tax revenues,” she said.
Villa said plans by the ruling African National Congress (ANC) to nationalise the Reserve Bank were not “rating-relevant,” assuming that the bank’s mandate would not be affected.
The central bank has said any change of ownership would not affect its mandate or independence.
Africa’s most developed economy needs faster economic growth if it is to reduce high unemployment &#8211; currently at 27 percent &#8211; and alleviate poverty, analysts say.
Unemployment is a hot-button issue ahead of national elections in 2019, and the ANC has made repeated pledges that things will improve.
($1 = 14.8287 rand)
Writing by James Macharia

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By Sabine Dall’Omo, CEO for Siemens Southern and Eastern Africa
The value of data coupled with connected infrastructure and industrial ecosystems offers Africa a remarkable opportunity to create smart factories of the future. Data will be at the heart of reinvigorating Africa’s industrial prowess, creating new industries and an entirely new set of jobs that previously did not exist.
Historically, Africa’s growth has been defined by its abundance in natural and mineral resources but digitalization will change this. It will tip the scales of Africa’s economic outlook more towards exports emanating from the manufacturing sector, with the textile vertical being the prime example. Developing factories of the future will boost Africa’s GDP and catapult its international competitiveness by merging both the physical and virtual worlds. The future will now be defined by how Africa harnesses its manufacturing potential and how it moves the industrial revolution forward.
The continent’s unique identity and extraordinary sense of creativity could be what puts us on the global map. The Afro-inspired design revolution taking shape is an opportunity to take our ingenuity to the world, and with skills development the continent will see a new industry emerge. The combination of smart hardware and intelligent software could help position Johannesburg, Nairobi or Lagos as the next design capital of the world.
The Siemens FABRIC showcase, launched at the end of August, is a testament to the talent Africa holds. Told through the universal language of fashion, FABRIC was a powerful project that demonstrated how data combined with technology could transform African cities. Three iconic African fashion designers (John Kaveke, Zizi Cardow and Palesa Mokubung) created one-of-kind outfits weaving in data extracted from these three African cities to tell a unique story about each of them. These are the kind of edgy collections that have gained the attention and admiration of the international fashion community, taking all three designers to renowned fashion shows across the world. But despite recognition on the global catwalk, the economic output from the apparel industry in Africa has not been grand in the last few years. However through digitalization, Africa’s dynamic fashion sense could become a global hit.
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Urbanization
As urbanization rapidly increases, so too does the demand in products and services. In the last few years, manufacturers have had to shorten throughput times to keep up with the increasing trend of individualised mass production and at the same time reduce their energy and raw material consumption. Now is the time for manufacturers to relook at rising production costs and determine how to safeguard their competitiveness.
As connectivity changes the world and how we communicate, the manufacturing industry will also need to adapt. Transforming into factories of the future will be a smart step because intelligent machines will effectively respond to changing market and customer needs, and enable manufacturers to pick up on inefficiencies quickly. The industrial internet of things (IIOT) will be the foundation of production, ensuring machine to machine communication and automation while real-time data boosts productivity and revenue. Digitalization will transform workforces and contribute to the entire value chain while ensuring safe, reliable operations.
According to a Frost &amp; Sullivan White Paper by the Manufacturing Leadership Council, the manufacturing industry will look completely different in the next 10 to 15 years as industries become high-tech engines of mass customization.
“Highly automated and information-intensive, the factory of tomorrow will look like an integrated hardware and software system…fuelled by vast quantities of information from every corner of the enterprise and beyond, moderated by analytical systems that can identify and extract insights and opportunities from that information, and comprise of intelligent machines that learn, act, and work alongside highly skilled human beings.”
Through research and insights, Siemens acknowledges the vast potential and possibilities for Africa’s future through manufacturing and has already been hard at work creating technologies for smart factories. It has created flexible, modular, economic automation and drive solutions to help industries transform easily. Its single-source solution maximises production and minimises downtime and has the capability to cover all facets of a textile plant from the production of chemical fibres and yarn to spinning, fabric manufacturing and finishing. It’s cost-effectiveness in configuration and commissioning makes it a manufacturer’s dream. Industrialisation will additionally bridge the gap between blue and white collar workers creating an upskilled workforce termed ‘grey-collar’ workers. This dynamic and developed staff contingent will be able to execute their duties with ease in the digital economy, alongside machines.
This transformation will push the continent onto another level that amplifies GDP, while creating a smarter Africa for all. The role of data architecture in this metamorphosis cannot be magnified enough, and with the exponential value of industrialization, Africa’s development could be fast tracked to tip the scales of its economic potential. The only element left will be active collaboration between government, regulators, business and society.

OpEd: How to transform Africa’s manufacturing industry through data

By <a href="https://www.brookings.edu/experts/landry-signe/">Professor Landry Signé</a>, David M. Rubenstein Fellow in the Global Economy and Development Program and Africa Growth Initiative at the Brookings Institution and <a href="https://www.brookings.edu/author/chido-munyati/">Chido Munyati</a>, Global Leadership Fellow, World Economic Forum.
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This July, Zimbabwe held its first post-Robert Mugabe era presidential election, nearly four decades after his accession to power. The ruling ZANU-PF party won the 69 percent of the 210 seats in parliament after winning rural voters by large margins. In the presidential vote, Emmerson Mnangagwa, the ZANU-PF party candidate and the incumbent president, emerged victorious from a 23-candidate field, winning 50.8 percent of the vote. The main opposition, the MDC Alliance, challenged the election results, and today the constitutional court upheld the outcome.
Free, fair, and credible elections are preconditions for sustainable peace and democratic development, as well as for attracting new investment and other support from international financial institutions and foreign governments. While most election observers have acknowledged improvements in this election, they have not considered them sufficient. They highlighted “inclusive participation rights and a peaceful vote” but also noted a “lack of trust in the process.” Two U.S. based groups, the International Republican Institute and the National Democratic Institute, highlighted “numerous incidents of food and agricultural assistance and extreme media bias” in favor of President Mnangagwa. The Southern African Development Community largely considered the election successful, noting that people had the “opportunity to exercise their constitutional right.”
Support for democracy is strong in Zimbabwe. According to the latest Afrobarometer Survey, 75.2 percent of people “prefer democracy” and an additional 4.7 percent “sometimes prefer democracy.” Additionally, 78.5 percent of citizens think that they should choose leaders in their country through regular, open, and honest elections. Finally, 67.8 percent of people believe that the constitution should limit the president to serving a maximum of two terms in office.
Zimbabwe seems to be regaining the trust of international investors and foreign governments. The country has attracted an estimated $16 billion in investments since Emmerson Mnangagwa took over in November 2017. Development partners are also collaborating again. The Indian government will provide a $310 million soft loan for the rehabilitation of the Hwange Thermal Power station and the CDC and Standard Chartered will provide $100 million in lending to new businesses.
Despite these advancements, there is still a lot to do to bring the country back to sustainable development:
IMPROVE GOVERNANCE TO REPEAL INTERNATIONAL ECONOMIC SANCTIONS, ADDRESS INTERNATIONAL DEBT, AND DELIVER BETTER PUBLIC SERVICES 
Recently, the U.S. government renewed the Zimbabwe Democracy and Economic Recovery Act (ZIDERA), which requires that the country make credible progress towards holding free and fair elections, restore the rule of law, and ensure military subordination to the civilian government. The Government of Zimbabwe needs to increase accountability and accountable governance, and convince the U.S. government to repeal ZIDERA. With the sanctions bill in place, Zimbabwe cannot access loans or guarantees from international financial institutions without the approval of the U.S. government.
The renewed legislation also requires that U.S. representatives at multilateral organizations not support any efforts to address Zimbabwe’s debt situation. As of February 2018, Zimbabwe still had debts of $1.15 billion at the World Bank, $601 million to the African Development Bank, and $3 billion to Paris Club countries.
The government needs to re-engage diplomatically to get the sanctions lifted as they restrict business, its ability to borrow from international organizations, and resolve its debt situation. Zimbabwean officials continue to look to engage U.S. officials with the Foreign Affairs and International Trade Minister, Dr. Sibusiso Moyo, telling reporters that “we are determined to continue in the re-engagement with the U.S. administration, as we together seek to restore our bilateral relations to normalcy.” In order to regain access to international capital markets Zimbabwe must repay its debt arrears to major foreign lenders.
Other necessary reforms include repealing the chilling media laws—including the Access to Information and Protection of Privacy Act (AIPPA) and the Public Order and Security Act (POSA)—which restrict the media environment and promotes self-censorship. Additionally, the government must align current laws with the constitution.
IMPROVING THE MACROECONOMIC CONTEXT AND POLICY DELIVERY
Resolve the chronic cash shortage in the short-term, and create its own currency in the long-term 
Addressing the cash shortages must be a priority for the government. Zimbabwe desperately needs an influx of foreign cash to resolve the currency crises and spur economic growth. The country has not had a currency of its own since it dollarized in 2009 because of hyperinflation.
In the long term, Zimbabwe needs to have its own currency. In 2016, the Reserve Bank introduced “bond notes”, a substitute currency that locally has the same value as the U.S. dollar. Bond notes were meant to alleviate the shortage of U.S. dollars in the system—this, however, had the opposite effect by further increasing the demand for U.S. dollar.
Implement economic and civil reforms domestically 
As highlighted earlier, President Mnangagwa has attracted significant new investment to Zimbabwe since last year. However, the country continues to face chronic cash shortages that are holding back economic growth. In recent months, businesses raised prices as they struggled to find U.S. dollars to conduct business.
Beyond reforms, President Mnangagwa can send positive signals to foreign lenders and investors by tackling corruption, and appointing reputable and accountable technocrats to manage the economy. Indeed, the window of opportunity has narrowed considerably since the post-election violence that followed a peaceful vote. President Mnangagwa said there would be an independent investigation into the post-election violence. Some hope and goodwill remains; however, actions taken in the next few months will determine whether Zimbabwe is breaking with the past.
By <a href="https://www.brookings.edu/experts/landry-signe/">Professor Landry Signé</a>, David M. Rubenstein Fellow in the Global Economy and Development Program and Africa Growth Initiative at the Brookings Institution, distinguished fellow at Stanford University’s Center for African Studies, World Economic Forum Young Global Leader, and author of “Innovating Development Strategies in Africa: The Role of International, Regional and National Actors,
and <a href="https://www.brookings.edu/author/chido-munyati/">Chido Munyati</a>, Global Leadership Fellow, World Economic Forum.

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