KAMPALA (Reuters) &#8211; Stanbic Bank Uganda, lead arranger for the East African nation’s $2.5 billion debt for a crude oil pipeline, expects the deal to conclude in June next year, its chief executive said on Wednesday.
Uganda and Tanzania signed an agreement in May last year to jointly develop a pipeline that has been described as the longest electrically heated crude oil pipeline in the world.
Stanbic Uganda, a unit of South Africa’s Standard Bank Group, secured the role of joint arranger and adviser together with Japan’s Sumitomo Mitsui Banking Corp.
The pipeline will cost a total of $3.5 billion, with the balance coming from shareholders in equity.
Patrick Mweheire, Stanbic’s CEO, said it had engaged in talks with other lenders in Europe, Japan and China and that “they have all been extremely positive”.
“People like the project &#8230; the economics of the pipeline make a lot of sense. I think we are looking at some time in June next year for financial close,” he said in an interview.
Covering a distance of 1,445 km, the 24-inch diameter pipeline will start near the oilfields in western Uganda and terminate at Tanzania’s Indian Ocean seaport of Tanga.
Landlocked Uganda discovered crude oil reserves estimated at 6.5 billion barrels more than a decade ago.
France’s Total, owns the fields alongside China’s CNOOC and Britain’s Tullow.
Uganda’s government hopes production will start in 2020 after repeated delays but Total and CNOOC, joint developers of the fields, have said output is likely to start a year later. Mweheire said Stanbic, which is Uganda’s largest lender, would create a unit to chase deals in financial technology, also known as fintech, to be unveiled in January. “The fintech (unit) &#8230; will allow us to have relationships with other fintechs, potentially buy into some of those fintechs that bring some value propositions that we need,” he said.
Stanbic, he said, was already in talks to with Africa e-commerce firm Jumia for a potential partnership, he said without offering more details.
Editing by Duncan Miriri and David Evans

Here’s when Stanbic expects $2.5 bln debt deal for Uganda’s oil pipeline to conclude

By Professor Halton Cheadle, partner at BCHC, a specialist labour law firm. Danny Hodgson, a candidate attorney at the firm.
In September 2018, the Constitutional Court ruled that certain provisions of the Drugs and Drug Trafficking Act were unconstitutional and infringed on the right to privacy. But what does it mean for occupational health and safety in the workplace?
One of the biggest changes will be around testing. In the past, the focus was on determining whether an employee was a user of cannabis and therefore urine, blood and hair follicle testing was appropriate. Now the focus is on whether the employee is intoxicated by cannabis at the workplace and therefore observational checklists need to be utilised as well as saliva tests in order to signal recent use, lawyers from BCHC, specialists in labour law, said.
“The intoxicating effects of alcohol are well known and, for that reason, most employers have a zero tolerance policy against being drunk at work,” said Professor Halton Cheadle of BCHC. “The effects of cannabis, on the other hand, are not as familiar and although dagga may not impair a person to the same extent as alcohol, it is a psychoactive drug.”
The Constitutional Court ruled that adult South African citizens are allowed to cultivate and use cannabis in a private place, which means it can no longer be described as an illegal substance. “Employers will have to reconsider policies that deal with substance use in light of this change,” he explained.
This means that if workers’ cognitive abilities are impaired, they could potentially pose a risk to themselves and others when it comes to operating machinery, driving a vehicle or performing other dangerous work. From these effects, it seems clear cannabis should be regulated in the same manner as alcohol, and a zero tolerance policy should be applied, said BCHC’s Danny Hodgson.
The Occupational Health and Safety Act 85 of 1993 requires employers to provide and maintain, as far as is reasonably practicable, a working environment that is safe and without risk to the health of employees. And if someone is intoxicated, with alcohol or cannabis, this could pose problems for employers and other employees.
“This means an employer is obliged to implement policies and put measures in place to limit any potential risk of harm, which include identifying intoxicated employees through observation and drug testing and excluding them from the workplace,” said Hodgson.
In light of the Constitutional Court judgment, cannabis use is likely to increase due to its new legal status and a corresponding change in societal norms, Cheadle reckons. “It is therefore important for employers to review their policies to ensure that they can adequately deal with intoxicated employees and comply with their obligations.”

Improperly appointed boards spell disaster for organisations

OpEd: What employers need to know about cannabis in the workplace

By Eric Streso, Certified Financial Planner, FPI.
21 November 2018; “Clients often ask me when they should invest offshore and I tell them now is the time, why wait until the next financial setback reduces your potential investment capital further,” says Eric Streso, a top-flight financial consultant, with more than 20 years’ experience in financial planning.
“South Africa is a relatively small financial market and, with the ability to invest up to R1 million every calendar year, without a tax clearance certificate, the opportunities multiply internationally.
“Here are markets, sectors or even companies outside the JSE that represent a wealth of experience and prospects. Utilising South African advice and expertise, clients are able to discuss the portfolios with an expert, who then advises and creates investment opportunities in various markets. I find the personal touch alleviates the understandable anxiety of venturing into a new monetary space. I encourage clients to ask questions, review portfolios and generally understand the complexities of offshore investments, taxes and regulatory practices.
“Investing in funds that are registered in foreign currencies can protect your investments in a hard currency and, if you plan to use the money overseas without bringing it back to South Africa, can potentially protect you from political and economic downturns at home.
“Ideally, one should be looking at $30 000 as an investment, with an investment period of 5-8 years, otherwise the returns may not be as lucrative as desired. One must also take into account capital gains tax, if you wish to realise your investment and convert it back to Rands. However, again if the rand has depreciated over this period, your capital gain is likely to be lower on your offshore investment than it would have be on a rand-denominated fund,” concludes Streso.

OpEd: It’s a good time to invest offshore, here’s why

ADDIS ABABA (Reuters) &#8211; A powerful party in Ethiopia’s government accused authorities of arresting members of its ethnic group in a politically-driven crackdown &#8211; an unprecedented public charge exposing deep rifts at the heart of the ruling elite.
The accusation marked growing tensions between elements in the Tigrayan People’s Liberation Front (TPLF) &#8211; a movement that has dominated Ethiopia for decades &#8211; and new reformist prime minister Abiy Ahmed who has upended politics with a string of radical reforms.
At least 79 security officers, officials, businessmen and women, many of them Tigrayan, have been arrested since last week &#8211; under what the government said was a clamp-down on corruption and mistreatment of prisoners.
Amenty International and other rights grops have welcomed the arrests. But TPLF chair Debretsion Gebremichael said on Monday the arrests ordered under “the pretext of corruption and human rights are being used to attack Tigrayans”.
The prime minister’s office did not immediately respond to a request for comment on Debretsion’s remarks.
Abiy’s rise &#8211; as Ethiopia’s first leader from the majority Oromo group &#8211; had transformed decades-old hierarchies in the Ethiopian People’s Revolutionary Democratic Front (EPRDF) coalition that was founded by the TPLF and came to power in 1991.
Soon after Abiy was inaugurated in April, he made peace with long-time foe Eritrea and started pushing reforms he said were meant to rein in the military and security services and limit their involvement in the economy &#8211; changes that have been largely welcomed by Western powers.
The TPLF’s Debretsion did not spell out who he thought was behind the arrests, that were announced by the government’s attorney general. “There is a foreign involvement in the process. Thus, it is unacceptable,” he said, without giving further details.
Debretsion picked out last week’s arrest of Kinfe Dagnew, a Tigrayan major general in the army and former chief executive of the METEC military-led conglomerate.
“While Kinfe was arrested peacefully, they tied him handcuffs. This is a political attack,” Debretsion told a news conference.
“While they should have gone after an individual, they went after an ethnic group and a party,” he said in comments aired by Dimtsi Woyane TV.
Kinfe and others appeared in court but have not been charged or entered any pleas. There have been no statements from them or lawyers representing them.
Writing by George Obulutsa; Editing by Andrew Heavens

Ethiopia’s government is being accused by powerful party of ethnic crackdown, what you need to know…

By Suzanne Daniels
JOHANNESBURG, South Africa, 20 November 2018.
The public outcry in response to Momentum’s decision not to pay Nathan Ganas’ family out following his tragic death at the hands of hijackers has raised some ethical questions. While Momentum may legally be in the right, South Africans are questioning the morality of its decision, writes Suzanne Daniels, lawyer and fellow of the Institute of Directors.
In March last year, Ganas was fatally wounded in a hail of bullets while trying to protect his wife and daughter during a hijacking. Ganas, however, was well insured through Momentum Life and thankfully the policy kicked in with an immediate release of R50,000 to cover urgent expenses such as funeral and living costs following the tragedy.
But that did not happen. The media reported that Ganas’ widow would have to pay back the instant cash pay-out and she would not be receiving the insured amount. Apparently, Ganas had a pre-existing condition, diabetes, which should have precluded him from even being insured in the first place. While his death was not even remotely caused by the condition, Momentum is within its legal rights to not pay out.
This decision resulted in public outrage – nobody can quite understand how bullets and blood-sugar relate to each other. The horrific way in which Ganas died would have happened no matter what his health status was.
Notably, South African law is very clear that contracts are binding. When it comes to civil law, such as in this case, there are no grey areas. If the contract states you will not be paid out if you did not disclose a pre-existing medical condition, then that’s what will happen. The manner of death does not come in to play.
The bottom line is that Momentum is correct in terms of the law. The public outcry has been about the morality of it. But just how do you navigate the grey areas between law and morality?
While Momentum may be correct in law and maintaining its business equity balance, it is displaying a lack of moral equity in this instance. The company has, however, redeemed itself somewhat by allowing Ganas’ widow to keep the R50 000 funeral benefit and agreeing to pay the premiums back to her.
Unfortunately, there are no courts of equity in South Africa and the law can be relatively heartless. This is why it is vital that South Africans know what they are signing. Contracts are fully binding and if they don’t understand what their role is, or what the insurer’s role is, they can find themselves in a very tricky situation.
In an interview on Radio 702 with Bongani Bingwa, Momentum CEO Johan Le Roux stated that Nathan Ganas should not have been insured in the first place. So, whose fault is it then? Why was he given a policy and why did the insurer accept his monthly premiums? The answer isn’t exactly clear.
The insurance industry is highly regulated and there are checks and balances in place to ensure that both parties understand what is expected of them. But it seems there needs to be even more stringent checks in place so that a situation like Nathan Ganas doesn’t happen again. Consumers cannot be passive participants in their own lives and have a responsibility to educate themselves.
What is worth pondering, however, is whether the decision to not pay the claim was worth the subsequent negative publicity and potential loss of existing and future clients. Perhaps if Momentum had acted in good faith and supported the grieving family, it would have elevated its reputation amongst South Africans and boosted its social license to operate.
On a final note, I cannot stress enough how consumers need to know what they are signing. There does need to be an element of trust as well – they need to trust that the insurer can and will pay out a verified claim, and the insurer needs to trust that the consumer has actually been open and honest when answering questions relating to the risk assessment.

OpEd: Was Momentum within their rights to decline R2.4m claim by Nathan Ganas’ family?

ABIDJAN (Reuters) &#8211; Consumer price inflation in Ivory Coast rose to 0.8 percent year-on-year in October, up from 0.5 percent in September, data from the National Statistics Institute showed on Monday.
Food and soft drink prices in the world’s top cocoa producer rose 0.5 percent year-on-year, while housing and utilities prices jumped 3.1 percent. Transport costs rose 1.2 percent.
Ivory Coast’s economy accounts for around 40 percent of the eight-nation West African CFA franc currency zone.
Reporting By Loucoumane Coulibaly; Editing by Aaron Ross and Matthew Mpoke Bigg

This West African country’s inflation has rose to 0.8 percent year-on-year in October

Global market research company Euromonitor International launched a global study on illicit alcohol.
The multi-region report compiles findings from 24 countries in Africa, Eastern Europe and Latin America. Results show that 26 percent of the total volume of alcohol consumed in these countries is illicit.
Out of the 25 countries covered by Euromonitor’s research, Africa has the largest illicit alcohol problem. Whilst almost double the number of countries were covered in South America, Africans consume double the volumes (in absolute alcohol terms) of illicit alcohol.
Key points on illicit alcohol in Sub-Saharan Africa
• South Africa witnessed the largest fiscal loss out of the 7 African countries due to illicit trade despite the low share of illicit to licit litres of absolute alcohol (LAE) volume predominantly due to its tax strategies. 
• In international standards and even by African standards, South Africans consume excessive amounts of alcohol. The country has the second highest per capita alcohol consumption, falling just behind Zambia. 
• South Africa has the largest variance between the price that consumers can purchase legal alcohol vs what they pay for illicit alcohol (51%) and it is well above the regional average of 42%. 
• In 5 of the 8 countries covered the share of the illicit alcohol market is more than 50%, which means that 1 in every two 2 alcoholic beverages consumed, are illicit. In Zambia, this number is much higher. At 69.5% percent, Zambia is second only to Mozambique and almost 3 out of every 4 alcohol drinks are illicit. 
• Measured on a per capita basis, Zambians drink the largest amount of legal alcohol but also drink the most illegal alcohol. These numbers are measured on an LAE basis so this is absolute alcohol consumption. South Africans follow closely when it comes to the per capita consumption of illicit alcohol. 
• Whilst smuggling is present across all the countries researched, Zambia loses by far the most of its tax revenue to smuggling (71%).
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Article provided by Euromonitor International.

One in four bottles of alcohol consumed is illicit, what you need to know

ABUJA (Reuters) &#8211; Nigeria’s main opposition candidate Atiku Abubakar said on Monday he will boost oil sector investment, cut costly fuel subsidies and double the size of the economy by 2025 if he wins next year’s presidential election.
The businessman and former vice president portrayed himself as a champion of the private sector as he released his manifesto and set out his plans to stop incumbent Muhammadu Buhari securing a second term in February.
There are few reliable opinion polls in Nigeria, Africa’s largest oil producer. But Abubakar is seen as a substantial challenger to Buhari, a former military leader who has suffered a run of defections, overseen a stumbling economy and struggled to contain militant violence in the northeast.
The opposition People’s Democratic Party (PDP) candidate is, like Buhari, a northerner &#8211; but analysts say his business background, in port logistics among other ventures, has won him supporters among the southern business elite.
“I will be proactive in attracting investment and supporting the 50 million small and medium scale enterprises across Nigeria for the purpose of doubling the size of our GDP to $900 billion by 2025,” Abubakar said in a video message.
“These investments will create a minimum of 2.5 million jobs annually and lift at least 50 million people from poverty in the first two years,” he added.
In the manifesto, Abubakar said he would privatise government-owned crude refineries, issue new licenses for greenfield investments in refineries and consider re-introducing bidding rounds for marginal fields and oil blocks.
The plan, the manifesto said, would make sure Nigeria refined half its current crude output of roughly 2 million barrels per day by 2020.
OIL 
Nigeria remains largely dependent on sales of oil, which make up roughly two-thirds of government revenues. But it refines almost none of its crude, instead exporting what it produces and paying to import refined products &#8211; a large drain on the country’s wealth.
Abubakar said he would eliminate subsidies on imported fuel and let the market determine the price, a potentially risky strategy in a country where even rumours of price hikes have triggered violence.
The candidate also vowed to invest $90 billion in infrastructure annually over the next five years, and set up a $20 billion infrastructure debt fund with private backing to finance projects.
He said he would sign the African Continental Free Trade Agreement. Buhari has up to now kept out of the continent-wide pact, saying he wants to carry out wider consultations.
Abubakar’s manifesto re-iterated his plan to partially privatise state oil firm Nigerian National Petroleum Corporation (NNPC).
Buhari’s government has tried to keep tight control of exchange rates as the naira weakened in the face of global oil price declines.
Abubakar’s manifesto said the exchange rate controls were an issue. But it stopped short of saying whether he would end them.
Buhari &#8211; who in 2015 became the first opposition candidate to oust a president through the ballot box &#8211; has promised to keep up his campaign against corruption.
Reporting by Alexis Akwagyiram in Lagos and Paul Carsten in Abuja; Editing by John Stonestreet and Andrew Heavens

What Nigeria’s opposition candidate Abubakar promises to do if elected

JOHANNESBURG (Reuters) &#8211; South Africa’s economic recovery plans face serious constraints with growing debt of state firms domestically and capital outflows as a result of global trade tensions, <a href="https://www.imf.org/en/News/Articles/2018/11/16/ms111918-south-africa-staff-concluding-statement-of-an-imf-staff-visit">the International Monetary Fund (IMF)</a> said on Monday.
In October the global lender said it saw Africa’s most industrialised economy expanding by 0.8 percent in 2018, down from a prior forecast of 1.5 percent. South Africa’s Treasury predicts growth of 0.7 percent.
The recession-bound economy and a bleak budget in October have piled pressure on President Cyril’s Ramaphosa.
“Some of the initial optimism has dissipated as growth remains stuck in low gear and reform implementation has faced constraints,” the IMF said, naming the state power firm Eskom as a key risk.
The president’s work is made harder by cash-strapped state-owned firms, including debt-ridden Eskom, which is struggling to supply the nation’s power.
The IMF said the proposal to amend property laws to allow for expropriation without compensation should be carefully considered and be guided by lessons of international experience.
“Land reform should focus on enhancing agricultural productivity and strengthening tenure security,” said the IMF.
A parliamentary team has recommended a constitutional amendment to make it possible for the state to expropriate land without compensation. The recommendation will now go to the national assembly for a vote.
Reporting by Mfuneko Toyana; Editing by James Macharia
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South Africa’s economic recovery plans fading: IMF

ABUJA (Reuters) &#8211; Nigeria is in talks with Transnet for the concession to run its railways after General Electric, which has spun off its transport business, handed the leadership of the consortium to the South African firm, the transport minister said on Sunday.
“We are in talks with Transnet. When we conclude we will sign the concession agreement and they will rehabilitate the entire 3,500 kilometers of railways,” Transport Minister Rotimi Amaechi told a government delegation in Abuja.
Transnet was not immediately available for comment.
A procurement process adviser told Reuters last week that General Electric (GE) had pulled out of the $2 billion concession deal with the Nigerian government for two rail lines connecting northern cities to others in the south.
GE on Thursday said it had handed over the leadership of a consortium chosen to run the Nigerian rail concession to Transnet.
The concession aims to cover about 3,500 km (2,200 miles) of existing narrow-gauge lines from the southwestern commercial capital Lagos to Kano in the north and from southeastern oil hub Port Harcourt to Maiduguri in the northeast.
Economic growth in Nigeria has been hampered for decades by its dilapidated rail network, built mainly by British colonial rulers before independence in 1960.
Nigeria, which has one of Africa’s biggest economies and is the continent’s top oil producer, is seeing slow growth after emerging last year from its first recession in a quarter of a century which was largely brought on by low crude prices from late 2014.
Reporting by Chijioke Ohuocha; Editing by Robin Pomeroy and Emelia Sithole-Matarise

Here’s why Nigeria is in talks with South Africa’s Transnet

HARARE (Reuters) &#8211; Zimbabwean gold mines have been allowed to retain 55 percent of their earnings in dollars, from 30 percent previously, the deputy mines minister said, as the government moves to ensure their operations remain viable.
Polite Kambamura said miners of gold, the country’s largest mineral export, should be allowed to earn up to 70 percent of their sales in dollars.
The mining sector like most of businesses in the southern African nation, is struggling to pay for imports like spares and other consumables due to a severe dollar crunch.
Reporting by MacDonald Dzirutwe; Editing by Adrian Croft

Zimbabwe gold mining firms have been allowed to retain 55 pct of dollar earnings, what you need to know…

By Francois Conradie, Head of Research at NKC African Economics
On Sunday, November 11, the last day of a three-day meeting in Geneva, Switzerland, the Congolese opposition picked a unity candidate for the presidential election on December 23: the choice fell on Martin Fayulu of the Engagement for Citizenship and Development (Ecidé).
This unusual unity lasted just under 24 hours.
Late at night on Monday, November 12, two key opposition members who had signed the deal changed their minds and pulled out of it, and are now expected to run against Mr Fayulu and against Emmanuel Ramzani Shadary, the candidate of President Joseph Kabila’s Common Front for Congo (FCC). The election is a one-round affair: the candidate who gets the most votes becomes president.
The opposition conference in Geneva was an interesting process, piloted by the Kofi Annan foundation. It brought together seven opposition figures: Mr Fayulu, a 61-year-old Lingala-speaker from Kinshasa, educated in France and the US, who entered politics in the last days of Mobutu Sese Seko’s rule after a career as an oil executive with ExxonMobil; Felix Tshisekedi of the Union for Democracy and Social Progress (UDPS), whom we saw as the most likely man to lead a united opposition campaign; Jean-Pierre Bemba of the Movement for the Liberation of Congo (MLC), who looked like the most potent challenger but who was disqualified in August because of a conviction for witness-tampering at the International Criminal Court (ICC); Moise Katumbi, the popular and rich former governor of Katanga, who has not returned home since 2016, and who was thus unable to register for the election; Vital Kamerhe of the Union for the Congolese Nation (UNC), who is from South Kivu and is popular in the east of the country; Freddy Matungulu, a more marginal party leader who used to be an economist with the IMF; and Adolphe Muzito, who served as prime minister under Mr Kabila until 2012 and who was disqualified from running on a technical point.
The way the voting took place to choose a presidential candidate explains why Mr Fayulu ended up getting the nod rather than Mr Tshisekedi or Mr Kamerhe, who are more popular.
In the first round of voting the four men who had registered for the election (Messrs Fayulu, Matungulu, Tshisekedi and Kamerhe) could pick two names: their own, and that of one of their colleagues (also one allowed to run). As each man ended up giving the name of someone he did not consider a particularly menacing challenger to himself, Mr Fayulu and Mr Matungulu went through to a second round ahead of better-known peers. In the second round all seven opposition figures voted, and Mr Fayulu carried it.
On Sunday in Geneva, Mr Tshisekedi said: “I know this is going to be very tough for the UDPS base, but we accepted this game of nominating a common candidate and we must play it to the end.” And it was very tough for his base: protests were reported outside the UDPS offices in Kinshasa on Monday. The same happened in Mr Kamerhe’s UNC: its members also protested the fact that Mr Fayulu got the nod rather than their man.
On Monday Mr Tshisekedi announced that he was withdrawing his signature to respect the wishes of his voting base; tellingly he told Top Congo FM that going against his base would be the “end of my political career.” Very shortly afterwards Mr Kamerhe announced that he was also rejecting the deal on the basis that the opposition ought to have searched for consensus rather than use the two-round election system, even though he had agreed to it.
Mr Fayulu called on the two men to change their minds and asked the rhetorical question: “What signal are we sending? This shows that some of us are in politics out of personal interest, clan interests, and not for the higher interest of the nation.”
As of writing he still appeared to have the support of Mr Bemba and Mr Katumbi, which does count for a lot.
We had seen the way in which the seven opposition members put aside their differences to throw their collective weight behind Mr Fayulu as positive for the opposition, even though we continued to consider Mr Shadary the favourite, given the FCC’s dominance and the opportunity it will have to use government resources for party political ends: the Independent National Electoral Commission (Ceni) is certainly inclined to favour the FCC in the upcoming polls, and controversial electronic voting machines from Korea will make the election easier to rig.
Now we consider Mr Shadary’s win a foregone conclusion, as he will not only have the same structural advantages as he would have had facing Mr Fayulu as the unity candidate, but the opposition vote will probably be split among three men (we expect Mr Tshisekedi and Mr Kamerhe to run), making his job easier given the one-round system.
Congolese contacts have told us they are convinced that both men are in fact controlled opposition and playing Mr Kabila’s game; this is entirely plausible.
We still expect some protests in the next month, probably over the issue of voting machines, but the split in the opposition means that they will probably be smaller and less concentrated than could have been expected if Mr Fayulu had been the opposition candidate. This is positive from the point of view of violence, but FCC rule after Mr Shadary’s win will in no way be good news for governance.

OpEd: Fleeting moment of unity for DRC’s opposition

President Cyril Ramaphosa reported nearly R290 billion worth of investment pledges from local and international companies. PwC’s Strategy&amp; calculations suggest that this investment would add an estimated R338 billion to South Africa’s GDP over the 2019–2024 period, create or sustain an estimated 825 000 direct and indirect jobs (on average per year) and generate an estimated R59 billion in additional government revenue.
In addition, the investment would enable some R468.8 billion in potential production from 2025 to 2035. This production would, over the ten-year period, add an estimated R505 billion to South Africa’s GDP, create and/or sustain an estimated 116 000 direct and indirect jobs (on average per year) and generate an estimated R133 billion in government revenue.
On 16 April 2018, President Cyril Ramaphosa announced his five-year, US$100 billion investment drive in a bid to revive the South African economy. According to the president, his initiative is a response to the drop in total fixed investment in South Africa from 24% of GDP in 2008 to 19% of GDP in 2017, and foreign direct investment (FDI) inflows dropping 77% in rand terms over the same period 1.
Shortly after this announcement, President Ramaphosa began an international roadshow promoting trade and investment agreements with existing South African partners. A team of investment envoys was assembled to support the presidency, made up of former finance minister Trevor Manuel, former deputy finance minister Mcebisi Jonas, Afropulse executive chairperson Phumzile Langeni, and chairman of Liberty Group Jacko Maree. In addition, economist Trudi Makhaya was appointed as the president’s economic advisor.
Early results 
Initial investment pledges were made by the governments of the United Arab Emirates (US$10 billion), the Kingdom of Saudi Arabia (US$10 billion) and the Republic of China (US$14.7 billion)5.
In an announcement about the Presidential Investment Summit held in October, investment envoy, Jacko Maree supported the President’s benchmark vision of a 50/50 split between local and foreign investment to make up the projected $100 billion total sum6.
FDI is an important enabler of economic growth. For emerging market economies, foreign investment inflows are crucial for transferring money and expertise from multinational companies to local enterprises. Emerging markets also need FDI to help finance infrastructure deficits.
President Ramaphosa was cognisant of this when, as the deputy head of the National Planning Commission (NPC), he oversaw the formulation of the National Development Plan (NDP) 2030, published in 2012. The NDP aimed for total fixed investment to rise from below 20% of GDP at the start of the current decade to 30% of GDP by 2030.
The NDP also planned for public sector investment to account for 10% of GDP by 2030. In 2017, total fixed investment was recorded at 19% of GDP, with around 80% of the investment coming from the private sector.9
In other words, both the overall investment target as well as the public investment target have not been met.
This is indicative of the fact that the South African economy needs significant investment stimulus.
Outcomes of the Investment Conference 
The key sectors targeted by the summit were: 
• Agriculture and agro-processing; 
• Mining and minerals beneficiation; 
Heavy manufacturing; 
• Water and transport infrastructure; 
• Energy; 
• Information, communication and technology; 
• Manufacturing; 
• Tourism, business process outsourcing, and film; and 
• Venture capital. 
During his final address to the summit, President Ramaphosa declared that during the course of the day “nearly R290 billion” had been pledged by both local and international companies seeking to participate in the President’s five-year plan.
Unemployment remains one of government’s core concerns. In August 2018 , President Ramaphosa declared the urgency “to develop and implement a stimulus package to ignite growth that will lead to the creation of jobs, especially for young people and women”.10 To this end, some of the investment pledges also specify job creation targets, including those by Sumitomo Rubber, Anglo America and McDonald’s.
Estimated economic impact of the promised investment
The R284.6 billion of investment pledged is expected to support long-term economic benefits for South Africa, including stronger real GDP growth, the creation of jobs and generation of additional tax revenue.
We estimate the potential economic activity over the next five years 
resulting from this investment will include:
• An estimated R338 billion added to GDP; 
• Creating and/or sustaining an estimated 165 000 direct and indirect 
jobs, on average, per year; and 
• An estimated R59 billion added to total government revenue, through 
both the collection of direct and indirect taxes.
These estimated economic impacts are only associated with the investment spending between 2019 and 2024.
Long-term economic contributions will be created by the additional production in the various sectors, once the investment phase is complete.
We estimate some R468.8 billion in potential production from 2025 to 2035 due to linkages. Our calculations show that the above-mentioned production would potentially contribute the following impacts over a ten year period: 
• R505 billion added to GDP; 
• Creating and/or sustaining an estimated 116 000 direct and indirect 
jobs, on average per year; and 
• R133 billion added to total government revenue.
When considering the economic impact results for each of the sectors, we see that the sector with the largest investment does not necessarily generate the largest long-term economic contributions: 
• The largest investment is captured within the mining sector; 
• Investment in the rubber sector generates the largest GDP multiplier 
effect; 
• In terms of the jobs created and tax revenue generated through the investment, the food sector has the largest job and tax multipliers; and 
• The sector that generates the largest production from the investment is the transport equipment sector. This sector will also generate the most long-term economic benefit across all three performance indicators (GDP, employment and tax).
From our analysis, we see that the continued investment in South Africa would assist in reducing unemployment, poverty and improve people’s lives, which, in turn, would also support long-term economic growth.
This aligns with President Ramaphosa’s State of the Nation Address (SONA) 2018 in which he promised to use investment, among other levers, to address the country’s challenges of poverty and inequality.
However, this analysis is based on the assumption that all investment pledges, amounting to R284.6 billion, are translated into real investments, as the estimated economic contributions will be proportionate to the investment made. The challenge for South Africa is to ensure that the already-listed factors that influence investment are 
addressed. Investment pledges will only translate into actual investments if a supportive business environment, policy certainty and political stability are in place. These too were pledges of SONA 2018.
The well-attended Investment Summit was a showcase of South Africa’s attributes, and a place of conversation about how the country had progressed over the preceding eight months on the policy and political front. The R284.6 billion in investment pledges assessed here are testament to the perceived improvement in the local investment climate and the optimism around South Africa heading into 2019.
Provided by PWC

Estimating the potential economic impact of investment pledges made at the South Africa Investment Conference

<div id="attachment_322578" style="width: 625px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-322578" class="wp-image-322578" src="http://cnbc.africa/wp-content/uploads/2018/11/digital-finance_PxHere2.png" alt="" width="615" height="615" />Picture: PxHere</div>
We put academics and innovators together in the same room for a week. Guess what happened next.
By Nnamdi Oranye
Two weeks ago I had the immense privilege of speaking and being involved with a Colloquium at the University of Johannesburg called “Digital Finance in Africa’s Future”. The Colloquium was birthed from an idea I had some time last year that came in the form of a question: what would happen if we put Africa’s best innovators together in a room with academia and asked them some hard questions? Interestingly enough, I met two other Professors with the same idea – Prof. John Sharp and Prof. Peter Vale.
The result of this idea was absolutely mind-blowing.
In fact, the week far exceeded any of the expectations of those of us who were involved in setting it up. The opening night included a keynote address by Trevor Manuel, former South African Minister of Finance, and then a panel discussion on “The Impact of Digital Finance on Africa’s Future”. I was one of the panellists along with Stephen Mwaura Nduati, International Technology Consultant and former head of the National Payments Systems at the Central Bank of Kenya. We even had someone who came all the way from Chile just to be part of this Colloquium!
I want to focus on the big takeaway from this conference that I think is going to be incredibly important as we build innovation in Africa going forward. It’s simply this: All innovators should have an anthropologist by their side.
Sound odd? Actually, it’s less odd than you imagine. Anthropologists study human cultures and societies and their development. Immediately you can see how this would benefit any innovator. The concept of bringing academics like anthropologists together with innovators who are on the ground, solving African problems in African ways, is absolutely critical. At this colloquium, I saw how well it worked.
Here’s an example of why this is so needed. An innovator who attended told me off-hand about some interesting stats when it comes to the average life cycle of an innovator in Africa. He was part of an accelerator programme, and of the eleven people who were part of that programme, only two are still “alive” today in the innovation and tech space. That’s an incredibly low conversion rate! And if one of those two is still going on in two or three years time, I’d be impressed. These stats are so dire that we have to have a different approach to innovation in Africa. There’s no choice. We don’t have something like a Silicon Valley where there is just money lying around that we can throw here and there and hope something will be successful. We can’t take those sorts of risks.
One of the ways of sorting this out, as far as I’m concerned, is to make innovators aware of the potential challenges they’re going to face in the industry they’re coming into. The best way to help these innovators is to pair them with those who can guide them through social science, social history, and the history involved in the problem the innovators are trying to solve. Who better than an anthropologist?
Here are some examples to showcase the beauty of this pairing.
<ol>
<li>Mobile Money’s Ethiopia problem</li>
</ol>
Professor Mesfin Woldmariam from Ethiopia at the Colloquium talked us through some of his research that asks why it seems mobile money &#8211; which has been so largely successful in many African countries &#8211; has not taken off nearly as well in Ethiopia. The reason, according to the research, has to do with literacy.
Here’s an example of a point he made. Cash is easy to work with. You know how to distinguish its value just by looking at it. For example, if it’s green and has Madiba’s face, you know it’s a ten rand. You don’t need to know how to read the number ‘10’. But if you decide to remove the cash and digitise it, you run into a problem where value is only determined by a number &#8211; not by colours or sizes or faces on notes. For people who can’t read or understand numbers, this is not helpful at all. They simply don’t know or understand the value of R501.67 in their mobile phone’s wallet.
Plus, this opens up other problems. For instance, a grandmother might give one of the young ones the cellphone and instruct them to go to the closest agent and have the money stored on their mobile money account converted to cash. Neither the child, nor the grandmother, might have that good of an idea how much money is actually in the account. So when they get to the agent he gives the child R400, but in reality the account had R500. He pockets the rest and lies to the child about the value on the account. It’s way too easy to manipulate.
These are the sorts of things we have to think about. How do you keep the same methodology people are used to &#8211; ascertaining the value of cash by looking at it and feeling it &#8211; and transfer that to the digital space, which is safer and more convenient in other respects?
<ol start="2">
<li> Insurance resurgence</li>
</ol>
Here’s a second example. For a very long time it’s been difficult to find a clear and efficient way to provide insurance to Africans on our continent. Insurance is primarily a foreign concept to many &#8211; and for good reason. But one of the academics at the Colloqueim provided an interesting argument that is well worth pursuing. It starts with realising that we have to change how we define insurance in the first place.
In most African contexts people make a lot of investment into social networks. We do this because we know family will be there even when other things collapse. We can trust family and we’re always keen to help each other. Even close friends are incorporated into this circle. The logic goes that if anything happens to you then you know your kids are going to be taken care of, because you’ve invested into your family and your social networks in a big way.
This is an African thing. But it’s also far more than that. It’s actually, if you think about it, a form of insurance. It’s just not typically how we think of ‘insurance’ and how we classify it &#8211; when you put, say, R550 aside every month into some or other bank account.
So when we think of how we innovate in this area, how do we innovate around how Africans already actually ensure their futures? Another question worth pondering &#8211; and doing something about.
<ol start="3">
<li> Remittance </li>
</ol>
This was a fascinating example and it links to both of the above. When a bunch of anthropologists decided to actually track money sent from a young man in the diaspora back home they uncovered some very interesting facts.
In most cases, money appears to go to mothers or grandmothers. What is the reason for this? Well, after some research the answer was uncovered: because the mothers and grandmothers have their ears to the ground. They know who is in dire straits and needs the money. They make the decisions as to who gets what and for how long. The distribution, the anthropologists found, was not usually haphazard. Umama’s and Gogo’s know what they’re doing!
The conclusion was we cannot assume that just because people don’t have bank accounts that they are financially excluded. The way the money flows is just very different to the formal financial sector. There is a financial system that functions and is already in place. Research into Kenya found that the reason why M-Pesa is so successful there is because it has piggy-backed off this financial system that was already in place. All they did was took what the culture was doing and made it easier and safer. Instead of cash going to the mothers or grandmothers it now goes to their cellphone, and they know what to do with it once it comes in. This means we need to change our view on what financial inclusion means for people in Africa &#8211; and we must learn the lesson to look at how Africa functions and innovate based on how we already think and work and live.
There was a lot of discussion at the Colloquium about intellectual property (IP) and the impact of IP laws we’ve inherited from the colonial system and that sort of thing. All of this actually has tremendous impact and relevance to innovators, and getting them into the same room with academics has worked much better than even I dared to dream. In short, it’s put a fire in the heart of many of the innovators I spoke to. They’re seeing things more clearly &#8211; and putting more creativity into the right places. And this is the first step of many that I hope will pick up the pace and get us running!

Op-Ed: The Future of Digital Finance in Africa

JOHANNESBURG (Reuters) &#8211; South Africa’s Home Affairs Minister Malusi Gigaba has resigned, the presidency said on Tuesday, following calls from opposition parties to stand down in recent weeks over a High Court ruling which found he lied under oath.
Gigaba, who was finance minister between March 2017 and February 2018, has denied any wrongdoing. Gigaba, who in February was reappointed home affairs minister, last month apologised over a private sex video that was leaked.
Reporting by Nqobile Dludla; Editing by James Macharia

Gigaba resigns as South Africa’s home affairs minister, Nzimande appointed as acting minister

JOHANNESBURG (Reuters) &#8211; A South African court on Tuesday approved an application by the central bank to wind up VBS Mutual Bank, which was caught up in a corruption scandal this year.
A report commissioned by the South African Reserve Bank and titled “The Great Bank Heist” found that at least 1.9 billion rand ($132 million) had been looted from VBS and that its financial statements had been misstated.
The regulator placed the small lender under curatorship before applying last month to the High Court to close it down for being “hopelessly insolvent”.
“There is no reasonable probability that the continuation of the curatorship will enable VBS to pay its debts or meet its obligations and become a successful concern,” court papers filed by the Reserve Bank said.
The collapse of VBS has prompted an outcry in South Africa because many municipalities had deposits with the bank. More than 50 individuals and firms are alleged to have benefited from the fraud.
VBS was thrust into the spotlight in 2016 when it provided a 7.8 million rand loan to then-president Jacob Zuma to reimburse the state for lavish upgrades to his private residence including a swimming pool and amphitheatre. ($1 = 14.3926 rand)
Reporting by Alexander Winning; Editing by Dale Hudson

South African court orders VBS Bank to be liquidated

CAPE TOWN (Reuters) &#8211; South African mobile phone group MTN Group plans to apply for payment banking license in Nigeria and launch a service in Africa’s biggest economy by the second quarter of 2019, its chief executive said on Tuesday.
“We will be applying for a payment service banking license in Nigeria in the next month or so, and if all goes according to plan, we will also be launching Mobile Money in Nigeria probably around Q2 of 2019,” Rob Shuter said.
Reporting by Wendell Roelf; Editing by James Macharia

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