<a href="https://theconversation.com/profiles/nathanial-matthews-109013">By Nathanial Matthews</a>, <a href="http://theconversation.com/institutions/kings-college-london-1196">King&#8217;s College London</a> and <a href="https://theconversation.com/profiles/frank-van-steenbergen-580803">Frank van Steenbergen</a>, <a href="http://theconversation.com/institutions/utrecht-university-1354">Utrecht University</a>
One of the fastest growing economies in Africa, Ethiopia, has an <a href="http://www.ethcrge.info/crge.php">ambitious plan</a> to cut a green, sustainable path to becoming a middle-income country by 2025. Along the way, the country faces growing urban migration and rising demand for food – challenges that are linked by, and depend on, roads for access, supply and mobility.
In 1997, the total road network in Ethiopia was 26,550 kilometres. By 2014 it reached 99,522 km. For the country to reach its ambitious growth targets it’s aiming to double this to over <a href="http://www.globalconstructionreview.com/news/ethiopia-double-road-network-200000km-2020/">200,000 km by 2020</a>.
But new roads in Ethiopia and across sub-Saharan Africa often change the landscape, bringing dust, flooding and erosion. The impact is felt most by rural communities. Roads can negatively affect water flows to wetlands, block fish movements and cause landslides, as well as impact the livelihoods of millions of people.
There is a solution: an <a href="http://www.globalresiliencepartnership.org/wp-content/uploads/2018/02/Meta-Meta-Solution-Statement.pdf">approach</a> to road building developed by Dutch social enterprise MetaMeta shows that it’s possible to reduce the impact of new roads and support food production by harvesting excess water.
Under a project rolled out in Ethiopia as well as nine other countries including <a href="http://www.globalresiliencepartnership.org/teams/metameta/">Bangladesh</a>, roads are being built using innovative designs and drainage structures to collect water caused by flooding. This has solved an infrastructural issue while conserving water that can be used for crops and to feed livestock.
<h2>Well built roads</h2>
Practitioners at <a href="http://metameta.nl/">MetaMeta</a> found that more than a third of households in Tigray, northern Ethiopia, reported flooding as a result of new roads with negative effects on crop production for around one in ten households.
The study found that poor road construction can lead to soil erosion on farms and plots of land hugging the roadside. In addition, construction can increase the cost of road maintenance and repairs. This in turn limits transport options, including restricting access to markets, schools and hospitals. The net cost is damaged livelihoods.
One solution, developed by MetaMeta, helps both mitigate the impact of new roads and support food production by harvesting excess water with “smart roads”. A project called <a href="http://roadsforwater.org/">Roads for Water</a> is testing the concept. Funded by the <a href="http://www.globalresiliencepartnership.org/">Global Resilience Partnership</a>, an independent partnership of public and private organisations focusing on the most vulnerable people and places, this project uses innovative road concepts, designs and <a href="https://link.springer.com/chapter/10.1007/978-3-319-66239-8_7">drainage structures</a> to collect water caused by flooding.
For example, roads can route water to storage ponds or underground aquifers. Road drifts can help to retain water in dry riverbeds, and ensure systematic spreading of floodwaters.
By harvesting rainwater, communities living near road networks can increase their resilience to shocks such as floods and droughts.
In Ethiopia the project showed that USD$1,800 per km investment is sufficient to implement such measures, and can directly benefit over two million people.
This compares favourably with annual maintenance expenditures <a href="http://roadsforwater.org/wp-content/uploads/2013/10/the-burden-of-maintenance_roads-in-SSA.pdf">per kilometre of USD$1,100 per year</a> on rural roads in sub Saharan Africa and a periodic maintenance of USD$11,200 often incurred from water damage.
These smart roads are increasing resilience to shocks, such as floods because water is being harvested and maintenance costs are reduced. They are also driving down the cost of road construction through, for example, the reuse of borrow pits for permanent water storage rather than requiring them to be backfilled. This is a considerable cost saving measure and additionally creates a local water resource.
In <a href="https://edition.cnn.com/2017/09/01/asia/bangladesh-south-asia-floods/index.html">Bangladesh</a>, for example, smart roads are helping build resilience to floods that submerged a third of the country last year. If countries like Ethiopia and Bangladesh are to become more resilient they will need innovative solutions to an increasingly uncertain climate.
The importance of building resilient roads will only intensify as populations grow and countries develop.
Globally, an estimated 900 million rural people still don’t have access to road and transport infrastructure. The <a href="http://blogs.worldbank.org/ppps/forecasting-infrastructure-investment-needs-50-countries-7-sectors-through-2040">investment gap</a> on global roads is expected to approach USD$1.6 trillion per year for the next 40 years as increasing amounts of roads are built, especially in the developing world.
But solutions for better roads won’t work unless they are driven by local ideas and are compatible with local needs and contexts. Collaboration and buy-in between local partners – from engineers to technicians, farmers, labourers and governments departments – is critical. Solutions as simple as bringing the ministry responsible for roads together with the ministry responsible for water and talking them through the challenges and opportunities can produce remarkable results.
_Frank van Steenbergen, the head of MetaMeta, also contributed to the article. _<img loading="lazy" decoding="async" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/104720/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />
<a href="https://theconversation.com/profiles/nathanial-matthews-109013">Nathanial Matthews</a>, Senior fellow, <a href="http://theconversation.com/institutions/kings-college-london-1196">King&#8217;s College London</a> and <a href="https://theconversation.com/profiles/frank-van-steenbergen-580803">Frank van Steenbergen</a>, Water management specialist, <a href="http://theconversation.com/institutions/utrecht-university-1354">Utrecht University</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/africas-roads-are-badly-built-and-there-arent-enough-this-can-be-fixed-104720">original article</a>.

Africa’s poor road construction can impact the livelihoods of millions of people, here’s how Ethiopia plans to fix it

By <a href="https://theconversation.com/profiles/thomas-kochan-155721">Thomas Kochan</a>, <a href="http://theconversation.com/institutions/mit-sloan-school-of-management-1878">MIT Sloan School of Management</a>
The <a href="https://www.wired.com/story/google-walkout-just-latest-sign-tech-worker-unrest/">recent walkout</a> by thousands of Google employees at offices around the world was the first protest of its kind by well-paid and benefit-rich high-tech workers.
The collective action was triggered by a report that their employer had <a href="https://www.nytimes.com/2018/10/25/technology/google-sexual-harassment-andy-rubin.html">awarded several top male executives accused of sexual misconduct</a> multimillion-dollar exit packages. But <a href="https://www.instagram.com/p/BpnoQ3DBRZ1/?taken-by=googlewalkout">their list of demands</a> suggests the roots of the crisis go much deeper.
To me, it’s a reminder of just how outmoded American labor laws are, <a href="https://scholar.google.com/citations?user=QfH1gOcAAAAJ&amp;hl=en&amp;oi=ao">a primary area of my research</a> these days. In fact, the underlying grievances that motivated the Google employees to walk out are emblematic of what’s prompting millions of American workers to feel they have lost their voice.
And unfortunately, U.S. labor law no longer has their back. The walkout by these non-union professionals at Google, however, might change that.
<h2>Five demands</h2>
The brief walkouts took place in about 40 Google offices including New York, London, Singapore and the company’s headquarters in Mountain View, California.
They followed a <a href="https://www.nytimes.com/2018/10/25/technology/google-sexual-harassment-andy-rubin.html">New York Times investigation</a> that found that the search giant gave Andy Rubin, the creator of its Android mobile software, a US$90 million exit package despite a credible claim of sexual misconduct. The report said two other executives received similar treatment.
The leaders of the walkout presented a list of five demands on an <a href="https://www.instagram.com/p/BpnoQ3DBRZ1/?taken-by=googlewalkout">Instagram page</a>:
<ol>
<li>an end to forced arbitration in cases of harassment and discrimination</li>
<li>a commitment to end pay and opportunity inequality</li>
<li>a publicly disclosed sexual harassment transparency report</li>
<li>a clear, uniform, globally inclusive process for reporting sexual misconduct safely and anonymously</li>
<li>promote the chief diversity officer to answer directly to the CEO and make recommendations directly to the board of directors. In addition, appoint an employee representative to the board.</li>
</ol>
The demands signal, in my view, a deep dissatisfaction with the lack of effective channels for reporting and resolving harassment claims, as well as a distrust of human resources, a department tasked with looking out for employees’ legal rights and enforcing company policies.
<h2>Workers losing their voice</h2>
The Google walkout has little precedent to help us understand what might happen next.
For one thing, it’s the first time employees at a high-tech company – with their <a href="https://www.thisisinsider.com/coolest-perks-of-working-at-google-in-2017-2017-7#googlers-also-reap-the-benefits-of-working-at-some-of-the-most-unique-and-beautiful-offices-in-the-world-5">free meals and on-site gyms</a> – staged a public protest. For another, it spanned multiple countries, a feat that very few unions are able to pull off. Finally and perhaps most importantly, the demands put forward go well beyond those covered under U.S. labor law.
The thing that comes closest to it is the spontaneous strike by 25,000 executives, managers and employees at the Market Basket grocery chain in Massachusetts in 2014 to <a href="https://www.bbc.com/news/business-28580359">protest the firing</a> of their CEO in a family dispute over strategy. After a six-week strike and a consumer boycott, the board capitulated and sold the company to the CEO. At the time, <a href="http://www.wbur.org/cognoscenti/2014/09/03/market-basket-collective-bargaining-thomas-kochan">I called it</a> the most successful strike of the 21st century.
Both Market Basket and Google are examples of outbursts of employee tensions that have long been simmering among the private workforce. In a <a href="https://gcgj.mit.edu/new-paper-worker-voice-appear-ilr-review">recent national survey</a> we conducted at MIT, a majority of workers <a href="http://theconversation.com/who-wants-to-join-a-union-a-growing-number-of-americans-102374">said they don’t have as much of a voice</a> as they believe they should on a range of issues, from compensation and benefits to protections against harassment and respect for their labor.
Astoundingly, almost half of respondents said they would join a union if given the chance, a number that has increased from about one third in comparable surveys conducted in prior decades.
Yet, in case after case, companies have suppressed worker efforts to form a union, as we saw at <a href="https://www.nytimes.com/2017/02/15/business/boeing-union-south-carolina.html">Boeing facilities in South Carolina</a>, <a href="https://www.freep.com/story/money/cars/2017/08/04/uaw-wins-loses-organizing-vote-nissan-plant-mississippi/540679001">Nissan’s Mississippi factory</a> and <a href="https://www.washingtonpost.com/news/wonk/wp/2014/02/14/united-auto-workers-lose-historic-election-at-chattanooga-volkswagen-plant/?noredirect=on&amp;utm_term=.77286762fbdb">Volkswagen’s Tennessee plant</a>.
<h2>No legal standing</h2>
Like at Market Basket, Google’s employees have no legal standing to require their employer to negotiate with them, particularly over the issues they care about.
Legal standing only comes if they go through <a href="https://doi.org/10.1177/001979390806200101">what is almost always</a> a hotly contested, long and usually futile election process overseen by the National Labor Relations Board.
And should they try, these employees would quickly find the board would rule a good number of them ineligible for coverage for several reasons, such as their being managers, contract employees or simply outside the U.S.
Furthermore, their demands – such as an employee rep on the board or requiring the chief diversity officer to report to the CEO – are outside the narrow confines of what the labor relations board considers “the mandatory scope of bargaining.”
And the demand to eliminate forced arbitration would likely end up at the Supreme Court, which <a href="https://www.law.cornell.edu/supct/html/99-1379.ZS.html">has already issued a ruling</a> that backs companies’ right to do it.
<h2>But powerless?</h2>
All this is not to say that Google employees are powerless to achieve the “structural changes” they seek.
Although labor law won’t protect them, they might be able to use the hundreds of millions of Google’s customers – of its search engine, email program or mobile phone software – to pressure executives to negotiate in good faith.
In this regard, Google might be wise to look to Market Basket for guidance. Because of the strong customer support of the workers in that dispute, <a href="https://www.boston.com/news/business/2015/08/22/a-year-later-things-are-going-pretty-well-for-market-basket">business plunged by 90 percent</a>, which is likely what compelled the board to give in.
In other words, if Google’s employees hold steady despite the lack of federal protection, they could not only end up changing their company’s policy on harassment, but become the vanguard that could help disrupt U.S. labor law in the process.<img loading="lazy" decoding="async" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/106305/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />
<a href="https://theconversation.com/profiles/thomas-kochan-155721">Thomas Kochan</a>, George Maverick Bunker Professor of Management Professor, Work and Organization Studies Co-Director, MIT Sloan Institute for Work and Employment Research, <a href="http://theconversation.com/institutions/mit-sloan-school-of-management-1878">MIT Sloan School of Management</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-googles-employees-walked-out-and-what-it-could-mean-for-the-future-of-labor-106305">original article</a>.

Here’s why Google employees at offices around the world are protesting

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By: Amadou Hott, Vice-President of Power, Energy, Climate Change &amp; Green Growth at the African Development Bank
Accessible, reliable and affordable energy is the cornerstone of transformational socio-economic development. For Africa, delivering sustainable development is dependent on meeting the continent’s energy needs in order to lift populations out of poverty, catalyze industrialization, and stimulate economic growth.
Despite the continent’s abundant energy resources, energy poverty is still rife in the continent with close to 600 million people lacking access to electricity. This sets nations back on meeting energy access goals, retards industry progress, and diminishes the continent’s economic growth by 2 to 4 percent every year.
On a positive note, energy access has improved in recent years with the number of people without access in sub-Saharan Africa falling for the first time in absolute terms, and with countries such as Ethiopia, Kenya and Rwanda leading the pace. Africa is at the forefront of distributed energy systems that can increase energy access in rural areas faster, more cheaply, and more widely than conventional grid extension, driven by innovative business models and rapidly decreasing technology costs. At the same time, renewables are on the rise across the continent with significant renewable generation capacities added in countries such as Egypt, Morocco and South Africa.
Renewable energy investments are also on the rise across the continent from Senegal, to Kenya, and Zambia. While this progress is encouraging, the pace of energy access falls far short of meeting the universal energy access target by 2030.
Closing the gap on Africa’s energy challenges presents major opportunities for investors keen on engaging with the continent, especially on helping Africa meet the shortfall in the estimated $90 billion required to achieve universal energy access by 2030.
Clearly, these financing needs are of such magnitude that no single institution is capable of meeting them in isolation. This is why development finance institutions need a pragmatic shift in how they do business and leverage scarce public resources in order to mobilize private sector financing at scale, “from billions to trillions”.
The African Development Bank is leading by example. For instance, the Bank launched the Facility for Energy Inclusion to close funding gaps in the small-scale energy infrastructure sector, and catalyze last-mile energy access. Through a mix of commercial and concessional instruments, the facility provides low cost of capital, and mitigates key credit and currency risks. Additionally, the recently approved the Room2Run transaction allows the Bank to effectively transfer the credit risks of selected loan portfolios to investors, which lowers the total risk consumption of the Bank.
This initiative will enable the Bank to recycle capital efficiently in order to boost lending capacity and enhance private sector investments. The transaction has already attracted major support from partners like the European Commission who will provide a $100 million guarantee to be channeled into renewable energy projects in Africa. Ultimately, this will free up around $700 million, which can be re-allocated to new projects.
Multiple barriers hinder investments and private sector participation which could potentially fast-track energy access. These include lack of an enabling policy environment for investors, and other systemic bottlenecks that slow down transactions and escalate project costs. Transforming the energy landscape calls for a multi-faceted approach to unlock private sector capital by resolving these barriers in order to create the ideal conditions for investments in the continent.
The African Development Bank in close collaboration with other development partners is perched on the apex of creating a vibrant marketplace that will deliver the energy transformation necessary to move Africa forward. The Bank is dedicated to eliminating and minimizing barriers for investors, primarily through financial instruments to de-risk transactions, disseminating knowledge and market data, and facilitating peer-to peer learning and networking. Private sector engagement is on the rise, buoyed by various partnerships such as the New Deal on Energy for Africa and the US-led Power Africa Initiative.
To sustain this momentum, the bank convened the inaugural Africa Energy Market Place (AEMP) in Abidjan in July 2018. The AEMP is a platform for public private dialogue, and is set up to address barriers to mobilizing and scaling-up private investment into the energy sector. Effectively, AEMP reviews and prioritizes transformative energy transactions, and accelerates reforms in order to attract private investments and create a pipeline of bankable projects. Five countries participated in the inaugural edition: Côte d&#8217;Ivoire, Egypt, Ethiopia, Nigeria, and Zambia.
The conversations that began at the AEMP are set to continue in November’s Africa Investment Forum (AIF) in South Africa. The forum convenes project sponsors, borrowers, lenders and investors with a shared interest in closing Africa’s infrastructure gap which is estimated to be anywhere between $130–$170 billion per year.
By convening,and facilitating mutually beneficial dialogue amongst stakeholders who can dramatically impact Africa’s energy landscape, the Bank is creating the requisite foundation for accelerated private sector investments in Africa’s energy sector to achieve universal energy access.
Indisputably, this will put the continent steadily on the path to socio-economic growth, and sustainable development.

OpEd: Why financing Africa’s energy infrastructure is a major opportunity for investors

By Jared Jeffery, Political Analyst at NKC African Economics
On Monday, November 5, the European Union (EU) recalled its ambassador to Tanzania, Roeland Van de Geer, because of the worsening human rights situation. This comes after Dar es Salaam Regional Commissioner Paul Makonda said that he would set up a squad to hunt down and arrest gay people.
The Tanzanian ministry of foreign affairs issued a statement on Sunday, November 4, distancing itself from the commissioner’s plan, saying it was his “opinion” and not the state’s position. The ministry said the government would respect human rights.
As there has been no news of Mr Makonda’s squad, it must be assumed that his plan has been blocked. However, The Guardian quoted an activist on Monday saying that houses were being raided and potentially targeted people were leaving the city for safety.
Mr Makonda’s public weeping at the Efatha Church on Sunday can perhaps be interpreted as an attempt to garner public sympathy before the fallout.
Regional commissioners are appointed by the president, and past controversies surrounding Mr Makonda – which he surprisingly survived – have created the impression that he is one of President John Magufuli’s closest allies and enjoys special protection.
For example, in March 2017 Mr Makonda stormed into the offices of Clouds FM Media Group with six armed men to insist they air a video alleging a popular pastor had had an affair; soon thereafter, Mr Magufuli fired not Mr Makonda but the information minister for launching an investigation into the incident.
&#8220;I, as president, don&#8217;t let anyone tell me what to do. I decide who should be where. So you Makonda, do your job and ignore the rest,&#8221; was the president’s answer to criticism.
More recently, there was controversy this year over a shipment of furniture the commissioner tried to import without paying taxes. He said that the 20 containers with furniture allegedly for teachers’ offices were aid from Tanzanians in the US, according to local newspaper The Citizen. This time, however, Mr Magufuli did not back up his ally.
The president in August called on Mr Makonda to pay the tax on the furniture and implied in his comments on the matter that the commissioner was being deceitful: “What if they come from your friends and you have imported them for your business interest but you use teachers as a scapegoat? Even the beneficiary schools are not mentioned, what does that mean? It means you want to use teachers to import furniture. What if they end up in some shopping mall somewhere?” he is quoted saying.
That he did not fire Mr Makonda for his pet peeve – the misuse of government office – speaks to the importance of the relationship and also shows that Mr Magufuli’s principles are more flexible than popularly believed.
It will be interesting to see how the president reacts this time seeing as the controversy over his favoured commissioner has gone international.
He will not want to be seen to be bowing to international pressure, and he seemingly does not have an issue with Mr Makonda’s stance on homosexuality – repression of LGBT+ groups has only increased under Mr Magufuli.
The EU will want to see some assurance that the government meant what it said in its statement about human rights and dismissing Mr Makonda appears to be the minimum gesture on this front.
Pressure from the EU to respect rights is potentially a positive development, but it would need to be wider than the focus on LGBT+ rights to have an effect.
The political environment in Tanzania has deteriorated significantly over the past three years with leaders of opposition parties routinely arrested (Zitto Kabwe of the Alliance for Change and Transparency-Wazalendo just last week), media freedoms curtailed, and protests effectively banned.
In short, there is little opportunity for local actors to have an effect. Pressure from liberal countries could help open the political space once again or it could drive Tanzania closer to China (which does not put conditions on assistance) and cause Mr Magufuli’s administration to become even more repressive.

OpEd: What you need to know about Tanzania’s homosexual crackdown fallout

INFOGRAPHIC: Reasons to invest in South Africa

ABUJA (Reuters) &#8211; Nigerian trade unions and the government agreed to a new minimum wage proposal on Tuesday, in an attempt to avert a planned nationwide strike following threats to shutdown Africa’s biggest economy, a union official said.
Unions, which have been discussing with the government a new minimum wage proposal, had planned to commence a strike on Tuesday.
Nigerian Labour Congress (NLC) General Secretary Peter Ozo-Eson said a committee set up with the government was recommending 30,000 naira as the new monthly minimum wage, after a series of meetings, up from the current minimum of 18,000 naira.
He said the proposal, which was negotiated by senior government officials including Labour Minister Chris Ngige, would be recommended to President Muhammadu Buhari on Tuesday.
“Following &#8230; the signing of the final report recommending 30,000 naira as the recommended new national minimum wage &#8230; the strike called to commence tomorrow has been suspended,” Ozo-Eson said.
“We all need to stand ready in a state of full mobilization in case future action becomes necessary to push for the timely enactment and implementation of the new minimum wage.”
Nigeria’s main unions launched a strike in September after the wage talks broke down. Unions initially wanted the monthly minimum wage raised to about 50,000 naira ($164). But the government, which is facing dwindling revenues due to lower oil prices, declined the proposal.
Unions later suspended strikes on their fourth day, saying the government had agreed to hold talks to discuss raising the minimum wage.[nL8N1WD44P][nL8N1WG0PN]
Buhari had vowed to review the wage due to a fuel price hike and currency devaluation in the last two years aimed at countering the effects of a global oil price plunge that hit the country hard. Nigeria is Africa’s biggest crude producer.
Buhari plans to stand for a second term at an election next February and his economic record will come under scrutiny, given previous pledges to raise living standards, tackle corruption and improve security.
Reporting by Camillus Eboh; Writing by Chijioke Ohuocha; Editing by Leslie Adler

What you need to know about Nigerian unions and government’s minimum wage agreement

JOHANNESBURG (Reuters) &#8211; South Africa’s rand weakened in early trade on Tuesday, in line with falls in stocks amid subdued investor appetite for riskier assets ahead of U.S. midterm elections later in the day.
At 0650 GMT, the rand traded at 14.1175 per dollar, 0.11 percent weaker, having closed in New York at 14.1625.
The currency is expected to trade in a range of 14.1000 to 14.4000 to the dollar on Tuesday, NKC African Economics said in a note.
The rand remained under pressure as markets favoured caution ahead of U.S. midterm Congressional elections, as policy decisions that could sway the economy, corporate decision-making and consumer spending hinge on the results.
Emerging market assets will likely respond inversely to movements in the U.S. dollar after the elections.
Government bonds were firmer early on Tuesday, with the yield on the benchmark instrument due in 2026 down 4 basis points at 9.110 percent.
Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.37 percent.
Reporting by Nomvelo Chalumbira; editing by Richard Pullin

Why U.S midterms are putting pressure on South African rand ahead of elections

<a href="https://theconversation.com/profiles/jannie-rossouw-135800">By Jannie Rossouw</a>, <a href="http://theconversation.com/institutions/university-of-the-witwatersrand-894">University of the Witwatersrand</a>
The South African Reserve Bank placed VBS, a small mutual bank, under curatorship in March this year against a backdrop of a serious liquidity crisis. The initial findings of the curator revealed significant financial losses, which prompted a decision to institute a forensic investigation. This was <a href="https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/8830/VBS%20Mutual%20Bank%20-%20The%20Great%20Bank%20Heist.pdf">completed</a> by early October and handed over to the banking regulator, the Prudential Authority. The report revealed widespread looting and subsequent cover-ups. The report was handed over to the country’s law enforcement authorities for further investigation and possible prosecutions. In <a href="https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/8830/VBS%20Mutual%20Bank%20-%20The%20Great%20Bank%20Heist.pdf">the words</a> of Advocate Terry Motau who headed up the investigation:
<blockquote>I have, for the past five months, investigated the sorry affairs of the VBS Mutual Bank. My report will reveal that the perpetrators of the heist at VBS made away with almost R2 billion.</blockquote>
Last week the banking regulator <a href="https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/8860/1VBS%20Liquidation%20release%2030%20October%202018.pdf">asked</a> a South African court to terminate the curatorship and for permission to wind up the affairs of the bank. The regulator argued that liquidation was necessary because VBS was hopelessly insolvent after being subject to massive fraud. This meant that there was no prospect of saving the bank. The South African Reserve Bank responded to questions on the issue from Jannie Rossouw, who is Head of School of Economic &amp; Business Sciences, at the University of the Witwatersrand.
<hr />
What drove the regulator’s decisions?
In the first instance the decision to place the bank under curatorship was taken because the bank regulator realised that swift action was needed given the liquidity crisis that had come to light. This was necessary both to protect depositors as well as to make sure that no further damage could be done to the bank. The welfare of the depositors and the speed of execution was important.
The decision to go to court and ask for VBS to be liquidated six months later followed evidence that came to light as a result of the forensic investigation. The report showed that the bank had been subject to massive fraud. It was incumbent on the regulator to take action in the light of this evidence. As argued in the application, the regulator believes that the damage done to the bank is irreparable. And that it can’t be saved.
Why the decision to go from curatorship to liquidation?
When a bank is put under curatorship, the curatorship provides tools and instruments to manage the bank’s liquidity and its operations to save the bank, to put it back on a sound footing and to protect depositor funds. The idea is that the bank can be nursed back to health.
So the aim of curatorship is ultimately to turn the bank around. An example of this being executed successfully in South Africa was African Bank which was put under curatorship. It continues to operate today.
But the law states that when the registrar of banks is of the view that the bank is insolvent, they are legally obliged to go to court to apply for liquidation. This does not mean that the bank cannot be saved. But it does mean that the registrar is of the view – based on all the available evidence – that the bank is insolvent and probably can’t be saved. That is, that the probability of the bank being saved is limited.
The decision to apply for liquidation was made on the basis that the Prudential Authority believes the final winding-up of VBS is in the best interests of all parties. It paves the way for two things to happen. Firstly, it will allow a liquidator to use the insolvency law and the Companies Act to effect recoveries – in other words to protect people who had deposited money with the bank. And, secondly, it will mean that the recommendations of the investigator into the affairs of VBS can be followed.
What does liquidation actually mean? What happens now?
Liquidation provides for the winding down of a bank under the terms set out in the Companies Act. The bank will still be managed to maximise depositor value, to collect on loans and to recover as much money as possible. It does, however, reduce the discretion on the creditor hierarchy. In other words a curator has more discretion about who gets paid out what amount. Under liquidation, that discretion is removed.
Nevertheless, the National Treasury has issued a guarantee that will ensure that 97% of retail depositors will be <a href="https://www.fin24.com/Companies/Financial-Services/vbs-retail-depositors-to-get-their-money-back-20180709">covered</a>. That guarantee will remain should the court agree to the bank’s liquidation.
What are the key lessons learnt from VBS?
There are a number.
The first is that audit reports need to be treated with a degree of circumspection. In some cases they will require independent verification.
Another lesson is that the bank regulator needs stronger tools to force a bank to convert from a mutual bank licence to a full bank licence when they get to the point of being too big to fall under the mutual bank regulations.
Mutual Banks are <a href="http://www.treasury.gov.za/comm_media/press/2018/2018031401%20TREASURYS%20RESPONSE%20TO%20THE%20VBS%20MUTUAL%20BANK%20MATTER.pdf">very different</a> to commercial banks. The three main differences are that they tend to be smaller, that some types of deposits in mutual banks qualify as an ownership stake in the mutual bank and lastly that they’re not regulated to the same standard as commercial banks. Because they don’t carry as many risks, the regulatory framework governing them is substantially lighter.
But the events of VBS have shown that supervising small banks requires more resources. This is true even though the failure of a smaller bank won’t necessarily lead to systemic risk – it won’t pose a threat to the entire banking and financial services sector. But the risks still need to be managed better.<img loading="lazy" decoding="async" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/106189/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />
<a href="https://theconversation.com/profiles/jannie-rossouw-135800">Jannie Rossouw</a>, Head of School of Economic &amp; Business Sciences, <a href="http://theconversation.com/institutions/university-of-the-witwatersrand-894">University of the Witwatersrand</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/explainer-lessons-from-the-collapse-of-a-small-south-african-bank-106189">original article</a>.

Explainer: What are the lessons learned from the collapse of South Africa’s VBS Mutual Bank ?

ADDIS ABABA (Reuters) &#8211; Eritrean President Isaias Afwerki says Eritrea and Ethiopia have built trust since signing a peace deal in July, but need to iron out further elements of their ties to make their cooperation sustainable.
The neighbours had been bitter enemies ever since a two-year border war, in which some 80,000 people were killed, broke out in 1998 following disagreements over trade.
Ethiopia’s prime minister, Abiy Ahmed, extended an olive branch in April, shortly after his appointment, as part of a package of reforms that have reshaped the political landscape in the Horn of Africa.
Since then, the countries have reopened crossing points and embassies and resumed flights between their capitals.
Isaias told state-run television that the peace deal had heralded a “transitional stage that will lead to a new era” between the neighbours.
“The priority now is to create an environment for this new reality to flourish,” he told Eri-TV late on Saturday.
“We need to consolidate. One by one, we have to clearly state our issues and solidify them on a concrete basis. The reality is new, but it has to be sustainable,” Isaias added, without going into specifics.
“The agenda of pitting Eritrea against Ethiopia as antagonists, an agenda that also sought to isolate Eritrea globally, has concluded. It never succeeded.”
Editing by George Obulutsa and Kevin Liffey

How Ethiopia and Eritrea can strengthen trust since signing peace deal

JOHANNESBURG (Reuters) &#8211; South Africa’s new Finance Minister Tito Mboweni said on Thursday that struggling state-run South African Airways (SAA) should be closed down, adding that decisions over the future of the state carrier were not under his remit.
SAA, which has not generated a profit since 2011, survives on state guarantees and is regularly cited by credit ratings agencies as a drain on the government purse.
“It’s loss-making, we are unlikely to sort out the situation, so my view would be close it down,” Mboweni told an investor conference in New York televised live on South African public broadcaster SABC.
“Why I say close it down is because it’s unlikely that you are going to find any private sector equity partner who will come join this asset,” Mboweni added.
In August, President Cyril Ramaphosa transferred oversight of SAA to the public enterprises ministry which is led by Pravin Gordhan from the finance ministry. Ramaphosa has pledged to revive struggling state firms, including SAA.
SAA CEO Vuyani Jarana has said he is mapping out a punishing austerity plan to turn the flag carrier around. He has said layoffs and other cuts were unavoidable.
In a dramatic fall from grace over the past decade, SAA has lost its place as Africa’s biggest airline and a symbol of patriotic pride to become a source of frustration for taxpayers who have forked out more than 30 billion rand ($2 billion) since 2012 to keep it in the air.
($1 = 14.4700 rand)
Reporting by Olivia Kumwenda-Mtambo; Writing by Joe Brock; Editing by James Macharia

Should South African Airways (SAA) be closed down? Why Mboweni thinks it should…

HARARE (Reuters) &#8211; President Emmerson Mnangagwa will retain John Mangudya for a second term as governor of the Reserve Bank of Zimbabwe, a state-owned newspaper reported on Thursday.
The announcement follows speculation this week that the bank chief, who was first appointed for a five-year term in May 2014, would lose his job in the face of a worsening dollar crunch.
But the president’s spokesman George Charamba told the Herald newspaper that Mnangagwa would keep Mangudya in his job.
“The President is very clear on the Reserve Bank Governor’s tenure and his performance. Not only is he there to stay but the President is about to renew his contract for a second tenure,” Charamba was quoted as saying.
Charamba declined to comment further when contacted on Thursday.
Two years ago, after the country was rocked by hyperinflation during the rule of former president Robert Mugabe, Mangudya introduced the surrogate “bond note” currency, supposedly pegged to the U.S. dollar.
Dollar shortages have caused prices of basic goods, taxis and medicines to rise in recent weeks.
The central bank chief has defended the use of bond notes, which have lost value against the dollar on the black market. He says a government budget deficit of 11.1 percent of GDP and a high import bill are the main causes of the U.S. dollar shortages.
Reporting by MacDonald Dzirutwe; Editing by James Macharia and Andrew Roche

What you need to know about Mangudya’s second term as Zimbabwe’s central bank governor

Bonolo Masilo began her work career at CHEP, a world leader in logistics and supply-chain management. Within six years, she was in a boardroom in London, presenting a proposal to the international leadership of the company.
She’d risen to become an innovation leader, had built a network of contacts that spanned the globe and been identified as one of her organisation’s brightest young talents.
Bonolo has been recognised as a precocious talent from the outset. CHEP started on this journey with her when they awarded her a full bursary for her operations-management studies at the University of Johannesburg, after which she joined the company in 2011 as a graduate trainee.
<img loading="lazy" decoding="async" class=" wp-image-321540 alignleft" src="http://cnbc.africa/wp-content/uploads/2018/11/Chep-e1541084523771.jpg" alt="" width="332" height="590" />
By 2015, she had risen in the organisation to become an operations supervisor, which kickstarted an interesting journey for her.
“I was probably the first CHEP female supervisor in the country,” says Bonolo. “It’s a male-dominated industry and you need to work a little harder than your peers to be recognised. But it does help you grow, and I emerged from the process stronger as a person and as a professional.”
Enhancing her growing reputation as a future star in her area was Bonolo’s selection for the company’s Bambanani inclusion and diversity project. This groundbreaking program saw the company develop a course that allowed each person to uncover their unconscious biases and address these, in order to make the organisation grow its people and its revenue. She was involved in facilitating 60 workshops across sub-Saharan Africa and develop a great deal from that.
The impact she made on the lives of her colleagues through Bambanani saw Bonolo selected for the CHEP talent development programme (TDP). This was a gilt-edged opportunity to work on a strategic project as part of a global team.
“I was the only staff member from South Africa chosen for the programme,” says Bonolo. “I met so many people, and got to grow my network in the sector, travelling to Spain, France and the UK.”
Bonolo says her involvement in the programme was a highlight of her career. 
“I really appreciate CHEP’s commitment to my development and that of everyone in the business,” she says. “To me it is clear why they’re seen as an employer of choice, and have been recognised by organisations like the Top Employers Institute for their exceptional employee offerings.”
Having blazed trails in her industry as a woman and a young person, Bonolo is now seeing her dedication bear fruit. She sees transformation rapidly gaining momentum in her sector, as more women find operations roles.
Bonolo says one of the keys to transformation is to build support networks with other women in the company and the industry. “We need each other. It’s good to have someone to talk to for advice and solidarity. It’s exciting to be making a real difference.”
She sees her future with CHEP, perhaps one day as an Operations manager. “I’ve had great mentorship from women in senior positions and I’m developing my skills, so I can get to the next level. I completed my BTech last year, and I might go for my masters next year. There are so many opportunities in our company.”
She insists that women can continue to make strides into previously male-dominated areas of business. “It’s not as difficult as it may seem. If you’re passionate about what you do, anything is possible.”
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Article provided by CHEP.

How this company is developing future supply chain leaders

JOHANNESBURG (Reuters) &#8211; Gold Fields said on Thursday the biggest workers union at its sole South African mine, South Deep, planned to strike over proposed job cuts, a move the bullion producer said would threaten output and could lead to even more layoffs.
Gold Fields plans to slash about 1,100 jobs, a near third of its workforce, at South Deep mine, where it has been working to mechanise operations in the face of challenging geology 3 kms (2 miles) below the surface.
“We are very concerned about the further impact that industrial action will have on the mine &#8211; and on our employees, with potentially more job losses,” Chief Executive Officer Nick Holland said.
The company said it might consider stopping production for a limited time.
The National Union of Mineworkers (NUM), which represents around 80 percent of the employees at the South Deep mine, planned to down tools on Friday, the bullion miner said.
“South Deep employees are not to be retrenched for poor management. We are going to be on strike until we can engage with South Deep management and the Department of Mineral Resources on how best we can avoid retrenchments,” said NUM South Deep branch Chair Kanetso Matabane.
Gold Fields, which employs about 3,600 people, said in August it would restructure operations at South Deep and would cut jobs in a cost-saving attempt.
The company said it aimed to reduce the number of contractors at the mine by approximately 420 people.
The firm had earlier said South Deep had lost 4 billion rand ($284 million) over the past five years.
Reporting by Tanisha Heiberg; Editing by Tiisetso Motsoeneng and Edmund Blair

South Africa’s Gold Fields union plans to strike over 1,100 job cuts

HARARE (Reuters) &#8211; Zimbabwe’s gold miner RioZim has closed its three mines due to a shortage of dollars, the company said in a letter to the central bank seen by Reuters on Wednesday.
RioZim is the southern African nation’s third biggest gold producer and early this month threatened legal action to force the Reserve Bank to pay it more U.S. dollars for part of its output.
Reporting by MacDonald Dzirutwe; Editing by James Macharia

Why Zimbabwe’s RioZim closed three of its mines

NAIROBI (Reuters) &#8211; The World Bank has approved $1.2 billion in grants and loans to Ethiopia.
The bank said in a statement posted on its website late on Tuesday that the funds — a $600 million grant and a $600 million loan — would go towards supporting reforms in the financial sector including improving the investment climate.
In response to the reform pledges made by the government since Prime Minister Abiy Ahmed took office in April, the bank is providing new financial and technical support, it said in the statement.
The support will promote public-private partnerships “to improve efficiency in key sectors” including telecom, power, and trade logistics, the bank said.
In these sectors, the bank said its support would also help the government “reduce inefficiencies and operating costs and improve financial performance” to help Ethiopia attract more foreign direct investment and raise export revenues.
Until Abiy took office and began announcing sweeping political and economic reforms, the country of 105 million had an economy tightly controlled by the state. Investors hope the economic reforms announced in June could significantly loosen the state’s grip on the economy.
Reporting by George Obulutsa; Writing by Maggie Fick; Editing by Alison Williams

The World Bank has approved $1.2 bn in grants and loans to this East African country

ZURICH (Reuters) &#8211; Former Ghana Football Association president Kwesi Nyantakyi was handed a life ban from all football-related activities by FIFA on Tuesday following various violations of the governing body’s ethics code, including bribery and corruption.
Nyantakyi, a former member of FIFA’s General Council, was found guilty after being filmed by an investigative journalist in a hotel room appearing to take a $65,000 bribe from a supposed businessman seeking to sponsor the Ghanaian football league.
He was also fined 500,000 Swiss Francs ($498,000).
“The adjudicatory chamber found Mr Nyantakyi guilty of having violated art. 19 (Conflicts of interest), art. 21 (Bribery and corruption) and art. 22 (Commission) of the FIFA Code of Ethics,” FIFA said in a statement.
“As a consequence, Mr Nyantakyi is banned for life from all football-related activities (administrative, sports or any other) at both national and international level.
“Additionally, a fine in the amount of CHF 500,000 has been imposed on Mr Nyantakyi.”
Nyantakyi, who was also a former vice-president of the Confederation of African Football, resigned in June after a recording by undercover journalist Anas Aremeyaw Anas appeared to show him demanding kickbacks to pass on to top government officials, including the presidency.
Nyantakyi later apologised to Ghana president Nana Akufo-Addo and the government for what he called his “indiscretion”.
He denied any wrongdoing regarding match fixing.
The scandal, along with undercover footage that showed numerous match officials receiving bribes, forced the suspension of the Ghana Premier League in June, which has still not resumed.
Former Ghana Football Association (GFA) board member Kofi Amoah was placed in charge of a four-member normalisation committee in September that was tasked with steering the affairs of football in the country for the next six months.
Nyantakyi and the Ghana FA could not be immediately reached for comment on Tuesday.
($1 = 1.0048 Swiss francs)
Reporting By Nick Said, editing by Pritha Sarkar

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Special Report

Africa’s poor road construction can impact the livelihoods of millions of people, here’s how Ethiopia plans to fix it

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OpEd: Why financing Africa’s energy infrastructure is a major opportunity for investors

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Explainer: What are the lessons learned from the collapse of South Africa’s VBS Mutual Bank ?

How Ethiopia and Eritrea can strengthen trust since signing peace deal

Should South African Airways (SAA) be closed down? Why Mboweni thinks it should…

What you need to know about Mangudya’s second term as Zimbabwe’s central bank governor

How this company is developing future supply chain leaders

South Africa’s Gold Fields union plans to strike over 1,100 job cuts

Why Zimbabwe’s RioZim closed three of its mines

The World Bank has approved $1.2 bn in grants and loans to this East African country

Why FIFA handed former Ghana FA president Nyantakyi a ban for life

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