LUSAKA/JOHANNESBURG (Reuters) &#8211; Zambia’s mining investment arm ZCCM-IH is seeking a controlling stake in Glencore subsidiary Mopani Copper Mines, Zambia’s mines minister said on Tuesday, after a disagreement over Glencore’s plan to halt production.



ZCCM-IH currently holds a 10% stake in Mopani Copper Mines. Glencore is the majority owner with 73.1% and First Quantum Minerals owns 16.9%.



A 10% stake was “not sufficient” to determine Mopani’s future, Mines Minister Richard Musukwa said in a statement, and ZCCM-IH was therefore seeking a larger stake “with a view to holding a controlling stake in Mopani”.



The mines minister told Reuters ZCCM-IH was seeking a 51% shareholding “or even more”.



Musukwa said the government has a team liaising with ZCCM-IH for the negotiations with Glencore, and ZCCM-IH is engaging a transaction adviser.



Glencore said in a statement discussions with ZCCM-IH “and other shareholders” were progressing and further updates would be issued as appropriate.



Asked about ZCCM-IH seeking a controlling stake in Mopani, a Glencore spokesman declined to comment.



A majority stake would require Glencore selling more than 41% of the company to ZCCM-IH.



Glencore’s announcement in April that it planned to suspend operations at Mopani, citing low copper prices and COVID-19 disruptions, sparked a backlash from Zambia’s government, which said Mopani had not given enough notice and threatened to revoke the company’s mining licences.



In May, Mopani said it would resume mining operations for 90 days but still expected to go into care and maintenance &#8211; a term for a temporary production halt during which a mine site is maintained ahead of an eventual restart.



On July 16 the company said it would appeal the mines ministry’s decision to reject its proposal to suspend the operations.



The government is working closely with labour unions and suppliers to ensure operations continue to run smoothly during the negotiations, Musukwa said.

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Zambia’s ZCCM-IH seeks to take control of Glencore’s Mopani Copper Mines

GABORONE, Botswana (Reuters) &#8211; The Botswana government said there was no guarantee that it would be able to renew a new 10-year sales agreement with De Beers before the end of December, when the current one expires, as the coronavirus pandemic has delayed negotiations.



“The ideal situation would be to end the talks by December but there are no guarantees that will happen,” said Mmetla Masire, Permanent Secretary in the Ministry of Minerals told Reuters in an interview late on Monday.



The deal is necessary for the Debswana Mining Company, jointly held by the world’s biggest producer De Beers and the Botswana government, as it provides the country with around two-thirds of its foreign exchange and makes up a fifth of its GDP.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="910" height="569" src="https://www.cnbcafrica.com/wp-content/uploads/2020/08/diamonds-black-background.jpg" alt="" class="wp-image-378169" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/08/diamonds-black-background.jpg 910w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/diamonds-black-background-300x188.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/diamonds-black-background-820x513.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/diamonds-black-background-768x480.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/diamonds-black-background-696x435.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/diamonds-black-background-600x375.jpg 600w" sizes="(max-width: 910px) 100vw, 910px" /></figure>



For De Beers, a new deal would mean another 10 years of clarity on the terms of its revenue stream from a country from where it sources 70% of its diamonds and 90% of its sales.



The wealth from diamond mining has helped transform the country from primarily a agri-based economy to one of Africa’s richest countries.



A delay would set back President Mokgweetsi Masisi’s efforts to boost a fledgling diamond polishing and cutting industry and create jobs in a country of 2.2 million with high unemployment.



Masire said the government had resumed talks for a new deal, but travel restrictions have kept the progress slow.



In 2011, De Beers agreed a deal to transfer its global sightholder sales, which accounts for 90% of its total diamond sales, from London to Gaborone, creating thousands of jobs and investment in the southern African country.



Botswana’s government would want a higher allocation of diamonds produced by Debswana for sale from the current 15% agreed in 2011, or get a larger share of rough stones, said Avi Krawitz, an analyst from Israel-based diamond information provider Rapaport.



“This will be a sticking point for De Beers,” he said.



Masire declined to divulge specific terms being negotiated in the talks.



De Beers, a subsidiary of Anglo American Plc, is an important business division for its parent contributing a fifth of its revenue. De Beers has not responded to an emailed request for comment sent on Monday.

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Botswana government says no guarantee on De Beers sales deal by end-2020

JOHANNESBURG (Reuters) &#8211; South Africa’s Nedbank said on Wednesday it was hopeful the worst impacts of the COVID-19 pandemic were in the past and that bad debts would fall in the next six months, after reporting an almost 70% decline in half-year profit.



The lender had in August already flagged a massive hit to its interim profit citing a spike in bad debt charges due to the coronavirus outbreak.



The company on Wednesday warned that profit for the full-year would likely fall by at least 20% and credit losses would be well above what was expected earlier this year, but added that things would improve going forwards.



“We are hopeful that the worst impacts of COVID-19 and the (Great Lockdown Crisis) are behind us and that impairments in the second half will be lower,” Nedbank said in its results statement.



The bank said its headline earnings per share &#8211; the main profit measure in South Africa &#8211; stood at 438 cents ($0.2605) in the six months to June 30 compared with 1,435 cents a year earlier.



That was mainly due to a hefty impairment charge for bad debts, which increased by 202% to almost 7.7 billion rand ($458.46 million), some of which was a provision for potential future losses.



The company said it was in the process of developing new business plans for the next three to five years and would update investors on these, as well as give revised medium-term targets at its full-year results in March.



It added that it was unlikely to declare a dividend as long as the guidance from the central bank, which asked lenders to hold off on paying out to preserve capital, remains in place.



($1 = 16.7955 rand)

NEDBANK CIB logo

S.Africa’s Nedbank hopes worst is over after posting almost 70% profit drop

As several African countries continue to grapple with spikes in Covid-19 cases, it remains difficult to foresee the Africa that will emerge from the virus. Does the pandemic present an opportunity “to reset Africa”, as suggested by the Nigerian entrepreneur Tony Elumelu, or will the continent’s leaders be faced with the same long-term challenges that have simply been exacerbated by the pandemic?



For months, Africa had escaped relatively unscathed as the global centre of the virus shifted from Asia to Europe to North America and South America. Yet we now know that the number of African infections and deaths is still rising. According to the World Health Organization back in July, 22 of Africa’s 54 countries found that cases had more than doubled in little over a month.



While the primary concern for policymakers should be the health of their citizens, the economic impact of Covid-19 is plain to see. The African Development Bank Group has projected that Africa’s GDP is to contract in 2020 by 1.7 percent in the baseline scenario, which assumes a substantial impact of the virus but over a short duration. The collapse in oil prices has hit Africa’s second and third largest economies &#8211; Nigeria and Angola &#8211; hard, while the collapse of tourism and a drop in demand for agricultural exports to Europe have devastated economies from Kenya and Ethiopia to Cote D’Ivoire, Mauritius and the Seychelles.



Across the globe, the pandemic has damaged international supply chains and many are in agreement that the future is, by necessity, regional. It is clear that economies are having to look inwards, considering how to best support local industry in order to navigate the impact of the ongoing pandemic. While the coronavirus may be a new phenomenon, supporting entrepreneurship and stimulating the diversification of African economies has been a long-term challenge.



As mentioned, the Nigerian entrepreneur Tony Elumelu has said “the pandemic presents an opportunity to reset Africa, create employment and eliminate poverty”, and that the continent must “embrace the new normal”, with disruption in every sector from the digital economy to logistics. He suggests that there is now a “unique opportunity for a united Africa as a strong regional bloc acting in a coordinated fashion”.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://www.cnbcafrica.com/wp-content/uploads/2020/08/Peter-Burdin-1-rotated.jpg" alt="" class="wp-image-379931" width="684" height="913" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Peter-Burdin-1-rotated.jpg 480w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Peter-Burdin-1-225x300.jpg 225w" sizes="(max-width: 684px) 100vw, 684px" /><figcaption>Peter Burdin -&#8220;If a transformation is to take place, it will require investment and training across the board.&#8221;</figcaption></figure>



The fact that the launch of African Continental Free Trade Area has been delayed challenges Elumelu’s plea for strong regional coordination, however, we have seen some examples of a coordinated approach between African nations that does provide significant hope.



Cameroon has sent planes to the Democratic Republic of Congo to help that country get medical support its more remote areas, the African Development Bank has denoted $4 million to South Sudan to bolster its fragile health system, and the African Union has launched a medical supplies platform for all 54 African countries. This is designed to make medical supplies, test kits and protective equipment available across the continent.



Something extraordinary is needed, and there are growing calls for investment to encourage African SMEs to create local supply chains in communities to boost employment. SMEs currently account for 90% of all businesses in Africa. If a transformation is to take place, it will require investment and training across the board. SMEs need support, training and financing to deliver solutions for manufacturing, healthcare, energy, digital innovation, infrastructure, agriculture and other sectors.



It is programmes such as the Citizens Entrepreneur Development Programme launched by the Economics Association of Zambia which exemplify the type of initiative that will be needed across Africa in the post-Covid world. In partnership with investors, including the Zambian business African Green Resources chaired by Zuneid Yousuf, and local NGOs, the independent programme has mobilised $1 million to support small businesses through the provision of funds, skills, and access to markets. The scheme hopes to bring economic opportunities to all parts of Zambia.



It is obvious that much more is needed across the continent to stimulate growth, and while it remains extremely difficult to say with any great confidence that economies will be “reset” following the pandemic, it is clear that that when we do reach the other side it cannot simply be business as usual. Long-term challenges remain, and it is true that they have been compounded by the events of 2020, but I remain an optimist.



 Peter Burdin, is the BBC&#8217;s former Africa Bureau Chief

Peter Burdin

OPINION:  Post Covid-19: Is this an opportunity to “reset” African economies?

(Reuters) &#8211; South Africa’s Nedbank Group said on Tuesday Raisibe Morathi has resigned as the chief financial officer (CFO) and executive director of Nedbank Group and Nedbank boards with effect from Sept. 30.



Mike Davis has been appointed as CFO designate with immediate effect and as the group’s CFO from Oct. 1, the financial services provider said in a statement.

South Africa’s Nedbank Group CFO Raisibe Morathi resigns

LONDON (Reuters) &#8211; The International Monetary Fund said on Monday central banks’ independence must be maintained, in a statement in response to a change of Zambia’s central bank governor.



Zambian President Edgar Lungu on Saturday dismissed central bank governor Denny Kalyalya and replaced him with former deputy finance minister Christopher Mphanza Mvunga.



“Without credible institutions and sound policies, sustained economic growth and much needed improvements in living standards will not be possible,” the IMF said.

IMF_logo

IMF says central banks must be independent after change of Zambia’s governor

(Reuters) &#8211; TikTok said on Monday that “we simply have no choice” but to sue the Trump administration over U.S. President Donald Trump’s executive order banning transactions in the United States with the popular short-form video-sharing app.



In a blog post, TikTok said it strongly disagreed with the White House’s position that the company was a national security threat, saying it had “taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data.”



It also said the administration has ignored its “extensive efforts” to address its concerns, and accused Trump of politicizing the dispute by calling for a ban on TikTok in an Aug. 6 executive order.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="594" height="427" src="https://www.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1.jpg" alt="" class="wp-image-352564" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1.jpg 594w, https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1-300x216.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1-584x420.jpg 584w" sizes="(max-width: 594px) 100vw, 594px" /><figcaption>WASHINGTON, DC &#8211; DECEMBER 11: U.S. President Donald Trump (2R) argues about border security with Senate Minority Leader Chuck Schumer (D-NY) (R) and House Minority Leader Nancy Pelosi (D-CA) as Vice President Mike Pence sits nearby in the Oval Office on December 11, 2018 in Washington, DC. (Photo by Mark Wilson/Getty Images)</figcaption></figure>



“We do not take suing the government lightly,” TikTok said. “But with the Executive Order threatening to bring a ban on our U.S. operations &#8230; we simply have no choice.”



The White House was not immediately available to comment.



TikTok’s complaint is expected to be filed later on Monday.



(Reuters) &#8211; TikTok said on Monday that “we simply have no choice” but to sue the Trump administration over U.S. President Donald Trump’s executive order banning transactions in the United States with the popular short-form video-sharing app



In a blog post, TikTok said it strongly disagreed with the White House’s position that the company was a national security threat, saying it had “taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data.”



It also said the administration has ignored its “extensive efforts” to address its concerns, and accused Trump of politicizing the dispute by calling for a ban on TikTok in an Aug. 6 executive order.



“We do not take suing the government lightly,” TikTok said. “But with the Executive Order threatening to bring a ban on our U.S. operations &#8230; we simply have no choice.”



The White House was not immediately available to comment.



TikTok’s complaint is expected to be filed later on Monday.



Amid growing distrust between Washington and Beijing, Trump has for weeks complained that TikTok, owned by Chinese internet company ByteDance Ltd, was a national security threat and might share information about users with the Chinese government.



His Aug. 6 executive order called for banning transactions with the app after 45 days.



Trump issued a separate executive order on Aug. 14 giving ByteDance 90 days to divest TikTok’s U.S. operations and any data TikTok had gathered in the United States.



Reuters reported last week that TikTok was preparing to mount a legal challenge as early as Monday to Trump’s Aug. 6 order.



ByteDance had acquired Shanghai-based video app Musical.ly in a $1 billion transaction in 2017, and relaunched it as TikTok the following year.



In its blog post, TikTok said the Trump administration violated its constitutional right to due process by banning the company without notice.



It accused Trump of misusing the International Emergency Economic Powers Act, which lets the president regulate international commerce during a national emergency.



Trump had in May 2019 invoked that law to stop alleged efforts by foreign telecommunications companies to conduct economic and industrial espionage against the United States.



But TikTok said the Aug. 6 executive order was not supported by the emergency Trump declared a year earlier, and that the company did not provide the types of technology and services contemplated at that time.



It also said the executive order was not rooted in genuine national security concerns, adding: “We believe the Administration’s decisions were heavily politicized, and industry experts have said the same.”



ByteDance has been in talks to sell TikTok’s North American, Australian and New Zealand operations to companies including Microsoft Corp and Oracle Corp.



Those assets could be worth $25 billion to $30 billion, people familiar with the matter have said.



Before buying TikTok, ByteDance had not sought advance approval from the Committee on Foreign Investment in the United States, which reviews acquisitions for potential national security risks.



CFIUS later opened an investigation, and according to TikTok “repeatedly refused” to engage with ByteDance before saying it had found national security risks associated with the purchase.







His Aug. 6 executive order called for banning transactions with the app after 45 days.



Trump issued a separate executive order on Aug. 14 giving ByteDance 90 days to divest TikTok’s U.S. operations and any data TikTok had gathered in the United States.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="594" height="427" src="https://www.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1.jpg" alt="" class="wp-image-352564" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1.jpg 594w, https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1-300x216.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2019/12/gettyimages-1071817812-594x594-1-584x420.jpg 584w" sizes="(max-width: 594px) 100vw, 594px" /><figcaption>WASHINGTON, DC &#8211; DECEMBER 11: U.S. President Donald Trump (2R) argues about border security with Senate Minority Leader Chuck Schumer (D-NY) (R) and House Minority Leader Nancy Pelosi (D-CA) as Vice President Mike Pence sits nearby in the Oval Office on December 11, 2018 in Washington, DC. (Photo by Mark Wilson/Getty Images)</figcaption></figure>



Reuters reported last week that TikTok was preparing to mount a legal challenge as early as Monday to Trump’s Aug. 6 order.



ByteDance had acquired Shanghai-based video app Musical.ly in a $1 billion transaction in 2017, and relaunched it as TikTok the following year.



In its blog post, TikTok said the Trump administration violated its constitutional right to due process by banning the company without notice.



It accused Trump of misusing the International Emergency Economic Powers Act, which lets the president regulate international commerce during a national emergency.



Trump had in May 2019 invoked that law to stop alleged efforts by foreign telecommunications companies to conduct economic and industrial espionage against the United States.



But TikTok said the Aug. 6 executive order was not supported by the emergency Trump declared a year earlier, and that the company did not provide the types of technology and services contemplated at that time.



It also said the executive order was not rooted in genuine national security concerns, adding: “We believe the Administration’s decisions were heavily politicized, and industry experts have said the same.”



ByteDance has been in talks to sell TikTok’s North American, Australian and New Zealand operations to companies including Microsoft Corp and Oracle Corp.



Those assets could be worth $25 billion to $30 billion, people familiar with the matter have said.



Before buying TikTok, ByteDance had not sought advance approval from the Committee on Foreign Investment in the United States, which reviews acquisitions for potential national security risks.



CFIUS later opened an investigation, and according to TikTok “repeatedly refused” to engage with ByteDance before saying it had found national security risks associated with the purchase.

The Rise Of TikTok

TikTok says it has ‘no choice’ but to sue Trump administration over threatened U.S. ban

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LONDON (Reuters) &#8211; When the death of George Floyd forced companies to reflect on why there were so few Black people in their senior ranks, top banks and private equity firms pledged to do better.



But one corner of the finance world &#8211; the hedge fund industry &#8211; made fewer public statements.



Hedge funds are mostly small firms employing people who first made their names in banking. They say their relatively small size and the talent pool they usually hire from makes rapid progress increasing ethnic diversity challenging.



“Those who land in hedge funds are those who have been successful within the banking system in general, so the onus is really on banks creating&nbsp;the talent that will become hedge fund managers,” said Alain Nkontchou, co-founder of Enko Capital who worked on JPMorgan’s proprietary trading desk and at BlueCrest.



Black staff in the industry said there has been little progress in hiring and promoting Black people in 20 years.



A report in 2018 by think tank New Financial found the asset management industry in London as a whole had just 12 Black fund managers. &nbsp;



“I hoped we’d be further on today than we are,” said Marcus Gibbs, head of operations for Europe at an American hedge fund platform, who began working in the industry in 2001 and said he is regularly the only Black person in the room at industry events.



In the United States, 2019 regulatory data showed 8.9% of hedge fund firms were owned by ethnic minorities, including Hispanic, Black, Asian and Native Americans, and they hold just 2.7% of assets.



“I don’t see any Black money managers, people making investment decisions, or Black salespeople,” said Ansumana Bai-Marrow, chief compliance officer at Cairn Capital.



Hedge fund industry consultants said that since Floyd’s killing some hedge fund investors &nbsp;&#8211; particularly among&nbsp;U.S. pension funds &#8211; are asking about diversity.



“In the past, maybe 5% of our clients would engage us on this, now it’s more like a quarter,” said Chris Redmond, head of manager research at consultancy Willis Towers Watson, which advises investors on hedge funds.



“Investors are asking who is on our list of hedge funds who have had good racial and gender diversity.”



Albourne Partners, another adviser to hedge fund investors, also said more clients wanted to know about diversity.



Albourne launched a survey on Aug. 17 asking hedge funds for data on employee and ownership composition, including ethnicity, gender and sexuality, which the consultancy can use to provide information for investors.



“We have seen increased concern and awareness from our clients on this issue over the last few months,” Albourne CEO John Claisse said.



<h3 class="wp-block-heading"></h3>



Reuters asked 30 London-based hedge funds for data on the number of Black staff they employ.



Some funds said they did not disclose diversity data while 11 funds declined to comment, including Lansdowne Partners, Winton Group and Brevan Howard.



TT International Asset Management said that of 89 TT employees, four were Black and one of the four was involved in managing money. The firm also said it plans to start unconscious bias training.



A spokeswoman for Man Group, Europe’s largest hedge fund, said the company does not disclose diversity data but runs a Black employees network and supports #talkaboutblack, a campaign to improve diversity in the City of London.



Black people working at hedge funds told Reuters they have faced an array of negative experiences in the industry.



“I’m going to a lunch, I’m wearing a suit like everyone else and someone comes to me and asks me where the cloakroom is,” said one employee at a fund who did not allow him to speak publicly.



Another senior Black person at a hedge fund who did not wish to be named remembered being repeatedly asked by a colleague to fix his computer problems.



“The guys of my generation are broadly tired. We’ve seen all of this stuff &#8230; when you’re in a conference with your peers and some guy comes up to you and says how do I get to x and y,”.



Daryl Wright, executive board member and head of product &amp; investment management at Lumyna Investments, a platform for hedge funds and asset managers, said the problem was an unconscious association between Black people and negativity.&nbsp;



“I think that’s really what comes into some of the issues we see in the hiring processes, promotions and the way people get treated day to day in the industry.”



Senior hedge fund industry figures said while change has to be led from the top, it needs to start at the bottom.



“It’s quite difficult to address that underrepresentation when there is no middle layer or senior layer to start with,” said Jonathan Sorrell, president of Capstone Investment Advisors.



Sorrell helped to launch a programme this week where eight hedge funds, including CQS, Man Group, Brevan Howard and TT International, joined more than 80 firms in the asset management industry in committing to each hire at least one Black intern. It aims to boost the number of Black portfolio managers in the long-term.



Hedge fund industry group AIMA said it is engaging with Black professionals and with hedge fund leaders who want to take action specifically on Black representation.



For Gibbs, the hope is that change will unfold much faster than it has done since he started out.



“Now is the time to act,” he said

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Hedge funds in long haul to tackle lack of Black money managers

LONDON (Reuters) &#8211; The COVID-19 pandemic has forced sovereign wealth funds to think the previously unthinkable.



With prime office blocks lying empty around the world, hotels half-vacant and retailers struggling to stay afloat, the funds are retreating from many of the real estate investments that have long been a mainstay of their strategies.



Sovereign wealth funds (SWFs) invested $4.4 billion in the sector in the first seven months of 2020, 65% down from the same period a year ago, according to previously unpublished data provided to Reuters by Global SWF, an industry data specialist.



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The nature of property investments is also shifting, with funds increasingly investing in logistics space, such as warehousing, amid a boom in online commerce during the pandemic, while cutting back on deals for offices and retail buildings.



Such shifts in behaviour can have seismic effects on the global real estate market, given such funds are among the largest investors in property and have interests worth hundreds of billions of dollars in total. Three sovereign funds sit within the top 10 largest real estate investors, according to market specialists IPE Real Assets.



A big question is whether the changes are structural for the funds, for which property is an asset-class staple at about 8% of their total portfolios on average, or a temporary response to a huge, unexpected and unfamiliar global event.



“Real estate is still a big part of sovereign wealth fund portfolios and will continue to be so,” said Diego López, managing director of Global SWF and a former sovereign wealth fund adviser at PwC.



“What COVID has accelerated is the sophistication of SWFs trying to build diversification and resilience into their portfolio &#8211; and hence looking for other asset classes and industries.”



Sovereign funds have been more bearish on property than public pension funds, another big investor in the sector, Global SWF found. While they have outstripped the pension funds in overall investment across most industries and assets this year, by two to one, that ratio is reversed for real estate.



Funds are nursing hits to their existing property portfolios stemming from the introduction of lockdowns and social-distancing restrictions. While other parts of their portfolio, such as stocks and bonds, have rebounded from March’s trough, a real-estate recovery is less assured.



Property capital value globally is expected to drop by 14% in 2020 before rising by 3.4% in 2021, according to commercial real estate services group CBRE. Analysts and academics question whether the pandemic’s impact may prove long-lasting, with more people working from home and shopping online.



“I think there’s a real threat to some commercial business districts in the big cities as I can’t see us all return to the 9-to-5 schlep in, schlep out,” said Yolande Barnes, a real-estate specialist at London university UCL.



The value of property assets of some funds has fallen in 2020, with those experiencing the biggest drops including Singapore’s Temasek Holdings and GIC, Abu Dhabi Investment Authority (ADIA) and Qatar Investment Authority (QIA), according to data compiled for Reuters by industry tracker Preqin.



Those four funds have collectively seen the value of such assets drop by $18.1 billion to $132.9 billion, the data showed.



Reuters was unable to confirm whether the fall was due to lower valuations or asset sales. The funds either declined to comment or did not respond.



Many sovereign funds do not publicly disclose data on property investments, with Norway’s one of the exceptions.



The Norwegian fund, which has around $49 billion invested in real estate, up from $47 billion at the end of 2019, said last week its unlisted property portfolio returned minus 1.6% in the first half of 2020.



Sovereign funds have also largely steered clear in 2020 of new direct investments in London or Los Angeles, hotspots in normal times, according to property services firm Jones Lang LaSalle (JLL), which said SWFs were “on the defensive”.

SAMSUNG CSC

Safe bet? Sovereign funds rethink once-reliable real estate

By Charles Leyeka Lufumpa, Acting Chief Economist and Vice President for Economic Governance and Knowledge Management at the African Development Bank Group.



After demonstrating its resilience during the Ebola outbreak and the global financial crisis, Africa is once again facing a severe test of its strength and agility because of the coronavirus pandemic.



 The good news is that the continent has entered this crisis in reasonably good shape following decades of progression in health, education and economic outcomes. As of early 2020, macroeconomic fundamentals in Africa were improving, with investments, rather than consumption, accounting for more than half of the region’s growth. Inflation was falling and the continent was making impressive strides towards accomplishing the United Nations Sustainable Development Goals (SDGs). Africa must build on the momentum and strive to prevent the coronavirus pandemic from reversing the gains of the past 20 years.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1110" height="740" src="https://www.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-1110x740.jpg" alt="" class="wp-image-379845" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-1110x740.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-2048x1365.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-696x464.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-1068x712.jpg 1068w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-1920x1280.jpg 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2020/08/Dr.-Charles-Lufumpa-002-5-600x400.jpg 600w" sizes="(max-width: 1110px) 100vw, 1110px" /><figcaption>Charles Leyeka Lufumpa</figcaption></figure>



 Admittedly, that’s easier said than done: despite their best efforts, many countries still struggle with fragile health systems, high debt levels, weak external balances, as well as high rates of poverty and unemployment. The African Development Bank now projects that Africa will fall into a recession in 2020 with economic growth contracting by at least 1.7 per cent. In a worst-case scenario, this figure could turn out as high as 3.4 per cent. Cumulative losses in gross domestic product (GDP) across the continent could range between $173.1 billion and $236.7 billion in 2020 and 2021. The coronavirus pandemic threatens to increase the debt burden of African countries from 60 per cent to 70 per cent of gross domestic product, heightening the likelihood of a sovereign debt crisis. The additional financing required to cushion the consequences of the crisis could be in excess of $150 billion.



 In a part of the world where 85 per cent of the population earn their living in the informal sector,unemployment as a direct result of the coronavirus pandemic could push an additional 28 to 49 million people into extreme poverty. Moreover, if we fail to take adequate action, the impact of the crisis on food insecurity and malnutrition may be even worse than anticipated. 



 To counter the fallout of the coronavirus pandemic, Africa needs robust policy responses from every country on the continent, paired with strong support from Africa’s development partners. In the short term, African countries should prioritise healthcare spending for the provision of essential personal protective equipment (PPE) and materials, acceleration of local production of medical supplies including PPE and vaccine and drug discovery. Targeted cash transfers and subsidies for vulnerable households as well as subsidies and tax relief for businesses should be high on the agenda. Central banks must inject liquidity into the economy, turning to unconventional policy tools such as quantitative easing if necessary. In the longer term, countries should seize the imperative of building resilience to future crises. As good times return and economies get back on track, it should become a priority to build domestic and external buffers against any potential exogenous shocks. More money should be earmarked for scientific, economic and social research. Countries should pursue global and continental partnerships to prepare for eventualities. Private sector growth and revamping education and labour markets for the future of work are also key.



 The role of development partners. At the onset of the coronavirus pandemic, multilateral development institutions took immediate action to help Africa’s poorest countries navigate the crisis and help them on the road to recovery. The African Development Bank is playing its part through its USD 10 billion COVID-19 Rapid Response Facility (CRF). The CRF offers immediate relief to African countries to address the crisis by providing additional resources for public health interventions, social protection programs and liquidity and budget support to affected sectors of their economies.



 Civil society and think tanks have a useful role to play by helping to build trust, solidarity and uptake of COVID-19 prevention and containment measures. They can also help to ensure that COVID-19 interventions are carried out equitably and that governments are held accountable for their policies and actions. The African Development Bank stands ready to work with other multilateral financial institutions and wealthier nations to alleviate the impact of the pandemic on African countries. 



 The continent’s youthful and innovative population, its growing middle class, its value addition to the abundant natural resources and its ever-improving governance systems give us plenty of reason to be confident that Africa will overcome the ravages of the coronavirus pandemic.



 This year marks the first time the continent has entered a recession in more than half a century. Over the past two decades, Africa has boasted some of the highest growth rates in the world, setting the region up as the next investment frontier in a post–COVID-19 world. The level of cooperation in Africa has been encouraging. But beyond the crisis, we need to continue working together to help rebuild our economies and prepare them for the future. Africa will emerge from this episode stronger and more resilient than ever before.

Dr. Charles Lufumpa (002) (1)

OPINION: Post COVID-19-Rebuilding Africa and strengthening it against future economic shocks.

JOHANNESBURG (Reuters) &#8211; South African retail chain Edcon has signed an agreement to sell parts of its business to private equity-backed Retailability Ltd, administrators in charge of its restructuring said on Monday.



Edcon, which owns the 91-year old department store chain Edgars, entered into a form of bankruptcy protection in April after a coronavirus-led lockdown hurt the already struggling finances of the company.



“(The deal) not only indicates confidence in the Edgars business but augments Retailability’s already blue-chip level of retail expertise,” said Matuson Associates, administrators of the process.



As a next step in the process, the administrators and Retailability will start work on signing of the sale and purchase agreements for Edgar’s rest of Africa business.



The transactions will close by September and will save a “significant” number of jobs, the administrators said.



Durban-based Retailability, which also runs the clothing outlets Beaver Canoe for men’s fashion and Style for families, has 440 stores and some 2,000 employees in South Africa and neighbouring countries.



These are mainly located outside of big cities where the core of its low to middle income target market exists.



Edcon signed a deal with retailer TFG this month sell select assets of budget clothing retailer Jet.

Edgars

Edcon administrators sign sale of Edgars to Durban’s Retailability

(Reuters) &#8211; Old Mutual expects to post a loss in the first half of 2020, it said on Monday, as it deals with weak business volumes and a spike in business interruption insurance claims due to the COVID-19 crisis.



The insurer forecast a basic loss of between 128.5 and 154.2 South African cents per share for the six months ended June 30, versus earnings of 127.3 cents a year earlier.



The 175-year-old company expects results from operations to plunge by between 61% and 71% to 1.31 billion-1.76 billion rand ($44.56 million-$76.80 million) in the period.



Shares in Old Mutual were 4% lower by 0737 GMT, deepening a 35% drop they have seen since the start of 2020.



New business sales volumes were hurt as most of the group’s tied advisers were unable to sell during the lockdown period due to the partial closure of the branch network and lack of access to customers’ homes, worksites and branches, it said.



While lockdown restrictions have been eased and economic activity has somewhat resumed, sales levels remain below prior year levels, it said.



Old Mutual, whose primary operations are in South Africa, serves retail and corporate customers in 14 countries.



The company named Iain Williamson as its permanent chief executive last month after a year of upheaval caused by the exit of his predecessor Peter Moyo, who was fired over an alleged conflict of interest.



Insurers across the globe have been setting aside billions of dollars as they face steep claims resulting from coronavirus lockdowns, which have shut businesses and led to cancellations or postponements of major events including the Olympics.



Another aggravating factor has been higher credit spreads, which Old Mutual said have led to notable unrealised mark-to-market losses in the unlisted equity and credit portfolios of its investment business.



($1 = 17.0563 rand)

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Old Mutual forecasts H1 loss as coronavirus crisis hammers volumes

MAPUTO (Reuters) &#8211; French oil major Total has signed a security pact with the Mozambique government to protect a $20 billion natural gas (LNG) project being developed in the southern African country, the company said on Monday.



Mozambican security forces have been battling a low-level insurgency against militias suspected of having links to Islamic State in the gas-rich north of the country.



Violence in the northern Cabo Delgado region has recently claimed dozens of lives. Earlier this month insurgents captured a heavily-defended port in the far northern town of Mocimboa da Praia.



Total’s project includes the development of the Golfinho and Atum natural gas fields in the Offshore Area 1 concession, containing more than 60 trillion cubic feet (Tcf) of gas, and the construction of a liquefaction plant with a capacity of 13.1 million tons per annum.



Initial production is slated by 2024.



“This &#8230; bolsters security measures and endeavours to create a safe operating environment for partners like Total which enables their ongoing investment in Mozambican industry,” Ernesto Elias Tonela, minister of mineral resources and energy, said in the statement.

Mozambique records first COVID-19 death

Total and Mozambique sign security pact for $20 billion natural gas project

LAGOS (Reuters) &#8211; Nigeria’s economy contracted by 6.1% in the second quarter of 2020 from a year earlier, the statistics office said on Monday, as lockdowns in its two main cities and low oil prices took their toll.



The West African country, which has Africa’s largest economy and is the continent’s top oil producer, reported its first coronavirus case in late February. It imposed lockdowns lasting just over a month in commercial hub Lagos and the capital Abuja which ended in early May.

Nigeria_naira

Nigeria’s economy contracts by 6.1% y/y in Q2 – stats office

TUNIS (Reuters) &#8211; Tunisia’s premier-designate plans to gather the ministries of finance, investment and state property into a single department to be led by economist Ali Kooli under plans to revamp government and revive the economy, political sources said.



Hichem Mechichi, a political independent, is expected to announce his technocratic government’s 23 ministers within the next few days, the sources told Reuters on Sunday. Kooli is CEO of Arab Banking Corporation(ABC Bank) in Tunisia.



Mechichi was proposed by President Kais Saied last month to replace Elyes Fakhfakh, who quit over allegations of conflict of interest, deepening a political crisis at a time when international lenders are asking Tunis to make painful reforms.



Authorities have been struggling to defuse constant protests over widespread unemployment, lack of investment for development and poor health, electricity and water services.



Western countries have hailed Tunisia for its comparatively successful transition to democracy since the 2011 revolution that ended decades of autocratic rule.



Many Tunisians have grown frustrated since then over economic stagnation, a decline in living standards and decay in public services while political parties often seem more focused on staying in office instead of tackling problems.



Mechichi, 46, needs to form a government capable of winning a confidence vote in parliament by a simple majority by Wednesday or face dissolution of parliament by the president and another election, deepening instability.



Mechichi said earlier this month his government would focus on rescuing public finances and easing social hardships, saying that while political turmoil had dragged out, “some Tunisians have not found drinking water”.



Tunisia’s tourism-dependent economy shrank 21.6 pct in the second quarter of 2020, compared to the same period last year, due to the coronavirus crisis.



The government said last month it had asked four creditor countries to delay debt repayments, as it announced more pessimistic economic and budget forecasts for 2020 because of the coronavirus pandemic.

international-flag-tunis-tunisia

Tunisia’s incoming PM plans restructuring of economic ministries

The lender, in the midst of a turnaround drive when the pandemic struck, had already warned that bad loans would blow a hole in its performance and drag earnings down by up to 97%.



“Given our focus on preserving capital, we do not envisage declaring an ordinary dividend for 2020,” the lender said in its results statement, adding that its capital levels were expected to remain resilient.



The bank’s headline earnings per share &#8211; the main profit measure in South Africa &#8211; stood at 67.7 cents ($0.0396) in the six months to June 30, compared with 920 cents a year earlier.



The impact of a 297% rise in credit impairments was felt across all of its units. Its operations elsewhere in Africa, which were expected to bolster the earnings of South African banks following one of the world’s strictest lockdowns in their home market, posted a 388% rise in credit impairments.



Absa has been on an aggressive drive to grow revenue elsewhere in Africa following its split from Britain’s Barclays in 2017.



Eager to gain back lost ground under its former parent, the bank set itself a series of ambitious targets and ramped up in areas like lending, where it could be more aggressive than had been possible under Barclay’s.



Now it looks set to suffer one of the biggest blows to performance due to bad loans amongst all of South Africa’s major lenders.



Its return on equity &#8211; a key profitability metric &#8211; fell to 1% from 14% previously.



On a normalised basis, which accounts for Absa’s separation from Barclays, headline earnings per share fell by 82%.



($1 = 17.1172 rand)

Absa Reboots Image As 100 Years Of Barclays In Africa Ends

S.Africa’s Absa says full-year dividend unlikely after interim profit tumbles

JOHANNESBURG (Reuters) &#8211; South Africa’s confirmed COVID-19 cases have surpassed 600,000, the health ministry said on Friday, although the number of new cases has been declining since a peak in July.



Despite imposing one of the world’s toughest lockdowns at the end of March when the country had only a few hundred cases, South Africa saw a surge in coronavirus infections that has left it the hardest hit on the continent.



The ministry said in a statement South Africa now had a total of 603,338 cases and 12,843 deaths &#8211; accounting for more than half of the continent’s cases and around 47% of its deaths, according to a Reuters tally of government and World Health Organization data.



Africa’s most industrialised economy reported 3,398 new cases on Friday, compared with a peak of over 13,000 cases a day seen in July.



“We believe that South Africa is in a way moving past the point of the peak of the pandemic, we believe we have gone beyond the inflection point,” Health Minister Zweli Mkhize said on Wednesday.



The COVID-19 crisis has battered an economy already in recession and pushed millions of South Africans deeper into extreme poverty.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://www.cnbcafrica.com/wp-content/uploads/2020/06/gettyimages-1152457961-594x594-1.jpg" alt="" class="wp-image-374813" width="707" height="563" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/06/gettyimages-1152457961-594x594-1.jpg 594w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/gettyimages-1152457961-594x594-1-300x239.jpg 300w" sizes="(max-width: 707px) 100vw, 707px" /><figcaption>OSAKA, JAPAN &#8211; JUNE 28: (RUSSIA OUT) South African President Cyril Ramaphosa speeches during a bilateral meeting at the G20 Osaka Summit 2019, June 28, 2019 in Osaka, Japan. Vladimir Putin has arrived to Japan to participate the G20 Osaka Summit and to meet U.S.President Donald Trump. (Photo by Mikhail Svetlov/Getty Images)</figcaption></figure>



The government eased lockdown restrictions this week to allow most of the economy to re-open. But President Cyril Ramaphosa cautioned that cases could surge if people failed to maintain vigilance.

Clarification on COVID-19 “hotspots” as SA moves to level 3 lockdown

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Newsletter

Zambia’s ZCCM-IH seeks to take control of Glencore’s Mopani Copper Mines

Botswana government says no guarantee on De Beers sales deal by end-2020

S.Africa’s Nedbank hopes worst is over after posting almost 70% profit drop

OPINION: Post Covid-19: Is this an opportunity to “reset” African economies?

South Africa’s Nedbank Group CFO Raisibe Morathi resigns

IMF says central banks must be independent after change of Zambia’s governor

TikTok says it has ‘no choice’ but to sue Trump administration over threatened U.S. ban

Hedge funds in long haul to tackle lack of Black money managers

Safe bet? Sovereign funds rethink once-reliable real estate

OPINION: Post COVID-19-Rebuilding Africa and strengthening it against future economic shocks.

Edcon administrators sign sale of Edgars to Durban’s Retailability

Old Mutual forecasts H1 loss as coronavirus crisis hammers volumes

Total and Mozambique sign security pact for $20 billion natural gas project

Nigeria’s economy contracts by 6.1% y/y in Q2 – stats office

Tunisia’s incoming PM plans restructuring of economic ministries

S.Africa’s Absa says full-year dividend unlikely after interim profit tumbles

South Africa’s COVID-19 infections breach 600,000 mark

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Advertise With Us

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