Given the euphoria that has trailed the successful reconstruction of the runway of Nnamdi Azikiwe International Airport, my interest as usual is purely academic, a tall order in a country in which deep reflection about nation building is a luxury. The airport which services the federal capital closed on March 8 with the promise of being reopened on April 19 after a comprehensive overhaul.
There is a general national consensus that for once in recent time we recorded “a remarkable feat”. Well before the reconstruction deadline, new run away was delivered, precisely on Monday, April 17 with resumed flights and operations by the Nigerian Civil Aviation Authority, NCAA. Don’t get me wrong please. We must definitely salute the Hon Minister of State for Aviation, Hadi Sirika, for delivering on promise and for reportedly putting his integrity on the line by vowing to resign if the airport was not reopened.
But lest we forget, this is a run way long over due for a repair almost two decades ago. The received wisdom has it that there is no greater crime than a loss of time. If we could roll out the drums for a belated rehabilitation , it will very well be nice we are also sobered with the knowledge of the huge costs we have so far incurred for the original delay and outright criminal neglect. To dispense with some N5.8 billion earmarked for an airport rehabilitation within a month and few days, must task our cost consciousness in an economy technically in a recession. That is if at all we are cost conscious in the first place. Undoubtedly the opportunity cost of non-repair is as high. But the opportunity cost of the decades long neglect is certainly higher. Sometimes in 2010 we were debating the prospect of building the second runway at the estimated controversial N63.5 billion contract. Almost a decade later, we are celebrating a rehab of an old run way even as we keep a sealed lip on building a new one. Nigeria is often characterized as a mono- economy, relying almost on nothing but oil and gas (accounting for 94 per cent of export earnings and 62 per cent of Government revenue!). Abuja airport is another metaphor for a nation that stands on one leg, sorry, for a nation whose major international airport relies on only (and only one!) rehabilitated run way.
For me the bigger picture of delay, neglect and the recent belated tokenism at a huge cost calls for sobriety rather the recent self praise that we have achieved “a feat”. With feat like this, we can as well say a farewell to ambitious nation building project. Yet Nigeria must learn to be ambitious as a nation. So far with all the official noise, the comprehensive repair of the Abuja terminal is yet to be completed. While we all micro manage Abuja airport, (sorry rehabilitating a runway!) we should not forget that Nigeria parades as many as 26 airports in the country operated by the Federal Airports Authority of Nigeria (FAAN). Five of these are called “international airports” namely that of Kaduna, Lagos, Kano, Abuja, Port Harcourt and Enugu. On arrival at the Murtala international airport, every passenger is ever psychologically prepared that the elevator will ever not function.
While the repair was on, President Buhari launched with fanfare , the Economic Recovery and Growth Plan Job creation and youth empowerment. One cardinal principle of this new commendable road plan for growth and development is to promote public finance aimed at reducing unemployment and under-employment, especially among the youths. Pray how many sustainable jobs are the fall outs of N5.8 billion Abuja airport repairs/ intervention? The ERGP also sets to promote local content. What then is the local content of N5.8 billion Abuja airport repairs? We even ignored the “local content” suggestion by critical stakeholders, in the Nigerian Society of Engineers (NSE), who argued that the rehabilitation could take place with the airport in use. Are we using public intervention in infrastructure development to empower Nigerians and move the economy from recession to recovery or doing business as usual patronizing foreign investors and fueling capital flight and perpetuating underdevelopment? Still on ERGP . This wonderful document is almost romantic about “..placing emphasis on Made-in-Nigeria” as part of the “.. diversification of the economy”. It is therefore mind boggling seeing almost all Nigerians, federal government and the media alike doing generous promotion of Ethiopian Airlines, “the only foreign airline that accepted to use the alternative Kaduna airport during the rehabilitation” having being the first aircraft to have landed at the reopened airport. Haba! Again lest we forget, our national anthem opens with the clarion call “Arise, O compatriots, Nigeria’s call obey, To serve our fatherland” NOT another country certainly not Ethiopia. Again don’t get me wrong. Ethiopia airlines in a gloablized world is commendably doing very well to corner the huge market share of Nigeria which scandalously kills its own national carrier. But even at that for as long as Abuja repair lasted Ethiopia airlines was not doing charity work but smart business making good money on routes abandoned by other international airlines. Why on earth should we rise in unison with cheap advert for a foreign airline having fun at our idiocy and gross underdevelopment? . Nigeria and Nigerians must certainly return to basics in patriotism and nation building. We sign on to open sky policy without reciprocal flights to any of the countries that have colonized our routes. That is bad enough. But it is a national shame and indeed national disgrace that we now inadvertently promote foreign airlines at the expense of our own.
Many Nigerian compatriots certainly feel diminished that a foreign airline was indulged to land on a runway Nigerians paid for and the first pilot to be so favored to speak to us is nor from Nigeria. Sir Nnamdi Azikiwe who the airport is deservedly named after must be wondering in his grave; what has happened to the promise of independence him and his compatriots fought for.
Economy Would Be Out of Recession By Second Quarter – Central Bank
The Central Bank of Nigeria has restated that the Nigerian economy would come out of the recession in the second quarter… Read more »
Apr 28 2017 | Posted in Transportation
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THE Bulawayo Agricultural Society (BAS) has come up with stringent measures to prevent the spread of the deadly Foot and Mouth Disease at this year’s Zimbabwe International Trade Fair.
The international trade showcase now in its 58th year kicked off on Tuesday and runs until April 29. Namibian President Hage Geingob will officially open the trade fair on Friday.
The government has been battling to contain the spread of Foot and Mouth Disease especially in the cattle-rich Matabeleland region.
This has affected cattle sales in the region with government moving to decentralize the marketing of cattle to avoid a depletion of the national herd.
In an interview, BAS Administrative Officer Natalie Adlam said they were accepting livestock only from quarantined areas to prevent the spread of the disease.
“Any animal that has cloven feet, that is your cattle, sheep and goats, all can catch and transmit the disease to each other,” he said.
“They are only allowing them from places that are vaccinated and are clean and have not had any Foot and Mouth Outbreak for the past 18 months.”
Adlam said there has been outbreaks of FMD in some places recently although the outbreak was contained.
She added that there will be an exhibition of 110 heads of cattle on show and also 29 pedigree cattle.
Cattle shows have been a major highlight throughout the years however, the outbreak of FMD has seen the numbers of cattle dwindling.
The premier trade showcase has attracted 326 exhibitors, a decline from 337 who exhibited in 2016. However, foreign exhibitors have marginally increased from 20 last year to 21 this year.
Tsvangirai Says Won’t Go Public On Coalition Talks
THE MDC-T has dismissed as disrespectful and ill-timed demands for disclosure of the terms of alliances forged with… Read more »
Apr 28 2017 | Posted in Health
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Photo: The Nation
By Margaret Wahito
Nairobi — A JKUAT student has been charged at a Thika Court for conning unsuspecting members of the public using fake electricity tokens.
The student, Simon Gitau Kimani, who appeared before Thika Chief Magistrate’s Court is a first-year student at the university’s main campus, was nabbed by Kenya Power security officers on Monday.
He pleaded guilty to charges of obtaining money by false pretense and was remanded pending judgment on May 4th, 2017.
At the time of his arrest at his hostel room, Gitau was found in possession of assorted Safaricom sim cards, ID cards, a Techno phone with a line used for the con game and a laptop with the scam advert documents.
Kenya Power’s Security Services Manager Major Geoffrey Kigen (Rtd) says the Bsc Industrial Technology student has been running advertisements on social media purporting to be selling fairly priced KPLC tokens.
Upon receiving payment for the non-existent tokens from his targets, he would block their numbers, cutting off further communication and leaving aggrieved.
Kigen has cautioned members of the public against engaging in any transactions with unauthorized persons in regard to acquisition of electricity supply and payment for the service thereafter.
“There are many criminals out there who are fleecing money from innocent Kenyans. We urge the public to be vigilant and report all suspicious activities to Kenya Power offices or the nearest Police Station,” Maj Kigen said.
“The Company is carrying out an intensive operation to track down illegal electricity connections, vandalism and other vices that are undermining the quality of electricity supply to customers,” he added.
Meanwhile, the Company’s security team has also arrested one suspect, while constructing an illegal line at Ngelani Village in Machakos.
How Alliance Leaders Broke Deadlock On Flag Bearer Choice
The main Opposition alliance yesterday sought to project a picture of unity and collegiate leadership as Mr Raila Odinga… Read more »
Apr 28 2017 | Posted in Energy
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opinionBy Peter Warutere
The violence that has hit the primaries of Jubilee and Nasa is sending disturbing signals that are likely to dampen economic prospects.
The political climate has diverted capital and labour, from productive engagement to political campaigns.
Perception of a looming disaster is strong enough to influence rational investors to wait and see the outcome of the elections before making commitments on how much and where to invest.
The history of political violence and resulting economic damage, reached its peak in 2007/8.
This prompted a search for peace by the government and other interested parties to lower political temperatures and safeguard economic.
In December last year, President Uhuru Kenyatta and other leaders signed a peace pledge that underlined his commitment to “free, fair, transparent and credible” elections.
SUFFERED MAJOR BLOW
The search for peace suffered the first major blow when Mr Raila Odinga, the Orange Democratic Movement leader and one of Nasa’s principals, rubbished the peace and led his troupe in boycotting the leadership summit organised by the Kenya Private Sector Alliance.
A negative impact from the elections would be a double tragedy for the economy, which has suffered since last year from devastating drought.
The latest government Economic Survey reported that although economic growth improved from 5.7 per cent in 2015 to 5.8 per cent in last year, drought undermined agriculture and caused the economy to slow down.
The World Bank latest predicts a slowdown of economic growth to 5.5 per cent this year. Violence towards the August 8 elections, will increase the economy’s vulnerability.
The economy will also suffer considerable stress from increased idling and dependency on handouts, particularly among jobless youth.
WORK TO GET MONEY
These are driven to an illusion that they don’t have to work to get money and are easily incited to violence to protect their new benefactors.
Only in a few instances do they fight because they genuinely feel their freedom of choice has been violated through rigging.
Persistent conflicts between Jubilee and Nasa are also contributing to violence.
While Jubilee has focused its campaign on the promises it has fulfilled, expanding the economy, infrastructure and creating jobs, Nasa campaigns on its perceived failures, particularly on management of public debt, corruption and public waste.
The opposition has also fuelled hostilities between the government and counties over sharing of power and resources.
The public attacks, sometimes based on wrong premises, cause considerable anxiety and keep foreign investors away. Violence disrupts business and causes massive losses.
In its latest survey on business confidence, Kepsa reported on Wednesday that chief executives are worried about the disruptive effect of elections that could lead to job and production losses.
There is no effective way to stymie violence and protect the economy except by calling for peaceful and credible elections to deflate the increasing political pressure.
The government, political parties, private sector and civil society need to deepen their resolve to have a good election year.
RESOLVED ELECTORAL DISPUTES
This can only be assured if all politicians commit themselves to the peace pledge and agree to resolve electoral disputes through party tribunals and the Judiciary.
Lest we forget, choices have consequences, and every cloud has a silver lining.
The choices that Kenyans make today will determine whether economic prospects will remain strong during the election period or they will have to pick up the pieces and rebuild the economy after a political mess.
When politicians sneeze, the entire country catches a flu that takes quite long to cure.
Preventive measures will be more effective in diffusing hostilities than waiting for a cure after the situation blows up.
Mr Warutere is the principal associate at MA Consulting Group.
Apr 27 2017 | Posted in Kenya
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opinionBy Eddie Cross
MAIZE or “corn” as it known in other jurisdictions is a crop developed from a plant grown naturally in South America and has become one of the world’s largest food grains.
Yellow maize is grown all over the world as a feed source for livestock — poultry, pigs and cattle and white maize is grown as an industrial feed stock to produce starch and alcohol.
But in Africa, maize is largely grown as a staple food for the people.
In Zimbabwe, most people feel that they have not eaten until they have had “sadza” with its associated “relish” — either vegetables or meat.
It is estimated that we need about 1,8 million tonnes per annum to provide the basic staple in most people’s diet, feed livestock and supply industry with raw materials.
Maize is a relatively cheap product — in the United States, probably the largest producer of maize in the world, the current market price in the Midwest, is about US$170 a tonne delivered to the silo.
At this price a sizable percentage of all production goes into the production of ethanol which is then used a substitute fuel for motor vehicles.
But by far the majority of the crop is used to feed livestock.
The same ratio in Africa is probably 70-30 — use as a staple and as stock feed.
Because of its nature and widespread use, maize is regarded in many African States as a strategic commodity.
Every government knows that this is one commodity that has to be kept in free supply.
Since the main sources of surplus maize are in the America’s and they are a long way from African markets, it has always been policy in Zimbabwe to maintain at least five months stocks.
Zimbabwe has a very variable climate — this year our main cropping areas have had on average 1200 mm of rainfall — last year it was about 600 mm — half of what we received this year.
In fact this is not exceptional as the mean variation in rainfall from one season to the next, over the past century has been 40 percent.
In the main cropping zones of the USA it is only 5 percent.
For all of these reasons maize marketing has always attracted a great deal of attention and support.
From a pricing perspective, when maize is in short supply in the region, prices rise to accommodate the shipping and logistics costs, when the region is in surplus, the opposite happens.
So in the past marketing season (April to March) we have seen severe shortages in all regional markets; this has resulted in massive imports running to many millions of tonnes.
To give you some idea of what that entails, if imports to the SADC region were 14 million tonnes in the past year, this would entail some 600 sea going ships and 47 000 wagons or road vehicles.
The cost would be US$4 billion in purchase and transport costs before the maize could be put into circulation.
In the current year we have South Africa with a potential 14 million tonne crop, Zambia and Malawi with three million tonnes each and most other States in the region will either requires fewer imports or be self sufficient.
Some seven to eight million tonnes will be surplus to demand in exporting countries with perhaps three million going to deficit States and the rest overseas.
What this all means is that the basic needs of the maize industry from a marketing perspective are: price stability; adequate and sound storage and a good transport infrastructure that can move maize around in large quantities; and finally good efficient Port facilities to handle the incoming and outgoing volumes when needed.
Prior to Independence, the Government of the day (often called the Farmers Union at work) established an organisation called the Grain Marketing Board.
Over the years the GMB established a national net work of Depots and Silos with a combined capacity of perhaps 1,5 million tonnes.
In addition the GMB was mandated to maintain stocks at a minimum of five months consumption in order to make up any shortages that might be experienced because of drought conditions and before imports could arrive.
The GMB maintained farm gate prices at a reasonable level negotiated annually by farmers and then sold the maize it had in stock at a price negotiated with the milling industry.
Because of the controlled nature of the market for maize, the GMB was given a monopoly and financial support whenever it incurred a loss.
Transport costs were met by the Board and in this enabled a standard price which was maintained throughout the country for both consumers and producers.
The GMB at that time was a remarkable organisation, once it was decided to build concrete silos for storage purposes, the Board contracted companies to build them and a system was adopted where concrete was poured on a continuous basis until an individual silo of a standard size was completed.
In this way silos were constructed in all centres of major consumption or production.
Maize could then be delivered in bulk straight off the farm, raised in elevators to the top of the silos and delivered to selected units.
When required for fumigation or sale purposes the grain was simply dropped down onto conveyors and recycled.
Where silos were not justified, the Board built stacks of grain bags and anyone who knows the game, knows how skillful the staff had to be to get that right. Losses to either insects or moisture were tiny.
The Board had a proud financial record and I can think of few corruption scandals although they occurred, in my 20 odd years of association with the Board as an economist.
Certainly payments for deliveries and purchases were always made within a few days or immediately at the depots.
In the United States and many other countries all of these functions would be undertaken by the private sector, here because of the magnitude of the financial needs, only the State could carry the responsibility.
Prices in the States are set by supply and demand in the form of large markets for commodities such as the Commodity Exchange in Chicago which turns over more transactions in financial terms than the New York Stock Exchange.
From a production perspective, maize is a natural crop for the heavy soils in the main cropping zones of Zimbabwe.
It is also a useful crop to follow tobacco and Zimbabwe remains one of the largest producers and suppliers of flue cured tobacco in the world.
Research stations at Henderson in the Mazoe Valley and elsewhere became world renown for crop breeding and hybrid varieties such as SR 52.
In fact the Mazoe Valley held the world record for maize yields for a number of years.
Because of our variable climate, large scale commercial farms built over 10 000 farm dams – the largest concentration in Africa, and developed the capacity to put water on crops when they needed it to supplement the rain.
At Independence in 1980, they were able, at a push, to irrigate 300 000 hectares, not a great deal, but enough to ensure some stability in supply, delivering from that sector alone, about 600 000 tonnes of maize per annum.
The majority of the crop however, came from the small scale communal farmers who planted perhaps two million hectares a year in an effort to be self sufficient.
In a good year, this meant that the country had substantial surpluses and at one stage deliveries to the GMB averaged 2,5 million tonnes per annum. White maize attracts a small premium on world markets and despite UN mandated sanctions, this surplus of a million tonnes a year was sold on global markets, often for conversion into various forms of alcohol.
Today the government is still the “Farmers Union” at work but they are of a different hue and character.
The GMB is a heavily politicized body which is a shadow of what it once was.
The decline has been gradual, in 1992, in my view it saved the country from chaos by importing massive quantities of food when the wet season failed almost completely.
It no longer has that capacity and no longer performs the dominant role it played in the past.
Pricing policies are an unmitigated disaster with the government instructing the Board to pay a price for maize at US$390 a tonne which is double global prices and well above regional prices which will average this year at about US$230.
The result, farmers have grown maize and ignored other essential crops and the price of maize has risen to US$650 a tonne in retail stores — almost double what it was two years ago. Contrary to what the Cabinet ministers are saying, Zimbabwe will have to import maize again this year, half of what we have done this past year but we have still not produced enough to meet demand — but that is another story.
Eddie Cross is a renowned economist and an MDC-T Member of Parliament for Bulawayo South.
Apr 27 2017 | Posted in Agriculture
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Photo: Daily News
Dodoma — Progress has been made ready for a kick start of construction of a mega stadium in Dodoma, President John Magufuli said here yesterday.
The president made this remarks at an occasion to mark the 53rd Anniversary of the Union between the then Tanganyika and Zanzibar, held for the first time at the Jamhuri Stadium in Dodoma.
“We are making good progress ready to start construction of the biggest stadium in the country,” the president told hundreds of thousands of people, who gathered at the venue to witness a colourful event.
During his visit in the country in October, last year, King Mohamed VI of Morocco pledged to build an ultra modern stadium in Dodoma. In his visit, dozens of Morocco companies inked agreements with major players of Tanzanian private sector, including the newly planned sports venue, which the president said it will be the largest in the country.
The arrival of the modern stadium complex in the designated capital of the country coincides with government push for massive transfer of people and services from Dar es Salaam to Dodoma. The new stadium will cost between 80 and 100 million US dollars (about 200bn/-).
It will be bigger and better than the current National Stadium in Dar es Salaam, which had cost about 56bn/-. The National Stadium was largely financed by the Chinese government, with the Tanzania government also footing some costs.
President Magufuli said construction of the new sports complex will help improve the whole sport sector, notably soccer in the region.
The arrival of the modern venue will also enable the country to be in a better position to bid for hosting major continental and world events such as Africa Cup of Nations (AFCON) finals, Africa Nations Champions for home based players (CHAN) finals as well as other top athletics events such as All African Games and World Athletics championships.
The Union celebrations were coloured by various other activities, but the attention puller was martial art and acrobatic shows demonstrated by commandos from the Tanzania People’s Defence Forces (TPDF).
The gathering was also thrilled by traditional and cultural dances by several groups including Gonga from South Pemba, Makongoro Cultural Dance group from Mwanza and others from host Dodoma.
Late yesterday, Mainland champions Young Africans were due to play a friendly match against Polisi Dodoma as part of celebrations to mark the 53rd Anniversary of the Union.
Gold Regains Status As Tanzania’s Top Export
Gold has regained its prestigious position as Tanzania’s largest non-traditional goods export, thanks to a rise in value… Read more »
Apr 27 2017 | Posted in Tanzania
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By Victor Owusu-Bediako
Financial Analyst and Member of Parliament (MP) for the Bolgatanga Central Constituency, has lashed out the Managing Director of Stanbic Bank and President of the Ghana Bankers Association, Alhassan Andani who had taken on people with concerns about the US$2.25 billion bond issued by government few week ago.
Isaac Adongo, revealed that Alhassan Andani sees nothing wrong with the US$2.25 billion dollar bond bought Franklin Templeton, because the investor is a client of his bank; Stanbic Bank, therefore, too compromised to profess an opinion on the matter.
He insisted Mr. Andani is an individual with an overwhelming interest in the transaction embroiled in heavy web of conflict of interest involving families, spouses, their friends, their companies and their managements which intrinsically connected.
Many economists including Dr. John Gatsi and Kenneth Thompson of the Dalex Finance had described the financial arrangement as shady, expensive, unlawful and heavily laden with conflict of interests.
The US$2.25 billion bond appears cooked by family and friends of Finance Minister Ken Ofori -Atta. His two companies Data Bank and Enterprise Insurance, his friends and business partners; Keli Gadzekpo and Trevor G. Trefgarne; Chairman of the Enterprise Group, his wife Dr. Angela Ofori-Atta have all been mentioned in connection to the money with the Minority calling for a full scale investigation into the controversy.
Speaking to The Herald via phone from Constituency, Mr. Adongo charged “I’m very surprised that Stanbic Bank who are the trustees or custodians of FT are hiding behind fear mongering to defend their high value client. Who will not defend a client with a portfolio of US$4 billion”,
The Minority group in parliament, led by a former Deputy Finance Minister, Mr. Cassiel Ato Forson insists the issuance of the bond was done in secrecy, denying other investors an opportunity to participate in the bond transaction.
The Minority further alleged that the transaction was “cooked” to favor a particular investor, Franklin Templeton, while the transaction did not receive parliamentary approval.
But responding to the issue in an interview with Citi Business News, Mr. Andani described the accusations as unhealthy and has the potential to hurt Ghana’s reputation on the international capital market.
“It’s absolutely unhealthy. My caution is that when a nation decides to play on the international capital market we have to know that the participants and the people we go to for resources on these international markets are very monstrous companies. They are huge companies and have wide international reputations and therefore we have to be extremely careful if we are making any comments that is going to impugn any wrongdoing, to especially the people we go to raise capital from,” he warned.
“It’s about country reputation, so those of us who report on those transactions let’s make sure we are well informed otherwise if we just touch these people, they will give anything up for their reputation. Whether Templeton or any other global investor. They will give anything up for their reputation, and therefore we should be very careful the kind of commentary that we are running around,” he added.
Pointing to several bonds issued on the international debt market, Mr. Andani maintained that the major players will always be there when Ghana hits the market to mobilize funds.
“This will not be the first time or the last time we are going into the international debt capital market. We are not just hurting Templeton but we are probably passing on a message to other serious players, which I don’t want to say, suffice to say let’s be careful,” he stressed.
He rebutted claims that Stanbic Bank is part of the Book runners hence the defense, pointing out that there are international best practices which guide the issuance of such bonds, which Templeton did not flout.
“It is in the interest of the country to treat our partners in the international debt capital market with a lot of respect and a lot of professionalism. They don’t play around with their reputation. They take years and years and great investment to build that reputation so if you want to say something about them be sure that you must. I can tell you confidently from where I sit that the must to criticize is not correct”, he warned.
In a rebuttal, Mr. Adongo insisted that “the role played by major financial institutions in doubling as both book runners and primary dealers for FT provides a serious route to dubious US$2.25billion bond issue.
According to the National Democratic Congress (NDC) MP, Franklin Templeton’s juicy relationship with book runners and the Finance Ministry is cancerous.
Barclay’s bank which acted as the book runner also engaged in bidding for FT. This makes it a referee and a player at the same time’ he pointed out.
He insisted “we must investigate whether this role and the deliberate strategy of the Minister of Finance and his team to shroud this bond issue in secrecy is not a broader scheme of collision to dupe the people of Ghana”.
The Bolgatanga Central MP, added that “it is quite clear that the lack of transparency and competitiveness conspired to deny the people of Ghana the benefits of an efficient pricing of this bond”.
He could not understand how “a country in which all the factors driving down interest rates such as inflation and stability of the cedi locked itself in a ridiculous interest rate of 19.75percent for 15 years”, adding “I’m very surprised that Stanbic Bank who are the trustees and custodians of FT are hiding behind fear mongering to defend their high value client. Who will not defend a client with a portfolio of US$4 billion?
He told this paper that “it is common knowledge that Africa bleeds from shoddy deals of major multinational companies running into billions of dollar.
“If by demanding transparent and a competitive process that delivers value for money to our people and halt the current create, loot and share schemes of this Government will scare them, they better leave in a hurry. We will deliberate those who are genuine partners in our long tedious journey to a prosperous Ghana”, he defiantly told The Herald.
The Ministry of Finance had issued a press statement saying that “the issuance was not shrouded in secrecy nor was it “cooked” for any particular investor”.
“The Bookrunners, (Barclays, Stanbic and SAS), on behalf of the Ministry of Finance have been mandated since 2015 to issue these domestic bonds on a regular basis as per the debt issuance calendar which Ministry of Finance (MoF) puts out every quarter”.
“Also the book runners announce and publish every impending bond issue to the market, the week of issue and provide price guidance to the market. This particular bond issue was no different and was done in conformity with the established process. It was announced by the Book Runners to the market on March 30, via email and same published on MoF and Bank of Ghana (BoG) websites with settlement on April 3,” the statement said.
It rebutted that FT was not the only participant, as there were over 25 other buyers including other foreign entities, who all brought in dollars to convert to cedis to buy the bonds.
“This bond issue, like all the others done prior could not have been designed to favour any single investor. The conventional processes for the issue of bonds using the book building approach were adhered to in this particular issuance. It is our understanding that the said investor engaged various market participants and other key institutions including the IMF before deciding to participate in the bonds. It is worth noting that local investors also participated”.
It clarified that the said investor participated in the issuance in the manner they have always done since 2006 through their local Primary Dealer, Barclays Bank and their local custodians, Standard Chartered Bank and Stanbic Bank.
“To have obtained preferential treatment, all the above mentioned institutions would have had to conspire to do so, a situation which is unfathomable. The investor in question, FT, has held Government of Ghana bonds of up to USD 2 Billion prior to this transaction. Indeed FT has been buying and investing in government bonds since 2006,” it argued.
On the issue of parliamentary approval, the statement maintained that this issuance, like all other domestic bonds issued under this bond program since 2015, did not require Parliamentary approval.
“Approval was given under the initial application to Parliament in the 2015 Budget Statement and Economic Policy document, to run such a bond issuance program. The Ministry of Finance has the mandate to fund the deficit as contained in the budget approved by Parliament through the issuance of debt instruments and to manage the countries debt stock”.
The statement claimed that the issuance brought in significant amount of foreign currency, which was converted into cedis to purchase the bond, helping to strengthen the value of the Cedi and providing much-needed respite for the citizens of Ghana.
It added that “the transaction will also lengthen the maturity periods of government debts thereby reducing the short term redemption and rollover pressures on government”.
According to the statement, the proceeds from the bond issue are to be used for liability management and for the re-profiling of our domestic debt stock by repaying more expensive short-term debt as it matures, as such it shall not add to the total debt stock of the nation.
“This deal is a positive move in the current debt management strategy being pursued by government and should be applauded”.
Apr 27 2017 | Posted in Banking
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By Princewill Ekwujuru
Multichoice and StarTimes, two major pay-TV providers in the country have thrown up various marketing stunts to retain and recruit prospective subscribers. The strategies employed by Multichoice was the DSTV Thank You programme to appreciation its subscribers across the rest of Africa – excluding South Africa.
The programme is designed for Multichoice subscribers to get access to additional TV channels for free, if they remained subscribed for at least three months. Among the channels to be enjoyed include Zee Bolly movies, Viasat Life and AfricaXP’s, a new male-focused Trigger channel – offered for free to subscribers in various African countries. Multichoice also said there will also be a “monthly airtime bonuses.
“When putting together this rewards programme, we analysed the best global rewards practices, as well as what our customers love about the DStv brands,” says MultiChoice in a statement. The company further said the programme was slightly adjusted per African country where DStv Thanks was announced.
According to Multichoice, “The rewards offered had to provide greater value to our loyal customers beyond the normal, while also providing more motivation to stay loyal to our platform. We are confident that the rewards we have lined up for DStv Thanks now and in the future will not only enhance our customers’ television viewing experience but also solidify their connection to our platforms.”
At the same time pay-TV rivals from China, StarTimes is ferociously competing to sign up and retain subscription television customers in Africa’s growing direct-to-home , DTH, satellite TV market. Startimes says its market strategy is based on quality content and affordability as its products are already heavily subsidized compared to what competitors are doing.
In a release signed by Mr. Israel Bolaji, Head of Public Relations of StarTimes, the company said it also gave its subscribers an Easter promo gift that allowed subscribers to enjoy a visual feast, especially during the Easter celebration.
According to Bolaji, the “Easter promo provided an excellent opportunity for viewers to learn more about premium channels on StarTimes platforms and fully experience the fantastic content services. StarTimes will always spare no efforts to offer rich, diverse and high quality television content services to its African customers.”
Meanwhile, StarTimes is not giving any condition precedent to enjoying its bouquets as was observed in the statement. MultiChoice which said it does not have plans to introduce DStv Thanks in South Africa, hiked its price with effect from April 1, 2017, besides minimal price increases for Namibia, Botswana and Swaziland.
However, MultiChoice Africa is feeling the pinch as subscribers in economies like Zimbabwe, Kenya, Botswana and Nigeria have been vocal about their struggles to afford DStv and GOtv. Recall Multichoice Nigeria Managing Director, John Ugbe said: “We try to minimize the impact of price increase in Nigeria. We have been very fortunate that after the price we put through on April1, 2016, we haven’t had to subject another price increase.”
According to him, at the moment we have been able to avoid increasing rates in Nigeria, despite increase in exchange rate and that is largely because the government and the Central Bank of Nigeria, CBN, have been strong on policy decision-making. We also understand that there are times when we do things that are not popular, but we do it in the interest of the business. So because we are very conscious of the way that the consumers are likely to react, we tend to think quite deeply before we do stuff that is going to result in a negative impact.”
Quite recently, Multichoice at a press conference in Lagos made an announcement of a possible increase across some bouquets on the DSTV and Gotv platforms with effect from May 1, 2017. A probe into the pay-tv market shows that StarTimes is the only major competing pay-tv brand with subscribers paying as low as N800 to N4800 for the lowest to highest bouquet.
Chief Cyprian Umeh, a DSTV subscriber, said on possible price increase, “the Nigeria market and consumers are very active. They don’t like surprises in the system. They tend to react quite strongly to anything that they perceive as negative, which obviously, as a consumer-based business, it means that DStv needs to be on top of its game.”
Mike Uzeze, a StarTimes subscriber said that affordability is what drove him to the platform, but said that StarTimes needs to make sure that what they do in the country really makes sense for the consumer in order to keep competition running.
Apr 27 2017 | Posted in Technology
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Photo: The New Times
Computerised greenhouse works in Rwanda.
columnBy Junior Sabena Mutabazi
The African continent has the potential to feed itself and even have surplus food to export to other parts of the world. But instead, the continent imports $35 billion worth of food and agricultural products every year, and if the current predictions hold, the import bill will rise to $110 billion annually by 2025. So the question is: if the African continent has vast agricultural potential as we have been led to believe, why are we facing an astronomical food import bill?
To say nothing of, I’m not the first or last person to ask this question. Indeed, a few days ago, the President of the African Development Bank (ADB), Akinwumi Adesina, made the following remarks while speaking at the Centre for Global Development in Washing DC: “Africa’s annual food import bill of $35 billion, estimated to rise to $110 billion by 2025, weakens African economies, decimates its agriculture and exports jobs from the continent. Africa’s annual food import bill of $35 billion is just about the same amount it needs to close its power deficit.”
Adesina added: “to rapidly support Africa to diversify its economies, and revive its rural areas, we have prioritized agriculture. We are taking action. The Bank has committed $24 billion towards agriculture in the next 10 years, with a sharp focus on food self-sufficiency and agricultural industrialization.” Clearly the AfDB chief is very concerned, and so he should be. With the latest food crises in East Africa (South Sudan and Somalia), there is a strange feeling that we may be about to repeat the scenario of two years ago when the United Nations declared that nearly 2.5 million people in the Sahel belt were in urgent need of humanitarian assistance, particularly food. At the time, the UN and other organisations campaigned to raise more than $2 billion to feed people from countries such as Sudan and the Central African Republic.
But while the situation varies from one country to another and you cannot point to a stand-alone reason to explain why many nations on the African continent have continuously struggled to guarantee food supply let alone export agricultural products beyond coffee and tea despite the potential to do so, generally speaking, there are interlinking factors that can help explain the inability for Africa to fulfil her potential.
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For instance, in a 2011 report by the Food and Agriculture Organization of the United Nations (FAO) ‘Why has Africa become a net food importer’, Rakotoarisoa et al. put forward five reasons they believe have hindered African countries the most from realising their full potential of self-sufficiency. They are: population growth, low and stagnating agricultural productivity, policy distortions, weak institutions, and poor infrastructure.Nonetheless, while some of the limitations pointed out above could indeed be somewhat challenging to deal with especially when you consider the continent’s financial limitations, population growth, conflicts, climate change and so on, other challenges that have also played a major part like primitive agricultural methods, policy distortions, weak institutions, poor infrastructure, poor governance are all manageable problems that can be addressed swiftly with the little financial means available.We can start by addressing the basics:Encouraging agribusinessA shift from primitive agricultural methods to more mechanised, technical and commercial-led principles is crucial today more than ever before. We must take the initiative and apply technology-led methods to improve the production cycle – including harvest, storage, processing and export.In fact, with the right technical assistance, agriculture production would improve if many practitioners saw it as not just a subsistence vocation but also a profit-generating one.Undeniably, there must be a change of perceptions, especially among young people that agriculture is a primitive economic activity that employs the less educated and/or rural population alone. More young people should be encouraged to explore the dividends of agribusiness.Better intra-African tradeIt is reasonable to argue that although trade among African countries has gradually improved over time, particularly as a result of more economic alliances such as the East African Community where members have open markets to allow free movement of people and goods/services, there remains significant challenges. Several countries have not fully embraced the idea of trading with one another despite the potential to fill existing gaps.It is understood that although food crises continue to be reported in parts of Africa almost daily, in many other African countries they have food surplus and are willing and able to trade with other African countries at reasonable prices, provided that trade barriers and other obstacles, such as corruption, are eliminated. For instance, you may remember that in 2007, the Guardian newspaper reported that although Malawi had record harvests of corn that year, it did not necessarily guarantee good times for Malawian farmers (in terms of trade). Instead, the paper argued that farmers across the country were wondering where to sell their harvest.With better intra-African trade frameworks in place, however, corn surplus from Malawi could have been easily sold in Zambia, Mozambique or Tanzania, or to other countries with food shortages.This move could have improved the livelihood of farmers in Malawi while at the same time helping to tackle hunger in neighbouring Tanzania or Mozambique.To conclude, while some factors are quite challenging to deal with (for instance drought conditions that have been exacerbated by climate change), there are many other man-made causes that continue to worsen Africa’s food security despite the immense risks that can spring out of that insecurity. When you hear that the lives of 20 million Africans are at risk in the next five years, there must be concern, followed by actions. Business should not go on as usual.
Apr 27 2017 | Posted in Rwanda
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analysisBy Desta Gebrehiwot
Contract farming is relatively an emerging phenomenon in the Ethiopian agriculture sector. Yet it is the best solution to create linkage between smallholder farmers, markets and firms.
According to a recently launched book ‘Contract Farming in Ethiopia: Concept and Practice’, firms that often use agricultural inputs find it difficult to starting their own farm as green field investment takes more time and resource. In several cases, while acquiring land proves tough, still investors fail to develop their land resulting in their licensees be revoked. To the rescue, contract farming is a better fit to companies’ needs than any option can deliver.
Contract farming is still not well developed in Ethiopia despite it’s over 20 years in practices. However, if well executed, besides reducing market uncertainty, farmers can be acquainted with new ways of agricultural priorities and will have secured market.
As contract farming is an agreement between unequal parties – strong companies and economically weaker farmers, its critics argue that it is risky for farmers to giving power to the companies to obtain cheap labor and to transfer risks to growers. If managed properly, it reduces risk and uncertainty for both parties compared to the traditional open market
There has to be a legal framework to enforce contract farming which many companies identify as a major constraint, says Ayele Gebreamlak, Agricultural Transformation Agency Director for Commercial Contract Farming. Establishing the legal frameworks is vital to protect both producers and businesses companies and preparation of legal guideline is underway on how to move forward with contract farming.
Many companies need stable supply of better quality products. The best option to do so is contract farming and firms should invest on the farmers for the latter to be able to grow and supply products in the right quality, adds Ayele.
Firms should give training for farmers to produce agricultural products the way the firms want to. “There is lack of experience among the farmers in growing the needed cereals,” he says. It is very important that farmers have the knowledge of growing technologies that a buying company need.
Contract farming best suits smallholder farmers as they know who to sell their product to prior to production. Contract farming will also help farmers to use the technology and insights for growing other productions, says, Gerrit Hotland editor of the book.
There is a growing interest from companies to get into contracts with smallholder farmers to meet demands for adequate ingredients used to produce their respective products. One of such is Heineken brewery. The company uses barley for its beer production. Heineken has currently got into contracts with 25,000 farmers for they supply barley for malt production.
“We want to substitute imported barley with local ones. The country has good ecology and strong farmers,” says Tarekegn Garomsa Heineken Breweries S.C Raw Materials Development Manager. “All what we need to do is to give farmers the necessary finance and training for quality supply of barley. This has now solved shortage of barely supply and farmers have been able to have reliable market access and generate more income as part of the contract.”
Apr 26 2017 | Posted in Agriculture
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