Arguably, one of the factors responsible for Africa’s improved trading over the past decade has been the Africa Growth and Opportunity Act (AGOA), a piece of legislation that was approved by the U.S Congress in May 2000. It was granted to assist the economies of sub-Saharan Africa grow economic relations with the world’s greatest economy.
The act facilitates duty-free entry into the U.S for certain goods, and the result had been an expanded access mostly for textile and apparel goods and a surge in foreign exchange earnings. It was initially set to expire in 2008 but, again, the U.S Congress extended the Act till 2015.
Last year, at the U.S-Africa Leaders’ Summit, a number of African heads of state pushed for the pact to be extended by a further 15 years and suggested that the range of products covered by the act be expanded to include agricultural products. The rationale for this is clear; U.S bound exports from sub-Saharan Africa under the AGOA totalled about $26.8 billion in 2013 alone according to Reuters. This fulfils the exact reason the act was enacted in the first place.
Lesotho and Kenya can be said to be the biggest beneficiaries of the deal as their economies have been diversified and strengthened largely as a result of the trading opportunities created by the act. Nigeria, the continent’s biggest economy, has also seen trade flows blossom to $18 billion since the act enactment.
South African President Jacob Zuma, at the summit, emphasized the need for another extension, saying; “Almost 95 percent of South African exports receive preferential treatment under AGOA. We strongly believe that by endorsing the extension of AGOA, the U.S. will be promoting African integration, industrialization and infrastructure development – I’m sure the Americans would not want to lose this opportunity.”
Diverse criticisms have emerged over the years from elements in the United States. Their main argument being that a further extension could damage America’s interests in the long run.
Dr Carlos Lopes, Executive Secretary of the UN Economic Commission for Africa, explains the points-of-view of the critics in a 2013 article, in which he wrote; “The Act’s opponents argue that Africa’s impressive growth in the 21st century means the continent no longer needs special treatment. They also claim that it is China and other countries who have been investing in Africa which have been the main beneficiaries from the removal of restrictions and that, in some cases, they are simply re-exporting their own products through African countries.”
“Evidence, however, shows that while African countries have certainly gained, as intended, the most from AGOA, the benefits have not by any means been all one-way. In the first decade since it came into force, US exports to sub-Saharan Africa tripled to $21 billion. As the US commerce department estimates that 5,000 American jobs are created or sustained for every $1 billion worth of exports, this trade is helping support over 100,000 jobs in the US. The US trade department has also insisted that proper safeguards are in place to prevent abuse of the rules,” he added.
This is a win-win for both regions, making the case for further extension all the more necessary. Apparel and footwear companies continue to champion the largest support as several hundred thousand jobs were created via AGOA. But, with the uncertainty surrounding the renewal of AGOA, further investments will be likely stall and the already created jobs may be in jeopardy.
If the extension succeeds, it will benefit both regions. American exports and jobs will increase as African countries develop their economies in new sectors. This will bolster the US’s global influence eve more.
The European Union, keen to escape its present economic uncertainties has already set up an Economic Partnership Agreement with 35 African countries. This is essentially a framework for free trade agreements. If this materializes and the AGOA fails to scale, the United States may remain at a permanent competitive disadvantage with respect to Africa, which happens to be the new investment frontier for global businesses.
In the run up to current AGOA expiry date of September 30, the world will be watching to see how the US treats its growing ally.
Source: Ventures Africa
Mobile money providers will earn an estimated USD 1.5 billion in fees from such things as bill payments and sending money to relatives in sub-Saharan Africa by 2019, according to the Boston Consulting Group.
Although mobile financial services are emerging all over the world, sub-Saharan Africa’s unique circumstances, a combination of a mostly “unbanked” population and heavy mobile-phone penetration, have turned the region into an early adopter of mobile banking and a test bed for the technology’s potential.
Eight of the ten countries that make the most use of mobile financial services are in Africa, and sub-Saharan Africa has the highest proportion of active accounts (43 %). Revenues will grow as Africa’s “unbanked” use their phones to pay bills, save money, and take out loans. As this trend takes hold, there will be opportunities for banks and MNOs. Africans are looking for more-secure ways to borrow and save money and are open to other financial products delivered using mobile phones, including loans and insurance.
With the population in sub-Saharan Africa growing and becoming wealthier, the number of people aged 15 or older with an individual annual income USD 500 or more will rise to more than 460 million by 2019. This trend is likely to strengthen as governments in sub-Saharan Africa increasingly focus on their education, health, and security systems, enhancing the potential for long-term economic growth in their countries.
According to BCG, there will be some 400 million mobile-phone subscribers and almost 150 million traditionally banked sub-Saharan Africans by 2019. This will leave about 250 million people aged 15 or older who have incomes of USD 500 or more and mobile phones but no traditional bank account. To succeed, banks and MNOs will need to invest in infrastructure, business capabilities, and governance.
Foreigners will be banned from owning land in South Africa under new proposals outlined by President Jacob Zuma. Locals will have limits set on the size of their farms under the proposals.
Mr Zuma first announced them in a state of the nation speech on Thursday overshadowed by violence in parliament. Two decades after the end of apartheid, land is still concentrated in the hands of a largely white minority, and remains a sensitive issue.
The government is under growing pressure to put more land in the hands of the country's black majority. "Land has become one of the most critical factors in achieving redress for the wrongs of the past," said Mr Zuma, elaborating on the plans on Saturday.
"In this regard, the regulation of land holdings bill will be submitted to parliament this year." In the future, foreigners will only be allowed to lease land, not to own it, he said, adding that local farmers would not be able to own more than 12,000 hectares.
That is presumably aimed at white farmers who still own much of the best farmland a generation after the end of racial apartheid, says the BBC's Andrew Harding in Johannesburg. There are many reasons for the slow pace of change in the country, says our correspondent, and these new proposals will face strong legal challenges from farmers who argue that smaller plots will not be commercially viable.
But the governing African National Congress is looking for votes, and is wary of being outflanked by more radical voices calling for white-owned land to be seized without compensation, he adds.
On Thursday, parliament descended into chaos as leftist MPs scuffled with security during Mr Zuma's key annual speech. The Economic Freedom Fighters (EFF), led by Julius Malema, repeatedly interrupted Mr Zuma, demanding answers over a spending scandal.
The speaker of parliament then ordered their removal, prompting scuffles. The EFF used President Zuma's annual State of the Nation speech to question him about a state-funded, multi-million dollar upgrade to his private residence.
The party has shaken up South African politics with a series of populist proposals to redistribute wealth.
Cocoa purchases declared to Ghana's industry regulator reached 494,960 tonnes by Jan. 29 since the start of the main crop, down 23.9 percent from Jan. 30 last year, industry regulator Cocobod said on Tuesday.
Cocobod is conducting a field trip to assess the crop and will decide in coming weeks whether to lower its annual output target, spokesman Noah Amenyah said.
The purchases, which covered 17 weeks of the main crop season, were lower than the 650,852 tonnes recorded for a period that ended Jan. 30 last year. That period represents the first 15 weeks of last season, Amenyah said.
Total purchases for the 17th week were 7,637.38 tonnes, he said.
Ghana, the world's second-largest cocoa producer after Ivory Coast, aims to buy at least 850,000 tonnes of cocoa in the 2014/15 crop year which is expected to end in September.
"We have had a strange season this year and we are still working to understand the phenomenon," Amenyah said, adding that besides dry Harmattan winds hitting the crop this year, there could be other factors responsible for the low yield.
Seatronics, UK, is to take delivery of GBP1million worth of its 6G acoustic positioning technology. The contract was placed on the second day of the Subsea Expo 2015 exhibition and conference in Aberdeen, UK. The multi-functional Compatt 6 transponders and Ranger 2 USBL (Ultra-Short BaseLine) positioning systems that make up the order will be utilised for a wide variety of subsea operations including structure installation, pipeline metrology, ROV tracking and touchdown monitoring.
The equipment is headed for West Africa to support the survey and construction phases of a major new field development project.
The Ranger 2 systems are being supplied with Sonardyne’s high performance Gyro-USBL transceiver. Unlike a conventional USBL transceiver, GyroUSBL can be set to work without the need for a time-consuming calibration procedure to determine the alignment of the ship’s motion sensors to the acoustic transceiver prior to use. Its easy installation and setup features ensure it is always in high demand in the offshore rental market where it is frequently supplied for short term use on vessels of opportunity.
Commenting at Subsea Expo 2015, Phil Middleton, Seatronic’s Deputy managing director for Subsea Rentals said this equipment adds to the largest rental stock of 6G equipment available globally and is in place to support committed client projects due to mobilise this spring.
The World Bank Group has announced the launch of Scaling Solar at the Powering Africa Summit in Washington DC, a gathering of African ministries, utility companies and the international power community.
The summit was to discuss progress and initiatives to increase access to energy across Africa. Scaling Solar aims to create a viable market for private solar projects in Africa that will help governments increase the supply of energy for millions of residential and commercial consumers across the continent.
The project, which was launched on Thursday in Dakar, Senegal, and Washington DC, United States, is aimed at reducing the development time and uncertainty for bidders and investors, while lowering tariffs for utilities, which ultimately benefits consumers. “The World Bank Group is committed to promoting sustainable universal access to modern energy in Africa, and Scaling Solar is a key step towards attaining this goal,” said Jean Philippe Prosper, IFC Vice President for Global Client Services.
“By quickly delivering affordable electricity to previously unreached populations, significant progress can be made on other development goals.” According to Jean Philippe Prosper, Africa has some of the world’s most abundant solar resources, yet more than a third of the population lives without electricity.
Investors developing private solar projects in Africa, he said, are often deterred by a variety of obstacles, including the unique features and structures of the different markets, high transaction costs, heavily negotiated agreements and high-perceived risk and cost of capital. As a result, the region continues to struggle with slow, relatively expensive and ineffective solar development, which impedes access to electricity.
Ejura Audu of Africa Communications International Financial Corporation Nigeria said this to Daily Independent on Thursday through email. He said Large-scale photovoltaic solar power can be quickly and economically developed to increase the supply of electricity to national grids and improve the reliability of power services for households and businesses.
Scaling Solar provides a straightforward package to help countries determine the size and location of projects, then auction them competitively to developers.
Source: Daily Independent Nigeria
An internally flawless 100 carat diamond described as 'perfect' by experts is expected to sell for a staggering £16 million.
The Type IIa diamond, which is in a classic emerald cut and is 'whiter than white', was mined by De Beers in South Africa.
Its current owner spent more than a year studying, cutting and polishing the rough diamond to deliver the spectacular stone.
The result is what experts are calling the largest perfect diamond with a classic emerald cut ever to be offered at auction. It is one of just five diamonds of similar quality over 100 carats that have ever been sold publicly. It will be sold by Sotheby's at its Magnificent Jewels auction in New York on April 21.
Gary Schuler, head of Sotheby's jewelry department in New York, yesterday described the 100.20 carat diamond as 'the definition of perfection'. He said: 'The colour is whiter than white, it is free of any internal imperfections, and so transparent that I can only compare it to a pool of icy water.
'It is the first true emerald cut diamond over 100 carats to be offered at auction - the most classic of cuts, quietly elegant and very contemporary.' Less than one per cent of the world's diamonds are Type IIa, and they are the most valuable of all diamonds.
The diamond will be exhibited in Dubai, Los Angeles, Hong Kong, London and Doha, before returning to New York for exhibition in April. If it sells for £16 million ($25 million), it will be among the most expensive diamonds ever sold publicly.
The current record is $30.6 million, which was paid for a 118.28 carat diamond at a 2013 Sotheby's sale in Hong Kong.
Lisa Hubbard, chairman of North & South America for Sotheby's International Jewelry Division, said: 'The rarest object of natural beauty on the market right now, this 100-carat diamond could be considered the ultimate acquisition.
'It has everything you could ever want from a diamond. The classic shape begs to be worn, while the quality puts it in an asset class of its own. 'The stone gives you so many options - admire it un-mounted, wear it as a simple but stunning pendant, or mount in a designed jewel.'
Source: Daily Mail UK
THE Minister for Energy and Minerals, Mr George Simbachawene, has given greenlight for acquisition of TanzaniteOne Mining Limited by Sky Associates Group.
State Mining Corporation (STAMICO) Acting Managing Director, Eng Edwin Ngonyani said on Thursday that the consenting of the Minister was in accordance to the terms and conditions of the Mining Act 2010 and the Mining Licence (ML) regulations 490/2013.
"The implication of this consent now means that Richland Resources has been allowed to sell its company TanzaniteOne (SA) Proprietary Limited to Sky Associates Group Limited, a company registered in British Virgin Island and operating in Hong Kong for 22.5 million US Dollars inclusive of debts and assets," he said.
Eng Ngonyani said that prior to the Minister's consent there were a lot of misconceptions floating on social media that STAMICO was wrong by agreeing to the sale, that the amount was too little and that one of the directors of the new owner was rumoured to be the son of President Jakaya Kikwete, Mr Ridhwani Kikwete.
He said that these rumours even reached the Parliamentary Committee for Energy and Minerals and in their meetings they had agreed that once the Minister has consented, STAMICO should inform the public to quell anxiety amongst the public. "Now that the consent is out, let me clear a number of things. One of the three directors is Rizwan Ullah, an Indian national residing in Hong Kong, and not Mr Ridhwani Kikwete.
It was perceived by some that the sale amounted to 5.1 million US Dollars but is in fact 22.5 million US Dollars," he explained. Eng Ngonyani said that now that the consent is out, they are preparing meetings with the new joint shareholder of the ML 490/2013 Sky Associates Group to improve their joint venture contract in the Mirerani block for the greater welfare of STAMICO and Tanzanians.
Some of the areas targeted in the improvement of the contract include production from the mine to be sold locally so as to ensure enough supply of Tanzanite into the local market for value addition purposes before the surplus is sold into the international market, STAMICO to be given the assurance of receiving timely payments of management fees (2.5 per cent) of Tanzanite sales.
Others are STAMICO to be fully involved in the mining, sorting and trading business chain of Tanzanite as a partner with 50 per cent ownership in the mineral right, the two parties to work aggressively together to promote Tanzanite internationally and locally so as to boost its demand and price for the benefit of the nation and operators.
Source: Tanzania Daily News
Stabilising Eskom's finances is a priority and the power utility will be given R23 billion to do so, President Jacob Zuma announced on Thursday. "The government will honour its commitment to give it around R23 billion in the next fiscal year," he said in his state-of-the-nation address to Parliament.
He acknowledged South Africa was experiencing serious energy constraints. "[These] are an impediment to economic growth, and are a major inconvenience to everyone in the country."
Overcoming the problem was uppermost in government's priorities. "We are doing everything we can to resolve the energy challenge." Cabinet was working "round the clock" with Eskom to stabilise the electricity supply system and contain load shedding.
"As a priority we are going to stabilise Eskom's finances to enable the utility to manage the current period." Zuma said Eskom had been directed to switch from diesel to gas to run its generators. Government's long-term energy master plan involved gas, petroleum, nuclear, hydropower and other sources as part of the energy mix.
"South Africa is surrounded by gas rich countries, while we have discovered shale gas deposits in our own Karoo region. "The Operation Phakisa ocean economy initiative, launched last year, also promises to unveil more oil and gas resources, which will be a game changer for our country and region."
On the country's future nuclear energy plans, he said this involved a 9600MW nuclear build programme, as approved in the 2010-30 integrated resource plan. "To date government has signed inter-governmental agreements and carried out vendor parade workshops in which five countries came to present their proposals on nuclear."
These included the US, South Korea, Russia, France, and China. "All these countries will be engaged in a fair, transparent, and competitive procurement process to select a strategic partner or partners to undertake the nuclear build programme.
"Our target is to connect the first unit to the grid by 2023, just in time for Eskom to retire part of its ageing power plants." On hydro power, he said the Grand Inga Hydro-electrical Project partnership with the Democratic Republic of Congo would generate over 48,000MW of clean hydro-electricity, of which South Africa would have access to over 15,000MW.
No fewer than 5,400 vessels called at Nigerian ports last year, shippers in the country have said. The shippers, under their umbrella union, Shippers' Association Lagos State (SALS), said the vessels called at the nation's seaports through their efforts and co-operation.
President, SALS, Reverend Jonathan Nicole disclosed this in Lagos. However, Nicole said the shipper needed more support from the federal government in form of duty waivers. According to him, SALS would vigorously pursue exportation of agro-allied products and would encourage local manufacturing industries.
"Imports will continue to come but agriculture and exportation of agro-allied products would be promoted", he said.
He stated that members of SALS support the revamping and construction of cottage refineries and for the by-products to be exported, adding that clearance of cargo will be more scientific and cost effective. Nicole explained that industries should be able to overcome their heavy financial burden in clearing their raw materials.
He suggested that the 33 mineral resources of the nation should be properly used to improve revenue. According to the SALS president, in the early 70s, Nigeria's crude oil was sold at 13 dollars per barrel. Three dollars was saved while 10 dollars was used for budgetary purposes. He therefore suggested that 10 dollars be set aside for our reserves which should not be shared.
He called for the resuscitation of the Price Control Board, pointing out that emphasis must be on aggressive farming in all states, as well as the warehousing and preservation of agricultural products.
"Shippers' Association is available to act as an instrument of hope in all segments of the maritime community; encourage ownership of vessels by Nigerians; and reintroduce barges for evacuation of cargo. We need all to support the objective of the Shippers' Association to lay the foundation for a veritable and trusted rail track toward a total economic freedom.
"In this process, government will be approached to relax levies on exportable items; simplify cargo clearing process and make farming implements duty free. Shippers across the country and outside, especially in Cotonou will be reached and made to relocate to Nigeria", he added.
Giving an insight into the formation of SALS, Nicole said the association was formed over nine years ago to protect the interest of shippers, protect their investments and act as a pressure group.
His words: "The Nigerian Shippers' Council, after noticing the efforts of the shippers, made available a space on the 10th floor of the Shippers' Plaza to work together as one of its primary partners. We therefore solicit for a bigger, more spacious and befitting secretariat. It is our belief that in a few years' time, we will achieve an enviable status as problem of members would have been solved at least 90 per cent when the new port order comes into manifestation. Industries will overcome their heavy financial burden in clearing their raw materials".
He said shippers will hold conferences and workshops at least two times in a year until the Federation of Nigerian Shippers' Association (FONSA) is formed. The Chairman of Ports Consultative Council (PCC), Chief Kunle Folarin, commended the association for moving the nation's commerce and industry sector forward.
He said that the shippers had been the movers of the Nigerian economy, adding that without the ports, there would be no ship and without the shippers, there would be no cargo. He called for investment and co-operation as well as opportunities for the new economic agenda for the maritime sector of the economy.
Source: THISDAY NEWS NIGERIA