Major International Business Headlines Brief::: 03 November 2020

Tue Nov 3 09:02:09 CAT 2020

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Major International Business Headlines Brief::: 03 November 2020

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ü  US businesses brace for election unrest

ü  Third of staff 'fear catching Covid at work'

ü  Chinese firm moves from adult diapers to face masks

ü  Indians asked to eat more sugar to tackle oversupply

ü  Covid threatens to ground India's aviation industry

ü  Covid: Ryanair will not offer refunds for November flights

ü  Tired of Trump, Deutsche Bank wants out but sees no good options - sources

ü  Lenovo profit beats expectations, helped by remote working trend

ü  Nigeria: Amnesty Prioritised Stable Oil Production, Not Progress of Niger Delta - Report

ü  Nigeria: Govt Raises Committee to Address Delay in Salary Payments

ü  Nigeria: World Bank Projects $2bn Drop in Nigeria's Diaspora Remittances

ü  African Development Bank Group Approves $440,000 Emergency Relief Assistance for Flood Victims in South Sudan and Sudan

ü  Northam Platinum in discussions to “accelerate” maturity of Zambezi BEE transaction

ü  AngloGold Ashanti doubles payout rate as third quarter cash floods into coffers

 <mailto:info at bulls.co.zw> 

US businesses brace for election unrest

Shop-owners in cities across the US are boarding up windows as they brace for unrest following the US election.

The preparations come just a few months after many businesses were hit by looters in the violent demonstrations that erupted after the death of George Floyd in the hands of police.

Retailers Saks 5th Avenue, Nordstrom and pharmacy chain CVS were among the biggest firms taking precautions.

Concerns the election will be contested have also weighed on financial markets.

However, the main US indexes closed higher on Monday, reversing course after steep falls last week.

National polls suggest a healthy lead for challenger Joe Biden over current US President Donald Trump in Tuesday's election.

But Mr Biden's lead is narrower in the handful of states that could decide the result. Legal disputes over what votes will be counted are already under way in many states.

In 2000, when a recount fight in Florida raised uncertainty about the outcome of the US election, financial markets sank by about 5%, said Brian Gardner, chief Washington policy strategist at investment bank Stifel.

Mr Gardner is predicting a Biden victory but warned that questions about the result and any outbreak of violence could cause a steeper fall this time around.

Walmart last week said it was temporarily removing guns and ammunition from display in thousands of its stores in the United States, citing concerns of "civil unrest". A day later, however, it reversed the decision.

In recent days, Australia's Department of Foreign Affairs updated its travel advisories, warning citizens against travel to the US in part due to anticipated violence.

"Take precautions to keep safe during the election season," it says. "Avoid areas where protests and demonstrations are occurring."

More than 96 million Americans have already cast their ballots in early voting, putting the country on course for its highest turnout in a century.--BBC

Third of staff 'fear catching Covid at work'

More than a third of workers are concerned about catching coronavirus on the job, according to a study by the Resolution Foundation think tank.

The poorest paid are particularly worried, the research found, but also the least likely to speak up about it.

Younger workers are also less likely to raise a complaint, the Resolution Foundation said.

The widespread concerns come despite government advice on making workplaces Covid-secure, researchers said.

Lindsay Judge, research director at the Resolution Foundation, said: "More than one-in-three workers are worried about catching coronavirus on the job, despite the extensive steps employers have taken to make workplaces Covid-secure.

"Given many workers' limited ability to get employers to address Covid concerns, the UK needs a strong enforcement regime to ensure that workplaces are as safe as can be.

"But instead health and safety resources have been cut, inspections have been slow, and Covid-related enforcement notices are few and far between."

Funding question

The researchers said they were also concerned about the reduction in funding at the Health and Safety Executive.

The HSE's funding for each site it has the right to inspect has shrunk from £224 a decade ago to £100 for the current financial year, according to the report.

"The Foundation says policy makers should overturn the current view that health and safety is a 'brake on business' and take a more proactive approach to enforcement in the face of the pandemic," it said.

A government spokesman said £14m of funding was given to the HSE to combat coronavirus earlier this year.

An HSE spokesperson said: "We thank the Resolution Foundation for its report, and with our partners across government we will examine its findings. We welcome the acknowledgement of our increased activity and share the commitment to ensure all employees have a voice.

"Making sure Great Britain's workplaces are Covid-Secure is our priority; this effort will not be affected by recent additional restrictions announced across England, Scotland and Wales. We will work with stakeholders to deliver workplace health and safety during this coronavirus pandemic.

"Inspection and putting duty holders on the spot is just one part of a wide ranging regulatory approach. We use a number of different ways to gather intelligence and reach out to businesses with a combination of site visits, phone calls and through collection of supporting visual evidence such as photos and video footage."

While a new lockdown in England is planned from Thursday, up to half of workers could still be going to work in jobs such as essential retail, education and health, Resolution said.

The research used an online YouGov survey of 6,061 adults across the UK.--BBC

Chinese firm moves from adult diapers to face masks

A Chinese firm has pivoted its business from making adult diapers to surgical masks.

A Chinese firm specialising in adult nappies - also known as diapers - is to provide protective masks to the UK.

Daddybaby has just been certified by the British Standards Institution (BSI) and the EU to offer personal protective equipment (PPE).

It is one of many companies to have switched to medical supplies and equipment during the virus pandemic.

Daddybaby is one of the China's best-selling diaper brands, becoming the first to be publicly-listed in 2015.

The company normally specialises in a very different line of products - including baby diapers, adult diapers and sanitary towels - but it has now modified six production lines, increasing its output to 1,100 mask pieces per minute, or 4.5m a day.

Reacting to the approvals by the BSI and EU, the company said it will allow it "to break new grounds".

Daddybaby first started making masks for Chinese citizens when the outbreak started in late January, and has since begun exporting them to other countries.

"Daddybaby has provided more than 30m civilian masks to the people of China and donated over two million masks to people around the world," it said.

Since the Chinese firm retooled its production lines it has been exporting more personal protective equipment (PPE) overseas.

"The demand for high quality, certified equipment will continue to soar," said Shanghai-based Shaun Rein, founder of the China Market Research Group.

"This gives good opportunities for better run factories with large scale manufacturing capabilities to get certified and ship globally."

Despite being a successful company, diaper sales are flat in China so this change "is an enormous opportunity for them to grow", Mr Rein added. "This will also be part of China's mask diplomacy. I expect China to help poorer countries especially with masks and other protective equipment."

There have been a number of high-profile companies that have pivoted towards protective equipment and medical devices during the pandemic.

In March, Louis Vuitton owner LVMH said would use its perfume production lines to start making hand sanitiser to protect people against the coronavirus outbreak.

And a handful of firms including Siemens, Airbus, Ford and a number of Formula 1 teams, worked with Penlon, a medical device maker, to adapt its ventilators so that they could be mass-produced at speed.

The BSI was established in 1901 and has become world-renowned for setting business standards.--BBC

Indians asked to eat more sugar to tackle oversupply

A glut of sugar has prompted India’s industry body to start a campaign to encourage Indians to eat more.

The Indian Sugar Mills Association (ISMA) said it wants to bust myths about sugar and its health effects.

On average, Indians eat around 19kg a year, which is well below the global average.

Still, the country is the world’s biggest consumer of the sweetener overall.

India’s production is expected to rise by 13% this year to 31m tonnes but the government has indicated that it might stop export subsidies aimed at clearing surpluses.

ISMA's new website features short articles with titles such as “Eat, Drink & Be Healthy: A little sugar not all that bad”.

The online campaign also includes social media posts and workshops, where celebrity chefs and health coaches discuss healthy living.

It features recipes for sweets, and takes aim at artificial sweeteners, suggesting they don't help people lose weight and can have health consequences.

At the launch of the website, India’s food secretary Sudhanshu Pandey told local media that sugar’s reputation is not deserved.

“There are a lot of myths going around about sugar and sugar consumption without scientific basis,” he said.

The campaign takes a distinctly different approach to campaigns in other countries, which have pushed to reduce sugar consumption.

Sugar is associated with a variety of health problems, such as obesity and diabetes.

The World Health Organisation (WHO) is particularly concerned about “free sugars” which are usually added to food and drink by manufacturers, but are also found in honey and fruit juice.

Trade sweetener

About 50 million farmers in India are engaged in cane farming, with millions more working in mills or engaged in the transportation of cane.

The government has taken an interventionist approach, using subsidies to help sell Indian sugar overseas, an approach that has been opposed by other sugar-producing nations.

One other way to get rid of excess sugar is to use it for fuel, by turning it into ethanol.

The Indian Sugar Millers Association predicts ethanol production will increase from 1.9bn litres this year to 3bn litres in 2021.--BBC

Covid threatens to ground India's aviation industry

The pandemic has dealt a body blow to India's airlines, which had already been battling a broken pricing model and a domestic slowdown, writes the BBC's Nidhi Rai in Mumbai.

"I have sold my house and moved into a small apartment because I could no longer afford to pay my home loan," says a former pilot who wishes to remain anonymous.

The 38-year-old, who used to work for the state-run Air India, said he and his relatives were constantly harassed by the bank when he began defaulting on his payments.

"Bankers even came to my house and it was embarrassing for me. So I gave up my house in a distress sale. It was heartbreaking."

There was a time when flying for Air India was a lucrative career. In 2011, senior pilots were earning as much as 10 million rupees which, at the current exchange rate, amounts to more than $135,000 or £103,000.

But the country's flagship carrier is now bankrupt. It has been looking for a buyer for years - a prospect that has dimmed amid the pandemic, reportedly forcing the government to even consider wiping the airline's $3.3bn debt-tag from the deal.

Air India is not the only one in trouble. Indian aviation - once a promising industry with aspirational jobs - has been floundering in recent years. Seven airlines, including Jet Airways, India's oldest private carrier that was often hailed as a success story, shut shop in the past decade. And now Covid-19 is threatening the rest, compounding the effect of years of high fuel prices, heavy taxes, low demand and cut-throat competition.

Jet Airways employees hold placards as they raise slogans during a protest against delayed salaries and the current shutdown crisis outside Rajiv Gandhi Bhawan at Jor Bagh on May 21, 2019 in New Delhi, India.

And it comes after a difficult year globally - in 2019, the grounding of the Boeing's 737 Max aircraft due to technical issues and Airbus' problems with its Pratt & Whitney engines hit airlines hard. Although lower aviation fuel prices offered some respite, it was not enough to recover long-term losses.

India currently has eight carriers, with Indigo leading the market. Air Deccan was the only airline which was forced to suspend operations in April, putting all its staff on leave without pay until further notice.

"Indian airlines are very precariously placed," says Kapil Kaul, South Asia CEO of CAPA - Centre for Aviation, an industry organisation.

The biggest challenge, experts say, is the slowdown in passenger traffic. India's stringent coronavirus lockdown, which lasted more than two months, stopped all air traffic. Although airlines have begun operating again, far fewer people are flying and international traffic is still severely curtailed.

Domestic passenger traffic between May and September 2020 was 11 million, down from more than 70 million for the same period the previous year, according to ratings agency ICRA. Traffic is expected to remain low in 2021 as well, ICRA vice president Kinjal Shah says.

So cash-strapped airlines are cutting jobs. Air India alone has let 48 pilots go this year and other airlines have sent many of their pilots on leave without pay or have slashed salaries up to 30%, says Praveen Keerthi, general secretary of Indian Commercial Pilots' Association. The International Air Transport Association estimated that India could see up to three million job losses in aviation and allied sectors such as airport services.

"It's the only option left," says Urvashi Jagasheth, a research analyst at Care Ratings. "The only cost which can be adjusted or tapered is salaries."

This is because revenue is now stagnant and operational costs - such as fuel, maintenance and airport charges for parking - are beyond their control.

Ms Jagasheth adds that the so-called budget airlines, such as Indigo or Air Asia, are no better off because they have been absorbing the costs they didn't pass on to passengers. Both airlines are looking to raise millions of dollars to get through the crisis.

IndiGo Airlines Air hostess wearing protective mask posing for selfie on smartphone at the Netaji Subhas Chandra Bose International Airport on June 04, 2020 in Kolkata, India.

"It's mentally very challenging to work in such uncertain times," says Amalendu Pathak, a pilot for a private airline. "But we have to keep working. I used to earn in millions and now I am earning $81 per hour. I have a family to feed. My savings are running out."

The situation is jut as bad for other employees in the industry. Ritika Srivastava, 34, used to work in the accounts division of a private airline. She quit her job for a similar role at a private airport company that was due to begin in March 2020. But the offer fell through because of the pandemic.

"They said they would call back once things normalise. It looks difficult now."

To reduce their living costs, she and her husband moved from the national capital, Delhi, to her hometown, Varanasi, in the neighbouring state of Uttar Pradesh.

"We couldn't afford to live in Delhi. Our savings dried up. My husband is not getting paid in full either. He only gets 30% of his salary," Ms Srivastava says.

"I have been hunting for a job for seven months. Wherever I go, they tell me that I only have experience in the aviation sector. But I have a background in finance too."

A Passenger with protective gear arrive Netaji Subhash Chandra Bose International Airport in Kolkata on September 03,2020.

But experts fear that the recovery, like the virus' progress, will be prolonged and full of uncertainties. For one, the pandemic's impact on the global economy and the slowdown in India will both effect aviation in the long-term. And consumer demand will likely pick up slowly.

What airlines need is cash - in the form of government-backed credit lines or loans to help them get back up and running.

Ms Jagasheth says the government cold help in other ways too: "Waiver of airport parking charges or navigational services for three months could help."

But beyond that, experts say, it's a waiting game.

"Demand is improving but it's still significantly lower," Mr Kaul of CAPA - Centre for Aviation says. "There are no visible trends that key traffic segments like business or leisure are returning soon and there are no expansions likely until the end of the financial year 2022 by key players."--BBC

Covid: Ryanair will not offer refunds for November flights

Ryanair's CEO says claims that the airline has not refunded all passengers are false.

Ryanair customers will not be refunded for flights in November, according to its boss, despite the UK government banning all but essential travel.

Michael O'Leary said if a flight was operating, passengers would not get their money back but they could change to a later flight without paying a fee.

>From Thursday, all but essential travel will be banned under a second lockdown.

Ryanair said the first lockdown and subsequent restrictions had resulted in an 80% drop in passenger numbers.

It said 17.1 million people travelled on the airline in the six months to September, compared with 85.7 million last year.

The carrier reported a €196.5m (£174m) loss for the period compared with a €1.15bn profit last year.

But it warned the situation was likely to worsen, saying it "will continue to be a hugely challenging year for Ryanair".

Coronavirus: Can I still go on holiday?

The new lockdown measures for England to stop the spread of the coronavirus were announced on Saturday and are expected to come into force on 5 November following a vote in the House of Commons on Wednesday.

They will remain in place until at least 2 December though Cabinet Office minister Michael Gove said restrictions could extend beyond that date.

>From 5 November until 2 December, people living in England are not allowed to travel overseas "unless for work, education or other legally permitted reasons".

If you've booked a flight to go on holiday during that period you are not supposed to travel.

But because people who have a valid reason can travel, airlines will operate a limited number of flights to certain destinations.

In fact, Ryanair says it won't cancel any of the flights it had scheduled during that period.

However, the law states that you are only entitled to a refund if your flight is actually cancelled.

So the only option for people who are booked to fly with Ryanair on a holiday during that period is to try and reschedule their booking to a Ryanair flight after 2 December.

There is no fee for changing bookings which were made after 10 Junebut there is also no guarantee that the new international travel restrictions won't remain in place beyond that date.

Commenting on what it means for people who have booked flights, Mr O'Leary told the BBC's Today programme: "If a flight is operating then no, we will not be offering refunds.

"But what customers can avail of is our change facility and we've waived the change fee so if they have booking in November they can change it and move it to December or January if needs be. But there won't be refunds on flights that are operating and travelling."

However, the no fee on changing flights only applies to bookings made after 10 June for journeys between July and November, according to Ryanair's website.

'No outstanding refunds'

Mr O'Leary also said that Ryanair had paid out all refunds to customers who had requested one following disruption to flights earlier this year.

"We have refunded every single customer who has requested a refund… from March, April, May, June and July.

"Every customer who has requested a cash refund from Ryanair has now received it."

He said the airline had "no backlog" in its refunds department, adding: "Even if you apply for a refund today you'll receive now in the next three to four days."

But Rory Boland, travel editor at consumer rights group Which?, said: "While Ryanair has recently made some improvements, we still get more complaints about its handling of refunds than any other airline, including from a steady stream of passengers still struggling to get their money back."

He added: "Trust in travel has taken a battering during the pandemic and questionable claims about an airline's performance on refunds are hardly going to help matters. Ryanair now risks adding insult to injury by refusing to refund passengers who cannot fly this month because of the latest lockdown.

"The airline is only offering fee-free transfers to a later flight."

Mr O'Leary said the airline had paid out €1.5bn in refunds amid the pandemic.

Ryanair's revenues in the six months to September plunged to €1.1bn from €5.3bn last year, as air travel ground to a virtual halt after measures to stop the spread of the coronavirus were introduced.

However, when flights did resume Ryanair said passenger confidence and forward bookings "were negatively impacted by the return of uncoordinated EU government flight restrictions in September and October which heavily curtailed travel to and from much of Central Europe, the UK, Ireland, Austria, Belgium and Portugal".

If you have a package holiday cancelled by the provider, then a refund should be provided for the whole holiday within 14 days

If your flight is cancelled, you are entitled to a full refund to the original form of payment within seven days, although many airlines are struggling to meet that deadline. You can accept, or refuse, vouchers or a rebooking but a voucher will probably be invalid if the airline later goes bust

If you decide against going on a future flight, which is not yet cancelled, then there is no right to a refund. Different airlines have different rules over what you can do, but many are waiving any charges for changing to a later flight or having a voucher instead. Your travel insurance is unlikely to cover you.--BBC

Tired of Trump, Deutsche Bank wants out but sees no good options - sources

NEW YORK/FRANKFURT (Reuters) - Deutsche Bank AG DBKGn.DE is looking for ways to end its relationship with President Donald Trump after the U.S. elections, as it tires of the negative publicity stemming from the ties, according to three senior bank officials with direct knowledge of the matter.

Deutsche Bank has about $340 million in loans outstanding to the Trump Organization, the president’s umbrella group that is currently overseen by his two sons, according to filings made by Trump to the U.S. Office of Government Ethics in July and a senior source within the bank. The three loans, which are against Trump properties and start coming due in two years, are current on payments and personally guaranteed by the president, according to two bank officials.

In meetings in recent months, a Deutsche Bank management committee that oversees reputational and other risks for the lender in the Americas region has discussed ways in which it could rid the bank of these last vestiges of the relationship, two of the three bank officials said. The bank has over the years lent Trump more than $2 billion, one of the officials said.

One idea that has come up in the meetings: sell the loans in the secondary market, two of the bank officials said. But one of the officials said that idea has not gained traction, in part because it is not clear who would want to buy the loans and the attendant problems that come with it.

While it was known that Deutsche Bank has been closely examining its relationship with Trump, including by setting up a working group in 2016 to review the bank’s relationship with him, its recent eagerness to end all ties and the contours of discussions in light of the election have not been previously reported.

Deutsche Bank declined to comment. The Trump Organization did not respond to requests for comment. The White House declined to comment.

WARREN’S WARNING

The German bank, which first started lending to Trump in the late 1990s, has been dragged into congressional and other investigations into the real estate mogul-turned-politician’s finances and alleged Russia connections.

The probes and the bad press, seen by one senior executive as “serious collateral damage” from the relationship, are an unwelcome distraction for the bank, the three officials said. It comes at a time when Chief Executive Christian Sewing is trying to turn Deutsche Bank around after its decades-long run at becoming a major Wall Street bank left it nursing huge losses.

Elizabeth Warren, a Democrat member of the Senate banking committee, has previously called for an investigation into Deutsche Bank over its money laundering controls and has demanded answers from the lender about its relationship with Trump and his family. She told Reuters that she intended to keep pushing for a probe in the next administration.

“You bet I’m going to continue to fight for accountability and strong enforcement of our banking laws, especially for giant institutions like Deutsche Bank,” she said.

What happens next for the bank rests on the outcome of Tuesday’s elections, according to the three bank officials.

If the Republican president loses, and Democrats take control of the White House and Congress, senior Deutsche Bank executives believe congressional investigations that have stalled amid a court battle over access to Trump’s financial records could be rejuvenated, the three bank officials said.

In this scenario, however, Deutsche Bank executives believe they will also have more freedom to deal with the loans and end their relationship with Trump, the officials said. They hope doing so might help reduce some of the scrutiny, they said.

DIFFERENT SCENARIOS

The loans, which are against Trump’s golf course in Miami, and hotels in Washington and Chicago, are such that the Trump Organization has only had to pay interest on them so far, and the entire principal is outstanding, two of the three bank officials said. They come due in 2023 and 2024, the filings show.

The businesses backing the loans face challenges. The coronavirus-driven economic slowdown has hit the travel industry, including hotels. Moreover, last month Reuters reported that Trump’s plan to make money by developing houses and hotels on his golf courses, including the one involving the Deutsche Bank loan, had not panned out so far.

The Deutsche Bank executives are not unduly concerned about Trump’s ability to repay the loans, given the president’s personal guarantees and the time left before they come due, the three bank officials said.

If Trump is not in office, Deutsche Bank executives feel that it would be easier for them to demand repayment, foreclose if he is not able to pay it off or refinance, or try to sell the loans, according to two of the three bank officials.

Since Trump has personally guaranteed all the loans, Deutsche Bank could also seize the president’s assets if he is unable to repay, two of the three bank officials said.

If Trump wins a second term, Deutsche Bank executives feel their options would be fewer, the three bank officials said. The bank wouldn’t want the negative publicity inherent with seizing assets from a sitting president and would likely extend the loans until he is out of office, two of the bank officials said.

The bottom line, the three bank officials said, is that the matter won’t be resolved until well after the election.

Lenovo profit beats expectations, helped by remote working trend

HONG KONG (Reuters) - China’s Lenovo Group, the world’s biggest PC maker, posted a better than expected quarterly profit on Tuesday and said it is continuing to benefit from “new normal” remote working after COVID-19.

Lenovo reported a 53% jump in net profit for the quarter ended September to $310 million, beating an average $224 million estimate of eight analysts, according to Refinitiv data.

Revenue increased 7% to $14.5 billion.

Nigeria: Amnesty Prioritised Stable Oil Production, Not Progress of Niger Delta - Report

Nigeria's Presidential Amnesty Programme (PAP) created in 2009 by the government of late President Umaru Yar'Adua was not meant to fix the socio-economic and environmental difficulties faced by people living in the oil-bearing Niger Delta region, but chiefly to restore oil production which declined from militants' interruption of activities in oil fields there, a new report has disclosed.

Now in its 10th year with huge sums of money reportedly put in its implementation, the report 'Assessment of the Presidential Amnesty Programme (PAP)' published by the Nigerian Natural Resource Charter (NNRC) and Nextier SPD (Security, Peace and Development) noted that the amnesty programme now suffers from elite capture, corruption and accountability deficit.

It called for its wind-down by the government, or transition into social and community-based programmes within the ministries of the federal and state governments, as well as independent programme for young Nigerians.

The report, however, warned that this could be resisted by key beneficiaries of the programme's weak governance framework but insisted that the government would have limited financial strength to continue to fund it with current situations in the global oil market.

Obtained by THISDAY, it reiterated that the region from where most of Nigeria's oil is extracted is marred by youth unemployment, environmental degradation and other forms of socio-economic and political deprivations which are major security threats to lives, livelihoods, environment and critical oil infrastructure.

It also noted that at the peak of the crisis in 2009 which birthed the programme, Nigeria's oil production dropped to as low as 700,000 barrels per day (bpd) from the previous production level of 2.2 million barrels a day (mbd).

The country, it explained, lost about N8.7 billion or $58 million daily from the crisis, but that the initiation of the programme, "was designed to restore oil production to pre-amnesty level and reducing the scale of insecurity in the region."

"Part of its provision is to support ex-militants with monthly stipends, as well as providing vocational and university education as part of its Disarmament, Demobilisation and Reintegration (DDR) process.

"PAP has now existed for more than 10 years, well beyond the planned five years, with its objectives not fulfilled and no end in sight. The programme's budget is becoming too heavy and unsustainable in light of competing priorities for the government.

"This coupled with issues of lack transparency, corruption, nepotism, patrimonialism and exclusionism have trailed the existence of the PAP," it added.

The report explained that the PAP has recorded some successes including helping to mitigate tension and insecurity in the region but has been largely mismanaged.

"The payment of the monthly N65, 000 to ex-agitators, while ensuring some stability in the region has had the unintended consequence of making some beneficiaries bigger than their communities, ultimately upending some traditional mores.

"Another troubling aspect revolves around the maintenance of the list of 30,000 beneficiaries, which has been seemingly compromised through the direct control of the ex-generals of the various groups," it said.

While reviewing its efficiency, the report said, "it is obvious that the root causes of the conflict such as marginalisation, corruption, youth unemployment, poverty, environmental degradation are still visible and largely unaddressed.

"The PAP appears to have rewarded criminality, militancy and aggressiveness while being unable to address the underlying causes that gave birth to the militancy in the first place."

It further noted that despite its well-funded profile, its cost-efficiency has deteriorated as juicy contracts are handed to influential Nigerian elites. It added that the National Assembly which is equally legally duty-bound to oversight its activities have turned a blind eye to the maladministration of PAP.-This Day.

Nigeria: Govt Raises Committee to Address Delay in Salary Payments

The federal government has set up a committee to address the problem of fund shortage that has stalled the payment of October salaries to workers in ministries, departments and agencies (MDAs).

However, it assured them that steps have been taken to resolve the matter and the salaries might be paid this week.

The Head of Civil Service of the Federation (HoS), Dr. Folasade Yemi-Esan, in a statement yesterday, said a committee made up of representatives of the Federal Ministry of Finance, Budget and National Planning, the Budget Office and the Office of the Accountant General of the Federation had been set up to determine the shortfalls of MDAs.

According to her, the shortfalls are to be paid from the lump sum already set aside in the budget for the minimum wage and its consequential adjustment.

The committee is expected to conclude its work by the end of this week so that salaries can be paid.

While appreciating civil servants for their patience, the HoS stated that she is in touch with the Director-General, Budget Office, who assured her that salaries will be paid by the end of this week.

Earlier in another statement by the Director of Information, Office of Head of Service of the Federation, Mrs. Olawunmi Ogunmosunle, Yemi-Esan had attributed the salary delay to the fact that the 2020 budget was passed before the conclusion of negotiations on the new minimum wage and its consequential adjustment.

She added that a lump sum was, however, provided in 2020 budget for minimum wage and its consequential adjustment.

The HoS' clarification followed a report of outcry in the civil service that prompted some workers from MDAs to storm her office yesterday to protest the delay in the payment of salaries for October.

The statement, however, dismissed the report of protest by aggrieved workers.

It also said the committee that was constituted was at the behest of the Budget Office, tasking each MDA to work out what was needed to take care of the increase for the money to be paid from what was set aside for 2020 based on past provisions that were exhausted.

"First, let me start by stating that there is (was) no protest in the HoS office. Secondly, let me explain the delay in payment of salaries for October.

Enough provision was made for salaries for the year 2020 based on past provisions. Some percentage of the allowance was also set aside to take care of the salary increase. The provision made based on the previous salary has been exhausted. The Budget Office has therefore called on each MDA to work out what is needed to take care of the increase for the money to be paid from what was set aside. The committee is working on it. It is expected that it will be concluded this week and salaries will be paid," the statement said.-This Day.

Nigeria: World Bank Projects $2bn Drop in Nigeria's Diaspora Remittances

The World Bank has predicted that inflow of Diaspora remittance to Nigeria will drop by $2 billion in 2020 to $21.7 billion as against the $23.8 billion the country recorded in 2019.

The World Bank in a report hinged the decline in remittances from Nigerians living abroad on an account of the double whammy of the COVID-19 pandemic and the attendant economic crisis that has continued to spread.

However, another report from the National Bureau of Statistics (NBS) showed that the federal government generated a total sum of N424.71 billion from Value Added Tax (VAT) in the third quarter of the year (Q3 2020) compared to N327.20 billion in Q2 as well as N275.12 billion in Q3 2019.

Globally, the bank also anticipated that the amount of money migrant workers send home would decline by 14 per cent by 2021, compared to the pre-COVID-19 levels in 2019.

The Washington-based institution stated this in the 40-page,

'Migration and Development Brief 33,' it released yesterday.

It stated: "Remittances are helping to address the impact on African households. Nigeria remains the largest recipient of remittances in the region and is the seventh largest recipient among LMICs, with projected remittances to decline to around $21.7 billion, a more than $2 billion drop compared with 2019."

According to the report, remittance flows to low and middle-income countries (LMICs) are also projected to fall by seven per cent to $508 billion in 2020, followed by a further decline of 7.5 per cent, to $470 billion in 2021.

It stated that the foremost factors driving the decline in remittances included weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.

"The impact of COVID-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances," Vice President for Human Development and Chair of the Migration Steering Group of the World Bank, Mamta Murthi said.

He added: "The World Bank will continue working with partners and countries to keep the remittance lifelines flowing and to help sustain human capital development."

The report said the anticipated decline in 2020 and 2021 would affect all regions, with the steepest drop expected in Europe and Central Asia (by 16 per cent and eight per cent respectively), and followed by East Asia and the Pacific (11 per cent and four per cent), the Middle East and North Africa (eight per cent and eight per cent), Sub-Saharan Africa (nine per cent and six per cent), South Asia (four per cent and 11 per cent) and Latin America and the Caribbean (0.2 per cent and eight per cent).

"The importance of remittances as a source of external financing for LMICs is expected to amplify in 2020, even with the expected decline.

Remittance flows to LMICs touched a record high of $548 billion in 2019, larger than foreign direct investment flows ($534 billion) and overseas development assistance (about $166 billion). The gap between remittance flows and FDI is expected to widen further as FDI is expected to decline more sharply.

"Migrants are suffering greater health risks and unemployment during this crisis," lead author of the brief and Head of Global Knowledge Partnership on Migration and Development (KNOMAD), Dilip Ratha, said.

"The underlying fundamentals driving remittances are weak and this is not the time to take our eyes off the downside risks to the remittance lifelines," he stated.

The report said: "This year, for the first time in recent history, the stock of international migrants is likely to decline as new migration has slowed and return migration has increased. Return migration has been reported in all parts of the world following the lifting of national lockdowns which left many migrant workers stranded in host countries.

"Rising unemployment in the face of tighter visa restrictions on migrants and refugees is likely to result in a further increase in return migration.

"Despite being the cheapest, money transfer and mobile operators face increasing hurdles as banks close their accounts to reduce the risk of non-compliance with anti-money laundering (AML) and combating terrorism financing (CFT) standards.

"To keep these channels open, especially for lower-income migrants, AML/CFT rules could be temporarily simplified for small remittances."

It said strengthening mobile money regulations and identity systems will improve the transparency of transactions, explaining that facilitating digital remittances would require improving access to bank accounts for mobile remittance service providers as well as senders and recipients of remittances.

It added: "Remittances to Sub-Saharan Africa are expected to decline by around nine per cent in 2020 to $44 billion. Within the region, remittances to Kenya have so far stayed positive, though flows are likely to eventually decline in 2021. All major remittance-receiving countries will likely see a decline of remittances.

"As the COVID-19 pandemic affects both destination and origin countries of Sub-Saharan migrants, the fall in remittances is expected to further lead to an increase in food insecurity and poverty.

"Remittance costs: Sending $200 remittances to the region cost on average 8.5 per cent in the third quarter of 2020, representing a modest decrease compared with nine per cent a year ago. Sub-Saharan Africa is the costliest region to send remittances to," the report said.

FG Rakes in N424.71bn from VAT in Q3

The federal government has generated a total sum of N424.71 billion from VAT in the third quarter of the year (Q3 2020) compared to N327.20 billion in Q2 as well as N275.12 billion in Q3 2019.

According to the sectoral distribution of VAT data for Q3 2020, which was released yesterday by the NBS, the figure represented a 29.80 per cent or N97.51 billion increase in VAT collection month-on-month and 54.37 per cent or N149.59 billion increase year-on-year.

Other manufacturing generated the highest amount of VAT with N47.07 billion and closely followed by professional services, which posted N44.01 billion as well as commercial and trading that recorded N21.18 billion.

Mining generated the least, closely followed by textile and garment industry and pharmaceutical, soaps and toiletries with N64.50 million, N346.27 million and N386.16 million, respectively.

According to the NBS, out of the total amount generated in Q3 2020, N214.66 billion was generated as non-import VAT locally while N115.34 billion represented non-import VAT for foreign.

The balance of N94.70 billion was generated as Nigeria Customs Service (NCS)-import VAT.

According to the report, revenue from banks and financial institutions during the period under review totalled N6.87 billion; breweries, bottling and beverages N15.83 billion; hotels and catering N2.14 billion and federal ministries and parastatals N6.37 billion.

Others are state ministries and parastatals, N19.64 billion; properties and investments, N1.07 billion; transport and haulage services, N11.86 billion and gas N1.12 billion.

Other contributors to VAT included local government councils N567.97 million; pioneering N1.13 billion; oil-producing N11.54 billion; oil marketing N3.08 billion and conglomerates N1.74 billion.

Agriculture and plantation contributed N1.01 billion to VAT, automobiles and assemblies N8,8.34 million; building and construction N2.93 billion, offshore operations N1.41 billion and publishing, printing, paper packaging-This Day.

African Development Bank Group Approves $440,000 Emergency Relief Assistance for Flood Victims in South Sudan and Sudan

The African Development Bank Group has approved an emergency assistance relief package of $440,000 to fund ongoing humanitarian and emergency relief efforts in areas recently hit by floods in South Sudan and Sudan.

The package, from the Bank's Special Relief Fund, will be split nearly equally between the two countries and will be used to purchase food items and water, and to cover the implementation costs to be incurred by the United Nations Food and Agriculture Organization (FAO).

The funding is part of a multinational emergency response to provide relief to flood victims in both countries, where torrential rains have caused rivers to overflow their dykes and banks, disrupting trade routes, damaging crops, killing livestock and submerging houses.

By the end of September, the Food Security Technical Secretariat reported that heavy rains and flooding had affected more than 860,000 people (over 480,000 of them children) in Sudan. Over 125,000 refugees and internally displaced people are among those affected in that country since the start of the rainy season in July. The states most affected by floods are Khartoum, North Darfur, Blue Nile, West Darfur and Sennar. More than 100 people have reportedly died as a result of the flooding.

In South Sudan, the UN has estimated that more than $80 million is needed for the overall flood response, including $46 million for immediate assistance to 360,000 people until the end of the year. Vast areas of the country along the River Nile are now under water, affecting more than 600,000 people since July in Jonglei, Lakes, Unity, Upper Nile, and Central and Western Equatoria. Entire communities have fled to higher ground to escape the rising waters.

African Development Bank Country Manager for South Sudan, Benedict Kanu, said more than 100 people died through the disaster in the country, with about 25,000 internally displaced.

"The situation is particularly critical given the COVID-19 preventive measures in place, insecurity in some of the affected states and the financial constraints faced by the government and humanitarian agencies, despite the growing needs of the flood-affected communities," Kanu said.

The FAO, the implementing partner for the Bank's emergency relief assistance operation, already has a well-established network and long-standing operational presence in both countries for food relief assistance.- African Development Bank.

Northam Platinum in discussions to “accelerate” maturity of Zambezi BEE transaction

NORTHAM Platinum was in discussions to “accelerate” by around four years the maturity of an empowerment transaction it signed in 2015 with Zambezi Platinum.

The company said in an announcement to the Johannesburg Stock Exchange (JSE) today that the potential transaction it was discussing would also maintain its broad-based black economic empowerment (BEE) ownership.

Shares in Northam Platinum closed 2.48% higher on the JSE . On a 12-month basis, the share is 54% higher, largely owing to the improvement in the rand basket price of platinum group metals (PGMs).

Bloomberg News reported last month that Northam Platinum was considering buying out the largest shareholders in its empowerment scheme held in Zambezi Platinum, including its chairman, Lazarus Zim.

Said Paul Dunne, CEO of Northam Platinum today: “The significant value created for all Northam shareholders from our empowerment transaction with Zambezi Platinum, as well as Northam’s current ownership of 70% of all Zambezi Platinum preference shares and the inherent share buy-back implied by his holding, provides a unique opportunity to unlock permanent value for our shareholders, whilst maintaining Northam’s broad-based black economic empowerment ownership”.

“Northam has taken the initiative to enter into proactive discussions with Zambezi Platinum with a view to secure a successful and sustainable outcome,” he said.

Northam extended its stake in Zambezi Platinum to 70% from 46.7% on October 16 after announcing it had bought R3.5bn preference shares in the company.

Northam has preferred the repurchase of the preference shares in Zambezi rather than paying out dividends to shareholders, arguing that it was a comparable form of shareholder return.

Zambezi Platinum subscribed for Northam shares in 2015 as part of an empowerment scheme. These shares were issued at R41 per share with Northam agreeing to pay the difference if the value of Northam shares fell below that level when the preference shares matured in 2025.

Apart from removing the guarantee risk, Northam argues that in buying back the preference shares, it will reduce the dividend expense and cut shares in issue in the event the preference shares holders in Zambezi Platinum elect to redeem their shares for ordinary shares in Northam.

Zambezi Platinum is owned by a number of empowerment groups and employees. Lazarus Zim, Zambezi Platinum chairman, and co-investors Sipho Mseleku and Brian Mosehla, who together own 55.4% of Zambezi platinum, stand to benefit from the purchases.

Terminating the Zambezi Platinum transaction, if that is to be Northam’s intention, could pave the way for traditional dividend payments by the company.

Dunne said following publication of Northam’s annual review that a decision on the firm’s long-term capital allocation plans was imminent: “The critical time is the next six months. You can expect to see some action in that time,” he said in August.

Northam recently reported record financial numbers and near record PGM production in its 2020 financial year ended-June. Normalised headline earnings were 150% higher year-on-year at R3.4bn. Share earnings increased more than 100% to 676.3 cents.

The stellar improvement was owing to rhodium and palladium prices which increased 170% and 52.4% respectively.-mininmx

AngloGold Ashanti doubles payout rate as third quarter cash floods into coffers

ANGLOGOLD Ashanti doubled the dividend which it will now pay semi-annually following a third quarter of strong cash flow.

It will now pay 20% of free cash flow before capital expenditure following a third quarter in which year-on-year cash generation for the period increased $252m to $339m.

This cash inflow excluded $200m from the sale of its Mponeng and Mine Waste Solutions businesses to Harmony Gold, sealed in September. The third quarter cash doesn’t include AngloGold’s $359m share of cash locked up in the Democratic Republic of Congo (DRC).

AngloGold Ashanti and its partner, Barrick Gold have an equal stake in Kibali, a gold mine in the DRC the government of which has delayed the distribution of subsidiary profits. The amount owed to AngloGold increased $66m in the quarter.

Net debt halved year-on-year to $875m.

This took the firm’s debt to profits – measured as adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to net debt to its lowest level in a decade of 0.36x. The firm said it was committed to a ratio of 1x through the cycle.

The company, which is in search of a new permanent CEO following the surprise August resignation of Kelvin Dushnisky, also reinstated guidance in September. Including the contribution to date of the operations sold to Harmony, production for 2020 will be 3.03 to 3.1 million ounces at an all-in sustaining cost (AISC) of $1,050 to $1,100/oz.

For the quarter, production came in at some 837,000 oz – 11% higher – at an AISC of $1,044/oz (Q2: 825,000 oz at $1,031/oz).

The gold price was the main factor behind the third quarter performance. Adjusted EBITDA increased to $803m from $468m in the second quarter. The price received in the period was $1,904/oz from a previous price of $1,464/oz.

Commenting in a media conference following publication of the third quarter numbers, Christine Ramon, interim CEO of AngloGold, acknowledged the company had “lagged our peers” in terms of improving dividends.

“We have been very focused on investing in our own resources, but we think the revised policy is now sustainable through the cycle,” she said.

The dividend adjustment could lead to a rerating of the share, according to the title of a note issued by Standard Bank Group Securities analyst, Adrian Hammond, today. “Management has enhanced the dividend policy which was long overdue and likely contributed to the significant discount on the stock,” he added in the note.

Shares in the company were about 5.5% higher on the Johannesburg Stock Exchange but have unperformed their peer group for most of the year.

The company wasn’t planning a special dividend, however, should the the cash locked up in the DRC be eventually released. “We think the adjusted policy will deal with that.”

Asked if she was interested in applying for the CEO position, Ramon said: “At the moment I have got my hands quite full.” The board had not set a drop dead deadline on an appointment, she added.

Plans by AngloGold to list in either London or New York were no longer a priority whilst not abandoned either, she said.-miningmx

Invest Wisely!

Bulls n Bears 

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INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Afdis

AGM

virtual

13/11/2020 | 12:20pm

Zimbabwe

National Unity Day

Zimbabwe

22/12/2020

Christmas Day

25/12/2020

Boxing Day

26/12/2020

New Year’s Day

01/01/2021

Companies under Cautionary

Bindura Nickel Corporation

Padenga Holdings

Delta Corporation

Meikles Limited

 <mailto:info at bulls.co.zw> 

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

(c) 2020 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77 344 1674

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