Major International Business Headlines Brief::: 07 November 2020

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Major International Business Headlines Brief::: 07 November 2020

 


 

 


 <https://www.gemportal.co.zw/> 

 


 

 


 

 

ü  Brexit: Watchdog warns of 'significant' border disruption

ü  US jobs growth slows in October as unemployment dips below 7%

ü  How liquid air could help keep the lights on

ü  Investors focus on undecided Senate as Biden edges in on presidency

ü  Analysis: High-flying U.S. tech stocks get post-election lift, near new
highs

ü  Wall Street ends little changed, posts big weekly gain on Washington
gridlock hopes

ü  Southwest Airlines issues first furlough notices as talks with unions
stall

ü  McConnell: Signs of economic recovery point to smaller COVID-19 stimulus

ü  Google says it will not file motion to dismiss U.S. lawsuit

ü  East Africa: Weaker Currencies Increasing EA Debt Payments Burden

ü  Mozambique: Forestry Company to Abandon Rights to 54,000 Hectares

ü  South Africa: Post Offices 'Overwhelmed' With Covid-19 Recipients

ü  Nigeria: Oil Price Slump Threatens 2021 Budget - Govt

ü  South Africa: Tshwane Automotive Special Economic Zone Races to Meet June
2021 Deadline

ü  Namibia: N$180m Tax System Haunts Govt

 

 


 <http://www.nedbank.co.zw/> 

 


 

Brexit: Watchdog warns of 'significant' border disruption

UK trade with the EU faces "significant disruption" when the Brexit
transition period ends in January, a government spending watchdog has said.

 

The National Audit Office (NAO) said it was "very unlikely" traders would be
ready for checks the EU is due to impose at its borders.

 

It also warned "limited" time remained for UK ports to test new IT systems.

 

The government said "significant" efforts had been made to avoid disruption
to businesses.

 

The UK formally left the EU earlier this year but is following EU trading
rules until the end of December.

 

Preparations are under way to prepare the border for the change, amid
warnings the new systems might not be ready in time to avoid disruption.

 

In a report, the NAO said the end of the transition period would bring
"significant change," even if the UK agrees a trade deal with the EU.

 

Even with a deal, traders will face new hurdles to clear - including the
need to fill in customs declarations on goods being traded.

 

HM Revenue and Customs (HMRC) estimates it may need to process 270 million
customs declarations from 2021, compared with 55 million currently.

 

In June, the government announced that - regardless of whether it reaches a
post-Brexit trade deal - new checks on EU goods entering Great Britain would
be phased in over six months from January 2021 to give firms "time to
adjust".

 

However, the NAO said there was still "uncertainty" over where new border
infrastructure would be located and whether it would be ready.

 

It also expressed concern traders would not be ready for the full checks on
UK exports the EU is planning to implement from the start of 2021.

 

It cited the government's latest "worse case scenario" planning figures,
which estimate 40% to 70% of lorries crossing the English Channel will not
be ready.

 

Under the UK's withdrawal deal, Northern Ireland is due to enforce EU
customs rules at its ports, requiring declarations for goods coming from GB.

 

The NAO said Northern Ireland's Department of Agriculture, Environment and
Rural Affairs (DAERA), which is responsible for planning checks on food and
live animal imports, had been "severely hampered" by the continuing UK-EU
trade talks.

 

The watchdog added that DAERA lacked "clarity" about the checks required,
and now considers it will not be possible to finish work on its border
infrastructure in time for January 2021 and is "exploring contingency
options".

 

It added that the UK government's controversial Internal Market Bill, giving
ministers powers to override sections of the Brexit divorce deal, had
"further increased this uncertainty".

 

In addition, it added there were still "various operational issues to be
resolved" for goods crossing the English Channel.

 

This included making sure hauliers are able to use a planned online service
allowing them to declare they have the correct documents for the EU border
and thus obtain a permit to drive on certain roads in Kent.

 

The NAO also said border preparations had been hampered by the Covid-19
pandemic, with senior officials being diverted to the emergency response and
communication efforts being temporarily paused.

 

'Badly let down'

Labour MP Meg Hillier, who chairs Parliament's Public Accounts Committee,
said ministers had not given businesses "enough time to prepare".

 

"It's incredibly worrying that, with two months to go, critical computer
systems haven't been properly tested," she added.

 

"The government can only hope that everything comes together on the day, but
this is not certain."

 

On Thursday, Rod McKenzie, policy director for the Road Haulage Association,
told a Scottish Parliament committee his industry had been "been badly let
down by the UK government from beginning to end."

 

'New opportunities'

He added that the information given to hauliers to help them implement the
international permits they will require in the event of no trade deal being
reached had been "quite often totally incomprehensible".

 

In response to the NAO's report, a UK government spokesperson said it had
invested £705m to ensure the "right border infrastructure, staffing and
technology is in place".

 

"With fewer than two months to go, it's vital that businesses and citizens
prepare too," they added.

 

"That's why we're intensifying our engagement with businesses and running a
major public information campaign so they know exactly what they need to do
to grasp the new opportunities available as the transition period ends."-BBC

 

 

 

 

US jobs growth slows in October as unemployment dips below 7%

The US economy added 638,000 jobs in October, which was the slowest growth
in five months but still helped to push the unemployment rate below 7%.

 

Jobs were added in leisure and hospitality as US lockdown measures were
eased, according to the US Bureau of Labor Statistics.

 

The unemployment rate fell to 6.9% from 7.9%, with 11.1 million Americans
out of work.

 

September's data was revised up to show that 672,000 jobs were created.

 

The results were better than expected. Economists polled by the Reuters
newswire had expected growth of 600,000 jobs in October.

 

unemployment

"Overall, there is probably more in this for the optimists than the
pessimists, but not by much," said Neil Birrell, chief investment officer at
money manager Premier Miton.

 

"The unemployment rate fell quite sharply and the labour force participation
rate ticked up, although hourly earnings were a bit weaker than expected."

 

But stocks on Wall Street opened down, with the Dow Jones Industrial Average
falling 0.4%, and the larger S&P 500 down 0.5%.

 

claims

The data came as US ballot counts indicated that a victory by challenger
presidential candidate Joe Biden was now more likely than a win by incumbent
president Donald Trump.

 

The race for the White House is coming down to who wins the few remaining
battleground states - Georgia, Pennsylvania, Nevada and Arizona.

 

A win in just Pennsylvania or two of the other four remaining states would
be enough to confirm Mr Biden as president-elect, barring any legal
challenge.

 

Mr Trump, meanwhile, needs to win Pennsylvania and three of the remaining
four states.

 

The US economy emerged quickly from the depths of the crisis triggered by
coronavirus lockdowns this spring, but full recovery remains a long way off.

 

Official figures published last week show the economy grew at a record 7.4%
in the three months to 30 September from the prior quarter, when it suffered
a severe decline.

 

But output remained 2.9% lower compared with the same period a year ago, and
some analysts have warned that the rebound could be running out of
steam.--BBC

 

 

 

 

How liquid air could help keep the lights on

It sounds like magic but it is real - a plan to store cheap night-time wind
energy in the form of liquid air.

 

Here is how: you use the off-peak electricity to compress and cool air in a
tank, so it becomes a freezing liquid.

 

When demand peaks, you warm the liquid back into a gas, and as that expands
it drives a turbine to create more electricity.

 

The technology, promoted by a backyard inventor, is about to hit the big
time.

 

It has been tried at small scale but now the firm behind it, Highview, has
announced that a grid-scale 50MW plant will be built in the north of England
on the site of a former conventional power plant.

 

Turning carbon dioxide into cash

Clean electricity overtaking fossil fuels

The technology has been supported by the UK government. One attractive
feature is that it uses existing simple technology developed for storing and
compressing liquefied natural gas (LNG), so unlike battery storage it does
not require mining for rare minerals.

 

The key innovation is to store the excess heat given out when the air is
compressed and use it to re-heat the liquified air when it is needed.

 

The idea was promoted by self-taught engineer Peter Dearman from his garage
in Bishop's Stortford, Hertfordshire.

 

He had been developing a car run on similar principles with liquid hydrogen
and saw the potential for applying the technology to electricity storage.

 

He is now a passive shareholder in Highview, which is hoping to play in the
big league of storage.

 

He told BBC News: "It’s great news - very exciting. There’s such a lot of
potential in these technologies."

 

'Carbon free future'

The proposed grid-scale project will supply electricity to around 25,000
homes for a day, although realistically it will only be used for short
periods to cover sudden peaks in demand.

 

The firm's boss, Javier Cavada, said the plant will be built on the site of
a former disused power plant.

 

He said: "This plant will provide the critical services needed to help
maintain a stable and reliable grid. Giga-scale energy storage will be key
to a 100% carbon-free future."

 

Professor John Loughhead, Chief Scientific Adviser at the government’s
business and energy department, has previously praised the technology.

 

The Electricity System Operator, which manages supply and demand in Britain,
said they expected the Highview plant to bid for contracts in the market for
flexible electricity.--BBC

 

 

 

Investors focus on undecided Senate as Biden edges in on presidency

NEW YORK (Reuters) - As Democratic nominee Joe Biden edges closer to
claiming the presidency, investors are focused on the still-undecided race
for control of the Senate and the potential consequences for taxes,
regulation and the outlook for more stimulus.

 

The benchmark S&P 500 has jumped nearly 4% since Election Day, driven in
part by expectations that divided control over Congress will make it
unlikely that a President Biden could pass his calls to increase corporate
and capital gains tax rates.

 

The S&P 500 .SPXdipped 0.2% in afternoon trading on Friday, while yields on
benchmark 10-year Treasuries US10YT=RR rose to 0.82%, their highest levels
since before the Nov. 3 election.

 

Biden took the lead over President Donald Trump in the battleground states
of Pennsylvania and Georgia for the first time on Friday, putting him on the
verge of winning the White House.

 

However, Georgia appears set for run-off races in January to determine its
two Senate seats. Biden’s move ahead in Georgia focused some investor
attention on chances that the Democrats could have more sway in the Senate.
If they won those two run-offs it would give them a tie in the Senate and
give Kamala Harris a deciding vote.

 

Two other Senate races remain undecided, though Republican Senators Thom
Tillis of North Carolina and Dan Sullivan of Alaska are leading in those
contests.

 

“There is some concern with regards to if Biden creeps ahead or wins
Georgia, then there is chance that those seats will follow. That’s what
people are reading into this. They’re saying, ‘OK, if there is this kind of
momentum for Democrats, maybe the Senate (control) isn’t over yet.’ There’s
a little bit of hesitation,” said Yousef Abbasi, global market strategist at
StoneX Group Inc.

 

Justin Hoogendoorn, head Of Fixed Income Strategy at Piper Sandler in
Chicago, said “even if (Democrats) capture one Senate seat, it just becomes
more plausible to push some legislation through. The closer they are to
that, the more plausible.”

 

Unsettled control of Washington will likely weigh on markets as the United
States continues to post record daily coronavirus case counts.

 

“If it’s contested, it adds a little bit of uncertainty” to markets after
investors began pricing in a divided government, said Scott Brown, chief
economist at Raymond James.

 

Delays in the vote count also increase the risk of legal challenges, leaving
investors in limbo, said Simon Harvey, currency analyst at broker Monex
Europe.

 

“I think the big risks to markets now is if this isn’t wrapped up swiftly -
say by Monday- especially considering the level of traction a Biden
presidency has gained over the course of the day,” he said. “Any lack of
clarity over the result before Monday suggests markets will have to brace
for a truly contested election with a series of court rulings.”

 

Still, despite the uncertainty, expectations for near-term market volatility
have declined. The Cboe Volatility Index .VIX has fallen more than 11 points
since last Friday, on track for the largest weekly decline since early
April. VIX futures have also dropped broadly.

 

Few investors are calling for a deep decline in stocks, buoyed in large part
by unprecedented levels of financial support from the Federal Reserve. The
central bank said Thursday that it will do whatever it can in the coming
months to support the U.S. economy.

 

It created the fewest jobs in five months in October while the number of
part-time workers increased, the clearest evidence yet that the recovery
from the pandemic recession was slowing as new COVID-19 cases explode.

 

Some investors are starting to wade back into stocks that would benefit from
a Democratic sweep of Washington. Clean energy exchange-traded funds jumped
more than 1.1% in early trading Friday, while technology stocks - seen as
more likely to face stricter regulations and more tax-motivated selling if
the Senate flips to Democratic control - slipped 0.5%.

 

“Now the focus is shifting from the president to Georgia and the Senate
because that is really going to define what happens next,” said Ken Polcari,
managing partner at Kace Capital Advisors. “But if Biden gets in and the
Senate flips, then we are back to the sweep.”

 

 

 

Analysis: High-flying U.S. tech stocks get post-election lift, near new
highs

NEW YORK (Reuters) - A weaker-than-expected election performance by
Democrats and fears of new coronavirus restrictions have prompted investors
to double down on high-flying technology stocks, which have come roaring
back in recent days to put the Nasdaq within striking distance of a record.

 

Since Election Day, the tech-heavy Nasdaq Composite is up 6.6%, easily
outpacing the 4.2% gain in the broad S&P 500 over the same time. This was
partly driven by investors and traders unwinding trades placed on
pre-election assumptions of a Democratic sweep which they thought would
usher in higher taxes and more regulation.

 

Polls had forecast Democrats would solidly win the presidency on Tuesday,
extend their control in the House of Representatives and potentially win
control of the Senate. While Democratic candidate Joe Biden looks likely to
win the presidency, the margin of victory appears to be razor thin;
Democrats lost seats in the House and the Senate is evenly divided ahead of
two runoff elections in Georgia on Jan. 5.

 

The result leaves Democrats in a weak position to push through a progressive
agenda of increasing corporate and capital gains tax rates, said Steve
Chiavarone, portfolio manager at Federated Hermes.

 

Investors had been expected to sell high-flying tech stocks and lock in
current capital gains tax levels ahead of a strong Democratic showing in the
election.

 

But there will still likely be some tax-motivated selling of technology
stocks at the end of the calendar year ahead of the Jan. 5 Senate runoff
election, Chiavarone warned.

 

“Even though a Georgia Senate runoff is a risk in the eyes of the Street,
both of those seats going blue is a highly unlikely scenario,” said Dan
Ives, an analyst at Wedbush Securities, who sees a risk of tax-motivated
selling in late December but expects tech stocks to rise another 15% through
the end of the year.

 

Beyond the short-term impacts that have swung tech this week, investors said
the long term reasons to own tech remain.

 

“Tech has been getting cheap, at least relative to where it’s been, and that
sets it up nicely if we have to have a move back to a stricter stay at home
mandate,” said Jim Paulsen, chief investment strategist at The Leuthold
Group.

 

Apple AAPL.O, for instance, now trades at a price to earnings ratio of 35.1,
compared with its 52-week high of 40.9, while Amazon.com Inc AMZN.O trades
at a P/E of 94.9, compared with its 52-week high of 152. Microsoft MSFT.O
trades at a trailing P/E of 36, down from its 52-week high of 40.2, while
Facebook FB.O trades at a P/E of 34.9, down from its 52-week high of 38.8.

 

CORONAVIRUS CONCERNS

Spiking coronavirus cases may also prompt investor demand on the view that
record high cases in the United States will prompt state and local
authorities to impose new economic restrictions.

 

“You are seeing (COVID-19) flare-ups and real issues throughout the world,
and it’s the same types of companies - the Apples, the Netflix’s and PayPals
- that have fared so well during the pandemic that investors believe will
continue to do well if we have another form of an aggressive lockdown,” said
David Marcus, chief investment officer at Evermore Global Advisors.

 

Overall, investors will likely remain bullish on technology stocks until
there are greater signs that the broad economy has regained its footing and
coronavirus treatments and vaccines are widely available, said Brian
Jacobsen, senior investment strategist for the multi-asset solutions team at
Wells Fargo Asset Management.

 

Tech stocks “are the ones that have been able to prove that they have very
resilient business models to this new economy that we’re going through,” he
said.

 

Still, some investors cautioned about the risks of betting too much on tech.

 

“The idea that those big tech companies are the only game in town defies the
way the economy functions,” said Bill Smead, chief investment officer at
Smead Capital Management.

 

 

 

Wall Street ends little changed, posts big weekly gain on Washington
gridlock hopes

NEW YORK (Reuters) - U.S. stocks held near the unchanged mark on Friday to
close out a strong week as Democratic challenger Joe Biden edged closer to
victory in the presidential election, while the monthly jobs report
underscored the hurdles still facing the economy.

 

 

Biden built on narrow leads in Pennsylvania and Georgia, putting him on the
verge of winning the White House, although President Donald Trump has filed
lawsuits in battleground states to contest the results.

 

The three major indexes notched their biggest weekly percentage gains since
April as the prospect of policy gridlock in Washington eased worries a Biden
administration might tighten regulations on U.S. companies.

 

“It’s not fairytale land, we don’t go up every day so at some point you
would think we would see a little bit of downward pressure,” said JJ
Kinahan, chief market strategist at TD Ameritrade in Chicago.

 

Control of the U.S. Senate could hinge on four as-yet undecided races. If
Republicans retain their majority, they would likely block large parts of
Biden’s legislative agenda, including expanding healthcare and fighting
climate change.

 

“There is some concern with regards to if Biden creeps ahead or wins Georgia
then there is chance that those (Senate) seats will follow. That’s what
people are reading into this,” said Yousef Abbasi, global market strategist
at Stonex Group Inc, New York.

 

The government’s closely watched report showed unemployment dropped sharply
to 6.9% last month from 7.7% in September, but job recovery slowed as fiscal
support waned and coronavirus cases surged.

 

After the jobs report, U.S. Senate Majority Leader Mitch McConnell said
economic statistics indicated Congress should enact a smaller coronavirus
stimulus package that is highly targeted at the pandemic’s effects. The Dow
Jones Industrial Average fell 66.78 points, or 0.24%, to 28,323.4, the S&P
500 lost 1.01 points, or 0.03%, to 3,509.44 and the Nasdaq Composite added
4.30 points, or 0.04%, to 11,895.23.

 

 

 

Southwest Airlines issues first furlough notices as talks with unions stall

(Reuters) - Southwest Airlines LUV.N said on Friday it has sent notices of
potential furloughs to 42 parts inventory workers after talks with one union
group stalled over pay cuts the airline argues it needs from all employees
to offset $1 billion in overstaffing costs.

 

The first furloughs at the 49-year-old company would take place in January
unless the International Brotherhood of Teamsters agrees to a deal or
Washington passes “a satisfactory” extension of a payroll support program
for airlines, Southwest said.

 

An initial $25 billion in federal payroll support for airline workers
expired in September, prompting tens of thousands of furloughs across the
industry after lawmakers failed to agree another COVID-19 economic relief
deal before the Nov. 3 U.S. election.

 

Southwest remains in talks over cost savings with representatives of other
union groups, it said, and left the door open for negotiations to save the
42 jobs at risk among Teamsters members.

 

“This is not the result we hoped to achieve,” Southwest Vice President of
Labor Relations Russell McCrady said in an emailed statement.

 

The Teamsters did not immediately comment.

 

Unions represent about 83% of roughly 61,000 Southwest employees.

 

Meanwhile, Southwest’s outsourcing of maintenance work to foreign
contractors threatened to return to the fray in discussions with the union
representing some 2,700 mechanics, after the two sides ended a 7-year
contract impasse in 2019.

 

The Aircraft Mechanics Fraternal Association (AMFA) believes contract
language protects members from furloughs as long as Southwest is outsourcing
maintenance work, its national director Bret Oestreich said on Friday.

 

AMFA has asked Southwest to provide information on its outsourcing footprint
and costs, while moving forward with discussions on possible cost-savings
measures, outside of opening the collective bargaining agreement.

 

Southwest pilots have also pushed back on the company’s proposal to cut
employees’ pay by 10% but remain in talks, as does the flight attendants’
union.

 

 

 

McConnell: Signs of economic recovery point to smaller COVID-19 stimulus

WASHINGTON (Reuters) - U.S. Senate Majority Leader Mitch McConnell said on
Friday that economic statistics, including a 1 percentage point drop in the
unemployment rate, showed that Congress should enact a smaller coronavirus
stimulus package that is highly targeted at the pandemic’s effects.

 

The Republican senator told a news conference in Kentucky that the fall to a
6.9% jobless rate, combined with recent evidence of overall economic growth,
showed the U.S. economy is experiencing a dramatic recovery.

 

“I think it reinforces the argument that I’ve been making for the last few
months, that something smaller – rather than throwing another $3 trillion at
this issue – is more appropriate,” McConnell told reporters.

 

But his call for a narrow package was quickly rejected by House of
Representatives Speaker Nancy Pelosi, a Democrat, who has been working to
broker a COVID-19 stimulus deal near the $2 trillion mark with Treasury
Secretary Steven Mnuchin.

 

“It doesn’t appeal to me at all, because they still have not agreed to crush
the virus. If you don’t crush the virus, we’re still going to have to be
dealing with the consequences of the virus,” Pelosi told a news conference
on Capitol Hill.

 

“That isn’t anything that we should even be looking at. It wasn’t the right
thing before,” she added.

 

Senate Republicans, who oppose a larger package, have twice failed to move
forward with smaller legislation worth $500 billion due to Democratic
opposition.

 

Pelosi insisted that any agreement must include effective support for
testing, tracing and vaccine development, as well as aid to state and local
governments. Trump and his Republican allies have balked at Democratic
demands for state and local aid, calling it a bailout for Democratic-run
states and cities.

 

 

 

Google says it will not file motion to dismiss U.S. lawsuit

WASHINGTON (Reuters) - Alphabet’s Google said on Friday it would not file a
motion to dismiss a U.S. government lawsuit filed last month but would fight
it in federal court.

 

The U.S. Justice Department sued the $1 trillion (£760 billion) search and
advertising giant in October, accusing it of illegally using its market
muscle to hobble rivals in the biggest challenge to the power and influence
of Big Tech in decades.

 

The two sides said in a short court filing on Friday that Google would
refrain from filing a motion to dismiss the lawsuit. It said it would file
an answer to the government’s complaint before December 21.

 

The two sides also said they had failed to reach an agreement on how to
protect confidential information that was given to the government by third
parties. They said that they would file statements on their positions by
Nov. 13.

 

 

 

East Africa: Weaker Currencies Increasing EA Debt Payments Burden

East African economies are facing a potential rise in debt servicing burden
owing to the depreciation of regional currencies currently weighed down by
uncertainties in the global economy, disruption of global trade by the
Covid-19 pandemic and political jitters linked to the region’s election
cycles.

 

Monetary authorities are concerned about stability of the currencies, with
fears their persistent fall in value against major foreign currencies could
make repayment of external loans in foreign currencies an arduous task.

The resultant increase in interest payments is expected to be a substantial
drain on resources which could have otherwise been used to finance
development programmes.

 

By June this year, EA economies (Kenya, Uganda, Tanzania and Rwanda) had
accumulated over $86 billion worth of public debt, with Kenya holding 77.11
per cent of the debt, followed by Uganda (17.4 per cent), Rwanda (five per
cent) and Uganda (0.4 per cent).

 

The increase in the EA debt is largely explained by the countries’ attempts
to grow the economies through borrowed funds spent mainly on infrastructural
development amid revenue shortfalls.

Kenya’s public debt stands at Ksh7.06 trillion ($70.6 billion) of which
domestic and external debt stands at Ksh3.4 trillion ($34 billion) and
Ksh3.66 trillion ($36.6 billion) respectively.

 

TO THE GREENBACK

 

The Kenya shilling has lost 7.4 per cent of its value against the dollar for
the last 10 months to stand at Ksh108.82 on October 28 from Ksh101.3 against
the greenback on December 31, 2019.

 

Ugandan shilling depreciated by 1.77 per cent against the US dollar to trade
at Ush3,730.43 from Ush3,665.21 while Rwandan Franc lost 1.96 per cent of
its value to rwf953.39 from Rwf935 against the greenback during the period
under review. The Tanzania shilling gained marginally by 0.2 per cent
trading Tsh2,297.65 against the dollar from Tsh2,303 December 31, 2019.

 

 

The Bank of Uganda (BoU) cautiously noted in its state of the economy report
(September 2020) that while the country’s currency is expected to remain
stable on the account of matched corporate activity there is already a bias
to depreciation due to Covid-19-related market uncertainty.

“The economic outlook is extremely uncertain largely because of the
unpredictable intensity and duration of the Covid-19. The pandemic could
persist beyond the second half of 2020 or there could be a more severe
second wave, with adverse consequences for the global economy,” the Bank
said.

 

“Going forward, the exchange rate is likely to remain stable on account of
matched corporate activity; with a bias towards depreciation due to
Covid-19-related market uncertainty.”

 

According to BoU the Ugandan shilling has been adversely impacted by o lower
foreign direct investment inflows coupled with sustained portfolio
investment outflows both occasioned by the impact of the coronavirus on
business activity, investor confidence and risk appetite.

The World Bank through its Africa Pulse Report dated October 2020 classified
Kenya and Rwanda’s risk of debt distress as ‘high’ and ‘moderate’
respectively while Tanzania and Uganda were considered as ‘low’ risk.

GLOBAL TRADE SHRINKAGE

 

In 2018, Kenya’s risk of debt distress increased from low to moderate,
having breached three indicators (external debt service-to-export ratio,
external debt service-to-revenue ratio, and the present value (PV) of
external debt to export ratio).

Analysts at Cytonn Investments Ltd attributed the shilling depreciation to
the uncertainty in the global economy and also the decline in dollar in
inflows as global trade is impacted.

 

“Going forward the shilling shall remain under pressure due to continued
uncertainty globally making people prefer holding dollars and other hard
currencies and a deteriorating current account position,” the market report
said.

 

However, the depreciation by the Rwanda Franc was relatively subdued in the
beginning of this year due to lower economic activities caused by Covid-19
pandemic.

 

In June the Franc weakened by 1.6 per cent against the dollar although this
was slower compared to the 2.2 per cent depreciation in the same period
(June) last year, according to the National Bank of Rwanda (NBR).

According to the Bank of Tanzania, the country’s stock of public debt,
(domestic and external), increased to Tsh824.5 billion ($353.38 million) on
June 30, from Tsh808.8 billion ($346.66 million) in the same period last
year, largely on account of exchange rate depreciation.

 

It is argued that the Covid-19 pandemic, volatilities in the financial
markets and the global disruptions of demand and supply in international
market will likely weigh on local currencies in the region.

 

The EAC’s annual headline inflation is projected at 4.5 percent in 2020
compared with 3.8 per cent in 2019 according to the NBR.

In August, Moody's Investors Service downgraded the foreign and local
currency issuer ratings of the Government of Tanzania to B2 from B1 and
changed the outlook to stable from negative.

 

The downgrade to B2 in Moody’s view is that governance remains very weak,
raising risks to Tanzania's credit profile. According to the agency the
stable outlook balances it’s relatively large and diversified economy
against institutional weaknesses which undermine fiscal strength.-East
African.

 

 

 

Mozambique: Forestry Company to Abandon Rights to 54,000 Hectares

Maputo — The Norwegian owned forestry company Green Resources has renounced
the occupation of 54,000 hectares of land, in four districts in the northern
Mozambican province of Niassa, in order to avoid conflicts over land,
according to a report on Radio Mozambique.

 

Green Resources had rights to pine and eucalyptus plantations in the
districts of Lichinga, Chimbunila, Lago, Sanga, Muembe, Mandimba and Ngaúma.

 

The renunciation occurred on Tuesday through an agreement that involves
communities of four of these districts - Sanga, Chimbonila, Ngaúma and
Mandimba - as well as district governments and other stakeholders involved
in the management of natural resources.

The Niassa delegate of the NGO, the Rural Mutual Aid Association (ORAM),
Leonardo Abilio, said the transfer of the land to the communities will be
supported by the United States Agency for International Development (USAID)
to the tune of seven million meticais (about 96,000 US dollars) up to
November next year.

 

"Green Resources wants to work in a very responsible way and we, as ORAM,
are ready to support through the funds that we have", he said.

 

Green Resources operates monoculture tree plantations in Mozambique,
Tanzania and Uganda. Green Resources Mozambique says that its guiding goals
are to establish and manage sustainably commercial forestry plantations, in
order to generate forestry products for domestic use and export, as well as
to conserve natural forests and biodiversity, and to ensure the social and
economic development of the areas where it operates.

 

But Green Resources has frequently been involved in land disputes with local
communities, accused of usurping community land that was mostly used for
food production, and of establishing its commercial plantations alongside
rivers and other water sources, next to roads and housing, and even inside
areas of native forest.

 

 

 

South Africa: Post Offices 'Overwhelmed' With Covid-19 Recipients

There has been a spike in people visiting post offices in KZN to check on
the status of their R350 Covid-19 Social Relief of Distress grants.

 

The South African Social Security Agency (SASSA) says over 1.3 million
people have been approved for the grant in KwaZulu-Natal.

 

This has resulted in snaking queues and long waiting times for
beneficiaries.

 

The Black Sash has recommended that SASSA finds an alternative way to pay
recipients who receive their grant as cash.

 

Over 1.3 million people have been approved for the special Covid-19 Social
Relief of Distress grant in KwaZulu-Natal, according to the South African
Social Security Agency (SASSA).

 

This, however, has resulted in snaking queues outside the post offices
everyday, with scores of people coming to check whether their money has been
paid.

Post Office spokesperson in KwaZulu-Natal, Nobuhle Njapha, said there has
been a spike in people visiting their branches for the R350 Covid-19 grant.
This is in addition to other grant beneficiaries who have been complaining
of long waiting times.

 

Njapha urged people waiting for the Covid-19 grant not to come to a post
office before without first checking their application status online or
until they have received an SMS confirming payment.

 

Evashnee Naidu, regional manager at Black Sash said post offices they have
been monitoring in Lamontville, Umlazi and Bishopsgate in central Durban
were unable to cope with the mass influx of people coming to collect their
grants everyday.

 

Naidu said that going to a post office had become the default method of cash
payment for the Covid-19 grants for applicants without bank accounts. "The
arrangements between SASSA and banks for cash-send or e-wallet options only
became available as late as September and this created a desperate need for
cash payments to be rolled out," said Naidu.

Naidu said that the Post Office's lack of adequate infrastructure to deal
with large crowds led to the staggering of grant payment dates as of May
this year and a further staggering from August to ensure physical distancing
was possible.

 

"The hope was that even the Covid-19 grants could be staggered but as we
have all seen this has not happened and there are always masses of people
queueing at post offices across the country with very little to no adherence
to social distancing.

 

"Many people in the queue are there out of desperation. They have received
no proper communication from SASSA on whether they are approved or not, when
their monies will be paid, or they have been awaiting payment for quite some
months," Naidu said.

 

She recommended that SASSA improve its communication with recipients and
that an alternative is found to pay the Covid-19 grants in cash to ensure
that post offices are not continuously overwhelmed.

 

GroundUp is being sued after we exposed dodgy Lottery deals involving
millions of rands. Please help fund our defence. You can support us via
Givengain, Snapscan, EFT, PayPal or PayFast.-GroundUp.

 

 

 

Nigeria: Oil Price Slump Threatens 2021 Budget - Govt

The Minister of Finance, Budget and National Planning, Zainab Ahmed, has
said the resurgence of COVID-19 in Europe, which has caused oil prices to
decline in the international market, may affect the 2021 budget estimate.

 

The 2021 budget is predicated on $40 per barrel but the current price in the
market stands at $37.

 

Ahmed made the statement on Thursday when she appeared before the Senate
Committee on Finance to defend her ministry's budget.

 

The chairman of the panel, Senator Adeola Olamilekan (APC, Lagos) had asked
the minister about the contingency plans the federal government has put in
place to insulate the budget from the shocks of falling oil price.

 

"The actual projection was $40 per barrel and that is the average price that
we projected for the year. Some of the institutions that are responsible for
tracking the price of crude oil, actually have crude oil prices going as far
as $50, $52 per barrel.

"We took the safer path. It seems the second wave of COVID-19 in Europe is
affecting us. We are hoping to have clarity as to which direction to take in
the next week or two," she stated.

 

The minister, however, dismissed insinuations that the federal government
may increase Value Added Tax (VAT) again by 2.5% in 2021.

 

"As for the finance bill, we have the draft. There will be no increase in
VAT or any form of taxes because we see 2021 as a year of recovery."

 

When they appeared to defend their budgets, almost all the heads of the
agencies under the committee's supervision lamented that their budgetary
allocations were too meagre to meet their obligations.

 

The Accountant General of the Federation, Ahmed Idris, said his agency has
37 offices in dire need of rehabilitation. But the finance minister said the
budget office could not go beyond available resources.

 

"Everybody is claiming scarce resources, but we can't go beyond what is
available," the minister said.

 

The Director General, Budget Office, Ben Akabueze, said until the federal
government gets more revenue, no agency of government would get enough
allocation.-Daily Trust.

 

 

 

South Africa: Tshwane Automotive Special Economic Zone Races to Meet June
2021 Deadline

The Tshwane Automotive Special Economic Zone (TASEZ) in Silverton, Tshwane,
is a hive of activity as construction companies race to meet the June 2021
deadline to complete the economic zone.

 

Once complete, TASEZ, which is strategically situated next to the Ford
headquarters in Silverton, will house a number of automotive component
manufacturers, who will supply parts to Ford Motors Company South Africa
(FMCSA).

 

Launched by President Cyril Ramaphosa in November 2019, the R4.3 billion
project brings together the Department of Trade, Industry and Competition
(the dtic), Gauteng Provincial Government and the City of Tshwane in
partnership with the private sector through Ford.

The multi-layered partnership is set to boost Ford's ambition to become the
world's largest Ford Ranger pickup plant.

 

Nestled between the townships of Mamelodi and Nellmapius, the TASEZ forms
part of government's automotive masterplan that is geared to shape Tshwane
as a smart city, while creating much needed jobs through the automotive
industry.

 

Speaking to SAnews on Thursday, the dtic's Special Economic Zones Deputy
Director General, Sipho Zikode, says the project demonstrates the magic that
happens when public and private partners collaborate for a bigger purpose.

 

"The project is galloping at a very high rate, thanks to Ford and all the
spheres of government that are involved in making this project a reality.
This is an example of what can happen if government collaborates with the
private sector in developing industries in our localities," said Zikode.

TASEZ Executive Manager, Msokoli Ntombana, says the project currently has 12
investors, who, combined make up the investment of R4.3 billion, while
government will invest R3.8 billion.

 

"Investors that will be taking occupation will create about 2 088 permanent
jobs, and during construction, we are looking at about 8 557 jobs that will
be created," said Ntombana.

 

In an effort to empower small, medium and micro enterprises (SMMEs), at
least R1.5 billion of the project procurement spend has been set aside for
SMMEs that reside within the area.

 

Moago Construction is among the 16 SMMEs and construction companies
appointed for a short-term contract to do bulk earthworks at the TASEZ
construction site, through a sub-contracting opportunity.

 

The company's Director, Benny Serepong, says the opportunity was a silver
lining after the dark cloud of COVID-19, which halted many construction jobs
that were in the pipeline.

"We went through a tough year due to COVID-19. Business was tough and this
opportunity came at the right time. We are being exposed to areas that were
not necessarily exposed to in a sense that bulk services is something that
we had not done before. It's the first time as Moago that we were doing bulk
services."

 

The TASEZ contract enabled Serepong's company to offer short-term employment
to 39 people; 70% are from the local areas of Mamelodi and Nellmapius.

 

While the project is set to create jobs for locals, Coega Development
Corporation Executive Manager, Kelly Byrne, who spearheads the initiative as
project manager, says the TASEZ forms part of a bigger value chain.

 

"It generates a whole value chain because the vehicles that are produced
here... [will also] be exported out of the country.

 

"We have a rail network from here to Port Elizabeth where the exports will
go... All of that is South African job creation.

 

"In terms of the Gross Domestic Product and employment for South Afric,a
that is quite significant," said Byrne.

 

According to the dtic, government's localisation policy imperatives in this
project have been surpassed. Currently, 45% local businesses have been
empowered in the construction phase.-SAnews.gov.za.

 

 

 

Namibia: N$180m Tax System Haunts Govt

A N$180 MILLION tender to build an internet-based tax administration system
for the Ministry of Finance has divided opinions in the government.

 

There has been a push and pull in the past few months between the supplier
and the government over this contract's reliability and cost.

 

To some, those questioning the deal are "jealous", because other companies
were eyeing the tender.

 

Others liken the contract to "being in an abusive marriage with no ability
to divorce".

 

"It's been a mess for the last six years," says a person familiar with the
finance ministry system. "Those who negotiated it are still around the table
and defend everything around it," the source says.

It all started in 2014 when the finance ministry awarded this contract to a
joint venture between a company of businessman Vaino Nghipondoka, Profile
Investments, and Beijing CSSCA Technologies, a company with direct ties to
the Chinese government.

 

The tax platform contract was valued at N$180 million in 2014 to build a
system and online platform for more than 767 500 taxpayers across the
country.

 

But the new system largely failed to live up to expectations after concerns
about technical capacity and friendliness.

 

"It's the payment of taxes and how that IT contract is structured. Where
have you heard that six years later, not a single IT technician in the
ministry can even do a basic back-up," a source familiar with this tender
says.

"The supplier is trying to charge obscene monthly amounts for maintenance.
They can collapse the system and we won't be able to restore information,"
the source says.

 

Questions sent to finance minister Iipumbu Shiimi were not answered.

 

The Namibian understands he has been crucial in reducing the amounts asked
by the private company.

 

The finance ministry vaguely announced the extension of deadlines for the
submission of annual income tax returns to 31 March 2021.

 

This is the first time the taxman has extended the submission of returns in
a long time.

 

Some point to this extension as a clear symptom of the failure to maintain
the tax system.

 

The Namibian understands the finance ministry has been negotiating with the
involved company on maintaining the tax system for the past three months.

Sources say Ngipondoka and his Chinese partners initially valued the
maintenance deal at around N$1,7 million per month.

 

At some point, the private company allegedly walked away from the talks
because the government was offering N$10 million for three years. The
company allegedly refused that offer.

 

The parties then renegotiated and settled for around N$1 million a year for
three years (36 months) for maintenance.

 

Ngipondoka's company believes they are being lenient to the government by
settling for N$1 million a month since the work is valued at around N$3
million a month.

 

They believe the N$1 million includes paying technical expats, who are
allegedly in the country to keep the system running.

 

Nghipondoka yesterday said there was no bad blood between their joint
venture and the finance ministry.

 

"There was no stand-off. It's pure negotiations. Please talk to the
ministry," he said.

 

He said the structure of the agreement was standard IT practice.

 

"It works like this: Whoever implements the system should maintain the
system because they have knowledge of the system," he said.

 

Questions sent to Shiimi were not answered by yesterday.

 

News about the continuous challenges over the tax platform comes at a time
when the government is promising to polish its tax collection efforts to
fund its budget.

 

MIXED REACTIONS

 

New Era reported last month that the Namibian Employers' Federation (NEF)
said the Integrated Tax Administration System (Itas) portal lacked
guidelines for employers, making the system unfriendly to use.

 

The NEF said the deadline extension was necessary based on the needs of
employers, as many had difficulty with the Itas portal.

 

NEF secretary general Daan Strauss says a recent federation survey indicated
that 78% of respondents cited various challenges on the Itas portal.

 

In addition, the survey shows that 68% of employers were in favour of
reverting to a manual process instead of electronic submissions.

 

The introduction of the digital tax platform has attracted mixed reaction in
the country.

 

Red flags were raised as early as last year when some commentators said the
platform was not user-friendly.

 

The Namibian reported that PwC tax partner Johan Nel raised questions over
the system.

 

"It is a challenging process, but I eventually managed to register in my own
capacity," Nel then said.

 

He said taxpayers' identification information on Inland Revenue's former
system should be the same as that which is used to register, or it would not
work.

 

"This provides a challenge to taxpayers as they are not always aware of the
information that is on Inland Revenue's system, and now still needs Inland
Revenue to correct it," Nel said.

 

BEIJING

 

Beijing CSSCA Technologies, the company that built Namibia's digital tax
system, is a Chinese software company that has links to the Chinese
government.

 

"We are proud of our heritage from the China National Software & Service
Corporation, which was founded in 1980 as one of the biggest China
state-owned software companies and has contributed tremendously to the
development of the China ICT industry over the past 30 years," the company
says.

 

Beijing CSSCA Technologies appears to be a hot favourite in winning
government digital jobs.

 

It says on its website it runs electronic document and report management
systems for the Office of the President, the Office of the Prime Minister
and other ministries.

 

The Namibian reported earlier this year that the same Chinese software
development company developed and implemented integrated case-management
systems at the legal advice and civil litigation directorates at the Office
of the Attorney General.

 

The same company created an e-policing platform for the Namibian Police to
improve crime prevention, detection and control.-Namibian.

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


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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