Major International Business Headlines Brief::: 13 February 2021

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Major International Business Headlines Brief::: 13 February 2021

 


 

 


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ü  Post-Brexit trade: 'If you don't speak French, you're stuffed'

ü  Amazon sues NY amid threat of virus labour lawsuit

ü  UK economy suffered record annual slump in 2020

ü  Coca-Cola company trials first paper bottle

ü  Shell in Nigeria: Polluted communities 'can sue in English courts'

ü  The 'saviour' loan apps that trapped pandemic-struck Indians

ü  Investors eye shares of hotels, cruise lines as U.S. vaccinations pick up

ü  Facebook building smartwatch with health features: The Information

ü  Roaring Kitty to testify on GameStop alongside hedge fund managers

ü  Wall Street's SPAC craze scales new heights with record filings

ü  Analysis: How McDonald's plans to bring back traffic with new cheaper chicken sandwiches

ü  Namibians Weigh-in On 3D-Printed Meat

ü  Namibia: The End - Air Namibia Shutdown to Cost Billions

ü  Nigeria: Dangote Refinery to Bail Nigeria Out of Recession, Says IMF

ü  Nigeria's Crypto Crackdown Causes Confusion

 

 

 


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Post-Brexit trade: 'If you don't speak French, you're stuffed'

More than a month after the UK's post-Brexit trade deal with the EU came into force, complaints from British importers and exporters continue to mount.

 

Rules of origin for products that are imported into the UK, then exported to the EU are causing difficulty for some firms.

 

Others are caught up in the complexity of VAT issues, while the time and trouble taken to get merchandise through customs remains a hassle.

 

Small wonder, then, that according to a survey by the Road Haulage Association, Brexit-related problems caused the volume of exports passing through British ports to the EU to fall very sharply last month compared with a year ago.

 

A government spokesperson admitted that some businesses are "facing challenges with specific aspects of our new trading relationship" and promised to provide them with the necessary support "to trade effectively with Europe".

 

"That's why we are operating export helplines, running webinars with experts and offering businesses support via our network of 300 international trade advisers," the spokesperson said.

 

The BBC spoke to three of the firms affected to learn more about the particular challenges they are facing.

 

"We have to take a hit and blindly support our customers," says Nisha Menon, whose company, Nikasu Foods, specialises in Indian snacks and meals.

 

It's a family-run firm, started by her father 25 years ago. She took over the UK and European side of the business 12 years ago.

 

Her headaches began when the company that distributes her products in Greece complained about having to pay extra to receive its latest consignment of Jack & Chill jackfruit products.

 

These are vegan-friendly meals, including spicy burgers and biryanis, that are gaining popularity in the Greek market.

 

But like all the firm's foodstuffs, they are manufactured at its two factories in India - and that's where the problem lies.

 

Naturally, Nisha had to pay duty on the goods when they arrived in the UK. In the past, that would have been it, but now there is an additional tariff barrier.

 

"Apparently because the product is not made in the UK, they now have to pay customs duty when they import it into Greece," Nisha says.

 

"They said, 'We cannot increase the price, so you have to support us with that.'"

 

One solution would be to send the products directly from India to Greece, but because they are shipped in big containers, that would involve a minimum order of 10 tonnes, which is too much for the distributor to handle.

 

"I'm very frustrated," says Nisha, who is now considering dropping the EU market altogether.

 

"I've been told I don't have to pay duty again, but the Greek customs don't agree."

 

"Bikers are notoriously fussy about getting the right colour paint match for their bikes," says Phil Allen, managing director of RS Bike Paint.

 

And if you're a motorcyclist who wants to be sure of getting the right paint job to complete a repair, Phil has the solution.

 

His company has 45,000 records of different paint shades covering 160 different bike brands. It's the only comprehensive database of its kind.

 

"It's a niche market that's about an inch wide, but a mile deep," he says. "Nobody else does what we do."

 

However, it turns out there is a limit to how far his customers are prepared to go.

 

"When we export to the EU, customers are paying VAT not only at the point of purchase - our online shop - but are being asked to pay again to release their products from customs in their own country, together with an admin fee," Phil says.

 

"This, of course, prices us out of the market, especially now that our courier has added a £4.50 'cross-border' surcharge for every packet we send."

 

The effects are already being felt. One Frenchman placed an order worth €54 - that's €40 worth of paint. plus a €14 shipping charge. But when he was asked to pay another €39 in charges, he declined.

 

"Now that the goods are in France, we can either pay the carrier to bring them back to us or have the product destroyed. It's cheaper for them to be destroyed."

 

Phil's website asks EU customers to agree to pay any duties, but he can't tell them in advance what those will be, because different countries are applying the rules differently and inconsistently.

 

"One-third of everything we manufacture goes straight to the EU," he says. "There's a limit to how much we can write off."

 

"If you don't speak French, you're stuffed," says Nicolas Hanson, managing director of high-end pasta-making firm La Tua Pasta. Fortunately he does, having dual British and French citizenship.

 

That has allowed him to carry on sending truffle ravioli and other delicacies to top retailers on the other side of the Channel, having forged contacts that have safeguarded his supply route in the face of increasing bureaucracy.

 

That trade has become all the more valuable to him as demand from posh UK restaurants has withered during the pandemic.

 

But since 1 January, new demands for paperwork have saddled him with an extra £50,000 to £75,000 in costs.

 

These include the need to obtain a public health certificate for his products and inspections from two sets of vets, one in the UK and one in France, for every shipment he sends.

 

These Product of Animal Origin rules apply not just to meat, but to all foodstuffs that contain 50% or more processed dairy product, eggs or milk.

 

"It's not uncommon for the truck driver to call me at 8pm on a Saturday night from Calais," he says.

 

"There are never enough vets, so we can wait for four hours. Every hour we wait costs £50. Then the truck driver has worked his shift and needs eight hours' rest time."

 

At every step of the way, there are officials who need to be paid. "What's going on is highway robbery. Everyone has got their snout in the trough."

 

Nicolas says his customers will have to pay more because of the extra costs: "I will absorb some, they will absorb some and we will have to live with it.

 

"But frankly, it's scandalous that the governments are allowing this to happen. We're just a food manufacturer trying to make a living."--BBC

 

 

Amazon sues NY amid threat of virus labour lawsuit

Amazon has sued New York's top prosecutor over her probe of the firm's response to Covid-19 safety concerns, including its firing of workers who spoke out with concerns.

 

The company said Attorney General Letitia James was applying "an inconsistent and unfair" standard for workplace safety to Amazon.

 

It asked the court to stop her inquiry.

 

Ms James called the move "a sad attempt to distract from the facts and shirk accountability".

 

"We will not be intimidated by anyone, especially corporate bullies that put profits over the health and safety of working people," she said in a statement.

 

"We remain undeterred in our efforts to protect workers from exploitation and will continue to review all of our legal options."

 

Worker retaliation

Ms James launched her investigation last spring, after a small protest by a group of workers at a warehouse in Staten Island, New York, and the firing of organisers, including Christian Smalls.

 

At the time, she said it had raised concerns about illegal retaliation, noting that the state had codified the right to organise in its law.

 

In its complaint, Amazon said Ms James lacked oversight over the workplace issues, which it said are governed by national labour laws.

 

It also accused her of ignoring the steps the company has taken to protect its workers, pointing to a 30 March city inspection inspection of its warehouse in Staten Island, New York, which concluded that "there were absolutely no areas of concern".

 

The rate of infection among Amazon staff in New York is half that of the area's general population, it added.

 

It is unusual for companies to file pre-emptive lawsuits to block potential regulatory actions.

 

But Amazon said Ms James had threatened to sue unless the company met a list of demands, including reducing production speeds, subsidised bus service and reinstating Mr Smalls.

 

"Amazon cannot accept the OAG's attempt to subject Amazon to an inconsistent and unfair standard for workplace safety that is pre-empted by federal law and assigned to the primary jurisdiction of federal regulators - especially when the underlying facts show that Amazon has done an exemplary job responding to an unprecedented global pandemic," the firm said in the lawsuit, filed in federal court in Brooklyn.

 

In the complaint, Amazon, which has a reputation for being aggressive against instances of workplace activism, said that it fired Mr Smalls for violating requests that he quarantine after being exposed to the virus.

 

Mr Smalls has pledged to continue protesting until better protections are in place. In November, he filed a class action lawsuit seeking damages for black and Hispanic workers.--BBC

 

 

 

UK economy suffered record annual slump in 2020

The UK economy shrank by a record 9.9% last year as coronavirus restrictions hit output, official figures show.

 

The contraction in 2020 "was more than twice as much as the previous largest annual fall on record", the Office for National Statistics (ONS) said.

 

However, the economy looks set to avoid a double-dip recession after growth picked up at the end of the year.

 

In December, the economy grew by 1.2%, after shrinking by 2.3% in November, as some restrictions eased.

 

Hospitality, car sales and hairdressers recovered some lost ground, the ONS said.

 

 

The growth meant that in the October-to-December quarter the economy expanded by 1%. As a result, the UK is expected to avoid what could have been its first double-dip recession since the 1970s.

 

A double-dip is when the economy briefly recovers from recession, only to quickly sink back. A recession is generally defined as two consecutive quarters where the economy contracts.

 

What is GDP and why does it matter?

Has the UK economy been hit harder than other countries?

ONS deputy national statistician Jonathan Athow said: "An increase in Covid-19 testing and tracing also boosted output. The economy continued to grow in the fourth quarter as a whole, despite the additional [lockdown] restrictions in November."

 

GDP was first measured in the aftermath of the Second World War, and the measure has never previously dropped by more than 4.1% in a year. However, the Bank of England models GDP going back centuries, and the 2020 contraction could be the worse since 1709.

 

GDP graphic

Suren Thiru, the head of economics at the British Chambers of Commerce, said: "Despite avoiding a double-dip recession, with output still well below pre-pandemic levels amid confirmation that 2020 was a historically bleak year for the UK economy, there is little to cheer in the latest data."

 

All four economic sectors tracked by the ONS saw a drop in output, with the highest fall coming in the construction sector, which contracted by 12.5%.

 

Chancellor Rishi Sunak told the BBC: "Today's figures show that last year our economy experienced a significant shock, and also some signs of resilience over winter.

 

"You know what's clear is right now, many families and businesses are experiencing hardship. That's why we've put in place a comprehensive plan for jobs to support people through this crisis, and we will set out the next stage of our economic response at our Budget in early March."

 

Economy like a coiled spring, says Bank economist

But shadow chancellor Anneliese Dodds said: "These figures confirm that not only has the UK had the worst death toll in Europe, we're experiencing the worst economic crisis of any major economy.

 

"Businesses can't wait any longer. The chancellor needs to come forward now with a plan to secure the economy in the months ahead, with support going hand-in-hand with health restrictions."

 

However, Mr Sunak said international economic comparisons were not necessarily a useful yardstick.

 

"We calculate GDP in a different way to pretty much everybody else. And if you either correct for that difference or look at it in a way that's more comfortable with nominal GDP, what you find, as the Bank of England and the ONS have pointed out, is that our performance is very much in line and comparable to other countries."

 

GDP graphic

Economists said that with Covid-19 restrictions expected to remain until early spring, the hit to the economy will continue over the next few months.

 

"We anticipate a sharp decline in activity during the first quarter of the year," said Kemar Whyte, senior economist at the National Institute of Economic and Social Research. "Nevertheless, growth will pick up from the second quarter onwards as restrictions ease on the back of a successful vaccination programme."

 

As expected the economy stabilised in the last quarter of 2020. But the latest set of statistics confirm the scale of the hit over the whole of last year.

 

A technical return to recession has been avoided, with the economy returning to growth at the end of last year. But the economy is certainly falling again so far in the first three months of 2021, due to the tough national lockdowns, as well as some impact from increased trade barriers with the European Union.

 

The chancellor and Bank of England will be paying much more attention to what is going on right now. The renewed lockdown has hit growth considerably again, but not as hard as last April.

 

Businesses and households remain in holding pattern ready to unleash pent up growth when the economy is reopened.

 

While the vaccine will eventually unlock that growth, the precise timing is still uncertain, and the government remains under pressure to maintain significant sums in economic support.

 

'Coiled spring'

Last year's contraction is steeper than almost any other big economy, although Spain suffered an 11% decline.

 

Britain has reported Europe's highest death toll from coronavirus and is among the world's highest in terms of deaths per head of population.

 

Much of the damage to the UK economy is attributed by economists to a high dependence on the service sector, which suffered particularly badly during the year because of lockdown.

 

However, Britain has vaccinated many more people than other European countries so far, raising the prospect of a bounce-back for its economy later this year.

 

That potential fast rebound prompted the Bank of England's chief economist to describe the economy as like a "coiled spring" ready to release large amounts of "pent-up financial energy".

 

Andy Haldane said on Thursday that consumer confidence would surge back thanks to the vaccine programme, with the economy firing "on all cylinders" by spring.

 

Mr Sunak told the BBC: "There are reasons for cautious optimism, because the vaccine roll-out is going really well.

 

"The prime minister will set out a roadmap for exiting restrictions in the next few weeks and months. It will be the week of February, 22nd, and it's related that we base our roadmap on the best possible evidence of data."--BBC

 

 

 

Coca-Cola company trials first paper bottle

Coca-Cola is to test a paper bottle as part of a longer-term bid to eliminate plastic from its packaging entirely.

 

The prototype is made by a Danish company from an extra-strong paper shell that still contains a thin plastic liner.

 

But the goal is to create a 100% recyclable, plastic-free bottle capable of preventing gas escaping from carbonated drinks.

 

The barrier must also ensure no fibres flake off into the liquid.

 

That would pose a risk of altering the taste of the drink - or potentially fall foul of health and safety checks.

 

But industry giants are backing the plan. Coca-Cola, for example, has set a goal of producing zero waste by 2030.

 

Coca-Cola was ranked the world's number one plastic polluter by charity group Break Free From Plastic last year, closely followed by other drink-producers Pepsi and Nestle.

 

Under pressure

The Paper Bottle Company, or Paboco, is the Danish firm behind development of the paper-based container.

 

Part of the challenge has been to create a structure capable of withstanding the forces exerted by fizzy drinks - such as cola and beer - which are bottled under pressure.

 

On top of that, the paper needs to be mouldable, to create distinct bottle shapes and sizes for different brands, and take ink for printing their labels.

 

After more than seven years of lab work, the firm is now ready to host a trial in Hungary this summer of Coca-Cola's fruit drink Adez. Initially, this will involve 2,000 bottles distributed via a local retail chain.

 

But it is also working with others.

 

Absolut, the vodka-maker, is due to test 2,000 paper bottles of it own in the UK and Sweden of its pre-mixed, carbonated raspberry drink.

 

And beer company Carlsberg is also building prototypes of a paper beer bottle.

 

Zero plastic

Michael Michelsen, the firm's commercial manager, says the bottles are formed out of a single piece of paper-fibre-based material to give them strength.

 

"That's part of the secret really," he explained, adding that moulding a single object - rather than relying on joins - ensured the bonds between the fibres stayed robust.

 

"With a clever combination of product design and the strong fibre blend, that's what makes it really possible to not break under pressure."

 

Coca-Cola and Absolut's trials will be the first real-world test of whether the technology holds up to the rough-and-tumble logistics of food transport.

 

"We have a good understanding already of what the bottle will go through as we put it into the real world. But there is a certain point where you just can't design yourself out of this at a desk, right?

 

"You need to get into that real world and you need to get that real world feedback," Mr Michelsen said.

 

But even if the tests go flawlessly, the real challenge lies in getting rid of plastic altogether.

 

Because the paper cannot come into direct contact with liquids, the plan is to use a plant-based coating on the inside of the bottle.

 

"It's going to be a bio-based barrier, that's really something minimal, that keeps that food safe, that keeps the product safe at the same time," Mr Michelsen said.

 

"We have a couple of different options... we have the technology path pretty much chosen, but it is something that we definitely need to pilot and prototype."

 

For now, one of the benefits of using a plastic screw top is that the prototypes can be used on existing production lines.

 

But in time they will need to be adapted for an all-paper cap.

 

Long-lasting

Even if these tests go well, paper bottles will be "a niche product for a while yet", according to Fin Slater, digital editor at Packaging Europe magazine.

 

"Paper bottles are really exciting for packaging innovation geeks like us, but pilot concepts like this have been knocking around for a few years without taking off in a big way," he explained.

 

Plastic bottles are embedded in the industry, and in many countries, are widely recycled, he said.

 

"Scaling up to replace that infrastructure is a huge challenge."

 

And there's a cost issue. Plastic bottles are cheap and effective - "another reason why the paper bottle is likely to be used in added-value niche applications at the start".

 

But Tetra Pak - which you may know as the paper-and-plastic carton that milk and juices often come in - managed to pull off a similar feat in the mid-20th Century.

 

"There's always competition on sustainability credentials, but this is a healthy thing," Mr Slater said.

 

"Each sustainable innovation not only pushes the boundaries in relation to that particular packaging material, but increases the pressure on other materials to drive up recyclability, and drive down carbon footprints."--BBC

 

 

 

Shell in Nigeria: Polluted communities 'can sue in English courts'

The UK Supreme Court has ruled that oil-polluted Nigerian communities can sue Shell in English courts.

 

The decision is a victory for the communities after a five-year battle, and overturns a Court of Appeal ruling.

 

The Niger Delta communities of more than 40,000 people say decades of pollution have severely affected their lives, health and local environment.

 

The oil giant had argued it was only a holding company for a firm that should be judged under Nigerian law.

 

Shell described the legal ruling as disappointing.

 

The Supreme Court, the UK's final appeal court for civil cases, ruled that the cases brought by the Bille community and the Ogale people of Ogoniland against Royal Dutch Shell were arguable and could proceed in the English courts.

 

Royal Dutch Shell did not dispute that pollution had been caused, but argued it could not be held legally responsible for its Nigerian subsidiary. Shell is responsible for about 50% of the delta's oil production.

 

Last year the Court of Appeal agreed with the company, but the Supreme Court said on Friday that that decision was flawed.

 

The communities, represented by law firm Leigh Day, argued Shell owed a common law duty of care to individuals who had suffered serious harm as a result of the systemic health, safety and environmental failings of one of its overseas subsidiaries.

 

The Niger Delta pollution has continued despite years of promises by successive governments in Nigeria to clean it up. In 2016 President Muhammadu Buhari launched an ambitious clean-up operation in Ogoniland. The work is ongoing but residents say little progress has been made.

 

Continued oil spills from the activities of multinationals have also cast doubt on the impact of the clean-up exercise. "Things are getting worse by the day," Celestine Akpobari, an environmental activist from Ogoni, told the BBC.

 

The region provides most of Nigeria's government revenues but the communities say successive governments have neglected them. Mr Akpobari says people can no longer fish or farm because of the devastation. "People are dying, there are strange diseases and women are having miscarriages" from the pollution, he says. But the communities and campaigners say the recent court victory gives them hope they will see justice.

 

In 2011 the UN concluded it would take 30 years to clear up the vast amounts of pollution in the Niger Delta.

 

The Ogale community of about 40,000 people are mostly fishermen or farmers who rely on Ogoniland's waterways. But pollution has all but destroyed fishing, turning their lush home into a toxic wasteland.

 

There have been at least 40 oil spills from Shell's pipelines since 1989, lawyers say Shell's records reveal.

 

UN scientists have found an 8cm (3 inch) layer of refined oil floating on top of water that supplies the community's drinking wells - vastly higher than is legally permitted.

 

The water is now too dirty for people to drink. Despite promises to provide clean water, people must often either shell out for bottled water or drink from contaminated sources.

 

Thick crusts of ash and tar cover the land where oil spills have caused fires. Planting new vegetation to replace burnt crops or plants is almost impossible.

 

Farmer Damiete Sanipe describes a wasteland where the trees and the mangrove have been destroyed.

 

"The habitat is gone, the river we used to swim in is gone. For a coastal community whose life revolved around the water, it's all gone.

 

"I don't think money can bring back what we have lost. Even if they want to revive the mangrove, it will take more than 30 years which is a long time."

 

On Friday Leigh Day lawyer Daniel Leader said the ruling was a "watershed" for "impoverished communities seeking to hold powerful corporate actors to account". The firm said the amount of compensation sought had yet to be determined.

 

What does Shell say?

In a statement Shell said: "The spills at issue happened in communities that are heavily impacted by oil theft, illegal oil refining, and the sabotage of pipelines."

 

It said that, despite the causes of the pollution, its subsidiary had worked hard to both clean up and prevent spills.

 

It's the latest in a run of international and domestic law suits over Shell's oil extraction in Nigeria.

 

In 2015 it accepted responsibility for two spills and agreed to pay £55m ($76M) to the Bodo community and assist in the clean-up.

 

In 2006 a Nigerian court ordered the company and partners to pay $1.5bn to the Ijaw people of Bayelsa state for environmental degradation in the area.

 

In an ongoing civil case, the widows of four environmental activists executed by Nigeria's military regime in 1995 are suing Shell for allegedly providing support to the military. Shell denies the claims.

 

Europe's biggest oil firm sets out carbon neutral plans

The decision on Friday is the latest case to test whether multinational companies can be held accountable for the acts of overseas subsidiaries.

 

Amnesty International welcomed the ruling. Mark Dummett, director of Amnesty International's Global Issues Programme, said the fight had not yet been won, but added: "This landmark ruling could spell the end of a long chapter of impunity for Shell and for other multinationals who commit human rights abuses overseas."

 

Leigh Day also represented 2,500 Zambian villagers in their pollution case against UK-based mining giant Vedanta Resources. Last month the Supreme Court ruled in their favour and they won an undisclosed settlement.--BBC

 

 

 

The 'saviour' loan apps that trapped pandemic-struck Indians

"If you don't pay the amount by today, I am calling your friends and relatives. You will regret that you ever decided to take a loan!"

 

This was just one of many intimidating phone calls Vineeta Teresa endured for nearly three months last year. The men - who identified themselves as loan recovery agents - would call her regularly and shout at her. And the threats often turned abusive.

 

Ms Teresa found herself in a severe financial crunch in the weeks after India went into lockdown to stem the spread of the coronavirus. When banks turned her away, she was led to apps that offered "instant loans".

 

All she had to do was provide her bank account details, government ID and references. The loan was credited to her account in minutes. "It's that simple," she says.

 

The apps proliferated as the pandemic and the lockdown left millions in India jobless. While many working class jobs have returned, salaried professionals - from engineers and software developers to salesmen - and small businesses have struggled to survive. So the apps helped them out when they needed money quickly.

 

For loans as small as $150 and for periods as short as 15 days, these apps charge a one-time processing fee, a convenience fee and steep interest rates - some as high as 30%. Compare this to to Indian banks, which lend at 10-20% with a tenure of at least 12 months.

 

The other problem is that while some of these apps work within India's banking norms, many others don't appear to be legitimate.

 

Several states are now probing dozens of such lending apps after they were accused of violating rules and using aggressive methods to recover loans. India's Enforcement Directorate (ED), which investigates financial crimes, has also stepped in to establish a money trail. Google recently removed several such apps from its Playstore after receiving complaints that they had violated terms.

 

Officials have found that many of them are not even registered with India's central bank, which has warned people about "the growing number of unauthorised digital lending platforms/mobile apps". It has also advised those in need of money to approach legitimate financial institutions.

 

Experts say once a borrower secures a loan, their data gets shared with similar apps, which then start pumping them with notifications of higher credit limits, luring them deeper into a web of unregulated borrowing. Ms Teresa says she ended up with eight loans.

 

And the calls from recovery agents can get so harrowing that some people borrowed money again just to pay off the first loan. "It's like a vicious circle from one loan to another," said one borrower who wished to remain anonymous.

 

An Indian vendor uses her mobile phone to take customers orders at a wholesale market on the outskirts of Hyderabad on April 17, 2009.

 

Like many other apps, at the time of download, these apps too ask for permission to access contacts and photo galleries. When an unsuspecting borrower agrees to this, they become more vulnerable.

 

"When I investigated one such case, I found that these apps are actually not only able to read and access your contact list, they're also capturing your images, videos and location. They also know many things about you - like, where you have actually used this money, to whom you have transferred this money," says cyber security expert Amit Dubey.

 

The threats too become personal. "I saw the toll it took on my children," Ms Teresa says. "I have seen the pain my children were going through when they saw me continuously on calls, breaking down and not able to focus on work or on my family."

 

Jenis Makwana says it was this kind of harassment that played a role when his brother Abhishek killed himself in November.

 

Abhishek, a screenwriter for Indian television, saw business dry up during the lockdown due to restrictions on filming and payment delays. So he borrowed about $1,500 - it wasn't long before the threatening calls began, Jenis recalls. He says they have continued after his death.

 

Both Makwana's and Ms Teresa's cases are now being investigated by police along with hundreds of similar complaints.

 

"We have to keep on digging, this problem is just so deep," says Pravin Kalaiselvan, who has been tracking these cases with a small team of experts that shares whatever they find with police.

 

Mr Kalaiselvan got drawn into it when a close friend borrowed money from one of these apps and was harassed when he couldn't repay the loan on time. So he decided to investigate further and started a support group for people who have had similar experiences with such apps.

 

"In the last eight months my team has received more than 46,000 complaints and 49,000 distress calls. We receive more than 100 to 200 distress calls a day," he says.

 

Mr Kalaiselvan petitioned India's Supreme Court, seeking a ban on hundreds of these apps. But the court asked him to approach the federal government.

 

In December, 17 people were arrested on charges of cheating, fraud and harassment after investigations led police to call centres in Gurgaon, a suburb of capital Delhi, and the southern city of Hyderabad.

 

Police say they are trying to trace people further up the chain, possibly even abroad, but experts say it's hard to establish links between those arrested and developers. Also, the borrowers are scattered across the country and no single app connects them all.

 

But Mr Dubey says the apps have a more sinister agenda than just targeting the financially vulnerable. "The invisible entities running such apps are interested in your personal data and there is a lot of money to be made out of this. This data can be stored and sold to criminal syndicates and also floated in the dark web."

 

On one occasion, he says he found a cluster of apps hosted on the same server, programmed by the same developer - proof that many of them share a source.

 

"What's more is that they are hosted on a server which is usually in China, away from Indian jurisdiction and control," he adds.

 

Experts say these apps are difficult to regulate because they operate as intermediaries, connecting borrowers to lenders. So without specific laws that target them, creating awareness may be the only way to stop them.

 

And that is exactly what Ms Teresa hopes to do.

 

"I do not want to be called a victim," she says. "The only way to fight back is by talking about my story so that others can learn from my experience."—BBC

 

 

Investors eye shares of hotels, cruise lines as U.S. vaccinations pick up

NEW YORK (Reuters) - Investors are watching next week’s earnings reports from hotels, cruise lines and other businesses that have been hard hit by COVID-19 for indications of which companies could be the first to bounce back when the pandemic recedes.

 

For nearly a year, money managers have largely looked past earnings in the travel and leisure sector, where coronavirus-fueled lockdowns and travel restrictions battered companies’ businesses and crushed their stock prices: shares of Marriott and Norwegian Cruise Lines, for example, are down 12% or more in the last year, compared to a nearly 17% gain for the S&P 500 through Friday afternoon.

 

Next week’s numbers, however, may offer clues on which companies are in the best financial health and would benefit the most from economic reopening, while also allowing investors to better gauge where companies should be valued.

 

“The results across the board are going to be bad, but it’s really going to be about who is coming back,” said Adam Trivison, a portfolio manager at Gabelli Funds.

 

The focus on travel and leisure companies comes as investors more broadly gauge the effectiveness of the U.S. vaccination effort and the degree to which it will help the economy get back on track.

 

The White House announced Feb. 2 that it will start shipping vaccines directly to retail pharmacies alongside regular shipments to states, increasing weekly supplies of shots to 11.5 million. Approximately 10.5% of the U.S. population through Feb. 11 had received at least one of the two shots required for full vaccination, according to estimates by the Centers for Disease Control and Prevention.

 

Will Hilkert, portfolio manager of the Fidelity Select Leisure fund, said that earnings results over the next two quarters will serve as a gut check for investors who had bet on the leisure sector as a play on the economy reopening.

 

“Over the next six to nine months you’re going to get a chance to make sure that what you think the world is going to look like after the pandemic is being matched by company fundamentals,” he said.

 

Hilton Worldwide Holdings Inc and Hyatt Hotels Corp are expected to release their results on Feb. 17, followed by Marriott, Norwegian Cruise Lines and TripAdvisor on Feb. 18.

 

Trivison, of Gabelli Funds, said he will be keeping an eye on hotel bookings in the group meeting business, which he expects to offer clues on the scale of employee travel in the week ahead. Business travelers typically make up 25% of a hotel chain’s customers, though that number may be higher in destinations such as Orlando and Las Vegas.

 

Historically high valuations in the hospitality sector may give some potential investors a pause before buying at current levels, said Daniel Kane, a portfolio manager at Artisan Partners who bought shares of Marriott while its stock was tumbling last March and April.

 

Most stocks in the hospitality sector are now trading based on estimates of their 2023 results, pushing their current valuations well above their long-term averages, said Robin Farley, an analyst at UBS.

 

Marriott, for example, trades at a trailing price to earnings multiple of 240.7, while Hilton is currently unprofitable but trades at 515.7 its current fiscal year’s full year earnings, according to Refinitiv data.

 

Cruise lines, meanwhile, are not expected to become widely profitable again until 2022, when most international travel restrictions should be eased. Norwegian, for instance, trades at 35.2 times its 2022 estimated earnings, while Royal Caribbean trades at 40.4 times its 2022 estimated earnings, according to Refinitiv. Marriott was trading at a trailing P/E of about 16 before widespread economic restrictions were put in place in March.

 

Chris Terry, a portfolio manager with Hodges Funds, has been paring back a position in Norwegian after shares of the company rallied following the vaccine approvals. He is now watching for the company to show incremental improvement in its upcoming earnings report to confirm that business is rebounding.

 

“Going back a year ago, quarterly earnings were basically irrelevant,” he said. “Now we want to see that there’s progress on the timetable to get revenues back to where they were in a meaningful way.”

 

 

Facebook building smartwatch with health features: The Information

(Reuters) - Facebook Inc is building a smartwatch that will let users send messages and also offer health and fitness features, The Information reported bit.ly/378YViU on Friday, citing people with direct knowledge of the device.

 

The social media giant plans to start selling the device next year, according to the report, a move that would mark its entry into a market currently dominated by Apple Inc and Huawei.

 

Facebook’s smartwatch will work via a cellular connection, letting users send messages through its services and also connect to the services or hardware of health and fitness companies, such as Peloton Interactive, according to the report.

 

Menlo Park, California-based Facebook has been foraying into the hardware sector in recent years, coming up with products including virtual reality headset Oculus and video chatting device Portal.

 

Facebook did not immediately respond to Reuters’ request for comment.

 

 

 

Roaring Kitty to testify on GameStop alongside hedge fund managers

(Reuters) - The YouTube streamer known as Roaring Kitty, who helped drive a surge of interest in GameStop Corp, will testify before a House panel on Thursday alongside top hedge fund managers.

 

The House Financial Services Committee is examining how an apparent flood of retail trading drove GameStop and other shares to extreme highs, squeezing hedge funds like Melvin Capital that had bet against it.

 

The witness list was announced on Friday by Congresswoman Maxine Waters and includes Keith Gill, who also goes by Roaring Kitty, Robinhood chief executive Vlad  Tenev, Citadel chief executive Kenneth Griffin, Melvin chief executive Gabriel  Plotkin and Reddit chief executive Steve Huffman.

 

The virtual hearing, entitled “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide," will take place on Feb. 18 at 1200 ET (1700 GMT), according to the press release and will be livestreamed here here. Waters, a Democrat, is Chair of the House Committee on Financial Services.

 

Robinhood, Reddit, Melvin and Citadel have been at the center of the GameStop saga, which saw retail traders promote GameStop on the Reddit forum WallStreetBets. Robinhood emerged as a popular venue to trade the stocks but was criticized for temporarily restricting trading in the hot stock.

 

The GameStop surge resulted in massive losses for Melvin, after the hedge fund bet the retailer’s stock price would tumble. Citadel’s hedge funds, along with founder Griffin and firm partners, put $2 billion into Melvin.

 

Democrats and Republicans are united in their outrage by Robinhood’s decision to suspend trading in the so-called “meme stocks” on Jan. 28. Tenev said the company had to impose the restrictions after wild trading in the stocks triggered a $3 billion margin call by Robinhood’s clearing house, straining the company’s balance sheet.

 

Massachusetts securities regulators have also issued a subpoena seeking Gill’s testimony.

 

 

Wall Street's SPAC craze scales new heights with record filings

(Reuters) - Richard Branson and Barry Sternlicht were among more than two dozen investor groups that filed with U.S. regulators on Friday to raise new blank-check acquisition companies, setting a new record.

 

The 28 filings for new special purpose acquisition companies (SPACs) underscore their growing appeal on Wall Street. SPACs raised a record $82 billion last year, and the trend has gathered further steam in the early weeks of 2021.

 

Overall, 144 SPACs have raised $45.7 billion so far this year, according to data from SPAC Research, with backers including high-profile investors, politicians and sports personalities.

 

Starwood Capital Group’s CEO Barry Sternlicht’s Jaws Juggernaut Acquisition Corp filed for an IPO of up to $200 million on Friday. Other notable investors that launched SPACS included serial entrepreneur and billionaire Richard Branson and former BuzzFeed Chairman Ken Lerer.

 

Friday’s filings count more than doubled a previous record of 13 deals on Feb. 5, SPAC Research said.

 

A SPAC is a shell company that raises money in an IPO to merge with a privately held company that then becomes publicly traded as a result.

 

SPACs have emerged as a popular IPO alternative for companies, providing a path to going public with less regulatory scrutiny and more certainty over the valuation that will be attained and funds that will be raised.

 

 

Analysis: How McDonald's plans to bring back traffic with new cheaper chicken sandwiches

NEW YORK (Reuters) - When McDonald’s Corp rolls out its new crispy chicken sandwich line on Feb. 24, it will swap out a higher-priced premium chicken sandwich from its menu, the company confirmed to Reuters.

 

McDonald’s three new sandwiches – all with a larger fillet and new potato bun – will start at $3.49 and top out at roughly $4.69, depending on the region, according to a U.S. franchisee who spoke on the condition of anonymity and a Credit Suisse analyst.

 

Soon to disappear from the menu: the more expensive Buttermilk Crispy Chicken Sandwich, which usually costs around $5.

 

McDonald’s menu swap follows several years of declining customer traffic at its U.S. locations. The last year in which guest visits rose was 2017, when they increased by 1%, according to annual financial filings.

 

The pricing strategies illustrate how the world’s biggest restaurant brand stands to make more money selling higher quantities of a cheaper product than lower quantities of a more expensive one.

 

That scheme has long helped McDonald’s beat competitors and is especially relevant as millions of Americans remain out of work because of the coronavirus pandemic.

 

Amid a consumer frenzy for chicken, McDonald’s forthcoming sandwiches represent one of its most significant menu changes since it switched the Quarter Pounder to fresh beef in 2018.

 

The company has said the sandwiches are precursors to even more new chicken items as McDonald’s looks to regain customers who flipped to Popeyes, a unit of Restaurant Brands International Inc , and Chick-fil-A. Both rivals charge about $3.99 for their fried chicken sandwiches.

 

Kentucky Fried Chicken will switch to a new chicken sandwich nationally by the end of February.

 

McDonald’s suggested price is a “very solid defensive play,” especially for a low-priced brand, said restaurant marketing consultant Chas Hermann.

 

McDonald’s “can’t go out at $3.99 and think they’re going to move anybody back” to their restaurants, he said.

 

If successful, the new sandwiches could help boost sales at an average location by as much as 4.2%, according to Credit Suisse analyst Lauren Silberman.

 

An average McDonald’s location is currently selling about 50 Buttermilk Crispy Chicken Sandwiches per day, she said.

 

But McDonald’s stores are expected to sell between 100 and 150 of the new sandwiches daily, or even more, according to Silberman and the franchisee.

 

The company said pricing will differ by region and location and is influenced by various market conditions.

 

Many McDonald’s franchisees turn to consulting firm Deloitte for advice on how to set optimal pricing.

 

For example, the franchisee told Reuters that Deloitte recommended a price of $3.69 for the spicy and crispy versions and $4.29 for the deluxe. But the person, who declined to be named, said they will mark up the menu price because of higher minimum wages in the area, and that they plan to charge $3.99 and $4.69 instead.

 

As prices rise, customer visits sometimes fall.

 

Customer checks at fast-food restaurants rose more than 3% year over year in 2018 and 2019, then shot up 10.5% in 2020, in part because the pandemic prompted people to place larger family-sized orders. The data, from Black Box Intelligence, does not show how much of the increase is from larger order sizes versus higher prices.

 

 

 

Namibians Weigh-in On 3D-Printed Meat

The prospect of munching digitally printed meat has been met with raves and ridicule after the recent unveiling of a three-dimensional (3D)-printed rib-eye steak in Israel.

 

An Israeli company unveiled the first 3D-printed rib-eye steak this week in what could be a leap forward for lab-grown meat once it receives regulatory approval, the Washington Post reported on Tuesday.

 

While Namibians are a long way from getting their mouthful of 'cultivated' meat, The Namibian weighed in with some people who do not consume animal products about their thoughts on the alternative meat.

 

Jolene Nel remains steadfast that 3D printed meat is still not an ethical or sustainable production method.

 

"No, I would not eat it. Animals still get used and abused in the process," she said.

 

Nel believes that since animal cells are required for the replication process, animals will need to be in fresh supply and may be subjected to living in confinement.

"Even if the extraction of cells is painless, these animals would be subject to living in a lab for the rest of their lives. To me, spending your life in a lab or cage is cruel and abusive," she said.

 

Contrary to Nel, Toni Brockhoven entertained the idea of 3D-printed meat positively.

 

Brockhoven said the extraction of the animal cells is much more humane than current meat production methods.

 

"Let's be clear: a bit of tissue is removed like a biopsy plug after something [is put on] to deaden the area. It is nothing like being de-balled, de-horned, debeaked, de-tailed or having teeth clipped without anesthetic," she said.

 

Furthermore, she said animal foods cause diseases that plant foods don't. This is, however, not the first instance of 3D-printed protein. Companies in countries like China, Japan and Spain have endeavoured to manufacture 3D-printed meat and fish as well.

 

 

Generally, 3D printing is the process of using computer-aided design (CAD) to create three-dimensional objects by layering materials like plastics, composites or bio-materials.

 

In the instance of 3D-printed meat, however, cells rather than plastics are used.

 

"Bio-printing is different in that you are printing with cell tissue rather than bio-degradable materials, for example," explained founder and maker at Printhoek 3D in Windhoek Romar Quitasol.

 

Quitasol also said Namibia most likely does not have any bio-printers at this time.

 

According to a journal published by the National Centre for Biotechnology Information (NCBI), 3D bioprinting is a layer-by-layer manufacturing process that uses biological constituents, biochemicals and living cells.

 

The journal explains that the required cells are normally extracted from a living organism and then cultured into a bioink to 'print' tissue objects.

 

In a report prepared by Reuters, taste-testers who tried the printed meat product said the plant-based steak cooks, tastes and looks just like traditional meat.

 

Past research has tied red meat to increased risks of diabetes, cardiovascular disease and certain cancers.

 

Despite a global debate about this new method, it will still take a number of years to bring printed meat products to markets worldwide.

 

Furthermore, countries - Namibia included - will have to formulate regulatory frameworks around the production and consumption of the lab-produced meat before people can get a taste of it.-Namibian.

 

 

Namibia: The End - Air Namibia Shutdown to Cost Billions

The government will spend around N$300 million to pay salaries of Air Namibia employees who will stay at home while the 74-year-old airline is shut down.

 

The closure of the national airline marks the end of an institution that has gobbled up N$11 billion in government bailouts over the past two decades.

 

Sources told The Namibian that Air Namibia's monthly wage bill is between N$25 million and N$30 million.

 

Air Namibia has been on death row for the past three years, but its fall from grace was reinforced this week when the Cabinet was briefed that last year's decision to liquidate the airline will prevail.

 

Ministers have reportedly been debating on whether the Cabinet should stick to the liquidation decision.

 

"The answer to that is that liquidation still stands," a source familiar with the Cabinet discussion said.

The national airline's troubles have been long-coming.

 

And they involve politicians and executives who often used Air Namibia as a cash cow.

 

President Hage Geingob has for years supported the airline.

 

In October 1999, Geingob - as prime minister- welcomed Air Namibia's brand new Boeing 747-400, which cost around N$700 million.

 

That deal was clouded with allegations of bribery and signalled continued support from the government.

 

In fact, the government agreed to pay an additional N$2 billion to Air Namibia from 2001 to 2002.

 

NAIL IN THE COFFIN

 

Minister of finance Iipumbu Shiimi said the Cabinet has decided that it is in the best interest of the country to file for voluntary liquidation.

 

He said the airline has not been profitable since its inception.

Speaking at a press conference yesterday, Shiimi said the government spent billions of dollars to support the airline, but cannot keep sustaining it at the expense of other pertinent issues, such as economic growth and social services.

 

"It must be noted that the government considered all other options . . ," he said.

 

Shiimi said the liquidation of the airline would cost N$2 billion.

 

He said liquidation costs are not always the responsibility of the shareholder, but funds may be generated by selling the company's assets.

 

Air Namibia's assets at book value stood at N$981 million as at August 2020, while the airline's liabilities stood at N$3 billion over the review period.

 

Shiimi said the government has committed to paying employees' salaries for 12 months.

 

It will also consult the temporary board on the winding up of operations.

"That includes the schedule of payments to the employees and the protection of assets," Shiimi said.

 

Shiimi denied information that the government wants to close Air Namibia to advance another airline.

 

'SOARING DEBTS'

 

He said: "This information is totally misleading and devoid of any truth. The history of Air Namibia is well known and the government can no longer carry this burden, given Air Namibia's soaring debts."

 

Minister of public enterprises Leon Jooste said the government explored various options to avoid liquidation, but all options proved to be futile.

 

He said the government has to date spent N$11 billion on the struggling airline.

 

Jooste corroborated Shiimi's sentiments on the government not promoting the growth of another airline, but said the liquidation decision was already in the pipeline.

 

"The discussions that we have had leading up to the conclusion we have reached, were done quite a considerable time ago already. So, there were obviously a number of issues that needed to be resolved. One of them had been a very complicated issue of the lease agreements we have on the two Airbus aircraft, and the fact that they are fully backed by a government guarantee," Jooste said.

 

One of the issues Jooste mentioned was the fact that the airline was losing more money when operational than when operations ceased.

 

He said the airline lost N$111 million monthly during the Covid-19-imposed lockdown, compared to N$119 million monthly when operating.

 

"They were actually losing less than when they were operating because the business model is so flawed. When the minister says all options were explored, we mean all options," Jooste said.

 

NEW DIRECTORS

 

The minister was queried about the new board and said he appointed it to assist with the liquidation process.

 

He appointed businessman James Cummings, lawyer Norman Tjombe and Hilda Basson-Namundjebo as board members of Air Namibia last week. This was, however, rejected.

 

Two government officials were instead appointed.

 

Meanwhile, the two ministers said it was deemed as best for the new interim board members to be from both the finance and public enterprises ministries.

 

The two new directors are Martin Ashikoto, from the finance ministry, and Tjiuee Kaura, from the public enterprises ministry.

 

DIVIDED NATION

 

Air Namibia's demise has divided opinion.

 

Rally for Democracy and Progress leader Mike Kavekotora says he supports the decision by the Cabinet to liquidate and close down Air Namibia.

 

Kavekotora is one of the members of parliament who have been calling for the closing down of parastatals that have been "technically insolvent for years".

 

"We don't need to be emotional about it. We currently have an airline which is basically a bottomless pit. It has been a liability. The money we have been pumping into Air Namibia as a nation went into billions and billions of dollars. This is money that could have been used for other pertinent issues such as education and health," Kavekotora said.

 

"I only hope that the decision to liquidate Air Namibia is not politically motivated to the benefit of the politically connected people as we have been hearing in the papers," he said.

 

Kavekotora said he does not support the narrative of maintaining a national airline for the sake of it.

 

"I am not buying into that argument of just wanting to see the Namibian flag on an airline. That is nonsense ... If something does not work, you just have to kill it. And this applies to many technically insolvent state-owned enterprises," he said.

 

Institute for Public Policy Research director Graham Hopwood also supports the Cabinet's decision.

 

He said: "Air Namibia has not produced any audited financial statements over the years. You can't run a business like that and expect it to continue ... it is very sad, but it is inevitable that it has to happen."

 

Popular Democratic Movement parliamentarian Nico Smit says although the decision has far-reaching effects on its more than 600 employees and their beneficiaries it was the right decision, since the airline has been running at a loss.

 

"It is a difficult situation but it all comes down to the mismanagement of Air Namibia from day one. If the business is not making profit, it is very unwise to continue with it," he said.

 

A former minister of works and transport, Helmut Angula, described the planned liquidation as "horrible news".

 

"We are at the mercy of capitalists who are killing the national airline to appease bookkeepers. Everything is done at the stroke of a pen."

 

He asked what would happen to specialised employees such as pilots in a local industry that lacks other airlines.

 

"Will they become farmers like me? What will happen to the technology which took us years to acquire?" he asked.

 

Angula said talks of establishing another airline shouldn't be entertained.

 

"People are no longer thinking well. Countries that killed their national airlines are struggling to bring them back. All the successful airlines in the world are indirectly or directly supported by the government," he said.

 

Former prime minister Nahas Angula was shocked to hear that the government has decided to shut down Air Namibia.

 

"I was not aware. This is news to me. Everything appears to be failing in this country. I am sorry about the workers who now have to go into the streets," he said.

 

PROMISES IN THE DARK

 

Between 2003 and 2009, the government splashed about N$2 billion on Air Namibia to turn its fortunes around. Not much was achieved.

 

In 2011, Air Namibia's management formulated another five-year turnaround strategy and convinced the government that it would lead to the airline breaking even.

 

The government chipped in with N$1,6 billion. From that turnaround a bit of success was achieved, according to its former acting managing director Rene Gsponer.

 

At the time, Gsponer said Air Namibia averaged N$188 million between July and October 2014.

 

He said Air Namibia made a record high of N$205 million in October 2014, making it the first time in history that the airline broke even and made a profit in four consecutive months.

 

However, that success was shortlived as Air Namibia was soon back to its begging ways.

 

In the 2015/16 financial year the government allocated N$579,8 million to Air Namibia.

 

The budget was then increased to N$722,4 million in the 2016/17 financial year.

 

The government allocated another N$629,6 million for the 2017/18 financial year.

 

A N$740 million subsidy for the airline was also budgeted for in 2018/19.

 

A further assistance of N$676 million was budgeted for in 2019/20, while N$698 million was allocated in 2020/21.-Namibian.

 

 

 

Nigeria: Dangote Refinery to Bail Nigeria Out of Recession, Says IMF

The International Monetary Fund (IMF) has projected that Dangote Refinery has the potential to rescue Nigeria from the current economic downturn as well as provide an elixir for the country's economy when it is completed and start production by 2022.

 

In its latest report on Nigeria's economy, the Fund raised the hope that the start of production from the refinery, solely owned by Africa's richest man, Aliko Dangote could help Nigeria improve its current account balance.

 

It said Dangote Refinery has the potential to catalyze more domestic crude oil production and boost GDP growth.

 

According to the report, on the upside, the Dangote refinery, if commencing production in 2022 as planned, could meet the full demand for domestic consumption of refined petroleum products, which are almost all imported at present, thereby, improving the CA balance.

 

"With crude oil for local refining not subject to the OPEC quota, the refinery also has the potential to catalyze more domestic crude oil production and boost GDP growth," it said.

Many experts also projected that the refinery, which may cost Dangote about $15 billion to complete is capable of helping to save Nigeria huge foreign exchange in fuel importations.

 

The 650,000 capacity Dangote Refinery, is regarded as one of the world's biggest oil refineries and could end the irony of Africa's biggest oil producer importing estimated $7 billion of fuel yearly, and instead see it meeting its own needs and supplying neighbouring nations.

 

Renaissance Capital in a report in 2018 projected that Dangote Refinery has the potential to revolutionise Nigeria's economy with its operations adding $13 billion, or 2.3 per cent to the nation's Gross Domestic Product (GDP).

 

Dangote Refinery, which is described as Nigeria's largest-ever industrial project, boasts a distillation column for separating crude into various fuels at different temperatures that is the largest of its kind in the world.

 

The 650,000 barrel-per-day refinery is just part of a $15 billion petrochemical complex that will also house a gas processor and the world's biggest plant for ammonia and urea, which is used in making plastics and fertiliser.

 

Already, the fertiliser plant is said to be ready and could be inaugurated any time to add to the agricultural revolution not only in Nigeria but in some parts of Africa to boost the continent's economy.-Leadership.

 

 

 

Nigeria's Crypto Crackdown Causes Confusion

Nigeria -- the world's second-largest Bitcoin market after the United States -- has banned the trading of cryptocurrencies. It's triggered anger among Nigerians who see cryptos as a safe haven in a battered economy.

 

Cryptocurrencies eliminate the need for banks and other financial intermediaries in managing exchanges of currency and assets.

 

Despite the technology being decentralized -- with no government, company or person controlling it -- the Central Bank of Nigeria (CBN) is cracking down on the trade of cryptocurrencies.

 

Last Friday, the CBN instructed commercial banks and other financial institutions to close accounts transacting with cryptocurrency exchanges.

 

Before the ban was introduced, Enogieru Osasenaga invested 100,000 Naira (€216, $263) in Bitcoin, the world's first decentralized digital currency. A week later, its value had doubled.

Dollar shortage and excessive controls

 

Osasenaga showed me on his phone just how much the trade in digital currencies has recently risen.

 

He said the crypto ban had taken a significant toll on his business.

 

"I'm unable to receive and send payments or procure electronic gadgets online. Because, of course, again, I cannot exceed the $100 limit on my Naira debit card," Osasenega told DW.

 

The CBN also asked banks to identify "persons and entities" operating cryptocurrencies within their systems.

 

Since July 2020, Nigerian banks have reduced the amount customers can spend abroad using debit cards.

 

Africa's giant economy faces dollar shortages due to the sharp fall in oil price, Nigeria's main export.

 

Local banks restrict transactions with hard currency -- mostly limiting customers to withdraw less than $100.

That's why Osasenega had to look for a way to circumnavigate the restrictions set by financial institutions.

 

Behind the ban

 

The CBN doesn't clearly state its reasons behind the crackdown, but some economy experts have an idea.

 

Shuaibu Idris, the managing consultant at Time-Line Consult, said the CBN had foreseen a potential crisis in the digital currency trade.

 

He said there was about $4 billion of assets embedded in cryptocurrencies in Nigeria.

 

"If the owners of these assets reside in China, Singapore, India, US, or Kenya come and take this money, what will happen to the economy of Nigeria? There will be a systemic collapse," Idris told DW.

 

"Then there's a potential systemic collapse arising from the price sensitivity that is exceptionally high with Bitcoin," he added.

 

Cat-and-mouse race

It's not the first time the CBN tried to control cryptocurrency trade.

 

In 2017, it released a similar secular, but it did not stop the booming of cryptocurrency business in the West African nation.

 

Since then, Bitcoin trade volume in Nigeria has increased by at least 19% annually.

 

Estimates show that Nigerians have traded nearly $600 million in Bitcoin in the last five years, making it the second-largest Bitcoin market after the United States.

 

Idris doesn't believe the Central Bank of Nigeria can control how people conduct digital currency, no matter how many tough regulatory measures are introduced.

 

"We are having an enormous amount of currency restriction. People who want to trade are not able to buy dollars or foreign exchange to import the items," Idris said, adding that is the reason people have turned to cryptocurrency to remedy the problem.

 

"It's like a cat-and-mouse race."

 

The Nigerian economist said the number of so-called informal businesses in Nigeria numbered almost twice that of registered businesses, and billions of dollars were in circulation without the government's knowledge.

 

The recent ban will most likely make the situation worse and lead to a further fall in revenues.

 

Osasenega said he and other cryptocurrency enthusiasts will find a way around the ban.

 

"It's going to be around a couple of days or a week to circumvent this policy," Osasenega said, adding that "we don't necessarily have to use banks, and at the end of the day, it's the banks' loss."

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

Dairibord

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <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) 2021 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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