Major International Business Headlines Brief::: 30 March 2021

Tue Mar 30 09:46:51 CAT 2021

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Major International Business Headlines Brief::: 30 March 2021

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ü  US to seize Top Glove products over labour abuses

ü  Uyghurs: Xinjiang cotton ban is self-defeating, China tells H&M

ü  Biden administration threatens tariffs on UK goods in 'tech tax' row

ü  Historic Amazon union drive set to conclude

ü  Suez Canal reopens after giant stranded ship is freed

ü  Asia shares set to rise as broader worries about hedge fund default ease

ü  Apple supplier Foxconn's Q4 profit slips, lags view

ü  Malaysia's AirAsia shares slide after record quarterly loss

ü  U.S. safety agency says it will gather information on Tesla-truck crash in New Jersey

ü  Samsung Electronics' Texas chip output returns to near-normal levels

ü  Nigeria: Govt, States' Debt Profile Rises Over U.S.$80 Billion

ü  Nigeria: Govt Approves New Policy Framework for MSMEs

ü  Kenya: Pandemic Hits Top Banks Hard

ü  South Africa: Coal-Powered Industry Plan for South Africa's 'Eden' Sparks Green Outcry

ü  Nigeria's Debt Rises to N32.92 Trillion

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US to seize Top Glove products over labour abuses

US Customs and Border Protection (CBP) has ordered the seizure of disposable gloves made by Malaysia's Top Glove.

The order said CBP had sufficient information to believe that Top Glove uses forced labour in the production of disposable gloves.

Top Glove is the world's largest producer of latex gloves, and exports to 195 countries.

The company has said it has taken extensive actions to improve its labour practices.

"CBP will not tolerate foreign companies' exploitation of vulnerable workers to sell cheap, unethically-made goods to American consumers," said Troy Miller from the CBP.

The US had already banned products from two of Top Glove's subsidiaries in July, but the new ban extends to all disposable gloves from Top Glove factories in Malaysia.

In its July finding, CPD accused Top Glove of debt bondage, excessive overtime and abusive working and living conditions.

Nevertheless, HR Asia recently named the company one of the best companies to work for in Asia in 2020.

World's biggest rubber glove manufacturer

CBP said it had taken steps to ensure the ban would not have a significant impact on total US imports of disposable gloves, which are critical to efforts to contain Covid-19.

Top Glove has 21,000 employees and makes 96 billion gloves each year.

The company has factories in Thailand, China and Vietnam, but 41 of its 47 factories are in Malaysia.

Although Top Glove makes person protective equipment, its was forced to shut more than half of its 28 factories in November after almost 2,500 employees tested positive for coronavirus.

All have since reopened, with additional safety measures in place.

Meme stock

Top Glove shares fell 5% on the news of the US ban.

The company's shares surged in late January as retail investors in Asia drew inspiration from the GameStop trading frenzy.

A Reddit forum called BursaBets was set up, describing itself as the "Malaysian version" of Wallstreetbets, the Reddit forum that helped fuel the GameStop craze.

Unlike many of the US companies which saw a surge of interest from retail investors, Top Glove is a profitable company.

The group had its strongest ever sales, with revenue of $1.3bn in its most recent quarterly results.

The company has applied for an additional listing on Hong Kong's stock exchange.--BBC

Uyghurs: Xinjiang cotton ban is self-defeating, China tells H&M

The Chinese government has warned clothing brand H&M it will not earn a penny in the country if it refuses to buy cotton from the Xinjiang region.

H&M and other western brands are facing a backlash in China after they expressed concern about the alleged use of forced labour in cotton production.

China has been accused of forcing members of the mostly Muslim Uyghur minority to pick cotton in Xinjiang.

China denies this and, in recent days, critical brands have faced boycotts.

"I don't think a company should politicise its economic behaviour," said Xu Guixiang, a Xinjiang government spokesman, at a news conference on Monday. "Can H&M continue to make money in the Chinese market? Not anymore."

Mr Xu said the decision by some brands to stop buying Xinjiang cotton was "not reasonable", comparing it to "lifting a stone to drop it on one's own feet".

H&M has not yet responded to a request for comment from the BBC.

The Chinese spokesman's remarks cast doubt on the Swedish company's future in one of the world's largest markets.

They also indicate Chinese government support for the recent Chinese consumer boycott of products from H&M and other global retailers.

China's boycott initially targeted Nike and H&M, with reports of the latter's products withdrawn from major e-commerce platforms and some of its stores being shuttered across the country.

But the boycott has widened to include Burberry, Adidas and Converse, among others.

The cotton row erupted after the US and other western governments ramped up pressure on China over alleged human rights abuses in Xinjiang.

China is accused of committing serious human rights violations against Uyghurs in the region.

In December the BBC published an investigation based on new research showing China was forcing hundreds of thousands of minorities including Uyghurs into manual labour in Xinjiang's cotton fields.

Last week several western countries - including the UK, US, Canada and European Union members - imposed sanctions on officials in China over the situation in Xinjiang.

China has repeatedly denied the allegations of abuse and has hit back with retaliatory sanctions on European officials.

Xinjiang, China's biggest region, produces about a fifth of the world's cotton. An autonomous region in theory, in reality it faces restrictions which have only increased in recent years

Millions of China's Uyghurs, a Muslim minority that sees itself as culturally and ethnically close to Central Asian nations, live in Xinjiang

In recent decades, mass migration of Han Chinese (China's ethnic majority) to Xinjiang has fuelled tensions with Uyghurs which has at points flared into deadly violence

This has resulted in a massive security crackdown and an extensive state surveillance programme, which critics say violate Uyghur human rights. China says such measures are necessary to combat separatism and terrorism

Uyghurs have been detained at camps where allegations of torture, forced labour and sexual abuse have emerged. China has denied these claims saying the camps are "re-education" facilities aimed at lifting Uyghurs out of poverty--BBC

Biden administration threatens tariffs on UK goods in 'tech tax' row

The US has warned it could put tariffs of up to 25% on a host of UK exports in retaliation for a UK tax on tech firms.

Ceramics, make-up, overcoats, games consoles and furniture could all be hit, according to a list published by the Biden administration.

The duties are designed to raise $325m (£235.8m), the amount the US believes the UK will raise from US tech firms.

A UK government spokesperson said it wanted to "make sure tech firms pay their fair share of tax".

They added: "Should the US proceed to implement these measures, we would consider all options to defend UK interests and industry."

Washington is pressing ahead with the action, initiated under President Donald Trump, and has scheduled hearings on the list.

It argues the recently introduced digital services tax - which taxes tech firms on their revenues - has "unreasonable, discriminatory, and burdensome attributes".

Such actions have proceeded against similar taxes in India, Austria and Spain, but action against the European Union as a whole was dropped.

The US Section 301 action is designed to apply domestic political pressure within the UK and other countries over the imposition of such taxes.

The UK and US held talks about the digital services tax on 4 December, and UK government sources stressed that the tariff list was being seen as procedural, rather than an escalation.

The tariffs are now subject to a consultation in the US over the next few weeks.

UK ceramics are on the US Trade Representative's list, including certain tiles, bathroom ware like sinks and bidets, as well as ceramics for laboratory uses.

About £17m of these products were exported to the US in 2020, and £24m in 2019 before Covid.

Trade group the British Ceramic Confederation said it was "monitoring developments closely, working with UK officials".

Meanwhile Adam Mansell, head of the UK Fashion & Textile Association (UKFT), called the threat to UK-made overcoats "hugely disappointing", noting the US had only removed separate tariffs on other types of fashion goods, such as British cashmere last month.

"At a time when we are trying to start discussions over a UK-US trade deal, it is extremely important that both governments get around the table to remove this threat as soon as possible," he said.

"With the industry still struggling with the impact of Covid-19 and understanding the new trade arrangements with the EU, an additional burden on our exports couldn't come at a worse time."

'Public frustration'

At the Budget, the Office for Budget Responsibility calculated the digital services tax would raise £300m in the current financial year, and as much as £700m in future years.

Brought in last April it taxes at 2% the revenues - not profits - of search engines, social media services and online marketplaces which derive value from UK users.

It followed years of claims in Europe and elsewhere that big tech firms do not pay enough tax in the countries where they operate.

Last August, Facebook agreed to pay the French government €106m (£95.7m) in back taxes to settle a dispute over revenues earned in the country.

Earlier that year, Facebook boss Mark Zuckerberg said he recognised the public's frustration over the amount of tax paid by tech giants.

'Temporary'

A UK government spokesperson said: "Like many countries around the world, we want to make sure tech firms pay their fair share of tax. Our digital services tax (DST) is reasonable, proportionate and non-discriminatory.

"It's also temporary. We're working positively with the US and other international partners to find a global solution to this problem and will remove the DST when that is in place."

There are signs the Biden administration wants a more conciliatory relationship on trade with the UK than Donald Trump did.

Last month, Washington agreed to suspend tariffs on UK goods, including single malt whiskies, that were imposed in retaliation over subsidies to aircraft maker Airbus. However, the UK is still lobbying the US to drop duties on British steel brought in in 2018.--BBC

Historic Amazon union drive set to conclude

Officials are set to reveal the outcome of a high-profile battle in Bessemer, Alabama that could establish the first unionised Amazon warehouse in the US.

Ballots will start being counted on Tuesday after more than a month of voting ends on Monday.

The fight is a key test for Amazon, which has faced criticism around the world over its working conditions during the pandemic.

The e-commerce giant has fiercely opposed the effort.

If it loses, it would be forced to enter formal negotiations with representatives from the Retail Wholesale and Department Store Union (RWDSU) over a contract for nearly 6,000 staff at the warehouse, located just outside Birmingham, a city in the north central region of Alabama.

With both sides likely to challenge some of the votes, the results of the ballot are not expected to be known for some time.

Amazon says it offers competitive pay and benefits. It has also tried to persuade workers that the union would not be able to win more for its members, even while the union collects hundreds of dollars in dues payments.

But union organisers have said staff are fed up with the relentless and impersonal treatment they receive.

Amazon, the second largest employer in the US after Walmart, has long faced criticism over its working conditions.

The complaints hit new intensity last year, as the pandemic brought a surge of business and profit while raising health risks.

Workers in Spain, Italy, France and elsewhere have protested and held strikes, including this week in Germany.

The vote in the US is the first time since 2014 that Amazon has faced a formal union drive in the US.

If organisers succeed against the company in Alabama, many pro-union backers are hopeful it will inspire workers elsewhere to take a stand and set a new work standard for its US workforce.

Political support

"The reason that Amazon is putting so much energy to try to defeat you is they know that if you succeed here, it will spread all over this country," Senator Bernie Sanders told workers at a recent union rally.

Mr Sanders is among the many Democratic politicians and celebrities who have endorsed the union effort in Alabama.

Last month, President Joe Biden also appeared to back the drive, in a video that called the Alabama vote a "vitally important choice" and warned against company efforts to intimidate workers, though he did not mention Amazon by name.

Unusually, at least one prominent voice from the typically anti-union Republican Party has chimed in with support as well: Florida Senator Marco Rubio, who wrote in a recent opinion piece that "uniquely malicious corporate behaviour like Amazon's justifies a more adversarial approach to labour relations".

In recent days, Amazon officials have been unusually outspoken in defending the company, contesting claims from politicians about how much it paid in taxes, among other issues.

Dave Clark, Amazon's retail chief, wrote on Twitter that Mr Sanders should "save his finger wagging lecture" until he delivers on a promise to raise the US minimum wage to $15 an hour - where Amazon sets its starting pay.

Mr Sanders said the pushback was a sign the company was "getting nervous".--BBC

Suez Canal reopens after giant stranded ship is freed

Traffic has resumed in Egypt's Suez Canal after a stranded container ship blocking it for nearly a week was finally freed by salvage crews.

Tug boats honked their horns in celebration as the 400m-long (1,300ft) Ever Given was dislodged on Monday with the help of dredgers.

Hundreds of ships are waiting to pass through the canal which links the Mediterranean to the Red Sea.

It is one of the world's busiest trade routes.

Peter Berdowski, CEO of Dutch salvage company Boskalis, said the Ever Given had been refloated at 15:05 (13:05 GMT) on Monday, "thereby making free passage through the Suez Canal possible again".

Egyptian officials say the backlog of ships waiting to transit through should be cleared in around three days, but experts believe the knock-on effect on global shipping could take weeks or even months to resolve.

Salvage teams had faced a daunting challenge after the 200,000-tonne ship ran aground last Tuesday morning in high winds and a sandstorm which reduced visibility.

A Dutch specialist team, SMIT, oversaw a flotilla of 13 tugs, small but powerful vessels that can shift large ships, as they tried to dislodge the Ever Given.

Dredgers were brought in and dug 30,000 cubic metres of mud and sand from beneath the ends of the ship.

Over the weekend, it was feared that some of the ship's cargo of some 18,000 containers would have to be removed in order to lighten the load.

But high tides helped the tugs and dredgers in their work and early on Monday, the stern (rear of the ship) was freed and the great ship swung across the canal, to shouts of celebration. Hours later, the bow (front) too came unstuck, and the Ever Given was able to move out.

The vessel was towed to the Great Bitter Lake, which sits between two sections of the canal to the north of the salvage site, where it will undergo safety checks.

A marine source told Reuters news agency on Monday evening that ships were travelling southwards towards the Red Sea while canal services provider Leth Agencies said vessels had resumed transit from the Great Bitter Lake.

Some ships have already left the region, preferring to take an alternative, longer route around the southern tip of Africa.

Inevitably, cargoes will be reaching their destination much later than planned. There may be congestion when they arrive in port, while future sailing schedules have been thrown into disarray,

The cost of shipping goods to Europe is expected to rise as a result, BBC Business Correspondent Theo Leggett reports.

Shipping group Maersk said the "ripple effects on global capacity and equipment" were significant.

"There'll be an investigation, clearly, because this has had such a big impact and exactly what's happened here, I think, will be debated for some time," Marcus Baker, global head of marine and cargo at Marsh Inc, told Reuters.

"What do we do going forward to ensure it doesn't happen again? Again, I would leave that to the competent authorities that are in Egypt to decide how they want to make sure that traffic transits safely through the canal because, look, it's in their interest to do that."

Spirits here are quite high. There's a strong sense of achievement. Some experts had warned that it might take weeks to free the Ever Given. But the high tide, as well as the specialist equipment brought in, all helped the rescue operation.

Now the authorities will have to address another challenge - congestion. The head of the Suez Canal Authority said that hundreds of stranded vessels would be allowed through the canal on a first-come-first-served basis, though there might be some exceptions to specific ships, based on the types of goods on board.

The blockage put the authorities under immense pressure, given the major impact it had on global trade. For Egyptians, the canal is not only a source of national pride, but it also provides the economy with much needed foreign currency.

A couple of days ago, I asked Osama Rabie, the head of the Suez Canal Authority, whether he was concerned that some shipping companies might be discouraged from sending such giant ships through the canal in the future. He replied that there was no alternative to the Suez Canal, which he said was fast and safe. So, it's not just about time here, but also about security.

What happens to the ship now?

It will now undergo a full inspection at the Great Bitter Lake, the vessel's technical managers, Bernhard Schulte Shipmanagement, said.

It said there had been no reports of pollution or cargo damage, and initial investigations had ruled out any mechanical or engine failure as a cause of the grounding last week.

The ship's Indian crew of 25 remaining aboard the vessel are safe and in good health, BSM said, adding: "Their hard work and tireless professionalism are greatly appreciated."

The ship's containers are carrying a huge variety of items and the insured value of the cargo is believed to amount to hundreds of millions of dollars.--BBC

Asia shares set to rise as broader worries about hedge fund default ease

A pedestrian holding an umbrella walks past an electronic board showing the various stock prices outside a brokerage in Tokyo, Japan, January 18, 2016. REUTERS/Yuya Shino

Asian shares were set to open higher on Tuesday as investors shook off earlier worries about a hedge fund default that roiled global banking stocks overnight, while rekindled concerns about inflation pushed bond yields higher.

The firmer tone in Asia comes as Wall Street pared earlier losses driven by the banking sector on fears that issues with a defaulting hedge fund could spread throughout the banking sector. read more

Nomura (8604.T) and Credit Suisse (CSGN.S) are facing billions of dollars in losses and regulatory scrutiny after a U.S. investment firm, named by sources as Archegos Capital, defaulted on equity derivative bets, putting investors on edge about who else might be exposed. Shares in Nomura and Credit Suisse declined 16.3% and 13.8%, respectively, on Monday.

In early Asian trade, however, Australian S&P/ASX 200 futures were up 0.44% and Japan's Nikkei 225 futures had advanced 0.86%.

Michael McCarthy, chief markets strategist at CMC Markets said the worries "are very specific to a small number of hedge funds." He said he did not expect any systemic fallout.

Still, the dollar gained on safe-haven buying, while bond prices came under pressure as the outlook for economic growth raised the specter of inflation, he added.

Benchmark 10-year yields rose to a session high of 1.728% in the U.S. after the state of New York on Monday announced people aged 30 and older could get coronavirus vaccinations starting March 30. read more

Crude prices inched up on a report that Russia would back broadly stable oil output when the Organization of the Petroleum Exporting Countries and allies meet this week. read more

Futures had earlier fallen on news that a container ship in the Suez Canal blocking traffic for nearly a week had been refloated, bringing some relief to concerns about a supply blockage.

Optimism about speedy vaccinations, the record U.S. stimulus, and robust estimates for upcoming earnings, drove the Dow and the S&P 500 to record closing highs last week.

On Wall Street, the Dow Jones Industrial Average (.DJI) rose 0.3%, the S&P 500 (.SPX) lost 0.09% and the Nasdaq Composite (.IXIC) dropped 0.6%.

The KBW Nasdaq Bank stock index (.BKX) ended 2.3% lower after falling nearly 3.5% during the session. read more

"There's still chatter as to whether or not, and which, American banks may be affected," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. "That is a question that's lurking. But so far the market has taken (the news) in stride essentially."

Apple supplier Foxconn's Q4 profit slips, lags view

Foxconn (2317.TW), the world's largest contract electronics maker, posted on Tuesday a lower fourth-quarter profit that lagged expectations despite strong iPhone 12 sales and pandemic-led demand for telecommuting devices.

The Taiwanese firm, which counts technology giants such as Apple Inc among its major clients, booked October-December net profit of T$45.97 billion ($1.61 billion).

That represented a 4% fall from a year earlier, according to a company statement, and compared with the T$50.89 billion average of 11 analyst estimates compiled by Refinitiv.

Formally called Hon Hai Precision Industry Co Ltd, Foxconn's fourth-quarter revenue rose 15% on the year.

The company had previously forecast fourth-quarter revenue to be in a range of a decline of 3% and gain of 3% from a year earlier.

($1 = 28.5280 Taiwan dollars)

Malaysia's AirAsia shares slide after record quarterly loss

Shares in AirAsia Group Bhd (AIRA.KL) fell in morning trade on Tuesday, as analysts lowered earnings forecasts after the Malaysian budget airline group posted its record quarterly loss.

The stock fell as much as 6.2% in the first half session of trade.

Affin Hwang Capital cut earnings forecasts for 2021 and 2022, expecting a larger net loss this year due to lockdowns in Malaysia in the first quarter, closed borders and longer-than-expected timeframe for the COVID-19 immunisation programme.

"We now anticipate AirAsia to report net loss of 92 million ringgit in 2022 due to slower-than-expected recovery in international tourism," analyst Isaac Chow said in his note.

AirAsia in a results presentation on its website said it expects a soft first quarter for its Malaysia unit due to lockdowns, but the following quarter could see up to 33% of pre-COVID domestic levels following relaxation on some cross-state tourism.

AmInvestment Bank said in its note that it was highly critical for AirAsia to shore up its liquidity quickly given its cash burn rate.

The research house said while prospects for the air travel industry and airlines have improved, AirAsia may need to raise more fresh capital, "including potentially a debt-to-equity swap for creditors (that is also highly dilutive to its existing shareholders) to ensure its long-term survival."

In its presentation, AirAsia said it reduced its average cash burn by 92% in the last quarter of 2020, partly due to continued support from lessors and banks for deferrals.

The airline said ongoing discussions for raising new capital in Indonesia and Philippines were also positive.

AirAsia reported a record $591 million quarterly loss on Monday.

AirAsia has been looking to raise up to 2.5 billion ringgit to weather the pandemic, and said that it expects to secure 1 billion ringgit in loans from three Malaysian banks.

U.S. safety agency says it will gather information on Tesla-truck crash in New Jersey

The U.S. auto safety agency said on Monday that it will collect information about an accident in which a Tesla (TSLA.O) vehicle crashed into a tractor-trailer in New Jersey.

The Tesla driver, a 44-year-old, said he had his cruise control on "when he momentarily lost focus on the roadway" and drove his car under the trailer on Monday morning, according to a statement from the South Brunswick Township Police Department.

"The impact was so severe it shredded the roof off the passenger's side of the vehicle."

The Tesla was destroyed in the crash, but the driver received minor injuries.

"NHTSA is aware of the Tesla crash on March 29 in New Jersey. We have contacted Tesla and local law enforcement regarding this crash and will act accordingly when we have more information," a representative of the National Highway Traffic Safety Administration said in a statement to Reuters.

Tesla did not immediately respond to a Reuters request for comments.

The NHTSA said earlier this month that it had opened 27 investigations into crashes of Tesla vehicles, 23 of which remain active, and at least three of the crashes occurred in recent weeks. 

Samsung Electronics' Texas chip output returns to near-normal levels

Samsung Electronics (005930.KS) said on Tuesday that production at its U.S. chip plant at Austin, Texas had returned to near-normal levels as of last week after more than a month of disruption that exacerbated a global chip capacity crunch.

Samsung and other chipmakers with production facilities in the area had seen shutdowns due to severe weather on Feb. 16. read more

Samsung declined to comment on when production would be fully back to normal.

The disruption will have a definite impact on the global chip contract manufacturing industry that is already battling a severe capacity crunch, research provider TrendForce has said.

Qualcomm (QCOM.O)5G radio frequency chips and Samsung display and image sensor chips account for about 65% of the monthly production at the Samsung plant, TrendForce added. Other chips include power management integrated circuits (PMICs) and a small amount of chips that control electrical parts, Seoul-based analysts said.

The disruption is expected to hurt production of smartphones globally over April-June by about 5% and may lower this year's penetration rate of 5G smartphones, TrendForce estimated.

"This was a problem because it exacerbated a worldwide foundry capacity shortage. But at least it won't get worse as production resumes," aid Park Sung-soon, an analyst at Seoul-based Cape Investment & Securities.

"Smartphone makers have chip stockpiles, but because vendors' inventory of smartphone sets are currently low, smartphone production may see some impact in the second half of this year from the plant's shutdown."

Analysts have estimated losses from the production disruption at the plant to be around 300-400 billion won ($265-353 million), which they expected Samsung to mostly reflect in its January-March quarter earnings result to be announced in April.

($1 = 1,133.7700 won)

Nigeria: Govt, States' Debt Profile Rises Over U.S.$80 Billion

Nigeria's total public debt portfolio as at December 31, 2020, stood at N32.92 trillion, the National Bureau of Statistics (NBS), has revealed.

It made the revelation in its Nigerian Domestic and Foreign Debt report for Quarter Four, 2020, obtained from its website yesterday in Abuja.

According to the News Agency of Nigeria (NAN), the debt profile was for the states and the federal government.

According to the bureau, Nigeria's total public debt showed that N12.71 trillion or 38.60 per cent of the debt was external, while N20.21 trillion or 61.40 per cent of the debt was domestic.

"Further disaggregation of Nigeria's foreign debt showed that 17.93 billion dollars of the debt was multilateral, 4.06 billion dollars was bilateral from the African Development Bank, Exim Bank of China, Japan International Cooperation Agency, India and KFW.

"Meanwhile, 11.17 billion dollars was commercial which are Eurobonds and Diaspora Bonds and 186.70 million dollars as Promissory notes."

The report said that the total States and Federal Capital Territory domestic debt was put at N4.19 trillion with Lagos State accounting for 12.15 per cent of the debt stock.

It added that Jigawa had the least debt stock in this category with a contribution of 0.74 per cent.-This Day.

Nigeria: Govt Approves New Policy Framework for MSMEs

The Minister of State, Federal Ministry of Industry, Trade and Investment, Mrs. Maryam Yalwaji Katagum, has said the Federal Executive Council (FEC) has finally approved the revised National Policy on Micro, Small and Medium Enterprises (MSMES) which provides the framework to resolve the challenges faced by the sub-sector.

The minister said the revised policy which accommodates key changes that have occurred in the national and international socio-economic scene, was a product of deep and wide consultations with critical stakeholders across the country such as MSMEs operators, policy makers, academics/researches and development partners, both local and international.

Speaking at signing of a Memorandum of Understanding (MoU) between the Nigeria Entrepreneurs Forum (NEF) and the Organisation of Women in International Trade (OWIT), in Abuja, she expressed optimism that the implementation of the policy would set the MSMEs on the path of sustainable growth and development.

The minister further emphasised the critical role which MSMEs, especially women-owned businesses play in the development of the national and global economy in terms of employment generation and contribution to Gross Domestic Product (GDP) as this cannot be overemphasised.

She pointed out that it was in recognition of the important role of small businesses that the federal government of accorded special attention to the growth and development of the sector, with special emphasis on women-owned enterprises.

She said it was further to this regard that the implementation of the Survival Fund scheme which has received commendation by stakeholders across the country, further provisioned for 45 per cent female-owned businesses.

Katagum, however, disclosed that the ministry had commenced the stakeholders' engagement on drafting of national policy on startups so as to keep pace with innovation and new wave of digital revolution of start-up ecosystem in the country.

She said the move was aimed at repositioning the Nigerian start-ups to be major contributors to GDP.

The minister also expressed the federal government's commitment to positioning the MSMEs for global competitiveness through effective implementation of policies and programmes.

She also affirmed the ministry's readiness to collaborate with the private sector in achieving its mandate.

She said: "More so, I believe that the implementation of this MoU that would be signed today, will provide another platform to impact women-owned enterprises in the country."

Separately, Katagum, at a meeting with a delegation of Women Food Sellers Association of Nigeria (WFSAN) led by its National Coordinator, Mrs. Funke Tetteh, said Nigerian women are playing major role towards achieving food security in the country particularly in their responsibilities in agricultural food value chain.

She pointed out that Nigerian women have contributed positively to the reduction of hunger in the country through their value addition to agricultural produce in areas of food processing, preservation among others.

In a statement issued by Assistant Director, Information, Mrs. Oluwakemi Ogunmakinwa, she said: "We are helping in the agricultural value chain. You cook it, you preserve it, which is another area you are contributing. In doing so, you are contributing to the reduction of hunger or poverty in the country. You are playing a very important role".-This Day.

Kenya: Pandemic Hits Top Banks Hard

Equity Bank and NCBA are the latest top tier banks to report double digit drops in profitability for the year ended December 2020, as lenders are hit hard by huge provisions for bad loans triggered by the Covid-19 pandemic.

The two now join Absa Bank, Co-operative and KCB in the list of big banks who have reported significant declines in net profit, weighed down by higher provisions for bad debts.

NCBA yesterday reported a 42 per cent dip in profit after-tax to Sh4.6 billion, the second biggest drop among top tier lenders after Absa Bank, after it increased its bad loan provisions by Sh20 billion.

Absa Bank last week reported a 44 per cent drop in profits to Sh4.1 billion after it more than doubled its loan loss provision to Sh9 billion.

Non-performing loans

Banks make provisions for bad loans to deal with potential loan defaults and related expenses. The provisions come at a time when the industry is witnessing a sharp rise in non-performing loans, necessitating the huge provisions which are now hitting banks bottom lines, hard.

NCBA said despite the pandemic, it increased its net operating income by 38 per cent to Sh 46.4 billion. Its total interest income also surged by 73 per cent to Sh44.2 billion.

However this rise was wiped away by the increase in provision for bad debts as it prepared to deal with defaults. The lender said its non-performing loans rose 19 percent to Sh40.1 billion in the period.

Despite the profit slump, the lender said the Group disbursed over Sh432 billion in digital loans to small enterprises and individuals, giving a peek into how lucrative mobile loans are becoming to banks.

This is the first time NCBA is announcing full year results as an entity following its merger from the NIC Group PLC and CBA in October 2019.

"We implemented a robust cost containment plan that reduced operating expenses and contributed to the operating profit increase," NCBA said in a statement.

The lender said it restructured loans worth Sh78 billion and increased credit provision reserves by Sh20 billion to address the uncertain economic environment that continues to persist.

"The high levels of credit provisions taken resulted in a year over year drop in profit after tax of 42 per cent," the lender said.

NCBA said that as a result of the pandemic, the economic outlook for 2020 was lowered substantially, due to slowdown in global trade, services and the continued uncertainties around the pandemic impacting exports, tourism and agribusiness sectors.

Equity Bank

On its part, Equity bank reported an 11 per cent drop in profits after tax to Sh20 billion for the same period.

Its total interest income rose 23 per cent to Sh73.7 billion in the year under review as total operating expenses rose from Sh44.2 billion to Sh72.6 billion, a 64 per cent jump.

Equity has for the second time not declared any dividend for year ended December 31, 2020.

"The Board of Directors do not recommend payment of a dividend in respect of the year ended 31 December 2020," the lender said in a statement to investors on Monday.

The lender increased its loan loss provision by more than five times from Sh5.3 billion to Sh26.6 billion. Equity bank said in its financial statements that its non-preforming loans surged by 58 percent to Sh50.6 billion in the year under review.

KCB reported mid this month reported a 22 per cent decline in net profits to Sh19.6 billion in the same period in the wake of increased provisions for coronavirus-related defaults.

The lender had reported net earnings of Sh25.1 billion the year before. The reduced profit came as loan loss provisions tripled to Sh27.5 billion from Sh8.8 billion, with the lender responding to non-performing loans (bad loans) rising to Sh96.6 billion from Sh63.4 billion.

"The pandemic significantly affected our business across the markets we operate in, with most of them going into some degree of lockdown," KCB chief executive Joshua Oigara said.

Absa last week reported a 44 per cent drop in profits, Co-operative Bank (24 per cent drop), StanChart (33.9 per cent) and Stanbic had its profits decline by 18.6 per cent.- Nation.

South Africa: Coal-Powered Industry Plan for South Africa's 'Eden' Sparks Green Outcry

Makhado, South Africa — Proposals for a coal-powered industry hub in lush Limpopo promise jobs, but opponents say it will destroy pristine habitats, hike emissions and harm residents' health

South Africa's northern Limpopo province is known for its lush forests, national parks, fruit farms and heritage sites - but lately its green image has come under threat from a proposed multi-billion-dollar industrial mega-project.

Made up of a cluster of 20 steel and other metalworking plants and fuelled by a coal-fired power station, supporters say the project would create much-needed local jobs, while opponents warn it would spell catastrophe for the climate and health.

"We are worried that if the project goes ahead, we will be wearing masks for years to come, not because of coronavirus but because of pollution," said environmental activist Innocent Ramuhala from Mudimeli village, close to the proposed site.

"We have so many questions and so few answers," said Ramuhala, secretary of the Mining and Environmental Justice Community Network of South Africa (MEJCON-SA).

The planned Musina-Makhado Energy-Metallurgical Special Economic Zone (EMSEZ) would cover 8,000 hectares (19,768 acres) with industrial facilities including a coal washery and plants for coking coal, ferromanganese, steel and cement.

It promises to provide nearly 54,000 jobs in a province with 22% unemployment, according to government data.

But critics say South Africa is already Africa's biggest emitter of planet-heating carbon dioxide due to its heavy reliance on coal for electric power, and is failing to align its energy policy with a pledge to reach net-zero emissions by 2050.

Zaid Kalla, spokesman for the Limpopo Department of Economic Development, Environment and Tourism (LEDET), which is tasked with assessing the Limpopo project's merits, said "balancing economic, social and environmental benefits ... forms part of the ongoing review and consideration of the application".

The Centre for Environmental Rights (CER), a South African environmental law organisation, has submitted comments opposing the project on behalf of MEJCON-SA and other green groups.

"We have strong objections to the project - which entails the development of massive, unnecessary and expensive polluting infrastructure," said Michelle Koyama, an attorney with the CER.

In Mudimeli, which is close to potential coal mine sites mentioned in the project's environmental impact assessment (EIA), young boys ride past on a donkey-drawn cart.

"These boys should be in school but instead they are driving carts for money," said Lawrence Neluheni, 37, who had heard about the EMSEZ on the radio but said the details remained hazy.

"Of course we want jobs... But we also want our health - if you are rich but you are sick, then what is the point?" said the construction worker, covered in dust from a day of building.

CHINESE INVESTMENT

Economic zones like the EMSEZ are typically business or industrial areas, governed by special laws, that aim to boost economic activity and employment.

The EMSEZ is the largest such zone planned for South Africa, according to the EIA published in February by Delta BEC, a South African environmental consulting firm.

The EMSEZ will be managed by the Limpopo Economic Development Agency (LEDA), with capital investment estimated at 248 billion rand ($16.8 billion), according to the EIA.

The area was selected for its proximity to minerals and road networks, says the assessment, which was funded by the LEDA.

The project is expected to generate about 1 billion tonnes of carbon dioxide over its lifetime - equal to a little more than double South Africa's current annual emissions.

Johan Fourie stands in front of the 1,200-year-old baobab tree on his property close to the proposed special economic zone in Limpopo, South Africa, February 24, 2021.

The planned EMSEZ would comprise a northern site for logistics and a southern site for the energy and metallurgical cluster - where more than 100,000 indigenous and protected tree species are found, according to the EIA.

Chinese company Shenzhen Hoi Mor has reportedly pledged to invest $3.8 billion in the zone, but could not be reached for comment on its role.

The EMSEZ operator permit was issued to South African Energy Metallurgical Base, a subsidiary of Shenzhen Hoi Mor, according to a government news site.

Shavana Mushwana, a spokesman for the zone, added that China would be a likely export partner for products and materials produced in the EMSEZ, alongside "various market destinations across the globe".

WATER DOUBTS

Bordering Botswana, Mozambique and Zimbabwe, Limpopo's UNESCO Biosphere Reserve and reputation for being the country's winter breadbasket have earned it the title of Africa's Eden.

It is also considered a hotspot for climate change, with rising temperatures and increased rainfall variability in the region already leading to more droughts and floods, according to University of the Witwatersrand researcher Victor Munnik.

The N1 highway that runs along the proposed EMSEZ site is flanked by game lodges and villages shrouded in dense, green indigenous trees.

Lodge owner Johan Fourie, deputy chair of the Save Our Limpopo Valley Environment group, said its members - citizens based in South Africa and abroad - were not "anti-development".

"But it must be the right kind of development that benefits local communities," he said, walking through his property where a 1,200-year-old baobab tree towers above his lodge.

Recent rains have painted the area green, but for years it has been brown and parched due to patchy rainfall, Fourie said.

The EIA for the zone - which will require 80 million cubic metres of water per year - refers to a possible water source in Zimbabwe that could meet part of this demand, while noting that Zimbabwe is at high risk of groundwater scarcity.

"This keeps me up at night. Where will we get this water from?" asked Fourie.

WHAT JOBS?

Part of the planned EMSEZ will be built on the ancestral land of the Mulambwane people, where graves and mopane trees are found, said activist Ramuhala.

"It feels like I am between a rock and fire, imagining that my village can be destroyed from the coal mine and ancestral land lost to the industrial zone," he said, standing by the proposed site.

Hundreds of women camp out here twice a year to collect mopane worms from the Emperor moth, which they dry to eat.

Regina Mukwevho, 48, has sold high-protein mopane worms for the past decade, enabling her to build a home and support her family - but she, like many villagers in Mudimeli, said she had never heard of the economic zone project.

"If it bring jobs then OK, but what jobs? We are in the dark. Experts must explain it to us and they must make sure our groundwater will be safe," she said.

The LEDET recently put the project on hold temporarily, stating that the environmental impact assessment was not complete, partly due to poor community consultation, a lack of clarity on water and energy supplies, and the fact that the EIA did not recommend a final decision on the zone.

EMSEZ spokesman Mushwana said public participation would continue to be solicited through April, while Kalla from the LEDET said it was up to the Limpopo Economic Development Agency to decide whether a new project site should be considered.

"It feels like good news for now," said Ramuhala. "But it is not yet a victory... We still need clarity on all the rumours, and we will keep fighting until our voices are heard."

($1 = 14.7850 rand)-Thomson Reuters Foundation.

Nigeria's Debt Rises to N32.92 Trillion

Details of the debt figures show that the domestic debt figures of the 36 states of the federation and the FCT were put at N4.19 trillion with Lagos accounting the highest.

Nigerian states and federal debt stock as of December 31, 2020 stood at N32.92 trillion, the National Bureau of Statistics has said.

The bureau, in its Nigerian domestic and foreign debt Q4 2020 report released Monday, said Nigeria's total public debt portfolio showed that N12.71 trillion or 38.60 per cent of the debt was external while N20.21 trillion or 61.40 per cent of the debt was domestic.

The NBS gave further disaggregation of Nigeria's foreign debt to include $17.93 billion of the debt as multilateral; $4.06 billion as bilateral from the AFD, Exim Bank of China, JICA, India, and KFW while $11.17 billion was commercial which are Eurobonds and Diaspora Bonds and $186.70 million as promissory notes.

Details of the debt figures show that the domestic debt figures of the 36 states of the federation and the FCT were put at N4.19 trillion with Lagos accounting the highest.

The report said the total states and FCT domestic debt was put at N4.19 trillion with Lagos State accounting for 12.15 per cent of the debt stock while Jigawa State has the least debt stock in this category with a contribution of 0.74 per cent, it said.- Premium Times.

Invest Wisely!

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INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

CFI

AGM

Farm & City Boardroom, 1st Floor Farm & City Complex, 1 Wynne Street

31/03/21 | 11am

Good Friday

02/04/21

Easter Sunday

04/04/21

Easter Monday

05/04/21

Independence Day

18/04/21

Public Holiday in lieu of Independence Day falling on a Sunday

19/04/21

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.

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