Major International Business Headlines Brief::: 30 May 2021

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Major International Business Headlines Brief::: 30 May 2021

 


 

 


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ü  Bitcoin falls 5.2% to $33,849, Ether down 6.3%

ü  Biden’s big budget comes with a modest growth outlook for an aging
country

ü  Carmakers in 'India's Detroit' allowed to operate as workers protest
COVID risk

ü  China, U.S. can find common ground on tariff exclusions, Chinese think
tank says

ü  Colonial Pipeline says temporary network disruption resolved

ü  Egyptian court delays hearing in Suez container ship compensation case

ü  Money is cheap, let's spend it - White House $6 trillion budget message

ü  Amazon pressed for racial equity review after strong vote tally

ü  Electric-vehicle firm Rivian could seek $70 bln valuation in IPO-
Bloomberg News

ü  Lesotho: Embrace Partnerships to Revive Textile Industry - Report

ü  Mozambique: True Cost of Hidden Debts Already Over U.S.$11 Billion

ü  Nigeria: Dangote Cement Shareholders Approve N272.6bn Dividend

ü  Nigeria: Nasarawa, Flour Mills Sign MOU to Invest Over $300m in Sugar
Company

ü  Mozambique: No Need for Cotton Subsidy This Year

ü  Tunisia: Djerba - Tunisian-Libyan Economic Council Set Up

 

 

 

 

 

 

 

 


 <https://www.facebook.com/Hyundaizimbabwe/> 

 


 

Bitcoin falls 5.2% to $33,849, Ether down 6.3%

Bitcoin dipped 5.16% to $33,849.47 at 18:00 GMT on Saturday, losing
$1,842.99 from its previous close.

 

Ether , the coin linked to the ethereum blockchain network, dropped 6.26% to
$2,262.06 on Saturday, losing $151.11 from its previous close.

 

Bitcoin, the world's biggest and best-known cryptocurrency, is down 47.8%
from the year's high of $64,895.22 on April 14.

 

It has been less volatile in the past week but losses this month have been
heavy at 38%, driven by growing regulatory pressures on the sector. It is
trading at levels last seen in January and at roughly half its peak value.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Biden’s big budget comes with a modest growth outlook for an aging country

President Joe Biden’s first budget proposal comes with a big price tag - at
$6 trillion, roughly 50% higher than pre-COVID-19 federal spending - but, at
least for now, projects a relatively modest long-term lift to the economy,
likely reflecting concerns about the aging U.S. population.

 

The administration’s spending blueprint for the fiscal year ending in
September 2022 would increase spending on infrastructure, education and
combating climate change, echoing familiar priorities for the first-term
Democrat.

 

But it comes with forecasts for near-term growth that do not reflect the
rapid improvement in the economy so far this year.

 

With the help of $1.9 trillion in additional stimulus spending approved
earlier this year, the economy grew at an annualized rate of 6.4% in the
first quarter, a pace projections from both the Survey of Professional
Forecasters and Federal Reserve officials see persisting through the year.

 

By contrast, the Biden budget pegs growth this year at just 5.2%. Council of
Economic Advisers Chair Cecilia Rouse said forecasts underlying the budget
were locked down in early February, assumptions administration officials
plan to revisit later this year.

 

Also notable is the rapid deceleration in growth expectations after next
year, to between 1.8% and 2% each year from 2024 through 2031. While that is
squarely in line with the longer-run output estimates from Fed officials, it
is at least a quarter percentage point short of the consensus among private
forecasters, and around a full point south of the amped-up projections from
the Trump administration's final budget proposal two years ago, before the
COVID-19 pandemic.

 

Economists said the Biden projections likely factor in two systemic
headwinds to a prolonged run of above-trend growth: The country is aging
rapidly, and the workforce is not growing.

 

The Census Bureau in 2017 estimated that 20.5% of the U.S. population would
be 65 or older by 2030, compared with about 16.8% at the start of this
decade. And the labor force participation rate, which at 61.7% is now
roughly where it was in the 1970s, is not expected to rebound from its
COVID-19 drop.

 

At the same time, the Biden forecasts also imply the country will grow more
productive, in part thanks to the budget's investment proposals.

 

"These are very solid numbers in light of those demographic realities," said
Julia Coronado, president of analysis firm MacroPolicy Perspectives. "The
notion here is that without the investment, you are not going to see
productivity growth."

 

Looking only at the overall growth rate alone misses the point, Coronado
said.

 

"A lot of the argument around his plan is not just about juicing up growth
potential, but making our growth more sustainable, more equitable," she
said.

 

Cornerstone Macro's Roberto Perli agreed. The White House growth projections
are "realistic, with upside potential," he said, noting that the forecast of
2% growth in 2030 versus 1.8% growth in 2025, given the drag from
demographics, suggests "they think productivity is going to increase over
time."

 

One area where the Biden team appears optimistic: unemployment.

 

It sees the U.S. jobless rate averaging 5.5% this year, down from the
current 6.1% and falling to 3.8% - close to its pre-pandemic low of 3.5% -
by 2023 and holding there through 2031. The Fed, by comparison, pegs the
longer-run unemployment rate at 4%, the professional forecasters survey puts
it at 4.1% and even the former Trump administration projected it at 4.2%.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Carmakers in 'India's Detroit' allowed to operate as workers protest COVID
risk

Carmakers in the Indian automobile hub of Chennai will be allowed to keep
operating, the state government said on Saturday, amid protests by workers
who fear catching COVID-19 in one of the country's hardest-hit states.

 

Tamil Nadu's government on Friday extended a near-total lockdown as
coronavirus infections and deaths rise in the southern state, where average
cases are running at more than 30,000 a day, official figures show. read
more

 

But a government order issued on Saturday said so-called continuous process
industries, which include auto factories, would be allowed to function in
accordance with measures such as social distancing to stem the virus's
spread.

 

It also urged vehicle manufacturers to initiate immediate action to
vaccinate all their employees within a month.

 

Tamil Nadu authorities have ramped up vaccination in recent days, and
companies including carmakers have organized vaccination drives.

 

Hundreds of workers in and around Chennai - often dubbed India's Detroit -
have fallen ill with COVID-19 and dozens have died, labour unions say.

 

Manufacturing plants run by Ford Motor Co (F.N) and Hyundai Motor Co
(005380.KS) near Chennai were shut this week after workers protested over
unsafe working conditions. read more

 

Renault-Nissan shut its manufacturing unit after workers threatened to
boycott work, saying social distancing norms were being flouted, while
Eicher Motors-owned (EICH.NS) Royal Enfield shut its three units over safety
concerns. read more

 

Union sources at Hyundai, Ford and Renault-Nissan said they were continuing
to talk with the companies.

 

"We're scared about working. The company is citing government orders and
asking us to report for work. The government needs to think about the
welfare of workers," a senior union leader at Hyundai said.

 

Tamil Nadu's government also gave permission for units near Chennai with
export orders, such as construction and mining equipment maker Caterpillar
Inc (CAT.N) and Taiwan electronics manufacturer Foxconn (2354.TW), to
operate their plants with 50% worker capacity.

 

Global carmakers operating in Chennai have said they will prioritize worker
safety and adherence to social-distancing protocols.

 

"Health and safety of our societies, partners and employees is our topmost
priority," Biju Balendran, managing director at Renault-Nissan India, said
in a statement earlier this week.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

China, U.S. can find common ground on tariff exclusions, Chinese think tank
says

The Biden administration is unlikely to remove tariffs on Chinese goods in
the short term, but China and the United States might find a middle ground
by increasing tariff exclusions as a way to reduce tensions, a Chinese
think-tank said.

 

With even free trade advocates in the U.S. lobbying that Washington should
use tariff cuts as a tool for new trade negotiations with China, tariffs are
likely to remain in place, said a report from China Finance 40 forum (CF40)
on Saturday, a economic and finance think tank with members from regulators,
academia and financial institutions.

 

But with the United States facing inflationary pressures in the first half
of this year, Washington may look to reduce the tariff burden through tariff
exclusions, which would avoid resistance in congress and ease political
pressure, the report said.

 

The Biden administration is conducting a comprehensive review of U.S.-China
trade policy, ahead of the expiry of the Phase 1 deal at the end of 2021.

 

The report noted that the U.S. government still retains additional tariffs
on US$370 billion of Chinese exports to the United States.

 

The report also noted that the Biden administration was more concerned about
the impact of China's support for the technology sector and wanted the U.S.
to focus on its own tech support.

 

"During the Biden administration, technological competition and
confrontation between China and the United States in cyberspace will
intensify, and the possibility of parallel systems will increase," the
report said, predicting intensified competition between the two countries
over creating international rules around emerging technologies.

 

U.S. Senate Majority Leader Chuck Schumer said on Friday the Senate would
consider a sweeping package of legislation on June 8 intended to boost the
country's ability to compete with Chinese technology.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Colonial Pipeline says temporary network disruption resolved

Colonial Pipeline, the largest fuel pipeline in the United States, on Friday
said it had resolved a temporary network disruption, just weeks after a
ransomware attack crippled fuel delivery for several days in the southeast
region.

 

Colonial earlier on Friday experienced a network issue, the company said,
but restored service to its network. The issue was not associated with
malware, the company said.

 

The company had earlier said shippers were having problems entering and
updating nominations for deliveries.

 

The "system functionality has returned to normal," the company said.

 

The reason for the network issues was not immediately clear.

 

Colonial's shipping nomination system is operated by a third party,
privately-held Transport4, or T4, which handles similar logistics for other
pipeline companies.

 

T4 on Friday said its application was working for all customers and
carriers. It did not comment on Colonial's current network issue and said
that data between T4 and Colonial was transacting normally.

 

Friday's network problems are the second occurrence of such issues since the
attack earlier in the month. Colonial is the largest fuel system in the
United States, accounting for millions of barrels of daily deliveries to the
U.S. East Coast and Southeast.

 

Shortly after Colonial restored operations from the hack, it suffered a
brief network outage that prevented customers from planning upcoming
shipments on the line. At the time, Colonial said the disruption was caused
by efforts by the company to harden its system, and was not the result of a
reinfection of its network.

 

The southeast United States is still recovering from the six-day line outage
from earlier this month and the supply issues it caused in the region.
Around 6,000 gas stations were still without fuel this week, according to
tracking firm GasBuddy, down from a peak of more than 16,000.

 

Almost 40% of gas stations in the capital, Washington, were without supplies
on Thursday, GasBuddy said. More than 20% of stations in North Carolina,
Georgia and South Carolina were also empty.

 

The hack also boosted gasoline prices earlier than expected this year.
Heading into Memorial Day weekend, the traditional start of the summer
driving season, U.S. motorists are seeing the highest gasoline prices in
seven years. read more

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Egyptian court delays hearing in Suez container ship compensation case

An Egyptian court on Saturday postponed a hearing in a compensation case
filed by the Suez Canal authority against the owners of a container ship
that blocked the canal for six days in March, giving the sides more time to
negotiate, legal sources said.

 

The Ever Given, one of the world’s largest container ships, became jammed
across the canal in high winds on March 23, halting traffic in both
directions and disrupting global trade.

 

The Suez Canal Authority (SCA) initially demanded $916 million in
compensation from the Ever Given's Japanese owner Shoei Kisen for disruption
caused by the blockage.

 

But earlier this week, the SCA said it would be willing to accept $550
million, including a $200 million deposit paid to secure the ship's release
and the remaining amount payable through letters of credit.

 

SCA Chairman Osama Rabie has said Shoei Kisen offered to pay $150 million.

 

A lawyer representing the ship's owner said the two sides had asked for
Saturday's hearing to be postponed to allow for further negotiations.

 

"The two parties have requested the delay, and we have not yet determined
any amount for compensation, and this will be done after holding several new
negotiations sessions with the Suez Canal," the lawyer said, asking not to
be identified.

 

The court has now scheduled the hearing to take place on June 20, the SCA
said on its Facebook page.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Money is cheap, let's spend it - White House $6 trillion budget message

The White House on Friday sent Congress a $6 trillion budget plan that would
ramp up spending on infrastructure, education and combating climate change,
arguing it makes good fiscal sense to invest now, when the cost of borrowing
is cheap, and reduce deficits later.

 

The first comprehensive budget offered by Democratic President Joe Biden
faces strong opposition from Republican lawmakers, who want to tamp down
U.S. government spending and reject his plans to hike taxes on the rich and
big corporations.

 

Biden's plan for fiscal year 2022 calls for $6.01 trillion in spending and
$4.17 trillion in revenues, a 36.6% increase from 2019 outlays, before the
coronavirus pandemic bumped up spending. It projects a $1.84 trillion
deficit, a sharp decrease from the past two years because of the COVID-19
pandemic, but up from 2019's $984 billion.

 

The blueprint builds on a partial "skinny budget" the White House released
last month that mapped out $1.5 trillion in discretionary spending. read
more

 

The plan drew praise from Democrats, including House Speaker Nancy Pelosi,
and criticism from Republicans - who blasted the proposed higher debt levels
- and some progressive groups, who said it should have scaled back military
spending.

 

Senate Budget Committee Chairman Bernie Sanders called Biden's budget "the
most significant agenda for working families in the modern history of our
country," and said it would create millions of good-paying jobs, while
reducing poverty.

 

Senate Majority Leader Mitch McConnell heaped scorn on the plan, and warned
Democrats to "move beyond the socialist daydream and the go-it-alone
partisanship."

 

"President Biden’s proposal would drown American families in debt, deficits,
and inflation," McConnell said in a tweet.

 

PAID FOR IN 15 YEARS

 

White House officials said Biden's $4 trillion plans to address historic
U.S. inequality, climate chance and provide four more years of free public
education would be completely paid for in 15 years, with tax increases
starting to chip away at deficits after 2030.

 

Cecilia Rouse, the chair of Biden's Council of Economic Advisers, says
Biden's plan is front loaded and that the administration was willing to live
with budget deficits amid low-interest rates to make significant investments
in the nation's economy. She projected a drop in deficits by over $2
trillion in the following years.

 

"That is a sharp departure from unpaid tax cuts under the prior
administration that seriously worsened our long-term fiscal problem," she
said. "The most important test of our fiscal health is real interest
payments on the debt. That’s what tells us whether debt is burdening our
economy and crowding out other investments."

 

While rates on U.S. Treasury securities have climbed off record lows seen at
the height of the coronavirus crisis last year, the government's borrowing
costs are still the lowest they have been in years.

 

Rouse said the economy was seeing short-term inflation spikes, fueled by the
sharp growth in the economy, but projected it settling down to an annual
rate of around 2% over time.

 

Increased investment would boost U.S. economic growth, with the current
conservative White House forecast calling for 2% gross domestic product
growth in 2031, compared with the Federal Reserve's estimate of 1.8%.

 

Biden's first full spending outline since taking office in January serves as
the fiscal blueprint for his political priorities, and is likely to kick off
months of difficult negotiations with Congress, which needs to approve most
of the spending.

 

Republicans' opposition is growing to much of Biden's push to spend more to
revamp the U.S. economy, as they argue it could fuel inflation and tamp down
corporate competitiveness.

 

Biden has tussled with Republicans over the price of his initiatives,
recovery from the pandemic and improvement of roads and bridges. No
Republicans voted for his $1.9 trillion stimulus bill, but some touted its
benefits later, drawing some chiding from the president. read more

 

U.S. Treasury Secretary Janet Yellen said on Thursday that the budget would
push U.S. debt above the size of the U.S. economy but would not contribute
to inflationary pressures. read more

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Amazon pressed for racial equity review after strong vote tally

Amazon.com Inc should review how it is addressing racial justice and equity
after a shareholder proposal on the topic won strong backing, New York
state’s top pension official said on Friday.

 

A filing on Friday showed 44% of votes cast supported a call for a review of
the company's impact on equity, diversity and other areas proposed by New
York State Comptroller Thomas DiNapoli at Amazon's annual meeting on May 26,
a high total for such a measure.

 

DiNapoli said the measure would have received a majority but for the 14%
stake held by CEO Jeff Bezos, a sign of investor dissatisfaction at the
leading online retailer.

 

"Shareholders sent a loud message to Amazon that they want the company to do
more to address racial diversity, equity and inclusion. It's time for Amazon
to listen to its investors," DiNapoli said in an emailed-statement.

 

Amazon had previously said the measure did not win a majority but it did not
give the voting breakdown.

 

An Amazon representative said the company has "initiated numerous programs
to assess and address racial justice considerations across key aspects of
our operations that we believe fully address the objectives of this
proposal.”

 

The call for the racial equity audit received the highest level of support
among 11 shareholder proposals at Wednesday's meeting.

 

Another, calling for Amazon to consider adding an hourly worker to its board
of directors received support from 17% of votes cast, the filing showed.

 

Proposals with such low levels of support are rarely adopted, although the
figure was about twice what similar calls for workers-on-boards have
received at other companies in recent years.

 

The measure, which received a rare endorsement from Institutional
Shareholder Services, was closely watched at the annual meeting after a
union organizing effort at the company failed in April.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

Electric-vehicle firm Rivian could seek $70 bln valuation in IPO- Bloomberg
News

Electric-truck startup Rivian Automotive Inc could target a valuation of
about $70 billion in its potential public listing later this year, Bloomberg
news reported on Friday.

 

Amazon.com Inc (AMZN.O) and Ford Motor Co (F.N)-backed Rivian had a
valuation of $27.6 billion, Reuters reported in January, after a
$2.65-billion investment round led by T. Rowe Price.

 

Rivian is working with advisers including Goldman Sachs Group Inc, JPMorgan
Chase & Co., and Morgan Stanley on an initial public offering, Bloomberg
news reported, citing people familiar with the matter.

 

The news outlet in February reported the company could seek a valuation of
about $50 billion. read more

 

Rivian, JPMorgan Chase andMorgan Stanley declined to comment on Bloomberg
News' Friday report, andGoldman Sachs did not respond to Reuters' request
for comment.

 

Rivian, which aims to compete with Tesla Inc (TSLA.O), targets to start
production of an electric-pickup and SUV this year.

 

Our Standards: The Thomson Reuters Trust Principles.

 

 

 

Lesotho: Embrace Partnerships to Revive Textile Industry - Report

LESOTHO must embrace new partnerships and approaches to reconstruct the
textile industry and help it recover from Covid-19.

 

This is according to a new study conducted by the Private Sector Foundation
of Lesotho (PSFL) on the impact of Covid-19 on the textile industry.

 

The study, which sampled 93 local tailoring businesses and five foreign
firms in Maseru urban, found that the lack of customers for the textile and
apparel industry was a major challenge for both local and foreign firms as a
result of the Covid-19 pandemic.

 

The study also found that high rental costs and expensive fabrics were some
of the major challenges facing the industry amid the Covid-19 pandemic.

 

"The respondents clarified that the prices on fabrics keep rising, and this
was as a result of Covid-19," a report from the study said.

 

The closure of borders was another challenge since factories depend on
international markets for sales while some obtained their production inputs
from South Africa.

 

 

"The increase in prices of material from the local market was influenced by
closed borders as tailors were unable to access materials from international
market."

 

Closed borders forced producers to rely on poor quality materials for their
production. Industry players said they could not access good quality
material for their products as it is only found in South Africa.

 

They also lost customers since they were unable to deliver their produce to
the neighbouring country due to closed borders.

 

The lack of funds which forced tailors to sometimes fail to purchase quality
sewing machines was identified as another challenge, with producers often
failing to purchase fabrics to knit for their customers, due to non-payment
of deposits. This was compounded by the lack of institutional support and
coordination, especially among local producers.

To tackle these challenges, the study recommended the establishment of
industry- wide structures.

 

"Tailoring business is considered a starter sector on the road to
industrialisation as it creates employment and poverty reduction
opportunities within the economy.

 

"However, this sector is affected by multiple challenges that hinders its
growth. The Covid-19 pandemic is one of the crises that have put forth an
external shock on the global economy, hence Lesotho must embrace new
partnerships and approaches to reconstruct the textile industry and help it
recover from Covid-19."

 

The PSFL also counselled formal engagement between the industry and the
government to address some of the above-mentioned challenges. It proposed
the following recommendations:

 

Establish Textile and Apparel Association (TAA) and structures both at the
National and District levels to deal with all matters relating to the
textile and apparel sector;

The TTA must ensure that all members, involved in the textile and apparel
sector, are fully licensed by One Stop Business Facilitation Centre (OBFC).
Based on that, the financiers will have trust and confidence to provide
financial resources;

 

Textile and Apparel Association will be in a position to fully engage the
Government of Lesotho through Public Private Dialogue (PPD) platform in
order to present the concerns of its membership;

 

The Government of Lesotho with the assistance of Development Partners
through Aid for Trade should craft the policies and special programmes to
ensure that the textile and apparel sector thrives;

 

The Government of Lesotho must resource Business Development Services (BDS)
in order to provide training, mentorship, technical and managerial
assistance, accounting and marketing for members of TTA;

 

Business linkages between Corporates and MSMEs should be institutionalized
by Act of Parliament to ensure that MSMEs do tap skills and knowledge from
Corporates;

 

Government of Lesotho should make use of The Third Industrial Development
Decade in Africa (IDDA 3) in order to uplift textile and apparel sector;

 

Establish partnerships with brands and weaving mills to foster more vertical
integration for companies. These partnerships shall unlock higher
added-value within Lesotho as well as a strong return on investment;

 

Develop sustainable textiles and apparel production capabilities;

 

Introduce financial schemes which will enable the tailors to invest on
technology which shall shape the textile and apparel sector by reducing lead
time, whilst improving quality of quality.-Lesotho Times.

 

 

 

Mozambique: True Cost of Hidden Debts Already Over U.S.$11 Billion

Maputo — The scandal of Mozambique's "hidden debts" has already cost the
country at least 11 billion US dollars, and has plunged an additional two
million people into poverty, according to a detailed study of the costs and
consequences of the debt published on Friday by the anti-corruption NGO, the
Centre for Public Integrity (CIP), and its Norwegian partner, the Christian
Michelsen Institute..

 

The term "hidden debts" refers to illicit loans of over two billion US
dollars from the banks Credit Suisse and VTB of Russia in 2013 and 2014 to
three fraudulent, security - linked Mozambican companies - Proindicus,
Ematum (Mozambique Tuna Company), and MAM (Mozambique Asset Management).

 

The loans were only possible because the government of the day, under the
then President Armando Guebuza, issued loan guarantees in violation of the
2013 and 2014 budget laws and the Mozambican constitution. The man who
signed the guarantees, former Finance Minister Manuel Chang, is currently
languishing in a South African jail, while a legal tussle continues over
whether he should be extradited to the US or to Mozambique.

The illicit scheme was largely the brainchild of the Abu Dhabi based group,
Privinvest, which became the sole contractor for Proindicus, Ematum and MAM.
Privinvest profited from the deal through the vastly inflated prices it
charged the Mozambican companies for fishing boats and other assets.

 

When the company Kroll carried out a forensic audit of the three companies
in 2017, it estimated Privinvest's over-invoicing at more than 700 million
US dollars.

 

United States prosecutors investigating the scandal found that at least 200
million dollars of the loan money was spent on bribes and kickbacks. Among
those who received Privinvest bribes were Chang and other senior Mozambican
officials, and three Credit Suisse bankers who negotiated the loans, Andrew
Pearse, Surjan Singh and Detelvina Subeva. All three have confessed to
taking bribes.

The CIP report puts the direct cost of the loans so far incurred, up to and
including 2019, at 674.2 million dollars, in payment of interest and
capital. If Mozambique is obliged to go on servicing the debts, there will
be an additional 3.93 billion dollars to pay up to 2031.

 

But the indirect costs of the scandal are much higher. The secrecy and
corruption surrounding the loans dealt devastating blows to Mozambique's
credibility and reputation.

 

The report notes that "When rumours about hidden loans began to circulate,
Mozambican ministers lied to the IMF and ambassadors of Mozambique's
development partners, denying the existence of any loans. When the Wall
Street Journal revealed the hidden debt in April 2016, the anger was
extreme. Donors and lenders had kept the country afloat, and they pulled the
plug".

The International Monetary Fund (IMF), angered that the Mozambican
government had concealed the true size of its foreign debt, suspended its
programme with Mozambique in April 2016. All the 14 donors and funding
agencies who had provided Mozambique with direct budget support, suspended
further disbursements, and to this day, five years later, they have not
resumed.

 

The loss of this foreign aid in 2016 cost Mozambique 831 million dollars, in
comparison with 2015, and these losses have continued to cascade down the
years.

 

The CIP report notes that the ensuing financial crisis meant that "the
government became unable to pay its bills, there was a major currency
devaluation, foreign debt became unpayable, the economy slowed down sharply,
real GDP per capita fell, unemployment soared and poverty increased".

 

The report puts a figure on this damage. It calculates the fall in the value
of Mozambique's GDP at 10.7 billion dollars between 2015 and 2019. This is a
loss that cannot be recovered, and it will continue to grow, year after
year.

 

The report puts the total economic losses over this four year period at
11.33 billion dollars - or a loss of 403 dollars for every man, woman and
child in the country.

 

The 2016 financial crisis, caused by the hidden debts, precipitated fiscal
and monetary instability which sharply reduced public expenditure, notably
in health and education. CIP compares the three year average for 2016 to
2018 to the three years prior to the discovery of the hidden debts, and
finds that expenditure on health and education fell by 1.7 billion dollars.

 

In per capita terms, 10 dollars less was spent for each citizen on education
and seven dollars less on health care,

 

The report note that "the sudden rise in inflation in 2016 and rising prices
drove 2.6 million people below the threshold of consumption-based poverty".
It estimates that, because of the hidden debt scandal, at least 1.9 million
people had fallen below the consumption-based poverty line by 2019.

 

More difficult to quantify are the political and institutional costs of the
scandal. CIP notes that, since 2010, and particularly since 2016,
Mozambique's performance across a range of indices measuring governance,
democracy and public financial management has deteriorated.

 

The report suggest this can be blamed on attempts to cover up and lie about
the debt and to seek impunity. It points out that "so far, no one in
Mozambique has been held to account and convicted for manifestly illegal
actions".

 

The system of checks and balances failed. Neither the country's parliament,
the Assembly of the Republic, nor the judiciary proved able to control
illegal acts by members of the executive.

 

The one partial exception was that the Constitutional Council, the country's
highest body in matters of constitutional law, ruled the loans and their
guarantees unconstitutional. But the Finance Ministry has ignored this, and
has continued to make payments to the bondholders who inherited the original
850 million dollar loan to Ematum. So far the Constitutional Council has not
tried to enforce its ruling.

 

CIP argues that the scandal, and attempted cover-up, led to "worse quality
of governance and weakened state institutions, brought the regime and the
government into disrepute, and turned Mozambique into a less democratic and
more authoritarian country".

 

 

 

Nigeria: Dangote Cement Shareholders Approve N272.6bn Dividend

Shareholders of Dangote Cement Plc have approved N272.6 billion as dividend,
translating to N16 per share for the year ended December 31, 2020.

 

The shareholders, at the virtual 12th annual general meeting (AGM) held in
Lagos commended the management for the full disclosure provided for the
year, share buyback process and the various donations made at COVID-19
pandemic.

 

Speaking on behalf of shareholders, the founder, Independent Shareholders
Association of Nigeria, Sir Sunny Nwosu commended the company for attaining
a trillion-naira revenue growth, saying that the Company is moving in the
best way of corporate governance.

He appealed to the company to prevail on its numerous distributors who
arbitrarily sell cement at very high costs as against the real factory
price, thereby making so much profit for themselves.

 

Also, a shareholder, Nona Awoh applauded the board for the consistency in
dividend payout, urging the board to consider payment of dividend twice a
year.

 

Speaking to shareholders, chairman of Dangote Cement Plc, Aliko Dangote
assured the shareholders of better returns always, noting that the company
is doing everything possible to create wealth for its shareholders and other
stakeholders.

 

He further said despite the challenging year surrounding by COVID-19
pandemic, 2020 was a record year for us across the board.

 

"Dangote Cement hit the N1 trillion mark in term of revenue. Group revenues
were up 16 per cent compared to 2019. We record Group cement sales of 25.7
million tonnes (Mt) and revenues of N1.034 trillion. Most notably was our
record high EBITDA of N478.1 billion, up 20.9 per cent compared to 2019."

Dangote said that the board maintains the 2019 dividend of N16 per share,
reinforcing its commitment to maximising shareholder value.

 

Also, the chairman said: "In 2020, we commissioned our Apapa and Onne export
terminals in Nigeria and commenced clinker exports to West and Central
Africa. The vision for our exporter strategy is to make West and Central
Africa cement and clinker self-sufficient, with Nigeria as the main supplier
and exporter. We also remain focused on meeting the demand in Nigeria and as
such, we increased our capacity by three metric tonnes (MT) on Obajana."

 

He explained that "Pan-Africa volumes were up by 4.4 per cent to 10.0Mt
despite the various lock-downs and restrictions in 2020. The Pan-African
region achieved a record high EBITDA of N71.3 billion, up 49.0 per cent,
notably supported by strong performance in Ethiopia and Senegal."

 

On outlook for 2021, Dangote said the company remains optimistic about the
future, saying that the board is considering all strategic and financial
options for the company.

 

Also, the Group managing director/CEO of Dangote Cement Plc, Michel
Puchercos said that despite the impact of the COVID-19 pandemic, 2020 was a
record year for Dangote Cement across board.-Leadership.

 

 

 

Nigeria: Nasarawa, Flour Mills Sign MOU to Invest Over $300m in Sugar
Company

Flour Mills Nigeria is to invest over $300m in the establishment of a sugar
manufacturing company in Nasarawa State to stimulate economic activities and
provide employment opportunities to its teaming citizens.

 

Speaking at the Memorandum of Understanding (MoU) signing ceremony with
Flour Mills Nigeria, Governor Abdullahi Sule said the agreement was in
fulfilment of his earlier promise to industrialise the state.

 

According to him, the sugar company would stimulate economic activities,
generate employment and bring development to the state, stressing that the
state government would ensure that the majority of the workforce in the
company are from the state.

While announcing that land for the project has been provided for the
project, Sule added that Nasarawa would collaborate with the federal
government and security agencies to ensure the smooth take-off of the
company.

 

He tasked the company not only to engage in sugar production but to also
venture into massive production of cassava to provide raw materials for
flour production.

 

Also speaking at the event, the managing director / chief executive officer
of the company, Omoboyede Olusanya, explained that the company would invest
an initial capital of $300 million in the project and would cover 2,450
hectares of land.

 

Olusanya added that as part of the company's corporate social
responsibility, it would build schools and recreational facilities among
other amenities, and lauded the state government for giving the company the
opportunity to add value to the industrial drive of the present
administration in the state as well address its economic problems.

 

Minister of Trade, Industry and Investment, Richard Adeniyi-Adebayo,
commended the Nasarawa State governor for keying into the diversification
drive of the federal government.

 

The minister called on other state governors to emulate Nasarawa State to
make the country self-sufficient and an exporter of agricultural
products.-Leadership.

 

 

 

Mozambique: No Need for Cotton Subsidy This Year

Maputo — The Mozambican government announced on Thursday that it will no
longer subsidise the price of raw cotton, paid to the producers.

 

This reverses the policy for the 2020 cotton campaign when the government
invested 240 million meticais (about four million US dollars, at current
exchange rates) to maintain a minimum price of 25 meticais per kilo.

 

Speaking at Netia, in Monapo district, in the northern province of Nampula,
Agriculture Minister Celso Correia said the subsidy was no longer necessary
because the cotton companies themselves have guaranteed that they will pay
the 25 meticais a kilo minimum price during the current campaign.

"This year, because of the good performance, no price subsidy by the
government will be necessary", said the Minister.

 

He congratulated the representatives of the companies and of the cotton
farmers for the consensus reached in the negotiations over this season's
minimum prices, mediated by the government.

 

The farmers, through the National Forum of Cotton Producers (FONPA), had
proposed maintaining the 25 meticais a kilo minimum price. The companies,
organised in the Mozambican Cotton Association, wanted to reduce the price
to 24.5 meticais a kilo, but government mediation led them to drop this
proposal.

 

Correia argued that it was because of the government subsidy in 2020 that
annual cotton production rose from 30,000 to 52,000 tonnes, an increase of
over 73 per cent. This, the Minister added, guaranteed an income to 150,000
peasant families.

 

This success led to a near doubling of exports of cotton fibre, from 20
million to about 38 million dollars a year. The state expects revenue from
cotton this year of 70 million meticais, compared with 21 million achieved
in 2020.

 

"Our commitment, as a government, is to continue stimulating the growth of
this sector", said Correia. He was optimistic that the minimum price would
remain stable next year too, "protected against eventual exchange or market
shocks".

 

 

 

Tunisia: Djerba - Tunisian-Libyan Economic Council Set Up

Tunis/Tunisia — The creation of the Tunisian-Libyan Economic Council was
announced at the close of works of the Tunisian-Libyan Business Forum in
Djerba (May 27-28).

 

The event was held by the Association of Development, Investment and
International Cooperation, in cooperation with the local union of industry,
trade and handicrafts.

 

The council is made up of experts in entrepreneurship and investment as well
as structures and professional organisations from both countries. It is
mainly tasked with ensuring economic networking, monitoring agreements and
addressing challenges confronting investors.

 

Several agreements to implement joint projects were inked at the forum,
which saw the participation of large number of Tunisian and Libyan economic
actors.

 

These projects mainly include a graduate school of public health in Djerba,
two medical centres specialised in cardiovascular diseases andoncological
pathologies in Zaouïa, libya.

 

A partnership agreement on trade, employment, development of private
investments, training and the organisation of fairs was signed by the
Association of Development, Investment and International Cooperation and the
Union of Industry, Trade and Agriculture in Zaouïa.-Tunis Afrique Presse.

 

 

 

 

 


 


 


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.

 


 

 


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