Major International Business Headlines Brief::: 25 March 2022

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Major International Business Headlines Brief::: 25 March 2022 

 


 

 


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

 


 

 


ü  US jobless claims at lowest level since 1969

ü  Europe agrees new law to curb Big Tech dominance

ü  Russia considers accepting Bitcoin for oil and gas

ü  Uber to list New York City yellow taxis in app

ü  Spotify paid 130 artists more than $5m last year

ü  Nigeria: Lagos-Ibadan Expressway, Second Niger Bridge Ready This Year - Govt

ü  Nigeria: Oil Theft - NUPRC Meets With Oil Producers, Pushes for Accurate Data On Stolen Crude

ü  Nigeria: Power Outage - $132m Projects Stalled By Right of Way Issues, Minister Tells NEC

ü  Kenya: Petition Filed in Court Seeking Halt of Spire Bank Liquidation

ü  East Africa: Activists Opposed to East African Crude Oil Pipeline Call on Pope Francis for Support #AfricaClimateCrisis

ü  Africa: UNCTAD Calls for IMF, World Bank Measures As Global Downturn Bites

ü  Africa: Why African Banknotes Are Printed in Europe

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

US jobless claims at lowest level since 1969

Fewer workers sought jobless benefits in the US last week than at any time since 1969.

 

Just 187,000 people filed for unemployment, the Labor Department reported. That was down roughly 28,000 from the previous week.

 

The figures show a stark turnaround in the job market in the US since the start of the coronavirus pandemic.

 

The news sparked several historic comparisons on social media, with some sharing photos of Woodstock music fest.

 

"The last time jobless claims fell this low was the same year we landed folks on the moon," said Rep Ted Lieu, Democrat from California.

 

"The last time weekly jobless claims were this low The Beatles were still together," added Rep Don Beyer, Democrat of Virginia.

 

The US economy has many looking back to the past at the moment, but it hasn't been easy for economists and analysts to settle on the right historic analogies.

 

When lockdowns hit two years ago, the weekly jobless report hit record highs, with claims eventually exceeding six million.

 

But the economy, helped along by a massive government stimulus programme, has since roared back with a strength that surprised most analysts.

 

The perils of rising gas prices for Biden

US jobs growth stronger than expected

Growth jumped 5.7% last year, while payrolls have been expanding at a healthy clip, increasing by more than 600,000 last month, helping to cut the jobless rate to 3.8%.

 

Thursday's report highlighted the tight labour market, analysts said.

 

President Joe Biden has sought to claim credit for the gains, pointing to Democratic spending plans and progress controlling coronavirus under his watch.

 

He celebrated Thursday's report, citing it as another sign of a "historic economic recovery".

 

But surveys show the public remains worried about the economy, reflecting prices that are increasing at a pace not seen in 40 years.

 

Many in the business world are haunted by comparisons to the 1970s, when the US was hit by so-called stagflation - when growth slowed even as price increases spiralled, driven in part by oil shocks.

 

David Rosenberg, head of the Toronto-based economic research firm Rosenberg Research, said economic indicators - including low jobless claims - suggest that America's economy is headed for a recession - as it was at the end of 1969.

 

But that doesn't mean the US economy is in for a repeat of 1970s-style problems, he added.

 

He said inflation pressures driven by supply shocks from the pandemic and Russia's invasion of Ukraine will eventually abate.

 

And he expects productivity gains to drive growth, pointing to investments companies have accelerated in areas like automation since the pandemic.

 

"That is where the comparison to the 1970s really falls flat on its face," he said. He thinks a better comparison is the temporary inflation seen after World War One.

 

'Uncertainty is rife'

Brad DeLong, economics professor at the University of California, said the US should try to avoid that example.

 

To control price increases, the US central bank at that time doubled interest rates from 3.75% to 7% - a move prominent economists have since judged as moving too late and too far, he noted.

 

He favours comparisons from the late 1940s and early 1950s, as the economy shifted in response to World War Two and the Korean and Cold Wars.

 

"I could be wrong. Uncertainty is rife. Everyone right now is reaching into the past and seeking for their favourite past historical inflationary episode as an analogy," he said.

 

"Maybe we will see something completely new."-BBC

 

 

 

Europe agrees new law to curb Big Tech dominance

European lawmakers have agreed on new rules which they hope will curb the dominance of Big Tech companies.

 

Under the Digital Markets Act (DMA), giants such as Google and Apple will be forced to open up their services and platforms to other businesses.

 

Major technology firms have long faced criticism that they use their market dominance to squeeze out competition.

 

"What we want is simple: fair markets...in digital," said EU antitrust chief Margrethe Vestager.

 

"Large gatekeeper platforms have prevented businesses and consumers from the benefit of competitive digital markets," she said.

 

The announcement is the biggest regulatory move yet from the EU to act against what it defines as "anti-trust" or anti-competitive behaviour from mainly US technology businesses.

 

"The agreement ushers in a new era of tech regulation worldwide," said German MEP Andreas Schwab, who led the negotiations for the European Parliament.

 

Under the proposed Digital Markets Act, Apple would be forced to open up its App Store to third-party payment options instead of users being forced to use Apple's own payment system.

 

It is something Apple has been fighting in the US during a high-profile court battle with Epic Games, the maker of Fortnite.

 

Google will be asked to offer people who use smartphones which run on the company's Android operating system alternatives to its search engine, the Google Maps app or its Chrome browser.

 

Apple would also be forced to loosen its grip on the iPhone, with users allowed to uninstall its Safari web browser and other company-imposed apps that users cannot currently delete.

 

The targets of the law include WhatsApp, Facebook Messenger, iMessage, the App Store, Google Play and many other services belonging to large tech firms.

 

The EU wants to give users more choice over how people send messages. The new rules would require that technology make their messaging services interoperable with smaller competitors.

 

However, Apple said it was "concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for our users".

 

Meanwhile, Google said: "While we support many of the DMA's ambitions around consumer choice and interoperability, we're worried that some of these rules could reduce innovation and the choice available to Europeans."

 

The law will only affect companies with a value of more than €75bn (£63bn), annual sales of €7.5bn and at least 45 million monthly users.

 

Legislation was originally proposed by Ms Vestager just over a year ago in reaction to what she felt was monopolistic behaviour from Big Tech. She was known to be frustrated by how mainly large, US tech companies had managed to delay and even thwart EU attempts to fine them.

 

"The gatekeepers - they now have to take responsibility," Ms Vestager said on Thursday.

 

Once implemented, the law will give Brussels unprecedented authority in regulating major tech companies.

 

Many major US tech companies have huge lobbying operations in Washington, and have been emphasising that such laws punish successful American companies.

 

However many US politicians are also keen to clip the wings of Big Tech, with bills currently going through Congress that would also rein in their power.

 

With the deal reached by negotiators, the DMA now faces final votes in the European Parliament as well as by ministers from the EU's 27 member states.-BBC

 

 

 

Russia considers accepting Bitcoin for oil and gas

Russia is considering accepting Bitcoin as payment for its oil and gas exports, according to a high-ranking lawmaker.

 

Pavel Zavalny says "friendly" countries could be allowed to pay in the crypto-currency or in their local currencies.

 

Earlier this week, Russian President Vladimir Putin said that he wanted "unfriendly" countries to buy its gas with roubles.

 

The move is understood to be aimed at boosting the Russian currency, which has lost over 20% in value this year.

 

Sanctions imposed by the UK, US and the European Union, following the invasion of Ukraine, have put a strain on Russia's rouble and raised its cost of living.

 

However, Russia is still the world's biggest exporter of natural gas and the second largest supplier of oil.

 

Mr Zavalny, who heads Russia's State Duma committee on energy, said on Thursday that the country has been exploring alternative ways to receive payment for energy exports.

 

He said China and Turkey were among "friendly" countries which were "not involved in the sanctions pressure".

 

"We have been proposing to China for a long time to switch to settlements in national currencies for roubles and yuan," said Mr Zavalny. "With Turkey, it will be lira and roubles."

 

Mr Zavalny added: "You can also trade bitcoins."

 

'More risk'

Analysts said Russia may benefit from accepting the popular cryptocurrency, despite the risks.

 

"Russia is very quickly feeling the impact of unprecedented sanctions," said David Broadstock, a senior research fellow at the Energy Studies Institute in Singapore. "There is a need to shore up the economy and in many ways, Bitcoin is seen as a high growth asset."

 

However, he noted that the value of Bitcoin has swung by as much as 30% this year. In comparison, the dollar has traded within 5% against the euro.

 

"Clearly accepting Bitcoin, compared with other traditional currencies, introduces considerably more risk in the trade of natural gas," Mr Broadstock said.

 

"Moreover, one of the major 'friendly' trade partners for Russia is China, and cryptocurrency is banned for use in China," he added. "This clearly limits potential for payment using Bitcoin."

 

There are concerns that Russian oligarchs could be using virtual currencies to avoid sanctions.

 

This has spurred Ukraine's government as well as US and European politicians to ask crypto-currency platforms to ban all Russian users.

 

But many firms have ruled this out.

 

"Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed," said Brian Armstrong, chief executive of cryptocurrency firm Coinbase.

 

He said: "Many of them likely oppose what their country is doing, and a ban would hurt them, too."

 

On Wednesday, Mr Putin's comments on making "unfriendly" countries pay in roubles drove the currency to a three-week high.

 

However, many existing gas contracts are agreed upon in euros and it is unclear if Russia can change them. The EU relies on Russia for 40% of its gas.-BBC

 

 

 

Uber to list New York City yellow taxis in app

After ravaging New York City's yellow cab industry, Uber is now taking steps to embrace it.

 

The company will now list New York City yellow cabs on its app, a partnership Uber described as the latest step in a global effort to work with the taxi industry to unlock new markets.

 

It already has similar arrangements in place in countries such as Spain, Germany, Austria and Turkey.

 

Uber has been facing a driver shortage as it emerges from the pandemic.

 

The deal will add about 14,000 taxi drivers licensed in New York City - one of its most important markets - to Uber's platform.

 

Guy Peterson, director of business development for Uber, called it a "win for drivers".

 

"No longer do they have to worry about finding a fare during off-peak times to getting a street hail back to Manhattan when in the outer boroughs," he said.

 

The number of rides in yellow taxis in New York has plunged since Uber launched in the city in 2011, as people opted for the ease of online booking. The collapse helped to push nearly a thousand drivers to file for bankruptcy in recent years.

 

Under the partnership, the software companies that currently work with city-licensed cab drivers will integrate with Uber, which will take a cut of the fares. The companies did not say how much this would be.

 

The offering will roll out to the public this spring. Riders hailing a yellow taxi via the app will pay fares comparable to an Uber X ride, according to a Wall Street Journal report that Uber confirmed.

 

Shares in Uber rose on the news.

 

But Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said Uber should not make the mistake of thinking that this means its fights with drivers in New York are over. She said Uber typically pays about 15% less than what a driver could earn running the meter.

 

"The companies that tore up this industry need this more than the drivers do," said Ms Desai. "The fare structure that is not enough for Uber drivers is also not going to be enough for yellow cab drivers."

 

Bruce Schaller, a New York-based consultant who has studied the growth of Uber in the city, said the deal would benefit drivers and customers by widening market access, while helping the city control the number of empty cars adding to pollution and congestion problems as they look for customers.

 

"I've always felt that these industries would converge," he said. "This is probably sooner than one would have expected...but clearly the pandemic has turned everything upside down and people are trying to put things back together in a way that will work."

 

As Uber pursues this model in other cities, the firm may come to dominate the market even more, Mr Schaller said. But in New York City, he said hailing a taxi from the street was likely to remain an essential part of life.

 

"The street hail is still a big deal in New York," he added.

 

Ryan Wanttaja, the acting head of New York's Taxi and Limousine Commission (TLC), which regulates the industry, said it was "always interested in tools that can expand economic opportunities for taxi drivers".

 

"We are excited about any proposal to more easily connect passengers with taxis and look forward to learning more about this agreement between Uber and the taxi apps and ensuring it complies with TLC rules," he said.-BBC

 

 

 

Spotify paid 130 artists more than $5m last year

Spotify has revealed it paid $7bn to music industry rights holders last year, accounting for almost 25% of the industry's total revenues.

 

The news came on the company's Loud And Clear website, which was launched last year with the aim of "increasing transparency" around its payments.

 

The streaming giant said 52,600 artists earned more than $10,000 (£7,500) from Spotify in 2021.

 

Of those, 130 were paid more than $5m (£3.8m) over the last 12 months.

 

Spotify didn't name any of the artists involved, but its most-streamed acts last year were Bad Bunny, Taylor Swift, BTS, Drake and Justin Bieber; while the most streamed-song was Olivia Rodrigo's Drivers License.

 

For example, an artist whose music earns $10,000 in Spotify royalties might only receive $2,000, once the record label and publishers take their share. For a seven-piece band like BTS, that $2,000 be split seven ways.

 

Songwriters and session musicians are paid even less, with many struggling to make ends meet.

 

Even so, Spotify's data provides some insights into how artists are faring in the streaming era - with earnings falling into the following brackets:

 

About 28% of the artists who earned more than $10,000 last year (some 15,140) uploaded their own music via the likes of TuneCore, Ditto, DistroKid and CD Baby - which means they will have kept the bulk of their earnings.

 

Spotify also estimated that, once revenues from rival streaming sites and CD sales were taken into account, most of these artists will have made about $40,000 (£30,000) last year.

 

Spotify's most-streamed songs of 2021. .  .

Of course, the musicians we're talking about represent the tip of a very sizeable iceberg.

 

Spotify says about eight million people have uploaded tracks to its service, with 60,000 new songs arriving every day. As a result, 99.3% of the artists on Spotify are generating less than $10,000 a year.

 

The company counters that more than half of the eight million artists on its database have uploaded fewer than 10 tracks, "so they are quite early in their journey, or maybe doing it more as a hobby," said Spotify's global head of music product, Charlie Hellman, in an interview with Music Ally.

 

He added that the number of artists generating more than $10,000 has risen by 10,100 in the last 12 months - and that "the industry is half as top-heavy and half as star-concentrated as it was in the heyday of the CD."

 

This is the same argument promoted by the wider music industry, which claims more artists are making a living in the streaming era than at any other time in history.

 

The BPI, which represents the British music industry, says nearly 2,000 artists achieved more than 10 million UK streams in 2021, up 25% from the 2020 figure.

 

"The rise of streaming has empowered more artists than ever - from all backgrounds and eras - to build new fanbases around the world and to forge successful careers in music," said BPI chief executive Geoff Taylor in January.

 

Earlier this week, it was revealed that total music industry revenues rose 18.5% in 2021 to reach $25.9bn (£19.5bn), the highest level since records began in the 1990s.

 

On its Loud And Clear website, Spotify boasted about its contribution to that figure, claiming that its "$7bn total is the largest sum paid by one retailer to the music industry in one year in history - including any single retailer at the height of the CD or digital download era."-BBC

 

 

 

 

Nigeria: Lagos-Ibadan Expressway, Second Niger Bridge Ready This Year - Govt

The federal government has reassured Nigerians that the on going construction of the Second Niger bridge and the Lagos-Ibadan Expressway would be completed before the end of this year.

 

Works and Housing Minister, Babatunde Fashola, made this known yesterday, while featuring on the weekly Ministerial Briefing, organised by the Presidential Communication Team, at the State House, Abuja.

 

He also stressed that the initial February 2022, projected completion date for the Second Niger Bridge failed due to the impacts of the COVID-19 lockdown and EndSARS protests, adding that the project was already at 91 per cent completion stage.

 

While putting the cost of three major Presidential Infrastructure Development Fund (PIDF) projects at N1.3 trillion, the minister listed the projects to include Abuja-Kaduna-Zaria-Kano Expressway (375km): N797 billion, Second Niger Bridge (11.59km): N206 billion and Lagos-Ibadan Expressway (127km): N310 billion.

On when the projects would be completed, Fashola said the Lagos-Ibadan Express Way and Second Niger Bridge are on course for completion in year 2022, while the main Carriageway of Abuja-Kaduna-Zaria-Kano expressway is scheduled for completion by Q2 2023.

 

He listed the Second Niger Bridge, Lagos-Ibadan and the Abuja-Kaduna-Zaria expressways as the main projects being executed through the PIDF adding that two of the projects would be completed this year while the Abuja to Kano Road would be completed next

 

year.

 

"The Lagos-Ibadan expressway will be delivered this year, subject to how we navigate the pricing issues. Second Niger Bridge also this year, while the main carriageway of Abuja-Kaduna-Zaria-Kano expressway is scheduled for completion by the second quarter of 2023 before the President leaves office at the end of his tenure," he added.

 

He said the Abuja to Kano Road has ancillary works that cannot be finished next year.

 

"There is ancillary work that cannot be finished next year; the service lanes and truck parks, toll plazas, but that will continue because the funding is properly structured and the NSI is trying to mobilize some private capital now into the project".

 

According to him, thousands of jobs have been created through the execution of the three projects, as he highlighted the economic benefits of the three.

 

"The three projects have been able to collectively create 5,246 direct jobs and 13,998 indirect jobs. This is a major link chain of the economic agenda of this country because right now people are getting something to do. If you analyze the GDP results sectorally, you will see that mining is thriving, you will see that the construction sector is booming, you will see petroleum products also booming, this is part of the reason why.

 

"And then you see the food vendors also making money because at each construction site, people must eat twice a day. A plate of food was N250 before the cost of living started going up.

 

"This is a major economic driver. We focus more on the roads but you will see the millions or hundreds of thousands of tons of cement that are churned out form the cement industry, where they are now working at full steam and many people are employed there.

 

"Each of these projects has a bank guarantee for the money they get and such guarantees are not given for free. The contracts also have a 7.5 percent Value Added Tax, which when collected, 85 percent of it goes to the States," he explained.

 

Fashola said the three projects were chosen based on President Muhammadu Buhari's priority.-This Day.

 

 

 

Nigeria: Oil Theft - NUPRC Meets With Oil Producers, Pushes for Accurate Data On Stolen Crude

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday met with Independent Petroleum Producers Group (IPPG) and the Oil Producers Trade Section (OPTS), the groups that form the core of companies drilling oil in Nigeria, as part of efforts to halt the massive oil theft in the country.

 

Describing the phenomenon as a national disaster, the Chief Executive of the commission, Mr. Gbenga Komolafe, told the groups that the meeting was to share information as to the actual number of crude oil losses confronted by the entities.

 

Although during a presentation at the event, the commission stressed that Nigeria may have lost as much as $3.27 billion to vandalism between January 2021 and February 2022, a period of 13 months, it noted that the industry figures needed to be reconciled.

In addition, it put the average monthly value lost during the period at $233.99 million, while on the average, it estimated that the country may have lost as much as $7.72 million on a daily basis.

 

However, Komolafe stressed that the issue of oil theft had become very critical to have divergent data on the menace, announcing that the reason for the meeting was to get all stakeholders' view so as to confront the challenge using a common front.

 

"This is a one-agenda meeting and it centres on the issue of crude oil theft. The issue of oil theft has become a very worrisome one to the nation, to the government and I believe to you as investors in OPTS and IPPG, even as it is to us as your regulators.

 

"So, this is for us to sit at a roundtable and hear each other and share information. More worrisome, is that in recent times, we have had conflicting positions as to what is really happening in the upstream. As a responsible regulator, there's need for us to agree on the way forward and to hear your perspective.

"We need to have accurate figures. As a government we cannot continue to use abstract or inaccurate figures in a matter as important as crude oil theft. We have set up a crack team to be able to have the information we need," he stated.

 

Komolafe maintained that the challenge remained a disincentive to investment at a time Nigeria was in dire need of foreign exchange, assuring that the government was determined to make the industry more attractive for investors.

 

While promising positive change, Komolafe stated that no aspect of the value chain would be unattended to, saying President Muhammadu Buhari, had directed that Nigeria must be rid of the menace.

Komolafe said the government was determined to end the menace so that the country can benefit from the rising price of oil and also be able to protect the environment from oil spills.

 

"The concern of the government is to increase our national oil production. Basically, we are an oil economy and when the upstream is sick, it affects the wellbeing and the health of the country.

 

"The situation that is happening in the upstream is getting to the level of threat to the existence and wellbeing of Nigeria. As a responsible regulator, we are very concerned about it. We have been doing a lot and we are not relenting.

 

"We will do everything possible to increase oil production in a manner that will make the nation benefit from the upward swing in the international price of crude oil," he noted.

 

Similarly, during the presentation, the commission disclosed that most of the crude oil losses came from Bonny Terminal Network, Forcados Terminal as well as Brass Terminal.

 

It listed factors aiding the criminal activities as: economic challenges, inadequate security, poor surveillance, poor community engagements, exposed facilities and stakeholder compromises.

 

The commission stated that due to the high level of theft, the country had been unable to meet its Organisation of Petroleum Exporting Countries (OPEC) production quota.

 

Also speaking, Senior Technical Adviser to the CEO, Abel NSA, said that the impacts of the phenomenon include loss of value-a situation where government revenue is adversely affected, increased costs-due to frequent repairs of damaged facilities and environmental degradation due to spillages by the activities of saboteurs.

 

On actions taken to mitigate the challenge, he said work teams had been set up to deliberate on workable solutions, identify various responsible parties and propose improvement areas.

 

In addition, he noted that a public, private approach was being adopted while the implementation of the provisions of the Petroleum Industry Act (PIA) was ongoing.

 

He noted that on the community side, the outlook was to engage, carry out awareness campaigns as well as ensure prompt payment of community contractors, while the installation of check meters, engagement of competent entities for pipelines surveillance and pipelines integrity assessment were being envisaged.

 

Also speaking, Chairman/Managing Director of ExxonMobil, Richard Laing who represented OPTS, maintained that the issue had grown beyond mere theft to what he described as, "organised criminality" involving sophisticated operations.

 

"As an industry, I know how hard my colleagues work to produce products that we need and to suffer the level of theft that we have is disheartening. But more importantly it is a threat to investments, a threat to the health of the industry and wealth of the nation

 

"It is important that the stakeholders integrate their activities and their thoughts. As OPTS we have met with a number of stakeholders over the last several months and we want to make sure that whatever we do is joined up and effective.

 

"The language is very important and I think we use theft rather quickly. I don't think this is theft, this is organised criminal activity.

 

"The level of sophistication in terms of tapping into the pipelines, the distributions, efforts required to move hundreds of thousands of barrels a day isn't some guy coming along and tapping into a pipeline and taking container crude oil. It is organised criminality," he insisted.

 

Also commenting, the Independent Petroleum Producers Group (IPPG) represented by the Managing Director of Waltersmith Petroman, Chikezie Nwosu, disclosed that about 82 per cent of its members' production was stolen in the month of February 2022.

 

Stressing that independent producers were facing an existential threat, Nwosu explained that the oil theft challenge had jumped from about 4 per cent in the past, to a high of 91 per cent in December, 2021.

 

"The TNP (Trans Niger Pipeline) is the major issue. We have seen crude theft grow from single digit percentages to reports of 91 per cent in December for some of the operators who produce into the TNP, 75 per cent in January and the February report we got has an average of 82 per cent," he added-This Day.

 

 

 

Nigeria: Power Outage - $132m Projects Stalled By Right of Way Issues, Minister Tells NEC

The National Economic Council (NEC) at its monthly meeting in Abuja, yesterday, was informed that unresolved issues of Right of Way (RoW) stalled some 32 power transmission projects worth $137 million spread across the country.

 

Governor Inuwa Yahaya of Gombe State, who briefed newsmen yesterday evening at the end of the virtual NEC meeting presided over by the Vice President, Prof. Yemi Osinbajo disclosed that the Minister of Power, Abubakar Aliyu, briefed FEC on the power situation in the country especially on the on-grid power generation which also resulted in grid collapses on March 14 and March 15.

Yahaya said: "A key observation came up that need urgent attention is the issues ROW that has hampered billions of Naira of Transmission projects that are meant to strengthen and expand the grid.

 

"Most of these projects are stalled or delayed because of gaps in implementation of RoW resolutions that state governments are responsible for.

 

"Currently, there are 32 projects across multiple states stalled or that have been unable to begin post approval.

 

"The projects account for an investment of 137 million dollars that the Nigerian public is unable to realise value from due to these intractable issues," he said.

 

The governor said NEC was urged to review the situation with a view to having the issues addressed by the affected states.

 

He added that the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, presented an update to the council on federation accounts.

 

According to him, as of March 22, the Excess Crude Account stood at 33.8 million dollars; Stabilisation Account, N31.2 billion; Development of Natural Resources Account, N55.5 billion.-This Day.

 

 

Kenya: Petition Filed in Court Seeking Halt of Spire Bank Liquidation

Nairobi — The liquidation of Spire Bank which is fully owned by Mwalimu Sacco remains uncertain after a petition was filed at a high court in Kisumu seeking to stop the process.

 

The Sacco wanted to sell the bank to a local lender by the end of March when its members will meet for the annual performance review.

 

But in a suit filed by Keneth Otieno, a teacher from Siaya County has faulted the process saying cooperative " deliberately concealed and did not disclose to its members in the Annual delegates meeting the purported reports of the transactional advisors engaged in the sale of the bank to investors."

"The decision to voluntarily liquidate the bank is rash and premature, apart from being unlawful and further, the financial ramifications of the same have not been adequately considered by the bank much to the detriment and prejudice of its members," the petition read in part.

 

He further accused the Sacco of failing and neglecting to take adequate steps to address the financial challenges facing the bank noting it has instead hesitated and watched it struggle

 

"The Sacco will be completed to take a huge hit in its financials once the losses are booked hence creating additional losses for members," he added.

 

As part of its prayers, the petitioner wants the entire transaction declared unlawful, null, and void

 

The petitioner further wants the" Sacco to be obligated to continuously ensure and offer its financial support to the bank in meeting its day to day clearing and financial obligations until a lasting solution is found."-Capital FM.

 

 

 

East Africa: Activists Opposed to East African Crude Oil Pipeline Call on Pope Francis for Support #AfricaClimateCrisis

Cape Town — Ugandan activists have met Pope Francis to ask for his support in stopping the East African Crude Pipline (EACOP) - a heated crude oil pipeline planned to run from Hoima in Uganda to the port of Tanga in Tanzania. The proposed project will cover an area of 1,443-kilometres and run near Africa's largest freshwater reserve - Lake Victoria - posing a huge threat to local livelihoods and biodiversity in the region. According to 350.org, more than 100,000 people are being forced off their land and are facing expropriation.

 

The oil deal signed in February by France's TotalEnergies and the China National Offshore Oil Corporation is looking to exploit crude oil reserves under Lake Albert, on the border between Uganda and the Democratic Republic of Congo. If this project goes ahead it will be the longest heated crude oil pipeline in the world.

 

Climate justice activist Vanessa Nakate, together with Diana Nabiruma of the Africa Institute for Energy Governance (AFIEGO), a non-profit based in Uganda and Maxwell Atuhura, the Executive Director at Tasha Research Institute Africa Limited, based in Uganda, met with the Pope.

"Pope Francis has been consistent in support of a global shift away from fossil fuels, providing a moral framework for a clean energy transition outlined within his 2015 encyclical 'Laudato Si', and more recently urging Catholics to stop investing in fossil fuels in 2020", according to 350.org.

 

Diana Nabiruma says that "the tour has helped us to mobilize youth and activists in Europe to create pressure on Total, banks, insurers, the legal system and others to stop the EACOP. In Uganda, we don't have much space to mobilize and engage in actions such as protests that are needed to create pressure. We hope that the youth and activists we have engaged can continue to create pressure through protests, financial advocacy, engaging insurers and more."

 

The visit comes against the backdrop of the ongoing Russian attacks on Ukraine that have placed pressure on global gas and petroleum supplies and is pushing some countries to accelerate plans to move away from fossil fuels even as others see an opportunity to replace Russia's supplies on the global market.

 

Activists, indigenous peoples and even the United Nations Chief António Guterres have repeatedly called for divestment from fossil fuels as the impact of the climate crisis becomes increasingly dire around the world but more so in Africa, where countries have contributed least to the current crisis.

 

A recent UN report has drawn attention to the possible role of groundwater in mitigating the impact of global water shortages as droughts become more frequent and rains more unpredictable. But mining poses a risk not only to water bodies but can pollute groundwater as well.

 

350.org say this project will contribute and additional 34 million tons of carbon into the atmosphere every year, even as countries are not reducing emissions at level sufficient to meet the target of keeping global temperatures to an increase of 1.5 degrees celsius.

 

"This meeting with Pope Francis is vital because activists, environmental defenders and scientists have been reaching out to world leaders about the dangers the people and the planet are facing, for years now. We've demanded that they take action but instead we continue to see continued investment in fossil fuels. It is time to escalate our efforts to end the age of fossil fuels and having the Pope acknowledge our campaign to StopEACOP lends even more moral authority to our demands," Vanessa Nakate said.

 

 

 

Africa: UNCTAD Calls for IMF, World Bank Measures As Global Downturn Bites

The Russian invasion of Ukraine has been the "main contributing factor" to the potentially devastating one per cent drop in projected global economic growth this year, UN development economists UNCTAD said on Thursday, in the body's latest global economic update.

 

"The main headline is a downgrading of the projection for global growth this year," said Richard Kozul-Wright, Director, UNCTAD Division on Globalization and Development Strategies, speaking in Geneva.

 

"We anticipated back in September of last year that the global economy would grow by around 3.6 per cent. We expect it to grow by 2.6 per cent this year and of course, the main contributing factor to that, is the war in Ukraine."

 

Trillion-dollar debt

 

With inflation on the rise and developing countries already weighed down by a $1 trillion debt burden to pay back to creditors, the UN body decried the inadequate financial measures already taken to help them withstand exchange rate instability, rising interest rates and soaring food and fuel prices.

Wholesale multilateral fiscal reform - possibly on the scale and ambition of the US Marshall Plan that shouldered Western Europe following the Second World War - is urgently needed to improve the financial liquidity of developing countries to prevent them - and even middle-income countries - from potentially going under, UNCTAD insisted, as it appealed to the International Monetary Fund (IMF) and World Bank.

 

Emergency measures call

 

"There is a rapidly worsening outlook for the world's economy and to think that this year, the year after two years of crisis with COVID-19, the average rate of growth of the world economy will be 2.6 per cent, down from 5.5 per cent last year, and down from the projections that were made in the last quarter of 2021," said Rebeca Grynspan, UNCTAD Secretary-General.

In particular, Ms. Grynspan called for "emergency measures from the IMF and World Bank", namely the activation of rapid funding instruments which IMF can provide to help countries with looming balance of payments problems.

 

"Conditions are worsening for everybody," continued the UNCTAD chief, noting how the climate crisis has played its part, along with successive droughts in the Horn of Africa, the ongoing COVID-19 pandemic and war in Ukraine.

 

Even relatively wealthy countries that are struggling with multiple cost-of-living pressures, have already sought help from the international system to keep them afloat.

 

"Pakistan went back (to the IMF) at the end of last year," said Mr. Kozul-Wright. "Sri Lanka has now gone to the IMF to organise a programme. Egypt, which was already under a programme, has gone back to the IMF to renegotiate. And these are countries - these are not least developed countries, these are middle-income countries that are under very serious economic and in some cases political pressure, as a consequence of the shocks that they now face."

 

Importer woes

 

But it is the world's poorest, import-dependent countries that will be worst-hit by the global economic downturn, UNCTAD insisted.

 

"The brunt is being carried by the developing countries because of the rise in prices of food, of energy and fertilisers that is very steep and also the financial stretch under which the developing countries are already under," said Ms. Grynspan.

 

Although "all regions of the global economy will be adversely affected by this crisis", Mr. Kozul-Wright, suggested that "high commodity exporters" were likely to do well from a rise in prices. "But the European Union will see a fairly significant downgrade in its growth performance this year... so will parts of central and southern Asia as well," he said.

 

UNCTAD's policy recommendations include the need for global financial reform to allow developing countries the economic space for "reasonable growth" so that they can service potentially crippling debt levels.

 

"Debt servicing in 2020 for developing countries excluding China was already $1 trillion, that was the kind of financial pressure that developing countries are in," Mr. Richard Kozul-Wright said.

 

"We know and we have argued in the past that the initiatives from the G20, the Debt Service Suspension Initiative is welcome, we welcomed it, but it was clearly insufficient, it provided something of the order of $11 billion for the countries that were eligible."- UN News.

 

 

Africa: Why African Banknotes Are Printed in Europe

At least 40 African countries print their money in the UK, France and Germany -- decades after independence, raising questions about self-sufficiency. DW examines what prompts them to outsouce their currency production.

 

Last July, a delegation from Gambia visiting the Nigerian Central Bank asked if the Gambian Dalasi, could be ordered from its West African neighbour.

 

Gambia's central bank governor, Buah Saidy, said the country was running low on its national currency.

 

The tiny West African country had to redesign its currency after the defeat of former President Yahya Jammeh, who ruled Gambia from 1994 until he was forced into exile after refusing to accept defeat in the 2016 elections.

 

Jammeh, who is accused of human rights violations and killings of political opponents during his 22-year reign, had images of himself on the nation's banknotes.

After his ouster, the Gambian Central Bank set about destroying those images.

 

Now, the Dalasi notes have images of a fisherman pushing his canoe out to sea, a farmer tending to his rice paddy, and a spattering of colorful, indigenous birds.

 

Outsourcing the cash

 

One issue remains, however: Gambia doesn't actually print its own currency. It places orders with UK companies, resulting in a shortage of liquid money.

 

It is perhaps a curious aspect to the economy of a sovereign nation. Gambia is not alone, though.

 

More than two-thirds of Africa's 54 countries print their money overseas, mostly in Europe and in North America. It comes at a time when the African Union is trying to usher in a golden, made-in-Africa age that should see Africa beef up production and enjoy greater profits.

Among the top firms that African central banks partner with are British banknote printing giant De La Rue, Sweden-based Crane AB, and Germany's Giesecke+Devrient.

 

It is really a problem?

 

It is perhaps surprising that almost all African countries import their currencies. The practice could even raise questions of national pride and national security.

 

For richer countries, like Angola and Ghana, there's also the issue of real autonomy and economic sufficiency.

 

Most countries are tight-lipped about their currency-printing processes -- likely for security reasons. The printing firms are even less transparent.

 

None of the firms DW reached out to responded to requests for a list of African countries that print with them.

Counting the cost

 

Ethiopia, Libya and Angola -- along with 14 other countries -- place orders from De La Rue, wrote Ilyes Zouari, who studies African countries.

 

Six or seven other nations including South Sudan, Tanzania and Mauritania are said to print theirs in Germany, while most French-speaking African countries are known to print their money with France's central bank and with the French printing company Oberthur Fiduciaire.

 

It's not clear how much it costs to print African currencies like the Dalasi, although the US dollar costs between 6 and 14 cents.

 

But it is likely that the cost of printing for over 40 African currencies is significant.

 

In 2018, a central bank official in Ghana complained to local journalists that the country spends huge amounts for its UK orders of the Ghanaian cedi.

 

And since countries usually order millions of notes to be carted in containers, they usually have to pay hefty shipping fees. In Gambia's case, officials say shipping costs rack up a bill of £70,000 (€84,000, $92,000).

 

High demand

 

Still, while it may sound odd, analysts say that African countries printing much of their currency abroad is not unusual.

 

Many countries around the world do it. For example, Finland and Denmark outsource their money-making, as do hundreds of central banks around the world.

 

Just a handful of countries, like the US and India, produce their own currencies.

 

Mma Amara Ekeruche from the African Center for Economics Research told DW that when a country's currency is not in high demand -- and not used globally like the US dollar or British pound -- it makes little financial sense to print it at home due to the high cost involved.

 

Money printing machines usually churn out millions of notes at a time. Countries with smaller populations, like Gambia or Somaliland, would have more money than they needed if they printed their own.

 

"If a country prints one banknote for €10 at home and sees that it can print it for about €8 abroad, then why would they incur more costs to do that? It won't make sense," Ekeruche explained.

 

Some countries -- like Liberia -- don't attempt to print their own money because they don't even have a printing press -- it is costly to set up and requires special technical capabilities.

 

Only a handful of African countries, like Nigeria, Morocco, and Kenya have enough resources to print their own currencies or mint their own coins, and even they sometimes supplement production with imports.

 

Is third-party printing secure?

 

Ekeruche said some individual countries attempting to produce their own currencies could fall victim to corrupt officials or hackers who might attempt to forge or manipulate them. In many cases, outsourcing is more secure.

 

Even with importing, there can be challenges. Containers of Liberian dollars shipped from Sweden disappeared in 2018, although the government later accounted for it.

 

Meanwhile, firms like De La Rue have been in existence for hundreds of years, mass-producing for central banks across the world.

 

They have the tools and experience to keep up to date with currency innovations, such as polymer which is considered cleaner, more durable and more secure than paper, with the plastic material allowing the inclusion of more sophisticated features to protect against counterfeits.

 

But outsourcing is not without disadvantages. Some countries could find themselves on the receiving end of economic sanctions. In 2011, for example, the UK withheld orders for Libya's Dinar from De La Rue, after the UN sanctioned the late leader, Muammar Gaddafi.

 

Why not print the notes in Africa?

 

African countries have been formulating plans to boost intra-African trade. There is currently more trade with Western and Eastern countries than there is within the continent.

 

Printing banknotes in Africa would boost profits on the continent and, at least theoretically, African countries could choose those with printing capabilities since there's likely some idle capacity.

 

But that is not happening in practice. This is perhaps due to trust issues since countries have been printing with overseas firms for years.

 

And there's the complicated case of Francophone Africa -- the countries using the Central African CFA franc and the West African CFA franc. The currencies are tightly pegged to France's because of colonial relations and are produced in France.

 

Still, there's hope that change could be on the horizon. With Gambia's central bank, officials proposing a possible partnership with Nigeria, countries could start to look inwards for their currency orders. If that happens at scale, it could cut shipping costs drastically.

 

 

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

 

 


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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