Major International Business Headlines Brief::: 31 March 2022

Thu Mar 31 10:35:13 CAT 2022

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Major International Business Headlines Brief::: 31 March 2022 

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

ü  Oil prices drop as Biden considers releasing reserves

ü  Shanghai lockdown: Volkswagen scales back operations in the city

ü  Germany and Austria take step towards gas rationing

ü  Ukraine conflict: Russia to allow unauthorised imports from West

ü  Ronin Network: What a $600m hack says about the state of crypto

ü  P&O Ferries: New ferry pay rules won’t work, warn ports

ü  Menzies Aviation accepts £571m takeover by Kuwaiti rival

ü  Warning millions would struggle if cash phased out

ü  Nigeria: Reps Ask NNPC to Submit Status Details of $12bn Natural Gas Pipeline Project

ü  Tanzania: NMB - Low Interest in Agric Triggers More Borrowings

ü  Tanzania: RC Kudos TBs for Enhancing Awareness On Goods Standards

ü  Nigeria: Countries With Huge Debts Vulnerable to Financial Crises, Recession, IMF Warns

ü  Nigeria: 250 Million Africans Live On Empty Stomach Daily - Adesina

ü  Nigeria Has Potential to Attract Fibre Optics Investments - Report

 <mailto:info at bulls.co.zw> 

Oil prices drop as Biden considers releasing reserves

Oil prices have fallen sharply after reports that the US is set to take new steps to bring down high fuel costs.

The Biden administration is reportedly considering the release of up to 180m barrels of oil in the coming months from the Strategic Petroleum Reserve.

If confirmed, this will be the largest-ever release since the reserve was created in 1974.

The war in Ukraine has rocked global energy markets in recent weeks over concerns that supplies will be cut.

In afternoon trade in Asia, US oil benchmark West Texas Intermediate was 5.4% lower at $102 a barrel, while Brent Crude was down by 4.6% at around $108.

The soaring cost of fuel has become a major political issue in the US ahead of mid-term elections in November.

Without giving further details, the White House said that Mr Biden will deliver remarks at 13:30 local time (17:30 GMT) on Thursday, on "his administration's actions to reduce the impact of [Russian President Vladimir] Putin's price hike on energy prices and lower gas prices at the pump for American families".

News of the potential major release of oil by the US came as the Organization of the Petroleum Exporting Countries (Opec) and its allies including Russia were due to meet on Thursday.

The group of major oil producing nations, which is known as Opec+, is expected to stick to its existing deal to gradually increase production.

The cost of oil has jumped in recent weeks, with Brent Crude hitting $139 a barrel earlier this month after Russia's invasion of Ukraine and sanctions slapped on Moscow by the US and its allies.

Energy prices have fallen back since then, but Brent Crude is still almost 70% higher than it was a year ago.

The perils of rising gas prices for Biden

Could the world cope without Russian oil and gas?

Global energy supplies had been tightening for months as economies started to reopen as they relaxed pandemic lockdown measures.

That was made worse in recent weeks by expectations that Russian oil exports could fall by as much as 3m barrels a day.

Russia is the world's second-biggest oil exporter after Saudi Arabia.

Most other major energy producing nations are either at full capacity or are unwilling to increase output

The US, which is the world's largest oil producer, is currently pumping out 11.7 million barrels of oil a day, but that is not enough to meet global demand.

Meanwhile, the International Energy Agency has called an emergency meeting for Friday.

It is unclear whether other IEA members - which include 29 nations such as the UK, France, Germany and Japan - will follow the US by releasing oil reserves.

Also on Thursday, Japan said that it will take emergency measures to secure supplies of seven strategic materials it relies on heavily from Russia or Ukraine as the war and sanctions cause disruptions to supplies.

The country's industry minister said the actions include government support to boost domestic production, alternative procurement and to help technological developments to reduce use of the materials, which include liquefied natural gas and gases used in computer chip-making.-BBC

Shanghai lockdown: Volkswagen scales back operations in the city

Businesses including Volkswagen (VW) have scaled back their operations in Shanghai, which is being locked down due to a surge in Covid-19 infections.

The German carmaker partially shuttered its factory in the Chinese city on Thursday, citing supply shortages.

More than a dozen companies have suspended plans to list their shares in the major financial centre.

Economists are concerned that a slow down in Shanghai could affect growth in the world's second largest economy.

On Thursday, official data showed that China's manufacturing and services sectors slowed this month at a faster pace than expected.

The National Bureau of Statistics said its purchasing managers' index (PMI) slipped from 50.2 in February to 49.5 in March.

A reading below 50 represents contraction on the 100-point scale.

PMI data is a summary of market conditions gathered through surveying senior executives in key industries about their expectations for a number of factors including new orders, production and employment.

Late on Wednesday, VW said it would partially close its factory in Shanghai due to "lack [of] parts from suppliers".

The carmaker shut the factory earlier this month, when coronavirus infections were climbing in the city, before restarting production 48 hours later.

Earlier this month, a VW spokesperson said "What we have lost so far in production can be recovered, [for example] via additional shifts, once the situation eases."

VW did not say how long the latest closure was expected to last, and did not immediately respond to a BBC request for further comment.

Its factory in the north eastern city of Changchun has been closed for several weeks.

Meanwhile, more than a dozen companies have delayed plans to sell shares on Shanghai's technology-focused STAR Market.

The STAR Market has been described as China's answer to New York's Nasdaq trading platform.

The plans, which were made public in filings to the stock exchange, affect more than $9bn (£6.9bn) in fundraising, Reuters reported.

Iris Pang, Greater China chief economist at ING, said the weaker economic data "reflects the impact of lockdowns for mass Covid testing on production, new orders and delivery times".

"There is, without doubt, some uncertainty reflected in these numbers - mainly on supply chains," she said. "But we are slightly more optimistic than the market in general."

However, lockdowns in Shanghai and other Chinese cities may ultimately have "little impact" on production, said UBS' chief China economist Tao Wang.

She said in a research note that most factories were continuing to operate by keeping workers at the factories or shifting production to unaffected areas.

But she added that "logistics delays and port congestion in Shenzhen may have had some temporary impact on trade, especially China's semiconductor components imports via the Shenzhen-Hong Kong route."

The lockdown of Shanghai is China's largest since the coronavirus outbreak began.

Until now, Chinese authorities had resisted locking down the city of almost 25 million people to avoid destabilising the economy.

It has battled a new wave of infections for nearly a month, although case numbers are not high by some international standards.

Authorities have locked down the eastern side of Shanghai, which includes the city's financial centre, for Covid testing.

The western side of Shanghai is scheduled to go into lockdown on Friday.

This staggered approach means that half of the city will be able to remain open.-BBC

Germany and Austria take step towards gas rationing

Germany and Austria have triggered emergency plans over possible gas supply disruption amid a payments stand-off with Russia.

Russia had demanded "unfriendly" countries pay for its gas in roubles from 31 March, but the EU, which mainly pays in euros, rejected the idea.

Moscow later appeared to soften its stance, saying on Wednesday rouble payments would be introduced gradually.

But Germany and Austria have taken the first steps towards gas rationing

Germany urged consumers and companies to reduce consumption in anticipation of possible shortages, while Austria said it was tightening its monitoring of the gas market.

Germany gets about half its gas and a third of its oil from Russia and has warned that it could face a recession if supplies suddenly stopped.

Neighbouring Austria relies on Russia much more for gas, with the country getting about 80% from the country and Austrian Chancellor Karl Nehammer's office said measures such as gas rationing would only come into play in an "immediate crisis".

Under an existing gas emergency plan, the "early warning phase", which both Germany and Austria have begun, is the first of three steps designed to prepare the country for a potential supply shortage. In its final stage, the governments would bring in gas rationing.

German economy minister Robert Habeck said the country's gas supplies were safeguarded for the time being, but said it was increasing precautionary measures in case of escalation by Russia.

The head of German network regulator Bundesnetzagentur, Klaus Müller, said the aim of the early warning was to avoid a deterioration of supply. He urged consumers and industry to prepare for "all scenarios".

Kremlin spokesman Dmitry Peskov said Russia would not demand payments in roubles from Thursday.

"Payments and delivery is a time consuming process... from a technological point of view, this is a more prolonged process," he said.

Russia doubles interest rate after rouble slumps

Russia considers accepting Bitcoin for oil and gas

The West has been imposing sanctions on Russia in response to its invasion of Ukraine.

In response, Russian President Vladimir Putin has demanded that natural gas exported to Europe should be paid for in roubles.

Analysts say the move will support the country's currency, which fell sharply after the invasion but has begun to recover.

Europe, which in total imports about 40% of its gas from Russia and pays mostly in euros, says Russia's state-controlled gas giant Gazprom cannot redraw contracts.

But Vyacheslav Volodin, the speaker of the lower house of the Russian parliament, said on Wednesday: "European politicians need to stop the talk, stop trying to find some justification about why they cannot pay in roubles.

"If you want gas, find roubles."

The Kremlin also said Russia could start demanding payment in roubles for other commodities such as fertiliser, grain, metals and timber.

German business leaders have welcomed Berlin's announcement of an "early warning" of a gas emergency. That's because German industry would be the first hit by gas rationing if Russia turned off the taps.

If Germany was forced to ration gas, households and emergency services, such as hospitals, would get priority. This would hit manufacturers that rely on gas for production particularly hard, pushing up prices and possibly leading to job losses.

This early warning stage aims to help businesses plan for any future shortfalls: a crisis group of representatives from the government will meet daily. German Economy Minister Robert Habeck also hopes for support from the public and has called for people to save energy where possible. "Every kilowatt helps," he said.

So far there are no gas shortages and Germany had large reserves. But over the past year Russia has failed to keep German gas reserve tanks fully stocked - some believe this indicates a long-standing plan by the Kremlin to use gas as a weapon against Europe.

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'Game of chicken'

S&P Global energy analyst Laurent Ruseckas said Russia and the EU were involved in "a game of chicken" over who would back down first.

"Putin started it last Wednesday, with his first comment about requiring the change to payment in roubles, and now the EU has responded at a political level, saying: 'Well, no, we won't,'" he told the BBC World Service. "Something has got to give here."

He said the most likely next step was for the EU and Gazprom to seek a compromise by redrawing contracts, as both sides have an interest in resolving the stand-off.

Russia currently gets €400m (£340m) per day from gas sales to the EU and it has no way of rerouting this supply to other markets.

However, Mr Ruseckas said there was a small chance "the brinksmanship leads very quickly towards a cut-off". This would force Germany to run more coal plants, import as much liquified natural gas as possible, and in the longer term build more renewable energy production.-BBC

Ukraine conflict: Russia to allow unauthorised imports from West

Russia's prime minister said he wanted to saturate the market to create fast access to essential goods

Russia is allowing imports without a trademark owner's permission, in reaction to sanctions that have halted an array of Western products.

Prime Minister Mikhail Mishustin approved "parallel imports" as part of a fourth package of support for small and medium-sized businesses.

The West's response to Russia's war has prompted a surge in inflation.

The prime minister said until now goods could not be sold in Russia without the trademark owner's authorisation.

The aim of letting retailers import products without the companies' permission, he explained, was to saturate the market so that people had fast access to necessary goods, guaranteeing supply despite the "unfriendly actions of foreign politicians".

Lists of products were to be co-ordinated with the ministry of industry and trade, Mr Mishustin said in a televised address. Russian reports indicate they will focus on consumer products where prices have risen.

Annual inflation has soared this week to 15.66%. Sugar in particular has been hit by price rises and shortages and Russia's anti-monopoly service said it was investigating the country's five biggest producers.

In a bid to prop up the currency, Russia announced last week that "unfriendly countries" would have to pay for their natural gas in roubles from Thursday.

The EU has rejected the idea and Germany said Chancellor Olaf Scholz had been told that Europe would be able to continue paying in euros to an unsanctioned Russian bank, which would then convert the money into roubles.

Hundreds of global brands such as Apple and H&M have also either pulled out of the Russian market or halted sales since the invasion of Ukraine began on 24 February.

Several companies have continued to provide basic nutrition and hygiene items. Sports shop Decathlon said this week it was only closing its shops because of supply chain problems, while Nestle has suspended the sale of the "vast majority of volume and sales" in Russia.

In a separate development, Russian state institutions have been barred from buying foreign software from Thursday for so-called critical information infrastructure, without prior government consent.

The decree covers telecom and information systems used by government agencies, as well as companies in defence, healthcare, transport, energy and finance.-BBC

Ronin Network: What a $600m hack says about the state of crypto

Thousands, if not millions, of people could have lost money in the second largest crypto hack in history.

Ronin Network, a key platform powering the popular mobile game Axie Infinity, has had $615m (£467m) stolen.

A 20-year-old from Wiltshire, Dan Rean, is one of those affected. He told the BBC: "I have lost 0.15 Ethereum, about $500. It's bad but I have friends in a worse position."

Jack Kenny is one of those friends, and said: "I'm down about $10,000."

The 23-year-old from Ireland added: "I don't think people fully understand the significance of this hack - $600m is a very big portion of all the assets in this network."

Another man from the US east coast says he has lost $8,000, but adds there are people who may have lost their "life savings" after saving up digital coins from playing Axie Infinity.

In the game, players fight cartoon pets called Axies to earn cryptocurrency.

The game is hugely popular with millions of players around the world hoping to win cryptocurrency and collect the game's non-fungible tokens (NFTs).

Its particularly big in the Philippines, where playing has become a full-time and potentially lucrative job.

The real victims of mass crypto-hacks

Crypto-exchange loses $150m to hackers

Ronin Network, which is also owned by Vietnamese parent company Sky Mavis, allows players to exchange the digital coins they earn in Axie Infinity with other cryptocurrencies like Ethereum.

It says a hacker transferred $540m worth of cryptocurrency to themselves six days ago, but the company only noticed on Tuesday when a customer was unable to withdraw their funds.

The stolen stash has since risen in value with the price of cryptocurrencies to be worth about $615m.

It's just the latest in a string of mass crypto heists in the last year totalling well over $2bn.

The sequence of events around the hack tells us a lot about the perils of cryptocurrency and decentralised finance.

Will customers get their money back?

Ronin Network says it is "working with law enforcement officials, forensic cryptographers, and our investors to make sure all funds are recovered or reimbursed".

In the meantime, it has only put out one statement on its substack - a newsletter service - and taken its website offline.

It has also disabled comments on its company posts on social media, and the BBC has not had any replies from the many requests for comment sent to company bosses.

"I've not tried customer support because I know it'll be useless," says Dan.

"I just have to wait to hear from them if and when it'll be fixed, and I can hopefully get my Ethereum out. Crypto companies don't really work in the same way as regular companies," Dan explains sympathetically.

Ronin Network has not yet told customers what's happening with their funds or when they will get their money back.

In most cases of mass crypto hacks, customers are reimbursed in some way, but it can take months or years.

Cryptocurrency writer David Canellis, from Protos, says direct communication with cryptocurrency companies is notoriously poor.

"When you're dealing with entities that are handling more than half a billion dollars you'd expect a little bit more avenues and openness to communication - especially when there has been such a lapse in security around this hack.

"But then again, one primary tenet of the ecosystem is that anyone at all can launch their own projects, and there should be no barriers to this."

How it happened

Ronin Network says that the hack started in November 2021, when Axie Infinity's user base swelled to an unsustainable size.

The company said the influx of players caused "immense user load", which forced it to loosen security procedures to cope with the increased demand.

It says that things calmed down in December, but that it forgot to retighten its security, and the hackers took advantage of the backdoor left open.

Economist and author Frances Coppola says: "This is pretty typical of crypto companies.

"We've seen so many hacks and exploits caused by - to be blunt - frank carelessness and lack of concern for the safety of people's funds.

"Crypto companies are sometimes so anxious to make 'loadsamoney', or simply accommodate high demand, that they put out badly designed and tested code, compromise security, or place too much reliance on infrastructure."

Experts say cryptocurrency is increasingly being seen as low hanging fruit by hackers.

Cryptocurrency companies are "huge honeypots for hackers", says Tom Robinson, of Elliptic.

"Crypto transactions are irreversible, so if a hacker can get their hands on it, it's very difficult for anyone to retrieve it," he says.

Mr Robinson said it is also attractive because huge pay days are possible without the extra hassle of cybercrime like ransomware, where criminals have to negotiate with hacked companies.

It's not known who is behind this latest hack, but it is not necessarily cyber-criminals out to make money for themselves. For example, state-sponsored hackers have been identified as the culprits behind some crypto heists.

According to cryptocurrency researchers at Chainalysis, North Korean hackers stole almost $400m (£291m) worth of digital assets in at least seven attacks on cryptocurrency platforms last year.-BBC

P&O Ferries: New ferry pay rules won’t work, warn ports

British ports have described Grant Shapps' new pay plans for the ferry industry as "unworkable".

The transport secretary has urged ports to block ferries from docking if they do not pay their crew the UK minimum wage, with plans to create new laws.

The move comes after P&O Ferries sacked 800 of its staff without notice and replaced with them with agency workers.

But the boss of the ferry ports trade body raised concerns the government was "rushing to find a solution".

"The ports industry is genuinely sympathetic towards the situation of the impacted seafarers, however we would suggest that ports are not the competent authorities to enforce rules on employee salaries or working conditions in the shipping industry," Richard Ballantyne, of the British Ports Association, said.

The trade organisation covers more than 400 port facilities in the UK.

The UK Major Ports Group, the trade association representing large commercial ports in the UK, argued ports should not have to "be the police for the labour practices of ferry companies".

"We want to engage urgently and work with government to find a more effective and appropriate way of addressing the issues raised" by the P&O Ferries sackings, it said.

Unions also expressed disappointment that the plans didn't go far enough.

The Department for Transport said it is "engaging closely with industry to ensure that the new measures work effectively for all parties" and added Mr Shapps had written to all ports requesting their support.

Mr Shapps said he wanted to see British ports refusing access to ferry companies "who don't pay a fair wage, as soon as [is] practical".

The government will consult on the changes needed to make it a legal requirement, he added, but urged ports to take action "as soon as practical".

The UK minimum wage is £8.91 per hour for workers over 23. The average rate paid to the agency staff brought in by P&O Ferries is £5.50, which is in line with international maritime standards.

Mr Shapps set out a number of other measures in response to the P&O sackings, including plans to create "minimum wage corridors" on ferry routes between the UK and other countries.

The transport secretary has also asked the Insolvency Service to consider disqualifying P&O Ferries chief executive Peter Hebblethwaite from acting as a company director.

He said the announcement would force P&O Ferries to "fundamentally rethink" its sacking of 800 workers without consulting unions beforehand.

P&O Ferries drew outrage from politicians, unions and the public when it sacked hundreds of seafarers without any notice, replacing them with agency workers paid less than the minimum wage.

Media caption,

P&O Ferries boss Peter Hebblethwaite faces MPs

Mr Hebblethwaite admitted that the firm knowingly broke the law by not consulting with unions and planned to compensate workers instead.

Mr Shapps said that he would also take action to prevent employers using "fire and re-hire tactics" where the employer has not made "all reasonable efforts to reach agreement through a full and thorough consultation".

Mr Shapps said: "P&O Ferries' failure to see reason, to recognise the public anger, and to do the right thing by their staff has left the government with no choice.

"Where new laws are needed, we will create them. Where legal loopholes are cynically exploited, we will close them. And where employment rights are too weak, we will strengthen them."

But Nick Humphreys, an employment partner at Penningtons Manches Cooper, described the package as "weak".

"I don't think that these measures will have any affect whatsoever on P&O Ferries," he said.

"It's aspirational in a lot of places, it won't get workers their jobs back," he added, saying that nothing was likely to change for several months because of the need for consultation.

On asking ports to enforce pay rules, he pointed out that one problem was that there is no legal basis for turning away ships that don't pay the national minimum wage.

It could even mean that ports could be liable for damages if sued by a ferry operator, Mr Humphreys said.

Unions also hit out at the government's response, saying it was too little, too late.

Mick Lynch, the general secretary of the RMT union, said: "Despite all the bluster, Grant Shapps has failed to grasp the opportunity to adequately stand up to the banditry behaviour of P&O.

"The prime minister repeatedly said to parliament that the government would be taking legal action save British seafarers' jobs but he has failed to keep his word," he said.

Mark Dickinson, general secretary of the Nautilus trade union, said he broadly welcomed the measures announced but that they would not make P&O change course.

"P&O Ferries are already extolling that extending the UK National Minimum Wage to international ferry routes will not cause them to change direction and that their cheap labour agency-based crewing strategy will remain intact."

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Analysis box by Katy Austin, Transport correspondent

Ministers have condemned the actions of P&O Ferries in strong terms over the last fortnight.

Today's measures are designed to improve wages and protections for seafarers working for all ferry companies operating to and from the UK - not just P&O Ferries.

But they show the limits of what the government can actually do in this situation.

Sacked workers won't be offered their jobs back, nor will the change to using agency crew be stopped.

In an ongoing war of words with Grant Shapps, P&O Ferries' boss insisted reinstating fired workers would lead to the business collapsing.

Tomorrow's deadline for staff to respond to their severance offers will be looming large, with many of the measures announced today expected to take some time to come into effect. .-BBC

Menzies Aviation accepts £571m takeover by Kuwaiti rival

Bosses at Menzies Aviation have accepted a £571m takeover bid by a Kuwaiti firm for the Scottish air services company.

The offer by National Aviation Services (NAS) was made over a month ago, but was still conditional.

The board of Menzies, one of Scotland's largest firms, has recommended the bid to shareholders as a "fair price".

The Edinburgh-based ground services company, formerly bookseller John Menzies, works in 37 countries.

NAS is a subsidiary of Kuwait-based logistics conglomerate Agility Public Warehousing which works in Africa, Asia and the Middle East.

Menzies said on Wednesday that it had reached an agreement on the terms of the deal with the suitor.

The 608p per share deal follows previous bids of 460p, 510p and 605p made in February.

NAS has expanded across emerging markets in recent years and already owns a 19% stake in Menzies Aviation after purchasing millions of pounds worth of shares earlier this year.

Menzies has 25,000 employees in 37 countries, providing passenger, baggage, fuel at airports and aircraft handling services.

Menzies chief executive Philipp Joeinig said: "The Menzies directors believe that the offer represents a fair and recommendable price for shareholders which recognises Menzies' future prospects.

"Menzies is an outstanding business with a long and rich history."

The company cut more than 17,500 jobs worldwide in March 2020 because of the downturn in air travel due to the pandemic, but remained one of Scotland's biggest businesses.

Mr Joeinig said: "The board of Menzies applauds the work that the Menzies management team have done to steer the business through the challenging impacts of the pandemic and position the business for continued future growth and the next evolution in its journey."

Agility vice-chairman Tarek Sultan said they were focused on "growth and shareholder value creation" and investing in companies in "high-growth sectors with strong fundamentals, reinforced by management teams with established records".

Menzies started in Edinburgh in 1833 selling Charles Dickens books and The Scotsman newspaper, and became a high street name across the UK.

It became one of Britain's biggest newspaper distributors, expanding into air freight from 1987. It sold its distribution arm in 2018.-BBC

Warning millions would struggle if cash phased out

Ten million people would struggle to cope in a cashless society even though only 17% of payments are now made with notes and coins, a report has found.

Going cashless would make budgeting difficult and would be a "major inconvenience" to another 15 million, the Royal Society of Arts (RSA) found.

Thousands of bank branches have closed in recent years, and access to cash withdrawals is under threat.

The RSA said the "dash to digital" held huge risks as finances were stretched.

"For millions of people, their relationship with cash is critical to the way they manage their weekly budget," said Mark Hall, author of the report called The Cash Census.

"Despite online banking and shopping becoming more common, our research shows the percentage of the population wholly reliant on cash is unchanged."

The report said that although millions of people benefitted from the convenience of things like smartphone payments, others felt forced into a world they were not equipped for.

An estimated 15 million people used cash to budget, the report said, which was all the more important when the cost of living was rising.

The constituencies of Liverpool Walton and Bradford South had the smallest decline in cash withdrawals, and were among the most deprived in the UK, it said.

Among those keen to keep cash going is Joanne Batty, from Leeds, who said it was still the "easy and simple" way to pay and manage finances.

"It is stress and hassle-free," she said, explaining that she liked the control you had as a consumer with notes and coins.

The 51-year-old said that a "traumatic" episode in which she was the victim of fraud meant she was now far more sceptical about online and digital payments.

The RSA - or its full name - The Royal Society for the Encouragement of Arts, Manufactures and Commerce - used surveys and interviews during its research.

It also suggested that, in contrast to those dependant on cash, there were another 11 million people who were cashless converts. They strongly preferred digital payments and saw no benefit in using cash.

They included Craig Purr, a 32-year-old commercial insurance broker, who said that cash was more inconvenient because you usually had to go to an ATM to get hold of it.

Mr Purr, from Cambridge, said he carried cards in his wallet instead, or used his smartphone to pay.

"My personal, and selfish, point of view is that we do not need cash. It is out of date because technology is evolving so fast," he said.

Bank closures graphic

This is the first major study into the topic of cash reliance since the Access to Cash Review in 2019.

The author of that 2019 report, Natalie Ceeney, said: "The question we asked three years ago was whether the UK is ready to go cashless? The answer is still no."

She told BBC Radio 4's Today programme that digital payments "just don't work" for some people, including the 1.5 million who don't have a bank account, and similar numbers without broadband.

"They're increasingly getting marginalised, unable to pay for goods and services, and for many people they could lose their independence, particularly for elderly people, and it can leave people increasingly isolated," Ms Ceeney said.

Among the recommendations in the latest RSA report were:

Legislation to ensure everyone has access to cash near their home

Payment in cash must be accepted for essential services such as school dinners and council tax bills

Digital money lessons should be taught from primary school level onwards

No region should miss out on the roll-out of broadband

Martin McTague, from the Federation of Small Businesses, said: "One in four small High Street businesses say cash is still the most popular payment method among customers.

"This new report rightly suggests a combination of innovation in the free access to cash space and investment in digital capability as the way forward."

The closure of thousands of bank branches and ATMs has ignited debate about access to cash, and the ability of small businesses to cash their takings nearby.

"With bank branches closing, the problem facing a retailer is do they shut up shop at lunchtime, go [and] drive somewhere else, stand in a queue to pay-in cash, and go back, or do they go cashless?" Ms Ceeney said.

Major banks recently signed a new voluntary agreement which means an independent assessment of local needs will be carried out each time a branch is shut.

These reviews could recommend a shared branch is opened, an ATM installed or a Post Office upgraded. Banks will commit to deliver whatever is recommended.

The government is legislating to give the Financial Conduct Authority oversight of access to cash. It has also paved the way for more convenience stores to offer cashback to customers, even if they are not making a purchase.-BBC

Nigeria: Reps Ask NNPC to Submit Status Details of $12bn Natural Gas Pipeline Project

The House of Representatives yesterday called on the Nigerian National Petroleum Company, NNPC, Limited to make available the report of the implementation, funds utilization and status of the $12 billion 4,128 kilometres Natural Gas Pipeline Project.

It also urged the corporation to review the National Gas Master Plan of the project in the light of present day realities.

The call was sequel to the consideration of a motion on the urgent need to address prolonged construction of the Trans-Saharan Natural Gas Pipeline project.

In the motion presented at plenary by Ahmed Munir. he recalled that on January 14, 2002, the then Nigerian National Petroleum Corporation, NNPC, and the Algerian National Oil and Gas Company (Sonatrach) signed a Memorandum of Understanding, MoU, for a $12 billion 4,128 kilometers Natural Gas Pipeline project with a projected annual capacity of 30 billion cubic meters that will extend gas supply to Europe.

He said: "In June 2005, NNPC and Sonatrach signed a contract with Penspen Limited for a feasibility study of the project, which was completed in September 2006, and the pipeline was discovered to be technically and economically feasible and reliable which in turn led to the inter-governmental agreement on the pipeline signed by the energy ministers of Nigeria, Niger and Algeria on July 3, 2009, in Abuja," he said.

The lawmaker, however, expressed concerns that in 2013, the Federal Government approved a budget of $400 million for commencement of the project originally scheduled to be operational by 2020, with no commensurate progress made to date.

"A new Gas Master Plan (GMP) needs to be crafted due to the current geo-political realities, such as newly completed 20,000 barrel per day Zinder Refinery in the Niger Republic, new Niger-Benin Republic Pipeline due for completion in 2023, as well as discovery and exploitation of hydrocarbons in commercial quantity in the Lake Chad Region of Chad Republic. He said the House was cognizant of the fact that the successful completion of the project would create jobs, spur economic growth, and enhance energy and regional security.

Adopting the motion, the House mandated its Committee on Gas Resources to ensure compliance and report back within four weeks for further legislative action.

Vanguard News Nigeria

Tanzania: NMB - Low Interest in Agric Triggers More Borrowings

NMB bank has said the reduction of interest rates on agriculture loans has attracted more farmers to borrow, which will ultimately boost the sector's development and economic growth.

Speaking at the NMB Business Club that brought together entrepreneurs and traders from all over Dodoma yesterday, grapes and horticultural farmer, Hezekiah Chibulunje (former minister) said lowering lending rates and the way bank staff visit and educate them on efficient use of loans has enticed many farmers to borrow to expand their agricultural activities.

"In my lifetime, I have never considered borrowing from the bank for agricultural activities would be possible despite being involved in farming all the time," he said.

He said that the bank staff visited him and advised him on how he can improve and support himself in agriculture using bank loans.

"I am not alone, many farmers in our area were encouraged and told that it is possible, especially when they told us the interest on the loan is now only 10 per cent," said Chibulunje.

NMB Senior Business Manager, Mashaga Changarawe said there are many things that have been improved within the bank as they are making changes due to the business environment and times.

For example, the bank has increased the amount to be borrowed to 75m/- from 50m/- for small business owners while significantly reducing the terms and conditions that were previously required.-Daily News.

Tanzania: RC Kudos TBs for Enhancing Awareness On Goods Standards

Tanzania Bureau of Standards (TBS) has been hailed for their efforts to enhance public awareness on quality of goods and standards, particularly cereals and spices.

The remarks were made by the Tanga Regional Commissioner, Adam Malima while opening a training to entrepreneurs in the region on how to control aflatoxin in maize, groundnuts, spices and its products.

"Food safety is a fundamental component in protecting health of the people and in penetrating domestic and global trade, thus contributing to economic development," he said.

He added, "Unhealthy food may cause health problems as well as huge effects to the country's economy,"

He said aflatoxin in cereals is one of the challenges facing food safety, causing health problems to people and the economy.

"Maize and groundnuts are major cereals consumed by majority of the people in the country, but they are highly prone to contamination by aflatoxin," he said, noting that some studies show that aflatoxin also contaminates spices.

He said organizing the training to the entrepreneurs by TBS was of paramount importance in efforts to curb contamination of aflatoxin in cereals.

He advised TBS to make the training programmes more sustainable, particularly in councils in collaboration with the councils' executive directors.

The TBS Research and Training Manager, Hamis Mwanasala said the training was an important opportunity to provide education on how to curb aflatoxin as a way of protecting the health of the people and making business competitive.

He said TBS has conducted similar trainings in various districts, namely Kiteto, Kilosa, Gairo, Dodoma and Kongwa, where entrepreneurs dealing with groundnuts and maize were equipped on how to control aflatoxin.

He said the three-day training to entrepreneurs' started on 29th to 31st March this year.

The entrepreneurs who participated in the training are those dealing with maize, groundnuts, spices and its products.-Daily News.

Nigeria: Countries With Huge Debts Vulnerable to Financial Crises, Recession, IMF Warns

The International Monetary Fund (IMF) has warned that economies with large external debts could be vulnerable to financial crises and deep recessions when capital flows out.

The IMF stated this in a Review of the Institutional View on the Liberalisation and Management of Capital flows it released yesterday. It noted that while the overall presumption that capital flows could bring substantial benefits for countries and that capital flow management measures (CFMs) it should not substitute for warranted macroeconomic adjustment.

It stated: "Capital flows can help countries to grow and to share risks. But economies with large external debts can be vulnerable to financial crises and deep recessions when capital flows out. External liabilities are riskiest when they generate currency mismatches--when external debt is in foreign currency and is not offset by foreign currency assets or hedges.

"In a review of its Institutional View on capital flows released today, the IMF said that countries should have more flexibility to introduce measures that fall within the intersection of two categories of tools: capital flow management measures (CFMs) and macro-prudential measures (MPMs).

"Today's review said that these measures, known as CFM/MPMs, can help countries to reduce capital inflows and thus mitigate risks to financial stability not only when capital inflows surge, but at other times too."

It further noted that during a capital flow reversal, conventional policy instruments may not be effective in addressing the balance sheet effects related to FX mismatches.

"First, while a currency depreciation due to a capital flow reversal may boost net exports, it may also tighten external borrowing constraints by reducing the FX value of local-currency assets, collateral, and income relative to FX debt and liabilities.

"In such circumstances, monetary policy faces a difficult trade-off: raising the interest rate could result in excessively tight domestic monetary conditions, with pro-cyclical effects on credit and economic activity; while lowering it could lead to further depreciation, tightening external borrowing constraints further.

"Second, the capacity of the government or the central bank to provide FX liquidity to the private sector to satisfy rollover needs on FX debt may be limited, owing to insufficient FX reserves or other sources of FX funding," it added.

It also added that FX debt inflows may be useful in a pre-emptive manner, in the absence of an inflow surge, to prevent a further accumulation of already-elevated FX mismatches and the associated systemic financial risks.

"If the adverse balance sheet effects of a currency depreciation can be mitigated pre-emptively through CFM/MPMs that reduce FX mismatches, the exchange rate can be allowed to adjust more flexibly after external shocks, hence reducing the cost of capital flow reversals and facilitating the needed external adjustment. Such arguments have been developed in the IPF workstream and the IEO report as rationales the pre-emptive use of inflow CFM/MPMs.

"The accumulation of external debt in local currency can also pose financial vulnerabilities in the private sector, but a wider set of policy tools is typically available to address them. "Maturity mismatches and excessive leverage in local-currency debt positions increase rollover risks and the probability of fire-sales of domestic assets during capital flow reversals. In those cases, adequate MPMs would typically address these risks effectively," it added.-This Day.

Nigeria: 250 Million Africans Live On Empty Stomach Daily - Adesina

The President of the African Development Bank Group (AfDB), Dr. Akinwumi Adesina has estimated that about 250 million men, women and children across the continent go on empty stomach from dusk to dawn.

Adesina stated this in an article he wrote that was posted on the AfDB's website on Tuesday, noting that hunger has become a way of life in many African countries.

He said food systems in the continent were failing to deliver diets that are healthy, affordable, secure and safe for vast majority of Africa's population.

"Africa's food systems are failing to deliver diets that are healthy, affordable, secure, and safe for vast swathes of its population. For many in Africa, persistent food shortages mean that they struggle to put food on the table -- hunger has become a way of life.

"Almost 250 million men, women, and children across the continent go on an empty stomach from dawn to dusk," Adesina said.

He emphasised the need to invest in sustainable and healthy diets to ensure the advancement of the health and well-being of Africans.

He maintained that African countries had for too long failed to make investments necessary to provide sustainable and healthy diets for their citizens.

Noting that the continent cannot go on in this way, the AfDB boss said better nutrition in African countries was the foundation to advance health and well-being, educational attainment, prosperity, and equity.

Pointing out that it was time to deliver food security at scale and to nourish Africa once and for all, Adesina also stressed the role of AfDB in ensuring food security and proper nutrition in Africa.

He added, "We will not succeed unless we all play our part. Since the start of my first term as President of the African Development Bank Group in 2015, Feed Africa has been one of the bank's 'High five strategic priorities'

"Over the past six years, almost 76 million people have benefited from agricultural technologies for food security through our Technologies for African Agricultural Transformation programme.

"Furthermore, Special Agro-Industrial Processing Zones, which are promoted by the African Development Bank in partnership with other institutions, provide world-class infrastructure to develop competitive value chains and transform rural areas into zones of prosperity.

"Seven SAPZs have been rolled out in Côte d'Ivoire, Ethiopia, Guinea, Madagascar, Mali, Senegal, and Togo. SAPZs are planned for the Democratic Republic of Congo, Liberia, Kenya, Mauritius, Mozambique, Nigeria, South Africa, Tanzania, and Uganda. However, much more needs to be done."-This Day.

Nigeria Has Potential to Attract Fibre Optics Investments - Report

The findings of a joint study by Boston Consulting Group (BCG) and EDHECinfra, a venture of the international EDHEC Business School, published recently, reveals that large markets such as Nigeria, Ghana, South Africa, Brazil and parts of Asia, have huge potential to attract digital infrastructure projects but are untapped markets for fibre optics investments.

This, according to the report, can be linked to uncertain economic growth that has made fiber-penetration levels uneven, despite a clear demand for fiber infrastructure projects.

In the new report entitled 'Infrastructure Strategy 2022: A Pivot to the Digital Frontier', Boston Consulting Group (BCG) and EDHECinfra provide a new perspective on the investment strategies and risk-adjusted performance of different groups of infrastructure investors.

According to the report, "Although demand for fiber optic projects is most pronounced in less-wealthy economies, large and diverse regions with significant potential, such as Nigeria, Ghana, South Africa, Brazil, and parts of Asia, are untapped markets, as fibre penetration is also uneven in places where economic growth is less uncertain."

The study points out that the increasing desire for higher speeds and reliable online access will inevitably lead to a huge expansion of fiber optic installations in new networks in low and middle income nations as well as in existing networks in higher income countries. Ultimately, fibre, which has already begun to make inroads in networks everywhere, will replace legacy (primarily copper) infrastructure completely, particularly as 5G rolls out.

Analysing the report findings, the Managing Director and Partner, BCG Nigeria, Stefano Niavas, said: "Fibre optic investment is required to expand the capacity of the undersea cable infrastructure on the shores of Nigeria beyond the cities to other regions of the country in order to make connectivity truly ubiquitous.With the growing demand for fast and reliable Internet connectivity, investing in digital infrastructure is profitable and it is expected that investment in fibre installations all over the country will accelerate in a few years from now."

The report has key findings, and one of them is: A Pivot to the Digital Frontier. As the analysis shows, all investors are planning to over invest in digital infrastructure going forward. While this also entails data centres, towers, satellites, and subsea connections, the appetite for broadband connectivity remains high.

BCG's Managing Director and Partner and a Co-author of the report, Roman Friedrich, said: "The increasing desire for higher speeds and reliable online access will lead inevitably to a huge expansion of fibre optic installations in new networks in developing nations as well as in existing networks in more developed countries. Ultimately, fiber will replace legacy (primarily copper) infrastructure completely, particularly as 5G rolls out."

Another finding is on the North American Pensions Funds that have the highest risk-adjusted returns in 2021 and are in the top ranked peer group. Other peer groups took more risk to achieve lower average returns, while Canadian investors are very close to the all-investor average. At the bottom of the risk-adjusted rankings, EU and UK pension funds take less risk but also achieve comparatively lower returns.

The Director of EDHECinfra and Co-author of the report, Frederic Blanc-Brude, while analysing the report, said: "Certain investors have gained exposure to different segments of the infrastructure universe over time and each segment has performed differently."

The report said one-third of the surveyed investors expressed that they want to decrease their exposure to conventional power generation. According to the report, the main beneficiary of the 2021 recovery, after transport, was gas and conventional power generation, especially since wind levels were lower than usual.-This Day.

Invest Wisely!

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INVESTORS DIARY 2022

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ART

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Zimre

Nampak Zimbabwe

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