Major International Business Headlines Brief::: 24 May 2022

[Bulls n Bears]

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Major International Business Headlines Brief::: 24 May 2022 

 


 

 


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

 


 

 


ü  Airbnb to quit China as lockdowns restrict tourism

ü  What Didi's US exit tells us about China and Wall Street

ü  Quad summit: The China factor at the heart of the meeting

ü  Starbucks to quit Russia but pay six months' wages

ü  Ukraine calls for safe passage for grain exports

ü  Millionaires at Davos say 'tax us more'

ü  Nigeria: FG Urged to Stop Petrol Subsidy, Spend On Key Sectors

ü  Nigeria: Expert - No Automatic Economic Recovery for Nigeria After Buhari's Exit

ü  Zambia: Reforming Zambia's Mines Needs More Change and Support

ü  Nigerian Govt Sets Up New Phone Call Tax

ü  South Africa: S&P Upgrades SA's Credit Rating Outlook to Positive

ü  Nigeria: Growing Inflation Eroding Purchasing Power of Nigerians - Report

ü  Kenya: Ex-Uber Executive Reveals How Driver Earnings Were Slashed in Kenya

ü  Egypt: Sylndr, an Online Used-Car Retailer, Raises $12.6m Pre-Seed to Disrupt Egypt's Automotive Market

ü  Uganda: Parliament Committed to Fostering Oil Production

 

 

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Airbnb to quit China as lockdowns restrict tourism

Airbnb is shutting down its domestic rentals in China, where a "zero-Covid" policy has meant lockdowns are ongoing.

 

All listings for homes and experiences in the country will be removed from the company's website by summer, a source familiar with the matter told the BBC.

 

Stays within China made up only 1% of Airbnb's revenue over the last few years.

 

The company is expected to instead focus on Chinese residents travelling abroad to other destinations.

 

Before the pandemic, Chinese travellers heading abroad had tripled in less than a decade, reaching 155 million journeys in 2019, according to the United Nations World Tourism Organisation.

 

But since 2020, China has had some of the toughest Covid restrictions in the world, making travel into and around the country extremely difficult.

 

Airbnb set up its business in China in 2016. Since then, some 25 million guests have booked stays there through the online home rental company.

 

But a source familiar with the company's decision said the domestic rental operation for travellers visiting China had been complicated and expensive to run even before the pandemic.

 

For example, guest's details were sent to the Chinese government in line with local laws and regulations, and the company has faced strong competition from native Chinese home-rental platforms.

 

In 2017, as part of its bid to expand, it renamed the Chinese operation Aibiying (爱彼迎) - meaning to welcome each other with love - which is easier to pronounce for Mandarin speakers.-BBC

 

 

 

What Didi's US exit tells us about China and Wall Street

Less than a year after its US market debut, Chinese ride-hailing giant Didi Global is set to leave Wall Street.

 

A majority of shareholders voted on Monday to stop trading the firm's shares via the New York Stock Exchange.

 

The company says the delisting is key to completing a cybersecurity review to relist in Hong Kong and resume normal operations in China.

 

The move comes as China's major technology companies face intense scrutiny at home and abroad.

 

Beijing has been pursuing a wide-ranging crackdown on the industry, from slapping e-commerce firm Alibaba with a record fine to ordering social media giant Tencent to suspend the roll out of new apps.

 

It ordered Didi to be removed from app stores last year and launched an investigation, citing data collection concerns, days after the firm moved forward with its New York listing, reportedly against authorities' wishes.

 

 

In recent weeks, faced with slower economic growth, regulators' attitudes have appeared to be softening with the country's Vice Premier Liu He saying to tech executives that the government supports the development of the sector.

 

But Washington has also been pushing for more accountability from Chinese companies. The US market regulator, the Securities and Exchange Commission (SEC), last year finalised rules to remove firms from US stock exchanges if they do not make their auditors' books open to inspection.

 

Why are Chinese firms leaving US markets?

They will also have to disclose whether they are owned or controlled by a government entity.

 

The SEC has said it has the same requirements for all US-listed foreign companies and of the more than 50 jurisdictions it has worked with to gain access to firms' accounts only two have failed to comply: China and Hong Kong.

 

"It is a legitimate request to make sure that their accountings are credible and would not hurt investors," said Nina Xiang of China Money Network. "But the devil is in the details. Chinese regulators want to know what kind of auditing will be done and if it means sensitive data can be passed onto the US government."

 

Companies like Didi are caught in the middle of the clash.

 

As of 31 March 2022, there were 261 Chinese companies listed on America's three biggest stock exchanges, with a total market value of $1.4tn (£1.1tn), according to the US-China Economic and Security Review Commission.

 

Investors are now weighing the risk of them getting kicked off those exchanges.

 

"All the Chinese tech giants are walking on eggshells," said Edith Yeung, a partner at Race Capital.

 

Why is Beijing concerned about data?

 

Didi's US delisting is also a sign of the impact of the new personal data laws in China, as Beijing aims to keep information on individuals' locations and movements from falling into what it sees as the wrong hands.

 

Last year, China introduced two new pieces of security and privacy legislation - the Data Security Law (DSL) and the Personal Information Protection Law (PIPL).

 

The DSL classifies data collected and stored in China based on its potential impact on Chinese national security and regulates its storage and transfer.

 

The PIPL regulates the protection of personal information. It is modelled on the European Union's General Data Protection Regulation (GDPR), which is a set of legal guidelines for the collection and processing of personal information from individuals.

 

The rules have meant that companies like Didi - such as Bytedance, owner of popular video sharing app TikTok or van-hailing and courier services firm Lalamove, which also handle data about locations and movements - are unlikely to list in the US.

 

"For ByteDance, the only way for them to list is in Hong Kong," said Ms Yeung.

 

Can China afford to lose access to Wall Street?

Ms Xiang said if Chinese companies can no longer list in the US "it will have a devastating impact on China's innovation ecosystem and future development".

 

New York is home to the world's two biggest stock exchanges, with companies worth a total of more than $50tn listed on the NYSE and Nasdaq. In comparison, all the shares on the Shanghai and Hong Kong exchanges amount to just a quarter of that amount.

 

"The overseas-listed Chinese companies are not only getting money from American investors. They are also getting accustomed to international governance standards, best practices in disclosure and investor protection, and how to be a responsible member of the global investment community," Ms Xiang said.

 

Experts are split over the future of Chinese companies on US financial markets.

 

Some, like Ms Yeung, believe there is still hope that companies from mainland China and Hong Kong could sell shares on US markets.

 

But even if Washington and Beijing could reach a compromise, few expect a return to the heyday seen between 2017 and 2019, when dozens of Chinese companies listed the US.

 

All of this, Ms Xiang said, has the potential to create a perfect economic storm: "If not handled properly, this could be the beginning of a significant financial decoupling."

 

As Didi bids farewell to Wall Street, we may look back at this moment as part of a growing fault line between the world's two biggest economies.-BBC

 

 

 

Quad summit: The China factor at the heart of the meeting

Leaders of the Quad nations are meeting in Tokyo on Tuesday in what can be described as one of the most important meetings in recent years that will affect the geopolitics and security of the Indo-Pacific region.

 

The group - composed of Japan, the US, Australia and India - seems to be emerging from the shadows of the Covid-19 pandemic and, to some degree, from Russia's invasion of Ukraine as well.

 

The top leaders are gathering for the fourth time - they have already met once in Washington last September and twice virtually - in less than two years. That underscores the importance of the Quad, which was largely just a concept until 2017.

 

That year, then-US President Donald Trump revived the group in a bid to take on China in its own backyard.

 

But analysts say the steady decline in each Quad nation's bilateral ties with China in the past few years appears to have given it new impetus.

 

Michael Kugelman, deputy director at the Wilson Center think-tank, says the latest meeting is likely to sharply focus on the Indo-Pacific.

 

"With the pandemic in the rear-view mirror and an understanding over India's stand on Ukraine, the Quad will get down to focusing on its core business of ensuring an open and free Indo-Pacific," he says.

 

India has so far refused to directly criticise Russia over its war in Ukraine but it has reiterated the importance of respecting the sovereignty of each nation.

 

Why India is not criticising Russia over Ukraine

How India and US agreed to differ on Ukraine war

After initial anger against India's stand, the US and other Western countries seem to have understood Delhi's position.

 

The 2+2 Dialogue - attended by the foreign and defence ministers of the US and India - in April helped smooth their differences over Ukraine.

 

The US has acknowledged that India's heavy dependence on Russia for its defence imports could not be overlooked.

 

So the Quad will focus on mutual points of convergence - and China is the biggest of these.

 

China has become increasingly assertive in the region, with ongoing maritime disputes with several countries and a land boundary conflict with India.

 

Beijing is investing heavily in strengthening its navy and its recent security pact with the Solomon Islands has stoked fears in Australia. A leaked draft of the agreement - which was verified by the Australian government - said Chinese warships would be permitted to dock on the islands and that Beijing could send security forces "to assist in maintaining social order".

 

It will be interesting to see how Anthony Albanese, Australia's newly elected PM, deals with this threat and how he raises the issue within the Quad framework.

 

Japan, for its part, has become increasingly wary of what it calls routine "incursions" from the Chinese navy.

 

As for the US, it is evident that it wants to protect its interests in the region.

 

The launch of the US-led Indo-Pacific Economic Framework (IPEF), which has 13 regional players, is a step in that direction. It aims to promote regional growth, sustainability and inclusivity in the region.

 

It comes on the back of US President Joe Biden's recent meeting with the Association of South East Asian Nations (Asean) leaders in Washington.

 

The region's importance can be understood from the fact that it has some of the world's most heavily used shipping lanes, including the Strait of Malacca. Around 30-40% of the world's trade, including goods and crude oil, passes through these lanes.

 

So when Indian PM Narendra Modi, Mr Biden, Mr Albanese and Japanese PM Fumio Kishida meet in Tokyo, they may not mention China directly - but regional security will be on top of their agenda.

 

The Quad has several working groups, including on cybersecurity, health, infrastructure and education, but it has not explicitly spoken about any defence co-operation.

 

However, it's likely to announce a joint strategy to tackle illegal fishing in the Indo-Pacific region - which analysts say is largely aimed at China.

 

Mr Kugelman says this announcement would be quite significant because it involves the use of satellite imagery and active intelligence sharing - which will have security implications.

 

But he adds that the group will need to do a lot more before Asean nations see it as a major counterbalance to China.

 

It's not that there is no defence angle to the Quad. The four countries, and a few others, have taken part in India's Malabar naval exercises, and issues such as Afghanistan and North Korea's nuclear programme have been discussed at the Quad. Mr Biden recently warned China that the US would intervene militarily to protect the island if it is attacked.

 

But Mr Kugelman points out that both Asean and Quad nations have significant trading volumes with China and they will try to avoid any direct confrontation with Beijing - at least until the Quad can emerge as a net security provider in the region.

 

Moreover, Delhi is a partner with Beijing in several multilateral forums, including Brics - which also includes Russia, South Africa and Brazil.

 

"The Quad has come a long way but it still has an informal structure and has no secretariat. So, it needs to keep evolving," Mr Kugelman says.

 

Meanwhile, Russia's growing ties with China will most likely feature as well as they don't suit Delhi's geopolitical calculations.

 

Some analysts have predicted that the Ukraine war may "send Russia into China's arms" and Beijing might be able to persuade Moscow to increase its presence in the Indo-Pacific.

 

If that happens, it will upset Delhi's interests the most as it has close ties with Russia and an ongoing dispute with China.

 

It's just a scenario at the moment, Mr Kugelman says, but one that can't be completely overruled, especially since Russia has been quite critical of the Quad.

 

Beijing's initial reaction to the Quad was to dismiss it, saying the group would "dissipate like sea foam". But it later sharpened its criticism of the group, calling it the "Asian Nato".

 

On Sunday, Chinese Foreign Minister Wang Yi said the Quad was formed "to contain China".

 

With such hardening of positions from both sides, Asean nations - some of whom have active maritime disputes with China - may find themselves between what one analyst called "a rock and a hard place".-BBC

 

 

 

Starbucks to quit Russia but pay six months' wages

Starbucks is leaving Russia after 15 years, the latest Western corporation to quit the country after the war in Ukraine.

 

The coffee chain will now retreat entirely from the Russian market, after suspending trading there in March.

 

It said it would continue to pay nearly 2,000 staff working at its shops in the country for six months.

 

Starbucks joins firms such as McDonald's and Renault in permanently exiting the country.

 

US and Western allies responded to the war by hitting Russia with wide ranging economic sanctions aimed at isolating it economically and cutting it off from the global financial system. The rules make it difficult for Western companies to operate there.

 

Starbucks entered Russia in 2007 and had grown to include 130 coffee shops, owned and operated by a licensee.

 

The company had stopped shipments to Russia in March. It said it had now "made the decision to exit and no longer have a brand presence in the market".

 

It did not give details of the financial impact of the decision, but said it would provide assistance to its staff "to transition to new opportunities outside of Starbucks".

 

A spokeswoman for Starbucks said the stores would close.

 

The Kuwait-based Alshaya Group, which owns and operates the Starbucks stores, said the decision to leave was a "Starbucks announcement" and referred questions to the coffee chain. It did not say whether it would seek to sell its stores or reopen under a new brand.

 

Last week, McDonald's announced that it was selling its nearly 850 restaurants in Russia to a current licensee, Russian businessman Alexander Govor, who is expected to rebrand the restaurants.

 

Earlier this month, French carmaker Renault also said its business had been nationalised and would be run by Russian government entities, who said they hoped to revive production under a Soviet-era car brand.

 

The mayor of Moscow last month estimated that about 200,000 people in that city alone risked losing their jobs as Western companies left the country.-BBC

 

 

 

Ukraine calls for safe passage for grain exports

The international community should help create a "safe passage" to enable the millions of tons of grain stuck in Ukraine to leave the country, its deputy PM has said.

 

Yuliia Svyrydenko, First Deputy Prime Minister of Ukraine, told the BBC that some sort of "corridor" was needed.

 

Ukraine's inability to export its grain has led to global food prices soaring.

 

It has also raised the prospect of famines in the countries which depend on its exports.

 

Ms Svyrydenko, who is also Ukraine's Minister of the Economy, urged the international community to help lift the blockade of the country's sea ports.

 

She said this could be a "solution" allowing Ukraine to export the grain currently stuck in its silos and unable to be shipped.

 

"We need the assistance of our international partners, to secure our exports through the sea ports... to find a way to build a corridor, or another solution, how to give an opportunity to Ukrainian vessels [to export via the Black Sea]," she said. "A safe passage."

 

Bank chief in 'apocalyptic' warning on food prices

Global wheat prices jump after India export ban

Why are prices rising so quickly?

She hinted that military means might be necessary to achieve this.

 

"We need a guarantee from partners, of course it's a defence guarantee, a security guarantee, to be able to export [using] these vessels," Ms Svyrydenko said.

 

"And to make it, not once but on a regular basis. That is most important."

 

'World hunger' warning

Ukraine's wheat exports plunged after the Russian invasion.

 

As wheat prices soared on world commodity markets, the cost of everything from bread and cakes to noodles and pasta has gone up.

 

Ukraine is able to export small quantities of its commodities by river, rail and barges on the Danube river.

 

But Ms Svyrydenko warned those routes are insufficient.

 

"I think if you calculate it would take us five, six, seven years to export all these agricultural yields by these routes. So right now it's extremely important for us to unblock the seaports and we apply to our partners to do this," she said.

 

"The world needs it because Russia threatens the world with world hunger and the only way to solve this problem is to unblock the sea ports.

 

"If we don't give farmers the opportunity to export their goods, for them there won't be any sense in going to the next growing season," she continued.

 

Reconstruction

Another item on the agenda, was how to make use of assets affected by international sanctions, Ms Svyrydenko said.

 

Ukraine made clear in March that it believed the assets belonging to Russian oligarchs and Russian central bank funds that have been frozen should be used to finance the rebuilding of Ukraine.

 

"We should take them and [use] them for the reconstruction of Ukraine," she said. "Otherwise what was the sense in freezing those assets, if no Ukrainian [would] receive them?"

 

"We just need to find a clear procedure for how to get these funds," Ms Svyrydenko said.

 

Everything from railways stations to factories would need to be rebuilt, she said. Ukraine has estimated the amount of money needed to rebuild the country at around $600bn.

 

Last week, European Commission President Ursula von der Leyen said the EU was examining how the frozen assets of Russian oligarchs could be used to pay for the reconstruction of Ukraine after the war.-BBC

 

 

 

Millionaires at Davos say 'tax us more'

A handful of wealthy attendees gathered in Davos are calling on world leaders to tackle the cost of living crisis by pushing up taxes for people like them.

 

They took to the streets on Sunday alongside left-wing activists to call for fairer tax systems worldwide.

 

Political and business leaders are at the first in-person World Economic Forum (WEF) since the pandemic began.

 

But criticisms are mounting over the way the wealthy have profited in the last two years.

 

UK millionaire Phil White said: "While the rest of the world is collapsing under the weight of an economic crisis, billionaires and world leaders meet in this private compound to discuss turning points in history.

 

"It's outrageous that our political leaders listen to those who have the most, know the least about the economic impact of this crisis, and many of whom pay infamously little in taxes. The only credible outcome from this conference is to tax the richest and tax us now."

 

Mr White, who represents a group called Patriotic Millionaires, made his money as a business consultant. He said he was joining left-wing and anti-poverty campaigners calling for change at the annual meeting of influential business people and political leaders because the current economic system was failing.

 

Over the past decade, a growing number of millionaires and billionaires in the US and Europe have spoken out, calling for governments to impose higher taxes, including wealth levies on the richest.

 

While only a small number of millionaires were in Davos to attend the protest, the campaigners have sent an open letter to all Davos delegates, signed by more than 150 millionaires in several countries.

 

New signatories to the letter, which was initially sent in January, include the American actor Mark Ruffalo. Among the earlier supporters of the movement are Disney heiress Abigail Disney, Nick Hanauer, a US entrepreneur and early investor in online giant Amazon, and Morris Pearl, a former managing director at investment firm BlackRock.

 

Marlene Engelhorn, another millionaire at the protest, said: "As someone who has enjoyed the benefits of wealth my whole life, I know how skewed our economy is and I cannot continue to sit back and wait for someone, somewhere, to do something.

 

"We have hit the end of the line when another quarter of a billion people will be pushed into extreme poverty this year."

 

The charity Oxfam, which issues a report on inequality during the Davos forum each year, claims that over the last two years a new billionaire had been created every 30 hours.

 

At the other end of the income spectrum, Oxfam expects around one million people to fall into extreme poverty every 33 hours this year, the charity's international executive director Gabriela Bucher told the BBC.

 

"Inequality between countries had been reducing over the last couple of decades," she said.

 

"During the pandemic it had increased and with the rates we're seeing now it looks like it's going in extreme directions that are creating these catastrophic conditions and they reflect in people's lives."

 

Energy prices began to rise towards the end of last year, but grew more steeply following Russia's invasion of Ukraine. Prices for food and other goods are also sharply higher.

 

Geopolitical tensions are making it harder resolve tensions over trade, and growth has slowed in much of the world.

 

The world's richer countries collectively grew by just 0.1% in the first three months of this year, according to the Organisation for Economic Co-operation and Development, with the US, Italy and Japan shrinking in the quarter, and France experiencing zero growth. The UK's economy grew by 0.8%.

 

Ahead of the WEF meeting, the head of the International Monetary Fund, Kristalina Georgieva, said the global economy was facing a "confluence of calamities" with trade fragmenting.

 

This WEF meeting is taking place later in the year than usual, meaning the 2,000 leaders, experts and business people attending will not be able to enjoy skiing in their spare time in the Swiss resort.

 

Topics on the agenda include the war in Ukraine, pandemic recovery and climate change.-BBC

 

 

 

Nigeria: FG Urged to Stop Petrol Subsidy, Spend On Key Sectors

The Group Managing Director of Rainoil Limited, Dr Gabriel Ogbechie, has called on the federal government to end the wasteful petroleum subsidy and put the funds in other critical sectors of the economy to unlock the potential in those sectors.

 

Ogbechie said that Nigeria cannot continue to spend over N3 trillion on a single product, while other critical sectors continue to suffer, adding that the country was ripe for deregulation to allow market forces drive the petroleum marketing business in the country.

 

The Rainoil GMD made the intervention in Lagos at a briefing to herald the firm's 25 years anniversary as a major downstream petroleum industry player in the country since 1997.

Nigeria's petrol subsidy spend for 2022 has been pegged at N4 trillion as the National Assembly recently approved President Muhammadu Buhari's request to raise the subsidy budget, citing changes in inflation and the rising oil prices.

 

The government had planned to remove petrol subsidy and fully deregulate the downstream petroleum sector by the second half of this year, but in January it deferred the deregulation by 18 months.

 

Nigeria currently sells petrol, which is 100 per cent imported at a subsidised pump price of N165 per litre, even when the landing cost alone is over 100 per cent higher than the pump price.

 

However, Ogbechie expressed concern over the parlous state of the Nigerian economy, which he attributed partly to the huge resources used to subsidise petrol, insisting that government must deregulate the downstream sector to curb wastages and loss.

 

"Nigeria is over-ripe for deregulation. The over N3 trillion currently being spent to subsidise petroleum products in the country can be put into other critical sectors like education, health, road infrastructure, power, among others," he said.-This Day.

 

 

 

 

Nigeria: Expert - No Automatic Economic Recovery for Nigeria After Buhari's Exit

Nigerians, already traumatised by the current harsh economy, have been warned against hoping for better days ahead by the time the administration of President Muhammadu Buhari would elapse in 2023 unless the right leaders emerge.

 

A strategic management/organisation development consultant and change agent, Agu Ojukwu gave the warning in Umuahia while addressing journalists on his advocacy for the emergence of good leaders in 2023.

 

He stated that post-Buhari economic recovery would be a mirage unless the incoming administration has the wisdom and political will to bring on board experts with the full knowledge of how the economy can be resuscitated.

Ojukwu, who is an advocate for rapid economic development, faulted the claims by presidential and governorship aspirants that they would put Nigeria's economy in the rebound within four to eight years if elected into office next year.

 

He argued that past administrations since after the civil war had made similar claims and even put in place economic programmes with different titles but all of them failed to fix the economy because they used "fail-safe approach" in the implementations.

 

"This resulted in a steady emasculation of the economy and culminated in the negative synergy that Nigeria is experiencing and suffering today," he said.

 

The economic expert noted that as things stand presently, there is no guarantee that any of the aspirants or candidates, "can turn the tide using his solo knowledge or that voters can elect the more capable of the lot with their present mindset, orientation and gullibility.

 

"The only thing that will guarantee the changing of the status quo( bad economic management) is to advocate the election of aspirants and candidates that are likely to use the collective wisdom of the people to lead them."

 

According to him, "this collective wisdom refers to the best idea (approach, method, process, knowledge, skill, and tool) that emerges from a competition of ideas conducted for the purpose".

 

Ojukwu, who is a former chief economic adviser in Abia State, insisted that both during the party primaries, and the general election Nigerians should ensure that the right people were elected to pilot the affairs of the country if there is sincere desire to get things right.

 

"The reason," he explained, "is because it is the responsibility of the incoming president or governor to tackle and correct the common problems of the level of the economy he will lead".

 

He argued that the incoming president and governors "cannot afford to make avoidable mistakes at the level of their offices (because) 80 percent of the factors of success of their level economy can be influenced by them while only 20 percent can be influenced by other stakeholders".

 

"They are expected to be excellent and this is why they are addressed as 'your excellency'. They are expected to take actions based on organised knowledge necessary for the improvement of success," Ojukwu said.

 

He stated that there would be hope for sustainable economic recovery if the intellectual process is activated, assuring that within three to six months the national economic can be rapidly emancipated to start working effectively."-This Day.

 

 

 

Zambia: Reforming Zambia's Mines Needs More Change and Support

The call to action for the mining sector must be supported by continued improvements to the domestic operating environment and bring along regional partners.

 

Zambian president Hakainde Hichilema - affectionately known as HH - used his speech at the annual African Mining Indaba held in Cape Town in May to sell to the international investment community his vision for the nation's vital mining sector.

 

The country is well-positioned to capitalize on the global drive for the minerals critical to green transitions. The ambition is to more than treble the country's copper production to three million tonnes per year.

 

The speech was well-received by industry players who have long waited for the country's political and regulatory regimes to match the nations resource potential. Promises of a transparent, predictable, and fair regulatory environment created a hopeful buzz among investors.

Capital inflows are testament to the goodwill and optimism that HH has garnered amongst the international investment community

 

And the government's intention to work alongside foreign partners to deliver national economic benefit, including through training and procurement, were deliberately designed to move the country's reputation away from looming threats of resource nationalism.

 

Zambian reform leading to investment

 

This appears to have already brought benefit to Zambia. In a well-choreographed stamp of approval for the changes HH's administration have brought in, the country's top copper producer, Canadian-listed First Quantum Minerals (FQM), announced a new $1.35 billion dollar investment over 20 years in its Kansanshi Mine. Credible commitment on investment security from government was critical to the decision to move ahead with a much-needed injection of cash for the company's maturing asset.

 

Other top tier firms have also made investment after years of hesitancy. Anglo American announced the acquisition of a majority stake in a junior exploration firm, marking Anglo's first investment in Zambia in 20 years. Rio Tinto have also stepped-up exploration through joint ventures in the country.

Capital inflows are testament to the goodwill and optimism that HH has garnered amongst the international investment community. But maintaining this momentum will depend on progress on domestic policy, improving bureaucratic processes, and streamlining government decision-making.

 

Following consultation with industry stakeholders, the government has already implemented significant policy measures to attract investment. These include the removal of a contentious 'double taxation' policy whereby mining companies paid corporate tax on top of royalties, cleaning the 'cadastre' system, and limiting licences to address long-term speculative licence holders preventing new exploration.

 

However, two major legacy issues from the previous regime remain. The state-owned mining holding company ZCCM-IH remains embroiled in a legal dispute with Vedanta over the enforced liquidation of Konkola Copper Mines (KCM). And Zambia took on $1.5 billion in debt to buy Mopani from Glencore in January 2021.

 

Both mines require new investment, and any incoming company will need to put serious effort into securing their social licence to operate in two contexts where communities have complex historical relationships with the mines and those running them. Finding the right buyer and on the right terms will be an important litmus test of the governments private-sector-led approach to the industry.

 

Beyond the extractive sector

 

Attracting investment is vital for the legitimacy of the New Dawn government. Domestic political and economic pressure is mounting as electoral promises of jobs and improved economic living standards become ever harder to deliver against rising fuel and food prices caused by factors well beyond Zambia's control.

 

Hitting government targets - such as producing three million tonnes of copper a year - will require a holistic economic vision that extends beyond mining policy appraisal. Most significantly, there is a need to articulate a plan for energy generation that both supports the industry and national electrification targets for access for the rural population.

 

Around 85 per cent of Zambia's electricity comes from hydropower. This is an attractive proposition for companies needing to demonstrate green credentials to increasing sensitive international investors. However, the only increase in generating capacity in the past seven years has come from the commissioning of a coal-fired power plant in Maamba. The mining industry has a vital role to play in supporting sustainable generation. FQM's investment announcement was paralleled by an ambitious solar and wind energy project to power its operations.

 

Infrastructure and regional cooperation

 

There is a growing realization at a political level of the importance of regional cooperation for supporting growth. A Chatham House conference in Lusaka in March highlighted this importance, especially as part of its wider international relations and unlocking the potential of its critical mineral endowments.

 

At the Indaba, President Hichilema, President Ramaphosa of South Africa and President Masisi of Botswana all noted the importance of regional cooperation and the potential for a regional strategy on the sector. If they are serious, this high-level political rhetoric needs to be backed by inter-ministerial and technical-level visits and wide stakeholder engagement, including with communities and CSOs.

 

There is hard work ahead for national administrations to deliver on their political leaders' promises of revived industry, and a clear need for regional cooperation and collaboration between ministries, national agencies, and companies

 

Southern African mining jurisdictions share many challenges, relating to histories of decolonization, the economic centrality of extractive industries, pressures for job creation, and often fraught community relations. Each has been through successive mining code revisions that have created uncertainty, and alignment is necessary on important policy questions on empowerment and transformation, as well as optimum tax and royalty rates. They have much to learn from each other.

 

Cross-border cooperation on infrastructure will also be vital. While Zambian railways signed an agreement with Transnet of South Africa in 2018 for the lease of rolling stock, there is a need for wider synergies between national transport agencies for bulk carrying.

 

The Kazungula Bridge road project is an important example of national 'buy-in' through blended financing into regional projects, with Zambia and Botswana both financially contributing to parts of the JICA and AFDB financed project.

 

The attractiveness of the region as an investment destination would also be enhanced through cooperation and alignment on international frameworks, codes, and initiatives that govern the industry. For example, there is inconsistent regional membership of the EITI. While many view such organizations as vehicles of power of the global north, regional cooperation and alignment within these programmes could provide a strong base to advocate for constructive reform.

 

Hard work still ahead

 

After a two-year hiatus due to COVID-19, this year's delayed mining Indaba had less of a summer party feel and more of an autumnal 'back to school' atmosphere. The investment announcements for Zambia are an important signal for regional leaders of the potential investment returns that policy reform can bring.

 

There is hard work ahead for national administrations to deliver on their political leaders' promises of revived industry, and a clear need for regional cooperation and collaboration between ministries, national agencies, and companies. The wider consultation of communities and CSOs, and engagement of international frameworks, are also vital to this success.

 

Central to the Zambian administration's economic plan is finalising a deal with the IMF for an agreed $1.4 billion three-year credit facility. The deal requires a wider creditor agreement, including progress on a slow moving G20 common strategic framework.

 

Christopher Vandome

 

 

 

Nigerian Govt Sets Up New Phone Call Tax

The government plans to use the tax to fund healthcare services to vulnerable Nigerians.

 

The Nigerian government has introduced a new tax on phone calls to fund the provision of healthcare to vulnerable Nigerians who cannot afford the cost of medical care.

 

President Muhammadu Buhari said the National Health Insurance Authority Bill 2022 will ensure coverage of 83 million poor Nigerians who cannot afford to pay premiums.

 

About eight out of 10 Nigerians do not have health insurance cover, according to a survey by NOI Polls, and most Nigerians pay cash when they have to visit a hospital for treatment.

 

The new law creates a vulnerable group fund that will be financed through a new telecommunications tax charged on phone calls at not less than one kobo per second of GSM calls.

 

It will also be funded through a basic health care provision fund, health insurance levy, special intervention fund, as well as any investment proceeds, donations and gifts to the authority.

With an average call rate of 11 Kobo per second, the new law implies at least nine per cent charge on every second of phone calls in the country.

 

The vulnerable group comprises children under five, pregnant women, aged, physically and mentally challenged persons, and indigent people as may be defined from time to time.

 

Section 26 of the bill states that the government will raise the funds for groups through various measures but the sources can be reviewed by the Council.

 

The new act requires every resident in Nigeria to obtain health insurance.

 

The implementation of the law will likely see an increase in call tariffs as phone companies are likely to transfer to cost on users.

 

Telecoms operators had in April proposed a 40 per cent increase in call and SMS tariffs, citing rising cost of operations and inflation as major drivers for the hike.

 

The group said the fee for calls would increase from N6.4 to N8.95 while the price cap for SMS will increase from N4 to N5.61.

 

The Nigerian Communications Commission said it did not approve any hike in call fees and would only take a decision after reviewing the prevailing cost of operations in the industry.-Premium Times.

 

 

 

South Africa: S&P Upgrades SA's Credit Rating Outlook to Positive

Government has welcomed rating agency Standard &Poor's (S&P) decision to revise South Africa's credit rating outlook to positive from stable, while affirming the long term foreign and local currency debt ratings at 'BB-' and 'BB', respectively.

 

According to S&P, recent favourable terms of trade in South Africa have improved the external and fiscal trajectory, while the country's reasonably large net external asset position, flexible currency and deep domestic capital markets provide strong buffers against shifts in external financing.

 

In addition, the agency expects South Africa to post a current account surplus in 2022 for the third consecutive year, as prices for key metals and mining exports have risen significantly since the start of the Russia-Ukraine conflict.

 

S&P also noted some improvement on the implementation of key reform targets under Operation Vulindlela - established in October 2020 as a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms - as well as higher than-expected tax revenue.

 

The National Treasury in a statement said: "As stated in the 2021 Medium Term Budget Policy Statement and 2022 Budget, government is using a portion of the additional revenue to accelerate debt stabilisation, with the majority targeted to address urgent social needs, promote job creation through the presidential employment initiative, and support the public health sector."

 

The department said faster implementation of economic reforms, accompanied by fiscal consolidation to provide a stable foundation for growth, would support a faster recovery and higher levels of economic growth over the long term.-SAnews.gov.za.

 

 

Nigeria: Growing Inflation Eroding Purchasing Power of Nigerians - Report

Most Nigerians are no longer be able to afford major expenditure on discretionary or non-essential goods and services as inflation has continued to take its toll on their purchasing power, a new report by Fitch Solutions has shown.

 

Tagged: "Nigeria 2022 Consumer Outlook: Elevated Inflation Will Weigh On Consumer Spending," the leading global market and credit intelligence firm made a forecast that real household spending will grow by 3.6 per cent in 2022, a deceleration from the estimated 3.7 per cent growth in 2021.

 

Discretionary spending refers to items such as recreation and entertainment, that consumers purchase when they have enough income left after paying the necessary expenses such as rent and utilities.

 

A THISDAY review indicated that last month, the consumer price index, which measures the rate of increase in the price of goods and services, jumped amid increases recorded in food and energy prices.

Last Monday, the National Bureau of Statistics (NBS) pegged the country's urban inflation rate for April 2022 at 17.35 per cent (year-on-year) while the rural inflation rate was 16.32 per cent.

 

Nigerians have continued to complain as the value of the naira continues to depreciate and the cost of essential goods and services keep skyrocketing.

 

"We note that Nigeria's elevated inflation is a risk to our outlook for consumer spending in 2022 as it will negatively impact consumer purchasing power, limiting spending to essentials," it stated.

 

However, it noted that despite the erosion of value of the currency and associated inflation, total household spending in nominal terms will reach N150.9 billion in 2022, increasing from N128.5 billion in 2021.

 

In addition, it said that private final consumption is forecast to grow by 3.5 per cent (in real terms) in 2022, consistent with the estimated growth of 3.5 per cent in 2021, aided by rising oil production.

 

 

But the report noted that continued forex shortages and slow productivity growth in the agricultural sector, which it said employs almost 35 per cent of the workforce, will prevent a sharper acceleration.

 

"Since the start of 2021, inflationary pressures have been rising in many countries globally, as base effects, higher commodity prices and supply-chain challenges create localised shortages.

 

"The Ukraine-Russia conflict has also significantly impacted the global supply prices of key commodities, such as oil and gas, fertiliser, wheat, corn and barley.

 

"The commodity price increases are already feeding through into higher consumer prices and will continue to do so over the year.

 

"We believe that rising consumer price inflation is a key risk to consumer spending over 2022, as it has the potential to erode purchasing power and shift spending away from discretionary spending," it pointed out.

 

 

Nigeria's consumer price inflation had been trending lower in recent months before elevating in April to 16.82 per cent, worsened by rising commodity prices and the weakening naira which has increased the cost of imported consumer goods.

 

"In March 2022, Nigeria's food inflation was 17.2 per cent y-o-y due to increases in the price of bread and cereals, potatoes, yam and other tubers, fish, meat and oils and fats.

 

"Our country risk team forecasts Nigeria's consumer price inflation to average 17.2 per cent in 2022, slightly higher than the 2021 average of 17.0 per cent y-o-y. The persistently high inflation will continue to negatively impact consumer spending power over 2022," Fitch noted.

 

On the back of the Russia-Ukraine war, it stated that supply chain issues and bottlenecks resulted in consumer goods shortages, feeding through into supply-side inflation.

 

" Fitch Solutions believes the global semiconductor shortage will continue... , putting pressure on the supply of several consumer goods," it stressed.

 

According to the firm, the Ukraine-Russia conflict is placing significant supply pressures on key commodities, pushing up final market prices across a spectrum of consumer categories.

 

Earlier in the year, the World Bank predicted that Nigeria may have one of the highest inflation rates globally in 2022, with increasing prices diminishing the welfare of Nigerian households.

 

"In 2022, Nigeria is expected to have one of the highest inflation rates in the world and the seventh highest in Sub-Saharan Africa," it said in its Nigeria Development Update.

 

According to the global financial institution, high inflation hampers the country's attempt to achieve economic recovery and erodes the purchasing power of most vulnerable households.

 

"High inflation is frustrating Nigeria's economic recovery and eroding the purchasing power of the most vulnerable households. In the absence of measures to contain inflation, rising prices will continue to diminish the welfare of Nigerian households," it said.

 

It projected that this could push 8 million Nigerians into poverty, with the possible disruption of consumption, investment and saving decisions, among other consequences.-This Day.

 

 

 

Kenya: Ex-Uber Executive Reveals How Driver Earnings Were Slashed in Kenya

New details have emerged showing that Uber was planning to further reduce commuter charges in Kenya, months after the 35% cut of 2016, which is the subject-matter of a civil suit filed by drivers against Uber BV and its local subsidiary.

 

Alissa Orlando, a former Uber executive in Kenya, said that she left the ride-hailing company in February 2017, after a period of contesting the additional price cuts, which the company's management was actively pushing for. As the operations manager in Kenya, Orlando was in charge of launching new products across East Africa, and negotiating partnerships with third-party companies like banks, amongst other duties.-TechCrunch.

 

 

 

Egypt: Sylndr, an Online Used-Car Retailer, Raises $12.6m Pre-Seed to Disrupt Egypt's Automotive Market

Egypt is home to one of Africa's largest vehicle fleets, with over 6 million cars (80% are passenger cars) on its roads. According to this finding, most are used cars; their ratio to new vehicles is 3:1. But the used cars market isn't only enormous in Egypt; it is in almost every country with a large population globally.

 

Recently, there's been rapid digitization of this market, with several startups upending incumbents such as classifieds and hoping to define the new era of used-car-sale platforms. Some include U.K.'s Cazoo, India's Cars24 and Spinny, Brazil's InstaCarro and Mexico's Kavak.-TechCrunch.

 

 

 

Uganda: Parliament Committed to Fostering Oil Production

Kakumiro, Uganda — The Deputy Speaker of Parliament, Thomas Tayebwa has promised unwavering support from the legislative arm of government towards the production of oil.

 

Tayebwa made these remarks at the belated Women's Day celebrations hosted by the Prime Minister, Robinah Nabbanja on Friday, 20 May 2022 at the Kakumiro Stadium in Kakumiro District.

 

The Deputy Speaker who was representing the Speaker said that Parliament would not be deterred by any forces attempting to block the slated exploration and production of oil in the Albertine region of Uganda.

 

"Oil production is the only hope this country has to be lifted out of poverty and the biggest benefiting region is going to be Bunyoro. Therefore, I wish to promise you, Banyoro that the Speaker, Anita Among and I shall work towards that realisation," he stated.

He added that Parliament is doing everything in its powers to see that all legalities are met enabling the construction of the oil pipeline to the Dar-es-Salaam port.

 

With the East African Oil Pipeline project recently getting the go-ahead, Uganda is set to produce its first oil as early as 2025 and production in the next five years is expected to jump to 230,000 barrels per day.

 

Additionally, Tayebwa allayed the fears of the public by assuring the women that Parliament will fight to make sure government sustains the women's empowerment fund.

 

This follows Government's proposal to move money from the Uganda Women Empowerment Project (UWEP) to the Parish Development Model (PDM), a move the legislators said would negatively impact the welfare of women.

 

A total of Shs29.2 billion out of the UWEP budget of Sh32 billion had been proposed to be re-allocated from the Ministry of Gender, Labour and Social Development leaving Shs2.98 billion for secretariat operations and salaries of staff.

 

The Deputy Speaker also delivered a contribution of Shs60, 15 and 10 million from the President, the Speaker and himself respectively, towards the construction of a District National Resistance Movement (NRM) office for women.-Independent (Kampala).

 

 

 

 

 

 

 


 


 


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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