Major International Business Headlines Brief::: 13 September 2022

[Bulls n Bears]

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Major International Business Headlines Brief::: 13 September 2022 

 


 

 


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ü  Rwanda: Agricultural Exports Increase By 44%

ü  Rwanda: Food Prices Increase By 29%

ü  Nigeria: Analysis - Nigeria's Energy Transition Plan: Challenges for
Decade of Gas

ü  Africa's Mining Industry Requires Right Legal Framework to Flourish

ü  Nigeria Loses Africa's Top Oil Producer Spot to Angola

ü  Kenya's Maize Price Has Doubled in a Year - 6 Ways to Avoid a Staple Food
Shortage

ü  Africa: Stronger US Dollar Adversely Affecting Africa, Emerging Economies

ü  Uganda: Makerere Gets Uganda's First Smart Classroom

ü  Ghana: Examine Background Before Granting Approval for Mining Companies -
Researcher

ü  Kenya: Equity Group Ranked as the Most Attractive Bank in Kenya

ü  Rwanda: Connectivity Critical to Transforming Kigali Into a Smart City

ü  Starbucks adds benefits for non-union U.S. workers ahead of investor day

ü  Wells Fargo to pay over $13 million penalty to resolve 401(k) review

 


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Rwanda: Agricultural Exports Increase By 44%

Rwanda's agricultural exports increased by 44 per cent to over $640.9
million (over Rwf663 billion) in 2021-2022, from $444.8 million (over Rwf460
billion) in the previous financial year, according to a new report.

 

These figures released on Monday, September 12, contained in the June Report
by the National Agricultural Export Development Board (NAEB), imply that
Rwanda got over $196 million (or Rwf201 billion) from its agricultural
exports.

 

This additional export revenue is more than Rwf160 billion which was
allocated to funding agriculture sector projects in the current fiscal year.

 

According to the report, the increase in terms of revenues is attributed to
the economic recovery measures and movement of goods and people in 2021-2022
compared to 2020-2021, where cross borders movements were restricted by the
coronavirus pandemic preventive measures.

 

During the period in review, traditional export commodities - coffee, tea,
and pyrethrum - increased by 18 per cent, while non-traditional export
commodities (those that are relatively new for Rwanda, such as horticulture
and cereals), increased by 58 per cent.

 

In comparison to the fiscal year 2020/2021, horticulture (vegetables, fruits
and flowers) accounted for 6.7 per cent of total agro-export revenues as
they generated $42.8 million. Vegetable and fruit export earnings rose by 63
per cent and 87 per cent respectively.

 

However, flower export quantities and revenues decreased (5 per cent and 13
per cent, respectively) as a result of the ongoing political crisis between
Russia and Ukraine, both of which are major importers of flowers.

 

 

Cereals and grains' export revenues increased by 44 per cent, accounting for
20.8 per cent of total agro-export revenues.

 

NAEB said that it values the contribution of all stakeholders for this
performance and anticipates further growth in the agricultural export
business as the global economy continues to open up.

 

"We are pleased that, in addition to other opportunities, the agro-export
sector contributes significantly to job retention and creation. We will
build on this year's strong performance by looking for new and innovative
ways to keep Rwanda's agribusiness environment adaptable and competitive
while drawing in the interest of international markets," said NAEB's Chief
Executive Officer, Claude Bizimana, while commenting on the annual
agricultural export performance.

 

Coffee exports

 

 

In the fiscal year 2021-2022, coffee export volumes amounted to over 15
million kilogrammes (kgs), and generated over $75.5 million.

 

The increase of about 23 per cent in coffee revenues from July 2021 to June
2022 in comparison with the same period of 2021, is attributed to good
prices registered in this period.

 

In the period under review, the average price was $4.58/kg against $3.62/kg
of 2021.

 

"Even if the quantities of coffee sold in 2021-2022 was low (decrease of
8.85%) in comparison with the year 2021, the good price influenced the
increase in revenue," the report reads in part.

 

Processedtea sales

 

Export of made (processed) tea in July 2021-June 2022 amounted to over 35
million kilogrammes, which fetched$103.4 million.

 

In the same period of the previous fiscal year, more than 34 million
kilogrammes of tea were sold at the international market for $90 million.

 

The increase of 15 per cent in tea revenues comes from two factors, namely
the high volume of tea sold in 2021-2022 (2.94 per cent increment), and the
good price registered in 2021- 2022 in comparison with the previous year.

 

In the 2020-2021 period, a kilogramme of tea was $2.92, higher than $2.62
per cent in the previous period.

 

Meanwhile, cereal export revenues rose by 44 per cent to $133 million in the
financial year which concluded on June 30 this year, compared to $92 million
in the previous one. Export quantities of the same commodity went up to more
than 254 million kilogrammes from 194 million kilogrammes.

 

It is worth mentioning that Rwanda seeks to expand its agricultural export
base through commodity diversification as it seeks to able to generate $1
billion (over Rwf1 trillion) in annual foreign agricultural revenues by
2024.

 

-New Times.

 

 

 

Rwanda: Food Prices Increase By 29%

Food and non-alcoholic beverages prices in urban areas increased by 29.2
percent during the month of August compared to the same period last year
according to the Consumer Price Index that was released, during weekend, by
National Institute of Statistics of Rwanda.

 

The urban Consumer Price Index is calculated based on approximately 1,622
products in twelve urban centres of Rwanda.

 

The report shows that prices for bread and cereals increased by 27.9
percent, meat increased by 19.4 percent while milk cheese and eggs prices
increased by 12.6 percent.

 

The prices for vegetables increased by 35.5 percent while non-alcoholic
beverages increased by 14.5 percent as alcoholic beverages tobacco and
narcotics increased by 10.8 percent.

 

 

According to the index, food and nonalcoholic beverages increased by 0.3
percent in August, 2022 compared to July, 2022.

 

Overall prices

 

Prices across the country increased by 20.4 percent on an annual basis and
increased by 1.1 percent on a monthly basis, the index shows.

 

Urban prices increased by 15.9 percent on an annual basis (August 2022 and
August 2021) and increased by 0.5 percent on a monthly basis (August 2022 to
July 2022).

 

In rural areas, prices increased by 23.6 percent on an annual basis and
increased by 1.6 percent on a monthly basis.

 

The annual average inflation rate between August 2022 and August 2021 was
7.3 percent.

 

Housing water, electricity, gas and other fuels prices increased by 7.5
percent, transport increased by 12.6 percent and restaurants and hotels
increased by 18.5 percent on an annual basis.

 

General prices, for August 2022, increased by 0.5 percent compared to July
2022.

 

The Consumer Price Index (CPI) is a measure of the average change over time
of goods and services purchased by households.

 

The reference population for the CPI consists of all households, urban and
rural in Rwanda.

 

The household basket includes 1,622 products sold in many places spread all
over the country.

 

A variety of places of observation are selected namely shops, markets,
hospitals, schools and others.

 

More than 29,482 prices in urban areas and 10,744 in rural areas are
collected every month.

 

A spot check by The New Times among consumers found that the average price
per Kilogramme for Irish potatoes has increased from Rwf300 to over Rwf500,
rice has increased from between Rwf800 and Rwf1,000 to between Rwf1,200 and
Rwf1,400.

 

The price for a kilogramme of beans increased from Rwf500 to between Rwf900
and Rwf1,000 while maize flour increased from Rwf700 to Rwf1,000.

 

One litre of cooking sunflower oil has increased from Rwf3,200 to Rwf4,000
as meat prices increased from Rwf3, 200 to Rwf4, 000 per kilogramme.

 

A cooked egg has increased from between Rwf150 and Rwf200 to Rwf200 and
Rwf250.

 

-New Times.

 

 

 

Nigeria: Analysis - Nigeria's Energy Transition Plan: Challenges for Decade
of Gas

In preparation for COP 27, Nigeria's government recently launched its Energy
Transition Plan (ETP), which is purported to be its homegrown, data-backed
and multi-pronged strategy to achieve net zero emissions by 2060.

 

"Gas is critical as a transition fuel to power Africa's industrialisation,
solve energy poverty and generate resources for energy transition" is a
phrase you would hear often at the Africa Pavilion at the UN's Conference of
Parties (COP) or anywhere climate justice and energy transition is being
discussed.

 

In preparation for COP 27, Nigeria's government recently launched its Energy
Transition Plan (ETP), which is purported to be its homegrown, data-backed
and multi-pronged strategy to achieve net zero emissions by 2060 while
solving energy poverty and lifting 100 million Nigerians out of poverty.

 

 

The ETP focuses on five critical energy sectors -- Power, Cooking, Oil and
Gas, Transport and Industry and is estimated to cost $1.9 trillion.

 

However, there are critical questions that Nigeria's Energy Transition plan
must grapple with if its success is anchored on gas being a critical
transition fuel.

 

Gas infrastructure is expensive and investments are interdependent. Who will
finance it?

 

Future gas demand is unpredictable. Where is demand going to come from?

 

Nigeria's 2060 net neutrality goal. Is the ETP feasible?

 

 

This article will consider each of these questions in turn.

 

Gas infrastructure is expensive and investments are interdependent. Who will
finance it?

 

Gas infrastructure, from exploration to processing to transport and end use
can be expensive. Each stage costs billions of dollars. Investments are also
interdependent, in that exploration will likely not occur if processing,
transportation and end use are not in place and vice versa. Therefore, new
investments must be coordinated.

 

International Oil Companies (IOCs) are walking away from new exploration and
choosing projects more carefully. They are focused on producing assets, and
exploration in countries where investment is cheaper and easier to
implement. IOCs are even walking away from already-planned projects, and we
have seen unprecedented $87 billion IOC write-downs, Q4 2019 - Q2 2020 (OPL
245) with many more divestments expected. Local companies, including NNPC/
NPDC, do not have the financial or technical resources to implement many of
the projects, therefore, production costs will grow and production levels
can be expected to decline.

 

 

Multilateral development finance institutions, along with US and EU
governments' opposition to funding for gas projects on climate grounds are
growing. So, most public funds for gas projects will likely come from a
handful of Asian countries.

 

Funding Nigeria's gas ambitions such as a trans-Saharan pipeline to export
gas from Bonny to Europe through Niger and Algeria (estimated to cost $12
billion) or the Nigeria-Morocco pipeline (estimated to cost $25 billion) or
any of the frontier exploration projects proposed under the Petroleum
Industry Act 2022 will struggle to find financiers. The same is likely true
of new gas-powered electricity generation and LNG terminals.

 

Future gas demand is unpredictable. Where is demand going to come from?

 

Gas demand from domestic and export markets is uncertain.

 

The top export destinations for Nigeria's petroleum products (India, Spain,
Netherlands, United States and China) have all announced ambitious carbon
neutrality goals of between 2030 and 2050. This means that by the time
exploration, and liquefaction or pipeline infrastructure construction is
completed in about ten years, demand may have plateaued or plummeted.

 

Domestic demand for gas is difficult to model and getting the demand and
timing wrong can be costly. Gas supply contracts often come with penalties
that can make over or under-supply costly.

 

Domestic demand from the power sector faces several challenges as the sector
grapples with lingering liquidity crises. Infrastructure and market required
for industrial, cooking and transportation uses are yet to be developed to
incentivise targeting those markets.

 

Financiers will require firm offtake contracts for projects to happen so
these investments have to be made concurrently.

 

Under the ETP, Nigeria expects to spend $1.9 trillion between now and 2060
to meet its goals. The plan estimates that business as usual will attract
about $1.49 trillion in investments leaving a deficit of ~$410 billion in
"incremental funding", translating to an average of $10 billion per annum in
incremental funding over the period. The authors of the plan see an
opportunity here to create almost a million jobs in the process.

 

The plan accounts for investments of about $405 billion in the power sector
($270 billion in generation and $135 billion in transmission and
distribution), and between $3.5-12 billion investment in gas
commercialization (exploration, production and transportation) and to end
flaring by 2030. Details of other investments can be found in the investor
presentation here. Toward COP27, Nigeria is looking to raise an initial $23
billion for immediate investments.

 

The central challenge is that this plan assumes that the gas infrastructure
required, which could take up to 10 years to build, would be put up in
record time (including financing, engineering and construction) in time for
the markets (export and domestic) to still require the supply. It also
assumes that all the segments of the plan, particularly the all-important
transmission and distribution investments required to bring in more
centralised power generation will happen in step (see more about the power
sector challenges here). An audacious goal if you ask me, and I reckon most
investors will think the same.

 

Meeting Nigeria's 2060 net neutrality goal. Is the ETP feasible?

 

Nigeria's Energy Transition Plan is ambitious, but is it feasible? If the
ETP is followed, Nigeria will reduce emissions by first moving away from
dirty fuels such as firewood, diesel and petrol to gas as a less dirty
alternative in the transition to cleaner alternatives by 2060. The table
below shows the path along the five relevant sectors:

 

These ambitious goals require that infrastructure be built at a pace
unprecedented in developed countries let alone in Nigeria with the attendant
investment risks and dearth of technical expertise, especially within the
context of international oil company divestments.

 

The goals would also require significant public acceptance, grassroots
infrastructure in rural areas and grant funding to replace firewood with LPG
and provide off-grid electricity to millions. The political will and capital
to do this will probably have to come from a bipartisan agreement to sustain
the plan regardless of who wins the presidential election and be translated
to the state and local government levels - not a mean feat.

 

The plan assumes that business as usual will generate $1.5 billion in
financing, and only an incremental $410 billion additional is required.
Given Nigeria's current fiscal state, and the reluctance of new capital
investment in the light of the security and foreign exchange environment, it
is unclear that the business-as-usual scenario is plausible, let alone the
additional financing.

 

Finally, the plan would require significant technology exchange.
Technologies like the clinker method for cement production or hydrogen
production, or even electric vehicles and their supporting infrastructure
need to be localised urgently to meet the goal.

 

The challenges to meeting the goals seem insurmountable, and the execution
pathway would be vastly different from what the plan proposes in the face of
market, financing and technological realities. But if we commit to these
ambitious goals regardless of political expediency, nothing is impossible.

 

-Premium Times.

 

 

 

Africa's Mining Industry Requires Right Legal Framework to Flourish

Mining is a critical industry in Africa.

 

The continent is endowed with just about every mineral imaginable. The
mineral resources in the modern-day Democratic Republic of the Congo alone
are mind-numbing both in terms of metals and other natural resources.

 

It has been said that if waters from the Congo River were harnessed to
provide hydroelectricity, that energy could power the whole continent. This
is a legend.

 

The mining industry is central to the economic development of Africa

Countries like South Africa, Nigeria, Zimbabwe, Angola, Zambia, and Botswana
owe their existence to the sector

Despite its great promise, the sector generally fails to reach its potential
to provide economic transformation to countries that are host to large
deposits of natural resources. This is a phenomenon known as the resource
curse or the paradox of plenty

 

It has not yet been tested for its veracity; however, when one considers the
vast mineral deposits in that country, it is not difficult to imagine it as
a fact. The African continent is also host to several countries that owe
their existence to their mining activities.

 

Where would South Africa be today without the diamond fields of Kimberly?
And what would that country be today if not for the hive of mining activity
that took place in that country without the rich gold deposits of the
Witwatersrand?

 

The same can be said of Botswana, a country built on a deposit of diamonds
that were first discovered in that country in the 1960s. Zimbabwe has been
called a gold mine. The entire country has deposits of gold littered all
over its geographic expanse.

 

 

Diamonds in the early 2000s were discovered in the country's eastern
highlands in an area in Marange called Chiadzwa. The deposit is a fabulously
rich one. There is something unique about the Chiadzwa diamond field in
Zimbabwe. It is one of the few in the world where diamonds are alluvial.

 

Alluvial deposit refers to an unconsolidated deposit of ores, minerals or
mineral resources located at or near the surface formed where the
concentration of ore minerals was caused by the physical or mechanical
separation of heavier from lighter weight minerals during the surficial flow
of running water in stream channels.

 

Simply put, this means that the diamond deposit in Zimbabwe consists of gems
that occur very close to the surface to the extent that miners, residents,
and fortune hunters could pick up diamonds right off the ground without
digging a single hole in the ground. Alluvial diamond deposits around the
world are also found on the Atlantic coast of South Africa and Namibia, as
well as in some riverbeds in Angola, Sierra Leone, Democratic Republic of
Congo, Central African Republic, Cote d'Ivoire, Guinea, Ghana, Liberia,
Tanzania, Togo, Brazil, Venezuela, Guyana, and South Africa.

 

 

This is according to the geoscience news and information website
geology.com.

 

Zimbabwe also has other resources like coal and methane gas. Recently
Australian firm Invictus has been prospecting an area in the country in
search of oil. This is a matter unfolding, and it remains to be seen if,
from its exploration activities, the company will discover an oil field that
is commercially viable to exploit. Nigeria is rich in oil and gas and is
even a member of the Organization of Petroleum Exporting Countries (OPEC).

 

According to recent news reports, the country is set to begin exporting
liquified natural gas to European countries. This is after many of them
placed embargoes on coal and gas from Russia. Russia has also turned off the
gas taps to the rest of Europe in retaliation to the economic sanctions and
measures set against it by the world's leading countries.

 

Despite the immense natural resources that African countries are endowed
with, these countries, for the most part, have high levels of poverty. A
cruel irony of sorts. This is attributed to a concept called the "resource
curse". The Natural Resource Governance Institute defines this concept which
is also known as the paradox of plenty, as the failure of many resource-rich
countries to benefit fully from their natural resource wealth and for
governments in these countries to respond effectively to public welfare
needs.

 

While one might expect to see better development outcomes after countries
discover natural resources, resource-rich countries tend to have higher
rates of conflict and authoritarianism and lower rates of economic stability
and economic growth compared to their non-resource-rich neighbours.

 

The effects of the natural resource curse are easily identifiable in Africa.
The DRC, Nigeria, Zimbabwe, Sierra Leone, and others have notably high
levels of poverty despite their endowment of natural resources. Nigeria has
historically been a contentious hotbed of political upheaval due to the
country's oil wealth. From its independence in the 1960s, the country has
experienced numerous and successive coups up to 1999. In Sierra Leone, the
diamond deposits in that country financed a protracted and brutal civil war.

 

In Zimbabwe, the diamond fields of Chiadzwa are militarized, with reports of
human rights abuses rife. What is the cure? How do countries in Africa rid
and cure themselves of the natural resource curse?

 

The answer is in the law and the governance models that these countries
approach. The way in which the governments of those countries approach the
mining industry is imperative.

 

In South Africa, the natural resource curse is more pronounced in the sense
that while the mining sector has made a few individuals fabulously wealthy,
inequality in that country has meant that while the richest of the rich get
richer, the poor get poorer.

 

How can governments approach the mining sector to ensure its development
leads to broad-based and shared prosperity for all? The answer is the same.
The answer is in the respective governments and the legal frameworks for the
mining industries of those countries. Recently The Exchange published an
article on how and why Australia is a top mining investment destination. The
article found several reasons why the country attracts the highest amount of
exploration expenditure of any country in the world.

 

The country has made good use of strategic comparative advantages like its
proximity to China to supply the Asian giant with a near ceaseless supply of
commodities. The country has focused its mining industry on minerals and
resources, which it is a leading exporter. Australia is a world leader in
terms of exports of iron ore, coal, gold, and cobalt. These are some of the
reasons why the country is home to one of the most robust mining sectors in
the world. Most importantly, Australia does not suffer from the natural
resource curse that characterizes many of the named African countries.

 

The legal, regulatory, and governance framework a mining country adopts is
the most sustainable cure there is for the natural resource curse. Australia
offers an excellent case study to countries in Africa on how to mitigate the
resource curse by applying the right kind or most conducive legal framework

Nigeria, Zimbabwe, Sierra Leone, and South Africa are countries where the
resource curse is very prevalent or pronounced. Nigeria suffered successive
brutal military coups since its independence due to the discovery of oil in
that country. Sierra Leone suffered a protracted and brutal civil war
financed largely by the diamonds in that country. Zimbabwe's discovery of
diamonds in the eastern highlands of that country has done little to change
the plight of the people in that country

The mining industry will only reach its full potential to deliver economic
transformation in Africa if it is supported by a robust legal, regulatory,
and governance framework

At best, Australia suffers from what is called Dutch Disease. This is a
concept that describes an economic phenomenon where the rapid development of
one sector of the economy (particularly natural resources) precipitates a
decline in other sectors. It is also often characterized by a substantial
appreciation of the domestic currency. Dutch disease is a paradoxical
situation where good news for one sector of the economy, such as the
discovery of natural resources, negatively impacts the country's overall
economy.

 

One of the reasons best to explain the success of Australia's mining sector
is the legal framework and context in which it exists. Its governance system
is another reason. Australia is a vibrant democracy that has respect for
property rights, the rule of law, and human rights. Its legal framework,
combined with its governance system, inspires confidence among investors
when it comes to the safety and certainty of their investments. The Law
Review of the United Kingdom states that Australia is a federal
constitutional monarchy under a parliamentary democracy, formed in 1901
because of an agreement among six self-governing British colonies, which
became the six states (and which later included three self-governing
territories).

 

The head of state is Queen Elizabeth II, who the Governor-General
represents. The Queen appoints the Governor-General on the advice of the
Prime Minister of Australia but has no active role in the day-to-day
operations of government. Australia's Constitution establishes a centralized
federal government (known as the Commonwealth government) and various state
and territory governments. The Constitution also reserves exclusive
responsibility for certain matters (i.e., trade, commerce and defence) to
the Commonwealth government. It allocates law-making responsibilities among
the Commonwealth and the states and territories.

 

According to Thomson Reuters, the regulatory and legal framework governing
the mining industry and mineral extraction process is divided throughout the
three levels of government. Federal government involvement in the mineral
extraction process is not extensive. The federal government is indirectly
involved through policy concerning tax, foreign investment law, competition
policy, trade and customs, corporation law, and international trade
agreements, among others.

 

The Federal government interacts in terms of foreign investment approval.
Interestingly, the states and territories are responsible for conferring
mineral exploration and mining titles. This is not the case with most
countries in Africa. Mining rights are granted only by the central
government. The justification for this is that African countries keep a much
closer eye on who receives the rights to mine in their country for the
benefit of all that country's citizens. The demerit of this system of
mineral resource governance is that it gives rise to corruption.

 

In Australia, however, the territories and states collect mining royalties
on minerals produced and regulate mining operations.

 

What is similar in Australia to countries in Africa is the ownership rights
to minerals. Under State/Territory legislation, the State/Territory owns the
minerals. The mineral rights do not vest in the landowner. Only the
State/Territory government can grant rights to parties to explore or mine.
The rights to explore/mine are regulated by extensive and objectively
administered State/Territory legislation. Holders of mining leases gain
ownership of minerals extracted when the minerals are separated from the
earth. This system is the same in South Africa and Zimbabwe. With the
significant role the mining sector plays in the economic development of
African countries, the legal, regulatory, and governance framework that
Australia has created is something countries in Africa need to replicate
without fail.

 

Government policy needs to be intentional about being geared towards
encouraging the development of the mining sector.

 

-The Exchange.

 

 

 

Nigeria Loses Africa's Top Oil Producer Spot to Angola

Abuja, Nigeria — Nigeria has lost its position as Africa's top oil producer
to Angola, industry insiders say, and could soon become third after Libya.

 

Oil analysts say Nigeria's production struggle is coming at the worst time,
as oil prices have jumped, partly because of Russia's invasion of Ukraine.

 

According to the Nigerian oil regulation commission, the country's oil
production during August dropped to 972,000 barrels per day, down from about
1.1 million barrels per day in July.

 

That allowed Angola to pass Nigeria in monthly oil production for the third
time this year. The other months were May and June.

 

 

Nigeria's oil production has been declining steadily for months. Authorities
blame rising crude oil theft and sabotage at production sites.

 

The Nigerian National Petroleum Corporation (NNPC) said recently that
thieves from all levels of society, including religious groups, were
stealing 200,000 barrels of crude oil per day.

 

Oil and gas expert Emmanuel Afimia said Nigeria's its position as Africa's
biggest oil producer has consequences.

 

"[It] actually sends a wrong signal to the global oil market," Afimia said.
"The country may slowly be losing its influence in the global market, and it
may be difficult for Nigeria to contribute to decisions in the global market
as time goes on. And most importantly, buyers may start to panic, because if
you look at the reasons behind the decline, the buyers will think Nigeria is
slowly losing its grasp."

 

The lost production also translates into billions of dollars in lost
revenue. Global oil prices skyrocketed in March soon after Russia's invasion
of Ukraine, and oil is still trading at around $96 per barrel.

 

At that level, crude oil is trading 36 percent above Nigeria's benchmark for
its 2022 budget.

 

But in July, the NNPC reported zero revenue from crude oil exports, compared
with $5.96 million earnings in June.

 

Last Friday, President Muhammadu Buhari instituted a Committee on National
Economy and immediately discussed issues of oil theft with the new team.

 

He said the theft is putting the country in a precarious economic position.

 

"The fall in production is essentially due to economic sabotage," the
president said. "Producing at about half our OPEC quota has deprived us of
much-needed revenue and foreign exchange. The government is working
tirelessly to reverse this situation."

 

Afimia said authorities must address theft and invest more in oil production
before companies can raise monthly output.

 

"Once the country is able to increase its surveillance and improve security
as well, it will really encourage existing firms to maximize their
production. That confidence will be restored," he said.

 

Last week, Nigeria's oil workers union said massive crude oil theft was
putting worker safety and jobs at risk and threatened to go on strike if the
issue is not addressed.

 

Nigerian authorities say they have improved surveillance of oil assets,
especially in areas prone to bunkering and vandalism.

 

This month, security authorities arrested 122 oil thieves and said
operatives recovered nearly 36 million liters of stolen oil and 22 million
liters of diesel.

 

-VOA.

 

 

 

Kenya's Maize Price Has Doubled in a Year - 6 Ways to Avoid a Staple Food
Shortage

The elections in August offered Kenyans a temporary distraction from some of
the challenges the country is facing. At the top of these challenges is food
insecurity. In 2022, the country has experienced higher food prices than
ever before. Among the commodities that have seen high price increases is
maize. This staple food has doubled in price in a year.

 

Food price inflation, although the result of a "perfect storm", will be high
on the agenda for the new administration, which has promised to develop a
lasting solution.

 

The current food inflation is a result of a combination of factors. First,
the COVID-19 pandemic affected both production of food and inputs for
production. Coupled with supply chain challenges, prices of inputs on global
markets started to rise during the last quarter of 2021.

 

 

Second, Kenya is experiencing one of the worst droughts registered in the
past four decades. The La Niña weather phenomenon has hit the central,
eastern and northern regions of the country, leaving about 4.3 million
Kenyans in need of food assistance as of August 2022.

 

Third, the Russian war in Ukraine affected supply not only of grains, but
also of key inputs such as fertiliser.

 

These shocks occurred simultaneously. But long-standing issues in Kenya must
be resolved anyway if the country is to be self-sufficient in staples, such
as maize.

 

Preventing future crisis

 

There are six areas the incoming government should focus on:

 

Reduce the cost of production: In 2022, the cost of all inputs, including
seed, fertiliser, agro-chemicals, hire of machinery and labour, increased.
Simulations based on cost of production studies suggest that the cost of
maize production will likely rise by an average of 60% for the 2022 main
season. The cost of production is projected to be upwards of KSh4,000 or
about US$40 for a 90kg bag, with a two-kilogram packet of flour retailing at
an average of KSh220 (US$2.2). It is estimated that the annual per capita
consumption of maize is 80 kg. This translates to about 200 grams daily. The
average household, with four members would require to spend about KSh600 per
week (about US$6).

 

 

To maintain prices at affordable levels, farmers should aim to produce maize
for less than KSh1,800 (US$18) per 90-kg bag. This would allow the producers
to sell at around KSh2,300 (US$23). Market data suggests a wholesale price
of KSh2,300 (US$23) per 90kg bag will translate to a retail price below
KSh90 US$9) per 2kg. This would be a great outcome for the country:
producers would get a profit while consumers could afford to buy an
essential staple.

 

 

The key cost drivers in recent years have been the rental value of land and
labour. Besides these, low yields result in high production costs.
Therefore, by increasing maize productivity, farmers would likely register
lower costs of production, but there is still a need to address the other
cost drivers. This can be attained through policy.

 

Fix policy incoherence: Coherence in policy is easily attained when it's
based on evidence. Decisions based on politics lead to incoherent policies.
For example, a fertiliser subsidy came too late for the maize planting
season this year and its design was criticised. And the maize flour subsidy
announced in July was inefficient: everybody got the subsidised flour.

 

Combat climate change and build farmers' resilience: The government must
invest in getting and sharing advance information about weather. This year,
alerts about poor weather should have resulted in advisories for farmers
about what to plant. Farmers also need a better understanding of crop
insurance.

 

Reduce post-harvest losses: For maize, this has occurred mainly due to poor
storage infrastructure, and poor handling and storage of grain. There are
new laws to encourage private sector investments in solving the problems -
they need to be finalised and put into action. Then farmers wouldn't have to
sell crops at low prices straight after harvesting.

 

Invest in agricultural data systems: Once again, this must be done in
cooperation with county governments, which are closer to farmers. Reliable
and credible data will be useful for informing policies and interventions.
It can alert the public sector to shocks such as low production. This was
recommended in 2019 but the government is yet to implement most of the
recommendations.

 

Address stagnation in productivity: Although in some years the country has
registered increases in maize production, this has come primarily from area
expansion rather than from productivity increases. There is a need to
support county governments to revive extension and advisory systems. Robust
systems make it clearer what farmers are purchasing with subsidies and how
productivity is affected.

 

Ethiopian example

 

Kenya can benefit from the experience of other countries in the East Africa
region. For example, Ethiopia has registered increased cereal productivity
over the past two decades. It achieved this primarily because it revamped
its extension systems and combined them with an inputs subsidy programme
which delivered seeds and fertilisers to farmers. The strategy was to teach
farmers about new technologies and enable them to get the inputs required to
use new knowledge.

 

Timothy Njagi Njeru, Research Fellow, Tegemeo Institute, Egerton University

 

 

 

 

Africa: Stronger US Dollar Adversely Affecting Africa, Emerging Economies

The United States dollar has rallied against major world currencies since
the beginning of the year.

 

According to the World Bank, the greenback has appreciated by as much as 11%
since the beginning of 2022. Several major currencies have lost ground to
the US dollar and this development has serious implications for emerging
markets, many of which are in Africa.

 

United States dollar has appreciated in value since the beginning of the
year as investors demand them relative to other currencies, World bank
reports

The Federal Reserve has been increasing interest rates, and this has led to
investors piling into the currency which they perceive to be safer than the
more esoteric emerging market currencies that have shown to be more volatile

World Bank warns that a strong United States dollar environment will
adversely affect Africa and emerging market economies. This is because of
fundamental and structural economic vulnerabilities

 

The New York Times in July 2022 reported that the United States dollar is
the strongest it has been in a generation. The New York tabloid and the
World Bank agree in terms of why the Greenback has strengthened as much as
it has so far. The Greenback appreciates value because of the strong demand
for United States dollars. This is because the outlook for the global
economy is largely pessimistic.

 

The outlook points to a slowing global economy. The war in Ukraine has also
served to increase demand for the US currency by introducing volatility and
geopolitical risks to the markets. Additionally, inflation which has reached
historic high levels has prompted the Federal Reserve, which is the US
central bank, to increase interest rates.

 

 

So strong has the rally in US dollars been that the Greenback has, for the
first time in two decades, reached near parity with the Euro. These factors
are combined with the flight by investors to safe-haven investments. The
United States dollar's appreciation shows that investors still view the
currency as a safer option to the more esoteric and exotic investment
options that they would otherwise select in a low-risk environment.
Investors are exiting investments in Europe, emerging markets, and in other
countries in search of safer investments in United States dollar-denominated
securities, which require US currency to purchase.

 

According to the World Bank's Global Economic Prospects 2022 report, "Global
growth is expected to slump from 5.7 per cent in 2021 to 2.9 per cent in
2022-- significantly lower than 4.1 per cent that was anticipated in
January. It is expected to hover around that pace over 2023-24, as the war
in Ukraine disrupts activity, investment, and trade in the near term,
pent-up demand fades, and fiscal and monetary policy accommodation is
withdrawn. As a result of the damage from the pandemic and war damage, the
level of per capita income in developing economies this year will be nearly
5 per cent below its pre-pandemic trend."

 

 

In an environment where the market anticipates further interest rate
increases, the consequences tend not to be good for emerging markets and
Africa. In fact, a high-interest rate environment in the United States will
almost always result in crises for emerging markets.

 

The World Bank went on to support this position by relating historical
incidents of such crises that took place in the 1980s in Latin America and
in the 1990s in Mexico, which extended to Russia and Asia. The multilateral
financial institution also expects that countries with high levels of
sovereign debt will cause stress for countries with unsustainable
borrowings. This is because low-income or poor countries cannot borrow in
their own currencies in the amounts and for the maturities they desire.

 

For lenders, they cannot afford to be paid back for credit that they would
have extended in the volatile currencies of emerging markets. In this
instance, these same low-income and poor countries commit to borrowing
United States dollars and repaying their debts in United States dollars
regardless of the exchange rate.

 

In such a scenario, when the United States dollar becomes stronger relative
to their own currencies, the loan repayments become more expensive in terms
of the domestic currency. This is what is known in economics as the
"original sin". This is pertinent, especially for Africa. In May 2022, the
Economic Intelligence Unit reported that African states have been
accumulating external debt at a rapid pace over the past decade, taking
advantage of an abundance of low-cost international credit for budgetary and
balance-of-payments support to help to drive development plans and for other
purposes.

 

The stock of total external debt held in Africa--debt accrued by the public-
and private-sector entities and owed to foreign lenders--surpassed US$1trn,
and related annual servicing costs broke through the US$100bn threshold for
the first time ever in 2021. External debt remains highly concentrated in
Africa, with just nine countries holding two-thirds of the region's total
external debt stock in 2021: South Africa (holding 15% of Africa's total
external debt), Egypt (13%), Nigeria (7%), Angola (7%), Morocco (6%), Sudan
(6%), Tunisia (4%), Kenya (4%) and Zambia (4%).

 

Africa is in for interesting times...

 

According to the EIU graphic, much of the external debt stock of African
countries consists of public medium- and long-term borrowings. This form of
borrowing has been on the rise since 2000.

 

Private medium- and long-term debt stock in Africa has also been on the
increase but not at the same scale and magnitude as the public debt. In
short, governments, through their finance ministries, have been on a
borrowing binge since 2000, whereas the private sector has marginally
increased its borrowings in United States-denominated debt.

 

The increased levels of borrowing in hard currency badly expose governments
to movements in interest rates and exchange rates. South Africa has the most
external debt exposure of any country in Africa, followed by Egypt and
Nigeria. With these facts in mind, it is no surprise to how much the Rand,
the South African currency unit, has depreciated against the dollar.

 

African countries are highly leveraged with unsustainable levels of debt on
their books. This problem going forward will be compounded by the increasing
cost of servicing the debts as their currencies depreciated, as evidenced by
the case of South Africa, which has seen its currency steadily depreciate
against the United States dollar. External debt servicing will remain an
issue, with the region projected to spend no less than 15% of its foreign
exchange income on this cost category. This will culminate in difficult
financing conditions for several countries on the continent. Most will not
be able to access further debt to finance their development. In the worst of
cases, others will experience heightened levels of financial distress in
servicing their loans.

 

A strong dollar has implications for economic growth...

 

As the Federal Reserve increases interest rates, other central banks will
follow suit. The World Bank is of the view that investors will need an
incentive in the form of higher interest rates to continue investing in
currencies other than the Greenback. This action will lead to a dilemma
where a central bank will increase interest rates to protect foreign
investment and the domestic economy but will also inadvertently lead to a
lower rate of growth or a shrinking economy altogether.

 

The strengthening US dollar will also have an adverse effect on trade. This
emanates from the dominance of the US dollar in settlement of international
trade transactions. A case in point is in the trade of minerals and
commodities like oil which happens exclusively in United States dollars.
Developing economies like those that constitute the continent of Africa are
price takers, which means that their policies and actions have little to no
impact on the global markets. Such countries are largely dependent on global
trade, unlike the case of India, which has a vibrant domestic economy. Where
there is excessive dependence on global trade, a strong dollar can seriously
and negatively impact the economy.

 

A strong dollar will lead to increased inflationary pressure in some
economies. Zimbabwe is a case in point. The southern African country is
highly dependent on imports for nearly everything. A strengthening US dollar
makes good produced in that country more expensive.

 

World Bank official Marcello Estevão advises that there is no easy solution
to problems arising from the strong United States dollar. To prevent the
next crisis, countries should act now to shore up their financial position
and engage in sustainable borrowing. Even in challenging times, policymakers
can find opportunities to encourage investment and spur economic growth
while reducing fiscal pressures. For its part, the international community
must do more to speed up debt restructuring. Doing so will go a long way to
put countries back on a more sustainable fiscal path.

 

-The Exchange.

 

 

 

Uganda: Makerere Gets Uganda's First Smart Classroom

Prof Barnabas Nawangwe, the vice chancellor of Makerere University has
commissioned Uganda's first smart classroom. The CreateView classroom is
located in Block A of the college of Computing and Information Sciences
(CoCIS) at Makerere.

 

Nawangwe and partners in the project said this was the first in the country,
and the second in East Africa after the one at University of Nairobi, Kenya.
Nawangwe said Makerere had started the process of acquiring a smart
classroom earlier than Nairobi, but Covid-19 restrictions made Makerere
delay longer.

 

A smart classroom provides advanced interactive teaching recording and
broadcasting systems for institutions; it's equipped with a specialized
learning management system and an interaction system that supports
multi-camera recording and post-production. It is a combination of ICT and
higher education innovation.

 

 

CoCIS principal, Prof Tony Oyana said the facility is worth $100,000 (about
Shs 360 million). The equipment - 50 standalone high-grade computers, one
electronic (smart) blackboard, three supporting view screens, and a robot -
worth $50,000 was donated by three strategic academic Chinese partners
(Southern University of Science and Technology (SUSTech), Shenzhen, China;
International Centre for Higher Education Innovation under the auspices of
Unesco (Unesco-Ichei), Shenzhen; and Guangzhou's CreateView Educational
Technology Co. Ltd.). Makerere put in the remainder $50,000 for shipment and
installation.

 

He said this was a result of a partnership agreement to collaborate in
research, teaching, ICT industry and community engagement activities signed
in 2018, by CoCIS, CreateView Education Technology, Unesco-Ichei, and
Southern University of Science and Technology, China.

 

 

Oyana explained that the facility enables lecturers to engage with students,
both physically at the site and online. Secondly, the facility can be used
as a recording and broadcasting studio for classrooms anywhere in the
country. A teacher can record a lecture alone or as part of a classroom
lecture of students and the lecturer teaching.

 

Therefore, it will be used to assist and teach students in other
universities and institutions of higher learning. He, therefore, called upon
educational institutions to make use of it.

 

Nawangwe chipped in saying whoever is left behind in technology is doomed.
"The future belongs to those who embrace technology. It is time for us to
wake up if Africa is not to be left behind again! This facility is for
Makerere and the whole of Uganda. And Makerere will work hard to have more
of such smart classrooms in its colleges and other institutions for the
benefit of Ugandans, and larger Africa."

 

 

Oyana said the facility enables lecturers to have full control of and
discipline over the students, by knowing what each student is doing with the
computer. It also does assessments, and can show in concrete terms whether
students are learning or not; it can also monitor examinations and quizzes.
It is also highly automated.

 

With the assistance of the robot, the facility system is able to perform
many functions such as recording classroom attendance, reading and
concentration, language processing, speech recognition, photo taking, and
checking room temperature, among others. The robot can also perform music,
dance and other entertainment to create a lively learning environment.

 

Prof Lyu Feng of Unesco-Ichei said the donation was made as part of a Unesco
project for universities in developing countries, adding that 20 smart
classrooms have been set up in Africa and Asia since 2020.

 

Hassan Adeel Shehzad, also from Unesco-Ichei, said the equipment was funded
by the Chinese taxpayers and education technology companies (the UNESCO
International Centre for Higher Education Innovation (Ichei) and China's
International Institute of Online

 

Education) under the auspices of Unesco.

 

Shehzad is a program specialist and project lead of the Smart Classroom
System sent to set off the project at Makerere. He trained the local team
that will man it. He said through the provision of the smart classroom
facility, Unesco-Ichei and CreatView will work closely with Makerere
University to encourage the development and integration of online courses
into the university's curriculum to address challenges facing education in
Uganda.

 

He said the facility will not only record the lectures but also broadcast
them live on conference tools such as Zoom, Google Meet and Microsoft Teams.

 

"The target audience of this smart classroom project in Uganda is
universities, teachers, and students to improve the quality of teaching and
learning. Once fully established, the rest of the country, including
government ministries, departments and agencies will utilize it for
meetings, training and workshops."

 

He added that the project helps share experiences of China's higher
education massification and the technological advantage of Shenzhen - the
leading technology city in China.

 

The commissioning was dedicated to Makerere University's centenary
celebrations and acknowledgment of 60 years of diplomatic relations between
Uganda and China.-Observer.

 

 

 

Ghana: Examine Background Before Granting Approval for Mining Companies -
Researcher

A research into the beneficial ownership disclosure of mining companies in
Ghana has recommended strict examination of applicants' background before
approval is granted.

 

This due diligence, the research believes would ensure that persons with
questionable characters would be uprooted from the Ghanaian mining space.

 

These recommendations were contained in the 17-page research document put
together by the Director of the Northern Patriots in Research and Advocacy,
Bismark Adongo Ayorogo, for the Opening Extractives Programme and Global
Impact.

 

 

Titled 'Research on beneficial ownership disclosure and integrity screening
of mining companies in Ghana,' the report examined the background of
directors and shareholders of mining companies in the Upper East Region.

 

"It is worth restating that effective due diligence in screening the true
owners and integrity of mining companies applying for mining rights, does
not only strengthen government conscious efforts to do away with hard core
criminals and potential terrorist groups in the mining sector.

 

"It also helps to improve the investment attractiveness of the country to
companies that may otherwise be concerned about the risks of competing
against dishonest competitors or about the integrity standards in the
country.

 

"It is therefore recommended that beneficial ownership disclosure and
integrity screening of mining companies be prioritised by the Minerals
Commission and Ghana Police Service in the due diligence process of granting
mineral rights to mining companies to avert government inadvertently handing
over mineral rights to the country's most valuable natural resources to
mining companies whose directors have a history of corporate misconduct and
illegal activity including drug offences, tax evasion, money laundering
among others."

 

According to the report, some mining firms had significant environmental
breaches and other abuses that must be properly checked.

 

Using the in-depth interview as a qualitative research instrument,
respondents in the report included officers from the Registrar-General's
Department, Security Experts, Minerals Commission, Criminal Investigations
Department (CID) of the Ghana Police Service, Attorney-General and Ministry
of Justice and directors/shareholders of the mining companies.

 

The research defined due diligence or integrity screening as "companies
making disclosures, and mandated state institutions not only checking the
owners and political connections of these owners but also doing background
check on the integrity record and reputation of the company as part of
evaluating its mineral right application."

 

-Ghanaian Times.

 

 

 

Kenya: Equity Group Ranked as the Most Attractive Bank in Kenya

Nairobi — Equity Group Holdings has been ranked as the most attractive bank
in Kenya in the Cytonn H1'2022 banking sector report, backed by a strong
franchise value and intrinsic value score.

 

The franchise score measures the broad and comprehensive business strength
of a bank across 13 different metrics, while the intrinsic score measures
the investment return potential.

 

Co-operative bank improved to position two in the half year 2022 from
position four in Q1 2022 backed by an improvement in its net interest margin
to 8.4 per cent from the 8.3 per cent it recorded in the first quarter of
2022.

 

 

Absa bank took the third position while KCB Group declined to position four
in H1 2022 from position two in Q1 2022 due to an increase in its
Non-Performing Loans (NPL) ratio to 21.4 per cent from 16.9 per cent in the
first quarter of 2022.

 

>From the report themed 'Earnings Growth Signify Banking Sector Resilience',
Core Earnings Per Share (EPS) for the listed banks recorded a weighted
growth of 34.0 per cent in H1 2022 from a weighted growth of 136.0 per cent
recorded in H1 2021 whereas the Asset Quality deteriorated as the gross NPL
ratio increased marginally by 0.3 per cent points to 13.0 per cent in H1
2022 from 12.7 per cent in H1 2021.

 

"The listed banks' management quality on the other hand improved, with the
Cost to Income ratio increasing by 3.5 per cent points to 53.6 per cent,
from 57.1 per cent recorded in H1 2021 as banks continued to reduce their
provisioning levels," said Stellah Swakei, Investment analyst at Cytonn
Investments.

 

During the period under review, the listed banks continued to borrow from
international institutions to strengthen their capital position and to boost
their capacity to lend to Micro Small and Medium Sized Enterprises (MSMEs).

 

Equity group received Sh18.6billion from the International Finance
Corporation (IFC) in January 2022.

 

Moreover, IFC disclosed an arrangement of extending Sh18.0billion to KCB
Group in form of a senior unsecured loan in August 2022.

 

Commenting on the report, Cytonn Investments analyst Kevin Karobia noted
that only one activity in terms of mergers and acquisitions was recorded
during the review period as the Kenyan banks look forward to distributing
their risks and reducing their reliance on the Kenyan market by diversifying
to other regions in the continent.

 

"In light of the above, KCB Group PLC announced that it had entered into a
final agreement with shareholders of Trust Merchant Bank (TMB) to acquire an
85.0 per cent stake in the Democratic Republic of Congo (DRC) based lender,"
said Karobia.

 

The listed banks recorded a weighted average deposit growth of 11.3 per cent
slower than the 18.4 per cent growth recorded in H1 2021 indicating a
reduced investment risk in the business environment.

 

Non-Funded Income grew by 24.4 per cent compared to the 19.2 per cent growth
recorded in H1 2021 attributed to the faster growth in the fees and
commission by 18.0 per cent compared to the 16.6 per cent growth in H1 2021.

 

The performance of the Banking sector in H1 2022 was shaped by regulation,
regional expansion through mergers and acquisitions, asset quality and
capital raising.

 

-Capital FM.

 

 

 

Rwanda: Connectivity Critical to Transforming Kigali Into a Smart City

Imagine a city that can operate efficiently to improve service delivery for
millions of lives. The kind of city where public transport is fully
functional, where traffic lights work and traffic congestion is a thing of
the past, where poverty is alleviated and jobs are created, where education
and health facilities are performing optimally, where safety and security is
no longer a concern, where emergency response is swift and disaster relief
aid is accelerated. This is a smart city we all dream of.

 

Back in the 80s and 90s, we never thought this was possible in Africa, in
our lifetime. But we were mistaken. The future is here, and smart cities are
already taking shape across the globe. Africa is no different, and
developing economies are finally being recognised on the global map. This is
all thanks to the benefits of connectivity and intelligent technology.
Improving and optimising functions of cities remains a top agenda item in
most countries and Kigali, the capital city of Rwanda, is well on its way to
reaching this dream. But the rapid urbanisation taking place there means
that this knowledge-based economy is now more crucial than ever before.

 

 

Research by the Centre for Sustainable, Healthy and Learning Cities and
Neighbourhoods (SHLC) found that in the last 20 to 30 years, Kigali had
experienced a significant demographic and spatial growth driven by internal
migration and natural population increases. Further analysis shows that
Rwanda is urbanising at an unprecedent speed. To give you some insight, in
1978, Rwanda's urban population stood at 4.6% and in 2012, it jumped to
16.5%. By 2024, it is estimated to be a staggering 35%. A population
projection by the UN's Department of Economic and Social Affairs (UN-DESA)
shows that only 18.4% of Rwandans live in urban areas and half of country's
urban population reside in Kigali. This annual urban population growth rate
far exceeds the worldwide average of 1.8% and Africa's urban growth rate of
3.2%.

 

 

Meeting urbanisation needs and fast-tracking a smart city is therefore
pivotal for Kigali. But creating this data-driven environment requires
connectivity, infrastructure, access to digital technologies and investment.
In line with this, the Rwandan government has invested and continues to push
the ICT agenda and Liquid Intelligent Technologies - a business of Cassava
Technologies - has already begun to carry out the leg work in Kigali.

 

Just like its project in Nairobi, Liquid has so far installed city-wide
fibre that connects all major buildings, office parks and communication
towers. Connectivity is now more accessible and reach has been extended to
innovation hubs, businesses, educational institutions, and public sector
organisations. This project has resulted in free Wi-Fi being enabled in
public areas like the Kigali International Airport, car freezone areas and
the city's gardens. In addition, business and technical skills development
has been prioritised for start-up companies.

 

The thought of a smart city in Kigali aligns to the UN's Sustainable
Development Goals (SDG) 2030 where connectivity has now been prioritised
following COVID-19. In June 2022, the World Telecommunication Development
Conference (WTDC) agreed to address the global connectivity gap in which 2.9
billion people worldwide still lack an internet connection. The conference
adopted the Kigali Action Plan charting a course for digital development
that aligns to the SDG goals where they agreed to apply greater focus on the
practical implementation of connectivity.

 

Given this remarkable commitment by world leaders, it looks like Kigali's
hopes for a smart city is more than likely in our lifetime - a dream that is
materialising before our eyes and it's incredible to witness. Welcome to
Africa's future, we have made it.

 

The writer is CEO of Liquid Intelligent Technologies Rwanda

 

-New Times.

 

 

Starbucks adds benefits for non-union U.S. workers ahead of investor day

(Reuters) - Starbucks announced new student loan repayment tools and a
savings account program for all U.S. employees who are not union members,
the company said on Monday, amid a growing union drive and soaring demand
for coffee.

 

The move comes ahead of the chain's annual Investor Day on Tuesday, when
Wall Street expects it to lay out next year's growth prospects.

 

Boosting benefits to non-unionized workers while saying that unionized cafes
must first bargain for those same benefits may be slowing the pace of union
organizing. The company has lifted hourly U.S. pay for non-unionized cafe
workers to an average of nearly $17 as of Aug. 1.

 

 

"We believe the recent wage hikes
 are having an adverse effect on the labor
unions, with the number of stores filing for a vote declining to the lowest
level all year in August," BTIG analyst Peter Saleh wrote in an Aug. 31
note.

 

Last month the National Labor Relations Board accused Starbucks of illegally
withholding raises from unionized workers. Workers at more than 230 of
Starbucks' roughly 9,000 company-owned U.S. locations have voted to
unionize, while at least 48 have voted against. As of October 2021, U.S.
corporate-owned Starbucks stores employed about 235,000 people.

 

 

Despite having spent $1 billion on enhanced employee benefits in fiscal
2022, which ends in October, the company still has enough cash to pay for
additional benefits and major store overhauls, analysts said.

 

"They have plenty of liquidity to do that without hampering the dividend,"
said Edward Jones analyst Brian Yarbrough.

 

Analysts expect Starbucks to increase capital investments in fiscal 2023 to
add new ovens and espresso machines and to speed up maintenance and repairs,
among other changes to improve operations that have become bogged down by a
surge in mobile orders, cold beverages and customized drinks.

 

 

The chain currently has about $3 billion in cash on its balance sheet and is
expected generate another $3.5 billion in free cash next year, Saleh said.

 

In December, the company forecast long-term earnings growth of 10% to 12%
per share. Analysts believe the chain is still on track to meet that
forecast.

 

The Thomson Reuters Trust Principles.

 

 

 

Wells Fargo to pay over $13 million penalty to resolve 401(k) review

(Reuters) - Wells Fargo & Co (WFC.N) said on Monday it would pay a penalty
of $13.2 million as part of a settlement with the U.S Department of Labor to
resolve the federal agency's review of certain transactions related to the
bank's 401(k) retirement plans.

 

About $131.8 million would also be paid out to eligible current and former
participants of the plan, the bank said, adding that it "strongly disagrees
with the DOL’s allegations".

 

 

WFC gives its employees some of its preferred stock under a retirement
package offered to them. The DoL alleged that from 2013 through 2018, the
funds under the plan paid more for the preferred stock than what it was
worth. Wells first disclosed the federal review in February.

 

The fourth largest U.S. bank has been the subject of several regulatory
crackdowns in the past few years, including those tied to a sales scandal
that erupted publicly in 2016.

 

 

Chief Executive Officer Charlie Scharf has pledged to get the bank "on the
right track" and resolve regulatory issues as quickly as possible.

 

The Thomson Reuters Trust Principles.

 

 

 

 

 

 

 

 

 

 

 


 


 


Invest Wisely!

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INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

National Unity Day

 

December 22

 


 

Christmas Day

 

December 25

 


 

Boxing Day

 

December 26

 


Companies under Cautionary

 

 

 


CBZH

Meikles

Fidelity

 


TSL

FMHL

Turnall

 


GBH

ZBFH

GetBucks

 


Zeco

Lafarge

Zimre

 


 

 

 

 


 <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.

 


 

 


(c) 2022 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

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