Major International Business Headlines Brief::: 08 March 2023

Wed Mar 8 09:55:21 CAT 2023

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Major International Business Headlines Brief::: 08 March 2023 

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ü  Elon Musk apologises to sacked Twitter worker over online row

ü  US interest rates could go higher than expected

ü  Australia: Crop exports set for record high after heavy rains

ü  State pension: Deadline extended for National Insurance top-ups

ü  Energy bills: Let people remove prepayment meters, charity says

ü  Foxtons boss: Struggling renters have to move further out of London

ü  Greggs to open 150 shops and extend opening hours

ü  BA-owner and EasyJet hold millions of unclaimed travel vouchers

ü  Australia: Crop exports set for record high after heavy rains

ü  CBI boss Tony Danker steps aside after misconduct allegations

ü  South Africa: New Electricity Minister Can't Promise a Quick Fix for Power Cuts 

ü  Malawi Receives 20,000 Metric Tonnes of Fertilizer From Russia

ü  Malawi: President Chakwera Appeals for Direct Budgetary Support >From Donors

ü  Kenya Faces Fuel Shortage Amid a Dollar Crisis

ü  Namibia: Another Oil Discovery in Namibian Waters

 <mailto:info at bulls.co.zw> 

Elon Musk apologises to sacked Twitter worker over online row

Twitter chief executive Elon Musk has apologised over an exchange he had on the platform with an employee.

It came after worker Halli Thorleifsson tweeted to Mr Musk saying: "Your head of HR is not able to confirm if I am employed or not".

Mr Musk responded by asking: "What work have you been doing?"

After a series of follow up questions and answers Mr Thorleifsson said he received an email confirming that he had been fired.

Mr Musk followed that Twitter conversation with a tweet on Tuesday describing Mr Thorleifsson as "the worst" before deleting it.

But in an apparent change of heart, Mr Musk took to the platform a few hours later to apologise - and appeared to offer Mr Thorleifsson his job back.

"I would like to apologise to Halli for my misunderstanding of his situation. It was based on things I was told that were untrue or, in some cases, true, but not meaningful."

"He is considering remaining at Twitter," he added.

On Monday, Mr Thorleifsson told the BBC exclusively that he could not get an answer from Twitter's human resources department on whether or not he had been sacked.

"My theory is they made a mistake and are now looking for anything they can find to make this a "for cause" firing to avoid having to fulfil their contractual obligations," he said.

Mr Thorleifsson, who sold his creative agency Ueno to Twitter in 2021, did not want to say how much he was paid for the company. However, there is speculation that Twitter would have to pay him a considerable amount upon his departure from the firm.

Mr Thorleifsson has muscular dystrophy and has campaigned in Iceland for better wheelchair access.

According to local reports, when he sold his company to Twitter he structured the deal deliberately to pay a high rate of tax to the Icelandic government.

Last year, he was voted person of the year in Iceland by four media outlets.

Some of Mr Thorleifsson's former colleagues could not understand why he had been singled out for such public criticism.

Photographer Daniel Houghton tweeted "As someone who has worked directly with Halli Thorleifsson during a turnaround, this is super disappointing to see. Not only is his work ethic next level, his talent and humility are world class."

Mr Musk replied: "Based on your comment, I just did a video call with Halli to figure out what's real vs what I was told. It's a long story. Better to talk to people than communicate via tweet."

After apologising, Mr Musk said that Mr Thorleifsson was considering coming back to Twitter. The BBC has not spoken to Mr Thorleifsson since Mr Musk's apology.

Mr Thorleifsson had previously told the BBC the situation was "strange" and "extremely stressful".

The BBC has asked Twitter for further comment but the company did not immediately respond.-bbc

US interest rates could go higher than expected

The head of the US central bank has warned that officials could raise interest rates farther and faster than previously expected in order to stabilise prices.

US stocks fell and the dollar rose following the remarks, which come just a few weeks before the bank is due to make another rates announcement.

Many analysts had been expecting another 0.25 percentage point increase.

But the comments suggest the bank could move more aggressively.

Over the last year, the Fed has raised its benchmark rate to more than 4.5% - the highest rate since 2007 - responding to prices rising at the fastest pace in decades.

Inflation - the rate at which prices rise - in the US stood at 6.4% in January.

Seven reasons living costs are rising around the world

While that is lower than it was, it remains far higher than the 2% rate considered healthy, and Mr Powell said officials have been worried by recent data suggesting that progress could be stalling.

He said that could push the bank to lift rates above the 5% to 5.5% officials had forecast in December.

Raising borrowing costs is one mechanism to slow price increases in the wider economy.

"The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated," Mr Powell said in Congress during the first of two days of testimony on the economy.

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," he added.

The comments generated some pushback from lawmakers, especially those on the left.

They said the moves would do little to address causes of the inflation problem - such as the war in Ukraine and supply chain issues - while leading to an economic slowdown that will throw millions of people out of work.

"You are gambling with peoples' lives," said Senator Elizabeth Warren, a Democrat from Massachusetts, who also blamed the inflation problem on price-gouging by companies.

Mr Powell said the economy would be in worse shape if the bank did not act.

US prices jumped an unexpected 0.5% from December to January, while monthly updates on retail sales and hiring have also been stronger than expected.

By raising borrowing costs, Federal Reserve officials are hoping to reduce demand for loans for business expansions, homes and other purchases, ultimately cooling the economy and easing the pressures pushing up prices.

The moves have already led to sharp slowdowns in rate-sensitive areas of the economy, like the housing market.

Mr Powell said officials would be looking carefully at incoming data as they make their decision.

"The upshot is that not only are interest rates set to rise higher than we previously anticipated, but there is a lot less scope for rate cuts later this year than we had originally thought," Andrew Hunter, deputy chief US economist for Capital Economics wrote in a note following the testimony.

In early afternoon trade in New York, the Dow Jones Industrial Average had fallen 1.6%, while the S&P 500 was down about 1.4% and the Nasdaq was roughly 1% lower.-bbc

Australia: Crop exports set for record high after heavy rains

Heavy rains, which were blamed for some food shortages in Australia, have also given crop exports a boost.

The country's farmers are predicted to see their most valuable year ever.

Agricultural exports are forecast to hit a record $75bn (£62.3bn) in the year to the end of June, according to the Australian Bureau of Agricultural and Resource Economics (ABARES).

The Ukraine war has pushed up the price of goods including wheat, Australia's biggest agricultural export.

"We have been incredibly lucky. That high level of production is certainly due to rains, but also having rains at the right time," Tony Bacic, director of the La Trobe Institute for Agriculture and Food in Melbourne, told the BBC.

"The stars were aligned. If the rains had come a bit later or hadn't dried out in time, we could have lost a major crop," he added.

"Once again, we're seeing record levels of production, driven by exceptional growing conditions and high commodity prices," ABARES' Jared Greenville said in a statement on Tuesday.

"National winter crop production has driven much of these results, with the winter crop estimated at a new record of 67.3 million tonnes in 2022-23," he added.

Prices have also been boosted by droughts in other major exporters and the war in Ukraine, which was a major supplier of cereal crops including wheat, Mr Greenville said.

However, he added that drier conditions were expected in the months ahead with the easing of a climate phenomenon called La Niña.

Over the last few years, successive La Niña periods have lowered global temperatures and brought heavy rains to countries like Canada and Australia.

Sonia Akter, a senior lecturer at the Australian National University, believes the increase in production in Australia has "outweighed the losses due to flood damage and disruption".

"However, this is likely to change next year as the climate forecasts suggest drier weather. Consistently, Australian export volumes of key food commodities are also likely to decline significantly," Ms Akter said.

Like countries around the world, Australia has been hit by food supply chain issues caused by the war in Ukraine and the Covid-19 pandemic.

Australia's own food production has also been affected by extreme weather events.

For instance, major flooding on the east coast of the country last year caused shortages of some fresh fruits and vegetables.

Social media users posted photos of lettuces costing over A$10 ($6.70; £5.60), three times the usual price.

In June, fast food giant KFC said it had been forced to put cabbage in its burgers and wraps in Australia because of the shortage of lettuce.

-bbc

State pension: Deadline extended for National Insurance top-ups

People have been given more time to plug gaps in their National Insurance record - to ensure they can maximise their state pension entitlement.

Initially, people had until 5 April to make voluntary adjustments for gaps between 2006 and 2016, but the cut off has been extended to the end of July.

The original deadline had led to blocked phone lines.

In general, people need 35 years of qualifying contributions to get the full state pension.

'Surge' in calls

Some people may have spaces in their National Insurance record, for example if they have lived abroad or taken time off for caring responsibilities.

Top-ups have been permitted, as part of the transition to the flat-rate state pension which was introduced in 2016.

But blocked phone lines to HM Revenue and Customs left some worried they would miss the April deadline, and led to the latest extension which the government said was to ensure nobody would miss out.

"HMRC [HM Revenue and Customs] and DWP [the Department for Work and Pensions] have experienced a recent surge in customer contact," said financial secretary to the Treasury, Victoria Atkins.

"We've listened to concerned members of the public and have acted. We recognise how important state pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their national insurance record to help bolster their entitlement."

Check your circumstances

Pensions experts say that extra contributions may not suit every individual in these circumstances, so it is important to check whether it is worthwhile for their finances.

Anyone can look on their personal tax account to view their National Insurance record and obtain a state pension forecast without charge to decide if making a voluntary contribution is a good decision for them.

Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP, said: "For most people, paying voluntary National Insurance contributions to deal with a shortfall in their state pension makes excellent financial sense.

"But it is also important to make sure that extra contributions are right in your individual case as sometimes additional contributions may not boost your pension."

Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown, said: "It is vital that you check before handing over any money as you may be able to plug these gaps in a different way - by backdating a benefit claim for instance."-bbc

Energy bills: Let people remove prepayment meters, charity says

A leading charity has called for an amnesty on prepayment meters that would allow people to get them removed from their homes.

Age UK said homes on prepayment meters pay more for gas and electricity than those on direct debit and risk energy being cut off due to a lack of cash.

Energy firms have paused force-fitting prepayment meters until 31 March.

But Energy UK, which represents firms, claims an amnesty could mean other households would pick up the cost.

The issue of prepayment meters is under the spotlight after it emerged last month that debt agents acting for British Gas had broken into vulnerable people's homes to force-fit meters.

It prompted the regulator, Ofgem, to ask suppliers to suspend forced installations. The regulator is also conducting a review into how prepayment meters are handled across the market.

A government spokesperson said: "Ofgem is carrying out a review into the use of prepayment meters, but where one has been fitted and it is not suitable due to a customer's circumstance - such as if they are highly vulnerable - then it should be changed for a credit meter."

Christopher Brooks, head of policy at Age UK, the charity for older people, told the BBC that the industry should use the opportunity to allow households to get rid of prepayment meters if they want to.

"We think everyone should be given the option to switch because prepayment meters have a higher cost attached to them," he said. "It is often unfairly penalising some of the poorest people in our society and forcing them to pay higher costs for their energy."

While some households choose to have a prepayment meter - as it allows people to pay as they go - others are forced into having them if they fall behind on their bills, while some inherit a meter from a previous tenant or property owner. The cost per unit of energy is higher than direct debit, because of the costs involved for suppliers.

Once a pre-payment meter is installed it can be very difficult to have it removed, and there is no automatic review process to see if it's still the most appropriate payment method.

Many properties have a prepayment meter, or a smart meter in prepay mode because of a transfer of a previous tenant or owner, and it can be a slow and difficult process to be transferred.

Each supplier has a different procedure, they are likely to do a credit check, and may ask for a deposit of around £300 to remove the physical box.

It's often a shorter process for those happy to have a smart meter installed instead as companies may feel more confident customers will pay as the smart meter could be flipped back into prepayment mode.

Energy costs have soared, particularly following Russia's invasion of Ukraine, adding pressure to households struggling with the cost of living.

While Mr Brooks is seeking an amnesty for all people with prepayment meters, he highlighted there were 600,000 UK homes containing at least one person over 60 who are on a prepayment meter.

Age UK said it is "extremely concerned about the impact of prepayment meters on older people living on low fixed incomes".

Jackie Roeleveld, from Trafford, pays quarterly for her electricity but is on a prepayment meter for her gas - which she likes because it means she can't go over budget. But she is aware that friends of hers pay less for gas on direct debt.

"It isn't fair, everybody should be paying the same rate," she told the BBC.

But Energy UK, which represents the energy suppliers, said a blanket approach to removing all prepayment meters from people's homes could result in those who are in financial difficulty falling further into arrears.

"It's accepted that it's bad for customers to be falling further and further into arrears which is why suppliers are required to take steps to prevent it," said an Energy UK spokesman.

"In addition, it's likely much of these arrears will turn into bad debt - will never get repaid - which ends up going on other customers' bills."

Ofgem said while moving a customer to prepayment meters "must be a last resort", it added that "moves to stop prepayment meters risks leaving a serious financial blackhole".

"Suppliers have a statutory right to recover debt - so a ban would force them to write off the debt, force other customers to pick up the tab or force government to cover the costs."

We asked the seven largest energy providers (Scottish Power, British Gas, EDF, Shell, Octopus, EON and OVO, plus Utilita which has many pre-pay customers) to update us on their plans for future protection and redress of prepayment customers.

British Gas told us that as well as suspending warrant activity they are "fully co-operating with Ofgem on their investigation and we will be contributing to Ofgem's consultation process on pre-payment meters".

EDF said that it changes customers from prepayment "if it's not the right payment method for them".

"However, we would need to agree an affordable and sustainable repayment solution with them, for example Direct Debit."

Social tariff

Mr Brooks suggested that the government should introduce a cheaper social tariff, "which essentially means a discount on people's energy bills for eligible customers".

He said the cost should be paid for out of general taxation. "There is some degree of cross-subsidy so there is some cost that might be passed on to other customers, but in the grand scheme of things its probably not a huge amount," he said.

"It is definitely a fairer system than penalising some of the poorest people and making them pay more for their energy."

Ofgem said the total value of household energy bill debt, which is money still owed after 90 days, reached £2.5bn between July and September last year. It said that amount had jumped by £1bn since the beginning of 2021.

Energy UK said it was necessary to look at how to ensure energy bill affordability in the future. "That could well include a social tariff but what this would look like exactly, who would be covered, how would it be funded," said a spokesman for Energy UK.

"So by all means let's look at that but should be wary of implying that a social tariff automatically deals with any issues around prepayment meters."-bbc

Foxtons boss: Struggling renters have to move further out of London

The boss of London's biggest estate agent has said the lack of rental options in the capital is so "dramatic" people will need to move further out.

"We absolutely don't welcome this but people are going to have to move," Foxtons chief executive Guy Gittins told the BBC.

People who are being priced out will "have to compromise on the property type or location," he said.

It came as Foxtons reported its annual profits had doubled in the past year.

Its lettings business saw particularly strong growth, with revenue up more than 17%.

Rising rents have been blamed for driving renters out of London. But Mr Gittins said a mismatch between supply and demand was the real problem.

"The main issue is not affordability for the majority of the market - it's the stock issue," he told Radio 4's Today Programme.

Mr Gittins put the "unhealthy" supply and demand challenges down to recent policy decisions.

In its update to investors, Foxtons said the housing market relied on the availability of mortgage financing. It noted that interest rates had increased globally last year, with the UK impacted "in particular" by the government's "mini-budget" last September.

In the immediate aftermath, there was a drop in buy-to-let mortgage deals with many property investors reliant on interest-only mortgages hit by the volatility. Foxtons said this was likely to "adversely affect affordability" in the housing market.

He predicted the shortage in the market would continue for the next two to three years.

But Foxtons expects sales activity, which has slowed in the last six months, to improve in the latter part of this year.

"Mortgage rates have started to reduce in recent weeks and buyer activity is picking up, which may result in a more favourable sales market in the latter part of the year," the company said in a statement.

Rental site SpareRoom said the number of renters versus rooms available in London and its surroundings was higher this month compared to the same time last year.

According to its data, there were five active renters for each room available, versus two last March. The number was as high as eight per room in September 2022.

'Record high'

"The last 12 months has seen rents across the UK hit record highs and, unless new supply comes into market over the coming months, it's hard to see how those rents will come down," SpareRoom director Matt Hutchinson told the BBC.

"High rents not only make it difficult for tenants who need to move now, it also means that many stay put to avoid paying more rent," he added.

Average UK house prices fell in the second half of 2022 as buyers were squeezed by higher mortgage rates and living costs.

However, fresh figures from the Halifax suggest the situation has improved somewhat. Average UK property values increased by 1.1% on a monthly basis in February, it said, accelerating from 0.2% growth in January.

Kim Kinnaird, director at Halifax Mortgages, said: "Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.

"Still, with the cost of a home down on a quarterly basis (by 2.5%), the underlying activity continues to indicate a general downward trend.

Earlier this month, property portal Rightmove found that house hunters are looking in a wider geographical area compared to before the pandemic, with increased searches for more properties in cheaper areas further afield.

Ski trip and new minis

Guy Gittins took up his role last September, faced with the worst housing market since the financial crisis.

In an early move, he bought a fleet of green and yellow Mini Coopers for the estate agent's sales force.

He also spent on sending around 100 of the firm's top-performing employees to the Italian ski resort of Courmayeur.

Mr Gittins started his career at Foxtons in 2002 on a salary of £22,000. He then rose to becoming the boss of rival agent Chestertons.

His current role has a starting salary of £450,000 and a maximum bonus one and a half times this figure.-bbc

Greggs to open 150 shops and extend opening hours

Greggs plans to open around 150 new bakeries in 2023 as part of major plans to expand.

The firm, which opened its first shop in Newcastle in 1951, also plans to extend the opening hours of some outlets and test 24-hour drive-thrus.

It comes after the chain posted bumper profits for 2022, despite cost of living pressures hitting consumers.

The bakery chain has put up its prices several times in the last few years blaming rising costs.

Under the new plans Greggs, which currently has around 2,300 shops, aims to open more branches in airports, train stations, supermarkets and shopping centres.

It also said it hoped to grow its total number of bakeries to over 3,000 in the coming years.

The chain - which made profits of £148.3m last year - put its growth down to the "value" it was offering customers impacted by the rising cost of living.

Inflation - the rate at which prices rise - is near a 40-year-high, forcing many consumers to cut back their spending or find way ways to cut costs.

However, the cost of ingredients for Gregg's pasties and pies has been going up, along with its energy bills and staff wages.

As a result, the chain's prices rose in 2022 and 2023. In January it increased the price of a sausage roll from £1.15 to £1.20 - the fourth price rise since 2021 when the snack cost £1.

As well as opening 150 new shops, Greggs said it would refurbish another 150 and relocate 40 of its shops to larger sites.

Last year, the opening hours of 500 shops were extended until 20:00 or later and in 2023, Greggs said it planned to extend hours in 300 shops to 21:00.

Greggs was first founded by John Gregg in the late 1930s when he began delivering yeast, eggs and confectionery on his bicycle to homes around mining terraces in Newcastle.

The company then opened its first shop on Gosforth High Street in 1951 and the firm has gone onto to become a well-known brand.

'Perfectly pitched'

Russ Mould, investment director at AJ Bell, said the firm's value proposition put it in a good place in the current climate.

"With the best will in the world and even when household budgets are under real pressure sometimes people are just too busy to make sandwiches. There is always going to be a place for food-on-the-go venues and Greggs' offering is perfectly pitched in the current environment," he added.

However, Mr Mould warned Greggs needed to be "careful ambition does not tip over into hubris" and questioned how popular the brand might be when "people have a bit more money in their pocket".

Greggs is not alone in its expansion plans, with Starbucks announcing on Monday plans to open 100 new stores across the UK this year.

Only last year Starbucks was reportedly looking to sell its UK operations after sales were hit hard during the pandemic.-bbc

BA-owner and EasyJet hold millions of unclaimed travel vouchers

Passengers of BA-owner IAG and rival EasyJet have yet to reclaim some €724m (£643m) in travel vouchers going back to the beginning of the pandemic.

IAG, which owns five airlines including Aer Lingus, said it had about €600m (£533m) in unclaimed vouchers.

EasyJet's most recent results suggested it had £110m in unclaimed vouchers.

The practice of issuing vouchers attracted criticism because many people wanted a cash refund instead, with some claiming it was difficult to get one.

Aviation consultant and former IAG employee Robert Boyle, who flagged the IAG figures, said that when airlines were forced to cancel a huge number of flights during the pandemic they encouraged customers to accept vouchers for future travel rather than issue refunds.

Given so many vouchers have yet to be redeemed Mr Boyle questioned how many of the vouchers will ever be used.

The rate of voucher use might increase as the expiry date approaches he said: "But if even 20% of the original €1.4bn [£1.24bn] of vouchers expire unused, that would be a €280m [£248m] release to profit".

"However, if the vouchers are never used, IAG will have extra seats available to sell. Given what has happened to ticket prices since the pandemic, the cash value of those seats will be even bigger than the reported voucher values."

Woman single-handedly takes on BA and wins

'I don't want a flight voucher, where's my refund?'

Both BA and EasyJet have extended the expiry date of their vouchers several times.

In its most recent set of results EasyJet said no vouchers had expired yet as expiry dates had been extended "to ensure customers have the maximum opportunity to utilise their vouchers".

The airline said the number of unused vouchers at the end of its last financial year on 30 September equated to £110m, or 2% of its ticket revenue in 2019, so there was a "very small proportion of customers who have not yet used their vouchers".

"And it is also worth noting that the number will have reduced since then as five months have passed - including a busy booking period at the turn of year.

BA's will now run out in September 2023, though the airline said it was "always reviewing that".

It said last year 700,000 vouchers were used and it was sending reminders to customers holding outstanding ones.

Airlines, including BA, faced accusations during the pandemic of making it difficult for people to claim a refund.

BA said when a flight was cancelled it always offered the option to get a full refund, rebook or reroute. It never automatically issued vouchers, which had to be requested by a passenger.

But it said it recognised that during the height of the pandemic it could not offer "all the usual channels for customers to request a refund".

As a result, it added, if a customer had been due to travel on a flight cancelled by the airline between 9 March 2020 and 19 November 2020 and they opted for a voucher, BA had already contacted them to offer a full refund.

"We have issued 4.8 million refunds since the start of the pandemic and offered highly flexible booking policies enabling millions of our customers to change their travel dates or destinations," BA said.-bbc

Australia: Crop exports set for record high after heavy rains