Three reasons the Burundi coup plot failed miserably

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VENTURES AFRICA – Despite riding on popular local support and a silent acquiescence of the international community, the Major General Niyombare-led plot to remove Burundi’s sit-tight President Nkurunziza was a colossal failure. Backed by some prominent forces within the country’s security establishment, Niyombare had on Wednesday announced the dismissal of the President for seeking a controversial third term mandate. His announcement was received with wild jubilations on the streets of Bujumbura, and a tacit heave of relief from members of the international community, most of whom were frustrated by the president’s quest to remain in power.

However, barely 24 hours after the Major General’s announcement, the euphoria that greeted the coup was all but diffused. It dawned on the coup plotters and their backers that they had lost the plot, same with the international community which finally began to condemn the act of the plotters. By this morning, the government announced it has arrested the leaders of the putsch, among them Major General Niyombare, who had been on the run and begging for clemency. So why did coup that looked so sure to succeed fail so swiftly?

Here are three things the plotters so wrong:

They wrongly assumed that ‘away’ meant ‘out’ 

The first mistake of the coup plotters was assuming that President Nkurunziza’s absence from the country meant a power vacuum.  Immediately the President left for a meeting in Tanzania, Major General Niyombare, the former chief of army staff and recently sacked national intelligence service, announced the dissolution of the government. He moved to seize institutions as well as seal the country’s borders to prevent the President from returning, pretty easy tasks he must have thought. Analysts thought so too; looking solely at precedence, they called the deposition a facsimile success, but they were wrong.


The president, around or not, could count on his loyalists in the army to safeguard his government.


Burundi has a history of similar takeovers that went smoothly.  The first President of the country, Michel Micombero deposed the Monarchy in 1966 through a bloodless coup and was removed in similar fashion ten years later by then Army Deputy Chief of Staff, Jean-Baptiste Bagaza. Bagaza was himself deposed by Pierre Buyoya without much hassle while he was on his way to Canada in 1987. Buyoya would leave office in 1993 and return three years later in another popular, military backed and bloodless coup against interim President Ntibantunganya. But, the present has proven different from history because unlike with past presidential casualties, the current president still has a solid support base within the military and the civilian population.

Once learning of the Niyombare’s announcement, the Nkurunziza’s spokesman derided the dismissal as a “joke”, and he had reason to feel confident. The president, around or not, could count on his loyalists in the army to safeguard his government, and that was exactly what they did. This is evident in the statement by coup co-leader, General Cyrille Ndayirukiye, who said the rebels had been “faced with an overpowering military determination to support the system in power”. This brings the second reason the coup failed.

They failed to win over the Army, or, at least, most of it

Major General Godefroid Niyombare announced the president’s dismissal at a military barracks and had some senior Army and Police Officers by his side. However, what he did not have was the support or control of most barracks, which was in the hands of the Chief of Army Staff, General Prime Niyongabo. And Niyombare did not have the General.

Major General Niyombare did not have the general support of the Army

Major General Niyombare did not have the general support of the Army

Within hours, forces loyal to General Niyongabo had pushed back the advances of the coup plotters, retaken the airport that they had blocked and sacked Radio Stations that broadcasted their declarations. “The coup attempt failed, loyal forces are still controlling all strategic points,” said Army Chief of Staff General Prime Niyongabo in a statement broadcast on state radio. While there were still running battles around the state television and radio station in the capital by Thursday, it was clear that the plot had failed.

The coup’s failure is also partly because its main backers, Niyombare and former Defence Minister Cyrille Ndayirukiye, were largely out of the pivots of the military establishment, and thus had limited control over men and resources. Niyombare lost favour with Nkurunziza in February over his warning to the president not to run for third term. He was fired as intelligence chief, and was shifted off any role of strong influence. Cyrille Ndayirukiye, who became Defence Minister after former president Busoya sacked current President Nkurunziza from the position in 2000, has also been far away from the corridors of power. It was highly inconceivable that both men could rally the armed forces without support from the current military leaders, and they clearly did not have that. This brings us to the third reason.

They did not realise the extent of ethnic sentiments, in the Army and in the public

The rebel leaders underestimated the level of ethnic loyalty to President Nkurunziza, and paid a dire price for it.

The Burundian Army is widely regarded as one of the best products of the year 2000 Arusha Accords, which marked a formal end to the country’s civil war. It was reconstituted to balance the representation of the Hutu Majority and Tutsi minority through the establishment of ethnic quotas. Since then, the unity within the army seemed to be growing– it even declared itself neutral from the protests against the President– until the coup attempt. “… In the wake of the coup, divisions between those supporting the coup and those backing Nkurunziza quickly manifested themselves in battles for control of the capital, especially state radio,” Stephen Graham and Anthony Morland wrote in IRIN. 

The Coup plotters underestimated the ethnic loyalty to Nkurunziza.  Source: Desire Nimubona, IRIN

The Coup plotters underestimated the ethnic loyalty to Nkurunziza.
Source: Desire Nimubona, IRIN

While at the surface the divisions seemed to be between supporters and opponents of Nkurunziza, than Hutu and Tutsi, it now seems not to be the case. Both Niyombare and Ndayirukiye may be of Hutu extraction, but the opposition that they led has been propagated by the government as Tutsi driven. The President’s CNDD-FDD party youth wing, the Imbonerakure, is overtly Hutu and has been accused of attacking Tutsis. Rwanda’s president, Paul Kagame has also warned of the influx of fighters from the Democratic Forces for the Liberation of Rwanda (FDLR), a Hutu rebel group based in the Democratic Republic of Congo (DRC), whom he says have come to assist Nkurunziza’s hold onto power. Such ethnic sentiments, played up by the president–a former Hutu rebel leader– made any attempt to sack him as an attempt to dismantle Hutu domination.

Given this ethnically tensed climate, it is unforeseeable how the rebels would have succeeded without starting another nationwide bloodshed. Members of the international community feared this too and condemned the coup attempt, although most did after its failure was certified.

Although coup is a confirmed failure, President Nkurunziza’s problems are far from over. Many in his country are still disgruntled with his bid for a third term, how he responds to their protests will determine if the country plunge further into crisis. Already, over 105,000 Burundians have fled to neighbouring countries for fears of more violence.

Source: New feed27

Burundi arrest 3 generals over coup attempt, leader on the run

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VENTURES AFRICA – The spokesman of the President of Burundi said this morning that security forces have arrested three generals for their role in an attempted coup in Burundi, but that the leader of the group was “still on the run.”

Among those arrested are a police general and two army generals, including former Defence Minister Cyrille Ndayirukiye, spokesman Gervais Abayeho said. He told Reuters that Major General Godefroid Niyombare, who led the coup attempt, was “still on the run, his whereabouts are not known to us.”

On Wednesday, former intelligence chief, Major General Godefroid Niyombare announced that he was dismissing President Pierre Nkurunziza seeking a third term against the Arusha accords that ended the country’s civil war a decade ago. The General’s statement, announced on national radio, was followed by an attempt to seize government institutions, the state radio and seal the Airport to prevent the president, who was at that time in Tanzania, from returning.

However, despite the support from some prominent persons in the security forces and a significant segment of the civilian populace, many of whom have been protesting Nkurunziza’s third term bid, Niyombare’s coup failed to overthrow the president. By Thursday, the early gains of seizing the airport and government institutions had been reversed by forces loyal to the President, led by the Chief of Army Staff. President Nkurunziza returned to Burundi on the same day, his office said, as the army chief declared putsch failed.

Source: New feed27

South Africa’s gold mining sector facing another prolonged strike

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VENTURES AFRICA – South Africa, Africa’s most advanced economy, could face yet another prolonged strike when the militant Association of Mineworkers and Construction Union (Amcu) takes on the gold mining companies. Amcu has called for an increase in the basic pay for entry level workers in the gold mining sector to be more than doubled.

Amcu, which is known for being a tough wage negotiator, was also behind the platinum wage strike which lasted nearly five months last year, demanding that its lowly based workers be paid R12 500.00 ($1.045).

The platinum miners and Amcu resolved to increase the salary by about 20 percent a year annually. But this crippled the platinum miners because these companies are now set to retrench thousands of workers.

Joseph Mathunjwa, the President of Amcu, this week said his union would demand a monthly wage of R12.500 ($1.045) for workers who currently earn around R6.000 ($508.98) from the gold miners.”The mineworkers are enslaved across the country. Whatever we put forward is to liberate the mining workers from this oppression,” Reuters quoted Mathunjwa as having said.

South Africa’s gold miners that could be hit by the strike include AngloGold Ashanti, Sibanye Gold and Harmony. These companies have been negatively impacted by decreasing profits and surging costs.

The companies reckon increased wages and strikes would cripple the already stressed industry.

Source: New feed24

WHO fears Ebola vaccine may not see light of day as epidemic nears end

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VENTURES AFRICA – Last weekend, a significant milestone when Liberia was declared Ebola free, having gone 42 days without a new case of the virus. While this is definitely a positive development, there are concerns that further vaccine trials will fail to provide enough insight on the degree of protection offered against the virus.

This twist in the Ebola narrative was recently disclosed by the World Health Organization (WHO) after officially declaring Liberia free of the disease. The epidemic, which lasted for about a year killed more than 4,700 people in Liberia. Neighbouring countries Guinea and Sierra Leone reported 10 and 2 cases respectively last week, confirming a gradual tilt towards the zero case target.

Presently, two experimental Ebola vaccines are being tested on volunteers but may not yield sufficient data on efficacy as the number of cases continue to shrink. According to Dr. Marie-Paule Kieny, WHO Assistant Director-General for Health Systems and Innovation, these vaccines were developed by GlaxoSmithKline and jointly by Merck and NewLink Genetics. Two other drugs including the already known Zmapp will also be tested, going forward. “The best news is we are going to zero cases, there is absolutely no doubt about that. It is not clear whether it will be possible to have even a hint of efficacy from these two vaccines. To have efficacy we must see if people are actually protected, as the number of cases is going down it is not clear whether there will be a strong robust answer to this question at the end of epidemic.”

The health body continues to hold meetings with experts on developing a plan to expedite the production of vaccines and drugs that can be used during any future epidemic. A deal on research and development could potentially be reached by the end of the year.

By Emmanuel Iruobe

Source: New feed24

Zambia hikes fuel price less than six months after slashing it

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VENTURES AFRICA – Yesterday, Zambia reversed its decision to lower fuel prices when it increased the pump prices of petrol and diesel by 15 percent.

It comes four months after it slashed prices by 23.13 percent and 28.22 percent for petrol and diesel respectively, its energy regulator said. “This adjustment is mainly due to the volatility of the kwacha, which resulted in significant depreciation of the kwacha against the United States dollar,” the regulator–chaired by Pastor Geoff Mwape–said, referring to the local currency.

Mwape explained that although international oil prices have remained stable during the review period, the exchange rate has been volatile.

Since Zambia last cut fuel prices in January, the Kwacha has averaged K7.1 to a dollar, reaching an all-time high of 7.74 in March. Weeks before the January cut, the southern African country had slashed the pump price of petrol by 4.72 percent and diesel by 5.5 percent.

The energy board hinted that prices would be adjusted again to ensure full cost recovery in the supply chain. “Future price adjustments will be dictated by changes in the key fundamentals. The ERB will endeavor to automatically adjust prices so that cost reflectively is attained for each and every petroleum feedstock cargo and imported finished petroleum products,” said Mwape.

Meanwhile, Hakainde Hichilema, Zambia’s opposition leader, says the hike in fuel prices show that the reduction ahead of the presidential elections was only a campaign gimmick by the Patriotic Front (PF). Hichilema lost the January election to Patriotic Front (PF)’s Edgar Lungu, who was the Minister of Justice under the late president, Michael Sata.


Source: New feed24

How the world reacted to the Burundi ‘coup’

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VENTURES AFRICA – In the early hours of Wednesday, a senior army officer announced that he has dismissed Burundi’s embattled President Pierre Nkurunziza for seeking a third term against the warnings of the local and international community.

Major General Godefroid Niyombare, a former ally of the president, proclaimed in a radio broadcast that “President Nkurunziza is dismissed, his government is dismissed too.” Nkurunziza, who was at that time in crisis talks in Dar es Salaam, Tanzania, dismissed his dismissal as a “joke.”

While uncertainty still hovers over who’s currently in charge of Burundi, several people have taken to the streets and social media to applaud the actions of the Major General. However, supporters of the president have also hit back at the coup, describing it as failed and ineffectual.

Here are some reactions we gathered from the micro-blogging site, Twitter, on the attempted coup.












By Tobi Eyinade

Source: New feed27

MasterCard maintains Africa is its fastest growing region

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VENTURES AFRICA – MasterCard Inc, the world’s second biggest debit and credit card firm, this week said the volume of its transactions in Africa and the Middle East had surged 21 percent against a 15 percent increase internationally in the past three years.

“This is the fastest growing region,” Michael Miebach, President of Mastercard in the Middle East and Africa, told Reuters, adding the firm continues to anticipate growth that is more than the global average in the region.

MasterCard had doubled up the amount of its cards to around 100 million in the Middle East and Africa. In the Middle East and Africa, the company has launched joint ventures with governments with the aim of providing them with entry to its payments system.

In March this year, MasterCard entered into an agreement with the Egyptian government that would see the issue of digital identification cards with built-in payment devices reach 54 million Egyptians.

MasterCard has run a trial of a plan akin to this with the federal government of Nigeria. Africa’s biggest economy also has a low rate of financial inclusion. “We see in the Middle East as well as Africa a fairly high cash dominance. If you go to Nigeria it is about 94 percent cash,” Miebach told Reuters.

Last month, MasterCard signed a deal with Premier Bank of Somalia to issue debit cards and install ATM machines in some parts of the troubled country.



Source: New feed24

How much are you paying for fuel?

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VENTURES AFRICA – In the last two weeks, Nigerians have been forced to queue for fuel and pay about a dollar more than the official price, despite being citizens of Africa’s biggest oil producer. Its four grounded refineries have ensured most of its locally consumed petroleum products are being shipped from Europe and the US, a situation that has given rise to purported “Subsidy Cabal.”

This cabal (oil marketers) got its relevance from the government’s decision to incur a portion of fuel cost for consumers by regulated the price locally. The difference is paid to this group as Subsidy. Over the last decade, this group has reportedly shared about N3 trillion, a sum that is well over three quarters of the country’s 2015 annual budget.

Despite this, queues remain evident. The group of marketers has claimed that the government still owes it $1 billion, while industry experts believe the uncertainty surrounding the incoming government’s plan on the subsidy scheme has made them reluctant to spend on transporting fuel down to Africa’s most populated country and its biggest economy.


The bickering aside, the real sufferers are local consumers, some of whom are purchasing fuel for N400 per litre ($2.3) at black market rate–four times the official N87 going rate. This is mostly seen in Lagos, Nigeria’s commercial hub where business and board meetings are happening by the minute, and a huge chunk of the higher net worth individuals reside. In the eastern state of Anambra, home to the popular Onitsha Market, one of West Africa’s largest markets, fuel is selling for around N115 to N150. The same is seen in Warri, an oil-producing city, and Benin City.

A survey by NOI Polls showed that the fuel scarcity is biting harder in Nigeria’s Northeast, a region decimated by Boko Haram insurgency. About 97 percent of people in the region admitted they bought petrol above N87 per litre. The Southwest had the lowest percentage of people who bought petrol above N87 per litre.


The poll also revealed that a majority of Nigerians have seen a rise in domestic expenses. About 48 percent are paying higher transport fares, 12 percent are spending more to keep their businesses open, and 3 percent have been unable fuel their cars.

In what way has the fuel scarcity affect you? 

Join the conversation on social media and tell us how much you have spent on a litre of fuel recently.



By Ehis Okpamen and Niyi Aderibigbe



Source: New feed24

Glencore, Barrick set to sell Tanzanian nickel project

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VENTURES AFRICA – Resources titans, Glencore and Barrick Gold are poised to dispose of their joint nickel expansion scheme in Tanzania, one of east Africa’s fastest-growing economies.

This is according to the Wall Street Journal (WSJ), which cited people familiar with the matter on Thursday.
It is believed that the disposal process may encounter problems because it is happening in the middle of instability in the price of nickel.

The Tanzanian asset is among many that have been disposed of in the past couple of years as mining companies reorganize their investment portfolios and raise funds to fix their beaten up balance sheets.

Ivan Glasenberg, Glencore CEO, has often said the company would not like to invest money in greenfields projects, adding these require bulky cash injections. The Toronto-based Barrick Gold is disposing of assets because it wants to shrink its debt by $3 billion before the close of this year, according to the WSJ.

The price of nickel continues to be unstable with some bankers claiming it could scare some investors from the Tanzanian asset.

Nickel has been surging in recent weeks. But it has slipped 5.3 percent this year and 31 percent down from highs touched last May. The two mining giants each own half of the Kabanga nickel project in northwest Tanzania.


Source: New feed24

Burundi in crisis: Army General says President deposed, government dismisses coup

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VENTURES AFRICA – Burundi’s President Pierre Nkurunziza has rebuffed the dismissal of his government announced by a senior ranking army officer, Major General Godefroid Niyombare. Niyombare, the president’s former Intelligence chief, announced this morning that he was dismissing President Pierre Nkurunziza for violating the constitution by seeking a third term, and was working with civil society groups to form a transitional government. But his statement was immediately dismissed as “a joke” by the president’s media adviser.

Major General Godefroid Niyombare was fired by Nkurunziza as intelligence chief in February for discouraging the president from running for a third term. French news network RFI reported then that the president was warned by his one-time close ally that seeking another term could plunge the country into chaos, an advise that the president has now officially rejected. 
In late April, Nkurunziza announced his decision to run for a third term in office triggering widespread protests that his candidacy violates the country’s constitution – which mandates a maximum of two term limits. The president has so far refused local and international pressure to back down from contesting, arguing that in his first term, he was elected by MPs, not through a general election.
Nkurunziza’s dogged desire for a third term has angered Major General Niyombare and several other senior ranking officers. At a military barracks, surrounded by ranking officers in the army and police, he told reporters; “regarding President Nkurunziza’s arrogance and defiance of the international community which advised him to respect the constitution and Arusha peace agreement, the committee for the establishment of the national concord decide: President Nkurunziza is dismissed, his government is dismissed too.” The action of the Niyombare-led officers has drawn wide praise from many of the Burundians who have been protesting the president’s third term bid.
Reuters say the General’s announcement drew crowds of people onto the streets of Burundi’s capital, cheering and singing, as soldiers surrounded the state broadcaster building. However, the situation is still very unclear if the General’s forces have taken over power. The South African Foreign Ministry, which is monitoring the situation in Burundi closely, said it was too early to determine whether the move amounted to a coup.
President Nkurunziza is currently in Tanzania meeting with East African leaders and a top official from South Africa to discuss the crisis that is threatening to throw the country into another war and further destabilize the region. The fate of those talks are currently unknown given the new development. The United Nations High Commission for Refugees (UNHCR) has warned that the crisis was heading towards a “worst case scenario” that could see 300,000 people fleeing. At the moment, over 50,000 people have fled to neighbouring states.

Source: New feed27

Job cuts in mining industry worry SA government

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VENTURES AFRICA – Retrenchments that have been pronounced in South Africa’s mining industry recently were a serious cause for concern for the government, Minister of Mineral Resources, Ngoako Ramatlhodi, admitted on Tuesday.

He was more worried about the fact that these retrenchments were going to add woes to the already ailing South African economy.

Last week, JSE-listed platinum producer, Lonmin, said it would retrench 3 500 workers at its South African mines due to lower platinum prices. Lonmin was among the platinum miners that were affected by the five-month long wage strike earlier last year.

The other platinum miners were Anglo American Platinum (Amplats) and Impala Platinum (Implats). At the time, economists did warn that these strikes would lead to massive job cuts. “We need bold leadership from all in the industry at this time, in order to decisively tackle this matter,” Ramatlhodi said. “Notwithstanding the difficulties faced by the industry currently, the impact of retrenchments on the economy – when we are already grappling with the triple challenge of poverty, unemployment and inequality – will have an adverse impact on the country’s socio-economic development objectives.”

Ben Magara, the Lonmin CEO, said these job cuts were aimed at saving the business for as many workers as possible.
Ramatlhodi said he is poised to escalate the issue for serious talks at the forthcoming gathering of the Mining Industry Growth Development and Employment Task Team (Migdett) principals this week Thursday.


Source: New feed23

 Seven African governments support illegal Ivory trade – Report

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VENTURES AFRICA – The governments of seven African countries are supporting elephant poaching and illegal ivory trade, a new joint report by conservation group, Born Free USA, and C4ADS has revealed.

The report showed that some senior government officials in DR Congo, Tanzania, Kenya, Zimbabwe, Sudan, Gabon and Mozambique are condoning and arming criminals who kill elephants and rhinos for their tusks and horns, respectively. “Organized crime, government corruption and militias are all linked to elephant poaching and the illegal ivory trade. Poachers in Zimbabwe, Tanzania, Sudan and Kenya move across borders with near impunity,” reads a part of the report.

In Sudan, government-allied militias fund their operations by poaching elephants outside North Sudan’s borders, while in the Democratic Republic of Congo, state security forces provide rebels with weapons and support in exchange for ivory. “It’s not just enough to say it’s criminal syndicates, nefarious profiteers. We wanted to know who is really behind it so that we can try and get governments around the world to do more to crackdown,” said Born Free USA CEO Adam Roberts. Roberts added that Born Free needed some help in gathering that kind of information.



By George Mpofu



Source: New feed27

Legacy of apartheid hits SA’s work ethic

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VENTURES AFRICA – The South African economic landscape has seen so much labour strife that some have joked that worker strikes have become Africa’s most advanced economy’s national pastime.

According to data collected and analysed in 2013 by the government’s department of labour, there was a rise in the number of strike incidents during that year. About 114 strike cases were identified and recorded by the department, and the number of strikes recorded in 2013 was more than the strikes recorded in the five years before. This represented an increase of 15.1 percent between 2012 and 2013.

During the period under review, the mining industry continued to experience more working days lost. In total, the sector lost 515,971 in 2013, contributing 27.9 percent of the total days lost to the economy. This was followed by the transport and manufacturing industries at 477,355 and 343,222 working days lost respectively. In 2013, about R6.7 billion ($562m) in wages was lost due to the participation of workers in strikes as compared to the R6.6 billion ($553.4m) in 2012. Figures for 2014 were not available at the time of writing this article.What does did say about the culture of working in South Africa?

It is basically unsettling that workers have become so numbed to losing months of wages that it is now seen as a social norm. There are many underlying factors that contribute to these outbursts. But little attention is given to the more subtle emotions and ideas not expressed but manifests themselves in their work ethic and life views.

One of them is that in South Africa, the apartheid regime, supported by the country’s big capital, exploited workers so much so that many did not enjoy going to work at all.

So, the workplace became a platform of the struggle against the government and capitalists. Unfortunately when the new democratic government came into power, it failed to make sure that there was serious transformation in the workplace. This meant the legacy of fighting employers continued as the workers continued to be exploited with little or no change.

In addition, the South African working landscape is unfortunately dominated by white employers and supervisors. Many are known to be very nasty people and still treat black people as sub human. For example, I once worked in a newsroom that was teeming with talented journalists. But the company decided to hire a white editor who was clearly racist. But the company was not aware he was racist. He ran the newsroom as his fiefdom, forcing all those journos to resign and join other companies. This begs the question, what is the magic formula for instilling the desired work ethic in South Africa’s existing and prospective employees?

According Shamillah Wilson, a human resources specialist from Sowilo Leadership Solutions, the good news is that there are ways to address it. “The bad news is that it requires dedicated efforts and initiatives to ensure that the results of these efforts are enduring.”

It could be great if South African businesses’ focus should be on the brand, profit and also releasing the potential of the people in the business. If South African businesses could do this then I am sure that the work ethic can come back in the South African workplace and the labour strife can be reduced. “The key is to take responsibility for changing and instilling a desired work ethic,” Wilson says. “This means actively creating mechanisms for identifying and articulating it in company documents and plaques such that it is not the company’s best kept secret. Taking responsibility is a key leadership strategy which involves management embodying the values and principles in their actions, interactions inside and outside of the company.”


Source: New feed27

Fuel Subsidies: Angola says it just can’t take it anymore

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VENTURES AFRICA – Battered by the collapse of its oil revenue, the Angolan government says it can no longer bear the burden of subsidizing the price of petrol and other fuels. “Gasoline now joins the free price system, ending the burden on the state of the cost of subsidies,” the ministry of finance said on Thursday. It added that the price changes will commence on September 30.

Last year’s plunge in global oil prices dealt a heavy blow to Angola’s economy, pushing the country into a budget deficit of around 8.1 percent of GDP, causing the halving of the proposed 2015 budget, and removing over 4 percentage points in the country’s GDP growth forecast. The local currency, the Kwanza, has also fallen by over 10 percent and sucked off nearly $1 billion dollars spent on defending it. Oil accounts for nearly 50 percent of Angola’s GDP, 80 percent of government revenues and 95 percent of the country’s exports.Despite being Africa’s second largest crude exporter, Angola imports most of its fuel because of its insufficient refining capacity. According to Control Risks, the Southern African nation spent around 4 percent of its 2013 budget on fuel subsidies. The government says it is unrealistic to keep carrying the heavy burden, and argues that the program, against its objectives, enriches a few than benefits the poor for whom it was made. “The ongoing effort to adopt realistic prices will help strengthen social programmes and reduce inequality, since subsidies benefit the most favoured groups and encourage fuel smuggling to neighbouring countries,” part of the statement of Finance Ministry read.The ministry added that while it will still subsidise 21 percent of the price of diesel, it will hand over the fixing of the price of gasoline to state-oil company Sonangol.  By this changes, Diesel price will increase by 25 percent, the same percentage by which the price of gasoline increased last September. The statement said the country has saved 110 billion kwanza ($1 billion) from reduced subsidies since October last year.

Despite the savings from subsidies, the Angolan government is set to embark on a borrowing spree. In February the finance ministry said it plans to borrow $10 billion from the World Bank and China in order to cushion the effect of its drastically reduced revenue. Reuters revealed in the same month that the country plans to issue a debut $1.5 billion Eurobond.

Source: New feed23

Mugabe turns to West as bankruptcy looms for Zimbabwe

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VENTURES AFRICA – Broke Zimbabwe made a surprise move this week when it approached western governments for funding to mend the country’s crumbling economy. It would be the first time in over a decade the country will be plying this route.

President Robert Mugabe has maintained a hostile relationship with western countries, especially United Kingdom, Germany, Canada and United States have been sour in the past decade. He has been very critical of these nations for accusing him of violation of human rights and election rigging. However, a worsening economic situation locally—one that is edging the Southern African country closer to Bankruptcy—has forced the 91-year old’s government to reconsider their stand.

On Wednesday Zimbabwean government officials called for a meeting with Western ambassadors and official representatives from the International Monetary Fund, World Bank and African Development Bank (AfDB) in the capital Harare to discuss direct budgetary support. “As we go forward and as we successfully build trust among ourselves, we can in future channel development assistance through the vote of credit (budget) so that we are able to plan more effectively and more efficiently,” Zimbabwe Finance, Minister Patrick Chinamasa, told the meeting that included diplomats from the United States and the European Union.

The EU has already extended a hand of support to the ailing economy. Earlier this year, it gave Zimbabwe 234 million euros after lifting sanctions in November, the first time the bloc has given cash to Mugabe’s government since imposing sanctions in 2002. Zimbabwe will hope for a similar response from the United States and Canada.

Prevailing harsh economic environment in Zimbabwe has left several companies doors closed, and kept thousands without a pay-check. According to the Reserve Bank of Zimbabwe, about 4,000 workers lost their jobs in 2014, while Finance and Economic Development Minister Patrick Chinamasa said 4,600 companies closed down between 2011 and October 2014, resulting in 64,000 job losses.

Zimbabwe is one of the few developing countries that funds its budget entirely from taxes because it does not qualify for international credit due to a foreign debt of $9 billion. Local economist Eddie Cross said, unless something drastic happens, 2015 will be another year of economic decline in Zimbabwe as collapse of social institutions and further reduction in the delivery of essential services takes its toll on the economy.



By George Mpofu



Source: New feed23

Why South African companies prefer to invest in Nigeria

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VENTURES AFRICA – Despite the diplomatic strain on Nigeria and South Africa’s bilateral relationship due to recent xenophobic attacks, South African companies are merging to expand investment to oust local competition in the country. Popular supermarket chain Shoprite and Retail clothing store, PEP store are spreading their outlets in major areas of Africa’s most populous black nation.

To meet the needs of over 170 million inhabitants of Nigeria, Shoprite will be constructing 10 other shopping centers in Nigeria. Whitey Basson’s Shoprite which launched into the Nigerian Market in 1995 entered a joint venture with Resilient Africa, a property development and investment company. The $85 million deal involves two other big South African finance and investment organizations: Standard Bank and Group Five.

“The risk in South Africa is up but returns are down. It is time to explore fresh markets,” said the Managing Director of Resilient, Mr. Des de Beer, who is known for spotting growth opportunities. He also believes that Nigeria offers better potential returns than South Africa, where opportunities for new retail developments have become few.

South African based company Pepkor Ltd, owners of PEP stores in Nigeria have also been bought by Steinhoff International Holdings. To increase its presence in Nigeria, the middle income clothing, footwears and accessories retail store will have 31 stores in operation by July this year.

Deon Conradie, the Nigeria’s manager of PEP store recently disclosed that the development is in line with the company’s desire to readily meet the growing market in Nigeria for other goods aside from food. He also confirmed that company’s expansion plan will see to the opening of 10 stores per year till 2018.


By Tobi Eyinade



Source: New feed23

Struggling Ivorian telco may be saved by Nigerian billionaire

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VENTURES AFRICA – Mike Adenuga, Nigeria’s second richest man, has moved to buy Ivorian mobile telecoms operator Comium Cote d’Ivoire. According to multiple reports, Globacom, a Nigerian mobile telecoms operator owned by Adenuga, has lodged a $600 million takeover bid for the operator.
The move is perceived by many to be a strategic one where Globacom will see gains by way of an increased presence in the West African region. Already, the Nigerian mobile telecoms giant operates in Ghana and Benin Republic, in addition to its home country and will seek to invest over $1 billion in upgrading Comium-CI’s network over the next three years. Officials of both companies are yet to confirm the bid.
Comium CI has more than 900,000 mobile subscribers according to L’Autorite de Regulation des Telecommunications and is a subsidiary of the Comium Group, a Lebanon-based telecommunications company. The group operates as a multi-service provider on four continents, specializing in Wireless Data Networks, GSM communications, Internet service provision and VoIP.
Comium CI is cash-strapped and heavily indebted to the tune of over $25 million; it’s been given till May 15 to pay off or risk being placed into receivership, a situation which leaves it with no better option than to sell to Adenuga.
According to Ventures Africa’s The Richest People in Africa, Mike Adenuga, 63, is the 2nd richest man in Nigeria with a fortune currently estimated at $8 billion. Most of his fortune comes from his ownership of the Nigerian mobile telecoms outfit Globacom, and Conoil Producing, a Nigerian oil exploration firm that operates about 6 oil blocks in the Niger Delta region of the country. His venture into entrepreneurship started with the sales of lace materials and sodas in the 1970s, he later became the first Nigerian to strike oil in commercial quantities.

Source: New feed23

How to fight poverty without aid

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VENTURES AFRICA- Non-profit global venture fund, Acumen has announced its expansion to support social entrepreneurship in Latin America. The impact investor will be headquartered in Bogotá and will invest in innovative entrepreneurs and establishments in Colombia and Peru.

Despite the rapid growth of Colombia’s economy over the years, inequality still persists in the country. While urban areas have flourished, lives in the rural areas have not improved. But Acumen is set to help better the lives of people in Latin America.

The company’s Latin America Country Director, Virgilio Barco believes that there is a strong pipeline of investment opportunities, particularly in the agriculture sector. He also explained that the organisation is focused on creating opportunities that alleviate potential poverty for generations to come, rather than short-term interventions which only generate sustainable incomes for households.

About a quarter of the country’s population who live in rural areas have been exposed to conflict and violence, thereby hindering development. Agriculture has been are held back by certain factors such as- financial services or technical assistance, land and irrigation. The lack of infrastructure prevents them from competing with other global markets, further aggravating the barriers to progress.

Although extreme poverty in Latin America has dropped by half, over 80 million people still live on $4 a day and more than 200 million suffer the risk of returning to their previous status. This launch to tackle poverty will ensure that income challenges of small holder farmers are addressed while tacking rural challenges such as water, energy and health.

Acumen CEO Jacqueline Novogratz explained that rather than rely on markets or aid alone, turning charitable donations into financial capital is also wise. “Acumen can enable Latin American businesses to grow and ultimately bring large-scale, sustainable solutions poverty.”

Source: New feed23

Aliko Dangote Still Keen On Buying Premier League Club

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The richest man in Africa Aliko Dangote is still interested in  buying English Premier League side Arsenal.

Aliko Dangote has an estimated fortune of about £10 Billion, the Nigerian has been keen to take control of the Gunners for a number of years and was linked with a stake in the club when former director Lady Nina Bracewell-Smith was selling her shares in 2010.

Majority shareholder at Arsenal Stan Kroenke remains committed to Arsenal for the long-term while Uzbekistan magnate Alisher Usmanov, who controls around 30 per cent of the club, has also expressed no desire in selling any of his stock.

But Dangote is refusing to rule out taking charge of the Londoners in the future.

Dangote, 58, who was speaking to Bloomberg, he said:

“I still hope, one day at the right price, that I will buy the team. I might buy it, not at a ridiculous price but a price that the owners won’t want to resist. I know my strategy.”

However, the 58-year-old was quick to point out that, despite the interest, no bid for the Premier League side ‘is in the pipeline’.

Dangote however had this to say about Arsenal and Arsene Wenger.

“Wenger needs to change his style a bit,” he said. “They need new direction.”


Source: 25

Why increased global trading is good for Africa

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Trade is the best cure for prejudice. It is an almost general rule that, wherever there is good citizenship, there is trade, and that, wherever there is trade, there is good citizenship.” –  French philosopher Montesquieu.

VENTURES AFRICA – Philosophically, it could be argued that nations are endowed with different sets of natural resources for the sole purpose of facilitating trade and exchange – if every nation had the exact same resource profile, there’d be no need for any form of exchange.

Beyond philosophy, however, the case for boosting global trading has never been louder with the recent growth slowdown in the global economy. A series of analyses from the International Monetary Fund (IMF), which has a long history of advocating for more criss-crossing of goods and services, suggest that trading does more than just provide money for nations, it triggers a virtuous cycle that spikes growth and innovation, while reducing poverty. “If you care about growth and innovation; if you care about jobs and the real incomes of the middle-class; if you care about poverty reduction and greater economic fairness; if you do care about all these things, you need to be serious about fostering global trade,” advocates Christine Largarde, the IMF’s Managing Director.

Africa has witnessed impressive economic growth in the last decade—fuelled by increased foreign investment inflow and better commodities trading—but a slowdown in the transfer of goods poses a number of setbacks. Africa is expected to suffer a shrunken portfolio of investment inflows should the slowdown persist.

However, should global trading improve, here are the gains Africa’s stands to attract:

More jobs: A strong correlation exists between trading and job creation. The IMF reports that exports of goods and services directly and indirectly supported an estimated 11.7 million U.S. jobs in 2014.

Ironically, Africa continues to suffer from massive unemployment. Its two biggest economies—Nigeria and South Africa—both have more than 20 percent of their population unable to secure a job. Interestingly both countries, despite attracting significant international investments, noticeably have marginal trade relations with neighbours. With the U.S. already providing more than 10 million jobs from trade avenues, both economies can take a cue from the global economic leader.

Economies of Scale: Countries like Nigeria are known for oil production, while South Africa is known for diamond and platinum mining, as well as telecom services and finance. East Africa provides a suitable tourism destination in Kenya and Ethiopia. These could all form the basis of specialisation for most of these regions.

Encouraging structural reforms: The IMF believes that trade reforms, which result from increased trading, can increase external competition in the products and services markets. This, it believes, encourages key infrastructure investments, and strengthens institutions by encouraging better governance and an improved business environment. This can be seen in China’s renewed investments strides across Africa. The country, which has sunk a minimum of $200 billion into Africa’s infrastructure landscape, has improved road access, improved aviation and supported governments’ effort in rebuilding the emerging African economy.



By Emmanuel Iruobe



Source: New feed23

South Africa to renew energy relations with Tehran

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VENTURES AFRICA – Nearly three years after international sanctions put a moratorium on oil trade between South Africa and Iran, Africa’s most advanced economy plans to reinstate its energy relation with Iran.

Tina Joemat-Pettersson, the energy minister, said, this weekend, that South Africa was looking at cooperating with Iran concerning crude oil, LNG, LPG, gas and petrochemicals. She was visiting Tehran at the weekend.

Joemat-Pettersson added that South African companies could inject money in many parts of Iran’s oil sector.
Mohsen Ghamsari, director of international affairs at the National Iranian Oil Company (NIOC), was quoted as saying South Africa was poised to import crude oil and other energy products from Iran.

In May 2012, South Africa acquired about 68.000 barrels a day of Iran’s crude. And in September last year, Africa’s second-largest crude consumer expressed interest in restarting imports from Iran, Reuters reported on Monday.

Iran’s exports of crude have slipped to about 1.1 million barrels a day, from a high of 2.5 million barrels a day in 2012 due to international sanctions, which made it tough for Iran to get buyers of its energy. Iran is currently in talks with world powers to cancel crippling economic sanctions against it. Iran could in turn introduce tough controls on its disputed nuclear programme.



Source: New feed23

Sainsbury’s CEO jailed for two years

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VENTURES AFRICA – An Egyptian court has sentenced Mike Coupe, the CEO of United Kingdom’s supermarket giant, J Sainsbury’s, to a two-year jail term. He was found guilty for allegedly trying to seize cheques from an Egyptian that had worked closely with Sainsbury’s. The sentencing though, is likely to display potential difficulties of doing business in some emerging markets.

About 15 years ago, Sainsbury’s withdrew from an Egyptian partnership with the North African country’s businessman, Amr El Nasharty, posting losses worth $170 million the process. Sainsbury’s disposed of its remaining shareholding at the time to El Nasharty with the hope of being free of what had been described as a difficult investment.

Nasharty alleged that Coupe was in Egypt in July 2014 and tried “to seize cheques” signed by him to Sainsbury’s in 2001. “This is clearly ridiculous. Mike Coupe was in London carrying out his normal duties that day,” a spokeswoman for Sainsbury’s said in a statement then.

However, as a result, a trial was held in an Egyptian court in September based on these allegations, but Coupe failed to attend. Sainsbury’s say Coupe had no prior notice of the trial. This resulted in a two-year jail sentence on Wednesday without bail, being imposed on the Sainsbury’s boss.

Coupe is currently free to travel and went to Egypt last weekend to try and deal with the charges. His case will be heard again on Sunday, May 3.



Source: New feed27

Dollar Drops Have Significant Detriment On Naira

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Emerging report have it that the American dollar has sank to its lowest level in more than two months as the currency market adopted a markedly dovish view on the United States monetary policy after data showed the economy virtually stagnating in the first three months of the year.

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However, according to Financial Times, as the market awaited the outcome of a meeting of the Federal Reserve policy makers, government bonds and equities on both sides of the Atlantic also came under pressure.

This was particularly so in Europe as the euro broke above key resistance levels, further aided by more signs that the European Central Bank’s quantitative easing programme was helping to ease deflation pressures and improve credit conditions.

By midday in New York, the dollar index (a gauge of the currency’s value against a weighted basket of peers) was down 1.1 per cent at 95.09, the lowest since the end of February. In mid-March, the measure reached a 12-year high above 100.

Mr. Ayodeji Ebo, who is an analyst at Afrinvest West Africa Limited, revealed that the drop in dollar might not impact the naira immediately.

He, however, said that if the fall persisted, it might affect foreign portfolio inflow.

He said, “The fall in dollar’s value may affect the FPI if it persists; it may not have direct impact on the naira immediately. However, it may have a very little impact if it persists for a long time.”

Source: 25

Nigeria’s new SEC boss: political settlement meets capable hands

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VENTURES AFRICA – On Monday, Nigeria’s outgoing President Goodluck Jonathan appointed his close ally and the former governor of Anambra State, Peter Obi, as the Chairman of the Securities and Exchange Commission (SEC), the regulator of Nigeria’s Stock Exchange. The appointment has all the trappings of a ‘token of appreciation’ from Jonathan to Peter Obi for his support in the former’s ill-fated presidential re-election bid. However, regardless of the political underpinnings of the selection, Peter Obi’s precedence in finance and politics means he comes to the SEC with some of the skills and traits that the regulatory body needs to kickstart growth in Nigeria’s capital market.

Peter Obi was the head of President Jonathan’s re-election campaign in the South, where the outgoing president got over 90 percent of the total votes. After finishing his second term as governor of Anambra State, Obi moved from the Southeast-based All Progressives Grand Alliance (APGA) to President Jonathan’s Peoples Democratic Party (PDP) last year October, and became one of the loudest supporters of the president’s re-election bid. He was generally expected to land a ministerial position if Jonathan got re-elected, as is commonplace in reward-driven Nigerian politics. With the failure of Jonathan to retain his Presidential seat, and the grim possibility of a political appointment for Peter Obi under the Muhammadu Buhari-led incoming government, the SEC appointment looks on the surface like a political settlement by Jonathan, whose last presidential acts have been dominated by hirings and firings. But, beyond the surface is a man capable of turning the tide in Nigeria’s struggling Capital Market.

Prior to venturing into politics, Peter Obi made his name in business and the banking industry, the most distinguishing of which was becoming the youngest ever Chairman in the history of top-tier lender, the Fidelity Bank PLC. His business exploits also extend to the fast moving consumer goods (FMCG) industry where he led the Next International Nigeria Ltd to become a leading supplier of products to supermarkets in the country. Obi’s business foundation played a crucial role in his governance of Anambra state, the commercial hub of Southeast Nigeria. He is widely praised for attracting foreign direct investments empowering indigenous investors and industrialists for which the state is renowned.”Anambra State has the tightest envelope but despite that, he achieved a lot,” Nigeria’s finance minister, Ngozi Okonjo-Iweala, said of Obi in 2014. She described him as “one the brightest governors Nigeria has produced” because of whom, “Anambra has become a good reference point in the country.” In the SEC, Obi’s finance sector experience ensures he will not be out-of-depth with his new environment.

Among the SEC’s biggest challenges is the poor local participation in the capital market. While local investment in the capital market has remarkably improved in the past few years, with a disadvantaged ratio of 40-60 percent, more Nigerian businesses are direly needed in the stock market. The domination of the stock exchange by foreign investors is one of the main causes of its tumbles in the face of negative speculations or political tensions. This is one of the areas where Peter Obi’s ‘local trader’ status can have a great impact. His connections with the local business community, especially the trading and manufacturing-focused Southeast, could be exploited to get more indigenous enterprises to list in the NSE.

Peter Obi’s ‘chill guy’ factor and political savviness is another trait that the SEC could benefit from. The thin-voiced politician is a clear departure from the loud-spoken hardline boss that the exchange commission had in the controversial Aruma Oteh. Oteh had running battles with members of staff of the SEC and other industry participants. Peter Obi’s success in winning two consecutive governorships terms in Anambra, known for the hotly contested nature of its elections, means he has the leadership savviness to navigate the conflicting interests that abound in the SEC.

While Peter Obi’s appointment may have been President’s Jonathan repayment of a political debt, it may also have landed the SEC job on the right hands. That however, will be judged by Obi’s performance in office.

Source: New feed27

Africa’s Richest Man Lists 3 Major Problems Nigeria’s President-elect Should Tackle

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Africa’s wealthiest man, Alhaji Aliko Dangote, has listed three major problems facing Nigeria’s economy that the President-elect, Muhammadu Buhari needs to deal with.

Dangote is of the opinion that Buhari, once sworn in on May 29, as the President of the Federal Republic of Nigeria, should endeavour he makes this 3 his top priorities;
1. Eradication of unemployment
2. Increment of power supply
3. Getting rid of corrupton

Dangote, while speaking with This Day, assured the president-elect that the business community will be backing his administration, adding that with President Goodluck Jonathan conceding defeat, the confidence of investors all over the world has been boosted, and that the business community would wax stronger if the president-elect tackles some urgent needs of the economy.

Speaking on unemployment, Dangote said: “It is a great and pervasive problem in Nigeria. But the point must be made that it is not peculiarly a Nigerian problem. All over the world, there are growing issues of unemployment. And what we are saying is that the in-coming government can achieve a remarkable success in this regard if it declares an emergency on unemployment and tackle it decisively. You know the organised private sector will or should play a key role in this. And that is why we are concerned.”

He further lamented the extent of damage corruption has done to Nigerian economy, describing it as a “big cankerworm that has really eaten deep into the fabric of our nation.”

“The malaise of corruption is a threat to the survival of the Nigeria economy, no doubt. We must all therefore rise in unison to tackle the menace both in the public and private sector of the economy. The Buhari-led government can show a lot of strength on this issue by showing direction, by demonstrating commitment to ridding every sector of the economy of this malaise.

“I can tell you that a lot will change in Nigeria if this issue is tackled decisively,” Dangote said.

Source: 25