Another landmark election for the continent, is underway in Africa’s second biggest economy, South Africa. South Africans have voted in a general and parliamentary election. As one of Africa’s leading economies, the elections will have ramifications for the rest of the continent.
South Africans trooped to the polls on Wednesday and the tallying continues. A new president will be announced on Saturday, but with early results, the ruling African National Congress (ANC) remains the dominant political party in the country and its candidate, Cyril Ramaphosa has a lot of issues to contend with if he’s returned elected.
From corruption scandals, growing urban crime, call for free education, economic instability, to perceptions that the party has lost touch with ordinary citizens, he’s got a lot on his plate but many expect him to bring his business prowess to play.
As the fifth and incumbent President, Ramaphosa, previously an anti-apartheid activist, trade union leader and partly communist, is a businessman. He previously held notable ownership in companies such as McDonald’s South Africa, chair of the board for telecoms giant, MTN and member of the board for Lonmin, one of the biggest mining companies in the Southern African nation.
Despite his credentials as an important proponent of his country’s peaceful transition to democracy, he has been widely criticised for the conduct of his business interests, but never indicted for illegal activity in any of these controversies, one of which, is his employment on the board of Lonmin’s Marikana mine and his active stance in the 2012 Marikana massacre at Lonmin premises, which led to about 30 workers’ death.
His business dealings with Glencore and allegations of benefitting illegally from coal deals with Eskom have also been called to question.
While dealing with these allegations, he has been notable for spearheading trade relations on behalf of his country, the likes of Singapore and Vietnam where they agreed on expanding trade and furthering education.
The Bilateral trade with Singapore has grown significantly, to R23.5 billion in 2015.
However, a major bone of contention for Ramaphosa once he returns as president is reform in education.
Education reform has been a priority in South Africa since the establishment of the Government of National Unity in 1994 and has played a key role in redressing the injustices of Apartheid.
Impressive progress has been made in education legislation, policy development, curriculum reform and the implementation of new ways of delivering education, but many challenges remain in many areas, such as student outcomes, labour market relevance, and funding.
Another issue, made more widely known by the student protest #FeesMustFall movement, is access to tertiary education for previously disadvantaged students.
Ramaphosa inherited a decision made by former President Jacob Zuma to grant more students access to free education, but it remains to be seen what his own stance will be on the matter and how he, along with national treasury, will provide support to the education department to make this feasible.
Last December, the government, in its 2018/2019 budget review, planned to implement fee-free higher education in a phased approach.
It planned to:
• Raise an additional R36 billion in tax revenue through an increase in the VAT rate, limited personal income tax bracket adjustments and other measures
• Reduce the Medium Term Budget Policy Statement baseline expenditure by R26 billion
• Allocate R12.4 billion for fee-free higher education and training.
• Set aside an additional R5 billion for the contingency reserve
• Provisionally allocate R6 billion for drought management and public infrastructure.
The national treasury reported that baseline spending reductions and tax measures feed through to the outer years of the framework, while allocations to higher education increase sharply.
Funding is a big issue if he intends to continue on this path but analysts are hopeful that Ramaphosa will bring his business to the table for inflow of investments for economic development.
World’s biggest marine diamond mining vessel to be financed by African banks
Nedbank Namibia, RMB Namibia, Standard Bank, ABSA and Bank Windhoek agreed to provide 80% of the funding for the ship
Five African commercial banks have partnered in a $375 million financing deal to build a new diamond mining vessel for a subsidiary of Anglo American’s diamond unit, De Beers.
Nedbank Namibia, RMB Namibia, Standard Bank, ABSA and Bank Windhoek agreed to provide 80% of the funding for the ship, which will be the world’s largest of its type.
Debmarine Namibia – a 50-50 joint venture company between De Beers and the government of Namibia – will provide the balance of $94 million.
The ship, to be known as the AMV3, will be the seventh in the Debmarine Namibia joint venture’s fleet, which mines high-quality diamonds from the ocean floor using hi-tech surveying equipment.
The AMV3 has the capacity to add 500,000 carats of annual production from 2022, and is expected to contribute 2 billion Namibian dollars ($137.64 million) a year in taxes and royalties to the Namibian treasury in its first five years of production.
“The highest quality diamonds in the world are found in our ocean,” Debmarine Namibia Chief Executive Otto Shikongo said in a statement.
“With this investment, we will be able to optimize new technology to find and recover diamonds more efficiently and meet growing consumer demand”.
Nedbank Namibia, which facilitated the arrangement, will contribute 40% of the financing and will also provide currency hedging for the deal, according to Karl-Stefan Altmann, an executive at Nedbank Corporate and Investment Banking and Treasury.
Mining, of which uranium and diamonds are a major part, contributed 14% of Namibia’s gross domestic product in 2018, according to the latest annual report of Namibia’s Chamber of Mines.
Diamonds also accounted for 14% of Anglo American’s core profit in 2018.
Zimbabwe’s inflation soars, stocks hit record high
Stocks are rising because local investors are desperate to hedge against inflation
Zimbabwe’s stock market has hit a record high, for all the wrong reasons as the country’s Industrial Index rose 5.6 per cent on Monday to extend its gain this quarter to 80 per cent.
Stocks are rising because local investors are desperate to hedge against inflation, which accelerated to 98 per cent in May. Prices are rocketing amid a scarcity of foreign exchange, which is causing shortages of fuel, medicine, and other imported goods.
In Zimbabwe, investors’ fears about inflation are heightened by a plunging currency.
The RTGS$, which the government de-linked from the U.S. dollar in February, has sunk about 57 per cent since March on the black market.
On the streets of Harare, the capital, it trades at 9.7 against the greenback. That compares with the central bank’s official and much stronger rate of 6.08.
Anadarko, Mozambique to proceed on $20 billion LNG export project
The gas liquefaction and export terminal in Mozambique will be the the largest single LNG project approved in Africa.
U.S. energy firm, Anadarko Petroleum Corp on Tuesday, gave the go-ahead for the construction of a $20 billion gas liquefaction and export terminal in Mozambique, the largest single LNG project approved in Africa.
The announcement had been expected after Anadarko flagged the decision date last month.
“As the world increasingly seeks cleaner forms of energy, the Anadarko-led Area 1 Mozambique LNG project is ideally located to meet growing demand, particularly in expanding Asian and European markets,” Chief Executive Officer Al Walker said in a statement.
Anadarko has agreed to be taken over by Occidental Petroleum Corp. Once that deal goes ahead, Occidental has agreed to sell assets including the Mozambique LNG project to French oil major and large LNG trader Total SA.
Natural gas use is growing rapidly around the world as countries seek to meet rising energy demand and wean their industrial and power sectors off dirtier coal.
The project, which has committed long-term supplies to utilities, major LNG portfolio holders and state companies around the world, underscores the industry’s conviction that LNG demand will soar in years to come despite a slump in prices this year.
Low prices for the gas that is super-cooled for transportation prompted fears final investment decisions (FIDs) such as Anadarko’s would be delayed or scrapped. But enough long-term buyers were gathered to underpin the project’s financing.
LNG prices slumped this year as a jump in supply from new terminals in the United States, Australia and Russia were not totally met by higher demand in Asia.
The trade is also nowhere near as developed as the market for crude oil, causing erratic price movements and is expected to be transformational for Mozambique, beset by economic crisis, conflict stemming from a civil war and governance malaise, whose annual gross domestic product is just $13 billion.
According to the government of Mozambique, the project is expected to create more than 5,000 direct jobs and 45,000 indirect jobs.
With a 12.88 million tonne per year (mtpa) capacity, Mozambique LNG is one of the largest greenfield LNG facilities to have ever been approved. It involves building infrastructure to extract gas from a field offshore northern Mozambique, pump it onshore and liquefy it, ready for further export by LNG tankers.
On the African east coast, the liquefaction plant will be able to sell LNG to both the lucrative Asian market, home to 75%of global LNG demand, and to the flexible European market, which helps balance global LNG trade by soaking up excess supply.
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