Increasing numbers among an estimated 2.5bn “unbanked” people in poorer countries are turning to their mobile phones to pay bills, transfer money and receive salaries. And now – a survey has found – the practice is spreading fast beyond its traditional heartland in sub-Saharan Africa to other parts of the emerging world such as Latin America.
The survey conducted by the GSMA, an industry group that claims membership from some 800 mobile operators in 250 countries, found that operators were offering 219 live services in 84 countries at the end of 2013, up from 179 live services in 75 countries a year earlier. A further 113 mobile money services are planned for launch, the GSMA said.
Mobile money services were rolled out in 2013 in nine new markets – Bolivia, Brazil, Egypt, Ethiopia, Guyana, Jamaica, Tajikistan and Togo, the GSMA added, quoting survey results. The survey polled 110 service providers in 56 countries. Read more
China Kingho Energy Group, one of China’s largest privately owned energy groups, remains optimistic it can make progress on a US$6bn-10bn Sierra Leone iron ore mining project as early as next year in spite of China’s slumping appetite for the metal ore.
“The difficulties we have faced so far are the macro-economic and market conditions,” said James Chang, director of external affairs in the Kingho chairman’s office told beyondbrics. Read more
The past five years have been a time of change for Nigeria’s banks but not all of it for the good. In a recent report on the sector, analysts at Ecobank Research, part of the pan-African banking group, say strategies being pursued by Nigerian banks are no longer sustainable and they must find a new growth story to boost thin lending margins and match the return on equity of their regional peers. Read more
Trent Barcroft (photo), an American who is CEO for Fiat Chrysler in South Africa, was shot in the stomach in February last year as three attackers robbed him and his wife of their cell phones, jewelry and a handbag outside Johannesburg. He survived and is determined to continue building his company’s business in a country that he was first posted to in the late 1990s.
He talks here about the experience of being shot, his recovery and the lack of police response – as well as his commercial aims – in a country where 62 per cent of business people say they or their immediate families have been affected by crime. Read more
Nigeria’s insurance sector is growing rapidly and has low levels of penetration in a young society inhabiting Africa’s largest economy. Add to this what a recent Fitch Rating report calls an environment “ripe for consolidation” and it becomes easy to see why foreign insurance groups are eyeing the market keenly.
The March 2014 Fitch report says “foreign investors in the Nigerian insurance market have shown a preference for acquisition or partnership above setting up new insurance operations”. This preference is down to a need for local knowledge, a good distribution footprint and the ability to achieve scale quickly. Read more
Two new exchange traded funds giving investors access to South Africa’s palladium market have hit the ground running.
Standard Bank’s AfricaPalladium ETF, launched on March 24, had grown to R300m ($28.4m), the equivalent of 33,000 ounces, by March 28, the bank said. Absa, a member of Barclays, unveiled its NewPalladium ETF on March 27; by Monday afternoon Absa said current listings being processed, to be concluded on April 2 and 3, showed the fund had grown to 24,847 ounces of palladium, valued at R200m.
Generally, commodity prices have come under pressure globally. So why would now be a good time to launch a palladium-backed product? Read more
At first glance, it looks as if South Africa’s latest announcements on trade and manufacturing data suggest two different narratives – one of recovery and one of continued slowdown. In fact, however, a common thread between them points toward an overall slowing growth trend.
A surprise trade surplus of R1.7bn in February represented a swing from January’s deficit of R16.9bn, pushing the rand higher as investors grew more confident over South Africa’s export performance. However, the manufacturing Purchasing Managers Index, announced on Tuesday, slipped to 50.3 in February from 51.7 in January, suggesting a slowdown in manufacturing growth. Read more
South Africa, the African continent’s largest economy, had better take note. West Africa, an area that includes Nigeria, has for the third time in three years notched up more private equity (PE) deals than Southern Africa.
West Africa had the highest reported value of deals ($545m) during 2013, surpassing Southern Africa ($491m) and Eastern Africa ($163m), according to the 2014 Deloitte’s East Africa Private Equity Confidence Survey, published this month. Read more
Zimbabwe is suffering from capital flight, a liquidity crunch, regular power outages, falling commodity prices and other manifestations of an economic crisis.
But beyond these well-documented woes, there are several “mysteries” that throw up searching governance questions for the regime of Robert Mugabe, the 90-year-old president. Read more
South Africa and Nigeria are global mineral and oil suppliers, respectively, that have built up their specialist industries over decades. So they should also be well advanced in creating investor-friendly policies and attractive operating environments. Similarly, Kenya, as east Africa’s leading economy, could be expected to create an appealing framework as it looks to tap into its own natural resources. Read more
Ghana celebrated its 57th anniversary of independence on Thursday, but a hangover from the heady 15 per cent GDP growth posted in 2011 is putting a damper on the mood.
West Africa’s second largest economy was turbo-charged by the discovery of oil in 2007. Foreign investment flowed in, attracted by the vibrant economy and the country’s reputation as a stable, democratic state. By 2011, Ghana was one of the top 10 fastest growing economies in the world and just a year later, oil had surpassed cocoa as the country’s second biggest export after gold. Read more
It’s rarely a quiet day in South African mining. Last week there was the Mining Indaba conference, where the mood among many miners was one of caution; the mines minister has indicated that the controversial Mineral and Petroleum Resources Development Amendment Bill will pass within months; and negotiations over the crippling mining strikes have apparently ground to halt. Then there was the tragic death of at least 10 workers in two separate incidents at Harmony Gold (pictured).
So where next for the industry? Read more
Mining may get a bad press in Africa, but there’s no denying the potential – and it’s importance. Nearly one quarter of the continent’s GDP is now based on extractive resources, the highest ratio among all regions, and between 2000 and 2008 alone, the value created from natural resources in Africa rose from $39.2bn to $240bn.
Yet this is all achieved despite a huge deficit in infrastructure, especially in rail. So a new Grindrod rail network deal in Zambia should be good news – if it can be delivered. Read more
Kenyan officials are on a round of investment meetings in London to discuss the country’s debut eurobond, pegged at $2bn, says the central bank. But market volatility is proving a nuisance and Kenya could be forced to delay the much-anticipated bond.
On Tuesday, analysts at Fitch Ratings said in a teleconference in London that the issue was unlikely to take place before April. Those remarks contrast with those of Kenyan officials, who reportedly said on Monday they were going ahead with plans to issue this month. So, is it going to happen? Read more
South Africa’s banks, notably its “big four” of FNB, Nedbank, Standard Bank and Absa, are some of Africa’s strongest financial institutions. But they aren’t immune to the main problems hurting the economy.
So what effect will Wednesday’s surprise interest rate hike have? Read more
Africa’s private equity industry, with the exception of South Africa, is at a phase of relative infancy and has its share of shortcomings. But factors like political stability, infrastructure growth and rising consumerism have helped spike activity in the continent’s PE hotspots across west, east and southern parts of the continent, fuelling optimism for 2014. Read more
You tell a lot by a country’s electricity supply – in fact, some people prefer it to GDP when it comes to assessing China. So how is Africa doing?
A new Afrobarometer survey of 34 African countries – What people want from government – has named the best and worst countries in terms of power supply in Africa. Read more
Tapping bond markets is something of a trend for many African countries in the past year, including Gabon this month with a $1.5bn 10-year eurobond priced to yield 6.375 per cent.
But selling long-term debt is proving a hard game in east Africa, despite the presumable attractions of political stability and a favourable business environment. Interest costs for government securities are high, with long-term instruments maintaining yields of about 10 per cent or more, creating a growing concern for central banks. Read more
Brian Dames, chief executive of Eskom (pictured), has stepped down after three years at the helm of Africa’s leading power utility and a total of 26 years with the company. Local media quoted chairman Zola Tsotsi saying Dames was going for for ‘personal reasons’.
Dames – who says he uses a gas stove at home and does not own an electric kettle – has had a turbulent time in the hot seat. His departure comes four months after that of Paul O’Flaherty, Eskom’s finance director, shines a light once again on the troubles besetting the power giant. Read more