Africa Brief: Ethiopian wine raises cheer for economy and more…

Africa Brief: Ethiopian wine raises cheer for economy and more…

Ethiopian wine raises cheer for economy

Beyond the donkeys on a potholed road in southern Ethiopia, is an unex­pected sight, vineyards bursting with merlot, syrah and chardonnay grapes ripening in the African sun.

French beverage giant Castel, which bottled its first batch of Ethiopian wine this year, is helping change the way outsiders view the country. It is also boosting government hopes of attract­ing foreign investment, key to its plans to reach middle income status by 2025. For Castel, the ambition is merely to produce good wine and Ethiopia is an ideal, if surprising, place to do that. Castel aims to sell half of this year’s production of 1.2 million bottles on the domestic market and half to Ethiopian Diaspora communities. But Olivier Spillebout, Castel’s Ethiopia site manager has been startled by some surprise customers, including a Chinese buyer who snapped up 24 000 bottles.

Ethiopia is hoping to emulate the growth of Asian nations that have focused on manufac­turing to develop rapidly.

Excerpt from : Ethiopian wine raises cheer for economy, published by Business Day on 22/07/2014

Africa well on its way to being an FDI hotspot

Africa has moved from third-last to become the second-most attractive investment destina­tion in just four years from 2011 to this year, according to EY’s Africa Attractiveness Survey for 2014. The continent’s share of global foreign direct investment (FDI) projects has reached a record high of 5.7 percent and the total value of FDI projects in Africa in­creased by 12.9 percent last year. The focus has been on sub-Saharan Africa, which now claims 83 percent of all FDI coming into the continent.

The study shows that investors are moving away from the traditional extrac­tive industries, such as oil and gas, and towards consumer-facing industries. In consumer-facing industries such as retail and banking, the foreign investor needs to add value to its investment within the host nation before it is able to take prof­its out. In the case of FDI into consumer-facing industries, foreign investors are attracted to Africa’s growing consumer base rather than its resources.

The infrastructure, value chains and regional integration developed by intra-African FDI will lay the groundwork for the rest of the world to see the potential in African growth. As investment hubs are expanded in Lagos and Nairobi, smaller, more margin­alised African economies will be brought into the continental economy and trade within Africa will increase significantly.

by Pierre Heistein published in The Star, Business Report on 22/07/2014

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Real People Investments seeks growth in Kenya

An East Africa lending drive is prompting Real People Invest­ment Holdings to sell its first bond in Kenya, as the South African company seeks to counter slowing growth at home. The lender may raise as much as 2-billion Kenyan shillings ($23m) of two- to four-year secu­rities, CEO Neil Grobbelaar said last week.

Real People, which provides loans for homes and small busi­nesses, is expanding in Kenya, Uganda and Tanzania as SA risks falling into a recession amid ris­ing unemployment and interest rates. The company has invested R300m in Kenya and wants to avoid currency fluctuations by raising local funding for the Nairobi unit, the CEO said.

“Our Kenyan business is oper­ating in a high-growth region with consumers who are under-indebted and coming off a low base,” Mr Grobbelaar said. “It’s a good opportunity.”

by Renee Bonorchis published in Business Day on 22/07/2014

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LONRHO: Cambria Africa sues for R100m in UK

Cambria Africa, a closed-ended fund listed in London and focused on Zimbabwe, is suing its former manager, Lonrho, for R100 million in the high court in London. Cambria settled a dispute with Lonrho over “alleged fraudulent misrepresentations” last year for R27m. The fund is seeking to rescind that agreement and pursue additional claims regarding three aircraft previously owned by Cambria, but leased to former subsidiaries of Lonrho.

Lonrho, the conglomerate built by the late “Tiny” Rowland and formerly known as the London and Rhodesia Mining and Land Company, was a major shareholder in Cambria Africa and managed the fund until February 2012.

by Independent Foreign Service published in The Star, Business Report on 22/07/2014

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Denel grows Somalia operation

Peace Denel is rapidly growing its presence in Somalia, providing life-support services to United Nations-led initiatives to broker peace there. This shows our versatility and capacity to provide high-level support and advice to activities outside of the defence and security environment.

Excerpt from Denel grows Somalia operation, published in Business Day on 22/07/2014

Denel grows Somalia operation

The initialling of the con­clusion of the economic part­nership agreement between a subgroup of the Southern African Development Commu­nity (SADC) and the EU sig­nalled the end of a long and difficult road for both regions, Trade and Industry Minister Rob Davies said yesterday. The EU promised that the act of initialling the agreement ensured that the current mar­ket access would remain in place until the agreement came into force. This would happen after a “scrubbing process”, which would involve legal experts and cabinet members of the countries involved.

The economic partnership agreement will improve re­gional access from the levels enjoyed under South Africa’s bilateral trade, development and co-operation agreement. The EU is SADC’s largest trading partner, and South Africa accounts for the largest share of SADC’s imports from and exports to the EU.

“In addition, we obtained an agreement that the EU will eliminate export subsidies on agriculture goods destined for Sacu, as well as more effective safeguards to address damag­ing surges of imports,” the Department of Trade and Industry said in a statement.

Excerpt from Denel grows Somalia operation, published in Business Day on 22/07/2014

Egypt Vodafone plans R14bn upgrade

Vodafone Egypt would invest about 9.5 billion Egyptian pounds (R14.1bn) over the next three years to improve its network, chief executive Ahmed Essam said late on Sunday. Vodafone Egypt would finance the plan from existing funds.

The company, which is owned by UK cellular operator Vodafone and state-controlled fixed-line telecoms firm Telecom Egypt, is the leading communications player by customer numbers in the country

Excerpt from Egypt Vodafone plans R14bn upgrade published in The Star, Business Report on 22/07/2014

Demutualised bourse to list

The Zimbabwe Stock Exchange (ZSE) had been transformed into a company from a mutual society opening the way for a public listing on the bourse it operated, Finance Minister Patrick Chinamasa said yesterday.

The ZSE had been owned and run by stockbrokers since 1946, but after demutualisation the brokers hold 68 percent while the government owns the remaining shares. Chinamasa said stockbrokers and the government would sell half their shares when the ZSE listed.

by Reuters published in The Star, Business Report on 22/07/2014

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African leaders push for own court

Complaining of bullying in the international justice arena, African leaders are forging ahead with plans to set up their own regional court and give them¬selves immunity in the process. The African Union (AU) accus¬es the Hague-based International Criminal Court (ICC) of anti-African bias and racism, and plans for a home-grown mechanism are inflaming a stand-off over who deals out justice in Africa.

In a decision last month AU leaders unanimously agreed to grant sitting heads of state and senior government officials immunity from prosecution at the African Court for Human and Peoples’ Rights. The Hague-based ICC rules that no one is protected from prosecution, but many African Leaders are quick to point out that all of the ICC’s eight cases are against Africans.

by AFP published in Business Day on 21/07/2014

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Implats falls after Zimplats collapse

MINE Impala Platinum (Implats) fell 2.9% to R103.90 on Friday after its Zimbabwean unit, Zimplats, suffered a major underground collapse at its Bimha mine. No injuries were sustained but production would halve and it would take 15 months to get back to full production.

Excerpt from Implats falls after Zimplats collapse published in Business Day on 21/07/2014

Sappi’s R1bn sale of Usutu to Swazi firm may ease Agoa woes

SAPPI’S sale of its Swaziland subsidiary, Usutu Forest, Products, this week for R1 billion to a Swazi firm is a step towards controlling the damage wrought by the country’s expulsion from the African Growth and Opportunities Act (Agoa), the US trade initiative.

“The current [paper] mill site is intended to become an industrial factory park to add full value to timber on site whenever possible and produce a reliable supply of quality timber products for diverse international markets,” said Andrew le Roux, the exec¬utive director of Montigny Investments. “There was widespread local and international interest and appetite for this opportunity and it took time to identify the best strategic partners and financiers,” said Le Roux.

While some commentators viewed Sappi’s sale of Swazi¬land’s oldest non-mining com¬pany as a vote of no-confidence in the economy, Dlamini said Sappi had its own reasons for shedding its subsidiary, includ¬ing a need for cash to reduce its debt load.

by Stephen Langa published in The Star, Business Report on 21/07/2014

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David Okwara

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