Africa Brief: Barclays Africa looks at asset disposals and more...

Africa Brief: Kenya slashes coffee output on poor prices, Nigeria startup coins it on vast jobless number, and more

Kenya’s Safaricom extends CEO’s term

Kenya‘s biggest telecoms operator, Safaricom has extended the contract of its chief executive officer Bob Collymore by two years, the CEO said. Profits have risen under Col­lymore, whose initial contract of three years was due to expire at the end of next month. Pre-tax profit increased from $240.62m (R2. 3bn) in the year ended March 2010 despite a price war that lasted between August 2010 to September 2011. Contracts for the entire execu­tive team, including the chief technology officer and the chief financial officer will be expiring over the next 18-24 months and the company is in the process of identifying who wil be taking over internally. Collymore, who joined the firm that is 40% owned by Britain’s Vodafone from SA’s Vodacom steered Safaricom through a bruising price war initiated by the Kenyan unit of Bharti Airtel in August 2010. Safaricom”s 39.6% margin on earnings before interest, tax, depreciation and amortization for its last financial year is near the top of the range for telecoms globally. Its shares have surged 46%, outpacing the benchmark NSE-20 share index year to date gains of 16% by far.

For the full story, read Kenya’s Safaricom extends CEO’s term by Reuters, published by The New Age on 23/07/13

Kenya slashes coffee output on poor prices

Kenya has lowered its coffee produc­tion and export earnings projections for the 2012-13 (October-September) coffee year due to poor global prices and reduced crop acreage, the industry regulator said, The Coffee Board of Kenya said it expected produc­tion of 44000 tons of coffee, down from the previous year’s 49 003 tons. Export earnings for the season could dip to 17 billion shillings (R1.9bn) from 19 billion shillings made previously.

For the full story, read Kenya slashes coffee output on poor prices  by Reuters, published by The New Age on 23/07/13

Nigerian startup coins it on vast jobless number

When university student Ayodeji Adewunmi faced daunting hurdles in starting his own business in Nigeria, he turned to an unlikely source of inspira­tion: the country’s huge youth unem­ployment problem. ”Our mission was to have the largest active job list in the country,” he said.He may have accomplished the goal. Adewunmi’s Jobberman.com now claims to be the leading job-finder site in Africa’s most populous country, with a staff of more than 50 and about 9 000 companies posting positions.

When he first considered opening a business, he confronted challenges facing many aspiring entrepreneurs, but which in Nigeria were especially daunting. He had no cash, no contacts and little hope of finding either. “I think in our own case we lacked all that, from a capital standpoint and from a connections standpoint.” Adewunmi said. Nigeria has long been regarded as one of the world’s most corrupt countries, where cronyism is rampant. He turned to the internet because it ”has little or nothing to do with the establishment”. Adewunmi got the idea for a job-finder site from a friend who had developed the concept but had taken no action.

It would be a business with a ready-made market. About 37.5% of Nigerians under 25 are out of work, according to the National Bureau of Statistics. In a 2010 report on the job market in Nigeria, the World Bank documented the continued rise of youth unemploy­ment despite key economic reforms since the end of military rule in 1999. Among its many recommendations, the World Bank report said forging closer ties between training institu­tions and job candidates was crucial if Nigeria hoped to improve its grim jobs picture.

For the full story, read Nigerian startup coins it on vast jobless number by Ben Simon, published by The New Age on 23/07/13

Somali central bank governor denies UN ‘slush fund’ charges

The governor of the Central Bank of Somalia has asked the United Nations (UN) for help in conducting an independent audit of the nascent institution after UN monitors described it as a slush fund for private purposes. UN experts, who monitor Security Council sanctions on Somalia and Eritrea, reported that money at the Central Bank of Somalia was not used to run government institutions in the horn of Africa country and that an average 80% of withdrawals were made for private pruposes. In a letter to UN special envoy to Somalia Nicholas Kay, Mr Omer said the allegations by the UN experts undermine the ongoing institution building efforts and leads to the loss of public confidence in the capability and integrity of the bank.

The UN Security Council discussed the experts’ report and deputy US ambassador to the UN Jeffrey DeLaurentis said the 15 members were ‘deeply troubled by some of the monitoring group findings’. The US is president of the UN Security Council for this month. The overthrow of a dictator in 1991  plunged Somalia into two decades of violent turmoil, first at the hands of clan warlords and then Islamist militants, who have steadily lost ground since 2011 under pressure from an African Union military offensive.

The UN report had said that a fiduciary agency managed by Price-waterhouseCoopers “could not ensure accountability of funds once they reached the Somali govern­ment” and that of $16.9m trans­ferred by the firm to the bank, $12m could not be traced. Pricewaterhouse Coopers has not responded to requests for com­ment on the UN report. Mr Omer also asked that an audit investigate his involvement in the transfer of the $16.9m after the UN experts accused him of being “key to the irregularities

For the full story, read Somali central bank governor denies UN ‘slush fund’ charges by Michelle Nicholes, published by Business Day on 23/07/13

South Sudan to shut down oil production by end of July

South Sudan plans to sell 6.4 million barrels of oil worth $300m (R3bn) before shutting down its entire production by the end of the month due to a row over its alleged support for rebels in neighbouring Sudan, its oil minister said. The shutdown is bad news for both countries, which fought one of Africa’s longest civil wars before separating in 2011. Diplomats worry South Sudan might collapse without oil, the main source for the budget apart from foreign grants. Oil industry insiders say once the pipelines are closed it will take several months to restart production as they would have to be Hushed of water and cleaned first. Sudan has said it would allow the sale of oil which has already reached pipelines on its territory or the export terminal on the Red Sea. Kahmatullah Osman undersecretary in Sudan’s foreign ministry, told al-Akhbar newspaper Sudan would not allow any passage of south Sudanese oil unless Juba cut all ties with insurgents. ‘There won’t be any reversal’ he said, adding that Sudan hoped like South Sudan that China would no t mediate. China dominates the oil industries in both countries, and state firm China National Petroleum Corp is most affected.

For the full story, read South Sudan to shut down oil production by end of July by Reuters, published by The New Age on 23/07/13

David Okwara

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