Africa Brief: Nigeria-SA Chamber talk African trade and more…
Nigeria-SA Chamber talk African trade
A meeting of the Nigeria-South Africa Chamber of Commerce to be hosted by Brand South Africa in Lagos, Nigeria tomorrow, will discuss Africa’s competitiveness and ways of boosting intra-African trade. Members include, amongst others, Stanbic, MTN, Honeywell Group, and Old Mutual. “The chamber is probably the most vibrant and active chamber of commerce in Nigeria, and was set up in 2000 to promote bilateral trade relations between Nigeria and South Africa” said deputy trade and industry minister Mzwandile Masina on Monday.
Excerpt from Nigeria-SA Chamber talk African trade published in The New Age on 20/08/2014
WBHO pulls plug on its Mozambican pipe mill
Wilson Bayly Holmes Ovcon (WBHO) has decided to either sell or close its financially troubled Mozambican pipe mill, Capital Star Steel (CSS). This follows the listed construction and engineering group reporting in June that it had impaired the value of CSS, which would affect its earnings in the year to June. CSS is a subsidiary of Capital Africa Steel, through which WBHO runs its construction materials businesses. The group said this week that the shelving and racking businesses Symo, a division within Capital Africa Steel and Krost Shelving were also both disposed of in the year to June. WBHO said these businesses would be disclosed as discontinued operations on September 1 when the group published its annual results. WBHO advised shareholders in June that the profitability of CSS had been severely affected by various production stoppages that had continued into the second half of the year. WBHO shares jumped 3.46 percent higher to close at R137.41 on the JSE yesterday.
by Roy Cokayne published in The Star, Business Report on 20/08/2014
City Lodge looks east to build its African empire
The City Lodge Group is to build a 170-room hotel in Nairobi, Kenya at a cost of $23 million (about R240 million) and another in Tanzania’s capital DAE es Salaam at a cost of $22 million. The move is significant, considering that many South African companies have Nigeria specifically, as a jumping-off point. It also shows how frail the South African hospitality industry really is as hotel operators shift their focus abroad. Financial director Andrew Widegger said City Lodge picked Bast Africa because it liked the fundamentals of gross domestic product growth for those countries, it is closer to South Africa than West Africa and hotel groups can still build scale. Besides Kenya and Tanzania, City Lodge plans to open hotels in Kampala in Uganda and in Rwanda. Widegger said that if its cross-border deals worked, City Lodge could be making up to 40% of its profits outside South Africa in about five years.
Excerpt from City Lodge looks east to build its African empire published in Business Times on 17/08/2014
Spar, Woolworths step into new markets
As Spars R800 million purchase of the Irish chain of the same name this week illustrates, SA retail giants are looking increasingly across the border for new profits. To underscore this trend, Woolworths is buying out the 49% it doesn’t own of its Zambian business. It follows hot on the heels of its mega R21 billion deal to buy Australian department store David Jones. Both deals make sense given that there does not appear much growth left in South Africa at the moment said independent retail analyst Syd Vianello. Investors will probably also be pleased that, in this case, Spar is taking on debt to buy the company, and choosing not to issue new shares. Thanks to the deal, Spar’s net asset value per share will rise to 10.4%, while its headline earnings per share for last year would have grown by 8.8%. Woolworth’s Zambian deal shows that CEO Ian Moir is not resting on his laurels after scoring his David Jones deal last month.
Excerpt from Spar, Woolworths step into new markets published in Business Times on 17/08/2014
Could Africa be the next China
Africa’s changing demographic over the next three and a half decades could transform the continent into the next China, but only if its youthful population is educated and entrepreneurial. By the middle of this century, Africa will be home to about 41% of the world’s births, 40% of all global under fives and 37% of all children under 18, said Unicef. “If you have a young, dynamic, entrepreneurial workforce with the appropriate economic models to absorb this workforce, you could see something like a China happening here,” said David Anthony, chief of the policy advocacy and coordination unit at Unicef. The window of opportunities for Africa to reap the demographic dividend is small and it is not a given. African government had to implement appropriate economic and social policies, particularly in terms of education and health, which encourages investment in children and young people, said Unicef. The demographic could turn into a burden if there is no investment in children and young people, he warned. “They really offer our best hope to consolidate the continent’s status as a global power. But what will matter most is whether or not we take the necessary steps to invest in our Children”, said Anthony.
Excerpt from Could Africa be the next China published in Business Times on 17/08/2014
Ebola shines a spotlight on Africa’s poor healthcare systems
The Ebola virus is creating a “strange, unfamiliar creature in Nigeria called responsible leadership” says columnist Pius Adesanmi wrote last week. For every problem, Africa’s most responsible leadership has only one solution: escape and leave the people at the mercy of the elements. Nigeria’s president certainly did move quickly on the Ebola crisis, declaring a state of emergency and making millions available to contain the virus as panic spread. The Ebola crisis has put the spotlight on health facilities in West Africa and by extension Africa. African countries is not for the fainted hearted unless you can afford private healthcare, which most cannot. The continent has 10% of the world’s population but it bears 25% of the global disease burden. Fighting disease from a prevention perspective is difficult as the necessary tools, such as sanitation, clean water and nutrition, are generally not in place. If political leaders were forced to use public health systems, they would soon find a way to address the challenges that they spend most of their time and energy to avoid.
by Diana Games published in Business Day on 18/08/2014
Sun International sells control of Africa
Sun International is planning on disposing of a significant portion of its interests in its African assets to the biggest hospitability firm in Asia Pacific, Minor International Public Company(Mint) for R664 million. The deal would allow it to focus on the casino element of the business in its African operations. Sun International would remain a minority shareholder and partner in the African operations, other than in Zambia, where it would still retain its 50 percent control. The proceeds will be used to reduce debt and to help identify more growth opportunities in Latin America and Asia in line with its strategy. It will continue to manage the casino operations whilst Mint assumes the day to day management responsibility for the hotel operations. At the completion of the transaction, Sun International will hold interest of 20 percent or less in each of these hotels and resorts. The transaction will exclude the South African operations as well as Sun International’s investments in the Tourism Company of Nigeria.
Excerpt from Sun International sells control of Africa published in The Star, Business Report on 19/08/2014