Nigeria has ordered foreign oil and gas companies to pay nearly $20 billion in taxes it says are owed to local states, industry and government sources said, in a move that could deter investment in Africa’s largest economy. 



n a letter sent to the companies earlier this year via a debt-collection arm of the government, Nigerian National Petroleum Corp (NNPC) cited what it called outstanding royalties and taxes for oil and gas production.



Royal Dutch Shell, Chevron, Exxon Mobil, Eni, Total and Equinor were each asked to pay the central government between $2.5 billion and $5 billion, said the sources, who saw or were briefed on the letters.



Norway’s Equinor, which produced around 45,000 barrels per day (bpd) of oil in Nigeria in 2017, confirmed the request.



“Several operators have received similar claims in a case between the authorities in Nigeria and local authorities in parts of the country,” an Equinor spokesman said.



Exxon “is currently reviewing the matter”, a spokeswoman for the U.S. company said.



Shell, Total, Eni and Chevron declined to comment, as did Nigeria’s presidency, petroleum ministry and NNPC.



<h4 class="wp-block-heading">‘NO MERIT’</h4>



The charge came after the central Nigerian government and local states settled a dispute over the distribution of revenue from hydrocarbon production. The sides agreed last year that Abuja would pay the states several billion dollars, three company and government sources said.



The companies were expected to dispute their respective payment claims.



“Equinor sees no merit to the case,” the company spokesman said.



A source at another company said: “This looks like an internal dispute between the federal and local governments. The central government is simply trying to shift to the IOCs (international oil companies) money it owes.”



It was unclear whether the move was linked to the upcoming presidential election in Nigeria, the most populous African country.



The tax demand adds a fresh challenge to energy companies investing in Nigeria, Africa’s biggest oil and gas producer, which have been negotiating production-sharing agreements with the government to develop and operate giant offshore fields.



Oil theft, massive oil spills and corruption further complicate operations in the country.



Nigeria, a member of the Organization of the Petroleum Exporting Countries (OPEC), produced around 2.1 million bpd of oil last year, compared with 1.86 million bpd in 2017, NNPC says.



 Nigeria uses several types of contract with energy companies including the establishment of joint ventures and production sharing, the two most common partnerships for international oil companies in the country.



The companies pay the government in the form of royalties and tax as well as providing the state with oil and gas. -Reuters



-Felix Onuah, Camillus Eboh, Alexis Akwagyiram, Gwladys Fouche, Jennifer Hiller, Bate Felix and Stephen Jewkes

gettyimages-533552151-170667a

Nigeria Hits Oil Majors With Billions In Back Taxes

Treasury sets out plans to render on to Caesar what belongs
to Caesar. 



<hr class="wp-block-separator"/>



 Revenue collection remains a bugbear for government due to weak economic growth and tax administration concerns, which were self-inflicted, South Africa’s Finance Minister Tito Mboweni told journalist in a Budget press conference. 



The revised tax revenue estimate for 2018/19 is R15.4 billion lower than anticipated by the 2018 Medium Term Budget Policy Statement (MTBPS) estimate. Thus the projected revenue shortfall of R27.4 billion is now R42.8 billion compared with the 2018 Budget estimate. 



This sombre news was revealed by Mboweni in his maiden Budget on Wednesday. To address this shortfall, tax changes designed to raise R15 billion in additional tax revenue in 2019/20 have been introduced.



These among others include:



<ul><li>Increasing the tax-free threshold for personal income taxes from
R78 150 to R79 000. No changes will be made to personal income tax
brackets.&nbsp; </li><li>Increasing the fuel levy by 29c/litre, consisting of a 15c/litre
increase in the general fuel levy, a 5c/litre increase in the Road Accident
Fund (RAF) levy and the introduction of a carbon tax on fuel of 9c/litre.&nbsp; </li><li>Increasing excise duties on alcohol and tobacco products by between
7.4 per cent and 9 per cent. The targeted excise tax burden for wine, beer and
spirits is 11 per cent, 23 per cent and 36 per cent respectively.</li><li>No change in the monthly medical tax credit for medical scheme
contributions.</li><li>Increase in health promotion levy from 1 April from 2.1c to 2.21c
per gram in excess of 4 grams of sugar per 100ml. </li><li>Limiting the RAF levy diesel refund for primary production
industries to ensure that diesel users in these sectors equitably contribute
towards their RAF indemnity.</li><li>The implementation of carbon tax on 1 June 2019. </li><li>Government proposes to align the tax treatment on ad valorem
excise duty on motor vehicles Because of the way ad valorem excise duty is
calculated, vehicles produced locally are taxed at a higher rate than imported
vehicles. </li><li>Government intends to publish draft legislation for public comment
during 2019 on a gambling tax. </li><li>Urban development zone tax incentive to be reviewed. </li><li>South Africa reviewing its oil and gas tax regimes in 2019. </li><li>Taxing electronic cigarettes and tobacco heating products. </li><li>Definition of fuel levy goods for tax purposes to be reviewed may
include mineral ethanol, illuminating paraffin, aviation kerosene, liquefied
petroleum gas, compressed natural gas – as well as biofuels such as bioethanol
and biogas</li><li>Tax on “single-use” plastics including straws, caps, beverage cups
and lids, and containers to curb their use and encourage recycling will be
considered. </li></ul>



Although few, government has also introduced a number of tax incentives. These include: 



<ul><li>From 1 March 2019, employers participating in the Employment tax
incentive will be able to claim the maximum value of R1 000 per month for
employees earning up to R4 500 monthly, up from R4 000 previously. The
incentive value will taper to zero at the maximum monthly income of R6
500.&nbsp; </li><li>From 1 April 2019, the list of items for zero-rating for VAT will
include white bread flour, cake flour and sanitary pads.&nbsp; </li><li>Energy-efficiency savings tax incentive to be extended to 31
December 2022. During 2019, government will review the design and
administration of the incentive to improve its ease of use, effectiveness and
economic impact.&nbsp; </li></ul>



Treasury has also recognised that to render on to Caesar, what belongs to Caesar it needs to restore the efficiency of SARS. To do this it plans to:



<ul><li>Appoint a new SARS Commissioner in the coming
weeks.</li><li>It has established a new Illicit Economy Unit to
fight trade in the illicit economy.&nbsp; </li><li>Officially launch the Large business Unit in
early April 2019.&nbsp; </li><li>Strengthen SARS IT team &amp; systems. </li><li>Establish information sharing agreements with
allies to help fight cross-border tax evasion schemes.</li><li>Set up an inspector-general for tax administration.</li><li>Through internal processes, SARS will implement recommendations
concerning inappropriate actions, fruitless and wasteful expenditure, unfair
labour practices and maladministration.&nbsp; </li><li>SARS will review contracts that breached public procurement
regulations and will act to recover funds spent.&nbsp; </li><li>SARS is normalising refund payments. </li></ul>

ED_0077667

#Budget2019 | South African government not taking on #Eskom’s debt

At the end of the third quarter last year, South Africa recorded a high unemployment rate of 27.5%. Townships and informal settlements are at the helm of this problem where the youth lack resources to even apply for jobs.



<hr class="wp-block-separator"/>



A young, unemployed man crosses a busy street on 12th Avenue.



Dragging a greasy trolley filled with trash, he looks at us
blankly as he continues to lug his garbage to the nearest junkyard. 



It is a regular sight and a regular weekday on the streets
of Alexandra, eight kilometers from Africa’s richest square mile, Sandton, in
South Africa.&nbsp; 



Sixteen-seater minibus-taxis dash from corner to corner,
packing their vehicles with enough passengers before making their way out of
the township. 



It is 10.30AM on this sunny Wednesday morning in December. 



The street corners are adorned with colorful tuckshops; they
stand out against the backdrop of the grey homes around them. 



<div class="wp-block-image"><figure class="aligncenter"><img loading="lazy" decoding="async" width="925" height="595" src="https://www.forbesafrica.com/wp-content/uploads/2019/02/Unemployed1.png" alt="" class="wp-image-39175" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed1.png 925w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed1-300x193.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed1-600x386.png 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed1-768x494.png 768w" sizes="(max-width: 925px) 100vw, 925px" /><figcaption>An Alexandra resident collects trash in order to make a living in the over-populated community. Picture: Gypseenia Lion</figcaption></figure></div>



One of the spaza shops is bright blue with light textures of
yellow paint; a man sits behind a mesh by the sales counter. It is almost
impossible to see his face. 



He offers a young man a cigarette via a peep hole through
the mesh. 



Three men gather to smoke the same cigarette before making
their way to the multi-purpose community center on the other side of the road. 



Each carrying a sling bag and an A4 envelope, they disappear
into a building located at the end of a twirling staircase. Young and old
ceaselessly walk in and out.



The yard is filled with a number of service centers: the
local clinic, revenue service offices, the post office, multiple internet shops
and the Youth Advisory Centre (YAC). 



At the end of the hallway, Themba Mafuya sits collecting
dozens of résumés from the eager youth who are desperately in search of
employment.



He gathers the pile of documents and hands it over to his assistant. 



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“People are hungry for jobs,” he says as he looks at the unending stream of visitors walking in and out of the center. </blockquote>



Mafuya’s institution creates a database of unemployed youth
within the community with the sole purpose of&nbsp;
collaborating with companies that are looking to hire. 



By working closely with government, YAC reports to the City
of Johannesburg on the state of unemployment in the community. 



Dressed in casual wear, the 29-year-old has a friendly and
positive approach when he advises potential employees. 



“Go and correct the mistakes on your résumé that I explained
to you. Make sure your documents are certified and bring it to me as soon as
possible. Don’t worry, they will hire you,” he tells a young lady.



With Gauteng province being the economic powerhouse of South
Africa, contributing 35% to the country’s GDP, according to recent figures
released by Stats SA, unemployment remains an area of concern – 29.6% of people
live in the province without jobs. 



But the province is not among the lowest performing in the
country. With an unemployment rate of 36.6%, the Free State has the highest
provincial unemployment rate according to StatsSA, in 2018. 



Limpopo, with a prominent rural population, surprisingly,
has an unemployment rate of 18.9%, making it the lowest in the country. 



Townships in the surrounding areas of Gauteng are still
faced with an influx of challenges relating to unemployment. 



Adding to the lack of jobs, social issues play a big part. 



“We need to start doing follow-ups. Ask how many youth have
been employed? Who are not employed? Why are they not employed? Maybe they do
not have a correct résumé and we need to figure out why the employees do not
choose them,” says Mafuya. 



Just a few streets away is a compound adjacent to a block of
fading pink apartments. 



The yard is divided by a muddy passage with small dwellings
on either side.



A smell lingers far beyond the cracks of the cement block as
two buckets get noisly filled with hot water to clean chicken. 



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="926" height="613" src="https://www.forbesafrica.com/wp-content/uploads/2019/02/Unemployed4.png" alt="" class="wp-image-39176" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed4.png 926w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed4-300x199.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed4-600x397.png 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed4-768x508.png 768w" sizes="(max-width: 926px) 100vw, 926px" /><figcaption>A scene depicting a busy street corner on a late Wednesday morning in Alexandra. Popularly known as Alex, the township has one of the most highest concentrated unemployment rates in Gauteng. Picture: Gypseenia Lion </figcaption></figure>



Alfredah Phuloane introduces herself after she wipes the
chicken remnants off her hands using her multi-colored t-shirt.



With Phuloane is her uncle Velile Ndlovu who is her business
partner.



“As long as I have chicken, they are going. If I have 55,
all of them will be bought. I’ve already sold 25 for the day and we have just
started,” she says.



A helper, who didn’t want to be named, gushes: “I love my
job and I am proud of it.”



She too, like the 27.5% of the South African population who
are unemployed, will celebrate any job that will help them put food on the
table.&nbsp; 



In 2018, StatsSA announced an increase in the unemployment
rate at the end of the third quarter. 



According to the Quarterly Labour Force Survey, there are
16.4 million employed people and 6.2 million unemployed people between the ages
of 15 and 64 years in South Africa.



The latest figures record that the number of unemployed
people in South Africa grew by 127,000 from the 6.08 million in the previous
quarter. 



StatsSA Statistician-General, Risenga Maluleke, says
unemployment, according to the statistics collected, is calculated using the
4&#215;4 rule. 



These are job-seekers in search of employment four days a
week in a four-week period. 



Phuloane, who has been unemployed for three years, took the
iniatitive to start the business when she realized there was a demand for
freshly-slaughtered chicken in her community.&nbsp;




“At the time, when we were slaughtering the chicken for our
own consumption, some people were coming in and asking if we were selling them.
That is when we realized people needed chicken,”&nbsp; Ndlovu laughs. 



Ndlovu leaves the compound at 4.30AM to stand in a long
queue in Linbro Park where he buys the live chickens. 



On his return, at around 7AM, he places the fowl in a
makeshift coop.



With the helper, who earns a sum of money for her
assistance, the trio spend the day processing and packaging chicken for
customers. 



Three years of unemployment led Phuloane, a former domestic
worker, to entrepreneurship.



“If my business does succeed, I want to hire those who do
not have jobs. I want to make their lives simple. They can start their own
businesses then, because you can’t wait for work. There are no jobs now and it
will be difficult,” Phuloane says.



Her uncle on the other hand, who worked as a recycler in a
recycling company, decided to quit his job in late 2018. 



When Ndlovu rejected a job transfer to South Africa’s
capital Pretoria, it suddenly made him one of the thousands without employment.




The formal sector recorded job losses of 65,000 people, and
agriculture lost 1,000 employees in the third quarter of last year.



Without the promise of an increase, had he accepted the job
in Pretoria, Ndlovu’s expenses would have increased by $111 to travel 41
kilometers to the north eastern part of Johannesburg. 



He decided to quit.



“We realized that there is a big opportunity in the
township. We are trying by all means to not rely on anyone. We can take our children
to school. No one will suffer if they think about starting a business,” he
says. 



Social engineer Action Setaka, from the organization
ACTIVATE! Change Drivers (ACD), who advocates for the unemployed, says there is
a copious amount of injustice hampering access to employment.



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It is even worse in the townships. 



ACD is a network of young people interested in driving
change for the public good of the country through innovation and activism. 



For Setaka, unemployment has become a commodity for business
and institutions to exploit those desperately in search of work. 



From the seemlingly endless amount of documentation required
when applying for governmental posts, to the costs of printing and accessing
the internet at internet cafés, money is required.



It does not end there. 



“Transportation costs for traveling to interviews; posting
of résumés cost money, which benefits the internet cafés; data to browse job
opportunities and mobile networks make money out of this. Searching for
employment requires money, yet you find people who claim that our young people
are lazy and, therefore, they are not prepared to find work,” Setaka says.



The dire plight of the jobless youth in Alexandra is not in
isolation.



Similar circumstances reverbarate throughout the townships
of South Africa.



Another township, much like Alexandra, with compounds filled
with shacks, is swarming with people seeking jobs for survival. 



Located in the northern part of Johannesburg, Diepsloot has
the highest concentration of unemployed people in Gauteng. 



This is according to the Gauteng City-Regional Observatory
(GCRO)’s Mapping Unemployment publication, released in August 2018. 



The location, established in 1994, has grown into a
community with a population of more than 160,000 with an estimate of “24,737
shacks alongside more than 5,000 formal housing units, such as RDP
(Reconstruction and Development Programme) houses, self-built houses on
serviced sites, and a small number of bank-financed houses,” as quoted in
Diepsloot, a brochure compiled by the Johannesburg Development Agency. 



Based on the StatsSA 2011 census, the GCRO map shows the
concentration of unemployed people in areas that had rates worse than the
provincial median in 2011.



According to GCRO statistics, “the square kilometer areas
with the highest concentration of unemployed people are observed in townships
such as Alexandra and Diepsloot and contain 4,965 and 8,758 people”.



Diepsloot’s South African Youth Project (SAYP) general
manager, Clifford Legodi, says gaining access to employment for unemployed
youth in townships is harder than it is for youth who grow up in urban regions.
This points to a system exclusion due to the lack of access to resources. 



Thus, the development programs that will meet the demands of
the working environment will, in turn, open up opportunities. 



It starts with breaking norms. 



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“Young black people or previously disadvantaged communities
are still using the traditional method of taking a taxi, printing a résumé or
going to the offices. We felt that it was important to incorporate an online
skills program. You look at their online presence. How they apply for a job
online. Are they actually keeping a good online profile and how to secure
opportunities in time?” Legodi says.



SAYP is a youth development organization aimed at the
empowerment of young people by giving them the skillsets to utilize the
opportunities around them. 



This is done through the ‘Power Through Jobs’ program
offered by the non-profit.



Life skills, work-readiness, and getting a job are some of
the main points of focus for the youth of the township. 



Online job-searching skills have been implemented in order
to keep up with the evolving working environment.



Through encouragement and continuous skills development,
Legodi says the notion of staying in one position will fade away, and the youth
of Diepsloot will aspire to climb the corporate ladder.



“If they can conduct themselves in a professional manner,
they will gain credibility,” he says. 



The population is dominated by black people and for Legodi,
the lack of opportunities within their reach means that those who are able find
employment will have to travel long distances to get to work.



“Diepsloot has its own reputation that is quite limiting for
young people to get opportunities out there. 



“The media also has a bit of an influence, bad news sells. A
lot of the things you see are about the crime, but everyone is treated equally
within the community,” he says. 



“The mistake we have been making in the past when it comes to
addressing unemployment, is that we tried to develop a program that put
everyone in the same box. We tend to forget that people come from different
geographical locations and they are exposed to different lifestyles.” 



Twenty-nine-year-old Thapelo Tau sits in a living room
watching television. 



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="921" height="611" src="https://www.forbesafrica.com/wp-content/uploads/2019/02/Unemployed2.png" alt="" class="wp-image-39177" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed2.png 921w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed2-300x199.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed2-600x398.png 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/02/Unemployed2-768x509.png 768w" sizes="(max-width: 921px) 100vw, 921px" /><figcaption>Thapelo Tau of Alexandra. Picture: Gypseenia Lion </figcaption></figure>



It is noon and he is catching up on his favorite shows in
the home he shares with his mother and two sisters.



“I have been unemployed for five or six years. It has been
difficult to look for work. Many people here give up and they just sit at home
and watch television,” he says. 



He spends most of his time on his phone and reading.



“You may take your documents to look for work, but when you
leave, they tear it up. We just give up because there is nothing we can do. I
have an uncle who has been looking for work for a long time. He just stopped
looking,” Tau says. 



When approached for comment, the uncle dismisses the
interview in vernacular. 



“We are looking for work. We can’t even speak English,” he
says. 



English is widely considered the language of access in this
nation where there are 11 official langages. Those who can’t speak the language
are almost always immediately excluded from public participation.



“The problem that we have seen with people from townships is
self-confidence. They get afraid when they have to leave their comfort space.
They then need to present themselves in a different way, they have to adjust to
a different lifestyle to showcase an approach,” says Legodi. 



Afri-Berry founder and director, Relobohile Moeng, says the language barrier is one of the biggest challenges for the youth in the townships. Going the extra mile for an intern who lacked verbal communication skills, she offered mentorship and guidance. “The confidence part I had to build in, as her mentor,” attests Moeng. 



Townships have the undying potential to contribute greatly to the country’s aggregate economic growth; this can be achieved only if the high populations are granted the opportunity to play their part in the economy. Alexandra and Diepsloot are testament to the facts. 



In the interim, Ndlovu, much like the rest of the unemployed population, strives against all odds, hoping against hope to continue to put food on his own table whilst feeding his community.

Unemployed3

IN PICTURES | The Occupation Of Unemployment In South Africa

Maipato Kesebang normally grows maize, jugo beans and sweet reed on her 20-hectare plot of land northwest of Gaborone, Botswana’s capital. But last year, worsening drought and heatwaves destroyed much of her harvest.



“The little that grew feebly we just ate. Nothing was left for storage or to sell,” she said.



Usually when her crops fail she turns to collecting wild spinach to sell, to support her two sons. But even that is now disappearing as climate change brings harsher weather and more people turn to harvesting the vegetable to survive, she said.



So last year, for the first time, she signed up to Ipelegeng, a long-standing government safety net program that provides temporary jobs for those struggling to make ends meet.



Now she works one month out of four cutting back overgrown grass and trees, desilting dams and drains, collecting litter or cleaning streets.



She’d prefer to work every month &#8211; but demand is so high for the jobs that there aren’t enough slots, she said.



“We only work for a month, then we go home and wait for three months before we apply again. That’s because there are too many people now needing the relief,” said Kesebang, as she pulled weeds on her parched plot of land.



As harsher droughts and hotter weather linked to climate change ruin crops more frequently in Botswana, the country is facing a new challenge: growing demand for social assistance programs.



<h4 class="wp-block-heading">SWELLING RANKS</h4>



About 68,000 people worked for Ipelegeng as of March 2018, according to figures from Statistics Botswana, up from about 64,000 in March 2016. Of those on the rolls, about 47,000 were women, according to the agency.



To accommodate rising demand, Botswana’s government last August increased the number of Ipelegeng slots by 5,000, after declaring 2018-2019 an expected drought year.



That will cost the country an extra $2.7 million &#8211; money that it does not readily have as its national budget does not specifically set money aside for drought relief, said Billyboy Siabatho, deputy director of the rural development council at the Ministry of Local Government and Rural Development.



“Often, when drought comes, we end up borrowing from funds that would have been set aside for infrastructure development projects,” he said.



Ipelegeng’s main objective is to provide short term employment and relief, while helping carry out development efforts the country sees as important, he said.



“During drought periods, there are fewer farming activities. Therefore most people relocate from farms to villages, looking for alternative sources of income,” Siabatho said.



“Due to limited job opportunities in rural areas, most people rely on Ipelegeng as an alternative source of employment,” he noted.



But as droughts continue to worsen in southern Africa, Siabatho wonders whether the government will be able to keep pace with growing demand.



He also worries whether people will begin to see dependence on safety nets as an easier route than farming, as crop failures worsen.



Botswana’s government, aware of the risks from worsening drought, began in December working on a new drought management strategy that aims to improve planning and budgeting for threats and not focus simply on responding to them, Siabatho said.



<h4 class="wp-block-heading">‘BEANS ARE BURNING’</h4>



For Kesebang, such help can’t come soon enough. Her farm, a few kilometers out of the town of Molepolole, sits in Kweneng District, which has the highest poverty levels in the country, of over 50 percent, according to 2018 report by Statistics Botswana.



Most of the 567 pula ($55) she earns each month she works for Ipelegeng goes to keep her youngest son in primary school.



“I buy books and uniform. Often nothing is really left. Life has become difficult,” she said.



The new planting season isn’t looking much more promising either, she said. Most of the maize, beans, sweet reed and watermelon she planted in late December are struggling, she said.



“The beans are already burning. I have no hope of harvesting maize. Maybe the watermelons will survive,” she said, hopefully.



She’s already given up plowing three-quarters of her farm, to avoid greater losses, she said, though she has allowed a friend to try her luck farming a four-hectare section.



For now, Kesebeng heads to town each day to join hundreds of other temporary workers trimming tree branches that obstruct traffic.



Harsher weather isn’t hitting only the poorest farmers, either. Oduetse Koboto, who heads the environment and climate change unit at the United Nations Development Programme, said he saw little harvest from his own farm last year, in part because of floods.



“I planted tomatoes on 1.5 hectares. I expected to make 200,000 pula ($19,000). I lost. I had also planted a hectare of green peppers, expecting 600,000 pula ($58,000) from it. I lost all that too,” he said.



His 600 mango trees produced not a single useable fruit, he added, and “this is regardless of the fact that I use drip irrigation, solar pumping, and spent on farm maintenance all year round”.



“Imagine what the poor in villages must be going through,” he said.



<h4 class="wp-block-heading">RISING COSTS</h4>



Botswana for over a decade has invested in helping farmers boost grain production and improve food security, including through measures such as better access to credit, technology, seeds and water.



But with droughts worsening, improving harvests remains a challenge &#8211; and the country continues to import over 80 percent of its food from South Africa.



“Low production in the agricultural sector due to drought has led to high import bills in cereals, dairy, poultry products and feeds, to name but a few,” Siabatho said.



Costs for programs like Ipelegeng also are rising, he said, noting that the program now costs over $28 million a year to run.



For Kesebang, stress levels are also rising. After watching her new crops wilt, she was nearly hospitalized as a result of anxiety and high blood pressure, she said, and had to remain in Molepolole for two weeks.



Recent rains have now given her a bit more optimism.



“A week into February it rained at least twice. The few plants that survived are recovering. I have hope,” she said. -Reuters



&#8211;Sharon Tshipa

gettyimages-184076723-594×594

Famed Cullinan Mine Banks On Big Diamonds To Drive Down Debt

South African power utility Eskom cut electricity for a fourth straight day on Wednesday, as the department of public enterprises warned the struggling state-owned firm needed a cash injection by April to survive. 



Eskom, which supplies more than 90 percent of the power in Africa’s most industrialized economy but is laden with more than $30 billion of debt, is battling a shortage of capacity that threatens to derail government plans to lift the sluggish economy.



President Cyril Ramaphosa said last week that the government would support Eskom’s balance sheet but said details would be announced in a budget speech by the finance minister on Feb. 20.



The department of public enterprises, which oversees Eskom, said in a presentation to parliament that Eskom was technically insolvent and would “cease to exist” at the current trajectory by April, unless it gets the bailout. The minister, Pravin Gordhan, however, ruled out privatization of the utility.



The department also said Eskom was struggling to keep its mainly coal-fired plants running due to coal shortages and poor maintenance, with 40 percent of breakdowns a result of human error.



The cash-strapped company said it would cut 3,000 megawatts (MW) of power from the national grid from 0600 GMT on Wednesday, likely until 2100 GMT. This follows a similar cut on Tuesday and 4,000 MW on Monday in the worst power cuts seen in several years that drove the rand currency down on Monday. The rand was slightly firmer against the U.S. dollar on Wednesday.



Around a third of Eskom’s 45,000 MW capacity was offline on Tuesday.



The power cuts are prompting frustration among ordinary South Africans, with traffic gridlock in major cities during rush hours as traffic lights stop working and switched-off fans leave office workers sweating in the summer heat.



Business owners with no access to backup power sources have also been hit.



“We’re struggling,” said Eunice Mashaba, a manager of a textile shop north of Johannesburg who said he had to close the shop early on Tuesday because most customers do not carry cash but have to rely on debit or credit cards for payment.



Ramaphosa announced a plan last week to split Eskom into three separate entities in an effort to make it more efficient as he tries to lift the economy before an election in May, but faces opposition from powerful labor unions and from within his ruling African National Congress party. -Reuters



-Olivia Kumwenda-Mtambo and Wendell Roelf

View of electric pylons in Randburg, viewed from Republic Road, Johannesburg, Gauteng, South Africa.

South Africa’s Eskom Extends Power Cuts, Needs Bailout By April

Investors made a U-turn on emerging markets, naming them the most crowded trade, in Bank of America Merrill Lynch’s survey for the first time in its history. 



This marked a big reversal from last month, when fund managers said “short EM” was the third most-crowded trade &#8211; showing how fast the mood can shift in an uncertain market.



It could prove to be a bad omen for emerging markets, though, as assets named “most crowded” usually sink soon afterwards.



Previous “most crowded” trades have included Bitcoin, and the U.S. FAANG tech stocks, which led the selloff in December.



Emerging-market stocks .MSCIEF are up 7.8 percent so far this year, and flow data on Friday showed investors pumped record amounts of money into emerging stocks and bonds.



Emerging-market assets had a torrid 2018. Crises in Turkey and Argentina ripped through developing countries already suffering from a strong dollar and rising U.S. yields pushing up borrowing costs.



But a dovish turn by the Fed at the start of the year, indicating the world’s top central bank would not raise interest rates as quickly as previously expected, sparked fresh enthusiasm among investors.



Major asset managers and investment banks such as JPMorgan, Citi and BlueBay Asset Management ramped up their exposure to emerging markets in recent weeks..



The Institute of International Finance (IIF) predicted a “wall of money” was set to flood into emerging market assets.



However, there are some indications momentum may be waning. Analyzing flows of its own clients, investment bank Citi noted they had turned cautious on emerging-market assets over the last week, with both real money and leveraged investors pulling out funds following four weeks of inflows.



BAML did not specify whether the “long EM” crowded trade referred to bonds, equities or both.



Outside emerging markets, investors’ main concern remained the possibility of a global trade war. It topped the list of biggest tail risks for the ninth straight month, followed by a slowdown in China, the world’s second-largest economy, and a corporate credit crunch.



Overall, BAML’s February survey &#8211; conducted between Feb. 1 and 7, with 218 panelists managing $625 billion in total &#8211; showed investor sentiment had hardly improved. Global equity allocations fell to their lowest levels since September, 2016.



“Despite the recent rally, investor sentiment remains bearish,” said Michael Hartnett, chief investment strategist at BAML.



<h4 class="wp-block-heading">SECULAR STAGNATION</h4>



Investors remained worried about the global economy, with 55 percent of those surveyed bearish on both the growth and inflation outlook for the next year.



“Secular stagnation is the consensus view,” BAML strategists wrote.



Following this theme, investors were most positive on cash and, within equities, preferred high-dividend-yielding sectors like pharmaceuticals, consumer discretionary, and real estate investment trusts.



As investors added to their cash allocations, the number of fund managers overweight cash hit its highest level since January, 2009.



The least preferred sectors were those sensitive to the cycle, like energy and industrials &#8211; which BAML strategists see as good contrarian investments if “green shoots” appear in the global economy.



Worries about corporate debt were still running high, with this month’s survey showing a new high in the number of investors demanding companies reduce leverage.



Some 46 percent of fund managers find corporate balance sheets to be over-leveraged, the survey found, and 51 percent of investors want companies to use cash flow to improve their balance sheets. That’s the highest percentage since July 2009.



Europe, one of investors’ least-favored regions, showed a slight improvement. A net 5 percent reported being overweight euro zone stocks, from 11 percent underweight last month.



But investors’ reported intention to own European stocks in the next year dropped to six-year lows as the profit outlook for the region continued to lag.



Allocations to UK stocks increased slightly from last month but the UK remained investors’ “consensus underweight”, BAML said. It has been so since February 2016. -Reuters



-Josephine Mason, Helen Reid, and Karin Strohecker

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A Bad Omen? Emerging Markets ‘Most Crowded Trade’ For First Time

Venture capital-backed financial technology companies raised a record $39.57 billion from investors globally in 2018, up 120 percent from the previous year, according to research by data provider CB Insights published on Tuesday. 



Funding was raised through 1,707 deals, up from 1,480 in 2017, the research said.



The surge in funding was due in large part to 52 mega-rounds, or investments larger than $100 million, which were worth $24.88 billion combined, the research said.



A $14 billion investment in Ant Financial, the payment affiliate of Chinese e-commerce giant Alibaba Group Holding Ltd, accounted for 35 percent of total fintech funding alone last year, the research said.



In the last three months of the year, five companies joined the coveted ranks of fintech “unicorns”, or companies valued at more than $1 billion. These include credit card provider Brex, digital bank Monzo and data aggregator Plaid.



Venture capital investors have been pouring billions of dollars into fintech companies, in the hopes that they can gain market share from incumbent financial institutions by offering easier to use and cheaper digital financial services.



Fintechs have emerged globally across all sectors of finance, including lending, banking and wealth management.



While the large rounds minted new unicorns and led funding to hit a record high in 2018, CB Insights estimates these will likely delay initial public offerings.



“IPO activity is likely to remain lackluster in 2019,” the research reads.



Asia saw the biggest jump in number of deals in 2018, growing 38 percent from the previous year and accounting for a record $22.65 billion, according to the study.



In the United States, fintechs raised a record $11.89 billion through 659 investments, while the number of deals dropped in Europe, but funding reached a record $3.53 billion. -Reuters



-Anna Irrera

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Fintech Companies Raised a Record $39.6 Billion in 2018: Research

In recent months,&nbsp;various debates&nbsp;about the South African Reserve Bank have focused broadly on three aspects – its shareholding, its mandate and its independence.



The three debates are somewhat convoluted. They are indeed three different issues, but they are interlinked.



Let’s turn to the issue of ownership first.



The South African Reserve Bank is one of&nbsp;only eight central banks&nbsp;in the world with private shareholders. The others are in Belgium, Greece, Italy, Japan, San Marino, Switzerland and Turkey.



The debate about shareholding in South Africa’s Reserve Bank centres around the issue of&nbsp;nationalisation. Some political players, such as the third largest party – the Economic Freedom Fighters – are&nbsp;calling&nbsp;for the ownership of the Bank to be transferred from current private shareholders to the South African government and has tabled a bill in Parliament to achieve this objective.



The issue is very charged. But it’s also confused and not very well understood. There’s an assumption that a change of ownership would automatically mean a change in the role the Bank plays. This isn’t the case because in fact the Bank’s shareholders play no role in its mandate. In that sense it doesn’t matter who the shareholders are. Because they can’t affect its mandate, nationalisation&nbsp;won’t affect&nbsp;the independence of the central bank.



But there are other ways in which the Bank’s ability to do its job can be undermined. This is where the Bank’s&nbsp;primary mandate&nbsp;comes in.



<h2 class="wp-block-heading">The mandate issue</h2>



The mandate of South Africa’s central bank is set out in the&nbsp;<a href="https://www.gov.za/documents/constitution-republic-south-africa-1996">Constitution</a>, which says:



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">The primary objective of the Bank shall be to protect the value of the currency of the Republic of South Africa in the interest of balanced and sustainable economic growth in the Republic.</blockquote>



The Bank also adheres to an inflation target which was&nbsp;<a href="https://www.resbank.co.za/MonetaryPolicy/DecisionMaking/Pages/default.aspx">put in place</a>&nbsp;in 2000. This requires it to keep inflation within a band of 3% to 6%. The Bank uses monetary policy and interest rate decisions to achieve this objective. In short, when the inflationary trend declines, the interest rate declines and when the inflationary trend increases, the interest rate increases.



The issue of the Bank’s focus on keeping inflation within this band – and the fact that its mandate sets out clearly that managing inflation is it’s core job – is hotly contested.



Those on the left of the political spectrum, including the country’s largest trade union federation,&nbsp;argue&nbsp;that the South African Reserve Bank shouldn’t focus primarily on inflation. Instead, they say, it should also be taking account of economic growth as well as the employment rate in the country.



The Bank’s response has been that its current mandate is broad enough because it says quite clearly that, while managing inflation, it must do so “in the interest of balanced and sustainable economic growth in the Republic”.



For those like myself who oppose a broader mandate, the issue is quite simple: giving the Bank a broader mandate raises the danger that the Bank will take its eye off inflation because it’s having to concentrate on other issues. This, in turn, could lead to rampant inflation.



The Bank’s mandate is crucial in another respect. The SA Reserve Bank’s ability to pursue its mandate without interference from government is how its independence is measured.



South Africa’s central bank has acted on the whim of politicians before. It didn’t end well.



<h2 class="wp-block-heading">How political interference can hurt</h2>



In the 1980s inflation rose dramatically, resulting in the country suffering its&nbsp;highest inflation&nbsp;rates ever: on average about 15% per year for the decade.



Despite the fact that rising prices called for the Bank to act by raising interest rates, it failed to do so on instructions of the government. Inflation wreaked havoc on the earnings of ordinary South Africans, as well as on the value of people’s pensions.



The government’s interference was dramatically brought to light ahead of a by-election in 1984 in a Johannesburg suburb called Primrose. Just prior to the by-election the government instructed the South African Reserve Bank to drop the interest rate. This subsequently became known as the&nbsp;Primrose Prime incident.



<h2 class="wp-block-heading">Where the focus should be</h2>



The debates swirling around the central bank have&nbsp;created uncertainty. This is despite&nbsp;reassurances&nbsp;from South African President Cyril Ramaphosa.



The President needs to do more: he also needs to establish certainty about the executive management of the South African Reserve Bank.



An executive vacancy at the central bank, created by the&nbsp;resignation&nbsp;of one of the Deputy Governors, Francois Groepe, must be filled as a matter of urgency. And the President should make clear his intention to reappoint the Governor, Lesetja Kganyago, and the Deputy Governor, Daniel Mminele, whose terms expire this year.



These appointments are under the purview of the President. The SA Reserve Bank Act&nbsp;stipulates&nbsp;that the President must fill executive positions after consultation with the Minister of Finance and the Bank’s board.



South Africa needs stability at the central bank to ensure a growth trajectory for the country. The President should get the process of filling the vacancy and providing certainty about the future of Kganyago and Mminele underway sooner rather than later. -The Conversation



-Jannie Rossouw: Head of School of Economic &amp; Business Sciences, University of the Witwatersrand



<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/110365/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important">

South African Reserve Bank Rate Announcement Ahead Of Stimulus Plan

Explainer: South Africa’s Central Bank – Ownership, Mandate and Independence

European equities may be close to a bottom as bearish investors price in a sharp economic slowdown and a flurry of political risks such as Brexit, asset manager BlackRock said in a note on Wednesday.



“Given the significantly bearish sentiment and positioning towards European equities, we could be nearing the point of maximum pain for the European market, particularly if fundamentals stabilize and improve from here,” wrote Nigel Bolton, who heads the BlackRock European Equity Team.



While Bolton saw “opportunity” for a “gentle increase” in European growth this year, he warned that company results could nevertheless disappoint, flagging risks of earnings downgrades across the market, particularly in leveraged companies. -Reuters



-Julien Ponthus

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European Stocks Nearing ‘Point of Maximum Pain’ – Blackrock

Tesla Inc’s chief financial officer will leave the company as the automaker on Wednesday promised cheaper Model 3 sedans, the launch of Chinese production this year and profits in every quarter in 2019. 



The departure of Deepak Ahuja as well as missing Wall Street profit targets for the end of 2018, sent Tesla shares down nearly 6 percent after hours. Zach Kirkhorn, Tesla’s vice president of finance, will replace Ahuja, who is about 56 years old.



Chief Executive Elon Musk touted strong demand for the Model 3, as the company begins to ship the car to Europe and Asia from its Fremont, California factory. But he acknowledged it was paramount to cut costs to lower the price of the vehicle for a wider customer base.



“We have to be relentless about costs in order to make affordable cars and not go bankrupt,” said Musk on a conference call with analysts.



While the company expressed optimism that it could post a profit in the first quarter despite fewer deliveries of its flagship S and X vehicles, Tesla warned of challenges such as logistics and global deliveries of its new Model 3.



Tesla said plans to lower the price of the Model 3 were contingent on quickly building its factory in China. It hopes to produce 500,000 vehicles a year there by the last quarter of 2019 and the second quarter of 2020, a goal it originally expected to meet in 2018.



To start, the Shanghai factory will build 3,000 Model 3s per week, while production at Tesla’s Fremont plant will rise to 7,000 Model 3s per week by year’s end, the company estimated.



“Bottom line is we need the Shanghai factory to achieve that 10,000 rate and have the cars be affordable,” Musk told analysts. “The demand for Model 3 is insanely high. The inhibitor is affordability.”



Musk announced a 7 percent workforce reduction earlier this month, saying it was crucial to cut costs to roll out a lower-priced, yet still profitable, Model 3.



The cheapest today is priced at $44,000. Musk gave a “rough guess” that Tesla would begin building its originally promised $35,000 version around the middle of this year.



Roth Capital Partners analyst Craig Irwin called Tesla’s results “somewhat weak, but largely as expected.”



“We think people have been too bullish about Tesla showing earnings power, and sustained positive cash from operations,” he said.



<h4 class="wp-block-heading">MORE CASH</h4>



Investors have wondered whether Tesla, which has never posted an annual profit, will seek more capital to fund a planned Model Y SUV, the building of factories in China and Europe, and the expansion of Tesla’s existing Nevada battery plant, the Gigafactory.Slideshow&nbsp;(3 Images)



Tesla said it ended the quarter with $4.3 billion in cash and said it could pay a $920 million convertible bond maturing in March.



“Tesla has a fantastic brand, and by all accounts a fantastic product, but we’re worried it’s also fantastically expensive,” said Nicholas Hyett, Equity Analyst at Hargreaves Lansdown. “2019 could prove a make-or-break year.”



The winding down of a U.S. tax subsidy this year will make all Tesla cars more expensive and could hurt sales.



Tesla said it expected lower S and X deliveries in the first quarter, given a “pull-forward in demand” in 2018 for those vehicles when the full subsidy was still available. Tesla recognizes revenue once a vehicle is delivered.



Apple posts revenue drop but optimistic on China



In the fourth quarter, customer deposits decreased by $113 million from the prior quarter to $793 million. Tesla said it was working through its Model 3 backlog without clarifying further.



Asked about Model 3 reservations, Ahuja said that number was “not relevant.” Tesla last disclosed in May that net Model 3 reservations &#8211; accounting for new orders and cancellations &#8211; exceeded 450,000.



The company made a net profit of $139.5 million in the three months ended Dec. 31, compared with a $311.5 million in the third quarter, when it benefited from regulatory credits. 



Excluding items, Tesla earned $1.93 per share, missing expectations of $2.20 per share, according to IBES data from Refinitiv.



Tesla’s total revenue rose 5.9 percent to $7.23 billion, beating the analyst average estimate of $7.08 billion. -Reuters



-Sonam Rai in Bengaluru and Alexandria Sage

RC11AFA40560

Tesla CFO Leaves as Automaker Promises Profits and Cheaper Cars

Jitters over global growth and a possible pause to U.S. monetary tightening are expected to set gold prices up for gains in 2019, a Reuters poll showed on Tuesday, but the metal will struggle to break above recent highs. 



The survey of 36 analysts and traders returned a median forecast for gold to average $1,305 an ounce in 2019, up around 3 percent from last year’s average and a touch higher than forecast in a similar poll three months ago.



It predicted prices would average $1,350 in 2020 &#8211; just below peaks of $1,374.91 in 2016 and $1,366.07 last year. 



In 2018, gold saw its first annual decline in three years, with surging stock markets and higher U.S. interest rates offering investors better returns elsewhere, while a stronger U.S. dollar made gold more expensive for non-U.S. buyers.



READ MORE | <a href="https://www.forbesafrica.com/wealth/2019/01/29/gold-reaches-seven-month-high-as-stocks-dollar-struggle/" target="_blank" rel="noreferrer noopener" aria-label="Gold Reaches Seven-month High as Stocks, Dollar Struggle (opens in a new tab)">Gold Reaches Seven-month High as Stocks, Dollar Struggle</a>



But the metal has managed a firmer trajectory so far this year, reaching seven-month highs and hovering around the important technical level of $1,300.



“A slowdown in Fed interest (rate) hikes, possibly a weaker or at least not strengthening U.S. dollar, further U.S. stock corrections and ongoing geopolitical instability are building the perfect storm (in favor of gold),” Frederic Panizzutti at MKS said.



Flagging growth in China and elsewhere and a U.S.-China trade dispute have knocked world stock markets from last year’s record highs and raised fears of a broader global slowdown &#8211; reviving interest in gold as a safe store of value.



Economists, meanwhile, say the U.S. Federal Reserve will slow the pace of rate rises, and currency strategists polled by Reuters believe a dollar rally is largely over.



Adding to the bullish mood, gold-backed exchange-traded funds have added around 4 million ounces, or 7.6 percent, to their holdings of the metal since early October.



Speculators had also turned positive, with bets on higher prices on the Comex exchange overtaking bets on price falls by mid-December, after which data has been unavailable due to a partial U.S. government shutdown. [CFTC/]



“We see gold in a longer-term recovery. The first phase, driven by normalizing sentiment in the futures market, seems to be completed and a short-term consolidation looks likely,” said Julius Baer analyst Carsten Menke.



“The second phase, characterized by a weakening U.S. dollar, should start around the middle of this year, followed by a third phase of returning safe-haven demand once growth and inflation concerns creep into financial markets early next decade,” he said.



Gold is often held as protection against inflation, which erodes the value of other assets.



For silver, poll respondents forecast an average price of $16 an ounce this year, up from last year’s average of $15.68 but less than the $16.40 they predicted three months ago. It marked the fourth consecutive poll in which the 2019 silver price forecast had been downgraded.



They said prices would average $17.20 next year.



That would push the closely watched gold/silver ratio down from 2-1/2-decade highs reached last year.



Silver is used in electronics as well as for investment, and the worsening global economic outlook has weighed on prices. It also tends to follow the direction of gold, and its price swings are often more extreme than those of bullion.



“We are cautiously bullish on silver prices, given a fundamentally sound demand-and-supply physical market,” Societe Generale analyst Robin Bhar said.



“Silver is undervalued relative to gold and some catch-up is likely,” he said. -Reuters



-Arpan Varghese and Arijit Bose, Peter Hobson and Sethuraman N.R.

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Gold Back on Upward Path As Global Growth Slows

Gold climbed to a seven-month high on Tuesday as markets opted for caution before three major macro events and a blizzard of big tech company earnings in the coming days, starting with Apple later. 



Despite the upcoming action &#8211; a key Brexit vote in the UK , Wednesday’s U.S. Federal Reserve decision and Thursday’s conclusion of the latest Sino-U.S. trade talks &#8211; European and Asian stocks held up relatively well.



London’s FTSE rose 1 percent and Frankfurt and Paris both made some ground. Utilities and other safety plays benefited from a series of U.S. profit alerts, including from digger maker Caterpillar, overnight.



News that the U.S had leveled charges against China’s telecom giant Huawei days before the next round of trade talks between Washington and Beijing knocked sentiment.



But it was offset by promises of more economic stimulus from China, which had berated Washington on Monday for blocking the appointment of judges for its World Trade Organisation appeal against U.S. tariffs.



Amid the turmoil, gold broke through $1,300 an ounce to reach its highest since mid June.



“Investors are very cautious with many uncertainties on U.S.-China trade talks and Brexit. Huawei is at the center of dispute, creating very noisy background for the trade talks,” said Margaret Yang, a market analyst at CMC Markets.



“All these are making it more difficult for investors to judge the market’s direction. Money is fleeing into assets such as gold, seeking safety.” ,”



The U.S.-Sino moves, as well as bets that the U.S. Fed will sound more cautious on Wednesday, kept the dollar near a two-week low and heightened the safe-haven appeal of the Japanese yen and the Swiss franc.



Sterling held at $1.3166 and 86.88 pence to the euro before crucial votes later in the day aimed at breaking a deadlock in the UK parliament over Brexit .



The pound has rallied 6 percent from Jan. 4 lows, but further gains may be limited unless lawmakers emerge with a big majority on the votes.



Most European government bond yields were little changed. Weaker economic data and unknowns like the trade feuds and Brexit have all boosted expectations that interest rates will stay low.



New debt deals from Greece, Belgium and Austria were also in the pipeline. The slide in rates has also encouraged governments to launch new bond deals. Even Angola, which has just taken IMF aid, said it was eyeing a bond sale.



In Asia, shares were mixed, with losses for Australia and New Zealand, with their benchmark indices down 0.5 percent and 1.2 percent respectively. Japanese and Chinese stocks both recovered from early wobbles to finish in the green.



<h4 class="wp-block-heading">WARNING BELLS</h4>



Markets will have more catalysts this week with over 100 of the S&amp;P500 companies reporting results, including Amazon, Apple and Facebook.



Overnight on Wall Street, the Dow and S&amp;P 500 each closed down 0.8 percent and the Nasdaq was off more than 1 percent.



The losses came after Caterpillar and Nvidia Corp joined a growing list of companies cautioning about the crippling effects of softening Chinese demand.



World markets slip on China worries; dollar steady ahead of trade talks



“Both companies are seen as industry bellwethers, and their disappointing results provide further evidence that this time China’s slowdown is for real,” said Rodrigo Catril, Sydney-based strategist at National Australia Bank.



Worryingly, earnings at China’s industrial firms too shrank in December, pointing to more troubles for the country’s vast manufacturing sector, which are already struggling with a decline in orders, job layoffs and factory closures.



Oil recovered after overnight losses. U.S. crude was last up 35 cents at $52.34 a barrel; Brent gained 37 cents to $60.30.



Washington imposed sanctions on Venezuelan state-owned oil company PDVSA on Monday, a step that is likely to curb its crude exports to the U.S. and ratchet up the pressure on President Nicolas Maduro. -Reuters



-Marc Jones

Gold Bar Casting At Valcambi SA Precious Metals Refinery

Gold Reaches Seven-month High as Stocks, Dollar Struggle

South Africa’s Naspers has taken full control of Russia’s largest classified advertising platform Avito after it spent $1.16 billion to buy the 29.1 percent it did not already own, the media and e-commerce group said on Friday. 



It was reported earlier on Friday that Naspers was nearing a deal to buyout minority shareholders in a transaction that could value Avito at about $4 billion.



Naspers said the deal, made through its classifieds business OLX Group, implied an enterprise value of about $3.85 billion and would boost its holding in the company from 70.4 percent to 99.6 percent, with Avito’s co-founders holding the rest.



“Avito is the leading online classifieds player in Russia and our decision to increase our stake reflects our belief in the long-term prospects of this great business and the Russian internet market,” Naspers Chief Executive Bob van Dijk said in the statement.



Online marketplaces in Russia have grown rapidly in the last few years, offering anything from food delivery and cleaning to private house construction services.



Avito was launched by entrepreneurs Jonas Nordlander and Filip Engelbert in 2007 as Russia’s answer to Craigslist and today owns and operates the country’s largest online classifieds website Avito.ru.



The company’s marketplace covers a range of categories including autos and real estate and attracts more than 32 million unique visitors a month, according to its website.



Naspers has transformed itself from a newspaper publisher into an $96 billion media empire by pushing into websites and e-commerce, holding stakes in Russian internet group Mail.Ru and Chinese social network firm Tencent.



The South African company invested in Avito in 2013 by buying a 17.4 percent stake, merging in its local classified businesses and injecting $50 million in cash. The transaction valued Avito at more than $570 million.



Naspers then raised its holding to 67.9 percent, valuing the company at $2.4 billion and leaving it with four minority investors.



Separately, Avito minority investor Vostok New Ventures said it had sold its 13.2 percent stake for $540 million. Its CEO Per Brilioth said Avito had produced an internal rate of return of some 37 percent for the investor that bought into the company when it was founded.



Naspers, which had $8.7 billion in cash as of the end of September primarily from the sale of Flipkart and Tencent shares, said the deal was funded by its existing cash resources and closed on Friday.



-Esha Vaish, Arno Schuetze and Emma Rumney

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Naspers Takes Full Control of Russian Classifieds Website Avito

As the rubbish built up on the rubble of Mogadishu’s wrecked streets, Ahmed Abdullah saw a business opportunity. 



He recruited a team of workers &#8211; many of them refugees from Somalia’s long conflict &#8211; and sent them out to collect plastic bags, bottles and wrappers to turn into roof tiles and other recycled goods.



“They cannot break, you see,” Abdullah said has he threw some of his tiles onto the floor to show their strength. “They are made of the recycled plastics and soil.”



Years of fierce fighting in the coastal city have destroyed its infrastructure and left the surviving buildings pocked with bullet holes.



The cash-strapped government is struggling to control a vast, divided country where Islamist militants from the al Qaeda-linked al Shabaab group still launch regular attacks on the capital.



Regular rubbish collection is way down the state’s list of priorities.



“A lot of rubbish like plastics, paper bags &#8230; are thrown outside the city,” said Abdullah. When the piles get too big, he added, people start dumping it in the ocean.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="999" height="666" src="https://www.forbesafrica.com/wp-content/uploads/2019/01/RC1A64D76950.jpg" alt="" class="wp-image-38741" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/01/RC1A64D76950.jpg 999w, https://cms.forbesafrica.com/wp-content/uploads/2019/01/RC1A64D76950-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/01/RC1A64D76950-600x400.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/01/RC1A64D76950-768x512.jpg 768w" sizes="(max-width: 999px) 100vw, 999px" /><figcaption> Employees fill bags with shredded plastic litter to be made into roofing tiles at the Envirogreen recycling plant in Mogadishu, Somalia January 13, 2019. Picture taken January 13, 2019. REUTERS/Feisal Omar </figcaption></figure>



So, in June 2018, he and others founded their company, Green Plastic.



Muslimo Aden Ali said he gets paid 3,000 Somali shillings ($5.18) for every kg of waste he brings in.



“We carry the rubbish on our heads and backs. It is a nice job. We survive on this,” he said.



Maryan Abdullahi, a 35-year-old mother displaced by fighting, said she walks more than 10 km (7 miles) a day searching for plastic.



“I cannot sleep at night because of back ache but this is the only way I can raise food for my children.”



-Abdi Sheikh

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Somalis Turn a Profit by Transforming Their Scrap Plastic

South African President Cyril Ramaphosa pledged on Wednesday that his government would not interfere with the independence of the Reserve Bank, despite a proposal by the ruling party to broaden its focus to boost employment and economic growth.



“We do not seek to interfere with its independence,” Ramaphosa told a news conference at the World Economic Forum in the Swiss ski resort of Davos.



The central bank’s mandate now focuses on price stability, but the African National Congress said in its 2019 election manifesto that monetary policy should also “take into account other objectives, such as employment creation and economic growth”.

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