Africa News blog

World Cup Bonus for Workers

Soccer City in Johannesburg will be home to the opening and the final of the FIFA World Cup this year. On Monday, the men and women who helped build the stadium were given letters that assured them of two free tickets to the opening match.

120 000 tickets will be distributed to construction, community workers and children as part of a FIFA initiative to make sure that regular South Africans, who would normally not have the opportunity to go watch a World Cup match, can see their soccer heroes in the flesh.

Father of three, Zola Mdinmgi, said he will be taking his wife to the opening game on the 11th of June. “She knows too much about soccer. I’m too excited. It will be a big event for South Africa. It will also be nice to be here with my partner,” he said.

Thoziswa Maliwa shared the same sentiment and said she will be taking her boyfriend to the opening.” I’m so happy. Welcome to Soccer City.”

Organising Committee CEO Dr Danny Jordaan described the structure as, “not just a stadium, but a monument of this country.”

What do you think of the new upgraded Soccer City? Is it a monument to the country? Will South Africa turn heads come June 11th?

Click here to view 2010 World Cup Stadiums Slideshow

Hope and fear in African business

It might surprise some that African business leaders are much more optimistic than the global average, which is what a new survey from PricewaterhouseCoopers shows.

The study, for which hundreds of executives were surveyed, suggested optimism had held up in Africa despite the global downturn.

“Africa’s immense growth potential could help explain high levels of confidence compared to that of business leaders elsewhere, many of whom work in mature markets that were heavily impacted by the crisis,” the study said.

The report, released ahead of the World Economic Forum for Africa, also indicated African executives were more confident that their firms would be providing more jobs than were those elsewhere.

Not everywhere in Africa fared equally well, however. South Africa was no more optimistic than the global average.

And while African executives might be more optimistic, they are also more worried about potential risks. While the global average on the ‘Anxiety Index’ was around 39, African CEOs came in at more than 52.

Motor-rickshaws changing face of transport in Mali

Mali introduced Chinese-made motor rickshaws in 2006. They’ve been such a hit that most of Mali’s bigger cities are overrun with them and competition between drivers is pushing down prices. They’ve now been barred from the centre of the capital, Bamako, but in Mali’s third-largest city, Segou, the rickshaw-taxi is the main means of public transport.

“I have a wife and seven children,” rickshaw driver Bassidi Baba Djefaga told Reuters Africa Journal. “This rickshaw is what enables me to feed my family. Before I had the rickshaw, I was a taxi driver and had two taxis. But when the new rickshaws arrived, I saw that taxi cars weren’t going to be good business any longer. So, I sold my two taxis and bought a rickshaw.”

Bassidi was one of the first drivers in Segou to buy a motor rickshaw, and it paid off. He can now make around $300 a month — a lot more than the average income in Mali, which is around $130.

The rickshaws are a government initiative to create employment and improve transport. Mali’s minister for transport introduced them in 2006 after a visit to China, where motor rickshaws are widely used.

In Mali, drivers buy them from the government for about $2000 and pay for them in instalments over 20 months.

For the people of Segou, the motor rickshaws have revolutionised transport. Before, the only options were taking a donkey cart or an ordinary taxi, which can cost up to 50 cents per trip within Segou. In a motor-rickshaw the same journey costs 10 cents.

Gabon — Africa’s least African country?

Tucked between Cameroon and Congo Republic on Africa’s Atlantic coast is Gabon, a country much unlike its neighbours.

Many other African countries face problems that Gabon’s President Ali Bongo has the luxury of not needing to worry about.

Domestic insurgencies and armed rebel groups, the ruin caused by recent civil war, the presence of al Qaeda, refugees, rapid population growth, an economy dependent on aid rather than exports, an army inclined to overthrow its own president — Gabon is not bedevilled with such troubles.

By contrast, Gabon is a picture of stability and relative wealth, densely forested and lightly populated, with an economy fuelled by rich energy deposits.

But that’s not to say the country is without difficulties.

The oil reserves that provide most of the country’s export income are dwindling, demanding the government does all it can to profit from its other natural resources such as minerals and timber, a need Bongo recognises.

And while Gabonese per capita gross domestic product of $13,900 is around four times that of its neighbours, most of the country’s wealth is in the hands of a minority. The gap between rich and poor is  huge — an issue not yet fully addressed by Bongo, who took over the presidency after his late father’s four decades of rule in elections last year.

Bashir’s magic number 68

On the face of it, Sudanese President Omar Hassan al-Bashir got the perfect election result.

His victory with 68 percent was not too high that it would spark concerns of fraud but high enough above the 50 percent needed for a win for him to be able fly in the face of the disapproving West.

Bashir is now the only elected sitting head of state wanted by the International Criminal Court for war crimes.    

But the path to victory was far from smooth.

Three weeks before what was promising to be an exciting electoral race, irregularities including a government printing press winning the contract to print ballot papers, sparked a wave of boycotts effectively ending any hope of a competitive presidential poll.

But given the late notice all the candidates’ names remained on the ballot papers. So despite opposition leaders urging their supporters not to go to vote — if they wanted to, they could in theory still vote for their man (or woman).

Delays prompted the National Elections Commission to abandon the computerised results system and move to a manual paper trail, allowing the results to come flooding in but leaving the door open to error or even possible manipulation.

Angola broadens its reach

Nigerian, Kenyan and South African banks have been making forays into the rest of the continent in search of growth so it was interesting to see Angola’s biggest bank opening an office in Johannesburg this month.   Banco Africano de Investimentos, Angola’s biggest bank by deposits, sees the office as a launchpad for ventures further afield in the southern African region as well as in business between Angola and South Africa.

Angola’s banking sector has enjoyed huge growth since the country emerged from a three-decade long civil war in 2002 as one of the world’s fastest growing economies thanks to booming oil production and high oil prices.

And as Angola’s economy has grown, so has the OPEC member’s influence as a power within southern Africa, within Africa’s other former Portuguese colonies and within the Gulf of Guinea region that produces most of Africa’s oil.

The interest in BAI’s opening in Johannesburg was itself a sign of how keen companies are to seek deals and investments and establish a presence there.

“You wouldn’t have this sort of crowd if it was a bank from elsewhere in Africa opening up,” commented one foreign financier at the event.

But while Angola expands abroad, it isn’t always as easy for those trying to get a share of Angola’s growth.

Investors complain of frustrating officialdom, corruption, a lack of transparency and astronomical operating costs as well as the difficulties of finding businesses or instruments to invest in despite the money flowing to Angola as a result of the oil.

Was Zuma right to reveal HIV status?

 South African President Jacob Zuma has disclosed that he is HIV negative after his most recent test for the virus that causes AIDS.  Zuma said he wanted “to promote openness and to eradicate the silence and stigma that accompanies this epidemic” in a country which has more people infected with the virus than any other – an estimated five million.

 Some South Africans had been calling on Zuma for a while to release the results of HIV tests and not just to take them. But critics now say Zuma could be sending the wrong message by saying he is HIV negative because of a lifestyle that has involved numerous affairs as well as marriages (he currently has three wives and a fiancée).

 In 2006, he acknowledged during a trial for rape, of which he was acquitted, that he did not use a condom during sex with a woman he knew to be HIV positive but said he took a shower afterwards in the hope of reducing the infection risk.

“So showering after sex DOES work!” said a blogger on the ‘Mail and Guardian website.

But some also applauded the president for setting a good example to younger South Africans by getting tested and being willing to reveal the results – although not putting pressure on others to do so. Was Zuma right to reveal his HIV status? And should other African leaders follow suit?

Iran and Zimbabwe: birds of feathers?

Zimbabwe’s President Robert Mugabe backs Iran’s controversial nuclear programme and has accused the West of seeking to punish the two countries for asserting their independence.

“Be also assured, comrade president, of Zimbabwe’s continuous support of Iran’s just cause on the nuclear issue,” Mugabe told Ahmadinejad at a banquet he hosted for Iranian President Mahmoud Ahmadinejad, who arrived in Harare on Thursday for a two-day visit..

Iran faces a possible new round of United Nations sanctions over its refusal to halt uranium enrichment. Zimbabwe itself escaped U.N sanctions in 2008 after Mugabe’s re-election in a second round poll marred by political violence, which forced his rival, Morgan Tsvangirai to pull out despite outpolling Mugabe in the first round voting.

The Iranian president’s visit has widened rifts within the coalition government, with Tsvangirai’s Movement for Democratic Change (MDC) party describing Mugabe’s decision to invite Ahmadinejad as a “collosal political scandal”.

Mugabe said Zimbabwe and Iran have been unjustly vilified and punished by Western countries. Is he justified in saying this? Is there a ploy by the West to pick on these two countries for not toeing the line, so to speak?

Slideshow: Mahmoud Ahmadinejad visits Zimbabwe

An icy black swan

By Jeremy Gardiner, director, Investec Asset Management There is a term in financial markets known as a black swan event. This term describes an event that has a significant impact on financial markets, but which could not / was not predicted by anyone. A volcano in Iceland leading to massive ‘eruption disruption’ certainly could not have been predicted by anyone. Certainly, market commentators were expecting some form of financial explosion out of Europe, but not a volcanic one!

 Fortunately it seems to be ‘blowing over’ and within a week the world should be back to normal. However, this, together with charges against Goldman Sachs and ongoing fears over Greece, could just have provided the catalyst for the much expected correction markets have been anticipating for close on six months now.

 Greece is fixed, for now. The EU and the IMF came to the rescue, which is good because it averted a default, but it is also problematic as it sends out an implicit signal to errant EU countries that there is a lifeline waiting if they need it. Germany is unimpressed, with Angela Merkel even threatening to develop a smaller, more disciplined collection of Euro countries than the current diverse bunch that comprises (or compromises) the EU. Unfortunately, Greece is not alone, and potential financial explosions from a variety of other European countries remain quite possible. Volcano-induced silence in the skies above Europe certainly hasn’t helped either.

2010 thus far has been predictably choppy, with markets generally grinding upward, far more slowly than last year, as the wounds from the financial crisis gradually heal. Equity markets, having run ahead of themselves, are more circumspect this year. Economically, while developed market economies limp towards recovery, the developing world, with Asia and in particular China, remains rampant.

 Meanwhile back in SA, Investec Asset Management hosted an investment conference last week. The conference consisted of several panel discussions featuring South Africa’s leading portfolio managers and the common theme throughout was that given how hard emerging markets and South African equities have run, money managers are bearish on future returns from current levels. While there wasn’t much discussion around potential crises or corrections, single digit equity returns for SA going forward seemed the consensus.

 So what should South African investors be doing? Future returns depend enormously on what price you buy your assets. The choice at this stage is tricky. Nothing is particularly cheap, and although equities are more attractive than cash, potential equity returns are not that appealing and do carry risk. One area which South Africans should be considering is offshore diversification. The rand has run hard and is not expected to maintain current strength for too much longer than the World Cup. While the direction of the rand is impossible to call, you could probably rely on some weakness at some stage going forward. 

 Unfortunately, however, most South African investors are jaundiced towards offshore investing, after having (along with the rest of the word) invested every cent they could, by hook or by crook, into the US markets at the end of the nineties. At that stage, the US markets and the US dollar were viewed as ‘bullet proof’, and the SA markets as ‘avoid at all costs’.

Hotter in the long run?

Ethiopia’s long-distance runners are among the best in the world, winning seven medals at last year’s Olympic Games. Generations of athletes have trained in the cool highlands of Asella but the weather there is changing, apparently as a result of climate change. There are now worries that this could have an impact on the country’s future runners.

For many young Ethiopians, this is where dreams are made. Internationally famous athletes like Haile Gebrselassie and Kenanisa Bekele have trained in these very parts.

Runners attend a training camp named after Tirunesh Dibaba who is the current holder of the world 5000 metres record. But the trainees’ future will depend greatly on the weather. Athletes require no more than 20 C when training and because it’s generally cool, Asella used to be perfect.

Not so lately. Temperatures rapidly increase as the day progresses and now runners have to get up earlier before training becomes almost impossible.

Tefere Alamerew is the squad’s coach. He told Reuters Africa Journal: “The temperature has changed — it’s hotter and hotter — so it will be difficult to train the athletes for the future here because the climate is changed.”

Like some other top Ethiopian runners, marathon world record holder Haile Gebrselassie was also born in Asella.

“Three weeks ago I was in Asella and I had the chance to jog 3km – around 9 o’clock – 9.30. You don’t believe it – I mean I was sweating, I asked myself, and I was running with Darata Tulu, we were struggling: ‘is this Asella, the place where we were training before? Yes it is.’ It’s amazing. My worry right now, what it will be like after 20 years?”