Africa News blog

Banking on Africa

Mining companies are looking more cautiously at South Africa after a brouhaha over  shady deals. Media and diplomats are nervous of measures they fear could curtail press freedom. South Africans in general are wondering how much damage an ongoing public sector strike will do and whether it is a sign of worse labour unrest to come.

But global banking giant HSBC certainly seems to be taking a positive long term view of Africa’s biggest economy with its talks to buy up to 70 percent of South Africa’s Nedbank in a deal that could be worth more than $8 billion.

HSBC wouldn’t only be getting a strong presence in South Africa, though.

It would be getting a solid foothold on a continent set to be among the world’s fastest growing in the years to come and where it is coming from behind against well-established emerging market rivals Standard Chartered and South Africa’s own Standard Bank.

Particularly important for HSBC would be helping its Asian customers do business in Africa. Although Nedbank does not by itself have the presence across Africa that some of its rivals do, it has an alliance with West Africa-based lender Ecobank spanning the continent.

Is Ethiopia’s development plan too “ambitious”?

Ethiopia’s Prime Minister Meles Zenawi seemed to anticipate this week exactly what a lot people were thinking about his government’s plan to double the poor country’s GDP and wean it off food aid within just five years.

“I think that this is a very ambitious plan,” he said.

“This is indeed an extremely ambitious plan,” a few minutes later.

And, once more for luck, “We have put in place a high-case scenario which is clearly very, very ambitious.”

Britain on Sudan: Selling out or cashing in?

Britain’s new coalition government made its priorities on Sudan very clear as Henry Bellingham, the minister for Africa, used 90 percent of his opening remarks at his first press conference in Khartoum to outline how Britain could increase trade with Sudan. The other 10 percent dealing with the run-up to the south’s referendum on secession which is likely to create Africa’s newest nation state and the International Criminal Court arrest warrant for President Omar Hassan al-Bashir for genocide all seemed like just an after thought. On first glance many would say Britain was selling out — engaging economically with a government whose head is a wanted man would destroy the global divestment campaign’s years of efforts to make investing in Sudan a poisoned chalice no one wants to touch in the hope of isolating Khartoum to pressure it to stop rights abuses and allow democratic freedoms. Many Darfuris and rights activists who have been victims of torture and harassment will be dismayed by the move which clearly extends a hand of friendship to Khartoum who had until now been reduced to almost pariah status since the ICC warrant for Bashir last year which propelled him to international fame — for all the wrong reasons. Is Britain selling out? In fact many ordinary Sudanese say no. They say U.S. sanctions, imposed since 1997 has had little effect on the government who took control in a 1989 bloodless coup and was elected in expensive and heavily disputed April elections. The economy has grown on average eight percent a year, Khartoum extracted the oil pretty much without Western companies, built hundreds of miles of tarmac roads, and erected high-rise government buildings which sparkle so much in the sun the rays mock the Americans even far out of town in their heavily secured embassy compound. But sanctions have made life almost impossible for any normal Sudanese to do business abroad or at home. It’s those struggling to become an emerging middle class who welcome initiatives Bellingham suggested to use the 35,000 Sudanese living in the UK to facilitate small and medium sized businesses investments in Sudan bringing much-desired jobs and training with them. Britain is the former coloniser of Sudan and many families have close links with the country often visiting to shop and visit family there. They would welcome British products instead of the often cheap and poorer quality Chinese goods flooding the market here in Khartoum. It would certainly lessen their excess baggage bills. But Bellingham went one step further saying British companies were lagging behind Chinese companies and missing out on great investment returns in Sudan, emerging from decades of civil war. He also mentioned the unmentionable. Oil. Most Western oil companies pulled out of Sudan citing rights abuses during the north-south civil war which ended in 2005 with a shaky peace deal which has just about held if only partially and reluctantly implemented. Some firms were even implicated by rights activists in those rights abuses. But for example a battered British Petroleum, a move into an oil industry in a country whose government has historically shown scant regard for its population or the environmental effects of exploration might be a silver lining to the clouds gathered over its HQ of late. So is Britain cashing in? Only if they can make it happen. Western oil companies have been reluctant to enter to a post-war Sudan. Oil exploration is a long-term and costly venture and the stability of the country is far from guaranteed. Many are waiting to see what will happen after the southern referendum on independence in five months because the oil lies mainly in the south. They worry contracts signed with a united Sudan may not be honoured post secession by a new nation fighting to survive as a country in its own right. British banks in the past five years all but stopped transactions to/from or those with any mention of Sudan, no matter what the currency and no matter who the recipient. Sudanese abroad had their bank accounts closed down regardless of who they were, foreigners working in Sudan received similar treatment and mortgage companies turned down anyone whose work brought them to the war-torn nation. Lloyds TSB, which also owns Halifax and Bank of Scotland, last year paid a massive $350 million fine to the United States for fraudulent transactions to U.S.-sanctioned Sudan, Libya and Iran. So how will Whitehall convince them it’s a good idea to facilitate investment in an opaque Sudanese economy dominated by companies many of which have been hijacked by government organs or ruling party officials? They will need considerable help from Sudan’s government to increase transparency and allow private businesses to flourish free from government interference. The jury is not only out on the moral implications of Britain’s new policy but also on whether London can convince UK businesses and banks to invest in a country which regularly ranks in the top five of failed states indices.

Britain’s new coalition government made its priorities on Sudan very clear as Henry Bellingham, the minister for Africa, used 90 percent of his opening remarks at his first press conference in Khartoum to outline how Britain could increase trade with Sudan.

The other 10 percent dealing with the run-up to the south’s referendum on secession, which is likely to create Africa’s newest nation state, and the International Criminal Court arrest warrant for President Omar Hassan al-Bashir for genocide all seemed like just an afterthought.

Gordon Brown resurfaces. In Africa

It’s odd to see a once powerful man walk slowly. And odder still to see him sit in the corner of a restaurant nursing a glass of water for more than an hour. But that’s exactly what delegates to an African Union summit in Ugandan capital Kampala saw former British Prime Minister Gordon Brown do on Saturday.

Brown has been treated as something of a fugitive by the British media since his May election defeat with a slew of “Have you seen this man? type articles published in the country’s newspapers. Speculation on what he was up to ranged from bashing out a book on economics to Alastair Darling’s “he’s reflecting”.

Live Aid anniversary: Unknown Ethiopia

This week is 25 years since a bunch of bouffant-haired pop stars staged the most ambitious concerts of all time to help millions of starving people who had never heard of them.

Live Aid, organised to raise money to stop Ethiopia’s catastrophic 1984/85 famine, was a huge success by some measures. An audience of more than 1.5 billion tuned in around the world to watch simultaneous live concerts from London and Philadelphia — an incredible technological feat for the time — and a staggering $230 million was raised for the emergency.

from Photographers Blog:

No turning back as Africa’s hour arrives

The 2010 World Cup has been a memorable and momentous occasion not only for me, but for South Africa, the African continent and the rest of the world.

It has indeed been incredible. It has been a unifying factor, with people beginning to appreciate the importance of their national symbols such as flags.

Juwama vs. the Nile Republic – South Sudan searches for a new name

What’s in a name? An entire cultural and national identity if you are from Sudan’s oil-producing south.

The region of southern Sudan is now less than seven months away from a referendum on whether it should split away to form Africa’s newest country.

New Africa about much more than football

The first World Cup in Africa also highlights a dramatic change driven by forces more powerful than football.

While the competition may help change Africa’s image in the minds of any outsiders still fixated on cliches of bloodshed and famine, those in the know long ago spotted Africa’s emergence from no-go zone to frontier market and are seeing the returns.

West must change approach to Africa

Tom Cargill, Assistant Head of the Africa Programme at Chatham House, writes on the West’s relationship with Africa:

French President Nicholas Sarkozy put it best this week, when he spoke of the increasing important of Africa in Global Affairs: “Africa’s formidable demographics and its considerable resources make it the main reservoir for world economic growth in the decades to come.”

South Africa overshadowed by growth of the rest

South Africa’s place as the sole economic giant in Africa is set to decline in coming decades as its growth is outstripped by countries to the north that have emerged as some of the fastest growing in the world.

As part of a package of Reuters reports on Frontier Markets, my colleague Ed Cropley takes a look at the importance for South Africa’s future of positioning itself as a springboard to the rest of the continent.