Africa News blog
African business, politics and lifestyle
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.
If you had put $1,000 in Nigerian or Kenyan stock markets at the start of the year, you would have made a profit of around $150. If you had done the same with the U.S. benchmark S&P 500 index, you would be nursing a loss.
Global fund trackers EPFR reported a 40th consecutive week of inflows to African equity funds this week. India’s Bharti Airtel completed a $9 billion purchase of Zain’s African operations in another vote of confidence in the continent.
The excitement is here in the townships too. We have our flags, our caps, our second hand sport shirts. All that is missing are the games.
Our electricity was cut off just a few days ago in what looks as though it was a crackdown on irregular power connections by the power company Eskom. No light. No television.
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.
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.
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.
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.
from Reuters Soccer Blog:
FIFA is guaranteed massive revenue from the World Cup, primarily through billions of dollars in commercial and television rights, that will fill its coffers for the next four years. But that doesn't hide the fact that soccer's governing body has made basic errors in the ticketing structure for the first African edition of the world's most watched sporting event.
FIFA boss Sepp Blatter has steadfastly supported holding the soccer spectacle in Africa despite a flood of negative reporting from Europe that said the tournament would be a disaster and that nothing would be ready in time. Those naysayers have so far been proved very wrong--the 10 stadiums, half of them stunning new venues--are ready way ahead of kickoff on June 11.
World Cup organisers probably dreamed of a placid, trouble-free final countdown to the soccer spectacular, with all the fears about crime, bad transport and accommodation shortages pushed to the background for Africa’s biggest sports extravaganza. Sadly for them, they are getting the opposite. It would be difficult to conjure up a more unfortunate set of events less than 60 days before the tournament. Simmering racial tensions have burst into the open because of the murder of white supremacist Eugene Terre’blanche and the diatribes of Julius Malema, leader of the youth wing of South Africa’s ruling African National Congress, who refuses to pipe down despite tough reprimands from President Jacob Zuma and other party officials. Even before what must be looking to hapless officials like a perfect storm, scenes had become commonplace of township residents rioting around South Africa against lack of improvements in their lives some 16 years after the end of apartheid.
To add to the torture for World Cup officials while the spotlight is fixed on South Africa, municipal workers have declared an indefinite strike over wages, threatening the chaotic scenes seen last year when rubbish was strewn over the streets. South Africa’s biggest labour federation has threatened strikes during the tournament to protest against big hikes in power prices.
All of this illustrates the point that countries or cities staging major world events suddenly become fixed in an often uncomfortable glare of world attention as the big day approaches. But even by these standards, South Africa looks unfortunate. World Cup officials, led by chief organiser Danny Jordaan, have spent literally years fending off suggestions that soccer fans will be in mortal danger in South Africa, which has one of the globe’s highest rates of violent crime. Jordaan and others have repeated a familiar mantra– the country has staged 150 sports and other events since the end of apartheid with little problem, millions of tourists have enjoyed South Africa’s many attractions for years without major criminal attacks and protecting a finite event is a lot less complex than overcoming the national crime wave–especially since 40,000 police have been mobilised to do only that.
Nevertheless, many foreign fans and even visiting journalists are anxious about security and alarmist media reports have undoubtedly deterred some, especially it seems in Germany–hosts of the last event. What could be worse then, as the final countdown begins, than the events of the last week or so? Terre’blanche was hacked and bludgeoned to death on April 3 in a killing whose brutality seemed almost calculated to set off new anxiety about visiting South Africa, even though police believe it was a simple criminal, rather than racial, attack. Terre’blanche’s own fringe AWB party lost no time in telling foreign journalists that overseas fans would be in danger during the World Cup and most reports on the killing mentioned the tournament’s approach. The most extreme reaction came from the U.K. tabloid the Daily Star which said English fans risked a “machete race war” –sparking howls of protest in South Africa.
All of this has been made a lot worse by Malema, a firebrand demagogue who had hitherto been apparently used by some of the ANC to hit at leftwingers in the party and to mobilise the youth vote, but who now seems to have got out of control. Terre’blanche’s supporters say that Malema’s insistence on reviving an apartheid-era song “Kill the Boer” — which has now been banned by the courts –was the direct cause of the murder. Zuma said on Sunday, in an unusually strong reprimand, that Malema’s comments and actions, including calling a BBC journalist a bastard and throwing him out of a press conference, were alien to the ruling party. Malema remained defiant despite the rebuke.
Three hours before South Africa’s central bank delivered a surprise interest rate cut, me and my wife stood on the grass outside our house while an auctioneer held a forced sale that could have driven us and our children from our home.
We are tenants – it was the landlord whose house had been repossessed – and a buyer was found who was ready to keep the lease.
Dawn was breaking and wisps of mist rising through the dense trees as wildlife expert and author Gareth Patterson and I set off into the forest, in search of one of the last remaining elephants of South Africa’s Knysna forests.
The Knysna forest, an expanse of 121,000 hectares of forest managed by South African National Parks, is home to the last remnants of the once abundant herds of Cape Bush elephants that inhabited the Southern Cape.