The Nigerian Stock Exchange (NSE) last week listed N4.6 billion bonds floated by Tower Funding Plc on its daily Official list.

The bonds, series one tranche A and series one tranche B, were raised by Tower Aluminium Group from the capital market under its N9 billion (Medium Term Note) last year.

The company issued N3.630 billion bond due on September 9, 2018 (series one tranche A) with a floating rate of Monetary Policy Rate(MPR) plus seven per cent and the N1 billion MPR plus five per cent floating rate bond due September 2018 (series one tranche B).

The funds were raised through a book-building exercise spear headed by Dunn Loren Merrified (DLM) Limited, which acted as financial adviser, issuing house and lead book runner to the transaction.

The N9 billion MTN programme is undertaken by Tower Funding Plc, which is a captive finance vehicle for the Tower Aluminium Group.

The Series N3.63 billion was 331/3 guaranteed and assigned an ‘A-’rating by Global Credit Rating and DataPro Limited while the N1 billion bond was 100 per cent guaranteed with a provisional rating of AA- and AAA from Global Credit Rating and DataPro Limited respectively.

According to the Chief Executive Officer(CEO) of DML, Mr. Sonnie Ayere, the proceeds of the bond were applied towards the funding of the member companies of the Tower Aluminium Group comprising: Tower Aluminium (Nigeria)Plc; Queensway Aluminium Limited; Asaba Aluminium Limited; Tower Roofing Systems Limited; Borno Aluminium Limited and Kolorkote Nigeria Limited.

“The rich history of the Tower Aluminium Group spanning over 50 years in Nigeria contributed in no small measure to the success of the Series 1 bond issuance,” Ayere had said.
Ayere noted that the bonds were the first internationally guaranteed bond by a real sector corporate entity in Nigeria.

The guarantee was given by GuarantCo Limited, a development finance institution regulated by the Financial Services Commission (FSC) of Mauritius with the key objectives of encouraging private sector involvement in the local currency financing of infrastructure projects and promoting local capital market development in low-income countries.

Chairman of GuarantCo, said: “This ground-breaking financing is a material advance in developing the local corporate bond market. Nigerian companies deserve the same access to long term funding from their capital markets as in other major economies and we look forward to more issuers accessing the market.”

Specfically, the Tower Group had explained that the proceeds of the bonds would be used for the refinancing of maturing bank debt obligations utilised by the Group to build the multi-million-dollar aluminium factory at Otta in Ogun state.

According to the company, the factory has been designed to convert scrap aluminium into new and usable aluminium hence reducing its reliance on imports and therefore significantly reduces cash flow vulnerability due to exchange rate fluctuations.

As Nigerian companies prepare to fully adopt the International Financial Reporting Standard (IFRS) as from the end of this year, KPMG Professional Services, Nigeria, has tasked audit committees to remain focus in their duties for the benefit of all stakeholders.

In a document titled: “Ten to-dos for Audit Committees in 2012”, made available at the 2011 seminar for audit committee members under the aegis of the Nigeria Shareholders Solidarity Association (NSSA) held in Lagos last week, KPMG urged shareholders to stay focused on the top priority, which is financial reporting and related international control risk.

“This number one to-do from last year holds true for 2012. Ensuring that the audit committee’s agenda focuses on the issues that require its attention will be a significant undertaking. The challenges of on-going economic uncertainty and volatility, coupled with impact of cost-reductions, major public policy initiatives and uncertain-yet clearly more complex regulatory environment, will require the attention of every audit committee,” the company said.

It explained that meeting this workload challenge would require focused yet flexible agenda with an eye on the company’s key financial reporting and related internal control risks.

KPMG added that Audit Committees should monitor fair value estimates, impairments and management’s assumptions underlying critical accounting estimates.

“Recognise that the company’s greatest financial reporting risks are often in areas where there is a range of possible outcomes and management is called upon to make accounting judgments and estimates,” the firm said.

The audit committees were specifically advised to understand management’s framework for making accounting judgments and estimates, making sure that the management has appropriate controls in place.

KPMG added that audit committees should ensure that the financial statements and disclosures tell the company’s story.

“Given the importance of transparency to the investor community, as well as the Securities and Exchange Commission (SEC)’s on-going focus on disclosures, consider how disclosures can be improved. Perhaps going beyond what is ‘required’ to better address expectations. At the end of the day, do the financial statements and disclosures tell the company’s story?,” KPMG said.

The firms of auditors equally urged audit committees to focus on companies’ plans to grow and innovate, saying that the growth strategy and innovation would be front-and-centre as companies search for top-line growth and look forward and beyond the recessionary environment.

“A key challenge will be monitoring and calibrating growth plans to appropriately balance risk and reward. Make sure risk and strategy are discussed together because each hinges on the other,” KPMG said.

The Financial Reporting Council of Nigeria (FRC) said it had sought the co-operation of the Central Bank of Nigeria (CBN) in ensuring effective enforcement of financial reporting guidelines in the country.

The FRC said the move would also address the challenges associated with implementation of International Financial Reporting Standards (IFRS).

The Executive Secretary, FRC, Mr Jim Obazee, disclosed this when he paid a courtesy visit to the CBN Governor, Mallam Sanusi Lamido Sanusi.

According to statement, Obazee explained that the collaboration would address issues concerning the implementation of IFRS.
Obazee particularly mentioned embedded insurance contract in banking products, fully provisioned loans reclassified to memorandum account, CBN policy in respect of 55 per cent restriction on revaluation surplus of property, plant and equipment versus International Accounting Standards 16 property, plant and equipment.

Others are the 2012 quarterly results under IFRS and comparatives, fair valuation versus cost model (especially for first time adopters) as grey areas that have to be addressed in the implementation of IFRS.

The FRC boss also called for the intervention of the CBN on professional ethics, certification of financial statements, registration of professionals, attestation of internal controls and information systems controls and standardisation of the code of corporate governance.

He called for the assistance of the CBN Governor in the establishment of the IFRS Academy where stakeholders would be educated on the rudiments of International Accounting Standards.

Obazee implored the CBN to assist the FRC in the standardisation of codes of corporate governance that were currently separately supervised by the CBN, Securities and Exchange Commission and the Corporate Affairs Commission.

In his response, Sanusi also called for a collaborative effort by financial regulators in the implementation of IFRS. Sanusi agreed that the FRC should be participating in the activities of the Financial Services Regulation Coordinating Committee (FSRCC), even as the statement quoted the CBN Governor to have expressed surprise that the Council was not a regular member of the body.
He also charged the FRC to be prepared for the bureaucratic bottlenecks that may be encountered in registration of professionals.

THE South African Ministry of International Relations and Cooperation has revealed that it will investigate threats against South African companies with investments in Nigeria by the Movement for the Emancipation of the Niger Delta (MEND).

The movement has reportedly threatened to attack the holdings of companies, including MTN Group Limited, Africa’s biggest cell phone operator, and SacOil Holdings Limited, an oil and gas exploration company, saying South African president Jacob Zuma, is interfering “in the legitimate fight for justice” in the Niger River delta region. MEND, Saturday, said it attacked and damaged a pipeline belonging to a unit of Eni SpA of Italy.

‘It’s a matter we’ll look into definitely; terrorism has to be rooted out,’ Clayson Monyela, spokesman for the Ministry of International Relations and Cooperation, said by mobile phone on Sunday, Bloomberg reports. ‘The authorities in Nigeria have always been responsive to acts that are unlawful and will deal with this as they always have dealt with such threats.’

MTN is leaving security matters to the Nigerian and South African authorities and has no further comment, Rich Mkhondo, a spokesman for the Johannesburg-based company, said in an e-mailed response to Bloomberg.

On Jan. 4, the company announced plans to spend more than $1 billion this year to improve its network in Nigeria after the nation’s phone regulator demanded better service.

Shares in MTN have dropped 5.5 per cent since Jan. 3, after Nigeria’s government removed fuel subsidies, cutting consumer spending power in the company’s largest market, and after saying Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile phone company, may sue MTN over the acquisition of an operating license in Iran.

The International Finance Corporation (IFC) on Monday launched an advisory services programme to complement a $13.5-million investment in three banks under Botswana-listed ABC Holdings.

The Africa Micro Small and Medium Enterprises (AMSME) programme, along with the investment, would help banks increase their lending, as well as develop tailored financial products for small and medium-sized enterprises (SMEs) in Botswana, Mozambique and Zambia.

The IFC hoped to build a platform that accelerated the rate at which commercial banks provide effective and efficient services to SMEs across Africa, enabling them to grow, IFC manager of financial markets in sub-Saharan Africa Ian Weetman said at the launch.

ABC Holdings group CEO Douglas Munatsi said that SMEs were the backbone of every economy and believed that developing a strong and sustainable SME portfolio would have a positive impact in the economic development of these countries.

Further, the advisory services would assist in developing long-term, sustainable SME banking operations within the banks during its two- to three-year implementation programme. The programme has also expanded its services to include risk management, strategy development and marketing and has now incorporated women in business.

The programme, which was launched into 16 African countries and has seen success within two years at seven banks, would operate under ABC Holdings subsidiary BancABC to develop new products and services, including long-term finance from debt to equity capital, for smaller businesses.

ABC Holdings group head of retail and SME banking Andrea Prazakova added that the IFC’s AMSME advisory would offer BancABC the opportunity to develop the right products, processes and scorecards by tapping into international and regional best practice.

BancABC would be an important partner in improving access to finance and helping entrepreneurs expand businesses that create jobs and improve services in Southern Africa, said Weetman.

By Yasiin Mugerwa, The Monitor

Common Market Protocol. For the sake of the integration dream and the credibility of the five Heads of State, East Africans need a realistic common market with no taxes on import-export trade and harmonised tax regimes with free movement of labour and capital.

We were all told lies as children, and some of these lies still affect us in some ways. If you took time to study the tricks adults use to raise their children these days, you may then be able to understand the faults in view of the world we present to our children.

I am using the word “lie” in a very general sense: not just subtle falsehoods, but also all the smart ways we used to mold children into responsible citizens. Since we all agree, lying to children is sometimes necessary and in some ways indispensable, one particular issue which is never a lie in its true meaning is that– as human beings all our dreams can come true, if we have the courage to pursue them.

Equally, futurist and independent scholar Joel Barker, in one of his famous inscriptions, tells us that a vision without action is merely a dream. Action without a vision just passes the time yet a vision with action can change the world. But even with Barker’s counsel, our leaders have refused to wake up to make our dream come true. As a result, the abstract dream of a united East Africa largely remains amorphous and puzzling.

Before we deal with the regional integration dream, let us welcome our MPs from a two-month recess. We also take this opportunity to welcome the New Clerk to Parliament, Ms Jane Kibirige, who has replaced Mr Aeneas Tandekwire who retired recently. While her appointment remains political and controversial, that’s not our topic today. So let us leave it at that. As for members, they return to Parliament on Tuesday to try and deal with a clogged agenda. Even though there is no clear business from the Executive, a friend who sits in Cabinet assured me last week that some three Oil Bills will be tabled when the House resumes.

EAC dream

Having said that, members of the East African Legislative Assembly, a sub organ of the larger East African Community, this week concluded its sittings in Kampala with one obvious message to the Heads of State in the five member countries– it is absurd for the Assembly to pass laws without implementation. The role of the Assembly is to discuss all matters pertaining to the Community and make recommendations to the Council as it may deem necessary for the implementation of the EAC Treaty.

The EAC is a potential precursor to the establishment of the East African Federation, a proposed confederation of the five members into a single state. In 2010, the EAC launched its own Common Market for goods, labour and capital within the region, with the goal of a common currency by 2012 and full political federation in 2015. However, EALA members this week complained that partner states were not doing enough to implement the Common Market, an expansion of the bloc’s existing customs union that entered into effect in 2005. In other words they are sleeping.

After failing to implement the Common Market Protocol, we are now busy pushing for Monetary Union and political integration. Other leaders are lobbying for incorporation of DRC and South Sudan into the bloc. Even as we wait to harmonise our data and fiscal policies in the hands of a single central bank, a first step in the right direction would be to turn this uncommon market into something more “common”. This way, the people in the five countries will then, see themselves as East Africans.

Our Heads of State must also deal with one issue at a time; or else they risk being everywhere and achieving nothing on balance.

While some people consider the regional integration a crazy dream, I strongly disagree. In fact, if we implemented the Common Market Protocol without thinking so much about the sovereignty of our individual nations, the integration dream would have come true. Under the Common Market Protocol, we had anticipated free movement of goods and services (trade), capital and labour but more than a year later, this is not happening.

Education harmonisation

Though for the purpose of ensuring the free movement of labour, the partner states undertook to harmonise their curricula, examinations, standards, certification and accreditation of educational and training institutions, the Council of ministers this week had to be forced to accept the creation of Inter-University Council of East Africa.

They had blocked the passing of this Bill claiming that there was no need for such a piece of legislation. This is unfortunate and it is a clear indication that unless the Council of Ministers gets serious, the integration will forever remain in theory. The minimum we can expect from a common market is that goods can travel freely within the Member States. But the hypocrisy of the member states who oppose harmonisation of taxation systems as envisaged under the customs union over political reasons is the reason why EAC dreams have not come true.

The ultimate goal of regional integration is to merge some or all aspects of the economies concerned. This usually evolves from simple cooperation on and coordination of mutually agreed aspects among a given number of countries to full integration or merger of the economies in question. But the way, things are moving in the five states, this focal purpose integration cannot be achieved when Partner States are behaving like aimless co-wives.

As East Africans we must hold fast to our integration dream for if our leaders allow this dream to die; our life will be like a broken-winged bird that cannot fly. Our leaders should know that this dream will only come true when they act to turn them into realities before East Africans part ways. Let us implement the Common Market Protocol to make integration a reality.

In 2011, the mining insurance market was not only hit by $2.7 billion in natural catastrophe losses, but over 60 operational losses totaling $835 million. The $3.5 billion total estimate of losses facing mining insurers has prompted a 30 percent withdrawal in insurance capacity since the start of 2011. This is according to the latest Mining Market Review released today by Willis Group Holdings plc, the global insurance broker.

The report, published to coincide with this week’s annual African Mining Indaba in Cape Town, a conference held for natural resource professionals, estimates that the current global capacity available to mining Property Damage & Business Interruption (PDBI) insurance programmes is $1.25 billion, down from $1.75 billion at the start of 2011. Willis says that “whilst this does not represent the dramatic loss of capacity that precipitated historical hard markets such as 2001, it may indicate a difficult year ahead for the renewal of mining PDBI programmes”.

Willis’ report identified resource nationalism, natural catastrophe exposure, and supply chain disruption and globalisation, as the three biggest risks facing mining companies:

– Resource nationalism and punitive taxation regimes are no longer only an issue in emerging markets, noted Willis, with “developed countries (notably the United States, Australia and Canada) increasingly adopting resource nationalist policies that include the blocking of Chinese investments and the tightening of fiscal regimes in the extractive sectors”. The report includes a chapter on the myths and realities of resource nationalism by global analysis and advisory firm, Oxford Analytica.

– The huge impact of the Japanese earthquake and tsunami, the Christchurch earthquakes, the Queensland floods, earthquakes in Papua New Guinea, the weather events and floods in Brazil and South Africa all served to reinforce the threat to the mining sector posed by natural catastrophe events.

– The Japanese earthquake and tsunami placed supply chain management at the top of the agenda for most mining boards. Following the disaster, many Japanese companies transferred their production trains off-shore to locations like Thailand, where another natural disaster struck a few months later, further compounding the contingent losses suffered by many companies.

Commenting on potential pockets of hardening in the mining market, Steve Higginson, Willis Mining Practice Leader said, “The key elements which are influencing the tightening of insurance terms and capacity availability are firstly the series of losses which have effected the industry over the past 12 months, secondly natural catastrophe exposure, especially flood and earthquake, thirdly the aggregation of exposures carried by insurers in regions such as the Pilbara in Western Australia (cyclone), the Bowen Basin in Queensland (flood and weather events) and Chile (earthquake), and finally the increased complexity of coverage for Contingent Business Interruption (CBI) caused by the globalisation of the supply chain.”

The report details 2011 and potential 2012 conditions in other mining-related insurance markets, including:

– The Construction insurance market remained competitive and stable, with natural catastrophes having little impact.

– The global Directors’ and Officers’ Liability insurance market remained competitive and awash with capacity, a trend that looks set to continue in 2012, although a significant increase in mergers & acquisition litigation might test insurers.

– During the past 12 months it has been difficult to chart any sustained direction in pricing for the international Liability market and this uncertainty is expected to continue in 2012.

– With seven of the top 20 kidnap hot spots being countries with significant mining operations, it is not surprising that several employees from the extractive industries have been kidnapped for ransom over the past year, a trend that will only increase as the global demand for commodities intensifies.

– In 2011 the Marine market continued to be soft, but this year the pace of the downward trend in pricing seems to have slowed, with the market at the beginning of 2012 offering single, not double-digit reductions. However, the implications of the Costa Concordia incident are yet to fully materialise.

– In 2012 the Specie (precious minerals, including cash and securities) insurance market is likely to see a possible hardening of rates as 2011 natural catastrophe claims in the property insurance sector work their way through the market.

– The last two years have witnessed more insurers offering Personal Accident/Accident and Health cover, especially in Lloyd’s, resulting in a competitive pricing environment.

– Terrorism capacity remained static through 2011. Commercial Terrorism capacity in the standalone market is currently estimated at $1.75 billion. However, Political Violence capacity is more restricted compared to previous years, particularly in areas that have experienced political unrest.

Andrew Wheeler, Willis Mining Practice Leader, commented: “Even though the insurance market is still reeling from the unprecedented spate of losses in 2011, well risk-managed mining programmes will still be able to get favourable terms and conditions this year if they can demonstrate: a clear understanding and ability to mitigate the effects of CBI exposures, a pro-active approach to minimising the effect of weather-related events to their operations, and that sound risk engineering and innovative risk avoidance measures form an integral and core part of their business.”

The extensive Willis report also contains sections on mine rehabilitation, Chinese mining investment, strategic loss management, contract certainty and risks to the UK metals market.

Scott Pickering, CEO of Willis South Africa, commented: “The Willis Mining Market Review once again illustrates the thought leadership shown by Willis in the mining insurance sector, represented locally by the specialist expertise of the Willis South Africa mining team located in the Johannesburg office.”

Click here to access the Mining Market Review or pick up a hard copy at stand 3103 where the Willis Group Mining Practice will be exhibiting at this week’s Mining Indaba.

About Willis

Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 17,000 employees serving clients in virtually every part of the world. Additional information on Willis may be found at www.willis.com .

SOURCE: Willis Group Holdings plc

Willis Group Holdings plc
Media:
Ingrid Booth, +27 11 341-9625
boothi@willis.com
or
Investors:
Peter Poillon, +1 212 915 8084
peter.poillon@willis.com

A recent policy change by South Africa’s National Treasury makes it easier for South African investors to trade in foreign domiciled companies and the Johannesburg Stock Exchange now considers these companies eligible for inclusion in domestic indices. “This means that inward or dual listed shares on the JSE will be classified as domestic assets and they will attract increased investment interest,” says John Burke, head of Issuer Regulation at the Johannesburg Stock Exchange.

“This augurs well for the JSE attracting further resource listings and we look forward to meeting the international mining companies with assets in Africa during Mining Indaba. On account of the policy change, both retail and institutional investors will have more flexibility and this could increase liquidity in dual listed shares.”

Franco Lorenzani, CEO, Macquarie First South Securities South Africa explains, “Inward listed shares have traditionally attracted low volumes due to the limits imposed on foreign exchange allowances. Now the investment decision is based on merit rather than the shackles of regulatory issues and dual listed companies will be able to raise capital more easily in South Africa. There’s demand for commodities particularly out of Asia and other markets and this change was imperative to encourage investment in the region. National Treasury, the Reserve Bank and the JSE are to be applauded for tackling the issue as South Africa and the continent will benefit with increased employment, revenue and the social benefits of mining.”

Euan Worthington, chairman of DiamondCorp plc (listed on AIM and JSE Main Board) and deputy chairman of African Eagle Resources (listed on AIM and JSE AltX), says of dual listings on the JSE: “The process was uncomplicated, the Reserve Bank put no hurdles in our way and institutions were very receptive to our African story.”

Forbes Coal, which listed on the JSE in July 2011, has a primary listing on the Toronto Stock Exchange with a head office situated in Toronto. According to Stephan Theron, the CEO, “This gives us access to North American investors for early stage mining projects. We listed on the JSE as a South African Reserve Bank requirement but also to gain access to the South African investment community.

“The pre-listing experience was good; the JSE team was world class. Post-listing has been relatively good. We have yet to raise capital since our listing, thus the float of shares trading on the JSE is small. We will however consider raising funds out of SA which will allow us to increase the size of the share register on the JSE. If companies consider doing a dual listing I would recommend coinciding the listing with a capital raise.”

Sasfin Capital has approximately a quarter of its clients inward listed with primary listings in jurisdictions including TSX, ASX and LSE. Sasfin brought two inward listings to the JSE during 2011 – Forbes Coal as well as Ferrum Crescent (an iron ore project developer listed on ASX, AIM and since November 2011, JSE Main Board).

Sarah Williams from Sasfin Capital explains that their business has extensive experience in the listing process as well as ongoing compliance. “The process for an inward listing is very similar to that of a primary listing from a regulatory point of view with a number of added complexities, particularly in terms of creating liquidity in the South African market. We have worked closely with the JSE and various stockbrokers to find ways to improve the market’s perception of investing in inward listings.

“The recent relaxation by Treasury will go a long way to resolving these issues, and we believe that this creates a good opportunity for offshore companies with South African assets to list on the JSE and take advantage of these capital markets.”

If a company is already listed elsewhere, a secondary listing can be fast-tracked as the JSE recognises exchanges that are members of the World Federation of Exchanges. For mining companies, the specific additional requirements include a Competent Persons Report and the application needs to be compliant with one of these codes: SAMREC (South Africa) JORC (Australia), Ni 43101 (Canada).

South Africans, compared with the British, Canadian and Australians, tend to be more risk averse when considering resource stocks. However, according to the JSE’s John Burke, “South Africans are increasingly becoming more educated and understand that with exploration initiatives if an investor doesn’t get in early, he will not satisfactorily participate in the future returns of that business.”

The JSE also makes a considerable effort to expose its listed companies to both local and international fund managers and funds. During Mining Indaba, this year as in other years, two showcases are held which teach investors how to invest in mining companies and then give audiences the opportunity to hear from and meet senior mining company executives. These events are free and booking may be done at www.jse.co.za/events.

Burke continues, “The message that the JSE will share with companies with African assets is that there is capital in South Africa. The JSE has a responsibility to provide an enabling environment in which South Africans and Africans can benefit from their resources and companies operating here.

“The basic hygiene factors are in place. These include a sound macroeconomic environment, securities market regulation rated first in the world by the World Economic Forum, technology provided and operated by the London Stock Exchange, strong surveillance capabilities where we see to client rather than broker level and international best practice in terms of corporate governance. In terms of clearing and settlement, the JSE rates highly in terms of settlement risk .”

Burke concludes, “The reality is that if a business has projects in Africa, the JSE should be a viable preferred destination to list the business and raise capital for that project.

For further information, photographs or interviews, please contact Michelle K Blumenau, Turquoise PR & Marketing Communications T 011 728 5004 / 083 273 9891 michelle@turquoisepr.co.za

German companies want to emulate their Chinese competitors and become more active in Africa. But doing business in developing and emerging markets is risky. Export credit guarantees are a useful safety net.

The past decade has seen China intensify commercial activities in Africa to become the continent’s major trading partner. Not surprisingly, German companies want a piece of the action as African economies are expected to grow significantly in the future.

According to Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), the past 10 years have seen Africa undergo its longest period of economic growth since the 1960s. The average growth rate across nations both rich and poor in natural resources was 5 percent.

A news study from business consultancy Roland Berger identifies a wealth of commercial opportunities in Africa, particularly in sub-Saharan regions.

Exporting goods to African nations often entails risks that individual companies or banks are unwilling to tolerate alone.

“Export credit guarantees protect German businesses from non-payment and are a useful tool for helping companies make the most of growth opportunities in Africa,” said Andreas Klasen, an export expert at PricewaterhouseCoopers (PwC) professional services group.

“This so-called ‘Hermes cover’ has allowed us to support German firms involved in many successful commercial projects in Africa, from the export of machinery for a solar panel factory in Algeria to the construction of drinking water infrastructure in Angola.”

Big chances for German firms

To help German companies expand in Africa, the German government contracted PwC to negotiate guarantees with the world’s largest credit insurer, Paris-based company Euler Hermes, on its behalf. In December the two companies signed a partnership agreement with the African Export-Import-Bank, also known as Afrexim.

Many of the 48 nations in Sub-Saharan Africa, including Mozambique, Tanzania, Ghana and Nigeria, are among the fastest-growing economies in the world. They are starting from a low base, however. Although the region is home to 750 million people, it still accounts for less than 2 percent of world economic output.

While German exports to Africa as a whole increased by 7 percent since 2006, the value of export destined for Sub-Saharan Africa rose by an impressive 16 percent in the same period.

“There is still untapped potential for German companies,” Klasen told Deutsche Welle. “The total value of global exports to Sub-Saharan Africa actually rose by 31 percent.”

Guarantees boost trade

The German government guaranteed more than a billion euros worth of export deals with sub-Saharan African states last year.

“Export credit guarantees aim to make trade with Africa easier. That’s why we’ve been working with Afrexim, and that’s why we signed a new agreement with the African Trade Insurance Agency in Nairobi last year,” Klasen said, adding that German companies benefit greatly from the regional know-how these organizations possess.

Afrexim was founded in 1993 by a consortium of African governments and private and institutional investors. Based in Cairo, it’s mission is to finance and promote African trade. The African Trade Insurance Agency in Nairobi is an international financial organization founded by African states in 2001.

Tangiers Petroleum (ASX:TPT) has started trading on London’s Alternative Investment Market under the ticker code TPET (LON:TPET), complementing its Australian listing.

Together with its ASX listing, the AIM listing provides the company with a strong platform from which to strengthen its shareholder base and increase its international profile, it said in a statement.

Following its recently announced A$6.35 million placement to UK, North American and Australian investors, the company is well positioned to unlock the potential of its oil and gas exploration projects in Morocco and Australia.

AIM is recognised as one of the world’s leading exchanges for junior resource companies, with a significant peer group, analyst coverage and institutional investor following of oil and gas explorers active in Africa, Tangiers said.

HB Markets initiated coverage of the oil and gas explorer with a ‘speculative buy’ recommendation last week ahead of the AIM listing.

Analyst Donald Linderyd said the current valuation of could be a fraction of its true worth if indications from the company’s independent competent person’s report on the resources base turn out to be accurate.

Tangiers has two potentially company making assets – the Tarfaya oil block off the coast of Morocco and highly prospective gas acreage off the coast of northern Australia.

Tarfaya has an un-risked prospective resource of 867 million barrels, with a high-end estimate of almost 5 billion.

In Australia, the company has discovered what it believes to be two huge gas finds – Nova and Super Nova – sitting below already existing oil fields.

Based on work carried out by Schlumberger, Tangiers cites what it calls a “probabilistic estimate” of un-risked gas in place of 71 trillion cubic feet to 148 Tcf – which makes the pair potentially huge on anyone’s register.

Barney Gray, oil and gas analyst at City broker Old Park Lane Capital, which assisted in the listing, commented today: “The recent fundraising puts Tangiers in a strong position to continue its exciting work programmes in Morocco and Australia and we believe that the company will attract a partner to promote the group’s exploration programme in Morocco in the current year.”

Old Park Lane has set the price target at 115 pence, equivalent to A$1.79. In debut trading on AIM, the stock stood at 37.75 pence at 10.28 am.

Afrinvest West Africa Limited has commended the Nigerian Stock Exchange (NSE) over the various reform initiatives adopted to enhance investor’sa confidence in the nation’s capital market.

Afrinvest believe that the factors that influence investors’ confidence in the market transcend macroeconomic and socio-political considerations.

In the Afrinvest 2012 Nigerian Market Outlook “Diamond in The Rough” made available to Vanguard, the company pointed that in the last one year; the Nigerian stock market has undergone wide-ranging regulatory and “housekeeping” reforms and initiatives that are geared towards restoring investor confidence in the Nigerian bourse.

“The need to capture a significant portion emerging market portfolio inflows necessitates a quantum leap in regulatory and administrative oversight, including high corporate governance standards, on the Nigerian bourse in line with acceptable global standards.”

The company revealed that having initiated varied reforms, which are targeted at enhancing fair and transparent market place, enhanced investor confidence, and improving market depth, the bourse is on course for boosting investors’ confidence going forward.

Revealing further, Afrinvest stated that policies such as the introduction of market making, securities lending, short selling and introduction of ETFs need to be accompanied with effective regulatory oversight, while their general acceptance and participation by the investing public will largely depend on improved investor education going forward.

However, the company, estimated a GDP growth rate of 7.0 per cent and 7.5 per cent for the country’s economy in 2012 with increased contribution from the non-oil sector especially agriculture, telecoms and financial services.

“We expect the CBN’s banking sector reforms to berth in 2012, giving further impetus to bank lending particularly given the mild uptick in credit growth observed towards the end of 2011. We envisage less aggressive fiscal tightening measures in 2012 even as reduced government borrowing should bear positively on the domestic equity market.”

“Given unfolding realities in Nigeria’s macroeconomic backdrop, as well as anticipated global economic conditions, our focus in 2012 remains on fundamentally strong and countercyclical companies, with strong cash generating capacity and strong management teams,” it added.

Standard Bank Group has for the second year in a row been independently ranked the most valuable banking brand in Africa, according to the 2012 global Top 500 Banking Brands report.

The definitive report is published in the leading global banking journal The Banker and is compiled by the valuation consultancy and asset management company Brand Finance.

According to the report, the Standard Bank brand is worth US$2.17-billion. This saw Africa’s biggest banking group jump up three places in the world rankings, from position 76 in 2011 to position 73 in the world. It also means that Standard Bank Group maintains its top spot as the highest ranked brand on the continent.

BrandFinance calculates the value of brands by using a “royalty relief method” that estimates the notional price a company would have to pay for the brand. The methodology employed uses a discounted cash flow (DCF) technique to discount estimated future royalties at an appropriate discount rate to arrive at a net present value (NPV) of the trademark and associated intellectual property: the brand value.

Standard Bank Group Deputy CEO Ben Kruger says: “We are delighted to receive this recognition, which adds to a growing list of prestigious awards in recognition of building a successful brand on the African continent. Standard Bank acknowledges the relationship between brand equity and the key value drivers in the business, and we view brand management as a key element to enhance value for all stakeholders.”

As a South African headquartered bank with subsidiaries in 17 African countries, Standard Bank Group is uniquely positioned to service clients doing business on the continent. Mr Kruger says this latest recognition bears testimony to this competitive advantage.

“This ranking is a reflection of the value created through the focus and dedication of our people in delivering what is important to our customers in different segments and markets, as we strongly believe that is what ultimately differentiates banks and builds value in a brand,” says Mr Kruger.

“The benefit of our strong commitment to Africa is increasingly evident and injects extra value into our relationship with customers. This enhances brand value, a measure of commitment and loyalty to Standard Bank.

“Whatever we do should help the customer advance in some way. Merely completing a routine activity or facilitating a complex transaction is only really worth something if we are assisting our customers and clients in their needs and delivering on their expectations.”

Brand Finance’s Top Banking 500 directly compares the values of the world’s banking brands. It is the only direct comparison of brand value in the banking industry. The consultancy produces a study that illustrates how the methodology, findings and value-based marketing techniques can be used for decision-making and to determine the impact of brand equity on business performance.

London-based private equity fund Actis intends to sell shares of Uganda’s power company, Umeme, through a double initial public offering (IPO) in Nairobi and Kampala.

This could mark the region’s first cross-border IPO listing, though the transaction is still in the early planning stages and the fund is yet to file applications with the capital market regulators.

Paul Fletcher, a senior partner at Actis — which owns the electricity distributor — told the Business Daily that the firm was targeting a cross-border IPO to secure liquidity of the stock in the secondary market. TransCentury and CFC Insurance Holdings listed at the NSE by introduction last year.
Listing on the Nairobi and Uganda securities markets is also expected to boost chances of a full subscription of the offer.

“We would like a dual listing as it would not only help liquidity post-IPO, but it would be an important step towards regionalising the market,” said Mr Fletcher, who added that the timing of the planned offer is still under review.

In their last meeting held in 2011, the East African Securities Exchanges Association said that listing of Umeme and Tullow Oil on the Uganda Securities Exchange (USE) was expected this year.

Joseph Kitamirike, the chief executive officer of the USE, told the Business Daily two weeks ago that the Uganda bourse was still awaiting applications from the two companies and therefore could not comment on the issue.

“We have not received any documents from the companies,” he said, adding that although the bourse is expecting new listings, the timelines will only be established once applications are received.

Umeme , which was established in 2005 won a 20-year concession from the Uganda government for power distribution.

In November 2009, Actis took over the power company in a deal that was valued at approximately Sh1.33 billion ($15 million).

At the end of 2010, Umeme had secured a loan with the International Finance Corporation for a refurbishment programme which saw over 90,000 electricity distribution poles replaced at a cost of approximately Sh8.9 billion ($100 million).

The Uganda power utility firm could become one of at least three other firms that have announced an intention to list at the Nairobi Securities Exchange (NSE).

The others include CIC Insurance, clothing and lifestyle goods retailer, Deacons and Longhorn Publishers.

CIC Insurance has already submitted its application for listing at the NSE to the Capital Markets Authority.

The companies that have already announced intentions to go public are however, opting for listing by introduction, fearing IPO under-subscriptions due to the high interest rate and inflation environment in the country.

8 plan to list

Last year, only three firms in the region listed through IPOs, which included Kenya’s British American Investments Company and Rwanda’s beer maker Bralirwa and Bank of Kigali.

Precision Air in Tanzania also raised funds for expansion at the Dar es Salaam Stock exchange, while Kenya’s brewer East African Breweries Limited sold its 20 per cent stake in Tanzania Breweries at the Dar es Salaam bourse.

The NSE chief executive, Peter Mwangi, said in an interview last month that at least eight firms have signalled their intention to list at the bourse this year.

He said five of the companies are planning to list on the main market segment; two others will list on the Growth and Enterprise Market Segment—which is expected to be operational by the middle of the year—while one firm from a neighbouring country is expected to list its shares in Nairobi.

South African investment fund New Europe Property Investment NEPI has taken over the majority stake in ModaTim Investment Properties, the developer of the City Business Center CBC in Timisoara. Businessman Ovidiu Sandor, the initiator of the project, will continue to administer the project untill 2015, and will be in charge with managing the development of buildings D and E from the project.

City Business Center Timisoara is a class A office projects with five buildings having a total rentable are of 43,000 sqm. Buildings A, B and C, totaling 25,000 sqm of rentable space are currently in use, while the other two are set to be finalized in 2012 and 2013.

Jones Lang LaSalle was the real estate advisor in the project, NNDKP provided the legal consultancy, and PwC was the financial and fiscal consultant in the project, all on the seller’s side.

NEPI has been active in Romania since its launch in 2007. Some of its recent investments are the acquisition of Floreasca Business Park (December 2010), the acquisition of the remaining part of the Auchan Retail Park in Pitesti (May 2011), the completion and opening of a leisure extension of Promenada Mall Braila (April 2011) and the completion of a refurbishment of an office building in Brasov (June 2011).  NEPI is currently listed on the main board of the Johannesburg Stock Exchange (South Africa) and the AIM market of the London Stock Exchange and, starting from June 2011, is also listed on the Bucharest Stock Exchange.  The group recently announced a EUR40 million underwritten rights issue that is expected to complete in December 2011.

The West African Monetary Institute (WAMI) and the African Capacity Building Foundation (ACBF), have signed a $2million grant agreement to strengthen the ability of the Institute and stakeholders to attain the monetary union goal by 2015.

The move is aimed at facilitating the preparatory activities for the West African Monetary Zone (WAMZ) among member countries.

The deal was clenched in Accra by Mr John Tei Kitcher, Acting Director of WAMI who signed on behalf of the Institute whilst Dr Fannie Leautier, Executive Secretary of ACBF initialled for her outfit.

The grant will support the implementation of WAMI’s medium-term Strategic Plan (2010-2015), which is based on five core pillars of Macroeconomic Convergence, Research and Statistical Harmonisation; Trade and Regional Integration; Financial Sector Integration; Payments System Infrastructure, and Institutional and Capacity Building.

WAMZ was formally launched by the Heads of State and Government of Ghana, The Gambia, Guinea, Nigeria and Sierra Leone in December 2000, with the objective of establishing a single currency. The membership was increased when Liberia joined the Zone in February 2010.

The WAMZ agreement provides for the establishment of other institutions including WAMI, which has the primary mandate of undertaking all necessary tasks that will lead to the setting of the West African Central Bank.

Dr Leautier said ABCF support to WAMI promises long-term results in the sub-region, which includes improving the quality of statistical data and enhancing reporting standards in line with the global best practices.

The other benefits comprise the enhancement of macroeconomic surveillance with the convergence criteria and other structural benchmarks.

There will also be the development of an electronic library to facilitate the conduct of relevant research; enhancement of the capacity of the central banks in monetary policy management; increasing financial system stability and reducing fraud as well as stepping up WAMI’s organisational efficiency and effectiveness.

These efforts Dr Leautier said are expected to improve in the long-run ECOWAS Member States economies and lead to a higher Gross Domestic Product growth.

“Let me emphasise that for ABCF, our partnership with WAMI is a strategic and mutually beneficial one that promotes Africa’s development agenda.

Mr Kitcher said the monetary union was to commence in January 2003, after a convergence process, “however, following the inability of member countries to meet the minimum stipulated criteria, the launching of the union has suffered three postponements with the new date scheduled for January 1, 2015”.

He said the Institute had increased its resources four-fold through external partners, while reducing the contribution of member countries.

WAMI is developing payment systems in The Gambia, Guinea, Liberia and Sierra Leone with an African Development Bank grant of $30 million.

“We have also played a pivotal role in the establishment of the College of Banking Supervisors of the WAMZ to promote regional financial stability,” he said.

Mr Kitcher said the ongoing Greek financial crisis and its impact on the Euro zone and the global economy, highlighted the need for more robust technical preparations for aspiring monetary unions, including the WAMZ.

Some WAMI’s key achievements from July 2008 to December 2011 are the enlargement of the membership of the WAMZ with the admission of the Republic of Liberia by convening a Heads of State Summit in February 2009. It had also convened seven Convergence Council meetings of the WAMZ.

The Institute prepared six statutes approved by the Convergence Council covering the West African Central Bank; West African Supervisory Authority; Single Economic Space and Prosperity Agreement; Banking Statute of the WAMZ; Non-Bank Financial Institutions Statute; Payment Systems Statute. In addition, The Fiscal Responsibility Act was also prepared.

WAMI has put in place reforms to strengthen the institutional mechanisms and internal control including the setting up Operations Committee and Corporate Services Committee and several policies.

The corporate body instituted the Ministers of Trade Forum and convened four meetings of the Forum to enhance trade related issues as well as a trade and investment forum in London in May 2011, which brought together Ministers, Governors of Central bank, investment bankers, financiers, and other private sector stakeholders.

In the area of knowledge and capacity building, recognising the need to support member countries in building capacity to implement the International Financial Reporting Standards (IFRS), WAMI in collaboration with Euro-money organised a high level training on IFRS. All participants were sponsored by WAMI.

WAMI organised a seminar with the Centre for Research on Political Economy on regional integration in West Africa, the outcome of which is being published as a book.

JOHANNESBURG – The South African Local Government Authority (Salga) as well as some of SA’s major municipalities are currently in the process of drafting applications for new taxes to be levelled on SA businesses.

The taxes, which may become “the straw that broke the back” of SA’s struggling small and medium (SME) business sector according to analysts, are envisaged to provide an additional revenue stream to SA’s ailing municipalities.

But business, professionals and the province of the Western Cape have come out in opposition to the proposals.

SA businesses, operating in a difficult economic environment with already stifling costs of doing business have “their backs to the wall” and can ill-afford an additional administrative and financial cost, says the opposition.

According the Western Cape, the proposed taxes are likely to have the effect of hampering SA’s economic development while stifling job creation.

Salga, on the other hand, argues that the taxes are necessary to cover a “tax-gap” left when the Regional Service Council (RSC) levies were abolished in 2006.

It is argued that SA’s municipalities are struggling with a revenue shortfall and need the additional income to fund investments into economic infrastructure and services.

Salga had agreed in principle to the idea of a new tax at its national conference, attended by the heads of SA’s various municipalities, in August last year according to Mayur Maganlal, executive director of economic development and planning at Salga.

Salga as well as “a number” of SA’s major municipalities, including Nelson Mandela Bay and Cape Town, are now in the process of finalising applications, to be submitted to Treasury, to have businesses charged the additional tax, according to Maganlal.

“We’re busy putting together an application … a couple of the big cities are also finalising their own applications and we’re working with them … the overall proposal that we’re all submitting is along a similar lines while there might be minor variations,” says Maganlal.

“The Salga application will be looking at the tax from a national perspective,” he says.

Although the exact manner of calculating the amounts businesses will be charged has not been finalised with “various options” likely to be submitted, Maganlal has confirmed that the South African Revenue Service (Sars) will be charged with collecting the tax and that all VAT registered businesses in SA will theoretically be liable to pay it.

“I don’t think that we are at a stage where we should be worrying about the mechanics of how to levy it,” he said, “the idea is that there should be a tax, that has been agreed upon and the magnitude will depend on the type of tax”.

Moneyweb understands that Business Unity South Africa (Busa) has submitted a formal response to the proposals with the South African Institute of Chartered Accountants (Saica) endorsing Busa’s response.

Busa was unavailable for comment by the time of going to print, However Saica’s project director, Muneer Hassan has questioned the logic of the policy decision behind the proposal.

“When there is a collection of tax, you have to think about what the policy decision behind it is … it is difficult to understand what the logic is of imposing an additional tax on business,” says Hassan.

He asks if a business tax at a secondary level is not simply a form of double taxation with businesses already being charged a range of taxes including companies tax and VAT.

The abolishment of the RSC levies “created a bit of a problem because that was an income mechanism specifically for the district councils … at the moment district councils don’t have an income stream,” says Alan Winde, the Western Cape Finance MEC.

But while municipalities may be “under severe pressure with a need to grow their income base”, the proposed tax may not be the best solution, he adds.

“At the moment we cannot talk about adding to the tax burden,” he says “it is going to negatively affect our growth potential … I cannot support that kind of thing right now, it doesn’t make sense.

“I believe in going through other ways, I believe in creating an incentive for businesses to employ more people.

“Instead of trying suck them dry, you need to say them ‘hang on a second we need to make sure you’ve got sufficient turnover to re-invest in your businesses, to grow in your businesses so you can grow more people”, he says.

The adoption by the African Union of a plan to create a continental free trade area by 2017 brings fresh hope that Africa may be finally waking up from its centuries of slumber and taking an initiative towards its economic freedom.

The plan is an ambitious one, and if continental leaders can keep their egos aside long enough for it to succeed, it could be the catalyst for Africa’s economic freedom. The estimated cost of developing Africa’s infrastructure is around $60-billion over the next 10 years.

The AU said at the end of its 18th summit in Addis Ababa, Ethiopia, on Tuesday that the Continental Free Trade Area would strengthen intra-trade and deepen market integration.

This is what has been missing in our approach as Africans to economic growth. Promoting intra-trade would contribute significantly to economic growth, poverty alleviation, employment creation and industrial development.

This will in turn lead to better integration of Africa into the global economy, and hopefully we will no longer need the begging bowl.

The plan is to get the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa working together in close cooperation by 2014. The bigger picture is the final consolidation of all the regional trading blocks between 2015 and 2016.

The emphasis was on the need for increased spending on infrastructure, major projects in hydroelectricity, oil refining and gas pipelines, accelerating the construction transport links and modernising railways and increasing the capacity of ports.

The world is going green and Africa, with its abundant unused land, has a great opportunity to developing renewable energy resources and lead the way towards clean, reliable and affordable energy.

We have always been looked at as the darkest continent because of our low industrialisation compared to the developed world.

This is now our advantage going forward. Instead of looking to follow the same industrialisation route Europe, North America and Asia took, we can go the clean energy route and actually become leaders in that field. It is possible. All it will take is the political will of our leaders.

We can start our own energy companies as well as attract those foreign ones currently developing renewable energy technology. The opportunity is knocking Africa, please open the door.

Continental intra-trade is the way to go instead of us individually fighting to break into the already over-saturated European and North American markets.

South Africa for instance is a net a food exporter, selling abroad 30% more agricultural goods than it imported in 2010, according to the latest South Africa Survey, published last week by the South African Institute of Race Relations in Johannesburg.

Agricultural exports grew by 10% between 2008 and 2010, with total agricultural exports amounting to $6.8bn in 2010. During the same period, agricultural imports increased by just less than 1% and amounted to $5.2bn.

Agricultural exports stood at 5% of South Africa’s total exports in 2010, with agricultural imports accounting for 2% of total imports.

The Institute’s analysis was based on data supplied by the Foreign Agricultural Service at the United States Department of Agriculture.

The data revealed that the Netherlands was South Africa’s largest agricultural export destination, accounting for a little over 10% of South Africa’s total such exports in 2010, worth $700m.

Between 2008 and 2010, the demand for South African agricultural exports grew in Asia and Africa while the proportion of such exports going to European countries declined.

Argentina has remained South Africa’s largest source of agricultural imports since 2008. However, the proportion of such imports from Argentina has fallen from 17% in 2008 to 12% in 2010, when they were worth $628m.

The ratio of agricultural imports to exports has increased since the mid 1960s, when the ratio of imports to exports stood at 1 to 5.

In the decade between 1995 and 2005 the ratio of agricultural imports to exports stood at 2 to 3.

In 2007 agricultural imports temporarily exceeded agricultural exports by a ratio of 11 to 10.

‘Recent data indicates that demand for South African agricultural products is not only holding steady, but is in fact growing’ said Mr Jonathan Snyman, a researcher at the Institute.

‘Food security is an especially precarious state of affairs in sub-Saharan Africa, so it is a positive development that South Africa has maintained its status as a net agricultural exporter’ added Mr Snyman.

If South Africa imported from African countries, the $628m paid for agricultural imports from Argentina would be staying right here in the continent, and contributing towards economic development.

Kenyan companies will benefit from improved funding essential for growth and investment following a EUR 20 million finance agreement between the European Investment Bank, the long-term lending institution of the European Union, and two Kenyan banks, ABC Bank and Consolidated Bank, with proven experience in understanding business needs.

The European Investment Bank’s Private Enterprise Finance Facility II will assist African Banking Corporation and Consolidated Bank of Kenya to provide long-term funding in Kenyan Shillings, US dollars and Euros to assist lending to local businesses seeking to expand or invest in new activities. This is similar to a previous scheme in Uganda that created 1,700 new jobs across the tourism, manufacturing, agribusiness, construction and education sectors.

“Ensuring long-term funding is available for small companies in Kenya will promote sustainable economic growth and job creation in Kenya. The European Investment Bank looks forward to working closely with local Kenyan banks to help entrepreneurs to expand their business activities across the country.” said European Investment Bank Vice President Plutarchos Sakellaris.

“We are excited about this partnership with EIB and view it as a valuable endorsement of the good working relationship we, at ABC Bank, have with our customers. This facility is also in line with our vision of facilitating our customers, especially in the SME sector, to grow their businesses because we will be able to lend to them for a longer tenor and at very competitive pricing. Also, our Importing and Exporting customers will get the additional benefit from this facility through the multi currency long-term lending opportunities that will safeguard against currency fluctuations and allow business expansion.” said Mr. Shamaz Savani, ABC Bank, Managing Director.

Speaking at the event, Consolidated Bank’s Chairman Eunice Kagane said that the facility will enable the Bank to play an active role in the much needed financial inclusion for small and medium businesses in Kenya’s economy. “SMEs will continue to play a significant role in the growth of our economy. We have begun to see the positive impact of local companies through delivery of innovative products and services in the market, as well as provision of employment. However, we appreciate that banks like ourselves have a crucial role to play to enable enterprises to optimize their contribution to the economy. ” said Ms Kagane.

Consolidated Bank’s CEO, David Wachira said that the funds will be available to the Bank’s existing as well as new customers. “The facility which will be available at reduced interest rates comes at a time when lending rates in the market have risen significantly. Therefore we expect to fund businesses which otherwise may have faced challenges with access to funds.” Wachira said. According to Mr. Wachira, the signing of this agreement is one of several initiatives by the Bank to reach out to growing businesses countrywide. The Bank is investing in technology to enhance service to business customers through mobile and internet banking. Additionally, the Bank will roll out its agency banking services in the second quarter of the year. These moves are aimed at deepening and widening its reach of financial services to more customers to enable them transact their business faster and easier.

The Private Enterprise Finance Facility II programme will provide new finance for Kenyan companies seeking long-term loans and will reduce the risk of interest rate fluctuations. Providing funding in Euros and US Dollars to export-oriented enterprises, alongside Kenyan Shillings for firms targeting local sector demand and generating revenues in Shillings, will help local firms to grow. The tenor of the facility ranges between four and ten years and will match the economic lifetime of planned activities. Small companies, a crucial segment essential for growth in Kenya, will be able to make use of three-year loans.

The European Investment Bank funding will be supported by a technical assistance programme for capacity building of the final beneficiaries of the facility. Companies seeking loans or existing SME clients of the bank will be able to receive training in workshops and individual coaching to improve their management skills and enable them to prepare bankable loan applications and business plans. This will increase the potential number of qualifying projects that could be financed by the Private Enterprise Finance Facility II programme and reduce the credit risk of the financial intermediaries.

Kenyan small businesses have benefited from more than EUR155m of European Investment Bank funding since 1991 this has played a crucial role in promoting long-term lending to private sector companies in the country. Last year the European Investment Bank provided more than EUR 1.3 billion for projects across Africa.

Development in mining of metals and bulk commodities including copper, coal and iron ore will continue to drive investment in Africa as a result of strong demand from emerging markets including China and Brazil.

This according to Rajat Kohli, the global head of mining and metals at Standard Bank.

Kohli told members of the media during a lunch hosted by Standard Bank, that countries African countries including Sierra Leone in West Africa, where a new iron ore mining was expected to improve fortunes and investment in Mozambique coal would successfully drive the economy region.

“It is exciting to see that projects are coming to fruition in Africa,” he said. Kohli expected continued mergers and acquisitions by small and medium sized mining companies would continue. Other exciting opportunities in Africa were in nickel rich Burundi and platinum wealthy Zimbabwe which had the second biggest reserve of the precious metal after South Africa.

Last year, the Chinese based Jinchuan Group announced plans to acquire South African Metorex for R9.1 billion. While Brazilian based Vale approved a $6 billion expansion of its Moatize coal project in Mozambique.

Better partnerships between government and the mining companies were needed. In Zimbabwe, government has introduced an indeginisation policy which requires foreign owned companies to cede 51 percent takes to locals to improve the economy.

“Zimbabwe is a fairly unique situation by African standards. A lot of companies are showing interest but everyone has adopted a wait and see attitude, and it is the right attitude given uncertainty in that country,” said Peter von Klemper, the director for Mining and Metals at Standard Bank.

Furthermore, uncertainty as a result of calls for resource nationalism, the euro zone debt crisis and infrastructure shortage will continue to be key trends in the mining sector for the next year, said Kohli. There had been consequences for the call for nationalization of mines in South Africa by ANCYL president Julius Malema.

“As long as the commodity sector outperforms other industries, countries will see mining as a source of revenue. A lot of countries in Africa rely on resources for GDP.

There had been consequences for the call for nationalization of mines in South Africa by ANCYL president Julius Malema.

“You may not see a level of investment in new projects or mergers and acquisition activity. Development capital has gone to other jurisdictions in pro-active. When you speak to major mining, and they think twice before putting money into South Africa.

But resource nationalism is not just an issue in Africa, but also in countries like Russia, Australia, and Chile.

Standard Bank, is South Africa’s largest has a footprint in African countries. The lunch was in preparation for the Mining Indaba that takes place next month. – Dineo Faku

EALA today resumed debate with the August House debating and approving a crucial Report of the Committee on Accounts. To that effect, the Assembly is reiterating the need for better governance of operations including enhanced supervision by the Council of Ministers, improved systems and capacity building of the Secretariat to strengthen the regional bloc.

The Chairperson of the Accounts Committee, Hon Bernard Mulengani, presented the Report of the Committee on Accounts for the Audited Accounts of the EAC for the period ended June 2010.

The Report encapsulates the audited financial statements of eight reports referred to the Committee for scrutiny. It follows “the laying on the table” of the Report, initially authored by the Audit Commission, by the Chairperson of the Council of Ministers in September 2011.

The Report includes financial statements of the Lake Victoria Basin Commission, Lake Victoria Environment Management Programme II (LVEMP) and the Civil Aviation Safety and Security Oversight Agency (CASSOA). Others are the Inter-University Council for East Africa (IUCEA) and IUCEA’s BIO-EARN and VICRES Initiative projects respectively.

The Report according to Hon Mulengani enumerates a number of areas and is largely qualified (clean). The Report however gives a number of areas that need strengthening across the institutions covered.

On the Audit findings of the consolidated Financial Statements of the EAC for the year ended June 2010, the Report notes the Secretariat had as at time of the Audit not produced the Accounting and Procurement Manuals. However, the Secretary General has since signed the Manuals (with the Council of Ministers approving the same).

Hon Mulengani noted that the internal audit function of the Secretariat was currently understaffed thus underscoring the need to enhance capacity by undertaking recruitment. In addition, Members called for the independence of the Internal Audit department and for the operationalisation of the risk management charter by March 2012.

On investments, the Council of Ministers was urged to approve the policy for proper guidance of investments at the EAC in a bid to effectively manage the additional funds maintained by the EAC in fixed deposits.

The Committee recommended to the Assembly that the Council of Ministers’ ensures the EAC improves on and conducts due diligence while handling all EAC financial transactions.

Rising to make contributions on the floor of the House were Hon. Christopher Nakuleu, Hon Dora Byamukama, Hon Augustine C.L Lotodo and Hon Dan Kidega. Others were Hon Jacqueline Muhongayire, Hon Mike Sebalu, Hon Catherine Kimura, Hon Margaret Zziwa and Hon Dr. Odette Nyiramillimo.

During debate, Members urged the EAC Secretariat to regularly produce activity reports and institute mechanisms in place towards releasing Community documents to donors including the storage of vital reports.

Members called on the EAC to streamline internal controls and retirement of imprest in line with the best practices in accounting.

“It is a good thing that the EAC shall now start recruitment for some of the key positions, we need better governance and segregation of duties to manage the resources more efficiently and effectively”, Members stated.

The Assembly further underscored the urgent need for automation of EAC systems. “The EAC needs to be embrace Information Communication Technology (ICT) and all processes involved, in addition all staff should be ICT compliant”, the Members declared.

“The area of implementation and adherence to the recommendations of the House is vital. We have time and again asked for the Ministers (of EAC) to be based in Arusha to offer the necessary guidance and speed up decision making”, it was stated.

On environmental matters, RV Jumuiya, the vessel of the Community shall need to be made operational with the removal/control of the water hyacinth. As it stands today, the vessel remains docked and is a burden to the Community. The move- Members declared, would enable it RV Jumuiya carry out its mandate towards enhancing navigation, research, educational and related activities.

In response, the Chairperson of the Council of Ministers, Hon Musa Sirma, noted the Council of Ministers’ commitment to implementing the decisions arrived at. The Hon Minister enumerated the areas as management and accountability issues, governance as well as environmental mitigation measures to remove the hyacinth problem and staff recruitment among others.

“I want to confirm that Council had in October 2011 in Zanzibar unfrozen the positions which shall now be filled subject to budget and formula laid out” Hon Sirma said adding that enhanced staff capacity would go a long way in improving activities of the EAC.

Hon Sirma said the operationalisation of the Internal Audit Manual, risk management chart strategy and the code of ethics among other areas were now underway.

The Minister said the Secretariat had commenced on the process of establishing the Audit Committee and was keen to establish other relevant positions in the Financial Year 2012/13.

The Council has further directed the Secretariat to undertake a feasibility study on financing options for the EAC, the Minister remarked.

The Minister further assured the House the new EAC Headquarters would be ready for occupation and opened in April 2012. “I confirm the EALA Chamber shall be ready for the last meeting of EALA – 5th Meeting of the 5th Session”, the Minister.

Earlier on, EALA Members were apprised by the EAC Deputy Secretaries General on the progress of projects and programmes of the bloc. The meeting presented an opportunity for Members and the Executives of the Secretariat to exchange ideas on how to espouse and strengthen the Community. The meeting chaired by the Speaker, Rt. Hon Abdirahin Abdi, saw presentations made by Dr. Enos Bukuku (DSG, Planning and Infrastructure), Mr. Jean Claude Nsengiyumva (DSG, Productive and Social Services) and Dr. Julius T. Rotich (DSG, Finance and Administration). Hon Beatrice Kiraso (DSG, Political Federation) sent her apologies.

Parliament continues tomorrow.