Risk 01_Afrikasources


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AFRIKASOURCES, your business intelligence partner is Africa, published it's first bulletin on the Risk analysis for Comesa countries.
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Risk 01_Afrikasources

  1. 1. o http://investincomesa.ning.com AFRIKASOURCES Volume 1 – N 1- 8 March 2009 COMESA COUNTRIES RISK ASSESSMENT BULLETIN   HEADLINES   The Central Bank of Zambia Offloads US$53 Million onto Foreign Exchange Market ZAMBIIA   ZAMB A As the country is facing a severe foreign exchange situation, the Bank of Zambia (BoZ) offloaded a total of US$53 million on the   foreign exchange market in January 2009 in order to mitigate the depreciation of the Kwacha against other convertible Tensions on the Kwacha  international currencies. The Governor Dr Fundanga said BoZ currently has $900 million in its reserves which it will continue to sell to sustain the foreign exchange market. He also admitted that inflation was still high, also said that BoZ had no intentions of   removing the zeroes from the Kwacha but added that the bank would study all types of situations regarding the issue. Zambia also introduced regulations barring non-residents from borrowing kwacha in the domestic money. The regulations will   prevent commercial banks in Zambia from extending “any form of local-currency lending to non- residents” for less than 12 months, the Bank of Zambia said separately in an e-mailed statement. The BoZ wants to prevent foreign banks from speculating   against the kwacha, which has plunged 31 percent since the start of 2008 as a slide in copper prices reduces foreign revenue.   The currency traded at 5,540 to the dollar compared to 3,500 in 2008 and may hit 6,000 US dollar. Copper has slumped about 60 percent in the past year as a global recession reduces demand for the metal used in wiring and household appliances.   Customs Council ready to take decision on tariff cuts EGYPT      EGYPT Inside the Customs Council, intense negotiations are ongoing with the aim of reducing tariffs on imported goods in an effort to spur the Egyptian industry. Most of the items under review in this category include industrial inputs — items critical to driving   Tariff cuts  Egyptian industry. Various reports indicated that the Customs Council would reconsider the tariff on any goods with a 10 percent import tax, but that items with a 30 percent tax will not be touched. The process for determining new customs laws is a lengthy one. First, a committee in the Customs Council reviews each of   hundreds of tariffs applied to different goods. The Council “studies the needs of the markets and of the business community…whether Egypt’s production is enough for Egypt.” The customs manual is over 400 pages long, comprised mostly   of lists of goods and their corresponding tariffs. The Industrial Union has petitioned the Customs Council to shift the tariffs on all goods currently at 2 to 5 percent down to   zero. Egypt, like many other countries, is focusing on stimulating internal markets, in order to fend off the external crisis.   IMF consider that growth could fall to 4½-5½ percent this year and next (from a 7 percent average in the last three years), with inflation declining to 8-12 percent over the same period.     Fighting kills more people in Ethiopia ETHIIOPIIA  ETH OP A Fighting in Mustahil district, in eastern Ethiopia's Somali-inhabited region, killed at least 25 people and wounded scores in February 2009. In response, the Ethiopian army deployed hundreds of troops backed by military trucks to the area along the State of Emergency in  border near Somalia's Hiran region. The Ogaden National Liberation Front (ONLF) said it had seized Mustahil and was also Ethiopia  fighting for the towns of Wardheer and Khalavo. The Ethiopian government has not commented on the ongoing military operations but had denied the statement. Ethiopian troops have been accused of committing war crimes against ethnic Somalis in the vast Ogaden region, which is home to a Somali population fighting for self-determination. The ONLF, founded in 1984, says the Somali-speaking population in Ethiopia's oil-rich Ogaden region has been marginalised by Addis Ababa with Chinese supports. A recent joint assessment by the government and its humanitarian partners found that 4.9 million people would require humanitarian assistance over the next six months. The government and donors have appealed for US$389.3 million worth of food aid to alleviate the situation.   South African bourse operator JSE is buying a stake in the Mauritius Stock Exchange MAURIITIIUS  MAUR T US According to Le Mauricien newspaper, the deal will cost the JSE Ltd a total of 367.5 million rupees ($10.7 million). For the news report, although talks began in February 2007, the deal needs approval of the Financial Services Commission and shareholders. South African relocation  The JSE launched the Africa Board on 19 February 2009, inviting leading African companies from many countries across the in Mauritius  continent to join the initiative. The Africa strategy is a long-term strategy to promote the growth of capital markets on the African continent. It aims to attract foreign capital to the African market, by allowing investors access to the opportunities that exist in Africa. Revenues at the JSE rose by 22% to R1 072 million in 2008 [R877 million in 2007] while net cash flow from operating activities climbed by 49% to R489 million (2007: R329 million). The Group had no debt and R946m in cash reserves. Which will be be used to fund the Bond Exchange SA [Besa] acquisition and buy a strategic stake in the Stock Exchange of Mauritius. Mauritius is one of Africa's most stable and prosperous countries but the stock exchange recently sank to its lowest level since October 2006.   Kenya: Food insecurity, about 10 million people are experiencing acute food insecurity due to chronic droughts, conflicts, global economic down turn, human and animal diseases. The latest Short rains assessment showed that the eastern province, northeastern and north-western areas were the most affected. Ongoing cholera outbreak in the eight districts in Nyanza, Rift valley and North-eastern provinces. The total number of reported cholera cases has risen to 515 with 21 deaths (CFR: 4.1%). There is a confirmed cholera (Cholera vibrio) outbreak in the two border towns of Moyale in Kenya and Ethiopia. In the Kenya side 63 cases were reported with 3 deaths. Zimbabwe: The cholera outbreak continues to affect all provinces. As of March 8th, 89,018 cases and 4,011 deaths (CFR: 4.5%) have been reported. Calm on the political front despite the traffic accident involving Mr Tsvangirai wich also fatally injured his wife. Uganda: Ongoing joint military offensive on LRA base in Garamba by forces of Uganda, Sudan and the DRC. Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [CEO-Senior analyst] The content of this publication (which is subject to change without notice) reflects only our opinion, based on information selected by us. Request for a more detailed analysis at afrikasources@gmail.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius]
  2. 2. RISK ANALYSIS - COMESA COUNTRIES     Former Mozambican president Joachim Chissano goes on an quot;African Union preventive diplomacyquot; to Malawi MALAWII  MALAW Three parties have been brought to the round table by African Union (AU) facilitator Joachim Chissano to defuse any possible tension coming ahead of the May 19 elections. MCP is being led by Daza and other members are Lingston Belekanyama, Nancy Preventive diplomacy  Tembo, and Ishmael Chafukila. UDF presidential candidate Muluzi is leading his team comprising Friday Jumbe, Harry Thomson, George Nga Ntafu, Robert Jameison and Lilian Patel. Mutharika as DPP presidential candidate is leading his party which has Peter Mutharika, Henry Phoya, Davis Katsonga and Henry Chimunthu Banda. For Public Affairs Committee (Pac) Publicity Secretary Morris Munthali, there is “no political tension in the country but disagreements… or rather intolerance among politicians, which might not even need outside intervention,” he said. For Munthali, the key political leaders were just greedy and not willing to dialogue. “We do not want to replace the Malawi Electoral Commission which has the mandate to decide on the eligibility of candidates,” said Chissano dismissing rumours that AU was persuading Muluzi to withdraw his candidature. Chissano pointed out that the   mission of AU is to promote “preventive diplomacy” to ensure Malawi holds free and fair elections. Uncertainty remains on security situation with continuing political violence. So far more than 1,000 people have been injured MADAGASCAR  MADAGASCAR and 170 killed by the violence. Ahead of a planned three-day National Consultative Conference to resolve Madagascar’s deep political turmoil, the country’s senior military commander warned on 10 March that the army will step in and impose order if a WAR games  solution to the crisis is not found within 72 hours. According to Edward George of the Economist Intelligence Unit: quot;The armed forces see themselves as guarantors of the rule of law, so it's becoming a tricky situation for the presidentquot;. The president has been hounded by a street-based campaign led by opposition leader Andry Rajoelina, which accuses the twice- elected Ravalomanana of being anti-democratic, and demanding his resignation. The planned 12 – 14 March conference is being organised by Madagascar’s influential Council of Christian Churches (FFKM) and the United Nations to broaden dialogue to include all parties affected by the crisis. Those invited include representatives from the armed forces, civil society, the private sector, labour unions and religious communities.The conference is intended to provide the two men at the centre of the political deadlock - Ravalomanana, and Rajoelina, the former mayor of the capital - with an opportunity to step away from their inflexible   positions without losing face. REGIONAL INTEGRATION PIIIRACY    P R ACY COMESA  COMESA P RACY COMESA In October 2008, EAC, COMESA, and SADC agreed to work toward a free trade area International law defines piracy as any act of violence, detention or depredation conducted among all three economic groups with the eventual goal of establishing a customs union. On on the high seas from one vessel to another. the Agenda for those African Regional Economic Communities, the major issue of In 2008, there were 115 pirate attacks off the coast of Africa. There have been a dozen more Economic Partnership Agreements [EPA] with European Union. attacks in 2009. And, an estimated 100 merchant ship crew members from countries Negotiations for a full EPA are ongoing, with Eastern and Southern Africa having identified including India, Greece, the Philippines and Ukraine still are being held hostage as a result certain contentious issues which it wants resolved, including the scope of coverage of the of incidents in the past year. trade in goods component of the agreement, the MFN clause, export taxes, safeguards and A group of African nations signed a regional code of conduct in Djibouti in January 2009 on rules of origin. Development cooperation provisions have been broadly agreed, but the ESA the subject of piracy. Ethiopia, Kenya, Madagascar, the Maldives, the Seychelles, Somalia, wants a strengthening of the language in relation to EU member state commitments to Tanzania, Yemen and Djibouti were early signatories. The document, aimed at repressing provide additional funding. armed robbery against ships off Somalia and in the Gulf of Aden, remains open for signature ESA Trade Ministers want to submit market access offers acceptable to both parties and by all countries in the region. enable all least developed countries [LDCs] to be part of a regional EPA that supports The United Nations recently passed two resolutions (numbers 1851 and 1846 ), which regional integration processes. They also maintained that there is a necessity for flexibility in authorize actions against Somali pirates on land, as well as at sea. The resolutions are modifying tariffs in line with the evolution of the regional integration programme. expected to spur further captures of pirates. SNAPSHOTS Diplomatic tug-of-war over a permanent seat allocated to Africa in the United Nations Security Council. Nigeria, South Africa, Egypt, Libya, Senegal, Kenya, and Botswana have all shown interest. South Africa is widely seen as it looks to have more quot;credibilityquot; among the G-8 nations than the other African contenders. Currently, Africa is the only continent without a permanent seat on the Security Council. South Africa accounts for nearly 40 percent of Africa’s economy. Libya, despite its oil wealth is still recovering from the UN isolation that ended in 2003. Kenya has a weak economy and is presently too bogged down in domestic politics to carry out a credible continental and international campaign. Senegal’s late entry will also be costly as it is already experiencing difficulties in selling itself on a continent where it is seen as a French proxy. The African Union so far has not only failed to pick a candidate for the potential permanent African seat on the United Nations Security Council, but has also failed to forge an accord on how Africa should be represented at the security council of the United Nations. It is believed that the negotiations will not move forward without a clear resolution that Africa will now be represented among the permanent members, while other countries like India and Japan are also being actively supported by some current permanent members. The UN Security Council is made up of five permanent members and 10 two-year members. An election for the non-permanent positions will take place in late 2012. The first round of inter-governmental negotiations to reform the UN Security Council took place in February 2009 on five key issues: categories of members, the question of the veto, now enjoyed only by the 5Ps [the United States, Russia, France, Britain and China], regional representation and the size of an enlarged council. The Open-Ended (Working) Group is led by the Ambassador from Afghanistan, Zahir Tanin who acknowledged that council reform “is sometimes dismissed as a cocktail party pastime for ambassadors”. Alternative models have been advanced over the years, differing over how many new seats should be added, who should have them, whether they should be permanent, semi-permanent or have term limits and which, if any, new states should wield vetoes. But all previous reform drives have failed because rivalries between countries and regions blocked agreement on the size and composition of an expanded council. Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [CEO-Senior analyst] The content of this publication (which is subject to change without notice) reflects only our opinion, based on information selected by us. Request for a more detailed analysis at afrikasources@gmail.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius]