By Oladeinde Olawoyin

The National Union of Air Transport Employees, NUATE, says the takeover of Arik airline by the Asset Management Corporation of Nigeria, AMCON, has worsened the crisis facing the airline.

Olayinka Abioye, General Secretary of NUATE, made this known to PREMIUM TIMES in an exclusive interview during the shutdown of the airline’s headquarters at the Lagos airport on Thursday.

Aviation unions had in the early hours of Thursday shut down the operations of Arik Air.

The unions, which include NUATE, Air Transport Services Senior Staff Association of Nigeria and the National Association of Aircraft Pilots and Engineers, on Wednesday threatened to ground the airline following Arik management’s failure to reinstate its sacked members.

The protesters also disclosed that the shutdown was because of the airline’s breach of the rights of workers and its indebtedness to aviation parastatals.

According to the protesters, Arik Air’s bad debt had crippled the operational capacities of the parastatals.

On February 9, the Asset Management Corporation of Nigeria took over Arik as a result of the airline’s bad debt to the company and other creditors.

AMCON, thereafter, appointed Roy Ilegbodu as manager of the airline and Oluseye Opasanya as the airline’s receiver manager.

The new management accused the previous management of Arik of mismanaging the airline, asking for patience of workers and creditors to reposition the airline.

But Mr. Abioye, while speaking with PREMIUM TIMES at the protest ground Thursday, alleged that the take-over of Arik by AMCON had worsened the crisis rocking Nigeria’s largest airline.

“In fact, taking over of Arik by AMCON has seemingly worsened the situation because we expected that immediately AMCON came, they would do an appraisal of issues and find out how to resolve them,” he said.

“Unfortunately, the receiver manager that AMCON brought in has crippled every avenue of social dialogue between the executives of the workers and Arik Management because what he has exhibited so far is unbridled arrogance and portrayal of himself as the owner and de facto financier of Arik.

“He has also gone further to rubbish the law which guarantees the right of workers to freedom of association… freedom to join unions,” Mr. Abioye added.

In December, the union had shut down the operations of the airline, in protest against the non-payment of salaries and other concerns. It however reached an agreement with the management, following the intervention of the Nigerian Civil Aviation Authority, NCAA.

Aviation union protesting at the Arik Air office

When probed on Thursday about the outcome of the resolution reached then, Mr. Abioye said the agreements reached in December had been breached by Arik Air’s management.

“What happened in December was a shut down like this over seven months salaries and allowances and the government intervened through the NCAA.

“But as I speak to you, those agreements were breached by Arik Management and that is one reason why this industrial action is taking place,” he said.

Commenting further, the union leader called on the federal government to sack the airline’s receiver manager, adding the airline should also pay its outstanding debts owed aviation agencies.

“The demand of the union is that this airline will remain closed until the federal government removes the receiver manager and appoints a new one who is ready to talk to people.

“We want our money that is being owed FAAN, NAMA, NCAA and others paid; money which has crippled those parastatals from performing their responsibilities to the optimum,” he said.

Mr. Abioye also disclosed that the management of the airline had yet to respond to their demands, adding that an official who claimed to be the chief security officer of AMCON had come out to threaten the protesters.

“They brought in policemen from outside to threaten us, but we will remain here until for as long as it takes us to remain here… ” he said.

PREMIUM TIMES’ efforts to speak with the management of Arik Air proved abortive.

Staff of the airline who spoke under strict condition of anonymity, however, confirmed that they had not been paid since December.

While speaking with PREMIUM TIMES, Igene Paul, NUATE Lagos State council representative, also alleged that Arik has organised a rebel group to counter the union, in a bid to scuttle the protest.

“If there is crisis here, we will not be held responsible. Staff who sabotage should be careful. We will not tolerate any nonsense from these people,” he said.

“We will stay here till one week, we are not going to leave here… we will be here from morning till dawn.”

When contacted on Thursday, Jude Nwauzor, AMCON’s Head of Corporate Communications, did not respond to calls by our correspondent. He also did not respond to text message sent to his mobile.

Pretoria — The Department of Agriculture, Forestry and Fisheries (DAFF) has suspended imports of meat from establishments suspected to be involved in the Brazilian meat scandal.

In a statement on Wednesday, the DAFF has requested the Brazilian authorities to provide official information and a list of establishments that have been identified in the issue raised in the media regarding unsafe meat being exported to various countries, which could include South Africa.

“DAFF has also advised the Brazilian authority to ban all exportation of meat from such establishments until the issue has been resolved to the satisfaction of the South African Veterinary Authority,” said the department.

The department said it is not known how many consignments may have already left Brazil and are on their way to South Africa.

“However DAFF is in the process of ensuring that the establishments implicated are suspended from exporting meat to South Africa until the Brazilian Veterinary Authority have fully investigated the matter and can give the necessary assurances for compliance to the South African requirements for importation of meat into South Africa.”

Officials of the department at all ports of entry which receive meat have been instructed to test every container of meat from Brazil using the existing policies regarding testing of consignments.

Consignments arriving at the ports of entry in South Africa may be tested microbiologically for organisms such as Salmonella.

In addition, the department assured consumers that officials at ports of entry have been vigilant when coming to meat imports.

“DAFF wishes to assure the consumers that the officials at ports of entry have always been vigilant on meat imports from any country to ensure compliance with sanitary requirements which are put in place to protect both the consumers and animals against food safety hazards and animal diseases respectively,” it said.

Zimbabwe Stock Exchange-listed CBZ Holdings is set to establish a pension fund for small to medium enterprises to be underwritten by its Life business.

CBZ Holdings chief executive Never Nyemudzo told media at the SME’s International Indaba in Bulawayo yesterday that the product comes out of the group’s need to include small business within the financial services system.

“This is a game changing umbrella pension scheme developed by CBZ Life to enable SMEs to secure their life after retirement.

“We introduced what we call the ‘Keyman Insurance’. This insurance comes in different forms where in the case that the Keyman or the person who started the business dies or gets injured or disabled then business gets a sum.

“Then the other part of the insurance is that at some point you will have to retire and in that case you will definitely need a pension,” said Mr Nyemudzo.

He said the financial services group is currently engaging the regulator, the Insurance and Pension Commission in finding ways to improve the product.

The financial services group has been at the forefront of SMEs development offering financial support and services to the formerly marginalised smaller businesses in the country.

This has seen the company extending in excess of $150 million in loans towards the development of several small to medium enterprise projects since dollarisation.

Mr Nyemudzo said the financial services group has managed to find ways to deal with security for the loans.

He said there was an insurance product to deal with the issue of security and such an initiative has a long way in assisting SMEs in processing loans in banks.

“In the event that you don’t have a tangible asset as security but with a viable business venture, there is an insurance product that we have introduced in the unlikely event that you pass on in the middle of loan tenure,” he said.

The CBZ Holdings SMEs International Indaba is being facilitated in partnership with the Embassy of India and I AM SME of India

Indian Ambassador to Zimbabwe Rungsung Masakui said there is a huge opportunity for SME development in Zimbabwe and what is only needed are strong partnerships going forward.

“Indian SME’s are here looking to strike joint ventures and partnerships. It is only through partnerships that we can achieve great things,” said Ambassador Masakui.

“I was telling Mr Rajiv Chawla, the head of delegation for the Indian small businesses to come and strike partnerships with local companies in Zimbabwe.

“There is a huge appetite by local business people to strike partnerships with us. We would want to see more business partnerships happening going forward,” he said.

ANALYSIS

Concerns over the mal-administration of the Angolan oil giant, Sonangol, continue to multiply, as the country’s prime source of foreign income haemorrhages millions of dollars on foreign (mainly Portuguese) ‘consultants’ close to the President’s daughter while defaulting on essential payments.

Isabel dos Santos, appointed by her father to run Sonangol last June, maintains the PR fiction that her objectives are to “raise transparency” and “improve management practise” at the state-owned petroleum giant.

Why then does the lady who likes to call herself “Africa’s first female billionaire” insist on secrecy over the remuneration of her board and the more than 60 Portuguese consultants she has hired? And why are these foreign consultants working inside Angola on tourist visas?

Insiders say Isabel’s board and administration are not paid according to the agreed salary scale at Sonangol and so are not on the official payroll. Instead, their elevated payments come directly from a secret slush-fund controlled exclusively by Financial Director Sarju Raikundalia, a Portuguese citizen, and Isabel dos Santos herself.

As for the foreign consultants, their fees are paid by Sonangol’s London subsidiary, which draws funds from Sonangol’s offshore accounts at Investec Bank’s Mauritius and Hong Kong branches.

Revelations passed to Maka Angola include the astonishing allegation that the million-dollar monthly cost of the consultants hired by Isabel dos Santos to advise her, surpasses the entire Sonangol Group payroll.

Isabel’s gurus include the Portuguese law offices of Vasco Vieira de Almeida, the US-based Boston Consulting Group and even a company owned by Isabel herself: Wise Intelligence Solutions. In effect, the Angolan businesswoman parachuted into Sonangol by her father, the country’s President, on grounds of her expertise, is paying herself to advise herself. And she is doing so by circuitous means to avoid paying the relevant Angolan taxes.

Contravening EU Tax Evasion Laws

A whistle-blower at the Finance Ministry (who must remain anonymous for obvious reasons) told Maka Angola that such payments are also in contravention of Angola’s tax laws, in particular Law 7/97, the Industrial Tax Retention at Source Special Regime, which states: “The organization receiving the service must withhold the appropriate tax in Angola, even in regard to non-residents, because in effect the service is delivered within the country.”

According to sources in the Finance Ministry: “Isabel’s scheme means that her consultants pay no taxes in Angola and Sonangol is in dereliction of its duty to honour its tax payments”.

A jurist, who also wishes to remain anonymous, concurs. “Angolan law applies duties to capital transfers outside the country in order to avoid the flight of capital and tax evasion (cf Presidential Decree 2/15) and this has a tendency to make it difficult for foreigners to move money out of Angola.”

“This has led to the increasing use of offshore accounts by companies as a way of getting around the restrictions imposed by Angola on the movement of money abroad and it amounts to tax evasion (which defrauds) both Angola and Portugal”, said the jurist.

And he notes that Sonangol Ltd (founded in 1983) and Sonangol Offshore Services Ltd (founded in 2012) are both UK-based and governed under UK company law expressly for the purpose of the international trade of crude oil and associated activities along with their realted administrative and office functions. “If by chance, they are using these British companies to evade the Portuguese tax regime, then they fall foul of EU rules which require them to divulge the relevant information and pay the required taxes.”

Paid tourists

The Portuguese ‘tourists’ helping Isabel dos Santos restructure Sonangol are certainly enjoying all the benefits of their ‘paid holiday’. Petroleum Ministry sources say two of these expatriate consultants are receiving housing subsidies of US $7,000 a month each, a sum that exceeds the official monthly salary of any of the Sonangol directors. The housing subsidy is paid locally – but the salaries for these consultants is being paid from London.

And what do they do to earn these large sums? These two individuals vet in advance all documents sent by the Finance Department to Finance Director Sarju Raikundalia, whose own position is a non-executive one and whose job includes the onerous responsibility for looking after such matters as the payment of the monthly nursery fees for the son of the Legal Director, César Paxe.

It is a running joke in Sonangol, that Sarju Raikundalia will not even glance at any document that has not been pre-vetted by his two fellow Portuguese colleagues. So while Sonangol cannot afford to pay its creditors, it can afford to pay three people to do one man’s job.

Sarju Raikundala’s own children attend school in Porto, Portugal, his home town and their fees are paid out of Sonangol London which also takes care of the London school fees (and other family expenses) of another Director, Edson Santos.

Meanwhile, the majority of the nearly 60 Portuguese ‘consultants’ working for Sonangol in Angola are in the country on tourist visas, because their ‘qualifications’ would not justify their gaining work permits and contracts over their Angolan counterparts. It’s no coincidence that most of these are also from Porto and are connected to the Porto-born Mário Leite Silva who administers Isabel dos Santos’s private fortune.

Mário Leite Silva is currently the chairman of the Board of Directors of the Banco de Fomento de Angola (BFA) but he seems to spend most of his working week at the Sonangol head office, even though he has no official role there. Nonetheless, he is able to issue instructions as though he were a director, via Sarju Raikundalia, the man he recommended to Isabel for the Chief Finance Officer (CFO) position.

State secrets in foreign hands

It is a mystery to Sonangol’s highly-educated Angolan experts as to why a cabal of under-qualified Portuguese officials has not only been allowed access to, but total control of, confidential information relating not just to Sonangol but to Angola defence and security matters.

One example: Sonangol has suspended shipments of oil to Israel which form part of the payment for a seven billion US dollar contract with Israel for defense and security services and equipment.

Paulo Catarro, the former RTP (Portuguese TV and Radio) correspondent in Angola, has just been appointed as Adviser to Sonangol’s Communications Office (working directly to Mário Leite Silva). Any chance he will shed any light on this situation?

By John Yeld

But Judge says environmental charges against the mining company “cannot be said to lack substance”

Australian mining company Mineral Sands Resources (MSR) has emerged with the major share of legal spoils from its High Court review application relating to a search-and-seizure operation at its Tormin mine on the West Coast last year.

The operation was authorised under a warrant issued by Vredendal magistrate CS Kroutz and conducted by government environmental officials led by the Green Scorpions in September. It followed complaints of alleged environmental mismanagement and illegalities in mining operations to extract heavy minerals from the beach.

Just days after the search-and-seizure, MSR brought a review application in the Western Cape High Court challenging the validity of the warrant.

In judgment delivered on Monday, Judge Owen Rogers ruled that the warrant was indeed invalid and set it aside. Awarding costs to MSR, he said it had achieved “substantial success” in its application.

However, the mining company did not get all it was looking for, and the judge also made it clear that his decision did not preclude a future search-and-seizure operation in respect of the same complaints, if the warrant was properly authorised.

The environmental officials had been looking for evidence relating to five complaints about the mining company; namely, that it:

unlawfully and intentionally or negligently caused significant degradation of the environment, in the form of a collapsed sea cliff directly in front of the mine (the “failing cliff” charge);

violated the Coastal Act by disposing mine tailings into the sea without a permit (the “dumping” charge); and

violated the National Environmental Management Act by, without authorisation, developing a jetty (the “jetty” charge); clearing an area of more than one hectare (the “increased footprint” charge); and developing a road wider than four metres (the “road” charge).

The judge said there had been no “egregious” [outstandingly bad; shocking] conduct in the execution of the warrant, and he refused MSR’s application for evidence seized during the operation to be destroyed.

Instead, he issued a preservation order, in terms of which one full copy of all the evidence seized must be made and held under seal by the Registrar of the High Court until a possible criminal case against MSR in respect of the charges has been concluded or the National Prosecuting Authority formally declines to prosecute.

The original documents were all returned to MSR and the investigators did not seize or copy any electronic data. All other copies must be destroyed (apart from a copy to be sent to MSR’s attorneys) and an affidavit deposed to this effect.

Crucially, the judge also said that, based on information contained in affidavits presented in court, the charges against the mining company “cannot be said to lack substance”.

Referring to the decision by the Department of Mineral Resources (DMR) to approve MSR’s application to amend its environmental management plan for Tormin in April 2015 – after complaints had been lodged – he wrote:

“Even if some aspects of MSR’s conduct became lawful as from 14 April 2015 (which I doubt), the DMR’s decision of that date did not retrospectively legitimise the activities in question. If MSR took matters into its own hands and only sought the necessary approvals after the event, such conduct is to be strongly deprecated.”

If the cliff failure had been caused or exacerbated by MSR’s unauthorised decision to move the PBCs (primary beach concentrator machinery) on the beach to the SCP (secondary concentrator plant) on the cliff top site in late 2013, “that is a very serious matter”, he added.

Judge Rogers found that the warrant was invalid in respect of the “increased footprint”, “jetty” and “road” charges because the investigation had not been within the mandate of the national environmental inspectors, following legislative changes of 8 December 2014 that saw the introduction of the government’s new One Environmental System for mining. This system gave the Department of Mineral Resources (DMR) exclusive jurisdiction for compliance monitoring and enforcement of environmental authorisations for all prospecting and mining operations.

In respect of both the “cliff” charge and the “increased footprint”, “jetty” and “road” charges, the warrant was invalid because the DEA had failed to disclose details of the One Environmental System to the magistrate, and had not informed him about MSR’s challenge to the DEA’s authority to conduct the search-and-seizure.

In respect of the “dumping” charge, the evidence presented to the magistrate had been “too confusing and unclear to constitute reasonable grounds for suspecting that the dumping offence was being or had been committed” said Judge Rogers.

By Anne Robi

CONSTRUCTION of the Standard Gauge Railway (SGR) that is scheduled to start soon is expected to create about 600,000 jobs.

Reli Assets Holding Company (RAHCO) acting Managing Director Masanja Kadogosa told reporters in Dar es Salaam yesterday that the company will provide direct jobs to 200 people, mostly youths from the country’s higher learning institutions.

“The 200 will mostly come from engineering fields, especially technicians and civil mechanics, among other construction experts who will be required to put up the bulk of rail works,” he said Mr Kadogosa said the recruits from higher learning institutions will have to undergo basic training before being engaged in the SGR construction.

Apart from the created jobs, the railway project will also offer business opportunities for other Tanzanians. “The construction of the railway will lead to setting up of stations that will create business centres, this is an opportunity for Tanzanians especially youths to create businesses, “he said.

Meanwhile, RAHCO has reiterated its determination to keep the railway “reserve access areas” free from invasion, asking all people within the reserve areas to vacate immediately.

The company has further dismissed as baseless media reports that the demolition of illegal buildings along the railway reserve was illegal, with Mr Kadogosa maintaining that the exercise is being implemented as per rules and regulations.

“All the victims were given the government notice a year ago and had been always reminded to demolish the structures,” he said, stressing that all houses within the reserve area are lined up for demolition without compensation to the victims.

He said 485 houses illegally staged from Dar to Pugu area along the railway reserve will be demolished to pave way for construction of the modern railway line.

Rabat — Morocco and Chinese company HAITE Group decided on Monday to invest one billion U.S. dollars to build an industrial and residential park in Morocco’s northern city of Tangiers.

At the Marchane Royal Palace in Tangiers, King Mohammed VI of Morocco chaired the signing ceremony of the memorandum of understanding on the creation of the park, which will be named “Mohammed VI Tangiers Tech City.”

The park will host hundreds of Chinese companies in numerous industries, including auto manufacturing, aerospace, aviation spare parts, electronic information, textiles and machinery manufacturing.

Carried out by the Tangiers-Tetouan-Al Hoceima regional authorities, Morocco’s BMCE Bank and HAITE, the project will cover an area of 2,000 hectares and generate 100,000 jobs.

On May 11, 2016, Chinese President Xi Jinping and King Mohammed VI of Morocco signed a joint statement on establishing a strategic partnership between the two countries in Beijing.

As part of the partnership, a memorandum of understanding to set up an industrial and residential park in Morocco was signed months later by the Moroccan government and HAITE.

By Noluthando Crockett-Ntonga

Washington, DC — The hundreds of delegates pouring into the glittering Marriott Marquis hotel for this month’sPowering Africa Summit were experiencing a stark, if unstated, contrast. On a good day this year, Nigeria – the largest per capita of Africa’s 55 countries, produced enough electricity to operate around five ‘eco-friendly’ hotels the size of the three-year old Marriott.

The market opportunities are massive, participants agreed; the challenges equally large. By the end of two days of discussions, a consensus emerged around  three themes:

1. There is a ‘wall of money‘ available to electrify Africa with bankable projects.
2. There is hopeful optimism that U.S. President Trump’s administration might be supportive, and
3. There are enormous opportunities for those with ideas, stamina and, most of all, patience to make money while doing good – on and off the grid.

“To unlock that wall of money,” says Standard Bank’s head of power and infrastructure David Humphrey, “Africa has to grow, develop, and become a place where that wall of money is happy to invest, and can take and understand the associated risks.” Humphrey’s assessment is underpinned by 150 years of African experience by Standard Bank, Africa’s largest bank by assets.

Power Africa, an initiative to ‘light up’ Africa launched by President Obama during a visit to three African countries in 2013, aims to see 60 million new connections and 30,000 megawatts (MW) “of new and cleaner power generation.”

Nigeria, Africa’s most populace nation, is key to meeting those goals,Andrew Herscowitz, the Power Africa coordinator, told attendees. ” If we succeed in Nigeria, we can be successful anywhere in the continent,” he said. Nigeria has some 12,000 MW of installed generation capacity and can transmit 7,000 MW on the existing grid, he said. Typical output ranges from 3,000 to 4,000 MW, of which only about 2,000 MW is being paid for.

Investors and developers new to Africa often need reminding that there are 55 countries on the continent, which compares in land area to the United States, China, Japan, Mexico, India and eastern and western Europe combined. There are tremendous variations by region and often within individual countries. Some countries have policy, regulatory and community frameworks already in place which make it easier to do business. But ‘easier’ is still not ‘easy’ compared to more developed regions, conference participants noted.

“In economic terms,” says Humphrey, “Africa is at the crossroads. “We’ve seen a lot of progress with democracy and democratic institutions, whether in Nigeria, Uganda, even in The Gambia where a constitutional standoff was peacefully resolved. There have been peaceful transitions in Zambia and in Ghana.” Those trends, he says, have made a difference in investor interest.

“Twenty years ago an investor might ask why would I go to Africa”, he says.” Now we’re having interesting conversations at the individual government level and individual client level about how you unlock that potential.”

There’s a lot at stake for Africa’s people. More than 620 million live without electricity. The people of Gbarnway, Liberia, a rural community about 100 miles from the capital Monrovia, illustrate the problems and opportunities. The Liberian government estimated that it could take at least 10 years for the national grid to reach Gbarnway and other rural areas – and that was before the setbacks brought on by the Ebola crisis of 2014-16.

Power Africa’s more than 100 private sector partners have committed to to develop some 16,000 MW of generation. These include a number of non-profits focusing on delivering ‘off-grid’ power to Africa’s rural population.

One of these, the National Rural Electric Cooperative Association(NRECA), has committed $400,000 to bring reliable and affordable electricity to Liberia with a solar-diesel hybrid system. The fifty-four-year-old not-for-profit U.S. organization has helped Liberians launch three electric cooperatives and has provided training in maintenance, service provision and financial management.

Gbarnway now enjoys electricity with solar panels that NRECA supplied. Korto Gizzie, a resident, says “We were living in darkness, and living in this place was hard. The houses were dark for the children. But now, we have light here, and this place is just like a city. I am so happy to see a town like this.”

Gizzie’s power came as part of USAID’s Power Africa “Beyond the Grid” project. The Obama administration launched the Power Africa initiative in 2013 with the goal of connecting 60 million people to power by 2030 through public/private partnerships.

One of the questions buzzing among delegates in between panels, round tables and keynote addresses, was the future of the initiative under the new U.S. administration. Power Africa, the initiative housed at USAID, involves many options including development finance and Independent Power Producers (IPPs)—all of which are favorable to businesses. The hope is that President Trump, with his background, might see a good opportunity for U.S. business.

Republican Congressman Ed Royce, Chairman of the House Foreign Affairs Committee, in a Summit keynote, extolled the chance “to create technology and long term power deals while increasing global security and social stability.”  He said that for American companies who maintain their competitiveness, opportunities abound as Africa’s economies grow. “You can’t run a factory on a generator,” he said, referring to the private generators that currently provide much of the electricity to African homes, schools, clinics, offices and businesses, including banks. Royce was lead sponsor of the Electrify Africa Act of 2015, which supports and broadens the Power Africa initiative.

African consumers are driving an accelerating process of renewable energy installations, while African governments and big utility companies are often stuck in the grid paradigm, some delegates said. Most everyone wants the ability to be connected to a reliable electricity grid. But as a result of Africa’s sheer size, the number of rural residents, and the lack of existing generating and distributing capacity, it is likely that many millions of people will get electricity from emerging, clean technologies including solar, wind, hydro and biogas, before a grid reaches them.

The cost of these technologies is dropping, making off-grid and mini-grid renewable energy affordable, even for the very poor. Some require little upfront capital investment and have the advantage of delivering energy quickly, replacing costly and unhealthy fuel sources like firewood and kerosene.

Optimists see new economies developing that give Africa the potential to ‘leapfrog’ old-fashioned grids dependent on dirty energy sources to move directly to sustainable, efficient power. Entrepreneurs such as ‘pay-as-you-go’ vendors are supplying small power sources, such as solar devices, and often collect payments through mobile money systems on cell phones – which in some areas, such as east Africa, are far more advanced than in North America. Companies are creating super-efficient appliances. Momentum is building.

The challenges, however, are enormous. There are issues of land and water rights in pastoral societies.  Some countries are awash in outdated regulations. Some rural areas are so remote that the only way to reach potential consumers is on foot. The bureaucracy of the funding requirements across international development agencies is also not for the faint of heart or the impatient.

In addition to the financial risks, investors and developers who fail to plan for environmental, social/community/cultural and other non-technical risks could encounter adverse pressure. Each project must begin with buy-in from affected communities, and ongoing engagement is essential each step.

There’s a saying sometimes heard among would-be investors: “You can make money in Africa, but not fast money – at least not fast, clean money!” Playing the long game, practicing integrity, and developing key partnerships will help.

As electricity expands across Africa, businesses are born and grow—from small barber or beauty shops to large agricultural and processing enterprises. Food can be safely stored in refrigerators. Students are able to access computers and the greater educational opportunities they bring. Hospitals and clinics can offer better health care. Quality of life improves.

With greater power equity, Africa – which boasts some of the world’s fastest-growing economies – will have a chance to address the extreme poverty that hobbles so many of its people. But in a global economy where – as the UN Economic Commission has documented– most resources flow away from rather than into the continent, it is close to impossible for Africans to reverse the flow alone. Africa needs that wall of money.

Noluthando Crockett-Ntonga is a contributor to AllAfrica.

By Fasika Tadesse

Back from recess after the first half of the current fiscal year, the all EPRDF and allies dominated Parliament heard from the Prime Minister, who chose to focus mainly on macroeconomic issues.

A Chief Executive Officer (CEO) of an IT firm established around 15 years ago was one of the many Ethiopians who followed the session in Parliament transmitted live on Thursday morning, March 15, 2017.

Running the business of a company engaged in developing and customizing software and providing solutions to businesses, the CEO was hoping he would hear from the Prime Minister on how his administration handles what is ailing his company. Scarcity of foreign exchange and extremely limited access to open letters of credit (LC) is impending many companies like his from fulfilling their contractual obligations.

Most of the business of this IT firm based in Addis Abeba consists of importing hardware and software, especially for the financial sector. It customizes the software it imports to fit the needs and systems of the domestic financial sector, which is clamouring to automate most of their transactions in keeping with customers’ demand. But the Firm is facing rough times. Unlike previous years, it is confronted with a severe problem of accessing foreign currency to import software for the projects it has signed contract for.

A 20 million Br contract it won in June 2016 is one of them. The firm is contracted to install a system for use at a public enterprise. However, it has run into major difficulties in handing over the project within deadline, mainly because it could not access foreign exchange for the project. The project delivery period was within six months of the contract signing.

“Eight months ago, we applied for an LC to get hard currency,” said the CEO. “We have yet to get our applications approved.”

Banks receive applications fro LCs from their clients, oblige them to deposit the full amount of their request in Birr, and make them lineup for months. The average waiting time has reached at nine months, according to industry sources. A directive from the central bank, meant to fight corruption and kickbacks by bank managers, denied bankers their discretions in discriminating between what is important and urgent from applications that can wait.

“Now we’re subject to penalties, which are equivalent to one tenth of the total project cost for every day we are late in delivering,” the CEO told Fortune.

The forex crunch is deeply structural and may not be addressed in the lifetime of those in charge of running the affairs of the government, many senior administration officials have admit occasionally. Yet the crises continue to grip the economy, leading businesses to frustrations and hopelessness. The economy suffers from a current account deficit of 7.4 billion dollars last year, attributed by the International Monetary Fund (IMF) to stagnated export revenues due to sharp falls in export prices.

The first half of the current fiscal year have brought no pleasant news marked by poor export performance, according to the Prime Minister. Earnings from export shrank by 4.2pc from the same period last year to 1.3 billion dollars, Hailemariam told MPs in his 24-page report. This falls far shorter than the administration’s plans, which target is an increase of 20pc in the country’s annual export revenues from 2.9 billion dollars last year.

“The decline in export earnings has been happening for the past three years,” the Prime Minister said in Parliament where 404 of the 547 MPs were in attendance. “The response we have had to address the issue has not succeeded for various reasons.”

The trade deficit from the past six months performance was 6.72 billion dollars, a decline from the seven billion dollars registered during the first half of the 2015/16 fiscal year. Foreign exchange spending on fuel and merchandises has declined by 4.1pc, according to the Prime Minister.

Hailemariam appeared before Parliament last week, days after Parliament declared a three-day national mourning after a landfill slide claimed the lives of no less than 115 people in an area known as Repi, in Kolfe-Qeranio District. Here too, the Prime Minister chose to remain silent from explaining the causes of the national tragedy, but offered families who have lost their loved ones few words of condolences.

Rather, his report gave more emphasis to the low performance in the export sector and the economic growth rate, which he says is below the expectations of his administration. He largely focused on 10 areas, from inflation to revenues mobilization, and from agricultural productivity growth to the manufacturing sector and the enforcement of the state of emergency.

A day before, his Defense Minister, Siraj Fegessa, who is also secretary of the Command Post formed to see through the enforcement of the state of emergency, briefed the media on the administration’s decision to relax on some of the restrictions imposed on civil liberties. Imposed in October 2016 to contain violent public protests that has seen the death of hundreds and damages to public and private properties, the decree remains in place, while the deadline comes close to expire.

The Prime Minister hinted nothing to Parliament if his administration wants to extend it, but claimed over 82pc of Ethiopians surveyed would want to see the decree remains in place. Pundits, however, blame the state of emergency for the loss of foreign exchange earnings from tourism and foreign direct investment.

Nonetheless, Hailemariam attributes the decline in foreign currency reserve, which was 3.4 billion dollars last week, to a combination of factors he said were internal as much as external. The decline in global commodity prices caused a drop in demand for Ethiopian products from China and other major buyers, and the strong exchange value of the Dollar against the Birr was the external factors, according to the Prime Minister.

In contrast to declining export earnings, the amount of foreign currency the country spends has been going up sharply from year to year, unable to be covered by revenues from exports. In the last two quarters, export earnings only covered 15.5pc of import expenditures. Other sources of foreign exchange, such as loans, grants, foreign direct investments and remittances have shown a downward trend.

The flow of remittance to the country through non-governmental institutions has seen a decline, Hailemariam conceded, although he attributed the decline to the fall in donations by development partners this year due to high amount of money they sent last year to the drought relief efforts. Ethiopia’s loans have declined during the past fiscal year, due to the increase in the amount of debt ratio, Hailemariam disclosed. As a consequence, foreign exchange earnings from loans and grants have declined by 14.5pc.

All these factors led the country to find itself in a foreign currency crunch, which became even more severe at the start of the current fiscal year. It has made life no less stressful to those engaged in the import business, such as the software company.

The Prime Minister downplayed these challenges in the business sector, mentioning only that the country is under-performing in the export sector. Yet, many companies are on the verge of having to close down business, as a result of the foreign currency shortage they are encountering.

“This omission by the Prime Minister was intentional,” said Alemayehu Geda (Prof.), a lecturer at Addis Abeba University (AAU). “The foreign currency crunch should have been the major agenda of his address but he failed to make it so.”

Last fiscal year’s import and export performance illustrates Alemayehu’s point. Imports worth 16 billion dollars came into the country, while exports brought in four times lower; there was a 500pc gap between the two.

“Last year was the first time in the country’s history where we saw such an export gap,” says Alemayehu.

Alemayehu would have wanted to see the Prime Minister give much emphasis to what his administration does to overcome the forex shortage, such as cutting the country’s expenditure and going out for euro market.

In the meantime, companies such as the IT firm, which has now stopped undertaking any of its activities because of the forex shortage, remain uncertain about when, if ever, they will be able to access foreign exchange to open LCs.

“We’ve no option other than switching to another business line or closing the company if this persist for a long time,” the CEO told Fortune, rather with visible frustrations.

By Hamisu Muhammad

Naira yesterday started the week positively as it appreciated by about 4 percent at the street market.

The local currency exchanged at 430 to a dollar in Abuja while it traded in Lagos at 435 before the closing hours.

This is coming as the Central Bank of Nigeria (CBN) on Monday, March 20, 2017 offered a total of $180 million to meet bids for wholesale auction and requests for invisibles such as medicals, school fees and personal travel allowances valued at $80 million, through the inter-bank window.

Confirming the figures, the Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, said the wholesale requests will be settled on Tuesday, March 21, 2017, adding that the closing interbank rate for Monday, March 20, 2017, was N307.5/$1.

With this development, it is expected that the Naira will further strengthen in the foreign exchange market in the days to come.

While disclosing that the Bank had so far met all the legitimate demands from genuine customers, he reiterated that the CBN would ensure sustainable forex liquidity and transparency in the process to enable as many customers as possible get access to the foreign exchange they genuinely demand.

He therefore advised eligible individuals with genuine foreign currency needs to freely approach their banks and authorised dealers with their request, stressing that the CBN had made adequate provisions of foreign currency for all such legitimate purposes.