Cairo — President Abdel Fattah al-Sisi said on Saturday that public debt reached EGP2.3 trillion and that he "will not hesitate" to take measures to improve the economy.

Sisi made the statements in a press conference held during the opening of a petrochemical complex in Alexandria.

He said the appointment of 900,000 people in the government sector due to public "pressure" and increasing salaries to EGP 228 billion annually instead of EGP 80-90 billion raised the public debt.

He added that it makes up 97-98 per cent of the Gross Domestic Product (GDP) as it stands at EGP2.3 trillion, up from EGP800 billion before 2011.

During his speech, Sisi stressed the importance of economic reform and said "the first effort at reform was in 1977" which was not accepted by the citizens and accordingly the state backed down and kept postponing it up until now.
 

Egypt is currently pushing ahead with reforms which include plans for a VAT tax and further subsidy cuts that were put on hold when global oil prices dropped.

The International Monetary Fund agreed on Thursday, in principal, to lend Egypt $12 billion over three years to support the government's reform programme.

Earlier last week, the government announced a sharp rise in electricity prices by up to 40 per cent on households as part of its plan to eliminate subsidies in the next few years.

Egypt's finance ministry expects a budget deficit of 9.8 per cent of the GDP in the fiscal year 2016-2017. It also expects revenues to reach EGP 669.7 billion and expenses to total EGP 974.8 billion.

The central bank said last week that Egypt's foreign reserves fell sharply by $2 billion at the end of July, reaching $15.536 billion, down from $17.5 billion in June.

The reserves remain to be less than half of what the country had before the 2011 Uprising when they stood at almost $36 billion.

Chinese conglomerate China Wu Yi is building a Sh10 billion housing materials plant in Athi River after bagging major tenders in the country.

The factory, expected to be complete in June, will manufacture precast materials that will also be sold to other construction firms.

The multinational is putting up the plant through its locally incorporated subsidiary China Wu Yi Precast (Kenya) Company Limited.

Its chairman Qiu Liangxin said the project would create a modern building industry base for research, manufacture, sale and demonstration of pre-cast elements in Kenya.

"The development of prefabricated building is significant to the transformation of construction, with advanced guarantee on construction quality and safety," Mr Liangxin said.

"We have been behind various projects in this region and this will be our first building materials producer established overseas."

The factory will sit on 30 acres of land off Mombasa Road. It will include a pre-cast element plant, a display area, warehouse and a construction material supermarket which will introduce materials from China, effectively making it a one-stop shop for building materials in the country.

The supermarket will stock among others stones, ceramic tiles, bathroom appliances, construction electrical fittings, lamps and kitchen furniture.

The pre-casts will include solid wall panels, hollow core slabs, sandwich wall panels, facade panels, lift shafts, staircases and foundation piles.

Customers will be able to obtain the pre-cast materials to fit their housing designs enabling fast and less costly construction.

The firm has partnered with two German technology services providers, Ebawe Anlagetechnik to supply equipment for the concrete pre-casts production and Nemetschek to provide the software for the design of the housing parts.

Industrialisation Cabinet Secretary Adan Mohamed who presided over the ground breaking ceremony on Saturday said the project was among those the government signed a cooperation agreement during the China-Africa Business Council in Beijing.

"This is basically industrialising the construction sector because this will shorten building period by more than 50 per cent," Mr Mohamed said.
 

"The building and construction industry is rapidly growing and this investment is very timely for our economy and in line with our industrialisation blue print. The number of cement companies around here will no doubt have new demand for cement from this firm."

China Wu Yi, which participated in the construction of the Thika Superhighway, the University of Nairobi Tower, Mama Lucy Kibaki Hospital and several apartments in Nairobi is also planning to put up an iron and steel factory in Kenya in the near term.

The plant, whose timelines were undisclosed, will produce over three million tonnes of steel targeting public and private sector projects.

China Wu Yi will also rely on the plants to feed its own projects in the country where it has emerged as one of the largest construction firms.The multinational last year said it had won four construction tenders in Kenya worth Sh10.1 billion.

Its latest contract is the Sh16.4 billion reconstruction and capacity enhancement of James Gichuru Junction-Rironi road.

The road works, meant to ease traffic flow in the capital, is being funded by World Bank and the government.

The Republic of South Sudan became the world's newest nation and Africa's 55th country on July 9, 2011. This brought renewed hope for peace and stability which had been prayer for its citizens for many decades.

The country, being rich in various natural resources, there was high expectation for growth and many believed they would not see another conflict in the country after fighting so hard and for so long to "gain independence."

However, it was not long before renewed civil wars, particularly; the latest one which has led to deaths, destruction of property, and displacement of people, disorganisation of the government and all systems.

The hopes to build a prosperous nation have yet again been dashed despite the peace accord which was signed between the two rival camps-government led by President Salva Kiir and the opposition led by Dr Riek Machar. The said peace deal is already in tatters given an internal party coup against Riek Machar following the replacement of First Vice President by his former chief negotiator with the government, Taban Deng on 23 July.

These political conflicts are not simply internal because their effects go beyond national borders and the region at large. Violence and instability create immediate impacts on local and nearby economies which happen in several ways. There is already a rife in refugees crossing borders to neighboring countries. As the war continues, this poses great humanitarian challenges to the East African countries, especially Kenya and Uganda who share a common border with South Sudan.

The challenges of refugee migration and interventions are a major concern whenever civil unrest occurs. Kenya is currently engrossed in the process of repatriating the Somalia refugees in Dabaab camp due to a number of challenges faced by the authorities. Some of these challenges are the possibility of small arms finding their way through the borders. There are also logistics and infrastructural support that requires phenomenal budgetary support and so forth.

The escalated conflict in South Sudan adds to the negative effects the region has faced since civil war broke out in Somalia in the 1990s. It is documented that Somalia has cost East African countries hundreds of millions of dollars in military spending, and Kenya is particularly suffering from increased insecurity from terrorist group al-Shabaab. The civil war creates more opposition and irregular forces which are environmental factors that favor international terrorism such as al-Qaida, which has already found fertile ground in Somalia.

The longer the violence continues to take in South Sudan, the further it spreads, and the more insidious it becomes, the more difficult the task will be for the country to undergo the kind of social, psychological and economic transformation needed to achieve lasting peace. There are also costs of foregone opportunities for regional development. There is huge business and political risks for foreign investors and neighboring governments. Some of the biggest trading partners with South Sudan have shied off due to the violence.
 

Regional companies and business people operating in the country had made great strides, some of them had their investments destroyed, or have been forced to scale down or halt their businesses because of the unsecured business environment.

Notably, South Sudan crisis is another setback befalling the East African region adding to the reigning political turmoil which has been going on in Burundi, another sick man of East Africa. This happens when there was supposed to be strengthened regional integration and linkages with the country which joined the East Africa Community early this year. The crisis in South Sudan will likely derail EAC multi-billion dollar projects, such as its plans to build an oil pipeline across the region; new roads and rail line through East Africa, the ambitious Northern Corridor projects linking the landlocked East African countries with Kenya's maritime port of Mombasa for their overseas trade, as well as the trade among themselves. If not dealt with in due course and in a meticulous manner, the current armed conflict in South Sudan has the potential to adversely affect the pending regional projects.

As a matter of great concern, the situation in this fragile country must be taken seriously before it indulges the entire region into other associated challenges. There is dire need to take swift and decisive action to resolve the crisis. Peace, security and conflict prevention are imperative pillars in all the projects the East African countries, neighboring countries or regions desire to sustainably achieve. Without due attention paid to these three key issues, our development goals are bound to receive negative impact resulting from conflicts. South Sudan conflict has simply gone out of hand and hence a regional peace process needs to be revitalised and rigorously pursued to bring a lasting settlement to the conflict.

n conclusion, ending all sorts of political conflicts in East Africa remains one of the daunting challenges of the region. Just like the region moved to establish East African Standby Force (EASF), peace building activities must continue in the same approach. Political, security, economic and humanitarian crisis in any member country will ultimately affect the regional economies.

Hotel and leisure conglomerate Sun International [JSE:SUI] announced on Monday that it will exit Nigeria.

In its results announcement for the year to end-June 2016, Sun International said its hotel and casino complex Federal Palace continues to operate in a difficult environment with the Nigerian economy facing a number of crises including the low oil price, Boko Haram and a weakening naira. The country also has still not recovered from the significant impact the Ebola epidemic had on the business.

In addition to problems faced by the country, there are a number of issues specific to the local Nigerian partners in the Federal Palace and these have further exacerbated matters, Sun International said.

Sun International, which had invested more than $50m in its Nigerian operations, said continued setbacks in Nigeria – including the ongoing shareholder dispute – have frustrated all attempts to develop and improve the property.

It also lamented the fact that its employees at the Tourist Company of Nigeria, in which it holds a 49.3% stake, had been put at risk.

“Five of our staff members who were detained by the Economic and Financial Crimes Commission earlier in the year have still not had their passports returned to them despite no charges being laid against the individuals, the company or Sun International.

“As a result of the current environment and issues facing the company the board has taken the decision to exit our investment in Nigeria.”
Sun International, however, said it expects the exit to be a protracted process, given the challenges it faces and to ensure it receives fair value for its investment.

In the review period the occupancy of Federal Palace at 41.6% was 6.8% below last year’s figure, with the average room rate up 3.8%.

The company said that despite all efforts to keep costs as low as possible, earnings before interest, tax, depreciation and amortisation (Ebitda) declined 58%.

Sun International said the Nigerian debt has always been, and remains, ringfenced to the Federal Palace, without recourse to the group balance sheet.

Other South African companies which have pulled out or made their intentions clear to exit the country, which is battling its worst economic crisis in decades, include Woolworths, Truworths and Tiger Brands, while MTN took a knock from a massively reduced fine of $1.7bn. After months of deliberations, Nigeria agreed in June to cut the fine initially demanded by almost 70% after MTN threatened to shut down its operations in the West African nation.

Sun International shares were trading 0.63% down at R91.51 by 11:14.

South Sudan is pleading with Kenya and Uganda for economic support to avert a humanitarian crisis after a fresh conflict brought the country to its knees.

Mid last week, a delegation of Transitional Government of South Sudan officials led by First Vice-President Taban Deng Gai was in Kenya on a mission seeking a bailout.

The EastAfrican has learnt that Juba will also be reaching out to Uganda later this month to craft a bailout package that will see Kampala pay its traders the $35.2 million Juba owes them in a bid to have them resume supplies to the country.

"The vice president will go to Kampala to request the Ugandan government to pay traders who supplied cereals to Juba but haven't been paid. The money will then be converted into a loan, for which Juba and Kampala officials will work out a repayment plan," a diplomatic source with the knowledge of the matter said.

The delegation to Nairobi, which included four ministers, met with Kenyan President Uhuru Kenyatta, Cabinet Secretary for Foreign Affairs Amina Mohamed and a number of Kenya government officials.

A source privy to the discussions told The EastAfrican that Mr Gai informed President Kenyatta that the country's economy was in a perilous state and needed urgent help.

Mr Gai implored the Kenya government to give his country a soft loan to help it deal with its current problems.

"We have been facing difficulties in delivering services to the people and we briefed President Kenyatta about the current economic difficulties the country is facing. We are experiencing severe inflation because of the civil war, poor oil production and the low oil prices, which have basically drained us as we are not making money. We asked Kenya for help so that our economy does not grind to a halt," Mr Gai said when he addressed a press conference at the Nairobi Intercontinental Hotel after a meeting with President Kenyatta.

The delegation also requested Kenya's support for implementation of the peace agreement by the Transitional Government as currently formed. This would mean excluding former first vice president Riek Machar.

"The President's view was that he would not act outside Igad," said the source.

Economic bailout

On the requests for a soft loan and food supplies, President Kenyatta is reported to have advised the group to send their finance minister, their Central Bank Governor and agriculture minister to Nairobi with a clear proposal, including the amounts needed and the modalities for repayment.

Kenya can then determine its level of commitment "cognisant of the fact that we have interests in South Sudan and cannot be aloof to the suffering of its people."

The loan, the source said, could be worked out along the same lines as the economic bailout of Zimbabwe by South Africa a while back. South Sudan relies on Kenyan traders for key supplies including food, edible oils, pharmaceuticals, electronic products and manufactured goods.

Uganda is South Sudan's biggest trading partner and exports maize, vegetables, sugar, iron and steel, cement, beer, motor lubricants and detergents. However, following fresh fighting in the country in July, most foreign traders have returned to their countries for security reasons.

In an interview with The EastAfrican, South Sudan Finance Minister Stephen Dhieu Dau declined to provide details on how the proposal would be structured.

"I am yet to get a briefing on the discussions in Nairobi and any other that will take place. However we are pursuing fiscal, monetary and diplomatic routes in a bid to unlock the economic challenge the country has been facing," Mr Dau said.

Last week, Mr Dau cancelled all unpaid cheques to suppliers due to "lack of money." The country is also yet to pass a new budget for the 2016/17 financial year, with sources saying that the new budget will be tabled before the Council of Ministers in the first week of September and later forwarded to the National Assembly for approval.

Evacuation of traders

Figures released by South Sudan's National Bureau of Statistics (SSNBS) last week showed that inflation increased by 405 per cent in the past two months to peak at 661.3 per cent in July, due to low supplies of food following the evacuation of Kenyan and Ugandan traders.

The evacuation was a result of the mid July dispute between President Salva Kiir and his former deputy Riek Machar that degenerated into fierce gun battles. South Sudan's presidential spokesman Ateny Wek Ateny said that the diplomatic overtures will Juba to stabilise the supplies of goods to the country.

"There will be more contacts with Kenya and Uganda as a follow up because we need to restore the supply in order to forestall food shortages. We have seen a massive reduction in supplies from these two countries, which has caused the current food crisis," Mr Ateny said.

It remains to be seen how the plea to Uganda will be received, given that in 2014, Juba entered into a mutual agreement with Uganda to pay the $45 million debt owed to the 22 Ugandan companies, in a deal that was to see Kampala seek compensation from South Sudan after its economy had stabilised.
 

The matter is under discussion by a subcommittee established at Uganda's Cabinet to decide on how money for traders held in South Sudan banks can be released. The Uganda Cabinet also asked Juba to form a joint co-operation commission that would engage its team on the matter.

Kenya and Uganda's move to evacuate their nationals, and the subsequent travel advisories on Juba have seen South Sudan's inflation more than double in July to reach an annual rate of over 650 per cent, the highest in Africa.

South Sudan President Salva Kiir has already asked his military to escort both Kenyan and Ugandan traders delivering goods to the nation in a bid to check the skyrocketing food prices.

Kenya's Long Distance Truck Drivers and Allied Workers Union secretary-general Nicholas Mbugua welcomed the move but remained sceptical of Juba's reassurances on security.

"In July, we saw a lot of transporters pull out of South Sudan, with some choosing to deliver the goods to Elegu, the Uganda-South Sudan border town. If we can have discussions between the Kenyan and Ugandan governments, then we believe we can work out an amicable solution to this," said Mr Mbugua.

Washington, DC — Corporate Council on Africa (CCA) President and CEO, Stephen Hayes will be honored by the Africa-America Institute with the AAI 2016 U.S. Business Leader Award at the AAI 2016 Annual Awards Gala.

Mr. Hayes was selected in recognition for his dedicated leadership and strategic contributions to the growth and strengthening of U.S.-Africa Business Relations. Under his direction, CCA’s work and initiatives have had a domino effect, transforming nascent policy and private sector engagement into greater and broader U.S. engagement with Africa. The award appropriately comes on the eve of President Barack Obama’s Second U.S.-Africa Business Forum.

“There is no greater honor than those from peers, especially when those peers are so highly regarded as is the Africa-America Institute, an organization that has been a leader in building US-Africa relations through education,” said Hayes. “I am deeply appreciative, genuinely surprised and humbled that they would bestow this honor on me. Of course it is really an honor for the Corporate Council on Africa as our contributions over the years have always been through a team effort of staff and board.”

In his 17-year tenure as president, Stephen Hayes has led CCA to become fully engaged in a wide range of economic and political issues affecting commerce between the U.S. and Africa. Mr. Hayes’ personal dedication to African growth, development and prosperity through business and investment is evident in his work, which has garnered several awards. To date, Mr. Hayes and CCA are the only individual and entity in the United States to have been awarded the two highest awards given by the U.S. Government for international economic leadership. In 2008, Mr. Hayes was awarded the Ron Brown Award for International Leadership, the highest individual award possible from the United States Department of Commerce; and in 2015, under Hayes’ leadership, the Corporate Council on Africa was presented with the President’s “E” Award for Excellence in Export Service.

The Award, presented by the United States Department of Commerce, was initiated by President John F. Kennedy in 1963. In addition to these awards, Mr. Hayes has also been honored by the Africa Chamber of Commerce of the U.S.; the Transnet Foundation, South Africa’s largest foundation chaired by Bishop Tutu; and the United Nations Development Programme. He has also been honored for his leadership by Senegal and Kenya.

The AAI 2016 Annual Awards Gala will take place on Tuesday, September 20, 2016 in New York City during the opening week of the 71st United Nations General Assembly and the Second U.S.-Africa Business Forum. The Africa-America Institute is the premier U.S.-based international organization that works to increase the capacity of African individuals and institutions through higher education initiatives, leadership development, professional workforce training, convening activities, program implementation and management.

Other accepted honorees include: AAI 2016 African Business Leader Award: Mr. Aliko Dangote, President and CEO, Dangote Group; and AAI 2016 Distinguished Alumnus Award: Mr. Sunil Benimadhu, Chief Executive, Stock Exchange of Mauritius.

Nairobi, Kenya — An African Development Bank (AfDB) Group delegation led by the Bank President, Akinwumi Adesina, will attend the Sixth Tokyo International Conference on African Development (TICAD VI) in Nairobi from August 27-28, 2016. This will be the first time TICAD is being held in Africa since its inception in 1993, demonstrating the strong African ownership and deepening partnership among TICAD stakeholders.

Co-organised by the Government of Japan, the United Nations Office of the Special Advisor on Africa (UN-OSAA), the United Nations Development Programme (UNDP), African Union Commission (AUC) and the World Bank, the event will bring together over 6,000 participants, including representatives of African countries, international organizations and civil society.

Japan is a very strong supporter of the African Development Bank, and also contributes significantly to the African Development Fund. The TICAD meetings will see President Adesina hold talks with senior Japanese officials from government, the private sector, non-governmental organizations and others, during which partnerships opportunities will be discussed with the aim of increasing support for Africa’s transformation. The Bank is also organizing several side events.

Since 2005, the Government of Japan (GOJ) has provided USD 4 billion under the Enhanced Private Sector Assistance (EPSA) for Africa. Drawing on successful development experience in Asia and around the globe, EPSA is an innovative, multi-component, multi-donor partnership framework between the GOJ and the AfDB for resource mobilization and development partnership to support implementation of the AfDB’s Strategy for Private Sector Development. Under the current phase (EPSA II), projects in infrastructure, agriculture and irrigation, water and health sectors are being considered for sovereign co-financing, non-sovereign loans and technical assistance. The latter is aimed at strengthening SMEs. A third phase of EPSA is being negotiated and will be announced during TICAD VI.

The Government of Japan prioritizes cooperation with Africa and puts emphasis on Public-Private Partnership (PPP) and the role of the private sector. In 2015, the Prime Minister Shinzo Abe announced that the Government of Japan intended to promote “quality infrastructure investments” that are environmentally friendly, disaster resilient, and cost-effective in the long run. TICAD VI is an opportunity for participants to underscore the centrality of quality national and regional infrastructure development on the continent, under five pillars: Industrialization, Health, Water and Sanitation, Women and Youth, and Social Security. All pillars are aligned to the Bank’s High 5 strategic priorities: Light up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the quality of life for the people of Africa.

Nairobi — Kenya's CFC Stanbic Bank plans to expand its trading facility for the yuan in order to meet the growing demand for the Chinese currency.

CFC Stanbic Bank Chief Executive Philip Odera told Xinhua on Friday that the growing volumes of Sino-Kenyan trade was fueling the demand for yuan.

"We are looking to expand the holding of yuan currency notes which will be available in all branches by the end of the month," Odera said as the bank released a statement on its financial performance for the half year period ending June this year.

Odera said that having the physical currency in Kenya would reduce exchange rate losses incurred by international traders.

"Previously, the business community trading with China had to take the Kenyan shilling and convert it to the U.S. dollar which is then converted to the Chinese yuan," he said.

The CFC Stanbic Bank is headquartered in the Kenyan capital Nairobi with branches in Kenya and South Sudan.

In the financial statement, the bank says it plans to convert its branch in South Sudan into a subsidiary in order to improve operations efficiency.

The bank also reveals that it made a pre-tax profit of 28 million U.S. dollars for the six month ending June, a 27 percent decrease from a year ago, which is blamed on increased expenses and the conflict in South Sudan.