Dubai’s ICD Invests $300 Million in Nigeria’s Dangote Cement

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Dubai’s sovereign-wealth makes its first major investment in Nigeria’s economy. 

Wall Street Journal by Nicholas Parasie

September 8, 2014

http://online.wsj.com/articles/dubais-icd-invests-300-million-in-nigerias-dangote-cement-1410187727

DUBAI—Dubai’s sovereign-wealth fund said Monday it is buying a minority stake in Nigeria’s Dangote Cement for $300 million as the Gulf emirate makes it first major investment in Africa’s largest economy.

Dangote Cement, which is listed on the Nigeria Stock Exchange and has a market value of around $23 billion, was founded and is still controlled by Nigerian business magnate Aliko Dangote. It is a leader in its domestic market and plans to nearly double production capacity by 2018 and expand abroad with new plants scheduled in South Africa, Senegal, Zambia, Cameroon and Sierra Leone.

“We believe sub-Saharan Africa, and particularly Nigeria, provides fantastic long-term investment opportunities,” said Mohammed Ibrahim Al Shaibani, chief executive of the Investment Corporation of Dubai. He said the Dangote investment allows ICD to “access and act on growth opportunities across the continent.”

Nigeria is Africa’s largest economy worth around $510 billion and gross domestic product is set to grow around 7% in the coming years, according to the International Monetary Fund.

ICD controls some of the emirate’s crown jewels such as Emirates Airline and Emaar Properties.

Dubai’s flagship carrier Emirates has already set up an extensive network across Africa as the emirate seeks to promote its role as the trade intermediary between the continent and the rest of the world.

Last month, ICD said it is teaming up with the Export-Import Bank of Korea to jointly pursue investments in Asia, the Middle East and Africa

Nigeria’s economy up 6.54 percent in the second quarter

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Very successful news regarding the continued success of the Nigerian economy during the second quarter of 2014. 

Reuters by Chijioke Ohuocha

September 8, 2014

http://www.reuters.com/article/2014/09/07/economy-nigeria-idUSL5N0R80XU20140907

(Reuters) – Nigeria’s economy grew 6.54 percent in the second quarter, up from 5.40 percent in the same period of last year, the statistics office said on Sunday.

It also said crude oil production hit 2.21 million barrels per day in the second quarter, up from 2.11 million barrels per day in the corresponding period a year ago.

Nigeria’s Orwellian Biometric ID Is Brought to You by MasterCard

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Foreign Policy by Siobhan O’Grady

September 3, 2014

http://blog.foreignpolicy.com/posts/2014/09/03/nigeria_s_orwellian_biometric_id_is_brought_to_you_by_mastercard

Imagine an ID card that remembers all of your personal records. This one card serves as your driver’s license and a catch-all that includes information about your health insurance, tax payments, and bank accounts. Oh, and it’s a MasterCard.

Now imagine you’re required to have it to vote. By 2019, that will be the case in Nigeria, where the government is running a large-scale pilot program with MasterCard, the U.S. credit card giant. An initial 13 million Nigerians will participate in the pilot program, but all those above the age of 16 — a whopping 160 million people — are expected to carry the cards by 2019.

At an official launch in the Nigerian capital of Abuja last week, President Goodluck Jonathan was the first to receive one of the biometric cards, which stores a scan of its owners irises and all ten fingerprints. “The card is not only a means of certifying your identity, but also a personal database repository and payment card, all in your pocket,” Jonathan said.

He also pointed to the economic benefits of the no-cost card, which will provide access to electronic banking for citizens who previously might have faced challenges qualifying for loans due to lack of identification.

While Nigeria is not the first country to launch a biometric ID card tied to a banking system, this is the first time a major banking institution has so specifically endorsed the use of an ID card. Eventually, the ID system could be used to disburse social benefits, make deposits and withdrawals, and set up savings accounts through local banks partnering with MasterCard for the initiative. MasterCard calls the initiative a “financial inclusion project,” and in that sense the project holds potential as a way to more efficiently disburse government benefits — without corrupt officials skimming off the top.

But the card has also raised concerns among many Nigerians who worry that the card could compromise their privacy — by making it accessible either to the government or to a hacker. With a massive trove of information stored on each citizen, the card could pose as an attractive target for cyber-criminals looking for personal information.

Gus Hosein, the executive director of U.K.-based civil liberties NGO Privacy International, said these concerns are especially frightening as so far no plan has been presented to protect citizens from having their private data shared with MasterCard.

“Building a vast and expansive identity system with weak protections means, sadly, that it’s going to be abused,” Hosein said.

This is not Nigeria’s first shot at a nationwide identification program. Ten years ago, a similar project failed after millions of cards were canceled amid double registrations and a slew of errors on the cards. That has made many Nigerians weary of the new all-encompassing ID card. And in a country plagued by a history of government corruption and abuse of power, the requirement to use an ID linked to banking in order to vote is particularly sensitive.

“There is good reason why no democratic society permits the creation of such a system, at least not without incredible safeguards,” Hosein said. “Something as precious as your right to participate in elections should never be placed at risk of faulty systems, deployed by people who may be well meaning, but do not understand the risks.”

 

Indonesia’s Finance Minister Girds for Impact of Fed Moves in 2015

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Wall Street Journal by Ben Otto

September 3, 2014

http://online.wsj.com/articles/indonesias-finance-minister-girds-for-impact-of-qe-in-2015-1409760072

JAKARTA, Indonesia—Indonesia is preparing for the end of the Fed’s easy-money program by moving to reduce foreign bondholdings and adding incentives against repatriation, hoping to mitigate sudden capital outflows and tighter liquidity in Southeast Asia’s largest economy, the country’s finance minister said.

Finance Minister Chatib Basri said in an interview that he expects the market shock stemming from the end of the U.S. Federal Reserve’s long-term bond-buying stimulus program, known as quantitative easing, will be worse than a year ago when tapering fears triggered an exodus of foreign funds from emerging markets world-wide. He said he has no plans for capital controls.

“I think there is a strong likelihood that the U.S. will [undergo] a normalization of its monetary policy sooner than we expect,” he said. “If that’s the case, then you would expect there would be tight liquidity in the global economy and it will affect emerging markets even more severely than what we [saw] in 2013.”

He pointed to strengthening economic and jobs data in the U.S. as signs that the Fed could start tapering in the first half of 2015.

The Fed’s expansive monetary policies since an economic downturn in 2009 have benefited countries such as Indonesia. Policy makers in the fast-growing emerging market kept monetary policy loose as capital flooded in, with investors searching for higher returns as U.S. rates headed toward zero.

But Indonesia was one of the hardest-hit countries in mid-2013 when the Fed hinted it was closer to turning off the tap. Foreign capital fled the near trillion-dollar economy, sending the local currency plummeting and helping pull economic growth below 6% for the first time in four years.

When the Fed later decided to keep the pace of its bond buying steady, much of that capital returned, with investors lauding several small but significant banking and fiscal reforms introduced during the exodus of capital. Mr. Basri said that the country’s relatively sound macrofundamentals better position it to deal with a shock today, but risks remain.

He forecasts economic growth will fall to 5.3% in 2014 after hitting 5.8% a year earlier. His official ministry forecast for growth next year is 5.6%, but he said Wednesday that global headwinds,—including hampered investment growth that could result from higher interest rates in the U.S., as well as decreased demand from China for some of its biggest exports,—could take that down further to “above 5%.”

The country is wrestling with the end of a commodity boom that has exposed its overreliance on resources exports, and with a ballooning bill for subsidized fuel prices that have left it with little money to invest in infrastructure and develop the manufacturing industries it needs to modernize its economy.

With a month and half to go before a presidential handover, Mr. Basri said he’s pushing for new ways to keep foreign money in the country in preparation for tighter liquidity when the Fed ends its program. A pending regulation from his ministry will offer tax allowances to companies that reinvest their profits here, freeing them from paying dividends taxes.

He said another measure being developed by the central bank would potentially require a company borrowing money overseas to ensure that foreign exchange is available for 1-3 months before the debt comes due.

Mr. Basri said also said he’s worried about increasing bondholdings among foreigners, which recently hit a record of around 37% of all government bonds.

“It’s very important for us to diversify the source of financing,” he said.

He hopes that proportion can be reduced by tapping the country’s Haj pilgrimage funds—which he projects to reach $15 billion by 2020—and social security funds. On top of selling bonds domestically, Mr. Basri is seeking to allow his ministry to sell securities to these government institutions in private placements.

The potential capital outflows are illustrated in Indonesia’s budget draft for 2015, which assumes the rupiah will weaken almost 2% from current levels to 11,900 to a dollar.

How three students created Nigeria’s online jobs giant

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BBC News by Jason Boswell

September 1, 2014

Three students had time on their hands in the summer of 2009 when their university lecturers in Nigeria went on strike.

Instead of slacking off, Ayodeji Adewunmi, Olalekan Olude and Opeyemi Awoyemi started an online job search company.

Five years later their start-up, Jobberman, has got a multi-million dollar valuation, employs 125 people, and is still growing.

While Nigeria is Africa’s largest economy it still has massive unemployment problems, in particular among young people who are also more likely to be connected to the internet.

Jobberman has become the single largest job placement website in sub-Saharan Africa, helping over 35,000 people find jobs within the last two years.

The number of companies using the site to find employees has grown from about 40 in 2009 to some 35,000 today.

Young Jobberman employees sitting in front of computers wearing headsets.
The company employs 125 people in Nigeria and beyond

Carrying between 500 and 1,000 jobs on the site every day, the founders estimate that there are about 1,000 active users searching for a job at any given time.

“The growth has been tremendous, it’s at rocket speed. One of the biggest challenges has been to keep up with the volume of work,” says Olalekan.

Overcoming fraud fears

However, there have been other challenges along the way.

“In the beginning a lot of people did not trust an internet-based business because at that time a lot of people were using the internet to perpetuate fraud here in Nigeria,” he says.

But as other online businesses thrived and became trusted, so Jobberman thrived. Companies would dip their toe in the water with one or two postings and then when they trusted the site they would come back.

In 2012 some of Jobberman’s clients wanted to use the site to find workers in Ghana and so the company took its first work outside Nigeria.

Two years later it says it is now the biggest online job site in Ghana as well as Nigeria.

The company is now expanding its reach to Kenya with a partner called Brighter Monday. The partnership also gives it a footprint in Uganda and Tanzania.

‘They found me’

Some people find a job through the site without actually applying for one.

Amarachi Apakama uploaded her details and was approached by a company to take the position of executive assistant at a mobile phone content company.

“That really changed my life,” she says. “It was a morale booster. It helped my confidence – the fact that my interests and my experience put together such a good fit that I didn’t have to apply for the job.”

Multiplier effect

“It is incredibly fulfilling helping people to become economically empowered by getting job placements via Jobberman,” founder Ayodeji Adewunmi says.

The BBC’s business teams across Africa meet the continent’s entrepreneurs who are starting up new enterprises and seeking to create big opportunities.

“One company recruited more than 80% of their employees through the site. Another time, a director was able to hire a former colleague in the United States to come and work for his company here in Lagos. All amazing stories.”

Olalekan Olude adds: “If you put food on the table by virtue of getting a job for someone, that person also fends for a mother, or a brother and you create a multiplier effect within that household.

“And anytime we get to hear of such stories, we are very, very happy. It motivates us, it makes us look forward into the future and try and get more people to get more jobs.”

Nigeria: NBCC Projects £20 Billion Trade Volume Between Nigeria, UK By 2020

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The Guardian by Faith Oparaugo

August 26, 2014

BILATERAL trade volume between Nigeria and the United Kingdom is expected to hit £20 billion in the next six years, President and Chairman of council, Nigerian-British Chamber of Commerce (NBCC) Prince Adeyemi Adefulu, has said.

Adefulu said the volume of business between the two countries has grown rapidly in the last four years, increasing from £4 billion to £8 billion, but noted that this growth has “merely scratched the surface.”

The NBCC President was speaking at a media briefing in Lagos on the activities to mark the centenary of Anglo-Nigeria trade relations by the chamber, in conjunction with the United Kingdom Trade & Investment Agency (UKTI).

He said that though the relationship between Nigeria and Britain has witnessed ups and downs, the bond has been long and enduring.

He listed some of the key factors that would enhance Nigerian-British trade relations to include creating an enabling environment by the government through right policies, encouraging the process of more export of non-oil products, well oiled value chain of export of products from packaging to storage, transportation, among others, noting that Nigeria’s export commodity goods have acquired bad reputation in the UK market as a result of poor standard in processing and product packaging.

Adefulu said the export potential to UK is huge with a population of over three million Nigerians and other Africans living in Britain.

The centenary celebration of the Anglo-Nigeria trade relations is a three-event affair beginning with a lecture in November 11 at MUSON Centre Lagos to be delivered by a senior cabinet member of the British parliament and chaired by a former Head of State of Nigeria.

There will also be a presidential dinner and awards at the Civic Centre, Lagos, while an NBCC Golf Classics to be held at the Ikeja Golf Club between Friday and Saturday November 28-29 to bring the celebration to a close.

The NBCC President, who justified the centenary celebration after a similar celebration by the Federal Government, said the planned activities will re-energise the trade relations between Nigeria and Britain, which he said started between 1672 and 1750 when the Royal Niger Company was charted to administer the territory that later became Nigeria.

Kia to Announce New Auto Factory in Mexico as Rivals Grow

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Bloomberg News by Nacha Cattan and Brendan Case

August 27, 2014

Kia Motors Corp. (000270) plans to build its first assembly plant in Mexico as the South Korean automaker follows European and Asian rivals in adding regional production.

Mexican President Enrique Pena Nieto is announcing the project at 11:30 a.m. in Mexico City, according to a government statement. The investment probably will top the 1 billion euros ($1.3 billion) for a Daimler AG-Nissan Motor Co. factory unveiled in June, said a person with knowledge of the matter.

Kia’s commitment expands on Mexico’s auto-manufacturing prowess. The nation’s output is poised to surpass 3 million vehicles this year for the first time, according to the Mexican Automobile Industry Association, buoyed by plant openings since November for Nissan, Honda Motor Co. (7267) and Mazda Motor Corp.

“Having a Korean company enter Mexico will mean that practically all global automakers will be represented in the country,” Armando Soto, president of Kaso y Asociados, a Mexico City-based auto industry consultant, said in a telephone interview. “It will also trigger large investments from Korean auto-parts companies.”

The statement from Pena Nieto’s office didn’t spell out what models would be produced at the factory. It will be in Pesqueria, near Monterrey, a second person with direct knowledge of the matter said. That would make Seoul-based Kia the first automaker with an assembly facility in Nuevo Leon state, based on a tally compiled by the automobile trade group.

Scott McKee, director of corporate communications for Kia Motors America, declined to comment ahead of today’s announcement.

Kia is partly owned by Hyundai Motor Co. (005380) Economy Minister Ildefonso Guajardo said last year that Hyundai was among automakers considering building a Mexico plant.

Bayerische Motoren Werke AG followed the Daimler-Nissan announcement by saying last month that it would spend $1 billion on a new Mexican factory.