Wednesday, July 26, 2017

Monday, July 24, 2017

Africa Is Islamic Banking's New Frontier

Islamic banking in AfricaAfrica is Islamic banking’s new frontier

But the barriers to entry are high
IN 2008 Ethiopia’s conservative central bank experimented: it authorised interest-free banking. Interest is prohibited under sharia law, so the move was lauded as a step towards expanding financial services for the country’s large and often poor Muslim minority. But momentum soon stalled. An attempt to launch a fully-fledged Islamic bank foundered. Today most of Ethiopia’s big commercial banks offer a narrow range of Islamic financial products, but to few customers. Islamic finance in Ethiopia was stillborn.
Outside Africa, Islamic finance is in much healthier condition. Between 2007 and 2014, the sector tripled in size (although growth has slowed lately). Total assets are around $1.9trn. Sub-Saharan Africa accounts for less than 2% of this, yet it should be especially fertile territory. The continent’s Muslim population is 250m and growing. And according to the World Bank, as many as 350m Africans do not have a bank account.

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Several countries are vying to become African hubs for Islamic finance. Kenya, with a much smaller Muslim population than Ethiopia, has three Islamic banks, as well as an Islamic insurance company. A further five conventional banks offer sharia-compliant products through dedicated Islamic “windows”. In December Kenya joined the Islamic Financial Services Board, a Malaysia-based regulatory body.
It is also hopes to issue a sovereign sukuk, Islam’s answer to bonds, this year or next. This will raise funds for infrastructure (sharia requires sukuksto be linked to ownership of a physical asset), and help foster an Islamic capital market. Nigeria, which has one Islamic bank, plans to do the same. Senegal issued its first (oversubscribed) sukuk in 2014, raising $208m. The same year South Africa raised $500m in Africa’s first international Islamic bond issue. Total issuance in Africa in 2016 was $1.3bn, comprising issues from Senegal, Côte d’Ivoire and Togo.
Sovereign sukuks are one thing, a sharia-compliant industry serving the private sector quite another. In north Africa, where Muslims make up as much as 96% of the population, Islamic finance has long been held back by a fear that it means introducing sharia law though the back door.
South of the Sahara the problems are more structural, says Thorsten Beck of City University in London. Islamic banks are mostly small; in Kenya they commanded less than 2% of the market in 2015. Though business lending in Africa suffers from punishingly high interest rates, giving Islamic lenders an apparent advantage, they face the same fundamental difficulties as conventional peers. “Many projects are simply not bankable,” Mr Beck notes, so few assets can easily be used as collateral. Moreover, Islamic banks’ sources of funds are mainly short-term, making it hard for them to offer long-term financing.
Islamic contracts are complex, requiring especially strong oversight. Regulators don’t yet know how to deal with the sector, says Khaled Al-Aboodi of the Islamic Development Bank. Despite issuing two sukuksSenegal has yet to introduce any specific regulations for Islamic finance. Onyango Obiero of Dubai Islamic Bank’s new branch in Kenya complains that Islamic transactions still face double taxation, since they often involve the purchase and resale of an asset, taxed each time. That makes it hard to compete.
The industry’s champions argue that there is pent-up demand among the continent’s Muslim population. Evidence suggests that some African Muslims shy away from conventional finance for religious reasons. A World Bank study found that an African Muslim is less likely to have an account or save than a non-Muslim.
It is less clear, however, that Islamic finance is the answer. “Islamic banks don’t tend to be geared towards the poor,” notes Rodney Wilson of Durham University. And the very poorest, however pious, are unlikely to pay a premium for peace of mind. Technological innovations, such as mobile money, will probably do much more to reach them. Saif Malik of Standard Chartered, a bank, notes that in Malaysia, Islamic banks are competitive enough to appeal widely to non-Muslims as well. Islamic finance is, after all, still finance: it thrives when the price is right.
This article appeared in the Finance and economics section of the print edition under the headline "Saharan sharia"
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Criminals Are Running Circles Around South African Police

Notorious JHBCriminals are running circles around South Africa’s police

Hollywood-style heists amid a breakdown in law and order
SOUTH AFRICA’S crime lords can be audacious. This month they waited until the country’s top security officials were busy preparing for a briefing on rampant crime at Johannesburg’s international airport, then struck again, hijacking a truck loaded with valuable cargo as it left the gates. The incident was the latest of many. In a particularly brazen heist in March, gunmen impersonating police officers stole 20.7m rand ($1.5m) as the bags of money were being loaded onto a flight to London. A few weeks later, thieves attacked a cash-laden van on a busy highway near the airport, blowing it open with explosives. This dramatic episode was caught on video.
After years of steady decline, serious crime is on the rise in South Africa. Aggravated robbery has jumped by 31% since 2012; murder is up by 20%. The crime appears organised, not opportunistic. Fikile Mbalula, the police minister, admits that many of the airport crimes are inside jobs with collusion from police, security guards and staff. Another type of robbery, known as a “follow home”, is happening with unprecedented frequency. Spotters watch at airports for passengers arriving with fancy bags or exchanging large sums of money. The travellers are then tailed to their homes or hotels and robbed at gunpoint. In similar cases, affluent shoppers are followed home from high-end malls. In one recent attack, a van carrying businessmen was stopped and looted on the off-ramp leading into the airport; the driver was shot and killed. Tourism officials worry that such crimes will deter visitors; South Africa has worked hard to shed its dangerous reputation.

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Even law-enforcement agencies and police stations are being targeted by South Africa’s robbers. A break-in this week at offices of the national prosecuting authority, in which laptops were stolen, followed a similar burglary at the Hawks, an elite crime-fighting unit. The office of the chief justice of South Africa’s highest court was burgled in March. The opposition Democratic Alliance fears sinister motives, warning of “a culture of intimidation” against corruption-fighters.
Mr Mbalula has promised to crack down. “If they come with AK-47s, we will outgun them,” he said. But it is the calibre of senior police, not the guns, that worries the critics. Top police jobs are routinely given to political appointees with few qualifications. All three national police commissioners appointed since 2000 have ended their terms in disgrace: one was jailed for corruption, one fired after a scandal over property deals and another found unfit to hold office.
This article appeared in the Middle East and Africa section of the print edition under the headlin

Friday, July 21, 2017

Would Be Succesore To Nigeria's President Are Circling

https://www.economist.com/news/middle-east-and-africa/21725289-muhammadu-buhari-has-been-absent-london-clinic-months-would-be-successors?cid1=cust/ddnew/n/n/n/20170721n/owned/n/n/nwl/n/n/na/Daily_Dispatch/email&etear=dailydispatch

Kenya-This Land Is Our Land

KENYA

This Land Is Our Land

Samburu herders in Kenya are not ready to give up their claim to 17,000 acres of land that a former president sold out from under them to create a national park, despite losing an eight-year court battle last month.
The Samburu claim the sale is invalid because they have been living on the disputed ranch land for 25 years. They have appealed the decision, Reuters reported Friday.
The case comes as protected areas around the globe are expanding in a bid to save endangered wildlife and boost tourism revenues, pitting conservationists against marginalized people facing loss of their traditional lands, the wire service said.
Kenya’s longest serving president, Daniel arap Moi, sold the property in 2008 to the Washington-based African Wildlife Foundation (AWF), which secured half of the funding for the purchase from The Nature Conservancy (TNC).
AWF claims it was vacant when they bought it, and the squatters moved in afterward. However, a report by the International Labor Organization pointed out that the “closed-door” deal, which didn’t conduct adequate due diligence or consultations with the indigenous community, was “a recipe for conflicts.”
The court decision now allows for the creation for Laikipia National Park – in a region that is the second most important for Kenya after Maasai Mara, one where “the Big Five” including rare rhinos roam freely, Reuters reported.
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DISCOVERIES

Thursday, July 20, 2017

Paul Kagame: Rwanda's Hard Man From The Hills

https://www.economist.com/news/briefing/21724982-rwanda-more-prosperous-country-ever-it-also-repressed-one-paul-kagame

Cameroon: Extreme Renditions

CAMEROON

Extreme Renditions

A new report by Amnesty International alleges Cameroonian forces have been torturing suspects in their campaign against Islamist group Boko Haram at military bases that are also used by American and French troops.
Amnesty’s report documented 101 such cases between 2013 and 2017 and alleged that some of the victims were tortured to death, Reuters reported. The US Africa Command told the agency it had not received any reports of human rights abuses at the base, while French Defense Ministry officials did not comment on the claims.
Reuters cited a Cameroon defense ministry spokesman as accusing Amnesty of “bad faith” and of trying “to transform killers into victims.”
The alleged torture techniques included beatings, waterboarding, being deprived of food, forced to drink urine, given electric shocks and burned, Amnesty said. Victims included women, the disabled and the mentally ill.
Amnesty claimed to have observed French troops at the base in May 2015 and said it has still and video images “clearly showing the regular presence of US personnel in numerous locations across the base.”
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Thursday, July 13, 2017

China Establishes Military Base In Africa

CHINA

Another Pearl

China deployed troops to its first overseas military base, sending ships loaded with soldiers to Djibouti in a bid to establish a beachhead in Africa.
An editorial in the state-run Global Times said the base “is not about seeking to control the world” but rather to support Chinese warships operating in the region in anti-piracy and humanitarian operations, CNN reported.
The US, France, Japan and Italy already have small military installations in the country. Located on the Bab el-Mandeb Strait, Djibouti borders troubled neighbors Somalia and Yemen and is positioned to be a gateway to the Suez Canal – one of the world’s busiest trade routes.
China is the largest investor in the Suez Canal region, and the route is part of its “Belt and Road” initiative. But the US and India see its military presence in the area as a threat – potentially forming part of a so-called “string of pearls” encircling India in the Indian Ocean.
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Both Chile And South Africa Face Crisis In The Mining Sector

SA and Chile dance to their own tune as miners battle policy uncertainty

Jul 13 2017 07:53 
Liesl Peyper


Cape Town – Mineral Resources Minister Mosebenzi Zwane signed a memorandum of understanding with Chile to cooperate on mineral beneficiation and processing and share experiences in policy formulation, among other things.
Zwane is currently attending a mining conference, the LatAM Mining Cumbre, in the Chilean capital Santiago where he is expected to address the audience on mining in South Africa.
According to a statement issued by the Department of Mineral Resources on Tuesday evening, both South Africa and Chile have a rich history in mining and the memorandum of understanding will serve as a framework for closer cooperation between the two mining jurisdictions.
Chile is one of the world’s major mining investment destinations and the largest global producer of copper and lithium. The country, however, also faces a number of challenges, such as the high cost of mining production in comparison with its peers.
Data from Chile’s mining council showed production costs in the country in 2015 were 5.4% higher than its global peers’ average.
Reuters reported earlier that mining companies operating in Chile are putting investment decisions on hold until political uncertainty abates after this year’s presidential elections in November.
Chilean President Michelle Bachelet has over the past three years promulgated a number of changes to the country’s tax and labour legislation to ease inequality.
Reuters quoted a foreign miner as saying that the reforms have made the mining sector “timid to announce new investments”, as there has been a loss of confidence in the country.
South African mining faces a similar conundrum on the back of a new Mining Charter with onerous new black ownership, employment equity and local procurement targets – this in an industry where investment has been waning for a number of years.
The new charter came into effect on June 15 2017, when the new regulations were published in the Government Gazette. 
Policy uncertainty is expected to continue for at least a few years, as the Chamber of Mines, which represents 90% of mining companies, has taken the Department of Mineral Resources to court to suspend the implementation of the new charter.
In addition, the chamber has also relaunched its declaratory order to seek certainty on the once empowered, always empowered principle.
The legal action will leave the mining industry in limbo and cause investors to look for alternative mining destinations, which will have a ripple effect on South Africa’s economy.
Policy uncertainty in mining is not limited to the new Mining Charter, though. The Mineral and Petroleum Development Amendment (MPRDA) Bill has still not been signed into law and will in all likelihood also be challenged in court.
During deliberations at the National Council of Provinces in June this year, a number of legal experts warned that the bill could be rendered unconstitutional because of new regulations added by the Department of Mineral Resources which have not been subjected to proper public consultation, among other things.
In addition, the sections in the bill that pertain to mineral beneficiation may be in contravention of international trade agreements, while a provision in the MPRDA that would elevate the Mining Charter to legislation could be unconstitutional as it offends the separation of powers between the legislature (Parliament) and the minister.
The MPRDA Bill was passed in the National Assembly on November 1 2016 and was then referred to the National Council of Provinces for further deliberations and consultations with communities at provincial level.
The bill was initially passed by Parliament in 2014, but President Jacob Zuma declined to sign it into law and referred it back to Parliament, citing concerns about the bill’s ability to pass constitutional muster.
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