The Books don’t Balance at Africa’s Largest Online Retailer
Jumia, which counts MTN as a major shareholder, has admitted to fraudulent sales figures. It has uncovered instances of improper orders placed and subsequently cancelled to inflate sales in Nigeria. Jumia owns clothing seller Zando in South Africa, and operates in 14 African companies, with some four million customers across the continent. Some 4% of first-quarter sales, or sales worth $17.5 million, are believed to have been inflated, and that sales agents inflated the sales to earn additional commission. The online retailer claimed the fraudulent orders have had no impact on its financial statements, and that the employees involved have since been suspended pending a review. Jumia was listed on the New York stock exchange in April, at a price of $18.95 – it soon climbed to almost $47. Following the news of the fraudulent sales on Wednesday, it fell from $14.75 to $12.21. But by Thursday early trading it recovered to around $13.00.
South Africa’s President Actions Plans to Ignite Economic Activity
President Cyril Ramaphosa has cited changes made to visa regulations for tourists and highly skilled professionals, financial support for black farmers and black industrialists and the upgrading and creation of industrial parks as evidence of government’s efforts to secure economic growth and deal with unemployment. The president said the government was pursuing a purposeful industrial strategy in partnership with social partners to develop Master Plans for sectors with high potential for growth. Government has already begun work with sectors such as the clothing, textiles and footwear, poultry, the sugar industries and steel and downstream metal fabrication. The African Continental Free Trade Area, which is planned to come into effect on 1 July next year, is expected to fundamentally reshape the South African economy. Already, exports to other African countries support about 250 000 South African jobs. To improve the levels of investment in the economy, the government will host the Second South Africa Investment Conference from 5 to 7 November this year. Technical Working Groups comprised of officials in the relevant departments have begun work on five of the indicators: starting a business, paying taxes, registering property, trading across borders, and dealing with construction permits. The president positioned the recently enacted Competition Amendment Act as a bulwark against economic concentration, which is a major constraint to growth in the South African economy. The new laws will give the competition authorities the ability to address abuse of dominance and high concentration that keeps small and emerging companies out of the economy.
[OPINION] Africa’s Future Food Security
New technologies are transforming farming systems across the world, including in developing countries. Innovations range from drones that help detect crop pests earlier to mobile systems that link previously “unbankable” smallholder farmers with vital financial services. For the 12 million young people entering into the workforce in Africa each year, this could all help make farming and food production much more appealing. Director of the Technical Centre for Agriculture and Rural Development, Michael Haily says, “We need more young Africans to farm. Let’s give them the tools to do so. ” These opportunities range from designing new platforms or software to making use of technology and creating access to new markets using blockchain. One such example is the EzyAgric solution based in Uganda. The platform provides access to finance and markets for farmers and agribusinesses through a network of youth agents equipped with smartphones and other digital technology. It creates an employment opportunity for Uganda’s youth, at one end, and helps farmers improve yields and market access at the other.
SOURCES: AFRICAN BUSINESS MAGAZINE
This US Deal could have a Major Impact on Mozambique’s Economy
The U.S. Export-Import Bank said on Thursday its board intends to vote on a $5 billion direct loan for the development of a liquefied natural gas (LNG) project in Mozambique, the bank’s biggest export financing deal in years. If approved, the transaction would support U.S. exports of goods and services for the engineering, procurement and construction of the onshore LNG plant and related facilities on the Afungi Peninsula in northern Mozambique. “This critical project is not only a win for American companies and workers, supporting over 10,000 jobs in the United States, but also for the people of Mozambique as well,” U.S. Commerce Secretary Wilbur Ross said in a statement. EXIM said the Mozambique LNG project would begin to develop the Rovuma Basin, one of the world’s most extensive untapped reserves of natural gas.
SOURCE: REUTERS AFRICA
Top African Money-making Routes
The most lucrative route is Emirates flying between Johannesburg’s Oliver Tambo International Airport and Dubai International Airport, which made over $315 million during the year’s review period (between April 2018 and March 2019). In second place is the British Airways route between Oliver Tambo and Heathrow, which made $295 million over the same time. Domestically, South African Airways’ route between Cape Town and Joburg generated the fifth-highest amount in Africa at $185 million. However, ‘while South African Airways (SAA) features as having one of the most lucrative routes in the world, it goes against OAG’s analysis in that it is not turning a profit at all,’ says Business Tech. The struggling airline has yet to publish its 2017/18 financial results, which are nearly a year-and-a-half overdue. Two other international routes, between Cape Town and Dubai with $176.7 million and between Cape Town to London with $174.6 million are also listed.
Update on the Zimbabwe Economy
Zimbabwean Finance Minister Mthuli Ncube said the country would not introduce new monetary notes to replace the quasi currency bond notes as yet, but would instead introduce replacement notes to address imbalances between cash in circulation and electronic money. The move comes on the back of reports that Zimbabwe was ready to introduce new bank notes under the Zimdollar banner to replace the bond notes. Ncube also reiterated that the Zimdollar remained constituted of bond notes, electronic funds and mobile money. Commerce companies such as retailers and wholesalers have also started to have in-house bureau de changes to manage exchange rate distortions fuelled by the parallel foreign exchange markets. The return to a fully fledged local currency exchangeable outside the country’s borders will be backed by an undisclosed amount of foreign-exchange reserves, gold and loans.
This Intervention will Change how Rwandans do Business
Rwanda has introduced the use of electric motorcycles as part of its efforts to protect the environment and cut fuel costs. One electric bike costs $1,300 — less expensive than the $1,600 price for fuel motorcycles. Two charging stations exist in Kigali. A moto-taxi driver has to bring an exhausted battery to take a charged one, which runs for 70 kilometers (43 miles). The price for recharging an electric vehicle is equal to the cost of the fuel for traditional cycles. In 2016, four entrepreneurs from different countries formed a start-up called Ampersand with a mission to transform Rwanda into a mass market for commercial electric motorcycles. Josh Whale, the company’s chief executive officer, said electric motorcycles, also known as e-Motos, have great potential in Rwanda — a country known for its environmental initiatives.
Unlocking Value In The Sub-Saharan Africa Mobile Market
Mobile network operators can avoid the challenges more mature markets have experienced by focusing on their customers. Mobile phone operators in Sub-Saharan Africa (SSA) are playing on borrowed time. Robust network investments, cheaper smartphones and data, and a rapidly expanding population of connected youth have fueled strong growth for the US$60 billion SSA mobile market. But as the market matures, operators risk falling into the “doom scenario” that has plagued their counterparts around the globe: saturated markets, an uneven response to evolving consumer preferences, and falling revenues. . To create the right conditions for growth, operators must first improve network coverage and capacity through targeted, demand-based investments.
Bringing more Sierra Leoneans into the Financial System
Kiva, a San Francisco-based tech nonprofit organisation, is using blockchain to create an online ID database in Sierra Leone allowing people who struggle to get loans to prove their credit history. President Julius Maada Bio officially launched the system in the capital Freetown this week. Kiva facilitates small loans in 80 countries, but Sierra Leone is the first country to implement an online credit system designed by the organisation. The platform will enable lenders to look up citizens’ credit histories using fingerprints and other biometric data that was collected a few years ago by Sierra Leone’s government to print voter ID cards. Ordinary Sierra Leoneans appear excited by the prospect, more than three quarters of Sierra Leone’s population lies outside the formal banking sector, according to data from the central bank. Informal institutions like community banks and microfinance lenders are more common, but they rarely share credit information and often charge extortionate interest rates.
SOURCE: REUTERS AFRICA
Doha to Enter Investment Partnership with Mogadishu
Qatar plans to build a new seaport at Somalia’s Hobyo, a potentially strategic investment in an area of East Africa fiercely contested by Gulf rivals. Hobyo, in the central region of Mudug, is an important Somali port owing to its proximity to the Bab-el-Mandeb Strait, which is one of the most important sea crossing points in the world, with the potential for access to international markets. The Hobyo port will “will contribute to opening new horizons of cooperation between the two countries” and bolster Somalia’s commercial ties to new markets in Africa and further afield, the ministry’s statement said. The small but wealthy Gulf state has looked to strengthen ties with Somalia, donating a fleet of 68 armoured vehicles this year and airlifting Mogadishu’s mayor to Doha for emergency medical treatment last month after an ultimately fatal attack by al-Shabab.
SOURCE: AL JAZEERA