Monday, January 28, 2008

Arcelor Mittal South Africa Limited



ArcelorMittal South Africa is Africa's largest producer of long and flat steel products. The steel giant was created in 2001 after it split up from its former mining operations, which became Kumba Resources. The company's Vanderbijlpark Works and Saldanha Steel plants produce flat steel while its Newcastle and Vereeniging Works turn out long steel products. Products include billets, carbon steel, cold-rolled steel sheets, hot-rolled steel plates, and stainless steel. ArcelorMittal, the world's top steel producer, owns just over half of the company, which changed its name from Ispat Iscor in 2005 and from Mittal Steel South Africa in 2007.


Available on Johannesburg Stock Exchange Public: MLA

Tuesday, January 15, 2008

Uganda's Bujagali Hydropower Project


Overall economic growth over the past several years in Uganda has been quite impressive, but investments in power and other infrastructure projects have not been keeping pace. Therefore the Government of Uganda considered that the development of the Bujagali site to be the next logical step in a series of projects on the Victoria Nile and a key opportunity to introduce private investment in the sector. The Bujagali Hydropower Project is a 250-megawatt power-generating facility proposed by Bujagali Energy Limited, a company jointly owned by affiliates of Sithe Global Power, LLC and the Aga Khan Fund for Economic Development.

The proposed World Bank Group participation included an IDA partial risk guarantee (up to US$115 million) for a syndicated commercial loan and proposed IFC loans totaling US$100 million, with the private sponsor providing US$111.3 million in equity for the project (Joint UNDP/World Bank Energy Sector Management Assistance Programme & Bank Netherlands Water Partnership Program (July 2003) “Stakeholder Involvement in Options Assessment: Promoting Dialogue in Meeting Water and Energy Needs” Available at http://www.adb.org/water/Topics/Dams/pdf/esm2640paper_sourcebook.pdf).
The Bujagali Hydropower project objectives are to:
a) To supply electricity fully from a central national grid;
b) To break the barriers to income poverty and supply of hydropower to the rural areas;
c) To ensure low-cost electricity in Uganda (caused to the tendency to overprice it and the technical inefficiencies); and
d) To revamp the industrial capacity of Jinja - once main industrial town of Uganda -on the basis of hydropower alone;

It is questionable whether these goals will be/have been ensued with this project. NGO campaigns put a number of opposing opinions on the table at the start of this initiative where some questioned the basic rationale of the project, its economic viability, national affordability and impact on tariff levels, as well as the allocation of project risk and environment impacts. There was concern of the lack of public participation in the project formulation and design, and knowledge about the environmental and social impacts of the dam project.

Bujagali Energy Limited has implemented a comprehensive "Public Consultation and Disclosure Program" (PCDP) whose goal is to provide opportunities for community input and involvement and increase community awareness. This is all well and good but there is continued need for local, regional and international NGOs (such as NEPAD, Nile Basin Initiative, Nile Basin Discourse, and WTA) to continue networking for the improvement of environmental advocacy and transparency for this initiative.

Friday, January 4, 2008

Company Highlight – Stock Exchange


African Bank Investments Limited underwrites unsecured credit risk through the provision of personal loans for domestic middle market in South Africa. The company offers unsecured credit and credit life insurance products. As of September 30, 2007, it operated 550 branches. The company was formerly known as Theta Group Limited and changed its name to African Bank Investments Limited in 1999. African Bank Investments Limited is based in Midrand, South Africa.

Available on:
Exchange Name Symbol

Monday, December 24, 2007

Article by William Easterly

Just when it seemed that Western images of Africa could not get any weirder, the July 2007 special Africa issue of Vanity Fair was published, complete with a feature article on "Madonna's Malawi." At the same time, the memoirs of an African child soldier are on sale at your local Starbucks, and celebrity activist Bob Geldof is touring Africa yet again, followed by TV cameras, to document that "War, Famine, Plague & Death are the Four Horsemen of the Apocalypse and these days they're riding hard through the back roads of Africa." It's a dark and scary picture of a helpless, backward continent that's being offered up to TV watchers and coffee drinkers. But in fact, the real Africa is quite a bit different. And the problem with all this Western stereotyping is that it manages to snatch defeat from the jaws of some current victories, fueling support for patronizing Western policies designed to rescue the allegedly helpless African people while often discouraging those policies that might actually help. Let's begin with those rampaging Four Horsemen. Do they really explain Africa today? What percentage of the African population would you say dies in war every year? What share of male children, age 10 to 17, are child soldiers? How many Africans are afflicted by famine or died of AIDS last year or are living as refugees?

In each case, the answer is one-half of 1% of the population or less. In some cases it's much less; for example, annual war deaths have averaged 1 out of every 10,800 Africans for the last four decades. That doesn't lessen the tragedy, of course, of those who are such victims, and maybe there are things the West can do to help them. But the typical African is a long way from being a starving, AIDS-stricken refugee at the mercy of child soldiers. The reality is that many more Africans need latrines than need Western peacekeepers — but that doesn't play so well on TV.

Further distortions of Africa emanate from former British Prime Minister Tony Blair's star-studded Africa Progress Panel (which includes the ubiquitous Geldof). The panel laments in its 2007 news release that Africa remains "far short" of its goal of making "substantial inroads into poverty reduction." But this doesn't quite square with the sub-Saharan Africa that in 2006 registered its third straight year of good GDP growth — about 6%, well above historic averages for either today's rich countries or all developing countries. Growth of living standards in the last five years is the highest in Africa's history. The real Africa also has seen cellphone and Internet use double every year for the last seven years. Foreign private capital inflows into Africa hit $38 billion in 2006 — more than foreign aid. Africans are saving a higher percentage of their incomes than Americans are (so much for the "poverty trap" of being "too poor to save" endlessly repeated in aid reports).


I agree that it's too soon to conclude that Africa is on a stable growth track, but why not celebrate what Africans have already achieved?Instead, the international development establishment is rigging the game to make Africa — which is, of course, still very poor — look even worse than it really is. It announces, for instance, that Africa is the only region that is failing to meet the Millennium Development Goals (MDGs in aid-speak) set out by the United Nations. Well, it takes extraordinary growth to cut extreme poverty rates in half by 2015 (the first goal) when a near-majority of the population is poor, as is the case in Africa. (Latin America, by contrast, requires only modest growth to halve its extreme poverty rate from 10% to 5%.)

This is how Blair's panel managed to call Africa's recent growth successes a failure. But the reality is that virtually all other countries that have escaped extreme poverty did so through the kind of respectable growth that Africa is enjoying — not the kind of extraordinary growth that would have been required to meet the arbitrary Millennium Development Goals.Africa will also fail to meet the second goal of universal primary education by 2015. But this goal is also rigged against Africa, because Africa started with an unusually low percentage of children enrolled in elementary school. As economist Michael Clemens points out, most African countries have actually expanded enrollments far more rapidly over the last five decades than Western countries did during their development, but Africans still won't reach the arbitrary aid target of universal enrollment by 2015. For example, the World Bank condemned Burkina Faso in 2003 as "seriously off track" to meet the second MDG, yet the country has expanded elementary education at more than twice the rate of Western historical experience, and it is even far above the faster educational expansions of all other developing countries in recent decades.Why do aid organizations and their celebrity backers want to make African successes look like failures? One can only speculate, but it certainly helps aid agencies get more publicity and more money if problems seem greater than they are.

As for the stars — well, could Africa be saving celebrity careers more than celebrities are saving Africa? In truth, Africans are and will be escaping poverty the same way everybody else did: through the efforts of resourceful entrepreneurs, democratic reformers and ordinary citizens at home, not through PR extravaganzas of ill-informed outsiders.The real Africa needs increased trade from the West more than it needs more aid handouts. A respected Ugandan journalist, Andrew Mwenda, made this point at a recent African conference despite the fact that the world's most famous celebrity activist — Bono — was attempting to shout him down. Mwenda was suffering from too much reality for Bono's taste: "What man or nation has ever become rich by holding out a begging bowl?" asked Mwenda.

Perhaps Bono was grouchy because his celebrity-laden "Red" campaign to promote Western brands to finance begging bowls for Africa has spent $100 million on marketing and generated sales of only $18 million, according to a recent report. But the fact remains that the West shows a lot more interest in begging bowls than in, say, letting African cotton growers compete fairly in Western markets (see the recent collapse of world trade talks).

Thursday, December 20, 2007

No one lives Forever: Zimbabwe & Robert Mugabe


Zimbabwe is issuing new bank notes in an effort to tackle the cash shortages in the country. Notes worth 250,000, 500,000 and 750,000 will enter into circulation effective today.

As known my many economists this puts Zimbabwe on the express train to inflation and continues the economies downward spiral. Zimbabwe’s Central Bank Governor Gideon Gono blames this crisis on the country’s senior officials. These efforts are believed to be a short-term fix for Zimbabwe’s current crisis. But like any medical affliction, one can treat the symptoms of the problem, but never actually get to the root. This will just lead to the situation getting worse.

No matter where the blame is pointed, the international spotlight usually always goes back to Robert Mugabe, who has been dubbed an African Dictator by many and has been in power in Zimbabwe for nearly 3 decades. Critics of Mugabe accuse him of single-handedly allowing the economy to go into ruin. Mugabe fires back at his Western critics and blames Zimbabwe’s ails on the Western plot to oust him from power.

Truth be told, the proof is in the numbers, and Zimbabwe has one of the highest inflation rates in the world. The International Monetary Fund (IMF) defines the contributing factors of inflation in the developing world as a mix of demand pressures, fiscal and monetary policies, supply shocks, and inertia resulting from the sluggish adjustment of expectations or the existence of staggered wage contracts.

With all the conflict between Mugabe and the West (particularly his British rivals) the focus tends to shift away from the most critical topic, which are the people of Zimbabwe. Regardless of who has done what to whom in the past, stringent action must be taken now to tackle Zimbabwe’s flailing economy and get them on a path to recovery. For more information go to http://www.guardian.co.uk/zimbabwe/0,,181131,00.html.

Wednesday, November 28, 2007

One Laptop


The One Laptop per child (OLPC) initiative unveiled in November of 2005 was the brainchild MIT Professor Nicholas Negroponte. The mission of this foundation is to provide children across the developing world with the ‘light of learning’ by providing each child with the very unique XO laptops. These laptops are designed for durability, and can withstand the damage that may occur by being used in rough terrain or areas in the developing world. The cost of one laptop is $100 when purchasing in bulk, such as committing to 1 million laptops.

The initiative sounds progressive but is met with much adversity. Some question the need for laptops in poorly equipped schools. Nigeria’s education minister, Dr. Igwe Aja-Nwachuku told the BBC “What is the essence of introducing One Laptop per child when they don’t have seats to sit down and learn; when they don’t have uniforms to go to school in, when they don’t have facilities.” This is a valid point; however, as noted by the OLPC ‘standing still is a reliable recipe for going backward’. Risk is obligatory.

Although this initiative is viewed as noncritical item to drive education forward, it is still an imperative step in the right direction for development. This initiative could help children in the developing world be well equipped for the technology era, and be more able to compete on an international level by being exposed to computers and technology at a very early age. More information is available at http://www.laptop.org/en/vision/mission/index.shtml. However, as Nigeria’s Education Minister highlighted, the education system may have more priorities than laptops, and Nigeria knows what is best for Nigeria; not the West.

Wednesday, October 31, 2007

The New Slave Market


The fate of six Aid workers of the charity L’arche de ZoĆ« is hanging in the balance, after it was discovered that they were caught attempting to fly 103 children out of Chad. The aid workers defended that the children were from Sudan’s war torn Darfur region, and that they were in fact ‘orphans’. This relief effort falls under the charities campaign to evacuate 10, 000 orphans in Darfur to France to place children in French families.

This situation is wrought with problems. UN officials state that the children are from Chad, not Sudan and that there is in fact no evidence that the children are even orphans at all. This makes the situation questionable. With all the refugees and immigrates who voyage to Europe on a daily basis on hopes of a better life only to be hunted down like fugitives, and then immediately ejected from the country, one must question the motives of these Aid workers.

Additionally one must note that the Aid workers chartered a private plane for this operation. One report noted that they Aid workers were to ‘sell’ the children to foster care; sell the children’s organs for harvesting, or sell the children to pedophilic agencies. This raises an eyebrow.

Just as leaders in Africa are criticized about corruption and transparency in their political dealings this situations should not be overlooked as a simple mistake or mis-communication for the Aid Workers.

The Chadian government believes that there are investigations that need to be carried out outside the country, but that the Aid workers should be tried in Chad, not France. "We have a country; we have a justice system; we have everything. We want them to be judged in Chad - we don't want them to be taken to Europe," one individual from a small angry crowd told the BBC.
The French are calling it a ‘political scheme’ and that the Chadian government is ‘exploiting ’ this situation to make complications with France. From a Southern perspective, the only ‘exploitation’ evident is the intention of the so-called Aid workers. Please go to http://news.bbc.co.uk/2/hi/africa/7070882.stm for updates on this story.