First Data, a major US-based electronic payment processing Services Company is to acquire a South African Company CashAxcess, which offers a range of ATM products and services to the South African and the entire African corporate and retail market, from local investment groups Mvelaphanda and Venfin for an undisclosed sum. CashAxcess, which has been in operation since 2005, provides outsourced ATM services to leading banks in the entire region, including Absa, Capitec and Mercantile.
It also provides ATM delivery and installation, signage, wireless GPRS communication, cash management and replenishment services, ATM monitoring, equipment insurance, sales and marketing and training services, and has 200 ATMs currently deployed across the country.
According to the director of First Data; Mr. Estevao Tokata, ATM outsourcing is a growth area within the South African and the entire payments market, as banks look to drive more cost efficiencies through their operations.
It was noted that banks are concentrating on building and providing core banking services to their customers while working with specialist partners such as First Data to enhance the breadth of payment solutions offered to customers. First Data operates a global ATM business, with networks in the United States, Asia Pacific and across Europe, and also offers ATM outsourcing and deployment solutions for banks and retailers in more than 17 countries around the globe.
It has been operating in South Africa since 1993, providing a full range of payment services to leading banks and retailers. The president of First Data in the emerging markets was quoted as: “We are delighted to welcome the CashAxcess team into the First Data family.” He added on that the combination of their considerable ATM expertise and knowledge of the local business environment, coupled with First Data’s scale and global experience, will ensure the delivery of an enhanced service to clients in South Africa and the entire of Africa.
Telecom group Zain to appraise its African operations.
As time nears for the 2010 FIFA world cup, host South Africa are hoping the tournament will leave a lasting legacy on the southern nation. With an estimated 483,000 people expected to visit the country, the government has already shown a major commitment to infrastructure development programs, because the tournament prompted construction and refurbishment of the dilapidated structures. With visitors from all over the world coming for the soccer fanfare the country will get a significant boost for the local tourism industry and other sectors of the economy.
The millions of visitors expected to pour into the country for world cup will boost opportunities in accommodation, health provision services, travel services, short-term insurance, event management entertainment as well and arts and crafts. The tens of thousands of jobs that were already created for the preparation of world cup and over 4000 volunteers that are expected to help during the world cup makes the country at a great stake of reaping great in this event. The world cup is seen as a catalyst of the construction of around 25 new hotels in the last couple of years. As part of the 2010 world cup legacy program, a total of 27 one star football turfs are to be built in rural and township areas all around South Africa. All these proposed facilities are to be built with synthetic surface that reduces the cost of upkeep on a continual basis. Hosting world football will leave a lasting soccer legacy in South Africa.
Economically, the word cup will contribute approximately $6.8b to the South African economy, generate 415,000 jobs and contribute $2.3b in tax income to the government. The research findings done so far indicate that 483,257 tourists will spend $1b in total during their stay in South Africa. Despite the global economic meltdown, the tournament will not be badly affected. By the end of July 2009, a great demand of tickets has already been shown; countries like Japan, Korea and USA have already advanced a huge interest for tickets because of their good show in the Confederations cup. USA requested for 93,000 tickets, UK requested for 220,000, South Africa has been allocated 240,000 while the rest of the world will have to share 800,000 tickets.
Loans Made Easy for Small Traders
A partnership between Fina Bank and the Centre for International Development at Harvard University`s Entrepreneurial Financial Lab has seen a new flavor in the banking industry in East Africa.
Clients of Fina Bank; one of the banks in East Africa will not need collateral anymore to get loans. A new technology that will enable all this is being experimented and once done, the bank will be using psychometric technologies that involve the evaluation based on the entrepreneurial potential or future earning potential of applicants for small business finance. This will replace the screening of new borrowers based on their current wealth, known as collateral-based lending or the social reputation known as microcredit.
The move that has been praised as a breakthrough in profitable lending to small and medium enterprises in Africa will be piloted in Kenya, Rwanda and Uganda. Once it is proved to be successful, it will be very essential in boosting small and medium enterprises in the region financially.
Rwanda to Assess Banks Liquidity Levels
The government of Rwanda through the Central Bank is set to assess the liquidity volumes in local banks; a move that will help to determine whether it should proceed with introducing long-term capital as a stimulus package to accelerate credit to the private sector. The lessening liquidity in local commercial banks has seen a rather tight clutch on private sector’s accessibility to long-term investment capital, a situation that has called for state intervention. The governor of the National Bank of Rwanda (BNR) was reported as saying that according to the local banks’ books of accounts, they have comfortable liquidity levels, but they keep warning that it`s for only short term lending. The assessment is set to be conducted throughout the second half of this year.
New Financing Plan for Public Universities in Kenya
Barclays Bank in Kenya is developing yet a new platform in the bonds market that promises to significantly change the way public universities finance their unending needs. The bank is working on an education bonds plan that will be valued on the billions of shillings worth of assets held by the public universities. According to people familiar with the plan, it has got the potential of lowering the cost of education and increasing access to the universities by the prospective students. The aim is to relieve the institutions of their heavy dependence on short term borrowing that has left them with a yawning budget gaps and ramped up the cost of higher education.
Tanzanian: EAC pact with EU to delay
The government of Tanzania has disclosed that the East African Community (EAC) bloc is likely to delay the signing of a new trade deal with the European Union because fresh issues have been introduced in the negotiations. The five bloc members of Kenya, Uganda, Tanzania, Rwanda and Burundi - are among the nearly 80 countries of the Africa, Caribbean and Pacific group that are in talks on a new pact with the EU. The Tanzania trade minister said that the issues included government procurement, environment and sustainable development among others.
Loans Made Easy for Small Traders
A partnership between Fina Bank and the Centre for International Development at Harvard University`s Entrepreneurial Financial Lab has seen a new flavor in the banking industry in East Africa.
Clients of Fina Bank; one of the banks in East Africa will not need collateral anymore to get loans. A new technology that will enable all this is being experimented and once done, the bank will be using psychometric technologies that involve the evaluation based on the entrepreneurial potential or future earning potential of applicants for small business finance. This will replace the screening of new borrowers based on their current wealth, known as collateral-based lending or the social reputation known as microcredit.
The move that has been praised as a breakthrough in profitable lending to small and medium enterprises in Africa will be piloted in Kenya, Rwanda and Uganda. Once it is proved to be successful, it will be very essential in boosting small and medium enterprises in the region financially.
Rwanda to Assess Banks Liquidity Levels
The government of Rwanda through the Central Bank is set to assess the liquidity volumes in local banks; a move that will help to determine whether it should proceed with introducing long-term capital as a stimulus package to accelerate credit to the private sector. The lessening liquidity in local commercial banks has seen a rather tight clutch on private sector’s accessibility to long-term investment capital, a situation that has called for state intervention. The governor of the National Bank of Rwanda (BNR) was reported as saying that according to the local banks’ books of accounts, they have comfortable liquidity levels, but they keep warning that it`s for only short term lending. The assessment is set to be conducted throughout the second half of this year.
New Financing Plan for Public Universities in Kenya
Barclays Bank in Kenya is developing yet a new platform in the bonds market that promises to significantly change the way public universities finance their unending needs. The bank is working on an education bonds plan that will be valued on the billions of shillings worth of assets held by the public universities. According to people familiar with the plan, it has got the potential of lowering the cost of education and increasing access to the universities by the prospective students. The aim is to relieve the institutions of their heavy dependence on short term borrowing that has left them with a yawning budget gaps and ramped up the cost of higher education.
Tanzanian: EAC pact with EU to delay
The government of Tanzania has disclosed that the East African Community (EAC) bloc is likely to delay the signing of a new trade deal with the European Union because fresh issues have been introduced in the negotiations. The five bloc members of Kenya, Uganda, Tanzania, Rwanda and Burundi - are among the nearly 80 countries of the Africa, Caribbean and Pacific group that are in talks on a new pact with the EU. The Tanzania trade minister said that the issues included government procurement, environment and sustainable development among others.
REGIONAL NEWS
Rich nations pledge $20bn in three year period.
The rich nations under their umbrella, G8, have pledged financial support amounting to USD 20billion over a period of three years, in farm aid to poor nations, Reuters reported. According to the US, a move to farm aid is much more important instead of food aid, but over 1.02bn people need food help this year, the UN said and food aid is necessary until they can produce their own.
The leaders of the African countries of Ethiopia, Algeria, Angola, Egypt, Libya, Nigeria, Senegal and South Africa discussed food security and farming with their G8 counterparts and pushed for climate-change compensation. On the other hand, the European Union and Japan urged a code of conduct for responsible investment in the developing nations where farmland acquisition is on increase.
East African governors disagree on dollar reserves.
East African central bank governors have failed to agree over how much dollar reserves is to be held by each country ahead of the introduction of a single regional currency in the year 2012. This disagreement stemmed from different interpretations of the necessities that each country is supposed to hold enough dollars to cover six months of imports. The countries that form the East African Community, that is, Kenya, Uganda, Tanzania, Rwanda and Burundi are planning to have a common legal tender by the year 2012 and this is expected to reduce the cost of currency conversions across the regions and will also eliminate the risk of volatile interest rates for cross-border investments within the region.
‘SADC not effective at coordinating power projects’
The South Africa’s energy minister Dipuo Peters has commented that Southern African Development Community (SADC) is not effectively coordinating power projects in the region. According to the minister, unprecedented growth in region has put a strain on electricity power supply and joint efforts between SADC member states is seen as the best way to balance supply of and demand for the electricity. SADC has several viable projects waiting to be developed, and the more cost effective tariffs should see renewed private investment in energy projects within the region.
Africa’s hard knock from global crisis
The finance minister of South Africa revealed that African countries have taken a severe knock from the global economic crisis and some of the financial obligations to help the continent have not been realized. Minister Gordhan told a conference to discuss the World Development Report 2009 that only about 10 to 15 countries in Africa had the capacity to be able to implement counter-cyclical responses to help them overcome the financial / economic crisis. He said economic growth in some African countries has “gone into the deep negative figures” and that their fiscal deficits ranged from 10-15%, making the situation constraining to most countries’ ability to respond significantly to the global economic crisis.
RWANDA
Remittances to Rwanda rise despite the global hiccup
Remittances sent home by Rwandans working abroad have increased by 26% y/y for the first five months of 2009 up to USD 71.4M from USD 56.8M previously despite the global economic downturn. According to the central bank of Rwanda, remittances for 2009 are now forecast at between USD 160M and USD 200M making it the country’s second largest foreign exchange earner after tourism which is said to have brought in USD 218M in 2008. The African Development Bank said that remittances and the aid inflows to Rwanda had increased bucking the expected trend as a result of reforms as well as improved economic conditions in the country.
Meanwhile Fitch has affirmed Rwanda’s long-term foreign and local currency rating IDR at B- with a more positive outlook and also confirmed a short-term foreign currency IDR of B and a country ceiling of B-. The ratings agency said it continued to be impressed with Rwanda’s obligation and dedication to reform and also the continued country’s growth performance, but notes that although per the country’s capita income has doubled over the last four years, it still remains below the B median. Fitch also forecasts that the economic growth in Rwanda will continue in the 6% to 7% range on the back of government efforts to enhance the business environment and address the infrastructure deficit in the country.
KENYA
Kenya tax body feels the pinch of the global economic downturn.
The Kenya Revenue Authority (KRA) fell short of its revenue target by KES 12bn on the back of the global economic downturn, only gathering KES 481bn out of KES 493bn the body had budgeted. The KRA’s target for the current 2009/10 financial year is KES 545bn but meeting the new targets will be quite difficult as severe drought is badly affecting agricultural production and high inflation is upsetting the profitability of businesses and the affordability of goods for the Kenyan wananchi, thereby affecting the country’s tax revenues. This elevates the question of how Kenya hopes to finance its planned budget expenditure.
Meanwhile, Kenya central bank is expected to retain its key rate at 8%, according to most market players, although more cuts are anticipated later this year. As the country struggles on the back of weaker exports, the Central Bank of Kenya has adopted a monetary easing stance to boost growth. At its last meeting in May, the
MPC cut the rate by 25bps, ending speculation of most analysts who had expected a decision to hold it at 8.25%. According to Reuters, the government expects the growth of 3% this year after expansion of 1.7% last year.
ANGOLA
Angolan central bank to contain drop in forex reserves
The Angolan central bank has announced its plans to implement measures to contain the drop in foreign exchange reserves in Angola, as a result of the lower oil-tax revenues following the drop in crude oil prices. The Central bank governor Abraao Gourgel said that the average monthly income from oil taxes fell from USD 1.33bn in Q1 of 2008 to USD 283mn for the first five months of 2009. Reuters reported that Angola’s foreign exchange reserves are down 30% this year to USD 12.2bn.
Meanwhile, Angola’s inflation rose to 13.95% in June, up from 13.83% in May on the back of rising food prices and that of non-alcoholic beverages; this is according to the national statistics institute. Month-on-month inflation for June stood at a figure of 1.11% up from 0.95% in May. The current 2009 government budget allows for an inflation rate of 12.5% which has been upwardly adjusted from 10% previously.
BOTSWANA
Botswana’s GDP drop by 20.3%
Botswana’s GDP has contracted by 20.3% in Q1 of 2009 on the back of reduced diamond mining output. As a result of the global economic slowdown, the global demand for diamonds has suffered a decrease and the economy is anticipated to face a deep contraction over the next two years.
According to the central statistics office, mining and quarrying contributed 68.6% to the decline in the country’s GDP. Water and electricity did also record a fall of 4% y/y in Q1as a result of a fall in consumption from the mining industry.
Meanwhile, the country’s inflation has slowed to three-year low of 7% in June. According to the Central Statistics Office, Botswana’s consumer price inflation rate slowed to a near three-year low of 7.0% y/y in June from 8.4% in May. Lowing inflation could lead to open the way for more interest rate cuts to boost such a weak economy. However, as inflation remains above the 3-6% target band, reports emerged that the Central bank governor Linah Mohohlo said last month that Botswana had room for further rate cuts, and later in June he announced a 150bps cut in the bank rate to 11.5%, bringing total cuts since December to
400bps, the agency said.
