By Chris Bishop



It&#8217;s the World Economic Forum in&nbsp;Davos again, which
means money and presidents in and its people out.



For nearly 30 years the tiny ski-resort of Davos, in the mountains of Switzerland &#8211; population just over 10,000 &#8211; has played host to the annual business bash that is WEF.



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Scores of people in Davos shut their shops, rent out their
apartments and head&nbsp;for sunnier climes. The apartment trade is at a
premium this year as many more delegates, than Davos has residents, try to cram
into scarce accommodation. Homeowners have charged up to $45,000-a-week for
accommodation.



&#8220;I got a room for&nbsp;$10,000 for one week and that is
very cheap,&#8221; says Luigi Matrone, a Geneva-based tech entrepreneur who will
be at WEF looking for&nbsp;investors. They too pay the price for being at
Davos- more than $30,000&nbsp;just to be able to attend and network.



Yet many residents&nbsp;complain this wealth does not
trickle down to the people.



&#8220;It is only the rich of this town&nbsp;who make the
money, most of us never see it,&#8221; says&nbsp;a Davos resident on the
streets.



&#8220;I find it all very stressful, we have many&nbsp;people
all over the place during WEF week.&#8221; says another resident.

#WEF19: Presidents in people out – that’s Davos

By Chris Bishop



Look left, look right, look upwards before you go out in
2019 because the biggest threat could come from the skies. We’re not talking
about bombers, nor meteorites from outer space, merely the destructive wrath of
mother nature.



This is the is one of the greatest long term threats to the
world in 2019, according to the World Economic Forum’s Global Risks Report&nbsp; that paints a bleak picture of the year ahead
full of trade wars, cyber-attacks and unemployment.



Four of the five top risks by impact are posed by the elements:
failure to mitigate the effects of climate change; floods and storms; water
crisis, plus earthquakes, tsunamis, volcanos and electric storms. 



“2018 was sadly a year of historic wildfires, continued
heavy flooding and increasing greenhouse gas emissions. It is no surprise that
in 2019, environmental risks once again dominate the list of major concerns.
So, too, does the growing likelihood of environmental policy failure or a lack
of timely policy implementation,” says Alison Martin, Group Chief Risk Officer,
Zurich Insurance Group.



“By 2040, the investment gap in global infrastructure is
forecast to reach $18 trillion against a projected requirement of $97 trillion.
Against this backdrop, we strongly recommend that businesses develop a climate
resilience adaptation strategy and act on it now.”



Gaps play a big part in the Global Risks Report. In the top
five trends are: the growing gap between rich and poor; the polarisation of
societies; along with climate change, the rise of nationalism and the risk of
increasing cyber dependency.



On the economic front, one of the biggest risks of all
likely to come in international trade; 90% of the experts, of the 1,000 polled
by the report, believed there is likely to be confrontation over trade between
the major powers in 2019. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



“Trade disputes worsened rapidly in 2018 and the report
warns that growth in 2019 will be held back by continuing geo-economic
tensions, with 88% of respondents expecting further erosion of multilateral
trading rules and agreements,” says the report.



The danger of large scale cyber-attacks that could break
down infrastructure and information systems along with major fraud attacks, was
also flagged by the report.



&nbsp;“Persistent
underfunding of critical infrastructure worldwide is hampering economic
progress, leaving businesses and communities more vulnerable both to
cyberattacks and natural catastrophes, and failing to make the most of
technological innovation. Allocating resources to infrastructure investment, in
part through new incentives for public-private partnerships, is vital for
building and strengthening the physical foundations and digital networks that
will enable societies to grow and thrive, ” says John Drzik, President of
Global Risk and Digital, Marsh.



 The report also delves into the biggest risks for Africa and other regions around the world:



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These are the top five risks facing Africa

By Chris Bishop



President Cyril Ramaphosa said Wednesday that South Africa’s
Reserve Bank will be left alone despite concerns that the economy is not
creating enough jobs.



The Reserve Bank, a private company with shareholders,
manages the country’s monetary policy based around inflation targeting.&nbsp;



“There is no interest whatsoever to tamper or tinker with
the independence of the Reserve Bank,” Ramaphosa said at a pre-Davos breakfast
at a Johannesburg hotel.



“Our wish is as it goes about with policy it should keep an
eye on the issue of employment.”



The Reserve Bank has cropped up in many political speeches
in recent years as the South African economy has struggled. Critics say the
central bank should forget about inflation and concentrate on stimulating job
creation &#8211; an analysis dismissed as facile and unworkable by the people who run
the central bank.

President Ramaphosa: This is what we plan to do with South African Reserve Bank

By Chris Bishop&nbsp;



President Cyril Ramaphosa took on the thorny issue of land
that is likely to raise a number of uncomfortable questions at the World
Economic Forum in Davos next week.



The ruling &nbsp;African National Congress surprised many
last year when it vowed to go along with land expropriation without
compensation in line with the calls from the radical opposition party the
Economic Freedom Fighters. It sent shivers down the spine of many foreign
investors who fear it could be the thin end of a nationalisation wedge.



“It will not be done out of vengefulness where people go
around grabbing land. That is how we do things in South Africa,” Ramaphosa told
a pre-Davos breakfast in Johannesburg.



“We are not going to cut off our noses to spite our faces
but we are going to push the interests of our people.”



Ramaphosa said the furore around land has put the issue to
the top of the agenda, which was good. He said it had lit a fire under
government to move it forward in sorting out the land question.



“Landowners have also come forward saying they now realise
how important this is and have offered to &nbsp;put land into the pot.” Says
Ramaphosa.



The president said the government would concentrate on
appropriating state owned, abandoned and unused land.



The ruling ANC goes to the polls in May in the hope of
extending its nearly 25-years in power in South Africa. It is unlikely to lose
its grip on power but knows that the land issue is likely to be a vote winner.

﻿President Ramaphosa reveals what team SA, plans to tell investors in Davos on concerns over land expropriation

By Chris Bishop, head of programming CNBC Africa 



Zimbabwe is boiling over with anger right now. The economy
is crumbling, commodities and currency are in short supply, petrol is expensive
and scarce, the solution to the latter was for the government to double the
price at the pump.&nbsp; This led to hot
headed violence on the streets of Harare, amid burning cars and flying bullets.



Ironically, he man who told the world he was going to sort
out this mess and should be taking the heat is spending the next week, or so,
in two of the coldest countries on earth. As I write he is in Russia and next
week he will land in Switzerland to make another pitch for investors among the
world money heavyweights at the World Economic Forum in the snowy ski resort of
Davos. 



President Emmerson Mnangagwa&nbsp;
&#8211; who came to power after a military takeover in November 2017 –
countered criticism that he was one of the Zanu-PF old school by saying he
would take radical steps to throw Zimbabwe open for business. He made all the
right noises and appointed technocrats to his cabinet, instead of party
stalwarts, like economist Mthuli Ncube. 



Yet Mnangagwa’s <a href="http://cnbc.africa/zdnl-mc/2018/01/22/zimbabwes-offering/">first pitch to Davos</a> for investment, in 2018, was weak to say the least. It was a vague document talking about tribunals to decide on compensation for farmers and a raft of lukewarm incentives to invest in what was once the food exporting jewel of Southern Africa. 



At least one high profile CEO in Zimbabwe has called on
Mnangagwa to cut short his trip to Davos to sort out the chaos and penury at
home. Many struggling Zimbabweans are likely to agree.



Mnangagwa is just one of two new presidents from southern
Africa with a point to prove at Davos this year.



The other is President Cyril Ramaphosa of South Africa in
his first year in power. He made a sterling appearance at Davos, in 2018, full
of hopeful speeches promising better days. He said corruption would be
investigated and big fish put in court. It was all good tub-thumping stuff as
he stepped up his campaign to take the top job, which happened the following month,
after years of depressing talk of state corruption it was like a breath of
fresh air.



Ramaphosa delivered, to an extent, yet his economy
stubbornly refused to show strong growth and the currency is in worse shape
than it was in the days of his predecessor – the discredited President Jacob
Zuma. 



This year Ramaphosa is likely to find it a bit trickier to
catch the ear of investors as he tries to balance being open for business with
an election in May. Voter-friendly talk of land expropriation without
compensation and propping up the economy with taxpayers’ money is unlikely to
go down well with hard-nosed investors. Also the euphoria that greeted
Ramaphosa taking over the reins has died down.



Two presidents; two different, yet equally vital, challenges
in what promises to be a fascinating week in Davos upon which could hinge
millions of dollars in investment . The well-being and future of millions of
African families depends upon it.

#WEF19: Ramaphosa vs Mnangagwa. The tough tale of two African presidents

By Chris Bishop, CNBC Africa&#8217;s head of programming 



How many of South Africa&#8217;s rising entrepreneurs remember
where they were on that warm August day, in 1997, when their countrymen made history
with style and swagger? The streets were deserted on that day &#8211; they always
were when South Africa played in those heady days &#8211; with 80,000 people crammed
into the FNB Stadium in Johannesburg and millions more crowded around
television sets. &nbsp;



South Africa had to beat Congo-Brazzaville to qualify for
the FIFA&nbsp;World Cup, in France, for the first time.



For millions, 10 seconds in the 14th minute of that historic
game will live in the memory for ever.&nbsp;



Time almost stood still as South Africa won back possession
in midfield and played a through ball to the muscular Phil Masinga, charging
down the right. He treated the last defender with disdain before unleashing a
rocket into the top right hand corner. Masinga sprinted behind the goal in
celebration, turned his shirt back-to-front and pointed to his name with his
thumb, to the heaving crowd, in unbridled joy. He said afterwards the greatest
feeling he took from that historic goal was seeing his fellow South Africans
united.



When the cameras went into the victorious dressing room
after the game, there were no cell phones, nor cynicism, just smiles and
optimism.



&#8220;For years I have heard about this World Cup, now I am
going to go there!&#8221; were the first apt, everyman, words spoken by
midfielder John &#8220;Shoes&#8221; Moshoeu &#8211; another of the talented class from
&#8217;98 who died cruelly young. &nbsp;&nbsp;



These were indeed better, more hopeful, times in the early
days of democracy in South Africa, when our football team had talent to burn.
The team was African champions and looking forward to qualifying for the World
Cup every four years, instead of fretting over playing&nbsp;the Seychelles.



Masinga, big confident and robust, was a larger-than-life
part of this feeling that South Africa was of the people and destined for
better times. Hours after that stunning goal Masinga drove back to his home
town of Klerksdorp, in North West province, to have a beer with his mates who
couldn&#8217;t afford to travel to the game. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
&nbsp; &nbsp; &nbsp; &nbsp;



The&nbsp; passing of Phil &#8220;Chippa&#8221; Masinga&nbsp; &#8211;
who died from cancer aged just 49 on January 13 &#8211; also brings into sharp focus
the steady decline of the once shimmering&nbsp; game in South Africa as well as
the life of one of its shining stars.



By 2011, South Africa was losing to minnows like Niger and
Masinga was back in Klerksdrop and broke, living in the back room of his
mother&#8217;s house. Newspaper reports told of how he was forced to sell his
football memorabilia, in a garage sale, to keep body and soul together. Sadly,
the man with the golden boot became a cautionary tale for sportsmen
contemplating life after their playing days.&nbsp;



In his prime, Masinga, who won more than 50 caps for his
country,&nbsp;was one of the first African footballers to break into the
European&nbsp; game. He played for Leeds United and also in Italy and Switzerland.



The ruling African National Congress lauded Masinga as a
true patriot who represented his nation with pride.



Many football fans will never forget that moment of magic
from Masinga&#8217;s right boot that sent his country to the World Cup for the first
time.



It is a pity his countrymen could not do more for him when
he fell on hard times. &nbsp;

Phil “Chippa” Masinga: The man with the golden boot, who signified the rise & decay of SA

By Chris Bishop, head of programming CNBC Africa



The results of the Democratic Republic of Congo’s rare elections are expected this weekend, according to a special adviser to one of the candidates promising a business friendly government and Mandela-style reconciliation for the war torn, yet mineral rich,nation.



It has been a journey of drudgery, downpours, allegations of fraud and protest since the polls opened on December 30 to find a successor to Joseph Kabila. He has stepped down after nearly two decades running the country that his father, Laurent, who died in a mysterious assassination in 2001, took control of in 1997 after overthrowing Mobuto Sese Seko.



Felix Tshisekedi, the son of a former minister who studied in Belgium and set up his own delivery business in Brussels after years working in the Post Office, is fighting it out with former Exxon Mobil manager and opposition lawmaker Martin Fayulu and the man with Kabila’s vote, former interior minister Emmanuel Ramazani Shadary.



 <blockquote class="twitter-tweet" data-lang="en"><a href="https://twitter.com/hashtag/RDC?src=hash&amp;ref_src=twsrc%5Etfw">#RDC</a> Le Président Joseph <a href="https://twitter.com/hashtag/Kabila?src=hash&amp;ref_src=twsrc%5Etfw">#Kabila</a> a rempli son devoir civique, en compagnie des siens, ce dimanche 30 décembre 2018 à Kinshasa. <a href="https://t.co/tMiljzmywD">pic.twitter.com/tMiljzmywD</a>— Présidence RDC ?? (@Presidence_RDC) <a href="https://twitter.com/Presidence_RDC/status/1079286376816930816?ref_src=twsrc%5Etfw">December 30, 2018</a></blockquote>
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“The latest we are leading by between 40 and 45%, in 13 out of 14 provinces. Around 70% of the vote has been counted and we understand all the votes have been captured,” says Claude Ibalanky Ekolomba, the special adviser to Tshisekedi . 



“Overall we are excited and extremely confident. We are leading the race at the moment.”



<h3 class="wp-block-heading"><a href="http://cnbc.africa/news/international/2018/12/31/drc-elections-why-the-opposition-is-crying-foul/">Read: DRC elections: Opposition, ruling coalition both say they’ve won, here’s why</a></h3>



Ibalanky Ekolomba, who is visiting Johannesburg, admits it is difficult to keep contact with the people back in the DRC with the internet shut down by the state for fear it may stir unrest.



“We have ways to get through, it is not always reliable but we do and it is the people on the ground who know what is happening,” he says. He pointed to a case of alleged fraud where a bag of votes for Tshisekedi were found by a fisherman in a river near Lake Kivu who simply picked it up and reported it to the authorities.



“You cannot stop 30 million people witnessing their own election and when things are happening we are told.”



Ibalanky Ekolomba says Tshisekedi wants to be a business friendly president, if elected, in search of the foreign direct investment that the DRC desperately needs to reap the rewards of its rich minerals.&nbsp;Tshisekedi did not plan to cancel contracts with foreign companies as had been done before after changes of government.



“If we find a mistake in a contract we will engage and see how we are going to correct it,” he says.



“Some people are fearing we will be hard on business but not at all – we will be open for business.”



Tshisekedi also promises to appoint people to government on merit.



“Fighting corruption and money laundering. There will be no witch hunt among people who were members of the former government, we will be saying let’s build this country together just like Mandela did,” says Ibalanky Ekolomba.&nbsp;

DRC elections: Downpours,no internet drudgery and a fisherman’s find on the way to a Mandela- inspired tomorrow?

At last, the politicians have summoned up the courage to take the former prize bull called Eskom by the horns. Like it or lump it, South Africa’s national power generator is a rotting bull beset by mismanagement, malfeasance and sloppy repairmen.
If the shake-up of Eskom succeeds it will not only save hundreds of businesses, but also ease the ire of millions of Africans who merely want to flick on a light switch. It will also bring into sharp focus the folly of complacency as break downs and maintenance have left South Africa with 29,000 MW – not enough to meet summer demand – when it should enjoy 47,000 MW of installed capacity.
Read: <a title="Guptas and midnight contracts castigated in Eskom shake up" href="http://cnbc.africa/zdnl-mc/2018/12/06/guptas-and-midnight-contracts-castigated-in-eskom-shake-up/" rel="bookmark">Guptas and midnight contracts castigated in Eskom shake up</a>
For years everyone thought Eskom was the bees knees. It was a world class operator and a pioneer of power generation in African that produced more than half of the continent’s electricity. It took out adverts to pat itself on the back and the South African public believed the lights would burn forever. South Africans could even afford to snicker at jokes about its power-strapped neighbours: What did Zimbabwe use before candles? Answer: electricity!
Read: <a href="http://cnbc.africa/news/special-report/2018/12/06/lights-out-game-on-no-christmas-of-rest-and-turkey-for-the-bosses-in-a-dingy-tale-of-decay/">Lights out, game on- No Christmas of rest and turkey for the bosses in a dingy tale of decay</a>
That joke is not funny anymore in South Africa after a decade of power cuts. The irony is, while many African nations, who have been scraping by on four-figure MWs for years, are now throwing money into building up power generation to encourage business, South Africa has let a gem of a system slip through its fingers.
It was an epic fail. When the first power cut shock hit, in January 2008, it closed down the entire South African mining industry. Not even political unrest, nor pestilence, nor two world wars, managed to do this. The last time the industry shut down was during the Rand Revolt of 1922 when soldiers and tanks fought battles with rifle-toting strikers across Johannesburg.
In the dream world of 2008, many people thought the blackouts wouldn’t last, but a combination of botched repair jobs and under investment saw to it that they did.
The complacency set in a the end of 2010, according to public enterprises minister Pravin Gordhan, when the bosses at Eskom cut back money for maintenance and merely papered over the cracks at coal-fired power stations built in the 1970s that are long past their lifespan.
The political significance of this shake up at Eskom has deep context. The language used by Gordhan is laden with the kind of fighting talk that saw the ushering in of the Cyril Ramaphosa era and the sweeping away of the rot of the Jacob Zuma years. There was talk of fighting back and: “there is something wrong in the kingdom,” that could have come straight out of the campaign to put Ramaphosa in the top job a year ago.
With elections coming in May, the Eskom shake up is likely to strengthen the hand of the new regime to be seen to take a firm hand in solving solve one of South Africa’s biggest problems and impediments to business. If it sweeps away a swathe of incompetence and corruption in the process – all the better when it comes to voting time.
If it ensures the survival of thousands of businesses and hundreds of thousands of jobs, in the process, it could be one of the momentous and worthy acts of year.
There is likely to be little sympathy, among those who pay rising electricity bills, for the senior executives who will not be lazing by the beach this December. Eskom has cancelled their leave so they can tour the grimy coal-fired power stations to find out what is wrong. It may be less pleasant for the executives to visit their paying customers sitting in their living rooms in the dark.

COMMENT: Taking Eskom, the grimy, rotting, bull by the horns

It didn&#8217;t take long for the name of the notorious Gupta brothers – who once made millions selling coal in South Africa with questionable contracts – to be dragged into the big shake up at Africa’s biggest power generator.
The brothers left South Africa, this year, after two decades of business in South Africa that garnered them a multi-billion rand fortune. Their critics claim they used political influence to secure many of these contracts to supply coal to Eskom from their operations under Tegeta Resources at premium prices at the last minute to ease shortages.
“It (Eskom) would sign midnight contracts with Tegeta to get coal pre-payments of hundreds of millions of rand that were given. There would be teleconferences to make sure the Guptas got the deal,” says Pravin Gordhan the minister of public enterprises.
“The idea was to squeeze everyone else out of the market and make the Guptas dominant. Now they (Eskom) are telling us it takes a year to sign such contracts. There is something wrong in this kingdom, so to speak.”
Gordhan also said he was concerned about the cost of diesel to run Eskom’s emergency open cycle gas turbines that are used to prop up the grid. He said a team of independent advisers were going to look at this cost.
“They were spending a billion rand a month to keep the lights on” There has to be a use of diesel but it is something you want to minimise.”
The Guptas left for Dubai earlier this year and most of their businesses have been sold off or liquidated.

Guptas and midnight contracts castigated in Eskom shake up

By Chris Bishop.
Business and households were given a pre-Christmas shock with a frank disclosure of the ruin of Africa’s biggest power generator amid claims of sabotage, corruption and decay where those who try to fix it are swept aside or forced out of their jobs. The only crumb of comfort is that the government promises to shake up South Africa’s power generator Eskom and has cancelled their Christmas holidays for its senior executives so they can tour the ageing power stations of the country to find out what is wrong.
“We have reshuffles in cabinet we are going to be reshuffles here as well,” says Pravin Gordhan, the public enterprises minister.
Gordhan and Eskom chairman Jabu Mabuza were called back from a road show for an emergency press conference at Eskom’s Megawatt Park in Sandton, Johannesburg. They painted a bleak picture of the failing national grid, supplied by Eskom, that has left many businesses and homes in the dark over the last few months. The grid of 47,000 MW is running on a mere 29,000 MW because of maintenance and breakdowns in the ageing power stations on the country, most of which were built in the 1970s. Eskom didn’t even know where the next break will be, he said.
“For business, we want to ensure by the time you get back to work in January we have a better situation,” says Gordhan.
But Gordhan acknowledged it was likely to be a grim fight against years of corruption and decay that has seen the pride of Africa’s power generation reduced to a load shedding shell.
“There has been declining production, the growing need for repairs, the lack of attention, we are not sure yet whether there is an undermining of the system, as well, let’s call it sabotage,” he says.
“Some of the problems can be ascribed to the age of the plant, but from about 2010 the investment in maintaining, repairing and big scale repairs were not done adequately. Enough money was not put into big repairs and mid-term repairs.” 
“ Often things were fixed with a very lousy old band aid supposed to last a week that comes unstuck in a few days, then you haven’t fixed it .We are looking at contactors not doing what they were supposed to do.”
Experts in Eskom who tried to fix the mess were either swept aside or forced to leave, Gordhan said.
The minister even admitted that his department was also a step behind what was going on at Eskom. It had merely on energy expert.
“The public was told we have a world class operation, but in the meantime all the malfeasance and mismanagment has gone on,” says Gordhan.
Eskom hopes to report back within ten days and plans to set up a team of experts to assess the damage to the power generation system.

Lights out, game on- No Christmas of rest and turkey for the bosses in a dingy tale of decay

Africa can look forward to a $28 billion investment bonanza by Friday night, South African President Cyril Ramaphosa promised delegates at the Africa Investment Forum Thursday as he made a rallying call to the economies of the continent. He also admitted that the state coffers of the continent are running short of cash.
Former mining millionaire Ramaphosa &#8211; who took the top job in South Africa in February with a pledge to be the country&#8217;s business president &#8211; spoke as the Africa Investment Forum, the biggest investment gathering the continent has ever seen. It is being led by the African Development Bank with an effort to meld private and state money to de-risk and increase investment.
Ramaphosa told delegates the Africa Investment Forum was expected to raise $28 billion by the end of the week outstripping his own South African conference that raised around $20 billion in investment last month.
&#8220;That figure is phenomenal,&#8221; says Ramaphosa, but he also cautioned: &#8220;We need to resolve problems that keep investors away must deal with policy uncertainty and regulatory uncertainty and strengthen financial institutions.”
Ramaphosa told the gathering that the state coffers of Africa could no longer foot the massive infrastructure bill that the continent faces and runs into &#8211; a shortfall in infrastructure that runs into tens of billions.
&#8220;African governments cannot do this on their own. They need to harness their partners in the private sector.&#8221;
Akinwumi Adesina, the ebullient head of the AfDB, was characteristically upbeat in his address to the conference that was his brainchild.
&#8220;People talk about who will be the next China&#8230;Africa is the next China,&#8221; says Adesina, &#8220;Äfrica is open for business.&#8221;
&nbsp;

A $28 billion bonanza for Africa – SA’s President Ramaphosa

Quoting Nelson Mandela and Charles Dickens, new Finance Minister Tito Mboweni’s climbed into the driving seat of South African economic policy, with aplomb, with his maiden mini-budget speech. His mere avuncular presence could revive comforting memories of better times – say, in 2005, when Mboweni was Reserve Bank Governor and the economy was cooking with 5% growth – times that the flagging economy needs to bring back badly right now.
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity,” says Mboweni with an apt quote from Charles Dickens in his book A Tale of Two Cities.
In his years of semi-retirement, spent fishing, farming and investing, Mboweni has been full of forthright opinions about what the once thriving South African economy needs to do to recover. Now he has a golden opportunity to do something about it in a tough job where he will have his work cut out for him in this quest for elusive growth.
With his trademark humour and  forthright opinion, the mere expectation of the  speech saw  the rand running to a three-week high – yet it was peppered with worrying news. The growth figures tripped easily off the tongue, but is likely to be a concern: GDP growth revised downwards to 0.7 from 1.5%, in 2018, following a recession in the first half of the year, at a time when the world economy is growing at 3.7%. Growth is predicted to recover to a mere 2.3% by 2021.
Debt is another worry. Mboweni said gross debt is expected to stabilise at 59.6% of GDP, but only by 2023/24. Analysts believe this could not only mean South Africa spends millions more every year on repayments but also the undermining of the reputation of the economy in the eyes of the ratings agencies. On top of this tax revenue has been revised down by R27.4 billion in 2018/19, R24.7 billion in 2019/20 and R33 billion in 2020/21 relative to the 2018 Budget. This mainly reflects higher-than-expected VAT refunds.
Yet another worry is in the skies over Africa. Mboweni said there will be reform and yet more cash to bail out the ailing South African Airways, despite the view among analysts that this is good money being thrown after bad.
One of the biggest cheers during the speech was for the VAT zero-rating for sanitary pads, along with bread and cake flour. Long overdue, some said.
In this vein, on the positive side, with an election just around the corner, there was a pledge of trillions for certainties for the people in the shape of water electricity services, and social grants. Less clear is how Mboweni plans to kick start growth.
Mboweni rounded off with a quote from his mentor: Mandela.
“Difficulties break some, but make others. No axe is sharp enough to cut the soul of a sinner who keeps on trying, one armed with the hope that he will rise even in the end.”
If that is not a quote made for Mboweni and his new, difficult, job- I don’t know what is. But please, spare us more Dickensian Hard Times.

MTBPS2018: Tito Mboweni talks tough in hard times

By Chris Bishop, Head of Programming, CNBC Africa
In Africa wealth and power attracts envy and retribution like flies. Mohammed Dewji – the youngest billionaire in Africa – had both wealth and power in spades – but many people are baffled why anyone would want to hurt him. It was my privilege to put him on the cover of Forbes Africa, in my days of editing it, and to announce him as Person of the Year a couple of years later, which he accepted with his trade mark politeness and grace.
<img loading="lazy" decoding="async" class="size-full wp-image-21481 aligncenter" src="http://cnbc.africa/wp-content/uploads/2017/01/2870x425.jpg" alt="Dewji raises $200mln to fund working capital needs" width="217" height="213" />
Mo, as most in business know him, was never the flamboyant, bullying type of billionaire, he was always the quiet type who worked hard, up to 100 hours a week, in earning $85 million a year and transforming the family import-export business into a Tanzanian conglomerate employing tens of thousands of people making everything from soft drinks to sisal.
A 180 degree turnaround from the dreams of his youth. Mo had a good golfing handicap from his primary school days and wanted to be the next Tiger Woods. His father sent him to study at the Arnold Palmer Golf Academy in the United States.
“I won the regional tournaments, but when I got to the nationals I realised how good everyone else was,” Mo told me once.
Mo went to Wall Street as a trader and one day he phoned his father back in Tanzania to ask for money to buy a new suit.
“My father said if I couldn’t afford a suit it was time to come home and work for him.”
This Mo did with a will and took over the family business in his 30s and modernised it garnering an estimated $1.5 billion fortune in the process. He even opted to take on the mighty Coca Cola – the graveyard of many a big time entrepreneur, including Sir Richard Branson – with his home grown Mo Cola. A sell out of his bottling plants to Coca Cola, which holds more than 90% of the market in Tanzania would have been very lucrative but Mo believed in his African brand. A certain struggle in a tough market.
What is more uncertain is who would want to hurt Mo and why would they go as far as kidnapping him from a gym at dawn firing guns through their window in their escape to God knows where.
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Who is Mohammed Dewji, kidnapped in Tanzania?

The fact that millions of Chinese workers are cycling to work every morning on cleaner, clearer, streets is just one reason, according to a veteran banker, why we shouldn’t fear the fourth industrial revolution – a concept that will be near the top of the agenda at this week’s BRICS conference at the Sandton Convention Centre in Johannesburg.
South Africa is chairing the conference that will see the leaders of China, Russia, Brazil and India – who between them preside over a third of the world’s GDP – descend upon the continent for talks on everything from investment to peacekeeping.
“We shouldn’t see the words ‘fourth industrial revolution’ as a frightening phrase for something that is too costly,” says K V Kamath, the president of the Shanghai-based New Development Bank – the so-called BRICS bank – in Johannesburg this week for the conference.
“What we are talking about is cost effective solutions. Disruption goes hand-in-hand with the fourth industrial revolution.”
Kamath cited an example from his bank’s backyard in Shanghai. He said there had been a sharp growth in cycling to work – as many as two million new cyclist commuters in Shanghai alone and 25 million in China that has cut congestion and pollution.
The new army of people, who leave their cars at home, is down to a new app that is part of the fourth industrial revolution, says Kamath.
“You can open the bike with your app, ride it for an hour for 10 cents, and then close it with the app and leave it. No one gives you the bike or takes it from you. It is cheap and efficient and the reason why many car owners are leaving their vehicles at home.”
The NDB plans to invest more into infrastructure projects in Africa. So far, it has ploughed $380 million into two projects in South Africa. It plans to look into projects from energy to roads.
“For Africa, China can act as a mirror with small changes and massive infrastructure investment leading to high economic growth,” says Kamath.
The NBD, in its third year, has a mere $10 billion in capitalisation, a small amount in the banking world, yet Kamath believes it can make a difference in Africa where the infrastructure gap runs into hundreds of billions.
“Sure, it will only be like a drop in the ocean, but we can help the economies of Africa to grow.”
So says KV Kamath who believes his bank can help Africa to get on its bike.

This is what the BRICS bank plans for Africa

This week a handful of the most powerful people on the planet will tread the pavement in Africa’s richest square mile to plot the way forward for the emerging economies of the southern hemisphere.
Russia’s Vladimir Putin, India’s Narendra Modi, Brazil’s Michel Temer and China’s Xi Jinping lead a group of presidents to the BRICS conference at the Sandton Convention Centre in Johannesburg on July 25,26 and 27. These are the strident leaders of the emerging economies armed with aggressive, long term, foreign economic policy, rich in resources and determined to see a shift of world power south from the northern hemisphere.
South Africa, which joined the south-to-south political and economic cooperation group in 2011, is chairing the group this year and has high hopes for it.
South Africa is very much the junior partner in the BRICS group that did R462 billion ($34 billion) in trade among themselves, in 2017, and garnered more than R554 trillion in foreign direct investments. In 2015, India gathered 38.9% of world foreign direct investment, Russia 26.1% while South Africa managed a mere 0.8%.
Yet South Africa will be hoping to use the gravitas of the organisation to help funnel investment in from Russia to Saudi Arabia and Qatar in search of fulfilling President Cyril Ramaphosa’s pledge of $100 billion in foreign investment.
South Africa plans to lead the way in talks over manufacturing, minerals process, science and technology. Tourism is also likely to be a topic for South African government officials with the country hosting around 200,000 tourists a year from BRICS countries, as will the fourth industrial revolution and peacekeeping.
“I think we may see a few infrastructure deals and trade agreements, especially with Russia, as South Africa tries to achieve Cyril Ramaphosa’s $100 billion foreign investment pledge,” says George Glynos, of ETM analysts.
“There will be a good deal of sharing of ideas and technology transfer, but I don’t think we will see too much concrete emerging from this conference,” says Azar Jammine, of Econometrix.
On the political front the big expected meeting will be between Putin and Xi Jinping to discuss the fall out of US President Donald Trump’s trade war.
President Modi plans to make a dash across the African continent to arrive in time for proceedings on Wednesday. At 9 am CAT the Indian premier will address the Parliament of Uganda, in Kampala, an address that will be carried live across the continent by CNBC Africa.

BRICS in Africa, what you need to know

Mining projects bearing jobs and investment could be lost across South Africa through one of the well-meaning clauses in the proposed amendments to the country’s Mining Charter, warns the head of one of Africa’s biggest precious metals producers. The legislators may live to regret the idea of “free carry,” in the ownership of mining projects.
The Mining Charter – the voluntary document governing black participation in South Africa’s shrinking, yet lucrative, mining industry – is open for public comment until the end of August and should come into force by the end of October. The amended document calls for 30% black ownership, up from 26% laid down in the original document in 2004, to be achieved within five years.
The well-meaning clause to give part ownership of projects to mine employees and the communities who live with the dirt and dust of mining – so called “free carry” – has caused controversy. It says that 10% of the 30% black ownership of new mining rights be handed free to employees and communities by the mining companies.
“Free carry will cause a lot of mining investors to look elsewhere and that is sad,” says Neal Froneman, the CEO of Sibanye-Stillwater the world’s second largest platinum producer.
“A few good projects will get through but most projects won’t be able to carry the costs in an industry where capital costs are already high.”
Soria Hay, BEE expert and Head of Corporate Finance at Bravura, an independent investment banking firm specialising in corporate finance and structured solutions, warned that mining was already in retreat. She says the industry contributed 14% to GDP in 1994 and now contributes a mere 7% and “free carry” could make it worse.
“The free carry requirement that 10% of the 30% black ownership target for new mining right applicants be granted free to communities and qualifying employees, as well as the required contribution of 5% from payroll will have a major impact on the profitability and cash flow of mining entities. From an investor’s perspective, this translates into big costs, before you even reach positive cash flows in a mine,” says Hay.
“A one-month extension for token consultation is not going to help. Going back to the drawing board and starting afresh on the problematic issues may take longer, but a bad outcome is worse than a longer waiting period. We are in a booming commodity cycle globally, but South Africa is missing out because we don’t get our ducks in a row.”

Hello free carry? Goodbye mining projects, warns top South African mining boss

Forget about the World Cup African Business News – the company that owns CNBC Africa and Forbes Africa – scored a satisfying hat trick in journalism at a glittering gathering of the finest financial journalists on the continent.
For the third year in-a-row ABN won the best newcomer award at the Sanlam Awards in South Africa.
This feat is a tribute to the academy of journalism that ABN is becoming; that idea of bringing up talent, mentoring the fire of youth and passing on skills. This has turned our proud operation here in Stella Street, Sandton, into a seed bed for future journalists.
This was a modus operandi I pioneered, as editor, at the birth of Forbes Africa way back in 2011 and I continue to this day at CNBC Africa. It always gives me a swell of pride to hear some of those I trained, training others. At this company we believe not in giving the hungry a fish, but teaching them how to fish. There is a lot of nonsense talked about inspiring the youth, but success boils down to the simple inculcation of hard work and effort.
The young hopefuls themselves, play a full part in pouring their youth and idealism into the career in journalism that lies at their feet – if they can apply themselves.
One factor that unites our young talent is that they had to make a concerted leap off the bottom rung of the ladder.
This tale is told by the way into the newsroom at ABN made by our hat trick of winners.  Our first winner, in 2016, was Ancillar Mangena a determined young woman who will win many more awards yet. She cut her teeth on a free community newspaper in Johannesburg writing about pot holes and school sports days. One morning I opened her newspaper and saw her many by-lines and wondered what wonders she could do on a magazine like Forbes Africa. I telephoned her and the next morning she came in, with a thumbed copy of the magazine in hand, and put her case. There followed years of intense journalism.
In 2017, it was the turn of Aviwe Mtila to accept the best newcomer award. In the last three years he has come a long way in more ways than one. His route to the ABN newsroom was overnight, on a bus, from East London, merely for an interview for an internship. Later that day, he went back overnight home. Within a year, Aviwe had got the hang of TV reporting and was soon dodging bricks at university riots and covering the chaos at the South Africa-Zimbabwe border. Mentorship and opportunity are his best friend.
This year it was Melitta Ngolonkulu who picked up the award with a trio of well executed and written stories on Ponzi schemes, the death of retail and the coffee industry. Her sacrifice was door knocking in search of scarce jobs for young journalists. For a year, she rang me every month, or so, from Port Elizabeth as part of her long and soul destroying search for a job. I eventually came to appreciate her tenacity and gave her an internship.
Three young African journalists to watch in a great African newsroom.

Chris Bishop

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Chris Bishop

#WEF19: Presidents in people out – that’s Davos

These are the top five risks facing Africa

President Ramaphosa: This is what we plan to do with South African Reserve Bank

﻿President Ramaphosa reveals what team SA, plans to tell investors in Davos on concerns over land expropriation

#WEF19: Ramaphosa vs Mnangagwa. The tough tale of two African presidents

Phil “Chippa” Masinga: The man with the golden boot, who signified the rise & decay of SA

DRC elections: Downpours,no internet drudgery and a fisherman’s find on the way to a Mandela- inspired tomorrow?

COMMENT: Taking Eskom, the grimy, rotting, bull by the horns

Guptas and midnight contracts castigated in Eskom shake up

Lights out, game on- No Christmas of rest and turkey for the bosses in a dingy tale of decay

A $28 billion bonanza for Africa – SA’s President Ramaphosa

MTBPS2018: Tito Mboweni talks tough in hard times

Who is Mohammed Dewji, kidnapped in Tanzania?

This is what the BRICS bank plans for Africa

BRICS in Africa, what you need to know

Hello free carry? Goodbye mining projects, warns top South African mining boss

ABN: A seed bed for future journalists

News Tips

Advertise With Us

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President Ramaphosa reveals what team SA, plans to tell investors in Davos on concerns over land expropriation