Looking to Frontier Markets for Next Big Thing in Investing

April 30, 2012 (New York Times By CONRAD DE AENLLE) -- The difficulty with investing in the next big thing is that it is often not recognized as that until after it has become a current or former big thing. Before its arrival, it tends to be seen only as a crazy, risky thing or nothing at all.

Emerging-market portfolio managers specialize in finding the next big thing. But after the transformation of many economies in Asia and Latin America in the past two decades and the strong returns and mainstream popularity of their markets, what’s left to be found?

How about stock markets in Africa, the Middle East and Asian countries like Vietnam,Bangladesh and Sri Lanka? Investment advisers who focus on the developing world contend that many of these so-called frontier markets, especially in Africa, offer similar opportunities to the fledgling markets of earlier generations.

“Africa is going to be the next big growth story that’s largely undiscovered,” said Larry Seruma, manager of the Nile Pan Africa Fund, a U.S. mutual fund that holds shares in companies that are based in the region or that do substantial business there. “It can supplant Brazil, China and Russia if its potential is realized,” he said.

Africa’s broadening horizons

April 30, 2012 ( FT Advisor) -- As companies go through their strategic planning processes, African cities should be a priority

Sub-Saharan Africa’s potential for economic growth is no longer a secret.

Some estimates show Africa having as many middle class households as China by 2020.

Matthew Spivak 

The region is expected to set the pace for global growth over the next five years, with economic expansion averaging 6 per cent per year. China increased Africa investment by almost 60 per cent last year, while India pledged to expand trade volume to $90bn (£56bn) by 2015.Much of this investment will be concentrated in fast-growing sub-Saharan African markets like Angola, Kenya and Nigeria. Multinational corporations are increasingly concentrating resources on these types of markets to make up for economic volatility in Europe and political uncertainty in the Middle East and North Africa.

Suadi Arabia and South Africa increase bi-lateral trade volume

Commerce and Industry Minister Tawfiq Al-Rabiah 

April 30 2012, (MENAFN  Arab News) -- The Kingdom and South Africa pledged yesterday to enhance their bilateral trade volume from SR20 billion to SR30 billion during the coming five years. 
This was announced at the conclusion of the Fourth Saudi Arabian African Joint Committee at the Royal Conference Palace in Riyadh
The minutes of the joint committee was signed by Commerce and Industry Minister Tawfiq Al-Rabiah and South Africa's Trade and Industry Minister Rob Davies.
The signed document included recommendations to develop bilateral trade between the two countries and increase the volume of trade between the Kingdom and South Africa. The minutes called upon the South African investors to take part in the development of mining industry in the Kingdom.

Daily Updates

TORONTO, ONTARIO--(Marketwire - April 26, 2012) - West African gold explorer and developer Azumah Resources Limited (TSX:AZR)(ASX:AZM) is pleased to advise that it has filed a technical report pursuant to National Instrument 43-101 in connection with a previously announced (March 12, 2012) update to resource information at its Wa Gold Project, northwest Ghana.

For further information on Azumah Resources Limited and its projects please visit the Canadian SEDAR website and Azumah's own website at www.azumahresources.com.au. 

New international land deals database reveals rush to buy up Africa

World's largest public database lifts lid on the extent and secretive nature of the global demand for land

April 27, 2012 (The Guardian by Claire Provost) -- Almost 5% of Africa's agricultural land has been bought or leased by investors since 2000, according to an international coalition of researchers and NGOs that has released the world's largest public database of international land deals.

Kenyans near makeshift village at Mau forest

The database, launched on Thursday, lifts the lid on a decade of secretive deals struck by governments, investors and speculators seeking large tracts of fertile land in developing countries around the world.

The past five years have seen a flood of reports of investors snapping up land at rock-bottom prices in some of the world's poorest countries. But, despite growing concern about the local impacts of so-called "land grabs", the lack of reliable data has made it difficult to pin down the real extent and nature of the global rush for land.

Researchers estimate that more than 200m hectares (495m acres) of land – roughly eight times the size of the UK – were sold or leased between 2000 and 2010. Details of 1,006 deals covering 70.2m hectares mostly in Africa, Asia and Latin America were published by the Land Matrix project, an international partnership involving five major European research centres and 40 civil society and research groups from around the world.

Golden opportunities, complex risks

April 27, 2012 (by Henry Hall, Critical Resource associate) --- A fast changing socio-political environment presents challenges for gold miners in West Africa

West Africa has had a long and complex relationship with gold, an important export for over 2000 years. Across the region runs the Birimian greenstone belt, a formation rich in the yellow metal, with high gold prices recently intensifying the search for new reserves. Yet countries in the region suffer variously from unpredictable politics, sporadic conflict and widespread poverty, making it difficult for mining companies to establish a ‘license to operate’.

Several countries in the region are also contemplating the simultaneous possibility of an oil-fuelled boom which, if realised, may cast gold revenues in to the shade. This article provides a snapshot of the various socio-political challenges to gold mining in the region, as well as of some of the solutions that gold miners might consider to combat them.

South Sudan to Get Aid From China; No Oil Deal

April 26, 2012 (New York Times) -- BEIJING — China has welcomed the president of South Sudan and agreed to provide bank loans and humanitarian aid, but it has stopped short of moving forward on an oil pipeline, a sign of the delicate position Beijing finds itself in as the biggest energy investor in both the new nation of South Sudan and its bitter foe, Sudan.

China President Hu Jintao & Sounth Sudan President Salva Kir, 

As the two new nations continued to edge toward outright war this week and Salva Kiir, the president of South Sudan, cut short his trip to China, the government here urged both sides to use international mediation.

Before oil-rich Sudan was partitioned into two countries last year, China financed the pipelines and refineries in the north to carry and process the oil that largely lies in the south.

Energy analysts say Sudanese oil makes up only 3 to 4 percent of China’s total oil imports, but China, traditionally reluctant to get involved in foreign disputes, is now at the center of attention in a looming conflict between two developing countries that depend on its economic largess.

A new Chinese special envoy, Zhong Jianhua, a former ambassador to South Africa, visited Sudan and South Sudan last month as China tried to maintain neutrality.

Urbanisation, infrastructure, resources draw Africa investors

April 26, 2012 (Business Report by Ethel Hazelhurst) -- Global investors are looking at Africa because of three megatrends, according to Tim Bashall, the KPMG head of strategy in Africa. He was speaking yesterday ahead of Africa Conversations, the fifth in a series of conversations around doing business in the continent, hosted by KPMG over the past 18 months.

The theme of yesterday’s discussions was investment in Africa. Bashall said there were three megatrends attracting investors to Africa.

“One is the natural resources story: mining; oil and gas; and agriculture. There is an insatiable appetite on the part of China, India and Brazil to industrialise and they just need all this raw material. That’s over and above demand from the rest of the world.”

The second megatrend is consumer demand from the population of 1 billion people, among them 350 million middle-income people.

Dapo Okubadego

“There is a huge wave of urbanisation which is creating a big consumer story for telecoms companies, banking, insurance and retail – fast moving consumer goods.”

As a result of both urbanisation and the growth in extractive industries, there was a “huge infrastructural change” which represented the third megatrend. Bashall said huge investment in infrastructure was needed to satisfy the needs of companies involved in extraction and the needs of consumers.

Dapo Okubadego, the KPMG head of transactions in Nigeria, said investors needed to understand there were not many large-scale businesses in Africa and that they had to pursue what he called “a roll-up strategy”.

“If you want scale you must take a long-term view; buy a few companies and build them up,” he said.

Okubadego also advocated looking at Africa as a portfolio – diversifying risk among different countries.

Rebasing will boost Nigeria's GDP by 40%

April 26, 2012 (Business Live) -- Nigeria's economic growth figures will shoot up about 40% in the second quarter this year when Africa's second-biggest economy changes the base year for its calculation to 2009 from the current 1990, a source close to the matter told Reuters on Wednesday.

SAMIR GADIO - EMERGING MARKET STRATEGIST AT STANDARD BANK:"Perhaps the upside for Nigeria is that it will become too important to ignore as a frontier market and investment destination."

"If confirmed, the 40 percent upward revision would bring Nigeria's GDP to about $370 billion, just shy of South Africa's output ($391 billion forecast for 2012), with the country subsequently becoming the largest economy in Africa within a year or two."

"This will probably mark a symbolic turnaround on the regional geo-political scene, but may not change much in terms of actual leadership in sub-Sahara Africa. South Africa will certainly remain the dominant entity in the Southern African region and, to a lesser extent, in parts of the COMESA zone."

"Nigeria is and will be the most influential member - but not undisputed leader - of ECOWAS."

"Yet Nigeria remains significantly underdeveloped in terms of basic infrastructure (electricity, roads, etc) and faces very high income inequality. Output per capita in Nigeria will continue to trail that of South Africa over the next decades."

DAILY UPDATES

Blackfire Minerals Limited Rare Earth Results

East Africa Resources Limited  KORES Fund Exploration Annoucement

What Tanzanians stand to gain in East Africa

April 25, 2012 (The Citizen Reporter) --  Dar es Salaam. Tanzanians stand to gain a great deal from integration in the East African Community—but only if they participate fully in the process and grab the opportunities available, stakeholders have said.
Speakers during the presentation of the State of East Africa 2012 report yesterday in Dar es Salaam said the belief that Tanzanians will lose in the integration process is wrong and only serves to stall the process. The report is compiled by the Society for international Development (SID).
With a larger natural resources base than the other countries in the region, the country’s economy could be a force to reckon with if reforms were undertaken to improve the business climate to take advantage of the available resources.
 “You can see how big investments from outside are helping to transform Tanzania’s economy,” said Mr Juma Mwapachu, former secretary general of the EAC. “Look at cement and mining companies, Coca-Cola, Pepsi and mobile phone firms whose large ownership is foreign.” 

Africa’s Free Press Problem

April 25, 2012 (NY Times.com by Jonathan Marks) -- As Africa’s economies grow, an insidious attack on press freedom is under way. Independent African journalists covering the continent’s development are now frequently persecuted for critical reporting on the misuse of public finances, corruption and the activities of foreign investors.

Why this disturbing trend? In the West, cynicism about African democracy has led governments to narrow their development priorities to poverty reduction and stability; individual liberties like press freedom have dropped off the agenda, making it easier for authoritarian rulers to go after journalists more aggressively. In the 1990s, leaders like Paul Kagame of Rwanda and Meles Zenawi of Ethiopia were praised by the West as political and social reformers. Today, the West extols these men for achieving growth and maintaining stability, which they do largely with a nearly absolute grip over all national institutions and the press.

Then there’s the influence of China, which surpassed the West as Africa’s largest trading partner in 2009. Ever since, China has been deepening technical and media ties with African governments to counter the kind of critical press coverage that both parties demonize as neocolonialist.
.

View From Abroad: Nigeria: Keystone Of Africa

April 25, 2012 (Leadership by Will Sap) -- Perhaps we can then draw some positives from last Monday’s World Bank election. Africa’s “Iron Lady”, Nigeria’s esteemed Finance Minister, Ngozi Okonjo-Iweala, lost her bid to become the first non-American President of the World Bank. That might be a good outcome after-all because Nigeria needs to keep strong leaders like Okonjo-Iweala—badly.

It is symbolic though that Okonjo-Iweala was the first non-American ever to be nominated for the position (alongside Colombian Finance Minister and economist Jose Antonio Ocampo who removed himself as a candidate to prevent a vote-split). Perhaps that was enough – the World Bank, notorious for its US-centric policies seems to be finally branching out, giving a voice to those nations it is supposed to aid. That is indeed a positive development.

Political diplomacy aside, economic development and prosperity in Africa require security – curbing the violent conflict that has plagued the continent. And, according to Nigerian President Goodluck Jonathan, Nigeria currently faces its worst security crisis since the Biafran War (1967-70).

Oil, Gold, Silver Found In Taraba State – Scientists

April 24, 2012 (AfrikaFocus) -- Russian scientists from the Institute of Aerospace Instrumentation have discovered deposits of silver and traces of gold and oil in central and northern parts of Taraba.

Mr Valery Shaposhinkov, the Economic Counsellor of Russian Embassy in Nigeria, disclosed this on Monday in Jalingo while briefing Gov. Danbaba Suntai on their survey for mineral deposits in the state.

The Counsellor noted that Russian scientists had vast experience in mineral exploration across the world and were sure of their findings.

“Of what we have found, silver is the largest in deposit in the northern part and traces of gold and oil, which are at a middle level in central and northern parts of the state,” he said.

The lead scientist, Robert Mukhanmedyenov, who spoke through an interpreter, explained that deposits of lead and zinc were also found in the northern zone.

He said that precious stones were also discovered along the Benue trough in southern part of the state.

“This is our first contract in Taraba and we hope to continue our survey of the state for more information on the discoveries especially gold and crude oil.

“Silver deposits we have so far discovered, cover 1.7 km in a 1,000 square kilometres,” the lead scientists said.

Responding, Suntai said God was about to open the state to greatness.

“God is about to open the great riches with which he has endowed the state to us.

“If we are able to exploit this great opportunity, we will become a self-sufficient state.

“We will commit funds to the project to ensure that the journey of becoming a rich state starts soonest.

“Even if it does not happen in my own time, it is going to happen in the next generation and Taraba will be able to stand on its feet,” he said. (NAN)

Oil in Africa 360 degree Context

April 24, 2012 (Fair Observer by Annika Schall) -- Oil is definitely among the most important natural resources of our time. According to a report by the African Development Bank and the African Union, it is estimated that in 2025 global oil demand will have increased by 57% compared to today. Considering that oil is non-renewable and therefore not available limitlessly, competition will rise along with increasing demand.Even though Africa’s oil reserves are estimated to only be 9-10% of the world’s total, they have gained major importance over the last couple of decades.

In the past 20 years, the known quantity of oil in Africa grew by over 25% and it is estimated that oil production will rise continuously at an average rate of 6% per year. They key sub-Saharan player is Nigeria, which produces around 2.2mn barrels a day. But other countries such as South Sudan, Angola and the Democratic Republic of the Congo hold an important share as well. Recently, a new actor entered the stage, when United Kingdom-based firm Tullow Oil, announced the discovery of oil reserves in the Turkana region in northern Kenya. Even though it is too early to tell its actual size and commercial viability, there are already hopes that oil revenues could foster commercial development in Kenya like they did in neighboring Uganda.

Tech Billionaires Plan Audacious Mission to Mine Asteroids

April 24, 2012 (Wired Science) -- There’s gold in them there hills. You know, those ones floating around in space. Asteroids contain many tons of precious metals, making them irresistible to scientists, aerospace engineers, futurists, fiction writers … and tech billionaires.

A group of wealthy, adventurous entrepreneurs will announce on Apr. 24 a new venture called Planetary Resources, Inc., which plans to send swarms of robots to space to scout asteroids for precious metals and set up mines to bring resources back to Earth, in the process adding trillions of dollars to the global GDP, helping ensure humanity’s prosperity and paving the way for the human settlement of space.

“The resources of Earth pale in comparison to the wealth of the solar system,” said Eric Anderson, who founded the commercial space tourism company Space Adventures, and is co-founder of a new company along with Peter Diamandis, who started the X Prize foundation, which offers prize-based incentives for advanced technology development.

Nearly 9,000 asteroids larger than 150 feet in diameter orbit near the Earth. Some could contain as much platinum as is mined in an entire year on Earth, making them potentially worth several billion dollars each. The right kinds of investment could reap huge rewards for those willing to take the risk.

Private equity billions flow into East African companies

April 24, 2012 (The Star) -- For most entrepreneurs, their business is their most valued asset. They would prefer to run their it their own way without outside interference, after all, isn't that why most of them opted for self-employment.
Selling out part of the stake is out of the question, but it could be the only option to get the much needed capital in a market where financiers are few.
Global and local Private Equity firms have been lining up with billions of cash willing to invest in Kenya, and the trend is catching on.

About 53 funds are targeting East Africa this year and around 30 have already opened offices. Together they have raised approximately  $633million (Sh52.54 billion) Kenya and the region has in the recent past experienced an influx of Private Equity, with large and relatively lower amounts.

Last week, Fusion Capital, announced it will be investing Sh6 billion in local SMEs this year alone in addition to $30million (Sh2.5 billion) put in various businesses last year.

“We have been quite happy with the quality and quantity of returns in the last year or so,” said Luke Kinoti, co-founder of Fusion Capital, which last year raised $150 million(Sh12.45 billion) to invest. Kinoti says the private equity concept has not fully caught on among their target SME businesses, but the progress is promising.

Just last month Progression Eastern Africah Microfinance, founded by a local professionals was launched. Its target is to put in $40 million(Sh3.4 billion) this year in the micro finance sector.

Mathias Katamba, a partner at Progression says 62 per cent of people in Kenya, as the most developed country of the region, still have no access to financial services.

Foreign direct investment in Africa rises by 20 pc

April 23, 2012 ( Business Daily) -- Capital flows, mainly foreign direct investment (FDI), to sub-Saharan Africa rose by 20 per cent in 2011 to $48.2 billion, thanks to rising economic growth and the growing middle class.

The World Bank said in a statement that the FDI to the region contributed to about 83 per cent or $6.6 billion of the increase in flows. “In a significant development, overall capital flows to sub-Saharan Africa rose by $8 billion in 2011 to $48.2 billion,” the Bretton Woods institution said.

Obiageli Ezekwesili,

According to the World Bank, economic growth in sub-Saharan Africa was at 4.9 per cent in 2011, just shy of the pre-crisis average of five per cent.
“Excluding South Africa, which accounts for over a third of the region’s GDP, growth in the rest of region was 5.9 per cent, making it one of the fastest growing developing regions,” said the statement.

It noted that over a third of countries in the region attained growth rates of at least six per cent, with another 40 per cent growing between four to six per cent.

Among fast-growing economies in 2011 were resource-rich Ghana, Mozambique and Nigeria, as well as economies such as Rwanda and Ethiopia, all posting growth rates of at least seven per cent in 2011, said the statement.

Franklin Templeton launches Africa fund for Mobius

April 23, 2012 (Investment Week) -- Franklin Templeton is launching an Africa fund for veteran investor Mark Mobius, making it the latest fund group to test investor appetite for the world’s second-largest continent.

The Templeton Africa fund, scheduled for launch next month, will invest in African equities or companies which have their principal businesses in Africa.

Mobius will be lead manager on the fund, with support from Franklin Templeton’s 50-strong emerging markets team.

In another sign fund groups are once again seeing long-term potential on the continent, J. P. Morgan has reopened its $377m Africa Equity fund. The fund soft-closed in 2010 but the team is now comfortable it can offer new capacity while investing on a sustainable basis.

Mark Mobius

African equities fell sharply last year, with the MSCI EFM Africa index dropping 16% amid a global sell-off, but it has risen 10% year-to-date as the continent’s equity markets benefit from an improvement in global risk appetite.

“There are of course many challenges to investing in Africa, but it is all about growth,” Mobius said. “As the largest frontier funds manager in the world, we are in a good position to launch such a fund.”

Africa funds have a chequered history in the UK retail market, in no small part due to the demise of New Star’s Heart of Africa fund in 2009. The fund was the subject of a major marketing campaign in 2007 but was suspended, wound up and sold off two years later as New Star struggled to meet redemption requests.

Global investors make a bee-line for Africa

April 23, 2012 ( Business Day by HELEN NYANMBURA-MWAURA) --There is a lot of hype and excitement about Africa as the next hot spot for global investors, but what they are quickly learning is that acquisitions do not come cheap.

Africa, long seen as a basket case and only good as a source of minerals and metals, is turning around: democracy is taking root, wallets are getting fatter and populations younger.

Marlon Chigwende

The International Monetary Fund sees sub-Saharan Africa growing at 5,4% this year against 1,4% for rich economies.

Buyers seeking a piece of that future growth are having to pay a premium now because sellers know opportunities with scale are slim.

Also, new investors come expecting bargains because the continent is seen as poor. "Valuations on the whole are challenging at the moment, but that doesn’t mean you can’t find individual opportunities," says Marlon Chigwende, co-head of sub-Sahara for private equity firm Carlyle Group.

Some bankers say Africa’s biggest telecoms operator, MTN, is a good example of a company that paid what was considered a hefty price at the time, for the right to start operations in Nigeria just over a decade ago.

Tanzania: Why Perceptions Audit On Mining Is Timely

April 23, 2012 (allAfrica) -- A NEW audit designed to gauge how the public perceives the contribution of the mining sector to the economy, launched by the Tanzanian Chamber of Minerals and Energy (TCME) is timely.

Joseph Kahama

It will seek for the opinions of key groups and individuals on the Tanzanian mining industry and its impact on the economy, communities and the environment.

The first perception audit is amongst its members, industry stakeholders and other interested parties and the information collected will be used to shape the Chamber future communication and engagement activities. The Chairman of the TCME, Mr Joseph Kahama said the perception audit is essential because the mining sector is an integral part of the Tanzanian economy and will continue to be for a considerable period of time.

"By regularly interacting with key stakeholders like politicians, civilsociety groups, industry players and the general public, through tools such as this perception audit, the TCME is ensuring it plays its part in creating a sustainable mining industry in Tanzania," said Mr Kahama.

Africa is the next big thing, just ask Bob Geldof and other private equity bankers.

April 21, 2012 (Reuters) -- The Irish rocker made headlines in February when he announced the launch of his $200 million "8 Mile" fund, a sign the Live Aid organizer had turned from promoting debt forgiveness to private enterprise.

Bob Geldof

Like the former Boomtown Rats frontman, more private equity investors are flocking to the continent, drawn by the prospect of outsize returns.

The signs of Africa's stunning potential are obvious: 6 percent average GDP growth, fast-rising incomes and abundant resources. So far, much growth has been beyond the reach of international investors given the region's small and largely illiquid capital markets.

But for private equity firms, with their natural bent toward unlisted companies and longer investment horizons, Africa's hurdles are not insurmountable.

'Huge' water resource exists under Africa

April 20, 2012 (BBC by Matt McGrath) -- Scientists say the notoriously dry continent of Africa is sitting on a vast reservoir of groundwater.

They argue that the total volume of water in aquifers underground is 100 times the amount found on the surface.

The team have produced the most detailed map yet of the scale and potential of this hidden resource.

Writing in the journal Environmental Research Letters , they stress that large scale drilling might not be the best way of increasing water supplies.

Across Africa more than 300 million people are said not to have access to safe drinking water.

Demand for water is set to grow markedly in coming decades due to population growth and the need for irrigation to grow crops.

Freshwater rivers and lakes are subject to seasonal floods and droughts that can limit their availability for people and for agriculture. At present only 5% of arable land is irrigated.

Now scientists have for the first time been able to carry out a continent-wide analysis of the water that is hidden under the surface in aquifers. Researchers from the British Geological Survey and University College London (UCL) have mapped in detail the amount and potential yield of this groundwater resource across the continent.

Africa Fails to Reap Maximum Benefits from Gold Boom

April 20, 2012 (Gold Investing news) -- A large number of resource-rich African countries have seen little benefit from their resource endowments, says “Gold Mining in Africa: Maximizing Economic Returns for Countries,” a working paper recently published by the African Development Bank (AfDB). For the most part, this is due to unfair mining concessions, especially with regard to royalties, the paper concludes. However, there is also another key factor, which some media sources have done a disservice to miners by omitting. 

Gold mining is described as a “significant sector” in at least 34 African nations. And though the continent accounts for 20 percent of global gold production, and gold prices have risen to an “almost unprecedented high,” the AfDB report argues that the potential for gold to contribute to both economic growth and development has not been realized.

Between 1980 and 2000, GDP growth rates in resource-rich African nations fell below the continent’s average rate of growth. The authors note that due to the commodity boom and perhaps better governance, this performance has somewhat changed course post-2000, but add that GDP growth alone is not a sufficient measure of economic development.

Africa is failing to reap the maximum benefits of gold mining, they insist, and its failure to do so is largely because of the prevalence of unfair mining concessions. Since most gold mines are owned by multinational companies, the main avenue through which governments benefit is by way of tax revenues.

But, often mining companies have negotiated tax exemptions far above the provisions specified in relevant mining codes. In the majority of cases, the authors say, these departures are not justified by the profitability of the mines.

Increasing Investment Opportunities in Africa

April 20, 2012 (allAfrica) -- More than three years after the start of the global economic crisis, which has had a considerable impact on African trade, investments and gross domestic product, investment prospects on the continent are increasing.

Nicky Newton-King

According to Nicky Newton-King, the first female chief executive officer of the previously male-dominated Johannesburg Stock Exchange (JSE), there are abundant investment opportunities in Africa today.

"There are a lot of interesting opportunities. Not only in mining, but also telecommunications, banking, mobile services and ICT (Information and Communications Technology). It is because those investments are able to traverse a huge space without needing infrastructure," says Newton-King.

Four months into her appointment as head of the 123-year old stock exchange, the 44-year-old Cambridge and South African educated lawyer and financial services expert talks about her take on the latest African investment opportunities and risks.

Excerpts from the interview follow.

Are there opportunities for African countries, especially commodity-heavy nations, to benefit from the financial crisis?

Emerging markets experienced a two-way effect. After initially withdrawing from emerging markets, investors realised that, ultimately, the returns they get from emerging markets are higher than those from their home markets. That made re-investments attractive.

Ghana May Lose Opportunities As An Oil Producing Country – Goosie Tannoh

April 20, 2012 ( GNA) -- Ghana might lose opportunities presented by her new potential as a major gas producing country in the West-African Sub-Region if she failed to resolve the current power challenges, Mr. Goosie Tannoh, an Energy Consultant said in Accra on Tuesday.
Addressing a dialogue session at the Third Ghana Policy Fair, Mr. Tannoh said Ghana’s current status as an important oil producing country presented her with a major growth of the industrial sector to ensure employment and general economic growth.
However, the numerous challenges of the energy sector, in terms of ensuring sustainable power supply to boost the performances in the industrial sector, had accounted for their poor performances.
Mr. Tannoh, contributing on the topic “Meeting Ghana’s Energy Needs-Current Status and Preparations for the Future” said Ghana had come a long way in terms of sustaining her energy supply needed by major industries such as Volta Aluminum Company (VALCO) and other manufacturing sectors.

As Mali Risks Regional Stability, No One Is Asking the Right Questions

April 19, 2012 (Oilprice.com by Jen Alic) -- Alot has happened in Mali in less than three weeks’ time. Renegade soldiers have declared a coup d’état; Touareg separatists have carved out their own state the size of France in the country’s north; the president has formally resigned; elections have been promised within 40 days; and a handful of Algerian diplomats have been kidnapped.

All of this has happened to the surprise of Malians, Mali’s neighbors, the entire African community and Western Intelligence. The media across the board has provided us with the “news” of these events, but nothing more. There is an unusual dearth of analysis. More significantly, no one is asking the right questions. In fact, no one is asking questions at all.

Where it concerns Western media reports, the lack of news analysis in this case could reflect the lack of US intelligence on the ground in Africa, and more to the point, the lack of a coherent US policy on Africa, which to a very large extent drives the more prolific US media outlets.

Growth in frontier African markets lure SWFs

April 19, 2012 ( Business Day)-- Behind the negative headlines about Europe’s debt problems, frontier-market equities and bonds in Africa are catching the eye of global investment managers, including Sovereign Wealth Funds (SWFs), looking for yield, stability and sustainable growth.

Sigbjørn Johnsen, Finance minister

Against this backdrop, Norway’s sovereign wealth fund, Europe’s largest institutional investor in equities, has earmarked Africa for increased investment, according to the country’s Finance Minister.

The $600 billion (94.8 trillion) Norway oil fund announced it is trimming its European exposure and increasing its allocations to Africa, Latin America and the Asia-Pacific region, after suffering a $15 billion (N2.37 trillion) loss in 2011 as European stock prices fell over uncertain growth prospects amid the debt crisis.

The Minister said the fund’s European investments will be gradually reduced to 41 percent from 51 percent in bonds, while the fund’s emerging markets allocation will rise to 10 percent of the total portfolio from 6 percent.

The West African gold rush is heating up

April 18, 2012 (The Penney Sleuth by Tom Bulford) -- When notorious American thief Willie Sutton was asked why he robbed banks he replied “Because that is where the money is”.  Similarly, if you were to ask mining executives why they are heading to West Africa and they might equally reply “Because that is where the gold is”. In a recent report, natural resource broker Old Park Lane Capital describes West Africa as the "destination of choice in the gold space". But the report also reveals that, as Willie Sutton could have told today’s gold explorers, you cannot make easy money without bearing a bit of risk.

I’ll come to those risks, and also to Old Park Lane’s preferred West African gold picks in a moment. But why is this region, stretching from Sierra Leone to Ghana, becoming such a hotbed of activity? Its promise lies in its geology.  Of particular importance is the Paleoproterozoic Birmian granite-greenstone terrain – this is the dominant source of gold in West Africa.

Three reasons gold explorers have ignored West Africa

Firstly; the terrain which dominates West Africa is largely surrounded by dense jungle, deserts and a deep overburden that this area is already a major gold producing region. But the area is still relatively unexplored and Old Park Lane believes that it has the potential for fresh world class discoveries.

Piracy threatening SADC trade

April 18, 2012 (Tralac Trade Law Centre) -- Piracy is causing havoc to trade routes along the east coast of Africa and the threat is fast moving closer to South African waters, Defence Minister Lindiwe Sisulu warned this week.

“In 2006 pirates took 186 people hostage and held them for ransom.

“By 2010 the figure had increased to 1016,” she said at the opening of the Indian Ocean Naval Symposium in Cape Town on Wednesday.

Lindiwe Sisulu, Defense Minister

The heads and representatives of the navies of 89 countries gathered in Cape Town to discuss options to combat the scourge of piracy.

This year’s event focused on regional maritime security threats.

Sisulu said maritime security is fundamentally linked to the development and economic prosperity of African countries.

She said she was concerned about the range of illegal and criminal activities burdening Africa’s shores and endangering economies that revolve around the oceans.

“Approximately 90% of trade destined for Africa is transported by sea.

“This percentage is higher within intra-African trade. It is within this context that you will understand how tangible our vulnerability is.”

Sisulu said piracy is rapidly moving to Southern African Development Community (SADC) nations.

“Tanzania has reported 57 attacks by pirates in its territorial waters between February 2011 and February 2012. This points to the relocation of piracy to the SADC oceans.”

Rear Admiral Robert Higgs, chief of staff of the SA Navy, said the greatest lesson is that cooperation is a necessity to combat piracy.

“No one is in this fight alone and no one nation has the means to go it alone.”

Delegates warned that while cooperation is critical, nations must retain sovereignity over their coastal waters.

“This was one of the issues raised,” Higgs said.

He said nations in Africa need rapid growth of their naval capabilities.

“Their resources are being plundered and there’s not much they can do about it. This is why cooperation is essential.”

The South African Navy already has a vessel patrolling the waters from South Africa to Tanzania.

South Africa recently signed a trilateral agreement with Mozambique and Tanzania on further cooperation.

South Africa has the only navy with the means to do deep water patrolling.

Sisulu said countries must act together to combat maritime insecurity, and that collective cooperation would be mutually beneficial in obtaining solutions to regional maritime security.

She also said there needs to be a focus not only on addressing piracy but also its root causes, such as ongoing instability and poverty in nations pirates originate from.

This sentiment was agreed upon by other delegates.

The chief of the Iranian navy, Rear Admiral Habiballah Sayyari, said people often revert to piracy out of desperation.

“It’s no use throwing water out of a leaking boat with a bucket. You need to fix the hole in the boat,” Sayyari said.