Billions are being lost, not collected in taxes due to corporate tax evasion throughout Africa. A Study by a Swedish agency, Forum Syd suggests that Money taken illegally from the developing world is worth 10 times annual global aid budgets, according to a recent study.Tax evasions by multinational companies in Africa is so vast that tax analysts believe that if the money were paid, most of the continent would be “developed” by now. But, lacking a sophisticated tax code, or the people qualified to enforce tax laws, many African countries continue to lose money that could solve most of its financial problems.

This all goes back to weak governing, the state not having competent officials to handle the work in enforcing the tax laws. Just blaming corporations shouldn’t be enough. Some blame has to be directed toward government officials who in many cases allow this to take place.  We all know that nothing talks louder than money and bribery is common towards government officials.  Another aspect that has to be looked at is modernizing, updating the tax codes that nations have to match one that fits into a globalized world. Money has no borders in this age. What is local is not just national but international. Money has to be looked at in the same way. A more streamlined, less bureaucratic tax code is crucial to be economically competitive. Money will always follow where there is business to be made. In order for this to happen, a business friendly environment has to developed.

Two way trade between Russia and South Africa has increased over the past few years.

South Africa and Russia could double their trade this year in comparison to last year, indicated Russian Natural Resources and Ecology Minister Yuri Trutnev. He was speaking in Pretoria on Thursday during the second and last day of the tenth meeting of the bilateral Intergovernmental Committee on Trade and Economic Cooperation (Itec).

In parallel with Itec, there was a meeting of the South Africa-Russia Business Council. “When the Business Council was formed [in 2006], it undertook the responsibility of making trade between our two countries [reach] $1-billion,” said Trutnev. “At the moment it is $300-million. “[By the end of] This year it could come to $600-million to $700-million.”

This year’s meeting of the Business Council was attended, he reported, by about 30 Russian and 70 South African companies. “The work of the Business Council has become very active,” he affirmed. “Our economic projects and the success of these projects creates trust and cooperation between our countries.”

“Congratulations to the joint Business Council for finally coming to the party and accelerating our trade and economic ties,” asserted South Africa International Relations and Cooperation Minister Maite Nkoana-Mashabane.

The Business Council is now headed, on the South African side, by Robert Gumede(executive chairperson of GijimaAST) and, on the Russian, by Vladimir Kremer (MD of Renova).

Nkoana-Mashabane reported that she and Trutnev had agreed that there should be “frequent interaction through the Business Council in order to enhance knowledge of commercial opportunities and potential business opportunities; to prioritise capacity building and skills transfers, particularly in strategic and high technology areas. [And] To facilitate good cooperation between the South African and Russian Business Council chapters.”

The Business Council ranks as one of Itec’s ten technical joint subcommittees. The other nine are – justice, trade and investment and banking, minerals resources, energy, aviation and maritime transport, education, agriculture and forestry, water affairs, and science and technology.

“Itec has done a great job,” said Trutnev. “Itec remains a critical instrument for deepening the relations between our two countries,” avered Nkoana-Mashabane. “We had a very successful tenth session of Itec. Our silver jubilee meeting.”

Both ministers also highlighted the further opportunities for deepening cooperation between the two countries through the forum of the BRICS (Brazil, Russia, India, China and South Africa) group.

Expect trade volume to increase both ways in the coming years. This is further enhanced with South Africa’s ambition to be included as one of the BRIC (Brasil, Russia, India, China) nations. Russia has made it clearly that it values doing business in Africa for economic and political reasons.

Japan will send troops to South Sudan as part of a UN force.

Japan on Tuesday approved a plan to send a unit of ground troops to South Sudan as part of a UN nation-building force, where they are expected to help construct infrastructure for the fledgling nation.

Japan’s military, called the Self-Defence Forces, is barred from fighting overseas under the country’s pacifist post-World War II constitution, but it has joined UN peacekeeping forces in countries such as East Timor and Haiti.

Under the latest plan, troops will be deployed to the South Sudanese capital of Juba — which is considered relatively safe — but will be permitted to use weapons in self-defence.

The troops, mostly engineers and logistical staff, are expected to help repair or build roads, bridges and infrastructure in the landlocked African country, which declared independence from Sudan in July after a long civil war.

Defence Minister Yasuo Ichikawa ordered the Self-Defence Forces to prepare for deployment and await further instructions on their mission, a defence ministry official said.

Japan has contributed military forces to several non-combat operations overseas

“I’ve always thought that the engineering unit of the Self-Defence Forces should play a role, so that they can leave footprints in South Sudan’s nation-building,” Ichikawa told reporters.

“As we start the new mission, it is important for Japan to show the world that we are playing a role in the international community,” he said.

Japan, which has already dispatched two fact-finding teams to South Sudan, is looking at sending the first batch of about 200 troops early next year to establish bases, Deputy Chief Cabinet Secretary Tsuyoshi Saito said.

The main unit of around 300 troops will replace them later, he said.

South Sudan, one of the world’s poorest countries, became a member of the United Nations on July 14 and joined the African Union on July 28.

Japan has contributed military forces to other non-combat operations, including the reconstruction mission in Iraq and as part of anti-piracy patrols off Somalia.

Japan recently has began to reestablish a presence on the international scene with its military. With regards to Africa, Japan opened up its first military base overseas in Djibouti.  The base was part of international coalition in helping stop piracy in the Gulf of Aden. Not just using hard power to spread its influence, Japan has also been using soft power in Africa by saying it will invest billions on the continent.

Low cost airline East Jet looking to open routes in Africa.

Africa could be about to benefit from a new low-cost airline thanks to a new venture from the founder of easyJet.

Sir Stelios Haji-Ioannou’s EasyGroup has entered into a deal with Rubicon, a British investment firm, to do a feasibility study into the prospect of creating a budget airline for the African market.

The proposal means EasyGroup will be issued shares of 5 percent in Rubicon, with the option to take a further ten percent.

A statement from the Chairman of Rubicon, Robert Burnham, said: “It iproposed that easyGroup will become a shareholder in Rubicon and will use the services of Stelios and easyGroup’s experienced aviation management team to provide general strategic, management and branding advice on the feasibility of implementing a low cost, point-to-point, no frills, all jet aircraft business model for Africa.”

EasyJet, a British airline founded in 1995, services cheap flights across Europe and is renowned for its “cheap and cheerful” image, expanding rapidly since its inception.

Growth in air travel, measured in revenue passenger-kilometers (RPK), has historically outpaced economic growth, represented by GDP, by approximately 1.5 to 2.0 percent. This leads to conclusion that about 60 to 80 percent of air travel growth can be attributed to economic growth, which in turn is driven, in part, by international trade. This is consistent with the observation that countries whose economies are tied to trade tend to have higher rates of air travel. Air travel revenues consistently total about 1 percent of GDP in countries around the world, regardless of the size of the national economy. Globally, air travel has historically trended toward this consistent share of GDP, such that countries that are below or above this level will generally move toward it over the long term.

Indian firms plan on expanding their presence in Africa.

India’s state-run companies are looking to acquire stakes in oil and gas blocks in Africa, form joint ventures in the continent and source natural gas to meet rising fuel demand at home, Indian Oil Minister S. Jaipal Reddy said Friday.

“Today as much as 21.5% of India’s crude oil imports are from Africa. In the years ahead, we seek more crude oil and liquefied natural gas from Africa,” Mr. Reddy said at a conference.

Africa is considered to have good hydrocarbon potential, with significant oil production coming from West Africa, and new promising gas discoveries in East Africa. Countries like China have already invested heavily in the region to develop its resources.

India, which faces a huge energy deficit and imports about 80% of its crude oil requirements, is scouting for hydrocarbon assets that can boost its energy security in the long term.

“Our companies are also interested in farm-in opportunities in producing blocks, especially in Libya, Algeria, Egypt and Nigeria,” Mr. Reddy said. He added that companies like GAIL (India) Ltd., Petronet LNG Ltd. and Indian Oil Corp. are interested in sourcing natural gas on a long-term basis from Africa.

He said the companies would “explore possibilities of equity participation” in natural gas export projects, gas processing businesses and gas-based petrochemical projects in Africa.

“There is no ceiling on imports from Africa. We are trying to maximise our [oil supply] sources in Africa,” Mr. Reddy said.

He didn’t specify which projects Indian oil companies were eyeing, how much they would invest and where the money would come from. He said that “with Africa’s economic development picking up momentum and its energy demands rising, India is keen to become a dependable supplier of petroleum products to Africa.”

Mr. Reddy also said that India’s crude oil imports from Iran remain on schedule and aren’t facing any bottlenecks.

Trade settlement between the two countries was hit after India’s central bank barred Iran-related payments from being processed through the Asian Clearing Union, a regional clearinghouse which the U.S. says is opaque and could be used by Tehran to finance its alleged nuclear-weapons program.

“The government of Iran is eager to help us in supplying oil in spite of many disturbing developments at the global level. Payment issues are being settled,” Mr. Reddy said.

Energy security is of top concern for India. Facing the critical challenge of meeting a rapidly increasing demand for energy, India is looking for more sources.  Africa naturally comes to mine.  Although India has significant reserves of coal, it is relatively poor in oil and gas resources. Its oil reserves amount to 5.9 billion barrels, (0.5% of global reserves) with total proven, probable, and possible reserves of close to 11 billion barrels. The majority of India’s oil reserves are located in fields offshore Bombay and onshore in Assam.

Due to stagnating domestic crude production, India imports approximately 70% of its oil, much of it from the Middle East. Its dependence is growing rapidly. The World Energy Outlook, published by the International Energy Agency (IEA), projects that India’s dependence on oil imports will grow to 91.6% by the year 2020.

Concerned about its growing reliance on oil from the Persian Gulf – 65% of its energy is imported from the region – India is following in the footsteps of other major oil importing economies, and seeking oil outside the Gulf. Indian firms’ investment in overseas oilfields is projected to reach $5 billion within a few years. Of particular interest is Africa

Big food companies know they need to reach more African shoppers. But on a continent where many consumers live far from urban areas and roads often are sketchy—at best—the typical multinational corporation’s supply network often falls short.

That’s where Desmond Mugwambane comes in.

Desmond Mugwambane arranges products at a Johannesburg store.

Armed with just taxi money, two cellphones and a briefcase stuffed with order forms, the Nestlé SA sales agent ventures where most salesmen won’t, like Johannesburg’s high-crime Snake Park neighborhood.

“This is where I dig my gold,” he says on a recent sales trip, passing a cow’s head on display at a street butcher.

While Nestlé’s usual sales staff focus on filling shelves of big supermarkets, Mr. Mugwambane and 80 other salespeople like him hunt for tiny shops across South Africa that will buy such Nestlé products as baby food and nondairy creamers, often in single-serving packages that appeal to Africa’s price-sensitive customers.

It’s easy to see why the Swiss food and beverage maker makes the effort.

The African Development Bank estimates that Africa’s middle class, those earning between $4 and $20 a day, will increase to 1.1 billion people by 2060 and account for 42% of the continent’s population. And the International Monetary Fund has forecast economic growth in sub-Saharan Africa at 5.25% this year and 5.75% next year, beating the global average of 4% each year.

Nestlé says it expects 45% of its sales to come from emerging markets by 2020, up from roughly 30% now. Africa is an important part of that growth. Nestlé’s sales on the continent rose 6.4% to 3.3 billion Swiss francs ($3.6 billion) last year, while global sales rose 2% to 109.7 billion francs.

That’s sparked the need for foot soldiers of sales like Mr. Mugwambane—and not just at Nestlé. Kraft Foods Inc. is forming a network of vans to deliver directly to street vendors in South African townships. Samsung Electronics Co. has introduced solar-powered phones in such markets as Kenya and Nigeria, where electricity supply is patchy. AndCoca-Cola Co. says it uses 3,200 distribution points to deliver to small shops in 15 African countries.

Nestlé’s journey into emerging markets hasn’t always been easy.

The company’s milk business in Zimbabwe is grappling with a law requiring that 51% of a foreign company be held by local, black-owned entities. Competition in India prompted Nestlé to pull out of the bottled-water market there. And in the 1970s and ’80s, the company faced a boycott over how it sold infant formula in developing countries. The company says that after that controversy, in 1981 it became the first company to adopt a World Health Organization code for marketing breast-milk substitutes.

Africa still presents challenges. About 61% of the continent’s population of roughly one billion people still lives on less than $2 a day, according to the African Development Bank.

Nevertheless, Nestlé in the past five years has invested $850 million in Africa, building up local manufacturing, expanding distribution networks and developing flavors catering to local tastes.

Some of Nestlé’s experiments, such as using sales agents like Mr. Mugwambane, have shown results. Sales at the type of small stores he sells to rose 20% in August from June. And the number of small stores carrying Nestlé products in South Africa doubled for the first eight months of the year to just under 4,500.

Desmond Mugwambane confirms an order with a convenience store owner in inner-city Johannesburg, South Africa, last month.

“We are halfway where we want to be,” says Dharnesh Gordhon, Nestlé’s sales chief for the country.

Selling some items has been an uphill slog in competition with local products because of the relatively high price of Nestlé’s items. “They are better quality but more price,” says Palash Munna Barua, who runs a shop in Hillbrow, a densely populated Johannesburg neighborhood with a large African immigrant community. Mr. Barua says that when he cuts prices for Nestlé items, like chicory-based Ricoffy, they sell fast.

Around the corner, Hilary Nnaji, the Nigerian owner of Hilvegas Trading, says hehas shelves full of Cerelac baby food, Klim powdered milk and other Nestlé items. After haggling with Mr. Mugwambane, the shopkeeper will receive a $30 discount from his $450 order.

Such negotiations are common. “Here, people argue with me,” says Mr. Mugwambane, who gets a 1% commission from Nestlé. He says that by agreeing to a discount, he hopes to get regular, and bigger, orders.

Small-scale delivery, often on bicycle, accounts for between 30% and 40% of Nestlé’s distribution in Africa, according to Frits van Dijk, the company’s former executive vice president for Asia, Oceania, Africa and the Middle East.

Back in Snake Park, Mr. Mugwambane sells Nestlé baby food to Njomane Drinks Distributors. Four years ago, the shop was essentially a shack. But as spending has increased, Njomane has expanded into a two-room concrete building. Today, the store orders nearly $400 a month in such products as Lactogen infant formula and Maggi bouillon cubes from Mr. Mugwambane.

“Nestlé is becoming popular because of us,” he says.

With about 27 factories strategically located around the continent, Nestle has been able to provide direct employment to around 15,500 people and also offer indirect employment to more than 50,000 people as more farmers were linked with its activities.  The business opportunites for growth are great throughout Africa for Nestle.  With an expanding consumer class, more disposable income will be spent and companies such as Nestle will be in prime position to benefit.

The Admiral Panteleyev missile destroyer

The Russian Navy has started escorting commercial vessels through the Gulf of Aden

A Russian Udaloy class destroyer has started escorting its first convoy of nine commercial vessels after a recent arrival to the Gulf of Aden.

A new task force from Russia’s Pacific Fleet, which comprises the Admiral Panteleyev missile destroyer, the Butoma supply tanker and the Fotiy Krylov salvage tugboat, arrived in the area on September 28.

“Upon the arrival, the task force carried out scheduled maintenance, replenished water and fuel supplies, and after forming its first international convoy of nine commercial vessels started escorting it along the designated safety corridor,” Pacific Fleet’s spokesman Capt. 1st Rank Roman Martov said on Tuesday.

Martov said the convoy is heading toward the Suez Canal via the Bab el-Mandeb Strait.

The Russian Navy has maintained a presence off the Somali coast since October 2008, with warships operating on a rotating basis.

Admiral Panteleyev carried out its previous anti-piracy mission in the Gulf of Aden from late April to early June, 2009.

The destroyer also held joint anti-piracy drills with the Republic of Singapore and Indonesian navies in May 2011.

Russia began rotating naval patrol ships off the coast of Somali in 2010 to help combat the fight against Piracy.  Russia strategically wants to be engaged in the region. This is one way to visibly tell the world that Russia is, and wants to be an active player in trying to solve international strategic crises.  Another angle to look at this is Russia’s attempt to reestablish itself in African affairs.  China, India, the U.S., Europe are all doing their best to maximize, enhance their interests and Russia is following suit.

Eni SpA expects to invest $50 billion developing natural gas off the coast of Mozambique and plans to begin producing fuel there by 2018, Chief Executive Officer Paolo Scaroni said.Italyâ€(TM)s biggest oil company estimates the Mambo deposit to contain 20 trillion cubic feet of gas, he said today in Doha, Qatar. Eni may transport the gas to market through a pipeline or by converting it into liquefied natural gas and shipping it to Asia. The producer may also sell the fuel locally in the form of compressed natural gas, Scaroni said. Eni announced the fieldâ€(TM)s discovery in October.“Our feeling is it would be a super-giant gas field and is well-placed to supply Asia by LNG,” he said at the World Petroleum Congress in Doha. Europe isnâ€(TM)t a likely destination for any gas from Mambo, Scaroni said.Eni, Anadarko Petroleum Corp. and BG Group Plc together with partners have found trillions of cubic feet of gas in waters off East Africa. The deposits are large enough to justify construction of at least eight LNG production trains, according to estimates by the companies. The producers may ship African gas to Asia and compete with fuel from Australia, where Royal Dutch Shell Plc, Chevron Corp. and other companies plan to invest about $250 billion in gas projects.

Johannesburg recently held its annual motor show. The show (also popularly known as the Joburg Motor Show) is the single largest international automotive event in Southern Africa.  The exhibition (held once every two years) runs in conjunction with two additional shows ‘Auto Shop’ and the ‘Johannesburg Truck Show’ which collectively offer a complete representation of the motor industry, serving Sub Saharan Africa and South Africa as host country. This event takes place at the MTN Johannesburg Expo Centre, Nasrec, Johannesburg, and is a comprehensive automotive lifestyle show case.

Here is a video promo of the event

The African car industry is poised for growth as more people move up the social economic class.  The new consumers throughout the continent are a bright spot for car companies such as Mercedes Benz, Nissan, Ford and General Motors.

The Nissan Leaf

Nissan will launch its only electric environmentally friendly car in 2013 for South Africa.  South Africa will become the first African nation to have the leaf on its roads.

Nissan is planning to launch its entirely electric car Nissan Leaf in South Africa in 2013.

The current World and European Car of the Year is on show at the Johannesburg International Motor Show and according to SA Managing Director Mike Whitfield will be brought to South Africa ‘as soon as government policies allow’.

The Nissan Leaf, released in 2010, is available to buy in countries keen to embrace eco-friendly vehicles and reduce their carbon footprint across Europe, Japan and the US and has sold more than 12,000 units so far.

Nissan has been in talks with the South African government over a potential launch within the next couple of years if the market is deemed ready.

“I am delighted to announce that we are intending to bring the Nissan Leaf to South Africa in 2013, subject to confirmation of government policy on charging infrastructure and customer incentives,” said Whitfield.

“This very special car is the world’s first mass-market EV, and has already brought affordable, practical and enjoyable zero-emission mobility to thousands of people.”

Expect more car brands to follow suit as more growth is expected to come from African nations, which have younger demographics and growing consumers with more disposable income to spend. Here is some background information about the Leaf from Nissan’s Director of Product Planning and Advanced Technology Strategy, Mark Perry.