Month: June 2011

Michelle Obama visits South Africa, meets Nelson Mandela

On her first solo trip to Africa, first lady Michelle Obama with her daughters Sasha left and Malia visited former president Nelson Mandela at his home in Houghton.

US First Lady Michelle Obama has met South Africa’s former President Nelson Mandela, on the first day of her two nation-tour of South Africa.

Mrs Obama, her daughters Sasha and Malia and her mother Marian Robinson, were also granted a rare audience with 92-year-old former president Nelson Mandela at his Johannesburg home.

It was Mrs Obama’s first encounter with the global icon, although her husband Barack Obama met him when still a senator on a 2006 Africa tour. Mrs Obama’s aides revealed that a mobile phone photograph taken of that meeting now hangs in Mr Mandela’s office.

Her visit to South Africa is aimed at advancing her international youth engagement agenda as well as highlighting Mr Obama’s support for “democracy, development and economic opportunities across Africa”.

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South Africa’s Wine industry bubbling with success

The wine industry in South Africa is bubbling on good times as of late. The future looks bright for growth and expansion based on current projections.

South Africa’s wine tourism sector is due to benefit from the sector being the fastest growing and most lucrative of the global tourism market, Tourism Minister Marthinus van Schalkwyk said. “In South Africa, our wine industry plays an important role in terms of its contribution to specifically regional and rural economic growth and job creation,” he said at a stakeholder workshop at the Spier Estate outside Stellenbosch. “In 2009 wine tourism contributed an estimated R4.3 billion to our country’s tourism revenue, and we believe there is still great potential for growth in this regard.” The wine industry has suffered in recent years through factors such as changes in foreign currency and demand fluctuations. But van Schalkwyk said increasing its revenue from tourism could counteract this. Last week he announced South Africa’s ambitious plans to increase the number of tourists to 15 million by 2020. Wine and gourmet tourism, van Schalkwyk said, could also play a role in terms of South Africa’s goal of increasing the geographic spread of tourism as it provided additional options for tourists. “Wine tourism is a vital product offering in South Africa’s tourism product as it helps improve the country’s competitiveness against destinations like Brazil, Australia, Kenya and Thailand,” he said. “We believe stakeholder inclusivity and alignment is fundamental to the adoption and implementation of a winning wine tourism strategy.”

When it comes to wine, South Africa is not exactly the first country that comes to mind for alot of people. Many people do not associate South Africa with wine at all, which might be somewhat surprising when you consider that wine has been made there for hundreds of years.  When wine exploded as a global commodity half a century ago, South African wines were largely off limits to the rest of the world because of the country’s apartheid policies. As apartheid ended, the industry gradually grew and improved as foreign investment-trade came in.

Initially, wines exported from South Africa were of poor quality. When wines from South Africa were introduced, they tasted unfamiliar and cheap. Brand “South Africa” faired poorly in public opinion, not only because of social stigma, but also because the wine exports were ultimately not very good.  This was primarily a byproduct of well-established wine cooperatives having the capital and capacity to supply the world. In this context, cooperatives in South Africa were massive joint winemaking entities that focused primarily on volume and price control and reduction of both at each stage of production.
But as times have changed, so has the country’s wine industry. South Africa’s commitment a few years ago to shift their focus from a higher-volume, lower quality “bulk wine” strategy to a higher-quality bottled wine focus has had an impact. While the country’s wine industry is relatively young compared to Europe or American wine industries, it is a positive development for the country as it tries to diversify economically.
Arguably the largest and most influential wine publication in the world,Wine Spectator who taste and professionally review more wine from more countries than any group of people in the world have South Africa as one of the world’s top wine producers.  In their March issue, Wine Spectator had a section called the Year in Review in which they showed the hard numbers behind all of that sipping and spitting and judging and rating.
The results were:
  • “Old World” producers Germany, France and Italy had highest percentage of reviewed wines rate 90+. Not surprising.They were also among the most expensive.
  • Of the “New World” countries, California is tied for the highest percentage of reviewed wines that rated 90+ at 29%. And their 90+ rated wines are pretty expensive.
  • South African wines were tied with California and ahead of every other country, also with 29% of their submitted wines rating 90+. And, they had the lowest average price for 90+ rated wines.

Wine comparison country by country

 South Africa is now producing a lot of high quality wine at reasonable prices.
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Japan plans on investing “billions” in Africa

Japan is keen on trying to catch up to China in Africa by being more aggressive in investments and forming new partnerships with the nations of the continent.  Japan will spend billions on investing throughout Africa.

Japan is keen to invest “billions of dollars” in minerals and infrastructure in Africa, trying to catch up to regional rival China for influence on the continent, a Japanese trade official said on Tuesday.Yoshikatsu Nakayama, vice minister of economy, trade and industry, said Japan was scouting for projects in which to invest, either via its state-owned oil and mining company JOGMEC or via joint ventures between local and Japanese companies.

China has spent billions of dollars on projects in Africa, trying to secure the resources it needs to fuel its quickly accelerating economy.

Analysts said the investment has given China an advantage in building trade in the emerging economies of Africa, leaving Japan behind for influence in the continent of one billion consumers whose purchasing power is steadily increasing.

“Whether through JOGMEC directly participating or through JOGMEC providing loans to Japanese companies, the figure would come to a few hundred million dollars per project,” Nakayama told Reuters on the sidelines of a mining conference.

Japan was also looking to develop South Africa’s rare earth metal resources but Nakayama said it would take a long time for projects to bear fruit.

The metals used for making high-tech products and auto parts were used by China as leverage in a political dispute with Tokyo last year, with Beijing restricting exports and alarming Japan’s top manufacturing firms.

Nakayama said Japan wanted to move into Africa gradually, even though the country had already been asked by some African mineral hubs such as Zambia why it was not pushing into Africa as aggressively as China.

Japanese trading firms such as Mitsui & Co, Mitsubishi Corp

and Itochu Corp have been in Africa for years.

Nakayama also said Japan was keen to develop Africa’s infrastructure, including rail lines, power plants and other transport links, along with the mines.

He dismissed fears Japan might miss out on the commodities boom if it waited too long.

“Once Japanese companies make a decision, they invest in the order of billions of dollars and buy an important stake in a minerals project,” he said.

Japan is already participating in a uranium project in Namibia and manganese and platinum projects in South Africa.

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Finland and Nigeria to boost relations

Both Finland and Nigeria have agreed to deepen and expand relations between both nations.

The Federal Government and its Finnish counterpart are determined to explore economic potentials towards trade and investments in both countries.

Though the volume of trade and investment portfolios have, in recent times, been abysmally low, the Finnish ambassador to Nigeria, Anneli Vuorinen, said at the weekend in Abuja that discussions are currently ongoing at the highest level of governments in Nigeria and Finland to ensure that their bilateral trade relations improve by tapping each country’s areas of comparative socio-economic advantages for their mutual benefits.

To create the needed forum for prospective investors to interact and share ideas and evolve strategies on realising the broad objectives of the new bilateral agenda, the Nigeria-Finland Trade Association, through its business networking platform, Nigerian-Finnish Business Group, has unveiled plans to host two business fora this week, to share information about Finland to Nigerian businesses and stakeholders.

This will precede a high powered trade delegation from Nigeria, which would be led by the minister of commerce and industry, along with some investors, businessmen, stakeholders and authorities, to visit Finland for the purposes of exploring opportunities in energy, environmental technology, mining and construction.

Briefing reporters about the proposed fora, scheduled for Abuja and Lagos between June 1 and 3 respectively, Mrs Vuorinen highlighted the potentials for improved Nigeria-Finnish bilateral relations in the years ahead, saying the events were planned as follow-up to recent exchange of visits by the leaders of governments of both countries.

She listed some of the visits as the March 2009 visit by the honorary president of Finland, Mrs Tarja Halonen, which was reciprocated by President Goodluck Jonathan (then as vice president) in May 2009.

Global leadership Ambassador Vuorinen, who identified Nigeria as a big economy with potentials for global leadership if the problems of corruption and insecurity are tackled head on, listed areas where Finnish companies could help in adding value to the Nigerian economy as climate change and the application of Finnish technologies in renewable energy and clean power production and of the sustainable products, processes and other services on offer by Finnish companies.

According to her, three Finnish companies are already helping to improve the power, mining, and clean environment situations of Nigeria.

Specifically, she listed the companies to include the power company – Wartsila- which currently has more than 15 sites in Nigeria and making up to 340 megawatts (MW) of electricity and the Geological Survey Agency of Finland, which “was involved in making the first geochemical mapping in Nigeria (and all of Sub-Saharan Africa).

On the clean environment technologies, the envoy said Nigeria could also benefit from the Cleantech-Industry of Finland, which could be relevant in the drive toward cleaner environment with the application of the Finnish Waste-to-energy technology in cities like Abuja or Lagos.

Finland has one of the world’s most dynamic and most developed economies.  They have well known global brands such as Nokia the consumer electronics company, and Linux the operating system.  Nigeria should definitely expand trade relations with the Fins given that they have world class companies. Finland benefits as it taps into one of Africa’s largest markets, especially in the growing cell and smart phone sector.  Something which Nokia i’m sure has noticed with great interest and delight.

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Barclays relocates African HQ to Johannesburg from Dubai

Barclays will move it’s African headquarters from Dubai to Johannesburg, South Africa.

UK banking giant Barclays plc, which owns a majority stakes in Absa, is relocating its Africa headquarters in Dubai back to Johannesburg.

The group has been running its Africa operations out of the Middle East office since 2006 when it moved from Johannesburg.

“We’re excited about the growth opportunity in Africa where we have operations in 10 countries and want to be closer to the business there. So we’re moving our back office operations back to South Africa,” said a spokesperson for the group.

Barclays said the Dubai operation employed around 120 people who had been given the option of relocating to Africa or resigning.

Barclays and Absa, South Africa’s biggest retail bank which operates in 12 African countries, recently developed the “One Bank in Africa” strategy to combine their operations in the continent.

Barclays Chief Executive, Bob Diamond, said earlier this year that the companies had agreed on a full geographical and global product structure for Africa from July 2011 the head offices of Absa Africa and Barclays Africa would be operationally combined.

“Together with our majority shareholder, Barclays, we have been exploring ways to leverage the significant potential of their combined African businesses with the view to providing our customers and clients with a more holistic service on the continent,” Absa said at the time.

“The focus now will be on the actions, including securing the requisite regulatory approvals, to establish the new regional office. The intention is to better align our businesses to meet the needs of our customers and clients on the continent.

“The new geographical and global product structure will provide a platform that will enable us to look for opportunities to serve our customers and clients better, with the full range of products offered across both Absa and Barclays,” it added.

More development and investment needs to be done to the financing sector of Africa.  Given that 7 of the top 10 fastest growing economies in the next decade according to the IMF will be in Africa, the sector is of great importance.  This move by Barclays is laying the ground to having a solid foundation of expansion and growth on the continent in the mid to long term future.

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Kenyans go big on foreign brands

Ms Murila shows some of the new Bata shoe brands. As local manufacturers – for instance, clothes and footwear companies – struggle, the fortunes of those peddling foreign stuff have been rocketing

Kenyans go big on foreign name brands

To see why foreign manufacturers love Kenya, cross Moi Avenue in Nairobi from Jazz restaurant, squeeze through the mobile airtime shops and porn video vendors, and you will reach Tom Mboya Street.

On your left, stands a glossy clothes shop full of young ladies trawling for latest fashions.

Jade is owned by a local investor, and that’s about the only thing Kenyan about it besides the hustle and bustle outside this tough side of downtown Nairobi.

All its merchandise – from the G-strings to sleek suits, have a deliberate foreign ring to them.

As local manufacturers – for instance, clothes and footwear companies – struggle, the fortunes of those peddling foreign stuff have been rocketing.

The appetite is rising, fuelled by a raging middle class, and more foreign companies are making a beeline to satisfy this tastes, including roofing companies from Turkey vying for the construction industry.

A transport and commercial hub in Eastern Africa, Kenya has emerged as a fertile hunting ground for foreign-made products, increasingly tilting the trade balance in favour of imports.

Other countries are foraying into the domestic market through delegations and trade exhibitions. Late January, a Russian business delegation visited Kenya to explore trade opportunities.

In March, Brazilian companies will showcase their prowess in agribusiness and renewable energy during the Brazil East African Community expo, with a direct bearing on the trade balances.

In 2009, for example, South Africa’s imports stood at Sh70 billion while Kenya’s exports to that country were valued at only Sh3.5 billion.

“Kenyans prefer imported food due to its high quality and low price compared to what is produced in the country,” says Bilha Rae of Magna Foods, a Nairobi based restaurant.

Ms Rae says spaghetti is one of those products enjoying good ratings in the country. “Due to lack of enough wheat for production Kenya will continue to import,” explains Ms Rae.

According to Central Bank of Kenya records between January and September 2010, Kenya’s exports totalled Sh395.6 billion, compared to Sh926.4 billion in imports.

Though Kenya is an agricultural economy, there’s a huge presence of products like eggs from South Africa and tomatoes from Spain.

With increasing urbanisation, and changing lifestyles boosted by technology and innovation, imports have gained a competitive edge through value-addition and packaging.

Even handicraft, which Kenya dominated a few years back, is shifting to Asia, especially China, Taiwan and Korea.

“What has made us survive, especially in the US market is our established brand name,” says Ecosandals’ international sales representative George Odhiambo. Ecosandals makes used-tyre sandals, know as akala, for both local and export markets.

While it takes the Kariobangi South light industry, Kenya’s answer to the global copycat industry, a day to produce 30 pairs of footwear, China produces millions given its technological advancement.

“China is going after a share not only in foreign markets but also in its domestic market,” says Mr Odhiambo. Besides, high cost of production like electricity and labour has slowed penetration of Kenyan goods in foreign markets.

“From production of a pair of sandals to the time the delivery is made in US, the cost will be Sh1,200 and so you have to sell at Sh2,400 to make a profit, but Chinese-made sell at a cheaper price,” he says.

Mr Chacha Nyangi, director of external trade at the Ministry of Trade attributes the low growth in exports to the high cost of production.

“The Common External Tariff is reviewed every year to give Kenyan goods preferential treatment over imports but the cost of production is still so high that those imported have a competitive edge due to their low price,” he said.

For Kenyan exporters to compete in foreign countries, the Export Promotion Council sources for buyers and transaction management.

Due to lack of diligence, says Mr Peterson Nyachwaya, the council’s manager in charge of trade policy analysis, some exporters enter into lopsided agreements that increase their cost, ultimately raising the cost of goods.

Though trade has been identified as a key driver of industrialisation and anchored in Vision 2030, most of Kenyan goods are semi-processed, less diversified and concentrate in a few markets.

Prof Henry Bwisa of the department of human resources at Jomo Kenyatta University of Agriculture and Technology attributes this to lack of a policy that can stimulate growth manufacturing.

“Technology to add value is there,” he says, “ but what is lacking is a policy to give incentives to the players in the respective sectors to improve that.”

As more of the world experiences globalization, including Africa expect to see a growing taste for all things foreign especially from a growing middle class. That is just the reality and natural course of development.  Name brands that were unavailable, out of reach due to economics are now achievable as more and more Africans move up in the world. Kenyans are no exception.

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2011 NBA Draft Prospect Bismack Biyombo

Bismack Biyombo

Draft international prospect Bismack Biyombo, a 6-9 power forward from the Congo is getting ready for the 2011 NBA Draft. Biyombo, 18, elected to enter his name in the 2011 NBA Draft, and several mock draft rankings already have him in the Top 20. Biyombo is highly regarded for his energy, athleticism and defensive prowess. Below Biyombo talks about the draft and practicing with the world team before they took on TEAM USA.

This guy has tons of potential, great attitude and might be the next African Super star to play in the NBA since Hakeem Abdul Olajuwon and Dikembe Mutumbo.

Biyombo’s stellar individual performance at the 2011 Nike Hoop Summit helped build buzz around his game and potential place in this month’s NBA Draft.

Whoever picks him up in the draft will be adding a high energy, explosive-and-defense guy to their roster,who is willing to work hard and is positive about the game of basketball.

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