The world is changing fast and to keep up you need local knowledge with global context.
By Alec Hogg
- The fallout from last week’s xenophobic attacks on foreign nationals is now affecting some of South Africa’s major companies. In a televised address over the weekend, the National Chairman of APC, Nigeria’s ruling political party, called for strong retaliation, especially against MTN, which dominates the mobile phone sector in Africa’s most populous nation. Here’s Adams Oshiomhole: “In a moment like this, in order to send a very strong message to South African authorities and South African people, it is worth it for the Nigerian government to take steps to take over the remaining shares of MTN that are owned by South Africans so that MTN becomes fully Nigeria-owned. I think right away Nigerians, in our individual capacities, this is the moment to show our commitment to our citizens and show sympathy to those who have lost their loved ones by boycotting South African goods and South African businesses. Beginning with Nigerians refusing, from today, to use MTN services.” The APC chairman also named MultiChoice, Standard Bank and Shoprite as companies which should be boycotted or ejected from his country. MTN Nigeria, at $6bn, is the second most valuable company listed on the Lagos stock market. The MTN group generates a third of its profit from Nigeria, its biggest single market where it has over 50 million users. Last week the company closed all its stores and service centres in the country after attacks on its facilities.
- China’s exports to the US fell for the fourth straight month in August, down almost 16% year-on-year, after a 6% drop in July. The decline is likely to accelerate after new tariffs were imposed at the beginning of the month. Although China and US trade negotiators have agreed to continue talking, insiders see little chance of an early end to the recently escalated trade war. Meanwhile, pro-democracy protestors in Hong Kong took to the streets for the 14th successive weekend, But this time they called on the US for support, marching en masse to the US consulate. Many of the tens of thousands of demonstrators waved American and British flags and the rally began with organisers playing the US national anthem to chants of “USA, USA.” Thus far the US response has been restrained, although President Donald Trump has warned his Chinese counterpart Xi Jinping that any violent reaction to the demonstrations would threaten a trade deal.
- South Africa’s oil-from-coal and chemicals group Sasol has pushed out the publication of its annual financial results by a further six weeks. This is the second postponement after the announcement had initially been postponed to next week, but will now only be made at the end of October. Sasol says more time is required to complete an in-depth investigation into what went wrong with the construction of its chemicals plant at Lake Charles in Louisiana, the cost of which has almost doubled from the initial projection to the current $13bn. Sasol’s share price dropped another 4% after the latest setback was announced on Friday morning. The stock has now fallen 54% in the past year with the current market capitalisation of the entire group, at R164bn, below the now revised R190bn cost of the Lake Charles project.
- Eskom is back in the news after the country’s Public Enterprises Minister Pravin Gordhan disclosed at last week’s WEF Africa summit that there will soon be negotiations with owners of the electricity utility’s debt. Eskom has borrowed more than R450bn from private sector lenders, much of it through international bond markets. In an interview with Bloomberg TV, Gordhan hinted at a suspension of interest payments but said it is unlikely there would be “haircuts” – a term to describe a reduction in the capital value of the amount owed. In the next few weeks, he said, the South African government will publish a policy paper spelling out what it envisions for Eskom. As the utility is redesigned, Gordhan added, there would need to be discussions with trade unions to create a compact; and consultations with lenders to design and then implement agreed options on the debt. The South African Government has proposed splitting Eskom into three units, two of which – generation and distribution – would compete with the private sector. It is intended that only the future transmission company would retain the monopoly position Eskom currently enjoys across the entire electricity sector.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.