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International Finance Centres can help SA improve its ease of doing business ranking

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DURBAN –  So how can South Africa improve its “Ease of Doing Business” ranking to facilitate  President Cyril Ramaphosa’s efforts to attract $100 billion of investment into the country over the next five years?

Alan Witherden, the business development director at Ocorian, an award-winning alternative investment, corporate, institutional, private client and international growth service provider, has strong ideas on the subject.
According to Witherden, International Finance Centres (IFC) can help South Africa improve its ease of doing business ranking, as IFCs usually have a large amount of funds waiting to be invested.
Ramaphosa in his State of the Nation Address in February  set a target of moving South Africa to a ranking of 50 or better in the World Bank Ease of Doing Business Index by 2022 from 82 in 2019.
In order to reach this $100 billion target, foreign direct investments will play a vital role in boosting South Africa’s economy and the President’s investment envoys have been criss-crossing IFCs such as New York and London to sell South Africa as an investment destination.
Attracting investment to South Africa is critical.
Rating agency Moody’s in April warned that while South Africa’s government indebtedness was currently in line with investment-rated sovereigns – it was on an upward trend that could rise as high as 70percent of gross domestic product (GDP) in five years.
Lucie Villa, the vice-president at Moody’s, said the rating agency’s baseline scenario estimated that the debt-to-GDP ratio was projected to reach 65 percent of GDP by 2023.
But Witherden says the situation can be improved,“Though moving up 32 places in the World Bank Ease of Doing Business Index in three years is a tough call, a marked improvement in South Africa’s position is possible. 
“If we look at the criteria used to compute the index, two areas retain our attention. First is trading across borders, where in my opinion, South Africa can do a lot better. South Africa has a lot to offer in terms of manufactured commodities, produce and industrial goods that can be traded with other African countries. An improvement on this criterion would also be welcome at a time when the African Free Trade Continental Area is nearing implementation,” Witherden said.
“The second criteria South Africa could focus on is the about enforcing contracts, which has the potential to foster trust and confidence of business operators. Also, working on improving these criteria on which South Africa scores the lowest would statistically have the highest impact in terms of improving its global ranking.
“In a related area, that of approval for permits from government and municipal bodies, the concept of ‘silent agreement’ can be adopted to ease the conduct of business. By virtue of this principle, which Mauritius for example has adopted, an application is deemed to have been approved if no reply was sent out to the applying party within a pre-approved delay,” he added.
He noted that a rapid improvement in the Ease of Doing Business Survey is possible with the right targeted measures as illustrated by the case of Rwanda and Mauritius. Mauritius was ranked 49th in 2017 and in 2019 had improved to 20th worldwide, while Rwanda improved from 41st in 2017 to 29th in 2019.
In response to a question on what Durban’s strengths and weaknesses are as a magnet for finance firms, Witherden said its strength was that it was a logistics hub, while its weakness was that financial services entities are predominantly located in Johannesburg and Cape Town.
Durban is Africa’s busiest port and is the channel for around 80% of the import and export of manufactured goods for the Southern African region as far north as the Democratic Republic of the Congo. It is also served by an excellent road, rail and air network. The development of a Special Economic Zone at Dube Tradeport adjacent to the King Shaka  International Airport north of Durban is attracting local and international investment for a variety of enterprises.
“IFCs are not only used to structure investments. They are also widely used to structure trade. Hence, with the pending implementation of the African Continental Free Trade Area, we should see more of trade structuring happening in IFCs.
“IFCs are also able to provide guarantee and credit mechanisms in support of trade. As a matter of fact, trade finance represents a huge market in Africa for which there is currently a very big financing gap. IFCs also thrive on the absence of foreign exchange control, a pre-requisite to enabling trade between countries with different currencies. IFCs also make it possible for trading companies to have an effective treasury management and thus mitigate currency risks. Procurement activities can also be very effectively conducted within an IFC,” Witherden said.
He noted that the skills shortage in South Africa was critical due to emigration of skilled people because of political and economic uncertainty, which was exacerbated by a real concern for personal safety as a result of the high crime rate in South Africa.
Development and training initiatives are being undertaken by banks, other financial institutions and business schools to producing highly competent individuals, which would also help to address the gender and racial imbalance in the industry as there are more back and female individuals being trained.
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Sahara Group Canvasses More Investment In Africa’s E&P Business

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Paris France: June 25, 2019 – Oil and Gas businesses in Africa need to intensify exploration efforts to guarantee reserve replacement and enhanced capacity to meet growing demand and global competition, Olajumoke Ajayi, Managing Director, Asharami Energy (A Sahara Group Upstream Company), has told participants at the Oil and Gas Council’s Africa Assembly in Paris.

Ajayi noted that Africa’s large volumes of undiscovered oil and gas makes the continent a veritable frontier for investment, adding that operators need to adopt new technology, explore alternative cost saving measures, ensure sustainable community relations, and build diverse multidisciplinary teams to ensure successful exploration projects.

In her presentation, “Renewing Players Commitment to Exploration and the Importance of Community Engagement in Capital Intensive Projects”, Ajayi cited the downturn in global oil prices and the corresponding negative effect on investor funds and returns as factors that have made a good number of Exploration and Production (E&P) companies in Africa cut down on investments, delay Final Investment Decision (FID) or totally stop embarking on new capital projects.

“Consequently, producing companies continue to pump oil from operated mature fields thereby depleting existing reserves with non-corresponding efforts for reserve replacement via new exploration discoveries. The big question remains whether or not E&P players should commit to exploration and how players can justify this commitment in the face of lower oil prices,” she stated.

According to Ajayi, the compelling case for the relevance of hydrocarbons in the future, in addition to huge investments on new technology, responsible and intentional community engagement will play a significant role in creating a stable and conducive environment for exploration and production. “Sahara Group’s exploration success story is being driven by a combination of technology, innovation and community management expertise. At Sahara, we are intentionally committed to creating a sustainable balance between our projects and host communities to ensure the creation of shared value for all stakeholders.”

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Going by the PwC Oil and Gas Review 2018, proven oil reserves in Africa have stayed at the same level of 7.5% of global reserves. The report also notes that exploration activity continued to decline in 2017. “The consequences of modest recovery in exploration spending and a continued decline in new discoveries are unavoidable and imminent. The International Energy Agency and various players in the oil industry have warned of demand exceeding supply as oil demand continues to grow and investment in projects is deferred,” the report stated. The report adds that Africa’s oil and gas consumption is predicted to increase by 45%, increasing its global share 5.1% by 2050.

Ajayi said strategic community engagements eliminate community interference in operations of capital projects that may lead to significant downtime; ensure that the host community understands its role as a project stakeholder and treats projects as commonwealth source for the people; reduce security breach as community representatives serves as infrastructure surveillance outfit; and promoting easy negotiations for Freedom To Operate (FTO) and Global Memorandum of Understanding (GMOU).

– Sahara Group

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Moustafa Madbouli witnesses signing of agreement with Mercedes-Benz on car assembly

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Mercedes-Benz A-class cars are displayed in a dealership of German car manufacturer Daimler in Paris, July 30, 2013. REUTERS/Christian Hartmann

STUTTGART, Germany – 24 June 2019: Prime Minister Moustafa Madbouli on Monday witnessed the signing of a cooperation agreement between the Egyptian government and German automaker Mercedes-Benz to boost bilateral cooperation in auto industry.

The deal is meant to establish an engineering hub for Mercedes-Benz in the Suez Canal area for assembling and manufacturing of automobiles, the premier said.

This comes as part of the state’s strategy to support the intelligent transportation system and electricity-powered means of public transport, the premier added.

He noted that the agreement represents a quantum leap in Egypt’s auto industry, asserting that Mercedes-Benz hub will not just serve Egypt, bu also the whole region.

Madbouli is currently on a visit to Germany to take part in the 22nd session of the Arab-German economic forum. He is accompanied by a high-level delegation grouping the ministers of international cooperation, electricity, petroleum, communications, trade and industry in addition to a number of businessmen.

– Egypt Today

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Taxify, now Bolt, launches Bolt for Business in SA

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Bolt Image: Techcentral

DURBAN –  Bolt has launched Bolt for Business, allowing companies of all sizes to manage and pay for corporate trips via a single, easy-to-use portal.

This addition to the Bolt range of services broadens the positive impact of on-demand transport for businesses, as companies can now democratise access to jobs by removing the ‘own transport required’ condition for employment, and have access to a simple service offering for employees and clients alike.

They can do this by allocating a monthly budget through the Bolt platform to individual employees, ensuring that all employees who travel for business enjoy the benefits of affordable and reliable personal transport without the often prohibitive costs associated with vehicle ownership.

“We have launched Bolt for Business after noticing that a growing number of Bolt trips are taken for business purposes during working hours, whether it’s commuting to work, rushing to client meetings or getting to the airport,” said Gareth Taylor, country manager for Bolt South Africa.

He added, “In a country with unreliable public transport and high costs of car ownership, Bolt for Business offers a convenient and cost-efficient solution to business travel. It also provides an alternative transport option for the many young people entering the workplace who cannot yet afford their own vehicle, or who actively choose to not buy a car”.

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In addition, Bolt for Business is the perfect solution for entrepreneurs and SMEs, where time is money and hours spent in traffic can be put to better use if someone else – like a driver on the Bolt platform – is driving.

Bolt for Business gives companies the ability to offer employee groups, clients and recruits the option to utilise the Bolt service at the company’s expense, and gives account managers the ability to set and customise spending allowances and the number of trips employees can take.

The digitised travel management solution, available on desktop and mobile, saves businesses time and money by storing all the information about their employees’ corporate Bolt trips on a single dashboard. Paying for trips is quick and easy: instead of reimbursing each individual employee, companies can pay Bolt once a month via a bank transfer.

“Bolt for Business is so much more than an efficient expenses management tool – it removes workplace discrimination based on access to vehicle ownership and offers a strategic use of time spent on the road, demonstrating again the positive impact that on-demand transportation  services can have on the South African economy,” added Taylor.

Additional functionalities such as adding restrictions to specific times and locations for taking trips, as well as a prepaid payment method, will be added to Bolt for Business later this year.

Bolt for Business is available in more than 30 markets across Europe and Africa.

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