Over US$4M Needed For 2013 Census

The statistician general at the Gambia Bureau of Statistics (GBoS) has revealed that the budget for the activities relating to the Fifth National Population and Housing Census in 2013 is estimated to be above US$4M.

Nyakassi MB Sanyang made this disclosure Wednesday while presenting the annual activity report and audited financial statement of GBoS for the year ended 31st January to December 2011, before the Joint Session of the Public Accounts and Public Enterprises Committee (PAC/PEC), of the National Assembly. He said the census is conducted every 10 years and The Gambia has successfully conducted four censuses since independence, the last of which was in 2003.

He also told the deputies that they plan to open 13 regional offices at least three months before the actual census count, and that each office needs to be equipped with a pick-up vehicle. Sanyang added that in the light of the above, it is recommended that a donor conference be held to solicit more donor funding for the 2013 Population and Housing Census.

Sanyang informed the Committee that the 2013 Census has both long and short-term objectives. He explained that the long-term objectives can be identified as follows: by the end of the project, to improve the knowledge on main characteristics of the population in the country to better understand the interrelationships of the population and development; build a data capture system that is sustainable and always available for document management for the GBoS and other government departments/agencies; analyse demographic and related socio-economic data/information at the national and sub-national levels, publish reports on thematic areas and disseminate these findings through seminars, workshops, internet and the mass media to engender wider access to information and for better integration of demographic variables in developing planning; and establish a geo-reference system of demographic and socio-economic information or planning and management.

Sanyang said the short-term objectives include the following: To develop skills of the GBoS staff; Geographic Information System (GIS), data collection, data processing, analysis, data dissemination and utilisation; to improve availability, accessibility and utilisation of census outputs in a timely manner; to identify population characteristics for the purpose of guiding social-economic policies and programmes; to update the enumeration area maps and district maps for use in sampling frame for inter-censual surveys; to establish an integrated GIS for the purpose of producing thematic maps; and to build a data processing system that produce tables for publication and further analysis as well as proper archiving of census data.

He said given the scope of censuses, preparatory activities usually start 2-3 years before enumeration.“When GBoS numerators were doing census mapping-out throughout the country, some people were claiming that they are not aware of any census activity going on, that means we at GBoS need to inform the people about what is happening so that they cooperate in what we are doing,” he added.

Sanyang noted that census activity entails a lot in terms of equipment and other resources, adding that in West Coast Region alone GBoS would open three centres, one for Kombo North, while the second centre is for the other Kombos and the third centre for the Fonis.

He further stated that preparations for the 2013 Population and Housing Census were continued in 2011 with the mapping exercise key among the preparatory activities. He also disclosed that The Gambia is for the first time using modern Geographic Information System (GIS) technology in census mapping, adding that with this technology, high quality census maps would be produced using satellite imagery while a GIS database will be developed.

He continued: “Recruitment and training for the mapping exercise was done in the second quarter of 2011. The actual mapping started in June 2011 both in the field and in office. For the field mapping exercise, teams were constituted and all teams were deployed to start the exercise in the URR. The official launch of the 2013 census mapping was also held in Basse, URR in July 2011 and it coincides with the national celebration of the World Population Day held in that region.”

The GBoS statistician general further informed the Committee that field mapping was successfully completed in URR and Banjul by the end of 2011, and that some teams have moved into CRR. He explained that to further build national capacity in GIS, a team was hired by UNFPA to conduct a two-week intensive training in GIS for the GIS assistants and some GBoS staff. 

He added that the training was not only found to be useful, but also timely. He opined that the census has been generally well coordinated since it started in mid-2011 at both field and office levels, adding that the exercise is on schedule as planned and is expected to be completed by the end of 2012.

Specific Recommendations

While underscoring that census is an extensive statistical inquiry that requires huge financial, material and human resources, Sanyang said since 2010, government and UNFPA are the financiers of the census preparatory activities. According to him, in the light of the above, it is recommended that a donor conference be held to solicit more donor funding of the 2013 Population and Housing Census.

GPPA Compliance Review

Ibraima Sanyang, senior compliance officer at the Gambia Public Procurement Authority (GPPA) said that for the period under review, GBoS was found to be mainly-complaint with the Public Procurement Act 2001 and Regulations 2003. The Committee then raised comments, concerns and observations before finalising the adaptation of the GBoS 2011 report.

Source: Daily Observer

Gamtel Made D1.450BN In 2011

The Gambia Telecommunications Company Ltd (Gamtel) said it generated D1. 450 billion in revenue in 2011, compared to the D1.395 billion registered in 2010.

This was disclosed by Baboucarr Sanyang, the managing director of Gamtel Tuesday, while presenting the annual activity report and financial statements for the year ended 31st December 2011, before the Joint Session of the Public Accounts and Public Enterprises Committee (PAC/PEC) of the National Assembly.

According to him, this represented an increase of D0.055 billion representing 4% increase with a gross profit margin of 33%. He explained that the increase in revenue was due to the increase in international, interconnection and data revenue by D13M, D32M and D42M respectively.

Sanyang further disclosed that the total sales for the year amounted to D970M and of this amount, D430M related to payment of interconnection charges to GSM operators for calls terminated on to their networks. He said that D195M related to payments to foreign carriers for the carrying and termination of international traffic on to their networks while the company incurred a material cost of D345M in 2011 compared to D68M in 2010 which shows an increase of D277M which represented 407%.

The Gamtel MD, however, noted that the increase was associated with an increase in the operations and maintenance of the international gateway. On their technical activities for 2011, Sanyang said there was an upgrade of international Internet bandwidth from two STM-1s to three STM-1s, which increased the capacity of their network from 310Mbits to 465 Mbits and back up of 14Mbits via satellite.

The Gamtel boss told the Committee that in their corporate affairs, the company in 2011, signed a Delegated Management Contract (DMC) with the Gambia Agency for Management of Public Works (GAMWORKS) for the refurbishment and upgrading of Gamtel sites and facilities in readiness for the NGN project. He said the activities of customer services in the fiscal year 2011 were centered mainly on expansion projects to keep pace with the stiff competition in the telecoms industry in The Gambia, due to the introduction of substitute and competing products by GSM operators.

Since training and development initiatives have been part and parcel of the development of telecommunication sector in the country, he said it has contributed immensely to the development of the telecommunications sector in the country. He added: “The high demand for more work-specific and academic programmes had made Gamtel management to put in a lot of efforts and finances towards the upgrading of the company’s training institute.”

Sanyang finally disclosed that the total number of staff of Gamtel as at the year under review stood at 1,125 comprising of 852 male and 273 female, out of which 81 are at managerial level, 67 male and 14 female. 

Gamcel 

In a similar presentation, Almamy Kassama, the general manager of Gamcel, also presented their report before the Committee. He reported total revenue of D1.127 billion as at 31st December, 2011, compared to D761M in 2010.  This, he said, represented an increase of D366M, representing 48% increase with a gross profit margin of 20%. D34M, D16M and D4M respectively attributed to the increases in revenue.

The Gamcel general manager explained that the total cost of sales for the year amounted to D900M, and of this amount, D522M related to free bonus given to customers while the company incurred a material cost of D116M in 2011 compared to D87M in 2010.

He further explained that the balance sheet has shown total non-current assets of D553M representing tangible fixed assets.He noted that there has been a decrease in tangible fixed asset from D637M to D553M as a result of depreciation charge for the year of D124M. He added that the total current assets stand at D68M as compared to D105M in the previous year.

On marketing and technicality, Sisay said Gamcel has embarked on network expansions while the commercial department manages the marketing and sales activity of the company through the creation and implementation of strategies aimed at adding value to Gamcel and its stakeholders profitably.

GPPA Compliance

Ibraima Sanyang, a senior compliance officer at the Gambia Public Procurement Authority (GPPA) revealed that Gamtel and Gamcel were found to be fully compliant with the public procurement Act, their Attendant Regulations and Instructions during the period under review, before both reports where finally considered and adopted by the Committee.

Source: Daily Observer

Can Ghana's Economy Prosper Against The Odds?

The sudden death of Ghana's president, John Atta Mills, on July 24 did not come as a rude surprise. Most Ghanaians already knew his health was failing; he was losing his eyesight and voice.

For the seven months that I was in Ghana (Dec 2011-July 2012), he rarely made a public appearance -- and despite official assertions to the contrary, most people did not believe he had the will nor the capacity to campaign for re-election in this year's elections in December.

What was remarkable, however, was that within hours of his death, the Vice-President, John Mahama, had been sworn in as the new president. The smoothness of the transition was exactly how Atta Mills would have wanted it. He was a man of peace and ardent believer in the rule of law.

The smooth transfer of power not only attested to the strength and stability of Ghana's democracy but also stood in sharp contrast to the rocky and chaotic transitions that followed the deaths of presidents Felix Houphouet-Boigny of Ivory Coast in 1993; Musa Yar'Ardua of Nigeria in 2010 and Bingu wa Mutharika of Malawi in 2012.

Also standing in sharp contrast to the smooth political transition process is the performance of Ghana's economy. After a stellar performance the past few years, the economy has hit some road bumps.

At a time when Europe has been in deep crisis, Ghana's economy galloped at a dizzying 14.5% rate of growth in 2011. In the fourth quarter, the rate was an astonishing 16%. The country achieved a single digit inflation rate of 8.6% and the lowest fiscal deficit to GDP ratio of 4.8% in decades, according to figures from the Minister of Finance.

Moreover, Ghana attracted $7 billion in foreign investment -- the highest amount recorded in its history. This economic boom has been sparked by recent discovery and production of oil.

However, prospects for 2012 have dimmed. The projected growth rate has been scaled back to 10%, although still impressive. An IMF team which visited the country in June described the economy as "sick" -- perhaps, an unintended allusion to the condition of the president.

The external value of the local currency, the cedi, has dropped precipitously from 1.4 cedis to the dollar in January 2.2 cedis to the dollar in July -- a drop of 57% in terms of the local currency. That drop has made imports more expensive and pushed the rate of inflation up above 10%. There is widespread grumbling about the rising cost of living.

It may seem skeptics, who questioned the sustainability of Ghana's economic success, are being proven right. They point to Ghana's neighbor, Ivory Coast, which was once declared an "economic miracle" back in the late 1990s but then convulsed into civil war and economic ruination in 2005 and 2010. They ask further: Hasn't oil been a curse to such countries as Angola, Cameroon and Nigeria, among others? Is Ghana not destined to follow the same path?

To some extent, the skeptics have a point but that is not the whole picture. To be sure, Ivory Coast was declared an "economic miracle" in the late 1980s and in 1994, the World Bank declared Ghana to be an economic success story.

However, received wisdom and accumulated evidence suggest that doing well economically is not enough. Intellectual freedom (freedom of expression, of the media, etc.) and political reform (establishment of democratic pluralism) are also needed to sustain economic prosperity. Countries that resist them eventually implode, unraveling all the economic gains made. This was what happened in Ivory Coast in 2005 and also in Yugoslavia (1995), Indonesia (1998), Madagascar (2001), Tunisia (2011) and Egypt (2011).

In other words, democracy is not necessary to engineer an economic success story but vital to sustain it.

In Ghana's case, incomplete political liberalization and fitful intellectual reform clipped its economic success in the 1990s.

However, things are much different today. The intellectual environment is much freer now. There are more than 100 private radio stations and over 20 privately-owned newspapers in Ghana. There is a vibrant and vigilant media that sparks intense intellectual debates. Call-in radio programs hold the feet of politicians to the fire and expose their shenanigans. Now and then, the country's Supreme Court rules against the government. Freedom of information bill is wending its way through Parliament, although it has been dragging its feet.

Politically, democracy is also being entrenched. Since 2000, there have been two successful transfers of power without violence or bloodshed. And the smooth transfer of power after the president passed away is another feather in the Ghana's democracy cap.

All these bode well for the sustainability of the current economic prosperity. But still, some serious hurdles lie ahead for Ghana's economic prosperity.

First, the non-oil sector of the economy is performing poorly. Agriculture, which employs over 60% of the population, grew marginally at 2.8% in 2011. With food production per capita declining, the country has to rely on food imports to feed itself. The performance of the manufacturing sector has also been weak. It is hard to find a manufactured good with the label, "Made in Ghana." As Ghanaians often lament, "We don't produce anything; we import everything from tooth-picks to toilet paper." As a result, imports are surging dangerously out of control.

The situation is eerily reminiscent of Nigeria in the 1980s when the country neglected its agriculture and manufacturing base and splurged on luxury imports. Army chiefs parked Maseratis and even Lamborghinis outside plush government villas, while their children attended expensive schools in Britain. One even had his Rolls Royce flown from Britain to Nigeria. Nigeria, which used to export food in the 1960s, now spends over $120 billion [latest figure I found] on food imports while 61% of Nigerians now live in poverty.

There are other bumps as well on Ghana's road to economic prosperity. The bloated size of the government suffocates the economy. In 1997, there were 88 cabinet and regional ministers plus their deputy ministers in a country with a population of 25 million. By 2004, the number had reached 92 but now down to 84. 

Too many ministries means overlapping jurisdiction and functions and a bloated bureaucracy. Indeed, the Vice President, John Mahama, has been complaining persistently about "excessive bureaucracy and red-tapeism in the public sector" in the state-owned Daily Graphic.

The public sector is riddled with overspending, wasteful practices and financial irregularities and profligacy. The situation has become so dire that the government consumes all it collects in revenue, leaving it with little or no savings to finance investments. For example, in 2011, total revenue stood at GH¢12 billion (or $7.5 billion) but general government expenditures added up to GH¢13 billion, leaving the government with negative savings.

However, the biggest hurdle when I was in the country was the high level of anxiety, tension and uncertainty about the December poll. In times of uncertainty, investors hold on to their wallets and the rich park their wealth outside the country. Capital flight and surging imports have evidently contributed to the sharp drop in the external value of the local currency.

I left Ghana for the U.S. on July 21 and President Atta Mills passed away on July 24. Most likely, political tension in the country will abate somewhat as Ghanaians put away their differences to mourn their departed president. However, the uncertainty will resurface after the burial. While the new president, John Mahama, is respected and level-headed, he is unlikely to accomplish much before December.

One wag has urged Ghanaians to vote for a "Non-John" in December. Since 1981, Ghana has had the following presidents: Jerry John Rawlings, John Kufuor, John Atta Mills, and now John Mahama. "Enough JOHNS. Haba! This is the worst form of name tribalism. Time for a revolution," the wag exclaims.

Well, Ghanaians will decide in December.

Source: CNN Marketplace Africa

Could Third World Debt Relief Pay Off?

According to the International Monetary Fund (IMF), there are 156 economies that could be considered "developing." Calling a country "developed" as opposed to "developing" is a charged topic: no one wants to be told that they aren't as good as someone else. Being a developing country, however, doesn't mean that the country is some backwater nation that time forgot. Quite the contrary; many developing nations are sitting on veritable goldmines of natural resources and with investments in modernizing the economy, these nations could see rapid growth in GDP.

Getting Funds from the Kitty

Countries seeking to modernize their economies face a daunting task. The projects that will push their economies forward - infrastructure, education, healthcare - don't come cheap. For example, China's Three Gorges Dam cost an estimated US$26 billion. Building roads to shuttle products and people around requires materials and engineering expertise; hospitals require expensive electronics. Developing countries often cannot afford to take on these projects without having to significantly sacrifice spending on other priorities.

There are several ways that developing countries can obtain funds from outside their borders. They can get direct loans from other countries, through funding provided by private companies or through loans provided by international lending organizations. Obtaining loans from private lenders is a difficult proposition for the poorest of countries, since they tend to be economically and politically riskier. A significant amount of developing debt comes from organizations such as the International Monetary Fund and the World Bank, which pool funds from multiple countries and use their financial clout (and good credit ratings) to obtain low interest rates.

The World Bank lends funds to countries based upon their Gross National Income (GNI). The poorest countries - those with per capita income of less than $1,195 - borrow from the International Development Agency (IDA) because they lack the ability to borrow from the World Bank's other fund, the International Bank for Reconstruction and Development (IBRD). The IDA charges little or no interest on the funds it lends out, typically allows repayments over longer-than-normal periods of time and also provides grants to countries in extreme financial distress. The amount of annual funds committed by the IDA - approximately $15 billion per year - is on par with the amount provided by the IBRD.

How Much Debt Are We Talking About?

The World Bank estimates that developing countries owed $4 trillion dollars in external debt as of the close of 2010. That number seems huge, but when compared to the debt owed by developed countries, it's fairly small. The United States and the European Union owe more than $25 trillion between the two of them.

Bleeding hearts and boisterous world leaders lament the oppressive burden that external debt (and the rules that often accompany it) has on developing countries. The evidence points to the opposite, however; debt forgiveness already exists. Debt is as much a political tool as an economic one. Leaders of developing nations, just as leaders of developed nations, want to keep their populations happy (at least happy enough to not cause trouble), and it's much easier to wag a menacing finger at foreign debt holders than it is to fess up to years of profligacy.

The World Bank, for example, operates both the Heavily Indebted Poor Countries (HIPC) Initiative and a Multilateral Debt Relief Initiative (MDRI). The MDRI was a 2005 pledge by G8 countries to cancel the IDA debt of countries that have gone through the MDRI program. The total pledge was $37 billion to an initial set of 19 countries, most of which are located in Africa. The International Monetary Fund (IMF) and Africa Development Fund (ADF) kicked in funds as well, bringing the total to $50 billion.

So what about wholesale debt forgiveness? What if the developed world and the financing institutions they run offer everyone a clean slate? It would be a disaster. It's one thing to offer the most struggling countries debt forgiveness: it's a small number of countries, it's a comparatively low amount of funds and it makes much more sense developmentally (a country in political and economic chaos could cause a humanitarian disaster at home and potentially spark lots of problems for its neighbors). It's a totally different thing to wipe the debt clean for 156 countries that the IMF considers to be "developing."

Lending countries could feel less inclined to shell out development money in the future, since there would be a precedent for not getting paid back. Debtor countries could balk at future commitments because they were allowed to start from scratch once before. The signals would be perverse. Additionally, while developing countries are net debtors - they often owe more to others than they are owed by others - many developed countries are owed money by others. If the money they are owed is suddenly wiped clean, then there would be multi-billion-dollar holes in countries' finances.

Next Time Will Be DifferentThe key to not getting into the debt forgiveness quagmire is to lend smart. Just as many individuals had lived beyond their means leading up to the financial maelstrom of the 2000s, so too did developing countries spend too much. The first taste of debt trouble came from the 1970s and 1980s, on the back of global commodity demand. Countries borrowed huge sums after finding natural resource bonanzas and crowded out private development. When commodity prices tumbled, those developing countries faced steep debt payments and had no funds with which to pay them. This was not totally the fault of debtors, as donors also provided expert advice that wound up not working out.

The Bottom Line
"Lending smart" entails injecting funds to develop industries outside of commodities, and to do so at a pace that won't cause a shock if the means to repay the loans falls short. After all, not all countries that receive developmental aid fall short of repayment. Some of the biggest success stories include China, Singapore, South Korea and India, all of which used funds to diversify away from reliance on volatile commodity exports. You'd be hard pressed to find a world leader who wouldn't want to be at the helm when a country makes the jump into a modern economic juggernaut.

Source: Investopedia

Oil-Rich Angola Bids To Secure Future With $5bn Wealth Fund

Angola, Africa's second-largest oil producer, has launched a $5 billion sovereign wealth fund in an attempt to diversify its economy -- a move more associated with wealthy Gulf States like Qatar and the UAE.

The state-owned investment fund, known as the Fundo Soberano de Angola, will invest domestically and internationally, focusing on infrastructure development and the hospitality industry. These are two areas the Government of Angola believes is "likely to exhibit strong growth".

In an exclusive interview with CNN, Jose Filomeno de Sousa dos Santos, the son of Angola's longtime president who is on the board of the fund, said "now is a very good time."

He added: "The country has had around five years of steady growth, good growth, mostly based on oil production increases, and it plans to diversify the economy. The best way to do that is to do that is to intervene directly in the economy through investments."

More than 90% of Angola's revenue comes from oil production -- reaching around 1.9 million barrels a day -- and it is second only to Nigeria in its exports. But despite its oil wealth, the country remains largely impoverished.

Dos Santos says the aim of the fund is to invest profits accrued from oil to promote social development in the country.

"It is very easy to have oil money and spend it but it is very difficult to have a positive impact to improve people's lives on a daily basis," he said, "and that is an area we intend to invest on a lot with the sovereign wealth fund."

Critics of the government say that Angola's oil wealth has been used to enrich a small section of society -- dominated by allies of president Dos Santos and his family, along with generals associated with Angola's lengthy civil war.

"We don't see the money that is being generated from oil having a direct impact on people's lives" says Elias Isaac, Angola country director for George Soros' Open Society Initiative for Southern Africa.

"Just look at the schools, look at the hospitals, look at the issue of water, electricity. Angola makes a lot of money out of oil, there is no doubt about this, Angola really is one of the few countries that can pay its national budget without donor funding, which is great, but where this money goes, that's the biggest issue".

Isaac's also argues that a $135 million development project of the capital city's waterfront is a sign of the government getting its spending priorities wrong.

Luanda's once shabby waterfront has been transformed after land was reclaimed from the sea. Portuguese expats, many of whom have sought sanctuary here from the eurozone crisis, now jog past manicured lawns each morning.

But wedged between the shiny offices and apartments that line this new waterfront, Angolans often struggle to survive in a shacks and ramshackle houses.

Beyond the capital lies a large underdeveloped country with a widening income gap.

Only around one in three Angolans are literate and more than half drop out before finishing primary school.

Angola has faced huge challenges to develop a country decimated by the war for independence and lengthy civil war. But civil society and human rights groups say that institutionalized corruption has helped cause the widening gap between the very rich and the rest of society.

Critics of the fund also point to the its board being dominated by cabinet members close to president dos Santos. And the younger dos Santos says he -- despite being the president's son -- is qualified for the position because his financial background.

Transparency International recently ranked Angola a lowly 168 out of 182 countries in its "Corruption Perceptions Index" but Dos Santos says that the fund will be beholden to international best practices, and transparent.

"We are familiar with the fact that this perception exists and we are taking a lot of care to make sure all of our investments are within an approved investment policy and our accounts will be audited annually by an independent renowned auditor."

The pledge of transparency is a departure from Angola's often opaque oil wealth where oil receipts are withheld by strict confidentiality agreements with international oil companies.

"The way the government manages the oil receipts, we think we still have a lot of corruption" says Manuel Jose Alves da Rocha, Economics Professor from Angola's Catholic University. "We think the lack of transparency is also another situation we have to look at to understand why the oil income does not go to the majority of the people".

Angola's oil industry is dominated by Sonangol, the state-owned company that gives concessions to international oil companies and, over time, takes in the lion's share of the profits.

Many observers believe that Sonangol was already acting as a sovereign wealth fund by investing its profits in many areas outside of the oil industry -- including buying up key stakes in Portugal's biggest bank by assets, Millennium BCP.

The formation of a formalized fund was first announced by Angola's President Jose Eduardo dos Santos. But the global financial crisis caused the oil price to plunge, hammering Angola's economy.

The government had to offset the crisis by securing a loan from the International Monetary Fund (IMF) in the form of a Stand By Arrangement of around $1.4 billion.

With new deep water oil finds announced by the government, Angola hopes to outstrip Nigeria to become Africa's largest oil producer. But the revenue from Angola's black gold won't last forever. The government hopes the sovereign wealth fund will help diversify Angola's profits to secure its future.

Source: Marketplace Africa

Gambia Gov’t, ADB & FAO Ink US$0.8M Grant Agreement

The government of The Gambia Wednesday signed a US$0.8 million tripartite grant agreement with the African Development Bank (ADB) and the United Nations Food and Agriculture Organisation (FAO) at a ceremony held at the Office of the Vice President in State House.

The six-month grant is funded by the ADB, and will be implemented by the FAO. It is an emergency response to the Gambia government’s call for assistance in the aftermath of the 2011-2012 crop failure that resulted to food shortages across the country.

The minister of Finance and Economic Affairs, Abdou Colley, signed on behalf of the government of The Gambia while Leila Mokaddem, the ADB resident representative based in Dakar, and the FAO country representative, Babagana Ahmadu, each signed on behalf of their various institutions.

Speaking after the signing ceremony, the vice president and minister of Women’s Affairs who is also the chairperson Disaster Governing Council, Aja Dr. Isatou Njie-Saidy, on behalf of the government and people of The Gambia, commended ADB for the assistance. She reiterated government’s political will in all aspects of development including the agriculture sector.

The vice president told the gathering that last year’s crop failure ushered in difficult times for The Gambia; and acknowledged that partners like the ADB have always been there for the country. While appealing to the ADB to assist the Gambia government realise its long-term plan for Agriculture, the VP Njie-Saidy also stressed that sustainability remains government’s primary goal. She also advised the Ministry of Agriculture and FAO to ensure a smooth and transparent implementation of the grant.

Abdou Colley, the minister of Finance and Economic Affairs, explained that part of the grant will be used to provide social amenities and relief for farmers. He described the response to government’s appeal for assistance earlier in the year as very encouraging. He then called on FAO to collaborate with the Ministry of Agriculture in the implementation process, while promising to further strengthen the partnership with the ADB.

The ADB resident representative based in Dakar, Leila Mokaddem, said that the grant is a strategic support for The Gambia and is aimed at mitigating the impact of the food shortage on household food security as well as to reduce the cases of malnutrition, and depletion of assets, thus preventing the population from engaging in negative coping mechanism.  The ADB’s main priority, she went on, is to ensure sustainable productive economic and social opportunities for the poor and vulnerable sections of society and ensure equal access.

Madam Mokaddem pointed out that climate change poses serious threat to food security, and went on to disclose that the bank in collaboration with partners has mobilised an extra US$28M towards The Gambia’s food security plan, implementation of which, according to her, shall begin in mid-2013. She added that a programme for food security and resilience for the Sahel region will also be designed in 2014.

For his part, the FAO country representative, Dr. Babagana Ahmadu, noted that the grant will allow his organisation to extend the ongoing support to affected communities. He used the occasion to call on government to make a declaration of disaster on the deadly cattle disease that has hit the country.

The FAO boss then assured that his organisation will ensure effective implementation of the programme within the time frame.

The permanent secretary, Ministry of Agriculture, Sait Drammeh, described the grant as timely, saying it will also help address the current fatal cattle disease in the country.

The ceremony was chaired by the permanent secretary at the Ministry of Finance, Mod Secka.

Source: Daily Observer

The Most Costly Banking Mistakes You Can Make

Every bank has a slew of fees associated with opening and maintaining accounts, and those fees are on the rise. A recent study by Bankrate.com found that only 39% of non-interest checking accounts are free of a monthly charge. That's down from last year's 45% and a high of 76% in 2009. The average monthly service fee has jumped 25% from last year. Here are four of the most expensive mistakes you can make with your bank accounts.

Using Overdraft ProtectionAt most banks, you can choose to allow your account to go into negative territory to allow a purchase to go through. Banks charge dearly for that service. The average overdraft fee is $31.26, and many banks charge upwards of $35 per item. Federal consumer protection law now requires that you have to choose this service. If you have done so, the danger lies in running your account close to the zero line if you have an unexpected charge go through. The overdraft fee adds to your negative balance and can cause more transactions to trigger the overdraft. For example, you may have thought there was $100 in your account and forget that your car insurance is charged automatically. Each additional transaction will trigger further overdraft fees, and your negative balance can grow quickly. Monitor your account closely to ensure that the funds are there to cover your transactions.

Not Maintaining the Minimum BalanceMany banks reduce or even eliminate monthly maintenance and other fees if you keep a certain amount of money in your account at all times. This fee break can often outweigh any interest you receive in a savings account. It's often worthwhile to keep the minimum in your checking account to bring the fees down. According to the Bankrate.com survey, the average balance to avoid the fee for non-interest checking accounts is $723. That's higher than the previous year by 23%.

Writing Post-Dated ChecksIn the United States, a personal check is nothing more than a promise to pay someone. It does not represent actual payment until it is presented at a bank and the money is withdrawn from your account. Post-dating a check to a future date indicates your intentions to the recipient to wait until that date to present the check to the bank. However, banks have the upper hand and are legally allowed to honor checks when presented. If the recipient is not someone you trust, it is safer to hold on to the check until the future date to avoid having it create havoc on your bank balance. The convenience of providing post-dated checks is outweighed by the risk to your account.

Using Other Banks' ATMsAlmost all banks charge a fee when users who are not customers use the ATM. Some also charge a fee when their own customers use another bank's ATM. These fees are also on the rise. The average charge for non-customers is $2.50 per transaction, and the average cost for customers using another ATM is $1.57. The easiest way to avoid these fees is to plan your cash flow more closely so that you do not need to hit up the ATM or that you can use your own bank's machine. Some banks refund other institutions' transaction fees, so look for accounts with this feature.

The Bottom LineWith bank fees going up year after year, it is more important than ever to ensure that you know the ins and outs of bank fees, are paying the least amount, and keeping the money in your pocket. Know what your bank's policies are, and be on the lookout for lower-fee accounts.

Source: Investopedia

Middle-Income Africa in Sight

The day when Africa becomes a middle-income continent — at least by the World Bank’s yardstick — could be in sight if growth trends continue and the global economy stabilises.

"We can look to the continent being middle-income," Shantayanan Devarajan, the World Bank’s chief Africa economist, said yesterday.

The economies of sub-Saharan Africa’s 48 countries are expected to grow by an average of 4.8% this year, the World Bank said in a report yesterday, slightly down from last year’s 4.9%. Officially, 22 states with a combined population of 400-million have now achieved middle-income status, meaning per capita annual income in excess of $1,000.

If the economic growth trend of the past decade is sustained, another 10 will reach the target by 2025, Mr Devarajan said in a video conference broadcast from Washington to African capitals.

Seven more will join the list if they average 7% growth in the coming years.

The biannual World Bank report, called Africa’s Pulse, analyses key economic and social developments. The last one forecast average growth for this year of 5.2% but trimmed the estimate because of slowing global economic activity.

The projected average was brought down by SA, the continent’s biggest economy and its most sophisticated. Excluding SA, this year’s African growth was forecast to rise by 6%.

The continent’s mineral resources have powered the past 10 years of expansion, much of it driven by booming exports of raw materials to China.

This year’s fastest-growing economy is Sierra Leone’s, which is heading for a 25% rise in gross domestic product compared with last year. The reason is a huge jump in iron-ore exports from a West African country that was devastated by civil war in the 1990s and held up as a basket case. Second is Niger because of uranium and oil exports.

Earning revenue from mineral resources is one thing, sharing it with the populace and the national treasury has proved much harder for many African presidents and their governments.

"People don’t feel this growth. As a taxi driver once said to me — I cannot eat growth," Mr Devarajan said.

The World Bank report referred to the central African state of Gabon, whose oil and timber wealth allied to a small population account for a per capita income of more than $10,000. Yet it has the lowest child immunisation rates on the continent, according to the World Bank.

Asked whether $1,000 per capita should qualify a country as "middle income", Mr Devarajan said: "Even if you earn more than that, it doesn’t mean you won’t have a huge poverty problem."

Source: BDlive

Africa to Foreign Investors - We're Open for Business

Squeezing the poor for the sake of corporate profit? Or providing vital jobs and incomes? Whatever your view of foreign investors, analysts believe that business will be essential to African development.
With Africa's population likely to double in the first quarter of this century, the private sector may be the only sector able to match this growth with precious jobs. In Africa, one job goes a long way towards protecting a family or community, as Africa Progress Panel member and former Nigerian President Olusegun Obasanjo told a recent conference of investors ahead of this week's UN General Assembly meeting.
Besides, many issues confronting the African continent can only be resolved with private sector involvement. Only the private sector, for example, has the know-how to build power plants that will reduce Africa's enormous energy shortages. Fortunately, foreign investors are increasingly keen to invest in Africa, because, as stated in our policy paper, "Africa - Investment Ready", this is a great time to get involved.
Africa is home to seven of the world's ten fastest growing economies, business regulation is getting better all the time, and the outlook for continued growth is good, according to both the World Bank and IMF.
Foreign investors say foreign investment would be higher if African countries had more stable public policies, more liquid stock exchanges, or even lower risk. They cite solutions that range from venture capital to use of donor funds.
But foreign investment does not have all the answers to African development. And in some cases, especially in the oil and mining industries, the social and environmental impacts on local communities have been disastrous.
But slowly Africa's development paradigm is shifting away from aid dependency towards wealth creation as a model for the future. And business will be central.
At the Africa Progress Panel, we have several policy recommendations for African governments that will help increase both the quantity and quality of foreign investment.
Governments should strengthen regional economic integration, which makes Africa a more attractive proposition by creating larger consumer markets.
They should keep commitments to regional and international initiatives on corruption and transparency, such as the Open Government Partnership or the New Partnership for Africa's Development (NEPAD). Lower corruption levels help attract foreign investment.
And governments should demand that foreign investment supports local companies, employs Africans, and transfers technology and skills. They should make job creation an explicit objective of economic policy, because job creation means sustainable and equitable growth.
Africa's workforce is young and growing fast. Leaders across the continent and their partners must find new and effective ways to harness this energy and creativity. And business must play a central role.

Source: allAfrica

Africa May Have Up to 200 Hidden Billionaires, Mobius Says

Africa may have as many as 200 “hidden” billionaires operating in the unofficial economy who will seek to legitimize their wealth in the future, investor Mark Mobius said.
“There is a lot of hidden wealth,” Mobius, who oversees more than $40 billion as executive chairman of Templeton Emerging Markets Group, said yesterday in London. “You hear about Dangote but there are maybe 200 with the same kind of resources that we do not see. The black economy is very big.”
Aliko Dangote, Africa’s richest man, is benefiting from the continent’s economic growth, adding $3 billion to his wealth this year, taking him to $13 billion, according to the Bloomberg Billionaires Index. Africa’s gross domestic product is forecast to expand an average 6 percent a year for the next five years if Europe, the largest trading partner, records 0 percent to 2 percent annual growth, Moody’s Investors Service said today.
Dangote controls Dangote Group, one of the continent’s largest conglomerates with publicly traded businesses in cement, sugar, flour and salt that make up about a third of the Nigerian Stock Exchange’s market value. Many of the continent’s richest individuals don’t have publicly traded assets, Mobius said.
“What we see is that these very wealthy people will begin to want to legitimize their wealth by a listing, by putting these assets together, forming a company, listing it,” Mobius told reporters yesterday. “Many of these people escaped to London or other countries in order to preserve their wealth. But it is going to get more and more difficult because of anti- bribery and all the rest that is going on in the U.S. and other parts of the world.”

Hidden Wealth

A lot of “hidden wealth” is concentrated in mining, Mobius said. Dangote said in May he “needs” to invest $7.5 billion in industries including mining in the next four years.
Mobius said he’s considering buying shares in Kenyan banks, and is most interested in lenders that issue credit cards, open savings accounts and offer money-transfer services. The prospect of violence in Kenya ahead of elections next year was not a “big issue,” he said.
A disputed 2007 vote sparked two months of ethnic and political violence that killed more than 1,000 people.
“The general consensus now is that they have sort of learnt the lesson,” Mobius said. “I don’t see it as being a big issue.”

Source: Bloomberg Businessweek

Citi Raises Gold Price Forecasts for 2012-13

Citigroup raised its gold price forecasts for 2012 and 2013, saying ongoing global economic issues are causing gold to remain a favored asset for investors.
"With continued concerns over the economic health in the developed world, safe-haven demand has seen renewed investor interest in gold-linked securities," analysts at the bank said in a note dated Sept. 24.
Citi raised its year-end price forecasts for most precious and base metals.
The bank increased its 2012 price forecasts for gold, silver and platinum by about 2 percent, 5 percent and 1.5 percent, respectively, while it cut its earlier forecast for palladium prices by about 1.7 percent.
For 2013, Citi raised gold and silver price expectations by over 3 percent each, and those of platinum and palladium by over 6 percent each.
Illegal strikes in South Africa, mine closures and project delays were seen causing supply issues in the market for platinum and palladium, analysts at the bank said.
Base metals were mostly forecast about 1 percent higher for 2012, with lead expected to rise 4.3 percent from earlier. Nickel was seen falling about 1 percent for the year, from previous forecasts.
For a list of the latest price forecasts of Citigroup on precious and base metals, click the following link. (Reporting by Naveen Arul in Bangalore; Editing by Steve Orlofsky)

Source: Reuters

Statement by an IMF Mission to The Gambia for Discussions of the First Review of the ECF Arrangement

An IMF mission led by Mr. David Dunn visited The Gambia during September 5-18, 2012, to discuss performance under the authorities' macroeconomic and financial program that is supported by the IMF under its Extended Credit Facility (ECF). The mission met with Minister of Finance and Economic Affairs Abdou Kolley, Governor of the Central Bank of The Gambia (CBG) Amadou Colley, and other senior officials. It also met with representatives of the private sector, civil society, and development partners.
At the conclusion of the visit, Mr. Dunn made the following statement in Banjul:
“Last year's severe crop failure, caused by drought throughout the region, led to a sharp contraction in the Gambian economy. In 2011, The Gambia's real gross domestic product (GDP) fell by about 5 percent. Economic activity remained weak for much of 2012, but is expected to pick up substantially in the final quarter, as the upcoming harvest points to a strong rebound in crops and growth in the tourism sector continues. The relief effort by the Government of The Gambia, international aid agencies, and bilateral donors appears to have helped to mitigate the impact of the drought on vulnerable families and provided critical support to farmers. For 2012 as a whole, real GDP is projected to be about 4 percent, while inflation has remained under control at about 4½ percent (year-on-year).
“Based on a projected further rebound in agriculture in 2013, which anticipates that crop production will have fully recovered to pre-drought levels, real GDP growth could surge to about 10 percent next year, before returning to its longer-term trend of about 5½ percent a year over the medium term. There are downside risks to this outlook, as well as greater upside potential. In particular, the possibility of prolonged weaknesses in the global economy or strong shocks to food and fuel prices could dampen growth in key sectors of the Gambian economy. At the same time, sound macroeconomic policies combined with a structural agenda that seeks to promote productive private sector investment in infrastructure—as envisaged in the authorities' Programme for Accelerated Growth and Employment (PAGE)—could boost longer-term growth trends. Strengthening The Gambia's relations with the regional and international communities would be important for building confidence in the economy and generating greater support from development partners for PAGE priorities.
“The Government has taken some initial steps toward addressing its heavy debt burden. During the first half of 2012, Government's net domestic borrowing (NDB) was reduced to 1.2 percent of annual GDP, compared with 2.3 percent of annual real GDP during the same period in 2011. Moreover, the Government remains committed to ceilings on NDB of 2½ percent of GDP for 2012 as a whole and 1 percent of GDP in 2013. By easing pressure on the domestic financial market and T-bill yields, it is projected that Government's interest payments on domestic debt relative to its revenues would fall from 18½ percent in 2011, to 18 percent in 2012, to just under 15½ percent in 2013. Updated external debt indicators also show progress has been made toward reducing The Gambia's debt vulnerability.
“In line with commitments to ECOWAS (Economic Community of West African States) The Government is committed to replacing the general sales tax with a value-added tax (VAT) on January 1, 2013, which is expected to lead to a boost in revenue collections. Beyond the VAT, the Government seeks to pursue a comprehensive tax reform that broadens the tax base, simplifies procedures, and lowers tax rates, while preserving revenues. However, fuel subsidies continue to cut into potential tax revenues, as little progress has been achieved toward eliminating them, despite monthly price adjustments.
“Growth of credit to the private sector and deposits in commercial banks has slowed considerably in 2012. In May, with inflation pressures contained, the Central Bank of The Gambia (CBG) acted to ease its monetary policy stance by reducing the reserve requirement on deposits by two percentage point (to 10 percent). Also, the CBG continues to strengthen banking supervision. In preparation for the upcoming increase in the minimum capital requirement at the end of 2012, the CBG has reviewed banks' plans for meeting the new requirement and stands ready to strictly enforce the new measure.
“Preliminary data indicate that all performance criteria for the first review of the new ECF-supported program were met. In addition, understandings were reached on several key policy issues. The mission will return to IMF Headquarters, but will remain in close contact with the Gambian authorities to conclude discussions as soon as possible.
“The mission thanks the authorities for candid and constructive policy discussions and expresses its appreciation for the excellent cooperation during its visit.” 

Source: StarAfrica.Com

IMF: Gambia Could See 10% Growth in 2013

Gambia could see economic growth hit 10 percent next year on the back of an expected rebound in its drought-stricken agricultural sector, an International Monetary Fund official said on Tuesday. The tiny West African nation's central bank in July projected a 1.7 percent contraction of GDP for 2012, which would represent the second straight dip in output after growth slipped to 3.3 percent last year from 5.5 percent in 2010.
Gambia appealed for food aid in March after it said that 70 percent of its crops failed during the last growing season.
But David Dunn, who headed a one-week IMF mission to the country, said the agricultural sector is expected to return to full output next year, leading a broad economic revival.
"Based on a projected further rebound in agriculture in 2013, which anticipates that crop production will have fully recovered to pre-drought levels, real GDP growth could surge to about 10 percent next year," Dunn said at the end of the mission.
Growth is then expected to return to a medium-term trend of around 5.5 percent in the mid-term, he said.
Gambia, which had a GDP of around $1 billion in 2010 and is heavily dependent upon agriculture and tourism, remains vulnerable to external shocks.
"The possibility of prolonged weaknesses in the global economy or strong shocks to food and fuel prices could dampen growth in key sectors of the Gambian economy," Dunn said.
Some 60 percent of the country of 1.7 million people, living in a nation completely surrounded on land Senegal, are farmers.

Source: Reuters Africa

Ecobank Gambia Reaches Out to NGO Community

Ecobank Gambia, one of the leading commercial banks operating in the country, Friday organized a day’s forum for movers and shakers in the Non-governmental organization community, designed among other things to forge partnership.

Organised in collaboration with The Association of Non-Governmental Organisation (TANGO), the forum that was the first of its kind, was described as a laudable move; one that marked a turning point of collaboration between the Bank and the NGO community in the country. Ecobank, known as the Pan-African bank seeks to comply with international best practices in key areas such as anti-money laundering and cooperate governance. It further seeks social responsibility and sustainability of “our business” to contribute to poverty alleviation.

Addressing a well-attended forum, the Bank’s Gambia Managing Director, Mrs Mareme Mbaye Ndiaye, underscored that the day marked an important milestone in the annals of the Bank’s existence in The Gambia in that this is the first time that they organized such an important forum.  “Ecobank Gambia recognised the contribution of the NGOs and development partners in the structure economic development of the Gambia,” Ndiaye told the forum, while indicating that the initiative is also in line with their mission and vision to contribute to economic and financial integration and development of African continent. “Ecobank Gambia considers itself as the Bank of the NGOs and international organisation in The Gambia,” she added.

Madam Ndiaye used the opportunity to detail out the gigantic strides of the Bank, disclosing that Ecobank is serving “eight million customers on the African continent.” “The network is composed of more than 1, 000 branches, 1, 400 ATMs and over 2, 000 POs machines. As a Pan-African Bank, you can follow your activities within 33 countries using three official languages and using more than 21 currencies. Indeed, Ecobank is in all countries in Africa than any other Bank in the world. We have a fully subsidiaries in France, and representatives in Dubai and London to be able to serve our customers,” she told the forum.

Managing Director Ndiaye told the convergence that Ecobank group seeks to provide its customers with convenient, reliable product and services locally in the Gambia, regionally and internationally. “We also operate as one Bank with common banking standards, policy and processes to provide a consistence and reliable customer experience for the entire network. We are cognizant of the fact that as a bank, it is important for us to collaborate with you to achieve our intuitional policy,” she concluded.

Speaking on behalf of the chairman of TANGO board of directors, the vice chairperson, Jainaba Nyang Njie, said TANGO was founded in 1983 with the objective for better coordination, as well as to serve as the voice of the NGOs in The Gambia. “TANGO seeks to influence public policy to build the capacity of its members, government institutions and its agents, as well as the communities in order to enhance national development,” she underscored.

“TANGO being an Association of national, and international NGOs, and community base organization,” according to Nyang-Njie, “need funding to support to our various activities, and we have been calling on the private sector to support TANGO.” “We sincerely and thoroughly appreciate the Forum organised by Ecobank, all aimed at building and strengthening partnership which is a very key important element in the development,” she stated.  She expressed their appreciation to Ecobank for donating GMD25,000 to TANGO, saying the gesture went a long way in supporting the Association’s activities.

TANGO’s Madi Joberteh, who also spoke at the forum, disclosed that in October, they will stage a consultative forum with the private sector to talk about dynamics, requirement and modalities on how to bring about stronger partnership between the private sector and the civil society. “NGOs are giving lot of money to the private sector and TANGO on quarterly basis, gives US$250,000 to Ecobank. All the NGOs have accounts with various banks in the country. We cannot be giving business to our private sector while they are not investing into the community,” he stated. Joberteh decried that when they were to organise the NGO Week, they had written to all the banks, but noted that only Ecobank had responded with a donation of GMD25,000.

Elias Bah of the Ecobank delivered the vote of thanks.

About Ecobank

The Pan African Bank is operating in 33 countries in Africa, as well as operating in three continents. Ecobank employs 11 million people, and has 750 branches. The Bank was listed No. 3 stock exchanges. In 2010, Ecobank was awarded Bank of the Year in 11 countries, and it is dealing in 21 currencies and banking with 300 international organisations.

Source: Daily Observer

Understanding The Risk In The BRICs

When Goldman Sachs economist Jim O'Neil first dubbed the four nations of Brazil, Russia, India and China as the BRICs, back in 2001, he made one of the gutsiest long-term global macroeconomic calls of all time. Featuring the right demographics, vast commodity wealth, growing middle classes and relatively steady fiscal and monetary policies, O'Neil postulated that these nations would be the biggest drivers for future global growth. So far, the economist's prediction has generally come true. The MSCI BRIC index has risen by more than eight times what the S&P 500 index returned during the past decade, and the BRIC's combined GDP soared to $13.3 trillion last year.

That outperformance has prompted many investors to add the four horsemen of the developing world to their portfolios as a way to cash in on the group's torrid growth. Despite the rosy long-term growth picture for the BRICs, there are plenty of risks, aside from the global macroeconomic pressures in these nations. In the end, these nations aren't called "emerging" for nothing.

With the BRICs continuing to contribute so much to the global economy and with the nations making up a huge portion of emerging market assets, it is critical for investors to understand these risks. Yet, each of the four nations is a completely different animal and comprehending the differences in each of their risk profiles can be a daunting task. Here are some of the internal risks when investing in the BRICs.

A Dragon of Lies
When it comes to emerging market investing as a whole, China remains at the top of many investors' minds. After all, the nation represents the hallmark of the developing market thesis. However, investing in Asia's Dragon economy isn't as easy as buying stock in Germany.

Perhaps the biggest problem is the lack of GAAP or international accounting standards. That issue has even caught some of the best investors by surprise. For example, billionaire hedge fund manager John Paulson lost a bundle on Toronto-listed Chinese forestry firm Sino-Forest Corp. It was accused of faking land holdings and "cooking the books." Others have been accused of falsifying bank deposits and accounts. That lack of transparency and disclosure of information makes it a lot harder to see the real picture, especially compared with developed market stocks.

That picture gets even muddier when investors are forced to deal with questionable official Chinese data and a heavily regulated/bureaucratic communist government. The majority of the major firms in the nation are in some way owned or controlled by Beijing.

Russia's Corruption Woes Despite the nation's recent entry into the World Trade Organization (WTO), there are still some significant investment risks in Russia; corruption and political will are the two biggest. Bribes and organized crime infiltrating legitimate businesses remain standard practices. According to a report by the Information Science for Democracy Foundation, the average amount of petty bribe in the Russian Federation has increased steadily in the last 10 years. Back in 2001, it was roughly 1,817 rubles. By the time 2010 rolled around, it had grown to 5,285 rubles and represented 93% of an average worker's salary.

Then there is the national government to contend with. Voicing an opinion that conflicts with President Vladimir Putin's wishes could lead to your business or investments being seized as well as a potential prison sentence. Just ask Mikhail Khodorovsky, former Chairman and CEO of Russian oil giant Yukos, who was convicted of fraud in 2005 for reasons that are believed to be politically motivated.

LATAM's Commodity King
While outright corruption isn't as big of a problem for Brazil as it is for Russia, the government does have a hand in creating risks for investors that stem from its "protectionist" attitude. The country now has the second-highest number of protectionist measures in Latin America, after Argentina. This includes rules to favor local products, high tariffs on imported goods, tax breaks to encourage domestic production and limiting the access of foreign investors to strategic natural resource assets. For example, investors wanting to tap the nation's vast oil wealth must partner with state-owned energy giant Petrobras. Overall, these policies could derail some investment returns if Brazil decides to go one step further and nationalize various assets.

Asia's Bureaucratic Nightmare
With a democracy as large as India's, you would expect there to be some red tape when it comes to successful investment. However, the nation's bureaucracy has been called the "most stifling in the world." Starting a business in India is incredibly hard, as the local and national governments generally have a hand in the commercial markets. Likewise, enforcing contracts can be impossible, especially when there is a propensity for business partners to enter into undeclared third-party transactions. The Political and Economic Risk Consultancy, a Hong Kong-based think tank, estimates that India's bureaucratic system will prevent it from matching the growth rates of other rival nations.

The Bottom Line
The BRICs offer much in the way of portfolio and economic growth, however, there are some pretty big risks for individual investors as well. Understanding these risks is key to navigating these emerging giants successfully.

Source: Investopedia

Oil's Slide Continues, Hits 6-Week Low Below $92

Oil prices fell on Wednesday for the third day in a row as traders realized that a recent run-up to $100 may have been overdone.

Oil ended at $91.98 on Wednesday, dropping $3.31, or 3.5 percent. That was its lowest close since Aug. 3. Oil has fallen 7 percent this week.
Several things have been pushing prices down. Analysts said traders are taking profits after oil got above $100 per barrel on Friday for the first time since May. And there have more signs this week that the global economy is slowing down, which tends to push oil prices lower because people and businesses use less energy.
Also, crude inventories rose three times more than analysts had expected last week. Crude supplies grew by 8.5 million barrels to 367.6 million barrels. That's 8.4 percent higher than at the same time last year, according to the Energy Information Administration's weekly report.
Analysts expected a rise of 2.5 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
There were also reports that Saudi Arabia is keeping production high to drive oil prices lower.
Oil's decline came despite some news that might have pushed prices higher. The Bank of Japan said on Wednesday that it would buy more government bonds, which is intended to boost Japan's economy. And ongoing tensions in the Middle East have tended to drive prices higher.
"Yet we continue to fall," said Addison Armstrong, senior director for market research at Tradition Energy. "I think that has accelerated some profit-taking. After all, crude did have a pretty good run from $86 up to $100."
Brent crude traded on the ICE Futures exchange in London fell $3.84, or 3.4 percent, to $108.19 per barrel.
Traders were also keeping their eyes on oil supplies as U.S. Gulf Coast refineries returned to production after shutting down due to Hurricane Isaac.
"We're getting back a few more refineries post (Hurricane Isaac), but on the flip side a few refineries had some restart issues and a few are headed into maintenance," said Carl Larry of Oil Outlooks and Opinions in a newsletter.
Regular gasoline at the pump fell a half a penny to an average of $3.854 per gallon.
In other futures trading in New York:
— Wholesale gasoline fell 7 cents $2.829 per gallon.
— Heating oil slipped 8.3 cents to $3.044 per gallon.
— Natural gas fell a penny to $2.762 per 1,000 cubic feet.
---
Associated Press writers Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.

Source: Yahoo Finance    

The Rise Of Africa

For decades, much of the world has been conditioned to think of Africa, from Tangier to the Cape of Good Hope, as a uniform morass of poverty.

Nevertheless, it's limiting and unfair to treat a 12 million-square-mile continent with a billion people as a single entity. No one assumes that Finns and Greeks share a culture, nor Canadians and Mexicans; yet to many uninformed critics, Africa is one homogeneous outpost of poverty and starvation. Not only is that the grossest of generalizations, it's inaccurate.

Africa Today and in the FutureNo, Africa doesn't enjoy quite the standard of living that the world's richest countries do. On the United Nations Human Development Report, the highest-ranking sub-Saharan nation on the African mainland is Gabon, which came in at a modest #106. However, the country is inching upward, progressing along a timeline common among many African nations: colonialism, followed by nominal independence, followed by long-overdue economic reforms and a corresponding increase in the standard of living. It was over a relatively brief period - barely two generations - that South Korea and the United Arab Emirates propelled themselves from destitution to affluence. Today, we could be witnessing that same phenomenon across Africa.

The International Monetary Fund (IMF) predicts that between now and 2015, Africa will be home to seven of the world's 10 fastest-growing economies. In descending order, that's Ethiopia, Mozambique, Tanzania, West Congo, Ghana, Zambia and Nigeria. (Granted, "fastest-growing" is hardly the same as "flourishing;" by contrast, the American and Luxembourgish economies can't possibly grow as quickly as ones whose every incremental step is noteworthy.) Finally, after countless years of mass governmental corruption abetted by misguided charity, much of Africa is jumping into the 21st century.

Look no further than the sophisticated financial instrumentation befitting sophisticated economies - specifically, exchange traded funds devised to attract Western investment. Van Eck Global, a New York-based management firm, developed the Market Vectors Africa Index ETF (NYSEArca:AFK) for that very purpose. The fund restricts itself to companies that either are headquartered in Africa, or derive most of their revenues from there. The fund's main components include Tullow Oil, a British oil producer whose biggest operations are in Ghana and Uganda; Orascom, an Egyptian construction firm; Guaranty Trust, a Nigerian bank; and Attijariwafa, a Moroccan bank, with other banks and breweries rounding out the top 10. It may come as a shock to some, but Africans deposit their money somewhere and build buildings, and drink beer, just like the rest of us.

Africa-centric exchange traded funds aren't intended as "socially responsible" investing, created to make guilt-stricken investors feel good about themselves. Rather, this is real investing, done with the intention of turning a profit and building lasting wealth. The Market Vectors Africa Index ETF has gained approximately 15% so far this year.

Trade, Not Aid
Hopefully, investment will overtake handouts as the predominant form of cash flow to Africa. By and large, being on the receiving end of the rest of the world's largesse has had the opposite of its intended effect. Zambian intellectual colossus Dambisa Moyo (chemist; economist; master's from Harvard; Oxford Ph.D.; director of Barclays Bank, SAB Miller and Barrick Gold, and only 42 years old) wrote the definitive book on this topic, "Dead Aid: Why Aid Is Not Working And How There is Another Way for Africa."

She argues that the $1 trillion of well-meaning handouts that have found their way to her home continent have done more harm than good, creating a culture of idleness and indolence ("Why work when I can get what I want from a relief organization?"), and that's the best-case scenario. More often, aid payouts never even found their way past the people in charge.

The modernization of the continent is something best witnessed firsthand. A visitor to Cape Town or Windhoek would be struck by how gleaming and modern either southern African capital is. While the former does have shantytowns on its outskirts, they're strikingly similar to some of the filthier housing projects in the United States.

Unfortunately, most of the major news stories that have emerged from Africa in the last few years have been horrifying (Darfur, the Rwandan genocide.) In addition, the stories that haven't emerged have been even worse. (Like the Second Congo War, humanity's deadliest conflict since World War II. Yes, there was a First Congo War in the late 90s that you probably never heard about either.) This is the same continent that spawns a disproportionate number of the engineering and mathematics graduates at some of America's most prestigious universities - the people who will shape Africa's future.

The Bottom Line
Africa has all the natural resources a continent could hope for, and is finally assembling the wherewithal to capitalize on that. The Industrial Revolution began in the United Kingdom almost two centuries ago, moving society en masse from an agrarian, subsistence economy to one characterized by force multipliers. Today, in a world where information flows freely and trade lifts millions out of poverty every year, Africa has only started to reach its potential and promise.

Source: Investopedia