Political infighting in South Africa is scaring off lenders from state-owned companies and potentially weakening everything in the economy from electricity to agriculture.
Citing factional fighting among political leaders, South Africa’s largest debt manager, Futuregrowth, halted loans to state companies on Aug. 31. On Sept. 1, the Danish Jyske Bank announced that it too would no longer lend money to the national power utility over concerns about governance.
The country’s credit ratings could be at risk. Political analysts say the ongoing tension between president Jacob Zuma and finance minister Pravin Gordhan, head of the National Treasury, could lead to the arrest of Gordhan as well as threaten the independence of the Reserve Bank. That, as well as the government’s power over state companies, has rattled lenders.
“We have observed recent reports which strongly hint of conflict between branches of South Africa’s government, the possible machinations of patronage networks, and a seeming challenge to the independence of the National Treasury,” Futuregrowth said in a statement.
The asset manager said it was particularly concerned by reports that president Zuma would head a committee to directly oversee state-owned companies.
The rand weakened 1.5% after the Aug. 31 Futuregrowth announcement and bond yields soared of two of the state’s largest companies, Eskom, the national power utility, and Transnet, the national rail and ports operator, according to data compiled by Bloomberg.
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South Africa’s Political Infighting Scares Off Lenders From State-Owned Companies
Political infighting in South Africa is scaring off lenders from state-owned companies and potentially weakening everything in the economy from electricity to agriculture.
Citing factional fighting among political leaders, South Africa’s largest debt manager, Futuregrowth, halted loans to state companies on Aug. 31. On Sept. 1, the Danish Jyske Bank announced that it too would no longer lend money to the national power utility over concerns about governance.
The country’s credit ratings could be at risk. Political analysts say the ongoing tension between president Jacob Zuma and finance minister Pravin Gordhan, head of the National Treasury, could lead to the arrest of Gordhan as well as threaten the independence of the Reserve Bank. That, as well as the government’s power over state companies, has rattled lenders.
“We have observed recent reports which strongly hint of conflict between branches of South Africa’s government, the possible machinations of patronage networks, and a seeming challenge to the independence of the National Treasury,” Futuregrowth said in a statement.
The asset manager said it was particularly concerned by reports that president Zuma would head a committee to directly oversee state-owned companies.
The rand weakened 1.5% after the Aug. 31 Futuregrowth announcement and bond yields soared of two of the state’s largest companies, Eskom, the national power utility, and Transnet, the national rail and ports operator, according to data compiled by Bloomberg.
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East Africa: Regional MPs Unhappy With Visa Take Up
Arusha — East African lawmakers are not happy at the slow implementation of the Single Tourist Visa, saying it has made little progress in boosting the tourism industry in the region as envisioned.
Nusura Tiperu (Uganda) said the region has vast tourist attractions which have not been fully exploited under the Single Tourist Visa plan. “There needs to be more information and data available on tourism to ensure visitors benefit from the tourist facilities,” she said.
The East Africa Legislative Assembly (EALA) currently is in session here, wants the implementation of the EAC One Single Tourist Visa fast-tracked.
Adam Kimbisa (Tanzania) said there is a need to ensure inter-connectivity and infrastructure are in place to support systems of the Single Tourist Visa.
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Tanzania: No Foreigner Can Own Land in Tanzania, Except for Investment Only
Tanzania’s Land Act No. 4 of 1999 explicitly states that no foreigner can own land in the country.
According to the former executive director of HakiArdhi, Yefred Myenzi, the Act spells out how land can be used, including leasehold.
“In Tanzania we have land laws categorised as customary and statutory laws, with the later having overriding powers in case there are problems with the former. Users of land are given rights of occupancy for periods of 33, 66 and 99 years, depending on the use,” said Mr Myenzi, adding, “Our system is similar to that of Uganda with the only difference being that in Uganda there is land that falls under the Buganda kingdom and it is recognised in the country’s constitution. However, Kenya’s system is completely different because it is freehold.”
He further said that in Tanzania, once the government leases land, the lessor isn’t allowed to sub-lease.
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Ethiopian Protesters Target Foreign-Owned Farms As Unrest Spreads
Ethiopian protesters stormed a Dutch-owned flower farm on Monday in Bahir Day city, Amhara region in North-West Ethiopia and caused damage estimated at about $7.8 million, in what authorities have linked to the deadly Oromo clashes.
Bloomberg reported that a “large group” of people invaded Esmeralda Farms Inc’s property on August 29 and torched part of it.
The farm is one of a series of foreign-owned plantations run by Israelis, Italians, Belgians and Indians that have fallen victim to the latest spate of violence since members of the Oromo and Amhara communities started protests in November.
Bahir Dar, the capital of Amhara region, experienced the deadliest clashes early last month when at least 30 people were killed in a single incident after government security forces clashed with protesters, BBC reported.
Human Rights Watch estimates that at least 500 people have been killed since the protests began.
The protests have galvanized two of the largest ethnic groups the horn of Africa.
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