Tag: investment

One of the most important findings of Rand Merchant Bank’s (RMB) seventh edition of Where to Invest in Africa is that the continent could find itself hovering on the brink of disaster if it continues to depend on its current economic fundamentals and does not usher in economic diversification. Where to Invest in Africa 2018 highlights those countries that have understood the need to adapt to the prolonged slowdown in commodity prices and sluggish levels of production growth – and those that haven’t.

The theme for Where to Invest in Africa 2018 is “Money Talks” and this edition “follows the money” on the African continent to evaluate aspects crucial to each country’s economic performance. The report focuses on the main sources of dollar revenues in Africa, which allows it to measure the most important income generators and identify investment opportunities.

“Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances – all as a result of a significant drop in traditional revenues,” says RMB Africa analyst Celeste Fauconnier, a co-author of Where to Invest in Africa 2018.

“Some countries have been more nimble and effective than others in managing shortfalls,” says Nema Ramkhelawan-Bhana, also an RMB Africa analyst and co-author of the report. “But major policy dilemmas have ensued, forcing governments to balance economically prudent solutions with what is politically palatable.”

“The last three years have sounded an alarm, amplifying what is now a dire need for the economies of Africa to shift their focus from traditional sources of income to other viable alternatives,” says RMB Africa analyst Neville Mandimika, a contributor to Where to Invest in Africa 2018.

“These years have exposed a number of African nations to severe economic stress – especially that of liquidity shortages. Unfortunately, there is no quick fix to infuse into a context as complex as this, and traditional forms of revenue will remain a reality for many years to come,” says RMB Africa analyst Ronak Gopaldas, also a co-author.

In this edition of Where to Invest in Africa 2018, RMB’s Investment Attractiveness Index, which balances economic activity against the relative ease of doing business, illustrates how subdued levels of economic activity have diluted several scores on the index when compared with last year, resulting in some interesting movements within the top 10.

Notable omissions from the top 10 this year are Nigeria and Algeria, which have fallen from numbers six and 10 to numbers 13 and 15, respectively. Ethiopia and Rwanda, on the other hand, have climbed three and four places, respectively.

But probably the most notable change is that South Africa has fallen from first place for the first time since the inception of the report, ceding its place to Egypt, which is now Africa’s most attractive investment destination.

Egypt displaced South Africa largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated markedly over the past seven years. South Africa also faces mounting concerns over issues of institutional strength and governance, though in its favour are its currency, equity and capital markets, which are still a cut above the rest, with many other African nations facing liquidity constraints.

Morocco retained its third position for a third consecutive year, having benefitted from a greatly enhanced operating environment since the “Arab Spring” that began in 2010. Surprisingly, Ethiopia, a country dogged by sociopolitical instability, displaced Ghana to take fourth spot mostly because of its rapid economic growth, having brushed past Kenya as the largest economy in East Africa. Ghana’s slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.

Kenya holds firm in the top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya’s diverse economic structure, pro-market policies and brisk consumer spending growth. A host of business-friendly reforms aimed at rooting out corruption and steady economic growth helped Tanzania climb two places to number seven. Rwanda re-entered the top 10 having spent two years on the periphery, helped by being one of the fastest-reforming economies in the world, high real growth rates and its continuing attempts to diversify its economy.

At number nine, Tunisia has made great strides in advancing political transition while an improved business climate has been achieved through structural reforms, greater security and social stability. Côte d’Ivoire slipped two places to take up 10th position. Although its business environment scoring is still relatively low, its government has made significant strides in inviting investment into the country, leading to a strong increase in foreign direct investment over the years and resulting in one of the fastest-growing economies in Africa.

For the first time, Nigeria does not feature in the top 10, with its short-term investment appeal having been eroded by recessionary conditions. Uganda is steadily closing in on the top 10, though market activity is likely to remain subdued after a tumultuous 2016 marred by election-related uncertainty, a debilitating drought and high commercial lending rates. Though Botswana, Mauritius and Namibia are widely rated as investment-grade economies, they do not feature in the top 10 mostly because of the relatively small sizes of their markets – market size has been a key consideration in the report’s methodology.

Where to Invest in Africa 2018 also includes 191 jurisdictions around the world, and measures Africa’s performance relative to other country groupings. The unfortunate reality is that African countries are still at the lower end of the global performance spectrum, which continues to be dominated by the US, the UK, Australia and Germany.

Source: Business Day 

Montblanc invests in South Africa

Although South Africa’s faltering economy has eroded consumer spending, the luxury goods market has been bolstered with the opening of the revamped Montblanc boutique in Sandton City Mall, Johannesburg, this week.

Owned by South African billionaire Johann Rupert’s Richemont, Montblanc is one of the world’s leading brands of luxury writing instruments, watches, jewellery, leather goods, fragrances and eye wear made mostly in Germany and Switzerland.

President for Montblanc’s Middle East, Africa and India region, Eric Vergnes, says the sluggish economy was an opportunity for Montblanc to reinvest in the brand.
“When times are tough you either cave in, wait and do nothing. Or you invest and gain market share. We are focused on the latter,” says Vergnes.
Vergnes noted how Montblanc was growing in South Africa where it was a highly recognised brand with four stores.
“We are growing because our range is wide. We have entry level items that are affordable and we have high end items,” says Vergnes.
Through the revamped store, Montblanc was hoping to improve customer experience with the first neo concept 119m² in its Middle East, Africa and India region.
Customers for the revamped store are likely to be the wealthy individuals.
South Africa 2016 Wealth Report by New World Wealth released last month indicated that there were 38 500 high-net-worth individuals in the country with a combined wealth of $159 billion (R2.16 trillion) at the end of last year.
But the number of high-net-worth individuals had declined by 10 percent during the period between 2007 and last year as some wealthy individuals left the country.
Vergnes says that “the idea is to be a luxury store but being less intimidating and more welcoming”.
South Africa is important as there are four Montblanc stores.
“We are delighted to open the region’s first neo concept boutique in Sandton, an important shopping district, and the historical location of Montblanc’s first boutique in South Africa.
“The sophisticated and contemporary boutique invites existing connoisseurs and new generations of customers to discover the Maison’s rich heritage and enjoy the wide selection of products showcased,” Vergnes says.

By Dineo Faku for www.iol.co.za

Inhibiting your employees’ sense of purpose – in a static, go nowhere environment – is a sure-fire way to obliterate any sense of team morale or job satisfaction. It’s the death knell for productivity and overall profitability for any business. You feel compelled to grow your business; why shouldn’t your employees feel compelled to grow as individuals? That’s why we can think of no better way to improve your business’s bottom line than to improve the skills of your employees.

Upskilling your employees not only boosts productivity by instilling confidence, making employees less reliable on external resources and generally allowing for more work to be done, but promotes business growth and employee satisfaction. These are all indicators of a successful business. But what so many employers and entrepreneurs so often get wrong is the types of skill enhancement they focus on, ultimately achieving a poor ROI (return on investment).

With a business to worry about, frivolously spending resources on skills transference will only put you in the red. You need to be strategic about how you provision training and focus on achieving tangible results from your investments. That’s why skills enhancement should always begin with a good induction for new employees, not just because it requires very little in the way of expenditure but goes a long way to establishing the right attitude and work ethic in employees from the get-go.

A formalised, structured induction will let employees know what is expected of them and establishes the short-term skills necessary to start working immediately. Crucially, it should assist in preparing new employees for the culture of their new workplace – acclimatising them and assisting their integration into new teams.

Another fairly cost effective but potentially very beneficial consideration is to focus skills enhancement initiatives on an employee’s weaknesses, as opposed to concentrating on what they’re interested in or already good at. Employees will naturally educate themselves in the fields that interest them. But supplement that by encouraging them to subscribe to relevant content like webinars or seminars, read more about their interests, and spend free time researching those topics.

Working on their weaknesses and ironing out the pain points that inhibit optimal productivity means generating a potentially huge ROI. Solving problems by eliminating their cause rather than attending to the symptoms is a far more productive, efficient way to go about your day. Compliment this practice by identifying future supervisors and leaders and give them the tools necessary to fill those positions within their teams. If they’re effectively able to communicate and lead a team, they will be able to put out fires – should they occur – without you needing to step in.

Modern businesses are increasingly flexible, innovative and adjustable to meet new customer demands, or alternatively, disrupt the market with entirely new products or services. Rather than outsourcing those skills, incentivise employees who take on those new responsibilities with soft skills that might benefit their new position, then ultimately promote them to a permanent role. As skills investments go, it’s going to directly affect your bottom line, improving productivity and preventing reliance on external, often far costlier, skills.

There are other relatively inexpensive methods of skills transference worth considering. One-on-one mentoring, for example, lets new and junior level employees have close working relationships with more experienced staff members. It doesn’t even have to be a formal program. All that is required is a commitment to set aside some time each week or month to provide feedback, assist with decision-making and direction, and offer general support and encouragement. Think of it as an extension of onboarding.

Perhaps the most effective solution to permanent skills enhancement is creating a workplace culture that encourages learning. Because it requires relatively little monetary investment, it affords an optimal ROI.

A continuous program of ongoing skills development is a popular choice because it means catering your spend to adjust to what’s required from employees on the fly – a flexibility that should match your business. Remember that skills quickly become obsolete in the modern digital era, and front loading your employees with an impressive list of skills, while certainly beneficial, is costly and may eventually prove pointless if they aren’t always put to use.

In the end, it’s all about effective communication – that you communicate with your staff as much as they want to communicate with you. That way you get a sense of what is required while they’re updated on what is expected and, together, you can fill in the holes with appropriate skills. It means building the right attitudes, encouraging leaders to step forward and boosts team morale by encouraging collaboration – something that mentorship will echo.

By Pieter Scholtz – leading business and executive coach and South Africa’s Co-Master Licensee for global franchise company, ActionCOACH

Barclays puts Absa up for sale

UK banking group Barclays Group has made firm its intention to sell its 62,3% stake in Barclays Africa Group (formerly Absa).

The global banker listed as part of its rationale for the sell-down that, despite a strong returns profile locally, Absa’s contribution is significantly diluted at Barclays Group level.

The bank also carries 100% responsibility with only 623% benefits, it said at its results presentation.

Barclays said the sell-down will lead to further simplification of the group, resulting in cost reductions.

Barclays said it intends selling its African business over the coming two to three years “to a level which will permit us to deconsolidate it from an accounting and regulatory perspective”.

The intended sale is subject to shareholder and regulatory approvals.

Barclays Group said Absa is a well-diversified business and a high quality franchise.

“However the stake in BAGL presents specific challenges to Barclays as owners, such as the level of capital held in respect of BAGL, the international reach of the UK Bank Levy, the GSIB buffer, and MREL/TLAC and other regulatory requirements.”

Barclays Gropup Africa on Tuesday reported a 17% return on equity for 2015 in its standalone local currency results versus the 8,7% return reported for Africa Banking in Barclays’ results, the group said.

Source: www.fin24.com

Follow us on social media: 

               

View our magazine archives: 

                       


My Office News Ⓒ 2017 - Designed by A Collective


SUBSCRIBE TO OUR NEWSLETTER
Top