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Africa: Statement by World Bank Group President Robert B. Zoellick on the Summit of G20 Leaders

World Bank (Washington, DC)
PRESS RELEASE
15 November 2008
Posted to the web 15 November 2008

This summit of G-20 leaders and the G-20 meeting of finance ministers last weekend have begun to lay a productive foundation of discussion, input, and agreement. What matters now are the follow up actions. People are looking to leaders for a global, coordinated and fast response.

If September and October were about coordinated and cooperative monetary policies, then November and December will be increasingly about starting fiscal stimulus. China's recent $580 billion stimulus package was well timed and shows leadership. Further decisive actions will be needed. Such actions must take into account the interests of the poor and most vulnerable in developing countries. Last month I called for a reform of the G7 and for a modernized multilateralism to better reflect the realities of the 21st century. It is a positive step forward that leaders of developed economies are now meeting together with leaders from the rising economic powers. But the poorest developing countries must not be left out in the cold. We will not solve this crisis, or put in place sustainable long-term solutions by accepting a two-tier world.

I welcome the reaffirmation by the Heads of Government of the importance of the Millennium Development Goals and their commitment to honor their pledges of overseas aid. If we are going to avert a human crisis, we will have to do more. At $100 billion a year, the amount spent on overseas aid is a drop in the ocean compared to the trillions of dollars that are now being spent on financial rescues in the developed world. The World Bank Group will continue to stretch by expanding our funding, ideas, innovative products and partnership to help developing countries. I am encouraged by the leaders' commitment to ensure that we have sufficient resources to undertake this task.

I also welcome the commitment to increase the voice and representation of emerging and developing economies in the governance structure of the Bretton Woods institutions. Though management can make proposals, ultimately the decision on the size and timing of reforms rests with shareholders. I hope that some bold steps can be taken to build on the preliminary reforms agreed at last month's Annual Meetings. I am also pleased to see the commitment of the G20 leaders "to strive to reach agreement this year on modalities that leads to a successful conclusion to the WTO's Doha Development Agenda with an ambitious and balanced outcome". The best way to resist protectionist measures is to advance measures to open markets."

Background: Support for Crisis-Affected Countries

World Bank Group President Robert B. Zoellick announced on November 11, 2008, that the World Bank would substantially increase financial support for developing countries:
The International Bank for Reconstruction and Development can make new commitments of up to US$100 billion over the next three years to protect the poorest and most vulnerable from harm, support countries facing big budget short-falls, and help sustain long-term investments upon which recovery and long-term development will depend.
At the same time, the World Bank lowered its growth forecast for developing country economies to 4.5 percent for 2009, compared to a previous projection of 6.4 percent, due to a combination of financial turmoil, slower exports and weaker commodity prices. It expects high income country economies to contract by 0.1 percent next year while the world economy ekes out only one percent growth.

In addition to expanded lending, the World Bank Group is working to speed up grants and long-term, interest-free loans to the world's 78 poorest countries, 39 of which are in Africa. Donors last year pledged US$42 billion over three years for the International Development Association, the World Bank's fund for these countries.
The World Bank Group is also ramping up its support to the private sector through the launch or expansion of four initiatives by the IFC, its private sector arm. Combining IFC funds and money mobilized from various sources including governments and other International Financial Institutions, these new IFC facilities are expected to total around $30 billion over the next three years. On Friday, the Government of Japan announced a $2 bn contribution to support the World Bank Group's new fund for bank recapitalization in small emerging markets.

Voice and Participation

At the Annual Meetings in October 2008, World Bank shareholders agreed a package of reforms. As a first step, this package:

Creates an additional Chair at the Board for Sub-Saharan Africa, giving developing countries the majority of seats on the World Bank's Board ;

Brings the share of developing countries to 44% for IBRD, aimed in particular at adding voice for the low income countries; brings developing country votes in IDA up to 48%

Undertake a comprehensive and intensive work program to realign Bank shareholdings, moving towards an equitable voting power between developed and developing countries, including also IFC voice reforms.

This Day (Lagos)
18 November 2008
Posted to the web 18 November 2008

Efem Nkanga
Lagos

Nigeria's second national carrier, Globacom, has emphasised its readiness to launch its international submarine cable, Glo 1, touted as the solution to Nigeria and West Africa's bandwidth requirements, in March 2009. Globacom, in a statement yesterday, said the 9,500 kilometre state-of-the-art cable would enable it to have a clear distinction in providing quality services through multiple and high quality direct links to several countries across the globe. It added that the cable would enable it to interconnect with several international networks and leading traffic carriers all over the world. The firm's Group Chief Operating Officer, Mr. Mohamed Jameel, said the $150 million contract for the construction of the 8,300-kilometre long submarine cable was awarded to Alcatel of France. The project is expected to provide connectivity from Lagos to Bude in UK through fibre optic cable laid undersea. The cable, which is of the 32 STM 64 type, has virtual infinite capacity and therefore offers sufficient capacity traffic for the company's mobile, fixed, and Internet telecommunications services.

Jameel said in readiness for the launch, 4,400 kilometres of the undersea cable had already been laid from UK, through Portugal to Nouakchott in Mauritania. According to him, cable laying from Nouakchott to Nigeria had started, adding that the cable required to complete the laying of the facility to Nigeria was already on its way. He said the cable, with a capacity of 640 Giga bytes, would have landing points in UK, Portugal, Ghana and Senegal as well as in Lagos and Bonny in Nigeria by February next year. Jameel added that landing points would also be extended to other West Africa countries by the fourth quarter of 2009. There will be 18 branching units along the route upon completion of the project. Glo-1 is the first of such project embarked upon by any single organisation in the world. Nigerians and African have been eagerly awaiting the inauguration of the cable ever since the firm disclosed that it had started work on it. Globacom, Jameel noted, embarked on Glo-1 submarine cable in keeping with its aspirations to avail Africa the possibilities offered by broadband. In addition to the Glo 1 project, Jameel said Alcatel would also provide one STM 64 submarine cable capacity from UK to New York to connect Nigeria to the United States (US) to provide crystal clear voice calls and high speed data/Internet transmission services.

"The undersea cable is designed with the latest technology and it is the first of such state-of-the-art submarine cable which will connect Nigeria directly to United Kingdom and further to the United States, the two major data hubs of the world. It further enhances Nigeria's capacity to provide telephone hubbing services for the rest of the world," he noted. Globacom became a major player in the international telecommunications industry when it inaugurated its switch in the UK. It also launched its Point of Presence in Paris, France, Frankfurt, Germany and the US. Globacom's aim is to have gateway infrastructure and switches not only in Africa, Europe and America, but also in Singapore and Hong Kong in Asia, the United Arab Emirate (UAE) in the Middle East and the Australian continent which will strategically position it as a major player in the global telecoms industry. Globacom's international operation is backed by the four gateways it has deployed in Nigeria comprising two in Lagos, one in Abuja and one in Port Harcourt.

Business Day (Johannesburg)
EDITORIAL
17 November 2008
Posted to the web 17 November 2008
Johannesburg

THE weekend's G-20 summit was never going to yield a package of practical proposals to save the world from financial and economic crisis. Nor was it going to be a new "Bretton Woods", the three-week conference in 1944 that created the International Monetary Fund (IMF) and World Bank. The leaders of the advanced and emerging market economies who met in Washington at the weekend agreed to work together to stabilise financial markets and restore global growth. But they stopped short of specifics, referring all the thorny issues to their finance ministers to look at, with a view to a further summit in April. Most of the more practical plans they proposed in response to the crisis reflected measures already being undertaken by their member countries. And the proposals on which they disagree were, for the most part, sent off to committees for discussion.

For all that, the summit was more than just a public relations exercise. That it happened at all was important because it recognised, first, that the world's leading economies had to co-ordinate their efforts to resolve the crisis and, even more significant, that emerging markets were as important among those leading economies as the old.
The World Bank is forecasting that global growth will be as low as 1% next year, with high-income economies contracting 0,1% and developing countries growing only 4,5% (down from 6,4%). The world economy, in other words, could be worse than at any time in the past 60 years. Concerted action is necessary. The G-20 signalled at least that there is common cause among the leaders of countries that account for 85% of the global economy.

They agreed to take whatever action is needed to stabilise the financial system, and to use fiscal measures to stimulate domestic demand and to help emerging markets gain access to the finance they needed. They agreed too that the Bretton Woods institutions should be reformed, including granting developing countries greater representation. But there remain big disagreements between the US and Europe, for example, over cross-border financial regulation. Though the US, and even the UK, want their financial institutions to be global, they are not about to let them be supervised by global, rather than domestic, supervisors. The US isn't too keen either on European calls to regulate ratings agencies and CEs' salaries.

Those differences will not easily be settled so we are not about to see new global regulators or new global rules. Nevertheless, there's quite a lot in the fine print of the G-20 communique that represents progress. The meeting backed the idea of a "college of supervisors" (proposed by UK Prime Minister Gordon Brown) through which the various countries' financial regulators would co-operate to keep an eye on systemically important global banks. It agreed that the Financial Stability Forum should be expanded to include emerging markets, and that the forum should work with the IMF. The idea is that the forum should focus on harmonising regulatory standards while the IMF focuses on surveillance, of macro-economic and financial stability.

Important too was a commitment to try to revive global trade talks. Though the Doha round may or may not restart by year-end as hoped for, one promise at the weekend was that the G-20 will not raise trade barriers over the next 12 months - crucial given that faced with recession, countries might well have turned to increased protectionism , making things worse for all their trading partners but particularly for emerging markets. It's not much yet. But the Washington weekend could prove to be the beginning of a process that will help to make the world economy a more stable creature.

Leadership (Abuja)
11 November 2008
Posted to the web 17 November 2008
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Taiwo Ogunmola
Lagos

Lagos State Governor, Mr. Babatunde Raji Fashola, yesterday, presented the year 2009 budget of N405 billion to the State House of Assembly for consideration. Presenting the proposed budget tagged 'Budget of Accelerated Growth', the governor noted that the budget has a 0.4 per cent increase over that of 2008. He stated that the budget was composed of capital expenditure profile of N245.716 billion and a recurrent expenditure of N15.284 billion, maintaining the ratio of 60:40 as in the last budget.

The budget, he further said, has a revenue projection of N288.963 billion made up of Internally Generated Revenue (IGR) of N208.791billion, Federal Transfers of N76 billion and other Revenue (Dedicated) of N4.174 billion. Fashola also indicated the sectoral components of the capital expenditure as follows:Economic N109.155 billion (44.4%); social N43.945 billion (17.88%); environment N42.735 billion (17.32%); and administration N49.881 billion (20.30%). While stating that the recurrent expenditure is N159.284 billion, the governor said personnel cost of N42.835 billion is envisaged along with a pension-related provisions of N12.509 billion, overhead cost of N80.196 billion; subvention of N17.5 billion and a public debt charge of N3.00 billion.

He also indicated that a financial requirement of N73.835 billion, translating to 3% of the state GDP, is also envisaged and is to be financed through bond issuance and loans. Governor Fashola further disclosed that the budget, in taking cognisance of the $45 oil benchmark for the preparation of the Federal Government budget, had anticipated a reduction in statutory allocations. He explained that major developmental programmes planned for the year 2009 include the 10-lane Lagos-Badagry Expressway, the establishment of a weather agency and completion of on-going projects. He said the re-ordering of priorities as approved by the House had significantly enhanced the realisation of the goals of development anticipated in the year 2008 Budget of Great Leaps. He added that his administration would continue to minimise wastages within the public service while also ensuring optimal utilisation of funds accruing to government. He reported a 71.14% performance of the 2008 Budget, as at the third quarter of the current year.

This Day (Lagos)
16 November 2008
Posted to the web 17 November 2008

Festus Akanbi
Lagos

A major boost was given to Nigeria's quest for foreign investment inflow at the weekend as the country was named the least vulnerable economy in the world, according to a report, Global Economics, compiled by a team of experts from Merrill Lynch. Merrill Lynch is one of the world's leading financial management and advisory companies, providing financial advice and investment banking services. The report, a copy of which was made available to THISDAY at the weekend, was compiled following several data requests from clients of the investment bank for key risk indicators for all major economies including Europe, the Middle East and Africa (EMEA).

According to the statistics, the world's 10 least vulnerable economies are Nigeria, Mexico, Philippines, Colombia, Egypt, Oman, Indonesia, Peru, China and Russia. Also, the report identified Australia, Switzerland, Korea, Romania, Hungary, Sweden, Bulgaria, Euro area, United Kingdom and the United States of America as the highest risk economies in the world. The risk ranking was based on seven indicators and they are - current account financing gap, foreign exchange reserves/short-term external debt ratio, private credit-to-Gross Domestic Product (GDP) ratio, and private credit growth, loans to deposits and banks capital-to-assets ratio. Merrill Lynch said the report also addressed all the requests in 62 indicators of the 60 world economies. According to the report, Nigeria, with a population of 141.41million, was able to record a 7.3 per cent growth in GDP, with its Consumer Price Index hovering at 11.5 per cent, its current account balance, fiscal balance and public debt at 6 per cent, 6.3 and 10.4 percentage respectively.

To determine its external vulnerability, Nigeria's external debt position was put at 12.9 per cent of the GDP, while external debt /exports ratio was put at 9 per cent. Her forex reserves totalled $60.8billion. The percentage of Nigeria's total external debt in relation to the GDP was put at two per cent, total foreign claims is $15.3billion while international claims stood at $13.1billion. The report stated that the percentage of Current Account Balance plus net Foreign Direct Investment of the Nigerian GDP was 34, Forex reserves/short-term external debt totalled 41, while percentage of export of the GDP was 38 point. The percentage of private credit of GDP was 43, while the percentage of bank capital to assets, according to Merrill Lynch was 41.

The 10 most vulnerable countries, which are mostly European countries, were said to have exhibited worse balance of payments positions, stretched external debt service ratios and over leveraged financial systems.
"Many of the economies that top our risk ranking have been identified by the National Bureau of Economic Research (NBER) as those that have experienced capital flow bonanzas in the past five years and hence exhibit higher likelihood of economic crisis," the report explained. Explaining further on how it put the report together, Merrill Lynch states that: "While we believe that our country risk ranking produces plausible results, one needs to be aware that, as any ranking of that type, it is highly sensitive to the selection of indicators employed. For example, developed countries can probably sustain higher external vulnerability indicators than emerging markets; some Euro area country statistics are possibly misleading given there is a monetary union."

In their reactions, the leadership of the Nigerian organised private sector said the various investment-friendly programmes put in place especially in the past five years largely gave Nigeria a pride of place in the ranking. Immediate past Director-General of the Nigerian Economic Summit Group (NESG), Dr. Mansur Ahmed said the latest ranking has confirmed that Nigeria is indeed an investors-haven. The feat, he said, should be traced to a regime of consistent and sustained improvement in the nation's fiscal management. Speaking with THISDAY in a telephone interview yesterday, Ahmed acknowledged that Nigeria has been able to maintain a healthy foreign exchange management, low budget deficit and heavily low external indebtedness, which he said have combined to grossly reduce the nation's level of risk. He said those indices have also endeared the nation's economy to foreign investors. However, the incumbent DG of NESG, Mazi Sam Ohuanbuwa said the investment community would not be surprised at the latest ranking by Merrill Lynch. According to him, the key indicator to the safety of investment in Nigeria is the freedom to invest in any part of the country without government's intervention.

Intra-Africa Business Executive Breakfast (Johannesburg)
SPONSOR WIRE
11 November 2008
Posted to the web 11 November 2008

Uganda , a key player in the East African Community offers business opportunities to companies that have identified East Africa as part of their growth strategy. We are honoured to have His Excellency Mr. Kweronda Ruhemba, the High Commissioner of the Republic of Uganda to South Africa, as our guest speaker at an Intra-Africa Business Executive Breakfast Meeting. The event will take place on Thursday, 20 November 2008 at the Hilton Hotel, 138 Rivonia Road in Sandton, Johannesburg South Africa. The ambassador will enlighten business delegates on why Uganda is an attractive market for investment in East Africa.
Specifically, he will focus on:
• Ugandan government's commitment to private sector.
• The conducive business climate.
• Country's strong natural resource base.
• Attractive Investment Incentives and policies.
• And much more.......

Business delegates will also be exposed to the macro-economic forecast of the East African region. The presentation will be done by Thalma Corbett, an emerging market economist from Noelani King Conradie Independent Economists touching on such countries as Kenya, Tanzania and Uganda.
Notes:
Thalma Corbett
• Thalma Corbett is a Senior Emerging Market Economist at NKC Independent Economists. Thalma's highest qualifications include a Masters Degree in Chemistry and a Masters Degree in Business Management and Administration (MBA) from Stellenbosch University. She obtained both her Honours and Masters Degrees in Business Management and Administration cum laude and has published seven articles in internationally accredited journals in the fields of science and economics. Her most recent work experience before joining the team at NKC in February 2007 was as manager of bio-analytical services development at a biotechnology company in Cape Town.
Thalma is an emerging market economist focusing on East Africa .
NKC Independent Economists
• The business of NKC Independent Economists is to understand the African continent. NKC focuses on understanding the macroeconomic and political environment of a selection of about 27 African countries. We use our extensive access to information resources on the continent, and apply our own knowledge base and understanding of the continent in order to make economic forecasts and to predict political turmoil. In addition, we have developed sovereign risk models to better understand and evaluate risks related to investing in countries on the African continent and to understand the implications that these risks have for businesses. With these risk models we monitor key criteria in crucial areas of political and economic stability, using weighting and scoring; enabling us to put a definitive number to the country-specific risk that our clients face. Through structured reporting and constant monitoring, using real-time information sources; we observe, analyse, interpret and predict these risks.

Intra-Africa Business Executive Breakfast Meeting : A platform where South African- based businesses with broader African strategies can be educated about the rest of the continent, its economic performance; and most importantly be informed of various business possibilities that may be available.

This Day (Lagos)
18 November 2008
Posted to the web 18 November 2008
Lagos

Samsung Mobile, at the weekend in Lagos, announced the donation of $150,000 (about N17.7m) in support of its commitment to soccer development in Nigeria. Mr James You, the managing director of Samsung Nigeria while making the announcement of the money in support of Search and Groom activities towards football development among youth at the grassroots, said it was it's firm believe that Nigerian youths have great potentials in the game.

"We believe that Nigerian youths have a lot of potential in the game of soccer, and Samsung Mobile is passionate in supporting them to realize their dreams". He said at the NextHero Gala at the Eko Hotels in Lagos that the campaign serves as a platform for Samsung to demonstrate its commitment to soccer development at the grassroots in Nigeria Mr. You also stated that the numerous Nigerians who purchased the sleek beautiful Samsung J700 mobile phone largely supported the Samsung NextHero Campaign. Samsung Mobile committed a portion of the profits realized from its Samsung J700 mobile phone sales to the campaign. Working with the funds generated from the sales of the Samsung J700 mobile phone, Search and Groom was able to commence its planned Samsung NextHero Cup Tournament designed for the physical and mental development of kids between the ages of 14 and 18 years through quality training and competitions. The tournament is currently taking place in Ibadan in Oyo state, Ajegunle, Agege, Abesan, Ikeja and Ikorodu. Communities in Lagos and will climax with the finals on the 20th of December at Astroturf, Osborn Ikoyi.

Responding to the gesture, the Executive Director Search and Groom, Mr. Yomi Kuku, said: "we are delighted to be Samsung Mobile's partner on this campaign; the company has demonstrated high level commitment to the development of the game of football at the grassroots. We hope other organizations will emulate Samsung Mobile and support Nigerian youths." Ten lucky Nigerians who will go on a hospitality trip to watch the Chelsea vs. Arsenal match in London on the 30th of November and have a lifetime chance to meet with the soccer hero, Didier Drogba were also presented with their cheques at the event.

Vanguard (Lagos)
18 November 2008
Posted to the web 18 November 2008

Hector Igbikiowubo

Capital Oil and Gas Industries, a company with varied interests in the country's downstream sector says it has invested over N100 billion in the development of its petroleum products depot, jetty and 1097 capacity trucks holding bay all sited in Lagos state. Mr. MCK Ubah, an Executive Director of the company made the disclosure while speaking with journalists on Thursday following the visit of Governor Peter Obi of Anambra State who inspected the company's facilities. Ubah disclosed that the company's petroleum products cargo jetty will be ready for commissioning before the end of the year and that when completed it would alleviate the problems of congestion being experienced at the Ibru jetty.

"The jetty should be able to dock 8 mother vessels discharging at the same time. At the moment only one jetty is in use for those operating in the Ibru jetty. But this will soon change. Even our multi truck park which is capable of holding 1097 trucks should be ready before the end of the year. The Lagos State government had assured us they would develop the access road and build the culverts. But this has not happened and we can't continue to wait. We have taken the initiative and gone ahead to construct both the access road and the culverts. We have invested over N100 billion in the in the development of the products terminal, the jetty and our truck park. We are members of the Depot and Petroleum Products Marketers Association (DAPPMA) and we have also reached an understanding with them for use of our facilities.

During the visit, Mr. Ifeanyi Patrick Ubah, Managing Director and CEO of Capital Oil and Gas industries donated two 18 sitter Hummer buses one each to the Anambra State Government and the Nigerian Chamber of Shipping. While speaking on the development, MCK Ubah explained that the donation constitutes a practical demonstration of the company's to development of Anambra state and the Nigerian Chamber of Shipping. He said the visit to the depot was at the instance of Governor Peter Obi of Anambra state whom he described as committed to the ideals of the state's NEEDS programme. Ubah said the company was ready to partner with the state government for the growth and development of the state, adding that the company had secured land and was developing a mini petroleum products depot in the state. "We also have five mega filling stations spread across various parts of the state, a gas plant initiative and the CEO of the company has over 100 students of Anambra state extraction on scholarship at any particular point in time." While speaking earlier, Governor Obi said the visit was part of his government's initiative to identify and work closely with indigenes of Anambra state and get them to come home and invest.

"This way they can create jobs for the people. We also expect them to ensure corporate governance in there organisations.
These budding entrepreneurs have not been approached in an organised manner. I was in Tennessee last week and the Governor of that state had traveled to Germany to solicit their businesses to come and invest in Tennessee. This is America we are talking about. So we need to visit these business men and attract them to come and invest rather than sit back and expect them to bring in their funds. We are offering several incentives including land, tax relief and whatever is within our power to grant, provided we are adequately informed on these needs. All they need do is let us know what they want and we would offer it. Capital Oil and Gas has not asked for anything and in this particular instance, they don't need to ask before we grant them adequate incentives. We are impressed with what we have seen since we got here," Governor Obi said. Vanguard gathered that Capital Oil and Gas Industries has also invested in other sectors of the economy including shipping, aluminum roofing sheets manufacturing and the hospitality industry.

NEWS