Malawi government has banned the exportation of raw cotton , Vice President Joyce Banda has disclosed. The Vice President made the disclosure when she launched a cotton investment project, Integrated Cotton and Textile Manufacturers, a Chinese company, in Balaka.
“It is the wish of the government that all cotton grown in Malawi should be processed in the country,” said Banda. She said it is the wish of President Bingu wa Mutharika and his government to ensure cotton farmers in the country earn more money on their commodity. Banda said as the only way to improve proceeds farmers earn on cotton products, government has set minimum buying prices.
The Vice President said all cotton buyers who did not agree to K75 per kilogramme minimum price can go elsewhere saying it is the President’s directive for the prescribed procurement prices. Banda urged companies to utilize locally grown cotton to feed into textile manufacturing rather than exporting it.
Like tobacco farmers, many cotton farmers have been complaining that they were being exploited by pricing problems, suspecting that buyers appear to have formed a cartel to fix prices.
Last year, the country’s largest textile manufacturing company, Mapeto David Whitehead and Sons Malawi Limited, sent its staff on leave due to the scarcity of cotton. The company uses about 1,200 metric tons of cotton a year.
Minister of Trade and Industry, Eunice Kazembe speaking at the same function said cotton has been given prominence by the current administration and would become Malawi’s second cash crop after tobacco. She said the opening of the cotton factory in Balaka will live to government’s goal to turn Malawi into a producing and exporting nation.
Chinese ambassador Lin Songtian said the company will employ about 1,000 Malawi and that the company will also be producing cooking oil and manufacturing clothes. He said final product will be exported to China.
In his State of National Address under the theme ‘Malawi’s Economic Miracle’ delivered during the opening of the 41st session of Parliament and the 2009/2010 Budget meeting in Lilongwe, President Mutharika said the country’s total export revenue last year increased by about 30 percent from K80.4 billion to K104 billion in 2007. According to the President, cotton was third after tobacco , tea which contributed greatly to export earnings.
Malawi grows about 75,000 metric tons of cotton per year.
June 28, 2009
Kenya hopes sugar factory privatizations will cut costs, improve sector competitiveness
by Duncan Miriri
Kenya expects privatisation of five sugar factories to cut inefficiencies in the industry and boost its regional competitiveness ahead of the end of trade safeguards, a top government official said.Experts blame high costs of production for making the Kenyan sugar industry uncompetitive compared with other producers in the region.
"We believe that when the private sector comes in, it will be able to look at each and every line and may cut costs to the tune of 30 percent. If they do that, then we will be home and dry in terms of competition," Romano Kiome, the Agriculture Ministry's permanent secretary said.
The east African nation has a deal with the Common Market for Eastern and Southern Africa (COMESA) trade bloc that allows it to restrict sugar imports from the bloc to 200,000 tonnes per year to protect its industry. It is selling shares in five sugar factories in a privatisation round that also involves sale of stakes in other enterprises.
Kiome said it was hard to tell if the industry is ready for the lifting of the trade safeguards. "We expect that privatisation will be achieved in the next, maximum, 16 months. Until it is in the hands of the private sector... it would be premature for somebody to say we are ready for the removal of the COMESA safeguards," he said.
Investors from Brazil, Mauritius and Turkey have shown interest in bidding for the factories, Kiome said, adding bids would be opened next Tuesday.
Successful bidders will be met by high costs of production that compare poorly with other producers. In the western Kenya sugar belt, it costs $570 to produce a tonne of sugar compared with $240-$290 in Sudan and Egypt, according to data from the Southern and Eastern Africa Trade information and Negotiations Institute. "There are a lot of inefficiencies of both labour and money in the sector," said Kiome.
Kenya has an annual sugar deficit estimated at 200, 000 tonnes. It is filled by imports from COMESA countries but illicit imports also make their way into the country, to the chagrin of local producers, whose processed sugar is far more expensive.
The Daily Nation
The Daily Nation
Foreign investment cushions downturn in Africa
by Sarah Childress
Foreign investment from China and the Persian Gulf nations is helping Africa weather the global downturn, but some say the funds come at a high cost.
Jiang Jianqing, chairman of the state-run Industrial & Commercial Bank of China Ltd., told African leaders here this month at the World Economic Forum on Africa that Chinese investment in Africa is growing and becoming more diversified, even as the global downturn curbs investment by other countries. China, which has been an African investor for more than a decade, plans to step up activities and work on its reputation in Sub-Saharan Africa as an employer and business partner.
This month, ICBC and Standard Bank Group Ltd., of South Africa, finalized a deal to expand Botswana's main coal-fired power station. China National Electric Equipment Corporation, a top ICBC client, was awarded the $970 million contract to supply and expand the station to ramp up the diamond-rich nation's energy supply.
ICBC is pursuing 65 multimillion-dollar projects across the continent through its partnership with Standard Bank, in which it bought a 20% stake in 2007, Mr. Jiang said. Chinese investment, initially focused on shoring up access to raw materials as its economy grew, is moving into sectors beyond infrastructure and mining.
Persian Gulf investors, too, although hammered by the downturn, say they are sticking with African projects. Soud Ba'alawy, executive chairman of Dubai Group, the state-owned investment group, said Dubai is pursuing opportunities in the continent. Falling oil prices and a plummeting real-estate market forced many big Dubai investors to retrench and rethink projects, particularly ones far from home. But as oil prices rebound and local stock markets rise, Persian Gulf investors are combing Africa for opportunities.
Foreign-investment flows could be a critical lifeline for some Sub-Saharan African economies. The region's income has been hit by falling commodity prices and dwindling government revenue. Remittances have declined as Africans abroad have been laid off. This year, foreign inflows to developing countries are expected to drop 82%, the Institute of International Finance says. The increased interest from China and Gulf countries, as well as India, has helped to embolden some African governments to demand more favorable terms or to create a more competitive business environment.
Officials in a number of African governments say the Chinese and Arab governments, compared with their Western counterparts, attach relatively few conditions to aid or investment projects.
In African countries where China has invested, many local people complain that the Chinese companies import everything -- including bottled water and toilet paper -- from home, bypassing the domestic economy. In mineral-rich countries such as Zambia and the Democratic Republic of Congo, some Chinese companies have a reputation for exploiting workers.
China's government has said it believes its investments in Africa benefit both sides, and that its involvement there is welcomed by most Africans. In 2005, 46 Zambians were killed in an explosion at a copper mine owned by China's state metals conglomerate. A government inquiry showed the company had cut corners on safety and banned union organizing. The Chinese company paid compensation to the victims' families and allowed a union to be formed. The following year, Chinese security guards at the mine opened fire on Zambian workers who were protesting the company's failure to improve working conditions and to deliver back pay promised in a new union deal. In 2007, a representative said the company was complying with Zambian law and had given a full report on the matter to the Zambian government. The incidents remain a sensitive subject for local miners and politicians in Zambia's Copperbelt, the country's industrial base.
"Bringing the Chinese into our industry is like importing poverty and exporting wealth," said Chishimba Kambwili, the member of parliament from Luanshya, in the Copperbelt, in an interview this year. "They pay very low salaries, and they deplete our resources without our country getting value."
In Congo, the International Monetary Fund has criticized a multi-million-dollar infrastructure deal China made last year in exchange for metals. Mr. Jiang acknowledged that there have been problems in the past and said the Chinese government is working to improve relations.
Wall Street Journal
Foreign investment from China and the Persian Gulf nations is helping Africa weather the global downturn, but some say the funds come at a high cost.
Jiang Jianqing, chairman of the state-run Industrial & Commercial Bank of China Ltd., told African leaders here this month at the World Economic Forum on Africa that Chinese investment in Africa is growing and becoming more diversified, even as the global downturn curbs investment by other countries. China, which has been an African investor for more than a decade, plans to step up activities and work on its reputation in Sub-Saharan Africa as an employer and business partner.
This month, ICBC and Standard Bank Group Ltd., of South Africa, finalized a deal to expand Botswana's main coal-fired power station. China National Electric Equipment Corporation, a top ICBC client, was awarded the $970 million contract to supply and expand the station to ramp up the diamond-rich nation's energy supply.
ICBC is pursuing 65 multimillion-dollar projects across the continent through its partnership with Standard Bank, in which it bought a 20% stake in 2007, Mr. Jiang said. Chinese investment, initially focused on shoring up access to raw materials as its economy grew, is moving into sectors beyond infrastructure and mining.
Persian Gulf investors, too, although hammered by the downturn, say they are sticking with African projects. Soud Ba'alawy, executive chairman of Dubai Group, the state-owned investment group, said Dubai is pursuing opportunities in the continent. Falling oil prices and a plummeting real-estate market forced many big Dubai investors to retrench and rethink projects, particularly ones far from home. But as oil prices rebound and local stock markets rise, Persian Gulf investors are combing Africa for opportunities.
Foreign-investment flows could be a critical lifeline for some Sub-Saharan African economies. The region's income has been hit by falling commodity prices and dwindling government revenue. Remittances have declined as Africans abroad have been laid off. This year, foreign inflows to developing countries are expected to drop 82%, the Institute of International Finance says. The increased interest from China and Gulf countries, as well as India, has helped to embolden some African governments to demand more favorable terms or to create a more competitive business environment.
Officials in a number of African governments say the Chinese and Arab governments, compared with their Western counterparts, attach relatively few conditions to aid or investment projects.
In African countries where China has invested, many local people complain that the Chinese companies import everything -- including bottled water and toilet paper -- from home, bypassing the domestic economy. In mineral-rich countries such as Zambia and the Democratic Republic of Congo, some Chinese companies have a reputation for exploiting workers.
China's government has said it believes its investments in Africa benefit both sides, and that its involvement there is welcomed by most Africans. In 2005, 46 Zambians were killed in an explosion at a copper mine owned by China's state metals conglomerate. A government inquiry showed the company had cut corners on safety and banned union organizing. The Chinese company paid compensation to the victims' families and allowed a union to be formed. The following year, Chinese security guards at the mine opened fire on Zambian workers who were protesting the company's failure to improve working conditions and to deliver back pay promised in a new union deal. In 2007, a representative said the company was complying with Zambian law and had given a full report on the matter to the Zambian government. The incidents remain a sensitive subject for local miners and politicians in Zambia's Copperbelt, the country's industrial base.
"Bringing the Chinese into our industry is like importing poverty and exporting wealth," said Chishimba Kambwili, the member of parliament from Luanshya, in the Copperbelt, in an interview this year. "They pay very low salaries, and they deplete our resources without our country getting value."
In Congo, the International Monetary Fund has criticized a multi-million-dollar infrastructure deal China made last year in exchange for metals. Mr. Jiang acknowledged that there have been problems in the past and said the Chinese government is working to improve relations.
Wall Street Journal
June 09, 2009
Brazil eyes increase in trade with Africa
Like China, Brazil is looking to expand trade with the African continent. In June the Brazilian export agency Apex opened a two-day forum on economic cooperation in the Senegalese capital Dakar.
"We want to develop the cooperation between Brazil and sub-saharan Africa and share our experiences and knowledge," Brazilian Minister of Development, Industry and Foreign Trade Miguel Jorge said at the opening of the forum. Possible areas of cooperation, according to the minister, could include biofuels.
As the world's biggest exporter of ethanol, and its second-biggest producer, after the United States, Brazil is a staunch advocate of biofuels. A switch to biofuel crops in Africa could "diversity agricultural production" and help west African countries "escape the oil tyranny."
Senegal's newly appointed Minister of International Cooperation Karim Wade said the forum provided a meeting place for "the vast emerging markets in Latin America and Africa with its mineral wealth and abundant human resources."
According to Brazilian government figures, trade between Brazil and Africa quadrupled between 2003 and 2008 from 6.11 billion to 26 billion dollars (18.5 billion euros).Trade with sub-saharan Africa was up 310 percent going from 2.3 billion to 9.5 billion dollars in the same period.
The Namibian
"We want to develop the cooperation between Brazil and sub-saharan Africa and share our experiences and knowledge," Brazilian Minister of Development, Industry and Foreign Trade Miguel Jorge said at the opening of the forum. Possible areas of cooperation, according to the minister, could include biofuels.
As the world's biggest exporter of ethanol, and its second-biggest producer, after the United States, Brazil is a staunch advocate of biofuels. A switch to biofuel crops in Africa could "diversity agricultural production" and help west African countries "escape the oil tyranny."
Senegal's newly appointed Minister of International Cooperation Karim Wade said the forum provided a meeting place for "the vast emerging markets in Latin America and Africa with its mineral wealth and abundant human resources."
According to Brazilian government figures, trade between Brazil and Africa quadrupled between 2003 and 2008 from 6.11 billion to 26 billion dollars (18.5 billion euros).Trade with sub-saharan Africa was up 310 percent going from 2.3 billion to 9.5 billion dollars in the same period.
The Namibian
June 08, 2009
Trade finance improving, but has long way to go
Trade finance is showing signs of life following traumatic upheavals during the height of the financial crisis in late 2008, but smaller traders in particular are still finding it hard to obtain credit.
"For smaller players without an established track record, getting credit is a huge problem," said Dale Ploughman, chief executive of Seanergy Maritime Holdings Corp, which hauls bulk commodities like coal and steel. "We've been lucky as our charterers have not faced this particular problem," he said. "But unfortunately, a lot of people have had to face this issue." He added: "This is an issue the whole industry must deal with."
In the normal course of events, trade finance receives little attention. Letters of credit -- providing payment to exporters on provision of goods -- loans to exporters or bank guarantees for importers or exporters tend to work smoothly. But in the uncertain weeks following the cataclysmic collapse of Lehman Brothers last September, that all changed virtually overnight as lenders cut credit lines, stifling trade.
"This was a huge issue in the fourth quarter, all of a sudden exports of some commodities like grain and steel came to a grinding halt," said Felipe Menendez, CEO of shipping company Ultrapetrol Bahamas Ltd.
But in recent months a thawing of the credit markets and fresh Chinese demand for raw materials have lifted shipping rates and eased the strain on shippers.
"We're no longer in the massive destabilizing that we saw when trade credit was not available," said Douglas Mavrinac, an analyst at Jefferies & Co. "The banking system is healing itself now. But there is still a long way to go and rates are still well off where they were."
Despite improvements, the market has not fully recovered. And some argue that if credit issues are not resolved, there will not be enough money out there when trade picks up.
Trade finance is a high-margin, short-term business -- a loan typically lasts 80 to 90 days -- and is considered low-risk as loans are well-collateralized using the goods being shipped as security. But after Lehman fell, banks found trade finance easy to drop as they shored up balance sheets.
"It's true trade finance is a high-margin, low-risk business," said Georgina Baker, director of short-term finance at the International Finance Corporation. "But because it's short term, it's also what people can cut quickly." Banks also feared they could be stuck with cargo if a shipper went under. "In a sudden downturn like the one we saw in the fourth quarter, this can be a legitimate cause for concern," said Gregory Lewis, an analyst at Credit Suisse.
According to the International Monetary Fund, the shortfall in trade finance -- the gap between how much credit is needed and how much banks are willing to lend -- hit $500 billion in early 2009. As credit was sucked out of the market, the Baltic Exchange's dry sea freight index -- which tracks prices to ship commodities such as iron ore, grains and cement -- fell an incredible 94 percent to 663 points on Dec. 5 from an all-time high of 11,793 points on May 20.
"The really sharp decline in dry bulk commodity rates was a function of a lack of trade finance," Lewis said.
The credit market has since improved, in part due to China's renewed appetite for raw materials. Chinese iron ore imports hit record levels in February, March and April, pushing the dry freight index above 3,800 points. "We're not in full-scale freak-out mode any more and the market is beginning to function again," said Omar Nokta, an analyst at investment bank Dahlman Rose.
According to the IMF, the trade finance gap has shrunk to between $50 billion and $220 billion. But business has instead been hit by the global recession, with the IMF predicting a global decline of 6.1 percent in trade in 2009.
"Earlier in the crisis, liquidity played a large part in the drop in trade," said Donna Alexander, president of the Bankers' Association for Finance and Trade. "We're hearing now that liquidity is not quite as much of the problem as it was." "Now it's more a matter of demand being down."
Chinese exports fell 22.6 percent in April, while U.S. exports were down 2.4 percent in March. According to Paris-based shipping consultant AXS Alphaliner, in May 10.3 percent of the global container ship fleet -- which haul containers full of consumer goods from toys to furniture -- was idled.
John Maccarone, CEO of Textainer Group Holdings Ltd, which leases out containers to shipping companies, said individual exporters still cannot obtain credit. "But this isn't one of my customers' main complaints," he said. "What they need is more cargo."
But while the market has improved, there is still a credit shortfall. In April, the G20 group of industrial and developing nations promised at least $250 billion over the next two years to support trade finance, but it is still unclear where the money will come from.
IFC's Baker said banks issuing guarantees are having trouble selling them in the secondary market. "There is no secondary market," she said. The worst-affected areas are Eastern Europe, Africa and East Asia, she added. She said the challenge faced by governments and organizations like the IFC is rebuilding trust between banks and persuading them to get back into the lending game. "Some banks have cash but aren't investing it; many companies don't need cash but want more of it on hand," Baker said. "There is more money out there, but it's not being spent. It's just being sat on."
Others warn that if trade finance problems are not addressed, they will stifle trade again when demand returns. "While trade finance wasn't a problem before the credit crisis, it's going to very quickly become a restraint as growth rebuilds but bank capital is lacking," said James Parsons, a portfolio manager at hedge fund BlueCrest Capital Management.
"For smaller players without an established track record, getting credit is a huge problem," said Dale Ploughman, chief executive of Seanergy Maritime Holdings Corp, which hauls bulk commodities like coal and steel. "We've been lucky as our charterers have not faced this particular problem," he said. "But unfortunately, a lot of people have had to face this issue." He added: "This is an issue the whole industry must deal with."
In the normal course of events, trade finance receives little attention. Letters of credit -- providing payment to exporters on provision of goods -- loans to exporters or bank guarantees for importers or exporters tend to work smoothly. But in the uncertain weeks following the cataclysmic collapse of Lehman Brothers last September, that all changed virtually overnight as lenders cut credit lines, stifling trade.
"This was a huge issue in the fourth quarter, all of a sudden exports of some commodities like grain and steel came to a grinding halt," said Felipe Menendez, CEO of shipping company Ultrapetrol Bahamas Ltd.
But in recent months a thawing of the credit markets and fresh Chinese demand for raw materials have lifted shipping rates and eased the strain on shippers.
"We're no longer in the massive destabilizing that we saw when trade credit was not available," said Douglas Mavrinac, an analyst at Jefferies & Co. "The banking system is healing itself now. But there is still a long way to go and rates are still well off where they were."
Despite improvements, the market has not fully recovered. And some argue that if credit issues are not resolved, there will not be enough money out there when trade picks up.
Trade finance is a high-margin, short-term business -- a loan typically lasts 80 to 90 days -- and is considered low-risk as loans are well-collateralized using the goods being shipped as security. But after Lehman fell, banks found trade finance easy to drop as they shored up balance sheets.
"It's true trade finance is a high-margin, low-risk business," said Georgina Baker, director of short-term finance at the International Finance Corporation. "But because it's short term, it's also what people can cut quickly." Banks also feared they could be stuck with cargo if a shipper went under. "In a sudden downturn like the one we saw in the fourth quarter, this can be a legitimate cause for concern," said Gregory Lewis, an analyst at Credit Suisse.
According to the International Monetary Fund, the shortfall in trade finance -- the gap between how much credit is needed and how much banks are willing to lend -- hit $500 billion in early 2009. As credit was sucked out of the market, the Baltic Exchange's dry sea freight index -- which tracks prices to ship commodities such as iron ore, grains and cement -- fell an incredible 94 percent to 663 points on Dec. 5 from an all-time high of 11,793 points on May 20.
"The really sharp decline in dry bulk commodity rates was a function of a lack of trade finance," Lewis said.
The credit market has since improved, in part due to China's renewed appetite for raw materials. Chinese iron ore imports hit record levels in February, March and April, pushing the dry freight index above 3,800 points. "We're not in full-scale freak-out mode any more and the market is beginning to function again," said Omar Nokta, an analyst at investment bank Dahlman Rose.
According to the IMF, the trade finance gap has shrunk to between $50 billion and $220 billion. But business has instead been hit by the global recession, with the IMF predicting a global decline of 6.1 percent in trade in 2009.
"Earlier in the crisis, liquidity played a large part in the drop in trade," said Donna Alexander, president of the Bankers' Association for Finance and Trade. "We're hearing now that liquidity is not quite as much of the problem as it was." "Now it's more a matter of demand being down."
Chinese exports fell 22.6 percent in April, while U.S. exports were down 2.4 percent in March. According to Paris-based shipping consultant AXS Alphaliner, in May 10.3 percent of the global container ship fleet -- which haul containers full of consumer goods from toys to furniture -- was idled.
John Maccarone, CEO of Textainer Group Holdings Ltd, which leases out containers to shipping companies, said individual exporters still cannot obtain credit. "But this isn't one of my customers' main complaints," he said. "What they need is more cargo."
But while the market has improved, there is still a credit shortfall. In April, the G20 group of industrial and developing nations promised at least $250 billion over the next two years to support trade finance, but it is still unclear where the money will come from.
IFC's Baker said banks issuing guarantees are having trouble selling them in the secondary market. "There is no secondary market," she said. The worst-affected areas are Eastern Europe, Africa and East Asia, she added. She said the challenge faced by governments and organizations like the IFC is rebuilding trust between banks and persuading them to get back into the lending game. "Some banks have cash but aren't investing it; many companies don't need cash but want more of it on hand," Baker said. "There is more money out there, but it's not being spent. It's just being sat on."
Others warn that if trade finance problems are not addressed, they will stifle trade again when demand returns. "While trade finance wasn't a problem before the credit crisis, it's going to very quickly become a restraint as growth rebuilds but bank capital is lacking," said James Parsons, a portfolio manager at hedge fund BlueCrest Capital Management.
June 07, 2009
Cheap imports collapse troubled Zimbabwe textile industry
by Shame Makoshori
Zimbabwe's textile workers this week (June 4) appealed for government's
intervention to halt the mass importation of textiles after results of a recent survey revealed that 5 231 jobs had been lost in eight months as the industry responded to increased foreign competition by cutting jobs.
The importation of textiles, which started taking its toll on the once vibrant industry in the early 1990s when cheap fabric from Mozambique flooded the local market, has accelerated since the liberalisation of the country's economy in February. Most industry players are now on the brink of collapse after failing to withstand the heat from cheap imports.
Last month, the Zimbabwe Textile Workers Union (ZTWU) warned, in a letter to
Industry and Commerce Minister Welshman Ncube, that further job cuts were
imminent if government does not take swift action to minimise the influx of
cheap fabric into the country.
The ZTWU membership has declined from 11 523 workers in September 2008 to 6
292 at the end of April.
"The industry is in intensive care," ZTWU secretary general Silas Kuveya
wrote. "Our statistics reveal that from September 2008 to April 2009, the textile
industry in Zimbabwe lost about 5 231 jobs and if the issue is not addressed
as a matter of urgency, the sector will lose more jobs.
"The above only refers to the textile industry and we believe that the clothing industry is also affected in the same manner and this affects our economy as well," added Kuveya.
Recent statistics by the National Union for the Clothing Industry indicate that 16 000 workers remained in the industry in 2006 from about 24 000 in 2000 as the effects of hyperinflation, power and foreign currency shortages combined to subdue production.
Two years ago, industry leader David Whitehead Textiles Limited escaped from
the jaws of closure as a result of the harsh economic terrain worsened by
the effects of imported textiles.
In the 1990s, another industry giant, Cone Textiles, now operating as
Modzone Enterprises, had to be rescued from collapse after serious viability
concerns triggered by the increased competition from imports and input
shortages.
Several other small textile companies have closed shop due to the hostile
operating environment.
The ZTWU said it has particularly been enraged by the sale of two-in-one
blankets in Chinese and Nigerian shops weighing only 3,5 kg instead of the
recommended 5kg. The union said while it appreciates the need for competition on the domestic market, it noted with concern that there is "unfair" competition emanating from some blanket manufacturers.
"The union has discovered that there is a sub-standard two-in-one blanket
being purported to be imported from South Africa and sold in local Chinese
and Nigerian shops.
"In actual fact, it seems this blanket is made in China and its packaging
and distribution is done in Zimbabwe while the bag is written 'Made in South
Africa' and the blanket label is written in Chinese," Kuveya said.
http://www.fingaz. co.zw/
Zimbabwe's textile workers this week (June 4) appealed for government's
intervention to halt the mass importation of textiles after results of a recent survey revealed that 5 231 jobs had been lost in eight months as the industry responded to increased foreign competition by cutting jobs.
The importation of textiles, which started taking its toll on the once vibrant industry in the early 1990s when cheap fabric from Mozambique flooded the local market, has accelerated since the liberalisation of the country's economy in February. Most industry players are now on the brink of collapse after failing to withstand the heat from cheap imports.
Last month, the Zimbabwe Textile Workers Union (ZTWU) warned, in a letter to
Industry and Commerce Minister Welshman Ncube, that further job cuts were
imminent if government does not take swift action to minimise the influx of
cheap fabric into the country.
The ZTWU membership has declined from 11 523 workers in September 2008 to 6
292 at the end of April.
"The industry is in intensive care," ZTWU secretary general Silas Kuveya
wrote. "Our statistics reveal that from September 2008 to April 2009, the textile
industry in Zimbabwe lost about 5 231 jobs and if the issue is not addressed
as a matter of urgency, the sector will lose more jobs.
"The above only refers to the textile industry and we believe that the clothing industry is also affected in the same manner and this affects our economy as well," added Kuveya.
Recent statistics by the National Union for the Clothing Industry indicate that 16 000 workers remained in the industry in 2006 from about 24 000 in 2000 as the effects of hyperinflation, power and foreign currency shortages combined to subdue production.
Two years ago, industry leader David Whitehead Textiles Limited escaped from
the jaws of closure as a result of the harsh economic terrain worsened by
the effects of imported textiles.
In the 1990s, another industry giant, Cone Textiles, now operating as
Modzone Enterprises, had to be rescued from collapse after serious viability
concerns triggered by the increased competition from imports and input
shortages.
Several other small textile companies have closed shop due to the hostile
operating environment.
The ZTWU said it has particularly been enraged by the sale of two-in-one
blankets in Chinese and Nigerian shops weighing only 3,5 kg instead of the
recommended 5kg. The union said while it appreciates the need for competition on the domestic market, it noted with concern that there is "unfair" competition emanating from some blanket manufacturers.
"The union has discovered that there is a sub-standard two-in-one blanket
being purported to be imported from South Africa and sold in local Chinese
and Nigerian shops.
"In actual fact, it seems this blanket is made in China and its packaging
and distribution is done in Zimbabwe while the bag is written 'Made in South
Africa' and the blanket label is written in Chinese," Kuveya said.
http://www.fingaz. co.zw/
June 01, 2009
Cellphones bring cashless transactions to Africa
by Helen Nyambura-Mwaura and Ed Cropley
To 28-year-old Kenyan Mary Wanjiku, her cellphone is not just a cellphone. It is also a cheap, safe and easy way of sending her mother $40.
But by using it to ping cash to friends and family she and millions of Africans are joining Japan in breaking a technology barrier that remains in Europe and the United States, and paving the way to what could be the cash of the future.
"Before, I would be forced to make the journey home to deliver the money," Wanjiku said outside a Nairobi shop that doubles as an agent for M-PESA, the virtual cash network that means 'mobile money' in Swahili, Kenya's lingua franca.
"M-PESA has revolutionised my life."
The network, owned by Kenya's biggest mobile phone firm Safaricom, has its roots in Africa's lack of infrastructure -- particularly bank branches -- and the enthusiasm with which people have taken to mobile phones.
Only one in five people have bank accounts, mainly because of the prohibitive cost to the banks of operating branches in far-flung parts of a continent where many of the population of one billion live on a few dollars a day or less.
But mobile phones are spreading extremely fast: to 270 million in 2007 from just 50 million in 2003, according to industry association GSMA.
Teaming up with Kenya Commercial Bank to let phone users who do not have bank accounts send each other money, M-PESA hit on a formula that has attracted 6.5 million customers, or one in six Kenyans, in just over two years.
In Japan, which has pioneered the technology and business models toward wallet phones, about 55 million mobile phones have an e-money function, so about half of Japanese users carry them.
The global market for mobile money is growing at 70 percent a year and should attain 'mainstream' status by 2012 with more than 190 million customers, or more than three percent of mobile users, IT consultancy Gartner said in a May report.
Other phone companies such as South Africa's MTN -- the continent's biggest operator -- and Kuwait's Zain are piling in with similar services in a slew of countries including South Africa and Nigeria, and have pilot schemes stretching from the Middle East to Afghanistan.
"Mobile handsets are in an excellent position to become the primary digital channel for providers of banking and related financial services in emerging markets," Berg Insight analyst Marcus Persson said.
In much of Europe and the United States access to fast Internet connections -- enabling online banking -- has been a brake on mobile money, but Berg Insight expects it to catch on as wireless technologies such as Bluetooth spread.
The scope of the African systems has grown quickly from simple cash transfers by text message to payments for everything from a taxi ride to a utility bill, and it is possible to spend a day in Nairobi without carrying any cash.
"This is just the beginning," Safaricom chief executive Michael Joseph said. "What you are moving towards is a person going out without cash in his pocket."
The cost of building and administering a network of 9,000 trustworthy agents to carry the cash that must be paid at the end of the chain means it has yet to make a profit, Joseph said.
But beyond simple profit, Zain Africa chief executive Chris Gabriel said the real value of mobile cash to phone firms lies in securing a long-term connection with customers as cut-throat competition in the mobile market eats into revenues.
"We see it as a tool to create stickiness," Gabriel said. "Yes, it's a revenue service but at the cost of an SMS, you're not going to get rich quickly."
Zain and Safaricom, part-owned by Britain's Vodafone, can also handle cross-border transfers, allowing them to tilt for a slice of global remittance flows, worth over $380 billion in 2008, according to the London-based International Association of Money Transfer Networks.
Cellphone cash has already gone deep into Kenya.
Companies such as tea or coffee plantation owners are finding they can pay staff salaries via mobile phone and charities can receive and distribute aid, as the Red Cross did during the violence after Kenya's 2007 elections.
Although the phenomenon is young, the World Bank in Africa has labelled it a "cornerstone for development" for its potential to mobilise remote rural economies.
University of Edinburgh researcher Olga Morawczynski said villages were getting up to 30 percent more in remittances due to M-PESA, allowing farmers to diversify out of subsistence agriculture into small businesses such as furniture making or running a small roadside kiosk.
"It's allowed money to penetrate more easily into rural areas where it's really needed," Morawczynski said.
Despite occasional tensions with the phone firms, most banks know they cannot compete on their own and so are happy to provide the cash float for the systems in the belief that in the long-term they are opening up a channel to potential customers.
"It's partly a question of education," said Ravind Ramanah, head of marketing, emerging markets, at BNP Paribas, France Telecom's partner in its Orange Money service now piloting in Ivory Coast.
"We believe a portion of clients will start with the basic banking service via mobile, and once they are used to that they will move to a normal bank account," Ramanah said.
There is no question, however, who is in charge.
"We're treading ground that's never been trodden before," Safaricom's Joseph said. "It's going to be introduced into other countries in the years ahead, and banks may have to change their working model in order to work with us."
Reuters
To 28-year-old Kenyan Mary Wanjiku, her cellphone is not just a cellphone. It is also a cheap, safe and easy way of sending her mother $40.
But by using it to ping cash to friends and family she and millions of Africans are joining Japan in breaking a technology barrier that remains in Europe and the United States, and paving the way to what could be the cash of the future.
"Before, I would be forced to make the journey home to deliver the money," Wanjiku said outside a Nairobi shop that doubles as an agent for M-PESA, the virtual cash network that means 'mobile money' in Swahili, Kenya's lingua franca.
"M-PESA has revolutionised my life."
The network, owned by Kenya's biggest mobile phone firm Safaricom, has its roots in Africa's lack of infrastructure -- particularly bank branches -- and the enthusiasm with which people have taken to mobile phones.
Only one in five people have bank accounts, mainly because of the prohibitive cost to the banks of operating branches in far-flung parts of a continent where many of the population of one billion live on a few dollars a day or less.
But mobile phones are spreading extremely fast: to 270 million in 2007 from just 50 million in 2003, according to industry association GSMA.
Teaming up with Kenya Commercial Bank to let phone users who do not have bank accounts send each other money, M-PESA hit on a formula that has attracted 6.5 million customers, or one in six Kenyans, in just over two years.
In Japan, which has pioneered the technology and business models toward wallet phones, about 55 million mobile phones have an e-money function, so about half of Japanese users carry them.
The global market for mobile money is growing at 70 percent a year and should attain 'mainstream' status by 2012 with more than 190 million customers, or more than three percent of mobile users, IT consultancy Gartner said in a May report.
Other phone companies such as South Africa's MTN -- the continent's biggest operator -- and Kuwait's Zain are piling in with similar services in a slew of countries including South Africa and Nigeria, and have pilot schemes stretching from the Middle East to Afghanistan.
"Mobile handsets are in an excellent position to become the primary digital channel for providers of banking and related financial services in emerging markets," Berg Insight analyst Marcus Persson said.
In much of Europe and the United States access to fast Internet connections -- enabling online banking -- has been a brake on mobile money, but Berg Insight expects it to catch on as wireless technologies such as Bluetooth spread.
The scope of the African systems has grown quickly from simple cash transfers by text message to payments for everything from a taxi ride to a utility bill, and it is possible to spend a day in Nairobi without carrying any cash.
"This is just the beginning," Safaricom chief executive Michael Joseph said. "What you are moving towards is a person going out without cash in his pocket."
The cost of building and administering a network of 9,000 trustworthy agents to carry the cash that must be paid at the end of the chain means it has yet to make a profit, Joseph said.
But beyond simple profit, Zain Africa chief executive Chris Gabriel said the real value of mobile cash to phone firms lies in securing a long-term connection with customers as cut-throat competition in the mobile market eats into revenues.
"We see it as a tool to create stickiness," Gabriel said. "Yes, it's a revenue service but at the cost of an SMS, you're not going to get rich quickly."
Zain and Safaricom, part-owned by Britain's Vodafone, can also handle cross-border transfers, allowing them to tilt for a slice of global remittance flows, worth over $380 billion in 2008, according to the London-based International Association of Money Transfer Networks.
Cellphone cash has already gone deep into Kenya.
Companies such as tea or coffee plantation owners are finding they can pay staff salaries via mobile phone and charities can receive and distribute aid, as the Red Cross did during the violence after Kenya's 2007 elections.
Although the phenomenon is young, the World Bank in Africa has labelled it a "cornerstone for development" for its potential to mobilise remote rural economies.
University of Edinburgh researcher Olga Morawczynski said villages were getting up to 30 percent more in remittances due to M-PESA, allowing farmers to diversify out of subsistence agriculture into small businesses such as furniture making or running a small roadside kiosk.
"It's allowed money to penetrate more easily into rural areas where it's really needed," Morawczynski said.
Despite occasional tensions with the phone firms, most banks know they cannot compete on their own and so are happy to provide the cash float for the systems in the belief that in the long-term they are opening up a channel to potential customers.
"It's partly a question of education," said Ravind Ramanah, head of marketing, emerging markets, at BNP Paribas, France Telecom's partner in its Orange Money service now piloting in Ivory Coast.
"We believe a portion of clients will start with the basic banking service via mobile, and once they are used to that they will move to a normal bank account," Ramanah said.
There is no question, however, who is in charge.
"We're treading ground that's never been trodden before," Safaricom's Joseph said. "It's going to be introduced into other countries in the years ahead, and banks may have to change their working model in order to work with us."
Reuters
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