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Three South Africans among Africa's 10 richest

There are three South Africans on the list of Africa's Ten Richest People. It was compiled by Emilia (in Stockholm) with the help of Forbes magazine, and published on her blog at http://africawithstyle.blogspot.com :

Counting from number ten to number one...

10. Patrice Motsepe (South Africa)
African Rank No.10 – World Rank No.503 – Wealth $2.4 billion

Fourteen years ago Apartheid died and now Africa’s largest economy, South Africa, has finally produced its first black billionaire - Patrice Motsepe. The Pretoria-raised lawyer was born into a relatively well-off black family, his father ABC Motsepe was one of the wealthiest black businessmen in the country. Motsepe became a mining lawyer and this paved his way into the industry that was to make his fortune. Today his company African Rainbow Mineral is one of the largest mining concerns in South Africa. Motsepe is also the owner of one of South Africa’s most successful football clubs Mamelodi Sundowns FC.

9. Mo Ibrahim (Sudan)
Africa rank No.9 - World Rank No. 462 - Wealth $2.5 billion

Founder of Mobile Telecommunications giant CelTel, which operated Mobile Phone services across Africa. He sold the firm in 2005 to Kuwaiti Investors.

8. Samih Sawiris (Egypt)
African Rank No.8 – World Rank No.396 – Wealth $2.9 billion

Samih Sawiris is the first of four Sawiris family members we find on this list. It has been a good year for Samih as his interests in tourism and leisure have seen his wealth rise from $1.6 billion to $2.9 billion. Probably his most significant investment over the year was $500 million in a luxury alpine resort in Andermatt, Switzerland. This was his first venture outside the Middle East. The resort will comprise a 5-star hotel, apartment and villa and an ice rink, all spread over 37 acres.

7. Aliko Dangote (Nigeria)
African Rank No.7 – World Rank No.334 – Wealth $3.3 billion

Another débutante on the list and the first from Africa’s most populous nation. While the average man on the street in Nigeria would insist the country has produced many billionaires - mostly former heads of state and their cronies - Dangote represents a break from this tradition as a man who has created his wealth in a comparatively transparent manner. His interests in sugar, cement and food have propelled him to the top of the pile in Nigeria. His close relationship with former Nigerian President Obasanjo, some argue, has fuelled his wealth and Obasanjo’s exit from power last year saw Dangote’s influence wane somewhat.

6. Johann Rupert & family (South Africa)
African Rank No.6 – World Rank No.284 – Wealth $3.8 billion

Johann Rupert and family have seen their total wealth slip by about $500 million and have dropped three places down the list of Africa’s richest on the back of challenging global economic conditions and a downturn in the luxury goods sector where his Richemont group is a major player. The tough economic conditions could not dampen rumours of Rupert looking to pay millions to purchase the English football team Blackburn Rovers, a deal Rupert has categorically denied.

5. Nicky Oppenheimer & family (South Africa)
African Rank No.5 – World Rank No.173 – Wealth $5.7 billion

The Oppenheimer fortune is facing challenging times as investment pours into Russian mineral resources fuelling competition, resource hungry representatives of China and India scour Africa looking to secure their supply lines and back home the Black Empowerment policy has meant changes in Anglo American Corporation the mining giant founded by the Oppenheimer family. Despite these challenges, the family fortune has grown, but not enough to hold the position reached on last year’s list, as they drop three places to No 5.

4. Mohammed Al Amoudi (Ethiopia)
African Rank No.4 – World Rank No.97 – Wealth $9.0 billion

Last year’s list omitted Mohammed Al Amoudi but this year the Ethiopian-born billionaire takes his rightful place. Al Amoudi migrated to Saudi Arabia from Ethiopia in 1965 and made his fortune in property before diversifying into petroleum. Al-Amoudi was one the biggest sponsors of celebrations earlier this year to mark the the start of the millennium in Ethiopia. The centrepiece of his sponsorship was the construction of the multimillion dollar Millennium Central Hall in Addis Ababa.

3. Onsi Sawiris (Egypt)
African Rank No.3 – World Rank No.96 – Wealth $9.1 billion

The list has already seen the first of the Sawiris family and the top three positions are all occupied by family members, the Sawiris father and his other two sons. Onsi Sawiris, despite being in retirement and having divested most of the Orascom Empire he built to his three sons, has seen his wealth almost double from $5 billion in 2007 to $9.2 billion today. The combined Sawiris fortune of $34.7 billion would see the family at No.7 amongst the world’s richest.


2. Nassef Sawiris (Egypt)
African Rank No.2 – World Rank No.68 – Wealth $11.0 billion

Of all those who made this list Nassef Sawiris has had the most spectacular rise in his wealth, last year his wealth was estimated at $3.9 billion, but he started this year with three times that fortune at $11 billion. Nassef Sawiris runs the construction arm of the Orascom empire and soaring oil prices have ensured his target market of the Middle East is awash with development funds. Orascom Construction signed some big deals last year including building a $1.8 billion fertiliser plant in Algeria, a $110 million Solar Plant in Egypt and part of a consortium building Cairo’s new metro.


1. Naguib Sawiris (Egypt)
African Rank No.1 – World Rank No.60 – Wealth $12.7 billion

In a gloomy world economy the growth of telecommunications, the internet and the media have been one of the few bright spots. In the emerging market it has been no different and Naguib Sawiris has benefited tremendously from this. In particular the mobile telephony part of his empire has shown strong growth although not without controversy as investments in North Korea and investigations into the purchase of an Italian Teleco.

Thanks, Emilia, for an interesting list.
11.7.08 17:44


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Another legal setback for eBay (and Tradus)

The ride is shaping up to be even bumpier than I had expected for Naspers's European online auction operator Tradus (read my articles "When Johann takes on Koos" dated 1 July and "Sleepless in Oranjezicht" dated 2 July).

The US website Businessweek.com carried the following report today (not completely republished here):

"A French court ruled on July 11 that eBay must remove listings for LVMH perfumes, while it appeals a $61 million decision in favor of the luxury brand manufacturer.

"Last month, lawyers for LVMH successfully argued before a French tribunal that eBay was responsible for counterfeit items sold on its French site. The court ruled that eBay must pay LVMH 38.6 million euros in damages and remove all listings for LVMH brand perfumes. That includes well known names such as Dior, Guerlain, Givenchy and Kenzo.

"eBay faces a 50,000 Euro fine for each day it does not comply. EBay had hoped not to comply with the ruling until its appeal was heard. “We believe that we have a good case given the significant overreach of the Tribunal’s ruling,” said an eBay spokesperson.

"eBay's lawyers maintain the company is blameless for counterfeit sales on its sites. They say eBay, like any Web message board, is not responsible for illegal activities by its users. Furthermore, they argue that eBay cannot be complicit because the company has no way of identifying illegal knockoffs until notified of their presence on the site by the brand manufacturer. Once alerted, eBay officials remove the itmes, operating in a similar fashion to other user generated sites such as YouTube.

"The French case is the third one in Europe that eBay has lost. A decision in another counterfeit case-- this time filed in New York by high end jewelry manufacturer Tiffany--could come as early as Monday.

Should eBay lose that case, it would likely have to rethink how it runs its business. As it stands, eBay relies primarily on the brands and the community to flag counterfeit items. Should the company be forced to pro-actively remove such material, it could require a significant technology investment. It would also likely damage eBay's ability to offer higher end items for sale, since such items would, potentially, have to first be approved by the brand manufacturer.

"Worse for eBay, some brands may be able to argue that their merchandise should never appear on eBay's site, as LVMH did before the French court. That would be a real setback for eBay which draws many users with the prospect of getting name brand items at a significant discount and has been attempting to break free of its online flea market image."

end of quote.

What is true for eBay, is true for Tradus. A quick search of one Tradus portal, namely Ricardo.ch, kicked up a long list of Louis Vuitton products. Should eBay lose its appeal, these products will most certainly also vanish from the Ricardo site. So, the appeal is very important to Naspers. If eBay loses, a major business model rethink awaits Tradus - and a significant amount of extra costs.
11.7.08 19:36


Hoping like hell to be wrong

Political tension continues to build in South Africa - the country to host the 2010 FIFA Football Championship. In the last two days the country took yet another step closer to political instability, when the ANC forced president Mbeki to reshuffle his cabinet and fire two provincial premiers.

This article from www.iol.co.za (only part-reproduced here):

"Like most ANC provinces, the ruling party in the Eastern Cape and Western Cape is turbulently divided, affecting proper administration and hampering service delivery.

"Meanwhile, the decision to force two premiers to step down is a direct challenge to Mbeki's authority.

"Mbeki, as the former ANC president, indirectly appointed premiers amid bitter complaints that he used this prerogative to dispense patronage, sideline opponents and divide the organisation.

"The NEC decision is likely to be interpreted by Mbeki sympathisers as a political purge, because both Rasool and Balindlela backed Mbeki's failed attempt to be re-elected as ANC president last year."

end of quote.

We're in territory now where the political situation is not 'interesting' any longer, but downright 'worrying'. While commentators and economists in SA still seem to think it will be "business as usual" for economic policy by this time next year, I am of a completely different opinion. I think economic policy is about to make a big "jump to the left".

Only light in the tunnel: I seem to be the only one holding this view at this point. I hope it turns out that "a mere observer living 10,000 kilometers outside South Africa" can't read trends better than all the rocket scientist-economists inside the country.
13.7.08 15:27


SA banks to help Nigeria transport its money

Sometimes crime does, in fact, pay. That dawned on me when I saw this interesting news snippet from the online version of Nigeria's The Sun newspaper (www.sunnewsonline.com).

According to the newspaper, the Nigerian central bank is about to outsource the job of transporting money in Nigeria to a South African consortium consisting of South Africa's four biggest banks, namely Standard Bank, Nedbank, Absa and Firstrand.

The article is sceptical of the move (doesn't like the idea that South Africa is growing its involvement in the Nigerian economy), but admits that money transportation in Nigeria is not for sissies. In fact, it's VERY dangerous.

Of course, it can't be more dangerous than in South Africa, where money transporters have been "training against the best" for many years now, making South Africa the logical candidate for getting this contract in Nigeria.

Now it's slowly dawning on you why I started out by saying crime does pay...

In this case, it might pay off for South Africa's four big banks. Which will be more than a bit ironic, if the consortium gets the contract.

Here the article from The Sun. Read (struggle through?) the whole thing. It's not only interesting for the above reason, but also for the thick air which (apparently) hangs between SA and Nigeria.

(I don't think South Africans are aware of this, or have any interest in this, but anyway, the Nigerians apparently feel they are in an "economic war" with South Africa.)

The article is also interesting from a journalistic point of view. I think the journalist who wrote this, would not pass too many exams at any South African school of journalism. (The Sun is one of Nigeria's biggest newspapers.)

Enough. Enjoy...

CBN’s planned outsourcing of cash transportation
By Edmund Onyiriogwu
Monday, July 14, 2008

The Cental Bank of Nigeria (CBN) has advertised its intention to divorce an integral duty which it has performed over the years – cash transportation processing function. In furtherance of this plan, CBN had circulated to the banking industry a draft guideline for the regulation of all cash operations in the country. It is expected that the implementation of full disengagement from cash handling services is any time from now.

The underpinning reason for the proposed plan as disclosed by CBN is the culmination of the challenges the new impetus in the banking industry has thrown up.
It is the perception of the financial institution that outsourcing its cash transportation and processing function to credible private operators would enable it focus more attention on the exercise of its statutory obligation to rapidly expand the banking sector as well as redirect its resources effectively to other core activities.

The proposed plan is in consonance with modern practice all over the world Organisations, even government organs, now tend to be leaner through devolution of ancillary functions to specialized firms to focus entire resources to core areas . The result of such development is the attainment of organizational goals at minimal cost.

Cash transportation and management is a perilous venture, highly prone to risk especially against the backdrop of surge in bullion van robbery and the attendant worrisome and unacceptable casualty figure which prompted the Inspector General of Police, Mr. Mike Okiro, to raise an alarm on the incessant death of police personnel who provide protection and cover for “skin” bullion vans at the hands of armed bandits.

It is in the effort to control the ugly incident that the IG issued a warning to banks to comply with police new security arrangement in the movement of cash or face the withdrawal of police cover, intelligence and surveillance given for cash movement in and out of banks.
It is in the light of this circumstantial problem and the need to find safe hands that one appreciates the wisdom in the proposed CBN Cash Management Disengagement Plan.

The threat of armed robbery to cash transportation is real and it is not only a justification for CBN’s new position, it is imperative that the volatile venture of cash movement be undertaken and performed by organizations that specialize in cash risk and operational management. The urgency of the situation at hand is exemplified by the frequency of bullion van attacks by armed robbers which has grown to frightening dimensions with notoriety in the Eastern parts of country where the flash points include Onitsha, Owerri, Onitsha–Enugu Road, Owerri–Port Harcourt Road, Owerri-Aba Road, to mention just a few.

A number of local investors took the challenge of providing adequate safety for movement of cash and personnel involved by pioneering firms with core function in cash transportation and management. These firms have acquitted themselves creditably in service delivery to banks. Hence, the proposed CBN disengagement from cash handling and processing and the current prospecting for private operators to take over the function is another test of the oars of these fledging local firms in the cash management industry.

Central Bank of Nigeria is the apex financial institution in the country with an oversight function on banks and other financial institutions. Its cash related function is huge, hence the enormity of the offer it is advertising for private sector participation cannot be over emphasised. But suffice it to say that anything that is not in the neighborhood of competence and expertise will not satisfy he institution. This indeed, has a new demand on these cash transportation firms with requisite technology to navigate the new challenge.

CBN is reputed for its creative approach to the economy. Undoubtedly, the institution understands the essence of sustenance and growth of the economy by empowering and encouraging local firms through patronage to provide the needed impetus and spring board for development of capacities and product confidence enroute building a Nigerian brand that will not only satisfy the local market but compete effectively in the global market. Engagement of these local companies in cash management, with the magnitude of what CBN is offering, would challenge the firms to develop expertise, engineer expansion and garner experiences that will impact positively on the industry.

As CBN is sourcing for private operators to handle its cash movement, the launching in Lagos, last week, of a South African firm, South Africa Integrated Management Service, SBV service (pty) Limited, a conglomerate of the four greatest banks in South Africa, Standard Bank, Ned Bank, Absa and First Rand Bank, cannot be overlooked. There is a need for a critical appraisal of the synchronization between the proposed plan and the coming on board of this giant corporation in Nigeria.

Ordinarily, one may not raise an eyebrow on this latest development in the cash management service at such auspicious time if not our people’s contempt for local capacities coupled with capacity for strategic maneuvering by the South African business community and its advantage to the detriment of our national interest. One may not entirely be bewildered if the CBN offer is grabbed by this corporation which has the capacity to muzzle Nigerian firms. However, such attempt will have security implications, given the sensitive position of CBN, the need to encourage retention of national assets, reduction of capital flight occasioned by preference of foreign firms and, above all, the dualistic struggle for dominance in Africa between Nigeria and South Africa.

The issue at stake is hazy to Nigerians unlike South Africans who have distinct perception which underlines the character of economic activities of South African firms in Nigeria encapsulated in economic despotism and inequities. But for time and space, it may not be feasible to chronicle the crass exploitation of Nigerians in this country by South African firms.

Although, the entrance of a South African firm in cash movement and management industry is an escalation of siege of Nigerian economy by South Africans, however, it will exacerbate competition which may trigger off improvement in the quality of service delivery.
Cash transportation and management is a technology-driven venture. It seeks the most efficient and effective technology that can guarantee the safety of cash and human elements involved in the transportation.

Remarkably, the local firms involved in bullion van service or cash transportation can boast of capacity, right technical know-how and all the necessary security instruments, equipment and facilities that can pass empirical test in any part of the world. These security assets will be effectively – deployed if the CBN offers them a chance to handle its cash transportation and management function.

End of article.
15.7.08 10:42


Be afraid, be very afraid...

As I've said before, I'm a big admirer of The Economist magazine (despite their stand on the Bush/Blair/Iraq debacle).

In recent years I've especially enjoyed the magazine's articles warning that a property bubble was building in many countries of the world, with the US at the top of the list. The first time they issued this warning was about 4 years ago, if I remember well. Since then they've repeated the message many, many times. But, no-one listened. Or, wanted to listen.

My father used to say 'If you don't wanna hear, you must feel', just before he laid in with the belt. Now it's time for the banks to feel. This extract from a respectable investment newsletter I just received:

"The last four days have seen the already distressed US banking sector lurch towards the precipice of a full blown financial system meltdown. Banks that have already seen stock price falls of as much as 90%, were again hit today, with many falling a further 5% to 10% on fears that a series of cascading bank failures were about to be triggered following the collapse of Indymac bank on Friday, when a run on the bank had panicking depositors withdrew funds at the rate of a billion a day.

"The Federal regulators stepped in to seize the assets and guarantee 100% of the first $100k of depositors' money. Meanwhile, another far bigger crisis was unfolding, as Freddie Mac and Fannie Mae (they insure or manage more than half of US mortgages) were also on the brink of collapse.

"The problem the US banking system now faces is that the failure of Indymac, and bailout of Fannie Mae and Freddie Mac to prevent a far worse collapse, are not an isolated instance, but systemic of the whole banking system. The New York Times estimates that as many as 150 banks could go bust and thus require the Fed to step in to seize assets during the next 12 month, with many of the remaining banks cutting back on their branch networks.

"However, this estimate may still be just the tip of the banking crisis iceberg as the Savings and Loans crisis of the early 1990's witnessed the number of bank failures explode and eventually saw more than 1000 financial institutions go bust. Given that the US is today experiencing the worst housing market crisis since the Great Depression, the banks may be in for an even worse fate.

"The FDIC had some $53 billion of funds available to pay depositors of defaulting banks, of which up to $8 billion has now been eaten up by Indymac, which means the US tax payer will be forced to step in to the tune of several hundreds of billions of dollars if not for over a trillion dollars, if anywhere near the number of anticipated banks fail.

"There is also a risk of an across the board loss of confidence in the banking system, culminating in a series of panic runs on US banks, accompanied by a collapsing US Dollar, as the US national debt levels explode (as the liabilities of these failing banks are taken over by the government) and depositors / investors seek shelter in more secure currencies and assets such as precious metals. The question now is: who will be next on the list to go bust?"

end of extract.

Afterthought: Just another sensationalist investment newsletter writer? My guess: No. Unfortunately not.
15.7.08 13:15


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