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Living the FATCA life in Africa: New U.S. tax regulations add to burden of compliance on financial institutions across Africa

Posted on 21 May 2013 by Eugene Skrynnyk

Eugene Skrynnyk

Eugene Skrynnyk (CIPM, MILE, BComm) is a senior manager and specialist for the asset management industry in the Africa Sub-Area at Ernst & Young in Cape Town, South Africa.

Eugene Skrynnyk is the Ernst & Young Senior Manager and specialist for the asset management industry in the Africa Sub-Area.

Eugene holds a Certificate in Investment Performance Measurement (CIPM), Master of International Law and Economics (MILE) and Bachelor of Commerce and Finance (B.Comm.).


When the U.S. Department of the Treasury (“Treasury”) and Internal Revenue Service (“IRS”) issued final Foreign Account Tax Compliance Act (“FATCA”) regulations in January of this year, there was a sigh of relief that the financial services industry in Africa could begin to digest FATCA’s obligations. However, achieving FATCA compliance remains a challenge for banks operating across Africa.

FATCA is already law in the U.S. but negotiations are under way to enshrine it in national law of countries around the world via intergovernmental agreements (“IGAs”) with the U.S. While a variety of African jurisdictions will each face unique obstacles with FATCA compliance, many in the industry share a general unease with FATCA’s scope, as well as scepticism that FATCA’s rewards (an estimated US$1 billion in additional tax revenue annually) justify its expenses. Generally, FATCA attempts to combat U.S. tax evasion by requiring that non-U.S. financial institutions report the identities of U.S. shareholders or customers, or otherwise face a 30% withholding tax on their U.S. source income. Overwhelmingly, FATCA compliance obligations apply even where there is very little risk of U.S. tax evasion and it impacts all payers, including foreign payers of “withholdable payments” made to any foreign entities affecting deposit accounts, custody and investments.

General issues in Africa

Concerns about privacy abound. FATCA requires financial institutions to report to the IRS certain information about U.S. persons. For this reason, IGAs are being put in place so that institutions could instead report information to their local tax authority rather than the IRS. In some jurisdictions, investment funds and insurance companies are permitted to disclose information with client consent. In other jurisdictions, such disclosure is prohibited without further changes to domestic law. The process to make necessary changes locally involves time and effort.

Cultural differences in Africa need to be considered. In certain situations FATCA requires that financial institutions ask a customer who was born in the United States to submit documents explaining why the customer abandoned U.S. citizenship or did not obtain it at birth. African financial institutions never pose such a delicate and private question to their customers. Even apparently straight-forward requirements may pose challenges; for example, FATCA requires that customers make representations about their identities “under penalty of perjury” in certain situations. Few countries have a custom of making legal oaths, so it would not be surprising if African customers will be reluctant to give them.

FATCA contains partial exemptions (i.e., “deemed compliance”) and also exceptions for certain financial institutions and products that are less likely to be used by U.S. tax evaders. It still has to be seen to what extent these exemptions have utility for financial institutions in Africa. For example, the regulations include an exemption for retirement funds and also partially exempt “restricted funds” — funds that prohibit investment by U.S. persons. Although many non-U.S. funds have long restricted investment by U.S. persons because of the U.S. federal securities laws, this exemption could be less useful than it first appears. It should be pointed out that the exemption also requires that funds be sold exclusively to limited categories of FATCA-compliant or exempt institutions and distributors. These categories are themselves difficult for African institutions to qualify for. For example, a restricted fund may sell to certain distributors who agree not to sell to U.S. persons (“restricted distributors”). But restricted distributors must operate solely in the country of their incorporation, a true obstacle in smaller markets where many distributors must operate regionally to attain scale.

Other permitted distribution channels for restricted funds are “local banks,” which are not allowed to have any operations outside of their jurisdiction of incorporation and may not advertise the availability of U.S. dollar denominated investments.

Challenges and lessons learned – the African perspective

Financial institutions will have to consider what steps to take to prepare for FATCA compliance and take into account other FATCA obligations, such as account due diligence and withholding against non-compliant U.S. accountholders and/or financial institutions.

The core of FATCA is the process of reviewing customer records to search for “U.S. indicia” — that is, evidence that a customer might be a U.S. taxpayer. Under certain circumstances, FATCA requires financial institutions to look through their customers and counterparties’ ownership to find “substantial U.S. owners” (generally, certain U.S. persons holding more than 10% of an entity). In many countries the existing anti-money laundering legislation generally requires that financial institutions look through entities only when there is a 20% or 25% owner, leaving a gap between information that may be needed for FATCA compliance and existing procedures. Even how to deal with non-FATCA compliant financial institutions and whether to completely disengage business ties with them, remains open.

The following is an outline of some of the lessons learned in approaching FATCA compliance and the considerations financial institutions should make:

Focus on reducing the problem

Reducing the problem through the analysis and filtering of legal entities, products, customer types, distribution channels and account values, which may be prudently de-scoped, can enable financial institutions to address their distinct challenges and to identify areas of significant impact across their businesses. This quickly scopes the problem areas and focuses the resource and budget effort to where it is most necessary.

Select the most optimal design solution

FATCA legislation is complex and comprehensive as it attempts to counter various potential approaches to evade taxes. Therefore, understanding the complexities of FATCA and distilling its key implications is crucial in formulating a well rounded, easily executable FATCA compliance programme in the limited time left.

Selecting an option for compliance is dependent on the nature of the business and the impact of FATCA on the financial institution. However, due to compliance time constraints and the number of changes required by financial institutions, the solution design may well require tactical solutions with minimal business impact and investment. This will allow financial institutions to achieve compliance by applying low cost ‘work arounds’ and process changes. Strategic and long-term solutions can be better planned and phased-in with less disruption to the financial institution thereafter.

Concentrate on critical activities for 2014

FATCA has phased timelines, which run from 2014 to 2017 and beyond. By focusing on the “must-do” activities, which require compliance as of 1 January 2014 – such as appointing a Responsible Officer, registering with the IRS, and addressing new client on-boarding processes and systems – financial institutions can dedicate the necessary resources more efficiently and effectively to meet immediate deadlines.

Clear ownership – both centrally and within local subsidiaries

FATCA is a strategic issue for the business, requiring significant and widespread change. Typically it starts as a ‘tax issue’ but execution has impacts across IT, AML/KYC, operations, sales, distribution and client relationship management. It is imperative to get the right stakeholders and support onboard to ensure that the operational changes are being coordinated, managed and implemented by the necessary multidisciplinary teams across the organization. These include business operations, IT, marketing, and legal and compliance, to name but a few. Early involvement and clear ownership is key from the start.

Understand your footprint in Africa

Many African financial institutions have operations in various African countries and even overseas, and have strategically chosen to make further investments throughout Africa. The degree to which these African countries have exposure to the FATCA regulations needs to be understood. It is best to quickly engage with appropriate stakeholders, understand how FATCA impacts these African countries and the financial institutions’ foreign subsidiaries, and find solutions that enable pragmatic compliance.

What next for financial institutions in Africa?

Negotiations with the U.S. are under way with over 60 countries to enshrine FATCA in national law of countries around the world via IGAs. Implementation of FATCA is approaching on 1 January 2014 and many local financial institutions have either not started or are just at the early stages of addressing the potential impact of FATCA. In South Africa, only few of the leading banks are completing impact assessments and already optimizing solutions. Other financial services groups and asset management institutions are in the process of tackling the impact assessment. Industry representative in Ghana, Kenya, Mauritius, Namibia, Nigeria and Zimbabwe have started engaging relevant government and industry stakeholders, but the awareness is seemingly oblivious to date. In the rest of Africa, FATCA is mainly unheard of.

Financial institutions choosing to comply with FATCA will first need to appoint a responsible officer for FATCA and register with the IRS, ensure proper new client on-boarding procedures are in place, then identify and categorize all customers, and eventually report U.S. persons to the IRS (or local tax authorities in IGA jurisdictions). Institutions will also need to consider implementing a host of other time-consuming operational tasks, including revamping certain electronic systems to capture applicable accountholder information and/or to accommodate the new reporting and withholding requirements, enhancing customer on-boarding processes, and educating both customers and staff on the new regulations. Where possible, institutions should seek to achieve these tasks through enhancing existing initiations so as to minimise the cost and disruption to the business.


Financial institutions in Africa face tight FATCA compliance timelines with limited budgets, resources, time, and expertise available. This is coupled with having to fulfil multiple other regulatory requirements. To add to the burden, FATCA has given stimulus to several countries in the European Union to start discussing a multilateral effort against tax evasion. The support of other countries in the IGA process indicates that some of these countries will follow with their own FATCA-equivalent legislation in an attempt to increase local tax revenues at a time when economies around the world are under unprecedented pressure. The best approach for African financial services industry groups is to engage their local governments in dialogue with the IRS and Treasury, while for African financial institutions to pro-actively assess their FATCA strategic and operational burdens as they inevitably prepare for compliance.


About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

The Ernst & Young Africa Sub-Area consists of practices in 28 countries across the African continent. We pride ourselves in our integrated operating model which enables us to serve our clients on a seamless basis across the continent, as well as across the world.

Ernst & Young South Africa has a Level two, AAA B-BBEE rating. As a recognised value adding enterprise, our clients are able to claim B-BBEE recognition of 156.25%.

Ernst & Young refers to the global organisation of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. All Ernst & Young practices in the Africa Sub Area are members of Ernst & Young Africa Limited (NPC). Ernst & Young Africa Limited (NPC) in turn is a member firm of Ernst & Young Global Limited, a UK company limited by guarantee. Neither Ernst & Young Global Limited nor Ernst & Young Limited (NPC) provides services to clients.

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A.M. Best Revises Outlook of the Issuer Credit Rating to Positive for Dubai Insurance Company PSC

Posted on 18 May 2013 by Africa Business

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.


LONDON —A.M. Best Europe – Rating Services Limited has revised the outlook to positive from stable and affirmed the issuer credit rating (ICR) of “bbb” and the financial strength rating (FSR) of B++ (Good) of Dubai Insurance Company PSC (DIC) (United Arab Emirates). The outlook for the FSR is stable.

The ICR positive outlook reflects DIC’s strong record of operating results, improved franchise and developing enterprise risk management (ERM). The ratings of DIC also reflect its very strong risk-adjusted capitalisation and a reinsurance programme of good quality. Offsetting these positive ratings factors are DIC’s investment concentrations.

DIC is likely to maintain a very strong risk-adjusted capitalisation over the medium term. The company’s capital base is supported by a low level of premium retention and a strong reinsurance panel. A high concentration of equity securities, particularly within the local banking sector, is of some concern and gives rise to volatility in DIC’s capital position. However, DIC’s capital position is sufficiently strong to absorb this volatility.

Despite competitive pressures in the UAE market, DIC has continued its strong growth levels with 21% achieved in 2012—well ahead of the market. DIC’s growth in recent years has improved its franchise and propelled the company to a top 10 position. However, its portfolio is indicative of the market biased towards medical and motor business on a net basis. Furthermore, underwriting performance remains strong with a good record of underwriting profitability. DIC’s combined ratio improved to 78% in 2012.

DIC’s level of ERM is considered to be improving. DIC has developed a better understanding of its risks and is integrating a capital model into its strategic planning process. There remains a disconnect between underwriting and investment risk as DIC’s investments remain concentrated in UAE banking equities. DIC has taken steps in diversifying its profile through surplus funds being conservatively invested.

Positive rating pressures can arise through embedding and integration of ERM and the maintenance of underwriting and operational performance. Considerable deterioration in its operating performance or a failure to embed improvements in ERM could add negative pressure to the current ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe – Rating Services Limited Supplementary Disclosure.

For more information, visit

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FOREX industry celebrates the JFEX 2013 awards winners

Posted on 13 May 2013 by Africa Business

Jordan, Amman, May 13th, 2013: JFEX awards, the most prestigious professional awards in the region announced on Monday honoring the best brokers and services providers in the FOREX industry. The 8th Annual JFEX Awards is celebrating the contributions to continue to develop the FOREX industry and reach achievements with great heights that will inspire the investors to pursue the many opportunities available in the industry.

It has been announced as the winners of the eight annual JFEX Awards, honored for their contributions to continue to develop the FOREX industry and reach achievements with great heights that will inspire the investors to pursue the many opportunities available in the industry.

JFEX’s mission, “Together, improve and adapt to the changing needs of the market.” recognizes that We need to keep pace with these rapid changes, we have to manage change so that we can still make a difference. and the awards, set up in 2013, aim to celebrate the hard work and dedication of the companies.

All winners were originally nominated by Filling the Award application , while the prestigious judging panel, who put experience and recognizes the winners in their categories.

Mr. Khaldoun Nusair, AFAQ GROUP chairman , said: “AFAQ GROUP is delighted to host these JFEX Awards to help highlighting the Obtaining of the qualifications, especially on this time basis it`s considered a huge accomplishment , improve and adapt to the changing needs of the market. And this evening, we have seen some of the best examples, from professionals and specialists, as to how this should be done.”

The JFEX Winners:

· FXSTREET: Best FOREX Forecast and Strategy Provider

FXStreet produces well-designed forecast strategy plans need to be desired outputs to required inputs) and provides the traders with market consulting and strategic forecasting supporting by strategic analysis service to emphasis analyzing and risk management.

· AFBFX: Most Innovative ECN Broker

AFBFX as ECN broker became the best who consolidates bank quotes and provides their clients the best bids and offers available. Providing their clients with FOREX scalping opportunities similar how it was originally done by floor traders.

· NOORCM: Most Transparent FOREX Broker

NoorCM is a service provider of Al Shams Investment one of the most respected Investment and financial companies in the region.  NoorCM offers their clients the best conditions, transparency and high level services that exceed all expectations.

· Money Experts : Best Educational FOREX Website

Money experts became the leader in day trading educational systems and strategies by providing online outstanding resources for quality articles, videos, news, analysis and opinions about the FOREX.

· ICM Capital : Fastest Growing Online FOREX Broker

ICM Capital is well-positioned to continue the company’s growth in MENA and is committed to be a dynamic and to provides their services and products in an efficient and innovative manner consistent with the needs of their client.

· FXCM: Best Retail FOREX Provider

FXCM, the best retail broker, who provides easy method to open an account with reasonable leverage, and their clients can demo trade with no limits on its platform until they learn.

· Banc De Binary: Best Binary options Broker in MENA

Banc De Binary , a top-notch binary options broker throughout MENA region and the world, provides traders with the opportunity to test out the platform and to gain trading skills that they can use to have a long, profitable binary options trading experience.

· ADS SECURITIES: Most trusted FOREX Broker

ADS SECURITIES the first and the only FOREX broker is regulated by Central Bank of the UAE. ADS SECURITIES became genuine Middle East brokerage, and it`s the most reliable FOREX broker provides  regional services are designed for use by Middle East customers and the high capitalization of the company means that they can invest in new technology and services.

· FXDD: Best Islamic FOREX Broker

FXDD, the leading Islamic FOREX broker, who strives to always respect the requirements of the Islamic Sharia, the moral code and religious law of Islam.

· DGCX :Best Middle East FX Exchange

DGCX commenced trading in November 2005 as the regions first commodity derivatives exchange and has become today, the leading derivatives exchange in the Middle East. DGCX offers huge advantages to existing participants in physical commodities markets in the region previously unable to hedge their price exposures as well as opportunities to the region’s burgeoning investment community.

· AFB: Best White Label Solution Provider

Arab Financial Brokers (AFB), the closed shareholding corporation registered under the Kuwait commercial law. AFB provides White Label program for individuals and institutions that want to establish a brand name and a presence in the FOREX industry. AFB white label partner are provided with a platform that reflects the partner brand or logo. AFB has been continued dedication to offer global benchmark White Label solutions.

· Activtrades: Best FOREX Customer Services

ActivTrades offers the security and peace of mind of insuring its clients’ funds above the threshold provided by the (FSCS) by providing insurance policy underwritten by Lloyd’s of London. Clients of ActivTrades are individually covered up to £500,000 as Excess of FSCS Insurance.

· FxSolutions: Best Affiliate Program

FxSolutions has the Best Affiliate Program to work with and promote offering the best tools, commissions and overall offerings. FxSolutions ` Affiliate Program has become increasingly popular and as a result there’s a lot more in way of their clients.

· Fxstat: Best Social Trading Networks

FXSTAT has become one of the largest social trading networks. It now serves as an Autotrading (copy trade) service provider as well as a FOREX social network platform to aid traders in their trading. FXSTAT autotrading platform is the image of its innovative approach to technology.

· Market Trader Academy: Best educational trading academy

Market Trader Academy serves their students by offering the best in financial education . Market Trader Academy has been committed to teaching the skills needed to trade with the confidence of the pros using risk management and technical analysis strategies.

The JFEX 2013 Honorees:

· PalFX: JFEX 2013 advisory

The high profile information and consultation services providers in the region, made its contribution to the conference and the award by providing high skills of consultation to JFEX 2013, also sharing its experience in the JFEX Award judging panel.

· Banc De Binary: Most Innovative Stand

· Optimized sense: Participant

· FXBORSSA: Participant

· FX Arabia: Participant

· Bareed Wared: Participant

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A.M. Best Special Report: The UAE Maintains Insurance Market Hub Status, Despite Economic Slowdown

Posted on 07 May 2013 by Africa Business


Please read here

United Arab Emirates – Market-Review – May 6 2013 (Acrobat Reader)

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A.M. Best’s Leading Analysts Discuss the Global Reinsurance Sector, London Market and Medical Professional Liability Insurers

Posted on 06 May 2013 by Africa Business

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.


A.M. Best Co.’s latest episode of “First Monday” features commentary pertinent to the global reinsurance industry by A.M. Best’s leading analysts. Click on to view the video program.

The May 2013 episode of “First Monday” includes:

· The Growing Reinsurance Role of Third-Party Capital: Managing Senior Financial Analyst Greg Reisner, Senior Financial Analyst Gale Guerra and Financial Analyst Scott Mangan discuss how the global reinsurance sector is doing financially, and how it is managing an influx of new capital to a market already saturated with it:

· Capital Management a Priority in London Market: Catherine Thomas, director of analytics at A.M. Best Europe – Rating Services Ltd., says London Market insurers benefited from rate increases and improved investment earnings in 2012, but that capitalization concerns among market participants remain given the economic environment:

· Medical Professional Liability Line in Good Condition: Assistant Vice President Henry Witmer explores how the medical professional liability line continues to outstrip the rest of the property/casualty sector, but notes that the market faces some serious challenges, including pricing pressure, heavy M&A activity and uncertainty over the impact of health care reform:

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The Outlook for Medical Devices in the Middle East & Africa

Posted on 30 April 2013 by Africa Business

NEW YORK /PRNewswire/ — announces that a new market research report is available in its catalogue:

The Outlook for Medical Devices in the Middle East & Africa–Africa.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=Medical_Equipment_and_Supply

Highlights from the Region

Egypt‘s market for medical equipment and supplies is one of the larger of those in the Middle East, but per capita consumption is very low by regional and world standards. In 2012, the Egyptian market for medical equipment and supplies is estimated at US$432.3 million, or US$4.9 per capita. The 2012-17 CAGR is projected at 10.3%. Egypt produces very little medical equipment, so the vast majority of the market is supplied by imports.

The Iranian medical device market appears to have no coherent regulatory framework, and Iranian buyers are very thorough in evaluating products for purchase. It is therefore advised that overseas firms appoint a local agent with knowledge of relevant procedures. Imports account for an estimated 88.1% of the market, despite the manufacture of basic consumable items such as syringes, needles & catheters, dental instruments & fittings and orthopaedic appliances. Imports were valued at US$785.3 million in 2011, with Germany and the Netherlands being the leading suppliers. Consumable medical devices and diagnostic imaging apparatus were the most significant import sectors.

Israel has the largest medical device market in the Middle East region. Much of the market, at just under 80%, is supplied by imports, and a significant portion of these in value terms are dominated by “high-end” products falling under the diagnostic imaging apparatus category. It also has important domestic manufacturing capabilities, with just under 300 medical device companies in Israel – according to Ministry of Health estimates

Both the government and private sector are committed to upgrading and modernising Jordan‘s healthcare provision. The country has a reputation in the region for its high standards of services provided. New public and private hospitals have been expanding and upgrading in recent years, providing good opportunities for companies in the provision of medical equipment.

In 2012, the medical market was estimated at US$204.4 million. However, per capita medical device spending at around US$6 remains low, leaving considerable potential for further expansion. The local medical device manufacturing industry remains at an embryonic stage, leaving most sectors of the market reliant on foreign imports, which totalled US$201 million in the 12 months to July 2011.

Espicom estimates the Omani market for medical devices to stand at US$97.1 million in 2012, equal to US$33.5 per capita. The market as a whole is expected to grow at a healthy CAGR of 11.3% per annum to reach US$165.8 million by 2017. Collated monthly trade data show that medical device imports rose to US$72.1 million in the 12 months to August 2012, representing year-on-year growth of 6.1%. The performance of the individual categories was mixed, with diagnostic imaging (20.1%), orthopaedics (19.8%) and consumables (4.7%) making gains during the latest 12 month period, whilst the value of imports stagnated or fell in other categories.

The Ministry of Health (MoH) has allocated over SR7 billion (US$2 billion) for 67 health projects throughout the country as part of its fiscal 2012 budget. The MoH said the projects include the establishment of 12 new hospitals with a combined bed capacity of 3,100 beds, as well as a number of comprehensive medical clinics, oncology centres and specialised dental centres. New healthcare facilities, coupled with the government’s plan to recruit more healthcare personnel from overseas to work in these new centres, will inevitably see a spike in procurement of medical equipment and supplies, and other capital goods.

The long term growth prospects of the South African medical device market will be strongly influenced by the ANC government’s policies in regards to the new National Health Insurance (NHI) scheme, the promotion of public-private partnerships to develop and upgrade hospitals, the serious shortage of healthcare personnel and an urgent need to effectively address the AIDS crisis in the country. The government has committed itself to increasing the level of healthcare spending and has launched a 14-year programme to implement universal healthcare coverage.

The government has placed an emphasis on developing its healthcare system, with the goal of establishing a Universal Healthcare System by 2013 as part of its ongoing reforms for the healthcare sector. Around 85% of the medical device market is supplied by imports, which have risen rapidly in the past decade. In 2011, imports rose by 17.6% over 2010 and by a 2007-2011 CAGR of 6.0%. Half of imports were sourced from the USA, Germany and China. In the 12 months to October 2012, imports decreased by 6.5% to US$1,888.0 million. In this period, dental products showed some growth but almost all other categories fell in value.

The UAE’s economy is heavily dependent on the price of oil. Per capita GDP is very high, ranked among the top 20 in the world, and in 2012 was estimated at US$46,638. Real GDP growth of 3.7% is expected for 2013. As a percentage of GDP, healthcare expenditure is low, but in per capita terms, spending is among the top 30 in the world. Overall health expenditure was estimated at US$12.3 billion in 2011, equal to 3.8% of GDP. Per capita spending was US$1,551.

These Quarterly Updated Reports Analyse the Issues

The Outlook for Medical Device Markets in the Middle East & Africa is published by Espicom Business Intelligence. Each report provides an individual and highly-detailed analysis of each market, looking at the key regulatory, political, economic and corporate developments in the wider context of market structure, service and access. The reports are available individually or as a discounted collection, and the price includes 4 completely updated reports sent quarterly and details of local medical equipment distributors

To order this report:
Medical_Equipment_and_Supply Industry:
The Outlook for Medical Devices in the Middle East & Africa

Contact Clare:
US:(339) 368 6001
Intl:+1 339 368 6001

SOURCE Reportlinker

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A.M. Best Affirms Ratings of Orient Insurance Company (PJSC)

Posted on 25 April 2013 by Africa Business

A.M. Best Affirms Ratings of Orient Insurance Company (PJSC)

LONDON, 25 April 2013—A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Orient Insurance Company (PJSC)  (Orient) (United Arab Emirates). The outlook for both ratings is stable.

The ratings reflect Orient’s supportive level of risk-adjusted capitalisation, solid business profile within the UAE and robust operating performance. An offsetting factor is Orient’s concentrated investment profile.

Orient’s level of risk-adjusted capitalisation remains supportive of the current ratings despite a substantial reduction in 2012, stemming from higher investment risk following the purchase of a single equity holding. Supporting Orient’s risk-adjusted capital position is its high level of internal capital generation, low retention of insurance risks and a reinsurance programme of good credit quality.

Orient remains the third-largest insurance company in the UAE by gross written premium with approximately 10% market share. Premiums grew 11% in 2012 to AED 1.4 billion (USD 380 million), driven by Orient’s strong multichannel distribution network and its position within the Al Futtaim group. Orient continues its strategy of diversifying its premium generation following the regional expansion of its parent’s franchise. However, at present, the majority of its business is generated within the UAE.

For the third consecutive year, Orient has generated the highest net profit in the UAE insurance market with earnings continuing its upward trend despite increased market competition. Profits increased 5% in 2012 to AED 213 million (USD 58 million), and the return over adjusted capital and surplus remained at approximately 20%. Orient’s technical results remain strong, achieving a combined ratio of approximately 60% in the last four years of operation.

A.M. Best has concerns regarding a shift in Orient’s investment strategy, with material exposure to a single equity investment, which consumes one-third of the company’s asset allocation. This change in strategy may create a potential volatility in Orient’s capital base and investment return, thereby creating the need for an enhanced enterprise risk management framework to ensure investment risks are controlled and mitigated effectively. A.M. Best notes that further improvement in risk management is expected over the coming year, with the development of an internal capital model.

Going forward, a material reduction in risk-adjusted capitalisation, a significant impairment emanating from its equity investment, or insufficient improvements in its enterprise risk management could add negative pressure to the ratings. Upward movements are unlikely over the medium term.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe – Rating Services Limited Supplementary Disclosure.

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit

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Russian Railways Logistics to hold a series of talks at TransRussia 2013

Posted on 15 April 2013 by Africa Business

ABOUT Russian Railways Logistics

JSC Russian Railways Logistics was founded in 2010 for the purpose of development of logistics business within “Russian Railways” Holding. In cooperation with Russian Railways subsidiaries and leading global transportation companies RZD logistics offers high-quality delivery solutions for its customers all over the world.

In 2012 the company organized transportation of 3.3 mn tons of cargo against 1.5 mn tons in 2011. Net profit of the company of amounted to RUB97.2 mn in 2011.

Russian Railways Logistics offers rail, road and sea-freight, intermodal transportation, storage and terminal handling, customs and insurance services, supply chain management.


Russian Railways Logistics will hold a series of talks with the customers and the partners during the 18th Moscow International Transport & Logistics Exhibition and Conference «TransRussia».

The most established and leading exhibition for the transport and logistics market in Russia, CIS and Baltic states will be held on 23-26 April 2013 at VVC All-Russian Exhibition Centre. Russian Railways Logistics stand B203 will be located in the logistics Hall 75B.

Company representatives will hold a series of talks with Russian and foreign partners. The company offers its customers a range of logistics solutions and services including intermodal transportation across Russia, Europe and Asia combined with storage, terminal handling and international transit.

For the first time the joint ventures of RZDL will be exhibited at RZDL stand. Among them EuroRailTrans (Latvia), YuXinOu (Chongqing) Logistics Co., Ltd (China) and Far East Land Bridge, Ltd. (Austria), which specializes in transit containerized cargo transportation on Europe-Asia route.

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Mervyn Goliath, Executive Vice President of Engineering and Operations, Clickatell:”Watch this space … we are geared up and energized!”

Posted on 13 April 2013 by Thandisizwe Mgudlwa

Mervyn Goliath has over 25 years of experience in the telecommunications, mobile banking, payment and transaction services industries and has held and excelled in executive roles at leading outfits, including ABSA (part of Barclays), MWeb (part of MIH) and Telkom.  Most recently, Mervyn was the Chief Operating Officer of Digital Banking Services for ABSA one of the largest financial services providers on the African continent, where his primary responsibility focused on transforming the bank’s digital channels. Before ABSA, Goliath served as CTO and General Manager of Technology and Operations at MWEB and as Group Head in National Telematics and Data Services at Telkom.

Founded in 2000, Clickatell is a global leader in providing the ability for its customers to alert, interact and transact with their customers, business partners and communities. Utilizing its global footprint, Clickatell can deliver short message services (SMS) through its Clickatell Mobile eXchange (CMX) to nearly every mobile phone user in the world. In addition, with Clickatell Transaction eXchange (CTX), the company is providing the essential link between the mobile consumer and their financial institution through such services as airtime top up. With its investment in Social Mobile Solutions, Clickatell is uniting customer communication, community creation and transaction services.

1) What is the nature of your business?

A: Clickatell is a global leader in mobile messaging and transaction service. We enable our customers to alert, connect, interact and transact with their business partners and communities on the mobile device.

We are the international pioneer for Business-2-Consumer mobile messaging. We have grown since the inception of the company in 2000 to our present global market position where we serve more than 65% of the top banks, insurance companies and retailers in South Africa as well as an impressive and diverse set of international clients.

2) Where did it all start?

A: The Clickatell story is such an exciting and inspirational story. It is a large part of the reason that I decided to leave a corporate financial services conglomerate, despite the fact that my primary role, just two months ago, was to head up the digital transformation of the largest bank in South Africa.

Clickatell has grown from a cash-strapped startup operating out of Cape Town 12 years ago to become a leading US-based multinational with very impressive annual revenues.

De Villiers and his twin brother Casper founded Clickatell with Danie du Toit and Patrick Lawson in 2000. It was the time of the Internet boom and they wanted to build a dot-com business. They originally planned to capitalise on the proliferation of low-price airlines and set out to build an Internet business that would sell discounted flight tickets to students at short notice. They looked for a mechanism that would enable them to inform customers by SMS about last-minute airfare deals. They couldn’t find one. That’s when they recognised the potential for a service like Clickatell, which would provide an interface between the Internet and telecommunications services.

Initial capital of R180 000, raised by the four founders, was quickly consumed, but fortunately they managed to secure funding from two angel investors who injected R1.2 million into the business.

By 2005, Clickatell was performing well and generating healthy profits. One of its international rivals then made a bid to take over the company. Their angel investors were keen to sell but management wasn’t. Ethos Private Equity stepped in, bought out the angel investors and enabled them to stave off the takeover bid. They recognised then, that they had to expand and grow internationally.

Ethos and Internet Solutions co-founder David Frankel funded an acquisition in 2006 and helped facilitate the relocation of the firm’s headquarters from Cape Town to Redwood City in California.

Soon after Clickatell moved to the US, prominent venture capital firm Sequoia Capital invested $7 million in the company. Sequoia was an early investor in technology giants Apple, Google, Cisco, Oracle and LinkedIn. Together with fellow venture capital firm DAG Ventures, Sequoia stumped up a further $12 million for Clickatell last year in its second round of financing.

3) What are the most memorable moments in your career?

A: I am humbled and pleased to have been part of some of the best teams in the telecommunications industry, all the way back to where I started as a pupil technician at the then South African Post and Telecommunications.

I was part of its transition to what is now called Telkom, serving in the very exclusive Telematics division, which was run by the legendary Allan Knot-Craig before he started Vodacom.

A memorable first career highlight for me was running the national technical support call center for the first online banking service, in the form of a videotext service known as Beltel.

We were all so privileged to work inside the nucleus of the telecommunications industry at the time, at the very beginning of the internet.

My move to MWEB was a key career change for me and right at the inception of the company. During my 12-year career there, I transitioned through numerous roles in technology, which culminated in a marathon tenure as Chief Technology Officer and arguably the most exciting phase of my career so far.

I once again found myself in an environment where I was able to contribute to both changing South African telecommunications regulation and as part of one of the best executive and technology leadership teams, blazing a trail of innovation and excellence. This culminated for me personally in building the largest IP network in South Africa, initiating and establishing open peering for the first time in South Africa, becoming a very significant anchor tenant on the SEACOM undersea Internet cable and bringing uncapped Internet to the market. These were game changers that created excitement and energy and again made a real difference across South Africa.

4) Any bad moments you can recall?  If yes, how did you overcome them?

A: It hasn’t always been plain sailing. I will never forget the day that I was fired and re-hired by my CEO on the same day. The market was tough due to disruptive competition and nerves were frayed.

My CEO was extremely unhappy about the slow rate at which we were developing new value propositions. Our software engineering practices were no longer serving us effectively. Smaller players in the market were outsmarting us left and right and my tenure as CTO came to an abrupt end.

I took one last breath and re-organized my team to introduce an Agile / Scrum methodology into our software engineering. Just 6 months later we were the darlings of the boardroom, rolling out projects with high levels of precision, speed and agility.

It was the best thing that I ever did. It took months of focused effort and many weeks of sleep deprivation to get it right – but we did it. I have many people from my team then to thank for believing in me and helping me to turn a sinking ship around and we still talk about it today.

While the SA ISP industry is small and while people never forget about the bad times and the failures, they also don’t forget about the successes and great times. Success should never be about the triumphs of you as a leader on an individual level – its ultimately highly collaborative teams that create winning companies.

5) What is happening in the mobile finance industry in Africa?

A: I delivered a number of talks last year on my strongly held view that “the future is decidedly mobile”. In 2013, the message is still the same, but amplified in orders of magnitude that have exceeded even the most aggressive forecasts.

Africa is the region that is leading the charge in mobile transactions and payments. It is fastest growing mobile financial services market globally because of the technology’s ubiquity, cost-effectiveness and the sheer unmet demand for financial services.

6) And what about Cickatell?  What’s been happening?

A: I joined Clickatell because it was particularly appealing for me to take on the challenge of leading a Clickatell team of engineering and financial services experts charged with growing the Clickatell enterprise business in Sub-Saharan Africa.

Clickatell’s deep enterprise and financial services experience in Africa positions us well to continue to be a technology innovator in this region. Expansion of the necessary intellectual capital and skills capability has already entered its second phase, with some key talent additions to our enterprise and engineering teams.

7) What is going to happen next?

A: We are entering Africa in a more determined fashion. Although Africa is the place where everyone wants to be, it’s not for everyone. There are enough failed mobile financial services starts in our industry to necessitate caution.

That said, we have already and will continue to expand our mobile financial services footprint into the rest of Africa, with the assistance of partners that complement our plans and capability. The partnership opportunities and benefits abound and the right time is now.

8 ) Do you think you are on the right track insofar as reaching your goals?

A: With the Clickatell team and partners behind our goals, absolutely YES.

9) Where to from here?

A: Pieter and the rest of the team have an incredible story to tell of tenacity, skill, and the courage and will to succeed. The strong Clickatell company culture that embraces these traits will see us charge into the next chapter of Clickatell’s growth and success.

Expansion into West and East Africa with Mobile Transactional services, are just some of the big plans for the business. We will continue to be an integral player where mobile, Internet and the consumer come together.

10) Is there anything you would like to add?

A: Watch this space … we are geared up and energized!

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“Mobile money is not just money transfer. To bring real and impactful financial services to the unbanked, one needs a platform that supports the whole ecosystem of mobile money services.”

Posted on 13 April 2013 by Africa Business

Exclusive interview with Yves Eonnet, CEO of Tagattitude,
exhibitor at the upcoming Mobile Money Africa
from 27-39 May in Johannesburg.

1) Which mobile money projects/products that Tagattitude is currently involved with are you most excited about?

We have today more than 35 projects we are working on. It is very hard to tell which one is the most exciting, they all are in their own way. Each one of our partners is using the TagPay platform in a unique way—our platform is modular and includes a powerful back end and very user friendly front end with so many different ways to offer mobile financial services. It is always exciting when the TagPay platform is used to offer a service that will have an important and impact on access to financial services through an innovative approach. One such project that I am currently very excited about is a project in West Africa where our TagPay platform will redesign and dramatically improve all the processes involved in microfinance operations. Another exciting, but very different project is with the leading telecom operator in a Central African country. It hasn’t been announced yet so I cannot say who it is but it is very exciting to work with a telecom operator with a very ambitious vision for their market.

2) What are your current business interests in Africa?

Mobile money market is emerging everywhere. In Africa the cell phones will be increasingly relied upon to deliver financial services to the unbanked. Financial inclusion is the driving force of all our customers. The business interest is huge because a completely new kind of banking business is being built. We are working with many existing and new financial actors who have purchased the TagPay platform to be able to offer a portfolio of financial services to their customers which are accessed using their mobile devices.

3)      Which regions are you most focused on?

East and West Africa are the most dynamic in our experience, but the south of the continent is becoming very active too and we are beginning to see activity in the north of Africa as well. The whole continent seems to be moving towards mobile money although each approach and strategy is unique. We also have some activities in Latin America. We are beginning to see a need for our platform and technology in Europe as well, especially since NFC continues to stagnate. However, the types of services that use TagPay in Europe are going to be very different from what we have been working on in Africa.

4)      What do you think are the most challenging aspects of being in the mobile money industry?

I believe that there are two major challenges facing the mobile money industry at this stage. The first has to do with interoperability. As markets and services mature, it is obvious that users of one service will need to be able to transact with users of another service. We have built a platform that will facilitate interoperability for our partners but the technology is only one part of what needs to be in place to solve this challenge.

The second challenge has to do with mobile payment. P2P transfers are a good start but people need to be able to use their mobile money to pay in stores and on websites. This requires a technology and user experience that is secure, fast, anonymous, and guarantees the physical presence of the cell phone to ensure nonrepudiation. Technologies like NSDT make this possible but very few platforms use this technology.

5)      What is your vision for this technology?
A successful mobile money service has to be built on a solid platform that includes the right technologies. Different technologies and approaches are suited to different types of transactions, cultures, and other factors. or amobile money deployment to succeed in Africa the technology must be extremely user friendly, cost effective and available on any existing phone. This is what our NSDT technology is all about. It secures transactions in stores and on websites using sound to guarantee the physical presence of the cell phone that is paying. It is as simple as answering a phone call and doesn’t impose any telecom costs on the users. Our vision is that NSDT technology will become the norm for point of sale and ecommerce mobile payments and that existing mobile money services will purchase the payment gateway layer of the TagPay platform to be able to add mobile payments in stores to their service offering.

6)      What surprises you about this industry?
The technologies we are using are making bankarization viral in a way that it was never able to be with cards. People now can be enrolled in a banking system just because they own a cell phone. This is a revolution.

7)      What will be your message at Mobile Money Africa?

Mobile money is not just money transfer. To bring real and impactful financial services to the unbanked one needs a platform that supports the whole ecosystem of mobile money services.  A service has to offer at least 10 financial services:  P2P transfer is important but not enough. Mobile money needs to allow people to pay in stores, pay on websites, pay bills, buy airtime, access savings, receive salaries, pay taxes, receive pensions, pay for TV and other subscriptions, receive and pay back loans, access insurance services … everything that can increase the fluidity of financial exchanges for the people and allow them to use their mobile money everywhere for everything. This is what our TagPay platform allows you to bring to your market.

8)      Why did you decide to exhibit at the event, what are you hoping to achieve?
The south of the African continent is starting to deploy mobile money services and we are right in the middle of it. The first step (P2P money transfer) is on its way. It is the right timing to bring all the additional services that Tagpay provides. We believe South Africa is a very important location to meet with all the new players that are working on these programs.

9)      Anything you would like to add?

Cell phones have dramatically improved the fluidity of information sharing between people – this was the very first step of the cell phone revolution. Our goal with TagPay is to allow people, employers, bankers, MFIs, governments, insurers,  suppliers… to be able to share money securely with people  just like  we share information today. This is key for social and economic development. TagPay is a tool to generate growth by accelerating the speed and the security of financial exchanges. Our goal with TagPay is to spread mobile money all over the continent.

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