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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.

Conclusion

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.

For more information about our organisation, please visit www.ey.com/za

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Global Trade Partners in the 21st Century

Posted on 15 May 2013 by Africa Business

WASHINGTON, May 15, 2013/African Press Organization (APO)/ — Remarks

Robert D. Hormats

Under Secretary for Economic Growth, Energy, and the Environment

World Economic Forum

Pretoria, South Africa

May 14, 2013

 

 

As Prepared

 

Thank you Lyal for the kind introduction.

I am delighted to be in South Africa again. I visited last fall with Secretary of State Hillary Clinton.

What was most striking then, and continues to be the case today, is the extent to which the image of Africa has changed. According to the IMF, growth in sub-Saharan Africa will surge to 6.1% next year, well ahead of the global average of 4%.

Africa is booming in nearly every sector, ranging from massive energy developments in Mozambique, Tanzania, Ghana, and other countries; to the growth of Rwanda and Kenya’s information and communications technology sectors; to South Africa’s thriving auto industry. And, though far from declaring victory, Africa is reaching a turning point in its hard-fought battles against poverty and corruption.

Today’s Africa looks nothing like what, in 2000, The Economist referred to as the “Hopeless Continent.” It is critical that we concentrate the world’s eyes on the new image of Africa, that of progress and promise. Perspectives are evolving—in 2011, The Economist referred to Africa as the “Rising Continent” and, last March, as the “Hopeful Continent.”

Trade is at the heart of Africa’s economic resurgence. So, in this context, I will speak first about America’s vision for global trade in the 21st century and then, focus on implications and, indeed, opportunities for Africa. America’s global trade agenda in the 21st century is shaped by a foundation laid, in large part, in the mid-20th century. After World War II, American and European policymakers worked together to build a set of international institutions that embodied democratic and free market principles.

The GATT—which led to the WTO—World Bank, IMF, and the OECD were designed to foster international economic cooperation. These institutions were vital to the economic prosperity of the United States, and to the success of America’s foreign policy and national security for the next three generations.

As we move into the 21st century, a new multi-polar global economy has surfaced. The emergence of a new group of economic powerhouses—Brazil, Russia, India, and China, of course, but also countries in Africa—has created momentum (if not necessity) for greater inclusiveness in the global trading system.

At the same time, these new players must assume responsibilities for the international economic system commensurate with the increasing benefits they derive from the global economy. In addition to the geography of international trade, the nature of trade and investment has evolved to include previously unimaginable issues such as e-commerce and sustainability.

So, part of our vision for trade in the 21st century is to build a system that is more inclusive, recognizes the new realities of economic interdependence, and matches increased participation in the global trading system with increased responsibility for the global trading system.

We are making progress with bringing new players into the global trading system as equal partners. Free Trade Agreements with Korea, Colombia, and Panama entered into force last year.

And, we are continuing negotiations on the Trans-Pacific Partnership—or TPP as it is more widely known. With Japan’s anticipated entry into the negotiations, TPP will grow to include 12 countries of different size, background, and levels of development. The agreement, when finalized, will encompass nearly 40% of global GDP and one-third of global trade.

In addition to TPP, we are embarking on a Transatlantic Trade and Investment Partnership with the European Union. TTIP—as it is being called—will strengthen economic ties between the United States and Europe, and enhance our ability to build stronger relationships with emerging economies in Asia, Africa, and other parts of the world.

TPP and TTIP are truly historic undertakings. Our objective is not only to strengthen economic ties with the Asia-Pacific and Europe, but also to pioneer approaches to trade and investment issues that have grown in importance in recent years.

These agreements will seek to break new ground by addressing a multitude of heretofore unaddressed non-tariff barriers, setting the stage for convergence on key standards and regulations, and establishing high quality norms and practices that can spread to other markets. TPP, for example, will raise standards on investment and electronic commerce, and afford protections for labor and the environment.

Our agenda also includes strengthening the multilateral trading system through the World Trade Organization. For example, the United States would like to see a multilateral Trade Facilitation Agreement, which would commit WTO Members to expedite the movement, release, and clearance of goods, and improve cooperation on customs matters. A Trade Facilitation Agreement would be a win-win for all parties—Africa especially.

Cross-border trade in Africa is hindered by what the World Bank calls “Thick Borders.” According to the latest Doing Business Report, it takes up to 35 days to clear exports and 44 days to clear imports in Africa. Clearing goods in OECD countries, in contrast, takes only 10 days on average and costs nearly half as much. Countries like Ghana and Rwanda have benefited tremendously from the introduction of trade facilitation tools and policies.

Ghana, for instance, introduced reforms in 2003 that decreased the cost and time of trading across borders by 60%, and increased customs revenue by 50%. A multilateral Trade Facilitation Agreement will create a glide path for increased trade with and within Africa.

Our views for 21st century global trade partnerships go beyond Europe and the Asia-Pacific, and efforts at the WTO. We are committed to supporting Africa’s integration into the global trading system. The cornerstone of our trade relationship with sub-Saharan Africa is the African Growth and Opportunity Act—known as AGOA. Of all of our trade preference programs, AGOA provides the most liberal trade access to the U.S. market.

Exports from Africa to the United States under the AGOA have grown to $34.9 billion in 2012. While oil and gas still represent a large portion of Africa’s exports, it is important to recognize that non-petroleum exports under AGOA have tripled to nearly $5 billion since 2001, when AGOA went into effect. And, compared to a decade ago, more than twice the number of eligible countries are exporting non-petroleum goods under AGOA.

South Africa, in particular, has made great strides in diversifying its exports to the United States. Thanks to AGOA, the United States is now South Africa’s main export market for passenger cars, representing more than 50% of exported value in 2012. Because AGOA is such an important mechanism for African countries to gain access to the U.S. market, the Administration is committed to working with Congress on an early, seamless renewal of AGOA. Our trade relationship with Africa goes beyond AGOA. For instance, AGOA represents only one-quarter of South African exports to the United States. The composition of South Africa’s exports to the United States, moreover, reflects complex interdependencies and industrial goods.

And, our trade relationship with Africa is not just about one-way trade. There is an immense opportunity for U.S. companies to do business on the continent.

We recently launched the “Doing Business in Africa Campaign” to help American businesses identify and seize upon trade and investment opportunities in Africa. The campaign was announced in Johannesburg, in part, because South Africa can play a prominent role in directing U.S. investment into other parts of the continent.

Although progress has been made on diversifying exports beyond energy, there is much more to be done. African ingenuity and entrepreneurship must be unleashed to drive innovation and growth throughout the continent. This requires closer integration to share ideas, transfer knowledge, and partner on solutions. Through AGOA and the “Doing Business in Africa Campaign”, we are promoting a business climate in Africa that enables and encourages trade and investment. However, realizing these goals is goes beyond trade preferences and commercial linkages.

Africa is also featured in America’s vision for global trade in the 21st century.

For example, we recently launched the U.S.-East African Community Trade and Investment Partnership—the first of its kind—to expand two-way trade and investment. The Partnership is designed to build confidence among the private sector by building a more open and predictable business climate in East Africa. We are considering a variety of mechanisms to accomplish this, including a regional investment treaty and trade facilitation agreement. The Partnership highlights our desire to help Africa integrate and compete in today’s global economy.

I will conclude with one final point. I began by saying that trade is at the heart of Africa’s economic resurgence. Trade is also at the heart of America’s economic recovery. We have a common interest and a common goal.

When it comes to enhanced trade, what is good for Africa is good for America. And what is good for America is good for Africa.

Thank you.


SOURCE

US Department of State

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Green business awards launched in Zimbabwe

Posted on 14 May 2013 by Wallace Mawire

Zimbabwe anticipates to ignite its green economic revolution with the recent launch of the green business awards expected to be presented to outstanding winners in November 2013, according to Sebastian Zuze, Chairman of the awards. The awards recently launched in Harare under the theme:Greening the economy for sustainable national prosperity are an initiative of Xhib-it Events company and are meant to celebrate excellence in green practice,strategy and products, complimenting the Ministry of Environment’s efforts on greening the economy.They seek to recognize the most innovative,ambitious and effective initiatives by Zimbabwean business and individuals for achieving environmental sustainability and implementing smart business practice.

Launching the award, Zuze said going green is the idea of making sure that in any activity that is conducted by individuals,communities and business,the environmental impacts are assessed and minimized to ensure sustainability.

He added that the effects of not managing the environment include loss of bio-diversity and long term damage to ecosystems,pollution of the atmosphere and the consequences of climate change,damage to aquatic ecosystems,land degradation,the impacts of chemicals use and disposal,waste production and depletion of non-renewable resources.

“On the other hand, good environmental practice ensures increased productivity in our factories,reduction of waste, improved efficiencies,enhanced national image,better utilization of resources and development of environmentally friendly technologies,” Zuze said.   Through the awards, Zimbabwe seeks to explore various approaches to attain sustainable growth in the global market place.

“Goals for the awards are simple, but bold, to fill heads with practical knowledge,ideas,new trends,helping transform business as usual by partnering with extraordinary visionaries,forward thinkers,creative industry leaders and companies committed to building profitable and sustainable enterprises while solving some of the world’s toughest problems,” Zuze said.

Some of the award categories include;the overall green business award,the green leader award,the green entrepreneur award,the green supply chain award,the green building award,the green residential building award,the green energy award,the green professional services award,the green travel initiatives award,the waste to business resource award,the green retailer award,the green school/college award,the green SME award,the green manufacturer award,the green product award,the green innovation award,the green local council award,the green community award,the green healthcare award,the green entertainment and leisure award,the green communications award, the green financial institution award,the green corporate citizen award, the Minister of Environment’s award for environmental excellence, the minister of tourism’s award for eco-tourism excellence and the ministry of mines green mining award of excellence.

Awards chairman Zuze says many factors are impacting on local, regional and international trade.”Managing the environmental impact of manufacturing,mining and the activities involved during the provision of services to markets is assuming significance of enormous proportions especially in Zimbabwe,” Zuze said.

Zimbabwe’s Minister of Environment and Natural Resources Management, Francis Nhema said threats to the environment in Zimbabwe are arising from the construction industry, infrastructure development, mineral resources exploration, waste disposal, packaging and branding, communications, natural resource consumption, energy and water consumption.

“The precautionary principle is therefore crucial to apply that business should operate in a way that does not threaten the future of our existence by continually seeking alternative means and ways of operations that are sustainable,” Nhema said.

Nhema added that his ministry envisions using platforms like the Green Business awards,the merging of business and the environment through behaviour change known as sustainable business or green business to present opportunities for new business that is future oriented.

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RUSSIA SEEKS GAMBIA’S SUPPORT TO HOST WORLD EXPO 2020

Posted on 13 May 2013 by Amat JENG

A special envoy dispatched to Banjul by the Russian Federation has disclosed that he came to seek The Gambia’s support in his country’s bid to host the World EXPO 2020 in the city of Ekaterinburg, report the Daily Observer – government’s controlled newspaper.

DV. Shubman, director of the staff of the Deputy Prime Minister, of the Russian Federation, said the event would open up a unique opportunity for the world to rediscover this city, designated in 1723 by Peter the Great, as the industrial centre of Russia. “We are here to promote the Russian bid to host the World Expo 2020. We made a presentation of our project to the Gambia government and we are very hopeful of a positive response from The Gambia,” DV. Shubman told journalists at State House in an interview Thursday, shortly after having a brief meeting with The Gambia’s Presidential Affairs minister, Dr Njogu Bah.

The Russian city to host the 2020 World Expo

“We have a team of our exposition which is a global mind and we are planning to receive up to 150 delegates from all over the world. They will be able to promote their countries in Russia in 2020, especially if Russia wins the bidding competition, of which five countries are battling for a win as to which country will host the event in 2020. Brazil, Russia, Thailand, Turkey, and the United Arab Emirates have all officially bid to host the World Expo 2020. A decision will be made at the BIE General Assembly this year to determine the winner of the bids,” he explained.

Asked about the reaction of The Gambia government, Shubman said they are hopeful of a positive response. “We have not had any response yet from the Gambia government but we are hopeful of a positive one. We just came to make a presentation to the Gambian authorities about the bid which voting will take place in November this year in Paris. There is no response yet from the government but our presentation was received at the high level and we are hopeful that we will receive a positive one from The Gambia,” the Russian diplomat told reporters.

Dr Njogu Bah

According to him, his Banjul visit also accorded him and delegation to talk about Gambia-Russia relations. “We hope that we will be able to cooperate with The Gambia to support this project of Expo 2020 bid,” he added.

The Expo 2020 would be the larger of the two kinds of world fairs, analogous to the Summer Olympics. It is considered “sanctioned” by the BIE, held every five years. Germany hosted Expo 2000; Japan hosted Expo 2005 China hosted Expo 2010; and Italy is preparing to host Expo 2015.
DV. Shubman was accompanied to the Presidency by the Russian ambassador to Senegal and accredited to The Gambia, His Excellency Valery Nesterushkin Shubman.

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Business Opportunities and Franchise Expo Offers Celebrates its 20th Anniversary

Posted on 09 May 2013 by Africa Business

This year marks the 20th anniversary of one of South Africa’s most successful exhibitions for a niche, high value audience of aspiring and established entrepreneurs. The 20th annual Business Opportunities and Franchise Expo will take place from 12-15 September 2013 at the Coca-Cola dome in Northriding, Johannesburg.

According to Lynn Chamier, general manager of the Business Opportunities and Franchise Expo, “The expo’s success in the past two decades rests solely on its ability to marry entrepreneurs and investors with the best business opportunities available to them in the market at a given time”.

A proven formula and on-target efforts to keep its content and format current and relevant has resulted in a loyal core of exhibitors, who return each year to replicate the success of their previous experience exhibiting at this powerful expo. This pool of established exhibitors is refreshed annually with scores of new exhibitors with fresh ideas and business opportunities to share.

Included among these exhibitors are franchisors, established business opportunities across a range of industry sectors, companies offering business support services to entrepreneurs and established BEE businesses who come to showcase their products and services to corporate procurement officers with BEE targets to meet.

Chamier adds, “Today’s expo visitors typically have one of three agendas. Some come to find a business or franchise opportunity to invest in; others to seek BEE partners to meet their corporate BEE procurement quotas; and still others to find business support services, expertise and products”.

“All are goal-oriented, motivated and determined to find what they’re looking for at the show. They also value the ability to approach exhibitors directly and engage in one-on-one meetings with them to explore the opportunity being presented in greater depth and to forge relationships.”

Visitors can also look forward to participating in the expo’s programme of workshops, cut to the chase on topics of relevance, concern and importance to entrepreneurs.

Unmatched Marketing Opportunity

The Business Opportunities and Franchise Expo is currently accepting exhibitor bookings for the Johannesburg expo.

The expo offer exhibitors the chance to get straight to the core of their target audience; gaining unrivalled access and brand exposure to a high value audience of thousands of aspiring and established entrepreneurs and corporate procurement officers.

For further information for Johannesburg bookings, call Claire Taylor at Tel: (011) 549 8300 or email claire@tepg.co.za; www.tepg.co.za Join the Business Opportunities & Franchise Expo on Facebook and follow on Twitter @BOFExpo

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ASANTE GOLD CORPORATION: ADVANCE NOTICE POLICY, ROYALTY ACQUISITION UPDATE AND WORKING CAPITAL LOAN AGREEMENT

Posted on 03 May 2013 by Africa Business

 

About Asante Gold Corporation

Asante Gold Corporation (TSX.V:ASE/FRANKFURT:1A9) is a Vancouver based gold exploration and royalty focused company, exploring the Fahiakoba Concession located in the centre of Ghana’s Golden Triangle between Perseus Mining’s 250,000 oz Au per year Edikan mine, and AngloGold Ashanti’s 315,000 oz Au per year Obuasi mine.


Vancouver, British Columbia – May 3, 2013 – Asante Gold Corporation (TSX.V:ASE/ FRANKFURT:1A9) (the “Company”) announces the approval and adoption by its Board of Directors of an Advance Notice Policy (the “Policy”). The purpose of the Policy is to provide shareholders, Directors and management of the Company with a clear framework for nominating directors of the Company. The Company is committed to: (i) facilitating an orderly and efficient annual general or, where the need arises, special meeting, process; (ii) ensuring that all shareholders receive adequate notice and information of the Director nominees; and (iii) allowing shareholders to register an informed vote after having been afforded reasonable time for appropriate deliberation. The Policy is intended to further these objectives.

The Policy includes a provision that requires advance notice to the Company in certain circumstances where nominations of persons for election to the Board of Directors are made by shareholders of the Company. The Policy fixes a deadline by which Director nominations must be submitted to the Company prior to any annual or special meeting of shareholders and sets forth the information that must be included in the notice to the Company. No person will be eligible for election as a Director of the Company unless nominated in accordance with the Policy.

In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 days and not more than 65 days prior to the date of the annual meeting; provided, however, that, in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement.

In the case of a special meeting of shareholders called for the purpose of electing Directors (whether or not called for other purposes), notice to the Company must be made not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made.

The full text of the Policy is available under the Company’s profile at www.sedar.com and on the Company’s website (www.asantegold.com) or upon request by contacting the Company’s Corporate Secretary, Janet Horbulyk, at (604)-558-1134.

The Policy is in effect as at the date of this news release. Pursuant to the terms of the Policy, the Company will seek shareholder ratification of the Policy at its next annual general meeting of shareholders (the “Meeting”). If the Policy is not confirmed at the Meeting, the Policy will terminate and be of no further force and effect following the termination of the Meeting.

The Company also announces that it has entered into a loan agreement with Goknet Mining Company Limited (“Goknet”) of Accra, Ghana. Pursuant to the terms of the agreement, Goknet will loan the Company CDN$200,000 for working capital purposes, payable within 60 days of demand, with interest payable on the unpaid principal at the rate of 5% per annum, calculated yearly. The loan is not convertible into securities of the Company. Goknet is a related party, as Douglas R. MacQuarrie is the CEO of the Company and the Managing Director of Goknet.

Goknet has also informed the Company that its arbitration with PMI Gold Corporation, with respect to PMI’s consent to the assignment of a 1% NSR royalty interest on the Obotan Gold Mine project in Ghana held by Goknet to the Company, is progressing with the full panel of arbitrators now selected. The Goknet/PMI agreement calls for a decision of the majority of the arbitrators to be made within 30 days. Further updates will be issued when and as received.

On behalf of the Board,

“Douglas R. MacQuarrie”

President & CEO

 

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“Africa has the ability to make a technology leap quickly whilst learning from deployment already in the field around the world.”

Posted on 01 May 2013 by Africa Business

Andrew Jones, Managing Director – Europe, Middle East and Africa
S&C Electric Europe Ltd. S&C are silver sponsors at the upcoming Clean Power Africa in Cape Town.

1) What are you most excited about currently in terms of S&C ELECTRIC’s products and solutions?

The S&C products range continues to expand as we seek to find solutions to customer problems. Currently the two areas that are gathering the most excitement from utility customers around the world are our energy storage solutions ranging from 25KWh to 10s of MWh and our smart grid products such as IntelliRupter and TripSaver. In addition, S&C expertise on connecting renewable projects on a global basis continues to result in a strong growth in business.

2) What is on the calendar for S&C ELECTRIC in 2013?

The major item on our calendar is to ensure that the high growth rate achieved in 2012 is continued and the expectation is that we will see growth in excess of 50% in 2013 in the EMEA region. Since we only targeted Africa as a region for growth in 2012, we see our ability to understand and support the Africa needs, as critical in helping us achieve this growth. This means that recruitment is underway particularly in our service area as we increase our level of local support, which includes Africa. In May we will open in Europe our global monitoring center so that we are able to monitor and troubleshoot any issues throughout the EMEA region. A number of product enhancements will be introduced during the year that suit the African market and this will be available to be discussed at the show.

3) What opportunities do you see in Africa?

Africa has the ability to make a technology leap quickly so that it can start using the leading edge technology quickly, whilst learning from deployment already in the field around the world. As such S&C expects smart grid opportunities in both rural and urban environments and increased integration of renewable energy. S&C is excited about the off-grid potential in Africa as a way to get more people connected to the grid quickly and cheaper than conventional methods. We see S&C experience of global deployment coupled with our engineering team who enjoy solving customer problems, as a great way to start generating business.

4) What do you think makes S&C ELECTRIC competitive in this market?

S&C is a specialist solution provider so is able to tailor its solution to meet the customer needs. Since we don’t offer a “one size suits all approach” we believe customers understand the value we create for them and with our help can understand the life cycle benefits of any solution. We have already advised customers in Africa that in some instances our solution offer significant value but in others it is the wrong product to offer. We see building trust based on this approach as being critical for customers to understand S&C value.

5) What do you think are the biggest challenges to the South African/African energy market?

One of the largest challenges facing the African market is the ability to provide reliable affordable electricity for all that is available 24/7. This is likely to result in adoption of new technology and the speed that the customers embrace this change will be critical.

6) What surprises you about this industry?

The most pleasant surprise is how technically informed the industry is and it clearly keeping abreast of activity in the rest of the world. I think this education coupled with the realization that new technology solutions are required will result in Africa quickly moving to the high technology innovative products. This recognition appears much higher than Europe.

7) Why did you decide to sponsor at Clean Power Africa?

After discussion with our local representatives we decided that this was the best event to show potential customers the innovative product range of S&C in a short period of time.

8 ) What will be the your main message for the event delegate and visitor?

We want to share our experience and knowledge with all delegates and visitors and would love for them to come to speak to us about problems that they can’t find solution to.

9)    Anything you would like to add?

All visitors who leave their business cards at the stand will have the chance to win a bottle of
Penderyn Welsh Single Malt Whiskey.

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African Development Bank Group approves a new Ten-Year Strategy

Posted on 30 April 2013 by Africa Business

“This document reflects Africa’s vision for itself – a vision of transformation that is achievable”, said Donald Kaberuka

TUNIS, Tunisia, April 30, 2013/African Press Organization (APO)/ The economic transformation of the African continent is the cornerstone of the African Development Bank Group’s new Ten-Year (2013-2022) Strategy (http://www.afdb.org). The Strategy, which has been approved by the Executive Directors of the Bank, emphasizes the quality and sustainability of growth.

 

Mr. Donald Kaberuka

The Directors’ approval followed a wide and deep consultation process, within and outside the Bank.

“This document reflects Africa’s vision for itself – a vision of transformation that is achievable”, said Donald Kaberuka, President of the African Development Bank Group since 2005. “It is a ten-year vision, which can make this continent – within another generation – the global growth pole that we know it can be and want it to be: a place fit for our aspirations and those of our children.”

“The Strategy reaffirms the Bank’s strategic choices around infrastructure, economic integration and the private sector. It charts the way towards inclusive growth that spans age, gender and geography, and takes special account of Africa’s fragile states which are home to 200 million people, as well as building climate resilience and the sustainable management of natural resources.”

The Strategy identifies the five main channels through which the Bank will deliver its work and improve the quality of growth in Africa. They are: infrastructure development, regional economic integration, private sector development, governance and accountability, skills and technology. The new strategy will also seek new and creative ways of mobilizing resources to support Africa’s transformation, especially by leveraging its own resources. Wider use of public-private partnerships, co-financing arrangements and risk-mitigation instruments will draw in new investors.

Mr Kaberuka added: “In a decade of seismic shifts in the global economy, Africa has defied the pessimists and experienced significant growth. That economic growth must now translate into real economic transformation, which will bring jobs and opportunities to its citizens. That is what makes the next decade so decisive, and the African Development Bank’s Strategy for 2013 to 2022 so vital”.

 

SOURCE

African Development Bank (AfDB)

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The Handbook of Global Corporate Treasury is out this week!!

Posted on 27 April 2013 by Africa Business

A complete guide to operating a corporate treasury from a global perspective

http://www.treasuryhandbook.com/

For CFOs and treasurers looking to re-align their treasuries with the growth of the global firm, bankers who seek to maximize the value they create for clients, treasury and finance firm employees, and even finance students, this book provides an easy-to-read approach to this exciting and increasingly complex world. It includes a toolkit that gives practitioners a reference point that they can adapt immediately for use in their firms, providing a low-cost, high-efficiency advisory solution they previously lacked.

  • Offers a uniquely global perspective unlike most books on the subject, which tend to focus on the US market
  • Incorporates a bottom-up, segmented approach that uses fundamental building blocks to form a comprehensive overview of corporate treasury
  • Includes a toolkit that provides a ready foundation for learning based on checklists, templates, and scorecards that can be adapted and customized to the needs of an individual firm
  • Written by an author with more than 13 years working in different aspects of corporate and institutional banking, from capital markets to transaction services
  • Written by an author who has spent many years working

The Handbook of Global Corporate Treasury serves as a ready reference for anyone interested in the nuances and practicalities of the complex world of corporate treasury.

About the Author

Rajiv Rajendra runs Singapore-based Aktrea Capital, a firm that delivers high-quality, cutting-edge training, consulting, and process solutions in the areas of capital markets, treasury, and risk management. His clients include an array of financial institutions, corporations, and funds throughout the Asia Pacific region. Mr. Rajendra has several years of experience with various aspects of corporate and institutional banking—from capital markets to transaction services.

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Stanbic IBTC declares N12bn profit on gross earnings of N92bn

Posted on 25 April 2013 by Africa Business

Stanbic IBTC Holdings, a member of Standard Bank Group, has declared a profit before tax of N11.7 billion for 2012, an increase of 16 percent above the N10.1 billion recorded in the corresponding period of 2011, according to its audited results for the financial year ended December 31, 2012. Similarly, profit after tax rose to N10.2 billion, translating to an increase of 53 percent over the prior year’s N6.6 billion.

The Stanbic IBTC group also made significant gains in other parameters during the period, as indicated in the results made available at The Nigerian Stock Exchange on Friday, April 19, 2013. Gross earnings, which stood at N63.4 billion in December 2011, increased to N91.9 billion in 2012, signifying a gain of 45 percent. The total assets increased to N676.8 billion last year, a 22 percent increase compared to the N554.5 billion recorded in December 2011.

The strong performance, despite the challenging operating conditions, is indicative of the soundness of the group’s decision to adopt a holding company structure, in line with its strategy to provide end-to-end financial services and build a franchise capable of generating sustainable and respectable returns to its stakeholders.

“This performance is a testament of the credibility of our strategy to realise our objective of being the leading end-to-end financial solutions provider in Nigeria. We continue to assess our risk assets through our robust and systematic risk management practices, whilst ensuring that adequate provisions are made for unforeseen shocks in line with the operating environment,” stated Mrs. Sola David-Borha, Chief Executive Officer, Stanbic IBTC Holdings PLC.

She said the group continued to expand its business on the back of growth in transactional volumes and activities, money and capital market activities and loan book. “Deposits from customers increased by 24 percent, while our loan book grew by 5 percent despite the sell down of existing large performing exposures to enable us comply with the post restructuring single obligor limit.”

During the period under review, total operating income increased by 22 percent to N67.4 billion, from N55.2 billion in December 2011. Gross loans and advances to customers went up 5 percent to N279.5 billion, compared to N266.6 billion in December 2011. Customer deposits went up 24 percent to N355.4 billion from N287.2 billion in the corresponding period of 2011, while non-performing loans at N14.3 billion decreased by 13 percent from N16.5 billion in December 2011.

The group will continue to seek opportunities in strategic sectors of the economy in order to grow its business in line with its future growth strategy, said David-Borha. “Our expanded branch network, excellent customer service, diversified business model and access to an extensive pool of experience within the group have put us in a desirable position to generate growing value for shareholders in 2013.”

Following its adoption of the holding company structure, the operating subsidiaries of Stanbic IBTC Holdings PLC are Stanbic IBTC Bank (including Stanbic Nominees Nigeria Limited), Stanbic IBTC Pension Managers Limited, Stanbic IBTC Asset Management Limited, Stanbic IBTC Stockbrokers Limited, Stanbic IBTC Trustees Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited. Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited are newly incorporated companies.

Some of the recent milestones recorded by the group include surpassing the 800,000 clients mark in the first year of the launch of the Stanbic IBTC Bank’s *909# mobile money solution and attainment of over one million retirement saving accounts by its pension business, Stanbic IBTC Pension Managers Limited.

 

Source: Standard Bank

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