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African Airlines experience strongest growth in 7 years

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In just a few months, Africa is experiencing its fastest growth in the freight industry since the global economy collapse. African Airlines are now experiencing strongest growth in 7 years

Data released by the International Air Transport Association (IATA) for the global airfreight markets shows that the volumes were up 31.6 per cent, with a capacity increase of 7.6 per cent.

This improvement contributed to a freight demand growth of 25.9 per cent in the first half of 2017 — the fastest in all regions.

The demand has resulted from increased trade between the continent and China, which has grown by nearly 60 per cent in the six months to June 2017.

“Seasonally adjusted growth has levelled off in recent months; but growth is set to remain in double digits for the remainder of 2017,” IATA said in its half-year report.

IATA director-general Alexandre de Juniac said that air cargo is flying high on the back of a stronger global economy and a rebound from the 2010 global economic crisis.

“This was the strongest first half-year performance in seven years and nearly triple the industry’s average growth rate of 3.9 per cent over the past five years.

“We have seen the demand grow at a faster pace than at any time since the global financial crisis. That’s great news after many years of stagnation,” said Mr Juniac.

“And even more importantly, the industry is taking advantage of this momentum to accelerate the much-needed modernization process and improve the value it provides to its customers.”

In June, Ethiopian Airlines, announced that it had signed a commitment with Boeing for the purchase of two B777 freighters at a cost of $651.4 million. This was after purchasing two aircraft to boost its freight business.

The airline’s group chief executive officer Tewolde Gebre Mariam said the freighters are strategic for the airline as it seeks to chart its long-term plan.

“We are building one of the world’s largest cargo terminals, and having new generation and high performance aircraft shows our commitment in supporting the continent’s growing cargo and logistics service,” said Mr Tewolde.

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Zimbabwe Artists Unite To Raise Funds For Cyclone Idai Victims

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Cyclone Idah

Cyclone Idai hit Malawi, Mozambique, and Zimbabwe

Last week Thursday, cyclone Idai hit Malawi, Mozambique, and Zimbabwe destroying human and properties on its path. It is said to be one of the worst disaster to hit the south-eastern African region. According to statistics, over 2.6 million people are affected across the three countries. Subsequently, the cyclone led to devastating flooding. The cyclone hit the port city of Beira in Sofala province at over 177 km/h (106 mph). Consequently, the port city of Beira which was once home to 500,000 people is now an ‘island’.

The President of Mozambique, Filipe Nyusi on Tuesday announced three days of national mourning. The official death toll as of Monday across Malawi, Zimbabwe, and Mozambique are 56, 98, and 200 respectively. However, many are still missing. President believes over 1,000 people may have been killed in the disaster. Consequently, the real death toll may remain unknown for many months as the disaster unfolds.

The urgent need for humanitarian services

There is an urgent need to rescue people still trapped within the devastated cities hit by cyclone Idai. Also, the survivors will be relying on humanitarian aid for survival. In the ‘new island’ people are clinging to trees and house roofs for survival. Speaking about the disaster, Manuel Rodrigues, Manica province governor, said,

“We saw people besieged and asking for help… on top of their roofs made up of zinc sheets. Others under flood waters. We can only imagine that they had been there for more than two or three days, without food and without clean drinking water.”

Several aid agencies in Mozambique are complementing government efforts in the distribution of food. Over 3,800 families are taking refuge in Mozambique’s National Institute for Disaster Management.

Zimbabwe musicians rise for cyclone Idai victims

Veteran Zimbabwe musicians have taken to their social media pages to solicit for donations to assist the victims. They also used the medium to share their condolence with the victims. The hip hop icon, Ex Q, Jah Prayzah said,

Jah Prayzah soliciting for donations for victims of cyclone Idai

“Let’s join hands and help those who have been affected by the cyclone Idai. No donation is too small to make a change. Anything you think can assist those in need right now in Chimanimani please bring it over… to 31 Hebert Chitepo in Belvedere.”

Michael Mahendere, a renowned gospel musician wrote,

“Our hearts and prayers go out to those affected by the cyclone Idai. The scenes are saddening but we know that there is Hope in the God we pray to. The relief that comes from Him is permanent and we stand with them during this devastating season.”

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Business and Development

Central Bank Of Nigeria Did Not Ban Textile Imports. Here Is What They Did Instead

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On the 5th of March 2019, a Facebook post by the Nigerian Tribune, one of the leading tabloids in the country alleged that the Central Bank of Nigeria (CBN) has banned the importation of textiles into the country.

However, this is not an accurate representation of what happened. What the Central Bank of Nigeria did was add textile to items no longer eligible for foreign exchange. The governor of CBN Governor, Mr. Godwin Emefiele said

“Effective immediately, the CBN hereby places the access to FX for all forms of textile materials on the FX restriction list.”

Making the announcement, the CBN Governor said the decision was to help revive the moribund industry. The CBN will continue to support cotton lint importation for use by textile factories. However, textile factories will have to make plans to source their cotton locally by 2020.

Businesspeople who import goods into the country buy foreign exchange from authorized dealers majorly banks. They use this foreign currency to pay their suppliers. The announcement means textile importers can no longer access the foreign exchange. This applies to other importers of items on the list. This brings the total amount of items on the restricted list to 41. However, in December 2018, CBN added fertilizer to the list to bring the total to 42.

How the policy will affect importers

The Central Bank of Nigeria trades 1 USD for 305 Naira. However, importers cannot buy the USD at the CBN rate for items on the restricted list. They will have to seek for foreign exchange from other sources including the black market. However, at the black market, the USD sells as high as 360N per USD and above.

Nigeria’s economy is largely dependent on the sale of crude oil. Following the plunge of oil price in 2015 which sank the country into recession, the CBN decided to ration foreign exchange to ensure it doesn’t run out of reserves. The CBN stated that,

“For the avoidance of doubt, please note that the importation of these items are not banned, thus importers desirous of importing these items shall do so using their funds without any recourse to the Nigerian exchange markets.”

What this means to the textile industry

According to the CBN, the policy is to boost the local production of the items on the list. The textile industries in the country are struggling to survive due to flooding of the market with foreign textile. Reacting to the ban, David Ibidapo, an economic and financial analyst said,

“This is a good initiative by the CBN, because if you look at what we spend on importation it is about 50 percent of our budget deficit. And imagine if that amount is being generated internally, it will automatically impact on our Gross Domestic Product (GDP).”

The CBN also has an importer/exporter window which facilitates currency exchange between buyers and sellers. In addition to lowering the pressure on FOREX, Mr. Ibidapo is of the opinion that,

“This will also inspire local production of textile with the single digit rate the CBN is promising local textile industries that are interested in getting loans.”

List of items shut out from CBN foreign exchange

  • Rice
  • Cement
  • Margarine
  • Palm kernel/palm oil products/vegetable oils
  • Vegetable and processed vegetable products
  • Poultry-chicken, eggs, turkey
  • Private airplanes/jets
  • Indian incense
  • Tinned fish in sauce
  • Cold rolled steel sheets
  • Galvanized steel sheets
  • Roofing sheets
  • Wheelbarrows
  • Head pans
  • Metal boxes and containers
  • Enamelware
  • Steel drums
  • Steel pipes
  • Wire rods (deformed and not deformed)
  • Iron rods and reinforcing bars
  • Wire mesh
  • Steel nails
  • Security and razor wire
  • Wood particle boards and panels
  • Wood fiber boards and panels
  • Plywood boards and panels
  • Wooden doors
  • Furniture
  • Toothpicks
  • Glass and glassware
  • Kitchen utensils
  • Tableware
  • Tiles
  • Textiles
  • Woven fabrics
  • Clothes
  • Plastic and rubber products, cellophane wrappers
  • Soap and cosmetics
  • Tomatoes/tomato pastes
  • Euro bond/foreign currency bond/ share purchases

There are viable industries in the country producing items on the list. For example, Nigerian rice production has grown to 9.86 million tonnes in 2017 from 353,000 tonnes in 1968. Dangote Cement is among the largest producers of cement in the continent. However, the flooding of the market with foreign goods and the consumer preference for these goods is adversely affecting the growth of local industries.

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Kenya’s Mobile Money M-Pesa to Become Available on AliExpress

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The launch of M-pesa as a payment method on AliExpress

Sylvia Mulinge, Safaricom’s Chief Executive Officer (Left) and Boniface Mungania, Head of M-pesa Product Management at Safaricom (Right) during the launch.

Safaricom has secured a deal that will enable users to pay for online shopping at AliExpress using M-pesa. AliExpress is an online shopping platform run by Alibaba Group—A Chinese e-Commerce giant. This deal means that, in a few weeks time, Kenyan shoppers can use M-pesa to pay for goods on the platform.

Ant Financial, an affiliate of Alibaba, will be offering M-pesa as one of the payment options. Ant Financial is the Group’s affiliate that runs payment services. The deal targets microtraders across Kenya who source or import their supplies and goods from manufacturers in China. Shopping for goods from China will now be easier and more convenient.

M-pesa

Launched in 2007, M-pesa is a mobile money service that has not only facilitated transactions of businesses in Kenya, but has also transformed lives. Kenyans can literally pay for anything using the mobile money platform. They can use M-pesa to pay for medical services, school fees, and utility bills. The platform also offers loans and savings to the 21 million users in Kenya.

Under the new deal with Alibaba, Kenyans will be able to select M-pesa as the preferred payment method. Total cost will then be displayed in Kenyan shillings. The standard Lipa Na M-pesa Paybill charges will still apply. The new service with Alibaba comes under the M-pesa Global banner, which allows users to send and receive money globally.

AliExpress in Kenya

AliExpress is available to all Kenyans who have access to the Internet. With a wide internet coverage and easy access to Smartphones in the country, this means that anyone planning to shop online can use AliExpress.

Compared to Alibaba, shoppers can buy products in smaller quantities on AliExpress. Alibaba mostly sells goods on wholesale. The integration with M-pesa means that shoppers can complete all the transactions on their mobile phone and have their goods delivered at their locations. Previously, AliExpress only allowed payments through bank transfer, Western Union, Master Card, and Visa.

Online Shopping

The deal between Alibaba and Safaricom puts AliExpress at a strategic advantage in the online shopping market in Kenya. The addition of M-pesa payment method minimizes apathy associated with online shopping. The new service means shoppers can order and pay for goods at the comfort of their homes, office, colleges, or whichever location.

AliExpress continues to compete with other online shopping platforms in the country that include Jumia, Kilimall, OLX, Shopit, Mimi, Avechi, Pigiame, Electrohub, and Amanbo. In 2017, Safaricom introduced its e-Commerce platform, Masoko.

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