Fitch Ratings-Hong Kong-07 April 2017: Fitch Ratings has downgraded South Africa&#8217;s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to &#8216;BB+&#8217; from &#8216;BBB-&#8216;. The Outlooks are Stable.
The issue ratings on South Africa&#8217;s senior unsecured foreign- and local-currency bonds have been downgraded to &#8216;BB+&#8217; from &#8216;BBB-&#8216;. The rating on the sukuk trust certificates issued by RSA Sukuk No. 1 Trust has also been downgraded to &#8216;BB+&#8217; from &#8216;BBB-&#8216;, in line with South Africa&#8217;s Long-Term Foreign-Currency IDR.
The Short-Term Foreign-and Local-Currency IDRs and the rating on the short-term local-currency securities have been downgraded to &#8216;B&#8217; from &#8216;F3&#8217;. The Country Ceiling has been revised down to &#8216;BBB-&#8216; from &#8216;BBB&#8217;.
KEY RATING DRIVERS
The downgrade of South Africa&#8217;s Long-Term IDRs reflects Fitch&#8217;s view that recent political events, including a major cabinet reshuffle, will weaken standards of governance and public finances.
In Fitch&#8217;s view, the cabinet reshuffle, which involved the replacement of the finance minister, Pravin Gordhan, and the deputy finance minister, Mcebisi Jonas, is likely to result in a change in the direction of economic policy. The reshuffle partly reflected efforts by the out-going finance minister to improve the governance of state-owned enterprises (SOEs). The reshuffle is likely to undermine, if not reverse, progress in SOE governance, raising the risk that SOE debt could migrate onto the government&#8217;s balance sheet.
Differences over the country&#8217;s expensive nuclear programme preceded the dismissal of a previous finance minister, Nhlanhla Nene, in December 2015 and in Fitch&#8217;s view may have also contributed to the decision for the recent reshuffle. Under the new cabinet, including a new energy minister, the programme is likely to move relatively quickly. The state-owned electricity company, Eskom, has already issued a request for information for nuclear suppliers and is expected to issue a request for proposals for nuclear power stations later this year. The treasury under its previous leadership had said that Eskom could not absorb the nuclear programme with its current approved guarantees, so the treasury will likely have to substantially increase guarantees to Eskom.
This would increase contingent liabilities, which are already sizeable. According to the 2017/18 budget, the government&#8217;s guarantee exposure to public institutions was ZAR308.3 billion at end-March 2017, up from ZAR255.8 billion a year earlier. The main SOEs had additional liabilities of ZAR463 billion in 2016 with no explicit guarantee but with a significant probability that the government would step in should SOEs be unable to service the debt. The government has repeatedly needed to support SOEs, including Eskom, which is responsible for a large share of liabilities.
The new finance minister has stated that he does not intend to change fiscal policy and remains committed to expenditure ceilings that have been a pillar of fiscal consolidation. However, Fitch believes that following the government reshuffle, fiscal consolidation will be less of a priority given the president&#8217;s focus on &#8220;radical socioeconomic transformation&#8221;. This means that renewed shortfalls in revenues, for example as a result of lower than expected GDP growth, are less likely to be compensated by expenditure and revenue measures. This could put upward pressure on general government debt, which at an estimated 53% of GDP at end-March 2017 was already slightly above the &#8216;BB&#8217; category median of 51%.
The tensions within the ANC will mean that political energy will be absorbed by efforts to maintain party unity and fend off leadership challenges and to placate rising social pressures for addressing inequality, poverty and weak public service delivery. The Treasury&#8217;s ability to withstand departmental demands for increased spending may also weaken.
Political uncertainty was already an important factor behind weak growth last year, as in Fitch&#8217;s assessment it has affected the willingness of companies to invest. The agency believes that the cabinet reshuffle will further undermine the investment climate. Fitch forecasts GDP growth of 1.2% in 2017 and 2.1% in 2018, but the reshuffle has raised downside risks.
South Africa&#8217;s ratings also reflect the following key rating drivers:
The current account deficit narrowed to 3.3% of GDP in 2016 from 4.4% in 2015, on the back of import compression reflecting weak domestic demand, low oil prices and increasing investment income from abroad. This improvement, together with the flexible exchange rate, will contain pressures should external financing dry up. The government&#8217;s low reliance on foreign-currency financing, which accounted for just 11.3% of debt at end-March 2017, is also helping to contain external pressures.
Most indicators of economic development are in line with &#8216;BB&#8217; category medians. GDP per capita at market prices is estimated at USD5,207 for 2016, compared with a median of USD5,007. The World Bank&#8217;s governance indicator, at the 59th percentile, is well above the &#8216;BB&#8217; median and more in line with the &#8216;BBB&#8217; median. However, this may not adequately reflect governance issues that were highlighted in the recent state of capture report by the public prosecutor and governance may deteriorate as a result of the reshuffle. The rating is supported by a sound banking sector, which has a Fitch Bank Systemic Risk Indicator of &#8216;bbb&#8217;.
SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)
Fitch&#8217;s proprietary SRM assigns South Africa a score equivalent to a rating of &#8216;BBB&#8217; on the Long-Term FC IDR scale.
Fitch&#8217;s sovereign rating committee adjusted the output from the SRM to arrive at the final LT FC IDR by applying its QO, relative to rated peers, as follows:
&#8211; Macroeconomic Performance, Policies and Prospect: -1 notch, to reflect South Africa&#8217;s weak growth prospects relative to the &#8216;BBB&#8217; category median, with important repercussions for public finances.
&#8211; Structural Features: -1 notch, to reflect the expected deterioration in governance standards, particularly related to SOEs.
Fitch&#8217;s SRM is the agency&#8217;s proprietary multiple regression rating model that employs 18 variables based on three year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch&#8217;s QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.
RATING SENSITIVITIES
The following risk factors could, individually or collectively, result in negative rating action:
&#8211; A failure to stabilise the government debt/GDP ratio or an increase in contingent liabilities.
&#8211; Failure of GDP growth to recover sustainably, for example, due to sustained uncertainty about economic policy.
&#8211; Rising net external debt to levels that raise the potential for serious financing strains.
The following risk factors could, individually or collectively, result in positive rating action:
&#8211; An improvement in governance standards that is supportive of a stronger business and investment climate and a sustained upturn in economic growth.
&#8211; A marked narrowing in the budget deficit and a reduction in the government debt/GDP ratio.
&#8211; An improvement in the country&#8217;s net external debt/GDP ratio.
KEY ASSUMPTIONS
Fitch expects global economic trends and commodity prices to develop as outlined in Fitch&#8217;s March Global Economic Outlook.

Fitch Downgrades South Africa to junk for both local & foreign currency

Rwanda has removed the chief executive of its state-run airline, a cabinet statement said on Thursday, without giving a reason.
The statement said the government had named Chance Ndagano as RwandAir&#8217;s acting chief executive officer, replacing John Mirenge. Ndagano also serves as the vice chairman of the Rwanda Civil Aviation Authority.
Mirenge had been at the helm of RwandAir since 2010 and is credited with steering an ambitious expansion plan despite the company not announcing any profits.
Last month, RwandAir said it would start flights to London in May, making it the airline&#8217;s 22nd destination.
RwandAir has 11 aircraft and expects delivery of a 12th, a Boeing 737-800, in May.
http://cnbc.africa/news/east-africa/2017/03/29/rwandas-airline-start-flights-london/
(Reporting by Clement Uwiringiyimana; Editing by George Obulutsa)

Rwanda replaces airline CEO, gives no reason

By Tiisetso Motsoeneng
JOHANNESBURG (Reuters) &#8211; Some of the banks South African regulators have alleged rigged the rand currency say the case against them lacks specific detail about anti-competitive conduct and its impact, three sources with direct knowledge of the matter said.
The banks have also questioned whether the country&#8217;s Competition Commission can penalise banks which do not have subsidiaries or branches in South Africa, the sources said.
The Competition Commission is seeking to impose fines on more than a dozen local and foreign banks that it alleges colluded to coordinate trading in the rand and the U.S. dollar.
The Commission launched the investigation in April 2015, joining a global clampdown that has led to big banks being fined around $10 billion in total for rigging interest rate and forex benchmarks.
It referred the case to the Competition Tribunal, which holds hearings on anti-trust matters before making a ruling. The Commission has recommended that the Tribunal impose fines amounting to 10 percent of the banks&#8217; South African revenues, the maximum allowed.
At a closed preliminary Tribunal hearing in March, some of the banks raised objections about the lack of specific detail in the case to allow their lawyers to present a defence, one of the sources said.
The Tribunal will meet again in July to consider the banks&#8217; objections if the Commission has done enough to fine-tune its case, the sources said.
The Competition Commission did not immediately respond to a Reuters&#8217; request to comment.
Under South African regulations, the Commission is required to investigate anti-competitive cases within South Africa, or those that have an impact in the country.
&#8220;If there was an anti-competitive conduct, as the Commission alleges, the question then is: did it have an effect in South Africa? That&#8217;s one jurisdictional issue the banks have raised,&#8221; another source said.
Another issue raised was how banks with no subsidiaries or branches in South Africa would be affected.
&#8220;Some of the banks want jurisdictional issues to be cleared up because some of the them named have no branches in South Africa,&#8221; one source said. &#8220;How do you calculate a fine for banks with no branches in South Africa?&#8221;
Australia&#8217;s ANZ Banking Group has no branches in South Africa. Nomura only launched a branch in South Africa in April last year, almost a year into the Commission&#8217;s investigation.
Among the banks, Barclays Africa Group, a regional unit of Barclays Plc, has been granted conditional immunity from prosecution in return for its cooperation in the investigation.
In February, the local arm of Citigroup was fined $5 million for its role in the affair. The Commission said it had set the fine for Citi Bank NA South Africa at less than 10 percent of its annual turnover after the bank &#8220;undertook to cooperate with the Commission.&#8221;
Other banks named in the investigation were Standard Bank, Investec, JP Morgan, BNP Paribas, Credit Suisse Group, Commerzbank AG, Macquarie Bank, Bank of America Merrill Lynch (BAML), HSBC Plc and Standard Chartered Plc.
Standard Bank, South Africa&#8217;s second biggest bank by market value, said its own internal investigation had found no evidence of any wrongdoing.
&#8220;Nonetheless, Standard Bank is treating these allegations very seriously and will engage fully with the Competition Commission and the Competition Tribunal to better understand the basis for the complaints,&#8221; spokesman Erik Larsen said.
StanChart would continue to co-operate with the Tribunal process, spokeswoman Geraldine Matchaba said. JP Morgan, Commerzbank, Bank of America and Nomura declined to comment. Credit Suisse, BNP Paribas, HSBC, ANZ and Macquarie did not respond to email requests for comment.
http://cnbc.africa/news/2017/02/20/south-africa-watchdog-settles-with-citi-over-currency-rigging/
(Editing by Jane Merriman)

Banks raise objections in South Africa’s FX rigging case- sources

The U.S. State Department on Thursday cautioned Americans living in or traveling to Kenya about possible rallies or protests that could turn violent, ahead of general elections slated for Aug. 8.
<blockquote>&#8220;Rallies, demonstrations, and protests may occur with little notice and even those intended to be peaceful can escalate into violence,&#8221; the State Department said in a travel alert. &#8220;As with all large events, there is also the opportunity for criminal elements or terrorists to target participants and visitors.&#8221;</blockquote>
Kenyan opposition leader Raila Odinga said in February that mass protests were possible if the August elections were rigged. After a disputed poll in 2007, more than 1,200 people were killed in weeks of fighting after political protests turned into ethnic clashes, but 2013 elections passed relatively peacefully.
(Reporting by Yeganeh Torbati)

Should tourists be cautioned ahead of Kenya elections?

By Abdi Sheikh
Somalia&#8217;s president replaced his security chiefs on Thursday and called on al Qaeda-linked al Shabaab insurgents to surrender within 60 days in return for education and jobs.
President Mohamed Abdullahi Mohamed, speaking days after U.S. President Donald Trump&#8217;s administration granted the U.S. military broader authority to carry out air strikes in Somalia, said tackling the al Shabaab insurgency was his top priority.
&#8220;We have ordered all the security forces and military to be ready for making peace and today there is a new change in the military commanders, security officials,&#8221; Mohamed, dressed in military uniform, told reporters.
Somalia has been at war since 1991, when clan-based warlords overthrew the president then turned on each other. A widespread drought has brought the country to the brink of famine and the U.N. says half the population will need aid by July.
Mohamed named a new military commander, director of national security and intelligence, commander of police and a new head of prison forces. He also appointed a new mayor for the capital Mogadishu.
U.S. forces have been carrying out drone strikes in Somalia in support of the government. Trump has given his military broader powers to attack militants even if they are not engaging partnered forces.
Mohamed did not mention the new U.S. directive, but emphasised that Somali troops should take the lead and added in a statement: &#8220;We want to pardon the Somali youth who were misled by al Shabaab.
&#8220;The government cordially welcomes them. We shall give them education; we shall create jobs for them. We do not want to kill our youth. We urge you again to leave al Shabaab as soon as possible.
&#8220;You have 60 days.&#8221;
Al Shabaab, which aims to impose its own harsh version of Islam in Somalia, is carrying out increasingly deadly bombings despite losing most of its territory to a 22,000-strong African Union peacekeepers supporting the Somali government.
The group aims to expel the peacekeepers and topple Somalia&#8217;s Western-backed government.
Among the new president&#8217;s chief challenges will be paying his military, who rampaged through the streets of Mogadishu earlier this year, saying they had not received their $100 salaries for several months.
(Writing by George Obulutsa; Editing by Katharine Houreld and Ralph Boulton)

Somali president shakes up security agencies, urges militants’ surrender

<div class="storify"><iframe loading="lazy" src="//storify.com/cnbcafrica/live-mass-marches-in-south-africa/embed?border=false" width="100%" height="750" frameborder="no"></iframe><script src="//storify.com/cnbcafrica/live-mass-marches-in-south-africa.js?border=false"></script><noscript>[<a href="//storify.com/cnbcafrica/live-mass-marches-in-south-africa" target="_blank">View the story &#8220;LIVE: Mass marches in South Africa&#8221; on Storify</a>]</noscript></div>

LIVE: Mass marches in South Africa

Express visas for Nigeria are currently not available due to an internal audit being conducted at the Nigerian consulate, Flight Centre Business Travel has warned.
Flight Centre Business Travel, the corporate division of Flight Centre Travel Group, SA’s largest travel company, says that travellers needing to travel to Nigeria need to note that it currently takes up to two weeks to get a visa (if all documentation is provided) – which means last minute or emergency trips are not possible.
Express visas for Nigeria are normally issued within two to five working days while a standard visa typically takes seven to 10 working days.
“Our visa supplier has been informed by Nigeria’s visa processing centre that the Nigerian Consulate is doing an internal audit and as such express visas are not available. That means that last-minute or emergency travel to Nigeria is not possible at the moment and companies needing to do business in Nigeria or planning trips to Nigeria need to take notice and take the necessary measures,” says Michelle Jolley, Corporate Brands Marketing Leader for Flight Centre Business Travel.
Jolley says it is unclear when the Consulate will resume processing express visas.
“Our supplier has been informed that normal service should be reinstated this week, but an exact date has not been identified. We will keep our customers advised,” she says.
Jolley says there was no indication on whether a new online system which is being launched in Nigeria to expedite the processing of visas is available. According to reports, visitors to Nigeria can apply online from 48 hours before arriving in the country and collect their visa on arrival. 
“The Nigerian Immigration System (NIS) has declined to comment around the new 48 hour 
online visa application system and advised they won’t be issuing any express visas yet. 
We strongly advise South African travellers to proceed as normal for the time being, which is to allow a lot of time to apply for your visa,” she says.
Meanwhile, Abuja’s Nnamdi Azikwe International Airport (ABV) in Nigeria’s capital city, remains closed until 18 April 2017 due to upgrades to the existing runway as well as the building of a new second runway. Repairs have been extended for an additional 18 weeks, but this shouldn’t affect day-time flights as these repairs will be done at night.
South African Airways, British Airways, Lufthansa and Air France have suspended all flights to and from ABV until then. 
Passengers have been advised to contact their airlines and Flight Centre Business Travel to discuss alternate arrangements.

No emergency, last-minute travel possible to Nigeria for South Africans

By Ed Stoddard
President Jacob Zuma&#8217;s pledge to expropriate South African land is unlikely to lead to violent seizures of farms like those that impoverished neighbouring Zimbabwe, but could still hurt the economy by scaring off investors worried about property rights.
Zuma is fighting to retain control of South Africa against opponents within the ruling African National Congress who want him to resign the party leadership.
http://cnbc.africa/news/southern-africa/2017/04/05/s-anc-rejects-calls-zuma-quit/
The confrontation came to a head last week when Zuma sacked Finance Minister Pravin Gordhan, who was often at odds with the president but widely respected by financial markets and whose dismissal triggered a credit downgrade.
Faced with opposition mainly from urban constituencies within the ANC, the president has doubled down on appeals to the rural poor, renewing promises to change the constitution to expropriate land without compensation and redistribute it.
<blockquote>&#8220;You can’t have a constitution that keeps people in poverty,&#8221; he told traditional leaders last week.</blockquote>
Zuma has reminded the party that &#8220;expropriation without compensation&#8221; was adopted as official policy at the ANC&#8217;s 2012 conference.
More than two decades after the end of apartheid rule, most of South Africa&#8217;s land is still in the hands of minority whites. Zuma&#8217;s ruling ANC has long been committed to the principle of redistributing it.
But the pace has been slow, relying mostly on a &#8220;willing buyer, willing seller&#8221; policy intended to respect property rights seen as vital to sustaining Africa&#8217;s most industrialised economy.
South Africa has many safeguards that should prevent the sort of lawlessness and violence that took place when followers of Zimbabwean President Robert Mugabe stormed onto white-owned farms in the early 2000s.
Zuma himself has said South Africa will not embark on the kind of lawless land grabs that saw Zimbabwe slide from breadbasket to basket case. Unlike Zimbabwe, South Africa has a robust, independent judiciary to keep the government in line.
Nor is South Africa as dependent on farming for its income as its northern neighbour: agriculture accounts only for about two percent of gross domestic product.
But the threat to redistribute land could still harm a sector which is a major employer and feeds a drought-prone nation, and any move to curb property rights could have wider economic repercussions by alarming investors in other sectors.
RHETORIC TO REALITY?
Changing the constitution as Zuma says he intends would not be easy, with the ANC so sharply divided over his leadership.
<blockquote>&#8220;The checks and balances in South Africa and the waning political support for the ANC itself make it difficult to disregard or change the constitution,&#8221; said Daniel Silke, the director of Political Futures Consultancy. &#8220;We are in a very different space to what was a very autocratic Zimbabwe.&#8221;</blockquote>
Zuma&#8217;s political woes, including electoral setbacks in major urban centres in local elections last year, explain his populist approach to the land issue.
It is part of a &#8220;radical economic transformation&#8221; drive aimed at the ANC&#8217;s increasingly rural support base. His plans will be high on the agenda of a major party policy conference in June-July, and another in December when Zuma&#8217;s successor as ANC leader is to be picked ahead of a general election in 2019.
<blockquote>&#8220;Deploying populist rhetoric is a powerful campaign strategy that has worked for Zuma before,&#8221; said Ruth Bookbinder, Africa Analyst at risk consultancy Verisk Maplecroft.</blockquote>
The Department of Rural Development and Land Reform says only 8 million hectares of arable land has been transferred to black people since 1994, less than 10 percent of the 82 million hectares available and a third of the ANC&#8217;s 30 percent target.
Yet the ANC has not yet fallen into line behind Zuma&#8217;s call for constitutional change. In February, ANC MPs voted down a motion by the ultra-left Economic Freedom Fighters (EFF) party to amend the constitution to take land without compensation.
ZIMBABWE PARALLELS
Zuma&#8217;s bid for rural support has parallels with Zimbabwe in 2000, when Mugabe, then in power for two decades, faced a challenge from an opposition rooted in the urban trade union movement.
Mugabe responded by unleashing violent invasions of white-owned farms that proved devastating to an economy already in meltdown, with acute balance of payments pressures, raging inflation, slowing growth, a depreciating currency and a dependency for funding on the International Monetary Fund.
Zuma too faces challenges from urban quarters, including calls for him to resign from the South African Communist Party and labour federation Cosatu, both allies of the ANC.
The economy is barely growing, the rand currency is vulnerable, inflation could reignite, and further ratings downgrades could push South Africa into the IMF&#8217;s embrace, which would see it forced to adopt austerity measures that ANC populists would baulk at.
Damaging South Africa&#8217;s high-tech agriculture sector through land seizures could have far-reaching consequences. Wandile Sihlobo, an economist at the agricultural business chamber, told Reuters he reckons the debt book for commercial agriculture is around 160 billion rand ($11.6 billion).
Food security is a concern as South Africa recovers from a drought, with forecasts showing another potentially looming.
Some analysts say such consequences will not dissuade Zuma.
&#8220;Zuma has shown he can be absolutely reckless in pursuit of his political agenda,&#8221; said NKC African Economics political analyst Gary van Staden.
($1 = 13.7680 rand)
(Editing by James Macharia and Peter Graff)

S.Africa’s land expropriation unlikely to end like Zimbabwe

The latest iteration of rapper Jay Z&#8217;s favorite champagne goes on sale on April 18, but only 2,333 bottles will be available in the U.S., and at a price: $850.
Armand de Brignac, known as &#8220;Ace of Spades&#8221; because of the logo on the bottle, has launched Blanc de Noirs second assemblage – or blend – known as A2, according to a <a class="inline_asset" href="http://armanddebrignac.com/la-vie-en-or/bloomberg-pursuits-announces-usa-launch-blanc-de-noirs-assemblage-two-a2/?ref=https://t.co/wXmu7QZxdR" target="_self">statement on the company&#8217;s website</a>.
Jay Z, real name Shawn Carter, <a href="http://www.cnbc.com/2014/11/07/jay-zs-got-99-problems-but-champagne-aint-one.html" target="_self">bought the champagne from Sovereign Brands</a> for an undisclosed amount back in 2014, and previously name-checked &#8220;Ace of Spades&#8221; in his 2006 rap &#8220;Show Me What You Got.&#8221;
Aside from the logo, the champagne stands out for its shiny bottle and fine taste. Fine Champagne magazine named the first assemblage as the number one Blanc de Noirs in the world, with writer Mark Oldman admiring its &#8220;complexity and nuance.&#8221;
The A2 blend comes from Pinot Noir producing villages in France including Bouzy, Verzenay, Chigny-les-Roses and Rilly-la-Montagne, and each bottle is inscribed with a number from one to 2,333.
Fans will have to act fast to get their hands on a bottle, as Armand de Brignac Chief Executive Sebastien Besson says that A2 is already selling fast. &#8220;Many of the A2 bottles have already been preordered from Armand de Brignac&#8217;s top clients. We anticipate they may only be available for a few months,&#8221; he said in an online statement.
For those who prefer to dress up and go out for a drink, the new fizz will be available at high-end bars and clubs in New York and Los Angeles, including Jay Z&#8217;s 40/40 Club in New York, where Armand de Brignac&#8217;s champagnes retail for between $400 and $1,000 a bottle.

Jay Z’s latest Ace of Spades champagne will cost $850 only 2,333 bottles available

Germany&#8217;s Cabinet on Wednesday approved a new bill that punishes social networking sites if they fail to swiftly remove illegal content such as hate speech or defamatory fake news.
Chancellor Angela Merkel&#8217;s Cabinet agreed on rules that would impose fines of up to 50 million euros ($53.4 million) on Facebook, Twitter and other social media platforms.
German Justice Minister Heiko Maas said that the companies offering such online platforms are responsible for removing hateful content. He said the new bill would not restrict the freedom of expression, but intervene only when criminal hatred or intentionally false news are posted.
Germany poses a particular problem for U.S.-owned social networking sites accustomed to American standards of free speech. Due to its Nazi past, Germany bans public Holocaust denial and any overt promotion of racism. The issue has come to the fore amid the recent influx of migrants to Germany, which has sparked a backlash among some Germans including a rise in online vitriol.
Social networks need to ensure that obviously criminal content — as defined by German law — will be deleted within 24 hours and other illegal content after seven days.
&#8220;Just like on the streets, there is also no room for criminal incitement on social networks,&#8221; Maas said.
&#8220;The internet affects the culture of debate and the atmosphere in our society. Verbal radicalization is often a preliminary stage to physical violence,&#8221; he added.
The minister pointed out that social networks don&#8217;t delete enough punishable content, citing research that he said showed Twitter deletes just 1 percent of illegal content flagged by users, while Facebook deletes 39 percent.
Maas also said that measures to combat hate speech and so-called fake news will ultimately have to be taken at the European level to be effective.
The bill still needs parliamentary approval.

Germany approves bill curbing online hate crime, fake news

On April 3, 2017, S&amp;P Global Ratings lowered its foreign currency ratings on South Africa to &#8216;BB+/B&#8217; from &#8216;BBB-/A-3&#8217;. The outlook is negative. We also lowered our national scale rating on South Africa to &#8216;zaAA-&#8216; from &#8216;zaAAA&#8217;.
• We do not rate financial institutions in South Africa above the foreign currency sovereign ratings, due to the direct and indirect impact that a sovereign distress would have on banks&#8217; operations.
• As a result, we are lowering our ratings on FirstRand Bank Ltd., FirstRand Ltd., Nedbank Ltd., Investec Bank Ltd., Absa Bank Ltd., Barclays Africa Group Ltd., and BNP Paribas Personal Finance South Africa Ltd. (BNPPPF), and our rating on the domestic medium-term note program issued by BNP Paribas (acting through its local branch).
• The negative outlooks on the first four entities reflect that on the sovereign and indicate that we could lower the ratings further if we lower our foreign currency ratings on South Africa.
• The other three entities and the note program carry national scale ratings only, to which we do not assign outlooks.
S&amp;P Global Ratings said today that it has lowered its ratings on five South Africa-based financial institutions and two related holding companies, as well as its national scale rating on the domestic medium-term note (MTN) program issued by BNP Paribas through its local branch.
More specifically, we lowered, to &#8216;BB+/B&#8217; from &#8216;BBB-/A-3&#8217;, our long- and short-term counterparty credit ratings on FirstRand Bank Ltd., Nedbank Ltd., and Investec Bank Ltd. In addition, we lowered our long-term counterparty credit rating on FirstRand Ltd. to &#8216;BB-&#8216; from &#8216;BB+&#8217;, while affirming the &#8216;B&#8217; short-term counterparty credit rating. The outlooks are negative.
At the same time, we lowered our long-term South Africa national scale ratings on FirstRand Bank, Nedbank, Investec Bank, and BNP Paribas Personal Finance South Africa Ltd. (BNPPPF) to &#8216;zaA&#8217; from &#8216;zaAA-&#8216;. We affirmed our &#8216;zaA-1&#8217; short-term national scale ratings on the four entities.
We have lowered to &#8216;zaBB+/zaB&#8217; from &#8216;zaA/zaA-2&#8217; our long- and short-term national scale ratings on Barclays Africa Group Ltd. and FirstRand Ltd., the nonoperating holding companies (NOHCs) of their respective financial services groups.
We also lowered our long-term national scale ratings on Barclays Africa Group&#8217;s subsidiary, Absa Bank Ltd., to &#8216;zaA&#8217; from &#8216;zaAA-&#8216;, while affirming our &#8216;zaA-1&#8217; short-term national scale rating. 
Lastly, we lowered to &#8216;zaA&#8217; from &#8216;zaAA-&#8216; our long-term national scale rating on the South African rand (ZAR) 10 billion MTN program issued by BNP Paribas (acting through its local branch). We affirmed our &#8216;zaA-1&#8217; short-term national scale rating on the program.
The rating actions follow the lowering of our foreign and local currency sovereign credit ratings on South Africa (see &#8220;South Africa Long-Term Foreign Currency Rating Cut To &#8216;BB+&#8217; On Political And Institutional Uncertainty; 
Outlook Negative,&#8221; published April 3, 2017, on RatingsDirect).
We lowered our ratings on the financial institutions because we do not rate South African banks above the foreign currency sovereign credit ratings. This is because of the likely direct and indirect influence of sovereign distress on domestic banks&#8217; operations, including their ability to service foreign currency obligations. The more pronounced downgrades of the NOHCs of the Barclays Africa Group and FirstRand Group reflect our view of the increasing risk of structural subordination following the downgrade of the operating bank entities to speculative grade (below &#8216;BBB-&#8216;). As a result of this,combined with the respective downgrades of the operating entities, we lowered our national scale ratings on the NOHCs by five notches, in line with our mapping 
criteria.
The national scale ratings on the ZAR10 billion domestic MTN program are supported by the global scale ratings on BNP Paribas, but constrained by the foreign currency sovereign credit ratings on South Africa. The lowering of the ratings on South Africa reflects our view that political and institutional stability in the country has weakened. However, amid slow economic growth and political turbulence, South African banks have been 
performing resiliently.
The sector&#8217;s average return on assets improved to 1.3% in 2016 from 1.1% the previous year, while total capital adequacy increased to 15.7% from 14.2%. We anticipate that credit losses for the top-tier banks will 
stabilize at 0.8%-1.0% in 2017. However, if decreasing investor confidence materially damages the local currency, sparking rising inflation and interest rates, banks&#8217; credit losses could accelerate toward the year&#8217;s end, due to the over-leveraged South African households and pressure on their disposable income to service their debt. Accordingly, this could erode the top-tier banks&#8217; profitability, resulting in lower returns on equity in 2017 than the currently anticipated 15%-19%.
The negative outlooks on FirstRand Bank, FirstRand Ltd., Investec Bank, and Nedbank reflect that on the sovereign. We would lower our ratings on these entities or revise the outlooks to stable should there be a similar action on 
the sovereign. Outside a sovereign action, we see positive or negative rating actions on these four banks as a remote possibility in the next 12 months, unless there is significant deterioration of the economy, due for example to weaker investor confidence.
Our national scale ratings have no outlooks but, for financial institutions in 
South Africa, are exposed to changes in the ratings on the sovereign and the 
economic environment.

S&P downgrades seven South African banks

The Office of the ANC Chief Whip confirms the resignation of former Deputy Finance Minister and ANC MP Cde Mcebisi Jonas as a member of parliament effective 31 March 2017. 
Comrade Jonas has served both as Deputy Minister and MP with absolute distinction and dedication. He has also served the movement and the South African people in various capacities over the years. On behalf of the ANC in Parliament we thank comrade Jonas for his selfless service to the movement as its public representative.
We are confident that he will continue serving the country and our movement in other capacities in future. We wish him well.

Former Deputy SA finance minister Mcebisi Jonas resigns as MP

If South Africa loses two of its prized investment grade credit ratings for foreign and local currency borrowing in the turmoil triggered by the sacking of the finance minister, the country could lose more than $10 billion in investment funds.
S&amp;P Global has already struck. In an unscheduled review on Monday that prompted a selloff in South African assets, it cut the sovereign rating for external debt to BB+, one notch below investment grade &#8211; or &#8220;junk&#8221; status in market parlance.
It cited the impact of the divisions in government that led to Pravin Gordhan&#8217;s removal.
Moody&#8217;s later placed South Africa on review for downgrade. A third major international ratings firm Fitch warned that President Jacob Zuma&#8217;s shake-up intensified political risk and signalled policy changes that could undermine its credit score.
Being downgraded to junk by at least two agencies will see South Africa drop out of some widely used global bond indexes that rely on investment grades only and force international funds who track these or who are prohibited from holding sub-investment grade securities to sell.
&#8220;The problem has just started in South Africa &#8211; there was a lot of complacency on the ratings shift,&#8221; said Salman Ahmed, chief global strategist at Lombard Odier.
The prospect of such a demotion is more imminent for hard currency debt, where Fitch&#8217;s standing rating is just one notch above junk. The Moody&#8217;s rating is two rungs above.
But a bigger impact on the country&#8217;s access to funds could come if two of the three agencies also demoninate the rand-denominated government debt as sub-investment grade. S&amp;P&#8217;s local currency rating is just one level above junk as well, with Moody&#8217;s two notches above.
So far, only one of the six ratings &#8211; three for sovereign debt and three for local &#8211; from the major international ratings agencies has slipped into junk.
JPMorgan &#8211; which compiles some of the most widely used emerging market debt indexes &#8211; estimates that a junk rating for South Africa&#8217;s mostly dollar-denominated foreign currency Eurobonds could see forced selling of up to $2.4 billion.
Roughly half the total would come from funds dedicated to investment grade emerging market debt, the other half from global investment grade bond funds, JPMorgan said, adding this was much less than the forced selling risk the bank had ascribed in recent years to Brazil at $6 billion or Turkey at $7 billion.
&#8220;The more modest figure for South Africa is explained by the smaller bond stock, and therefore smaller weights particularly in widely used global bond indexes, coupled with an underweight positioning by investors,&#8221; the bank said.
LOCAL DANGER
Yet South Africa&#8217;s outstanding $14.6 billion hard-currency debt is just a 10th of total public government debt, with local sovereign bonds tallying up to 1.722 trillion rand ($125 billion), according to data from the National Treasury.
For UBS, the real danger lies in local bond markets. In a note this week, UBS estimated some $10 billion of South African bond holdings are indexed to Citi&#8217;s World Government Bond Index (WGBI), tracked by $3 trillion worldwide.
JPMorgan, which compiles the GBI-EM IG-only index, said it estimated that a downgrade of local currency debt could lead to total index-related selling of as much as $8.5 billion.
Inclusion in both indexes hinges on investment grade ratings on local debt from both Moody&#8217;s and S&amp;P Global. Whle a formal index exclusion could take up to a year, many funds would likely exit the debt in advance.
Partially offsetting that hit is the fact that countries which find themselves downgraded to junk &#8211; so-called &#8220;fallen angels&#8221; &#8211; often draw in a different investor base seeking higher yields and more speculative investments, said Nafez Zouk, senior economist at Oxford Economics.
In other words, these fallen credits become bigger fish in smaller ponds.
Some dedicated emerging market fund managers are waiting for those opportunities.
&#8220;(South Africa&#8217;s) trajectory is quite negative and is likely to continue to be negative until we see renewal in South African politics which could be a few years from now,&#8221; said Jan Dehn at emerging market fund manager Ashmore Investment Management.
&#8220;Even in a gradually deteriorating credit like South Africa, asset prices can move into oversold territory relative to the risk &#8230; If prices fall enough that the credit has been oversold relative to how risky it is, then clearly that’s a buying opportunity.&#8221;
($1 = 13.7390 rand)
(Additional reporting by Sujata Rao in Moscow, Mfuneko Toyana in Johannesburg and Claire Milhench in London; Editing by Alison Williams)

“Junk”-rated debt could cost South Africa more than $10bn in lost funds

We have noted Standard and Poor’s (S&amp;P) decision to downgrade South Africa’s foreign currency credit rating to sub-investment grade, and the local currency to just one notch above investment grade, as well as their latest decision to downgrade South African banks in line with the sovereign rating. As a result, the national scale rating of Absa Bank Limited has been reduced to ‘zaA’ from its previous rating of ‘zaAA’.
Due to the intermediary role banks play in any economy it is the norm for their credit rating to be very closely linked to that of the country, and their decision to reduce the Absa Bank rating was therefore expected in light of recent events. S&amp;P does not rate South African banks above the foreign currency rating of the sovereign. Therefore, the downgrade of the sovereign has a direct impact to banks that are systemic to the economy.
We also acknowledge Moody’s announcement that they are putting South Africa under review for a downgrade.
These are very disappointing developments because until last week the country was building momentum towards better economic growth by the end of this year. During the past 14 months, Barclays Africa has actively participated in various initiatives in support of government’s efforts to effect much-needed structural reforms, in order to stimulate inclusive economic growth. We remain committed to doing so, but an abrupt interruption to this program is unhelpful and places at risk the livelihoods of many South Africans.
Barclays Africa is well-capitalised with a strong liquidity position and a balance sheet of over R1trillion. We remain well capitalised in terms of our strategy, risk appetite, risk profile, business activities and the macroeconomic environment in which we operate. We have a diversified portfolio of businesses with geographical presence across 10 countries in Africa and are determined to continue growing across all our markets.
For the year ended 31 December 2016 we released a solid set of results which included R239billion of liquidity reserves and we expect to remain robust from a liquidity and funding perspective. Our Common Equity Tier 1 (CET1) capital position as at 31 December 2016 remained strong at 12.1% (R105bn) &#8211; above our board target range of 9.5% to 11.5% and well above the regulatory minimum of 6.9%.
It takes enormous effort over many years to regain an investment grade sovereign rating. It is therefore very important that all stakeholders continue to work together to rediscover consensus on how to achieve inclusive growth.
&nbsp;

Barclays Africa responds to S&P downgrade of South African banks

Germany&#8217;s Development Minister urges Europe for more support to millions affected by the current drought in Ethiopia
ADDIS ABABA &#8211; With the words of former German President, Horst Kohler, spoken at his inauguration a decade ago used as inspiration, Germany has opened up a new bold and a pioneering engagement with a new plan for Africa.
With this soon to be finalized plan, Chancellor Angela Merkel and her officials are keen to bolster the economies of Africa, create jobs and slow the flow of migrants from the continent to Europe.
Named ‘A Marshall Plan’ for Africa– some are even drawing a direct parallel with the huge U.S. investment program that kick-started the ravaged German economy after World War Two.
Germany’s Minister of Economic Cooperation and Development Germany Gerd Muller said it is an “expression of our will and our optimism that we can truly find a path to peace and development in our cooperation between Europe and Africa”.
German officials are anxious to stop growing numbers of migrants risking their lives crossing the Mediterranean Sea, are pushing for increased public and private investment in Africa.
Minister Muller was on a two-day visit to Ethiopia, where he launched the &#8220;Marshal Plan&#8221; for Africa.
The plan has 10 principles, including a new equal relationship with the continent, the creation of African solutions to Africa&#8217;s problem, job creation for the youth, focus on entrepreneurship instead of aid, the avoidance of exploitation of African resources without real benefit, among others.
&#8220;Human dignity shall be inviolable,” the plan reinstates.
The minister pinpointed the need to invest in the youth and Germany’s commitment to invest and help create employment. He reflected on Ethiopia&#8217;s industrial parks as great examples in this regard.
He hoped the Ethiopian textile industry, with the right combination of investment, will help create the jobs of the future.
&#8220;The textile industry of Ethiopia has 50,000 people working in it today and maybe in five years, 5 million can and will work in the industry,&#8221; he reflected.
During his visit, the minister was accompanied by the president of the Somali region and officials of the UN children agency, UNICEF and the Head of OCHA (Office for the Coordination of Humanitarian Affairs, part of the United Nations Secretariat.
At the end of his visit, he spoke of the need for Europe and the rest of the world to be involved and help in the historic drought that has so far destroyed animals and displaced many people.

Germany encourages aid for drought-striken Ethiopia

Malian authorities have charged four people with kidnapping over the abduction of a Colombian nun, a prosecutor said on Wednesday.
Gloria Cecilia Argoti was seized by armed men on Feb. 7 from the southern region of Karangasso where she had been working in a health centre, about 300 km (186 miles) east of the capital Bamako. She has not been seen since.
<blockquote>&#8220;I confirm the indictment of four people on the grounds of kidnapping the Colombian Gloria Cecilia,&#8221; Boubacar Sidiki Samake, an anti-terrorism prosecutor, told Reuters.</blockquote>
Samake declined to provide details about those arrested but a security source, who declined to be named, said they are connected to the Catholic parish from which Argoti was abducted.
Investigators have previously said they suspect Islamist militants could be responsible.
Kidnapping has become a lucrative source of cash for groups like Al Qaeda in the Islamic Maghreb and al Mourabitoun. The latter is suspected of kidnapping a French-Swiss aid worker from the northern city of Gao in December.
Islamist militants, who seized northern Mali in 2012 before being driven back by French forces the following year, have regrouped and are increasingly conducting raids in southern and central Mali, areas previously deemed safe.
Human Rights Watch said in a statement on Wednesday that a wave of killings in Mali by Islamist groups, self-defence militias and government soldiers have resulted in at least 52 deaths since January.
(Reporting By Tiemoko Diallo; Writing by Aaron Ross; Editing by Janet Lawrence)

Mali charges four with kidnapping over abduction of Colombian nun

South Africa&#8217;s top court has dismissed an appeal by the department of environmental affairs to keep a moratorium on the domestic trade in rhino horn, according to court documents seen by Reuters on Wednesday.
Pelham Jones, chairman of South Africa&#8217;s Private Rhino Owners Association which was one of the respondents in the case, told Reuters this meant that the sale of rhino horns was legal in South Africa.
A global ban in the horn trade, which is regulated by a U.N. convention, remains in place.
(Reporting by Ed Stoddard; Editing by James Macharia)

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News

Fitch Downgrades South Africa to junk for both local & foreign currency

Rwanda replaces airline CEO, gives no reason

Banks raise objections in South Africa’s FX rigging case- sources

Should tourists be cautioned ahead of Kenya elections?

Somali president shakes up security agencies, urges militants’ surrender

LIVE: Mass marches in South Africa

No emergency, last-minute travel possible to Nigeria for South Africans

S.Africa’s land expropriation unlikely to end like Zimbabwe

Jay Z’s latest Ace of Spades champagne will cost $850 only 2,333 bottles available

Germany approves bill curbing online hate crime, fake news

S&P downgrades seven South African banks

Former Deputy SA finance minister Mcebisi Jonas resigns as MP

“Junk”-rated debt could cost South Africa more than $10bn in lost funds

Barclays Africa responds to S&P downgrade of South African banks

Germany encourages aid for drought-striken Ethiopia

Mali charges four with kidnapping over abduction of Colombian nun

South Africa’s top court lifts ban on domestic sales in rhino horn

News Tips

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