OBLIGATIONS OF PRIMARY DEALERS IN FIXED RATE GOVERNMENT BONDS TO IMPROVE LIQUIDITY IN SECONDARY MARKET

14 Novermber 2013: National Treasury

The Primary Dealers in fixed rate government bonds of the Republic of South Africa are
required to constantly improve liquidity in the secondary market by quoting a two-way
price on the bonds that have an outstanding amount of R10 billion and more.

The outstanding amount on the R2037 (8.50%: 2037) bond has reached the R10 billion
mark and consequently, Primary Dealers are obliged to quote a two-way price on this
bond as stipulated in the rules of the Primary Dealers in fixed rate government bonds of
the Republic of South Africa.

The R2037 (8.50%: 2037) bond should be quoted at a maximum bid-offer spread of
10 basis points and a minimum amount of R10 million between Primary Dealers and
other market participants.

http://www.treasury.gov.za/comm_media/press/2013/2013111401%20-%20MarketMakingBonds.pdf

THE DAVIS TAX COMMITTEE CALLS FOR CONTRIBUTIONS

Following his 2013 Budget announcement, the Minister of Finance publicised the members
of a tax review committee on 17 July 2013. The committee, now known as the Davis Tax
Committee (DTC), will examine the role of South Africa’s tax system to promote growth, job
creation, sustainable development and fiscal self-reliance. It will take the long term
objectives of the National Development Plan into account in its work.

Using its Terms of Reference as the point of departure, the DTC has adopted a work
programme that has prioritised the establishment of specialist sub-committees on small
businesses, the appropriateness of the tax base and tax mix in South Africa, and base
erosion and profit shifting (BEPS).

The DTC has also adopted an approach that is participatory and consultative. This will
provide for wide engagement with all stakeholders. Special dialogue sessions are arranged
on an ongoing basis to take into account a diversity of interests and opinions. The DTC
accordingly calls upon all interested parties to make use of the opportunity to contribute to
the mentioned priorities for now.

Top priority of the DTC at the moment is to address ways in which the tax system can be
improved to facilitate entrepreneurship and the growth of small businesses. Various tax
packages already exist to encourage small businesses. The DTC needs to review these
packages to find an optimal tax package that assists small businesses in contributing towards
economic growth and reducing the high unemployment rate. Urgent contributions in this
regard will be most welcome by 20 November 2013.

Contributions with regard to the tax burden and tax mix are invited by 30 November 2013.
The BEPS Sub-Committee is working on a longer timeframe that is aligned with the OECD
BEPS Action Plan. Contributions with regard to BEPS are welcome by 31 January 2014.

All contributions can be made via e-mail to taxcom@sars.gov.za . More details on the work
of the DTC and its Terms of Reference can be found on its website, www.taxcom.org.za

Investing in Women’s Employment – Good for Business

Addis Ababa, Ethiopia, 31 October 2013 – IFC, a member of the World Bank Group, is promoting increased participation of women in Africa’s private sector, helping them overcome long-standing barriers that prevent them from starting businesses or gaining employment opportunities open to their male counterparts. 
As part of this effort, IFC hosted an Africa Gender Forum in Addis Ababa that brought together more than 50 women leaders, IFC clients, members of civil society, and development partners to discuss best practices and challenges to scaling successful approaches. Discussions also focused on ways to increase access to training and finance for women entrepreneurs, who own or partially own only about one third of Africa’s smaller businesses. 

“Women's economic empowerment is essential to achieving sustainable economic growth and poverty reduction. When women entrepreneurs are supported with loans and new skills, they are able to turn their ideas into small and medium-sized businesses that generate economic benefits for their families and communities. An investment in women is an investment in the community,” said David Usher, Canadian Ambassador to Ethiopia. 
“IFC recognizes the need to tap the vast potential of women as drivers of inclusive economic growth and shared prosperity, and has made gender one of its cross-cutting strategic priorities. We need to support and harness the positive effect that women’s economic empowerment and leadership can have on our economy,” said Adamou Labara, IFC Resident Representative in Ethiopia. 
A recently-published IFC report, ‘Investing in Women’s Employment – Good for Business, Good for Development’, found that investing in women’s employment and improved working conditions can bring dramatic benefits to both women and businesses. IFC also runs a number of programs that promote increased participation of women in business, including Women in Business which has helped over 3,000 African women entrepreneurs gain access to $27.5 million in financing. 

During the Gender Forum, several women spoke of how they or their employers are helping women gain a foothold in the private sector. 

One female business owner, Constance Swaniker, explained how she benefited from a collateral lending system IFC helped establish in Ghana. She said that the registry allowed her to use her machinery to access finance, which helped her create 50 new jobs. 

Brenda Achieng, Legal and HR Director of Finlays Kenya, a horticulture company, highlighted Finlays strategic approach to promoting greater gender equality among its employees. Finlays achieved cultural change in the workplace by developing clear policies, training for supervisors, vocational health and safety training and support from senior management. 

For more information, visit www.ifc.org 

IFC facilitates expansion into Africa

Istanbul, Turkey, November 11, 2013 — IFC, a member of the World Bank Group, is providing a $35.5 million loan to Elif Plastik, Turkey’s largest supplier of flexible plastic packaging, helping the company expand into Egypt, creating jobs, improving local know-how, and bolstering supply chains. 
The investment will help the company, which makes flexible plastic packaging for consumer goods like food, cleaning materials, and personal hygiene products, build a modern factory in Egypt. Some $15.5 million of the loan will go toward the plant, Elif Plastik’s first international expansion, while $20 million will help fund the company’s operations. The new plant will be able to produce 15,000 tons of flexible plastic packaging annually. 

"We plan to expand into Egypt and other countries in the Middle East, and make the new plant a hub for Elif Plastik’s operations in the region," said Selcuk Yarangümelioğlu, Managing Director of Elif Plastik. "We look forward to developing a long-term partnership with IFC to further expand in the region and increase our company’s competitiveness." 
The investment is part of a wider IFC effort to encourage economic development in Egypt by supporting the country’s private sector and to support leading regional companies as they expand into Egypt, helping to create jobs and to strengthen the country’s economic integration with Europe, and the rest of the Middle East and North Africa. 
“This investment fits with our strategy of boosting confidence in Egypt's private sector, a major contributor to employment,” said Nada Shousha, IFC Country Manager for Egypt. “At the same time we are helping a Turkish company expand in the region, promoting cross-border investment between developing economies." 
During fiscal year 2013, IFC committed $276 million in Egypt across five projects. That brought IFC's total commitments since 2011 close to $1 billion, including $303 million mobilized from other investors. 
IFC has been investing in Turkey’s private sector for nearly 50 years. In fiscal year 2013, IFC delivered a record $985 million in 20 projects, supporting smaller businesses, renewable energy projects, energy efficiency, energy security, healthcare, education, infrastructure development, and cross-border trade. 

 For more information, visit:
www.ifc.org. 
www.elifplastik.com.tr

Investing in Moroccan poultry

Rabat, Morocco, November 12, 2013—IFC, a member of the World Bank Group, is making an equity investment in Zalagh Holding, a leading grain trading and poultry group, to help create jobs and encourage economic development in rural Morocco. 

IFC’s $24 million investment in Zalagh will support the company as it expands and creates new jobs, including those for women. The expansion will also help generate indirect employment in rural areas, where Zalagh is a key economic player.

"This agreement will support our strategy to become a major player in a rapidly expanding sector and strengthen our integrated value chain,” said Ali Berbich, Chairman of the Management Board of Zalagh Holding. “As well, IFC will bring with it its agribusiness expertise and its extensive experience in optimizing corporate governance and institutionalizing family businesses.”

This investment is part of the IFC strategy in Morocco to support the manufacturing and agribusiness sectors.

"Supporting the development of Zalagh Holding is part of our effort to spur job creation and promote sustainable growth in rural areas of Morocco,” said Guy Ellena, Director of IFC’s Manufacturing, Agribusiness and Services Department in Eastern and Southern Europe, Central Asia, the Middle-East, and North Africa. “We are excited to partner with a company with such an extensive experience and a reputation for supporting communities.”

The project will also support the growth of the poultry industry and promote the use of top-notch environmental and health standards.

Zalagh Holding is embarking on an ambitious 350 million Moroccan dirham expansion over the next three years. It is planning to ramp up production of animal feed, increase its supply of chickens and turkeys, and build poultry farms across the country. 

 For more information, visit www.ifc.org 

African Capital Markets I

The 10^th IMN South African and African Capital Markets Conference attracted over 600 delegates from across the globe in on the 22nd of November 2012. Converging at the Westin Grand in Cape Town, were the brains and pockets behind chiseling into shape, Africa’s capital markets which for decades have remained generally untapped.

Still experiencing growing pains, African capital markets akin to the continent’s economy have drawn the world’s attention as fertile hunting ground for higher returns.

“There has been strong development of local currency debt capital markets  in many countries in Africa as well as unprecedented interest by offshore investors for African credit risk as they turn away from near zero interest rates environments in the developed world and search for yields elsewhere.” Megan McDonald, Head  - Debt Primary Markets, Standard Bank

 Around this period last year, the word on issuers, bankers and investors' lips what “Eurobond”. The IMN Conference coincidentally fell just about two months after the historic Zambian sovereign Eurobond.  A USD denominated 10 year bond which raised $750million and was oversubscribed resulting in an order book value of $12billion. Excitement at the prospect of more sovereign and corporate issuances in Namibia, South Africa, Angola and Nigeria was in the air.

Fast-forward, one year later, the IMN conference goes into its 11^th year. Taking a look back at the past 12 months, economic tremors of varying magnitudes have swept the globe but Africa continues to register growth. Critics would render Africa’s growth story nothing to write home about but with liquidity in the capital markets seeking crevices through which to match assets, Africa is on track to catch up with the rest of the world.

Marking the beginning of the 10^th IMN conference for emerging markets in Africa questions that lingered above the meeting revolved around:

• ·         Africa’s institutional capacity
• ·         Underdeveloped markets with relatively undeveloped yield curves
• ·         High interest rates – a deterrent of poverty eradication

In a week, a wider pool of delegates will converge in Cape Town to behold and review the progress made over the past twelve months and project into the future.

·         Are Africa’s capital markets developing too quick too soon?

·         Is Africa transformed institutionally to make current and future investments worthwhile for investors?

·         If Africa has seen inflows of funds in other forms and failed to realise tangible growth over the decades, will the story change now?

·         With many African countries healing from the debt burden lifted under the HIPC debt review initiative, is Africa ready to take on more debt?

·         Africa needs approximately $100billion worth of investment per annum to develop her infrastructure, are capital markets the only solution?  

These are questions I hope we can all explore as we take a close look at financing Africa’s development  at The 11th Annual South African & African Capital Markets Conference.

DuPont says that Sustainability can be the defining feature of Africa’s growth

Continent well positioned to address the sustainable growth challenge

16 July 2013, Johannesburg:  African companies now recognise the importance of sustainability as a strategic imperative, although many still battle with implementing a comprehensive solution. This is the view of Antoinette Du Randt, Regional Director, DuPont Sustainable Solutions, the operations management consulting firm of the science company.
Du Randt says “after grappling with sustainability for many years, starting with how to define sustainability, there is now raised awareness about the need to continually think about keeping a business sustainable for the long term”. Du Randt ranks sustainability as a key challenge for corporations in the 21^st century and she equates it to the modern assessment of business performance.
 “A key element of sustainability is the creation of social value,” says Du Randt, who points out that companies are under pressure to not only deliver profits for shareholders, particularly evident in mining companies, but also to deliver higher value to government through increased taxes and royalties, as well as communities where they operate, who are looking for employment opportunities and improved facilities.
Sustainability can also become the defining feature of Africa’s growth in the decades ahead, helping the continent overcome the “growth at all costs” trap that has afflicted other countries in the past, whose economic growth has sometimes been accompanied by high social and environmental costs.  
Africa has changed for the better, moving from economic stagnation to being home to seven of the ten fastest growing economies, according to The Economist. This growth has helped build a burgeoning middle class, which has spurred demand for goods and services.   
But for Africa to truly realise its potential it will need to diversify its economy, encourage movement to high value manufacturing and facilitate beneficiation of its vast minerals. Putting in place robust sustainable development strategies will help the continent achieve inclusive growth without damaging the environment or harming the long term use of fresh water resources and agricultural output.
Du Randt points out that DuPont sees sustainability as part of the evolution of the business model and is a goal that companies have to pursue in collaboration with government, labour and communities. Du Randt believes that sustainability is no longer a function of corporate responsibility or compliance, but rather a key growth opportunity that differentiates a company from its competition. “For companies to thrive, the communities they operate in must thrive,”  
Du Randt says as with any other business objective, sustainability needs to be driven from the top of the organisation with a clearly defined set of goals, a buy in from all employees and leadership from board and executive level.
Du Randt points out that companies need a change in mind set and view sustainability as “going beyond corporate social responsibility” to create sustainable shared value for all stakeholders as a strategic imperative.
Sustainability can deliver commercial benefits. Between 1990 and 2004, DuPont estimates that it reduced its greenhouse gas emissions by 72% and has generated $ 10 billion in revenue from products based on non depletable resources.
She also argues that stakeholders need to have realistic expectations from sustainability and that stakeholder education and inclusion is important.
Du Randt argues that the best way for companies to achieve sustainability is to invest in innovation that improves all aspects of business performance, whether its improvement in production while reducing water and energy consumption or by defining market facing goals which deliver product innovation that reduces the environmental footprint throughout the value chain while providing tangible consumer benefits
There is also emerging debate whether companies should be provided with incentives, including financial incentives, to pursue sustainable practices. Du Randt points out those financial incentives are likely to have a limited impact and the companies should pursue sustainability for their own long term interests.
Du Randt also argued that there are already incentives such as tax breaks in place and the ultimate incentive for any company is increased and sustained profitability, gained through an integrated strategy informed by shared value creation and capture.
Du Randt concludes by noting that as external pressures continue to mount, improved sustainability performance is no longer optional, shareholders and stakeholders expect companies to reduce their environmental foot print.

As companies search for opportunities on the African continent and exploit its resources, they should use innovation and a robust sustainable culture to drive improvement.