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Macro Thoughts

A very nice spike on bitcoin, hitting a HOD of $10,540.49 but no
changes to the overall trend, which is down.

$BTCUSD 12hr Chart: No Changes. The game hasn't altered or morphed
into something new. Sit & Wait: trade around a core position, scale in
and out, make sure you have stops in place. Bitcoin can dance, all it
wants -but down is the main trend direction.

Why? Because the thrust up was too fast and too large. Which
automatically means, price is going to re-balance, for the next phase
(leg up or leg down).

Home Thoughts

Political Reflections

President Putin, whom I amongst others believe moved the Needle
sufficiently to put Trump into the White House.Putin's  assets range
from Marine Le Pen to  the Movimento 5 Stelle in Italy and if there
are Barbarians at the gates of Fortress Europe, they do belong to
Vladimir. His Syrian Intervention on behalf of Bashar Assad has lasted
48 months so far and the Optics of US Military vehicles departing [in
a hail of tomatoes] and Russian Military vehicles patrolling precisely
the same area a few minutes later sums it up.

Last week Putin made his ''late cycle'' Play for Africa hosting a
Russia Africa Summit in the Black Sea resort of Sochi. “Late to the
Party: Russia’s Return to Africa.” tweeted @pstronski.

Putin in an interview with state-run news service Tass, said

 “Indeed, interest in developing the relations with African countries
is currently visible not only on the part of Western Europe, the US
and [China], but also on the part of India, Turkey, the Gulf states,
Japan, the Republic of Korea, Israel and Brazil.
“This is not accidental, as Africa increasingly becomes a continent of
opportunities.”

These opportunities include natural resources, infrastructure
development and increasing consumer demand from a growing population,
Putin specified. But, he said, Russia was going to be a different kind
of superpower, one that does not engage in “pressure, intimidation and
blackmail” to “exploit” sovereign African governments.

“Our African agenda is positive and future-oriented. We do not ally
with someone against someone else; and we strongly oppose any
geopolitical games involving Africa.”

Putin's linguistics are an Art Form and I imagine he buttressed the
above points by discreetly showing his Visitors a Photo of a dead
Gaddafi and maybe he dwelled a little on the bottle and then a Photo
of a spritely Bashar Assad and would surely not even have had to ask
the question; what's the difference?

Between 2006 and 2018 Russia's trade with Africa increased by 335%,
more than both China's and India's according to the  Espresso
Economist. Russia is now Africa's leading supplier of arms. According
to the Swedish think tank SIPRI, between 2012 and 2016 Russia had
become the largest supplier of arms to Africa, accounting for 35
percent of arms exports to the region, way ahead of China (17
percent), the United States (9.6 percent), and France (6.9 percent).
Exports of Russian-made weapons and military hardware to Africa amount
currently to  $4.6 billion annually, with a contract portfolio worth
over $50 billion. Russian arms trade with Africa doubled compared with
2012.  Russia is the world’s largest wheat exporter and will surely
ramp up its supplies of grain and fertiliser to meet demand that is
rising in step with Africa’s booming population.

Russia’s clout on African soil runs on many tracks, and its expansion
is geared primarily towards hybrid activities. In Moscow’s offer for
Africa are mercenaries, military equipment, mining investments,
nuclear power plants, and railway connections.

“Russia regards Africa as an important and active participant in the
emerging polycentric architecture of the world order and an ally in
protecting international law against attempts to undermine it,” said
Russian Deputy Foreign Minister Mikhail Bogdanov back in November 2018

The Spokesman for the Egyptian Presidency gushed ''Russia has white
hands in Africa''

Recently we have seen Russian interventions in the Central African
Republic (CAR.

In July this year, a three-minute animated video appeared on YouTube.
Called Lionbear, the cartoon was aimed at children and told the story
of a brave but beleaguered Central African lion, who was fighting a
losing battle against a pack of hungry hyenas. Luckily the lion had a
friend who came to the rescue — the strong Russian bear. The bear
fights off the hyenas, brings peace to the land and everyone lives
happily ever after. The video was produced by Lobaye Invest, a Russian
mining company with links to the Wagner Group. Lobaye runs a radio
station in the CAR, and organised a Miss CAR pageant.
But, as a CNN investigation reported this year, Lobaye also funds the
250 Russian mercenaries who are stationed in the country. “The
dividend for Lobaye Invest: generous concessions to explore for
diamonds and gold in a country rich in mineral wealth,” it reported.
The Russian mercenaries are officially there to train the CAR’s
national army. But their activities in the country are shrouded in
secrecy, and when three Russian journalists travelled there to
investigate they were murdered.[Mail and Guardian Simon Allison]

I would argue Putin's timing is exquisite and optimal and his Model
has an exponential ROI. The Warsaw Institute headlined its article
Russia in Africa: Weapons, Mercenaries, Spin Doctors. Russia’s clout
on African soil runs on many tracks, and its expansion is geared
primarily towards hybrid activities. In Moscow’s offer for Africa are
mercenaries, military equipment, mining investments, nuclear power
plants, and railway connections.

Andrew Korybko writes

Moscow invaluably fills the much-needed niche of providing its
partners there with “Democratic Security”, or in other words, the
cost-effective and low-commitment capabilities needed to thwart Color
Revolutions and resolve Unconventional Wars (collectively referred to
as Hybrid War). To simplify, Russia’s “political technologists” have
reportedly devised bespoke solutions for confronting incipient and
ongoing Color Revolutions, just like its private military contractors
(PMCs) have supposedly done the same when it comes to ending
insurgencies

Once we look through the Optics of  two nuclear-capable supersonic
bombers belonging to the Russian Air Force landing in Pretoria for the
aircraft’s first ever landing on the African continent and, according
to an embassy official, only the second country in which it has made a
public appearance outside of Russia. The first was Venezuela. Then we
need to see this move for what it is.

It is meaningful. Where Xi is fed up and speaks about the ''The End of
Vanity'' because the ROI [outside Commodities and Telecoms for China]
is negative, Putin has created a hybrid Model with an exponential ROI.
I would imagine he is on Speed Dial.

"[The deployments are] short, they're crisp, they're not long and
enduring. [And] there's something that's really important for
everybody to understand -- there are no ally bombers. This is one
thing that we do better than anybody else," he said.

A US armored vehicle passing today in front of a giant poster of
President Assad in Hasakah. The poster reads "presented by the
political security branch in Hasakah."

Abu Bakr al-Baghdadi is a nom de guerre.[25] He had various names
and epithets, including Abu Du'a[5] (أبو دعاء ʾabū duʿāʾ),[26]
Al-Shabah (the phantom or ghost),[27] Amir al-Mu'minin, Caliph
(sometimes followed by Abu Bakr, al-Baghdadi, or Ibrahim),
http://j.mp/2qPJKJ8

From a domestic point of view, the purpose of the attack is fairly
obvious: Donald Trump has an election coming up, and potential
Presidents like nothing more than being seen to be tough. That means
taking out some “bad guys”.
Of course, none of that matters.
It doesn’t matter what happened, it doesn’t matter why it happened and
it doesn’t matter whether who it (allegedly) happened to was real, or
alive…or otherwise.
Because, as always, the problem is not the specifics. It’s the
principle and the precedent.

It was the worst of times, it was the worst of times. On the one hand,
inflatable reservist Mark Francois MP has previously promised that we
will leave the EU on 31 October, or “this country will explode”.
On the other hand, Devon-based extremist Katie Hopkins has previously
tweeted that we will leave the EU on 31 October, or “I will drink a
pot of tea naked in the Apprentice losers cafe with Farage’s face on
each nipple.”
We will not be leaving the EU on 31 October.
According to some reports, Brexit coins minted with the 31 October
date “could be worth up to £800”. So could €1 coins, soon enough.
Still, the cabinet hoarding the misprinted Brexit coins to pay for
their skiing holidays would be an irony we could all get behind.
If you’re keeping track of the accounts, Boris Johnson has just blown
£100m on an ad campaign insisting the UK was leaving on 31 October,
even though the chances of this were always so slim they amounted to
Conservative party election positioning.
Given that seven months ago the prime minister was describing £60m
spent on the historical sex abuse inquiry as money “spaffed up a
wall”, it’s important that you get his Brexit ads in perspective.
They were complete bollocks, and at the same time almost twice as
valued as investigating mass institutionalised child rape. It’s a very
exciting branding space for the Tories to be in.
Strange to think that, in another timeline, we would all currently be
pooling our corned beef and lightbulbs in anticipation of Theresa
May’s planned Festival of Brexit. Instead, we’re waiting to see
whether the French will give us an election.
Yesterday, Boris Johnson told MPs in the Commons tea room that he had
asked the French to block the Brexit extension request. In a
documentary filmed when he was foreign secretary, Johnson told the
cameras that the French were “turds”.
So it will be interesting to see which version of our friends and
partners turns up. What’s the French for, “You want picking up in the
morning, pal?”
The prime minister wants a Christmas election, but at present that old
Scrooge Jeremy Corbyn won’t give him one.
Despite having a deal that parliament merely wished to properly
scrutinise, we are told that no-deal plans are being stepped up by
Michael Gove (who frequently appears to have been visited by three
spirits).
“We are triggering Operation Yellowhammer,” he announced on Sunday.
You’re triggering us all, dear.
And what if they can’t get an election? Then, like a lot of other
comedy shows, the Conservative government has decided to have a strike
episode. South Park did one once, where the nation of Canada goes on
strike because it feels disrespected by the world.
As for how the Tory version will play out, instinct suggests you
should put your money on “for mirthless laughs”. We’ll have no choice
but to watch Conservative ministers presenting themselves as victims
of The Man, which is a bit like Peter Sutcliffe presenting himself as
a victim of the Yorkshire Ripper.
Consequently, they’ll be forced to band together and take industrial
action to protect their way of life. Listen, they just want their
dignity. They know that when these jobs go there’ll be nothing else,
bar retraining as an arms lobbyist or non-executive director of
Goldman Sachs.
Sadly, we know from bitter experience the privations of a winter
strike for those involved. The Conservatives wisely outlawed sympathy
actions in the past, so they won’t face having to go through it
without essential auxiliary services such as unwanted child collection
and Ocado.
But do begin putting aside your spare pennies to buy the young
Rees-Moggs footwear, while their da makes soaring speeches behind an
SW1 brazier. “My father went down the money pit, I went down the money
pit, and, so help me, my son will have a money pit to go down.”
Except not. This week, Jacob could be found in the House of Commons,
explaining why the withdrawal agreement bill that the government
actually had a majority for was suddenly nowhere to be seen, by
adapting the famous poem from the Scarlet Pimpernel.
“The answer lies with Sir Percy Blakeney,” he honked of that novel’s
hero. “They seek it here, they seek it there, those parliamentarians
seek it everywhere. Is it in heaven, or is it in hell? That damned
elusive Brexit bill!”
Oh dear. Of course, much to the chagrin of their silly 50-year-old
boy, the hugely bourgeois Rees-Moggs would have been entirely safe
during the French Revolution.
The voluminously suited Jacob’s chief exposure to Sir Percy Blakeney
would have run along the lines of the latter’s remark to the ghastly
government official Chauvelin: “Sink me! Your tailors have betrayed
you. T’would serve you better to send them to Madame Guillotine.”
I suppose it’s nice to see Jacob disporting himself with the
confidence of a man yet to realise Dominic Cummings is building an
oubliette for him to spend any election in.
And so to that gilet-clad Loki. This week we’ve had so many definitive
and yet contradictory anonymous No 10 rants about what fiendish
stratagem is next.
 Yet here we are, in the same place. The October Surprise is that
there is no surprise. There are mayflies that survive longer than
Cummings’ briefings, which now have a four-hour lifespan yet somehow
always achieve their destiny.
They are an essential component of a media ecosystem that kind of
knows that not signing a mandated letter means jack shit in legal
terms, but will write it anyway because their news editor’s Mr Right
Now and needs the appearance of fresh meat. Hey – it’s all retail.
Isn’t it?
With both main party leaders taken up with hourly contradiction, their
extravagantly gifted junior troops have been on hand to desecrate the
airwaves.
Informed by Kay Burley that the polls said Labour wouldn’t win, shadow
lord chancellor Richard Burgon retorted: “The polls said we wouldn’t
win last time.” Burley: “You didn’t.”
Reposting this exchange, Tory minister Johnny Mercer failed to
appreciate his precise comic status as the Tory Burgon. “I sometimes
get teased for being thick because I spurned university to join up and
serve when I was 19,” Mercer sensationally revealed.
“Then I see what a Cambridge degree and career in politics does for
this guy and so many others of my colleagues, and think I got it about
right.” If you say so yourself. I do enjoy Johnny’s tireless attempts
to disguise his raging self-regard as affable humility.
His entire output reads like one of those guys who replies to the
pictures porn stars tweet: “Mornin darlin! All the better for seeing
u! Think u posted that one just for me!!!!!”
All in all, another vintage week in the national journey. We remain in
the wandering hands of a government that doesn’t want 16- and
17-year-olds to vote because they aren’t mature enough, but will go on
strike if it can’t get its election exactly when it wants it.
Meanwhile, 16- and 17- year olds are having to bunk off their
childhoods to draw the attention of infantilised adults to the looming
risk of ecological and social collapse.
One month ago, members of Boris Johnson’s government were lining up to
tell teenagers that missing one day of school was unacceptable and
wrong. Presumably we’ll now hear from those same ministers how missing
weeks of your six-figure-salary job running the country is right and
heroic.
What a time to be existing, when the best escape route feels like
giving Xboxes to politicians, and waiting for the nation’s children to
grow up.

International Markets

Euro 1.1087
Dollar Index 97.809
Japan Yen 108.72
Swiss Franc 0.9951
Pound 1.2821
Aussie 0.6815
India Rupee 70.845
South Korea Won 1170.295
Brazil Real 4.0043
Egypt Pound 161417
South Africa Rand 14.6168

“But it is a curve each of them feels, unmistakably. It is the
parabola. They must have guessed, once or twice -guessed and refused
to believe -that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’

Well obviously there will be a Harvard Business School case study
about WeWork, but what will it say? What is the lesson? It’s a good
lesson, right? A lot of kids starting at Harvard Business School next
fall will be hanging up posters of Adam Neumann in their dorm rooms.
Neumann, the founder of WeWork, will walk away from this corporate
bonfire with a billion dollars and a bunch of fancy houses.  Neumann
created a company that destroyed value at a blistering pace and
nonetheless extracted a billion dollars for himself. He lit $10
billion of SoftBank’s money on fire and then went back to them and
demanded a 10% commission. What an absolute legend.

My very favorite part of the Adam Neumann legend might be the story of
his first encounter with Masayoshi Son, who runs SoftBank Group Corp.
and invests its vast piles of money. (One insane aspect of this
encounter is that it happened in 2017. A busy two years!) “Mr. Neumann
has told others that Mr. Son appreciated how he was crazy—but thought
that he needed to be crazier.” 1   I like to imagine that conversation
with the hindsight of the last few months:

Son: What does your company do?
Neumann: We lease office buildings, spruce up the space and sublet it
in small chunks.
Son: Hmm I invest in visionary tech stuff, this doesn’t really sound
like my thing.
Neumann: Did I mention we are a state of consciousness. A generation
of interconnected emotionally intelligent entrepreneurs.
Son: Okay yeah that’s more like—
Neumann: The world’s first physical social network. We encompass all
aspects of people’s lives, in both physical and digital worlds.
Son: You’re crazy! I love it! But could you be, say, ten times crazier?
Neumann: You’re going to invest $10 billion in my company, which I
will use as kindling to light the whole edifice on fire, and then when
we are both standing in the ashes you will pay me another billion
dollars to walk away while I laugh at you.
Son: All my life I have dreamed of meeting someone as crazy as you,
but I never really believed this day would come.
Neumann: I’m gonna use your money to buy a mansion with a room shaped
like a guitar, where I will play the world’s tiniest violin after all
your money is gone.
Son: YES PUNCH ME IN THE FACE.
Neumann: Also I’ll rename the company “We” and charge it $6 million
for the name.
Son: RUN ME OVER WITH A TRUCK.
He got his money; SoftBank ended up investing more than $9 billion in
WeWork before its aborted IPO. 2   Now it is doing this:
WeWork, in danger of running out of cash in the coming weeks, chose a
rescue offer from SoftBank over a competing proposal from JPMorgan
Chase & Co., according to people familiar with the matter. It had
asked both parties to submit proposals by a deadline yesterday.
The deal is expected to value the company at about $8 billion, a far
cry from what it was aiming for in an initial public offering earlier
this year and even less than the $47 billion at which a January
investment from SoftBank pegged its worth.
Mr. Neumann, who was forced out as chief executive after pushback from
prospective investors scuttled the IPO, has the right to sell $970
million of shares, or roughly one-third of his stake, in a so-called
tender offer in which SoftBank will offer to buy up to $3 billion in
WeWork stock from employees and investors.
The Japanese conglomerate, which already owns about a third of the
company, will also extend Mr. Neumann credit to help him repay a $500
million loan facility led by JPMorgan, the people said. It will also
pay him a $185 million consulting fee. ...
As part of the deal, which We was expected to announce as soon as
Tuesday, SoftBank would move up a $1.5 billion investment it had been
scheduled to make next year and extend the company a $5 billion loan.
That’s nine point five billion dollars that SoftBank is putting into
WeWork, 3  on top of the more than nine billion dollars it has already
put into WeWork, an astounding total of more than $18.5 billion for a
company it values at $8 billion. 4   And while WeWork is desperate for
the $1.5 billion equity investment and the $5 billion loan—it is
running out of cash and “so strapped that it could not afford
severance payments for the employees it plans to lay off,” notes my
Bloomberg Opinion colleague Shira Ovide—the $3 billion tender offer
seems a little gratuitous? That is not money that is going to keep
WeWork afloat; that is just cashing out other investors to leave
SoftBank holding more of the bag. (The bailout will give SoftBank
about 80% ownership.) Presumably—though who knows!—SoftBank does not
have limitless money to pour into WeWork, so it’s strange that such a
big chunk of its WeWork rescue investment is not going to fund the
company.

Perhaps the motivation is that SoftBank are true believers and don’t
want their deep-value bet on WeWork to be diluted by other
shareholders. But my assumption is that the tender offer is the result
of Neumann’s holdup power: Prior to the deal, Neumann is still the
company’s controlling shareholder, and he could just say no to a deal
that he didn’t like. That might completely evaporate his own wealth,
but it would evaporate a whole lot more of SoftBank’s, and it kind of
looks like SoftBank blinked first: In effect, the price of Neumann
allowing SoftBank to rescue WeWork was that SoftBank had to hand
Neumann a billion dollars for himself. One version of that Son/Neumann
origin myth has Son telling Neumann that “in a fight, being crazy is
better than being smart,” and you can see a little of that in this
negotiating dynamic. As his company’s value vanished due to his own
hubris and weirdness, Neumann went back to his biggest investor for
more desperately needed money, and somehow he held all the cards.

Certainly that $185 million consulting fee is a result of his holdup
power. 5  But to be fair there is a consulting arrangement, and a
four-year noncompete. Do you think they’ll call him up and ask him for
advice? Make him earn the money? What will he tell them?

When WeWork first filed the hilarious paperwork for its IPO, I wrote
about some of the governance red flags—not so much Neumann’s absolute
lifetime-and-beyond control of the company, but his apparent
willingness to enrich himself at the expense of shareholders. It all
struck me as ominous. If the founder-CEO-controlling-shareholder is
doing all that stuff before the IPO, I wondered, what will he do later
when the profits roll in? If WeWork ends up creating a lot of value,
how can you be sure that Neumann won’t find ways to appropriate a lot
of it for himself rather than sharing it with his investors? In
hindsight, this was insufficiently cynical. In the event, WeWork ended
up destroying a ton of value between that IPO filing and now, and
Neumann found new ways to enrich himself anyway.

Nonetheless the thing he did is a normal and mostly praiseworthy, or
at least okay, financial thing. He identified an irrationality in the
market and got on the other side of it. He saw prices that were wrong
and moved them toward right. By betting against other people’s
mistakes, he gave them incentives to correct them. He made the markets
more efficient, he improved the allocation of capital, he did his
small part to speed humanity’s progress out of ignorance and into
enlightenment. I mean, it’s fine, I don’t want to overstate the moral
case here or anything, but it’s fine.

I can’t quite say that Neumann improved the allocation of capital, but
there are certain parallels. Neumann too … look, here I am
speculating, and I don’t mean to speak for Neumann’s subjective
experience of his WeWork career, but from the outside, in hindsight,
objectively, one could describe it like this: He spotted a bubble in
venture-subsidized fast-growing money-losing capital-intensive
low-margin tech-adjacent companies, noticed in particular that
SoftBank seemed to be on the long side of that bubble, and set himself
up to profit on the other side—by raising money for his own
ultra-unicorn, by setting up the governance of that unicorn in a
maximally self-interested way, and by selling and margining a bunch of
his personal shares. 6  When investors like SoftBank were frenziedly
buying unicorn stock, he was frenziedly selling it. He set himself up
to profit from the collapse of the unicorn bubble, and accelerated
that collapse. Lessons were learned, and he taught them. Now he’s
rich.

“Capitalism occasionally makes huge mistakes,” is part of the story,
but the other part is that there are rich rewards for those who spot
the mistakes and bet against them. This is a lesson specifically of
financial capitalism: In most businesses you can notice a competitor
doing a dumb thing and create value by doing a better thing, but the
financial markets are special because you can notice a competitor
doing a dumb thing and get rich by taking the other side, without
creating value or doing a better thing. If you notice that people are
buying dumb unicorn shares for too much money, you don’t have to
invent a better way of doing business or of funding companies. You can
just sell them as many as possible of the dumbest possible unicorn
shares; when the bubble bursts, you collect your winnings. This sort
of thing—getting rich by being smarter than your counterparties,
making markets more efficient by being on the right side of bets—is a
classic path to wealth creation in the financial business. Tech,
traditionally, has a different ethos, one of getting rich by changing
the world. But sometimes there are crossovers, and anyway maybe WeWork
was never really a tech company.

Here’s one more crazy WeWork story, about an all-hands meeting in
January where Neumann told employees that he would run the company for
the next 300 years:

"WeWork is a controlled company. People don't know that," he tells the
audience. "I, Adam, and my family control the company 100% — very rare
when you have investors. It's not the truth of any company in the
world. Google still has it a little bit. Facebook and Mark
[Zuckerberg] already lost it. No other company else has it." …

He said he didn't expect his children to be future WeWork CEOs, as he
was before his ouster last month. Neumann added that he worried that
his children wouldn't "earn" leadership and that he would prefer a
leader who "grew from the bottom." ...
"It's important that one day, maybe in 100 years, maybe in 300 years,
a great-great-granddaughter of mine will walk into that room and say,
'Hey, you don't know me; I actually control the place. The way you're
acting is not how we built it,'" he said.
“You’re not gouging SoftBank enough,” she’ll say. “Get Masayoshi Son’s
great-great-great-grandson in here and punch him in the face.” Those
basic WeWork values, passed down through the centuries.

Here’s a longer version from New York Magazine: “Son met Neumann at
WeWork headquarters and told him he had precisely 12 minutes for a
tour, after which he invited Neumann to join him in his car, where Son
sketched out a deal on his iPad to invest $4.4 billion in WeWork. Son
told Neumann to make WeWork ‘ten times bigger than your original plan’
and to recognize that, in a fight, being crazy is better than being
smart — and that WeWork wasn’t being ‘crazy enough.’ Son said he
thought WeWork could be worth ‘a few hundred billion dollars.’”
SoftBank and its affiliates, including its Vision Fund, had “invested
or committed to invest …approximately $10.65 billion,” according to
WeWork’s IPO prospectus, but that counted $1.5 billion of warrant
financing that hadn’t closed yet and that also gets counted in the new
package.
The $9.5 billion is (1) about $1.5 billion for warrants that it had
already committed to buy, (2) “a $5 billion debt package” organized by
SoftBank,“which will include contributions from SoftBank itself,
Mizuho Financial Group Inc. and other lenders,” and (3) a $3 billion
tender offer. I am not counting the $500 million loan that SoftBank is
giving Neumann, because it appears that that’s a short-term measure
that will be paid back out of the tender offer proceeds. (Also it
appears to bereally $395 million.) I’m not counting the consulting
either because that might be paid by WeWork.
Thosenumbers aren’t apples-to-apples or anything; $5 billion of
SoftBank’s $18.5 billion is debt (and syndicated), whereas that $8
billion valuation is an equity value, also it ispresumablypre-money.
Still! “What SoftBank has agreed to add would bring its total equity
investment to more than $13 billion for a company now worth less than
$8 billion,” notes the Wall Street Journal.
“Japanese investment firm SoftBank will pay former WeWork CEO and
current non-executive chairman Adam Neumann around $200 million to
leave the board of directors, give up his voting shares and support
SoftBank's takeover,” reports Dan Primack at Axios, characterizing the
consulting fee a payoff to get Neumann to agree to the bailout.
I havesaid this before, even before the latest payout.“If you want,” I
once wrote,“you can imagine him as a diabolical genius who explicitly
set out to short the unicorn bubble and then walked away barefoot with
a jaunty whistle and $700 million of SoftBank’s money, but that does
not strike me as necessary or accurate. My model doesn’t require you
to think that your startup is dumb! You don’t need to worry about
Neumann’s personal beliefs and motivations at all, really. You can
just think of him as a product of the invisible hand of the market. A
lot of money was pouring into startups, there was a lot of demand, and
the demand called forth supply, and the people who supplied the supply
got rich; it is elemental and straightforward and has very little to
do with questions like ‘is this a good business model?’”

Commodities

Emerging Markets

“We’re entering a crossroads now,” Damac Properties PJSC Chairman
Hussain Sajwani said in a Bloomberg interview. “Either we fix this
problem and we can grow from here or we are going to see a disaster.”
Damac has dramatically reduced new sales in the past two years and
will focus on selling the properties in its inventory, Sajwani said.
Still, the developer will complete 4,000 homes this year and another
6,000 in 2020.
“All we need is just to freeze the supply,” Sajwani said. “Reduce it
for a year, maybe 18 months, maybe 2 years,” he said.
Sajwani pointed at his competitor Emaar Properties PJSC as the main
culprit in the oversupply and said the company offers payment plans
that encourage speculation. The majority of other big developers,
including Meraas Holding LLC and Nakheel PJSC, have halted new
construction or cut it back by about 80%, while Emaar continues to
“dump” properties on the market, he said.
Damac’s share price has fallen 40% this year and the company won’t pay
dividend this year because profitability is down. Sajwani said he
prefers to keep the cash in the company to meet financial obligations.
Emaar, which built the world’s tallest tower in Dubai, declined to comment.

Frontier Markets

Sub Saharan Africa

‘Do you believe in coincidences?”
The Russian embassy’s press attaché, Alexander Kulyaev, is on the
apron of Waterkloof Air Force Base. He is a busy man this week: not
only is his president entertaining 43 African heads of state and
government at the inaugural Russia-Africa summit, but two
nuclear-capable supersonic bombers belonging to the Russian Air Force
have just landed in Pretoria.
This is the aircraft’s first ever landing on the African continent
and, according to an embassy official, only the second country in
which it has made a public appearance outside of Russia. The first was
Venezuela, which has received three visits from Tu-160s, most recently
in 2018 as a show of support for the under-fire government of
President Nicolás Maduro.
It is unclear whether the same message is intended for the
administration of President Cyril Ramaphosa, who is in Russia for the
summit.  Both Russian and South African officials deny any ulterior
motives, maintaining that this is strictly a military exercise.
“The timing is just a coincidence. And honestly, one I could have done
without,” Kulyaev jokes.
Coincidence or not, the bombers’ high-profile visit comes during a
week in which Russia-Africa relations are under scrutiny like never
before.
In the Black Sea resort of Sochi, Vladimir Putin is making an
audacious play for influence on the continent by portraying Russia as
an enlightened partner for Africa — along with generous loans and arms
deals (such as the 12 combat helicopters sold to Nigeria this week).
As Putin said in an interview with state-run news service Tass, Africa
is attracting interest from every major power. “Indeed, interest in
developing the relations with African countries is currently visible
not only on the part of Western Europe, the US and [China], but also
on the part of India, Turkey, the Gulf states, Japan, the Republic of
Korea, Israel and Brazil.
“This is not accidental, as Africa increasingly becomes a continent of
opportunities.”
These opportunities include natural resources, infrastructure
development and increasing consumer demand from a growing population,
Putin specified. But, he said, Russia was going to be a different kind
of superpower, one that does not engage in “pressure, intimidation and
blackmail” to “exploit” sovereign African governments.
“Our African agenda is positive and future-oriented. We do not ally
with someone against someone else; and we strongly oppose any
geopolitical games involving Africa.”
This fine rhetoric is difficult to square with Russia’s recent track
record on the continent.
In the last 18 months alone, Russian mercenaries — run by the Wagner
Group, a shadowy military contractor led by a businessman with close
links to Putin — tried and failed to prop up the regime of former
Sudanese president Omar al-Bashir; Russian political strategists tried
and failed to influence the result of the presidential election in
Madagascar; and a consignment of Russian military hardware was
delivered to Mozambique, amid persistent reports that Russian
mercenaries have been deployed there too.
Nowhere is the gap between Russia’s rhetoric and its actions greater
than in the Central African Republic (CAR), where Russia began its new
scramble for Africa several years ago.
In July this year, a three-minute animated video appeared on YouTube.
Called Lionbear, the cartoon was aimed at children and told the story
of a brave but beleaguered Central African lion, who was fighting a
losing battle against a pack of hungry hyenas.
Luckily the lion had a friend who came to the rescue — the strong
Russian bear. The bear fights off the hyenas, brings peace to the land
and everyone lives happily ever after.
The video was produced by Lobaye Invest, a Russian mining company with
links to the Wagner Group. Lobaye runs a radio station in the CAR, and
organised a Miss CAR pageant.
But, as a CNN investigation reported this year, Lobaye also funds the
250 Russian mercenaries who are stationed in the country. “The
dividend for Lobaye Invest: generous concessions to explore for
diamonds and gold in a country rich in mineral wealth,” it reported.
The Russian mercenaries are officially there to train the CAR’s
national army. But their activities in the country are shrouded in
secrecy, and when three Russian journalists travelled there to
investigate they were murdered. If this is Putin’s definition of
“positive and future-oriented”, then African countries have cause for
concern.
Not that any of this is unique to Russia. Perhaps Putin should not try
so hard to distance itself from his global rivals — in Africa, at
least, they all seem to have plenty in common.
The United States, for example, operates a string of top-secret
military bases across the continent; China buys off leaders with
enormous, unsustainable loans and flashy infrastructure deals; and
France is no stranger to morally dubious arms deals (a French company,
Thales, played a starring role in the multibillion-rand arms scandal
in South Africa, for which former president Jacob Zuma is facing
criminal charges).
So far, there is little evidence to suggest that Russia is any better
— or significantly worse — than any of the other superpowers
scrambling to take advantage of Africa’s resources and markets.
What is clear, however, is that Russia’s soft power play in Africa
comes with hard edges — and none harder than the two Tu-160s currently
parked at Waterkloof.

One way to look at this is as a referendum on Emmerson Mnangagwa’s
rule so far, with SADC’s endorsement. And people voted with their
feet. They kept them at home. An epic disaster. If someone wanted to
tell him that he has lost it, they have succeeded.

“Money is accordingly a system of mutual trust, and not just any
system of mutual trust: money is the most universal and most efficient
system of mutual trust ever devised.”
“Cowry shells and dollars have value only in our common imagination.
Their worth is not inherent in the chemical structure of the shells
and paper, or their colour, or their shape. In other words, money
isn’t a material reality – it is a psychological construct. It works
by converting matter into mind.”
The Point I am seeking to make is that There is a correlation between
high Inflation and revolutionary conditions, Zimbabwe is a classic
example where there are $9.3 billion of Zollars in banks compared to
$200 million in reserves, official data showed.
The Mind Game that ZANU-PF played on its citizens has evaporated in a
puff of smoke.
‘’The choice of that moment is the greatest riddle of history’’ and
also said “If the crowd disperses, goes home, does not reassemble, we
say the revolution is over.”
What is clear to me is that Zimbabwe is at a Tipping Point moment.

President João Lourenço has a tough job on his hands trying to claw
back any of the billions siphoned off by corrupt government officials
in Angola.
[In our fifth and final instalment of our series on Angola’s missing
billions, we look at the obstacles facing President João Lourenço in
his anti-corruption drive.
It was the great promise when General João Lourenço spoke for 45
minutes at his presidential inauguration in Luanda in September 2017,
pledging to crack down on corruption and invest in health and
education.
“No one is so rich and powerful that they cannot be punished and no
one is so poor that they cannot protected,” he told the crowd. Then he
talked about reforms to free up the media, give small businesses a
chance against the country’s titanic monopolies and promote gender
equality.
Expectations were running low at the beginning. As outgoing President
Dos Santos had backed Lourenço as his successor, many believed there
was a deal to protect the old guard and the first family.
People were afraid it would turn bloody. The way the transition was
done was positive.”
But things started to change, says Ana Gomes, who was in Luanda late
last year. “People were afraid it would turn bloody. The way the
transition was done was positive.”
“Lourenço, with all the things he started doing, including putting
some of the Dos Santos government in gaol, is significant. These
things had a liberating impact on Angolan society. Suddenly there was
a guy coming from the MPLA giving a totally different speech.”
Some in Luanda argue that Lourenço has no choice but to go after the
stolen money, so dire is the state of the economy he has inherited.
For the next three years economic growth per head and oil production
will shrink, according to forecasts from the IMF and the Economist
Intelligence Unit.
By introducing new laws for the repatriation of illicit financial
flows, Lourenço has raised great expectations of the return of
ill-gotten gains.
It won’t be that easy, warned a well-travelled economic consultant.
“If I were trying to have an effect, I would do the same thing that
General Park did in South Korea in the 1960s. He said: ‘I know you
guys have stolen money, it’s going to be brought in and used in the
productive sector.’”
Then the penalties came in: “If after three months if you haven’t
brought it home, we are going to shoot you in the knees, if after six
months we’ll do whatever….”
However it’s done, he warns, it will take five to 10 years to pay off
and the person who starts it may not get the credit.
“The government should publish details of every cheque it writes,
every contract it signs. The people own the assets, they should have
the information. This is the only way anything would change.”
A lack of data and information is at the root of the government’s
problems, he argues. “Even the fiscal data is complete crap […] the
IMF knows that.”
Those who know how the economy has been operating reckon that at least
15% of state revenues have been lost, insists the consultant. “That’s
just what this very corrupt, very opaque system has revealed because
of external pressure.”
No-one knows how much is missing
Other experts are equally reluctant to put even an approximate number
on Angola’s missing money, beyond itemising deals in the oil services
and construction sector which were over-priced by tens of billions.
A veteran banker, a regular visitor to Luanda, gave a low-register
whistle when asked how much had gone missing.
“The inner core who made more than a billion each is maybe 20 people
where they are worth way more than we can imagine. The inner core are
like Rockefellers […] and the outer core are those – and their kids –
who will never have to work again. They have generational wealth.”
Finding the cash could be more difficult, he adds: “I don’t quite get
where the money is. I imagine it would flow into a Swiss bank account
and it would have to flow out. I can’t image you would leave $20bn in
a Swiss bank. All these guys have high-level connections […]. While
you have your mansions in London and Portugal, you have your vast
tracts of land in Latin America.”
Yet if the government was determined to track the money if it could,
says the banker. The central bank could lead the investigation, apply
as a government to all the secrecy jurisdictions such as Jersey and
the British Virgin Islands for information.
Not all the ill-gotten gains are the proceeds of crime in Angolan
terms, he adds. Many of them are hugely inflated oil-service contracts
imposed on foreign producers such as Chevron, ENI and Total or
commodity traders such as Trafigura.
These are added as “costs of doing business”, and carved out of the
state’s share of the revenue accordingly.
When the economy was growing at 25% the elite was making money everywhere.
The nomenklatura worked different deals with Chinese construction
companies. A company would get a no-tender to build a bridge and a
highway.
Then the top official would say: “I own X hectares in Lunda Sul. On
top of the deal we are doing, why don’t we do a partnership or you
just build me 100 houses,” says the banker. “The Chinese would have
come in and said: ‘This is great business.’”
When the economy was growing at 25% the elite was making money
everywhere. For example, cement imports were controlled by a handful
of people. “An entire economy was being built that needed cement and
99% was being imported.”
Once the main leakages have been identified, the real work has to
start according to a forensic accountant.
“To recover half-decent amounts the government needs to be so
committed […] spending serious amounts of money on investigations,
prosecutions. Most governments do it half-heartedly. Few manage to get
to the bottom of it because you’re looking at a period so long ago,”
says the accountant.
And the asset trackers are up against formidable adversaries, he adds:
“The targets usually have an army of lawyers and wealth managers
because they want to protect it.”
Most international recovery attempts require a final judgement from a
local court. There may be a lack of evidence, or a lack of political
will. That process can take years.
For example, the Angolan government would have to hire a professional
firm of investigators, says the accountant. “On the civil side, the
lawyers work with local enforcement agencies. You then have the local
prosecutor general whose job would be to bring the case against the
targets. There is a whole army of people involved.”
“Finally when you go through all the hoops, it’s rarely returned in
cash,” says the accountant. “The Swiss pay through social projects
that benefit the people and the country […] rather than to the
treasury.”
Out of court settlements or plea-bargaining can bring back some of the
money, but often, as in Nigeria, there is little clarity about what
has been returned and what it has been spent on.
Some lobbyists are talking up Angola’s chance of clawing back billions
of dollars and using it to reboot the economy; yet others, usually
linked to the Dos Santos family, say the the new president is just
pursuing vendettas and isn’t serious about structural change.
Market conditions could influence the direction, according to one
observer close to the current administration: if the oil prices goes
back up to $110 a barrel, the relatively small reforms could be thrown
overboard.
“The reforms are so modest, they are about keeping the ship afloat
rather than changing the course of navigation,” says the observer. “So
much of what needs to be done in the country is capital-intensive.
Just paying the civil-service salary bill for the next three years
will be a struggle under current conditions.”
That is why, we hear, Lourenço is so angry about the Chinese loans
contracted between 2014 and 2017, their sheer volume and the amount of
oil that has been mortgaged.
The short maturities and high interest rates are putting Angola’s
treasury under huge pressure to find the foreign exchange to service
the debt. It has also shifted the power balance decisively in favour
of China.
“Even if there is genuine reform, say on agriculture, electrification,
industrial policy and banking regulations […] the question is when
[Lourenço] pulls the levers can he really make a difference?” asks the
observer.
For now, Lourenço’s anti-corruption campaign is narrowly focused on a
range of political and military targets that he can take on without
triggering instability or threatening the interests of his key allies.
Yet to change Angola’s course, to restructure the economy, will
require a massive infusion of capital – the sort of money that is no
longer available from oil-backed loans from China, nor from the IMF
and the World Bank, or from the commodity markets unless there is a
dramatic return to the super-cycle.
That leaves Lourenço with few options if he want to pull Angola out of
the hole that the past two decades have dropped it in.
It would mean a hard-headed and politically iron-clad plan to secure
the return of at least $100bn of the state assets that have been taken
out of the country and are currently parked in stock markets or
upscale residential areas of several capitals in Europe, Asia or the
Americas.
That has been the talk in Luanda for months, but the policy remains
shrouded in secrecy. Over the next year, Angolans will be able to test
its seriousness.
One positive sign: the creation of a new penal code in Angola — the
first upgrade since the Portuguese arrived over 130 years ago – that
actually creates the infrastructure for an anti-corruption fight. It
represents one of “the central pillars of President João Lourenço’s
criminal justice reform program”.

Nyusi secured 73% of the vote in the presidential race, the National
Election Commission (CNE) said on Sunday, while his party, the ruling
Frelimo, also won big in the legislative and provincial contests.
His main rival Ossufo Momade, of former guerrilla movement turned main
opposition party Renamo, trailed behind with 21.88% of the vote, CNE
Chairman Abdul Carimo told a news conference.
During his second five-year term, Nyusi will be responsible for
overseeing a gas boom led by oil giants such as Exxon Mobil Corp and
Total, battling a festering Islamist insurgency and delivering on a
peace deal signed two months ago.

Russian Railways JSC signed a memorandum of cooperation with the
Democratic Republic of Congo to help rehabilitate its decrepit rail
system.
An eventual deal between Congo and the Russian state-owned rail
company could be worth $500 million, Kasongo Mwema Yamba Y’amba,
spokesman for Congolese President Felix Tshisekedi, said by text
message Saturday.
A statement on the Russian Railways website said the two sides “intend
to explore the possibilities for cooperation in areas such as the
implementation of restoration projects, the modernization and
construction of railway lines in the Democratic Republic of the Congo
and promising projects in the development of railway logistics and
freight and passenger transport.”
Russian Railways may also offer training in Congo and Russia for
Congolese rail workers, the statement said.
Congo’s Minister of Transport and Communication, Didier Mazenga,
signed the cooperation agreement Wednesday during the Russia-Africa
summit hosted by President Vladimir Putin in Sochi.
Congo has struggled to fix its railways, which once shipped the
country’s copper and cobalt riches, after years of war and
mismanagement. Last year, the World Bank ended a program that failed
to revive Congo’s bankrupt national rail company, Société Nationale
des Chemins de Fer du Congo, after spending about $380 million.
“SNCC is even further away from being on a sustainable financial and
operational path than it was in 2010,” the World Bank said in a
project evaluation released this year. “The company accumulates
additional debt at a pace of about $30 million per year.”

Tanzania’s economy grew by 7.2 percent year-on-year in the second
quarter of 2019, up from 6.1 percent in the same period a year ago,
buoyed by growth in construction, mining and communications sectors,
official data showed on Sunday.
In the first quarter of 2019, the East African nation’s GDP grew by
6.6 percent, according to the state-run National Bureau of Statistics.

Kenya

Kenya is betting on the multi-billion shilling Lamu Port to upset the
power balance along Eastern Africa’s coast, setting Nairobi up for
battle with the Port of Djibouti and the planned Bagamoyo harbour in
Tanzania. The first berth of the Ksh32 billion ($320 million ) Lamu
Port is set for official opening next month, with Kenya hoping to make
it the region’s transshipment hub. The strategically located Port of
Djibouti already controls transshipment business in the region, with
Tanzania’s Bagamoyo port, whose takeoff has delayed over contractual
concerns, now left to play catch up as Lamu's business comes to life.
Tanzania is also undertaking a $345 million World Bank funded Dar es
Salaam Maritime Gateway Project (DSMGP). Kenya’s President Uhuru
Kenyatta is, in a few weeks, expected to commission the first of the
32 berths of a trans-African Lamu Port, when the first Neo-Panamax
ship is expected to dock.

“Lamu will play host to the newest port on the African East coast. The
Lamu Port will begin its operations, initially as a transshipment hub
for global shipping lines. It will be supported by a special economic
zone that is expected to attract investors from across the world, to
undertake various economic activities.
“Our aim is to make Lamu Port the port of choice for the export of
Kenya’s crude oil,” President Kenyatta said in his October 20 Mashujaa
Day address to the nation.

For Nairobi, this is a big gamble, as the country looks to become the
Eastern Africa trans-shipment powerhouse. The country hopes to do this
by taking advantage of Lamu Port’s 18 metres natural draft, capable of
accommodating the increasingly huge maritime vessels.

“We intend to make Lamu a transshipment hub for the East African
region, and the larger horn of Africa. Currently, our Kilindini port
cannot handle a Suezmax, Neo-Panamax or Chinamax class vessels,
because of its shallow depths,” the Kenya Ports Authority (KPA)
managing director Daniel Manduku told The EastAfrican.
For Kenya, the docking of such size of ships capable of carrying more
than 20,000 twenty foot equivalents (TEU’s) will be a game changer.
Djibouti, with its two ports of Dolareh and the Port of Djibouti,
currently handles the largest cargo volumes in the region averaging
three million tonnes annually.
“When you look at our data, the transshipment traffic to Mombasa Port
doubled to 1.3 million tonnes in the seven months of this year, from
624,000 tonnes over a similar period in 2018, showing the business
opportunity for the Lamu port,” said Mr Manduku.
Cargo coming into the region from China, currently East Africa’s
biggest import source, docks at Singapore and is then offloaded to
smaller ships en-route to Mombasa. Those coming from Europe dock at
Omans’ Salala port, before they are shipped to the region.
“With the Lamu port, we aim to remove this barrier, which is costly
and time-wasting for shippers,” added Mr Manduku.
The Lamu Port has already attracted the attention of regional
neighbours hosting envoys and delegations from Uganda, Ethiopia, South
Sudan and the Democratic Republic of Congo (DRC).
Launched nine years ago, the multi-billion-dollar project entailed
building link roads between the Kenya and Ethiopia, a pipeline to
Kenya’s northern frontier of Turkana, an international airport in
Isiolo town and a sea port in Lamu.
Under its original plan, the Lamu Port, South Sudan, Ethiopia
Transport (Lapsset) plan included a 32-berth port, transportation hubs
for rail, highway and international airports in Lamu, Isiolo and
Lodwar, an oil pipeline from South Sudan, Uganda and Ethiopia to Lamu
Port, an oil refinery and three resort cities in Isiolo, Lamu and
Turkana, in northern Kenya.
Kenya’s Cabinet Secretary for transport and infrastructure James
Macharia said with the completion of the access roads leading to the
northern frontier, they will expect the port to eventually serve as
far as Congo Brazzaville.

“We have worked hard to make sure that the Northern corridors
infrastructure is up to date. This has been very deliberate so that we
position the country’s bespoke port services, with requisite
supporting infrastructure. We expect the port to comfortably serve
South Sudan, Congo-Brazzaville, DR Congo and other East African
countries,” Mr Macharia said.

A recent report by the Japan International Co-operation Agency showed
that the cost of transport in landlocked countries reduced by more
than 16 per cent due to infrastructure investments and cross border
trade facilitations along Kenya’s Northern corridor.
“We have introduced reforms in the Northern Corridor including the
introduction of motion weighbridges and reduction of the number of
border points thus increasing number of turnaround of trucks. With the
connection of interlink roads between Lamu and this corridor, we now
expect to position ourselves between the competitors,” Mr Macharia
said. The Ticad report ranked the Port of Mombasa fifth in Africa
after Egypt’s Port Said, Durban in South Africa, Tanger Med in
Morocco, and Alexandria in Egypt with Port of Dar reported to have
handled only 60 per cent of what is currently being handled in
Mombasa. For Lamu, the headache now remains the transit cargo
shipments, as the supporting roads outside of the port remain
incomplete and behind schedule.For example, the Garissa-Isiolo road is
yet to start, even after re-assurances that it "would start this
year," with only three months left of 2019.Other associated road
infrastructure projects in the ongoing construction of the $108
million Lamu-Garsen road are behind schedule with its construction
being 30 per cent complete, as its December completion deadline looks
unattainable. This means that the haulage of any goods landing at the
port this year will not be possible, leaving the port to only do
transshipment business, for the start.Shippers, already aware of the
poor supporting road infrastructure around the Lamu port have already
raised concern, noting that “there was need to invest more on
infrastructure to make the port more attractive to investors.”
“The government needs to work on the inland operations cost to make
Lamu Port more attractive to shippers and other investors,” Shippers
Council of East Africa chief executive Gilbert Lagat said.
“Most of shippers consider end-to-end cost before venturing in any
business hence there is a need for the government to speed up the
process of improving other infrastructure to make movement of goods
cheaper.
“We have seen KPA advertised promotional tariffs to entice more
shipping lines and agents to use the facility but that is not enough
as we consider other cargo handling cost from the port to its final
destination which is mostly either Nairobi or Uganda, but without good
roads or railway, the deal would not be attractive to many.”
Lamu’s close proximity to the terrorist group Al-Shabab’s Somalia base
also poses a security headache for the port’s management.
The Lapsset CEO Silvester Kasuku said Kenya has deployed the Navy and
Coast Guard at the port, the Army at Baragoni Police besides other
security formations including a GSU camp. He also said the channel
that ships use will be guarded by navy patrols.
The recent changes in the regional political landscape, especially
within the horn of Africa, has also seen Ethiopia-the project’s
biggest backer at its launch in 2012- make peace with Eritrea and also
invest hundreds of millions of dollars in several ports in Djibouti
and Somaliland.Addis has also acquired stakes in the Djibouti port of
Doraleh, Port of Djibouti, Khartoum’s largest seaport, Port Sudan. Its
$80 million investment for a 19 percent stake in Somaliland’s Port of
Berbera and its recent announcement that it is also seeking a stake in
Eritrea Port leaves the Lamu port business model exposed.

“The Ethiopia/Eritrea peace deal will have no negative implications on
this project. Lamu Port will strategically be located to service
southern Ethiopia which alone has about 50 million people even when
the country has access to Eritrean and Djiboutian ports.
“The two ports will actively handle North of Addis Ababa,” Sylvester
Kasuku, the chief executive officer of Lamu Port-South
Sudan-Ethiopia-Transport (Lapsset) Corridor project said.

In 2017, and to entice Ethiopia, Kenya offered land to enable Ethiopia
set up a logistics facility at the Lamu Port, in the clearest
indication that the Ethiopia was eyeing the Kenyan port for its import
and export activities. Outside of transshipment, Kenya is also angling
to have a crude oil dedicated berth for the port, as it actualises its
pipeline project from Turkana. Berth three has already been reserved
as a fuel dedicated berth.
“We are hoping to have both Berth two and three ready by the end of
next year. The cabinet recently approved for the petroleum ministry to
take charge of Berth 3, and link it with the Lamu-Turkana pipeline to
help us ship out our crude oil,” Mr Macharia said.
Kenya’s game plan is to have on board South Sudan, and possibly
Uganda, to use the pipeline facility, and berth three to export their
crude oil once the projects has been commissioned.
In June, Kenya signed agreements with Total, Tullow Oil and Africa Oil
Corp to develop a 60,000 to 80,000 barrels-per-day crude processing
facility for oil discovered in Lokichar, northern Kenya. It is now
expected that the berth will play host to this facility, among other
supporting oil infrastructure.
“The infrastructure installed for the foundation stage will be
utilised for the development of the remaining oil fields and future
oil discoveries in the region, allowing the incremental development of
these fields to be completed at a lower unit cost,” Tullow Kenya said.

Today from Massawa, Eritrea [admittedly on the Red Sea] to Djibouti,
from Berbera to Mogadishu, from Lamu to Mombasa to Tanga to Bagamoyo
to Dar Es Salaam, through Beira and Maputo all the way to Durban and
all points in between we are witnessing a Port race of sorts as
everyone seeks to get a piece of the Indian Ocean Port action. China
[The BRI initiative], the Gulf Countries [who now appear to see the
Horn of Africa as their hinter- land], Japan and India [to a lesser
degree] are all jostling for optimal ‘’geo-economic’’ positioning.

Professor Felipe Fernández-Armesto explains why ‘The precocity of the
Indian Ocean as a zone of long-range navigation and cultural exchange
is one of the glaring facts of history’, made possible by the
‘reversible escalator’ of the monsoon.’

The current reported debt would be over 60% of GDP in 2019, even in
the unlikely event of us becoming a Sh10 trillion economy this year.

(Transnational Bank recorded  full-year pretax loss of 98.5 million
shillings in 2018) -- Bloomberg

During the week, T-bills remained undersubscribed, with the
subscription rate declining to 72.8%, from 80.6% recorded the previous
week. The decline in the subscription rate is partly attributable to
the 16-year infrastructure bond sale that closed this week.

"Remittance inflows amounted to $214.7m in September 2019 compared to
$214.3m recorded in August" - CBK