January 10th, 2012 by Tom Minney
The JSE Ltd (www.jse.co.za), South Africa’s securities exchange, is hoping to attract more listings from the rest of Africa in 2012 and to expand its range of products and services. This year should also see the JSE installing its equity trading system in Johannesburg, to avoid dependence on a transatlantic cable connecting it to the London Stock Exchange.
Nicky Newton-King, who took up her post as CEO last week after succeeding Russell Loubser and the first woman to hold the post, told Business Day newspaper the plan was to offer more access to African companies and products such as exchange-traded funds products that enable people to access new investments: “With the rules of inward listing being relaxed, we would also like to attract more inward listings.” Besides IPOs, Newton-King said she expected to see more types of products, such as depository receipts and derivatives linked to companies being offered.
The JSE is in “good conversation” with several companies elsewhere in Africa over more potential listings. Last November she told Reuters: “We’ve got good conversations going … particularly on the continent.” She said the bourse is targeting mining, telecommunications and financial services: “Our approach is to look at issuers that need capital — need investors where their home markets might be too small. So we’ve got a lot of different segments we are looking at, but we are looking at particular issuers rather than trying to speak to everyone.”
The JSE already has 14 African companies listed, with 4 different debt instruments and 1 African ETF. Last year Reuters highlighted that some growing African firms preferred other international exchanges, particularly the London Stock Exchange and its AIM market, over the JSE for raising capital and listings, as highlighted in stories on this website. The JSE seeks closer cooperation with other African exchanges as it competes with other world bourses: “Clearly we need to be trying to find a way to cooperate with African exchanges, with African issuers to bring more African product to the table here in SA, where we have a lot of international investors everyday.”
The JSE attracted a total of 16 listings last year, with a combined market capitalisation of more than R35 billion (US$4.3bn), according to data from the JSE’s director of issuer services, John Burke. There were also a number of initial public offerings from the property sector. About 15 companies de-listed last year and 21 were on the suspended list. The number of new IPOs worldwide is lower since the start of the global financial crisis. Newton-King said there is a pipeline for potential listings in 2012: “Definitely there’s a pipeline, there’s always a pipeline. We never talk about the number since how many companies actually list and when they list is very much dependent on the economic circumstances of the country and whether the companies themselves are ready to list.
“We are looking forward to being able to attract a wider range of companies and investment opportunities on the JSE.”
The plan is still to use the same computer provider, Sri Lanka’s Millennium IT which is a subsidiary of the LSE. In terms of a February 2011 press release, the JSE is to migrate to a new system Millennium Exchange™, which the LSE has also adopted, in the first half of 2012. Millennium IT systems are used on many African stock exchanges.
Newton-King told Business Day she hoped this will minimise the outages experienced last year, which were linked to technical issues on the transatlantic cable. The JSE halted trading on its equity markets at least twice last year, which led to the exchange attracting criticism from trading houses, which often spoke anonymously to the media.
She said: “We are critically dependent on information technology (IT) and invest heavily in IT to ensure it is robust and able to handle increased volumes as the JSE grows. Our equity systems are run in London and there’s been some trading outages in the lines between us and London…. We are bringing the systems back to avoid that. We will continue to look at whether our technology is robust enough to withstand volumes.”
She did not give much information on rumours that the JSE is talking with SA Treasury on starting a trading market for carbon credits but said the JSE was looking at the possibility and how it would work with others.
Of the type of environment that she envisions at the JSE, Ms Newton-King says: “In 2012 I would like the JSE to be recognised as a place of excellence, a place where SA’s top talent would come and work, where our clients recognise that we provide products and services that are valuable to them.”
Her former post as deputy CEO no longer exists and duties that fell to her are being given to other people so that they can also grow.
January 4th, 2012 by Tom Minney
Although the number of investors from other East African countries opening trading accounts at Kenya’s Nairobi Stock Exchange (www.nse.co.ke) is still very small, it is growing more consistently in the last 2 years than other categories of investors. According to data to 30 Sept released by Kenya’s Capital Market Authority (www.cma.or.ke), East African individual investors opened 97 securities accounts at Kenya’s Central Depository and Settlement Corporation (www.cdsckenya.com). This compares to 92 accounts opened in the full year 2010 and 79 in 2009.
By comparison Kenyan individual investors only opened 27,669 accounts in the 9 months to September 2011, compared to 120,756 accounts opened in 2010 and 52,836 in 2009. Kenyan equity trading has remained subdued as investors say high interest rates make them choose government debt securities over equities.
One potential reason for the East African interest, according to an article in the East African , is that Ugandans are opening trading accounts at the NSE in anticipation of the IPO of electricity distributor Umeme (www.umeme.co.ug) scheduled for 2012. Umeme is expected to cross-list at the NSE and the Ugandan Securities Exchange (www.use.or.ug). Some investors open multiple accounts ahead of a potentially “hot” initial public offering (IPO) of shares, where they hope to sell their initial allocation quickly and make a quick profit, as this is likely to maximise their share of allocation if the IPO is oversubscribed.
Trading experience shows that cross-listed East African shares such as Centum, Kenya Airways, Jubilee Insurance, trade more on the NSE compared with the Dar es Salaam Stock Exchange (www.dse.co.tz) and USE. The increased liquidity in Nairobi means that East Africans are better off having a trading account at the NSE. The paper comments that Rwandans, Tanzanians and Ugandans are probably realising this fact and also taking positions ahead of the listing of some of their firms on the NSE by opening more CDS accounts in Nairobi: “Investors will go the extra mile to open and operate, as proxies, CDS accounts in the names of their relatives or friends who know nothing on trading in shares. Expect an influx of Rwandese, Tanzanians and Ugandans at the NSE in 2012.”
January 4th, 2012 by Tom Minney
We thank all our readers for your support and comments during the past years, we are very encouraged by the great interest shown in this blog through emails and advertising inquiries as well as people we meet at capital markets events.
We wish all our readers a very happy, fulfilling and prosperous 2012. We would wish peace, but it does not seem likely, but we do wish you fun and the ability to fulfil your dreams.
Best wishes for 2012
December 22nd, 2011 by Tom Minney
The International Finance Corporation (www.ifc.org), a member of the World Bank Group, on 20 Dec agreed to invest some CAD1,250,000 (Canadian dollars, equivalent to US$1.2million) in nickel and copper exploration. Sama Resources Inc (www.samaresources.com) will use the funds raised to advance the Samapleu project in eastern Côte d’Ivoire, near the border with Guinea, which it hopes will provide future jobs and government revenues to Côte d’Ivoire. The transaction is set to close in December.
The country has significant mineral resources but development of the mining sector has been hampered by political and military crisis during the past decade. IFC’s support to the Samapleu project will help promote good environmental and social standards in the country’s mining sector and send a positive signal for future foreign direct investment in the country.
IFC will work with Sama to ensure that exploration and any subsequent mine development is carried out in an environmentally and socially sustainable manner.
Dr. Marc-Antoine Audet, President and CEO of Sama, said in a press release (search “samapleu” on IFC website): “Sama is pleased to welcome IFC as a shareholder and partner on the Samapleu project. We look forward to drawing from IFC’s expertise to help ensure that the progress at Samapleu follows global best practices for the mineral exploration industry, the environment, and for working with local communities.”
Tom Butler, IFC Global Head for Mining, added: “We are excited to be making IFC’s first mining investment in Côte d’Ivoire through Sama, a company we believe has the leadership and resources to make the Samapleu project a success. This investment aligns with our strategy to support early-stage exploration companies with financing and advice.”
IFC offers mining clients in developing countries a broad range of financial and advisory services throughout the mining life cycle. Its early-equity investment programme is to help exploration-stage companies, such as Sama, with financing and advice on best practice in environmental and social management.
IFC is the largest global development institution focused only on the private sector. In fiscal 2011, investments climbed to an all-time high of nearly $19 billion.
IFC is acquiring 3,968,254 units, each of 1 common share and 1 warrant, out of 5,105,539 units offered by Sama to IFC and 2 other investors in a private placement. Each warrant entitles the holder to purchase 1 common share of Sama at an exercise price of CAD0.4725 per common share for a period of 4 years, subject to Sama’s right to accelerate the expiration of the warrant.
The issue price per unit is CAD0.315 Canadian dollars. It is expected that after completing the subscriptions to IFC and the other 2, there will be 66,013,174 Sama common shares outstanding and IFC will directly hold approximately 6.01% of the outstanding share capital and approximately 11.34% of the outstanding share capital if it exercises all its warrants
About Sama Resources
Sama is a growth-oriented resource company focused on exploring and developing nickel-copper-sulphide and laterite resources in West Africa. Its goal is to become the first poly-metallic producer in the region along side its joint venture partner SODEMI (Société pour le Développement Minier de Côte d’Ivoire – www.sodemi.ci). Its key assets are Samapleu project in Côte d’Ivoire and Lola project in Guinea, both in exploration phase. Future production from Samapleu will be managed by a joint venture controlled 66⅔% by Sama Nickel Corporation, a wholly-owned subsidiary of Sama, and 33⅓% by SODEMI. The licence encompasses 449 square kilometres and hosts nickel-copper and nickel-cobalt rich laterite deposits, and the newly discovered massive chromites occurrences.
The Lola project is 100% owned by Sama and encompasses 1,212 square kilometres adjacent to the Samapleu project. The Lola project has strong potential for nickel and copper mineralization and nickel-cobalt rich laterite.
December 21st, 2011 by Tom Minney
Dateline – Marrakech
FTSE (www.ftse.com) is working on a FTSE-ASEA index with the African Securities Exchanges Association (www.africansea.org), which will help to unlock Africa an investment for larger portfolio investors. According to Imogen Dillon Hatcher, Executive Director, FTSE Group, speaking at the ASEA conference in Marrakech, Morocco, on 12 Dec, the index will make clear how much Africa is outperforming the rest of the world: “A ‘back-cast’ of the FTSE Africa index performs better than FTSE world index by quite a margin”. The index covers stocks on 16 exchanges and is adjusted for investibility, including free float and liquidity.
She said that FTSE Group was restructured on 12 Dec, with the London Stock Exchange Group buying out the 50% share owned by Pearson, owner of the Financial Times newspaper, “as of this morning”. The buyout transaction is set to close in the first quarter of 2012. FTSE calculates and manages over 200,000 indices worldwide, which are linked to over $3 trillion in global assets under management. These include the widely-used global benchmark, the FTSE All-World Index. She said FTSE is the top index group worldwide: “FTSE is known as a partner around the word, FTSE works with you to unlock the investment potential that is your market.” As markets mature, broader ranges of investible tools are needed including a reliable index that can promote the development of a wider range of investment products, including exchange-traded funds (ETFs).
The group had a strong commitment to Africa and already been working with South Africa’s JSE Ltd (www.jse.co.za) since 2002. In December 2010 they signed with the Casablanca SE (www.casablanca-bourse.com) to create FTSE CSE Morocco Index Series with two index products. On 8 November 2011 FTSE announced a partnership with the Nairobi Stock Exchange (www.nse.co.ke) to create new indices. FTSE NSE Kenya Index Series track the performance of the largest and most widely-traded stocks listed on Africa’s fourth oldest securities exchange.
Dillon Hatcher said FTSE China indices form the basis for $14 billion worth of ETFs, including giant funds by iShares. The group had worked to develop the indices with international and domestic managers including Xinhua Finance Ltd. She added: “We know something about building an index” and the ASEA index would “throw the light of transparency onto your markets”.
The work of developing the ASEA index had been led for over a year by Jonathan Cooper, Managing Director Middle East and Africa, working with a broad range of African exchanges. The target was to build an investible index, with clear and transparent rules and methodology. They started with all African companies; then filtered for those whose price information is available on Bloomberg and Thomson Reuters. They looked at securities types, adjusted for a minimum 15% free float (the proportion of shares potentially available for buyers) and did liquidity testing on the securities and then did country weightings. The index now covers 16 countries, which have securities which meet the requirements.
The new index will be reweighted twice a year. Dillon Hatcher added that FTSE would be working with a prospective client base to put forward this pan-Africa index: “We hope funds will come out of this and drive Africa as an investible destination, make sure the index stays fresh and make it sure it stays relevant, as the client base comes to us with ideas, such as sectoral indices.
She also explained how securities markets indices had evolved. It started as a general economic indicator, showing how share prices are moving as an indicator of investors’ expectations of business prospects. Then indices became a tool for benchmarking but were still simple measurement tools. From this they became an underlying framework for more passive asset management such as ETFs, and depending on market these could be simple or ever more complex, depending on the needs of organizations such as asset managers or investment banks. Eventually they would also develop into a tool to assess market risk, with much potential to get involved in top-end investment strategy, where “we are starting to blur the lines between passive and active management”.
She threw down the gauntlet to active managers “We would assert that over time it is very hard for an active manger to beat an index, we have done lots of work with academics.” She said indices bring market benefits including low-cost market access provided they are transparent, rules-based and useful. “All the name-brand indices have to be fit for purpose and they have to do a job. You know they will behave in a particular way.” At other meetings this author has heard exchanges have wondered about the future of securities markets when the volume and value of derivatives and ETFs traded far outweighs the trade in the actual shares.
Commenting on the transaction in which the LSE buys out Pearson, LSE CEO Xavier Rolet commented in a press release: “Fully aligning FTSE with one of the world’s most liquid and most international trading groups is an exciting opportunity. This transaction further delivers on our diversification strategy, expanding the London Stock Group’s existing offering deeper into indices, derivatives and market data products and services. This is a business we know well, and we expect that going forward our customers will directly benefit from greater choice, opportunity and innovation.”
December 17th, 2011 by Tom Minney
The Securities Commission of Zimbabwe (www.seczim.co.zw) has declined to grant the Zimbabwe Stock Exchange (www.zse.co.zw – under maintenance), an operating licence, according to local media, and is challenging the exchange to provide a business plan. The Financial Gazette reports that the ZSE failed to provide critical information demanded by the regulator. ZSE CEO, Emmanuel Munyukwi, reportedly dismissed the SECZ claims, saying the exchange had complied with all requirements in terms of the law: “There is nothing like that. As far as I know we have confirmed and verified that all the required information is with the regulator,” he said.
According to a report in Zimbabwe Independent SECZ CEO Tafadzwa Chinamo summoned all members of the ZSE to attend a meeting. The Commission is reported to be concerned that the exchange has not automated and done away with the current paper-based trading system, despite suggesting that could happen by the end of 2011. However, the call-over meetings in Zimbabwe are often more active and lively than the screens of some of the less liquid African exchanges, which may even only record a few deals a day.
SECZ also said only 3 out of 20 stock-broking firms had been registered by the commission as having sufficient capitalization to continue and would issue their licences by circular. The regulator said there was concern that the exchange and most stock-broking companies did not get enough income to cover their expenses and remain viable, due to falling trading volumes. The Commission charges a yearly fee of US$3,000 for stock-broking firms and US$1,500 for individual stockbrokers.
According to the reports, the SECZ accused members of abandoning the exchange, given its current state of affairs, saying they needed to be proactive in the development and running of the exchange. It issued a circular to stockbrokers saying the ZSE had to comply with its licencing requirements and had to provide SECZ with information specified in Section 30 of the Securities Act, like other capital market intermediaries and “given that it operates as a Self Regulatory Organisation”.
The capital markets regulator reportedly wrote: “It is worrying therefore that the commission has not yet issued the ZSE an operating license due to the failure by the ZSE to provide the required information. Of particular concern to the commission is the non-submission of the 2010 financial statements which would enable the commission to verify the exchange’s capital adequacy. Also of concern is the lack of a business plan to satisfy the commission that the ZSE is working towards specific goals in developing the market.
“The exchange is owned by the members and as such it is the responsibility of members to ensure its smooth running. Members have a responsibility to resource the ZSE and see to it that the necessary management structures are established and supervised for the day- to-day operations of the exchange,” said Chinamo. “As the Commission we have reason to conclude that members have abandoned this responsibility and we seek to establish members’ position.”
The meeting was adjourned after brokers failed to reach consensus and they have nominated a 5-member committee, working under acting ZSE board chairperson Eve Gadzikwa, to sort out several issues affecting the viability and integrity of the exchange and report within a week. The committee includes veteran stockbrokers, Tediuos Matsaira, Bart Mswaka, Jeff Mhlanga, Edward Mapokotera and Rufaro Zengeni.
Chinamo reportedly added: “Given the important role members play in operating the exchange the Commission is concerned by the non-transparent manner in which new members are admitted. Several applications are awaiting approval months after submission resulting, in a number of firms operating without two brokers as stipulated in the SEC rules.” One broker was reported as saying that only having 30 stockbrokers was a limitation: “I believe that if the membership grows the bigger the pool of ideas we have and this can increase the pace of transformation of the market,” a leading broker indicated.
December 11th, 2011 by Tom Minney
Excitement building in Marrakech,Morocco, ahead of the formal opening tomorrow of the 15th annual African Securities Exchanges Association conference. The theme is “Africa, alive with opportunities!” and the host is the Casablanca Stock Exchange.
I spent a great afternoon wandering in the Kasbah and the Medina!
Top speakers include Salaheddine Mezouar (Morocco Minister of Economy and Finance), Sunil Benimadhu (of the Stock Exchange of Mauritius and chair of ASEA), Aomar Yodar of the Casablanca SE and Andrew Ross Sorkin guest columnist of the New York Times. Expect speeches from, Karim Hajji of the Casablanca bourse, leaders of African and top speakers from several world securities exchanges. Also there will be finance ministers, bankers, analysts, traders, investors and many more.
Topics on day 1 include
• “The financial crisis: Is there a pilot in the plane?” with Oxford Analytica, and African and UK expertsrom the heart of the crisis
• Capital markets and the developments of BRICS (see previous story on stock exchange link-ups) – hear from CEOs and Executive Directors of key BRICS and Istanbul stock exchanges and Emergent Asset Management and Epoch Fund
• The economic implications of the “Arab Spring” for the continent: Top analysts, strategist and others.
• Casablanca Finance City with the CEO of the Moroccan Financial Board.
• Nursing Africa’s future IPOs: heads of top African stock exchanges Karim Hajji of Casablanca SE, Ekow Afedzie of Ghana SE and Sunil from Mauritius as well as speakers from Morocco and France.
• A new FTSE-ASEA African index.
Day 2 covers
• Regulation for cross-border development, moderated by your author, with top experts from France, Euroclear, Cosumaf and Morocco
• Cost-effective and scalable technology options for emerging markets exchanges – featuring Tony Weeresinghe of the LSE, Sandy Frucher of NASDAQ OMX and maybe Josef Dobrawez of Thomson Reuters.
• What’s hot in Africa today? is the wrap-up with a host of top speakers from politics, consulting, banking, mining, economics and development finance covering energy, infrastructure, mining, industry, agribusiness and others.
December 6th, 2011 by Tom Minney
Africa is using much less than its share of global financing available for carbon reduction projects, but the process to apply is complicated and a special facility has been set up to help. The African Carbon Asset Development facility has funded successful projects to reduce carbon emissions in Africa. A workshop was held last weekend for sharing practical lessons, attended by about 30 developers, investors, and local experts and bringing together African carbon asset development partners and financiers and beneficiaries including entrepreneurs on how to make carbon finance work for Africa.
The workshop highlighted successful carbon investment projects in Africa supported by the African Carbon Asset Development facility (www.acadfacility.org), formed by the United Nations Environment Programme (www.unep.org) in cooperation with Standard Bank Group (www.standardbank.co.za) and funded by the German Federal Environment Ministry (www.bmu.du/english). The ACAD partnership addresses key barriers that have stopped more people in Africa benefitting from carbon financing on projects as it provides technical assistance, seed capital, and specialized advisory services to both green entrepreneurs and to banks across Africa.
Although carbon financing is growing in importance worldwide, Africa’s share remains very low. According to ACAD facility’s website, in 2009 around $84 billion was invested in 684 emission reduction projects in emerging markets, but African nations got only 2% of the global total. The aim of ACAD is to help increase Africa’s carbon markets.
The workshop was held (somewhere) in Durban as part of a Conference of Parties (COP 17/CMP7) to discuss the United Nations Framework Convention on Climate Change (at sometime) over the weekend 3-4 December. It was organized by Standard Bank and UNEP.
Two examples of successful projects were cited. Johannesburg-based AAP Carbon (www.aapcarbon.com) has developed a technology that can generate heat and electric power from furnace waste gases emitted during ferrochrome smelting. The development was piloted with a financing plan which included carbon credit revenue.
A plant near Rustenberg, South Africa is already operational for London-listed International Ferro Metals (www.ifml.com) and is reducing greenhouse gas emissions by over 200,000 tons a year. Alex Berger, Director of AAP Carbon, explained how the project benefited from UNEP support so that it could tackle challenges in registering for a Clean Development Mechanism (CDM), which is a global framework allowing industrialized countries to fund carbon emissions in places where this can be done more cheaply. The AAP Carbon project is now in the final stages of registration and has apparently been certified with the premium Gold Standard. Several investors are interested in using the climate-friendly technology for other plants, after IFM and AAP Carbon showed that it works.
Kevin Fruin, a South African small business owner, said there is scope to make bricks in a way that is more efficient with energy. He said that construction accounts for almost 30% of South Africa’s greenhouse gas emissions and 200 small and medium enterprises (SMEs) in South Africa make clay bricks. He is one of the small businesses piloting a cleaner production technology called “Vertical Shaft Brick Kiln”. This can save manufacturers at least 50% of coal use and reduce carbon dioxide (CO2) emissions and air pollutants such as soot and black carbon. ACAD is supporting the development of a national programme using the CDM to scale up these demonstration projects so that other businesses can use the technology. It is giving financial advisory, legal due diligence, and a customized carbon-auditing tool for participating SMEs.
The session also provided some 30 participants an opportunity to learn more about how to benefit from grants from ACAD and training.
December 5th, 2011 by Tom Minney
“Africa reminds me of China back in 1999. If you missed China then, don’t do that (miss Africa) now,” is how Plamen Monovski, chief investment officer at Russia’s Renaissance Asset Managers, describes prospects for Africa. “It’s the last place in the world that is due for that rapid change and advancement.”
He was speaking in an interview with Reuters on 2 Dec. He said investors looking at China will find assets already “very discovered” and more expensive. He said African equities were trading at “exceptionally cheap” levels, while Chinese demand for natural resources and Chinese investments are boosting African business.
“The real appeal of Africa is the rise of the consumer society. Africa has got a population the size of India and consumer force as big as India,” he said. Renaissance is backing Africa’s infrastructure, consumer-related and financial sectors, as these will gain from growing prosperity within Africa, rather than commodities which depend on external growth.
The International Monetary Fund (IMF) in October said it expects 6% growth for sub-Saharan Africa in 2012, up from 5% in 2011. It is positive about the outlook because of growth in mining and other areas. Africa is seeing new entrants and efforts by the world’s largest banks and corporate, including large funds
Monovski helps manage $2.5 billion of assets. Renaissance’s funds include a sub-Saharan fund which has fallen about 17% since it was launched in October 2010 as investors pull out of risky assets in the current crisis. The fund includes South Africa’s teleco MTN Group and Nigeria’s Zenith Bank Plc among its top holdings. He joined the fund management arm of Russia’s Renaissance Capital from Blackrock last year.
He also said China will grow and will not have a “hard landing” of strong correction in the current crisis, but much growth is already priced into Chinese equities: “We want to look at other regions in the world which looked like China in the late 90s.”
November 28th, 2011 by Tom Minney
Share prices on the Tunisian Stock Exchange (Bourse de Tunis – www.bvmt.com.tn) have been moving ahead all November, starting with a positive reaction to the meeting between Rachid Ghannouchi, leader of the Islamist Ennahda party and stock market executives only days after the election and moving forward as the politics progressed well. Even before the election results were finalized from the 23 October election that swept Ennahda to power, Ghannouchi was meeting the bourse on 26 Oct to send the message that the government would be “business friendly”. It is the first Islamist party to win power since Hamas’ 2006 victory in Palestine.
According to Bloomberg, the TUNINDEX dived from a close of 4636.67 on 20 Oct to 4538.41 on 24 Oct, but bounced back very fast and reached 4718.16 by 8 Nov. The index has been moving sideways since 4730.69 close on 18 Nov, back to levels last seen in early February. The low was 4033.43 on 25 Feb. The recent high was 5695.82 on 30 Sept 2010.
According to a report on Reuters, a party official said Ghannouchi met the market executives “to send the message that the stock exchange is very important and that he is in favour of more listings to accelerate economic growth and to diversify the economy.” Reuters adds that the Tunis stock market index fell sharply when trading resumed after the Sunday election, but rallied on news of the meeting and prices were up 1.13% by mid-morning.
Reuters reports that Ghannouchi spent 22 years in exile in Britain and has stressed his party will not enforce any code of morality on Tunisian society, or the millions of Western tourists who holiday on its Mediterranean beaches: “He models his approach on the moderate Islamism of Turkish Prime Minister Tayyip Erdogan”, according to writers Tarek Amara and Christian Lowe.
Tunisia’s Constituent Assembly held its historic first session on 22 Nov and Ghannouchi signed a coalition agreement with the heads of two junior coalition partners, Moncef Marzouki of Congress for the Republic and Mustafa Ben Jaafar of Ettakol. In the election, which saw a turnout of over 90% of registered voters, Ennahda took 89 seats of the 217-member assembly, Congress won 29 and Ettakol 21. Under the new agreement, Ennahda secretary-general Hamadi Jbeli will hold the most powerful post of prime minister, while Marzouki will be in the largely ceremonial role of Tunisian president. Ben Jaafar will be speaker of the assembly, which has the task of drafting a new constitution. They pledged to hold elections within a year.
There is a challenge to get the economy moving. Reuters cites Central Bank of Tunisia (www.bct.gov.tn) governor Mustafa Kamel Nabli saying on 24 Nov that the economy grew 1.5% in the third quarter but growth in 2011 will be close to zero. Unemployment stood at 18.3%. However, the draft budget presented earlier in November foresees 4.5% growth in 2012, after 3.7% growth in 2010. Nabli told Reuters “”We expect GDP growth of 4 percent next year but the European crisis will dampen these figures.” The World Bank, European Union, the African Development Bank and the French development agency has been giving an emergency $1.4 billion funding package. Nabli said another $5 bn will be needed next year to support the budget.
