The International Monetary Fund (IMF) has claimed that China risks facing a growing debt-dependency in its banking system, urging Beijing to increase its capital buffers to protect against a possible “financial crisis.”

The Washington-based organization said in a report on Thursday that reforms by Beijing over the past five years had not gone far enough as financial credit in the world’s second-biggest economy had risen high by international standards, and personal debt had also increased in the same period.

“The system’s increasing complexity has sown financial stability risks,” the IMF’s assessment report said. “Credit growth has outpaced GDP growth, leading to a large credit overhang. The credit-to-GDP ratio is now about 25% above the long-term trend, very high by international standards and consistent with a high probability of financial distress.”

The IMF recommended that China prioritize financial stability above development goals as the pursuit of regional growth targets and the protection of failing companies had led to a surge in debt, particularly at local government levels.

“The apparent primary goals of preventing large falls in local jobs and reaching regional growth targets have conflicted with other policy objectives such as financial stability,” the report said. “Regulators should reinforce the primacy of financial stability over development objectives.”

“As a result, corporate debt has reached 165% of GDP, and household debt, while still low, has risen by 15 percentage points of GDP over the past five years and is increasingly linked to asset-price speculation. The buildup of credit in traditional sectors has gone hand-in-hand with a slowdown of productivity growth and pressures on asset quality,” the IMF said.

The report also said that while China has been taking steps to address its debt risks, authorities in Beijing are required to “de-emphasize the GDP” projections to be able to rein in excessive credit growth in national plans that have incentivized local governments to set high growth targets.

Ratna Sahay, the deputy director of the IMF’s Monetary and Capital Markets Department, said during a news conference that China should “incite local governments to strengthen supervision on risks.”

“Risks are large,” Sahay told reporters. “Having said that, the authorities are really aware of risks and they are working proactively to contain these risks.”

The IMF report also highlighted the need for Chinese banks to hold more liquid assets and gradually increase their capital to create buffers to absorb potential losses that could be expected during China’s economic downturn following a credit boom.

Source: Presstv

Cameroon has slapped a $6.6 million (FCFA3.6 billion) sanction on South Africa’s telecom giant MTN for failing to respect mobile phone identification procedures and the use of radio frequencies Johannesburg-based MTN Group, in its market update, confirmed the fine imposed by Cameroon’s Telecommunications Regulatory Board (ART) on its central Africa state branch.

Besides the financial penalty, ART has also reduced to 14 MTN Cameroon’s 15 years operating licence granted in March 2015, according to local media reports. In a statement on Saturday, MTN Cameroon said it had been notified of the ART sanction and “is in discussions with the regulator regarding the subject”.

The telecom enterprise said it would continue to educate its subscribers on the need to have their phone numbers identified to protect themselves and ensure full compliance with regulations governing the identification of subscribers.

As part of a counter-terrorism drive, the Cameroon government in September 2015, through a prime ministerial decree, obliged mobile telephony operators to identify or disconnect unidentified subscribers not later than June 30, 2016.

The order also stipulated that no individual would be allowed to own more than three SIM cards from same mobile network operator. Those who needed an exception were to provide concrete justifications for the request. MTN Cameroon CEO Philisiwe Sibiya said then that the firm was “leaving no stone unturned” to fully comply with the subscriber identification regulations.

“In addition to Service Centres, special identification mega-centres, hotspots, mobile caravans and contact points at the level of partners, MTN Cameroon employees, equipped with specific mobile equipment, shall ply the streets of towns and villages to identify subscribers,” she said.

But it is believed the telco company, which prides itself as market leader in the country with roughly 10 million subscribers, failed to or delayed disconnection of thousands of subscribers who operated unregistered sim-cards within that period. MTN was slapped with $1.7 billion fine by Nigeria last year for failing to disconnect unidentified sim-cards in that country.

Source: Today ng

The latest market figures show Russia has increased its purchases of gold to record highs in what appears to be part of the country’s policy to cushion itself against the sanctions of the United States. 

Figures released by the World Gold Council (WGC) show that the Central Bank of Russia bought 63 tonnes of the precious metal in the third quarter of 2017. The WGC added in a statement that the Russian stockpile of the bullion had already reached 1,778.9 tonnes as of the end of September.

In September only, the regulator added 34.6 tonnes of bullion to its reserves, in the highest monthly increase since October 2016, reported the Russian news website Sputnik News citing the country’s business newspaper Kommersant.

Currently, the Russian Central Bank has been ranked sixth in the world in terms of bullion reserves. The top five are the United States (8,133.5 tonnes), Germany (3,373.7), Italy (2,451.8 tons), France (2,435.9) and China (1,842.6).

At the same time, according to the WGC, the Russian Central Bank is leading in terms of the pace at which it is stockpiling gold.

Russia’s campaign to collect gold is meant to enable the country to have guarantees amid the tightening of the US Federal Reserve’s policy and amid the growing tensions between Moscow and Washington. Russia also wants to protect its reserves against possible geopolitical risks.

Market analysts also suggest that the Russian Central Bank will continue to expand its gold reserves.

If the Russian Central Bank continues to buy gold at the same pace Russia is likely to topple China as the world’s fifth-biggest holder of bullion in early 2018, according to Kommersant.

Culled from Presstv

Vodafone has announced the termination of its activities in La Republique du Cameroun. The company made public its decision today Friday, November 10, 2017 indicating that its truly over. After the withdrawal of its license by the Ministry of Posts and Telecommunications and the Telecommunications Regulatory Authority including the long suspension of its services, the multinational specialized in telecommunications reluctantly concluded that it was no longer commercially viable to resume its services in Cameroon.

As a result, Afrimax Cameroon ceased operations with immediate effect, “says a company official. Vodafone in a statement presented their sincere apologies to their customers, partners and suppliers “for the inconvenience caused”. They also thanked the loyal staff of Afrimax Cameroon for their hard work, enthusiasm and support.

The press release from Vodafone Cameroon also stated that the structure operated by Afrimax using the Vodafone trademark in accordance with the license agreement signed with the Vodafone Group has no equity interest in Afrimax or Vodafone Cameroon.

In mid-September 2017, the inexperienced  Francophone Minister of Post and Telecommunications suspended Vodafone Cameroon on the grounds that the company had sold all of its capital to Afrimax. The partnership signed in July 2017 between Vodafone and Cameroon Telecommunications (CAMTEL), the state-owned telecoms operator, stipulated that Vodafone Cameroon will use CAMTEL’s existing infrastructure that covers 100% the cities of Douala and Yaounde and will allow Vodafone to expand its geographical coverage throughout the country.

By Sonne Peter with files from CIN

New documents have revealed that British Prince Charles’s private estate invested hugely in an offshore firm that lobbied to alter deals on climate change.

Leaks from the newly-released Paradise Papers indicated that the Prince of Wales’s private estate, the Duchy of Cornwall, invested millions of pounds in offshore funds and companies to change climate agreements and allow “carbon credits” from rain forests to be traded.

Reports said the investment was regarded as highly sensitive and members of the estate had been sworn to secrecy about the Prince’s involvement.

This comes as the Prince of Wales has long been a vocal speaker on the issue of climate change, making speeches and writing books on the environment since the 1980s.

The main purpose of the Duchy of Cornwall is funding the “public, charitable and private activities of the Prince of Wales and his family.”

Some 53,000 hectares of land in 23 counties belong to the Prince of Wales’s private estate, with latest accounts showing it had assets of 913 million pounds in April.

Many of the leaked documents reveal how politicians, multinationals, celebrities and high-net-worth individuals use complex structures of trusts, foundations and shell companies to protect their cash from tax officials or hide their dealings behind a veil of secrecy.

The Paradise Papers also revealed that about 10 million pounds of the private funds of Britain’s Queen Elizabeth were placed in the Cayman Islands and Bermuda.

The tax evasion controversy adds to the debate on the Queen’s income that is estimated at around 100 million dollars for 2017.

Source: Presstv

Newly-leaked documents reveal the private estate of Britain’s Queen Elizabeth has invested millions of pounds in the British Caribbean tax havens of the Cayman Islands and Bermuda.

According to documents obtained by the International Consortium of Journalists, around 10 million pounds (13 million dollars) of the queen’s private cash is said to have been tied up in offshore portfolios.

The leak, dubbed the Paradise Papers, contains 13.4 million documents, mostly from one leading firm in offshore finance. Nearly 100 media groups are investigating the leaked papers.

The core of the leak, totaling more than 13.4 million documents, focuses on the Bermudan law firm Appleby, a 119-year-old company, whose clients are corporations and very wealthy people. Appleby helps clients reduce their tax burden; obscure their ownership of assets like companies, private aircraft, real estate and yachts; and set up huge offshore trusts that in some cases hold billions of dollars.

Many of the leaked documents reveal how politicians, multinationals, celebrities and high-net-worth individuals use complex structures of trusts, foundations and shell companies to protect their cash from tax officials or hide their dealings behind a veil of secrecy.

The files show the offshore empire is bigger and more complicated than many had imagined.

What are the offshore tax havens?

Essentially the tax havens are places outside a country’s regulations, to which companies or individuals can redirect money, assets or profits to take advantage of lower taxes rates than their own country.

These jurisdictions are known as offshore tax havens, to use the more technical jargon, offshore financial centers (OFCs). They are generally stable, secretive and reliable, often small islands but not exclusively so, and can vary on how rigorously they carry out checks on wrongdoing.

Britain has a big role in the flourishing of these entities, not simply because so many of its overseas territories and crown dependencies are OFCs, but many of the lawyers, accountants and bankers working in the offshore industry operate out of the city of London.

Who hides the cash?

Wealthy individuals and large companies have one thing in common: enormous amounts of money they want to hide from taxing.

Some of the world’s biggest multinationals feature in the leak, including Apple, Nike and Facebook, as well as some of the richest people in the world, from the British monarch to Bono, and from the stars of British sitcoms to the stars of Hollywood.

Brooke Harrington, renowned author of Capital Without Borders: Wealth Managers and the One Percent, said offshore finance is not for the 1 percent but the .001 percent.

Source: Presstv

IMF team reached a staff level agreement with the authorities on policies that could support approval of the first review. Growth is decelerating, mostly due to weaker oil production.

The team and authorities agreed on the need to implement without delays measures to strengthen the financial sector, enhance the business environment to boost private sector investment and economic diversification, and achieve a more inclusive growth.

An International Monetary Fund (IMF) team, led by Ms. Corinne Deléchat, visited Yaoundé from October 24 to November 3, 2017 to conduct discussions for the first review of the program supported by an Extended Credit Facility (ECF) that was approved in June this year.

At the conclusion of this visit, Ms. Deléchat issued the following statement:

“The IMF team reached staff level agreement with the authorities on economic and financial policies that could support approval of the first review of their three-year program under the ECF. The IMF Executive Board is expected to consider the first review mid-December 2017. The completion of the first review would enable a second disbursement of SDR 82.8 million (about US$116.3 million).

“The country’s economic program has remained on track, despite a challenging backdrop. All quantitative performance criteria under the program for end-June 2017 have been met. In addition, all structural benchmarks through end-October have been implemented except for two, which have been modified. The authorities have also implemented measures to improve revenue mobilization, increase transparency of budget execution, enhance cash management and maintain financial sector stability.

“Growth is decelerating, mostly due to weaker oil production. Growth for 2016 has been revised downward slightly from an earlier estimate of 4.7 percent to 4.5 percent. For 2017, growth is projected at 3.7 percent, while inflation is expected to remain low, falling to 0.5 percent. The fiscal deficit should decrease as projected from 6.2 to 3.1 percent of GDP in 2017 despite a shortfall in oil revenue, which will be mostly offset by a reduction in current spending.

“The draft 2018 budget envisages a further reduction of the budget deficit to 2.3 percent of GDP, in line with the objectives of the ECF-supported program. To reach this target, the authorities will implement a set of measures to strengthen revenue mobilization by continuing to widen the tax base while continuing to rationalize and enhance the quality of public spending. In particular, the authorities intend to strictly prioritize public investment, focusing on current priority infrastructure and related projects, and projects with a high socio-economic impact.

“The team highlighted the importance of containing new borrowing, particularly on non-concessional terms, to preserve debt sustainability. The large stock of contracted but yet undisbursed debt is a symptom of remaining weaknesses in project preparation and implementation, amid an ambitious public investment program. The team encouraged the authorities to promptly implement the measures they have identified to reduce this backlog and ensure higher project execution rates going forward.

“The IMF team welcomed the reform momentum in public financial management and discussed key reforms that have been highlighted by the recent Public Expenditure and Financial Accountability (PEFA) analysis. In particular, the recent progress with the transposition of the six Directives on public finances harmonization in the Central African Economic and Monetary Community (CEMAC), the imposition of limits on the use of exceptional budget procedures and the preparation of a strategy to enhance the coverage of the single treasury account should help enhance the credibility and transparency of the budget. Furthermore, the team and the authorities agreed on the necessity to implement without delays measures to strengthen the financial sector, enhance the business environment to boost private sector investment and economic diversification, and achieve a more inclusive growth.

“The team met with Prime Minister Philémon Yang, Minister Secretary General at the Presidency Ferdinand Ngoh Ngoh, Minister of Finance Alamine Ousmane Mey, Minister of Economy, Planning, and Regional Development Louis Paul Motaze, BEAC National Director Jean-Marie Mani, and other senior officials and representatives of the diplomatic community, development partners and private sector.

“The team wishes to thank the Cameroonian authorities for their hospitality, cooperation, and the constructive dialogue.”

Source: Oil and Gas News

Following a directive issued by the Cameroon’s Telecommunications Regulatory Agency, Vodafone Cameroon has confirmed it has suspended its internet services in the country until further notice. Vodafone Cameroon is operated by Afrimax under a non-equity partner market agreement with Vodafone Group. Authorities in Cameroon are making moves to compel Vodafone to apply for its own license.

Since it began operations in 2016, Vodafone had been using the license issued to Northwave SARL which was subsequently acquired by Afrimax Group to create Vodafone Cameroon. This arrangement, according to authorities, is illegal.

Minette Libom Li Likeng, Cameroon’s Minister of Posts and Telecommunications said he directed the Telecommunications Regulatory Agency (ART) to withdraw the operating license issued to Northwave SARL, thus compelling Vodafone to apply for its own license – since the operator would not be allowed to operate until it secures a license from the government.

Likeng said the government has applied the law governing the establishment and operation of networks and supplies of electronic communication services authorisation system in Cameroon. Under the law, licenses are personal, non-transferable and do not confer any right of exclusivity. With this condition, Likeng said Northwave SARL’s operating license cannot be transferred to Vodafone Cameroon.

Likeng said, “I’ve had discussions with Vodafone Cameroon officials in recent months, and I’ve told them that they have to apply for a license in good form and will have to pay to provide 4G LTE to the population.”

Going forward, he confirmed that his ministry directed the company to suspend its plan to expand its operations to eight additional cities, adding that if allowed to continue to operate, Vodafone would not be competing fairly with other players who paid US$136 million (CFA75 billion) each for operating license.

Antoine Pamboro, CEO Vodafone Cameroon, in a statement apologised to customers and said the company is working hard to restore services as soon as possible.

“To date, Vodafone Cameroon has contributed 3 billion CFA to the State of Cameroon, including 2 billion CFA in taxes and duties and 1 billion CFA for regulatory fees. Vodafone Cameroon has 116 employees and indirectly created 1,055 jobs with more than half of the workforce composed of young graduates,” Pamboro stated.

Prior to the latest development, Vodafone was expanding its 4G LTE services across the country, starting with 8 regions following a partnership with CAMTEL. Richard Achu, Vodafone Cameroon’s Sales and Distribution Director, said the company will not renege on its vision to extend its operations across the country.

“Vodafone Cameroon will enable anyone with a 4G compatible equipment to benefit from the best 4G LTE network as it is already the case in Douala and Yaounde. We want to extend our 4G LTE ultra-fast network in the ten regions of the country before the end of the year. We will do our utmost best to achieve this,” Achu said.

Source: ITwebafrica