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Will this cloud have a silver lining? Part 1

Will this cloud have a silver lining? Part 1
Tilman Friedrich is a qualified chartered accountant and a Namibian Certified Financial Planner ® practitioner, specialising in the pensions field. Tilman is co-founder, shareholder and managing director of RFS, retired chairperson, now trustee, of the Benchmark Retirement Fund.

Tilman Friedrich is a qualified chartered accountant and a Namibian Certified Financial Planner ® practitioner, specialising in the pensions field. Tilman is co-founder, shareholder and managing director of RFS, retired chairperson, now trustee, of the Benchmark Retirement Fund.

Bad news both on the economic as well as the political front are currently unfortunately dominating our media and this also manifests in our financial markets of late. Investors are clamouring for good news and each time there is some good news, financial markets also respond positively to these. Where we have seen the FTSE/ JSE Allshare Index increasing steadily since the end of the financial crisis from its low of 21,000 in October 2008 to around 49,000 at the end of April this year, it has been see-sawing since then between 49,000 and 54,000.
We read of South Africa’s economic woes; Namibia ran a trade deficit of N$10 billion in the latest reported month, there are reports that our government is running out of cash and has recently had to issue a Eurobond, exposing Namibia to a significant currency risk while at the same time the Rand has depreciated by 26% from 10.5 at the end of April this year to around 16.24 on Thursday after the announcement that the South African finance minister is to be replaced with immediate effect.
Global commodity markets are in the doldrums, which is particularly bad news for commodity based economies such as South Africa and also Namibia. But wait – on the positive side of lower commodity prices is the low oil price which has declined by 65% from just short of US$ 133 per barrel in July 2008 to its current level of around US$ 47 per barrel only which should be good for your pocket and mine.
But is this true? In fact for you and me diesel for example only declined by 4% from N$ 11.31 per litre in July 2008 to N$ 10.85 currently. In Rand terms, one barrel cost R 976 or roughly N$ 6.14 per litre in July 2008, as opposed to R 643 per barrel, or roughly N$ 4.04 per litre the end of October this year, a reduction of 34%. Does this sound as strange to you as it does to me?
What this implies is that besides the taxes already built into fuel prices in July 2008 someone is currently cashing in at the rate of N$ 2.1 per litre consumed in Namibia. Working back from reported SA fuel consumption of 25 billion litres per annum on the basis of our economy relative to the SA economy, Namibia’s fuel consumption should be in the region of 1 billion litres per annum. Times this by N$ 2.1 per litre, this ‘someone’ is currently cashing in at the rate of N$ 2 billion per annum, and this for a full year already. Even the fuel storage facility in Walvis Bay which is reported to cost N$ 3.6 billion should be paid off fully by October next year everything else being equal.
So what could have been one piece of good news for the Namibian consumer unfortunately is also not really good news.

 

Continues in next week’s Economist with an overview of international developments.
Download the complete Benchtest fund investment overview for March 2015 at http://www.rfsol.com.na/benchmark

About The Author

Typesetter

Today the Typesetter is a position at a newspaper that is mostly outdated since lead typesetting disappeared about fifty years ago. It is however a convenient term to indicate a person that is responsible for the technical refinement of publishing including web publishing. The Typesetter does not contribute to editorial content but makes sure that all elements are where they belong. - Ed.

Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.