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Deglobalisation expected to impact world growth, commodity prices, and African economies

Deglobalisation expected to impact world growth, commodity prices, and African economies

The slowly unfolding deglobalisation sentiment holds long-term consequences for Africa which can not be ignored, according to a leading in-house economist of a large South African bank.

Speaking at a recent investment summit hosted by Nedbank Namibia and Simonis Storm Securities, Nedbank Group Chief Economist, Dennis Dykes said deglobalisation is negative for world growth, impacting commodity prices which in turn has a significant effect on African economies dependent on the extractive sector.

Dykes, who also served on the Nedlac Public Finance and Monetary Policy Chamber, believes that deglobalisation is a threat because the benefits of globalisation have been unevenly distributed.

“Deglobalisation could also see a decline of trade and demand, diminishing interdependence and integration between nations and multinational organisations,’ he said.

Furthermore, rising public debt in African countries has an adverse effect on growth. “An additional complication is Africa’s increased debt burden,” he said. “Policy missteps and rising debt have not helped the continent. External and government debt will be back at concerning levels if it is not backed up by improved growth potential.”

According to the Brookings Institution, African debt is on the rise, with the median debt ratio as a percentage of gross domestic product increasing from 31% in 2012 to 53% in 2017.

In her summit presentation, Simonis Storm Economist, Indileni Nanghonga said that the Namibian economy will suffer severely if a global recession sets in. Other perils she listed are currency volatility, reduced investment, reduced skill and technology transfer, and higher trading costs. All these can result from deglobalisation.

She recommended that Namibia should manage its debt better, and in addition, advance and create certainty in the policy space, improve the efficiency and productivity of the Central Procurement Board, reform unproductive state-owned enterprises, promote effective work ethic in the government and eradicate corruption. She further warned that rising youth unemployment is a serious problem.

Local political and economic analyst, Dr Hoze Riruako added that the emergence of populism in the world’s political system has an enormous impact on such systems that are still following the traditional political route. This results in “erosion of democratic practices, unusual politics, mob politics and strongman politics.”


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


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.