All articles in the Africa In Business Section:

Egyptian Telecom company Orascom has filed an appeal against Algerian tax authorities for allegedly overcharging it. The company says it has paid about $120 million (against back taxes that Algeria says it owes), in order for the appeal to go through.

The Algerian tax authority alleged, in November 2009, that the mobile telephone operator owed $596.6Million in back taxes and penalties for 2005-2007. “In order to file its appeal… Algerian law requires OTA (Orascom Telecom Algerie) to pay 20% of the taxes and penalties alleged to be owing,”, Orascom said in a statement. It said it had made the payment.

Orascom shareholders agreed to an $800Million rights issue to make up for lost dividends from its Algeria unit, which operates under the brand name Djezzy, until the tax issue is resolved.

Djezzy, which had revenue of $1.8 billion in 2007, provides Orascom with more than 50 percent of its cash flow.

Orascom runs mobile phone operations from North Africa to North Korea, and earlier this month won approval in Canada to go ahead with a start-up wireless operation called Glob alive, in which it owns an indirect stake.

ECONOMY: Algerian exports totalled $39.5 billion during the first eleven months of 2009, marking a 45.4% decline over the same period in 2008, the National Centre for Informatics and Statistics (CNIS) reported on December 21, 2009. Algeria’s trade balance surplus shrank from $36.35 billion in 2008 to $4.2 billion in 2009. Imports, however, showed a decline of just 2.2% compared to 2008.

TELECOM EGYPT HAS ACQUIRED THE entire capital of Lacom, the only private fixed telecommunications operator in Algeria. Telecom Egypt and another Egyptian company, Orascom, had each previously owned 50% of Lacom’s capital. Algerie Telecom, the largest provider of fixed, mobile and internet services is slated for privatisation in the first half of 2008(story above).

IN THE FIRST SEVEN MONTHS OF 2007, Africa saw $ 8.2-billion of new listings, already 13% higher than last year. Nigeria, not South Africa, was the largest recipient of inflows for new listings. Africa has seen foreign investment inflows triple in the past decade from $1 0-billion to $30-billion a year. In a sense, Africa is coming on to the radar screen of foreign investors.

Why?

Political and economic stability has resulted in GDP growth for the continent at 5.8% in 2007 and market performances are outstanding, with countries like Nigeria showing returns in excess of 100% in dollars. Since 1995 there has been, at least, one African equity market among the top 10 best-performing markets in the world. And it is not only oil and other resources that are fuelling growth. Some favourite picks in the Investec Africa fund include Egyptian cellphone provider Orascom and Nigeria’s Access Bank.

Orascom has seen a 100% growth in its subscriber base this year. Since 2005 it has grown its subscriber base from 15-million to 50-million. Analysts say Orascom’s current PE of 12 times is not unduly expensive. In Nigeria bank consolidation has been a major theme with the number of banks decreasing from 89 to 25 in two years. Access Bank grew its bottom line 500% in 2007 and is growing its loan book at 100%. No wonder Standard Bank of South Africa bought into IBTC, one of Nigeria’s 25 banks. Investec launched its Africa Fund two years ago and inflows have been way ahead of expectation. When it launched it considered that having inflows of $500-million to $1 -billion within five years would be a real achievement. In two years it has already had inflows of more than $500- million, with a further $250-million committed to the fund. Even countries such as Zimbabwe are attracting attention. Imara’s Zimbabwe fund had to be closed temporarily in April 2007, because the demand was overwhelming with $9-million flowing in the first two weeks after launch. There has been a switch in the type of investor looking at Africa from high-net-worth European and United Kingdom individuals to more institutional investors, including the United States. Investec is hosting a group of trustees from US retirement funds coming to check out Africa. They represent massive local government retirement funds and make minimum investments of $250-million. While the appetite for Africa is growing, liquidity is not growing at the same pace and remains a constraint. However, commentators believe that as interest increases, so will liquidity. In the meantime the low levels of liquidity can go in investors’ favour.

By Ahmed El Maghraby

CAIRO: 2050 IS ALONG-TERM PLAN FOR Cairo, which aims at reversing urban deterioration and improving the quality of life. The city has had an explosive growth over the years. Today, Cairo accounts for 22 percent of Egypt’s population and 43 percent of the country’s urban population. 55 percent of all universities, 46 percent of all hospital beds and 43 percent of all jobs lie within the Cairo region.

If we leave the situation as it is, in the year 2022 we will probably be living in a city… of 28 million people. We have to do something, this is not a choice, this is not something that we can wait on. We must move now.

I’m not saying that we should move now to try to keep the population at 16 million. I’m only hoping that we can contain the increase in the population of Greater Cairo to 24 million rather than 28 million. ‘That’s a huge number, but it’s a good target.

The housing ministry is for the first time producing comprehensive development plans for the different governorates and districts of Egypt. It is the fist time that a development plan had been formulated for the more than 4,600 villages in Egypt. New urban developments across Egypt, including Upper Egypt and the Red Sea, made possible by the new roads being built, will lead to a population shift away from Cairo. We are also increasing the rate at which we are developing the new urban cities or new communities to encourage settlements at faster rates there to relieve the pressure on greater Cairo. The housing ministry has a programme for establishing new villages near old ones to curtail the growth of buildings on agricultural land. The target is to build about 400 new villages to absorb 4 million people by 2022.

To lessen overcrowding, ministries are being relocated to an area near New Cairo. The ministry is also working to improve traffic flows around Cairo. All 13 of Cairo’s water stations are being either rebuilt or renovated to increase capacity. We ran at full capacity in the summer of 2007, but in the summer of 2008 and those after we will go to a much more normal situation where there is capacity to absorb the increasing population, at least until 2030. – Adapted from a lecture by Ahmed El Maghraby, Egypt Minister of Housing and Urban Development, at the American Chamber of Commerce, in June2007…