SA and Nokia partner on ICT initiatives

Espoo, Finland - The Department of Science and Technology in South Africa and Nokia Corporation have announced an ambitious new partnership aimed at implementing a number of Information and Communication Technology (ICT) projects, targeted at providing a thrust for innovation and growth across the country.

This follows the signing of a memorandum of understanding (MOU) by the DST and Nokia, establishing a framework on which potential areas of collaboration can be developed, funded and implemented.     

Addressing the media on this partnership, the Minister of Science and Technology, Naledi Pandor, acknowledged the role of ICT in stimulating economic growth.

"This is why the DST is leading the implementation of the national ICT research, development and innovation strategy. In this regard, we view public-private partnerships to be of importance for us in achieving this objective," said the Minister.

One of the key expected outcomes of this plan is an innovative indigenous ICT industry that addresses South Africa's ICT needs in the public and private sectors, and attracts investment by multinationals involved in innovation and manufacturing.

In addition to a significant increase in the number of postgraduate students at Masters and PhD levels, these R&D outputs are gradually evolving into near-market prototypes, large-scale technology demonstrators and packaged solutions that can readily address key priorities of government, such as education, health and enhanced citizen interaction with government.

Vice President for Government Relations for Nokia Middle East and Africa, Jussi Hinkkanen, said South Africa has a thriving telecommunication industry with a lot of potential for disruptive innovation.

"Our objective is to support local talent in developing their skills, and then integrate them into both regional and global markets," said Mr Hinkkanen.

In addition to stimulating entrepreneurial activity and high technological innovation, the collaboration intends to stimulate the interest of South African learners, cultivating the scientists and engineers of tomorrow. The General Manager for Nokia in South Africa, Gerard Brandjes, added: "As South Africa's leading mobile company, it is our responsibility to identify areas where our technical skills can facilitate the development of society. We hope the educational focus under this collaboration will motivate thousands of South African learners to explore careers in technology."

Some key focus areas to highlight that are covered in the MOU:

- Basic Sciences Education Support Programs: In conjunction with the Department of Basic Education, the DST and the Meraka Institute of the Council for Industrial and Scientific Research (CSIR), programs aimed at improved delivery of educational services through the use of mobile devices are being implemented. These include the Mobile Learning for Math and Nokia Education Delivery initiatives which were created to assist in the education of tens of thousands of South African learners.

- Mobile applications laboratory: This is a joint initiative between the DST, infoDev, the Ministry of Foreign Affairs (Finland) and Nokia that intends to train and build both the business and technical capabilities of the developer community. This will help them develop locally relevant content, solutions and services, and connect them to local, regional and international markets.

- Access to broadband networks for communities: Through Nokia Siemens Network and the CSIR, the parties will explore ways to enhance access to ICT for rural communities and support the wireless mesh network project.

- Support of the Square Kilometre Array (SKA) bid: Through Nokia Siemens Network, the Africa SKA Project Office and the DST, the parties will continue to seek ways to enhance collaboration on large-scale computing, data transport and sensor networks in support of the African SKA bid; a project that is expected to revolutionize the ICT industry in terms of data processing and sensor networks.

"Nokia Siemens Networks is using its global expertise in telecommunications and in-depth knowledge of the local South African market to advise the SKA bid teams, from both a technical and business perspective, about the best options to transport the huge volumes of generated data to the high-performance computer center of the SKA.

"We have been involved in the project from the start, supporting and advising the project team on all technical requirements, capacity planning, provisioning and skills," said Rufus Andrew, Managing Director of Nokia Siemens Networks South Africa.

With the commitment shown by all parties under this MOU - and the increased investment in R&D by both private and public sectors - the DST and Nokia believe that opportunities exist for bold interventions that will enable South Africa to secure a greater share of global markets, and help bridge digital divide.

Google to Acquire Motorola Mobility

Mountain View - Google Inc. and Motorola Mobility Holdings, Inc. today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5bn, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011.

The transaction was unanimously approved by the boards of directors of both companies.

“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”

The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”

Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”

Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.

Stay smart, stay out of debt

Johannesburg - It’s an exciting time – you’re finally earning your own pay cheque and proving you can make it on your own.  The things you desire most are within financial reach. But keeping your debt to manageable levels is one of the most important steps you can take to ensuring your dreams turn into reality. 

“When it comes to finances, young people are faced with a number of challenges,” says Obed Tongoane, Manager at the National Credit Regulator (NCR). “Many have a student loan to pay off, but are lured early on by credit deals which keep them permanently in debt.”

He says taking a few common-sense steps can help you manage your debt. 

Understand the different types of credit and their cost

Debt is not always bad. “It’s important to be able to build up a credit history so that when you want to apply for a car or home loan, credit providers can see that you can manage your finances responsibly,” says Tongoane. “However, make sure you understand the true cost of credit.” 

Unsecured debt, such as credit cards and personal loans are more expensive than secured debt, where assets such as a house, act as security. 

This is evident from the amount of interest credit providers are allowed to charge for different types of credit under the National Credit Act (NCA).  On a mortgage agreement, for example, credit providers can charge a maximum interest of 17.1% per year. 

This is with the repo rate currently at 5.5%. Compare this to other types of credit such as credit facilities which consist of credit cards, store cards and overdrafts. With these, credit providers can charge a maximum interest of 22.1% per year.

For unsecured credit transactions which consist of mainly personal loans, credit providers can charge a maximum interest of 32.1% per year.  If you are looking to buying a car or furniture, then the maximum interest a credit provider can charge is 22.1% per year. You will be charged 5% per month for short term credit transactions.

These are loans not exceeding R8 000 and the whole amount is repayable within a period not exceeding 6 months. You will be charged 2% per month for incidental credit agreements.  Credit providers can also charge other cots as stipulated in the National Credit Act.

Budget and plan

“Budgeting will assist you to keep track of your finances. The trick is being in control of your finances by creating a monthly budget and seeing how much money you have left over at the end of each month after basic expenses. Remember to always draw a budget and stick to it,” adds Tongoane.

“Before credit providers extend credit, they are required to conduct an affordability assessment to assess the consumer’s general understanding and appreciation of the risks and costs of the proposed credit; the rights and obligations of a consumer under the credit agreement; debt repayment history as a consumer under credit agreements; and the consumer’s existing financial means, prospects and obligations,” he says.

He adds that When you take up credit, read the small print before you sign up. It’s tempting to drive a flashy car and wear the latest designer labels, but if you get into a cycle of buying a new car every few years, you’ll simply be swapping one loan for another.

“If you’re going to borrow, invest in a more concrete asset, such as a home or property,” he adds.

Know your rights

As a consumer, you have rights and obligations under the National Credit Act. The NCR regulates credit bureaux and the consumer credit information held by the credit bureaux. The Act also assists over-indebted consumers to restructure their debt and aims to prevent over-indebtedness of consumers as well as to encourage responsible lending by credit providers.

“Debt counselling will help you to restructure your debts, but remember you need to continue paying your instalments even when under debt counselling.  Consumers who are facing financial difficulties should try and get help before they even default on their repayments,” adds Tongoane.

Reduce your debt over time

If you have negative listings at the credit bureau, you should aim to rectify those.

“Avoid being tempted by offers of more loans, especially those that target consumers with poor credit records,” says Tongoane. “Paying off one debt with another is one of the worst things you can do.”

He advises instead to put a debt reduction plan in place to ensure that you work towards paying off your debt. 

“Unfortunately there’s no quick fix and cleaning up and moving on can take a while, but it is possible,” he adds. 

“One of the ways to improve your credit rating is by proving your responsibility over time, paying your instalments on time and not taking on too much debt than you can handle,” concludes Tongoane.

Nokia enters patent license agreement with Apple

Espoo, Finland - Nokia announced that it has signed a patent license agreement with Apple. The agreement will result in settlement of all patent litigation between the companies, including the withdrawal by Nokia and Apple of their respective complaints to the US International Trade Commission.

The financial structure of the agreement consists of a one-time payment payable by Apple and on-going royalties to be paid by Apple to Nokia for the term of the agreement.  The specific terms of the contract are confidential.

"We are very pleased to have Apple join the growing number of Nokia licensees," said Stephen Elop, president and chief executive officer of Nokia. "This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."

During the last two decades, Nokia has invested approximately €43bn in research and development and built one of the wireless industry's strongest and broadest IPR portfolios, with over 10 000 patent families.

Nokia is a world leader in the development of handheld device and mobile communications technologies, which is also demonstrated by Nokia's strong patent position.

This agreement is expected to have a positive financial impact on Nokia's recently revised outlook for the second quarter 2011 of around break-even non-IFRS operating margin for Devices & Services.

Migration has win-win benefits: report

Johannesburg – With about 30 million Africans living outside their home countries, migration is a vital lifeline for the continent. Yet African governments need to do more to realize the full economic benefits of the phenomenon, says a new report by the African Development Bank and the World Bank.

The report, Leveraging Migration for Africa: Remittances, Skills, and Investments, presents data from new surveys. The report finds evidence that suggest migration and remittances reduce poverty in the origin communities.

Remittances lead to increased investments in health, education, and housing in Africa. Diasporas also provide capital, trade, knowledge, and technology transfers.

“Migration pressures will only rise in the future as a result of demographic changes of rising population in Africa and falling labor forces in Europe and many developed countries,” said Hans Timmer, director of development prospects at the World Bank.

“Therefore, adapting policy responses to demographic forces and crafting multilateral arrangements for managing future migration is essential.”

Two-thirds of migrants from Sub-Saharan Africa, particularly poorer migrants, go to other countries in the region, while more than 90% of migrants from North Africa have moved outside the African continent.

The top destinations for African migrants are France (9% of total emigrants), Cote d’Ivoire (8%), South Africa (6%), Saudi Arabia (5%), and the United States and the United Kingdom (4% each).

Shantayanan Devarajan, chief economist of the Africa region at the World Bank, said “Migration of skilled labor is particularly high in small and low-income African countries, which already have low levels of human capital. Fragile and post-war countries face even bigger challenges because of the flight of human capital. African governments and policy makers should focus on increasing education and skill levels and establishing an environment in which high-skilled workers have productive opportunities at home.”

“African governments need to strengthen ties between diasporas and home countries, protect migrants, and expand competition in remittance markets,” said Dilip Ratha, main author of the report and lead economist at the World Bank. “Otherwise, the potential of migration for Africa remains largely untapped.”

One innovation worth considering are diaspora bonds, which are sold by governments or private companies to nationals living abroad. These bonds have already been successful in tapping into assets of Israeli and Indian citizens living abroad.

According to Ratha¸ Sub-Saharan African countries can potentially raise $5–$10bn a year in diaspora bonds. Countries with large diasporas in high-income countries that can potentially issue diaspora bonds include Ethiopia, Ghana, Kenya, Liberia, Nigeria, Senegal, Uganda, and Zambia in Sub-Saharan Africa and Egypt, Morocco, and Tunisia in North Africa.

“African banks can improve their access to international capital markets by issuing bonds that are securitized by future remittance inflows,” said Mthuli Ncube, Chief Economist of the African Development Bank.

“The African Development Bank, the World Bank and bilateral donors can play a significant role in facilitating remittance securitization and mitigating the risks to African countries of issuing these remittance-backed bonds. Efforts can include technical assistance in project design and creditworthiness analysis, prudential debt management, and helping African countries obtain sovereign ratings.”

Recorded remittances into Africa, which grew fourfold between 1990 and 2010 to reach nearly $40bn in 2010, are the continent’s largest source of foreign capital after foreign direct investments.

Recent surveys show that investments such as land purchases, building a home, and starting a business were the highest uses of remittances sent home by African diaspora.

As a share of total investment, these represented 36% in Burkina Faso, 55% in Kenya, 57% in Nigeria, 15% in Senegal, and 20% in Uganda.

Education was the second-highest use of remittances from outside Africa into Nigeria and Uganda, the third highest into Burkina Faso, and the fourth highest into Kenya.

However, official remittance flows to Africa are significantly underestimated, with only about half of the countries in Sub-Saharan Africa collecting and reporting remittance data with any regularity.

The report finds it is still very expensive to send remittances to African countries, particularly within Africa. According to Ratha, these high costs encourage the use of informal channels and are an unnecessary burden for African migrants and remittance recipients.

DHL delivers fast-lane logistics to F1

Johannesburg - Global logistics provider, DHL, has announced that it will continue with its commitment to support the logistics needs of Formula 1 as the official logistics partner.

The company says it will support F1 in delivering equipment for the 2011 series.

“The 2011 Formula 1 season starts its engines in Melbourne this weekend and we are proud to be the Official Logistics Partner of Formula 1, ensuring that the organization and teams have everything in place when they need it,” says Ken Allen, CEO of DHL Express.

“Success in Formula 1 racing depends on a perfect mix of skills, commitment and a can-do attitude of trained and highly-capable professionals. The same applies to logistics.”

With its global customs clearance expertise, DHL simplifies the logistics of Formula 1 by ensuring fast-lane import of racing cars as well as their replacement parts – engines, tires and spares.

It also handles fuel requirements and additional freight, such as TV equipment, VIP tents, computer equipment, laptops as well as radio sets and headphones for communication purposes. The deliveries also include furnishings for the Formula One Paddock Club, which is the exclusive VIP hospitality for Formula 1.

DHL says it has specialized units to coordinate the transport of cars, equipment and fuel to the Formula 1 tracks around the world by air, sea and land – for both test sessions and GPs.

"DHL also has a 24-hour service point at the racetrack. The on-site team offers round-the-clock service for urgent shipments, customs clearance as well as shipments of hazardous goods and temperature controlled items. The teams can utilize DHL’s vast global network to pick up and deliver at any race circuit in the world," says the company.

In addition to providing logistics support, it said it also awards Formula 1 drivers with the Fastest Lap trophy, which recognizes the driver with the greatest number of fastest laps at the end of each season.

DHL is a global market leader in the logistics industry and commits its expertise in international express, air and ocean freight, road and rail transportation, contract logistics and international mail services.

It is a global network of more than 220 countries and territories with about 275 000 employees worldwide.

The company, is part of Deutsche Post DHL and the Group generated revenue of more than €51bn in 2010.

South Africa finally joining the BRIC

What earns South Africa the qualification to be invited to join the BRIC countries? It is one question that has left socio-economic analysts buffled and some academics black and blue.

The size of its economy comes barely close to that of the so called “Big Four”, yet it has received an official invite to share whatever spoils are offered on the top table.

One would have been forgiven to believe that Mexico or North Korea was closer to the BRIC doors than South Africa because of their nominal GDPs.

The Bric club, comprised of the world’s fastest growing economies, include Brazil, Russia, India and China stand reflective of their progressive economic policies and their governments’ steadfast resolve to find workable economic solutions suitable to their countries and their people.

Despite China’s not so good human rights record, it has soldiered ahead and is now the second largest economy in the world, after the United States of America – not far behind!

Brazil, a country composed of 26 States and one federal district, that contains the Capital city, Brasilia, is the largest country in South America, both geographically and by population.

It remains the largest national economy in Latin America and the world’s 8th largest economy at market exchange rates and, according to the International Monetary Fund and the World Bank, it is the world’s 9th largest in terms of purchasing power parity (PPP).

Brazil’s population as recorded in 2008 stood at 190 million people with about 83% defined as urban. Its GDP (PPP) stands at $10.200, placing it at number 64 in the world according to the World Bank.

Russia on the other hand has a market economy with enormous natural resources, particularly oil and natural gas. It has the 10th largest economy in the world by nominal GDP and the 6th largest by purchasing power parity (PPP).

By the end of 2008, its annual average growth rate for the 9th consecutive year was at 7%. It managed to drive effective poverty eradication programmes that saw the middle class grow from just 8 million persons in 2000 to 55 million persons in 2006. It is a country with an estimated 13% of its people living below the poverty line.

Russia’s population in January 2010 stood at 142 million people with 73% living in urban areas.
India, consisting of 28 States and 7 union territories, it is the 7th largest country by geographical area, with a whooping population of over 1.2 billion people.

According to the IMF, India's nominal GDP stood at US$1.3 trillion, which makes it the 11th economy in the world, corresponding to a per capita income of US$1 000. If its purchasing power parity (PPP) is taken into account, India's economy is the 4th largest economy in the world at US$3.6 trillion.

The country ranks 142th in nominal GDP per capita, with an average annual GDP growth rate of 5.8% for the past two decades. It is one of the fastest growing economies in the world. The country’s annual growth has averaged 7.5% in the last few years.

The people’s republic of China, generally known as China is the second largest country in the world by land area with a whooping population of 1.3 billion people and 22 provinces.

The inaugural Global Wealth Report by Credit Suisse Research Institute in mid-2010 stated China is expected to overtake Japan as the second wealthiest country in the world by 2015 ($35 trillion) due to its rapid economic growth and strong domestic consumption.

It is the world's second largest trading power behind the US with a total international trade of US$2.21 trillion. Its foreign exchange reserves have reached US$2.4 trillion, making it by far the world's largest.

The country owns an estimated $1.6 trillion of US securities. With US$801.5bn in US Treasury bonds, is the largest foreign holder of US public debt. It remains the world's third largest recipient of inward foreign direct investment (FDI) by attracting US$92.4bn in 2008 alone, while the country itself increasingly invests abroad with a total outward FDI of US$52.2bn in 2008 alone becoming the world's sixth largest outward investor.

China has the world's second largest nominal GDP at 34.06 trillion Yuan (US$4.99 trillion), although its per capita income of US$3,700 is still low and puts the PRC behind roughly a hundred countries. The primary, secondary and tertiary industries contributed 10.6%, 46.8%, and 42.6% respectively to the total economy in 2009.

If its purchasing power parity is taken into account, the PRC's economy is second only to the US at US$9.05 trillion corresponding to US$6 800 per capita.

South Africa, by invitation will soon be added to the club commonly known as Bric. It is a country with 9 provinces and 48 million people and unemployment topping 25%.

South Africa is a middle-income country with an abundant supply of resources, well-developed financial, legal, communications, energy, and transport sectors, a stock exchange that ranks among the top twenty in the world. It remains the largest energy producer and consumer on the continent, and ranked 25th in the world in terms of GDP (PPP) as of 2008.

In a 2010 survey, South Africa was found to have the second most sophisticated financial markets and the second-lowest effective business tax rate (business taxes as a percentage of company profits), out of 14 surveyed countries.

The country was also ranked 4th for ease of accessing capital, 4th for cost of capital, 6th for its transportation infrastructure (considered better than that of China, India, Mexico, Brazil and Poland, but behind that of Korea and Chile), and seventh for foreign direct investment as a percentage of GDP: in 2008 it was over 3% of the GDP.

However, for availability of manual labour, South Africa is ranked last, and is also the only country of the 14 whose labour force shrunk in 2008 (by over 3%, compared to India, where the workforce grew by almost 3%). The cost of manual labour is ranked 5th out of 11 countries, at about the same level as South Korea, but more expensive than Brazil, India and China. South African factory workers are also better paid than those of Brazil, China, India, Poland and Mexico.

South Africa ranks poorly when it comes to education; only India fares worse when it comes to the percentage of matriculants that moved onto higher education in 2007. In Brazil, 30% of matriculants graduated to tertiary institutions in 2007, and the figure was over 50% in Chile and over 90% in Korea, compared to just 15% in South Africa.

The question is where do these matriculants go after finishing school as the country is said to be running short of manual labour and ranked last in that regard?

South Africa is far behind other emerging markets, such as India and China because of several factors that include the size of the country and its population. Despite the fact that it does posses a huge domestic consumer base, it is in no way comparable to the other Bric club members whose populations top 100 million people.

The country has an inadequate, if not deficient education system and, as a consequence, an acute shortage of skilled manpower exacerbated by severe brain drain and an immigration system that does not promote the importation of those scarce skills.

A leading economist with the Public Investment Corporation (PIC), the SA government’s investment vehicle, once said that SA must make full use of the SADC countries and further open up ways of investing time and resources in its neighbouring countries. Through working bilateral relations, and other trade agreements, SA can create a bigger consumer pool than it currently has.

It has agreements with its neighbours that have never been effectively implemented. Opening up debate within the SADC on the manufacture, movement of finished goods, services and raw materials will certainly help.

Labour has been in the lead crying out loud about the strong and volatile currency which it says deters investors and makes exports less competitive.

The infrastructure, though far better than in the rest of Africa, suffers from severe bottlenecks, including power shortages. The national electricity generating and supply company, Eskom says it will take a lot of effort and teamwork to avoid load shedding in 2011, indicating a severe lack of upgrade and investment in electricity generation.

When President Jacob Zuma visited China in August 2010, with the largest business delegation ever, it was SA’s hope that this will warm up political and economic relations between the two countries.

China has been a very important political partner to SA. With the establishment of diplomatic relations between the two in 1998, the relationship has deepened, both economically and politically.

Politically, SA regards China as an important player in global debates characterizing a shift to multipolarity, while China regards SA as the gateway to Africa economically, and also an agent in resolving African disputes with a “look east policy” approach.

Academics and experts suggest that China is in a league of its own compared to the other BRIC countries.

David Rothkopf, president and CEO of Garten Rothkopf, an international advisory firm specializing in transformational global trends wrote in Foreign Policy, a bimonthly America magazine, that "without China, the BRICs are just the BRI, a bland, soft cheese that is primarily known for the wine that goes with it. China is the muscle of the group and the Chinese know it. It wields effective veto power over any BRIC initiatives because without them, who cares really?”

He says they are the one with the big reserves and have the biggest potential market.

Deutsche Bank Research said in a report that "economically, financially and politically, China overshadows and will continue to overshadow the other BRICs."

The report also added that China's economy is larger than that of the three other BRIC economies combined and moreover, its exports and its official reserve holdings are more than twice as large as those of the other BRICs combined.

Hence, this invitation is widely viewed as a resultant of warm relations, politically, between China and SA.