Economy | Business Politics Rich People

Tanzania: President @SuluhuSamia Won Accolades From @AlikoDangote, Africa’s richest man, and fellow billionaire Mohammed Dewji (@moodewji) For Her Business-friendly Noises. But Her Government’s Crackdown On Opposition Leaders is Raising Some Concern.

👉Economy could get boost from $30 billion natural gas project.
👉The government still has much work to become business friendly.

Tanzania’s new President Samia Hassan won accolades from Aliko Dangote, Africa’s richest man, and fellow billionaire Mohammed Dewji for her business-friendly noises. But her government’s crackdown on opposition leaders this week is raising some concern.

Since she took office on March 19, Hassan — Africa’s only female head of government — has signaled a new business-friendly era, pledging to reverse her predecessor’s policies that antagonized investors and hit foreign investments. Hassan, 61, promised to dismantle barriers put up by former President John Magufuli and resurrect a $30 billion natural gas project, prompting Dangote and Dewji to say Tanzania seems to be opening for business again.

On Monday, however, Tanzanian authorities dragged Freeman Mbowe, the leader of the main opposition party, to court over terrorism and economic sabotage charges. That came after he and other party officials were arrested the week before, just hours before they were to hold a meeting on constitutional reform — demanding a reduction in presidential powers and amendments to the electoral process. The arrests cast a shadow over what was turning into a post-Magufuli, good-news story for Tanzania.

The “arrest will obviously give ESG-conscious investors some cause for concern,” said Connor Vasey, an analyst at Eurasia Group. “That said, Hassan has publicly discarded the constitutional debate in favor of focusing on economic reforms. The lack of policy distraction could be taken as a positive by some in the investment/business community.”

Like Dangote and Dewji, investors began to give Tanzania another look after the death on March 17 of Magufuli, who tore up agreements his predecessors signed with companies, demanded usurious taxes from businesses and denied the existence of Covid-19 in his country. Foreign direct investment as a percentage of gross domestic product steadily declined from 2015. Nicknamed the “Bulldozer,” for bluntly speaking his mind and his uncompromising stance on corruption, Magufuli’s reign saw Tanzania slip 10 notches in the World Bank’s Ease of Doing Business rankings to 141 out of 190 countries last year.

Hassan has swiftly moved to fast-track several large projects that had been stalled. They include the liquefied natural gas terminal planned by Equinor ASARoyal Dutch Shell PlcExxon Mobil Corp. and other partners and a $3 billion joint venture with China’s Sichuan Hongda Co. for an iron ore and coal mine. In June, she said her government has resumed talks on a planned $10 billion port project backed by China, suspended by Magufuli in a disagreement over terms.

“We are reviewing around 88 laws that were identified as not being business friendly,” Minister for Industry and Trade Kitila Mkumbo said in an interview. “There is concern that there are too many regulatory authorities in this country. We are looking at the possibility of reducing them. We want civil servants to see themselves as business facilitators rather than business controllers, and that is really a question of changing mindsets.”

Hassan’s moves are aimed at luring sorely needed investments to add jobs in a country where 44% of the people are below the age of 15 years. Her decision to revive the gas project could make it one of Africa’s largest producers of the cleaner energy by 2028, with the central bank estimating that the start of the construction of the LNG terminal in 2023 could add 2 percentage points to economic growth.

“Hassan is promising a transformative agenda in economic policy after five years of economic quagmire and lack of clarity in economic philosophy” said Bravious Kahyoza, an economics lecturer and analyst based in Dar es Salaam.

For all her moves to reverse Magufuli’s economic legacy, Hassan seems to be doing little to turn her back on the political-freedom constraining steps taken by her predecessor. Magufuli’s rule resulted in the erosion of Tanzania’s civil society, prompting comparisons with neighboring Rwanda’s President Paul Kagame, who while earning praise for stamping out graft, quelled any form of dissent.

Hassan, who like Magufuli, comes from the ruling Chama Cha Mapinduzi party, is close to Magufuli’s predecessor Jakaya Kikwete, who conceived, initiated and passed some of those restrictive laws.

“She’s had this opportunity to redress how regressive Magufuli’s presidency was,” said Oryem Nyeko, a researcher at Human Rights Watch in Uganda. “The arrest and the timing of it really just doesn’t look good as far as the hopes that many people had for change. Attacks on opposition was a major part of Magufuli’s presidency. It appears that she’s following in that direction.”

Tanzanian government spokesman Gerson Msigwa dismissed any suggestion that Mbowe’s arrest was politically motivated, saying everyone “will be subjected to the law if they are suspected and accused of criminal conduct.”

The African Commission on Human and Peoples’ Rights voiced its concern, saying in a statement that the “lack of strict adherence to the right to due process of the law enunciated in Article 7 of the African Charter leads to abuse of the right to be free from arbitrary arrest and creates an atmosphere of fear on the part of opposition parties.’’

Meanwhile, Hassan’s ties with Kikwete could give the former president and his confidants an outsize influence over economic decision-making, Eurasia Group’s Vasey said. On his watch, the country recorded some impressive FDI growth figures and had a much more cordial public-private sector relationship, he said.

“She’ll be balancing Kikwete and Magufuli-era policies and it’s unclear how the private sector will ultimately digest that,” Vasey said.

Tanzania’s economy has fared better than most in the region since the onset of the pandemic, with the the International Monetary Fund estimating it grew by 1% last year when most economies shrank, while forecasting it to expand by 2.7% this year. The government put last year’s growth at 4.8%. That’s still far short of the near 7% growth rates it enjoyed over much of the last decade.

For now, Hassan — who was educated at Mzumbe University (then called Institute of Development Management) and the University of Manchester — seems to be taking economy-bolstering steps. In addition to seeking the resurrection of projects, she has started vaccinating her people and has approached the IMF for an emergency loan to boost Africa’s third-largest gold producer and top exporter of cashew nuts.

“We have more open discussions and more willingness from the government to work collaboratively,” said Jens Reinke, the IMF’s resident representative in Dar es Salaam, the commercial capital. “There are a lot of indicators that point the right way.”

While the LNG project won’t be a silver bullet, it would help shore up government finances, Reinke said. The planned LNG facility would be about 130 kilometers (80 miles) from a similar project in neighboring Mozambique, where TotalEnergies SE has indefinitely halted work because of an escalation in insurgency linked to Islamic State. That may provide Tanzania the opportunity to tap a fast-shrinking window in a world that’s increasingly moving away from fossil fuels, according to Shani Smit, an economist at NKC Africa Economics in Paarl, South Africa.

Equinor said it was encouraged by Hassan’s recent comments on the LNG sector, and was ready to start negotiations on what’s known as a host government agreement that’s critical for the project to proceed. Shell said it’s pleased the government is prioritizing the project, and is looking forward to more talks.

“There is still a lot of work to do and a long way to go,” Ola Morten Aanestad, an Equinor spokesman, said. “Before we can progress this project any further, we need to get a commercial, fiscal, and legal framework in place that demonstrates a viable business case.”

Source: Bloomberg

Celebrities Rich People

Rihanna Is Now Officially A Billionaire

How the singer became the richest female musician on the planet. Hint: it wasn’t performing.

When Robyn Fenty, known to the world as Rihanna, launched Fenty Beauty in 2017, she sought to create a cosmetics company that made “women everywhere (feel) included.” A perhaps unintended consequence: The beauty line has helped her enter one of the world’s most exclusive ranks: Billionaire.

Rihanna is now worth $1.7 billion, Forbes estimates—making her the wealthiest female musician in the world and second only to Oprah Winfrey as the richest female entertainer. But it’s not her music that’s made her so wealthy. The bulk of her fortune (an estimated $1.4 billion) comes from the value of Fenty Beauty, of which Forbes can now confirm she owns 50%. Much of the rest lies in her stake in her lingerie company, Savage x Fenty, worth an estimated $270 million, and her earnings from her career as a chart-topping musician and actress.

While Barbados-born Rihanna isn’t the only celebrity to capitalize on her social media presence —she has 101 million followers on Instagram and 102.5 million on Twitter—to build a beauty brand, she is the most successful beauty entrepreneur to do so. Fenty Beauty, which is a 50-50 joint venture with French luxury goods conglomerate LVMH (run by Bernard Arnault, the world’s second richest person), launched in 2017 with the goal of inclusivity. Its products come in a diverse range of colors—foundation is offered in 50 shades, including harder-to-find darker shades for women of color—and are modeled in its advertising by an equally diverse group of people. 

Available online and at Sephora stores, which are also owned by LVMH, the products were an instant success. By 2018, its first full calendar year, the line was bringing in more than $550 million in annual revenues, according to LVMH, beating out other celebrity-founded brands like Kylie Jenner’s Kylie Cosmetics, Kim Kardashian West’s KKW Beauty and Jessica Alba’s Honest Company.

“A lot of women felt there were no lines out there that catered to their skin tone. It was light, medium, medium dark, dark,” says Shannon Coyne, cofounder of consumer products consultancy Bluestock Advisors. “We all know that’s not reality. She was one of the first brands that came out and said ‘I want to speak to all of those different people.’”

Rihanna (R) and A$AP Rocky are seen filming a music video in the Bronx on July 11, 2021 in New York City.
Rihanna (R) and A$AP Rocky are seen filming a music video in the Bronx on July 11, 2021 in New York City. RAYMOND HALL/GC IMAGES

While cosmetics sales slowed during the pandemic, beauty companies are worth as much as ever. Stocks of larger beauty conglomerates like Estee Lauder and L’Oreal have bounced back, reaching all-time highs and trading at impressive 7.5 (or more) times annual revenues. Meanwhile independent brands like Beautycounter and Charlotte Tilbury inked deals with investment firms earlier this year at billion-dollar valuations.

That is good news for Rihanna. Thanks to the impressive multiples at which beauty companies are trading, Fenty Beauty is worth a conservative $2.8 billion, Forbes estimates. And all signs point to the company continuing to grow. In its annual report for 2020, LVMH said Fenty Skin, which launched last year, was off to a “very promising start” and “generated unprecedented buzz,” and that Fenty Beauty “maintained its appeal as a premier make up brand.”

Fenty Beauty isn’t Rihanna’s only billion-dollar brand. In February her lingerie line Savage x Fenty raised $115 million in funding at a $1 billion valuation. The company, which launched in 2018 as a joint venture with TechStyle Fashion Group, counts blue-chip investors like Jay-Z’s Marcy Venture Partners and private equity firm L. Catterton (in which Bernard Arnault is an investor) as shareholders. Rihanna maintains a 30% ownership stake, Forbes estimates. The latest round of funding will reportedly be used for customer acquisition and retail expansion. 

Not that everything Rihanna touches turns to gold.  In February, LVMH and Rihanna confirmed in a statement to Forbes that they had shut down their other venture, a high-end fashion and accessories house also called Fenty. Launched in 2019, Fenty sought to extend Rihanna’s brand of inclusivity and offer styles in a range of sizes. But like many luxury fashion brands, the high-priced line suffered during the pandemic, releasing its last collection in November 2020.

The only complaint some fans may have about her career as a fashion and beauty mogul? It keeps her busy. The singer, who used to release an album almost every year, hasn’t released a new album since 2016’s Anti. 

From a financial perspective, that may be just fine: “She is creating a brand outside of herself. It’s not just about Rihanna,” says consultant Coyne. “Even if you don’t like her music, she’s created a real style in the fashion and beauty space.”

SOURCE: Forbes