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South Africa to use procurement budget “strategically” to transform economy: Gigaba

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JOHANNESBURG (Reuters) – South Africa’s Finance Minister Malusi Gigaba said on Monday the treasury would use its 500 billion rand ($40 billion) annual procurement budget to transform the economy and give more support to black-owned businesses.

“The strategic use of state procurement is an important lever to grow black business,” Gigaba told a business dinner in Johannesburg. “The state getting value for money is important but this aim should be considered in conjunction with our economic history.”

Gigaba, appointed after President Jacob Zuma sacked his predecessor, has backed Zuma’s aim of redistributing wealth to poor blacks but said this would not involve a shift away from the fiscal consolidation outlined in recent budgets.

 

(Reporting by Mfuneko Toyana; Editing by Louise Ireland)

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Nigerian oil workers extend Exxon Mobil strike to Chevron, Agip and Shell

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ONITSHA, Nigeria (Reuters) – Nigerian workers from an oil labour union have extended a strike to oil majors Chevron, Shell and Eni subsidiary Agip in protest over the sacking of members from Exxon Mobil Corp, the union’s general secretary said on Tuesday.

Lumumba Okugbara, of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said union representatives would meet Exxon Mobil management on Tuesday for talks. Members of the union began a strike at Exxon Mobil last week.

 

(Reporting by Anamesere Igboeroteonwu; Writing by Alexis Akwagyiram; Editing by Mark Potter)

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Vodafone’s South African arm Vodacom takes over $2.6 bln stake in Kenya’s Safaricom

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By Nqobile Dludla

JOHANNESBURG (Reuters) – UK-based telecoms group Vodafone moved to consolidate two of its African interests on Monday with the transfer of a 35 percent stake in Kenya’s Safaricom to majority-owned South African subsidiary Vodacom.

The 34.6 billion-rand ($2.6 billion) deal, structured as an acquisition of the stake by Vodacom in return for new shares, is the latest move by Vodafone’s chief executive Vittorio Colao to rationalise the group’s disparate portfolio of interests around the world.

Colao said last month that the company would fold some of its operations in sub-Saharan Africa into Vodacom as part of a “single, coordinated Africa strategy”.

He told South Africa’s Business Day publication that it made sense to consolidate operations in Vodacom given the group’s “scale, advancement and competence in technology”.

The Safaricom deal also simplifies the management of two of Vodafone’s biggest money-spinners in sub-Saharan Africa and promises to speed up the roll-out across the continent of mobile money transfer service M-Pesa, which was launched by Safaricom in 2007.

“Vodacom Group sees scope to create further value through closer cooperation between both companies, including replication of Safaricom’s success in M-Pesa in Vodacom Group’s other territories,” Vodacom’s chief executive Shameel Joosub said.

Under the deal Vodacom said it will acquire a 87.5 percent shareholding in Vodafone Kenya, equivalent to a 35 percent indirect interest in Safaricom, in return for issuing 226.8 million new shares to Vodafone, raising the British company’s stake in Vodacom from 65 percent currently to 69.6 percent.

Vodafone will retain a 12.5 percent interest in Vodafone Kenya, equivalent to a 4.99 percent stake in Safaricom, the companies said.

For Vodacom, which also has networks in Tanzania, Democratic Republic of Congo, Mozambique and Lesotho, the transaction takes it into a market where Safaricom has a 71 percent share and demand is still growing for mobile services, including M-Pesa.

POLITICAL UPHEAVAL

The sale could be the first step for Vodafone, which also operates in Ghana and Ethiopia, to transfer more of its African assets into Vodacom.

“I think this is about simplification. It has been talked about for a long time,” said Macquarie Research analyst Guy Peddy.

It also shows a commitment by Vodafone to Vodacom, despite the political upheavals that have rocked South Africa in recent months.

South Africa lost its highly coveted sovereign investment grade credit ratings from two rating agencies last month after a cabinet shake-up that saw the sacking of respected finance minister and sparked a selling frenzy in bonds, stocks and the rand currency.

“Vodafone always takes a long-term view of politics and doesn’t really get into the political environment,” Joosub told Reuters.

“Although there would be concern around things like downgrades, there is always a long-term approach to South Africa and overall positive sentiment.”

Shares in Vodafone closed up 0.02 percent at 210.9 pence, while Vodacom’s share price was up 0.2 percent at 152.8 rand and Safaricom was up 1.2 percent at 20.50 shillings.

Safaricom, which is 35 percent owned by Kenya’s government, said in a statement the deal promoted the continued successful expansion of the company as well as the opportunity to take M-Pesa into other African markets.

Safaricom made a success of M-Pesa in Kenya whereas Vodacom’s launch of M-Pesa in Tanzania in 2008 and South Africa in 2010 disappointed.

“Vodacom’s first attempt at a money transfer business wasn’t very successful, but this deal could lead to better results,” Morning Star analyst Allan Nichols said.

Completion of the deal, which is subject to shareholders’ approval, is expected in August.

($1 = 13.1750 rand)

(Additional reporting by Duncan Muriri in Nairobi and Paul Sandle in London; Editing by Greg Mahlich)

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Lonmin to move Johannesburg office to Marikana operations

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LONDON (Reuters) – Platinum producer Lonmin will move its head offices from Johannesburg to its Marikana operations in South Africa in a move that will save it “tens of millions” of rand, Chief Executive Ben Magara said on Monday.

“For me it’s really about getting closer to the operations and giving support to our management teams,” Magara said on a conference call following the release of its first-half results.

 

(Reporting by Zandi Shabalala; editing by Jason Neely)

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Sibanye plans $1 bln rights issue to refinance Stillwater acquisition

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JOHANNESBURG (Reuters) – South African-based precious metals producer Sibanye Gold plans to raise $1 billion through a rights issue to repay a portion of a $2.65 billion loan facility it used to acquire U.S. platinum producer Stillwater.

Sibanye, a Gold Fields spin-off, has been expanding out of gold and now South Africa, reducing its reliance on bullion and exposure to the political and social risks of its home base.

“A further announcement setting out the full terms of and finalisation information regarding the rights offer is currently scheduled to be released on Thursday, 18 May,” Sibanye said in a statement.

It said all information with regards to the rights offer will be available on its website (https://www.sibanyegold.co.za).

 

(Reporting by Ed Stoddard; Editing by Greg Mahlich)

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South Africa’s Eskom says Molefe reinstated as chief executive

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By Nqobile Dludla

JOHANNESBURG (Reuters) – Eskom’s former chief executive Brian Molefe will return to his job next week, the South African power utility said on Friday, about five months since he stepped down after being implicated in a report by the anti-graft watchdog into alleged influence-peddling.

Molefe stepped down in November last year after a report by the Public Protector, a constitutionally mandated corruption watchdog, raised questions over coal deals between Eskom and a company controlled by the Gupta family.

Molefe has denied any wrongdoing.

His return follows a refusal by Public Enterprises Minister Lynn Brown to approve Eskom’s board’s 30 million rand ($2.24 million) pension payout for Molefe. Brown asked Eskom to find an “appropriate pension proposal.”

“Most of the options that were discussed were not mutually agreeable and the board decided that it was actually optimum to rescind its decision to grant him early retirement,” said Khulani Qoma, spokesman for Eskom’s board. “By virtue of that, then legally … you need to then proceed and reinstate him.”

Molefe was widely touted to replace Pravin Gordhan as finance minister but lost out to Malusi Gigaba in a cabinet shake-up late March.

His first stint at Eskom began in April 2015, when he was drafted in from state rail freight firm Transnet to stabilise the utility, which at the time was battling power shortages.

 

 

 

($1 = 13.4182 rand)

 

(Additional reporting by Mfuneko Toyana, editing by Larry King and Jane Merriman)

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Oil workers go on strike at Exxon Mobil in Nigeria: union

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LAGOS (Reuters) – Nigerian workers at U.S. oil major Exxon Mobil Corp have gone on strike in protest over the sacking of workers, oil labour union officials said on Thursday.

Nigerian labour unions have criticised oil companies for sacking workers in the last few months and held a number of strikes.

Abel Agarin, who chairs the Lagos zone of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said members of his union were on strike in protest at the sacking of 150 workers in December. He said 82 were PENGASSAN members.

“We want them to be brought back and if that is not possible we want a proper severance package for them,” said Agarin, who led around 50 protesters in the commercial capital.

PENGASSAN said strikes were being held in Lagos, Bonny, Akwa Ibom and Port Harcourt.

A spokesman for Exxon Mobil said by email that there were “no impacts” on oil production.

Two oil traders said it was too early to say whether the strikes would have an impact on production.

Strikes by Exxon workers in Nigeria at the end of 2016 did impact output, leading to weeks-long loading delays.

 

(Reporting by Tife Owolabi, Libby George and Alexis Akwagyiram; writing by Ulf Laessing and Alexis Akwagyiram; editing by Jason Neely)

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South Africa regulator to investigate Eskom over unsigned deals

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CAPE TOWN (Reuters) – South Africa’s energy regulator has agreed to investigate power utility Eskom’s refusal to sign power purchase agreements with independent power producers, the South African Wind Energy Association (SAWEA) said on Thursday.

SAWEA last October asked energy regulator NERSA to investigate Eskom’s unwillingness to finalise agreements which it said had delayed 2,942 megawatts in new solar and wind projects.

“We have had confirmation from NERSA that an expedited investigation into whether Eskom is in contravention of its licence, has now commenced,” said Brenda Martin, chief executive of SAWEA.

Some of the projects have been waiting for financial closure for more than two years and SAWEA estimates they would inject some 58 billion rand ($4.33 billion) of investment into the economy.

“Our primary intention is to achieve financial closure of power purchase agreements. It remains our hope that Eskom will comply with the legal framework for power purchase, so that penalties do not need to be imposed on Eskom,” Martin said.

An Eskom spokesman was not available for immediate comment.

($1 = 13.3800 rand)

 

(Reporting by Wendell Roelf; editing by Tiisetso Motsoeneng and Jason Neely)

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Zambia President steps into row with First Quantum Minerals

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LUSAKA (Reuters) – Zambia’s president Edgar Lungu has called for an out of court settlement with First Quantum Minerals, which is being sued for $1.4 billion by a state-owned firm, the presidency said on Thursday.

First Quantum asked a Zambian court in February to dismiss the suit from Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH), which is 77 percent state-owned and holds minority stakes in most of the country’s copper mines.

“The president decided that the finance minister leads a government team to engage First Quantum for a speedy and amicable conclusion of this matter,” presidential spokesman Amos Chanda said.

“The government team includes the minister of mines and should start work by next week so that we can quickly have an amicable settlement as directed by the president,” he said.

Zambia is Africa’s second-largest copper producer and differences with mining companies over taxes, electricity prices, environmental concerns and labour matters often arise.

The $1.4 billion claim by ZCCM-IH includes $228 million in interest on $2.3 billion of loans that it said First Quantum wrongly borrowed from the Kansanshi Copper Mine, as well as 20 percent of the principal amount, or $570 million.

ZCCM-IH said in papers filed in the Lusaka High Court on Oct. 28, 2016 that First Quantum used the money as cheap financing for its other operations.

First Quantum says the loans were at a fair market rate.

Chanda said another team headed by the minister of energy would engage mining companies, including First Quantum Minerals, regarding a proposed increase in electricity prices.

Zambia said in April it plans to introduce a flat tariff of 9.30 U.S. cents/kilowatt hour (kWh) backdated to January for mining companies, rather than individually negotiated rates that have averaged 6 U.S.

 

(Reporting by Chris Mfula; editing by David Clarke)

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Nigeria should simplify taxes, cut fees to boost tech sector: Google

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By Alexis Akwagyiram

LAGOS (Reuters) – Nigeria’s government should simplify taxes and reduce fees involved in laying fibre optic cables to encourage development of infrastructure for the technology industry, Google’s manager in the West African country said on Tuesday.

Juliet Ehimuan-Chiazor told Reuters boosting the technology industry would help diversify Nigeria’s oil-dependent economy, the largest in Africa and which is now in its second year of a recession caused mainly by low crude prices.

The Budget and National Planning Ministry said in March the government should encourage local production of technology hardware to reduce dependence on imports and generate foreign exchange. The government aims to create 2.5 million new technology jobs in 2017-2020 via a state-run training programme.

“The private sector can play a very strong role,” Ehimuan-Chiazor said, adding that internet service providers regularly complained that multiple taxes at the federal and state level raised the cost of expanding the required infrastructure.

“Where the government can help is just removing some of those obstacles – for example, bringing down right of way fees and removing this challenge around multiple taxation,” she said.

Right of way fees are the charges paid when securing permission to lay cables. A reduction of fees by Lagos state government helped bring fast broadband to Yaba, a district of commercial capital that is now Nigeria’s technology hub.

Ehimuan-Chiazor said Google had laid fibre optic cables in Uganda’s capital Kampala and in Abidjan in Ivory Coast, but said it had no similar plans in Nigeria.

A spokesman for the Communications Ministry could not immediately be reached for comment.

 

(Editing by Edmund Blair)

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