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Zimbabwe’s Mugabe is gone, but political kow-towing still abounds

Comments (0) Actualites, Africa, Politics

HARARE (Reuters) – Robert Mugabe’s 37-year rule may be over, but a culture of political fawning by the Zimbabwean state media and fear of those in authority still flourishes.

The Herald newspaper and the Zimbabwe Broadcasting Corporation – state and ruling ZANU-PF party mouthpieces – routinely heaped lavish praise on the 93-year-old Mugabe and his wife Grace in sycophantic articles and commentaries.

With the sudden change of guard, Zimbabwe’s official media is having a hard time shaking off old habits and is now tailoring its eulogies to fit Emmerson Mnangagwa, Mugabe’s successor.

State radio intersperses programmes with martial music from the war of independence in honour of Mnangagwa’s war veteran allies and the army.

One morning talk show host spoke glowingly on Tuesday of seeing the presidential motorcade at 0645 GMT. This, he said, signalled the new leader was keeping his word to hit the ground running.

“The president is showing the way so get to work on time,” he said.

Mnangagwa, 75, a close Mugabe ally for several decades, took power after the military takeover on Nov. 15 following a succession battle that split the ruling ZANU-PF party.

“Comrade Emmerson Dambudzo Mnangagwa, (is) a true son of the soil who sacrificed his entire life to serving Zibmabwe as evidenced by the role he played in the liberation struggle as well as after independence up to this day. We are blessed to have you as our leader,” an advertisement by the ministry for women affairs, gender and community development gushed in the Herald.

 

PERSONALITY CULTS

Not all within the ruling party are comfortable with the trend though.

Justice Wadyajena, a Mnangagwa admirer and outspoken ZANU-PF parliamentarian, reminded his Twitter followers of the dangers of personality cults.

“Those falling all over each other pledging loyalty to President ED are just brutes playing meek,” Wadyajena wrote, referring to Mnangagwa by the initials of his first and middle names.

“If you really are principled, there’s no reason to bootlick, your conduct should speak for itself. We’ve seen the danger of personalizing governance and gatekeeping a NATIONAL FIGURE!!”

Mnangagwa, who served Mugabe loyally for 52 years, is expected to form a new cabinet this week. Zimbabweans are watching to see if he breaks with the past and names a broad-based government or selects figures from the Mugabe era’s old guard.

 

 

(By Emelia Sithole-Matarise. Additional reporting by MacDonald Dzirutwe; Editing by Richard Balmforth)

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S.Africa’s Zuma calls for action after S&P downgrade, rand up on Moody’s reprieve

Comments (0) Actualites, Africa, Economy

By Olivia Kumwenda-Mtambo

JOHANNESBURG (Reuters) – South African President Jacob Zuma called for concrete measures to boost growth after S&P Global Ratings downgraded the local currency debt to sub-investment grade, while foreign currency debt was pushed deeper into “junk” territory.

The rand recovered on Monday from steep falls suffered late on Friday after the downgrade, taking some relief from Moody’s decision to only place South Africa on review for downgrade.

A cut to “junk” on the local currency debt by both S&P and Moody’s could have seen South African debt lose its place in Citi’s World Government Bond Index (WGBI), the biggest of the global benchmarks and tracked by about $2-3 trillion of funds.

Zuma directed Finance Minister Malusi Gigaba on Monday to finalise proposals for expenditure cuts amounting to 25 billion rand ($2 billion) and revenue boosting measures totalling 15 billion rand – including through taxes.

A proposal by a presidential commission to introduce free higher education should also be implemented in a “fiscally-sustainable manner”, the statement from Zuma’s office said.

Gigaba in October unveiled a gloomy outlook for the economy as he flagged weaker growth expectations, wider budget deficit estimates and rising government debt.

Both S&P and Moody’s cited deterioration in South Africa’s economic growth prospects and public finances.

As of 1527 GMT, the rand was trading at 13.7625 per dollar, 2.86 percent firmer than its New York close on Friday, when it had tumbled 2 percent following S&P’s announcement.

“The market is finding some relief in the fact that Moody’s has chosen to give us basically till February before they change our rating, if they do change our rating,” said Shaun Murison, currency strategist at IG Markets.

In fixed income, the yield for the benchmark government bond was down 9 basis points to 9.245 percent, also recovering after rising as much as 11 basis points earlier in the session.

Moody’s said the review will allow it to assess the South African authorities’ willingness and ability to respond to the rising pressures through growth-supportive fiscal adjustments that raise revenues and contain expenditures.

“The review period may not conclude until the size and the composition of the 2018 budget is known next February,” Moody’s senior analyst for South Africa, Zuzana Brixiova, said in a statement.

Moody’s rates South Africa’s foreign and local currency debt on their lowest investment grade rung of Baa3.

VOLATILITY

S&P’s decision will see South Africa excluded from the Barclays Global Aggregate index, whose inclusion criteria requires investment grade rating on its local currency debt from any two ratings agencies.

Fitch already rates South African debt as “junk”, and affirmed the rating on Thursday.

If nothing changes, the country will be downgraded to “junk” by all ratings agencies and the WGBI dream will be no more, at least for many a year, said Standard Bank chief trader Warrick Butler in a note.

“What this means, in terms of the currency, will be increased volatility.”

Falling out of the WGBI could have led to a larger sell-off in bonds, even though rising yields could present a buying opportunity for some yield-hungry investors.

“If you look at some of the metrics the real yields are among the highest in EM, the domestic curve is extremely steep, the current account is in better place than it was three to four years ago and the rand is quite competitive against likes of (Russia’s) rouble or Brazilian real,” said London-based Paul Greer, senior trader at Fidelity International.

“On the local side the real yield and steepness of curve look attractive from tactical perspective.”

Analysts said an exclusion from the Barclays index would lead to outflows of about $2 billion, compared with more than $10 billion if South Africa was to fall out of Citi’s WGBI.

South African debt was dropped from one the widely used global bond indexes, the JPMorgan Emerging Market Bond Index Global in April after S&P and Fitch downgraded foreign currency debt to sub-investment grade.

On the stock market, the Top-40 index was 0.35 percent lower at 53,810 while the broader all-share was down 0.28 percent at 60,157.

($1 = 13.7678 rand)

(Additional reporting by Sujata Rao in London; Editing by James Macharia/Mark Heinrich)

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Zimbabwe’s economic situation “very difficult”: IMF mission chief

Comments (0) Actualites, Africa, Economy

JOHANNESBURG (Reuters) – Zimbabwe’s economic growth is threatened by high government spending, an untenable foreign exchange regime and inadequate reforms, a senior International Monetary Fund (IMF) official said.

Zimbabwe was once one of Africa’s most promising economies but suffered decades of decline as former President Robert Mugabe pursued policies that included the violent seizure of white-owned commercial farms and money-printing that led to hyperinflation.

Mugabe, 93, resigned on Tuesday after nearly four decades in power following pressure from the military, the ruling ZANU-PF party and the general population.

New ZANU-PF leader Emmerson Mnangagwa is expected to be sworn in as Zimbabwe’s president on Friday.

Zimbabwe has not been able to borrow from international lenders since 1999 when it started defaulting on its debt, and has $1.75 billion rand in foreign arrears.

“The economic situation in Zimbabwe remains very difficult,” Gene Leon, IMF’s mission chief for Zimbabwe said in a statement to Reuters late on Wednesday.

“Immediate action is critical to reduce the deficit to a sustainable level, accelerate structural reforms, and re-engage with the international community to access much needed financial support.”

Leon said Zimbabwe should resolve arrears to the World Bank, African Development Bank and the European Investment Bank, among other reforms, for the IMF to consider future financing request from the country.

Zimbabwe should also be ready to implement strong macroeconomic policies and structural reforms to restore fiscal and debt sustainability, Leon said.

 

(Reporting by David Lawder in Washington and Olivia Kumwenda-Mtambo in Johannesburg; Editing by James Macharia)

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Facebook to open Nigerian hub next year in African tech drive

Comments (0) Actualites, Africa, Technology

LAGOS (Reuters) – Facebook will open a “community hub space” in Nigeria next year to encourage software developers and technology entrepreneurs and become the latest technology giant to pursue a training programme in fast-growing Africa.

The U.S. social media company said the centre would host an “incubator programme” to help develop technology start-ups, while it will also train 50,000 Nigerians in digital skills.

Africa’s rapid population growth, falling data costs and heavy adoption of mobile phones rather than PCs is attracting technology companies looking to attract more users.

Facebook did not provide details of the period over which its planned training would take place in Nigeria, which is Africa’s most populous country with 180 million inhabitants.

“We understand the important role Facebook plays here in Nigeria with developers and start-ups and are invested in helping these communities,” Emeka Afigbo, its regional head of platform partnership, said in a statement on Wednesday.

Facebook said the training – aimed at software developers, entrepreneurs and students – would be offered in cities including the capital, Abuja, Port Harcourt in the south, Calabar in the southeast and Kaduna in the north.

Last year Facebook founder Mark Zuckerberg visited technology companies in Lagos and his charitable foundation provided $24 million to Andela, which trains developers.

Google’s chief executive in a July visit to Lagos said the company aimed to train 10 million people across the continent in online skills over the next five years. He also said it hoped to train 100,000 software developers in Nigeria, Kenya and South Africa. [L5N1KH9WQ]

Although Africa may not offer as much opportunity to add consumers as China or India, because large wealth gaps mean that many people in places like Nigeria have little disposable income, Facebook said more than 22 million people already use its social media website every month in Nigeria.

Widespread poverty means mobile adoption tends to favour basic phone models. That, combined with poor telecommunications infrastructure, can mean slow internet speeds and less internet surfing, which tech firms rely on to make money.

 

(Writing by Alexis Akwagyiram; editing by Alexander Smith)

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Zambia’s central bank says delayed IMF programme affecting kwacha currency

Comments (0) Actualites, Africa

LUSAKA (Reuters) – Zambia’s central bank governor said on Wednesday the delay in reaching a conclusion for an aid programme with the International Monetary Fund (IMF) was putting pressure on the kwacha currency.

Zambia and the IMF agreed in October to chart a new path towards debt sustainability after the IMF delayed the conclusion of talks with Africa’s No.2 copper producer, saying it was at high risk of debt distress.

The government had said it hopes to get board approval from the international lender by the end of 2017

“It is more of sentiment because the fundamentals point to continued appreciation,” central bank governor Denny Kalyalya told a media conference.

“One of the factors has been that players were looking to the conclusion of an IMF programme before the end of the year.”

The kwacha currency slid to 10.0850 per dollar on Wednesday from about 9.0000 three months ago and traders said it was due to increased dollar demand and short foreign currency supply.

 

(Reporting by Chris Mfula; Editing by James Macharia)

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Africa’s major central banks embarking on policy easing cycle ride

Comments (0) Latest Updates from Reuters

By Vuyani Ndaba

JOHANNESBURG (Reuters) – Africa’s major central banks are entering an easing cycle as they try to stimulate growth after months of drought, austerity drives and confidence issues across the continent, a Reuters poll found on Thursday.

Much of southern and eastern Africa is still recovering after an El Niño-related drought wilted crops last year. Poor business confidence in South Africa and foreign exchange restrictions in Nigeria have also hampered growth.

“We expect that African monetary policy is entering a widespread and protracted period of policy easing. This will provide a boost to growth,” said John Ashbourne, Africa analyst at Capital Economics.

Ghana, which agreed a three-year fiscal discipline deal with the International Monetary Fund in exchange for aid in 2015, cut 100 basis points from its benchmark interest rate in May and is expected to do the same on Monday, putting it at 21.50 percent.

Medians in the poll predict South Africa will make a first quarter trim of 25 basis points to 6.75 percent and while Kenya will hold steady on Monday it is expected to cut 100 basis points to 9.00 percent in the second quarter of next year.

Nigeria is expected to hold rates at 14.0 percent on Tuesday, and through this year, but will reduce borrowing costs by 175 basis points across 2018.

BATTERED CONFIDENCE CHIPS AT GROWTH

Aly-Khan Satchu, CEO of Nairobi-based Rich Management said policymakers in Africa’s biggest economies have lost credibility and it would be difficult to regain that.

To try to reduce demand for dollars, Nigeria banned the importing of 41 items, but that only fuelled the gap between the official and black market rates for its naira currency.

The policy, alongside a commodity price slump that hurt oil exports, has since 2015 forced its central bank to hike the benchmark rate 300 basis points to 14 percent as it tried to deal with much faster inflation and restore the currency’s strength.

Nigeria — Africa’s biggest economy — fell into recession for the first time in 25 years in 2016 but is expected to turn in growth of 1.0 percent this year and 2.5 percent the following.

South Africa is expected to expand 0.7 percent this year after escaping a six-month recession last quarter that was partly due to weak confidence and drought.

Confidence in South Africa’s economy has been sapped by the chopping and changing of finance ministers four time since the end of 2015 by President Jacob Zuma. The last change in March triggered a credit rating downgrade to “junk” status.

Kenya is expected to grow 5.2 percent this year and 5.9 percent next.

Growth slowed to 4.7 percent in the first quarter, hit by a credit slow down after authorities late last year capped the interest banks could charge on loans.

However, Ghana is expected to fare better than most, growing 6.1 and 6.8 percent in 2017 and 2018 respectively, supported by the IMF programme, recovering from 3.5 percent last year.

On Tuesday, President Nana Akufo-Addo said Ghana would not extend its three-year aid programme with the IMF beyond April 2018, but the fund urged it to do so to allow time to complete the programme’s goals.

 

 

(Editing by Jonathan Cable/Jeremy Gaunt)

 

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Former Etisalat Nigeria, 9mobile, is open to new investors: CEO

Comments (0) Latest Updates from Reuters

By Chijioke Ohuocha

LAGOS (Reuters) – Telecoms group 9mobile is open to new investors but will continue to manage the business in the meantime, its chief executive said on Wednesday at an event to officially announce the company’s new name to replace Etisalat Nigeria.

UAE’s Etisalat terminated its management agreement with its Nigerian business in June and surrendered its 45 percent stake to a trustee following regulatory intervention to save the local company from collapse due to debt.

9mobile CEO Boye Olusanya said the company had retained its workforce and that Etisalat’s withdrawal had not led to a loss of business opportunities.

“Like any business we are always available for someone with a good offer … but we are prepared to manage this business for the long haul,” Olusanya said at the event in Lagos.

“This brand was not developed with the mindset that it’s a three-month brand.”

He declined to say how much the re-branding cost.

9mobile has 20 million subscribers, making it the country’s number four mobile operator with a 14 percent market share. South Africa’s MTN has 47 percent, Globacom 20 percent and Airtel – a subsidiary of India’s Bharti Airtel – 19 percent.

Etisalat Nigeria had been in talks with its lenders to restructure a $1.2 billion debt after it missed repayments, but the discussions failed to produce a deal, forcing the banks to step in and order shareholders to transfer their shares to a loan trustee.

Lenders have now taken control and appointed a new team to manage the company with a focus on getting it back to profitability while working to eventually raise new capital.

“If at any point in time someone does come in with an offer that is attractive then that person will have the right to do whatever they want to do with the brand,” Olusanya said.

The telecoms regulator, Nigerian Communications Commission (NCC) approved the brand name change on Tuesday.

Under Nigeria’s telecoms law, the regulator has to also approve a transfer of telecoms licences or any new investor in a telecoms company with more than 10 percent of the shares.

NCC spokesman Tony Ojobo told Reuters that the brand name change did not affect the terms of the license which was granted to a Nigerian entity known as Emerging Markets Telecommunication Services (EMTS). He said it was a change to its trading name.

 

(Editing by Susan Thomas)

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Guinea Bissau reaches $47 mln deal on submarine cable

Comments (0) Latest Updates from Reuters

BISSAU (Reuters) – Guinea Bissau has agreed a memorandum of understanding with the World Bank, Orange and MTN for a $47 million project to link the country to a submarine telecoms cable connecting Africa with Europe, the government said on Wednesday.

Under the agreement, French telecoms company Orange and South Africa’s MTN Group will form a consortium with the government of the West African country, the statement by the finance and transport ministries said.

“The World Bank unlocks $31.596 million in the form of a loan to connect Bissau to the international fibre optic cable,” said the finance and transport ministries in a joint statement.

Guinea Bissau will be hooking up to the ACE (Africa Coast Europe) cable, the statement said, one of five linking countries in West Africa to Europe. Guinea Bissau will the be last coastal country in the region to link to a submarine cable.

Orange and MTN will provide about $8 million each over a five-year period, the statement said.

The project is due to be completed in 18 months and officials said it would improve internet speeds and reduce communication costs in the poor, Portuguese-speaking country.

Only 3.8 percent of individuals in the country of 1.8 million are internet users, according to the U.N.’s International Telecommunication Union.

 

(Reporting by Alberto Dabo; writing by Emma Farge; editing by David Clarke)

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Ghana president says will not extend three-year IMF aid programme

Comments (0) Latest Updates from Reuters

ACCRA (Reuters) – Ghana will not extend its three-year aid programme with the International Monetary Fund beyond April 2018, President Nana Akufo-Addo said on Tuesday, despite continuing fiscal difficulties.

The president’s announcement is a surprise turnaround after government officials said last month that Ghana was considering a request by the Washington lender to extend the programme to December 2018.

An extension would have reassured markets of the government’s commitment to fiscal discipline, analysts say.

Akufo-Addo said, however, the government was on target with its policy to restore growth and create private sector jobs.

“There is no question about the IMF programme being extended beyond April 2018. We want to complete it and move on,” Akufo-Addo told reporters.

The $918-million agreement was signed in April 2015 to address problems of slow growth and high public debt.

The IMF said in May that an extension was needed after Ghana failed to meet certain deal requirements on schedule.

 

(Reporting by Kwasi Kpodo; Editing by Edward McAllister and Alison Williams)

 

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Ethiopia plans to offer firms shares in road projects: finance minister

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By Aaron Maasho

ADDIS ABABA (Reuters) – Ethiopia plans to offer shares in its road-building and maintenance projects to private investors, its finance minister said on Tuesday, the latest step to open up and modernise the state-led economy.

The Horn of Africa country has over 113,000 kilometres (68,0000 miles) of paved roads and plans to increase that to 220,000 kilometres by 2019/20, official data showed.

“We do not have private-run roads. Through public-private partnerships, the private sector is interested to develop roads,” Minister of Finance and Economic Development Abraham Tekeste told Reuters in an interview.

“Through this arrangement, we could work to share the risks and create an environment whereby the private sector can recoup returns on its investment.”

The move to partly liberalise the sector follows Ethiopa’s decision to offer foreign companies stakes in the government-operated Ethiopian Shipping and Logistics Services Enterprise early this year and its energy sector in 2013.

Ethiopia is one of the fastest-growing economies in Africa, but the expansion has mainly been fuelled by huge public investment. The spending has gone into roads, schools, new highways and dams for hydroelectric power.

It opened an electrified railway linking the landlocked nation to a port in neighbouring Djibouti this year.

Abraham said the government expected gross domestic product to grow 11 percent in the 2016/17 fiscal year, up from 8 percent the previous period.

Earlier this month, Ethiopia’s parliament passed a 320.8 billion-birr ($13.9 billion) budget for the 2017/18 financial year (July 8-July 7), an increase of nearly 17 percent on the previous year. About a quarter of that amount is set to be spent on roads.

The International Monetary Fund has said Ethiopia needs to attract more private investment to maintain growth. But the government has in the past tended to brush off such advice and said it would keep charge of key sectors.

“Why do we continue to invest in infrastructure? To make private investment feasible. With no roads, private investment will not be worthwhile,” Abraham said.

Though starting from a low base, foreign investment has also been rising the last five years, including for farms producing flowers and other horticultural products for export and in textiles.

Abraham said Ethiopia took in over $3 billion in foreign direct investment last year and expected that number to rise by the end of this year.

 

 

(Editing by Duncan Miriri, Larry King)

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