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Ghana seeks Swiss support to process more cocoa

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ACCRA (Reuters) – Ghana is seeking collaboration with Switzerland to boost its cocoa output and process more of the beans in the face of price volatility, President Nana Akufo-Addo said on Wednesday.

Ghana, the world’s second largest producer and top grower Ivory Coast, which together account for more than 60 percent of the world’s cocoa supply, have been hit by a sharp drop in world prices that have seen cocoa futures plummet by around a third.

While Ivory Coast responded by slashing its guaranteed farmgate prices, Ghana has maintained the price at which it buys cocoa from farmers since the season opened in October.

Ghana exports at least 70 percent of its beans mainly to Europe through forward contracts.

“Ghana, under my presidency, will no longer become mere producers and exporters of cocoa beans, and will continue the policy of processing more and more of our cocoa,” Akufo-Addo told reporters after a meeting with Swiss President Doris Leuthard in Accra.

Both sides agreed to undertake joint projects to add value to Ghana’s beans, Akufo-Addo said without giving details.

Ghana, which also exports gold and oil is under a three-year aid programme with the International Monetary Fund to restore fiscal stability to its economy, dogged by high public debt, deficits and consumer inflation.

 

(Reporting by Kwasi Kpodo; Editing by Greg Mahlich)

 

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Autos supplier Faurecia opens second Moroccan factory, plans third

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PARIS (Reuters) – French auto supplier Faurecia plans to open a third Moroccan plant to build car interiors and emissions control parts for clients, including its parent PSA Group, the company said on Thursday.

The future plant will open next year in the coastal city of Kenitra, Faurecia Chief Executive Patrick Koller said in a statement marking the formal inauguration of its second Moroccan production site, a seating facility north of the capital Rabat.

The seating plant represents an investment of 170 million dirhams (15.4 million euros; $17.58 million) and employs 1,300 workers making seat covers and leather trim for vehicles such as the Peugeot 3008 and 5008, as well as Opel models built at PSA plants. Faurecia is 46.3 percent-owned by the maker of Peugeot, Citroen and DS cars.

($1 = 0.8760 euros)

 

(Reporting by Laurence Frost; Editing by Sudip Kar-Gupta)

 

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South Africa considers privatisation to counter recession

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By Olivia Kumwenda-Mtambo and Mfuneko Toyana

JOHANNESBURG (Reuters) – South African Finance Minister Malusi Gigaba laid out an ambitious 14-point programme on Thursday to wrench the economy out of recession that included the sale of non-core assets and partial privatisation of state-owned firms.

The plans to stimulate growth in the continent’s most industrialised economy appear to represent an ideological shift by the African National Congress (ANC), whose political alliance with the unions has tended to make privatisation a dirty word.

A team commissioned by President Jacob Zuma to review state firms last year recommended that some should be sold. Now the government has set a date – March 2018 – by which to roll out a “private sector participation framework”.

“All of these items that we have announced … they constitute an important intervention to restore confidence and demonstrate action, and outline an action plan that we as government can be responsible for,” Gigaba said.

The government would also reduce the number of debt guarantees to this firms, especially those extended for operational purposes, he said.

Analysts said Gigaba’s plan could face opposition.

“I’m not sure how far he is going to be able to get with this because I think ideologically there’s a lot of opposition,” NKC African Economics analyst Gary van Staden said.

“The last time I heard the ANC even talk about privatisation or even talk about sale of state owned assets on any kind of level is when Thabo Mbeki was president. It’s been a long time.”

South Africa’s economy entered recession for the first time since 2009 in the first quarter and is also struggling with high unemployment and credit ratings downgrades.

The state of the economy is adding to the pressure on Zuma, who is also facing persistent corruption allegations and increasing calls for him to stand down from within the ANC. Parliament will hold a no-confidence vote on Zuma next month.

Many of South Africa’s 300-odd state-owned companies are a drain on the government’s purse. Ratings agencies have singled out some as threat to its overall investment grade rating.

The firms, known as “parastatals” in South Africa, include companies such as South African Airways, power utility Eskom and logistics group Transnet that are regarded as central to the functioning of the economy.

Gigaba did not say what would be going under the hammer first, saying that would be determined by an audit.

BNP Paribas South Africa economist Jeff Schultz said investors would want to see more details before endorsing it as a viable turnaround strategy.

“It’s very difficult to say at this stage. He was quite cagey on what sales of non-core assets he was referring to,” Schultz said.

South Africa sold its stake in mobile phone firm Vodacom in 2015 to as part of a 23 billion rand capital raising for Eskom.

Schultz said it might try to sell similar stakes, rather than embracing formal privatisation.

“In much the same way as government sold down their stake in Vodacom, the government is looking to do similar things to try and raise some revenue in the near term,” he said.

 

(Additional reporting by TJ Strydom and Tanisha Heiberg; Editing by Alison Williams)

 

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Base Resources forecasts lower ilmenite output from Kenya in 2017/18

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By George Obulutsa

NAIROBI (Reuters) – Australia’s Base Resources expects its ilmenite output in Kenya to fall by 8-14 percent this financial year but does not foresee disruption in the run-up to next month’s national election, it said on Thursday.

Base said that output of the commodity mined for titanium dioxide production and used as a base pigment in paint, paper and plastics will be between 400,000 tonnes and 430,000 tonnes in the year to June 30, 2018, compared with 467,359 tonnes the previous year.

Production of rutile, used in refractory ceramics and as a pigment, is expected to be 88,000-94,000 tonnes, from 90,625 tonnes. Zircon output, meanwhile, is forecast at 32,000-37,000 tonnes, against 34,228 tonnes.

“In the future … we will start moving into the lower-grade areas. Thus, for the given tonnage of ore, the amount of heavy mineral concentrate will reduce, thereby reducing the amount of ilmenite, rutile and zircon that we produce,” Joe Schwarz, Base Titanium’s general manager for external affairs, said in a conference call with reporters.

Zircon is used to make ceramic tiles and in refractories, foundries and chemicals.

Base Titanium, Kenya’s first large-scale international mining project, shipped its first consignment of minerals in February 2014 after years of delay.

The $305 million project is viewed as a major part of Kenya’s plans to boost its relatively modest and undeveloped mining sector.

Schwarz said he does not expect Base Titanium’s operations to be affected by the Aug. 8 election, when Kenyans will elect a president, parliament and local authorities.

Many investors and consumers have been taking a wait-and-see stance on concerns over the potential for election-related violence.

“We are not scaling down,” Schwarz said. “Operations continue as normal. Obviously we do monitor the security situation and we are not seeing any risks at this time.”

 

(Reporting by George Obulutsa; Editing by Aaron Maasho and David Goodman)

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Loss-making Air Zimbabwe cuts half its workforce

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HARARE (Reuters) – Loss-making Air Zimbabwe is cutting half of its 400 jobs as part of a restructuring plan meant to revive the ailing national carrier, Chairwoman Chipo Dyanda said on Wednesday.

Like most state-owned companies in the southern African country, Air Zimbabwe has been making losses for years due to mismanagement, high operating costs, old aircraft and equipment.

Dyanda told Reuters that Air Zimbabwe would cut 200 jobs in its fourth round of lay-offs in eight years.

“We were overstaffed by a lot and we are also trying to weed out people without the right qualifications,” Dyanda said.

“The retrenchment is meant to give space to the airline so that we can redeploy the money saved back into the company.”

Air Zimbabwe cut 300 jobs in August 2015 following cuts in 2009 and 2013, but has since rehired some of the workers.

President Robert Mugabe’s son-in-law Simba Chikore was appointed chief operating officer last October, drawing accusations of nepotism from the opposition and critics of the government.

Dyanda said Air Zimbabwe required a ratio of 45 workers per aircraft. The airline currently flies four planes, which has forced Mugabe to at times hire private jets for his foreign travels.

“As part of the strategic plan, we would like to get more reliable planes and expand our routes,” Dyanda said, without giving details.

An official at Zimbabwe’s Ministry of Transport said the airline, which has debts of more than $300 million, is looking to lease aircraft from Malaysia.

 

(Reporting by MacDonald Dzirutwe; editing by Ed Stoddard and Jason Neely)

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Egypt to halt flour subsidy and cut wheat imports by up to 10 pct

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CAIRO (Reuters) – Egypt, the world’s largest wheat buyer, will stop subsidising flour for its sweeping bread subsidy programme next month in a move expected to cut wheat imports by up to 10 percent by curtailing smuggling, the supply ministry said on Wednesday.

Egypt is looking to tighten its finances as it pushes ahead with a $12 billion three-year International Monetary Fund loan programme tied to ambitious reforms such as subsidy cuts and tax increases.

Austerity-hit Egyptians faced with inflation above 30 percent have increasingly turned to the state’s cheap subsidised bread to make ends meet, increasing the country’s food subsidy bill as well as its wheat imports. In the financial year to June 30 wheat imports reached 5.58 million tonnes, up from 4.4 million the preceding year.

In an attempt to reduce waste the state will next month stop subsidising flour used by bakeries offering the cheap bread. Instead, it will restrict subsidies to the actual bread offered to consumers, Supply Ministry spokesman Mohamed Sweed said.

Subsidy card holders currently obtain each loaf of bread for 0.05 pounds, less than a tenth of the cost of production, via an electronic smart card that allocates a maximum daily ration to citizens and compensates bakeries for the production cost shortfall with every swipe.

Unscrupulous bakers have long bought up cheap subsidised flour and sold it on the black market, costing the state millions of dollars a year in squandered subsidies.

Sweed said the new measure will remove the incentive for smugglng flour, cutting down on waste and helping to save the state up to 8 billion Egyptian pounds ($447 million) from its 2017-18 food subsidy bill, which had been set at 85 billion pounds.

He said that lower flour consumption would translate directly into reduced imports.

($1 = 17.9100 Egyptian pounds)

 

(Reporting by Eric Knecht; Editing by David Goodman)

 

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Zimbabwe looks to issue more ‘bond notes’ as cash shortages bite

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HARARE (Reuters) – Zimbabwe’s Reserve Bank is looking to increase the amount of domestic “bond notes” in circulation beyond an initial $200 million cap, its governor said on Wednesday, as the economy continues to grapple with shortages of U.S. dollars.

“We are in the process of negotiating those facilities and then we’ll come back to yourselves after we have made significant progress,” John Mangudya told reporters on the sidelines of a lecture at the University of Zimbabwe.

He declined to give any more details of the new currency issuance plans.

 

(Reporting by MacDonald Dzirutwe; Editing by Ed Cropley)

 

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Etisalat Nigeria’s new CEO targets profit after regulator rescue

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By Chijioke Ohuocha

LAGOS (Reuters) – Etisalat Nigeria is focused on getting the telecoms group back on track to make a profit after it was saved from collapse, while working on the paperwork to eventually raise new capital.

“Our mandate is to make sure the business runs as profitably as it can. What is most important now is to … ensure that the business runs and meets its obligations,” the company’s new chief executive Boye Olusanya told Reuters on Tuesday.

Nigerian regulators intervened last week to save Etisalat Nigeria after talks with its lenders to renegotiate a $1.2 billion loan from 2013 with 13 local lenders failed.

Etisalat Nigeria 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.

“Once we’ve gotten ourselves to where certain decisions are made and the structure and form of the business is formed then maybe we would look at a capital raising structure that would be suitable for the nature of how the business will be run,” the new CEO said in an interview in his offices.

Olusanya, who took over as CEO of Etisalat Nigeria following the appointment of a new board led by Nigeria’s central bank, said that while the business could run without an immediate recapitalisation, he would not rule one out completely.

“Obviously if its possible to do it tomorrow we will do it, because that enhances the ability of this business to roll-out quickly, to get more subscribers, which is what everybody wants,” he added.

UAE’s Etisalat, which had a 45 percent stake in the Nigerian business, has said its exposure to Etisalat Nigeria related to services worth 191 million UAE dirhams ($52 million).

In June, Etisalat said it had been ordered to transfer its shares to a loan trustee after debt talks failed.

“We’re still in negotiations with Etisalat over the use of the brand name,” Olusanya said, adding that the technical service agreement with Etisalat covered the brand name but the telecoms company was run by Nigerians.

The former Celtel executive said he has plans in place to rename the company if needed after UAE’s Etisalat said it had terminated a management agreement and given its one-time Nigerian business time to phase out the brand.

All UAE shareholders in Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company and left the board and management, Hatem Dowidar, CEO of Etisalat International, told Reuters.

 

(Editing by Alexander Smith)

 

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Gold falls slightly as dollar, equities gain ahead of Yellen testimony

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By Nithin ThomasPrasad

BENGALURU (Reuters) – Gold edged lower on Tuesday on a firmer dollar and equities as the market awaited cues on the path of interest rate hikes in the United States ahead of Federal Reserve Chair Janet Yellen’s testimony on Wednesday.

The market was looking ahead to Wednesday and Thursday as Yellen will deliver two days of testimony on the U.S. central bank’s semi-annual report on monetary policy and the economy.

Based on the minutes of the last Federal Open Market Committee (FOMC) released on July 5, Yellen may testify that the Fed will seek to reduce the central bank’s Treasury bond holdings and mortgage-backed securities by August, effectively tightening the supply of U.S. dollars. The FOMC also indicated in the minutes that another interest rate hike would happen later this year.

Bullion is highly sensitive to rising rates because they push up bond yields, increasing the opportunity cost of holding non-interest bearing gold. A higher dollar, in which gold is priced, would also lower the value of the yellow metal.

“If the (Yellen) commentary is a little more hawkish, it’s going to put a little more pressure on gold again and going by previous FOMC minutes, it’s probably going to be,” said MKS PAMP analyst Tim Brown, adding “a lot of it has already been priced in.”

Spot gold was down 0.2 percent at $1,211.34 per ounce as of 0656 GMT. U.S. gold futures for August delivery fell 0.2 percent to $1,210.50 per ounce.

“The rising dollar and rise in (Treasury) yields will continue to mount pressure on the gold and silver in the near term,” MKS PAMP trader Alex Thorndike said in a note.

U.S. Treasury yields slipped on Monday, in line with weak European markets, as sharp gains following Friday’s strong U.S. non-farm payrolls report prompted investors to consolidate positions. After Friday’s jobs report, U.S. 10-year yields had hit an eight-week high of 2.398 percent.[US/]

Asian shares and the dollar were slightly higher on Tuesday. [USD/] [MKTS/GLOB]

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell 0.35 percent to 832.39 tonnes on Monday from 835.35 tonnes on Friday.

Spot gold is expected to rise into a range of between $1,225 and 1,231 per ounce, as suggested by its wave pattern and a Fibonacci projection analysis, according to Reuters technical analyst, Wang Tao.

Among other precious metals, silver fell 0.5 percent to $15.55 per ounce, while palladium rose 0.3 percent to $842.25 per ounce.

Platinum fell for a third day, down 0.8 percent at $892.35 per ounce. On Monday, prices fell to as low as $889.25, the lowest since May 4.

 

(Reporting by Nithin Prasad and Arpan Varghese in Bengaluru; Editing by Christian Schmollinger and Subhranshu Sahu)

 

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Angola’s inflation slows to 32.58 percent year/year in May

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LUANDA (Reuters) – Angola’s inflation slowed to 32.58 percent year-on-year in May from 34.8 percent in April, according to data on the national statistics agency’s website seen by Reuters on Monday.

Price increases on a month-on-month basis slowed 1.6 percent in May compared to a 1.8 percent previously.

 

(Writing by Olivia Kumwenda-Mtambo; Editing by James Macharia)

 

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