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Morocco should step up structural reforms – IMF

Comments (0) Actualites, Africa

RABAT (Reuters) – Morocco needs to step up structural economic reforms and maintain “sound” fiscal and monetary policies, the International Monetary Fund (IMF) said on Thursday.

Morocco, the region’s biggest energy importer, has been working with a technical mission from the IMF on liberalising its currency regime after a drop in global oil prices helped strengthen its finances.

“Executive Directors commended the authorities for the sound macroeconomic policies and reform implementation that have helped improve the resilience of the Moroccan economy, upgrade the fiscal and financial policy frameworks, and increase economic diversification,” the IMF said in a statement following consultations.

“To¬†consolidate the gains achieved and promote higher and more inclusive growth, Directors underscored the need to maintain sound fiscal and monetary policies and to step up structural reform efforts,” it added.

The IMF said it supported Morocco’s plans for a more flexible currency and new policies, “which will help the economy to absorb external shocks and remain competitive.”

In July, Morocco’s central bank postponed a planned announcement of the first phase of the reform. The central bank gave no reason for the delay, but officials have since then said the government needed to further study the plan.

 

(Writing by Ulf Laessing; Editing by James Dalgleish)

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South Africa’s Sibanye-Stillwater buys troubled platinum miner Lonmin

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By Zandi Shabalala and Barbara Lewis

LONDON (Reuters) – South Africa’s Sibanye-Stillwater has agreed to buy Lonmin for about 285 million pounds ($382 million) in an all-share deal that drove shares in the troubled London-listed platinum miner up by more than a fifth.

Lonmin, the world’s third biggest platinum producer, has been battling weak global platinum prices and soaring operating costs in South Africa, shrinking the company’s market value by 98 percent in the past five years.

After the announcement, Lonmin’s shares jumped 23 percent, while shares in Sibanye-Stillwater, which will become the world’s second largest platinum producer on completion of the deal, fell 5 percent in Johannesburg.

“This is a bailout deal for Lonmin,” Nedbank precious metals analyst Leon Esterhuizen said “It makes for a good match, but it doesn’t resolve oversupply of the PGM (platinum group metals) industry.”

Global platinum prices are trading around their lowest levels since early 2016, under pressure from bloated supply and declining demand from the automotive industry.

“The flexibility inherent in the larger regional PGM footprint will create a more robust business, better able to withstand volatile PGM prices and exchange rates,” Sibanye Chief Executive Officer Neal Froneman said in a statement.

Under the offer, Lonmin shareholders would receive 0.967 new Sibanye-Stillwater shares for each Lonmin share, the firms said.

Following completion of the deal Lonmin shareholders would hold about 11.3 percent of the enlarged group.

“While in some way I am sad, I am sure has hell that this is the right thing for the sustainability of the company,” Lonmin CEO Ben Magara told Reuters.

Under Sibanye’s plans, Lonmin would put all of its older mines on care and maintenance, which means operations stop but they are kept in a condition to resume in future. The plan involves cutting 12,600 jobs in the next three years with a further 890 jobs at risk, a Sibanye presentation showed.

Job cuts are a particularly sensitive in South Africa where unemployment runs at around 27 percent. Lonmin now employs about 35,500 people. All of its mines are in South Africa.

The revised mine plan assumes “lower for longer” platinum prices, the presentation said.

“SUFFERING” SHAREHOLDERS

Sibanye and Lonmin have been talking for months, sources said, after looking at Lonmin a few years ago before turning to another deal. One banking source told Reuters the rest of Lonmin’s portfolio would be reviewed over time.

Lonmin, listed in London since 1961, has been undergoing an operational review to help resolve its cash crunch that led its banks to relax some debt covenants. The miner has tapped shareholders for cash three times since 2009.

“Doubtless welcome news to long suffering Lonmin shareholders averting the need to dig into their pockets once again to refinance the company in its regular three to four year refinancing cycle,” said Marc Elliott, analyst at Investec bank.

He said Sibanye management could get the most value from Lonmin’s smelting and refining assets and could also be betting on a rebound in the price of platinum group metals.

Lonmin emerged in the 1990s after the split up of Lonrho, a sprawling conglomerate run for three decades by buccaneering tycoon Tiny Rowland, whose firm was branded in the 1970s by Britain’s prime minister at the time as the “unacceptable face of capitalism”.

Lonmin was in the headlines again in 2012 when 34 striking miners at its Marikana facility were killed by police in the bloodiest confrontation since white rule ended in South Africa.

Sibanye, spun off from Gold Fields, made its first foray into platinum by acquiring Anglo American Platinum’s labour intensive Rustenburg operations in 2015. The company also bought Aquarius Platinum and U.S. palladium producer Stillwater.

With Lonmin, Sibanye will leapfrog another troubled miner, Impala Platinum, to become the world’s No. 2 platinum producer.

The government-owned Public Investment Corporation (PIC), which owns 30 percent of Lonmin, increased its stake in Sibanye in November to 10 percent.

PIC was not immediately available to comment on the deal.

In November, Reuters reported on its array of measures to save cash after it delayed its annual financial results pending conclusion of a business review.

UBS and HSBC advised Sibanye on the deal.

(Additional reporting by Noor Zainab Hussain, Ed Stoddard and Clara Denina; Editing by Adrian Croft and Edmund Blair)

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Morocco announces auto industry deals worth $1.45 bln

Comments (0) Actualites, Africa, Business

RABAT (Reuters) – Morocco said on Monday it had signed deals for 26 auto industry projects worth a total of 1.23 billion euros ($1.45 billion) as it seeks to build its position as an international hub for the sector.

The deals include six agreements with French company Renault to expand an “industry ecosystem” allowing the firm to increase local sourcing of car components to 55 percent, according to a government statement.

Renault has a large factory in the northern Moroccan city of Tangiers that opened in 2012, and an older assembly plant in Casablanca.

Another 13 of the new projects are planned as part of a manufacturing hub linked to a PSA Peugeot Citroen factory under construction in Kenitra, north of the capital, Rabat.

That plant is due to open in 2019 and initially produce 90,000 vehicles a year.

The projects announced on Monday are with companies from France, Spain, Italy, China, South Korea, Japan and the United States, and are expected to create more than 11,500 jobs, the government statement said.

Eleven of the companies will be operating in Morocco for the first time, Abdel Wahid Rahal, a senior official at the ministry for industry, investment, trade and digital economy, told Reuters.

On Saturday, officials announced a memorandum of understanding with Chinese automaker BYD to build an electric car plant near Tangier that is expected to create 2,500 jobs. They gave no details on the value of the deal.

Unlike many countries in the region, Morocco has avoided a big drop in foreign investment following the global financial crisis and the Arab Spring uprisings of 2011, partly by marketing itself as an export base for Europe, the Middle East and Africa.

The kingdom has attracted a number of big auto and aerospace investors in recent years.

 

($1 = 0.8495 euros)

 

(Reporting by Zakia Abdennebi; Writing by Aidan Lewis; Editing by Peter Cooney)

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Steinhoff accounting irregularities trigger share crash, CEO exit

Comments (0) Actualites, Africa, Business

JOHANNESBURG (Reuters) – Steinhoff International shares crashed on Wednesday after it revealed accounting irregularities and its CEO quit, shocking investors who had backed the rapid reinvention of a South African furniture chain into an international retail empire.

The company said late on Tuesday that “new information has come to light today which relates to accounting irregularities requiring further investigation” and that billionaire Christo Wiese, its largest shareholder and chairman, would take charge.

Steinhoff said chief executive Markus Jooste, who had been at the helm for nearly 20 years and oversaw its expansion to one of the world’s largest household goods retailers, had resigned with immediate effect and consultants PwC would undertake an “independent investigation”.

Steinhoff has been aggressively expanding in developed markets since moving its primary share listing from Johannesburg to Frankfurt in 2015, snapping up Britain’s Poundland, U.S-based Mattress Firm and Australia’s Fantastic.

Steinhoff said Wiese would “embark on a detailed review of all aspects of the company’s business with a view to maximising shareholder value”, but its South African shares slumped 65 percent to an eight-year low of 15.87 by 1120 GMT. Its stock was down in Frankfurt by 66 percent following the news.

Steinhoff has been under investigation for suspected accounting irregularities by the state prosecutor in Oldenburg, Germany since 2015. Steinhoff has said that was a tax case relating to whether revenues were booked correctly, and taxable profit correctly declared.

Reuters reported last month that Steinhoff did not tell investors about almost $1 billion in transactions with a related company, despite laws that some experts believe require it to do so.

It is unclear what accounting irregularities the company was referring to in its statement on Wednesday. A spokesman declined further comment and attempts by Reuters to contact Jooste were not successful.

The development had wider repurcussions too, with the chief executive of Steinhoff African Retail (STAR), part of Steinhoff which includes the control of Shoprite, also resigning on Wednesday and its shares falling 21.5 percent to 19.30 rand by 0855 GMT.

“In light of these developments at Steinhoff, STAR’s existing CEO, Ben la Grange has decided to step down as CEO of STAR,” the company said.

 

TAX RATE QUESTIONS

Analysts have long questioned how Steinhoff managed to achieve such a low tax rate. Its tax rate has averaged 12 percent over the past five years — half the headline corporate tax rate in its main markets and less than half the rates paid by listed competitors including France’s Casino, Germany’s Metro AG and South Africa’s Woolworths.

Experts say such low tax rates can be the result of complex corporate structures which stretch accounting rules and such arrangements are occasionally challenged by courts as unlawful.

“The company recorded a very unusual tax rate of c. 15 percent and also guided that this would be the rate going forward,” Juergen Kolb, an analyst at Kepler Cheuvreux, said in a note, adding that if this tax rate was at risk it could also hit Steinhoff’s cashflow.

Kolb also raised the possibility that as chairman, Wiese’s role could now come under scrutiny too.

Steinhoff did not respond to requests for information about what, if anything, Wiese knew about the accounting problems now being investigated before Tuesday.

Investors also told Reuters they are concerned Wiese may be forced to sell shares he bought last year with borrowed money.

Wiese borrowed 1.6 billion euros ($1.9 billion) to buy additional Steinhoff shares through a family trust in September 2016, pledging 3.2 billion euros of his existing holding as security to the investment banks that lent the money.

With the share price plunge taking the security below the value of the loan, Wiese may be required by the financing banks — Citi, Goldman, HSBC and Nomura — to post more shares as collateral, or sell part of his holding.

($1 = 0.8459 euros)

 

(By TJ Strydom. Reporting by TJ Strydom; additional reporting by Tanisha Heiberg, Tom Bergin and Alasdair Pal; writing by Alexander Smith; editing by Tom Pfeiffer and Keith Weir)

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African Development Bank gives $148 million to support Namibia’s education, agriculture

Comments (0) Actualites, Africa, Agriculture, Education

CAPE TOWN/WINDHOEK (Reuters) – The African Development Bank (AfDB) has approved a total of 2 billion rand 148 million) in loans to boost Namibia’s education and agriculture sectors, it said on Tuesday.

The funds are aimed at helping reduce youth unemployment by boosting technical and vocational training, and reducing food imports by the South-western African country.

Both the education and agriculture projects will receive additional Namibian government contribution, the AfDB said.

The south-western nation’s unemployment rate jumped to 34 percent of the working population in 2016 from 28.1 percent in 2014, the last time a labour force survey was conducted by the Namibia Statistics Agency.

($1 = 13.4738 rand)

 

(Reporting by Wendell Roelf in Cape Town and Nyasha Nyaungwa in Windhoek; Editing by James Macharia)

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South Africa’s private-sector activity slows in November: PMI

Comments (0) Actualites, Africa, Economy

JOHANNESBURG, Dec 5 (Reuters) – South African private sector activity slowed in November as new orders and output fell, a survey showed on Tuesday.

The Standard Bank Purchasing Managers’ Index (PMI), compiled by IHS Markit, fell to 48.8 in November from 49.6 in October, staying below the 50 mark that separates expansion from

contraction.

“Lower underlying demand formed the basis for the decline as new orders fell at the quickest pace observed since early 2016.

This led output to fall, and at a faster rate than that noted in the previous month,” IHS Markit said in a statement.

South Africa’s economic gloom has been compounded by allegations of corruption in state-owned companies and of influence-peddling in government that have hurt investor confidence.

The ruling African National Congress will this month elect a successor to President Jacob Zuma as party chief, adding to the climate of uncertainty.

“Apart from South Africa’s economy being characterised by generally weak growth, we note that the rating agency review on November 24th and the upcoming ANC elective conference will have

delayed production and consumption decisions,” Standard Bank economist Kim Silberman said.

S&P Global Ratings downgraded South African debt to junk status on Nov. 24, citing its deteriorating economic outlook and public finances. Moody’s put the country on review for a

downgrade.

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Heineken to open $100 mln brewery in Mozambique in 2019

Comments (0) Actualites, Africa, Business

JOHANNESBURG (Reuters) – Heineken will open a $100 million brewery in Mozambique, its first production facility in the southern African nation, the brewer said on Monday.

The world’s second-largest brewer plans to start production at the 0.8 million hectoliters capacity plant in the capital Maputo in the first half of 2019, it said in a statement.

Heineken, which also brews Amstel and Sagres, opened a marketing office in Mozambique last year, importing products to compete in a market where AB Inbev’s 2M is entrenched.

AB Inbev last year took over SABMiller, gaining a brewery in Mozambique among a host of assets worldwide.

“We are delighted to enter Mozambique, where we see promising long-term economic perspectives,” said Heineken’s managing director for East and West Africa Boudewijn Haarsma.

Heineken built a brewery in neighbouring South Africa less than a decade ago after ending a deal with SABMiller for brewing Amstel beer.

 

(Reporting by TJ Strydom; Editing by James Macharia and David Evans)

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Tanzania restores power in parts of country after nationwide outage

Comments (0) Actualites, Africa

DAR ES SALAAM (Reuters) – Tanzania’s power utility said on Friday it had started to restore electricity to parts of the country after the East African nation was hit by a country-wide blackout on Thursday morning.

“Efforts are ongoing to make sure that power supply is restored to all parts of the country,” the state-run Tanzania Electric Supply Company (TANESCO) said in a statement.

TANESCO apologised for the power outage, but did not explain what caused a “technical glitch” in the national power grid that left the region’s No. 3 economy in a blackout that lasted more than 12 hours on Thursday.

Power was restored in many parts of commercial capital Dar es Salaam late on Thursday.

TANESCO said it had also restored electricity in the administrative capital Dodoma, as well as Iringa region in the centre and Tanga in the north east.

Partial blackouts occur regularly in Tanzania, which relies on hydro, natural gas and heavy fuel oil to generate electricity. Many businesses use power generators as backups, pushing up their operating costs.

Tanzania’s energy infrastructure has suffered from decades of underinvestment, neglect and corruption allegations, and investors have long complained the lack of reliable power hurts business there.

President John Magufuli is pushing a major hydropower project at Stiegler’s Gorge in the UNESCO-designated Selous Game Reserve to help tackle chronic electricity shortages.

The project would more than double the country’s current power generation capacity of around 1,500 megawatts (MW). The government has not said how much the project would cost or how it would raise financing, but wants it completed within three years.

Tanzania aims to boost power generation capacity to 10,000 MW over the next decade by also using some of its vast natural gas and coal reserves.

 

(Reporting by Fumbuka Ng’wanakilala; Editing by George Obulutsa and Mark Potter)

 

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Eskom says rolling cuts unlikely despite coal supply fall

Comments (0) Actualites, Africa, Environment, Infrastructure

By Nqobile Dludla and Mfuneko Toyana

JOHANNESBURG (Reuters) – South African utility Eskom said on Thursday rolling power cuts are unlikely despite coal supply possibly falling below a 20-day requirement at its Hendrina power station.

On Thursday investigative news outfit AmaBhungane reported Eskom may be forced into nationwide electricity cuts after a coal mine linked to the Gupta family threatened to halt supply.

Eskom has been at the heart of allegations of illegal contracts and undue influence in awarding tenders to the Gupta family, friends of South African President Jacob Zuma.

Spokesman Khulu Phasiwe confirmed Eskom had held an emergency meeting last Friday to determine whether strategic coal stockpiles at Hendrina and other stations were sufficient after Tegeta Exploration and Resources threatened to halt supply to Hendrina.

Coal supply at Eskom’s power stations stood at 74 days’ worth in March but had fallen to 25 days’ worth at Hendrina by October and may have fallen below a 20-day requirement since, Phasiwe said.

He told Reuters the company was investigating whether supply at all its 12 power stations complied with regulations requiring at least 20 days’ worth.

South Africa had regular power cuts between 2008 and 2015, hitting key industries and knocking economic growth as demand exceeded capacity.

Quoting sources, AmaBhungane alleged that Tegeta has been exporting coal from its Optimum Coal Mine while limiting supply to Eskom.

“If it happens that for some reason they are unable to supply us with coal then clearly it means that they would have breached the contract and therefore it becomes a legal matter,” Eskom’s Phasiwe said.

A spokeswoman for Tegeta parent company Oakbay, founded by the Gupta family as its main investment vehicle in South Africa, said the company would likely comment on Friday.

The family agreed in August to sell Tegeta but the sale has not been finalised.

The Guptas are accused of using their links with the 75-year old Zuma to wield influence and win state contracts. Zuma and the family both deny any wrongdoing.

($1 = 13.6469 rand)

(Editing by Ed Stoddard and Jason Neely)

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Kenya cuts electricity tariffs for manufacturers to create jobs

Comments (0) Actualites, Africa, Economy

NAIROBI (Reuters) – Kenya is cutting night-time electricity tariffs for manufacturers by half to entice investors and boost economic growth and job creation, a top ministry of energy official said on Wednesday.

The East African nation charges firms 15.70 shillings ($0.1522) per kilowatt hour, which is seen as uncompetitive compared with other African nations such as Ethiopia, South Africa and Egypt.

Joseph Njoroge, the principal secretary in charge of electricity at the ministry, said the reduction will apply from 10 pm to 6 am every day to boost usage of electricity when most households and businesses shut down.

“It is about, how do we create jobs for our people? How do we grow as a country? How do we move from an agro-based to an industrial-based country so that we can be able to enhance our GDP,” he told Reuters on the sidelines of an energy conference.

During his inauguration for a second term, President Uhuru Kenyatta said he planned to increase the share of manufacturing to annual economic output to 15 percent from 9 percent.

The government has been trying to boost investments in the sector in recent years with modest success, including the opening of light vehicle assembly plants by Peugeot and Volkswagen.

Taxes account for about a third of electricity tariffs and Njoroge said they will consider whether some of the charges can be reduced.

Kenya has an installed electricity capacity of 2,336 megawatts (MW) with maximum demand of 1,727 MW, Njoroge said. It has increased the share of the population with access to electricity to 70 percent in the last four years from 30 percent.

 

($1 = 103.1500 Kenyan shillings)

 

(Reporting by Duncan Miriri, editing by Louise Heavens)

 

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