Latest Updates from Reuters
Category

KCB begins job cuts to counter technology and Kenya rate cap

Comments (0) Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s KCB Group, the country’s biggest lender by assets, said it has offered employees voluntary early retirement in a bid to save 2 billion shillings ($19.36 million) each year.

KCB, which also operates in five neighbouring countries, had already said it would cut an unspecified number of jobs, mainly due to technological changes and the capping of commercial rates in Kenya last September.

Kenya has been a global pioneer in technological innovations in finance, launching the M-pesa mobile phone cash transfer system a decade ago and the first mobile phone-based bond last month.

The cost of the proposed buyouts, which are being offered in line with local laws, will take a year and a half to recover, KCB said on Thursday.

Staff have a month to apply, and the group plans to complete the exercise in the middle of June, sources at KCB told Reuters.

KCB said the cuts would help it align its staff with a banking industry that had “been dimmed by legislative and regulatory reforms”. It also said technological changes were now attracting non-traditional firms into the sector.

The government set a commercial interest rate limit of 400 basis points above the central bank rate, which stands at 10 percent. The cap, which also set a minimum deposit rate, has curbed bank earnings and private sector credit expansion.

The government argued lending rates were too high, a position opposed by banks who argued the cap could lead to credit rationing.

($1 = 103.3000 Kenyan shillings)

 

(Reporting by Duncan Miriri; Editing by Alexander Smith)

Read more

Nigerian finance minister says country needs to tap its non-oil revenues

Comments (0) Latest Updates from Reuters

By Chijioke Ohuocha

ABUJA (Reuters) – Nigeria plans to get out of recession by boosting government revenues and cracking down on corruption, Finance Minister Kemi Adeosun said on Thursday, and will also issue more international debt to pay for infrasturcture projects.

The country is in its second year of recession, brought on by lower oil prices, which have slashed government revenues, weakened the currency and caused dollar shortages frustrating business and households.

World Bank chief economist for Africa, Albert Zeufack, on Wednesday said fiscal adjustments in Nigeria would be “extremely challenging” and that the country needs to reform its finances to ensure it can hedge against any future currency crisis.

Nigeria also ranks well into the bottom third of Transparency International’s global corruption index. On Wednesday, for example, more than $43 million found in an apartment complex in Lagos was said to be related to an investigation into the handling of humanitarian aid.

Adeosun said her aim was to get the non-oil sector of Nigeria’s economy which accounts for around 90 percent of GDP to contribute to government revenues.

“Improving non-oil revenues is something we are working hard on. We are rolling out measures to get more people into the tax net,” Adeosun told CNBC Television.

“We are get out of recession because we are following the right type of policies. We are improving our revenues, we are improving our efficiencies in how we spend money.

“We are investing in the infrastructure that is needed, power, rail, road, the big enablers of growing sustainable economies.”

Adeosun said liquidity on currency markets has been improving as the central bank has boosted dollar supply, thanks to recently rising oil prices. She added that government was harmonising fiscal, monetary and trade policies to get the economy growing again.

However, the central bank, worried about the currency effects on inflation, has so far resisted calls to lower interest rates for 14 percent to enable the government borrow cheaply to spend its way out of recession.

Adeosun said Nigeria plans to issue long-term debt on the international markets more regularly for infrastructure projects, taking advantage of the country’s debt to GDP ratio of 13 percent. But the interest burden is rising due to low revenues.

 

(Editing by Jeremy Gaunt)

tagreuters.com2017binary_LYNXMPED3J101-OZABS-VIEWIMAGE

Read more

Zimbabwe tax agency beats first quarter revenue target

Comments (0) Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe’s tax agency said on Thursday it had collected $862 million in the first quarter of 2017, exceeding its target by 6 percent, helped by automated operations and improved compliance among businesses.

The southern African country, which fell short of its 2016 revenue goal by 4 percent as its economy suffered from weaker commodity prices and a liquidity crisis, expects to collect $3.7 billion this year.

President Robert Mugabe’s government, which fell out with western donors nearly two decades ago amid accusations of human rights abuses and electoral fraud, does not receive significant direct international aid and relies almost entirely on tax revenues to fund its budget.

Zimbabwe’s economy stagnated last year following a devastating drought while its budget deficit exploded as Mugabe’s administration struggled to pay its workers, which helped fan anti-government protests.

Zimbabwe Revenue Authority (ZIMRA) chairperson Willian Bonyongwe said gross revenue collections for the first quarter of 2017 were 10 percent higher than figures for the same period last year.

“This upward trend is a result of a battery of revenue enhancement measures … which include automation, greater enforcement and the fight against corruption,” Bonyongwe said in a quarterly statement.

Value-added tax on local sales, at 22.42 percent, weighed in with the biggest contribution towards the revenue, followed by individual tax at 20.05 percent, ZIMRA said.

Company tax made up 11.2 percent, while mineral royalties, at $16.39 million, exceeded the quarterly target by 21.42 percent on the back of improved output and commodity prices.

The tax agency says it expects better revenue flows this year, following an improved farming season, but has cautioned that an extended bank note shortage Zimbabwe has experienced since the beginning of 2016 will affect economic performance.

Zimbabwe’s government has revised upwards its 1.7 percent economic growth projection for 2017 to 3.7 percent, citing the rebound in agriculture.

 

(Reporting by Nelson Banya; Editing by Gareth Jones)

Read more

Tanzanian gold miner Acacia to review operations if export ban persists

Comments (0) Latest Updates from Reuters

LONDON (Reuters) – Tanzanian gold producer Acacia Mining will have to review its mining operations if the government’s ban on gold and copper ore exports remains in place, a senior executive said on Thursday.

Shares in Acacia, which is majority owned by Barrick Gold, briefly touched a six-week low, paring losses by 0900 GMT to trade down 3.7 percent after it said first-quarter core profits rose 25 percent to $82 million but cashflow was reduced by $36 million in part due to the ban.

The government halted the export of unprocessed ore on March 3, following President John Magufuli’s call for the construction of more gold smelters in the country, Africa’s fourth-largest gold producer.

“If we get to a point where it’s a pure stalemate and we don’t see that dialogue there, then we are going to have to re-appraise,” Chief Financial Officer Andrew Wray told Reuters, adding that negotiations continued.

“We are making contingency plans in the background of what we would need to do if we can’t resolve this.”

Non-essential spending in the quarter was pushed back in response to the ban and the company would have to “really take stock if it makes sense to continue producing given the cash burn”, Wray said.

The company has offered to fund a study on whether it could afford to build a smelter in Tanzania after a study in 2011 found there wasn’t sufficient ore volume in the country to justify it.

The export ban effects two of its three mines and the company said it would reassess the ongoing operation of both operations “over the coming weeks”.

“Clearly the message to the government is to sort this out or people are going to lose jobs (and the government royalties),” Investec analysts said in a note.

The company is also facing a tax audit and VAT refunds have not been received.

Acacia’s gold production in the first quarter totalled 219,670 ounces but sales were lower by 34,926 ounces.

However, Tanzania’s biggest gold producer stuck to its full-year production targets, as its mines continue to operate normally and stockpile its ore while negotiations continue with the government.

Acacia said in February it expects production this year to be between 850,000-900,000 ounces, up from about 830,000 ounces last year.

A technical committee appointed by President Magafuli is expected to report back in the next few days, Wray said.

 

(Additional reporting by Sanjeeban Sarkar in Bengaluru; Editing by Greg Mahlich)

tagreuters.com2017binary_LYNXMPED3J0BM-OZABS-VIEWIMAGE

Read more

World Bank sees sub-Saharan Africa GDP growth up in 2017 after poor 2016 performance

Comments (0) Latest Updates from Reuters

NAIROBI (Reuters) – Economic growth in sub-Saharan Africa is seen rising between this year and 2019, helped by better commodity prices and improved global conditions, the World Bank said in a report on Wednesday.

The bank said in its latest “Africa’s Pulse” report economic growth was seen expanding to 2.6 percent this year and further to 3.2 percent in 2018 and 3.5 percent a year later.

Sub-Saharan African growth was an estimated 1.3 percent in 2016, the World Bank said.

“The upturn in economic activity is expected to continue in 2018-19, reflecting improvements in commodity prices, a pickup in global growth, and more supportive domestic conditions,” the bank said in its report.

The bank said the 2016 growth was the worst for the region in more than two decades, hurt by poor performance in Nigeria, South Africa and Angola.

“This low growth rate was driven mainly by unfavourable

external developments, with commodity prices remaining low, and difficult domestic conditions,” the report said.

It said growth in Nigeria contracted by 1.5 percent, due to tight liquidity, delays in implementing its budget, and militant attacks on oil pipelines.

The bank said Angola’s growth slowed due to a fall in oil production while South Africa’s economic expansion slowed to 0.3 percent due to contractions in the mining and manufacturing industries and the effects of drought on agriculture.

“Excluding these three countries, growth in the region was estimated to be 4.1 percent in 2016,” the report said.

 

(Reporting by George Obulutsa; editing by John Stonestreet and Pritha Sarkar)

tagreuters.com2017binary_LYNXMPED3I0WD-OZABS-VIEWIMAGE

Read more

S.Africa finmin dismisses adviser’s nationalisation call, seeks to calm investors

Comments (0) Latest Updates from Reuters

PRETORIA (Reuters) – South Africa’s finance minister dismissed calls from one of his own advisers for the nationalisation of banks and mines on Wednesday, and acknowledged that investors had been unsettled by turmoil surrounding his ministry.

Malusi Gigaba, appointed in an abrupt resuffle late last month that shook markets and prompted two ratings downgrades, told journalists he needed to reassure investors as he prepared to fly out to an IMF meeting in the United States.

President Jacob Zuma’s decision to sack Gigaba’s respected predecessor Pravin Gordhan hammered the rand and triggered protests by pro-democracy activists and opposition parties.

Uncertainty over the government’s fical policy rose again over the weekend when one of Gigaba’s advisers, Chris Malikane, wrote an opinion piece in South Africa’s Sunday Times backing the nationalisation of mines, banks and insurance firms.

Gigaba said the article by the economics professor at Johannesburg’s University of the Witwatersrand did not represent government policy.

“The technical advice he provides will never detract from the policies of the (ruling) African National Congress which don’t entail the wholesale nationalisation of the mines, the insurance industries and the land,” Gigaba told journalists.

“The changes in the national executive announced on the 30th of March has left some of them (investors) concerned and we need to give that reassurance in terms of government policy. It was only changes in the national executive and not changes in government policy,” he added.

Fitch and S&P Global Ratings both downgraded South Africa to junk after Gordhan’s sacking. Gigaba reiterated on Wednesday that he would meet Moody’s to give the ratings agency assurances about government policy in a bid to avoid a third downgrade.

Some political figures in the opposition have called for nationalisation of mines, saying private companies have failed to spread wealth and control of the economy beyond a small black elite and the white minority that ran the country under apartheid.

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

tagreuters.com2017binary_LYNXMPED3I0GI-OZABS-VIEWIMAGE

Read more

IMF lowers 2016-17 growth forecast for Egypt to 3.5 percent

Comments (0) Latest Updates from Reuters

CAIRO (Reuters) – Egypt’s economy will grow by 3.5 percent during the 2016-17 financial year, the International Monetary Fund said on Tuesday, lowering the 4 percent forecast it made in a report last year.

The IMF last November agreed to provide Egypt with a three-year, $12 billion loan as part of an ambitious economic reform programme that includes levying new taxes and cutting energy subsidies.

“In Egypt, comprehensive reforms are expected to deliver sizable growth dividends, lifting growth from 3.5 percent in 2017 to 4.5 percent in 2018,” the IMF said in its World Economic Outlook on Tuesday, in which it raised its overall global growth forecast. [nL1N1HQ0XS]

The 2017 figure, which refers to the 2016-17 fiscal year ending in June, is lower than what the international lender had expected in a report around the time Egypt accepted the loan. It is also a drop from the 4.3 percent the North African country recorded in 2015-16.

The report did not provide a reason for the downward revision.

Egypt has been hit by soaring inflation since it floated its currency in November, allowing it to roughly halve in value. Urban consumer inflation hit 30.9 percent year-on-year in March, its highest in decades, though month-on-month inflation has slowed. [nL8N1HI29X]

 

(Reporting by Eric Knecht; editing by Andrew Roche)

Read more

Tunisia central bank to steadily weaken dinar, finance minister says

Comments (0) Latest Updates from Reuters

TUNIS (Reuters) – Tunisia’s central bank will reduce its interventions so the value of the dinar steadily declines, but it will prevent a dramatic slide in the currency, the finance minister said on Tuesday.

The strategy is part of Tunisia’s talks on reforms with the International Monetary Fund. The IMF is pushing Tunisia to overhaul its finances and reduce public spending, especially public-sector wages, where spending is among the highest in the world compared with gross domestic product.

Part of those negotiations have been finding ways to encourage exports and reduce reliance on imports, a strategy which would benefit from a weaker dinar.

“The central bank is going to minimise its interventions to reduce the value of the dinar in a gradual slide of the dinar,” Finance Minister Lamia Zribi told local Express FM Radio. “But we will avoid a brutal devaluation like that in Egypt.”

The dinar reached 2.5 dinars to the euro on Monday.

Egypt floated its currency, the pound, last year, letting it fall by 32.3 percent.

The IMF on Monday agreed to release a delayed $320 million tranche of Tunisia’s $2.8 billion in loans. It had been held up by concerns over Tunisia’s lack of progress in its reforms.

The agreement to release the funds came after talks in Tunis that included setting priorities for progress in the reforms. Those include increasing tax revenue, reducing the public wage bill through civil-service reforms and reducing energy subsidies, according to an IMF statement.

The IMF also called for tighter monetary policy that would counteract inflationary pressures, and said “greater exchange rate flexibility would help narrow the large trade deficit.”

The finance minister said the reforms on public works may include early retirement, reforms to loss-making public companies and social funds.

“For our part we are willing to advance the reforms and avoid the painful reforms such as lifting subsidies completely,” she said.

Tunisia has been held up by as an example of a democratic transition since the overthrow of former President Zine El-Abidine Ben Ali in 2011. It has enacted a new constitution, held free elections and adopted compromise-style politics to overcome tensions between secular and Islamist leaders.

But economic reforms have lagged and many people are concerned about the cost of living, unemployment and rural marginalisation, especially in southern and central regions that were the heartland of the 2011 uprising.

 

($1 = 2.3148 Tunisian dinars)

 

(Reporting by Tarek Amara; Writing by Patrick Markey)

tagreuters.com2017binary_LYNXMPED3H0R3-OZABS-VIEWIMAGE

Read more

Morocco plans to start liberalising dirham in 2nd qtr: cenbank governor

Comments (0) Latest Updates from Reuters

RABAT (Reuters) – Morocco plans to start the first stage of liberalising its dirham currency in the second quarter of this year, though the process to full flexibility may take 15 years, the central bank governor said on Tuesday.

“We will begin the first phase of liberalising the dirham in the second quarter,” Governor Abdellatif Jouahri told Reuters at an Arab finance ministers meeting in Rabat. “I can’t tell how long the duration of each phase will take, it depends on the market.”

 

(Reporting by Samia Errazzouki; writing by Patrick Markey)

tagreuters.com2017binary_LYNXMPED3H0FD-OZABS-VIEWIMAGE

Read more

Tunisia’s economy to see recovery in 2017: premier

Comments (0) Latest Updates from Reuters

By Tarek Amara

TUNIS (Reuters) – Tunisia’s economy will start to regain momentum this year after six years of slow growth, driven by the revival of the vital tourism industry and the return to state phosphate production, Prime Minister Youssef Chahed said.

Chahed was speaking in an interview with state television late on Sunday, addressing concerns about the economy after hundreds of youths protested over the last week in some towns, demanding development and employment.

Tunisia has been praised as an example of democratic transition since the overthrow of former President Zine El-Abidine Ben Ali in 2011. But many people are concerned about the cost of living, unemployment and the marginalisation of rural towns – factors that fueled the uprising that sparked the Arab Spring revolts.

“The tourism sector is better now and will grow by 30 percent this year. Phosphate production returned to old levels and we expect a good agricultural season,” Chahed said.

He said that tax revenues rose by 14 percent in the first quarter of this year.

The prime minister said that this upward trend was still fragile and threatened by the inflammatory discourse of some politicians and by random strikes and protests that have hurt investor interest in the country.

Tunisia expects economic growth to rise to 2.5 percent in 2017 after failing to exceed 1 percent for the last six years.

The government is under pressure from international lenders to reduce public spending and cut its deficit as part of economic and financial reforms that have been delayed for years by political infighting and inertia.

A delegation from the International Monetary Fund last week arrived in Tunisia for talks on accelerating the North African country’s economic reforms, after postponing the payment of a second tranche of aid worth $350 million, out of a $2.8 billion loan programme.

The IMF put back the payment scheduled last December citing a lack of progress in overhauling the public sector wage bill, public finances and state banks among other issues.

Chahed said talks with the multinational lender “look positive and I am optimistic after negotiations” because reforms were progressing according to a specific timetable in the public sector and social funds.

“We are in good shape for these reforms and we are the first government that has the courage to start these delicate reforms that have been stalled for years,” he said, without giving details.

Tunisia is expected to sell stakes in three state-owned banks and cut up to 10,000 public sector jobs.

Chahed said parliament will discuss this month “an economic emergency” bill that will allow the government to bypass bureaucratic hurdles and speed up large-scale projects as it seeks to boost growth and create jobs.

 

(Editing by Patrick Markey and Hugh Lawson)

tagreuters.com2017binary_LYNXMPED3H0AD-OZABS-VIEWIMAGE

Read more