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Tanzania’s President Magufuli orders officials to speed up LNG project

Comments (0) Africa, Latest Updates from Reuters, Politics

By Fumbuka Ng’wanakilala

DAR ES SALAAM (Reuters) – Tanzanian president John Magufuli ordered officials on Monday to speed up long-delayed work on a planned liquefied natural gas (LNG) plant, saying implementation of the project had taken too long.

BG Group, recently acquired by Royal Dutch Shell, alongside Statoil, Exxon Mobil and Ophir Energy, plan to build a $30 billion-onshore LNG export terminal in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC) by the early 2020s.

But a final investment decision has been held up by government delays in finalising issues relating to acquisition of land at the site and establishing a legal framework for the nascent hydrocarbon industry.

“I want to see this plant being built, we are taking too long. Sort out all the remaining issues so investors can start construction work immediately,” the presidency quoted Magufuli as saying in a statement.

Magufuli, a reformist who took office in November, has sacked several senior officials for graft and cut spending he deemed wasteful, such as curbing foreign travel by public officials.

The president’s office said Magufuli issued the instructions for the LNG project to be fast-tracked during talks with Oystein Michelsen, Statoil’s Tanzania country manager, and senior Tanzanian government energy officials.

The Tanzanian presidency did not give the construction schedule for the project, but said once completed the LNG plant would have an expected economic lifespan of more than 40 years.

The government said it has acquired over 2,000 hectares of land for the construction of the planned two-train LNG terminal at Likong’o village in the southern Tanzanian town of Lindi.

Tanzania discovered an additional 2.17 trillion cubic feet of possible natural gas deposits in February, raising the east African nation’s total estimated recoverable natural gas reserves to more than 57 trillion cubic feet.

East Africa is a new hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda and major gas reserves discovered in Tanzania and Mozambique.

 

 

(Editing by Aaron Maasho and Richard Balmforth)

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Egypt’s supply minister resigns amid corruption probe

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CAIRO/ABU DHABI (Reuters) – Egyptian Minister of Supply Khaled Hanafi resigned from his post on Thursday, the highest level fallout from a corruption probe into whether millions of dollars intended to subsidise farmers were used to purchase wheat that did not exist.

“I announce leaving my post so that the state can choose who will bear and continue this path of giving,” Khaled Hanafi said on state television.

Egypt, the world’s largest importer of wheat, has been mired in controversy over whether much of the roughly 5 million tonnes of grain the government said it procured in this year’s harvest exists only on paper, the result of local suppliers falsifying receipts to boost government payments.

If Egypt’s local wheat procurement figures were misrepresented, it may have to spend more on foreign wheat purchases to meet local demand – even as it faces a dollar shortage that has sapped its ability to import.

Egypt’s supply ministry is in charge of a massive food subsidy programme and the main state grain buyer, the General Authority for Supply Commodities (GASC).

Parliamentarians who formed a fact-finding commission to investigate the fraud have said upwards of 2 million tonnes, or 40 percent of the locally procured crop, may be missing.

The general prosecutor has ordered arrests, travel bans, and asset freezes for several private silo owners and others allegedly involved in the scandal.

While Hanafi has not been accused of directly profiting from misallocated subsidies, parliamentarians, industry officials, and media commentators have in recent weeks pinned blame for the crisis squarely on his shoulders.

The prospect of hundreds of millions of dollars in squandered government subsidies comes as Egypt gears up for a raft of austerity measures, including various subsidy cuts agreed to as part of a $12 billion IMF programme that could bring pain for its poorest.

 

(Reporting by Eric Knecht and Maha El Dahan; additional reporting by Asma Alsharif; editing by William Hardy)

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Zuma says backs South Africa finmin but can’t stop probe

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By Mfuneko Toyana

PRETORIA (Reuters) – South African President Jacob Zuma said on Thursday he backs Finance Minister Pravin Gordhan but cannot intervene in a police investigation over a suspected spy unit at the tax service, signalling a prolonged tussle that could rock markets further.

Gordhan said on Wednesday he had done nothing wrong and had no legal obligation to obey a police summons linked to an investigation into whether he used the South African Revenue Service to spy on politicians including Zuma.

The rand, which had tumbled 5 percent since Tuesday in response to the investigation, picked up on Thursday and gained further ground after Zuma’s statement, while government bonds also firmed, even though analysts said the president had offered only qualified support.

News of Gordhan’s summons this week compounded investors’ worries about a power struggle between Zuma and Gordhan as Africa’s most industrialised economy teeters near recession and credit rating agencies consider downgrading it to “junk”.

The main opposition party called on Thursday for a parliamentary debate into what it called a “witch-hunt” against Gordhan, who was in charge of the tax service when the unit under investigation was set up.

Investors and rating agencies back Gordhan’s plans to rein in government spending in an economy that has been forecast by the central bank to register no growth this year.

In his first public comments on the matter since it surfaced late on Tuesday, Zuma said he had noted the concerns by individuals and various organisations over the investigation.

“President Jacob Zuma wishes to express his full support and confidence in the Minister of Finance and emphasises the fact that the minister has not been found guilty of any wrong doing,” the presidency said in a statement.

“The Presidency wishes to also emphasise that President Zuma does not have powers to stop any investigations into any individual/s,” it said, adding that Zuma could not bring a halt to the probe even if it was negatively affecting the economy.

 

TENSIONS WITH TREASURY

A Zuma-backed plan to build a series of nuclear power plants, at a cost of as much as $60 billion, has caused tension with the Treasury for months and is likely adding to pressure on Gordhan’s position, analysts say. The presidency said in May that Zuma was not warring with Gordhan.

On Thursday, the presidency defended plans by cabinet to give Zuma supervision over state-owned firms after Gordhan’s allies said this would limit the finance minister’s control.

Zuma’s team and the Treasury under Gordhan have disagreed about government spending, including at loss-making state companies like South African Airways, analysts say. [nL8N1B6328]

Analysts also questioned the extent of Zuma’s stated support for his finance minister.

“It was an ambiguous vote of confidence in Pravin Gordhan which would suggest that the agencies supposedly investigating in Pravin Gordhan will be given relatively free rein to continue these investigations,” said Daniel Silke, a director at Political Futures Consultancy.

NKC African Economics analyst Gary van Staden concurred.

“Anybody who watches English football can tell you when the owner says he has confidence in the manager, the manager is out of there in a week,” he said.

Political activists protested outside the offices of the Hawks, the elite police unit that is investigating Gordhan, in solidarity with the minister, where two former officials of the tax service presented themselves to the police.

Hawks spokesman Hangwani Mulaudzi declined to comment.

A former finance minister, Trevor Manuel, said on Wednesday the economy would be “destroyed” if Zuma fired Gordhan, after he changed finance ministers twice in one week in December.

 

(Additional reporting by Joe Brock, James Macharia and Tanisha Heiberg; Writing by James Macharia; editing by Dominic Evans)

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Libya sovereign fund claimant denounces U.N.-backed govt’s management plan

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Demonstration_in_Bayda_(Libya,_2011-07-22)

By Claire Milhench

LONDON (Reuters) – A claimant to the chairmanship of Libya’s $67 billion sovereign fund on Monday denounced the appointment by the country’s United Nations-backed government of a panel to run the fund, saying he had not been formally asked to step down.

Last week, the Government of National Accord (GNA) appointed a five-member caretaker committee to run the Libyan Investment Authority (LIA). The announcement was welcomed by Western governments, but it did not list AbdulMagid Breish amongst the panel members.

The GNA was designed to resolve a conflict that flared up in 2014, when an armed alliance took control of institutions in Tripoli and the newly elected parliament relocated to the east.

The hope was that it would reunify institutions such as the central bank and the LIA, but opposition to the GNA continues with the parliament in the east of Libya voting on Monday against a motion of confidence in the Tripoli-based administration.

The LIA has been hampered by a long-running leadership dispute, which mirrors the split nature of the country and its institutions following the fall of Gaddafi in 2011. This has led to multiple individuals claiming to lead key bodies such as the LIA, the central bank and the national oil company.

Breish was one of two men who claimed to be chairman of the LIA. He was appointed chairman in June 2013, but stepped aside a year later, then said he had been reinstated following a decision by the Libyan Court of Appeal.

His rival, Hassan Bouhadi, was appointed chairman by the authorities in the east of Libya. But he resigned earlier this month, saying political infighting had made it too difficult for him to carry out his duties.

He has been replaced by Ali Shamekh, who was installed as chief executive officer of the LIA by the Tobruk-based board of trustees.

In a statement issued on Monday, Breish questioned whether the GNA’s move complied with Libyan law and challenged the technical expertise of the five-member panel.

The statement said Breish had not yet received a formal notice mandating him to hand over his responsibilities, but on receipt of this, he would make an application to the Libyan courts to clarify the legal position.

“While I accept and share the Government of National Accord’s desire to unify the Libyan Investment Authority, it is my responsibility as chairman and CEO to ensure that it is done in compliance with Libyan law, that the technical expertise is in place to manage the institution and its funds, and that multi-million dollar litigations that we are pursuing in overseas courts are not adversely affected,” he said.

“I am therefore seeking an expedited court ruling to clarify the current legal position.”

The LIA is currently embroiled in two lawsuits against investment banks Goldman Sachs and Societe Generale, seeking over $3 billion lost in trades carried out under the Gaddafi regime.

Breish’s statement added that he was holding discussions with the directors of the Tobruk-appointed board of trustees, with the aim of establishing a single, united board of directors. A formal meeting is expected early next week, it said.

 

(Editing by Ralph Boulton and Andrew Roche)

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Morocco and the AU: A Game of Thrones?

Comments (0) Africa, Economy, Politics

African Union

After 30 years on the outside, Morocco is seeking a return to the African Union body that it dramatically left in 1984. As of 2002 this body is called the African Union, previously known as The Organization of African Unity (OAU). Some see this move as long overdue while critics see it as an insidious maneuver to further Moroccan agendas. The controversial and complex situation revolves around Morocco’s disputed ownership of the Western Sahara in North-West Africa. Much has changed since Morocco’s departure, including the AU itself.

The ghosts of the past are not easily dispelled. Regional entities remain untrusting towards Morocco after the nation claimed ownership of the Western Sahara region in the wake of the Spanish withdrawal in 1975. Critics condemned the action as an illegal annexation and an opportunistic land-grab: the region contains vast phosphate resources, abundant fisheries and large untapped oil potential. Morocco however believes that the Western Sahara has always been part of Greater Morocco’s true borders. This annexation for them was merely a return of the Sahara to the “motherland”, and not an aggressive power play. The Western Sahara’s partially recognized ruling body, the SADR (Sahrawi Arab Democratic Republic), severely contest these historical claims to ownership.

History of Morocco’s relationship with the AU

When the independence of the Western Sahara was recognized by the OAU, Morocco immediately exited the union and has been on the outside ever since. So the question is: what has changed? In recent years Morocco has been fostering closer relations with its regional neighbors. This may just be the next step in the process of strengthening their African ties, with a desire to become a key economic and political player in the continent. “For a long time our friends have been asking us to return to them so that Morocco can take up its natural place within its institutional family,” King Mohammed VI said in a speech to African leaders. Morocco claims the motives are entirely separate from its stance on the Western Sahara, and wishes to rejoin solely from an economic standpoint.

A more cynical reasoning is that after many years of diminished regional influence due to its absence from the AU, Morocco will be in a stronger position to undermine the legitimacy of the Western Sahara once inside the organization. An official from the AU speaking with anonymity said, “The AU general secretariat is concerned that Morocco wants to return in order to argue the SADR issue from within the AU.”

Will their stubbornness keep them from rejoining?

Morocco is unlikely to concede any significant points over their occupation of the Western Sahara. Some commentators feel that it is likely that they will continue some form of hostilities towards the SADR whether inside or outside the AU. The rest of the union needs to carefully consider whether it can better manage the outcome of disagreement with Morocco inside, or outside the union. Morocco’s return to the organization will undoubtedly cause conflicts. The nations of the AU and beyond are already taking sides. Despite Egypt and Tunisia’s links to Morocco via their common cultural identity and geographic locations, they have not issued statements or official comments supporting Morocco’s potential re-entry. Mona Omar, an assistant to the Egyptian foreign minister said, “Egypt is committed to taking neutral positions when it comes to Algeria and Morocco.”

Realistically, 30 years ago when Morocco left, the union was a far less influential and interventionist body. If it returns it will be to an entity that is far more prepared and capable to intercede in conflict. It will not sit back and watch Morocco bully the Western Sahara, even if it re-enters with no restrictions on its actions.

The African Union’s evolution

Today, the AU is a pan-African organization designed to promote peace and prosperity throughout the continent of Africa. It is quite different to the OAU in that it can and does intervene in conflict and is not just advisory in nature. Its Peace and Security Council can deploy military forces and initiate peacekeeping missions throughout Africa, while also suspending memberships if countries abandon democratic practices, excluding them from trade relations and intercontinental funds. This is particularly pertinent to the discussion, the AU will not play placid spectator to Morocco’s intimidation. Morocco will be required to make some concessions to its diplomatic relations if it wants to play a central role within the African Union.

The circumstances surrounding Morocco’s departure remain unchanged, so critics have questioned Morocco’s timing and motives. The dispute over the Western Sahara is unresolved, causing tension throughout the whole of North Africa. For all parties to be duly satisfied it will take delicate diplomacy and Morocco would undoubtedly need to meet certain stipulations laid out by the union. Both parties have made it clear that they will not be compromising on their standpoint on the SADR; whether this will be a sticking point over Morocco’s membership, remains to be seen.

 

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South African assets sink after police summon finance minister

Comments (0) Economy, Latest Updates from Reuters, Politics

By Joe Brock and Mfuneko Toyana

JOHANNESBURG (Reuters) – South African assets slumped on Wednesday after an elite police unit summoned Finance Minister Pravin Gordhan over an investigation into a suspected rogue spy unit in the tax service, fuelling speculation that there was a plot to oust him.

Gordhan and other former officials at the South African Revenue Service (SARS) must report to the Hawks on Thursday morning in relation to contravention of surveillance regulations, a source close to the matter told Reuters.

The announcement added to investors’ worries about leadership at the finance ministry as Africa’s most developed economy teeters on the edge of recession and credit rating agencies consider downgrading it to “junk” status by year-end.

Shadow finance minister David Maynier urged authorities not to take any more formal steps against Gordhan.

“The arrest of the finance minister would shatter investor confidence, risk a sovereign ratings downgrade and be a disaster for the already fragile zero growth, zero jobs economy in South Africa,” the member of the opposition Democratic Alliance said in a statement.

The Treasury confirmed the Hawks had contacted Gordhan and that he was seeking legal advice, but declined to go into further details.

Gordhan is due to speak at a debate in Cape Town at 7 p.m. (1700 GMT). Hawks spokesman Hangwani Mulaudzi said it did not comment on ongoing investigations.

The rand extended losses after dropping 3 percent the previous session when the news about Gordhan emerged.

Bonds also slumped with the yield on benchmark 2026 issue rising 46 basis points to 8.935 percent. South Africa’s stock market banking index opened almost four percent down.

 

“PLOT TO OUST GORDHAN”

A Zuma-backed plan to build a fleet of nuclear power plants, at a cost of as much as $60 billion, has been a cause of tension with the Treasury for months and is likely adding to pressure on Gordhan’s position, analysts say.

Russian state-backed companies are the favourites to win the nuclear bid, industry sources say.

“This is all part of a plot to oust Gordhan,” political analyst Prince Mashele said. “Gordhan refuses to sign-off on the Russian nuclear deal.”

Gordhan has refused to be drawn publicly on whether he supports the nuclear project but has said South Africa will only enter agreements it can afford.

Presidency spokesman Bongani Majola did not respond to requests for comment.

Local media reports in May said Gordhan may face arrest on espionage charges for setting up the unit to spy on politicians including President Jacob Zuma.

Zuma has rejected allegations by opposition parties that he has failed to publicly back Gordhan, saying that the law should take its course.

Zuma spooked investors in December by replacing then finance minister Nhlanhla Nene with relatively unknown lawmaker David van Rooyen. After markets tumbled, Zuma demoted van Rooyen and appointed Gordhan, in his second stint in the job.

Nene’s refusal to sign-off on the nuclear deal contributed to his downfall, government sources said at the time.

 

(Additional reporting by Nqobile Dludla and Ed Stoddard; Editing by Andrew Heavens)

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Tanzania extends its e-tax system to cut fraud

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John Magufuli

Tanzania’s president, John Magufuli, has extended the e-tax system to all government bodies as he bids to slash fraud.

Tanzania’s president, John Magufuli, has been in office for less than a year, but he is already making a name for himself as a staunch opponent of fraud and corruption. Magufuli has attacked tax evasion and corruption, in a bid to ensure that the government no longer loses billions of dollars in unpaid funds. One of the most significant measures taken in this battle with tax evasion has been the announcement that the nation’s e-tax system will now apply to all government departments and bodies.

The e-tax system

It was 6 years ago that Tanzania first introduced its e-tax system, but it has taken until now for the system to be applied to government positions and departments.

The e-tax system involved the distribution of Electronic Fiscal Devices (EFDs) by the Tanzania Revenue Authority (TRA) to Tanzanian businesses. The EFD is an advanced version of a traditional cash register that records all transactions, and provides the TRA with an easily processed record of the tax owed.

Prior to this point, businesses recorded sales in hand written books, which not only allowed much easier deceit, but ensured that the TRA’s job was far more difficult. Director of Education and Taxpayer Services Richard Kayombo said that businesses would claim to have sold less, and that the old system was practically “worthless” in terms of stopping tax fraud.

In contrast, EFDs are compatible with the TRA’s own Electronic Fiscal Device Management (EFDM), which provides the government with real-time sales information. Kayombo said, “The system enables us to get information directly from a trader when they make business transactions.”

An Electronic Fiscal Device (EFD)

An Electronic Fiscal Device (EFD)

While the system was initially rolled out to large scale traders in 2010, a second drive in 2013 saw it become compulsory for mid-sized traders too. However, it has taken President Magufuli until now to extend this measure to governmental departments and bodies too.

Magufuli not only feels that it will be a huge financial boon for government coffers, but that it is also a matter of principle. Magufuli explained, “We forced entrepreneurs to capitalize on the electronics tax collection while we, in government, have not resorted to the same thing, which is a total contradiction.”

The increased reach of Tanzania’s e-tax system ensures that the government cannot be accused of hypocrisy in regards to its stance on corruption, and it also means that taxation revenue is expected to exceed the government’s original target for the financial year. The commissioner general of the TRA, Alphayo Kidata, predicted that takings would surpass “the collection target of 15.5 trillion Tanzanian shillings during the 2016/2017 fiscal year.”

This is a figure akin to more than $7 billion.

Looking to reap the rewards

In the first 2 months of Magufuli’s crackdown on taxes last year, the TRA collected around $700 million in taxes. However, while some of this was achieved by targeting corrupt officials and business owners, the true impact of the president’s policy will not be seen until the end of the financial year.

The rollout of e-taxes to all government bodies was announced only last month, after Magufuli met with the Rwandan president, Paul Kagame, who has successfully implemented a similar system in his nation. Rwanda has offered to send IT experts to assist Mr. Magufuli’s government in the implementation of the technology, and the announcement was greeted with widespread approval by Tanzanian commentators and experts. If the move is as successful as hoped, Magufuli’s government will be in a strong position to build the economy and social infrastructure.

In 2014, tax collections covered 75% of government expenditure, but universal e-taxation could make a dramatic difference to this. Mr Kayombo confirmed that in the first year of commercial businesses using EFDs, tax revenue rose by 23%, and by 27% in the second year. A similar success within government institutions would provide Tanzania with a huge influx of revenue.

Professor George Shumbusho, Senior Lecturer at Mzumbe University, felt that it was an excellent move from the government, and one that could have a massive impact, exclaiming, “This is a commendable decision given the fact that the country has been losing a lot of money to unscrupulous public officials…With this system, the government may be able to fund its budgets by 100 per cent.”

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Can Morocco rejoin the AU?

Comments (1) Africa, Featured, Politics

African Union

Morocco seeks to return to the African Union, but the issue of Western Sahara remains unresolved.       

After 30 years on the outside, Morocco is seeking a return to the African Union, a body that it dramatically left in 1984. As of 2002 this body is called the African Union, previously known as The Organization of African Unity (OAU). Some see this move as long overdue while critics see it as an insidious maneuver to further Moroccan agendas. The controversial and complex situation revolves around Morocco’s disputed ownership of the Western Sahara in North-West Africa. Much has changed since Morocco’s departure, including the AU itself.

The ghosts of the past are not easily dispelled. Regional entities remain distrustful towards Morocco after the nation claimed ownership of the Western Sahara region in the wake of the Spanish withdrawal in 1975. Critics condemned the action as an illegal annexation and an opportunistic land-grab: the region contains vast phosphate resources, abundant fisheries and large untapped oil potential. Morocco however believes that the Western Sahara has always been part of Greater Morocco’s true borders. This annexation for them was merely a return of the Sahara to the “motherland,” and not an aggressive power play. The Western Sahara’s partially recognized ruling body, the SADR (Sahrawi Arab Democratic Republic), severely contest these historical claims to ownership.

History of Morocco’s relationship with the AU

When the independence of the Western Sahara was recognized by the OAU, Morocco immediately exited the union and has been on the outside ever since. So the question is: what has changed? In recent years Morocco has been fostering closer relations with its regional neighbors. This may just be the next step in the process of strengthening its African ties, with a desire to become a key economic and political player in the continent. “For a long time our friends have been asking us to return to them so that Morocco can take up its natural place within its institutional family,” King Mohammed VI said in a speech to African leaders. Morocco claims the motives are entirely separate from its stance on the Western Sahara, and wishes to rejoin solely from an economic standpoint.

A more cynical reasoning is that after many years of diminished regional influence due to its absence from the AU, Morocco will be in a stronger position to undermine the legitimacy of the Western Sahara once inside the organization. An official from the AU speaking with anonymity said, “The AU general secretariat is concerned that Morocco wants to return in order to argue the SADR issue from within the AU.”

Issue of Western Sahara remains

Western Sahara

Western Sahara

Morocco is unlikely to concede any significant points over their occupation of the Western Sahara. Some commentators feel that it is likely that they will continue some form of hostilities towards the SADR whether inside or outside the AU. The rest of the union needs to carefully consider whether it can better manage the outcome of disagreement with Morocco inside or outside the union. Morocco’s return to the organization will undoubtedly cause conflicts. The nations of the AU and beyond are already taking sides. Despite Egypt and Tunisia’s links to Morocco via their common cultural identity and geographic locations, they have not issued statements or official comments supporting Morocco’s potential re-entry. Mona Omar, an assistant to the Egyptian foreign minister said, “Egypt is committed to taking neutral positions when it comes to Algeria and Morocco.”

Realistically, 30 years ago when Morocco left, the union was a far less influential and interventionist body. If it returns, it will be to an entity that is far more prepared and capable to intercede in conflict. It will not sit back and watch Morocco bully the Western Sahara, even if it re-enters with no restrictions on its actions.

The African Union’s evolution

Today, the AU is a pan-African organization designed to promote peace and prosperity throughout the continent of Africa. It is quite different to the OAU in that it can and does intervene in conflict and is not just advisory in nature. Its Peace and Security Council can deploy military forces and initiate peacekeeping missions throughout Africa, while also suspending memberships if countries abandon democratic practices, excluding them from trade relations and intercontinental funds. The AU will not play placid spectator to Morocco’s intimidation. Morocco will be required to make some concessions to its diplomatic relations if it wants to play a central role within the African Union.

The circumstances surrounding Morocco’s departure remain unchanged, so critics have questioned Morocco’s timing and motives. The dispute over the Western Sahara is unresolved, causing tension throughout the whole of North Africa. For all parties to be duly satisfied it will take delicate diplomacy and Morocco would undoubtedly need to meet certain stipulations laid out by the union. Both parties have made it clear that they will not be compromising on their standpoint on the SADR; whether this will be a sticking point over Morocco’s membership remains to be seen.

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Ghana says on track to halve budget deficit after IMF deal

Comments (0) Africa, Latest Updates from Reuters, Politics

ACCRA (Reuters) – Ghana is on target to halve its fiscal deficit this year after its $918-million aid deal with the International Monetary Fund, Finance Minister Seth Terkper said on Wednesday.

His comments appeared designed to allay uncertainty over the deal that emerged this month when parliament rejected a key component that was designed to promote fiscal discipline. The following day the government suspended a planned Eurobond issue.

The government issued a bill to eliminate central bank financing of the budget deficit in line with the requirements of the deal but on Aug. 2 parliament passed the bill with an amendment allowing financing of up to 5 percent.

Ghana’s public debt eased to 63 percent of GDP in May from 72 percent at the end of 2015, while consumer inflation dropped to 16.7 percent in July from 19 percent in January, Terkper said, citing the impact of the deal that began in April 2015.

The central bank expects inflation to slow to 8 percent, plus or minus two, by September 2017.

“We are set to halve the deficit from 12 percent in 2012, and we have also started stemming the rate of growth of the public debt,” he told a meeting of private businesses in Accra.

Ghana, which exports cocoa, gold and oil, signed the assistance programme to bring down inflation and the budget deficit and stabilize the currency.

Terkper said the debt stock could rise marginally to 65-66 percent of GDP on planned disbursements towards the end of the year but will remain below 70 percent.

Ghana pulled out of a planned five-year $500 million amortising Eurobond this month because investors demanded a yield higher than the single digits the government had expected.

Terkper led the government finance team on the deal and said his team only suspended pricing of bids.

“We did not call off the 2016 bond …. What we did was to suspend pricing …. We must sometimes hold our nerves when we’re in the capital market to look for the right window before we strike in order to get the best results,” he said.

Ghana will on Thursday begin pumping oil from a second offshore oil field, Tweneboa-Enyenra-Ntomme or TEN, in addition to its flagship Jubilee production which began in late 2010.

 

(By Kwasi Kpodo. Editing by Matthew Mpoke Bigg)

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Nigeria plans capital spending of $312 million in coming days: VP

Comments (0) Africa, Latest Updates from Reuters, Politics

By Chijioke Ohuocha

LAGOS (Reuters) – Nigeria will spend 100 billion naira ($312.50 million) on capital projects in the coming days as part of the 2016 budget, Vice President Yemi Osinbajo said on Thursday, as the country tries to inject life into an economy facing recession.

Africa’s largest economy is in the middle of its worst crisis in decades, as a slump in oil revenues hammers public finances and the naira. Gross domestic product shrank 0.36 percent in the first quarter and the central bank governor has said recession is likely.

Government capital spending so far has reached 332 billion naira, Osinbajo said. The record budget has been held up for months by wrangling between President Muhammadu Buhari and parliament.

Another 100 billion naira will be released in the next few days to fund power, housing, transport, agricultural and defence projects, Osinbajo said.

“We have pledged to keep capital spending at a minimum of 30 percent (of the 6.06 trillion naira budget),” he told a business forum in Lagos.

But Osinbajo also said many of Nigeria’s 36 federal states were still struggling to pay the salaries of civil servants, despite assistance from the federal government.

He said a float of the naira and more flexible foreign currency regime in June had eased pressure on foreign reserves, without giving details. The naira has lost some 40 pecent since then.

“I believe … there will be an increase in supply of foreign exchange,” he said.

He also said Nigeria had saved 1.4 trillion naira by ending fuel subsidies and increasing fuel prices in May. “Fuel consumption is down 800 trucks per day from 1,600 trucks per day before the price increase,” he said.

Publication of GDP data for the second quarter will be delayed until Aug 31, the head of the statistics office said on twitter.

With oil prices dropping, the government has struggled to fund the budget. It is seeking advisers and bookrunners to manage a planned $1 billion eurobond it intends to offer this year.

($1 = 320.0000 naira)

(Reporting by Chijioke Ohuocha; Writing by Ulf Laessing; Editing by Larry King)

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