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Burkina Faso presidential guard should be disbanded, panel says

15 September 2015 Comments (0) Africa, Elections, Latest Updates from Reuters, Politics

OUAGADOUGOU (Reuters) – Burkina Faso’s powerful presidential guard should be dismantled, according to a commission charged with proposing reforms after a popular uprising toppled the West African nation’s longtime president.

The elite unit, known locally as the RSP, was a key pillar of President Blaise Compaore’s regime before mass demonstrations forced him to flee the country last October, ending 27 years of rule.

Its interference in the interim administration that followed Compaore’s ouster, including attempts to force the prime minister’s resignation of over his plans to reduce its size and pay, provoked further protests and prompted the authorities to call for a review of the RSP’s role.

In a report submitted to Prime Minister Yacouba Isaac Zida, himself a former commander in the RSP, the national reconciliation and reform commission on Monday described the 1,200 troop strong unit as “an army within an army”.

It called for the regiment to be broken up and its members redeployed within the framework of a broader reform of the military.

The commission said responsibility for ensuring the security of Burkina Faso’s president and state institutions should be conferred upon special units of the police and gendarmes.

A decision on the RSP’s future will most likely wait until after Oct. 11 elections when voters will choose a new president and parliament to restore democratic rule.

Burkina Faso’s army did not intervene to save Compaore when tens of thousands of demonstrators took to the streets to protest against the president’s attempts to push through constitutional changes to extend his rule.

However, the RSP has been accused by rights groups, including Amnesty International, of shooting and killing protesters during the uprising.

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China’s CNMC says it followed the law in closing Zambian copper mine

14 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

copper mine

LUSAKA (Reuters) – China’s CNMC Luanshya Copper Mines followed Zambian law when it closed the Baluba mine and sent more than 1,600 workers on forced leave due to plunging prices and energy shortages, the company said on Monday.

Zambia had threatened to revoke Luanshya’s mining licence if the company did not reinstate workers.

A slide in global copper prices has put pressure on Africa’s second biggest producer of the metal, with export earnings depressed despite the kwacha’s slump against the dollar this year.

“As a law abiding corporate citizen, we have always followed the Zambian laws,” CNMC Luanshya Copper Mines spokesman Sydney Chileya said in a statement, adding that it did not plan to make employees redundant.

Those placed on forced leave would receive a monthly allowance and other entitlements such as medical cover, the company said.

Chileya said the entire Luanshya Mine would have collapsed within three months if the company had not suspended production at Baluba.

The Mine Workers’ Union of Zambia (MUZ) said on Saturday it would challenge the decision, which it alleged was made without consulting labour unions.

Glencore’s Zambian subsidiary Mopani Copper Mines, is in talks with the government and unions over plans to suspend its production, but a source close to the company said on Friday a large number of workers would be retained.

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Banks’ messaging system SWIFT’s growth in Middle East, Africa outpaces global rate

13 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, Middle East

DUBAI (Reuters) – Growth in financial transactions messaging system SWIFT’s traffic volumes in the Middle East and Africa has accelerated by double-digit percentages this year as banks expand rapidly and non-financial institutions join the industry cooperative, said the regional head.

In the Middle East growth in the year up to the end of August was 12 percent, with double-digit expansion in Qatar and the United Arab Emirates helping offset a decline in Lebanon, Iraq and Libya, said Sido Bestani in an interview.

The data excludes Iran, which has been disconnected from the Belgium-based network since 2012 as a result of EU sanctions against the country.

Expansion in Africa in the past year was up 11 percent, led by Kenya, Ghana and Nigeria, Bestani said.

Average global SWIFT traffic growth so far this year is running at 10 percent. The Middle East and Africa represents more than 4 percent of total volumes, a level that should rise as both regions historically grow at a faster pace than the rest of the world.

Banks in the Middle East and Africa have been expanding both within and outside their borders in recent years. Through acquisitions, Qatar National Bank, the largest bank in the Gulf Arab region, has expanded into Egypt and several other African markets, while South Africa-based Standard Bank, Africa’s largest bank by assets, has built a presence in 20 countries including Nigeria, Angola and Mozambique.

In Africa, banks have been adding more clients in a country where the proportion of the population without a bank account totals as much as 80 percent in sub-Saharan Africa.

But Bestani said that drivers for business in the Middle East and Africa were different.

“We see more traction from some African communities,” said Bestani. “There is centralised decision-making, so for example the central bank of Ghana contacted us to ask if we can provide a service for complying with sanctions to all banks.

“In the Middle East we see less examples of supporting the community and more action at the level of individual banks and financial institutions.”

More non-financial institution companies are also joining. In the Middle East, around 50 such firms have joined, enabling them to handle cash management, trade and supply chain business through the system.

But SWIFT expects one of the main areas for future expansion to be the securities markets, where a lot of payments and settlement instructions are currently sent manually.

In the Middle East and Africa, including Turkey, payments represent 57 percent of information sent through SWIFT, with securities forming 30 percent of the total data. That compares with worldwide, where payments and securities roughly account for percent each of total data flow.

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Botswana’s first uranium mine targets 3.75m pounds output

11 September 2015 Comments (1) Africa, Australia, Business, Latest Updates from Reuters

uranium mining

GABORONE (Reuters) – Australian firm A-Cap Resources has applied for a licence to open what would be Botswana’s first uranium mine with a capital expenditure of $351 million, the firm said on Friday.

Botswana is estimated to hold around 1.04 billion tonnes in uranium reserves, in the central part of the country, and the government has issued prospecting licenses in the last decade although no production has taken place.

The exploration firm said results of technical studies showed the project would produce up to 3.75 million pounds of the ore in the first five years of its projected 18-year life.

The project was ideally located near roads, a railway network and power supply, the company said a statement, and was also on the site of one of the largest uranium deposits in the Africa, with estimated deposits of 261 million pounds.

A resurgent uranium price meant the project, where explorations started in 2006, was viable, the firm said.

Global uranium production had stalled recently due to depressed prices, curtailing exploration activities and the opening of new mines.

Spot uranium prices slumped over 12 percent in the past three quarters before bouncing back to a 5 month-high of $37.25 per pound in September.

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Glencore’s Zambia unit to keep most workers despite suspension

11 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, UK

LUSAKA (Reuters) – Glencore’s Zambian subsidiary Mopani Copper Mines will retain most of its workers even after copper production is suspended following a drop on the metal’s price, a source close to the company said on Friday.

An electricity shortage in the southern African nation and weaker copper prices have put pressure on the mining industry, threatening output, jobs and economic growth in Africa’s second-biggest copper producer.

The source said Mopani was in talks with the government and unions over Glencore’s plan to suspend operations and invest to improve efficiency at the mine.

The president of Zambia’s largest mining union said the move by the government could help save thousands of jobs.

“Over the next 18 months, Mopani will invest $500 million in expansion projects. A large number of employees are expected to be kept for mine development and care and maintenance,” the source told Reuters.

“We want Mopani to be efficient and competitive in the global copper market. It will also extend the mine life.”

Mining and trading company Glencore said on Monday it would suspended dividends, sell assets and suspend some copper production at Mopani and its Katanga Mining division in Democratic Republic of Congo for 18 months.

Mopani is the second largest employer in Zambia after the government with about 21,000 direct and contract workers.

Mopani would offer workers at the mining firm voluntary separation packages in line with Zambian law after the talks with the government ended, the source said.

A second source said the company was talking to the government and unions, but job cuts had not be discussed.

“As far as we are concerned everything is normal. We are undertaking a study to optimise our production efficiency with the unions and the government. Until we conclude that study we can’t make any pronouncements,” the source at Mopani said.

Glencore, Vedanta Resources, China’s NFC Africa and CNMC Luanshya Copper Mine have all said they will shut down some operations in Zambia because of the harsh business environment.

Electricity shortages and the slide in copper have driven the kwacha currency to record lows amid a sell-off in commodity-linked currencies as China’s economy slows.

By Chris Mfula (Reuters)

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Glencore holds talks with Congo officials on Katanga mine

11 September 2015 Comments (0) Africa, Business, Canada, Latest Updates from Reuters

KINSHASA (Reuters) – Glencore held talks with Congolese officials in Kinshasa on Thursday over the company’s plans to suspend some copper output at its Katanga Mining unit for 18 months, an adviser to the prime minister said.

The adviser, who asked not to be identified, said there could be an announcement by the mining ministry on Friday regarding the talks. A Glencore spokesman declined to confirm Thursday’s meeting.

The London-listed company said on Monday it planned to suspend 400,000 tonnes of copper output at Katanga and at Mopani Copper Mines in Zambia over the next 18 months.

“This is not a mine that is going to close. It’s just a moment when the copper price is very, very low,” said the adviser, referring to Katanga Mining. “When they sell copper they lose money.”

He said Glencore’s Mutanda Mining operation in Congo was a more efficient operation and did not face the same problems.

A Glencore source said the company would invest about $900 million in Katanga Mining to modernize it. This would bring the production cost per pound down from $2.50 to about $1.65 by time mine reopens in 2017.

By comparison, Mutanda Mining’s cost of production is around $1.33 per pound of copper because it is a newer mine, the source said.

The source declined to comment on potential job losses, saying discussions about employment continued.

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Botswana sees budget deficit narrowing in 2016

10 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, Politics

GABORONE (Reuters) – Botswana’s budget deficit will narrow to 0.03 percent of gross domestic product from a previous forecast of a 2.6 percent shortfall, the ministry of finance said on Thursday.

The department attributed this to expected growth in revenue collected from non-mineral taxes, which it said would likely grow 10.4 percent to 10.32 billion pula ($977 million).

“This significant growth rate of the non-mineral revenue is encouraging since it reflects possible success of our diversification efforts,” the department said in budget strategy paper.

Botswana halved its 2015 growth forecast in August to 2.6 percent from 4.9 percent previously, citing expected weakness in the diamond market which accounts for nearly 40 percent of its budgetary revenue and around 85 percent of exports in dollar terms.

Sluggish sentiment in the market has seen both De Beers and Botswana’s Okavango Diamond Company (ODC) sales falling by over 20 percent in the first six months of the year.

The ministry added that it projected total revenues and grants rising 3.1 percent in the 2016/17 financial year from previous estimates.

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Bollore invests 30 mln euros in Ivory Coast-Burkina rail link

10 September 2015 Comments (0) Africa, Business, Europe, Latest Updates from Reuters

bollore rail

ABIDJAN (Reuters) – Bollore has invested 30 million euros ($33.6 million) to buy trains for the freight and passenger line it operates between Burkina Faso and Ivory Coast, the French company said.

Landlocked Burkina Faso relies partly for its exports and imports on the ports of its southern neighbour Ivory Coast, the biggest economy in French-speaking West Africa. It also uses ports in other neighbours Ghana and Togo.

“We have invested around 30 million euros to acquire trains, including six received today,” Lionel Labarre, director of Bollore Africa Logistics, said on Wednesday.

“We are still waiting for nine locomotives that will add to the 20 that are already in service,” he said, adding that Bollore would also develop the station in Abidjan, Ivory Coast’s main city.

Trains take about 36-hours to do the 1,260-km (787-mile) journey between Abidjan and Burkina Faso’s capital Ouagadougou, and carriages are often packed with people, trade goods and animals being carried to market.

Bilateral trade between Burkina Faso and Ivory Coast hit 290 billion CFA francs ($495 million) in 2014, up from 165 billion in 2011, Prime Minister Daniel Kablan Duncan said at a ceremony to mark the arrival of the six new engines.

Most of the trade runs via rail and road links. Cargo traffic between the two countries stood at 610,000 tonnes last year, up from 402,000 tonnes in 2011, Duncan said.

Developing the rail line is a strategic priority for Ivory Coast and a tool for regional integration, said Duncan, adding that the country was aiming for 2 million passengers a year in the next few years up from 300,000 now.

Bollore has operated the Ivory Coast-Burkina Faso railway since 1995 and has recently been awarded a concession for a rail link between Niger, Benin and Togo.

 

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IMF will not see new Zimbabwe loans in at least three years

10 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, Politics

HARARE (Reuters) – The International Monetary Fund said on Thursday it would be at least three years before Zimbabwe can start accessing loans from international lenders and needs to deepen economic reforms in the medium term to strengthen its ability to repay debt.

Domenico Fanizza, head of a visiting IMF mission said there were no quick and easy fixes to Zimbabwe’s recovery, adding that what was needed in Zimbabwe were costly reforms that would take time to be felt by ordinary citizens.

The once promising southern African nation owes foreign creditors $9 billion and has been struggling for five years to recover from a catastrophic recession that send hyperinflation into billions amid widespread food shortages.

 

(Reporting by MacDonald Dzirutwe; Editing by James Macharia, Reuters)

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Post-Sanctions Iran: A Modern Day “Gold Rush” for Investors

10 September 2015 Comments (0) Latest Updates from Reuters, Middle East, Politics

Iranian flag

By Enu Afolayan (Contributor)

Iran is opening up all major sectors of its economy for foreign investments. The conditions are still under discussion, butforeign businesses are already preparing their market penetration plans. Iran offers exciting opportunities, however the risks are even higher.

On the 29th of June, the Foreign Minister of France met Bijan Namdar Zanganeh, the Oil Minister of Iran, to announce the beginning of a new era in the history of Iran’s oil industry. France’s Total corporation would be the first foreign company to develop Iran’s oilfields after the sanctions have been lifted.

It is expected that the additional oil from Iran will lead to a market supply increase, and consequently to a further decrease in oil prices. It is still a big question whether this scenario will become a reality. While experts and the media try to forecast the amount of barrels arriving on the market from Iran, there may be other aspects of this “Iranian thaw” that could be even more important than short-term fluctuations of BRENT and WTI oil prices.

Iran is opening up all major sectors of its economy for foreign investments. The conditions are still under discussion, but foreign businesses are already preparing their market penetration plans. Iran offers exciting opportunities, however the risks are even higher.

Economics of the Iranian Thaw

The result of the negotiations between Iran and the G6 countries (Russia, USA, EU, Great Britain, France, China and Germany) in July was the so-called Joint Comprehensive Plan of Action – the agreement on Iran’s nuclear program. In exchange for relief from some sanctions, Iran agreed to significantly reduce the stockpile of enriched uranium in the country, and to provide access to IAEA experts to all nuclear facilities in Iran for the next 20 years. Iran also agreed to suspend uranium enrichment operations for 15 years. The EU and the US agreed to lift sanctions starting next year as long as Iran complies with agreements made.

The decrease in oil prices shocked the Iranian economy that had already been struggling. Sanctions have been a heavy burden for the country, weakened by excess bureaucracy, corruption and mismanagement.

The sanctions imposed on Iran led to 60% decrease in oil exports – from 2.5 million barrels per day to 1.4 million barrels per day, with dire consequences for the country’s economy. In 2013, while oil prices were at their peak, Iran’s oil revenues fell from 100 billion USD to 35 billion USD, and GDP was down 5%.

The decrease in oil prices pushed the Iranian government into a corner and it had to recognise the urgent need of reforms. By agreeing with Western countries, Iran aimed to solve multiple problems: the lifting of sanctions, increasing the effectiveness of the economy by attracting foreign investments, and offsetting the oil revenue decrease through increased production output.

Oil-barrel

Oil Investments as a Key Goal of the New Governmental Policy

Throughout the history of Iran, oil played a significant role, not only for the economy, but also for the country’s national identity. The first nationalisation of the oil industry under Mohammed Reza Pahlevi happened under the idea of “liberation” of the country from English corporations that exploited the country’s oil resources. Mohammad Mossadegh, the prime minister of Iran in 1950’s, was the first politician to “give back the oil to the people of Iran”. In 1951, the property of Anglo-Persian Oil company (later known as BP) became national property of the country.

In 1953, as a result of a military coup, Mossadegh was ousted and nationalisation was cancelled. British and American corporations agreed on the privatisation of the National Iranian Oil Company. Even though only 10% of the company’s shares belonged to foreign corporations, Ruhollah Chomeini had gained many Iranian hearts by making the “battle for the oil” key to the main leitmotif of his political campaign in exile.

After the 1979 revolution, foreign companies were forced from Iran. The oil industry went into a long period of decline, which lasted until the end of 1990’s, when liberal president Mohammed Hatami attempted to revive the oil industry by cooperating with foreign partners. Unfortunately, his efforts were curbed by the nuclear program of Iran that deteriorated the country‘s relations with the West.

Today, the Iranian government is desperately trying to attract foreign investments into the oil sector in order to increase production output and to fill in the hole in oil revenue. Recently, the Oil Minister of Iran said that without sanctions the country would be able to increase output to 4 million barrel per day. However, Iran would need investments of 50 billion to 100 billion USD to achieve this ambitious goal. To attract this amount of money from foreign investors, the government of Iran has to ensure smooth transformation of all necessary institutions, and to restore the trust of the international community. After two decades of state oil monopoly and two nationalisations, it may take years.

The positive aspect is that after relief from the sanctions, Iran can bring about 30-40 million barrels of crude and condensates that it held in floating storage. Based on estimates of the International Energy Agency, it would ensure the supply of an additional 180,000 barrels per day for 6 months to the global market. Knowing that global consumption of oil is currently at about 90 million barrels per day, this additional oil supply is unlikely to influence oil prices.

SWITZERLAND-IRAN-US-NUCLEAR

Iranian Foreign Minister Mohammad Javad Zarif shakes hands on January 14, 2015 with US State Secretary John Kerry in Geneva. AFP PHOTO / POOL / RICK WILKING

Non-oil Investments as a Side Effect

It isn’t only the oil and gas industry players that are enthusiastically welcoming the opening up of the Iranian market. The World Bank predicted a “massive economic windfall”, advising Iran to attract investments into non-oil industry, including infrastructure and communications. However, the success of the new investment policy depends on proper planning on the part of Iran. At the moment, the outlook is not as shiny as it might have appeared: widespread corruption and the need of transformation of many national institutions will probably hamper the government’s efforts and discourage investors.

Despite many organisational challenges, Iran attracts investors with tremendous opportunities. A modern day “Gold Rush” is expected to set off in Iran. Coca Cola, Mercedes, Arabian hospitality corporations, American grain importers, European power corporations and many others are already looking forward to the battle for their share of the Iranian market.

The internal privatisation began in Iran few years ago. For a decade, Iranian investors have been acquiring undervalued assets: insurance companies, hospitals, and other public utilities were put up for sale. Recently, the state telecommunications company was put up for sale. However, due to the deep crisis in Iran’s economy, it is getting harder and harder to find internal buyers for these assets. Foreign investments could be an easy solution for Iran’s desperate need for money.

At the same time, Iran’s government is still not clear on conditions of cooperation with foreign investors. President Rohani stated recently that foreign investors would be welcome only if they worked with a local partner, hired local workforce and transferred their technology to Iran.

While the new foreign investment law is still a work in progress, the Iranian president continues his meetings with investors, encouraging them to take the opportunities offered by the new post-sanctions Iran.

Failure of Industrial Nationalism

Media attention is now focused on the relief from sanctions in Iran. However, the key problem in Iran’s economy is not the sanctions that were imposed just a few years ago. The problems with Iran’s economy began much earlier, and they were linked to the nationalisation of all sectors and economic isolation after the revolution.

Iran has the largest hydrocarbon reserves in the world, but its production capacity is lower than that of Russia, USA, Saudi Arabia and Canada. This proves that Iran failed to use the potential of its oil industry to give an impulse to economic development. It had good chances to become a country with one of the highest GDPs per capita and to develop a smart investment policy to boost other sectors of economy. But unfortunately, the success of economic development depends not only on the amount of oil reserves, but also on institutional capacity, anti-corruption measures and proper management systems. Unfortunately, in all these areas, Iran has been at the bottom of global rankings. With or without sanctions, the government of Iran should find a solution to the country‘s internal structural problems.

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