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South Africa’s deputy central bank governor says downgrade to junk a major setback

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PRETORIA (Reuters) – The deputy governor of South Africa’s central bank said on Thursday the downgrade of the country’s credit rating to junk status by S&P was a “serious set back”, and that the bank was ready to act if the political events caused the favourable rates outlook to reverse.

“It is a serious setback for the country. We will now need to redouble our efforts in providing assurance and communicating continued commitment to sound macro economic policies,” Deputy Governor Daniel Mminele said in a speech at a business cocktail.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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Nigeria oil tanker drivers call off strike after government pay deal

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ABUJA (Reuters) – Nigerian oil tanker drivers ended a strike over pay and the poor condition of the roads just hours after it began on Monday, following a government intervention, ending the threat of fuel shortages developing.

The union called off the strike “because the federal government has intervened and promised to look into the drivers’ demands,” said Charles Eleto, a regional chairman for Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), one of Nigeria’s two major oil workers’ unions.

In a meeting in the capital Abuja on Monday, the head of the Nigerian National Petroleum Corporation agreed with NUPENG’s president to increase transportation fees for the workers, said a spokesman for the firm.

 

(Reporting by Camillus Eboh and Anamesere Igboeroteonwu; Additional reporting by Alexis Akwagyiram in Lagos; Writing by Paul Carsten; Editing by Greg Mahlich)

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Botswana’s economy rebounds in final quarter of 2016

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GABORONE (Reuters) – Botswana’s economy expanded 0.1 percent quarter-on-quarter in the last three months of 2016 versus a revised 1.1 percent contraction in the third quarter, data from the statistics office showed on Monday.

On a year-on-year basis, gross domestic product (GDP) growth was at 4.2 percent in Q4 after expanding by 6.9 percent in Q3.

Statistics Botswana said the increase in growth in the quarter was due to expansions in the trade, hotels and restaurants, transport and communications sectors, while mining production continued to decline due to the closure of the country’s copper and nickel mines.

 

(Writing by Mfuneko Toyana; Editing by James Macharia)

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Ghana $2.2 bln debt sale boosts c.bank reserves by one-third

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By Kwasi Kpodo

ACCRA (Reuters) – Ghana has raised $2.2 billion from a sale of long-dated domestic bonds on Friday, boosting its central bank reserves by one-third, transaction leads and central bank sources said on Monday.

Offshore buyers constituted 90 percent of accepted bids, according to Barclays Bank Ghana sources.

The cedi fell to a record low of 4.7420 to the dollar last month but rallied to 4.2750 by noon (1200 GMT) on Monday, down 1.17 percent this year, according to Thomson Reuters data.

The transaction should boost the fiscal position of the government of President Nana Akufo-Addo, who was sworn in on Jan. 7, as it reviews a $918-million aid programme with the International Monetary Fund.

The government aims to restore rapid growth in Ghana, a country that had one of the hottest economies in Africa driven by exports of gold, oil and cocoa. Growth slowed in 2014 due to a fiscal crisis and a slump in global commodities prices.

Ghana sold 3.42 billion cedis ($790 million) of a 15-year debt and a fresh 7-year paper worth 1.45 billion cedis ($335 million) at 19.75 percent yield each.

It also reopened existing 10-year and 5-year bonds of which it sold more than $1 billion in a book-building transaction led by Barclays Bank Ghana, the sources said.

“They successfully sold around $2.2 billion on a single day. It shows there’s investor goodwill and confidence in the Ghanaian economy,” a lead source said.

The government inherited undisclosed debt arrears of $1.6 billion and a 2016 budget deficit of 8.7 percent of gross domestic product on cash basis.

In his first budget last month, Finance Minister Ken Ofori-Atta announced plans to restore fiscal balance, create jobs and stimulate private sector growth.

“People believe that they can do what they said they would do,” financial analyst Joseph Kumi told Reuters.

Settlement for the bonds is slated for Monday and analysts say the dollar transfers from offshore buyers should boost central bank reserves, which stood at $6.45 billion or 3.7 months of imports at the end of February.

 

(Editing by Matthew Mpoke Bigg and Tom Heneghan)

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Kenya’s budget paves way for Islamic finance

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By Bernardo Vizcaino

(Reuters) – Kenya’s government has unveiled a package of initiatives under its latest budget to develop Islamic finance in the country, as part of efforts to mobilise local funds and set Nairobi as a regional hub for the sector.

The moves could spur Kenya’s decade-old Islamic banking sector and help the government fund infrastructure in a country where Muslims account for about 10 percent of the population of some 44 million.

Finance Minister Henry Rotich outlined the steps as part of the country’s 2017/2018 budget, released on Thursday, aiming to level the playing field between Islamic and interest-based transactions.

Amendments to the Public Finance Management Act will also allow the government to issue Islamic bonds, or sukuk, as an alternative funding source.

This could prove useful for a government that has set aside billions for infrastructure, with a fiscal deficit set at 524.6 billion shillings ($5.10 billion). [nL3N1H74JT]

Implementation could be quick as most changes have already been drafted by the Islamic Finance Project Management Office (PMO), a body setup by the government to coordinate efforts among its regulatory agencies.

“The primary objective is to prepare the groundwork for a sovereign sukuk but also equally to attract corporate sukuk from the region,” said Farrukh Raza, managing director of IFAAS, an Islamic finance consultancy which designed the PMO’s framework.

The government has commissioned IFAAS to run the PMO, which is working with law firm Simmons & Simmons to help develop Islamic Finance in Kenya.

The Treasury has said it is considering a debut sale of sukuk this year, although national elections in August could delay those plans.

 

TAX NEUTRAL

The amendments will benefit Kenya’s two full-fledged Islamic banks and several Islamic windows, which until now have operated by way of exemptions.

They will be joined by Dubai Islamic Bank, which last month received approval in principle for a banking license from the central bank. [nL5N1GQ3UX]

Changes to stamp duty would ensure their products are tax neutral against interest-based transactions, as the asset-based nature of Islamic finance contracts often means they can incur multiple tax charges.

This is designed to be revenue neutral to the government and would not compromise fiscal revenues, said Raza.

Exemptions to value added tax would allow returns from Islamic deposits to be eligible for deductions similar to interest-based products. This would apply to individuals, corporates and government entities, Raza said.

The budget also calls for amendments to cooperatives and savings societies, while new regulations will help setup an Islamic pension scheme based on the risk-sharing concept of takaful.

This would aid the government in achieving financial inclusion and financial diversification targets, Raza added.

 

(Reporting by Bernardo Vizcaino in SYDNEY; Editing by Randy Fabi)

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South Africa watchdog seeks fine against Afrimat for excessive prices

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JOHANNESBURG (Reuters) – South Africa’s Competition Commission said on Sunday that it had asked the Competition Tribunal to fine construction materials group Afrimat for allegedly “abusing its dominance by charging excessive prices.”

“The Commission is seeking an order from the Tribunal declaring that Afrimat … must pay the maximum fine allowable by law which amounts to 10 percent of its annual turnover in South Africa as well as its exports from the country,” the Commission said in a statement.

A unit of Afrimat supplies the main ingredient in clinker bricks, which are mostly used in the construction of low-cost housing units, known as RDP houses in South Africa.

“The Commission has found that Afrimat abused its dominant position from 2012 until at least 2016 (the conduct may be ongoing) by charging clinker bricks’ manufacturers excessive prices to the detriment of consumers,” the Commission said.

Afrimat could not immediately be reached for comment.

 

(Reporting by Ed Stoddard; Editing by Susan Fenton)

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Ghana names monetary policy expert Addison as central bank governor

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ACCRA (Reuters) – Ghana’s President Nana Akufo-Addo named senior monetary policy expert Ernest Addison as central bank governor on Thursday, a day after his predecessor resigned for personal reasons, a statement from the presidency said.

Addison, who in the early 2000s was a leading architect of Ghana’s monetary policy, worked as a lead economist at the African Development Bank.

The announcement comes as Akufo-Addo’s young government seeks to stabilize national finances and review with the International Monetary Fund the terms of a $918 million financial aid deal aimed at reducing inflation, public debt and the fiscal deficit.

The fiscal problems and a decline in global prices for Ghana’s exports of gold and oil have led to a sharp slowdown in growth in a country that until 2014 had been one of Africa’s fastest-growing economies.

“In order not to have a vacuum at the top of such an important state institution, the president … has appointed Dr Ernest Kwamina Yedu Addison as governor,” the statement said.

The central bank cut the benchmark interest rate by 50 basis points in January to 25.5 percent and by a further 200 basis points on Monday in what economists say is the start of an easing cycle as inflation falls.

Ghana’s finance minister earlier issued a statement saying a new governor would be named in the next few weeks to replace Nashiru Issahaku, who had held the post since April 2016.

 

(Writing by Matthew Mpoke Bigg; Editing by Richard Lough)

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Farmers seek independent inquiry into controversial Sierra Leone palm oil deal

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By Olivia Acland

KOTUMA, Sierra Leone (Thomson Reuters Foundation) – Sierra Leonean farmer Bockarie Swaray was sitting on his porch one morning when he heard a deep whirring noise and jumped up to see a bulldozer fell his banana, oil palm and kola nut trees.

“There was nothing I could do,” he said, slumped on a plastic chair with a frown on his thin, lined face. “I just prayed to almighty God to help me.”

Swaray said his 11 acres (4 hectares) of land, in Sierra Leone’s southern Pujehun province, was taken to become part of a 45,000 acre (18,200 hectares) palm oil plantation run by international agro-investor Socfin.

But Socfin, which runs rubber and oil plantations in six African countries, maintains it respected all terms of an agreement with the government of Sierra Leone, one of the world’s poorest nations, and all acquisitions were above board.

The Luxembourg-registered company, part of the empire of the French tycoon Vincent Bollore, has been embroiled since 2011 in a feud with local landowners in the Malen chiefdom in Pujehun with landowners also fighting amongst themselves over the deal.

Now farmers and charities are demanding an independent investigation into the claims made by landowners who say their complaints and grievances were ignored.

“With Socfin everything has been shrouded in secrecy from day one,” said Joseph Rahall, director of environmental charity and advocacy group Green Scenery.

A growing number of African land lease deals for mining and agribusiness have provoked tension and violence, with local communities claiming forcible eviction by foreign companies.

Socfin’s general manager in Sierra Leone, Philip Tonks, told the Thomson Reuters Foundation that 40 landowner representatives with community support signed an agreement to lease the land.

“When we first came in we began discussions with the paramount chief because he is the custodian of the land. Of course in the early days there was mistrust, people didn’t know who we were. Five years down the line we’ve built up that trust,” said Tonks.

“We’re seen as land grabbers but it was actually all done through consent.”

Socfin has become the largest private employer in the West African country, employing more than 3,400 people from surrounding villages and providing extensive infrastructure projects and social services as well as jobs.

 

“LAND IS LIFE”

But Swaray said all but one of his 14 children have dropped out of school since he lost his land in 2011 because he can no longer afford the fees.

“For us, land is life,” he said. “We are not educated but with the money from this land we were educating our children.”

The family now lives on 500,000 Leones ($68) his daughter, Abi, 23, earns each month working as a labourer for Socfin.

“If she doesn’t work for them, then we don’t eat,” said Swaray, who is a member of the Malen Affected Land Owners Association (MALOA), which opposes Socfin’s investment.

Mineral-rich Sierra Leone, with iron ore, bauxite, diamonds and titanium ore, has attracted foreign investors since its civil war ended in 2002 but has no system of land titling, leaving land decisions open to corruption, experts say.

A 2011 agreement, seen by the Thomson Reuters Foundation, shows the Malen chiefdom council, headed by Chief Braima Victor Sidi Kebbie, leased some land to the government for 50 years.

A 2013 agreement shows the government then sub-leased a slightly smaller parcel of land in the chiefdom to Socfin.

But residents say Socfin’s annual payment of $5 per acre ($12.50 per hectare) is not enough and argue they did not understand the lease agreement – or were coerced into signing.

 

ARRESTS

When Socfin came to survey the land in October 2011, Swaray was among around 40 protesters arrested for blocking the road.

This was the first of six arrests of anti-Socfin protesters, who have been fined up to 20,000,000 Leones ($2,720) each for “riotous behaviour”, members of MALOA said.

Dozens were injured in 2013 when police opened fire on a group of armed protesters and two Socfin staff were shot at during a protest in 2015. Six activists were jailed in 2016 for destroying trees belonging to Socfin.[nL8N15J5XX]

MALOA’s leader, Shiaka Sama, an outspoken former member of parliament, spent three weeks behind bars in 2015 for cutting branches off Socfin’s crops – charges he denies – and accused Socfin employees of trying to bribe him to back off.

Kebbie said he called a village meeting in 2011 in Sahn Malen, the main village of the chiefdom, to get consent from landowners’ representatives before leasing the community’s land.

“Everybody was very happy,” he said, sitting watching CNN in the airy living room of his vast two-year-old home.

“The company would create jobs and open up the chiefdom.”

Seven out of 10 young people in Sierra Leone are unemployed, according to U.N. figures, and more than half of Sierra Leone’s seven million people do not have enough to eat with Pujehun ranked as one of the most food insecure parts. [nL8N1CW2WO]

Others present at the meeting have different memories.

Farmer James Blango remembers standing up and asking what happened if people did not want to lease or sell the land to Socfin and being told by Kebbie to move live elsewhere.

Kebbie denied this.

“Those who leased their land signed for it,” he said.

As Kebbie had little money in 2011, Socfin said it helped him, recognising his importance as the custodian of the land.

“We bought him a car,” said Tonks. “He had to move about and talk to people if there were any issues.”

Under the Socfin contract, each farmer received 1 million Leones ($135) in compensation for the loss of their crops and $2.50 a year for lease of each acre, said Tonks.

Another $1 per acre goes to the chiefdom council, which is a local parliament, and to the district council, which can add up to some $45,000 each for the whole plantation, Rahall said.

Tonks said he thought the deal was fair for the landowners.

“There will always be some opposition, like Sama and his followers, but those are muddy waters because he has political motives,” he said.

($1 = 7,350.0000 leones)

 

(Reporting by Olivia Acland: Editing by Katy Migiro and Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights and climate change. Visit http://news.trust.org to see more stories.)

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Egypt’s 2017/18 budget targets 4.6 percent growth – finance minister

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CAIRO (Reuters) – Egypt’s 2017/18 budget targets 4.6 percent growth, Finance Minister Amr El-Garhy said at a news conference on Wednesday after the cabinet approved the budget.

Garhy also said interest on debt would reach 380 billion pounds ($20.88 billion), up from 304 billion pounds in the current year.

($1 = 18.1950 Egyptian pounds)

 

(Writing by Asma Alsharif; Editing by Alison Williams)

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Egypt to halve arrears with oil companies in coming weeks

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RAVENNA, Italy (Reuters) – Egypt expects to cut the $3.5 billion euros it owes to international oil companies by around half in coming weeks, the Egyptian oil minister said on Wednesday.

“We have made a lot of progress on paying off arrears,” Tarek El Molla said at an oil and gas conference.

The minister also said he expected to finalise an agreement to import crude oil directly from Iraq in a month at the most.

“We will import around 1 million barrels a month,” he said.

Asked when Egypt might become an exporter of oil and gas, Molla said the country would be self sufficient by the end of 2018.

“Starting from 2019 and beyond we can start talking about exporting,” he said.

 

 

(Reporting by Stephen Jewkes)

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