By Fumbuka Ng’wanakilala

DAR ES SALAAM (Reuters) – Tanzania is seeking a loan of $200 million from the World Bank for debt-ridden state power supplier TANESCO, the country’s energy ministry said on Monday, two weeks after the president refused to allow the utility to hike prices to cover costs.

President John Magufuli wants cheap electricity to drive industrialization, but the World Bank is likely to insist the loss-making utility increases prices so it can cover the cost of producing power and begin much-needed reforms.

Any struggle to secure that loan would underline the constraints faced by Magufuli, who is nicknamed “The Bulldozer”, as he tries to push through an ambitious economic reform agenda 14 months after he arrived in office.

The Tanzania Electric Supply Company (TANESCO) has debts of$363 million, the ministry said in a statement, up from $250 million at the end of 2015.

“As part of efforts to reduce TANESCO’s arrears … and improve its operations, the World Bank has held talks with the government through the Ministry of Energy and Minerals for a $200 million loan,” the ministry said in a statement.

It also said there was no agreement at this point with the World Bank to raise tariffs in return for the loan.

The World Bank was not immediately available for comment.

Tanzania’s energy regulator approved on Dec. 31 a tariff hike of 8.53 percent, less than half of what the utility said it needed to cover the losses [nL5N1EQ07K].

But the next day, Magufuli sacked the head of the state electricity company, saying the price hike would stymie his plans to ramp up industrial output. [nL5N1ER0JA]

Decades of mismanagement and political meddling means the utility sells electricity below cost. It also struggles to cope with transmission leaks and power theft.

Despite reserves of over 57 trillion cubic feet (tcf) of natural gas, Tanzania faces chronic power shortages due its reliance on hydro-power dams in a drought-prone region for about a third of it’s 1,570 MW of installed capacity .

TANESCO has to resort to costly fuel oil or diesel plants to fill the shortfall during dry spells and many of its arrears are due to the costs of private power and fuel suppliers. Most oil plants are being shut or converted to use natural gas.

Tanzania aims to add about 2,000 MW in gas-fired generation by 2018.

(Reporting by Fumbuka Ng’wanakilala; Editing by Richard Lough)

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NAIROBI (Reuters) – Kenya’s economic growth rate will slow in 2017, from about 6 percent last year, due to sluggish credit growth and as investors take a wait-and-see attitude before a presidential election in August, a senior IMF official said on Monday.

Armando Morales, the International Monetary Fund’s representative in Kenya, said growth is likely to remain within the 5-6 percent range of the past five years, despite the slowdown.

“We expect a deceleration of growth for several reasons, but I think the most important reason we are considering is the potential impact of the interest rate cap on credit growth,” he told Reuters in an interview.

The government capped commercial lending rates at 400 basis points above the central bank’s lending rate last September, hurting already stressed private sector credit growth.

After September, banks’ lending grew by just 5 percent year-on-year, down from 17.8 percent in December 2015. Stricter supervision of banks by the central bank and the closure of two mid-sized lenders had cut credit growth before the rate cap came in.

The IMF’s 2017 economic growth forecast for the East African nation will be released later this month after its board meets to review a $1.5 billion precautionary arrangement that was agreed in 2015 and is set to run until March 2018.

President Uhuru Kenyatta is seeking a second and final term of office in an election on Aug. 8. He is expected to face off with his main rival, Raila Odinga.

A disputed election result in 2007 led to violence that killed around 1,250 people. Odinga challenged the outcome of the 2013 election but the result was upheld by the country’s Supreme Court.

Morales said investment delays due to concerns over the election were to be expected, but that the government’s investments in infrastructure, including roads and railways, would support demand and economic growth.

“We believe it is going to be a reasonable deceleration; it is not like the economy will lose momentum. It is only that there are other factors at play,” he said.

(Reporting by Duncan Miriri; editing by Katharine Houreld/Jeremy Gaunt)

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CAIRO (Reuters) – Egypt’s $12 billion three-year loan programme from the International Monetary Fund carries an interest rate of 1.5 to 1.75 percent, Finance Minister Amr El Garhy said on Sunday.

He said at a news conference that each tranche of the loan would be repaid within 10 years of disbursement with a 4.5 year grace period.

The IMF approved the loan, which is linked to an ambitious economic reform programme, and paid Egypt the first $2.75 billion installment in November, but the full terms of the deal have yet to be published.

(Reporting by Asma Al Sharif and Lin Noueihed; Editing by Catherine Evans)

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ABUJA (Reuters) – Nigeria’s state oil company has proposed legal amendments aimed at enabling the government to increase royalties and other revenues from deepwater oil production.

OPEC member Nigeria has been hit hard by a slump in crude oil prices in the last two years, which helped to push the country into recession. And militant attacks in the southern Niger Delta throughout 2016 have hampered production.

The proposed amendments relate to the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act.

The Nigerian National Petroleum Corporation (NNPC) said the calculation of what was due to the government should be “based on production and price to guarantee fairness and balance between PSC contractors and government”.

In a presentation to the lower house of parliament, NNPC’s chief operating officer for upstream operations, Bello Rabiu, said the current graduated royalty scale should be removed.

“It is our opinion that the proposal to increase the royalty rate for terrains beyond 1000 metres, from zero percent to 3 percent, is commendable but it is necessary to also make corresponding adjustments in other categories,” he said.

NNPC also said the petroleum minister should have powers to intermittently set royalties payable for acreages located in deep offshore and inland basin production-sharing contracts.

The company also said some incentives should be removed, including the investment tax credit, investment tax allowance and capital allowances to PSC contractors.

(Reporting by Camillus Eboh and Alexis Akwagyiram; Editing by Greg Mahlich)

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By Kwasi Kpodo

ACCRA (Reuters) – The International Monetary Fund (IMF) plans to visit Ghana to hear the new government’s plans for implementing the country’s $918 million aid deal, the Fund said on Thursday.

President Nana Akufo-Addo was sworn in on Saturday pledging to cut taxes, spend on development and boost annual growth to double digits as he seeks to return Ghana to its place as one of Africa’s most dynamic economies.

He also inherits a country following the Fund programme that aims to reduce inflation, public debt and the budget deficit and put Ghana, which produces gold, oil and cocoa, on a stable footing to facilitate long term growth.

Economists say it may be difficult for the government to maintain its commitment to fiscal discipline and at the same time satisfy popular expectations for spending and rapid change.

“An IMF staff team will be ready to visit Accra in the coming weeks to discuss recent economic developments and hear from the authorities about their plans for engaging with the Fund going forward,” said a spokesperson based in Washington.

The Fund contacted the government the programme and will renew contacts once the new finance minister’s appointment is confirmed by parliament, the spokesperson said. The vetting of ministers is expected to start next week.

Akufo-Addo on Tuesday named Ken Ofori-Atta, co-founder of investment bank Databank Group as finance minister.

Some economists say the New Patriotic Party government may seek to renegotiate elements of the three-year programme in a bid to free-up money for development. The government is yet to spell out how it plans to approach the IMF deal.

The objectives of the programme, signed in April 2015, are fixed but reviews held every few months can include renegotiation as new interim targets are set on the basis of prior financial performance.

(Editing by Matthew Mpoke Bigg and Raissa Kasolowsky)

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By MacDonald Dzirutwe

HARARE (Reuters) – Zimbabwe’s biggest mobile telephone company has pushed up data charges by a multiple of 25 in line with new regulations, prompting critics to complain that President Robert Mugabe’s government is trying to throttle the use of social media.

Econet Wireless’s new cheapest data package, which came into effect on Wednesday night, will see users get 10 megabytes for $1, compared with 250 megabytes for the same amount previously.

Last year, activists used the Internet to mobilise the biggest anti-government protests in a decade, bypassing traditional opposition parties as anger grew over Mugabe’s handling of a failing economy.

Social media group #ThisFlag, which helped organise those protests, said of the price hike: “They didn’t want us to continue to take pictures and videos of their abuse, neglect, incompetence and show the world.”

The increase came after the Postal and Telecoms Regulatory Authority of Zimbabwe (POTRAZ) set a base price of 2 cents per megabyte for data services and 12 cents per minute for voice calls.

POTRAZ said it was consulting “all relevant players”. Its director general was quoted in a state-owned newspaper as saying Zimbabwe had higher data costs than countries like South Africa and Tanzania because of its landlocked geography and smaller population.

Information Communication Technology Minister Supa Mandiwanzira said on Twitter he is abroad on leave until Jan. 30 and “on return to work I will get to the bottom of it.”

Econet Chief Executive Officer Douglas Mboweni said his company was aware that the new charges had caused “pain” but it was forced to comply with directives set by POTRAZ.

“Having said this, we would like to advise you that we will continue engaging the regulator on the impact this has had on you, our valued customers,” Mboweni said in a statement. Econet says on its website it has over 10 million subscribers in a country with a population of 13 million.

Customers took to social media to criticise the company and the regulator, accusing them of helping the government stifle dissent.

Lashias Ncube, a frequent Twitter commentator, said: “Two imperatives feeding off each other, government bid to curtail use of social media finds willing and unwitting ally in corporate greed.”

Zimbabwean activists have used Twitter, Facebook and WhatsApp to vent anger against Mugabe, in power since 1980, and the ruling ZANU-PF party, which they see as detached from their daily struggles.

“We had advanced a million baby steps in technology and connectivity but POTRAZ just threw us back to the stone age,” wrote Temba Dube, who posts regularly on Twitter.

Zimbabwe’s two other mobile phone companies, state-owned NetOne and Telecel, until last year majority owned by Vimpelcom, have yet to announce new prices.

(Reporting by MacDonald Dzirutwe; Editing by Joe Brock and Mark Trevelyan)

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JOHANNESBURG (Reuters) – South African bullion producer Harmony Gold said on Thursday that 1,700 miners were staging a wildcat sit-in at its Kusasalethu mine west of Johannesburg, an operation that has been a flashpoint of labour unrest and violence in the past.

The company said a statement that the sit-in began on Wednesday when employees failed to return to the surface at the end of the morning shift. It also said the miners had made no formal demands.

The Association of Mineworkers and Construction Union (AMCU) is the majority union at the mine and Harmony spokeswoman Marian van der Walt said most of the strikers were AMCU members.

“Union leaders are going there today and we hope to resolve the situation,” she said. AMCU officials could not immediately be reached for comment.

Kusasalethu, which has around 4,500 employees, produced just over 124,000 ounces of gold in the 2016 financial year and the company said in August it was reducing its life to five years from 24 because grades were expected to become much lower.

(Reporting by Ed Stoddard. Editing by Jane Merriman)

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By Dasha Afanasieva

LONDON (Reuters) – The former regional heads for Africa at private equity giants KKR and Carlyle are setting up an investment firm, Arkana Partners, to target local equity investments of up to $100 million.

Kayode Akinola told Reuters on Wednesday that he was leaving KKR to join forces with Marlon Chigwende, who left his role as Africa chief at rival Carlyle in 2016, as private equity opportunities in Africa are often seen as too small for the buyout industry’s titans.

“We will be focused on the mid-cap, where we believe the bulk of opportunities are,” Akinola said, adding that while the emphasis will be on private equity investments the new firm will be flexible in its approach.

“You need to bring your entire tool bag to the market. (In Africa) you can’t just say you’re only going to do buy-outs or just greenfield,” he said, referring to developing projects, often in infrastructure, from scratch.

The new firm will look for ventures which are ready to absorb up to $100 million but will mostly focus on opportunities requiring between $20 and $60 million of equity, Akinola said, highlighting that what counts as “mid-cap” can vary widely in different African economies.

It remained unclear when fundraising for the new venture would take place or how much the firm aimed to raise.

KKR, a global investment firm with more than $131 billion in assets under management, invests in Africa with its European private equity fund and targets at least $125 million in equity but more typically between $200 and $250 million, according to sources close to the firm.

Akinola joined KKR in 2013 amid growing hopes for the region to lead and develop the firm’s African efforts from Africa-focused Helios Investment Partners. Since then KKR has managed one investment in Africa, putting $200 million into Afriflora, a flower company in Ethiopia. Akinola remains on its board.

KKR will continue to examine deals in the region on a selective basis, the sources said.

Akinola, a Nigerian, and Chigwende who is originally from Zimbabwe, are setting up their firm as Sub-Saharan Africa’s two biggest economies face significant political and economic headwinds.

Nigeria’s economic recession deepened in the third quarter of last year as production of oil, its main export, fell.

Meanwhile South Africa’s economy barely grew in the same quarter as the manufacturing sector contracted sharply and investors worry whether the government can implement policies to boost growth.

Akinola remains unperturbed by any macroeconomic fears over Africa, where the U.N. says more than half of the world’s population growth between now and 2050 is projected to take place.

“The thing about emerging markets is that sometimes you have to be countercyclical. Africa continues to be a market where structural demand across most sectors will drive long term growth.”

(Editing by Greg Mahlich)

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