BEIJING/CAIRO (Reuters) – China and Egypt on Tuesday concluded an 18 billion yuan ($2.62 billion) three-year bilateral currency swap, a move that importers and economists said would facilitate trade and improve foreign currency liquidity in cash-strapped Egypt.

Egypt’s central bank, which signed the deal with the People’s Bank of China, said the arrangement could be extended by mutual consent.

“This bilateral currency swap is a mutually beneficial arrangement between both countries,” it said in a statement.

The People’s Bank of China said the move was aimed at promoting trade and investment and maintaining financial stability in both countries.

China has carried out swaps with more than 30 central banks around the world to increase the use of the yuan as a global reserve currency and to stimulate bilateral trade. The yuan is traded onshore against 16 major currencies.

Neither bank gave details on how the Egyptian currency swap would work but economists and businesspeople expect it to have a positive impact on Egypt’s foreign reserve position.

“The position of the central bank is definitely increasing, with more firepower denominated in foreign currency to stabilise the Egyptian pound when needed. So this is definitely something positive,” said Hany Farahat, senior economist at Cairo-based CI Capital.

Egypt has struggled to revive its economy since a popular uprising in 2011 drove away tourists and foreign investors, major sources of foreign currency.

Reserves tumbled from $36 billion in 2011 to around $16.56 billion at the end of last August.

But Egypt has since pressed ahead with a reform programme that has seen it abandon its currency peg, cut subsidies and introduce a value-added tax.

The measures helped Egypt clinch a $12 billion three-year loan from the International Monetary Fund last month. It has already received the first $2.75 billion IMF instalment, helping push foreign reserves above $23 billion in November.

Egyptian importers said the deal with China would allow them to source yuan directly, facilitating imports from China whilst reducing demand for dollars and easing pressure on the Egyptian pound.

They said the deal made sense for China as a Chinese developer will be involved in the construction of a planned new Egyptian capital at a cost of $20 billion and Chinese firms were investing in other sectors in Egypt.

Egypt’s pound has roughly halved in value against the dollar since the central bank abandoned its peg on Nov. 3. The central bank had blamed currency pressures on its large trade deficit.

“I expect the exchange will be done immediately with the full amount, and then the two countries can spend the local currency of the counter-party in whatever way they want. And then, at a later point, after the period of the swap, which is three years, they would exchange it back,” Farahat said. ($1 = 6.8772 Chinese yuan renminbi)

(Reporting by Beijing newsroom and Lin Noueihed and Asma AlSharif in Cairo; Editing by Kevin Liffey and Andrew Heavens)

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NEW DELHI (Reuters) – Nigeria will maintain oil output at 1.9 million barrels per day (bpd) with all three of its main fields on line, the country’s oil minister Emmanuel Ibe Kachikwu said on the sidelines of India’s Petrotech energy conference on Monday.

Nigeria in October said it expected its oil production rate to jump by 22 percent by the year’s end to 2.2 million bpd.

Apart from the impact of low oil prices, whose sales account for 70 percent of the Nigerian government’s revenue, the country’s energy facilities have been crippled by attacks by militants calling for a greater share of the country’s oil wealth.

(Reporting by Promit Mukherjee; Editing by Kenneth Maxwell)

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By Davide Barbuscia

DUBAI (Reuters) – Banque Misr <Banque Misr SAE>, one of Egypt’s biggest lenders by assets, is raising a five-year syndicated loan guaranteed by the country’s central bank, sources close to the situation said.

The bank has mandated ADIB Capital and Credit Suisse to arrange the transaction, which was launched to syndication in the second half of November. ADIB Capital is the investment banking arm of Abu Dhabi Islamic Bank’s Egyptian subsidiary.

The loan, an amortising facility, is expected to be about $350 million and offers a margin of around 500 basis points over the London Interbank Offered Rate (Libor), said one of the banking sources.

Banque Misr officials could not be reached by telephone, and the bank did not reply to an emailed request for comment.

The fact that the loan is guaranteed by the central bank is a positive factor for banks which could participate in the loan, the sources noted, adding however that the proposed five-year maturity was unusual for financial institutions, which generally raised syndicated loans with shorter tenors.

The presence of Credit Suisse as one of the arrangers indicates that the lead banks have the capacity to underwrite and hold a large part of the requested amount, so the deal should not have trouble reaching completion, one of the bankers said.

Banque Misr raised a $250 million, three-year loan in December last year, offering a margin of 290 bps over Libor.

(Editing by Andrew Torchia)

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JOHANNESBURG (Reuters) – South African Finance Minister Pravin Gordhan has ordered an investigation into the tax collection authority, officials told parliament on Thursday, underlining rising tensions between the Treasury and the revenue agency.

Gordhan has expressed concerns at the leadership of the South African Revenue Service (SARS), saying earlier this week he could not vouch for the accuracy of the information it provided because of a lack of accountability and cooperation from its top management.

SARS said in a statement on Thursday it was concerned over the comments questioning the integrity of its leadership.

News of the latest investigation adds to the impression of a system in turmoil after months of tension between President Jacob Zuma and the finance minister, who himself survived a separate probe into allegations of fraud while he was the head of SARS.

The tensions have unnerved investors at a time when Africa’s most industrialized economy is stalling, with growth forecast at 0.5 percent this year by the Treasury.

An 8-member team set up by the Treasury to investigate governance at SARS said in a presentation to parliament, seen by Reuters, that it was studying whether the agency was sufficiently accountable and had the capacity to deal with illicit financial flows.

It was unclear when the probe was initiated, but Business Day newspaper quoted the head of the committee, Dennis Davis, as saying it had been carrying out its work for several months.

Davis could not be reached for comment at the number provided on the committee’s website. SARS spokesman Sandile Memela and Treasury spokeswoman Yolisa Tantsi did not immediately reply to telephone and email requests for comment.

“The implication is that he has a lack of confidence in the top leadership at SARS,” political analyst Daniel Silke said, referring to Gordhan.

Gordhan and SARS commissioner Tom Moyane, who was appointed in 2014 by Zuma, were at loggerheads earlier this year when Moyane refused to halt an operational turnaround plan that had been vetoed by the minister.

At the time, media reported that Gordhan had threatened to resign from the cabinet unless Moyane was removed from his role.

(Reporting by Tiisetso Motsoeneng and Mfuneko Toyana; Editing by James Macharia and Mark Trevelyan)

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LUANDA (Reuters) – Angola’s state-owned oil firm Sonangol will not pay the government any dividends this year, its chief executive said, as crude revenues plunge in Africa’s second-largest producer.

Sonangol is an important source of revenue for the government, but the firm has amassed hundreds of millions of dollars in debts and has deferred payments to its suppliers in recent months.[nL8N1DM3PU]

“In 2016 it is estimated that there will not be dividends for the shareholder, which is the state,” Sonangol Chief Executive Isabel dos Santos said at a media briefing on Thursday.

Dos Santos, the daughter of President Jose Eduardo dos Santos who has ruled the oil-rich nation since 1979, added that the firm’s gross income has dropped to an estimated $15.3 billion, from more than $40 billion in 2013.

Sonangol’s debt is estimated at $9.85 billion and the firm still needs to find a source of finance for $1.56 billion in payments to suppliers this year, she said.

“Sonangol has been honoring the monthly payment related to its financial obligations to the banks,” Dos Santos said.

(Reporting by Herculano Coroado; Writing by TJ Strydom; Editing by Richard Pullin)

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TUNIS (Reuters) – The Tunisian government will sell its stakes in telecom companies Orange Tunisia and Ooredoo next year, a senior official told Reuters on Thursday.

“The government will sell next year its 10 percent stake in Ooredoo and its 51 percent holding in the company Orange Telecom,” Habib Dabbabi, a junior minister in digital economy, told Reuters.

He added that the government had not decided whether it would carry out the sales by tender or on the stock market.

The government will keep its 65 percent holding in Tunisia’s third major telecoms company, Tunisie-Telecom, Dabbabi said.

French telecoms firm Orange has a 49 percent stake in Orange Tunisia, which has more than 4.5 million mobile phone subscribers in the North African country. Ooredoo Tunisia is controlled by the Qatari companyof the same name and has about 6.5 million mobile subscribers.

The government confiscated a 51 percent stake in Orange Tunisia from a son-in-law of former leader Zine El-Abidine Ben Ali after he was ousted in an uprising in 2011. The son-in-law, Marouane Mabrouk, has appealed against the government’s seizure of the stake.

Tunisia has a population of 11.5 million people and mobile penetration of 97 percent.

(Reporting by Tarek Amara; editing by Susan Thomas)

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