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South Africa’s antitrust body rejects appeal to delay Massmart complaint

2 September 2016 Comments (0) Business, Economy, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South African grocery retailers have lost a bid to delay a hearing into a complaint brought by Massmart that accuses them of anti-competitive behaviour, the antitrust watchdog said on Friday.

Large food retailers Shoprite, Spar, Pick n Pay had sought to delay the hearing into Massmart’s complaint on the grounds there is already a wider investigation into factors that could be distorting competition.

Massmart, a division of Arkansas-based Wal-Mart, lodged the complaint in 2014, saying its expansion into the grocery sector was being hampered by lease arrangements that restrict malls from renting out space to rival food retailers.

Known for its Game chain that mainly sells electronic goods, Massmart has been trying to push into the grocery market since Wal-Mart took a controlling stake in 2011, a move that pits it against rivals that also include upmarket food retailer Woolworths.

The Competition Commission has said exclusive clauses in leasing agreements, which can restrict malls from renting out space to rival food retailers for up to 20 years, could be one of the features preventing more competition.

Its sector-wide investigation, which will also examine competition between small informal foreign-owned shops and local stores popularly known as “spazas”, is expected to be completed by the end of May 2017.

(Reporting by Tiisetso Motsoeneng; editing by David Clarke)

South Africa’s cabinet reappoints Zuma ally as head of national airline

2 September 2016 Comments (0) Economy, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s government has reappointed Dudu Myeni as the chairwoman of South African Airways, the loss-making state-owned airline, it said on Friday.

The cabinet said Myeni, an ally of President Jacob Zuma, was appointed alongside 11 other board members to the board of SAA. The new team will meet the Minister of Finance Pravin Gordhan who will provide direction from a shareholder perspective, it said in a statement.

On Thursday a Finance Ministry source said officials in the department had opposed Myeni’s selection, but had managed to push through some preferred candidates to the cash-strapped airline’s new board.

SAA has been surviving on state-guaranteed loans and has failed to submit financial statements for the past two years, with results for 2015/16 held back after the Treasury refused to grant it 5 billion rand ($343 million) in additional loan guarantees.

Myeni’s reappointment comes two days after asset manager Futuregrowth said it had halted lending to state-owned firms over concerns of political interference in their administration.

In December Zuma denied rumours that he had had an affair with Myeni or that their ties had led to the sacking of then-finance minister Nhlanhla Nene, who had rebuked Myeni for mismanaging a 1 billion-rand deal with Airbus.

Critics say government plans to form a new committee to be supervised by Zuma that would oversee state-owned enterprises like SAA will limit Gordhan’s control over firms.

The rand has slid more than 8 percent against the dollar since Aug. 23, also on renewed fears that Gordhan could be charged over the activities of a surveillance unit set up when he was head of the tax department which police say illegally spied on politicians.

($1 = 14.5933 rand)

(Reporting by TJ Strydom; Writing by Stella Mapenzauswa; Editing by Greg Mahlich)

Rwanda signs $818 mln deal for new international airport

2 September 2016 Comments (0) Africa, Business, Economy, Latest Updates from Reuters Like

By Clement Uwiringiyimana

KIGALI (Reuters) – Rwanda has signed a deal with the African division of Portuguese construction firm Mota-Engil to build an international airport at a cost of $818 million, the company and government officials said.

They said the first phase of the airport, which is part of a push to attract more tourists and boost Rwanda as a conference destination, would cost $418 million and is expected to start in June next year and be completed by December 2018.

Rwanda’s plans for the new Bugesera International Airport date back to 2011 when it first announced it was seeking bids from the private sector to design, build, finance, maintain and operate the airport through a 25-year concession.

“The first phase is for 1.7 million passengers (per year) capacity and it gets all infrastructure associated for $418 million,” Mota-Engil Africa Chief Executive Officer Manuel Antonio Mota told reporters late on Thursday after signing an agreement with government officials.

Rwanda said in a statement that Mota-Engil would operate the airport for 25 years, with an option to extend another 15 years.

When it first sought bids, the government said the first phase would involve building passenger and cargo terminals and a 4.2 km runway to handle large commercial airplanes, while the second phase would be for a second runway and more terminals.

Mota-Engil said the second phase costing $400 million was expected to raise the airport’s handling capacity to 4.5 million passengers per year.

Neither Mota-Engil nor the government said when the second phase would start.

The existing international airport in the capital Kigali has an annual capacity of 1.6 million, according to the Rwanda Civil Aviation Authority, though it has little scope for expansion.

“Bugesera International Airport is coming in at the time when it is badly needed because we all know that the current airport capacity is not matching the growth of our traffic in terms of aircrafts, in terms of passengers,” James Musoni, Rwanda’s minister for infrastructure, said.

The coffee and tea producing country expects its economy to grow 6 percent this year and 2017 and then 6.5 percent in 2018.

(Editing by George Obulutsa and David Clarke)

Kenya sees tourism revenues rising 18 pct to 100 bln shillings

1 September 2016 Comments (0) Business, Economy, Latest Updates from Reuters Like

NAIROBI (Reuters) – Kenya sees earnings from tourism rising to 100 billion shillings ($990 million) in 2016, helped by improved security, infrastructure and marketing, the president’s office said on Wednesday.

The office did not give a comparative figure, but in June, Tourism Minister Najib Balala said Kenya earned 84.6 billion shillings from tourism in 2015.

Tourism, along with tea, horticulture and remittances are Kenya’s leading sources of foreign exchange.

($1 = 101.2500 Kenyan shillings)

(Reporting by George Obulutsa; Editing by Toby Chopra)

Tunisia’s state airline to cut 1,000 jobs: minister

31 August 2016 Comments (0) Economy, Latest Updates from Reuters Like

TUNIS (Reuters) – Tunisair, Tunisia’s state-owned carrier, plans to lay off 1,000 employees or more than 12 percent of its full-time workforce, as part of reform plans, the Transport Minister told Reuters on Monday.

Transport Minister Anis Guedira told Reuters the Tunsiar reforms were planned months ago as part of a programme at the airline made in agreement with major unions to reduce costs and improve competitiveness.

“We will soon lay off 400 employees who have chosen to leave voluntarily and they will receive compensation,” Guedira said. “Job cuts will reach 1,000 in Tunisair in total”.

A source told Reuters the airline will pay about $50 million in compensation to 1,000 employees. The airline currently has around 8,200 full-time workers.

As part of broader reforms, Tunisia’s government is seeking to curb the large losses incurred by major state-owned companies, which last year amounted to about $1.5 billion.

Prime Minister Youssef Chahed has promised his new government will take tough decisions to help the economy grow and create jobs as the country comes under pressure from international lenders to push through reforms and trim public spending.

Public sector wages at about 13.5 percent of gross domestic product are among the highest in the world. The central bank said the government would need to seek more external financing for next year or it would be unable to cover those costs.

Chahed has warned an austerity programme with public sector job cuts will be inevitable if Tunisia does not introduce reforms that include the overhaul of some state-run companies.

(Reporting by Tarek Amara; editing by Patrick Markey and Susan Thomas)

Nigeria in recession as low oil prices shrink economy

31 August 2016 Comments (0) Economy, Latest Updates from Reuters Like

By Chijioke Ohuocha and Alexis Akwagyiram

LAGOS (Reuters) – Nigeria, Africa’s biggest economy, officially slid into recession for the first time in more than 20 years as the statistics office announced a further contraction in the second quarter of the year.

The Nigerian Bureau of Statistics (NBS) said on Wednesday that gross domestic product (GDP) contracted by 2.06 percent after shrinking 0.36 in the first quarter.

It said the non-oil sector declined due to a weaker currency, while lower prices dragged the oil sector down.

A slump in crude prices, Nigeria’s mainstay, has hammered public finances and the naira currency, causing chronic dollar shortages. Crude sales account for around 70 percent of government revenues.

Compounding the impact of low oil prices, attacks by militants on oil and gas facilities in the southern Niger Delta hub since the start of the year has cut crude production by about 700,000 barrels per day (bpd) to 1.56 million bpd. The government’s 2016 budget assumed 2.2 million bpd.

On Wednesday, the statistics office said annual inflation reached 17.1 percent in July from 16.5 percent in June – a more than 10-year high – and food inflation rose to 15.8 percent from 15.3.

Nigeria’s sovereign dollar bonds fell across the curve to their lowest value in more than two weeks after the NBS released its data.

“The Nigerian economy contracted more deeply than we had expected in the second quarter,” said Razia Khan, chief economist, Africa at Standard Chartered bank.

“With a wider current account deficit it remains important for Nigeria to maintain a credible policy response, in order to attract much-needed stabilizing inflows,” she added.

The NBS figures showed Nigeria attracted just $647.1 million of capital in the second quarter, a 76 percent fall year-on-year and 9 percent down from the first quarter.

Nigeria’s economy was last in recession, for less than a year, in 1991, NBS data shows. It also experienced a prolonged recession from 1982 until 1984.

President Muhammadu Buhari was in power for some of that period as a military ruler after seizing power in a December 1983 coup and remained head of state until the military pushed him out in August 1985.

The office of the vice president, who oversees economic policy, said in a statement it expected a “better economic outlook” for the second half of 2016 “because many of the challenges faced in the first half either no longer exist or have eased”.

Niger Delta Avengers, the group claiming responsibility for most of the attacks in the oil-producing region in the last few months, said on Monday it had ceased hostilities.

Adeyemi Dipeolu, a presidential economic advisor, attributed the recession largely to a “sharp contraction in the oil sector” caused by the militant attacks.

“The rest of the second quarter data is beginning to tell a different story. There was growth in the agricultural and solid minerals sectors,” he added.

The naira remained at the record low of 418 per dollar hit on Tuesday on the black market, as dollar shortages curb activity on the official interbank market where the currency was offered as rates as weak as 365.25 this month before gaining ground after central bank interventions.

(Additional reporting by Felix Onuah in Abuja; Editing by Toby Chopra/Ruth Pitchford)

IMF insists on international audit of Mozambique debt

30 August 2016 Comments (0) Economy, Latest Updates from Reuters Like

MAPUTO (Reuters) – The International Monetary Fund (IMF) is demanding an external forensic audit of Mozambique’s public debt to regain investor confidence after a scandal over more than $2 billion in secret loans, its local representative said on Tuesday.

Parliament and the attorney-general’s office have launched investigations into the undisclosed borrowing in 2013 and 2014 but the government has baulked at opening up its books to outside auditors.

However, the IMF, which suspended assistance when the loans came to light this year, has insisted on external scrutiny as a precursor to resuming financial aid to what is one of the world’s poorest countries.

“It is important to move quickly to an international forensic audit,” its representative, Alex Segura-Ubiergo, said in an interview on Radio Mozambique, the public broadcaster.

“Investors are still interested in investing in Mozambique and this will bring foreign exchange, will bring dollars, but for this we need also the return of confidence,” he added.

The debt crisis and aid suspension has hit Mozambique hard, with its currency, the metical, losing nearly 40 percent against the dollar since January and economic growth slowing to below 4 percent.

With foreign debt soaring towards 100 percent of GDP, the government has been forced to revise its 2016 budget, which now shows a deficit equal to 11.3 percent of GDP, while the central bank hiked interest rates by 300 basis points in July to try to prop up the currency and contain inflation.

(Reporting by Manuel Mucari; Editing by Ed Cropley; Editing by Ed Stoddard)

Shares in Kenya’s two biggest banks fall for third session after rate caps

29 August 2016 Comments (0) Africa, Business, Economy, Latest Updates from Reuters Like

NAIROBI (Reuters) – Shares in KCB Group,, Kenya’s biggest bank by assets, and Equity Bank, the biggest in terms of number of customers, fell sharply on Monday for a third consecutive session as investors reacted further to a government move to cap commercial lending rates.

By 0647 GMT, shares in KCB and Equity were both down 9.3 percent on the Nairobi Securities Exchange at 24.50 shillings and 26.75 shillings respectively.

Co-operative Bank of Kenya dropped 9.7 percent to 9.75 shillings, while NIC Bank fell 8.3 percent to 22.00 shillings.

President Uhuru Kenyatta on Wednesday signed into law a bill capping commercial bank lending rates in a bid to boost the economy.

Businesses in the East African country have complained that high rates, which average 18 percent or more, hobble corporate investment. Analysts, however, have said capping rates may be counterproductive as it makes banks less willing to lend.

(Reporting by George Obulutsa; Editing by Susan Fenton)

Ethiopian runner protests for his people as he crosses the finish line at Rio 2016

29 August 2016 Comments (0) Africa, Sports Like

Feyisa Lelisa, the silver-medalist in the men’s marathon at Rio 2016, will probably never return to his homeland. Despite coming second with an impressive time of 2 hours 9 minutes, he claims he will not be welcome to return to Ethiopia. At the end of the race he made a finish-line protest in solidarity with his people, the Oromo.

This protest could cost him his life or his liberty if he returns, and he now fears for the family he has left behind. The Ethiopian government claim otherwise and insist he will return a hero, and that his family are safe. However, the state-owned media did not show him crossing the finishing line, instead focusing on the winner, Kenyan Eliud Kipchoge. Despite the administration’s protestations it is unlikely that they will treat him kindly. The government has a veritable record of drastic crackdowns in order to quash dissent. The most recent demonstrations in Ethiopia, led to the government shutting down the country’s internet for two days, in an attempt to deter further campaigns.

With the public spotlight now on the runner, his family and predicament, the Ethiopian government is forced to deny reports that he is in danger. Whether that would be the case without international scrutiny however, remains to be seen.

Protests in Oromia, over land and resources

Since November, over 400 protesters have been killed according to the Human Rights Watch. This figure has been strongly denied by the ruling party, the EPRDF. The government has no opposition in parliament and has strong ties with world leaders in Europe and the USA, which some commentators say allows the regime to operate under less scrutiny. Many Oromo feel that their situation is ignored by the world, and with no political representation in the government their needs are not met. President Obama has even recently praised Ethiopia’s economic development and has met with leaders from the EPRDF.

The Oromo make up over a third of the population in Ethiopia and have a long history of conflict and oppression by other ethnic groups. The most recent protests began in November 2015, sparked by plans to expand the boundaries of the capital, Addis Ababa, into the Oromo land boundaries. This has since been shelved but demonstrations have been held in increasing frequency over their marginalization and political treatment. Despite being the “breadbasket” of the country, it is the second poorest region. According to the MIF, 90% of the Oromo population lives in poverty, over 80% do not have access to electricity or sanitation and a shocking 75% do not have access to safe drinking water. The Oromo people feel excluded from progress and economic developments which have been focused around the capital, Addis Ababa in recent years.

Was this a worthwhile sacrifice?

Lelisa may have sacrificed his career for this political statement; most runners have a limited physical peak and an asylum process could take years. He felt strongly that he could not overlook the opportunity to appeal to the global community in his time in the spotlight. The runner told a nearby journalist after the race: “The Ethiopian government is killing my people, so I stand with all protests anywhere. I am protesting for my people”.

The protest has gone from a little-known political movement to an international debate. Over $130,000 has been raised via crowdfunding for Lelisa to be relocated and granted asylum abroad, probably to the USA. A legal team has been hired and is looking into ways to extract his wife and two young children from Ethiopia, to join him in his country of refuge.

Although political protests or symbols are banned by the Olympic charter, Lelisa’s decision seemed particularly apt considering almost all Ethiopian runners are ethnically Oromo. Their success is mostly disregarded by the Ethiopian Athletics Federation, potentially to downplay their achievements, and to stifle exposure for their cause. His medal-winning performance in the marathon was the perfect time for him to highlight the plight of his people.

With the spotlight on Lelisa and Ethiopia, he is likely safe for now. The money generously donated will provide him with legal consul and perhaps a new life in the USA. Once the Olympics are finished, will this exposure just have helped one Oromo runner, or will it actually instigate the action needed to benefit the whole Oromo population?

Egypt’s government complicit in wheat corruption -parliamentary report

28 August 2016 Comments (0) Latest Updates from Reuters, Politics Like

By Eric Knecht and Maha El Dahan

CAIRO/ABU DHABI (Reuters) – A parliamentary fact-finding commission’s report into corruption in Egypt’s wheat industry finds that the government played a key role in “wasting public funds” in its costly food subsidy programme.

Reuters reviewed a copy of the report that will be presented in parliament on Monday. It states that government entities neglected their own storage facilities in favour of less regulated private sites, made contracts with “fake entities,” and oversaw flawed reforms that caused subsidy spending to increase rather than decrease as publicly stated.

From silo contracts to budgetary analysis to testimony from industry officials, the more than 500-page fact-finding report into wheat corruption points to government involvement in mismanaging, and at times facilitating graft in, subsidies intended to encourage agriculture and feed tens of millions.

“There are obvious flaws that rise to the level of complicity in the supply ministry and all of its bodies supervising the wheat procurement system,” the report said.

The supply ministry spokesman said he had resigned from his post and could no longer comment on the issue when contacted by Reuters.

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

Industry officials have estimated that upward of 2 million tonnes could be missing from silos, a deficit that could force Egypt to import large quantities of additional grains to meet local demand even as it faces an acute hard currency shortage.

A Reuters special report earlier this year detailed how the government’s wheat supply chain was riddled with corruption – from fraudulent wheat purchases by local suppliers to hacked smart cards that allowed bakers to steal flour – that has cost the country hundreds of millions of dollars per year.

LAX OVERSIGHT

The parliamentary report provides new insight into how government bodies may have played a direct role in many of the corrupt practices, particularly by awarding contracts to private suppliers who had lax oversight of their storage facilities, while leaving government sites unused.

The supply ministry’s Holding Company for Silos housed over 1 million tonnes of wheat in less-regulated private sector storage this season while leaving 700,000 tonnes of its own storage capacity unutilised – a violation of regulations that require government spaces to take priority, the report found.

The holding company used just 29.7 percent of the silo capacity it had available, it said.

“Despite that (unused storage), the company contracted with private sector companies to rent 16 silos and 35 shounas (open air sites) to store a total of 1,147,319 tonnes of wheat.”

“Not using the full storage capacity owned by the (government) company caused it to bear huge losses…and made it take on the cost of paying to rent from the private sector.”

The report also called into question the legality of many of the contracts made with the private sector sites.

Government firms contracted with “storage sites that had legal actions taken against them previously but which had since changed their commercial names”, and with those that “did not have a commercial registration or a tax identification.”

“This means that contracting was done with fake entities,” the report stated.

Last week Supplies Minister Khaled Hanafi resigned amid growing criticism of his management of the subsidies. His exit was the biggest fallout from the wheat scandal to date.

Hanafi repeatedly said that bread system reforms introduced under his watch in 2014 have saved Egypt in terms of both money and strategic commodities, an assertion the report undermines.

He was not immediately available for comment about the parliamentary report when contacted by Reuters.

Government spending on bread subsidies rose by 3.91 billion Egyptian pounds ($440.32 million), or 15.9 percent, in the 2014-15 financial year, and by an additional 1.89 billion ($212.84 million), or 6.6 percent, in 2015-16, the report states, citing Finance Ministry documents.

“Subsidies increased, and did not decrease as a result of the bread system as the supply ministry continuously claims.”

($1 = 8.8799 Egyptian pounds)

(Editing by Mark Heinrich)

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Protests in Oromia, over land and resources

Was this a worthwhile sacrifice?

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