AfricaMe-Team, Auteur à Africa M.E.

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)

Egypt’s GASC receives offers from seven suppliers at wheat tender

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

ABU DHABI/CAIRO (Reuters) – Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), received offers from seven suppliers on Friday for its wheat tender, Cairo-based traders said.

The lowest offer was $177.70 a tonne free-on-board (FOB), for two cargoes each of 60,000 tonnes of Russian wheat, the traders said.

Results for the tender, seeking shipment from Sept. 26 to Oct. 5, were due later on Friday.

An eighth supplier, Venus, was disqualified at the technical stage for not having the correct documents and was prevented from submitting an offer, traders said.

This is GASC’s first attempt to purchase wheat after Egypt’s Minister of Supply Khaled Hanafi resigned on Thursday, the most senior-level fallout from an investigation into whether millions of dollars intended for subsidising farmers were used to purchase domestic wheat that only existed on paper.

Egypt’s supply ministry, which also oversees GASC, is in charge of a massive food subsidy programme.

Trade minister Tarek Kabil has been put in charge until a new minister is appointed.

Traders said the following offers were made in dollars per tonne FOB:

*Union: two cargoes each of 60,000 tonnes of Russian wheat at $177.70

*Nidera: 55,000 tonnes of Russian wheat at $179.70 a tonne

*Alegrow: 60,000 tonnes of Russian wheat at $180.88

*Ameropa: two cargoes each of 60,000 tonnes of Romanian wheat at $180.11

*Daewoo: 60,000 tonnes of Russian wheat at $178.60

*Louis Dreyfus: 60,000 tonnes of Ukraine wheat at $179.94

*ADM: 60,000 tonnes of Romanian wheat at $208.89

(Reporting by Maha El Dahan and Eric Knecht; Additional reporting by Valerie Parent in Paris; Editing by Jason Neely and Susan Fenton)

Tanzania’s President Magufuli orders officials to speed up LNG project

25 August 2016 Comments (0) Africa, Latest Updates from Reuters, Politics 1

By Fumbuka Ng’wanakilala

DAR ES SALAAM (Reuters) – Tanzanian president John Magufuli ordered officials on Monday to speed up long-delayed work on a planned liquefied natural gas (LNG) plant, saying implementation of the project had taken too long.

BG Group, recently acquired by Royal Dutch Shell, alongside Statoil, Exxon Mobil and Ophir Energy, plan to build a $30 billion-onshore LNG export terminal in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC) by the early 2020s.

But a final investment decision has been held up by government delays in finalising issues relating to acquisition of land at the site and establishing a legal framework for the nascent hydrocarbon industry.

“I want to see this plant being built, we are taking too long. Sort out all the remaining issues so investors can start construction work immediately,” the presidency quoted Magufuli as saying in a statement.

Magufuli, a reformist who took office in November, has sacked several senior officials for graft and cut spending he deemed wasteful, such as curbing foreign travel by public officials.

The president’s office said Magufuli issued the instructions for the LNG project to be fast-tracked during talks with Oystein Michelsen, Statoil’s Tanzania country manager, and senior Tanzanian government energy officials.

The Tanzanian presidency did not give the construction schedule for the project, but said once completed the LNG plant would have an expected economic lifespan of more than 40 years.

The government said it has acquired over 2,000 hectares of land for the construction of the planned two-train LNG terminal at Likong’o village in the southern Tanzanian town of Lindi.

Tanzania discovered an additional 2.17 trillion cubic feet of possible natural gas deposits in February, raising the east African nation’s total estimated recoverable natural gas reserves to more than 57 trillion cubic feet.

East Africa is a new hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda and major gas reserves discovered in Tanzania and Mozambique.

(Editing by Aaron Maasho and Richard Balmforth)

Egypt’s supply minister resigns amid corruption probe

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

CAIRO/ABU DHABI (Reuters) – Egyptian Minister of Supply Khaled Hanafi resigned from his post on Thursday, the highest level fallout from a corruption probe into whether millions of dollars intended to subsidise farmers were used to purchase wheat that did not exist.

“I announce leaving my post so that the state can choose who will bear and continue this path of giving,” Khaled Hanafi said on state television.

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

If Egypt’s local wheat procurement figures were misrepresented, it may have to spend more on foreign wheat purchases to meet local demand – even as it faces a dollar shortage that has sapped its ability to import.

Egypt’s supply ministry is in charge of a massive food subsidy programme and the main state grain buyer, the General Authority for Supply Commodities (GASC).

Parliamentarians who formed a fact-finding commission to investigate the fraud have said upwards of 2 million tonnes, or 40 percent of the locally procured crop, may be missing.

The general prosecutor has ordered arrests, travel bans, and asset freezes for several private silo owners and others allegedly involved in the scandal.

While Hanafi has not been accused of directly profiting from misallocated subsidies, parliamentarians, industry officials, and media commentators have in recent weeks pinned blame for the crisis squarely on his shoulders.

The prospect of hundreds of millions of dollars in squandered government subsidies comes as Egypt gears up for a raft of austerity measures, including various subsidy cuts agreed to as part of a $12 billion IMF programme that could bring pain for its poorest.

(Reporting by Eric Knecht and Maha El Dahan; additional reporting by Asma Alsharif; editing by William Hardy)

Zuma says backs South Africa finmin but can’t stop probe

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

By Mfuneko Toyana

PRETORIA (Reuters) – South African President Jacob Zuma said on Thursday he backs Finance Minister Pravin Gordhan but cannot intervene in a police investigation over a suspected spy unit at the tax service, signalling a prolonged tussle that could rock markets further.

Gordhan said on Wednesday he had done nothing wrong and had no legal obligation to obey a police summons linked to an investigation into whether he used the South African Revenue Service to spy on politicians including Zuma.

The rand, which had tumbled 5 percent since Tuesday in response to the investigation, picked up on Thursday and gained further ground after Zuma’s statement, while government bonds also firmed, even though analysts said the president had offered only qualified support.

News of Gordhan’s summons this week compounded investors’ worries about a power struggle between Zuma and Gordhan as Africa’s most industrialised economy teeters near recession and credit rating agencies consider downgrading it to “junk”.

The main opposition party called on Thursday for a parliamentary debate into what it called a “witch-hunt” against Gordhan, who was in charge of the tax service when the unit under investigation was set up.

Investors and rating agencies back Gordhan’s plans to rein in government spending in an economy that has been forecast by the central bank to register no growth this year.

In his first public comments on the matter since it surfaced late on Tuesday, Zuma said he had noted the concerns by individuals and various organisations over the investigation.

“President Jacob Zuma wishes to express his full support and confidence in the Minister of Finance and emphasises the fact that the minister has not been found guilty of any wrong doing,” the presidency said in a statement.

“The Presidency wishes to also emphasise that President Zuma does not have powers to stop any investigations into any individual/s,” it said, adding that Zuma could not bring a halt to the probe even if it was negatively affecting the economy.

TENSIONS WITH TREASURY

A Zuma-backed plan to build a series of nuclear power plants, at a cost of as much as $60 billion, has caused tension with the Treasury for months and is likely adding to pressure on Gordhan’s position, analysts say. The presidency said in May that Zuma was not warring with Gordhan.

On Thursday, the presidency defended plans by cabinet to give Zuma supervision over state-owned firms after Gordhan’s allies said this would limit the finance minister’s control.

Zuma’s team and the Treasury under Gordhan have disagreed about government spending, including at loss-making state companies like South African Airways, analysts say. [nL8N1B6328]

Analysts also questioned the extent of Zuma’s stated support for his finance minister.

“It was an ambiguous vote of confidence in Pravin Gordhan which would suggest that the agencies supposedly investigating in Pravin Gordhan will be given relatively free rein to continue these investigations,” said Daniel Silke, a director at Political Futures Consultancy.

NKC African Economics analyst Gary van Staden concurred.

“Anybody who watches English football can tell you when the owner says he has confidence in the manager, the manager is out of there in a week,” he said.

Political activists protested outside the offices of the Hawks, the elite police unit that is investigating Gordhan, in solidarity with the minister, where two former officials of the tax service presented themselves to the police.

Hawks spokesman Hangwani Mulaudzi declined to comment.

A former finance minister, Trevor Manuel, said on Wednesday the economy would be “destroyed” if Zuma fired Gordhan, after he changed finance ministers twice in one week in December.

(Additional reporting by Joe Brock, James Macharia and Tanisha Heiberg; Writing by James Macharia; editing by Dominic Evans)

Libya sovereign fund claimant denounces U.N.-backed govt’s management plan

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

Demonstration_in_Bayda_(Libya,_2011-07-22)

By Claire Milhench

LONDON (Reuters) – A claimant to the chairmanship of Libya’s $67 billion sovereign fund on Monday denounced the appointment by the country’s United Nations-backed government of a panel to run the fund, saying he had not been formally asked to step down.

Last week, the Government of National Accord (GNA) appointed a five-member caretaker committee to run the Libyan Investment Authority (LIA). The announcement was welcomed by Western governments, but it did not list AbdulMagid Breish amongst the panel members.

The GNA was designed to resolve a conflict that flared up in 2014, when an armed alliance took control of institutions in Tripoli and the newly elected parliament relocated to the east.

The hope was that it would reunify institutions such as the central bank and the LIA, but opposition to the GNA continues with the parliament in the east of Libya voting on Monday against a motion of confidence in the Tripoli-based administration.

The LIA has been hampered by a long-running leadership dispute, which mirrors the split nature of the country and its institutions following the fall of Gaddafi in 2011. This has led to multiple individuals claiming to lead key bodies such as the LIA, the central bank and the national oil company.

Breish was one of two men who claimed to be chairman of the LIA. He was appointed chairman in June 2013, but stepped aside a year later, then said he had been reinstated following a decision by the Libyan Court of Appeal.

His rival, Hassan Bouhadi, was appointed chairman by the authorities in the east of Libya. But he resigned earlier this month, saying political infighting had made it too difficult for him to carry out his duties.

He has been replaced by Ali Shamekh, who was installed as chief executive officer of the LIA by the Tobruk-based board of trustees.

In a statement issued on Monday, Breish questioned whether the GNA’s move complied with Libyan law and challenged the technical expertise of the five-member panel.

The statement said Breish had not yet received a formal notice mandating him to hand over his responsibilities, but on receipt of this, he would make an application to the Libyan courts to clarify the legal position.

“While I accept and share the Government of National Accord’s desire to unify the Libyan Investment Authority, it is my responsibility as chairman and CEO to ensure that it is done in compliance with Libyan law, that the technical expertise is in place to manage the institution and its funds, and that multi-million dollar litigations that we are pursuing in overseas courts are not adversely affected,” he said.

“I am therefore seeking an expedited court ruling to clarify the current legal position.”

The LIA is currently embroiled in two lawsuits against investment banks Goldman Sachs and Societe Generale, seeking over $3 billion lost in trades carried out under the Gaddafi regime.

Breish’s statement added that he was holding discussions with the directors of the Tobruk-appointed board of trustees, with the aim of establishing a single, united board of directors. A formal meeting is expected early next week, it said.

(Editing by Ralph Boulton and Andrew Roche)

Kenya finalises agreement for development of crude oil pipeline

24 August 2016 Comments (0) Africa, Business, Economy Like

NAIROBI (Reuters) – Kenya has finalised an agreement with oil explorer Tullow Oil and its partners Africa Oil and A.P. Moller-Maersk for the development of a crude oil pipeline, as it bids to become an oil exporter, the president’s office said.

Tullow and Africa Oil first struck oil in the Lokichar Basin in the country’s northwest in 2012. The recoverable reserves are an estimated 750 million barrels of crude.

The two firms were 50-50 partners in blocks 10 BB and 13T where the discoveries were made. Africa Oil has since sold a 25 percent stake in those blocks to A.P. Moller-Maersk.

A statement from President Uhuru Kenyatta’s office quoted Energy and Petroleum Minister Charles Keter as saying the three partners and the government had finalised the pipeline’s development plan.

“He said the Government and its upstream partners, Tullow Oil, Africa Oil and Maersk Companies, have concluded a Joint Development Agreement (JDA) for the development of the pipeline,” the statement said.

In April, Keter said the pipeline – to run 891 km between Lokichar and Lamu on Kenya’s coast – would cost $2.1 billion and should be completed by 2021.

The government and the companies are pushing to start small scale crude oil production in 2017, at about 2,000 barrels per day to be initially transported by road.

“We have started and we are not moving back. We want to be at the top of the pile. So, we have set a path and by 2019, Kenya is going to be a major oil producer and exporter,” Kenyatta said.

The statement said Tullow Oil had confirmed it would start production in March 2017 and quoted Paul McDade, its chief operating officer, as saying the company would be ready to start exports in June next year.

Neighbouring Uganda is also looking to build a pipeline to export its oil. Though it initially favoured a route though Kenya, Kampala has decided to build its pipeline through Tanzania instead.

(Reporting by George Obulutsa; Editing by Aaron Maasho and Mark Potter)

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Protests in Oromia, over land and resources

Was this a worthwhile sacrifice?

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