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Congo copper output falls 14% in H1 on lower prices

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

KINSHASA (Reuters) – Copper output in Democratic Republic of Congo, Africa’s top producer, fell 14 percent in the first half of 2016 to 466,250 tonnes as a global price slump led some mines to suspend production, the central bank said on Tuesday.

The decline is hammering the economy of the country, which derives about 95 percent of its export earnings from extractive industries.

In June, the government slashed its budget by 22 percent in response to low commodity revenues.

Congo, among the world’s top copper producers, produced 990,000 tonnes of the metal in 2015, down from 1.03 million tonnes the year before.

In a weekly report, the central bank also said production of cobalt, the metal used in lithium-ion batteries and of which Congo is the world’s leading producer, slid by 13 percent to 35,267 tonnes over the same period.

Benchmark copper on the London Metal Exchange lost 25 percent of its value in 2015 and has recovered only slightly this year, while cobalt prices are also down about 14 percent from this time last year.

Glencore’s Katanga unit, one of the country’s largest copper and cobalt producers, announced an 18-month suspension of operations last September and thousands of jobs have been lost in the sector since then as companies cut costs.

(Reporting by Aaron Ross; editing by Matthew Mpoke Bigg and Jason Neely)

Old Mutual to invest in Nigerian real estate, agriculture

12 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters 1

ABUJA (Reuters) – Anglo-South African financial services firm Old Mutual and Nigeria’s sovereign wealth fund on Friday signed agreements to set up two funds to invest in real estate and agriculture in Africa’s most populous nation.

Old Mutual and Nigeria Sovereign Investment Authority (NSIA) said they would jointly raise a $500 million fund to invest in real estate and another $200 million to spend on agriculture projects in Nigeria.

The West African nation is in the middle of its worst crisis in decades as a slump in oil revenues hammers public finances and the naira. Gross domestic product shrank in the first quarter and the central bank governor has said a recession is likely.

Chief executive of NSIA, Uche Orji, said both parties will each commit $100 million as initial commitment for the real estate fund and $50 million for the agriculture fund.

“We are looking at office towers, commercial real estate,” Orji said. “We are investing equity in agriculture. We are looking at farming with emphasis on export.”

Poor infrastructure and access to capital is a major bottleneck to growth in Nigeria, which has made diversifying its revenue base and reducing a huge import bill its top priority.

“The most important thing is infrastructure. The problem is that its cheaper to move goods from China to Lagos, than move it from Kano to Lagos and that’s because we don’t have the infrastructure,” Finance Minister Kemi Adeosun said.

Nigeria established the Sovereign Investment Authority (SIA) in 2011 with $1 billion of seed capital in an effort to manage oil export revenues.

The new funds, which will stay invested for up to 12-years, will target returns of around 20 percent, Hywel George, chief investment officer at Old Mutual said.

A successful real estate investment in Nigeria can earn an returns as high as 30-35 percent, while rental income yields in cities such as Lagos and Abuja can easily reach 10 percent, developers and estate agents say.

However, navigating through opaque land laws, corruption, a lack of development expertise and financing, a dearth of mortgages and high building costs will take courage and influential local partners.

(By Chijioke Ohuocha. Editing by Ulf Laessing and William Hardy)

S.Africa’s power utility Eskom says signs wage deal with unions

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

JOHANNESBURG (Reuters) – South Africa’s state-owned power utility Eskom said on Friday it had signed a wage deal with unions after lengthy overnight talks, and urged unionised staff who have been on strike since Monday to resume work.

Eskom said in a statement it had signed a two-year wage deal with the National Union of Mineworkers (NUM) and Solidarity union, granting the lowest paid workers increases of 10 percent and other employees 8.5 percent.

Eskom was previously offering pay increases of 7 to 9 percent while the NUM, whose members were on strike, had on Tuesday lowered its wage demand to between 8.5 to 10 percent from 12 to 13 percent.

The utility also said the NUM was in the process of getting all its members to return to work and end the strike.

Officials at the NUM could not confirm that they would call off the strike, but said they would first present the new wage offer by Eskom to members, who make up about a third of the workforce at the utility.

The Solidarity union, whose members were not on strike, said its members had accepted Eskom’s latest offer.

The metalworkers union NUMSA, whose members had also not joined the strike, had yet to sign the deal, but accepted the offer in principle, Eskom spokesman Khulu Phasiwe said.

“NUM is currently in the process of telling its members to come back to work. We are expecting everything to be back to normal by Monday,” Phasiwe said.

The company, the sole power provider in Africa’s most industrialised country, has said that the strike had so far not affected electricity supplies.

The NUM said its members would have to give a green light to the latest pay offer by Eskom.

“There is a revised offer that is tabled by Eskom in the early hours of this morning, around 3 am. We can’t reveal it because we need to take it back to our members,” said NUM’s spokesman Livhuwani Mammburu.

The dispute is the latest problem to beset Eskom, which has struggled to meet power demand in South Africa due to its aging power plants and grid. However, it has managed a year without rolling blackouts that have hurt the economy in the past.

(Reporting by Tanisha Heiberg and TJ Strydom; Editing by James Macharia)

Strikes unlikely to curb Kenya tea output

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

NAIROBI (Reuters) – Several weeks of strikes by tea pickers in Kenya’s biggest estates in June and July are unlikely to disrupt production enough to warrant a change to the forecast for the year, the agriculture industry regulator said on Thursday.

Tea pickers were awarded a 30 percent pay increase by a court in June but went on strike when tea estate owners refused to pay, saying it would drive up costs and deter investment.

Tens of thousands of pickers in the major growing regions of Nandi and Kericho went on strike in protest. Pickers have since returned to work after the Labour Ministry brokered a deal allowing the award to be implemented in two phases.

The East African nation, the world’s No. 1 exporter of black tea, expects output to jump to as much as 450 million kg this year, thanks to good rainfall, from 399 million in 2015. Tea is one of Kenya’s top foreign-exchange earners.

“There is no change to the output forecast,” Alfred Busolo, acting director-general of the Agricultural, Fisheries and Food Authority told Reuters, adding that the impact of the stoppages was “minimal”.

The government is working to remove numerous levies and taxes on the tea industry to make its exports more competitive.

The labour stoppages had mainly affected big tea estates in the Rift Valley region, which account for 40 percent of production. The rest comes from small-scale farms.

(Reporting by Duncan Miriri; Editing by Edmund Blair and Dale Hudson)

Nigeria plans capital spending of $312 million in coming days: VP

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

By Chijioke Ohuocha

LAGOS (Reuters) – Nigeria will spend 100 billion naira ($312.50 million) on capital projects in the coming days as part of the 2016 budget, Vice President Yemi Osinbajo said on Thursday, as the country tries to inject life into an economy facing recession.

Africa’s largest economy is in the middle of its worst crisis in decades, as a slump in oil revenues hammers public finances and the naira. Gross domestic product shrank 0.36 percent in the first quarter and the central bank governor has said recession is likely.

Government capital spending so far has reached 332 billion naira, Osinbajo said. The record budget has been held up for months by wrangling between President Muhammadu Buhari and parliament.

Another 100 billion naira will be released in the next few days to fund power, housing, transport, agricultural and defence projects, Osinbajo said.

“We have pledged to keep capital spending at a minimum of 30 percent (of the 6.06 trillion naira budget),” he told a business forum in Lagos.

But Osinbajo also said many of Nigeria’s 36 federal states were still struggling to pay the salaries of civil servants, despite assistance from the federal government.

He said a float of the naira and more flexible foreign currency regime in June had eased pressure on foreign reserves, without giving details. The naira has lost some 40 pecent since then.

“I believe … there will be an increase in supply of foreign exchange,” he said.

He also said Nigeria had saved 1.4 trillion naira by ending fuel subsidies and increasing fuel prices in May. “Fuel consumption is down 800 trucks per day from 1,600 trucks per day before the price increase,” he said.

Publication of GDP data for the second quarter will be delayed until Aug 31, the head of the statistics office said on twitter.

With oil prices dropping, the government has struggled to fund the budget. It is seeking advisers and bookrunners to manage a planned $1 billion eurobond it intends to offer this year.

($1 = 320.0000 naira)

(Reporting by Chijioke Ohuocha; Writing by Ulf Laessing; Editing by Larry King)

Steinhoff raises Poundland offer after hedge fund increases stake

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

LONDON (Reuters) – South Africa’s Steinhoff has improved the terms of its agreed takeover of British discount retailer Poundland, saying its 610.4 million pound ($794.6 million) offer is final.

The increased offer follows a recent move by U.S. hedge fund Elliott to up its stake in Poundland to 17.5 percent, making it the firm’s second largest investor after Steinhoff.

Elliott has a track record of getting bidders to increase their offers. It was among activist investors that last month helped secure an improved offer from Anheuser-Busch InBev for rival brewer SABMiller.

Steinhoff said it is now offering 227 pence in cash for each Poundland share, comprising an offer price of 225 pence and a final dividend of 2 pence.

The revised offer price represents an increase of 5 pence per share over the 220 pence offer announced on July 13, which together with the dividend valued the British firm at 597 million pounds.

“The 5 pence rise in the Steinhoff bid for Poundland is a pretty modest victory for shareholder activism,” said independent retail analyst Nick Bubb.

All other terms and conditions of Steinhoff’s offer remain unchanged from last month’s deal.

Steinhoff said its revised offer is final and will not be increased.

“By offering Poundland shareholders an improved cash offer we aim to bring certainty to the transaction recognising the strength and value of the business and its management team,” Steinhoff Chief Executive Markus Jooste said.

Steinhoff owns the Bensons Beds and Harvey’s furniture chains in Britain. The Poundland deal should be third time lucky after it failed to secure Britain’s Home Retail, which owns Argos, and was also unsuccessful in a bid for Darty in France.

Poundland shares were down 1.5 percent at 221 pence at 07.21 GMT.

($1 = 0.7689 pounds)

(Reporting by James Davey; editing by Paul Sandle and Jason Neely)

Uganda’s Stanbic Bank H1 profit rises 57 pct on trading income

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

KAMPALA (Reuters) – Stanbic Bank Uganda (SBU), the country’s largest bank by assets, said on Wednesday its operating profit surged 57 percent in the first half of 2016, helped by strong performance in its trading activities.

A unit of South Africa’s Standard Bank, SBU’s operating profit jumped to 144 billion shillings ($42.73 million) for the first six months of 2016, from 92 billion shillings in the same period last year.

“Strong profitability was driven by … deploying high yielding investment assets and generating strong trading revenues,” Sam Mwogeza, SBU’s Chief Financial Officer, said.

The results showed strong earnings from trading in the interbank money market, interest from Treasury bills and bonds, and foreign exchange trading.

During the period SBU helped with arranging a $114 million syndicated loan for telecoms firm MTN Uganda and an interest rate swap deal with the Ugandan government on funds borrowed from China to finance a power plant.

SBU said the two deals supported the strong performance.

($1 = 3,370 Ugandan shillings)

(Reporting by Elias Biryabarema; Editing by Edmund Blair and Alexandra Hudson)

Beetles threaten Ugandan coffee crop

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

KAMPALA (Reuters) – Shrinking forest cover and climate change threaten Uganda’s coffee industry by creating conditions for the destructive black twig borer beetle to spread into plantations, an official said on Wednesday.

Africa’s largest coffee exporter, Uganda mostly cultivates the robusta coffee bean variety. Shipments of the beans are a major source of foreign exchange.

Exports in the 2015/16 (Oct-Sept) crop were expected to reach 3.6 million 60-kg bags, modestly higher than the previous period’s 3.46 million bags, according to state regulator Uganda Coffee Development Authority (UCDA).

But David Muwonge, head of marketing at the National Union of Coffee Agribusiness and Farmer Enterprises (NUCAFE), said prospects were clouded by the twig borer beetle which was increasingly migrating to coffee farms as forest cover shrank.

He said some farmers had reported losing as much as 40 percent of their potential harvest as a result of the beetle, although he did not give a forecast for the overall impact.

“The biggest threat to coffee in Uganda is … the twig borer,” he said.

The beetle thrives in the drier conditions which have become more frequent in recent years and which have been partly linked to global changes in climate, Muwonge said.

First detected in Uganda in 1993, the twig borer makes tiny grooves on the twigs – the small branches that bear cherries – of coffee trees and lays eggs there. It then infects the twigs with a fungi which causes the leaves and twigs to wilt and die.

A 2013/14 survey by UCDA found that at least 40 percent of all trees in robusta growing areas had infected twigs.

Muwonge said the beetle mostly lived in dense forests where natural enemies controlled its population. But smaller forests and drier conditions meant “some of the (beetle’s) natural enemies have been eliminated” and it was migrating to farms.

He said pesticides had only a limited impact and many farmers could not afford the chemicals.

“It’s an existential threat to our coffee because we don’t have a cure as yet,” he said.

British charity Oxfam warned in 2008 that changing weather patterns in Uganda could leave much of country unsuitable for growing coffee within 30 years if temperatures rose 2 degrees or more.

(By Elias Biryabarema. Reporting by Elias Biryabarema; Editing by Edmund Blair and William Hardy)

Workers at S. African power utility Eskom defy court order to continue strike

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

By Nqobile Dludla

JOHANNESBURG (Reuters) – More workers at South African state-run power utility Eskom joined a strike over pay, their union said on Wednesday, in defiance of a court order preventing the industrial action at the state-run firm.

The company has branded the stoppage by thousands of National Union of Mineworkers (NUM) members which started on Monday illegal because its members are prohibited by law from striking, but said its operations had not been affected so far.

The labour dispute is the latest problem to beset Eskom, which has struggled to meet power demand in Africa’s most industrialised country due to its aging power plants and grid. However, it has managed a year without rolling blackouts that have hurt the economy in the past.

“Our message to the whole nation is just to keep calm. We are handling the situation, currently the situation is under control,” Eskom spokesman Khulu Phasiwe said, adding that he could not divulge the firm’s contingency plans.

Phasiwe said the court order prohibits NUM and two other unions from going on strike as part of the Labour Relations Act, which bars workers deemed to provide an essential service from going on strike.

NUM said on Tuesday that all of its 15,000 members at the utility, or close to a third of Eskom’s workforce, would stop work on Wednesday. [L8N1AQ41Q]

The union’s spokesman Livhuwani Mammburu said its members were on strike in provinces where Eskom runs its biggest plants, including in Mpumalanga province.

“Our members are aware that for them being involved in this strike there are consequences and they are saying they are fighting for the right cause,” said Mammburu.

Asked whether union members will be dismissed if they do go on strike, Phasiwe said workers would not be fired en masse but that each case will be handled on its own merit.

He said talks with the union had not yet collapsed and both parties were due to meet this morning for further discussions.

The utility is offering pay increases of 7 to 9 percent while NUM on Tuesday lowered their wage demand to 8.5 to 10 percent from 12 to 13 percent.

The stoppage at Eskom coincides with a strike over wages by around 15,000 workers in the petrochemical industry that has been going on since last week but has so far not caused any significant fuel shortages.

(Editing by James Macharia and Louise Heavens)

Thousands more workers to join strike at South African power utility

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

JOHANNESBURG (Reuters) – Thousands more workers at South African power stations plan to join a strike on Wednesday over pay at state-run utility Eskom, their union said on Tuesday.

The strike began on Monday when about 1,500 members of the National Union of Mineworkers (NUM) downed tools after wage talks stalled. Eskom branded the stoppage illegal because its members are prohibited by law from striking, but said its operations had not been affected so far.

The union said that all of its 15,000 members at the utility, or close to a third of Eskom’s workforce, will stop work on Wednesday. Tuesday was a public holiday in South Africa.

“It is going to be a total withdrawal of labour by our members. NUM members will be striking for the right to strike at Eskom,” the union said in a statement.

Eskom could not be reached for comment on how its operations would be affected on Wednesday.

Eskom said on Monday that arbitration over the wage dispute was continuing. The utility is offering pay hikes of 7 to 9 percent while NUM is looking for increases of 12 to 13 percent.

The labour dispute is the latest problem to beset cash-strapped Eskom, which has struggled to meet power demand in South Africa due to its aging power plants and grid. However, it has managed a year without rolling blackouts that have hurt the economy in the past.

(Reporting by James Macharia; Editing by Susan Fenton)

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