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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)

Zambia’s H1 copper output rises 8%

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

LUSAKA (Reuters) – Zambia’s copper production rose by 8 percent to 368,371 tonnes in the first six months of this year from 340,510 tonnes in the same period last year, the country’s chamber of mines said on Tuesday.

Full-year copper production in Africa’s second-biggest copper producer was expected to rise by 5.4 percent to 750,000 tonnes this year from the 711,515 tonnes produced last year, the chamber said in a statement.

(Reporting by Chris Mfula; Writing by James Macharia; Editing by Louise Heavens)

South Sudan inflation surges to more than 600% in wake of conflict

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

NAIROBI (Reuters) – South Sudan’s inflation more than doubled in July to reach an annual rate of 661.3 percent, its statistics office said on Monday, as the economy of the 5-year old nation continued to reel amid civil conflict.

The National Bureau of Statistics said in a statement that inflation jumped from 309.6 percent a month earlier due to rising food and non-alcoholic drinks prices. Prices rose 77.7 percent month-on-month in July.

Oil-producing South Sudan won independence from Sudan in 2011 but in December 2013 slid into a two-year civil war after a dispute between President Salva Kiir and his former deputy Riek Machar.

The economy has been battered, driving prices higher.

In June, U.N. agencies said up to 4.8 million people in South Sudan face severe food shortages, the highest level since a conflict began.

(Reporting by George Obulutsa; Editing by Toby Chopra)

Cash-starved Burundi reports stronger inflow from domestic taxes

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

KIGALI (Reuters) – Tax revenues in Burundi rose by almost 13 percent last month compared with a year ago, official data showed on Monday, a boost for the economy following a year of unrest linked to the re-election of President Pierre Nkurunziza.

More than 450 people have been killed in violence and more than a quarter of a million people have fled to neighbouring countries since Nkurunziza was re-elected for a third term in the small east African country in what the opposition said was a violation of the constitution.

A strong inflow from domestic taxes as well as modest revenue from coffee and tea exports have become vital for the aid-dependent country, particularly since Belgium and the European Union, key donors, cut external aid over the past year.

Tax collection rose to 50.2 billion francs ($30.32 million), up from 44.7 billion francs collected in July 2015 and well up on the target of 47.1 billion francs, the semi-autonomous revenue authority (OBR) said in a report.

Political unrest held back tax collection last year. Recovery of tax arrears had helped tax collection this year and the fight against tax evasion had been more effective, officials said.

Cumulative tax receipts from January to July jumped to 355.9 billion francs versus 333.03 billion francs the same period last year.

“The OBR reiterates its commitment to continue its mission of maximizing tax collection to support the country’s economy,” it said.

In the 2016 budget, the government foresaw grants falling by almost 50 percent compared to 2015.

($1 = 1,655.9000 Burundi francs)

(Reporting by Patrick Nduwimana; Editing by George Obulutsa and Richard Balmforth)

South Africa’s business confidence rises to 96.0 in July

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

JOHANNESBURG (Reuters) – South Africa’s business confidence index rose to 96.0 points in July from 95.1 in June, lifted by a firmer rand and improvements in export volumes and retails sales, a South African Chamber of Commerce and Industry (SACCI) survey showed on Monday.

“South Africa experienced stronger merchandise export trade in June and July 2016, while the rand gained a healthy plus 10 percent on a weighted rand exchange rate against the U.S. dollar, British pound and the euro,” SACCI said in a statement.

SACCI, however, said it was concerned that the International Monetary Fund (IMF) and the South African Reserve Bank had lowered economic growth projections for Africa’s most industrialised country.

“A concerted effort will be necessary to avoid even tighter economic conditions in 2017 as such lower economic growth holds additional repercussions for public finance, unemployment and the real cost of borrowing,” SACCI said.

The IMF expects South Africa’s economy to grow by 0.1 percent this year, while the central bank cut its 2016 growth forecast to zero.

(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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