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Uganda says to grant oil production licences to France’s Total

Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Uganda’s cabinet agreed on Wednesday to allow the energy ministry to grant three oil production licences to France’s Total, the presidency said.

Commercial crude reserves were discovered in the east African country a decade ago but production has been repeatedly delayed amid wrangling over taxation and field development strategy.

The absence of key infrastructure, such as a crude export pipeline, has also slowed progress to production.

According to a statement issued by the president’s office, the cabinet approved a request from the minister of energy to allow the issue of three petroleum production licences to Total E&P.

The licences cover the Ngiri, Jobi-Rii and Gunya fields in the Albertine rift basin, the area along the country’s border with the Democratic Republic of Congo.

The licenses will be valid for 25 years and can be renewed for an additional 5 years, the presidency said in the statement.

Total is the second oil firm to be offered a production license after one of its partners, China’s CNOOC.

Tullow Oil, which also co-owns fields with Total and CNOOC, has also applied for production licences and has been waiting for approval for years.

In April, Uganda agreed with Tanzania to jointly develop a pipeline to the Indian Ocean port of Tanga to help export Uganda’s crude reserves, which are estimated at 6.5 billion barrels.

 

 

(By Elias Biryabarema. Editing by Louise Heavens)

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Ghana lawmakers back budget funding bill; breach terms of IMF deal

Comments (0) Africa, Business, Latest Updates from Reuters

ACCRA (Reuters) – Ghana’s parliament on Tuesday overwhelmingly rejected a core condition of a $918 million International Monetary Fund (IMF) aid deal on Tuesday, breaching the terms of a three-year programme meant to fix an economy dogged by high public debt.

The lawmakers passed the Bank of Ghana (BoG) Amendment Bill to allow central bank financing of the government’s budget deficit up to a ceiling of 5 percent of the previous year’s total revenue, instead of the zero financing demanded by the IMF.

Until now the bank was authorised to finance the deficit at up to 10 percent of revenue.

Implementation of the zero financing requirement is one of the targets the government was expected to meet in order for the Fund to conclude Ghana’s third programme review and disburse the next tranche of aid.

However, Deputy Finance Minister Cassiel Ato Forson told Reuters that, despite the law, the government will not finance its deficit with central bank funds.

“We have demonstrated enough that the government is committed to expenditure control and we will remain on course, irrespective of today’s decision by parliament,” he said.

 

 

(Reporting by Kwasi Kpodo; Editing by Aaron Ross and John Stonestreet)

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South Africa’s PPC shareholders pave way for proposed rights issue

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Shareholders in South Africa’s PPC on Monday overwhelmingly approved a proposal to issue additional shares for a planned 4 billion rand ($289 million) rights issue as the loss-making cement maker seeks cash to reduce debt.

PPC, which has pushed deeper into the rest of Africa as profit has slumped in its domestic market, is raising funds after a credit rating downgrade to “junk” status by ratings agency S&P.

The company proposed five resolutions, including the issuance of new shares, which were approved by virtually all shareholders who cast their votes at a special meeting.

Chief executive officer Darryll Castle said the approval from shareholders had prepared the ground work to make the rights offer possible.

“I think there’s reasonably high level of support for what we’re doing and for the need and necessity of it, and that’s what came through today,” Castle told Reuters.

PPC expects to complete the rights issue process during September, Castle added.

(Reporting by Nqobile Dludla; Editing the Tiisetso Motsoeneng and David Goodman)

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Finance minister: Egypt’s external debt to reach $53.4 billion with IMF loan

Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s finance minister said in a television interview on Sunday that Egypt’s external debt would reach $53.4 billion if his country receives an International Monetary Fund (IMF) loan.

Last week Egypt said it was seeking $4 billion a year over three years from the IMF to help plug a funding gap. The government hopes to finalise the deal in August.

A two-week IMF mission arrived in Cairo over the weekend to negotiate an IMF loan package.

 

(Reporting by Ali Abdelatti; Writing by Amina Ismail; Editing by Sandra Maler)

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South Africa’s growth outlook dilemma for central bank, treasury

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s central bank could resume its rate hiking cycle despite a poor growth outlook, its head said on Friday, while its treasury reined in state companies to avoid ratings downgrades and a long economic slowdown.

Africa’s most industrialised country is on the brink of its first recession after contracting 1.2 percent in the first quarter as key sectors shrunk due to severe drought and falling commodity prices.

Governor Lesetja Kganyago said the central bank’s monetary policy committee (MPC) would raise rates if inflation, fuelled in part by a weaker rand, remained elevated.

The rand has weakened nearly 20 percent against the dollar in past 12 months as looming rate hikes in the United States, the threat of a downgrades to “junk” status and diminished business and consumer activity locally weighed on its value.

“Although the MPC remains ready to respond to renewed inflation pressures, it remains mindful of the weak state of the economy,” Kganyago said.

Headline inflation has been higher than the Reserve Bank’s (SARB) upper target of 6 percent since January, prompting it to lift lending rates by 200 basis points from early 2014 despite poor growth.

The bank sees growth averaging zero percent in 2016.

“The rand exchange rate has been sensitive to these developments, with elevated levels of volatility,” said Kganyago said, adding the next round of rating reviews in December were key.

South Africa is also in a fiscal bind, with government’s plan to boost growth to an annual 4 percent to tame widespread unemployment, poverty and the growing cost of borrowing facing a number of obstacles.

Finance Minister Pravin Gordhan on Friday warned state firms that they would have to live without state bailouts of around $35 billion as treasury focused on achieving the deep spending cuts it promised in the February budget.

“The key concern that ratings agencies and others would have is that as a result of levels of mismanagement, those guarantees shouldn’t be called out at any stage,” he said.

On Monday, Fitch announced it had downgraded South Africa’s local currency debt. Fitch and S&P Global Ratings now both have South Africa’s local and foreign currency debt ratings a step away from subinvestment.

Maya Senussi of Roubini Global Economics said local government elections on Aug. 3, where the ruling African National Congress is expected to face a stern test, could worsen the dilemma for government before the general election in 2019.

“The big danger is that fears about the 2019 general election will prompt populist measures from the ANC, exerting more pressure on the stretched Treasury and further delaying much-needed reforms,” the economist said.

($1 = 14.1600 rand)

 

(By Mfuneko Toyana. Additional reporting by Stella Mapenzauswa; Editing by James Macharia and Tom Heneghan)

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Nigeria says it paid contractors to finish economy-boosting projects

Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – A Nigerian minister said on Friday the government had paid contractors 63.16 billion naira ($200 million) to finish delayed infrastructure projects, in an apparent bid to ease fears over the future of the schemes meant to boost the struggling economy.

Work on a series of road, power and other programmes had slowed or halted as the government struggled to make payments, amid delays in passing the national budget and foreign currency shortages.

Power, Works and Housing Minister Babatunde Fashola told an infrastructure conference in London that “63.16 billion naira have been paid out to contractors to finish infrastructure projects since the budget” was passed in May.

He did not say whether that covered all the outstanding payments. But the comments will come as a relief to contractors, many of whom were not paid for months.

They will also signal to foreign investors that there is some movement in the supply of money, which has been problematic over much of the last year due to foreign currency curbs introduced to conserve forex supplies.

The 6.06 trillion naira ($19.24 billion) budget tripled capital expenditure from the previous year in a bid to stimulate Africa’s biggest economy which is going through a crisis caused by low oil prices.

Nigeria’s economic development has been held back by erratic electricity provision and a poor road network, all of which falls under Fashola’s remit.

It was not clear whether the funds referred to by Fashola were part of the budget allocation.

Earlier this month the budget minister said Nigeria’s first quarter revenues reached only 55 percent of the government’s target due to recent attacks on oil and gas facilities in the southern Niger Delta energy hub.

 

($1 = 315.0000 naira)

 

(By Karin Strohecker. Writing by Alexis Akwagyiram; Editing by Andrew Heavens)

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South African unemployment still more than one in four

Comments (0) Africa, Business, Latest Updates from Reuters

By Mfuneko Toyana

PRETORIA (Reuters) – South Africa’s unemployment rate dipped slightly in April-June from the previous quarter’s record high but 26.6 percent of the labour force — more than 5.6 million people — remained without work.

A quarterly labour force survey published by the statistics office on Thursday showed a small decline in the jobless rate from 26.7 percent in the first quarter.

Statistics South Africa said that equated to 5.634 million people compared with 5.723 million who were out of work in the January-March quarter. Unemployment is now the largest driver of poverty in South Africa, the statistics office said.

The number of people without jobs increased by 403,000, or 1.6 percent, from a year earlier.

“Indications are that we are in a quite difficult economic situation,” said Statistician-General Pali Lehohla. “There are a huge number of job losses.”

Africa’s most advanced economy — though no longer its biggest — is on the brink of recession after contracting 1.2 percent in the first quarter as manufacturing and mining activity shrank.

“It’s a reflection of a weak economic climate,” said Nedbank economist Johannes Khoza.

“We didn’t expect much of an improvement in employment given the weak business and consumer confidence lately. A recession is still very likely.”

The central bank said last week it expected zero growth in 2016.

Under an expanded definition of unemployment which includes people who have stopped looking for work, the jobless rate rose to 36.4 percent in the second quarter, from 36.3 percent in the first three months of 2016, Statistics South Africa said.

The largest quarterly employment losses were seen in the public administration and social services sector, where 127,000 jobs were shed. Some 44,000 jobs were lost in agriculture due to a decline in the growing of crops and animal husbandry, with significant losses also seen in the transport sector.

“The high rate of unemployment contributes to much of the social tension and anguish experienced in South Africa on a daily basis, especially among the youth,” Stanlib chief economist Kevin Lings said.

South Africa’s financial hub of Gauteng, which includes the city of Johannesburg and the capital Pretoria, both set to be hotly contested in upcoming elections, had the country’s second-highest rate of unemployment at 29.5 percent.

(Editing by Catherine Evans)

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China, Africa ink $17 bil preliminary cooperation pacts

Comments (0) Africa, Business, Latest Updates from Reuters

BEIJING (Reuters) – Chinese companies and banks agreed preliminary deals with African counterparts on $17 billion worth of cooperation in sectors including infrastructure, energy, pharmaceuticals and information technology, the official Xinhua News Agency reported on Thursday.

Companies and financial institutions signed letter of intent for 39 cooperations pacts at a China-Africa economic and trade event in Beijing attended by more than 400 delegates.

Xinhua did not give further details.

Last year, Chinese President Xi Jinping announced a $60 billion development initiative at a summit in South Africa, saying it would boost agriculture, build roads, ports and railways and cancel some debts.

Such an initiative would proceed despite China’s slowing economy, Chinese officials have said.

 

 

 

 

 

(Reporting by Chen Aizhu; Editing by Catherine Evans)

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MTN Nigeria on track to list on local stock exchange in 2017

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Africa’s biggest mobile phone operator MTN Group said on Thursday its Nigeria unit is on track to list on the Nigerian Stock Exchange (NSE) in 2017 as part of an agreement with the Federal Government.

MTN had said in June its local unit would list on the NSE after agreeing to pay a reduced fine of $1.7 billion in a settlement with the Nigerian government of a long-running dispute over unregistered SIM cards.

MTN Nigeria aims for the listing to take place during 2017, subject to market conditions.

MTN is the largest mobile phone operator in Nigeria with 57 million subscribers, and the country accounts for about a third of its revenue.

MTN Nigeria appointed Stanbic IBTC Capital, Standard Bank of South Africa and Standard Advisory London, and Citigroup Global Markets, as joint transaction advisors and global coordinators, with Stanbic acting as lead issuer.

 

(Reporting by Nqobile Dludla; Editing by David Holmes)

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South Africa’s PIC in talks with SABMiller over improved offer by AB Inbev

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Public Investment Corporation (PIC) is in talks with SABMiller over an improved offer from Anheuser-Busch Inbev, the state pension fund said on Wednesday.

“We are in discussions with SABMiller on the offer price and would not like to make our view public at this point in time,” PIC Head of Corporate Affairs Deon Botha said in response to emailed questions.

The PIC is SABMiller’s fourth largest shareholder.

AB InBev raised its $100 billion-plus bid for rival brewer SABMiller on Tuesday in an attempt to quash investor dissent over an offer made less attractive by a post Brexit vote fall in the pound.

 

(Reporting by TJ Strydom; Editing by James Macharia)

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