MENU

Author

Congo to seek up to $500 million in budget support from World Bank

17 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KINSHASA (Reuters) – Democratic Republic of Congo will seek between $250 million and $500 million in budgetary support from the World Bank this year, pending a review of its economy by the International Monetary Fund next month, the government said on Tuesday.

Africa’s leading copper producer has been hit hard by a fall in commodity prices since last year. This month the government proposed a 22 percent reduction in the 2016 budget and cut its annual growth forecast to 6.6 percent from 9 percent.

It also announced on Monday that it would scale back the size of a planned international bond issue to finance infrastructure projects to 256 billion francs from 653 billion francs ($686 million).

The support would allow the central bank to boost its foreign currency reserves, which have fallen from $1.48 billion at the end of 2015 to $1.2 billion this week due to a slowdown in exports, said Vincent Ngonga, a deputy chief of staff to the prime minister.

After years of exchange rate stability, a lower supply of dollars has heaped pressure on the franc, causing it to lose more than 2.5 percent of its value against the dollar this year.

“The advantage of budgetary support is that it affects the reserves because, once you have the support, it’s in dollars,” Ngonga said. “The reserves increase but the revenues of the state increase too.”

However, the negotiations with the World Bank can only begin if the IMF certifies Congo’s conformity with governance and macroeconomic standards during a visit next month, he added.

The IMF called off a $530 million loan programme in 2012 after the government failed to provide sufficient details on the cession of mining assets by state miner Gecamines to a company based in the British Virgin Islands.

Ngonga said it was not clear when the government could expect to receive the first tranche of support. The World Bank’s office in Congo was not immediately available for comment.

Ngonga said the government would also seek budgetary support from the African Development Bank (AfDB) but said that too depended on the IMF’s blessing. The AfDB was also not immediately available for comment.

 

(By Aaron Ross. Editing by Matthew Mpoke Bigg and Gareth Jones)

Read more

Egypt’s central bank offers $120 million to cover pharmaceutical imports

17 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

CAIRO (Reuters) – Egypt’s central bank said it is offering $120 million in its regular currency sale on Tuesday to be used for imports of pharmaceutical products, manufacturing components, vaccines and related chemicals and infant formula.

Egypt’s economy has been hobbled by a shortage of foreign currency since a 2011 uprising drove away tourists and foreign investors. Dollars are rationed through weekly auctions imports of essential goods get priority.

The central bank, which has been keeping the pound artificially strong, devalued the currency on March 14 to 8.85 per dollar from 7.7301 and announced a more flexible exchange rate policy. It later strengthened the pound to 8.78 per dollar, where it has remained since.

A weaker currency has made it more expensive to import raw materials, and with the price of finished medicines fixed by the Health Ministry, some manufacturers have stopped making cheap generic medicines to staunch growing financial losses.

On Monday, Egypt raised the price cap on medicines that cost up to 30 Egyptian pounds ($3.38) by 20 percent in an effort to address drug shortages, the health minister said on Monday.

 

($1 = 8.8799 Egyptian pounds)

 

(Reporting by Asma Alsharif, editing by Larry King)

Read more

Nigerian oil output down 40% on Delta pipeline attacks

17 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria’s oil production has fallen by almost 40 percent to 1.4 million barrels a day due to militant attacks on facilities in the Delta region, its oil minister said on Monday.

Emmanuel Ibe Kachikwu’s comments come amid a resurgence of militancy in the southern region which produces most of the crude oil that Nigeria relies on for around 70 percent of national income, and days after Britain’s foreign minister said local grievances need to be addressed. [nL5N18B0L2]

Kachikwu said efforts would be made to engage with people in the area.

Nigerian oil output has been driven lower after attacks by a group calling itself the Niger Delta Avengers which says it wants a greater share of oil profits and independence for the swampy region where residents have long complained of poverty.

Attacks in the last few weeks have hit platforms belonging to Chevron and Shell.

“Because of the incessant attacks and disruption of production in the Niger Delta, as I talk to you now, we are now producing about 1.4 million barrels per day,” Kachikwu told the House of Representatives.

“We were at 2.2 million bpd but we have lost 800,000 barrels,” said Kachikwu, who was invited to address the lower house of parliament about the country’s oil sector.

The 2016 budget assumes oil production of 2.2 million barrels per day at $38 a barrel.

Nigeria has moved in army reinforcements to hunt the militants but British Foreign Minister Philip Hammond on Saturday said the government needed to the deal with the root causes of the conflict because a military confrontation could end in “disaster”.

Kachikwu echoed these sentiments when he told parliamentarians experience had shown that force alone tends not to solve problems.

“There are going to be robust engagements on what could have happened to the contract or relationship that used to exist between the Niger Delta and the Nigerian police that has suddenly resorted to sabotage,” said Kachikwu.

President Muhammadu Buhari has extended a multi-million dollar amnesty signed with militants in 2009 but upset them by ending generous pipeline protection contracts.

“We are trying to look at the amnesty and what has happened. Policing is key, security is key and throwing economic palliative to those sectors are also key,” added Kachikwu.

He said the government was “trying to create funding mechanisms for some private investments including funding mechanisms for some modular refineries” and “actually getting them involved in the security of the facilities”.

 

(By Camillus Eboh. Writing by Ulf Laessing and Alexis Akwagyiram; editing by Adrian Croft and David Evans)

Read more

Burundi’s inflation slows to 2.6% in April yr/yr

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

KIGALI (Reuters) – Burundi’s year-on-year inflation eased to 2.6 percent in April from 4.3 percent in March thanks to a significant fall in food costs, official data showed on Monday.

Food inflation in the year to April slowed to 2.5 percent from 6.4 percent in the previous month, the country’s Institute of Economic Studies and Statistics(ISTEEBU) said in a report.

Burundi has been grappling with unrest for more than a year, mainly in the capital Bujumbura. Western donors have suspended vital aid, leaving the poor nation more dependent on its modest coffee and tea exports and on domestic tax revenues.

Burundi’s economy shrank by 7.2 percent in 2015 and is expected to expand by 3.4 percent this year, the International Monetary Fund (IMF) said in a report.

 

(Reporting by Patrick Nduwimana; Editing by Edmund Blair and Gareth Jones)

Read more

Carlyle sets up $500 mln Europe, N.Africa energy vehicle

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

LONDON (Reuters) – Carlyle Group on Monday announced an investment in Tunisia-focused oil and gas explorer Mazarine Energy which will also receive $500 million to make bolt-on acquisitions in Europe and North Africa.

The deal is the first investment in over a year for Carlyle International Energy Partners, the private equity firm’s overseas oil and gas investment fund, which has more than $2.5 billion at its disposal, CIEP head Marcel van Poecke said.

The size of the investment in Mazarine was not disclosed.

Private equity funds including Carlyle, Riverstone and CVC Partners have built up significant firepower in recent years to invest in the oil and gas sector which has struggled following the collapse in oil prices since mid-2014.

“I think we will see more deals this year. Very slowly the M&A (merger and acquisition) space is starting to pick up,” van Poecke told Reuters.

Mazarine will seek investments in “low cost, low-risk opportunities” in onshore exploration and production assets, Chairman and founder Edward van Kersbergen told Reuters.

The company will focus on onshore fields in Romania, where CIEP acquired assets in March 2015 from Sterling Resources, as well as North Africa.

“We want resources that we can develop in a relatively short space of time at a low technical cost,” van Kersbergen said.

In Tunisia, Mazarine expects to start production of 1,500 to 2,000 barrels per day next year, according to van Kersbergen.

CIEP has in recent years created two companies to invest in assets in the North Sea and the Indian subcontinent.

Neptune, the North Sea vehicle set up by CIEP and CVC Partners a year ago which is headed by former Centrica boss Sam Laidlaw, was expected to make an investment over the next 12 months, van Poecke said.

 

 

(Reporting by Ron Bousso; editing by Jason Neely and David Evans)

Read more

Miner Lonmin reports core profit after cost savings

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

By Barbara Lewis and Mamidipudi Soumithri

LONDON/BENGALURU (Reuters) – South Africa-focused platinum producer Lonmin reported a core profit on Monday after cost savings, and said it expected firm chemical and car industry demand for the rest of the year despite the Volkswagen diesel emissions scandal.

Its shares rose more than 14 percent in early trading, outperforming the wider mining sector, which was around 2 percent higher.

Lonmin’s shares have lost around 90 percent of their value over the last year, hit by a strike, rising costs and plunging platinum prices. In December, the company raised $400 million from selling new shares.

In its first-half results statement, Lonmin said it had cut losses per share to 1.8 cents from a loss of 164.6 cents the same time a year ago, and reported a core profit of $36 million versus a loss of $6 million in the first half of 2015.

Cost-cutting is ahead of schedule, with close to 70 percent of the full-year target of savings of 700 million rand ($45 million) already achieved.

Net cash improved to $114 million at the end of March, compared with $185 million net debt at the end of September.

CEO Ben Magara said in a conference call he did not anticipate further job cuts at current market conditions, but added conditions may change.

Volkswagen’s admission last year that it cheated U.S. diesel emissions tests could, analysts have warned, hit sales of diesel cars, which need platinum for catalytic converters.

But Lonmin predicted emerging markets would spur demand as they seek to catch up with the “ever tightening emission standards of developed markets”.

It also said it saw firm chemical industry demand, while the jewellery market could remain static during the year.

($1 = 15.5008 rand)

(Editing by Adrian Croft and Mark Potter)

tagreuters.com2016binary_LYNXNPEC4F0AS-VIEWIMAGE

Read more

Zambia’s Lungu sees single-digit inflation, 2016 GDP growth of 3.7%

13 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LUSAKA (Reuters) – Zambian President Edgar Lungu said on Friday he expected inflation in Africa’s second-biggest copper producer, currently running at almost 22 percent, to slow to single digits “within months”.

Lungu, who faces a tough election challenge in August, also said in a televised press conference that economic growth was seen accelerating slightly in 2016 to 3.7 percent from 3.5 percent last year.

 

(Reporting by Chris Mfula; Writing by Ed Stoddard; Editing by James Macharia)

Read more

Coca-Cola HBC would consider expanding in Africa

13 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Coca-Cola HBC, a bottler of Coca-Cola drinks, is open to further acquisitions in Africa if the right opportunity became available, its chief executive said on Friday.

Coca-Cola and brewer SABMiller are combining their African soft drink bottling operations, but the future ownership could change, since SABMiller is in the process of being bought by Anheuser-Busch InBev.

The chief executive of Coca-Cola HBC, which has extensive experience operating in Nigeria, said it was too early to comment on the impact of those deals, but in response to a question added that if “the right strategic opportunity” were to come along, it would “certainly (be) something we would consider”.

 

(Reporting by Martinne Geller in London; Editing by Alexander Smith)

Read more

Recession looms as South Africa’s manufacturing, mining contract

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

JOHANNESBURG (Reuters) – South Africa’s manufacturing output resumed its decline and mining production contracted as weak global demand pushed the country’s ailing economy closer to a recession.

Manufacturing production shrank 2 percent in March and mining output plunged by 18 percent – the most on record – figures from Statistics South Africa showed on Thursday.

“The economy is very weak, and with these set of figures, we’re looking at the possibility of a contraction in the first quarter,” said Dennis Dykes, the chief economist at Nedbank.

South Africa’s economy grew 1.3 percent last year and 0.6 percent in the fourth quarter, and in its February budget, the National Treasury lowered its forecast for 2016 to 0.9 percent from 1.7 percent. The International Monetary Fund has cut its outlook for 2016 to 0.6 percent.

All three major ratings agencies have cited weak growth and policy upheavals as major risks to South Africa’s investment-grade rating.

Last Friday, Moody’s maintained the country’s Baa2 rating but with a negative outlook. Fitch and Standard & Poor’s rate the country’s debt just one notch above sub-investment grade and are due to revisit the ratings in June.

“You go back to brass tacks and ask if government is sending the right signals when it comes to a stable policy environment. But you look at sectors like mining and agriculture and the policy environment there is terrible,” Dykes said.

Last year, South Africa recorded its lowest annual rainfall since comprehensive records began in 1904, as an El Nino-driven drought ripped through the region, putting millions at risk of food shortages.

The government and mining companies have been deadlocked for years over proposed changes to the Mining Charter that will require the companies to keep black ownership at 26 percent.

South Africa, one of the world’s biggest metals producers, has been hit by a slide in commodities prices that has come on top of widespread labour unrest among miners.

“We need to be cognisant that our mining sector is under pressure and that it’s a global theme,” said Elna Moolman, an economist at Maquire First Securities. “We need to look for alternatives. And given that we are very strong in the services, this is an area we need to focus on.”

Moolman said an increased focus on tourism, which has already benefited from a weaker currency, and upping the export financial and business services would help lift the economy.

 

 

(By Mfuneko Toyana. Editing by James Macharia, Larry King)

 

Read more

South Africa’s mining output plunges the most on record in March

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

JOHANNESBURG (Reuters) – South Africa’s mining output fell the most on record in March, a result of last year’s ramp up in mining activity after a five-month strike two years ago, a statistics body said on Thursday.

Total mining output plunged 18 percent in March year-on-year compared to an 8.3 percent drop the previous month.

“It’s the biggest year-on-year drop ever,” Statistic South Africa statistician Juan-Pierre Terblanche said. “It’s a base effect of last year when there was a big spike after the mines recovered fast after the strike.”

Platinum mining companies Anglo American Platinum, Impala Platinum and Lonmin are still reeling from effects of the record 2014 pay strike and sustained low commodity prices.

 

(Reporting by Zandi Shabalala, editing by David Evans)

Read more