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World Bank and Nigerian president discuss the country’s economic crisis

27 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – The World Bank held talks with the Nigerian president on Wednesday on how it could help Nigeria overcome an economic crisis caused mainly by a sharp fall in crude prices eating into its oil revenues.

On her second day of meetings with Nigerian officials, World Bank Managing Director and Chief Operating Officer Sri Mulyani Indrawati met President Muhammadu Buhari, who plans to stimulate the flagging economy with a record 6 trillion naira ($31 billion) budget.

Nigeria will have to borrow 1.8 trillion naira from abroad and at home to help fund the budget, which has been delayed by several months and wrangling with parliament, if it goes ahead.

Although Nigeria has held talks with the World Bank over a possible loan or credit facility in recent months, Indrawati did not address this when speaking to reporters after the meeting.

“We would like to know how we can help Nigeria to make the very important decisions, whether on micro economic policy and other sectoral policy, that will make this economy move forward to become a strong middle income country,” she said.

Indrawati, who met Finance Minister Kemi Adeosun on Tuesday, said she and Buhari discussed the government’s “commendable goals to improve tax collection and crackdown on corruption.

Nigeria’s economy, the largest in Africa, grew by 2.8 percent last year, its slowest pace since 1999.

 

(By Felix Onuah. Writing by Alexis Akwagyiram; Editing by Raissa Kasolowsky)

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Atlas Mara says funding in place for Barclays’ Africa bid

26 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

By Lawrence White

LONDON (Reuters) – Atlas Mara, the African investment vehicle of former Barclays boss Bob Diamond, has held discussions with investors with a view to making a bid for Barclays’ African business, it said on Tuesday.

Atlas said such an acquisition would help it accelerate its strategy to build a major financial firm across sub-Saharan Africa and that it had already lined up funding for an offer, without elaborating on what form the financing would take.

“The consortium has committed, long-term strategic investors, the funding is in place,” Diamond said on a conference call.

Atlas Mara’s equity at the end of 2015 was $625 million, while Barclays Africa has a market value of $8.47 billion, causing some analysts to question whether they can muster the financial fire power to make a serious offer.

“I am very skeptical that they can pull it off quite frankly,” said Zoran Milojevic, a director at Auerbach Grayson, a New York brokerage specialising in emerging and frontier markets.

“However, if this were to happen, they would certainly jump a lot of hurdles, and join the proper playing field in African banking.”

Private equity group Carlyle is one member of the consortium, a source familiar with the matter told Reuters this week following media reports of the U.S. fund’s interest.

Barclays said this year it would sell down its 62 percent stake in Barclays Africa to focus on other divisions. While its business is mainly in South Africa, it has operations in Botswana, Ghana, Kenya, Mauritius, Mozambique and Seychelles.

Atlas said there was no certainty a transaction would be completed but if discussions with investors resulted in more substantive negotiations with Barclays, Diamond and co-founder Ashish J. Thakkar would recuse themselves from the talks.

Shares in Barclays Africa rose 1.2 percent by 1445 GMT while shares in Atlas Mara were up 4.9 percent, but remain down 18 percent so far this year amid a dim outlook for African banking.

“We share your pain, our money is where our mouth is,” Diamond told investors on Tuesday in reference to his and other senior executives’ investments in Atlas’s declining shares.

Founded in 2013, Atlas made four acquisitions in 2014 and now has operations in Botswana, Mozambique, Zambia, Zimbabwe, Rwanda, Tanzania and Nigeria.

But some of those countries have felt the brunt of the global slump in commodity prices, which has sapped government budgets and caused the likes of Zambia and Mozambique to turn to the International Monetary Fund for support. [nL5N17H32A]

Atlas Mara earlier on Tuesday reported profit before tax of $19.2 million for 2015, compared with a pretax loss of $58 million in 2014.

(Additional reporting by Andrew MacAskill and Karin Strohecker; editing by Sinead Cruise and David Clarke)

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Bank of Ghana new gov says top priorities are inflation, rates

26 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ACCRA (Reuters) – New Bank of Ghana’s Governor Abdul-Nashiru Issahaku said in his first domestic speech on Tuesday that bringing down inflation and reducing interest rates were his main priorities but that achieving those goals would take some time.

The Bank also remains committed to enabling commercial banks to scale up lending to small and medium sized businesses and other sectors in order to boost gross domestic product growth, Issahaku said.

 

(Reporting by Matthew Mpoke Bigg; Editing by Joe Bavier)

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South African supermarket chain Pick n Pay to expand into Nigeria

26 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African supermarket operator Pick n Pay plans to expand into Nigeria next year through a partnership with a local conglomerate, as it seeks to reduce its reliance on its home market, it said on Tuesday.

Pick n Pay already operates in Botswana, Zimbabwe and Namibia and plans to open new stores in Ghana next year. Like many other South African companies it wants to expand further across the continent amid sluggish economic growth at home.

The retailer, which reported a 26 percent jump in annual earnings on Tuesday, said it would take a 51 percent stake in a Nigerian joint venture with conglomerate A.G. Leventis, which runs a food business. It did not disclose the size of the investment.

“We are not suddenly going to explode onto the scene in Nigeria next year but we are going to start the process of looking at all those things,” Pick n Pay’s CEO Richard Brasher told a results briefing, adding that he was aware of tough trading conditions in Nigeria and would not expand hastily.

Nigeria is Africa’s biggest economy but some South African companies that expanded into the west African country, including Dairy products maker Clover Industries and fashion retailer Truworths, have either pulled out or scaled down due to a scarcity of hard currency to import spare parts and raw materials.

Brasher said Pick n Pay was taking a long-term view of Africa’s most populous nation.

“If you’re in the retail business and you are an African business its hard to ignore Nigeria,” he told Reuters.

Gryphon Asset Management analyst Reuben Beelders said he backed Pick n Pay’s conservative approach to Nigeria.

“People have realised that Africa is not just going to be a pot of gold at the end of the road, it’s a lot of graft and it’s going to need long-term investment rather than something that happens quickly,” Cape Town-based Beelders said.

Pick n Pay has lost ground in South Africa to rivals such as market leader Shoprite, after failing to invest in new stores. But Brasher, a former UK head of Tesco who took over in January 2013, is implementing a plan to win back market share.

Pick n Pay said headline earnings per share (EPS) rose 26.4 percent from a year earlier to 224.04 cents in the year to the end of February, helped by cost-cutting measures. Headline EPS, a measure that excludes certain one-off items, is the profit figure most widely used in South Africa.

The company declared a final dividend of 125.20 cents per share, bringing the year’s total payout to 149.40 cents, 26.5 percent higher than the previous year.

Shares in Pick n Pay, which are up nearly 30 percent over the last year, inched up 0.58 percent to 69.89 rand by 1215 GMT.

 

(By Zandi Shabalala. Editing by James Macharia and Susan Fenton)

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South Africa’s MTN pays former CEO $1.6 million after resigning over Nigeria fine

25 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s MTN paid its former chief executive officer Sifiso Dabengwa 23.7 million rand ($1.6 million) after he resigned over a record fine imposed on the company by Nigerian authorities.

Dabengwa quit in November after Nigerian authorities imposed a $5.2 million fine on MTN’s Nigerian unit in October.

He was awarded a total payout of 40.6 million rand, MTN said in its annual report on Monday.

Non-executive chairman Phuthuma Nhleko was then named executive chairman of Africa’s biggest mobile phone group for a period of six months, to help resolve the fine.

MTN has since managed to negotiate the penalty down to $3.9 billion but is still hoping to reduce it further.

MTN’s share price has been down almost 20 percent since October when the fine was imposed. The stock had fallen 1.21 percent at 145.59 rand by 1407 GMT.

Last year, Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.

($1 = 14.4865 rand)

 

(Reporting by Nqobile Dludla and Tanisha Heiberg; Editing by James Macharia

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Algeria GDP growth at 3.9% in 2015

25 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ALGIERS (Reuters) – Algeria’s economy grew by 3.9 percent in 2015, up from 3.8 percent the previous year, boosted by higher output in agricultural sector, the government said.

Last year’s growth was slightly higher than the 3.8 percent government forecast and the 3.7 percent International Monetary Fund (IMF) expectations.

Algeria relies heavily on oil and gas, which make up 60 percent of the state budget and 95 percent of total exports.

After the fall in crude oil prices, which has significantly hit its finances, Algeria has been trying to diversify the economy through incentives to develop the non-petroleum sector but those efforts are still in their infancy.

Hydrocarbon sector grew 0.4 percent last year after a 0.6 percent decline in 2014, according to the National Statistics Office data released on Sunday.

Growth in the non-oil sector stood at 5.5 percent in 2015 slightly lower than the 5.6 percent the previous year.

But agriculture output grew 7.6 percent, up from 2.5 percent in 2014, the figures showed. Algeria’s grain output in 2015 reached 4 million tonnes, a 14.3 rise from 20114.

 

(Reporting by Hamid Ould Ahmed Editing by Jeremy Gaunt)

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South Africa could extend talks on proposed empowerment rules

22 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa could extend consultations on a draft law opposed by mining companies that say the move to redress imbalances of the nation’s past apartheid rule would impose unfair conditions over black ownership.

Mining minister Mosebenzi Zwane announced the potential extension at a business briefing on Friday and later said that talks with the industry over the proposed changes to the Mining Charter would take place next Monday and Tuesday.

The new draft of the charter says that companies must be at least 26 percent black-owned at all times, even if some of the black shareholders choose to sell out.

Mining companies argue that after they have complied with the 26 percent black empowerment rule it shouldn’t be their responsibility to monitor the ownership balance continually.

A 30-day consultation period started when the draft law was published last Friday, but the mining industry has said this is not long enough.

“Should it be necessary for us to go beyond 30 days that call will be made as the necessity arises,” Zwane said. “Rather than us complaining about time, let’s engage.”

The news about next week’s talks was announced by Zwane at AngloGold Ashanti’s TauTona mine west of Johannesburg, where he said: “It (the draft law) is just a proposal, which is why we are saying ‘come, let’s talk’.”

The Chamber of Mines, which represents companies such as Anglo American and Glencore, said it was not consulted about the proposed changes and that the draft law comes at a difficult time for commodity producers contending with depressed prices and rising costs.

“We are saying it’s a tough time and, for us to regulate and go through these processes right now, the industry is taking strain,” the chamber’s president Mike Teke told Reuters.

AngloGold CEO Srinivasan Venkatakrishnan, meanwhile, said that judgment should be reserved until after “robust engagements and discussions” have been completed.

“We have high expectations,” he said of the talks.

Failure to meet the empowerment targets could result in mining permits or rights being revoked.

“This draft seems to me like all stick and no carrot for the industry,” said one fund manager at a large South African firm. “The whole situation adds another layer of confusion.”

A court process is under way to clarify the “once-empowered, always-empowered” principle and could have an impact on the draft bill.

Zwane said that investors should not be concerned by the bill because the process will be transparent and inclusive.

“I don’t foresee a situation where investors should be scared of people practising their democratic right to engage,” he told Reuters. “Let’s get real with the issues, let’s talk.”

 

(By Zandi Shabalala. Additional reporting by Ed Stoddard; Editing by James Macharia and David Goodman)

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Zimbabwe to present new IMF financing programme by November

22 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe will present a financing programme to the International Monetary Fund by November this year after clearing its arrears, opening the door to receiving its first loan from the Fund in nearly two decades, the finance minister said on Friday.

Patrick Chinamasa told reporters that he was optimistic an IMF executive board meeting on May 2. would accept Zimbabwe’s plan to pay $110 million in arrears to the Fund.

Another $1.7 billion would then be paid to the African Development Bank and World Bank.

Zimbabwe has not received a loan from the IMF since 1999.

President Robert Mugabe agreed last month to major reforms, including compensation for evicted white farmers and a big reduction in public sector wages. Those reforms are expected to be part of a new financing programme.

“Between September and November Zimbabwe will work feverishly to come up with a new country financing programme, on the basis of which we hope, if we clear our arrears, we should get new financing,” Chinamasa said.

Reserve Bank of Zimbabwe governor John Mangudya said on March 16. he expects a loan from the IMF in the third quarter of this year, after paying off foreign lenders by the end of June.

 

(Reporting by MacDonald Dzirutwe; Editing by James Macharia)

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South Africa’s former finmin Nene appointed as advisor at Thebe Investment

22 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Former finance minister Nhlanhla Nene has been appointed as an advisor at Thebe Investment Corporation to help roll-out the firm’s growth plan, his second private sector job in a week.

Nene said on Thursday in an interview with Business Day TV that his appointment will be full-time for a term of two years effective from next month.

“This is interesting that I find myself in the public sector again,” he said.

“It’s going to be an interesting journey and provide me with an interesting opportunity of finding a symbiotic relationship between the private sector and public sector.”

On Monday, Asset management group Allan Gray appointed Nene as a non-executive director, hoping to tap his strategic and leadership skills.

President Jacob Zuma fired Nene, who was keen to rein in government spending in Africa’s most industrialised economy, in December, replacing him with little-known David van Rooyen.

Days later, Zuma appointed Pravin Gordhan as finance minister, giving South Africa its third finance chief in a week after a selling frenzy in the markets.

 

(Reporting by Nqobile Dludla; Editing by James Macharia)

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South Africa expects jump in maize imports due to drought – minister

21 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – With two weeks left in the current marketing season, drought-hit South Africa has imported 1.732 million tonnes of yellow maize and 72,000 tonnes of white maize in line with expectations, the agriculture minister said on Thursday.

The country will significantly increase imports in the next season when 2.4 million tonnes of yellow maize and 1.9 million tonnes of white maize will be shipped to its shores, Agriculture Minister Senzeni Zokwana told parliament.

(Reporting by Wendell Roelf; Editing by James Macharia)

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