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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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Orange completes acquisition of Congo mobile operator Tigo DRC

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

DAKAR (Reuters) – Orange has completed the $160 million acquisition of Democratic of Congo mobile operator subsidiary Tigo DRC from Millicom, the French company said on Thursday, one of four African purchases it has made this year.

“With a population of more than 80 million people and a relatively low mobile penetration rate of 50 percent of the population, the country offers considerable growth potential,” Bruno Mettling, deputy chief executive officer of Orange, said in a statement.

This month it completed the acquisition of Cellcom, Liberia’s leading mobile operator, and in January it announced a deal to buy Indian firm Airtel’s Burkina Faso and Sierra Leone subsidiaries.

 

(Reporting by Marine Pennetier; editing by Edward McAllister and Jason Neely)

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Investors want answers from Mozambique, banks over loan mystery

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

LONDON (Reuters) – Investors holding Mozambique’s recently restructured ‘tuna bond’ are demanding answers from the government and its bankers over what the International Monetary Fund says are previously undisclosed loans that could exceed $1 billion.

The revelations have rocked the relationship between one of the world’s poorest countries and the International Monetary Fund (IMF), which last year agreed to lend Mozambique $286 million to cushion its economy following deep declines in commodity prices and the value of the metical currency.

Only last month investors met Mozambican officials and agreed to swap an outstanding $697 million of the dollar-denominated tuna bond, issued in 2013 by state-owned fishing-company Ematum, for a sovereign issue.

The deal was seen widely as investor friendly and accepted by holders representing more than 80 percent of the issue. Ratings agency Standard and Poor’s defined the restructuring as “tantamount to a default”.

The original $850 million bond has been controversial from the start: when it was launched, it was presented to investors as funding for “fishing infrastructure” but it quickly became apparent most of the cash was for defence.

Under IMF pressure, the government re-allocated $500 million of the debt to its defence budget. The subsequent bond rescheduling was part of efforts to clean up and rebuild trust for the southern African nation, under pressure from donors to improve the transparency of its finances.

However, last Friday the IMF said it believed Maputo borrowed $1 billion more than previously disclosed.

The Fund’s Africa Director, Antoinette Sayeh, said the additional loans appeared to have been borrowed from Credit Suisse and Russia’s VTB Bank and allocated to Mozambique’s defense and security sector.

Credit Suisse and VTB Bank were also joint dealer managers on the exchange offer launched in March. Mozambique’s Finance Minister Adriano Maleiane was quoted on Sunday saying the country had no hidden loans and that this was down to “some confusion”.

Investors say if found to be true, the IMF allegations could greatly damage the country’s reputation and ability to raise funds.

“At this stage, things are really up in the air until we hear from the various parties of what is really going on,” said one fund manager, who holds the bond but declined to be named. “If this is additional debt which was not included in the overall debt stock it completely changes the overall relationship with the international financial institutions’ community, the IMF, the donor community and it changes the market relationship. There is a lot of harm created in the short term.”

Details of the alleged new loans are sketchy and have not been disclosed in the prospectus to holders of the new bond issue.

However, a February 2013 Credit Suisse document obtained by Reuters outlines a $372 million loan to Proindicus, a company owned by the Ministries of Interior and Defence and the State Security and Intelligence Service. According to the document, the funds are to be spent on high-speed naval interceptors, radar stations, off-shore patrol vessels and aircraft. Credit Suisse declined to comment on the document.

The Ematum bond swap prospectus seen by Reuters also notes under “conflicts of interest” that the dealer managers may make loans or be involved in other transactions to Mozambique.

Marco Ruijer, portfolio manager at NN Investment Partners, who also holds the bond said he had addressed questions to Credit Suisse.

“It was perhaps not prudent of Credit Suisse to say we are doing restructuring to extend maturity from 2020 to 2023 when they themselves have a loan on the books which is maturing before 2023,” said Ruijer. “Now they get money back earlier than the bondholders.”

A Credit Suisse spokesman declined to comment on whether the bank had arranged loans for Mozambique in addition to the Ematum bond.

A source closed to VTB said the bank was assured by Mozambique’s finance ministry that all its financing had been disclosed to the IMF, and that the total debt spelled out in the prospectus included all outstanding direct and publicly guaranteed debt.

Mozambique has seen its foreign debt spiral in recent years. According to the restructuring prospectus, total foreign direct and government-guaranteed debt ballooned from $5.244 billion in 2012 – before the Ematum bond issue – to $9.637 billion in 2015. Combined with domestic debt of $1.5 billion, the government had obligations last year equivalent to 102 percent of GDP, the document said.

 

(By Karin Strohecker. Additional reporting by Sujata Rao in London, Ed Cropley in Johannesburg and Lidia Kelly in Moscow; Editing by Dominic Evans)

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Burundi’s inflation eases to 4.3% in March

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

KIGALI (Reuters) – Burundi’s year-on-year inflation eased to 4.3 percent in March from 6.7 percent in February due to falling food costs, official data showed on Wednesday.

Food inflation in the 12 months to March slowed to 6.4 percent from 10.9 percent in February, the country’s Institute of Economic Studies and Statistics (ISTEEBU) said.

Despite falling inflation, the economy has been battered by a year-long political crisis and associated violence, mainly in the capital. Western donors have reduced vital aid leaving the poor nation more dependent on its modest tea and coffee exports.

Burundi’s economy shrank by 7.2 percent in 2015 and is only expected to expand by 3.4 percent in 2016, according to the International Monetary Fund in a recent report.

 

 

(Reporting by Patrick Nduwimana; Writing by Edmund Blair, editing by David Evans)

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