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Japan, South Korea firms win contract to build $800 mil Botswana power plant

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

GABORONE (Reuters) – A joint venture by Japan’s Marubeni Corporation and South Korea’s Posco Energy has won an $800 million tender to expand Botswana’s Morupule B power plant by an extra 300 megawatt (MW), a government notice said on Tuesday.

The new coal-fired plant would be an extension of the troubled Chinese built 600 MW power plant.

The firms will recover their costs by selling the power to the Botswana Power Corporation (BPC) through a 30-year power purchase agreement at a cost of 812.56 pula per MegaWatt hour.

Construction of the new plant is expected to start late this year with the first power produced added to the national grid by May 2020, lifting power generation to more than 1,000 MW. Current national power demand stands at 610 MW.

 

(Writing by Zandi Shabalala; Editing by James Macharia)

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South Africa’s Q4 current account deficit widens to 5.1% of GDP

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PRETORIA (Reuters) – South Africa’s current account deficit widened to 5.1 percent of gross domestic product in the fourth quarter of 2015 from a revised shortfall of 4.3 percent in the third quarter, the central bank said on Tuesday.

Economists surveyed by Reuters had expected a 4.35 percent gap for the fourth quarter.

Year-on-year, the current account deficit shrunk to 4.4 percent of gross domestic product compared to a 5.4 percent deficit in 2014.

Exports slumped while imports rose during the quarter, leading to a sharp increase in the trade balance deficit to 57 billion rand ($4 billion) compared with a revised 22 billion rand gap in the third quarter, the reserve bank said in its quarterly bulletin.

“The bank has officially identified November 2013 as the upper turning point in the business cycle, implying that the South African economy is now officially in a downward phase,” the central bank noted.

($1 = 15.3384 rand)

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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Time short to protect Africa’s food supply from climate change

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

BARCELONA (Thomson Reuters Foundation) – Without action to help farmers adjust to changing climate conditions, it will become impossible to grow some staple food crops in parts of sub-Saharan Africa, with maize, beans and bananas most at risk, researchers said on Monday.

In a study of how global warming will affect nine crops that make up half the region’s food production, scientists found that up to 30 percent of areas growing maize and bananas, and up to 60 percent of those producing beans could become unviable by the end of the century.

Six of the nine crops – cassava, groundnut, pearl millet, finger millet, sorghum and yam – are projected to remain stable under moderate and extreme climate change scenarios.

“This study tells where, and crucially when, interventions need to be made to stop climate change destroying vital food supplies in Africa,” said Julian Ramirez-Villegas, the study’s lead author who works with the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS).

“We know what needs to be done, and for the first time, we now have deadlines for taking action,” he added in a statement.

For example, the study warns that around 40 percent of maize-growing areas will require “transformation”, which could mean changing the type of crop grown, or in extreme cases even abandoning crop farming.

Sorghum and millet, which have higher tolerance to drought and heat, could replace maize in most places under threat.

But for 0.5 percent of maize-growing areas – equal to 0.8 million hectares in South Africa that now produce 2.7 million tonnes – there is no viable crop substitution, the study said.

In a few places, the need to adapt to climate change is already urgent, the researchers said. Those include pockets in highly climate-exposed areas of the Sahel in Guinea, Gambia, Senegal, Burkina Faso and Niger.

Banana-growing regions of West Africa, including areas in Ghana and Benin, will need to act within the next decade, as the land is expected to become unsuitable for bananas by 2025.

And maize-growing areas of Namibia, Botswana, Zimbabwe and Tanzania also have less than 10 years left to change tack under the most extreme climate change scenarios, the study added.

“If we don’t do anything now, farmers are no longer going to be able to grow certain crops in certain sites,” Ramirez-Villegas told the Thomson Reuters Foundation from Colombia.

“But we know there are several adaptation options … with which farmers should be able to carry on growing these crops for a longer period of time than we project.”

 

TIME ‘RUNNING OUT’

Those options begin with shorter-term actions like improving irrigation and weather information services for farmers, and developing new varieties of maize and beans that can better tolerate heat and drought.

Such measures are already underway in parts of Africa, including the “Drought Tolerant Maize for Africa” initiative that has released 160 varieties, benefiting up to 40 million people in 13 countries.

But governments will still need to re-assess agricultural and food security policies to see whether bigger transformations are needed, such as switching to different crops or livestock.

If so, they will need to help farmers access markets or build processing and storage facilities for new crops.

CCAFS researcher Andy Jarvis, a co-author of the paper published in the journal Nature Climate Change, noted adjusting national policies can take decades.

“Our findings show that time is running out to transform African agriculture. This will require not only increased funding but also a supportive policy environment to bring the needed solutions to those affected,” he said.

A separate study released on Monday, by researchers from Brown and Tufts universities, suggested scientists have overlooked how two important human responses to climate will impact food production in the future: how much land people choose to farm, and the number of crops they plant.

Looking at Mato Grosso, a key soy-producing state in Brazil, they found a temperature rise of 1 degree Celsius was tied to substantial decreases in crop area and double cropping, accounting for 70 percent of the overall loss in production. Only 30 percent was attributable to falling crop yield.

“If you look at yields alone, you’re not looking at all of the information because there are economic and social changes going on as well,” said Leah VanWey, professor of sociology at Brown and one of the study’s senior authors. “You’re not taking into account farmers’ reactions to climate shocks.”

 

(Reporting by Megan Rowling; editing by Ros Russell. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, corruption and climate change. Visit http://news.trust.org)

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Telecom Egypt net profit jumps 111% after tax changes

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CAIRO (Reuters) – Telecom Egypt reported a 111 percent jump in 2015 net profit after corporate tax changes, the state-owned landline monopoly said in a statement on Monday.

Net profit rose to 2.999 billion Egyptian pounds ($383 million) from 1.419 billion, it said.

The company said it was helped by a fall in the corporate income tax rate to 22.5 percent from 30 percent retroactively as of January 1, 2015, and changes to the taxation of dividends.

“Additionally the increase of income from investment by 35 percent year on year contributed positively to the bottom line,” the company said.

Revenue reached 12.184 billion pounds, up from 12.157 billion the previous year.

($1 = 7.8300 Egyptian pounds)

 

(Reporting by Ehab Farouk; writing by Asma Alsharif; editing by Jason Neely)

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Fastjet warns on full-year results

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(Reuters) – Fastjet Plc warned that results for the year would be materially below market expectations, adding pressure to the African budget airline whose second-largest investor is seeking the ouster of Chief Executive Ed Winter.

The company said it no longer expected to be cash flow positive in 2016, citing challenging conditions in the domestic aviation market.

Fastjet shares fell as much as 45 percent to a record low of 36.04 pence on Monday morning in London.

Last week, Stelios Haji-Ioannou, whose private investment vehicle easyGroup has a 12 percent stake in Fastjet, called on shareholders to back his bid to immediately remove CEO Winter.

Haji-Ioannou said Winter had created significant overheads for the company, resulting in a high cost base that was disproportionate to its six aircraft fleet.

The budget carrier said in December that it was taking steps to manage its operating costs and overheads, after issuing its second warning on full-year 2015 revenue.

Fastjet had $20 million of cash available at the end of February, the company said, adding that it believed that these funds would be enough to meet its operational requirements.

Fastjet may consider raising further funds during the year to fund future growth as market conditions improve, it said.

 

(Reporting by Esha Vaish in Bengaluru; Editing by Sunil Nair and Gopakumar Warrier)

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Nigeria says producers to meet in Moscow, sees dramatic impact

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ABUJA (Reuters) – Some members of OPEC plan to meet other oil producers in Russia around March 20 for new talks on an oil output freeze, Nigeria’s petroleum minister said on Thursday, forecasting the meeting would spark a dramatic reaction in crude prices.

Nigeria has been pushing for action by the Organization of the Petroleum Exporting Countries because the slump in oil revenue has undercut its public finances and currency, leaving the government struggling to pay civil servants.

“We’re beginning to see the price of crude inch up very slowly,” minister Emmanuel Ibe Kachikwu told a conference in Abuja. “But if the meeting that we’re scheduling, it should happen in Russia, between the OPEC and non-OPEC producers, happens about March 20, we should see some dramatic price movement.”

“Both the Saudis and the Russians, everybody is coming back to the table,” Kachikwu said. “I think we’re very humbled today to accept that if we get to a price of $50, it will be celebrated. That’s a target that we have.”

The Russian Energy Ministry said it was ready for talks but the date and venue had yet to be agreed. “Currently, various options about the venue and date for the meeting, where measures on oil market stabilisation due to be discussed, are being worked out,” it said in a statement.

Benchmark Brent futures were around $37 per barrel by 1554 GMT on Thursday.

OPEC leader Saudi Arabia and non-OPEC Russia, the world’s two largest oil exporters, agreed last month to freeze output at January levels to prop up prices if other nations agreed to join the first global oil pact in 15 years.

Yet the accord has so far failed to have a dramatic impact on crude prices, partly because OPEC’s third-largest producer Iran plans to steeply raise production after the lifting of international sanctions on the Islamic Republic in January.

Nigerian President Muhammadu Buhari on Sunday stepped up rhetoric on the issue, telling Qatar’s ruler crude prices had fallen to “totally unacceptable” levels.

Kachikwu also said Nigeria was pumping 2.2 million barrels per day, in line with previous comments, of which 46 percent was coming from onshore fields.

He also said Nigeria’s average oil production cost from state firm NNPC and international companies was between $13 and $15 a barrel for onshore fields and $30 a barrel for deep offshore operations.

Oil prices have lost two thirds of their value since mid 2014 due to a glut of supplies caused by booming output from the United States and OPEC. In January they fell below $30 per barrel, their lowest in more than a decade.

 

(By Camillus Eboh. Writing by Dmitry Zhdannikov and Ulf Laessing; Editing by Susan Fenton and Susan Thomas)

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IMF says in advanced talks with Tunisia over $2.8 bil credit

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TUNIS (Reuters) – The International Monetary Fund and Tunisia are in the advanced stages of talks over a $2.8 billion credit over four years to help support the country’s economic reform programme, an IMF delegation said on Thursday.

A visiting IMF delegation said at the end of its mission that it would now focus on fine-tuning reform priorities and financing needs for this year.International lenders have been demanding Tunisia cut public spending, reduce deficits and introduce reforms that help create sustainable jobs and growth.

“Moving ahead with economic reform is crucial as the Tunisian economy confronts several significant challenges. Economic growth is held back by investors’ wait-and-see attitude and regional uncertainties,” the IMF said in a statement.

Five years after overthrowing autocrat Zine El Abidine Ben Ali and sweeping in democratic change, Tunisians are still struggling with an economy unable to deliver the jobs and reforms their revolution promised.

Three major militant attacks last year, including two on foreign visitors, have battered the tourism industry, while a week of rioting earlier this year has worried Western partners looking to help the North African state.

 

(Reporting by Tarek Amara; writing by Patrick Markey; Editing by Toby Chopra)

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Finance minister says South Africa not on the path to austerity

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JOHANNESBURG (Reuters) – South Africa’s recent budget was not aimed at implementing austerity measures and would not go the same path taken by some countries in Europe, the finance minister said on Thursday.

Gordhan’s pledge to narrow the budget deficit to 2.4 percent of GDP by 2018/19 was aimed at placating ratings agencies that had warned of downgrades.

“We are nowhere near austerity. We haven’t cut anybody’s pension, we haven’t raised the retirement age, haven’t cut any jobs in the public sector. Austerity as it was applied in parts of Europe is not what we are trying to do here,” Finance Minister Pravin Gordhan said at a business conference.

On the reported dispute between himself and the South African Revenue Service commissioner Tom Moyane, Gordhan said the dispute would be resolved in due course.

The two men have clashed amid a probe into a unit which allegedly operated unlawfully in the department under Gordhan’s watch during his previous stint as commissioner.

South Africa’s rand currency fell nearly 4 percent on Friday, its biggest daily loss since 2011, after Gordhan said there were attempts to discredit him and the integrity of the Treasury through the investigation.

The investigation also led to media reports of a fallout between Gordhan and Zuma, which both men have dismissed.

“I will stick to my job and do the best I can,” Gordhan said.

Gordhan said Treasury officials would meet investors in London, Boston and New York next week in a non-deal roadshow meant to clarify South Africa’s economic plans.

“(We will) explain the budget to them and the kind of direction that we want to go in,” Gordhan said.

 

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

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South Africa’s MTN says may list in Nigeria once fine resolved

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JOHANNESBURG (Reuters) – South Africa’s MTN Group may list its Nigerian unit on the stock exchange in Lagos once it has resolved a disputed $3.9 billion fine with authorities in the Western African nation, its executive chairman said on Thursday.

MTN also said it has set aside 9.3 billion rand ($600 million) to cover a potential settlement of a fine imposed by Nigerian authorities last year for failing to cut of unregistered SIM card users.

Shares in the mobile company rose more than 9 percent to 149 rand by 0845 GMT.

($1 = 15.645 rand)

 

(Reporting by Tiisetso Motsoeneng; Writing by Joe Brock; Editing by James Macharia)

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South Africa’s Clover says will no longer invest in Nigeria

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JOHANNESBURG (Reuters) – South Africa’s Clover Industries will no longer invest in Nigeria due to a financial crisis there, the dairy products company said on Wednesday.

“The current financial crisis experienced in Nigeria which is fuelled by the low oil price is a further cause of concern, thus the group has decided to withdraw from future investments in Nigeria,” Clover said in a statement.

Companies have laid off thousands, cut production and even closed operations as they struggle to get enough dollars to pay for imported spare parts and raw materials. The Nigerian naira had devalued following a slump in oil revenues, the country’s lifeblood.

“It’s a sad decision but until the currency crisis is resolved we wont be able to invest in there any further,” Chief Executive Johann Vorster told Reuters.

Clover had planned to invest no less that 100 million rand ($6.43 million) in developing its products in Nigeria, he said.

The company said it would continue to expand in Botswana, Namibia, Lesotho and Swaziland.

He added that the company would like to keep the Clover brand alive through its Tropika juices.

South African fashion retailer Truworths said this month it pulled out if its Nigerian business saying it was unable to import clothes and was struggling to pay rent and access foreign exchange.

Clover on Wednesday posted a 7 percent rise in first-half profits due to a higher demand for its milk products and as a heatwave in southern Africa caused consumers to reach for its juices and bottled water.

Headline earnings per share, a main gauge of profit in South Afica that strips out certain one-off items, for the six months to December totalled 117 cents from 109.2 cents in the previous year.

Vorster said Clover was on the prowl for acquisitions which it would fund through its balance sheet, adding that the firm could go to investors for cash “if needs be”.

($1 = 15.5603 rand)

 

(Reporting by Zandi Shabalala; Editing by Kim Coghill)

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