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South Africa’s MTN shares slump 13% on profit warning

19 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Shares in MTN Group slumped more than 13 percent on Friday, a day after the South African mobile company flagged it would report at least a 20 percent drop in annual profit.

Shortly after the market closed on Thursday, MTN said the expected fall in profit was due to underperformance in Nigeria, where it faces a $3.9 billion fine for failing to cut off more than 5 million SIM card users by the set date.

Africa’s biggest mobile phone company said the profit warning did not include the penalty because it was still in talks with regulators about the final size of the penalty.

“There remains some uncertainty as to the final quantum (amount) of the Nigerian fine, should an out of court settlement be reached,” the company said.

MTN was handed a $5.2 billion penalty in October, prompting weeks of lobbying that led to a 25 percent reduction to $3.9 billion but the company was still not prepared to pay the lower fine, which equates to more than twice MTN’s annual average capital spending over the past five years.

 

(Reporting by Tiisetso Motsoeneng; Editing by Alexander Smith and Adrian Croft)

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Nigerian red tape prompts South African retailer to exit

19 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African retailer Truworths has pulled out of its Nigerian business citing import restrictions, its chief executive said on Thursday, a sign President Muhammadu Buhari’s attempts to boost local industry are hurting foreign investment.

As well as being unable to fill its shelves, the clothing retailer said it was struggling to pay its rent and get access to foreign exchange which has dried up due to a collapse in oil prices. Nigeria is Africa’s biggest crude exporter.

“We were unable to operate the stores properly any longer because we were unable to send merchandise to the stores because there’s regulation preventing that,” Michael Mark told Reuters in telephone interview.

In an attempt to boost local manufacturing and prop up the ailing naira, Buhari has effectively banned the import of almost 700 goods, ranging from rice to toothpicks, bread and soap.

Even non-banned items are difficult to import due to dollar shortages.

Buhari won an election a year ago on promises to end a brutal Islamist insurgency in the northeast and wean Africa’s biggest economy off oil.

However, Boko Haram militants continue to launch regular attacks and economists have questioned the logic of Buhari’s shock therapy reform tactics, particularly because of the knock-on effects of the slump in oil prices.

 

(Reporting by Tiisetso Motsoeneng; Writing by Joe Brock; Editing by Ed Cropley)

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Tunisia, IMF hold talks on credit, economic reforms

18 February 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

TUNIS (Reuters) – The IMF began talks with Tunisia on Thursday over a new credit programme, tied to measures to strengthen its economy and finances and likely to be worth at least $1.7 billion over four years, a central bank official told Reuters.

Tunisia’s economy has struggled since the 2011 uprising against autocrat Zine El-Abidine Ben Ali that sparked the Arab Spring revolutions across North Africa. Two attacks last year by Islamist militants hurt its tourism industry.

Protests to demand work last month turned violent, underscoring the fragility of the economic growth that Tunisia needs to underpin its democratic transition.

Amine Mati, the head of the IMF delegation in Tunisia, met the Central Bank Governor Chedli Ayari to discuss the details of the credit programme on Thursday.

“The programme will be in accordance with new economic reforms in Tunisia this year and during the three next years,” an central bank official told Reuters after the meeting.

Mati will also meet the prime minister’s adviser in charge of economic reforms.

Tunisia is about to get a loan of 500 million euros ($550 million) from the European Union to support the economy, and former colonial ruler France last month pledged 1 billion euros in aid over five years.

The new IMF programme will follow on from a two-year deal totalling about $1.74 billion that was agreed in 2013 and extended last year by seven months to buy time for Tunisia to put banking and fiscal reforms in place.

Under the programme, Tunisia also agreed to keep its budget deficit under control and make the foreign exchange market more flexible.

 

(Reporting by Tarek Amara; Editing by Ruth Pitchford)

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Rwanda’s economic growth to slow to 6.3% this year

18 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KIGALI (Reuters) – Rwanda’s economic growth is likely to slow to 6.3 percent this year from an estimated 7 percent last year, mainly due to smaller expansions in the agriculture, construction and services sectors, the central bank chief said on Thursday.

Governor John Rwangombwa told a news conference the slower rate of expansion was partly due to the effects of El Gino rains.

“Agriculture has a big hand in that slight reduction from 7 percent to 6.3 percent,” he said, putting growth in the sector, one of the main drivers of the economy, at 5.1 percent this year compared with a projected 5.5 percent last year.

Rwangombwa said the service sector was expected to expand 7.1 percent this year after growing 7.3 percent in the first three quarters of last year.

He added the construction sector was also seen slowing compared with last year.

He said inflation was expected to remain within the 4.5 and 5.5 percent range during the year.

Rwanda’s urban inflation rate, a key indicator for the central bank, was unchanged at 4.5 percent in January compared with the previous month.

 

(Reporting by Clement Uwiringiyimana; Writing by George Obulutsa; Editing by Hugh Lawson)

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South32 considering buyout of Anglo American manganese unit

18 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

SYDNEY (Reuters) – South32 could be among the first to buy assets placed on the block this week by South Africa’s Anglo American, with the Australian company saying it was interested in its manganese unit.

The two companies share a manganese mining and smelting business located in Australia and South Africa, with Anglo American owning 40 percent of the division.

RBC last year valued South32’s stake in manganese at around $1.8 billion, though that was before the metal halved in price.

“As a JV partner with a deep understanding of their value, we would be a buyer if the price is right,” a South32 spokeswoman said in an emailed statement, confirming a report in the Sydney Morning Herald newspaper website.

News of the interest from South32, the diversified minerals group spun out of BHP Billiton last year, comes as Anglo American turns to widespread divestment to shore up a heavily indebted balance sheet.

South32 indicated negotiations had already started to acquire Anglo American’s manganese business.

“We have a good relationship with our joint venture partner and they’ve communicated their intentions,” the statement said.

Manganese can be found in drink cans to improve resistance to corrosion. Ahead of Anglo American unveiling plans this week to cut net debt in half, South32 had been mentioned as a potential buyer of Anglo American’s niobium business.

Anglo American on Feb. 16 detailed a drastic plan to hack and slash its sprawling empire of mining assets, paring it back to diamonds, copper and platinum.

Any acquisition, though, would come at a tough time for manganese producers.

Weak prices for the metal have already led South32 to suspend mining at its Hotazel mining division in South Africa This has removed around 700,000 tonnes of manganese ore production from the global supply chain.

South32 shares were nearly 5 percent higher at A$1.26 in late trading on Thursday, double the gains of the wider market. But the stock has still lost nearly half its value since listing in May.

 

(By James Regan. Reporting by James Regan; Editing by Muralikumar Anantharaman)

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Burundi annual tea revenue jumps by 52%

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

KIGALI (Reuters) – Burundi’s tea export revenues jumped 52 percent in 2015 from a year earlier, thanks to a fall in output of regional rival Kenya, a tea board official said on Wednesday.

Tea output in Kenya, the world’s leading exporter of black tea, fell by 10 percent last year, mainly because of dry weather conditions in East Africa’s biggest economy.

“The decline of Kenya’s tea production largely contributed to drive up prices and earnings for Burundi’s tea,” Joseph Marc Ndahigeze, the head of exports for the Burundi tea board (OTB), told Reuters.

The average export price per kilogram climbed to $3.09, against $2.17 in 2014, state-run OTB said in a report.

Tea is Burundi’s second-largest earner of hard currency behind coffee and supports 300,000 farmers in a nation of 10 million people.

OTB, which exports 80 percent of its tea through a regional weekly auction held in the Kenyan port city of Mombasa, said tea export revenue totalled $32.4 million last year, up from $21.3 million in 2014, with export volumes rising by 6.6 percent to 10,495 tonnes.

The rise in Burundi tea exports has come despite nine months of political chaos that has resulted in 400-plus deaths, pushed 240,000 people into exile and hampered many elements of the nation’s fragile economy.

 

 

(Reporting by Patrick Nduwimana; Editing by Drazen Jorgic and David Goodman)

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South Africa’s January headline CPI rises to 6.2% year-on-year

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

JOHANNESBURG (Reuters) – South Africa’s headline consumer inflation quickened more than expected to 6.2 percent year-on-year in January, compared with 5.2 percent in December, data from Statistics South Africa showed on Wednesday.

On a month-on-month basis, prices rose 0.8 percent compared with an increase of 0.3 percent in the previous month.

Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, edged up to 5.6 percent year-on-year in January from 5.2 percent in the previous month, while also rising to 0.7 percent month-on-month.

The consensus for January headline CPI was 5.93 percent, according to a Reuters poll.

 

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

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Kenya replaces Mombasa port management amid smuggling probe

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

NAIROBI (Reuters) – Kenya Ports Authority said on Monday it had replaced senior managers at Mombasa port in response to pressure to tackle drug and ivory smuggling at East Africa’s main trade gateway.

Masden Madoka, the port’s chairman, said managing director Gichiri Ndua and five other senior managers had been sent into early retirement and several others were likely to follow.

There are no suggestions any of the six were directly involved in smuggling, though Madoka said investigations into corruption were ongoing.

“There have been complaints levelled against the KPA (Kenyan Ports Authority) and it was time such drastic action was taken,” he told journalists.

Ndua could not be reached for comment, despite several attempts to contact him by telephone.

The Indian Ocean port is a vital artery for East African trade, handling fuel and other imports for landlocked neighbours including Uganda and South Sudan. The region’s main exports, tea and coffee, are also shipped out of Mombasa.

Western diplomats say it is also the main exit point for ivory poached in East Africa and smuggled to Asia, and has become a key entry point of Afghan heroin bound for Europe via East Africa.

Officials of the port and other government agencies there have faced frequent and widespread accusations of colluding with rogue importers and exporters, depriving Kenya of tax revenues.

While there have been no convictions, the port has become a focal point for a campaign by President Uhuru Kenyatta to boost economic growth by improving efficiency and fighting criminal cartels.

Madoka said Catherine Muturi, who was the port’s general manager for finance and administration, has been appointed acting managing director.

In another effort to curb smuggling, Madoka also said all transit cargo coming through Mombasa would be cleared within the port. At present, some containers bound for outside Kenya are cleared at privately run container freight stations located outside the port.

The government shut down two such stations last month.

 

(By Joseph Akwiri. Writing by Drazen Jorgic; editing by John Stonestreet)

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South Africa’s Impala Platinum sees up to 20% fall in H1 profits

15 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Impala Platinum said on Monday it expected half-year profits to fall by as much as 20 percent due to lower rand prices for its main commodity.

Headline earnings per share – a measure of profit which strips off certain one-off items – will be between 50 cents and 59 cents, a decline of between 20 percent and 10 percent.

Impala, the world No. 2 producer of the metal used for emissions-capping catalytic converters in cars, said the rand prices for platinum are down 15 percent compared to a year earlier causing the decline in profits.

Shares in Implats, which have more than halved in value over the last year, fell 0.74 percent to 35 rand by 1500 GMT.

 

(Reporting by Zandi Shabalala; Editing by James Macharia)

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Ugandan police arrest opposition leader Besigye, fire teargas

15 February 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

KAMPALA (Reuters) – Ugandan police on Monday arrested opposition leader Kizza Besigye and fired teargas to disperse hundreds of his supporters in capital Kampala, a witness said, in a move likely to stoke tensions ahead of Thursday’s presidential election.

Besigye was arrested after the police asked him and his supporters to use a different route during their march into central Kampala, according to a witness at the rally.

“They wanted him to use another road which was far away from where he wanted to go. Police then started firing teargas and arrested (Besigye) with two other opposition leaders,” said the witness.

 

(Writing by Drazen Jorgic; Editing by Toby Chopra)

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