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Ugandan shilling extends losses as banks seek dollars

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

KAMPALA (Reuters) – Uganda’s shilling extended losses on Wednesday as banks sought to cover short dollar positions amid uncertainty before next month’s presidential election and traders also cited an excess in local currency liquidity.

By 0948 GMT, commercial banks quoted the shilling at 3,475/3,485, compared with Tuesday’s close of 3,450/3,460. The shilling has lost nearly 3 percent of its value against the dollar so far this year.

“There’s general uncertainty being generated by the coming election so there’s a lot of speculation-driven demand by banks to cover short positions,” said Shahzad Kamaluddin, a trader at Crane Bank. He also noted a lot of shilling liquidity.

The presidential election is due on Feb. 18, and some analysts are concerned about possible vote-related violence.

 

 

 

(Reporting by Elias Biryabarema; Editing by Edmund Blair)

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Tanzania’s Q3 2015 GDP growth boosted by construction, mining

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

DAR ES SALAAM (Reuters) – Faster growth in the construction, mining and transport sectors pushed Tanzania’s growth higher in the third quarter of 2015 compared to the same period a year earlier, the statistics office said on Wednesday.

The economy grew 6.3 percent year-on-year in the third quarter compared with 5.4 percent in the same quarter in 2014, the state-run National Bureau of Statistics (NBS) said.

“Sectors that drove GDP growth in Q3 2015 include construction, mining and quarrying and transport,” Albina Chuwa, director general of NBS, told a news conference.

Tanzania’s total exports of goods and services during July-September 2015 rose by 3.3 percent, Chuwa added. Gold accounts for 89 percent of Tanzania’s mineral exports.

 

(Reporting by Fumbuka Ng’wanakilala; writing by Drazen Jorgic; Editing by George Obulutsa and Andrew Heavens)

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Nigeria’s “bad bank” AMCON seeks bids for stake in Peugeot plant

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

LAGOS (Reuters) – Nigeria’s state-backed AMCON “bad bank” said on Tuesday it plans to sell its majority stake in Peugeot Automobile Nigeria (PAN) Limited, a local joint venture with the major French automaker, and is seeking bids from investors.

Peugeot Citroen is the technical partner to the Nigerian assembly plant, which has capacity to assemble 240 cars a day, PAN said on its website.

In a statement, the Asset Management Corporation of Nigeria (AMCON) said it owned 79.3 percent of PAN Nigeria Limited, having acquired the stake four years ago after purchasing the company’s debt and taking some as equity.

PAN Nigeria Limited was set up in 1972 as a joint venture between the Nigerian government and France’s Peugeot, with an annual production of 90,000 cars by the 1980s.

But operations nosedived and the company accumulated bad loans shortly after the government sold its stake via a privatisation to local core investors in 2006.

AMCON said PAN Nigeria had assets totalling 24.96 billion naira ($125.43 million) as of December 2014 and equity of 11.98 billion naira, and was seeking investors with experience in automobile manufacturing to buy the stake on offer.

Bids will close on Jan. 26 at 1600 GMT, it said.

President Muhammadu Buhari is keen to promote a “Made in Nigeria” industrial policy. In November, he met Peugeot’s executive vice president for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production.

The government under a National Automotive Industry Development Plan has ordered local car distributors to come up with plans for new assembly plants, along with threats of imposing prohibitive import duties.

U.S. carmaker Ford Motor Co’s partnership with a local car dealer has built its first model in Nigeria at a new assembly plant in November and said it will produce an initial 10 vehicles a day for the domestic market.

The auto market in Africa’s biggest economy has huge potential but only a small number of new vehicles are sold annually because the sector is dominated by imported used vehicles, and the absence of an industrial policy that would encourage suppliers to set up in Nigeria has stunted growth.

AMCON was set up to absorb bad loans from banks after a $4 billion bailout in 2009 rescued nine lenders from collapse. AMCON then bought bad loans at a discount in exchange for government-backed bonds and has since been selling off collaterals against those loans to pay bondholders.

 

(Reporting by Oludare Mayowa; Writing by Chijioke Ohuocha; Editing by Mark Heinrich)

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UAE moves to quash talk of OPEC emergency meet as oil slumps

12 January 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ABU DHABI (Reuters) – The United Arab Emirates moved to quash talk of a potential emergency meeting of the Organization of the Petroleum Exporting Countries (OPEC) after Nigeria’s oil minister said on Tuesday a “couple” of members had requested a gathering.

Benchmark Brent crude futures slipped towards $30 a barrel to a near 12-year low before rising slightly. They have shed almost three-quarters of their value since mid-2014.

Such market conditions supported an emergency meeting to review whether OPEC should change strategy, Nigerian Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu told reporters on the sidelines of an energy conference in Abu Dhabi.

However, UAE Energy Minister Suhail bin Mohammed al-Mazroui later told the same conference the current OPEC strategy was working, adding that time was needed to allow this to happen — perhaps between one and 1-1/2 years.

“I’m not convinced OPEC alone can change or can solely unilaterally change this strategy just because we have seen a low in the market,” Mazroui said.

Mazroui added that while the first half of 2016 would be “tough” for the oil market, there would be a gradual recovery later in the year, aided by an expected drop in non-OPEC production.

Indeed, OPEC has no plan to hold an emergency meeting to discuss the drop in oil prices before its next scheduled gathering in June, two OPEC delegates said on Tuesday.

OPEC’s strategy of maintaining production levels, instead of reducing supply to allow prices to recover, has been aimed at defending market share at the expense of higher-cost producers such as those in the U.S. shale sector.

The supply glut is likely to be exacerbated in 2016 by the return of Iranian supply to the market, once Western sanctions have been lifted.

“I think all the members including Iran have the right to increase their production. I don’t think we are going to restrict anyone,” Mazroui said.

Such prospects have led oil analysts to downgrade their forecasts in recent days, with Standard Chartered saying prices could drop to $10 a barrel.

The likelihood of a meeting taking place will hinge on the attitude of OPEC heavyweight Saudi Arabia, which has been at the vanguard of resistance to a production cut.

“Saudi Arabia‎ has never held the position that it does not want to talk,” Kachikwu said. “In fact, it was very supportive of a meeting before June, at the time when we held the December meeting, if (there was a) consensus call for it.”

 

(By Rania El Gamal and Maha El Dahan. Writing by David French; Editing by Jason Neely and Dale Hudson)

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South African rand still fragile after sharp fall at start of week

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

JOHANNESBURG (Reuters) – South Africa’s rand remained on shaky ground against the dollar on Tuesday after tumbling as much as 9 percent in the previous session over concerns about both the Chinese and local economies.

The JSE securities exchange’s Top-40 futures index was down 0.97 percent, suggesting the local bourse would open more than 420 points lower at 0700 GMT.

At 0653 GMT, the rand traded 0.51 percent softer at 16.8850 per dollar compared with Monday’s close.

The rand had fallen to a record 17.9950 during Asian trade on Monday, on fears that China wants to weaken its currency aggressively and boost its export competitiveness.

It fared worse than most of its emerging market peers, reflecting additional concerns about the direction of policy in Africa’s most advanced but struggling economy after President Jacob Zuma inexplicably fired the finance minister in December.

“One can only hope that in the shorter term, the market has become a little stretched from all this negativity so far this year and that we get a bit of a relief rally,” Standard Bank trader Warrick Butler said.

In fixed income, the yield for the benchmark government bond maturing in 2026 added 5.5 basis points to 9.74 percent compared to Monday’s close. It was however still far off the previous session’s four-week high of 9.89 percent.

 

(Reporting by Stella Mapenzauswa; Editing by Anand Basu)

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Nigeria to sell 80 billion naira of bonds on Jan 20

11 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

money nigeria

LAGOS (Reuters) – Nigeria said on Monday it will sell 80 billion naira ($402.92 million) worth of bonds  denominated in the local currency at an auction on Jan. 20, its first debt auction of the year, the Debt Management Office (DMO) said.

The debt office said it will issue 40 billion naira each of bonds maturing in 2020 and 2026, using the Dutch auction system.

The 2020 debt is a reopening of a previously issued bond. The 2026 debt is a fresh issue. Results of the auction are expected the next day.

Nigeria has proposed a plan to issue 260 billion to 390 billion naira in 5-, 10- and 20-year naira bonds in the first quarter of the year. [L8N14V1QE]

Nigeria said it will borrow about 900 billion naira locally to finance part of the 2.2 trillion naira deficit in its 2016 budget.

($1 = 198.5500 naira)

 

(Reporting by Oludare Mayowa, editing by Larry King)

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Sudan inflation eases to 12.58% in December

11 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

(Reuters) – Sudan’s annual inflation rate eased to 12.58 percent in December from a revised 12.8 percent in November, a monthly report from Sudan’s Central Statistics Office said on Monday.

Prices soared in Sudan after South Sudan seceded in 2011, taking with it three-quarters of the country’s oil output, the main source of foreign currency used to support the Sudanese pound and to pay for food and other imports.

As an oil importer, Sudan has benefited from the fall in global oil prices since last year.

Sudan expects a budget deficit of 1.6 percent of GDP for the coming year, up from 1.2 percent for 2015.

The government said last month it expected growth to increase in the coming year as lower oil prices reduce the burden of its oil import bill.

It projects a growth rate of 6.4 percent, up from an expected 5.3 percent for 2015.

 

(Reporting by Khaled Abdelaziz; Writing by Ola Noureldin; Editing by Toby Chopra)

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Kenya shilling stable, seen facing pressure from importer demand

11 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s shilling was stable against the dollar on Monday but traders said they expected it to come under modest pressure during the week due to increased importer demand.

At 0728 GMT, commercial banks quoted the shilling at 102.20/30, the same as Friday’s close.

“Going into this week, we expect there will be some pressure on the shilling. The demand (for dollars) should pick up. Most corporate clients have come back to work,” a senior trader at one commercial bank said.

Typically demand for dollars comes from the energy sector, manufacturers and telecoms firms.

 

 

 

(Reporting by George Obulutsa)

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Central African growth hit by low oil price, security threats: IMF

8 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

YAOUNDE (Reuters) – Tighter public spending, economic diversification and greater regional trade are needed to spur growth in central Africa that has been hampered by plunging oil prices and security threats, the head of the International Monetary Fund said on Friday.

Speaking in Cameroon during a regional tour, IMF managing director Christine Lagarde said growth in the resource-rich CEMAC bloc – comprising Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea and Gabon – slowed in 2015 to around 2 percent and will increase only slightly this year.

“The prolonged slump in oil prices presents a new reality for CEMAC,” Lagarde said. “An adjustment in large scale investment plans may be necessary in the short run, to preserve fiscal viability and debt sustainability in the medium term.”

Oil has dropped from over $100 a barrel in June 2014 due to global oversupply, to around $30 a barrel this week, which provides a challenge for countries in Central Africa whose economies rely largely on exports of oil.

Some have been hit harder than others. Equatorial Guinea experienced a “severe” contraction, Lagarde said, while Cameroon saw some robust growth.

Economies have also been hit by security concerns, particularly from Islamist militant group Boko Haram which has carried out attacks in northern Cameron and elsewhere, disrupting economic activity and diverting spending from social programs to the military.

An “ambitious” reform agenda will be needed to bolster growth, which is estimated at 2 percent for 2015, down from earlier estimates of over 4 percent, Lagarde said on Friday. The bloc’s fiscal deficit is seen to have widened 6.5 percent of GDP in 2015, with only modest improvement expected in 2016.

The block’s growth is expected to hit 3.5 percent in 2016, still far below the growth of previous years.

Lagarde urged CEMAC members to rein in spending to reduce deficits during tough times and increase regional trade. Of all formal trade conducted by CEMAC countries, less than 5 percent involves intra-CEMAC commerce, according to the IMF.

 

(Reporting By Sylvain Andzongo, writing by Edward McAllister; Editing by Toby Chopra)

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Rand gains, but South African and Chinese economies pose risks

8 January 2016 Comments (0) Non classé

JOHANNESBURG (Reuters) – South Africa’s rand recovered against the dollar on Friday after hitting record lows in the previous session, but remained vulnerable to concerns about the local economy and that of China.

The rand rose a few cents after central bank data showed South Africa’s net gold and foreign exchange reserves were up slightly at $40.654 billion in December.

At 0704 GMT, the rand traded at 15.9400 to the greenback, a 0.9 percent gain over Thursday’s close at 16.0850.

The local currency had slid to a record low of 16.2015 as renewed concerns about China’s economy spurred an emerging markets sell-off.

The rand shed a quarter of its value against the greenback last year, undermined by worries about weak domestic growth and a global aversion to emerging markets as investors braced for the advent of policy tightening in the United States.

“With U.S. jobs data looming and the situation in China still perilous, respite (for the rand) will likely only be temporary,” NKC African Economics said in a note.

On the South African bourse, the Top-40 index added 0.7 percent while the broader all-share was up 0.56 percent after each dropped more than 2 percent on Thursday.

Government bonds also recovered, and the yield for the benchmark maturing in 2026 retreated 4 basis points to 9.575 percent.

 

(Reporting by Stella Mapenzauswa; Editing by Dominic Evans)

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