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South Africa central bank accuses anti-graft watchdog of incompetence

14 July 2017 Comments (0) Non classé

JOHANNESBURG (Reuters) – South Africa’s central bank accused the head of anti-graft watchdog of incompetence on Friday, following her proposal to switch the target of its monetary policy from inflation and currency stability to economic growth.

Public Protector Busisiwe Mkhwebane set off a political row and sparked a selling frenzy in the rand currency last month when she said the Reserve Bank current mandate focuses on a “few commercial interests”.

In a scathing court filing, Governor Lesetja Kganyago said the constitutionally mandated watchdog was “reckless” and her later explanation of the report showed a lack understanding of the constitution and the central bank’s powers and functions.

“This is a grave, rudimentary error,” Kganyago said. “The only explanation that the Public Protector has offered for her clearly unlawful conduct exposes her own lack of competency.”

Opposition parties, Democratic Alliance and the Economic Freedom Fighters, have also branded Mkhwebane incompetent and urged her to resign or for parliament review her ability to execute her duties.

Public Protector spokeswoman Cleopatra Mosana rejected the accusations of incompetence, saying Mkhwebane continued to “discharge her duties as prescribed by the constitution.”

Mkhwebane has been in the job since October last year. Her proposal was also opposed in court by parliament and finance minister Malusi Gigaba, both of whom have said she over-stepped her powers.

The call threatened to further stain South Africa’s credentials as an investor-friendly emerging market, coming less than a week after mines minister Mosebenzi Zwane spooked investors by raising the minimum threshold for black ownership of mining companies to 30 percent from 26 percent.

 

(Reporting by Tiisetso Motsoeneng; Editing by Toby Chopra)

 

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Botswana’s Okavango first-half diamond sales up 9 percent

14 July 2017 Comments (0) Latest Updates from Reuters

GABORONE (Reuters) – Botswana’s state-owned Okavango Diamond Company (ODC) sales rose 9 percent to $309 million in the first half of the year as demand improved, its deputy managing director said on Friday.

Marcus ter Haar told Reuters the company had sold 1.8 million carats in five auctions held since January.

“The volumes of carats sold were 3 percent higher than the same period in 2016,” he said.

ODC, which plans to have 10 tenders this year, sells 15 percent of the output of Debswana, a joint venture between Anglo American Plc’s De Beers and Botswana, which is targeting production of 20.5 million carats this year.

 

(Writing by Olivia Kumwenda-Mtambo, editing by David Evans)

 

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Kumba Iron Ore expects surging interim profits after price recovery

14 July 2017 Comments (0) Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Kumba Iron Ore said it expects half-year profits to rise by as much as 58 percent due to a recovery in iron ore prices.

Kumba, which is 70 percent owned by Anglo American, said headline earnings per share (EPS) were likely to be between 13.70 rand and 14.85 rand for the six months through June, an increase of between 46 percent and 58 percent.

“The increase in earnings for the period is largely attributable to higher export iron ore prices, partially offset by the stronger rand/US$ exchange rate,” the company said in a statement.

Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

Shares in Kumba were down 1.2 percent at 171.50 rand by 0710 GMT, hit by a near 3 percent drop in China’s iron ore futures after data added to concerns about surplus supply.

 

(Reporting by TJ Strydom; Editing by Susan Fenton)

 

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Barclays Africa challenges findings on apartheid-era bailout

13 July 2017 Comments (0) Latest Updates from Reuters

JOHANNESBURG (Reuters) – Barclays Africa launched a court challenge on Thursday to the anti-graft watchdog’s findings that the lender’s South African unit unduly benefited from an apartheid-era bailout.

Public Protector Busisiwe Mkhebane said last month her investigation had found the apartheid government and central bank breached the constitution by supplying a bank later acquired by Absa, the retail banking unit of Barclays Africa, with a series of bailouts from 1986 to 1995.

The constitutionally mandated anti-corruption agency said Absa must repay 1.1 billion rand ($83 million) to the state.

“In reaching her finding that Absa benefited from the South African Reserve Bank financial support, the Public Protector appears to have impermissibly ignored facts and disregarded evidence provided to her,” Absa said.

The bank said in court filings it had not benefited from the central bank bailout of Bankorp because the price it paid for it took into account the central bank’s financial assistance.

($1 = 13.2500 rand)

 

(Reporting by Tiisetso Motsoeneng, editing by David Evans)

 

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Ghana seeks Swiss support to process more cocoa

13 July 2017 Comments (0) Latest Updates from Reuters

ACCRA (Reuters) – Ghana is seeking collaboration with Switzerland to boost its cocoa output and process more of the beans in the face of price volatility, President Nana Akufo-Addo said on Wednesday.

Ghana, the world’s second largest producer and top grower Ivory Coast, which together account for more than 60 percent of the world’s cocoa supply, have been hit by a sharp drop in world prices that have seen cocoa futures plummet by around a third.

While Ivory Coast responded by slashing its guaranteed farmgate prices, Ghana has maintained the price at which it buys cocoa from farmers since the season opened in October.

Ghana exports at least 70 percent of its beans mainly to Europe through forward contracts.

“Ghana, under my presidency, will no longer become mere producers and exporters of cocoa beans, and will continue the policy of processing more and more of our cocoa,” Akufo-Addo told reporters after a meeting with Swiss President Doris Leuthard in Accra.

Both sides agreed to undertake joint projects to add value to Ghana’s beans, Akufo-Addo said without giving details.

Ghana, which also exports gold and oil is under a three-year aid programme with the International Monetary Fund to restore fiscal stability to its economy, dogged by high public debt, deficits and consumer inflation.

 

(Reporting by Kwasi Kpodo; Editing by Greg Mahlich)

 

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Autos supplier Faurecia opens second Moroccan factory, plans third

13 July 2017 Comments (0) Latest Updates from Reuters, Non classé

PARIS (Reuters) – French auto supplier Faurecia plans to open a third Moroccan plant to build car interiors and emissions control parts for clients, including its parent PSA Group, the company said on Thursday.

The future plant will open next year in the coastal city of Kenitra, Faurecia Chief Executive Patrick Koller said in a statement marking the formal inauguration of its second Moroccan production site, a seating facility north of the capital Rabat.

The seating plant represents an investment of 170 million dirhams (15.4 million euros; $17.58 million) and employs 1,300 workers making seat covers and leather trim for vehicles such as the Peugeot 3008 and 5008, as well as Opel models built at PSA plants. Faurecia is 46.3 percent-owned by the maker of Peugeot, Citroen and DS cars.

($1 = 0.8760 euros)

 

(Reporting by Laurence Frost; Editing by Sudip Kar-Gupta)

 

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South Africa considers privatisation to counter recession

13 July 2017 Comments (0) Latest Updates from Reuters

By Olivia Kumwenda-Mtambo and Mfuneko Toyana

JOHANNESBURG (Reuters) – South African Finance Minister Malusi Gigaba laid out an ambitious 14-point programme on Thursday to wrench the economy out of recession that included the sale of non-core assets and partial privatisation of state-owned firms.

The plans to stimulate growth in the continent’s most industrialised economy appear to represent an ideological shift by the African National Congress (ANC), whose political alliance with the unions has tended to make privatisation a dirty word.

A team commissioned by President Jacob Zuma to review state firms last year recommended that some should be sold. Now the government has set a date – March 2018 – by which to roll out a “private sector participation framework”.

“All of these items that we have announced … they constitute an important intervention to restore confidence and demonstrate action, and outline an action plan that we as government can be responsible for,” Gigaba said.

The government would also reduce the number of debt guarantees to this firms, especially those extended for operational purposes, he said.

Analysts said Gigaba’s plan could face opposition.

“I’m not sure how far he is going to be able to get with this because I think ideologically there’s a lot of opposition,” NKC African Economics analyst Gary van Staden said.

“The last time I heard the ANC even talk about privatisation or even talk about sale of state owned assets on any kind of level is when Thabo Mbeki was president. It’s been a long time.”

South Africa’s economy entered recession for the first time since 2009 in the first quarter and is also struggling with high unemployment and credit ratings downgrades.

The state of the economy is adding to the pressure on Zuma, who is also facing persistent corruption allegations and increasing calls for him to stand down from within the ANC. Parliament will hold a no-confidence vote on Zuma next month.

Many of South Africa’s 300-odd state-owned companies are a drain on the government’s purse. Ratings agencies have singled out some as threat to its overall investment grade rating.

The firms, known as “parastatals” in South Africa, include companies such as South African Airways, power utility Eskom and logistics group Transnet that are regarded as central to the functioning of the economy.

Gigaba did not say what would be going under the hammer first, saying that would be determined by an audit.

BNP Paribas South Africa economist Jeff Schultz said investors would want to see more details before endorsing it as a viable turnaround strategy.

“It’s very difficult to say at this stage. He was quite cagey on what sales of non-core assets he was referring to,” Schultz said.

South Africa sold its stake in mobile phone firm Vodacom in 2015 to as part of a 23 billion rand capital raising for Eskom.

Schultz said it might try to sell similar stakes, rather than embracing formal privatisation.

“In much the same way as government sold down their stake in Vodacom, the government is looking to do similar things to try and raise some revenue in the near term,” he said.

 

(Additional reporting by TJ Strydom and Tanisha Heiberg; Editing by Alison Williams)

 

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Base Resources forecasts lower ilmenite output from Kenya in 2017/18

13 July 2017 Comments (0) Latest Updates from Reuters

By George Obulutsa

NAIROBI (Reuters) – Australia’s Base Resources expects its ilmenite output in Kenya to fall by 8-14 percent this financial year but does not foresee disruption in the run-up to next month’s national election, it said on Thursday.

Base said that output of the commodity mined for titanium dioxide production and used as a base pigment in paint, paper and plastics will be between 400,000 tonnes and 430,000 tonnes in the year to June 30, 2018, compared with 467,359 tonnes the previous year.

Production of rutile, used in refractory ceramics and as a pigment, is expected to be 88,000-94,000 tonnes, from 90,625 tonnes. Zircon output, meanwhile, is forecast at 32,000-37,000 tonnes, against 34,228 tonnes.

“In the future … we will start moving into the lower-grade areas. Thus, for the given tonnage of ore, the amount of heavy mineral concentrate will reduce, thereby reducing the amount of ilmenite, rutile and zircon that we produce,” Joe Schwarz, Base Titanium’s general manager for external affairs, said in a conference call with reporters.

Zircon is used to make ceramic tiles and in refractories, foundries and chemicals.

Base Titanium, Kenya’s first large-scale international mining project, shipped its first consignment of minerals in February 2014 after years of delay.

The $305 million project is viewed as a major part of Kenya’s plans to boost its relatively modest and undeveloped mining sector.

Schwarz said he does not expect Base Titanium’s operations to be affected by the Aug. 8 election, when Kenyans will elect a president, parliament and local authorities.

Many investors and consumers have been taking a wait-and-see stance on concerns over the potential for election-related violence.

“We are not scaling down,” Schwarz said. “Operations continue as normal. Obviously we do monitor the security situation and we are not seeing any risks at this time.”

 

(Reporting by George Obulutsa; Editing by Aaron Maasho and David Goodman)

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Loss-making Air Zimbabwe cuts half its workforce

12 July 2017 Comments (0) Latest Updates from Reuters

HARARE (Reuters) – Loss-making Air Zimbabwe is cutting half of its 400 jobs as part of a restructuring plan meant to revive the ailing national carrier, Chairwoman Chipo Dyanda said on Wednesday.

Like most state-owned companies in the southern African country, Air Zimbabwe has been making losses for years due to mismanagement, high operating costs, old aircraft and equipment.

Dyanda told Reuters that Air Zimbabwe would cut 200 jobs in its fourth round of lay-offs in eight years.

“We were overstaffed by a lot and we are also trying to weed out people without the right qualifications,” Dyanda said.

“The retrenchment is meant to give space to the airline so that we can redeploy the money saved back into the company.”

Air Zimbabwe cut 300 jobs in August 2015 following cuts in 2009 and 2013, but has since rehired some of the workers.

President Robert Mugabe’s son-in-law Simba Chikore was appointed chief operating officer last October, drawing accusations of nepotism from the opposition and critics of the government.

Dyanda said Air Zimbabwe required a ratio of 45 workers per aircraft. The airline currently flies four planes, which has forced Mugabe to at times hire private jets for his foreign travels.

“As part of the strategic plan, we would like to get more reliable planes and expand our routes,” Dyanda said, without giving details.

An official at Zimbabwe’s Ministry of Transport said the airline, which has debts of more than $300 million, is looking to lease aircraft from Malaysia.

 

(Reporting by MacDonald Dzirutwe; editing by Ed Stoddard and Jason Neely)

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Egypt to halt flour subsidy and cut wheat imports by up to 10 pct

12 July 2017 Comments (0) Latest Updates from Reuters

CAIRO (Reuters) – Egypt, the world’s largest wheat buyer, will stop subsidising flour for its sweeping bread subsidy programme next month in a move expected to cut wheat imports by up to 10 percent by curtailing smuggling, the supply ministry said on Wednesday.

Egypt is looking to tighten its finances as it pushes ahead with a $12 billion three-year International Monetary Fund loan programme tied to ambitious reforms such as subsidy cuts and tax increases.

Austerity-hit Egyptians faced with inflation above 30 percent have increasingly turned to the state’s cheap subsidised bread to make ends meet, increasing the country’s food subsidy bill as well as its wheat imports. In the financial year to June 30 wheat imports reached 5.58 million tonnes, up from 4.4 million the preceding year.

In an attempt to reduce waste the state will next month stop subsidising flour used by bakeries offering the cheap bread. Instead, it will restrict subsidies to the actual bread offered to consumers, Supply Ministry spokesman Mohamed Sweed said.

Subsidy card holders currently obtain each loaf of bread for 0.05 pounds, less than a tenth of the cost of production, via an electronic smart card that allocates a maximum daily ration to citizens and compensates bakeries for the production cost shortfall with every swipe.

Unscrupulous bakers have long bought up cheap subsidised flour and sold it on the black market, costing the state millions of dollars a year in squandered subsidies.

Sweed said the new measure will remove the incentive for smugglng flour, cutting down on waste and helping to save the state up to 8 billion Egyptian pounds ($447 million) from its 2017-18 food subsidy bill, which had been set at 85 billion pounds.

He said that lower flour consumption would translate directly into reduced imports.

($1 = 17.9100 Egyptian pounds)

 

(Reporting by Eric Knecht; Editing by David Goodman)

 

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