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Nigeria increases excise duties on tobacco and alcohol

12 March 2018 Comments (0) Actualites, Africa, Economy, Health, Politics

ABUJA (Reuters) – Nigeria’s President Muhammadu Buhari has approved an increase in excise duties on tobacco and alcoholic beverages, the finance ministry said in a statement on Sunday.

The west African country, which has Africa’s biggest economy, fell into recession in 2016 largely due to low oil prices. It emerged from recession last year, mainly as a result of higher crude prices, and is trying to raise non-oil revenues.

In addition to a 20 percent tax on tobacco, the government will add an extra fixed tax per cigarette. A percentage tax on alcoholic beverages will be replaced by taxes of fixed amounts based on volume.

The finance ministry said the changes will take effect from June 4 this year.

The move would have “a dual benefit of raising the government’s fiscal revenues and reducing the health hazards associated with tobacco-related diseases and alcohol abuse,” it said in its statement.

The ministry said the new regime was in line with a directive from the Economic Community of West African States (ECOWAS) regional bloc on the harmonisation of member-states’ legislation on excise duties.

Raising duties in Nigeria for alcohol could further hit consumer demand amid fragile growth.

Anheuser-Busch InBev (AB InBev), the world’s largest beer maker, expects its new $250 million brewery being built in Sagamu, Nigeria, to start production in the middle of this year, its head of Africa head has said.

 

(By Camillus Eboh and Chijioke Ohuocha. Writing by Alexis Akwagyiram; Editing by Peter Graff)

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Ivory Coast to reduce cocoa output over next two years

10 March 2018 Comments (0) Actualites, Agriculture, Business, Economy

ABIDJAN (Reuters) – Ivory Coast’s Coffee and Cocoa Council (CCC) will suspend programmes for the 2018-19 season that boost cocoa output, it said on Friday, aiming to reduce production in the face of global oversupply.

The marketing board plans to halt distribution of higher-grade seeds and plants by chocolate makers, including Mars and Nestle, that develop hybrid species that they pass on to farmers to increase yields.

Those programmes helped to increase output in the world’s top grower to record highs last year but added to a supply glut that has depressed prices worldwide.

“Given the increase in global cocoa supply and falling prices since 2016/17, the CCC has decided to carry out a census of the coffee and cocoa orchards,” the CCC said in a statement. It did not say when the census would begin.

“Pending the finalisation of this census, we inform you of our decision to temporarily suspend any distribution of improved plant material, seeds, cuttings, etc, from the 18/19 season.”

Output in Ivory Coast has risen from 1.6 million tonnes 10 years ago to 2 million tonnes in the 2016-17 season because of higher yields, but global demand has failed to meet supply. The CCC expects production for the 2017-18 season to slip to 1.9 million tonnes, partly because of bad weather.

High-level sources at the CCC said the organisation wants to try to reduce output to between 1.7 million tonnes and 1.8 million tonnes over the next two years, affecting exporters and chocolate makers that also include Ferrero, Cargill, Olam, Cemoi and Cocoa Barry.

“Our goal is to control our production because these last 10 years, it is these programmes initiated by chocolatiers … that increased our production from 1.6 million to 2 million (tonnes),” a CCC source said.

Separately, the CCC has begun a three-year programme to uproot 300,000 hectares of cocoa infected by swollen shoot since January. The CCC source said that 25,000 hectares have been cleared already, which will also help to reduce growing capacity in the coming years.

 

(Reporting Ange Aboa; Writing by Edward McAllister; Editing by Jason Neely and David Goodman)

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South Africa’s RCL Foods expands in pet food to beat drought

2 March 2018 Comments (0) Actualites, Africa, Business, Economy, Environment

RANDFONTEIN, South Africa (Reuters) – South Africa’s RCL Foods has completed a 123 million rand ($10 million) expansion at its pet food plant to help reduce its exposure to a poultry business hit by drought and cheap imports.

Food companies in South Africa have been struggling with an El Niño-induced drought that drove up the price of ingredients such as maize, while poultry farmers have also faced competition from Brazil, the European Union and the United States.

RCL is aiming to tap into the country’s 5 billion rand ($418 million) a year pet food industry, which is less exposed to individual commodities, as part of a strategy to diversify, CEO Miles Dally said at a plant visit late on Thursday.

“Ideally we would like less impact from things like drought and dumping,” he said.

“Our vision has always been clear, to create a major food business,” he added, referring to the pet food division.

RCL’s expansion in Randfontein, west of Johannesburg, will boost its pet food production to 12,000 tonnes per month from 7,000 tonnes.

The company, which saw first-half profit plunge 54 percent last year, this week reported an increase for the first six months of its current financial year, boosted by a decline in input costs and higher chicken prices.

The firm cited lower poultry imports, which were reduced in part by an outbreak of bird flu in Europe.

RCL’s pet food business, which has annual revenue of around 1 billion rand, aims to grow by as much as 20 percent per year, Dally said, adding the firm would look for acquisitions to bolster the business.

The company currently produces over 20 brands including Rainbow chicken products, Nola mayonnaise, Yum Yum peanut butter, Bobtail dog food and Selati sugar products.

RCL cut 1,350 jobs and reduced production by 50 percent at its Hammersdale factory in the KwaZulu-Natal province in November 2016 as the chicken imports and drought took a toll.

($1 = 11.9204 rand)

 

(By Tanisha Heiberg; Editing by James Macharia and Mark Potter)

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IMF tells Ghana to adopt new revenue plan before April review

2 March 2018 Comments (0) Actualites, Africa, Economy, Politics

ACCRA (Reuters) – Ghana must legislate new measures to boost revenues by at least 0.5 percent of gross domestic product before the IMF reviews a $918 million credit deal next month, the Fund said.

The West African nation must also outline plans to clean up the financial sector and show stronger commitment to cut debt, including limiting its next Eurobond for budget support to $500 million, IMF said in a document seen by Reuters.

Finance Minister Ken Ofori-Atta said last week the government planned to issue up to $2 billion of sovereign issuance by June to pay down debt that hit 68.7 percent of GDP last November and help finance the 2018 budget.

Ghana is seeking a combined fifth and sixth review of the IMF programme in early April, government and IMF sources told Reuters. The fifth review, originally scheduled for December, had delayed pending implementation of benchmark structural reforms.

“Parliament to adopt revenue measures equivalent to 0.5 percent of GDP (one billion cedis) by March 31 and do more later,” the Fund said. The document, dated Feb. 26, formed the basis for talks between an IMF staff mission and the government this week.

The mission left Accra on Thursday after discussing the actions required for the next review, as well as other reforms needed to exit the programme early next year. It is unclear if the talks were conclusive.

Ghana, which exports cocoa, gold and oil, is in its final year of the programme, designed to stabilise an economy dogged by high inflation and debt, and low growth.

The Fund said the government must publish by end of March an agreement between the Finance ministry and Bank of Ghana to reinforce zero financing of the budget deficit, a core condition of the programme.

The government of President Nana Akufo-Addo, inaugurated in January 2017 said it inherited $2.3 billion in accumulated debt owed to power utilities and has launched long-term bonds for repayment. It is also probing unpaid contract arrears of around $1.6 billion.

The IMF said while the country made progress, the central bank must adopt a fully market-based foreign exchange management policy and cut non-performing loans.

The government aims to cut the budget deficit to 4.5 percent of GDP in 2018 from a revised 6.3 percent while inflation is projected to fall to 8.9 percent. It sees GDP growth at 6.8 percent from a projected 7.9 percent in 2017.

 

(Reporting by Kwasi Kpodo; editing by John Stonestreet)

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Barclays Africa lifts profit, looks to Nigeria for growth

1 March 2018 Comments (0) Actualites, Africa, Business, Economy, Leaders, Politics

By Ed Stoddard

(Reuters) – Barclays Africa Group, South Africa’s No.2 lender by market value, plans to extend its reach throughout the continent, it said on Thursday after posting annual profit up nearly 4 percent.

Chief Executive Maria Ramos said the bank, which is changing its name back to South African brand Absa after its split from former parent Barclays, aims to enter Nigeria as it seeks to lift its share of the African market to 12 percent from 6 percent over the medium term.

Finance Director Jason Quinn told Reuters that Nigeria has been in its sights for some time.

“We would have to think carefully about how and when to enter the Nigerian market and that is what we are going to start doing,” he said.

“We have to decide how we enter, whether we acquire or build.”

The bank had earlier reported normalised diluted headline earnings per share — the primary measure of profit in South Africa, stripping out one-off items — up 3.9 pct at 1,837.7 cents for the year to Dec. 31, helped by a 20 percent drop in credit impairments.

Net interest income, a gauge of lending profitability, rose by 1 percent to 42.32 billion rand ($3.56 billion), while its net interest margin was unchanged at 4.95 percent.

Growth in the United States was the positive surprise in the second half, even as Europe, Japan and China grew at or above consensus expectations, the bank said.

This more than made up for slow economic expansion in its main markets, which account for about 80 percent of group income.

Barclays Africa and its rivals have struggled to increase lending as slowing economic growth in many African markets tempers demand from corporate clients while retail clients in its home South African market feel the squeeze from rising interest rates.

However, confidence in its domestic market has been buoyed by the Cyril Ramaphosa’s elevation to the South African presidency last month, pledging to revitalise the economy.

Barclays Africa said it expects growth in loans and deposits to improve in 2018 and forecast stronger loan growth from the rest of Africa. It also forecast stronger loan growth in corporate and investment banking in South Africa.

($1 = 11.9025 rand)

(Additional reporting by Tiisetso Motsoeneng in Johannesburg and Esha Vaish in Bengaluru; Editing by Stephen Coates and David Goodman)

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South Africa’s rand at 2-week low as global headwinds, Fed jitters kick-in

1 March 2018 Comments (0) Actualites, Africa, Business, Economy, Politics, US

JOHANNESBURG (Reuters) – South Africa’s rand slipped to its lowest in two weeks on Thursday, succumbing to month end demand for dollars by local firms as the increasing chances of higher interest rates in the United States lured bulls back into long-dollar positions.

At 0640 GMT the rand was 0.4 percent weaker at 11.8350 per dollar, its softest level since February 14, compared to an overnight close of 11.7875.

It was the first time in more than two weeks the rand closed above technical support around 11.80, after weakening for three consecutive sessions, prompting some technical selling as well as portfolio rebalancing by corporates offloading excess rands.

Analysts said the “Ramaphosa effect”, named for the rise in investor confidence and rally in local assets after new president Cyril Ramaphosa took over as chief of the ruling African National Congress (ANC) in December, was now giving way to global headwinds.

“With the cabinet reshuffle out of the way, our local assets will continue to reprice in line with the global macro environment,” said fixed income trader at Rand Merchant Bank Gordon Kerr in a note.

The dollar index remained near 5-week highs early on Thursday, still drawing support after the Federal Reserve’s new chief Jerome Powell struck an optimistic tone on the U.S. economy, raising bets of at least four rate hikes by the bank in 2018.

Stocks opened softer with the benchmark Top-40 index down 0.13 percent.

Bonds were also softer, with the yield on the benchmark paper due in 2026 up 4 basis points to 8.165 percent.

 

(Reporting by Mfuneko Toyana; Editing by Ed Stoddard)

 

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South Africa economic confidence to get a lift after cabinet reshuffle.

1 March 2018 Comments (0) Actualites, Africa, Economy, Leaders, Politics

JOHANNESBURG (Reuters) – Confidence in South Africa’s economy will get a boost after Monday’s cabinet reshuffle by President Cyril Ramaphosa returned trusted hands to crucial budget-related ministries, a Reuters poll showed on Thursday.

Seventeen of the 20 economists surveyed in the past three days said Monday’s reshuffle would have a significant positive impact on South Africa’s economic confidence this year.

One economist said it would be very significant, while the remaining two said it would have an insignificant impact.

In that same sample, 18 indicated they were optimistic the country’s business sector would play a bigger part in job creation in the next two years. One economist was very optimistic while the remaining one was pessimistic.

“Both business and consumer confidence is likely to be boosted by the election of Cyril Ramaphosa to President of the Republic and the cabinet reshuffle that (followed),” said Jeffrey Schultz, economist at BNP Paribas in Johannesburg.

South Africa’s business confidence rose for a third month in a row in January to its highest since late 2015, on expectations the new leadership of the ruling party would stabilise economic policy, a survey showed last month.

“President Ramaphosa clearly has his sights set on improving the domestic business climate and promoting more public-private sector participation,” said Schultz.

Gross domestic fixed investment – normally capital spending, such as buying new machinery for future production – fell into a recession in 2016, recovering only slightly early last year before hitting another slump in the second quarter.

The private sector makes up nearly two-thirds of the gross domestic fixed investment contribution to GDP, although it has played a smaller role in recent years, with government pushing infrastructure projects to raise jobs.

Schultz added that it would take some time for the trust between business and the government to be rebuilt, but it was clear the new government has realised it needs business sector buy-in to get growth and reduce unemployment.

Unemployment was at just over 20 percent a decade ago and now more than a quarter of South Africa’s labour force is jobless.

 

OLD TRUSTED HANDS BACK AT HELM

Ramaphosa appointed Nhlanhla Nene as finance minister on Monday and Pravin Gordhan as public enterprise minister. All but one of the 20 economists polled singled out these two National Executive appointments as most likely to inspire economic confidence.

Both Nene and Gordhan served as finance ministers in the last administration but were unceremoniously sacked by former President Jacob Zuma.

A poll last month suggested South Africa’s new leadership would need to be prudent and creative in managing the economy to avoid a credit rating downgrade, by raising taxes without suffocating a chance for growth. [ECILT/ZA]

Moody’s is due to publish a review later this month, which economists said in February would offer the country a reprieve.

 

 

(By Vuyani Ndaba; Editing by William Maclean)

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Angola oil production declines slightly in 2017, profits rise

28 February 2018 Comments (0) Actualites, Africa, Business, Economy, Oil

LUANDA (Reuters) – Oil production for Angola, Africa’s No. 2 crude producer, averaged 1.632 million barrels per day in 2017, down from 1.72 million barrels the previous year, the chairman of the state-run oil company Sonangol said on Wednesday.

Angola has been grappling with the effects of generally depressed oil prices on its government finances but is constrained from lifting production because it is committed to OPEC-mandated cuts.

Angola is a member of the Organization of the Petroleum Exporting Countries, and it must limit output in line with OPEC’s commitment to cut output by about 1.2 million barrels per day (bpd) as part of a deal with Russia and others.

Sonagol chairman Carlos Saturnino also told a media briefing that the net profit for Sonangol, which regulates Angola’s oil sector, was $224 million in 2017 versus $81 million the previous year when oil prices were lower.

It was his first briefing since Angola President João Lourenço fired Isabel dos Santos, daughter of his presidential predecessor, from the helm of Sonangol.

Lourenço took power in September and is seeking to win credibility with international investors and shed Angola’s image as an opaque oil economy with rampant corruption.

 

(Reporting by Stephen Eisenhammer; Writing by Ed Stoddard; Editing by James Macharia)

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South Africa’s AECI sees growth in water treatment after drought hits continent

27 February 2018 Comments (0) Actualites, Africa, Business, Economy, Environment, Technology

JOHANNESBURG (Reuters) – South African chemicals group AECI could increase revenue from its desalination and water treatment business by up to 80 percent over the next five years after a severe drought hit Africa, its CEO said.

South Africa was declared a national disaster this month after drought afflicted Cape Town and other areas, and Kenya, Malawi, Mozbuambique and most of southern Africa have also experienced low rainfall.

AECI, which also makes explosives and announced a sharp rise in earnings on Tuesday, sees revenue growth coming from its subsidiary ImproChem, a water, air and energy management company.

“We have to manage our water a lot better as a continent and I think ImproChem can play a big role in that and that will boost sales on those opportunities,” Chief Executive Mark Dytor told Reuters in a phone interview.

Revenue from AECI’s water treatment unit rose 3 percent in 2017 to 1.409 billion rand ($121 million), Dytor said, and he expects them to rise by between 50 and 80 percent over the next five years.

Cape Town and other parts of South Africa suffering from drought have pledged to use desalination plants and underground water reserves and AECI has applied for government tenders for desalination projects in Cape Town.

Since the current drought in the Western Cape, ImproChem has sold some desalination plants in Cape Town to private sector operators, Dytor said.

“We have already sold five desalination plants, that’s into the private sector, they give from between 500,000 litres to 1 million litres a day of water that is treated from sea water,” he said.

AECI, which has business in Africa, Australia, Indonesia and South America, said its headline earnings per share rose 17 percent for 2017 to 959 cents, thanks to a global recovery in the resources sector.

 

($1 = 11.6680 rand)

 

(By Tanisha Heiberg;Editing by James Macharia and Susan Fenton)

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Sibanye clears most illegal miners from gold shafts

26 February 2018 Comments (0) Actualites, Africa, Business, Economy, Mining, Politics

JOHANNESBURG (Reuters) – Precious metals producer Sibanye-Stillwater arrested nearly 1,400 illegal miners at its South African gold shafts last year in a blitz the company says has mostly ended the practice at its mines.

Illegal gold mining has plagued South Africa for decades and it costs the government and the industry more than 20 billion rand ($1.7 billion) a year in lost sales, taxes and royalties, according to a Chamber of Mines report last year.

Sibanye Chief Executive Neal Froneman vowed last year to take the war to illegal miners and clear them from its shafts by January 2018 under the battle cry “Zero Zama”, after the Zulu term for illegal miners.

According to data provided to Reuters by Sibanye, it made 797 arrests in 2017 linked to illegal mining at its Cooke operations and 1,383 overall. The blitz peaked in June with more than 500 arrests, above the 443 arrests in 2016 as a whole.

While Sibanye fell short of its goal of stamping out illegal mining altogether, Sibanye’s head of security Nash Lutchman said based on available intelligence, “there are only about 40 to 50 illegal miners operating now, scattered across our Kloof and Driefontein operations”.

Froneman said last year the number of illegal miners in the company’s gold operations numbered “in the thousands”. Sibanye was the first South African gold miner to set itself a deadline to stop the practice.

Most zamas are undocumented immigrants from neighbouring countries who have long provided migrant labour for South Africa’s mines, but are now being laid off. The syndicates that support them and traffic the illegal metals are well-funded, well-established and highly dangerous, security experts say.

 

‘END OF STAGE ONE’

Sibanye’s drive was helped by the mothballing of its loss-making Cooke operation west of Johannesburg, which was the epicentre of illegal mining activity in its shafts.

Illegal miners gain access to working gold mines through bribery and other means, forcing companies to dispatch security teams to the shafts and to tighten entrance measures.

Sibanye spent 300 million rand last year and will spend another 300 million rand this year on access and biometric controls at the entry points to its gold mines.

“It still costs us so I don’t know if we will ever declare a victory but we are at the end of stage one,” Froneman told Reuters.

“My biggest concern about illegal mining is the corruption of our supervisors and our employees. That just sets a path for creating a rotten organisation. Everybody gets bribed and the integrity of the business just gets undermined,” he said.

Froneman admitted there was no guarantee illegal miners would not try to return, so the company needed to maintain its costly vigilance.

Security experts have said Sibanye would struggle to eradicate illegal mining completely but could reduce it by 90 percent.

Sibanye is the second South African gold producer to announce a milestone linked to illegal mining this month.

AngloGold Ashanti said it would spend up to $500 million to mechanise its Obuasi mine in Ghana.

The gold mine was rendered worthless when it was invaded by thousands of illegal miners. They were removed by the military last year and the South African company decided to revive the mine as an automated operation after a feasibility study.

($1 = 11.5400 rand)

 

(By Ed Stoddard;Editing by James Macharia and David Clarke)

 

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