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Google starts taking payments for apps via Kenya’s M-Pesa service

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

NAIROBI (Reuters) – Google Play apps and games store has started accepting payments in Kenya through Safaricom’s mobile phone M-Pesa service to boost downloads in a market where many people do not have a credit card.

M-Pesa, which enables customers to transfer money and pay bills via mobile phone, has 27.8 million users in the nation of 45 million people where Google’s Android platform dominates. M-Pesa has been mimicked across Africa and in other markets.

“This is very important to the developer ecosystem in markets where credit card penetration is low,” said Mahir Sain, head of Africa Android partnerships at Google, which is owned by Alphabet Inc.

Safaricom has 13 million smart phones on its network, most of them using the Android platform. It partnered with London-based global payments platform provider, DOCOMO Digital, to enable users pay through M-Pesa, both firms said on Thursday.

Safariom started M-Pesa in 2007, offering money transfer services between users. It has grown to allow users to make payments for goods and services through thousands of merchants.

It also allows users to save, borrow and buy insurance, through partnerships with commercial banks.

 

(Reporting by Duncan Miriri; Editing by Edmund Blair)

 

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Kenya raises $2 bln Eurobond but concerns over deficit linger

22 February 2018 Comments (0) Actualites, Africa, Economy, Infrastructure, Politics

NAIROBI (Reuters) – Kenya shook off a downgrade and the loss of access to an IMF standby credit facility to raise a $2 billion dollar bond at competitive yields, but market participants said on Thursday it still needs a credible plan to tackle its fiscal deficit.

Kenya received $14 billion worth of bids. It took just $1 billion in a 10-year note with a yield of 7.25 percent, and another $1 billion in a 30-year tranche with a yield of 8.25 percent, Thomson Reuters news and market analysis service IFR reported.

“They were in line with the yield curve,” said a fixed income trader in Nairobi.

The eventual yield reflected a tightening of the initial pricing area by about 30 basis points. It was close to the comparative yields for other African sovereigns like Nigeria, the trader said.

Last week, credit ratings agency Moody’s downgraded Kenya’s debt rating to B2 from B1 while officials were in the middle of the bond roadshow abroad, angering the government.

More bad news emerged on Tuesday, after the International Monetary Fund said it had frozen Kenya’s access to a $1.5 billion standby facility last June, after failure to agree on fiscal consolidation and delay in completing a review.

“They (the government) were able to weather the knocks of the Moody’s downgrade and the IMF issue,” said Aly Khan Satchu, a Nairobi-based independent trader and analyst.

But he warned that the government needed to convince investors it has a plan to tackle the fiscal deficit.

“People are worried about debt-to-GDP ratios and they want to see a stronger language about how this will be addressed,” he said.

Kenya’s total debt is about 50 percent of GDP, up from 42 percent in 2013. It has borrowed locally and abroad to build infrastructure like a new railway line from Nairobi to the port of Mombasa.

The finance ministry has published a plan to lower its fiscal deficit to 7 percent of GDP at the end of this fiscal year in June, from 8.9 percent in 2016/17, and to less than 5 percent in three years’ time.

Satchu said it was not enough for investors. They want to see more targeted infrastructure investments that will ensure a return, and attempts to reign in a ballooning public service wage bill and other recurrent expenditure.

“We have got to walk the talk. We are not even talking the talk yet,” he said.

 

(By Duncan Miriri. Editing by Katharine Houreld and Toby Chopra)

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Woolworths Holdings’ H1 profit falls on Australia arm write-down

22 February 2018 Comments (0) Actualites, Africa, Australia, Business, Economy, Politics

JOHANNESBURG (Reuters) – South African retailer Woolworths Holdings Ltd posted a 15 percent fall in half-year profit on Thursday hurt by a hefty write-down charge on the value of its David Jones business in Australia and tough trading conditions in its home market and Australia.

Woolworths paid a big premium to bulk up in Australia via David Jones as part of Chief Executive Ion Moir’s ambitions to turn the firm into a leading southern hemisphere retailer, but the delayed execution of certain initiatives aimed at transforming David Jones is threatening that ambition.

“A challenging market, along with some mistakes in the implementation of new systems and ranges, has had an impact on our clothing businesses both in South Africa and Australia,” Moir said in a statement.

Australia has recorded soft retail sales growth for months as cut-throat competition, relentless price discounts and online competition sap demand for brick-and-mortar shopping.

While in South Africa retailers have struggled to grow earnings as weak economic growth and clothing markdowns by competitors hit sales.

Woolworths, which sells groceries, food and homeware, said headline earnings per share (HEPS) fell to 206.3 South African cents in the six months to Dec. 24, from 242.6 cents a year earlier, while earnings per share turned into a loss of 505.9 cents on the David Jones impairment.

Woolworths booked a non-cash impairment charge of A$712.5 million ($556.04 million) against the carrying value of David Jones as a result of the cyclical downturn and structural changes that have hurt performance across the Australian retail sector.

The retailer, which paid 21.4 billion rand ($1.84 billion) for David Jones in 2014, said the impact of these changes have been exacerbated by poor or delayed execution in certain key initiatives in David Jones.

David Jones sales were 3.3 percent lower on a comparable basis, while comparable store sales were 3.4 percent lower in Woolworths South Africa, hurt by underperformance in Woolworths Fashion, Beauty and Home.

The group declared an interim cash dividend of 108.5 cents, an 18.4 percent decrease on the prior period.

“Encouragingly, we are seeing signs of recovery now, with political change in South Africa expected to lead to increased consumer confidence,” Moir said.

South Africa’s new president, Cyril Ramaphosa, was sworn in as head of state last Thursday after his scandal-plagued predecessor Jacob Zuma resigned on orders of the ruling African National Congress.

 

($1 = 1.2814 Australian dollars)

($1 = 11.6563 rand)

 

(Reporting by Nqobile Dludla; Editing by Gopakumar Warrier)

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Sibanye-Stillwater falls into annual loss, closes dividend tap

22 February 2018 Comments (0) Actualites, Africa, Business, Economy, Health, Mining

JOHANNESBURG (Reuters) – South African-based gold and platinum producer Sibanye-Stillwater reported an attributable loss for 2017 and in a bid to preserve cash turned off the dividend flow that has made it a darling of investors

Sibanye’s share price fell 5 percent, underscoring disappointment among investors who have grown accustomed to hefty dividend payouts from the Gold Fields spin-off.

The company’s operations, including the troubled Rustenburg assets it acquired from Anglo American Platinum, delivered solid results, with the loss stemming from impairments, provisions for occupational healthcare claims, and restructuring and transaction costs among other factors.

Sibanye-Stillwater reported an attributable loss of 4.437 billion rand ($333 million) for the year ended 31 December 2017, compared with attributable earnings of 3.473 billion rand ($237 million) for the year ended 31 December 2016.

“In the near term, cash preservation is prudent and as a result no final dividend is being declared,” the company, which has given over 4 billion rand back to shareholders since 2013, said.

Sibanye initially positioned itself as a dividend play with cash flowing from mature South African gold assets that did not require huge investment, but it has been expanding into platinum and beyond South Africa, diverting its dividend flow.

Its dividend yield is now 2.882 percent, almost the same as the 2.84 percent for Johannesburg’s All-share index.

The healthcare provision has been put aside for an expected settlement in a class-action suit against six current and previous South African gold producers related to a fatal lung disease. This also hit AngloGold Ashanti’s earnings.

It was launched almost six years ago on behalf of miners suffering from silicosis, a fatal lung disease contacted by inhaling silica dust in gold mines, and is expected to be settled in a few months.

Overall, Sibanye’s operational performance was good, suggesting it will return to profits and dividends.

The company said its labour-intensive Rustenburg platinum operations west of Johannesburg – which under Amplats were loss-making and flashpoints of violent labour unrest – contributed 1.6 billion rand or 18 percent to group adjusted EBITDA.

“The Rustenburg operations have consistently delivered solid production and improved financial results, with approximately 1 billion rand in cost savings and synergies realised in the first year of incorporation, well ahead of initial expectations of 800 million rand over three to four years,” the company said.

“This is a remarkable result from assets which, before being part of the Sibanye-Stillwater Group, had been delivering significant and sustained losses for many years,” said chief executive Neal Froneman.

 

(Reporting by Ed Stoddard; Editing by Tiisetso Motsoeneng and Adrian Croft)

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In “tough but hopeful” budget, South Africa raises VAT for first time in 25 years

21 February 2018 Comments (0) Actualites, Africa, Economy, Politics

CAPE TOWN (Reuters) – South Africa’s new leadership announced on Wednesday it was taking the politically risky step of raising value-added tax for the first time in 25 years, part of efforts to cut the deficit and stabilise debt under new President Cyril Ramaphosa.

The government of Africa’s most industrialised country has to plug a revenue hole in its budget and repair its economy after nine years of mismanagement under the scandal-plagued Jacob Zuma.

The move to raise VAT to 15 percent from 14 starting in April is expected to generate an additional 23 billion rand ($2 billion) of revenue in 2018/19.

But with the VAT rate unchanged since 1993 the move was likely to prove unpopular ahead of a national election next year.

“This is a tough, but hopeful budget,” Finance Minister Malusi Gigaba said, acknowledging the reality in his budget speech to parliament on Wednesday.

“We decided that increasing VAT was unavoidable if we are to maintain the integrity of our public finances.”

As Gigaba read his budget speech, the rand extended gains to 0.81 percent against the dollar, government bonds firmed and retail shares on the stock exchange fell.

Whatever cabinet Ramaphosa finally settles on will face an uphill battle to revitalise growth and create jobs in a nation still polarized by race and inequality more than two decades after the end of white-minority rule in 1994.

Much of the blame for the state of the economy has been laid at the door of Zuma and his allies. He was forced to step down as president this month by the ruling African National Congress (ANC), following a series of scandals. He has denied all wrongdoing.

But treasury officials sought to project a relatively optimistic outlook as they assessed economic prospects for the immediate future.

Gigaba said poor households would be cushioned against the VAT rate rise through a zero-rating of basic food items such as maize meal and beans, and welfare payments increases.

And the Treasury saw GDP growth at 1.5 percent this year, up from an estimated 1 percent last year, helped by a recovery in agriculture and improved investor sentiment.

South African debt faces the risk of a downgrade to “junk” by Moody’s after downgrades to sub-investment grade by S&P Global Ratings and Fitch last year. Moody’s said it would make a ratings decision soon after the budget announcement.

“We believe we have done enough to avoid a downgrade. We have taken the tough decisions. You can see our debt rates stabilising, you see our budget deficit improving,” Gigaba told a media briefing separately.

 

‘ASSAULT ON THE POOR’

But opposition leader and head of the Democratic Alliance party Mmusi Maimane said the budget meant the cost of living for poor people would rise sharply.

“This is a budget that is an assault against poor people. What we saw today is a consequence of nine years of mismanagement of the economy by the ANC.”

The ultra-left Economic Freedom Fighters, which has six percent of the seats in parliament, boycotted the speech. It demanded that Gigaba, a Zuma ally, be removed.

The Treasury said South Africa faced a 48.2 billion rand revenue gap in the current 2017/18 fiscal year ending in March, down from an earlier estimate of 50.8 billion rand, and that the revenue shortfall was expected to continue into the medium term.

In a sign that it was mostly middle to high income earners who were targeted by the tax increases, the Treasury said the excise duty on luxury goods would be raised to 9 percent from 7 percent, among other taxes.

The budget deficit is expected to narrow to 3.5 percent of gross domestic product (GDP) by 2020 from 4.3 percent in the 2017/18 fiscal year, while gross debt is seen narrowing to 56 percent of GDP in the 2020/21 fiscal year from nearly 60 percent seen in the October mid-term budget statement.

($1 = 11.6359 rand)

 

(By Olivia Kumwenda-Mtambo and Mfuneko Toyana. Additional reporting by Wendell Roelf and Alexander Winning in Cape Town; Editing by James Macharia and Richard Balmforth)

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Nigerian state oil firm spent $5.8 bln on fuel imports since late 2017

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

ABUJA (Reuters) – Nigeria’s state oil firm said on Tuesday it had spent $5.8 billion on fuel imports since late 2017, as it combats a fuel shortage that has left people queuing for hours at filling stations and hobbled an already-struggling economy.

“The corporation’s intervention became necessary following the inability of the major and independent marketers to import the product because of the high landing cost which made cost recovery and profitability difficult,” the Nigerian National Petroleum Corporation (NNPC) said in a statement.

The price of gasoline is a highly charged subject in Nigeria, Africa’s largest oil exporter. President Muhammadu Buhari in 2016 raised the top gasoline price to 145 naira ($0.4603) per litre, a 67 percent hike, but did not remove a cap for fear of hurting people on low incomes.

The price cap makes it tough for many importers to profit from gasoline and NNPC has imported as much as 90 percent of the nation’s gasoline needs over the past year. Fuel shortages have gripped much of the country in the last few months.

An economic body that advises Nigeria’s government has been in discussion with the state oil company to determine whether gasoline is appropriately priced in the country, a state governor said last week.

The relatively cheaper cost of Nigerian fuel combined with crude oil price rises in the last few months mean smugglers can make more money selling fuel intended for the Nigerian market across borders, creating shortages in the West African giant.

Nigeria’s refining system means it is almost wholly reliant on imports for the 40 million litres per day of gasoline it consumes.

Efforts by Buhari’s predecessor, Goodluck Jonathan, to end expensive subsidies in 2012 led to riots in the streets because the move would have doubled gasoline prices, angering citizens who see cheap pump prices as the only benefit from living in an oil-rich country

(Reporting by Paul Carsten, editing by David Evans)

 

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IMF: Kenya’s $1.5 bln standby credit in place, but not accessible

21 February 2018 Comments (0) Actualites, Africa, Economy

NAIROBI (Reuters) – Kenya’s $1.5 bln standby credit facility remains in place until the end of March 2018, but the country cannot access it because conditions have not been met, the International Monetary Fund said on Wednesday, clarifying comments given a day earlier.

“The precautionary… arrangement remains in place until end-March 2018,” the IMF said in a statement.

“Kenya continues to have access to resources since June subject to policy understandings to complete the outstanding reviews.”

On Tuesday, Jan Mikkelsen, IMF representative in Kenya, told Reuters that access to the two-year precautionary facility was lost in June because a review had not been completed due to Kenya’s extended election season.

The two-year precautionary facility, set to expire next month, was put in place in case of unforeseen external shocks that could put pressure on Kenya’s balance of payments.

The East African economy has not tapped the facility, which was preceded by a smaller standby one-year credit line in 2015, as foreign exchange reserves held by the central bank have soared to record highs.

 

CONCERNS OVER DEBT

“The facility is in place but permission to access it has been withdrawn,” said Kenyan economist Anzetse Were. “This comes at a bad time… we’ve seen Moody’s downgrade us to B2 from B1, and this is particularly important in the context of Kenya trying to raise a Eurobond.”

Senior government officials have just finished a marketing roadshow abroad, and they plan to issue dollar-denominated notes for a minimum of $1.5 billion soon.

The IMF has expressed concern over the fiscal deficit, but government officials have said borrowing is necessary to fund the government’s ambitious infrastructure plans, which were a key plank of President Uhuru Kenyatta’s successful re-election campaign.

Kenya’s total debt has risen to about 50 percent of GDP, from 42 percent in 2013, as it borrowed locally and abroad to build infrastructure like a new railway line from Nairobi to the port of Mombasa.

When Kenya secured the precautionary facility, IMF officials said it was recognition of the country’s stable economic fundamentals, as that type of facility is usually reserved for more developed emerging economies.

 

By Duncan Miriri

(Writing by Katharine Houreld; Editing by Simon Cameron-Moore)

 

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Zimbabwe’s mining minister says lithium biggest draw

6 February 2018 Comments (0) Actualites, Africa

CAPE TOWN (Reuters) – Zimbabwe has the potential to be a leading producer of lithium, which has so far attracted more interest than any other of its minerals, Zimbabwe’s new Minister of Mines and Mining Development Winston Chitando said on Tuesday.

He said he had last week reached a deal with a small listed company, which was expected to generate revenue of $1.4 billion over eight years from a lithium project.

Chitando took office after Emmerson Mnangagwa became president in November 2017 when the military took charge and Robert Mugabe resigned after 37 years in office.

To lure foreign investment into a mining sector that he says is under-capitalised and under-explored, Chitando has announced changes to mining laws, limiting indigenisation rules that mandate majority ownership for the state to just diamonds and platinum.

“Most of the enquiries have been about lithium,” he said on the sidelines of a mining conference in Cape Town. He added he could not give details of the deal signed last week until an official stock market announcement was made.

Lithium is in demand as a battery metal needed for the shift to electric vehicles and renewable power, although some analysts say the market could become oversupplied as the pipeline of projects builds up.

“Zimbabwe will become a very significant producer of lithium,” Chitando said. He added that he was not worried about oversupply of “the mineral of the future”.

Other minerals attracting interest are gold, as well as coal and coal-bed methane, which miners pursue as cheap sources of power, he added, noting that the biggest problem for mining is the lack of capital.

Zimbabwe’s economy is suffering acute shortages of cash dollars, increases in prices of basic goods, high unemployment and low levels of foreign investment but President Mnangagwa last month promised to safeguard all investments in the country.

On its website, Zimbabwe’s mining ministry says the country has “huge mineral potential characterised by about 60 economic minerals whose commercial profitability has been proven”.

Zimbabwe’s Great Dyke – a roughly 300 mile long rock formation which bisects the country from north to south – holds the world’s largest high-grade chrome resources and the world’s second largest resource of platinum group metals. Zimbabwe also has significant reserves of copper, nickel and lithium.

Many companies have said they are very interested in Zimbabwe and compare the country’s Great Dyke to South Africa’s mineral-rich Bushveld complex, but they are also waiting for policy certainty and say bureaucracy needs to be simplified.

Apart from meeting investors in Cape Town, Chitando said Zimbabwe, once one of Africa’s most promising economies, will host a mining conference at the end of this month.

 

(By Barbara Lewis. Editing by Kirsten Donovan)

 

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Foreign tourist numbers up 23 percent in Tunisia in 2017

27 December 2017 Comments (0) Actualites

TUNIS (Reuters) – The number of foreign tourists in Tunisia rose by 23 percent in 2017 compared with the previous year, official data showed, indicating that a vital industry crippled two years ago by Islamist attacks is recovering.

Tourism accounts for about 8 percent of Tunisia’s gross domestic product, provides thousands of jobs and is a key source of foreign currency, but has struggled since two deadly militant attacks in 2015.

A total of 6.731 million tourists visited the North African country in the year until Dec. 20, data provided by the presidency showed.

The number of European tourists rose by 19.5 percent to 1.664 million, the data showed. The number of French visitors rose by 45.5 percent and the number of Germans by 40.8 percent in the same period.

The number of Algerians visiting rose by 40.5 percent to 2.322 million.

Tunisia’s tourism revenues rose by 16.3 percent to 2.69 billion dinars ($1.09 billion), data showed.

In 2010 Tunisia’s tourism revenues had hit a record at 3.5 billion dinars with almost 7 million tourists visiting.

The rise is helping the government weather an economic crisis as it plans to raise taxes from 2018, part of reforms agreed with the International Monetary Fund in return for a loan package.

High unemployment has driven youth to seek illegal migration to Europe.

($1 = 2.4758 Tunisian dinars)

 

(Reporting by Mohamed Argoubi; Writing by Ulf Laessing; Editing by Louise Heavens)

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More work needed before Congo Republic bailout -IMF

21 December 2017 Comments (0) Actualites, Africa, Economy

ABIDJAN (Reuters) – The International Monetary Fund (IMF) ended a week of talks in Congo Republic on Thursday saying the debt-crippled nation had more work to do if it hoped to gain the lender’s approval for a bailout package.

Like other Central African oil producers, Congo has been hit hard by low crude prices. Government revenues have dropped by a third since 2015. The IMF said in its end-of-mission statement that the non-oil economy was in recession, with a contraction of 9.2 percent expected for this year.

The Fund said it was encouraged by Congo’s draft 2018 budget and added that progress had been made in formulating medium-term macroeconomic and structural policies it could support.

However, it said the government needed to do more to restore debt sustainability, urging it to finalise the hiring of legal and financial advisors. More progress towards strengthening governance was also needed.

Congo is regularly singled out by anti-corruption groups for the opaque management of its oil sector.

The finance ministry acknowledged that “immediate measures” were needed.

“That is why… Congo Republic will open negotiations with its main creditors in the aim of restructuring its debt,” it said in a statement.

Once the Fund’s recommendations were carried out, “a financial arrangement to support Congo’s economic programme would be discussed at staff level before being proposed for the IMF Executive Board’s consideration,” said Abdoul Aziz Wane, who headed the mission.

The slow pace of the negotiations with the IMF, which have been under way for months, as well as continuing legal uncertainties, have compounded Congo’s acute liquidity pressures, according to Fitch.

Unsustainable debt meanwhile had led to high default risks for private creditors, the ratings agency said. ​

The IMF said in October that the country’s public or publicly guaranteed debt totalled $9.14 billion, or around 110 percent of GDP, by the end of July.

Much of that debt is believed to be owed to oil traders, who lent money to the government against future crude shipments.

A construction firm has also filed suit in a French court seeking payment of over $1 billion for public works projects dating back decades. That debt was not included in the IMF’s estimate.

Negotiations to hammer out the terms of an IMF assistance package will continue early next year, the finance ministry said in its statement.

 

 

(By Joe Bavier. Additional reporting by Aaron Ross; Editing by Alison Williams and John Stonestreet)

 

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