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Shell says Nigerian output continuing despite reports of militant threat

Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Shell said on Monday that oil output was continuing at its oil fields in Nigeria despite local media reports of a militant attack near its Bonga facilities.

Media reports said the company was evacuating workers because of threats from militants.

“Our operations at Bonga are continuing,” a spokesman for Shell Nigeria Exploration and Production Company (SNEPCo) said in a statement, adding that it will continue to monitor the security situation in its operating areas and take all possible steps to ensure the safety of staff and contractors.

 

 

(Reporting By Libby George; Editing by David Goodman)

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South Africa’s AngloGold Ashanti posts free cash flow in Q1

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JOHANNESBURG (Reuters) – AngloGold Ashanti Ltd posted a free cash flow in its first quarter compared with an outflow last year due to cost and debt cuts, Africa’s biggest bullion producer said on Monday.

“We generated significant free cash flow again despite the lower gold price, which shows the continued success of our self-help measures to reduce debt by improving margins,” said Srinivasan Venkatakrishnan, chief executive officer, AngloGold Ashanti.

The company, which has 17 mines in nine countries, said free cash flow in three months to March-end reached $70 million from an outflow of $40 million in the first quarter of 2015.

Adjusted gross profit edged up to $210 million at the end of March from $209 million in the same period last year.

AngloGold said it cut debt and costs during the quarter, resulting in cash flow, benefiting weaker local currencies against the dollar.

South African miners sell their commodities in dollars while paying costs in rand, boosting margins when the exchange rate weakens against the greenback.

Production in the quarter fell 7 percent to 861,000 ounces compared with the same period last year, due to planned reductions from Obuasi, Tropicana and Morila mines, and unplanned output drop in Kibali joint venture.

 

(Reporting by Zandi Shabalala; Editing by Sherry Jacob-Phillips)

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Bamboo – Africa’s Green Gold?

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Bamboo poles

Bamboo farming could provide many African states with a green and lucrative industry.

If you asked the average person on the street to name a country that they associated with the bamboo plant, it’s unlikely you would hear many answers other than China. However, Africa has extensive bamboo reserves that the continent could reap huge rewards from.

What makes the prospect of harvesting the continent’s bamboo reserves particularly exciting is that the benefits offered are not solely economic. While the bamboo would indeed provide a veritable gold mine of revenue to many nations, it is also an opportunity to try and slow down the deforestation that threatens Africa’s myriad environments.

Sustainable, clean profits?

The issue of deforestation is obviously not confined to Africa, but many African countries are particularly at risk from the environmental impact that the practice brings. Cutting down large areas of forest contributes to a cycle of drought and pollution, especially as it leads to soil erosion which has been a primary factor in some of the disastrous famines that the continent has faced.

What makes bamboo so much better? According to Dr. Chin Ong, a retired professor of environment science, bamboo holds soils together, utilizes less water than trees and offers a greater overall package. Ong told the New York Times, “You want firewood; you want to reduce erosion, to maintain the water supply, generate cash and employment. Bamboo comes the closest — it gives you the most things.”

Bamboo is technically a grass, which means after a harvest it regrows and does so quickly. In fact bamboo can grow an astonishing meter per day, and it absorbs almost twice the amount of CO2 that is taken in by a tree.

A crop that is rapidly replenished, reduces pollution levels and does not damage the fertility of soils when harvested is clearly an environmentalist’s dream.

But do the numbers add up on the commercial side? The short answer is yes.

The International Network of Bamboo and Rattan (INBAR) is an intergovernmental body that works with the UN and has valued the global bamboo trade at $60 billion.

Thus far, 18 bamboo growing African states have joined INBAR as they look to make the most of their natural resources without devastating the local eco-system to do so. According to the United Nations Environmental Program (UNEP), bamboo has over 2,000 uses and China claims that if the plant is processed, this number rises to 10,000!

Despite such a glowing profile, the industry has yet to really take off in the majority of the 36 African nations where it grows. Adal Industrial PLC is a company trying to raise awareness and interest to help develop Africa’s bamboo farming. CEO Adane Berhe summed up the current problem facing the bamboo trade in Africa when he spoke to CNN saying, “The farmer who has bamboo is rich, but he doesn’t know it.”

Ethiopia takes the lead

Bamboo cooperative members in Ethiopia

Bamboo cooperative members in Ethiopia

One African nation that is investing in the industry is Ethiopia. Not only is Ethiopia rich in bamboo, with 2.47 million acres of it untapped, but due to widespread deforestation, the government has taken drastic steps to promote sustainable harvests and green industries.

The government has banned producing charcoal from hardwoods and has welcomed investment from China and other nations seeking to grow the bamboo trade.

INBAR now has an office in Addis Ababa and local people and small farmers have embraced the opportunity.

State Minister for Agricultural and Rural Development, Mitiku Kassa says, “Ethiopia has the resources, the investment, a rapidly-developing manufacturing industry and a strong demand for our bamboo products…The expansion of Africa’s bamboo sector has begun.”

As Ethiopia’s bamboo industry begins to grow, the hope is that other nations take note and follow their lead. The early signs are promising as the membership to INBAR continues to expand with new African members; there is patently interest in what the plant has to offer.

China has already offered investment in Ghana and a recent bamboo project there opened up 1,500 jobs.

The chief research scientist at the Forestry Research Institute in Ghana, Andrew Akwasi Oteng-Amoako told IPS news, “We anticipate a revival of investment interest in Ghana’s bamboo industry in the near future thanks to Ethiopia’s success.”

With recent government decrees from Rwanda and Nigeria on the importance of looking into utilizing bamboo resources, the future of Africa’s “green gold” looks promising.

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Nigeria’s Buhari signs delayed 2016 record budget into law

Comments (0) Africa, Latest Updates from Reuters, Politics

ABUJA (Reuters) – Nigeria’s President Muhammadu Buhari signed the delayed 2016 budget into law on Friday, ending weeks of wrangling with lawmakers and tripling capital expenditure as Africa’s biggest economy contends with its worst crisis in years.

The 6.06 trillion naira ($30.6 billion) budget is an attempt by Africa’s top oil exporter to stimulate an economy hammered by the fall in crude oil prices. Oil sales make up about 70 percent of national income.

The budget assumes oil production of 2.2 million barrels per day at 38 dollars a barrel, Budget Minister Udoma Udo Udoma told reporters shortly after the signing.

Growth last year fell to its slowest rate since 1999 at 2.8 percent and inflation rose to a near four-year high of 12.8 percent in March while capital imports declined by 74 percent year-on-year in the first quarter of 2016. [nL5N1817H4]

In a speech given after the signing, Buhari said the current period was “probably the toughest economic times in the history of our nation”.

“In designing the 2016 budget, we made a deliberate choice to pursue an expansionary fiscal policy despite the huge decline in government revenues from crude oil exports,” he said.

The president said 350 billion naira would be spent on capital projects, and he compared the 200 billion allocated to road construction with the 18 billion earmarked for that purpose in the 2015 budget.

Buhari withdrew his original budget bill in January because of an unrealistic oil price assumption. Parliament approved an amended proposal in March but only submitted highlights, prompting Buhari to say he would only sign the bill after it was resubmitted.

The lack of a budget, almost a year after Buhari took office, meant ministries were unable to allocate funds to projects in various sectors.

“The passage of the budget has been a long journey, and it has been as much about process as content,” Nigeria-focused PM Consulting’s Antony Goldman, said.

The government plans to generate 3.38 trillion naira this year from non-oil sources, up 87 percent from 1.81 trillion in 2015 [nL5N17E2KU]. But, with the heavy reliance on oil sales, it is unclear how this will be achieved.

Finance Minister Kemi Adeosun has said Nigeria is expected to post budget deficits for the next two to three years [nL5N17E17G]. In 2016, the deficit is seen at 2.2 trillion naira compared with a previously estimated 3 trillion.

She has said Nigeria plans to borrow a total of 1.8 trillion naira from abroad and at home.

($1 = 199.0000 naira)

 

(By Felix Onuah. Writing by Alexis Akwagyiram; Editing by Louise Ireland)

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Youssef Omaïs: the unassuming head of a Senegalese giant

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Youssef Omaïs

Youssef Omaïs continues to grow his Senegalese agribusiness – Patisen – after 35 years of success.

Youssef Omaïs is unlikely to be a name that is familiar to most people, as he is not a man who courts fame or accolades. However, as the CEO of Patisen, Omaïs heads up a group that provides many of the most popular food brands in Africa.

Omaïs is of Lebanese heritage but is Senegalese born and raised. This firm connection to the country, in which he launched his business, has been integral to earning the respect of his peers but also to ensuring that Patisen has continued to grow year on year.

Patisen was launched in Senegal, in 1981, and aimed to provide the people of the country and others in West Africa with a range of affordable food products. Patisen did not just set out to market recognizable brands, but to take on the international giant Nestlé, in one of its strongest markets. Patisen has even been accused of copying Nestlé with its color scheme and product names. Omaïs casually dismisses such complaints, insisting that the truth behind his success in Senegal and the wider African market is down to two key tenets.

Firstly, there is the fact that Patisen is entirely Senegalese owned and run. Every position within the company is filled by a local person, which must not only foster local support but also keeps overhead costs lower than rivals who employ European staff. Omaïs also states that it is simply a matter of knowing your customers saying, “We know we address consumers, while most foreign manufacturers are disconnected from the ground.”

The Growth of a Giant

This connection to the local markets enabled Omaïs to rapidly turn Patisen‘s range of spreads, chocolate drinks and bouillon cubes into hugely popular and recognizable names. The Chocolion brand of chocolate spread is one of the most popular in Senegal and export markets to the rest of West Africa and even into Europe have continued to increase.

In 2011, Omaïs said that the company’s export business accounted for “10% to 15% of our sales” but that he wanted to “increase this to 85%” as he aims to become West and Central Africa’s first choice.

In the same year, Youssef Omaïs was announced as the “Best Entrepreneur of the Year” for his previous year’s work, at Senegal’s prestigious, annual Sedar awards. This award sits alongside his title of “Knight of Agricultural Merit”, which was given to him by the department of agriculture in Senegal for his contribution to the nation’s economy and job production.

While individual recognition might drive some business figures, Omaïs is a quiet man who does not court the limelight. Rather, his focus is entirely on turning Patisen into an even greater presence within the African market. In 2011, Omaïs secured investment of $14.3 million from the International Finance Corporation, of which $3.2 million was equity.

Omaïs said that he believed the money would “transform us into a regional champion.”

The investment evidently worked, as by 2013, Patisen was employing over 3,000 local people and had a turnover of $143 million. The quietly spoken CEO continued to bolster his local reputation, by using some of his organization’s money to repair and re-open the abandoned Dakar Market, which had fallen into disrepair after numerous fires. Such moves resonate with local communities and make Patisen brands even more marketable.

Omaïs looks to the future

While the heart of Omaïs’s company lies in Senegal, his aspirations extend far beyond his home nation. Patisen is already exporting to 20 different countries, and it is gradually making its mark in Central Africa; but Omaïs wants to spread across the entire continent.

At 61 years of age, Omaïs believes that moving into new lines of food produce will allow his company to become the “undisputed leader in Africa”.

Patisen will open up a new production plant near Dakar in the second half of this year, as it moves into the manufacturing of mayonnaise. Within a year, Omaïs expects the plant to be producing 25,000 tons of the condiment for a turnover of over $42 million.

Omaïs summarizes the ethos of his company goals by saying, “We work every day to contribute to the well-being of millions of people who use our products.”

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South Africa’s rand weakens, focus on U.S. jobs report

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand weakened against the dollar in thin trade early on Friday as investors positioned for a U.S. jobs report that is likely to provide clues about the Federal Reserve’s monetary policy intentions.

At 0705 GMT, the rand traded at 15.0550 versus the dollar, 0.6 percent weaker from Thursday’s New York close.

“Trade remains jittery and liquidity thin, so it is not going to take much to send the market running again,” Rand Merchant Bank analyst John Cairns said in a note.

“…The monthly (payrolls) release no longer has the importance that it had a year back but still remains the single most important global economic indicator for the markets.”

A strong number could encourage the Fed to raise rates sooner, lending some support to the dollar.

On the stock market, the Top-40 index was down 0.67 percent, while the broader all-share fell 0.44 percent.

In fixed income, the yield for the benchmark government bond due in 2026 was up 1 basis point at 9.195 percent.

 

(Reporting by Zimasa Mpemnyama; editing by John Stonestreet)

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Solar power hits the road in Uganda

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Kayoola bus

A government-backed motor company introduces the continent’s first sun-powered bus.

With its abundant sunshine and growing need for efficient public transportation, Africa seems like a natural place for solar-powered vehicles. Now that idea will be tested with the introduction in Uganda of the continent’s first solar-powered bus.

The bus, called the Kayoola, is the brainchild of Paul Isaac Musasizi, chief executive officer of the government-owned Kiira Motors Corporation of Uganda.

Uganda has “non-stop sun,” Musasizi said. “No other countries manufacturing (solar) vehicles are on the equator like Uganda. We should celebrate that and make it a business.”

Powered by solar panels on the roof

He said the 35-seat bus could travel 50 miles. It is powered by two batteries. One battery is connected to solar panels on the roof; the other is charged electrically for longer trips and night journeys. It takes only one hour to charge each battery, according to Musasizi.

Kiira has produced a prototype of the Kayoola and ran a test drive in February in Kampala.

The prototype cost $140,000 to produce but the company said the price tag would be about a third of that amount – $45,000 – with mass manufacturing.

Ambitious solar vision

The bus is one part of Musasizi’s larger vision for a solar-powered automobile industry in Uganda, including service stations that have solar pumps to charge cars instead of selling them gasoline.

He wants Uganda to follow the lead of Morocco – which recently switched on the world’s largest solar power plant – in developing solar farms to power vehicles and other everyday devices.

He noted that efficient transportation is essential to the Ugandan economy.

“Without proper transportation, we cannot have a good economy.”

The Ugandan government funds Kiira through the Presidential Initiative on Science and Technology. The small company currently has 32 people on staff.

Company seeks investment to grow

Musasizi said he also hopes to attract private investors who are interested in green technology. He would like to grow the company to 200 employees in five years and produce 50 buses a year.

Uganda has been planning to develop an auto industry since 2007 after students and staff from Makerere University visited the Massachusetts Institute of Technology to study innovation.

Kiira plans to start manufacturing automobiles in 2018.

The auto industry is part of Vision 2040, a blueprint for Uganda’s economic development launched late last year by Prime Minister Ruhakana Rugunda. Rugunda said the government would support Kiira until the company is able to put vehicles on the market.

Kiira plans to produce sedans, pickups and crossovers, starting with production of 305 automobiles in 2018 and growing to 60,000 per year in 2039.

Nigeria also boosts auto production

Nigeria is also seeking to grow its auto manufacturing, primarily to replace imported cars with locally produced vehicles. Nigeria plans to assemble 500,000 autos annually for the next five years compared to production of 10,000 vehicles in 2014.

International automakers including Nissan, Ford and Honda, as well as local manufacturers are gearing up to increase production. The government has granted licenses to 36 manufacturers.

First solar bus operates in Australia

Meanwhile, solar vehicles remain a rarity globally; Australia, China, Austria and the United States have developed solar vehicles while India is working to launch solar-powered transport.

Australia began operating the world’s first solar-powered bus in 2007.

The Tindo as the bus is named after an indigenous word for sun, operates in Adelaide. It uses 100 percent solar power that it receives from a photovoltaic system at Adelaide’s central bus station rather than from solar panels on the bus. The bus can carry up to 40 people, including 25 seated.

While Uganda is not the first country to develop solar vehicles, Musasizi hopes the country will become a leader in the field.

“Our passion for automobiles will help us develop solar motor technology,” he adds. “I’m hoping we will become known as the innovation hub for solar transportation technology in the world.”

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Zimbabwe economy ravaged by drought, needs bold reforms

Comments (0) Africa, Latest Updates from Reuters, Politics

HARARE (Reuters) – Zimbabwe’s economic difficulties have deepened after drought weakened agricultural production and disrupted hydro power generation and the southern African nation needs bold reforms, the International Monetary Fund said on Wednesday.

“Unless the country takes bold reforms, the economic difficulties will continue in (the) medium-term,” the fund said in a statement after a consultation with Zimbabwean officials.

 

(Reporting by MacDonald Dzirutwe; Writing by TJ Strydom; Editing by James Macharia)

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SABMiller, Coke agree concessions with South Africa over bottling merger

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JOHANNESBURG (Reuters) – SABMiller and Coca-Cola have agreed concessions with the South African government to win approval for a deal to combine their soft-drink operations, the companies said on Wednesday.

The concessions, agreed with the South African Ministry of Economic Development, include a three-year freeze on layoffs and the companies investing 800 million rand ($54 million) to support small South African businesses.

SABMiller, which is in the process of the being taken over by larger rival Anheuser-Busch InBev, agreed in November to team up with Coke to create Africa’s largest soft drinks bottler, Coca Cola Beverages Africa.

The business will have annual sales of $2.9 billion and ambitions to corner the fast-growing market on the continent.

The all-equity deal was given a preliminary approval in December by South Africa’s Competition Commission, which said it could go ahead on several conditions including Coca-Cola Beverages Africa limiting jobs cuts to 250 and making sure it buys cans, glass, sugar and crates from local suppliers.

The Commission investigates deals for any antitrust issues and recommends remedies to the Competition Tribunal, which makes a final ruling. A Tribunal hearing on the proposed deal is due to start next Monday.

South Africa has a history of taking its time over approving deals, partly because regulators have a public interest mandate to safeguard jobs in addition to an antitrust mandate to protect competition.

“I am very happy that we have reached this agreement and hope we now have a clear path to the conclusion of this transaction,” said SABMiller Chief Executive Officer Alan Clark.

Coca-Cola Beverages Africa will account for 40 percent of all Coke volumes sold in Africa, serving 12 southern and eastern African countries. It will be headquartered in South Africa, its largest market.

The deal would also hand Coke an extra 20 brands, including sparkling soft drink Appletiser, whose fruit juice concentrate is sourced from South African producers.

Coca-Cola and SABMiller agreed to maintain and grow Appletiser production operations to serve the domestic market and use as a base from which to export elsewhere in the world.

The Gutsche family, Coke’s South African bottling partner, will also be a shareholder in the Coca-Cola Beverages Africa.

($1 = 14.6759 rand)

(Reporting by Tiisetso Motsoeneng; Editing by Mark Potter)

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West Africa pirates switch to kidnapping crew as oil fetches less

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LONDON (Reuters) – Pirate gangs in West Africa are switching to kidnapping sailors and demanding ransom rather than stealing oil cargoes as low oil prices have made crude harder to sell and less profitable, shipping officials said on Tuesday.

Attacks in the Gulf of Guinea – a significant source of oil, cocoa and metals for world markets – have become less frequent partly due to improved patrolling but also to lower oil prices, according to an annual report from the U.S. foundation Oceans Beyond Piracy (OBP), which is backed by the shipping industry.

“They have had to move towards a faster model and that faster model is kidnappings,” OBP’s Matthew Walje said, noting that ransom payouts were as high as $400,000 in one incident.

“It only takes a few hours as opposed to several days to conduct the crime itself,” he told Reuters at the report’s launch in London. “Fuel prices have fallen, which cuts into their bottom line.”

OBP said violence had also risen, including mock executions, and last year 23 people were killed by pirates there.

“A lot of people are dying from piracy – nowhere near that number died in the last few years in the Western Indian Ocean (due to Somali piracy),” Giles Noakes, of leading ship industry body BIMCO, told the briefing.

“We are particularly concerned by the issue,” said Noakes, whose association audits the OBP’s annual report.

Last month, Nigeria and Equatorial Guinea agreed to establish combined patrols to bolster security.

Analysts say the pirates have emerged from Nigerian militant groups such as the Movement for the Emancipation of the Niger Delta and OBP’s Walje said a growing problem was the splintered nature of the various gangs operating in West Africa.

“It is more fractured than it would be off Somalia where there were a few major gangs and kingpins operating,” he said.

OBP estimated costs related to piracy and armed robbery in 2015 in the Gulf of Guinea were $719.6 million, 61 percent of which was borne by the industry. The 2014 cost was $983 million, 47 percent of which was borne by the maritime sector, it said.

 

(By Jonathan Saul. Editing by Louise Ireland)

 

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