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Kenya aims to cut 50 bil shillings from net 2015/16 spending

17 March 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

NAIROBI (Reuters) – Kenya’s Treasury has sent parliament supplementary spending plans for the fiscal year ending in June that introduce net cuts of about 50 billion shillings ($493 million), the finance minister told Reuters on Thursday.

The government had forecast a budget deficit of 8.7 percent of gross domestic product for 2015/16, which unnerved investors. Draft figures released in February showed a revised 2015/16 deficit of 8.1 percent, falling to 6.9 percent in 2016/17.

Finance Minister Henry Rotich said in a short telephone interview that the supplementary figures sent to parliament had increased spending in some areas, such as security, but these were outweighed by cuts elsewhere.

“We are increasing spending in some areas and cutting in others but, overall, cuts are more than increases, so we have a net cut of around 50 billion (shillings),” he said.

President Uhuru Kenyatta’s political coalition dominates parliament and is expected to back the revised numbers.

When the 2015/16 budget was announced last year, expenditure including interest payments was forecast at a little over 2 trillion shillings. The International Monetary Fund has urged the government to narrow the deficit. [nL5N16N0KK]

Rotich said last month that the government would cut net domestic borrowing for 2015/16 by a quarter to 168.2 billion shillings as a result of spending cuts prompted by sluggish revenue collection.

($1 = 101.3500 Kenyan shillings)

 

(Reporting by Duncan Miriri; Editing by Kevin Liffey)

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Zimbabwe expects first IMF loan in nearly two decades this year

16 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe expects a loan from the International Monetary Fund(IMF) in the third quarter of this year, the first since 1999, after paying off foreign lenders by the end of June, the central bank governor said on Wednesday.

President Robert Mugabe’s government last week agreed to major reforms including compensation for evicted white farmers and a big reduction in public sector wages as the government tries to woo back international lenders.

Central bank governor John Mangudya said the IMF would decide the exact amount of the loan to issue at a later date. The fund had agreed to double the amount available for Zimbabwe, known as a financial quota, to $984 million, he said.

“We are talking about the third quarter, that’s when you see most of the action happening,” Mangudya told Reuters in an interview, referring to when Harare expected the loan.

Zimbabwe would also receive an $896 million loan from an unnamed country to pay off arrears to the World Bank.

In addition, the African Export-Import Bank would provide $601 million for Harare to clear arrears to the African Development Bank (AfDB).

Zimbabwe would then receive the same amount as a grant from the AfDB, Mangudya said.

The Southern African country’s foreign debt stands at $8.3 billion, of which $1.8 billion is arrears.

Zimbabwe is trying to emerge from years of international isolation, largely blamed on Mugabe’s policies, including the seizures of farms from white farmers.

The worst drought since 1992 has left 4 million Zimbabweans facing hunger.

Mangudya said the drought had forced the government to lower its growth target for 2016 to below 2 percent from 2.7 percent. The IMF and World Bank forecast growth of 1.4 percent and 1.5 percent respectively.

Once Zimbabwe clears its arrears, it would be ready for rating by international ratings agencies, with a view to issue international bonds in future, said Mangudya.

Mangudya said he supported the government’s decision to take over diamond mining in Marange because the government was receiving little money from the operations.

“After the rating we will then go for the Eurobonds and all to raise money on the international capital markets,” he said.

The government had issued $250 million in treasury bills to raise money for its operations in 2015, Mangudya said, adding that the bank would soon start holding public auctions of treasury bills to enhance transparency in state borrowing.

The central bank also issued $1 billion in bills last year to creditors of the bank, which owes $1.35 billion.

 

(By MacDonald Dzirutwe. Editing by James Macharia and Tom Heneghan)

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Ngozi Okonjo-Iweala: Economic trailblazer

16 March 2016 Comments (0) Africa, Featured, Leaders

Ngozi Okonjo-Iweala

Nigerian economist and author Ngozi Okonjo-Iweala is one of the most celebrated economists in the world today. Renowned for her accomplishments within the country and international institutions, she has impacted the micro and macro economies of Africa, employed successful reforms and won numerous awards.

Born in Ogwashi-Uku, Delta State, Nigeria, Ngozi Okonjo-Iweala is 61, married to Ikemba Iweala who is a medical practitioner and surgeon and together have four children, three sons and one daughter, Onyinye, Uzodinma, Ikechukwu and Uchechi.

From the hard life to Harvard

At the age of 18 she traveled to the United States to begin her education. She attended Harvard University in Boston where she studied Economics and received her undergraduate degree; she subsequently attained her PhD in Regional Economics and Development from the Massachusetts Institute of Technology and has received Honorary Doctorates from Yale University, Brown University, Colby College, Northern Caribbean University, The University of Pennsylvania and Amherst College.

Her tenacity was apparent from a young age when she carried her Malaria-infected sister to a small clinic 10 kilometers away and made her way through the dense crowd to see the doctor; her sister survived and she describes the walk back as “…the shortest walk I ever had. I was so happy that my sister was alive. Today she’s 41 years old, a mother of three and she’s a physician saving other lives.”

The determination she displayed in this situation resonates in her later life as she has held a number of positions within the Nigerian Government and International Institutions. She currently lives in Abuja, Nigeria, working as a Senior Advisor for Lazar Ltd., a position she has been in since September, 2015. Okonjo-Iweala is also the Honorable Minister of Finance of Nigeria and the Coordinating Minister for the Economy, a Member of the Governing Council of Nigeria Sovereign Investment Authority, a Member of the Board of Governors at African Development Bank, an Advisor to the World Bank, Director of the World Resource Institute and Governor of the Islamic Development Bank. This is preceded by various positions in the World Bank, including Managing Director (2007-2011), Finance Minister and Foreign Minister of Nigeria (2003-2006). She was the first woman to hold these positions. She also ran for President of the World Bank but was defeated by Jim Yong Kim, America’s candidate.

Influence and Accomplishments for Okonjo-Iweala

Before Okonjo-Iweala made her way onto Nigeria’s political scene, the vision of a productive economic future did not look all too promising. Okonjo-Wahala was the name she earned herself after becoming Finance Minister, which means Trouble Woman. “It means, ‘I give you hell,’ she said. “But I don’t care what names they call me. I’m a fighter; I’m very focused on what I’m doing, and relentless in what I want to achieve, almost to a fault. If you get in my way you get kicked.”

Having to face issues such as extreme corruption, billion dollar debts and a GDP headed in the wrong direction, she had her work cut out for her. During her average seventeen hour work day, she fought corruption by addressing the issue of financial kickbacks, terminating the jobs of those involved, imposing jail sentences on scammers and investigating corruption within the oil industry resulting in improved transparency of the sector.

Nigeria had been experiencing a negative per capita growth for the past ten years. She came up with a solution that rearranged the budget which led to the stabilization of the economy as well as savings during upwards fluctuation of crude oil prices; these savings were used during the financial crisis to stimulate the economy.

A more adjustable exchange rate was imposed which complimented market-determined rates and from there, she shifted focus to one of the looming issues: debt. The country’s largest debt was for $30 billion form the Paris Club. In 2005 she was able to make a deal which cleared this debt; before this, Nigeria was paying $1 billion per year, with none of the money actually going toward the principal debt.

Okonjo-Iweala also pushed for the privatization of certain government sectors, such as telecoms, power and ports, the result of which was a six percent economic growth which is still maintained.

Dedication does not go unnoticed: awards and accolades

Okonjo-Iweala has been celebrated throughout her career for her contributions to the economic world. She is the author of two successful books and a member of numerous advisory groups including the Nelson Mandela Institution, ONE Campaign, the African Institutes of Science and Technology and Friends of the Global Fund Africa.

She was #48 on Forbes’ The World’s 100 Most Powerful Women in 2015, named by Time magazine as one of the 100 Most Influential People in the World, chosen as one of the World’s 50 Greatest Leaders by Fortune, selected as African Finance Minister of the Year by the Financial Times/The Banker in 2005 and recognized as Global Finance Minister of the Year 2005 by Euromoney Magazine.

Ngozi Okonjo-Iweala’s career has directly aided Nigeria progressing to a leading African economy. She continues to be active in her field and is an advocate of change, growth and equality.

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South Africa’s anti-trust authorities concerned over job cuts after Sibanye acquisitions

15 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Competition Tribunal said on Tuesday it was weighing its approval of Sibanye Gold’s plan to acquire platinum mines over concerns that 510 jobs could be lost if the deals proceed.

Sibanye last year said it would buy Anglo American Platinum’s labour-intensive and costly Rustenburg mines and Aquarius Platinum.

Both transactions were approved by the Competition Commission, which investigates deals for any anti-trust issues, on condition that no jobs would be lost and the firms would keep the black empowerment policy to protect small businesses.

The government has set empowerment goals to redress the absence of South Africans excluded from the mining industry under apartheid in a policy meant to spread economic wealth to the black majority.

Sibanye has sought to have these conditions amended to allow for layoffs, the Competition Tribunal, which makes a final ruling on proposed mergers or acquisitions, said in a statement.

Sibanye argued in favour of layoffs at a hearing held by the Tribunal on Monday that was attended by unions, reports said.

Sibanye’s CEO Neal Froneman was quoted by Business Day newspaper as saying the deal might not proceed without retrenchments.

Froneman was not available to comment when Reuters tried to reach him.

The Tribunal is expected to make a final decision soon.

About 250 job would be lost through the merger with a further 260 jobs expected to be cut should Sibanye combine all its mining operations and head offices with the target companies, causing an overlap of important positions.

Competition Tribunal spokeswoman Chantelle Benjamin said labour unions and the Competition Commission lobbied for jobs to be cut only after three years while Sibanye proposed two years. She said most of the jobs lost would be at the head offices and senior management.

 

(Reporting by Zandi Shabalala; Editing by James Macharia)

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Kenya secures $1.5 bil IMF standby facilities in case of shocks

15 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – The International Monetary Fund (IMF) has approved two-year standby facilities for Kenya worth about $1.5 billion, which can be drawn on if the East African nation faces unforeseen shocks.

“The Kenyan authorities have indicated that they will continue to treat both arrangements as precautionary,” the IMF said in a statement issued late on Monday after the completion of discussions with Kenya on replacing existing facilities.

The funds comprise a standby arrangement worth about $990 million and a standby credit facility worth about $495 million.

The IMF said Kenya only intended to draw on them if it faced “exogenous shocks” that led to a balance of payments need.

The Central Bank of Kenya calmed volatility in the markets last year after hiking its benchmark lending rate by 3 percentage points to 11.50 percent. It has also increased foreign reserves without turning to the IMF standby loan.

So far this year, the shilling has been firm, appreciating by about 0.6 percent against the U.S. dollar. On March 10, reserves stood at $7.33 billion, the equivalent of 4.7 months import cover, up from $7.1 billion at the end of 2015.

“Kenya’s recent growth performance remains robust and the outlook is positive,” IMF Deputy Managing Director Min Zhu said in the statement.

At the end of last year, Kenya has estimated growth for 2015 at between 5.8 to 6.0 percent, lower than originally expected but still higher than the 2014 figure of 5.3 percent.

“Despite positive policy steps undertaken under the current Fund-supported program, the economy remains vulnerable to shocks, reflecting less favorable global financial market conditions, as well as continued security threats and potential extreme weather events,” the IMF deputy managing director said.

The IMF said cutting the budget deficit was a key step to contain risks, while still supporting major infrastructure projects and providing essential health and education needs.

Kenya’s budget deficit for the financial year 2015/16 ending on June 30 is forecast at 8.1 percent of gross domestic product, falling to 6.9 percent in 2016/17, draft Finance Ministry figures have shown. [nL8N15G1VC]

The East African nation has ramped up spending in recent years to build a modern railway, roads and electricity plants, driving up the deficit and unnerving investors.

 

(Reporting by Duncan Miriri and Edmund Blair; Editing by Richard Borsuk)

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South Africa turns on Saudi-built solar to cut coal reliance

14 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa and Saudi Arabian ACWA Power launched a $328 million solar power plant in the Northern Cape province on Monday, as Africa’s most industrialised country rushes to expand its power supply and cut its coal reliance.

The Bokpoort Concentrated Solar Power (CSP) Project, developed by a consortium led by ACWA Power, is set to provide 1,300 megawatts per hour, powering more than 200,000 homes, a statement from media firm OLB said.

Construction of the plant began in 2013, following a successful bid by ACWA Power, as part of South Africa’s plan to expand the use of renewable energy.

“It is aimed at providing energy security and diversified energy. It instils confidence that major green projects are going to be built in South Africa,” said the Department of Trade and Industry’s (DTI) deputy director general Yunus Hoosen.

Chronic energy shortages are pushing the government to seek alternative sources of electricity from state-owned power utility Eskom’s coal-powered stations that take much longer to build.

Eskom, which provides virtually all of South Africa’s power, is facing a funding crunch as it races to bring new power plants online.

With year-round sunshine and thousands of miles of windswept coast in South Africa, investors are warming to the renewable energy potential, with 66 projects completed or underway since the government launched a first bid round four years ago. [L5N0W61SY]

Bokpoort CSP plant is the first in a series of investments that ACWA Power is making in the power sector in South Africa, said the DTI.

The company expects to commence construction on the 100 MW Redstone concentrated solar power project, also in Northern Cape, later this year and is awaiting the outcome of tender submissions for a 300 MW coal-fired plant in Mpumalanga province in eastern South Africa.

 

(Reporting by Nqobile Dludla; Editing by James Macharia and Alexander Smith)

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S.African rand slides as appetite for emerging assets wanes, stocks rise

14 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand fell against the dollar as appetite for emerging assets was dented by a firming dollar in cautious trade ahead of the interest rate decision on Thursday.

By 0925 GMT the rand had slipped 0.82 percent to 15.3475 per dollar, reversing a run that took the currency towards 15.00, a level it has not breached in nearly three months.

Measured against a basket of major currencies, the greenback was 0.2 percent firmer.

With a dearth of data due in the session traders expect direction later in the week from the local release of an interest rate decision on Thursday.

“You have the FOMC and then the local interest rate decision. And in the trading world we’re limited to the scenarios we have on hand,” said trader at WWC Securities Marten Banninga.

“If you look at some of the forecasts its looks like its 50/50,” Banninga said.

A Reuters poll of 30 economists expects the South African Reserve Bank (SARB) to leave its benchmark lending rate at 6.75 percent after hiking by 50 basis points in January, despite rapidly rising inflation.

A rates decision on Wednesday by the United States central bank is also set to determine emerging market flows as investors look for clues on the pace of rate hikes in the world’s top economy.

Bonds were also weaker, with the government paper due in 2026 adding 1 basis point to 9.125 percent.

Stocks were higher, with the JSE securities exchange’s Top-40 up 1.5 percent to 46,464 points.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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Nine international “Top Employers” have operations in Africa, Middle East

14 March 2016 Comments (0) Africa, Business, Featured

top employer africa

The annual certification recognizes more than 1,000 companies globally for creating good working conditions.

The Top Employers Institute has recognized nine companies that do business in Africa and the Middle East for providing a good working environment for employees.

AbbVie, Becton Dickinson, DHL, Old Mutual, EY, G4S, JTI, Orange and Unilever were certified as top employers, according to the 2016 ratings by the Netherlands-based institute.

The Top Employers Institute evaluates companies at their request, considering companies that operate in at least five countries and have at least 2,500 employees. The institute audits human resource practices to determine whether a company is fostering a good work environment for employees.

The certified organizations have created forward-thinking human resources practices and work continuously to improve working conditions and provide employees opportunities to develop, according to the institute said.

Abbvie pharmaceuticals recognized

Abbvie operations in South Africa, Lebanon and the United Arab Emirates were among those recognized as Top Employers.

Abbvie is a Chicago-based pharmaceutical company that has 15 manufacturing facilities around the world and sells products in more than 170 countries. The company employs 28,000.

The instituted cited Becton Dickinson operations in East and West Africa as well as in Zambia as top employers.

Becton Dickinson is a medical technology company whose products include laboratory instruments, medical devices and diagnostic products. It has operations in more than 40 companies.

DHL cited in 13 countries in region

The institute also certified DHL operations in Nigeria, Uganda, Ghana, Angola, Gambia, Botswana, Madagascar, Mozambique, Kenya, Ethiopia, Egypt, Saudi Arabia and the United Arab Emirates.

DHL, based in Redwood City, California, is a global delivery service and the world’s oldest international air express company. With more than 325,000 employees worldwide, DHL delivers to 70,000 locations in 220 countries.

EY, or Ernst & Young, was cited as a top employer including businesses in Kenya, Nigeria, Zimbabwe and South Africa.

The company, based in London, offers tax, audit, business risk, technology and security risk services, and human resources services worldwide. One of the Big Four accounting firms, EY has more than 200,000 employees and operates in 150 countries.

Security company G4S tapped

The institute recognized G4S operations in Botswana, Cameroon, Ivory Coast, Ghana, Kenya, Malawi, Morocco, Mozambique, Namibia, Nigeria, the Democratic Republic of Congo, South Africa, and Zambia.

G4S is a security services company headquartered in London. Active in 110 countries, G4S has 623,000 employees.

JTI, based in Geneva, was recognized as a top employer in Dubai. JTI is a tobacco manufacturer with about 25,000 employees.

Old Mutual was recognized as a top employer for operations in South Africa, Namibia, Kenya, Botswana, Swaziland, Malawi and Zimbabwe.

Old Mutual provides banking, investment, asset management and insurance in Africa, Asia, Europe and the Americas. The company, based in London, has about 61,000 employees. Nearly half its holdings are in South Africa, where the company was founded.

Orange business services highly rated

Among Orange outlets recognized were operations in Cameroon, Ivory Coast, Guinea, Madagascar, Mali and Senegal as well as Egypt and Jordan.

Orange is a business services corporation with offices in 160 countries. Orange specializes in information technology and communications support to businesses in more than 200 countries.

Mobinil was recognized in Egypt. Mobinil, a subsidiary of Orange headquartered in Cairo, provides wireless telecommunication services in Egypt. Mobinil was rebranded as Orange in March.

More than 1,000 companies certified

Unilever was recognized for operations in Ivory Coast, Ghana, Kenya, Nigeria and South Africa.

The company, which produces and distributes food and household care products with brands that include Lipton, Dove and Suave, employs 172,000 people.

More than 1,000 organizations received the Top Employer rating for 2016, the institute said.

The institute also certified eight companies as Top Employer Global 2016. They are

Saint-Gobain, DHL Express, Dimension Data, JT International, Orange, TATA Consultancy Services, Technip and Valeo.

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Top Cities for Expatriates in Africa

11 March 2016 Comments (0) Africa, Business, Featured

Every year, Mercer Consulting publishes a list ranking the quality of life for expatriate or highly-skilled immigrants based upon surveys conducted in cities around the world. Mercer conducts these surveys in order to provide employers, and employees, with a comprehensive analysis of the world’s largest cities to use when, for employers, considering sending employees abroad or, for employees, relocating. The surveys include questions on a variety of metrics including personal safety (new in 2016’s survey), political stability, banking security, quality, accessibility and cost of healthcare, standards of education and history of natural disasters, to include a few.

Perhaps unsurprisingly, cities in developing countries and regions struggled to break into the upper levels of this ranking. Considering the current global political, social and economic crises, it is no wonder that peaceful, wealthy Vienna was ranked the number one best city in which to live, followed by Zurich, Switzerland, Auckland, New Zealand, Munich, Germany and Vancouver, Canada. The Mauritian capital of Port Louis, was the highest ranking African city at 83rd out of 230 cities. Mauritius is a wealthy island off of Africa known for its pristine beaches, booming tourism industry and high standards of living.

South Africa: The Next (three) Best Things

South Africa claims the next three best-ranked African cities: Durban at 85th, Cape Town at 92nd and Johannesburg at 95th. Durban is a beautiful oceanside town and is the largest city in the South African province of Kwa-Zulu Natal. Kwa-Zulu Natal is home to some of Africa’s largest game reserves, and, in 2015, Durban was ranked Africa’s number-one best city in which to live, citing the availability of high quality housing and variety of leisure activities. Cape Town, 3rd for Africa, is perhaps best known for being the port closest to Robben Island, where Nelson Mandela was held captive for 27 years during the anti-apartheid movement. Cape Town has a large tourism industry, internationally renowned medical school and university, and an abundance of outdoor activities. Johannesburg comes in at a surprising 95th: once ranked the seventh most dangerous city in the world, Johannesburg is no longer a leader in violent crime, but whether this speaks to the increasing danger of the rest of the world, or an increased rule of law, is unaddressed. While the overall standard of living has increased in South Africa, endemic poverty and widespread, systematic racism are still enormous barriers to improvement in the life of the average South African.

Victoria, the capitol of the Seychelles islands, is ranked 97th overall. A major exporter of items that are in high demand in western countries (such as coconut oil and vanilla bean), Victoria has a variety of business opportunities and is relatively safe.

The next three African cities are Tunis, Tunisia (113th), Rabat (116th) and Casablanca (126th), both in Morocco. Ironically, Tunis was the focal point of Tunisia’s Jasmine Revolution, a widespread series of protests against the low standards of living, poor economic opportunities and repressive government. Morocco boasts a large expatriate community across tourism, import/export industry and banking. Rabat and Casablanca are relatively safe, although less so for women, and provide wealthy workers with many opportunities for travel within and outside of the region.

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South Africa’s MTN offers $1.5 bil to settle Nigeria fine

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

ABUJA (Reuters) – South African telecoms firm MTN Group has offered $1.5 billion to settle a much larger fine from Nigerian regulators for missing a deadline to disconnect unregistered SIM card users, a document seen by Reuters shows.

Africa’s biggest mobile phone group has been in talks with Nigerian authorities to have the $3.9 billion penalty reduced and last month made a “good faith” payment of $250 million towards a settlement.

In a letter to the Nigerian government from MTN’s lawyer, former U.S. Attorney General Eric Holder, the company proposed a 300 billion naira ($1.5 billion) settlement to be paid through a combination of government bond purchases, cash instalments and network access to the Nigerian government.

Holder said in the letter, dated Feb. 24, the offer “ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria.”

Johannesburg-based MTN said on Friday talks with the Nigerian government were ongoing.

“MTN has previously advised shareholders not to make decisions based on press reports and MTN again urges its shareholders to refrain from doing so,” it said.

Nigeria’s telecoms ministry had no immediate comment.

In its annual results last week, MTN said it had put aside $600 million to cover a deal over the fine, which was originally set at $5.2 billion on the basis of charging $1,000 for every unregistered SIM card.

Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.

The fine, equating to more than twice MTN’s annual average capital expenditure over the past five years, came months after Muhammadu Buhari was swept to power after an election campaign which pledged tougher regulation and a fight against corruption.

Shares in MTN, which makes about 37 percent of its sales in Nigeria, were little changed at 147.53 rand at 0839 GMT, after rising more than 2 percent shortly after the market opened.

($1 = 199.0000 naira)

 

(By Camillus Eboh. Additional reporting by Zandi Shabalala in Johannesburg; Writing by Tiisetso Motsoeneng; Editing by Mark Potter)

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