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Old Mutual says to split up, asset management sale eyed

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

LONDON (Reuters) – Anglo-South African financial services group Old Mutual Plc said on Friday it would split up into its four main businesses, strengthening expectations of the sale or listing of its UK asset management arm.

The break-up of the company, which is listed in London and Johannesburg and has insurance, asset management and banking operations, follows a strategic review announced in November, when former Standard Bank executive Bruce Hemphill took over as chief executive.

Changes to the regulatory environment in Europe and South Africa have made the company, which started out in 1845 as a life insurance firm in Cape Town, more complex to run, it said in a statement.

“It’s a costly structure with insufficient synergies to justify those costs,” Hemphill said.

Old Mutual’s solvency capital ratio under new European rules was 135 percent, lower than many of the other major insurers that have reported earnings so far this year.

The group said it had not yet decided how it would go about spinning off the units but that it expected the separation to be largely completed by the end of 2018.

The company’s four units are Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank Group and OM Asset Management.

It said it planned to cut its majority stake in Nedbank to a minority one.

Old Mutual’s shares have risen since Sky News reported the break-up plans last weekend, and said private equity firms had tabled a multi-billion pound cash bid for Old Mutual Wealth.

Analysts said the unit would be worth 3-4 billion pounds.

The group said its pretax adjusted operating profit for 2015 rose 4 percent in reported currency terms to 1.7 billion pounds ($2.4 billion).

($1 = 0.7004 pounds)

 

(By Carolyn Cohn and Noor Zainab Hussain. Additional reporting by Soumithri Mamidipudi in Bengaluru; Editing by Rachel Armstrong and Mark Potter)

 

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South Africa’s rand firms to 2-1/2-month high after ECB cuts rates

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

JOHANNESBURG (Reuters) – South Africa’s rand rallied to its firmest since December in afternoon trade on Thursday after the European Central bank cut interest rates and stepped up its stimulus program.

By 1305 GMT the rand had firmed 1.12 percent to 15.0300 per dollar, its strongest level since Dec. 21.

“This means there is more cheap money going around and the risky assets are loving it,” said chief currency at Bidvest Bank Ion de Vleeschauwer.

 

(Reporting by Mfuneko Toyana; Editing by Tiisetso Motsoeneng)

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Bint el Sudan, a fragrance across the sands of time

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

bint el sudan

A small factory on northern Nigeria continues to produce a legendary perfume despite the ravages of the jihadist group Boko Haram.

While the ravages of Boko Haram have shut down much of the industry of northern Nigeria, production of a legendary perfume continues uninterrupted at a small factory in Kano.

Bint el Sudan, known for nearly a century as the “Chanel No. 5” of Africa and once the best-selling perfume in the world, is known for its musky fragrance and oil, rather than alcohol base, which made the scent popular with Muslims.

Bint el Sudan means “Daughter of Sudan” and a girl wearing the traditional topless garb of 1920s Sudan appears on the label.

Most of the fragrance – about seven million small 12-mililiter bottles a year – is produced by a dozen workers from inside a larger, ultra-secure bunker of a factory that also manufactures pesticides, detergents and disinfectants.

Shipments across the northern Africa

About 80 percent of Bint el Sudan is produced in Kano for shipment to local markets across the region and as far away as Libya. Factories in Cameroon, Ivory Coast, Sudan, Ethiopia and Zimbabwe produce the rest of the perfume, primarily for sales in their own local markets.

That the Kano production continues is quite a feat, given the devastation Boko Haram has brought to the region. In Kano, once a great Nigerian industrial center and historically a hub of regional trade, most factories are shut down today, victims of waves of attacks by jihadists since 2012. As it is, business executives in the city have been forced to use armored cars and bodyguards for security.

Stephane Malaussene, owner of the Gongoni Company, which produces the perfume under a franchise arrangement with U.S. owner International Flavors & Fragrances, said production has actually increased from about 500,000 bottles 10 years ago. Production in Kano began in 1952.

“It’s a pride to produce and distribute this fragrance that crossed the sands and time,” Malaussene said.

Fragrance dates to 1920s Sudan

Bint el SudanBint el Sudan was created in the 1920s when, according to legend, fourteen leaders of Arab tribes approached a British traveler and adventurer, Eric Ernest Burgess, in Khartoum and asked him to create a fragrance. The perfume was developed in six months in the lab of Burgess’ employer, W.J. Bush & Co. in London.

Burgess also photographed the Sudanese girl who appears on the label, topless wearing a traditional elephant-hair red skirt and bracelets on her ankles and wrists and her dowry and purse around her neck. The girl also appeared on posters used to market the perfume throughout the region in what was the first advertising campaign for a perfume at the time.

It was sold in markets rather than stores at low prices and for a time was used as currency.

Staple for cosmetics and other uses

Widely used in courtship and circumcision rituals, Bint el Sudan became a staple of women’s cosmetics, especially after the wave of national independence and modernization that began in the 1960s.

With its mix of jasmine, lilac and lily scents, it is also used as a skin moisturizer and bath oil.

The fragrance is a top seller on the continent, particularly in western, central and northeastern Africa while women in the eastern and southern regions prefer western scents.

Boko Haram destroys local industry

The continuing production of Bint el Sudan belies the devastation of industry in Kano, Nigeria’s second largest industrial center and its largest producer of textiles, tanning, footwear, cosmetics, and ceramics.

Industrial activity was reduced by 50 percent since 2012, according to Ali Madugu Safiyanu, vice president of the Association of Industrial Nigeria. Boko Haram undermined the whole economic and agricultural ecosystem in the Kano region as well as Mali, Burkina Faso and the Central African Republic, Safiyanu said.

The region has seen bloody raids on markets, mosques and universities by Boko Haram, which is allied with the Islamic State, have left hundreds dead as well as abductions and forced marriages.

A military coalition of soldiers from Nigeria, Chad, Cameroon and Niger has driven Boko Haram into the far northeast of the country but the group continues to attack.

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Zimbabwe needs up to 8% growth in next decade to revamp economy

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

HARARE (Reuters) – Zimbabwe needs an annual growth rate of up to 8 percent over the next 10 to 15 years to revamp its economy, Finance Minister Patrick Chinamasa said on Thursday, in addition to other reforms agreed with an International Monetary Fund delegation.

On Wednesday, Chinamasa said President Robert Mugabe had 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.

Chinamasa said that new loans from international lenders will only come if the drought-stricken Southern African nation showed the capacity to introduce a raft of economic reforms.

“Any reform agenda is painful. The journey we have travelled has been difficult and will remain difficult,” Chinamasa told a forum discussing Zimbabwe’s future prospects.

Chinamasa and Reserve Bank governor John Mangudya are leading Zimbabwe’s re-engagement with international lenders and the finance minister has previously said he has had to overcome divisions within Mugabe’s cabinet to pursue that process.

Zimbabwe is trying to emerge from more than a decade of isolation that saw the IMF, World Bank and African Development Bank freeze lending in 1999. Western powers imposed sanctions on Mugabe’s government over allegations of vote rigging and human rights abuses. Mugabe rejects the charges.

The IMF executive board will on May. 2 consider Harare’s plan to repay $1.8 billion in arrears. Chinamasa said he was seeking clear commitments from the IMF that clearing the arrears would trigger new financial aid.

“As I stand before you I am in buoyant spirits because I know that the measures that we are taking will exploit and realize the full potential of this country. We just need an uninterrupted process of reform,” said Chinamasa.

 

(Reporting by Macdonald Dzirutwe; Editing by James Macharia)

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African telecom towers firm IHS to buy Nigerian rival

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

LAGOS (Reuters) – Pan-African mobile telecoms infrastructure group IHS has agreed to buy Nigerian rival Helios Towers Nigeria (HTN) for an undisclosed sum, its chief executive said on Thursday.

Issam Darwis, who founded IHS, said Africa’s largest tower company, which builds and leases mobile telecoms towers in five countries across the continent, will acquire 1,211 towers spread across 34 of Nigeria’s 36 states.

IHS will acquire the entire issued share capital of HTN, IHS said in a statement.

“IHS will have full operational control of the underlying business and will market independent infrastructure sharing services to mobile network operators and internet service providers in Nigeria,” it said.

The deal is expected to close in the second quarter of 2016, it said.

IHS already has around 23,000 towers across Nigeria, Ivory Coast, Cameroon, Zambia and Rwanda. It has around 15,000 towers in Nigeria, its biggest market and Africa’s most populace nation.

“We remain committed to the Nigerian tower market where coverage levels are yet to mature and explosive data growth continues,” Darwis said. “This is a statement of how confident we are in the Nigerian economy.”

Africa’s biggest economy and top oil producer is flagging due to the fall in crude prices and restrictions imposed by the central bank to defend its currency.

Building and maintaining mobile communications towers in Africa tends to be more expensive than in other regions because of security costs and electricity shortages, while revenue per user is often lower.

These costs have prompted many mobile operators to sell or lease towers to specialist companies such as IHS, which can reduce building and maintenance costs by hosting multiple tenants — mobile operators and internet providers — on the same towers.

 

 

(By Alexis Akwagyiram. Editing by Susan Thomas)

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Ghana consumer inflation slows to 18.5% in February

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

ACCRA (Reuters) – Ghana’s annual consumer price inflation fell to 18.5 percent in February from 19.0 percent the month before, helped by the stability of the local currency, the statistics office said on Wednesday.

Consumer prices could fall further if the cedi holds steady and in the absence of any external shock, deputy government statistician Anthony Amuzu told reporters in Accra.

After weakening nearly 4 percent in January on seasonal high corporate dollar demand, the cedi, has remained firm in recent weeks. It was trading at 3.8500 to the greenback on Wednesday, down 1.3 percent year-to-date.

“The stability of the cedi was the major driver in February,” Amuzu said, adding that it drove down prices of imported items.

The commodities exporter is implementing a three-year aid programme with the International Monetary Fund (IMF) in an attempt to remedy fiscal problems including inflation persistently above government targets.

The IMF projects that inflation will peak before slowing to around 10 percent at the end of the year and the central bank has been tightening monetary policy in order to contain it.

Analyst say the easing in February CPI showed that the central bank’s tight monetary policy had been effective.

“The deceleration in year-on-year inflation also relieves the pressure on the Bank of Ghana to raise interest rates in the near term,” said Standard Chartered’s head of Africa research Razia Khan.

Year-on-year non-food inflation for February, which comprises imported goods, was 24.5 percent, compared with 25.5 percent the month before. Food inflation was 8.3 percent, from 8.2 percent in January.

 

(Reporting by Kwasi Kpodo; Editing by Matthew Mpoke Bigg and Toby Chopra)

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Peace Hyde: Entrepreneur, broadcaster, actress

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

peace hyde

The British-born personality promotes education, entrepreneurship in Ghana and Nigeria.

As a child growing up in the United Kingdom, Peace Hyde had two dreams: One day moving to Africa, home of her Ghanaian forbearers, and launching a career in television.

Today, Hyde is living that dream in high style as an award-winning broadcaster, internationally recognized entrepreneur, West Africa correspondent for Forbes, and founder of a nonprofit that promotes education in Ghana and Nigeria.

Two years after leaving a teaching career in England to move to Ghana, Hyde, 30, was recently named African Broadcaster of the year at the Nigerian Broadcasters Merit Awards 2016.

Awards for leadership, influence

Hyde also was one of five people in media and entertainment named to a prestigious list of 50 most influential young Ghanaians in 2015 and was recognized as a Young Chief Executive Officer leader by the young CEO Business Forum in London for her work with Aim Higher Africa, a nonprofit she founded to promote education in Ghana and Nigeria.

She is also currently nominated for International Business Woman of the Year at the Women 4 Africa awards in London in May.

As a teacher in England for seven years before relocating to Africa, Hyde learned two important lessons: the importance of education to motivate and empower young people and the ability to multi-task, which has served her well in her many roles.

Education is a critical tool in the fight to empower communities and lift them out of poverty, she said.

Encounters with young people who carried goods back and forth at the markets of Accra convinced her that education was their way out. Seeing young girls who had no future but laboring at the marketplace, she said she “felt a deep sense of injustice. Something needed to be done for these girls.”

Without funding initially, she began to teach the children at the marketplace. Later, she found support to start Aim Higher Africa, a nonprofit that focuses on education and entrepreneurship.

Project creates digital classrooms

Initially, working in Ghana, Aim Higher Africa focused on improving standards at rural schools, including providing teachers with guidelines on discipline, testing, evaluating and grading.

As the program has grown and expanded to also work in Nigeria, where Hyde is currently based, she said it has become more strategically focused on bringing digital education to rural classrooms.

Currently, the organization is working with 30 schools in Ghana and Nigeria, Hyde said.

Promoting African entrepreneurship

She wants to help build a generation of young African entrepreneurs to help improve employment opportunities on the continent.

She said discussions traditionally have focused on job creation. But her philosophy with Aim Higher Africa is that empowering the next generation entrepreneurs and leaders who can create new industries “the only way you can create sustainable and scalable opportunities.”

Aim Higher Africa organizes Ignite events where entrepreneurs share their expertise and encouragement with young people.

She also hopes to tell success stories in her role as a television host and Forbes West Africa correspondent. As more stories of successful entrepreneurs are told, the environment and opportunities for the next wave of entrepreneurship will improve.

She sees “a new Africa where we are proudly exporting our heritage to the world,” she said. “I believe it is time to highlight the move towards digital platforms and technological advances that were not present (in Africa) a couple of years ago.”

Started with a teaching career

Born to Ghanaian parents in the United Kingdom, she was raised in England and received a degree in psychology from Middlesex University. She went on to receive a master’s degree in journalism and communications as well as a teaching qualification.

Once she completed her studies, she taught in middle and high school for seven years.

She said her experience as a teacher gave her a lot of practice in multitasking, which has paid off as she juggles roles that include broadcasting, running a nonprofit and even some acting.

Her current broadcast projects include hosting a popular celebrity talk show, The EFGH Show (Entertainers from Ghana) and hosting Friday Night Live, a lifestyles show. She has occasional roles in television programs, including a role as a Yoruba mother on the MTV program “Shuga.”

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Moody’s to visit South Africa next week to decide on ratings

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

JOHANNESBURG (Reuters) – Ratings firm Moody’s will visit South Africa next week to decide whether to downgrade the credit status of Africa’s most industrialised economy to just one notch above sub-investment grade, the Treasury said on Wednesday.

South Africa’s Finance Minister Pravin Gordhan told local station Radio 702 that Moody’s informed him of their decision during his stop in London on an overseas roadshow to meet with investors and convince them the economy could be turned around.

“They will be in South Africa and meet with various stakeholders and get relevant information that will influence them either not to downgrade us or not to downgrade us,” Gordhan said.

The Treasury said in a statement that the “review visit will primarily serve to either affirm the current ratings or downgrade them.”

Gordhan is battling to boost South Africa’s growth and to persuade ratings agencies not to cut the country’s credit rating to junk following his appointment last December.

Late on Tuesday, Moody’s said it was placing South Africa’s Baa2 ratings on review for downgrade, citing the economy’s weak growth prospects and worsening fiscal position. [nFWN16G023]

“The review will allow Moody’s to assess to what extent government policy can stabilize the economy and restore fiscal strength,” the agency said in a statement.

Moody’s put South Africa’s Baa2 credit rating on a negative outlook in December, and is the only agency that does not have South Africa a step away from junk status.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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Japan, South Korea firms win contract to build $800 mil Botswana power plant

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

GABORONE (Reuters) – A joint venture by Japan’s Marubeni Corporation and South Korea’s Posco Energy has won an $800 million tender to expand Botswana’s Morupule B power plant by an extra 300 megawatt (MW), a government notice said on Tuesday.

The new coal-fired plant would be an extension of the troubled Chinese built 600 MW power plant.

The firms will recover their costs by selling the power to the Botswana Power Corporation (BPC) through a 30-year power purchase agreement at a cost of 812.56 pula per MegaWatt hour.

Construction of the new plant is expected to start late this year with the first power produced added to the national grid by May 2020, lifting power generation to more than 1,000 MW. Current national power demand stands at 610 MW.

 

(Writing by Zandi Shabalala; Editing by James Macharia)

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British bank Barclays will leave Africa

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

barclays africa

South African economic problems and corruption risks on the continent prompt decision to sell majority stake in Barclays Africa.

South Africa’s economic slow down and plummeting currency were key factors in Barclays decision to exit banking on the continent, ending a presence dating back nearly 100 years.

Barclays, one of Britain’s largest banks, announced it would sell its stake of 62.3 percent in Barclays Africa as part of a larger strategy of refocusing on operations in the United Kingdom and the United States.

Barclays has also cut back operations in Asia, Brazil, Europe and Russia.

Banks in 14 countries

Barclays Africa Group, Limited, one of the largest banks on the continent, is worth about $4.9 billion. It has 45,000 employees and 1,267 branches.

It operates in 14 countries: Botswana, Egypt, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, Tanzania, Uganda, Zambia and Zimbabwe, as well as South Africa, where the company owns and operates the bank network, Absa.

The African bank has been profitable, but the steep fall of the rand last year cut return on equity to 9 percent, below a target of 11 percent.

Barclays believes Africa is a growth area, according to those familiar with the bank’s review of its options. However, the South African issues along with higher risk of corruption prompted its decision to sell its stake.

Leadership seeks to refocus

Barclays CEO Jes Staley

Barclays CEO Jes Staley

The move comes under the leadership of Barclays CEO Jes Staley, who took over in October 2015, the latest in a succession of chief executives who have sought to improve the bank’s outlook following the financial crisis.

The decision is a major turnaround from just a year ago, when Barclays Africa CEO Maria Ramos promised that the bank would rank among the top three in revenue in its five largest markets – South Africa, Botswana, Kenya, Ghana and Zambia by 2016. Barclays Africa at that time was in the top three in only two of its markets – South Africa and Botswana.

Ramos also said the bank was on target to produce a return on equity of 18-20 percent.

Bank could be a tough sell

It was not immediately clear who potential buyers might be although it is unlikely Barclays would put its shares on the market if it didn’t expect suitors.

Despite the relative financial health of the bank, it may be a tough sell, according to analysts.

Garth Mackenzie of Trader’s Corner, said while Barclays Africa was a well-governed asset with a good dividend yield, concerns about risk “seem to overshadow that.”

South African turmoil undermines rand

The rand hit an all-time low in late 2015 after African President Jacob Zuma sparked protests with the ouster of a respected finance minister with an unknown who was then quickly replaced amid political and financial turmoil.

The value of the South African currency fell 40 percent in 2015. The rand has begun to recover but is still down by about 25 percent. Meanwhile, South Africa reported economic growth of only 0.06 percent in the final quarter of 2015.

Dividends cut

Barclays also announced it would cut shareholder dividends in half for the next two years, as the bank continues to struggle to recover from the financial crisis. The announcement prompted a reduction of eight percent in the value of its shares.

Staley, the CEO, said that the bank restructuring was coming to an end. “We are acutely aware of shareholders being tired” that it has taken so long to restructure the company.

Barclays has assured investors that their funds are safe; only share certificates will change hands in any sale. However, Barclays decision to leave Africa raises the question of whether other companies will also shift their focus to markets they perceive to be safer in America and Europe.

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