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South Africa’s Q4 current account deficit widens to 5.1% of GDP

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

PRETORIA (Reuters) – South Africa’s current account deficit widened to 5.1 percent of gross domestic product in the fourth quarter of 2015 from a revised shortfall of 4.3 percent in the third quarter, the central bank said on Tuesday.

Economists surveyed by Reuters had expected a 4.35 percent gap for the fourth quarter.

Year-on-year, the current account deficit shrunk to 4.4 percent of gross domestic product compared to a 5.4 percent deficit in 2014.

Exports slumped while imports rose during the quarter, leading to a sharp increase in the trade balance deficit to 57 billion rand ($4 billion) compared with a revised 22 billion rand gap in the third quarter, the reserve bank said in its quarterly bulletin.

“The bank has officially identified November 2013 as the upper turning point in the business cycle, implying that the South African economy is now officially in a downward phase,” the central bank noted.

($1 = 15.3384 rand)

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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Time short to protect Africa’s food supply from climate change

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

BARCELONA (Thomson Reuters Foundation) – Without action to help farmers adjust to changing climate conditions, it will become impossible to grow some staple food crops in parts of sub-Saharan Africa, with maize, beans and bananas most at risk, researchers said on Monday.

In a study of how global warming will affect nine crops that make up half the region’s food production, scientists found that up to 30 percent of areas growing maize and bananas, and up to 60 percent of those producing beans could become unviable by the end of the century.

Six of the nine crops – cassava, groundnut, pearl millet, finger millet, sorghum and yam – are projected to remain stable under moderate and extreme climate change scenarios.

“This study tells where, and crucially when, interventions need to be made to stop climate change destroying vital food supplies in Africa,” said Julian Ramirez-Villegas, the study’s lead author who works with the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS).

“We know what needs to be done, and for the first time, we now have deadlines for taking action,” he added in a statement.

For example, the study warns that around 40 percent of maize-growing areas will require “transformation”, which could mean changing the type of crop grown, or in extreme cases even abandoning crop farming.

Sorghum and millet, which have higher tolerance to drought and heat, could replace maize in most places under threat.

But for 0.5 percent of maize-growing areas – equal to 0.8 million hectares in South Africa that now produce 2.7 million tonnes – there is no viable crop substitution, the study said.

In a few places, the need to adapt to climate change is already urgent, the researchers said. Those include pockets in highly climate-exposed areas of the Sahel in Guinea, Gambia, Senegal, Burkina Faso and Niger.

Banana-growing regions of West Africa, including areas in Ghana and Benin, will need to act within the next decade, as the land is expected to become unsuitable for bananas by 2025.

And maize-growing areas of Namibia, Botswana, Zimbabwe and Tanzania also have less than 10 years left to change tack under the most extreme climate change scenarios, the study added.

“If we don’t do anything now, farmers are no longer going to be able to grow certain crops in certain sites,” Ramirez-Villegas told the Thomson Reuters Foundation from Colombia.

“But we know there are several adaptation options … with which farmers should be able to carry on growing these crops for a longer period of time than we project.”

 

TIME ‘RUNNING OUT’

Those options begin with shorter-term actions like improving irrigation and weather information services for farmers, and developing new varieties of maize and beans that can better tolerate heat and drought.

Such measures are already underway in parts of Africa, including the “Drought Tolerant Maize for Africa” initiative that has released 160 varieties, benefiting up to 40 million people in 13 countries.

But governments will still need to re-assess agricultural and food security policies to see whether bigger transformations are needed, such as switching to different crops or livestock.

If so, they will need to help farmers access markets or build processing and storage facilities for new crops.

CCAFS researcher Andy Jarvis, a co-author of the paper published in the journal Nature Climate Change, noted adjusting national policies can take decades.

“Our findings show that time is running out to transform African agriculture. This will require not only increased funding but also a supportive policy environment to bring the needed solutions to those affected,” he said.

A separate study released on Monday, by researchers from Brown and Tufts universities, suggested scientists have overlooked how two important human responses to climate will impact food production in the future: how much land people choose to farm, and the number of crops they plant.

Looking at Mato Grosso, a key soy-producing state in Brazil, they found a temperature rise of 1 degree Celsius was tied to substantial decreases in crop area and double cropping, accounting for 70 percent of the overall loss in production. Only 30 percent was attributable to falling crop yield.

“If you look at yields alone, you’re not looking at all of the information because there are economic and social changes going on as well,” said Leah VanWey, professor of sociology at Brown and one of the study’s senior authors. “You’re not taking into account farmers’ reactions to climate shocks.”

 

(Reporting by Megan Rowling; editing by Ros Russell. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, corruption and climate change. Visit http://news.trust.org)

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Fastjet warns on full-year results

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

(Reuters) – Fastjet Plc warned that results for the year would be materially below market expectations, adding pressure to the African budget airline whose second-largest investor is seeking the ouster of Chief Executive Ed Winter.

The company said it no longer expected to be cash flow positive in 2016, citing challenging conditions in the domestic aviation market.

Fastjet shares fell as much as 45 percent to a record low of 36.04 pence on Monday morning in London.

Last week, Stelios Haji-Ioannou, whose private investment vehicle easyGroup has a 12 percent stake in Fastjet, called on shareholders to back his bid to immediately remove CEO Winter.

Haji-Ioannou said Winter had created significant overheads for the company, resulting in a high cost base that was disproportionate to its six aircraft fleet.

The budget carrier said in December that it was taking steps to manage its operating costs and overheads, after issuing its second warning on full-year 2015 revenue.

Fastjet had $20 million of cash available at the end of February, the company said, adding that it believed that these funds would be enough to meet its operational requirements.

Fastjet may consider raising further funds during the year to fund future growth as market conditions improve, it said.

 

(Reporting by Esha Vaish in Bengaluru; Editing by Sunil Nair and Gopakumar Warrier)

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Morocco prepares to host global climate change conference

4 March 2016 Comments (0) Africa, Featured, Politics

marrakech

More than 30,000 people are expected to attend the COP22 gathering in Marrakesh in November.

Morocco has begun preparations for COP22, the 2015 global climate conference, where African nations hope to see further action to help mitigate damage from climate change.

The event, expected to attract 30,000 attendees, will be held November 7 – 18 in Marrakech. Morocco recently appointed a committee, headed by Foreign Minister Salaheddine Mezouar, to guide logistical preparations.

The conference follows COP21 last November in Paris, where 195 participating countries produced a landmark agreement to reduce carbon emissions.

Repairing damage will be key issue

The upcoming conference is expected to focus on an issue of great importance to many African nations: Mitigation of damage already done by climate change and help adapting to a new environment.

Speaking at a recent “From COP21 to COP22” conference in Geneva, Helen Clark, administrator of the United Nations Development Program, said the next conference must drive mitigation efforts.

Following the Paris agreement, Clark said, agencies and governments must “scale up” initiatives to repair or reduce damage and help countries adapt to changing environmental conditions.

Clark said her agency would facilitate access to financial and technical resources along with other major global actors.

From decision to action

She said COP 22 in Morocco marks a transition from the consensus building and decision-making of Paris to a “COP of Action.”

Clark said that in addition to supporting development to reduce emissions, her agency will work with more than 100 countries to finance mitigation measures as well as strengthening disaster management work and linking it to climate change damage.

While Africa is the least polluting continent on the planet, it has suffered some of climate change’s most severe effects.

At the climate conference in Paris, African leaders emphasized the need for financial help to address losses in their countries.

Drought, flooding, erosion hit Africa

Southern Africa, including Mozambique, Botswana, Zimbabwe and South Africa has been hard hit by drought as have Ethiopia, Eritrea and Somalia in the Horn of Africa.

Drought has nearly emptied the Kariba Dam reservoir on the Zimbabwe-Zambia border, forcing power shortages and energy rationing.

At the same time, heavy rains, landslides and flooding have hit Burundi, Nigeria and Malawi.

In tiny Zanzibar, the rise of sea levels is salinizing the soil, making farming impossible. Zanzibaris have also seen rising temperatures, floods and increased sea waves.

Coastal erosion is emerging as a major threat in West Africa, where large shares of gross domestic products are associated with the sea, including fishing and tourism.

Financial help to mitigate damages and help countries adapt to a new and changing environment are expected to take center state at the Marrakech conference.

Morocco has ambitious plans to reduce emissions

Morocco hopes hosting the conference will also shine an international spotlight on its ambitious efforts to reduce its own reliance on greenhouse gas emissions with its pledge to reduce them by one third percent by 2030.

Morocco plans to increase the share of renewable energy to 42 percent by 2020 and to 52 percent by 2030. The country recently opened what is believed to be the world’s largest solar power plant near the city of Ouarzazate, about 120 miles southeast of Marrakech

As preparations get under way, organizers have begun holding workshops to educate tour and hotel operators and discuss logistics in the city of about 1 million population is Morocco’s most popular tourist destination, known for its colorful markets. Marrakech hosted COP7 in 2001.

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Nigeria says producers to meet in Moscow, sees dramatic impact

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

ABUJA (Reuters) – Some members of OPEC plan to meet other oil producers in Russia around March 20 for new talks on an oil output freeze, Nigeria’s petroleum minister said on Thursday, forecasting the meeting would spark a dramatic reaction in crude prices.

Nigeria has been pushing for action by the Organization of the Petroleum Exporting Countries because the slump in oil revenue has undercut its public finances and currency, leaving the government struggling to pay civil servants.

“We’re beginning to see the price of crude inch up very slowly,” minister Emmanuel Ibe Kachikwu told a conference in Abuja. “But if the meeting that we’re scheduling, it should happen in Russia, between the OPEC and non-OPEC producers, happens about March 20, we should see some dramatic price movement.”

“Both the Saudis and the Russians, everybody is coming back to the table,” Kachikwu said. “I think we’re very humbled today to accept that if we get to a price of $50, it will be celebrated. That’s a target that we have.”

The Russian Energy Ministry said it was ready for talks but the date and venue had yet to be agreed. “Currently, various options about the venue and date for the meeting, where measures on oil market stabilisation due to be discussed, are being worked out,” it said in a statement.

Benchmark Brent futures were around $37 per barrel by 1554 GMT on Thursday.

OPEC leader Saudi Arabia and non-OPEC Russia, the world’s two largest oil exporters, agreed last month to freeze output at January levels to prop up prices if other nations agreed to join the first global oil pact in 15 years.

Yet the accord has so far failed to have a dramatic impact on crude prices, partly because OPEC’s third-largest producer Iran plans to steeply raise production after the lifting of international sanctions on the Islamic Republic in January.

Nigerian President Muhammadu Buhari on Sunday stepped up rhetoric on the issue, telling Qatar’s ruler crude prices had fallen to “totally unacceptable” levels.

Kachikwu also said Nigeria was pumping 2.2 million barrels per day, in line with previous comments, of which 46 percent was coming from onshore fields.

He also said Nigeria’s average oil production cost from state firm NNPC and international companies was between $13 and $15 a barrel for onshore fields and $30 a barrel for deep offshore operations.

Oil prices have lost two thirds of their value since mid 2014 due to a glut of supplies caused by booming output from the United States and OPEC. In January they fell below $30 per barrel, their lowest in more than a decade.

 

(By Camillus Eboh. Writing by Dmitry Zhdannikov and Ulf Laessing; Editing by Susan Fenton and Susan Thomas)

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Finance minister says South Africa not on the path to austerity

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

JOHANNESBURG (Reuters) – South Africa’s recent budget was not aimed at implementing austerity measures and would not go the same path taken by some countries in Europe, the finance minister said on Thursday.

Gordhan’s pledge to narrow the budget deficit to 2.4 percent of GDP by 2018/19 was aimed at placating ratings agencies that had warned of downgrades.

“We are nowhere near austerity. We haven’t cut anybody’s pension, we haven’t raised the retirement age, haven’t cut any jobs in the public sector. Austerity as it was applied in parts of Europe is not what we are trying to do here,” Finance Minister Pravin Gordhan said at a business conference.

On the reported dispute between himself and the South African Revenue Service commissioner Tom Moyane, Gordhan said the dispute would be resolved in due course.

The two men have clashed amid a probe into a unit which allegedly operated unlawfully in the department under Gordhan’s watch during his previous stint as commissioner.

South Africa’s rand currency fell nearly 4 percent on Friday, its biggest daily loss since 2011, after Gordhan said there were attempts to discredit him and the integrity of the Treasury through the investigation.

The investigation also led to media reports of a fallout between Gordhan and Zuma, which both men have dismissed.

“I will stick to my job and do the best I can,” Gordhan said.

Gordhan said Treasury officials would meet investors in London, Boston and New York next week in a non-deal roadshow meant to clarify South Africa’s economic plans.

“(We will) explain the budget to them and the kind of direction that we want to go in,” Gordhan said.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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Data shows decline in governance in 21 African nations

3 March 2016 Comments (0) Africa, Featured, Politics

Ghana

10 countries see improvement in their political systems and Mauritius, Cabo Verde and Botswana are the top rated.

Africa has seen scant improvement in national governance in recent years and more than a third of its 21 nations saw declines in the quality of their civic systems, according to a comprehensive index established by a Sudanese philanthropist.

The overall average for the continent increased by only 0.2 points to 50.1 out of a total of 100 possible points between 2011 and 2014, according to the Ibrahim Index of African Governance. The index also showed a decline of more than two points in the area of economic opportunity.

Twenty-one countries, including five of the top ten nations, have experienced deterioration of government performance since 2011 while only 10 countries registered improvement.

The index revealed significant gaps. Mauritius was the top-rated nation with a score of 79.9; war-torn Somalia had the lowest with a score of only 8.5. Regionally, Southern Africa had the highest rating for governance at 58.9. Central Africa had the lowest, 40.9.

Index assesses safety, business climate

The annual index is produced by the foundation of Sudanese telecom billionaire Mohamed Ibrahim, who is known for fighting corruption. Launched in 2006, it evaluates governance in each of 54 African countries based on 93 indicators that fall into four broad categories: safety and rule of law, human development, participation and human rights, and sustainable economic opportunity.

The top 10 countries, with their ratings in parentheses, are: Mauritius (79.9), Cabo Verde (74.5) Botswana (74.2), South Africa (73), Namibia (70.4), Seychelles (70.3), Ghana (67.3), Tunisia (66.9), Senegal (62.4), and Lesotho (61.1).

Mauritius, Cabo Verde, Botswana, Seychelles and Ghana, saw ratings declines while the other five countries improved.

Other countries that showed improvement were: Ivory Coast (48.3), Morocco (57.6), Rwanda (60.7), Senegal (62.4), and Zimbabwe (40.4).

Ivory Coast shows most improvement

Ivory Coast was most improved with an increase of 8.4 points. The West African nation is emerging from years of civil war that was triggered by a disputed election in 2010 and left an estimated 3,000 people dead. Ivory Coast held successful democratic elections for president in 2015.

War-torn South Sudan, Mali and the Central African Republic posted the steepest drops in the ratings. South Sudan’s rating declined by 9.6 points to 19.9 out of 100. The Central African Republic’s rating decreased by 8.4 points to 24.9. Mali was down 8 points to a rating of 48.7.

Thousands have been killed or displaced in South Sudan as the government battled rebel forces since 2013. The United Nations has warned that nearly 25 percent of the population of South Sudan is in urgent need of food.

After years of civil unrest, Mali has been plagued by jihadist attacks targeting tourist locations. Islamist militants killed 20 hostages in November at a hotel in the capital of Bamako.

In the Central African Republic, hundreds have been killed and an estimated 35,000 people displaced since 2013, when a mostly Muslim group overthrew the government. Widespread accusations of human rights abuses by that group prompted formation of mostly Christian militias that have retaliated against Muslims.

Tanzania, Uganda among those with declines

These countries had also ratings declines of one point or more: Tanzania (56.7), Uganda (54.6), Mozambique (52.3), Gambia (50.5), Cameroon (45.9), Guinea-Bissau (35.7), and Libya (35.5).

Other countries whose ratings declined slightly (less than one point) were Benin (58.8), Malawi (56.7), Niger (48.4), Guinea (43.7), Equatorial Guinea (35.5), Eritrea (29.9).

Along with the Guinea-Bissau, Equatorial Guinea, Libya, Eritrea, Central African Republic, South Sudan, the bottom 10 included: the Democratic Republic of the Congo (33.9), Chad (32.8), Sudan (28.3), and last-place Somalia (8.5).

The index also revealed striking differences across regions of the continent, from an average low of 40.9 points in Central Africa to a high of 58.9 points in Southern Africa. East Africa scored 44.3, North Africa 51.2 and West Africa 52.4 In addition to being the lowest rated, Central Africa was the only region where governance deteriorated, according to the index.

Business environment declines

In its four categories, the index showed that the sustainable economic opportunity indicators had the lowest average score for the continent, 43.2 points, a decline of 0.7 points from 2011. In particular, the index showed a decline of 2.5 points in “business environment,” which included a drop of 11 points in the sub-category of soundness of banks.

Four countries bucked the trend, showing gains of 5 points or more on economic opportunity ratings: Morocco, Togo, Kenya and Democratic Republic of Congo.

Ibrahim said that while the continent has made significant progress in the past 15 years, the latest results are cause for concern.

The 2015 index “shows that recent progress in other key areas on the continent has either stalled or reversed, and that some key countries seem to be faltering,” he said. “This is a warning sign for all of us. Only shared and sustained improvements across all areas of governance will deliver the future that Africans deserve and demand.”

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South Africa’s MTN says may list in Nigeria once fine resolved

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

JOHANNESBURG (Reuters) – South Africa’s MTN Group may list its Nigerian unit on the stock exchange in Lagos once it has resolved a disputed $3.9 billion fine with authorities in the Western African nation, its executive chairman said on Thursday.

MTN also said it has set aside 9.3 billion rand ($600 million) to cover a potential settlement of a fine imposed by Nigerian authorities last year for failing to cut of unregistered SIM card users.

Shares in the mobile company rose more than 9 percent to 149 rand by 0845 GMT.

($1 = 15.645 rand)

 

(Reporting by Tiisetso Motsoeneng; Writing by Joe Brock; Editing by James Macharia)

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Janine Diagou rises to number 2 in family company

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

janine diagou

As head of banking of NSIA Group, Janine Diagou prepares to introduce company shares on the regional stock exchange.

When Janine Bénédicte Diagou joined the family insurance and banking business in 1999, it wasn’t guaranteed that she would be running it one day.

But 17 years later, she is group managing director and head of the banking division at NSIA Group, a leading insurer in French-speaking Africa based in the Ivory Coast, and the number two to her father, Jean Kacou Diagou, who founded NSIA Group in 1995 and serves as its president.

These are busy times for the Diagous as their company, which has pursued an aggressive growth strategy, prepares to take their bank public and introduce shares on the regional stock exchange for eight West African countries, including Ivory Coast.

For Janine Diagou, that has meant months of travel to meet with boards of subsidiaries in the region to smooth the way for the initial public offering, which will enable the bank to raise capital.

Diagou studied business in England, France

Janine Diagou studied business and finance in Paris and in London, obtaining a Bachelor’s Degree in business administration in France and a Master of Science degree in finance in England.

After she finished her studies in 1995, she joined Citibank in Abidjan, and then moved to Mobil Group ACOE as an internal auditor.

She said she took what was essentially a demotion to join her father’s company at his request in 1999, trading an executive role at Mobil Group for the more modest role of auditor at NSIA.

Her father was forming a new auditing group and asked her to join as a simple auditor.

“He asked me to cut my salary in half. I was not very excited at first, especially since I did not know the insurance industry. So we had to work hard to prove that I deserved my place,” she said.

Skepticism, then success

She said she faced skepticism and took pains to avoid being perceived as having the job because she was the daughter of the boss, including addressing him as “mister president.”

She rose to become financial director of the group and then took charge of strategic development. She assumed her current position in 2011.

She said she and her father never had a game plan for her advancement.

“He never promised me anything and, believe me, he did not ease the task either. I think in my job, I won his trust,” she said.

Progress for women in business

She believes her success is a victory for women in business.

“Convincing men in industry of your competence is not simple in Africa,” she said. “The main challenge was to prove again and again that I was capable of doing the job at least at the same level as men — and even better.”

She said she and her father have not reached a stage of discussing succession. Instead she is focused in gaining investor confidence that the company is sustainable.

Family, private investors having holdings

NSIA currently owns nearly 80 percent of the bank, with the family holding 60 percent and the remaining 20 percent in the hands of private investors. National Bank of Canada bought a 20.9 percent share in the bank for approximately $94 million in 2015.

NSIA Bank, formerly known as BIAO-CI is part of the financial group NSIA, which is a leading insurance provider in 12 countries across West and Central Africa. NSIA also owns a bank in Guinea. The company reported revenue of $3.3 million in 2014 and Jean Diagou forecast revenue would increase by 10 percent in 2015.

Few details of the initial public offering have been made public and no date for the stock sale has been announced.

Ivorian law requires companies to offer at least 10 percent of their shares to be listed on the exchange.

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South Africa’s Clover says will no longer invest in Nigeria

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

JOHANNESBURG (Reuters) – South Africa’s Clover Industries will no longer invest in Nigeria due to a financial crisis there, the dairy products company said on Wednesday.

“The current financial crisis experienced in Nigeria which is fuelled by the low oil price is a further cause of concern, thus the group has decided to withdraw from future investments in Nigeria,” Clover said in a statement.

Companies have laid off thousands, cut production and even closed operations as they struggle to get enough dollars to pay for imported spare parts and raw materials. The Nigerian naira had devalued following a slump in oil revenues, the country’s lifeblood.

“It’s a sad decision but until the currency crisis is resolved we wont be able to invest in there any further,” Chief Executive Johann Vorster told Reuters.

Clover had planned to invest no less that 100 million rand ($6.43 million) in developing its products in Nigeria, he said.

The company said it would continue to expand in Botswana, Namibia, Lesotho and Swaziland.

He added that the company would like to keep the Clover brand alive through its Tropika juices.

South African fashion retailer Truworths said this month it pulled out if its Nigerian business saying it was unable to import clothes and was struggling to pay rent and access foreign exchange.

Clover on Wednesday posted a 7 percent rise in first-half profits due to a higher demand for its milk products and as a heatwave in southern Africa caused consumers to reach for its juices and bottled water.

Headline earnings per share, a main gauge of profit in South Afica that strips out certain one-off items, for the six months to December totalled 117 cents from 109.2 cents in the previous year.

Vorster said Clover was on the prowl for acquisitions which it would fund through its balance sheet, adding that the firm could go to investors for cash “if needs be”.

($1 = 15.5603 rand)

 

(Reporting by Zandi Shabalala; Editing by Kim Coghill)

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