TUNIS (Reuters) – Tunisia’s central bank kept its key interest rate unchanged at 4.25 percent, the spokesman of bank said on Friday.
The bank last cut its main interest rate in October, from 4.75 percent, in a bid to boost economic growth as inflation fell. Inflation was 4.9 percent in 2015, down from 5.5 percent in 2014.
(Reporting By Tarek Amara; editing by Patrick Markey)
LAGOS (Reuters) – Lafarge Africa is in the middle of a roadshow to market a 60 billion naira ($302 million) bond programme to refinance loans at United Company of Nigeria (UNICEM), which it acquired last year, its finance chief said on Thursday.
“We are in the process of restructuring the UNICEM debt. We are in the middle of a roadshow,” Lafarge Africa Chief Finance Officer Anders Kristiansson told an analysts call.
“We want to refinance the U.S. dollar borrowings that we have in UNICEM.”
($1 = 198.55 naira)
(Reporting by Chijioke Ohuocha; Editing by Alexander Smith)
CAIRO (Reuters) – Egypt’s Commercial International Bank (CIB) approved a two-week extension for an offer by Beltone Financial to acquire its subsidiary CI Capital, CI Capital’s Chief Executive Officer Mahmoud Atalla told Reuters.
The offer was due to expire on Thursday.
“CIB approved Beltone’s request to extend the period of the offer to acquire CI Capital by two weeks, ending on May 12,” Atalla said.
In February, CIB signed a deal to sell investment bank CI Capital to Beltone, a unit of billionaire Naguib Sawiris’ Orascom Telecom OTMT.CA, for 924 million Egyptian pounds ($104 million) but the deal has stalled pending approval from Egyptian regulators.
Sawiris said at the time he planned to merge CI Capital with Beltone Financial, which OTMT bought last year, to create one of Egypt’s largest investment firms, but the deal has faced a series of delays.
The Egyptian Financial Supervisory Authority said this month that the deal was delayed pending the resolution of a court case and other issues, including a violation by Sawiris of pre-existing pledges to the EFSA.
Sawiris’s bid for CI Capital was also challenged in February when a unit of the state-owned National Bank of Egypt made a counter-offer. It later withdrew.
Sawiris later said the deal was being held up by national security concerns and criticised the state for meddling in business, adding that it discouraged investors.
(Reporting by Ehab Farouk; Writing by Asma Alsharif; Editing by Susan Fenton and Ed Osmond)
African Internet Group (AIG) has become the continent’s first ever start-up company to be valued at over $1 billion.
African Internet Group (AIG) has been a trailblazer since the company was launched, in 2012, and it has now become the continent’s first ever “unicorn” startup. A “unicorn” simply refers to any startup company that becomes valued at over $1 billion, of which there are only 151 across the globe.
While such success is an incredible achievement for any business, to attain such status within only 4 years of launching is an astounding feat.
It is not simply the matter of how AIG can provide employment and services in Africa, but how such success inspires others to pursue their ambitions within the continent.
It was expected that AIG would reach its “unicorn” standing by early this year, as turnover from its numerous brands continued to soar. Then, in March, the French insurance group AXA announced that it had purchased an 8% share of the company for $326 million, and AIG finally had a valuation of over $1 billion.
Within weeks of this announcement, the organization had further investment. French mobile phone company Orange declared it had put a further $85 million into AIG, adding still more revenue to the startup’s burgeoning resources.
While Orange’s plans for cross-promotion with AIG are not yet clear, AXA will look to sell insurance packages through AIG’s largest source of income, its Jumia online retail brand.
Jérémy Hodara
Jumia was set-up, alongside AIG, by co-founders Jérémy Hodara and Sacha Poignonnec to provide African customers with an online shopping experience that matched the one offered by Amazon to consumers outside of Africa. While primarily focused in Nigeria, Jumia has expanded into a further 10 countries.
As Jumia flourished, AIG bought up and invested in other African companies that tapped into the demand for greater services in retail and leisure. The AIG portfolio includes the likes of Hellofood, an app for food delivery and Easy Taxi, which is essentially an African Uber.
AIG now controls 71 companies across 26 nations in Africa, with 10 of these companies involved in the e-commerce sector. The growth in the e-commerce market has been “double-digit…month after month” according to CEO, Jérémy Hodara.
Whenever a company realizes the level of growth that AIG has experienced, it is pertinent to ask: just what did they do to achieve such huge and rapid success? In the case of AIG, there are a number of factors that have allowed the company to do something unprecedented in Africa, with two in particular standing out.
The first of these was the focus on understanding and meeting the wishes of local markets. In an interview with Forbes magazine, Hodara explained that many African consumers were unsure about online shopping and trust had to be carefully fostered. This was done by offering not only exceptional service but by giving options that would be unusual in a market like America. One example of such options was cash on delivery, as Hodara said, “That way, people have assurance they can pay when the product arrives.”
The second major differential, that marks AIG’s group of e-commerce sites apart, has been their vertical integration. While most retailers in the US or Europe would outsource delivery to an existing company, this would simply not provide the level of customer service AIG wanted in Africa. Therefore, they use their own fleet of drivers, which Hodara explains is “larger than UPS, Fedex and DHL in Nigeria.”
AIG also employs its own online marketing and IT teams, which, aside from ensuring quality control, also reduces costs. Hodara says, “We believe we need to control the value chain from A-Z.”
Online retail is an area that Hodara believes will eclipse “bricks and mortar retail” within Africa. With that in mind, it has been a huge boon to AIG to have struck deals with the continent’s largest telecommunications companies, Rocket Internet, Milicom International Cellular and MTN.
Even more tantalizingly, McKinsey Consultants predict that within 9 years’ time, Internet penetration in Africa will have hit 50%. The opportunity for even greater expansion is evidently within AIG’s grasp.
A few years ago, an African “unicorn” might have seemed a proposition almost as unbelievable as its namesake, but AIG has not just become a first, they have potentially changed forever how investors view African startups.
LUANDA (Reuters) – Angola has opened an investigation into the conduct of the management at the local unit of failed Portuguese bank Banco Espirito Santo, Attorney General Joao Maria de Sousa said on Wednesday.
Banco Espirito Santo (BES) collapsed in 2014 under the weight of its founding family’s debts and exposure to bad loans in Angola.
Portugal’s Novo Banco was carved out as the “good bank” from BES, while its Angolan unit Banco Espirito Santo Angola (BESA) was reincarnated as Banco Economico, with new shareholders including state oil company Sonangol.
“We have opened an inquiry on Banco Espirito Santo Angola management. This inquiry was an initiative of the bank shareholders,” de Sousa told reporters.
“I can not talk about the possibility of arrests in this process because I don’t know the facts.”
(Reporting by Herculano Coroado, Writing by Stella Mapenzauswa, Editing by Angus MacSwan)
MAPUTO (Reuters) – Mozambique provided guarantees on loans to state firms Proindicus and Mozambique Asset Management to protect strategic national infrastructure and help maintain naval equipment, a government spokesman said.
The spokesman’s comment, in a statement, followed disclosure by the International Monetary Fund last week that Mozambique had admitted to having more than $1 billion of undisclosed debt and that the two parties were evaluating the implications of the disclosure.
Earlier, a source at the Fund had told Reuters that Proindicus, owned by the interior and defence ministries and the state security services, had been lent $504 million by Credit Suisse and $118 million by Russia’s VTB.
Another loan of $535 million had gone to Mozambique Asset Management, another state company set up to build a shipyard in the northern city of Pemba, that source said.
In his statement dated Tuesday but acquired by Reuters on Wednesday, spokesman Mouzinho Saide said the government had granted a $622 million loan guarantee to Proindicus in 2013, and $535 million to Mozambique Asset Management the following year.
“We faced security threats, such as piracy … illegal immigration, drug trafficking … and illegal fishing,” Saide said after a meeting of Mozambique’s cabinet.
He said the government had also been keen to ensure protection of the assets of oil and gas companies operating in Mozambique’s exclusive economic zone.
The loans are in addition to an $850 million ‘tuna bond’ issued in 2013 and restructured last month because the southeast African nation was struggling to meet repayments.
The IMF source said the extra borrowing had pushed Mozambique’s foreign debt to $9.64 billion, a level “very close to unsustainability”.
(Reporting by Manuel Mucari; Writing by Stella Mapenzauswa; Editing by Richard Balmforth)
ABUJA (Reuters) – The World Bank held talks with the Nigerian president on Wednesday on how it could help Nigeria overcome an economic crisis caused mainly by a sharp fall in crude prices eating into its oil revenues.
On her second day of meetings with Nigerian officials, World Bank Managing Director and Chief Operating Officer Sri Mulyani Indrawati met President Muhammadu Buhari, who plans to stimulate the flagging economy with a record 6 trillion naira ($31 billion) budget.
Nigeria will have to borrow 1.8 trillion naira from abroad and at home to help fund the budget, which has been delayed by several months and wrangling with parliament, if it goes ahead.
Although Nigeria has held talks with the World Bank over a possible loan or credit facility in recent months, Indrawati did not address this when speaking to reporters after the meeting.
“We would like to know how we can help Nigeria to make the very important decisions, whether on micro economic policy and other sectoral policy, that will make this economy move forward to become a strong middle income country,” she said.
Indrawati, who met Finance Minister Kemi Adeosun on Tuesday, said she and Buhari discussed the government’s “commendable goals to improve tax collection and crackdown on corruption.
Nigeria’s economy, the largest in Africa, grew by 2.8 percent last year, its slowest pace since 1999.
(By Felix Onuah. Writing by Alexis Akwagyiram; Editing by Raissa Kasolowsky)
The mid-size financial institution works to emerge from receivership after questionable loans discovered and top executives dismissed.
Chase Bank Ltd. in Kenya is reopening its branch offices and resuming online and mobile banking services this week as the troubled financial institution seeks to emerge from receivership with new management and a new majority owner.
The bank was abruptly closed by Kenyan regulators in early April after its chairman and managing director resigned because an audit revealed that the bank had loaned $80 million to its own directors and had allowed its bad debts to rise to $100 million.
Kenya Commercial Bank Group Ltd., Kenya’s largest bank and a Chase rival, agreed to acquire a majority stake in Chase Bank on April 19 and began reopening its branch offices and restoring online services.
Chase is the country’s 11th largest bank with assets of $1.4 billion. Chase has more than 40 branches and 100,000 customers. It is a mid-sized bank and has a mix of low and middle-income customers. Chase also operates Islamic banking services for wealthy business customers who trade with companies in the Middle East.
Chase, the third Kenyan bank to falter in less than a year, had reported a profit of $23 million in 2014 but recorded a loss of $7 million last year.
The bank was closed on April 7 after hundreds of panicked customers made a run on the bank based on rumors of problems on social media, according to the Central Bank of Kenya, which took control of the bank after financial discrepancies emerged.
The trouble began after Chase released two conflicting financial statements. An audit uncovered hidden loans to bank directors. Chase dismissed the two bank executives and police have ordered their arrest.
The Central Bank of Kenya said in a statement that Chase “experienced liquidity difficulties” and was not able to meet its financial obligations after panicked customers began making large withdrawals.
Chase is the third Kenyan bank to be placed in receivership because of liquidity problems and questions of mismanagement within the past year as regulators have stepped up scrutiny of the country’s financial institutions.
Central Bank Governor Patrick Ngugi Njoroge
Dubai Bank, a small institution, was taken over by regulators in August and Imperial Bank, a midsize financial institution, collapsed in October. Police in March also ordered the arrest of the chief executive officer and five other executives at a fourth bank, National Bank of Kenya, where an audit was scheduled.
Central Bank governor Patrick Ngugi Njoroge has tightened regulatory control on the nation’s banking industry since he took office in July. Earlier this year, Njoroge ordered a moratorium on new bank licenses until an investigation into the health of the country’s banks is complete.
Bank consolidations are likely going forward as Kenya has an oversupply of financial institutions.
Kenya, with a population of 40 million and a $61 billion economy, has more than 40 banks. By comparison, Nigeria, with more than four times the population and an economy nine times as big, has 22 banks.
This large number of financial institutions creates a competitive environment in which banks may take unwarranted risks. At the same time, Kenya has traditionally allowed banks to maintain relatively low reserves, making smaller banks vulnerable to runs.
One banker said the central bank should force banks into “arranged marriages” to winnow and stabilize the banking sector. Banks that refuse should lose their licenses, according to John Gacora, managing director of Kenya’s NIC Bank.
Hoping to calm pubic fears, Njoroge said the central bank would offer support to any bank that suffered liquidity problems through no fault of its own.
Njoroge said he hoped the Chase re-openings also would restore public confidence in the country’s banking system, which he said was stable in spite of problems at the four banks.
Kenyan regulators said they received offers from six local banks and two foreign banks for Chase.
The central bank cited KCB’s reputation as a strong bank with long experience in Kenya in favoring the larger bank’s acquisition of Chase.
Opening Chase under the management of KCB “will improve the profile of the troubled lender by capitalizing on the sound reputation of KCB,” said Eric Munywok, an executive at Sterling Capital. “If KCB wasn’t involved, a lot of depositors might have fled.”
Financial experts said Chase customers would be well served by KCB Group, which would gain as well.
Maurice Oduor, an investment manager at Cytonn, said the main question is whether clients will stay with the bank following the scare in early April. “Clients may go away unless KCB ups its game in client service.”
The new management has a year to demonstrate it can emerge from receivership, In the meantime, the central bank has placed a moratorium on payments to Chase creditors of Chase Bank until the new team comes up with a plan for dealing with the bank’s debts.
By Lawrence White
LONDON (Reuters) – Atlas Mara, the African investment vehicle of former Barclays boss Bob Diamond, has held discussions with investors with a view to making a bid for Barclays’ African business, it said on Tuesday.
Atlas said such an acquisition would help it accelerate its strategy to build a major financial firm across sub-Saharan Africa and that it had already lined up funding for an offer, without elaborating on what form the financing would take.
“The consortium has committed, long-term strategic investors, the funding is in place,” Diamond said on a conference call.
Atlas Mara’s equity at the end of 2015 was $625 million, while Barclays Africa has a market value of $8.47 billion, causing some analysts to question whether they can muster the financial fire power to make a serious offer.
“I am very skeptical that they can pull it off quite frankly,” said Zoran Milojevic, a director at Auerbach Grayson, a New York brokerage specialising in emerging and frontier markets.
“However, if this were to happen, they would certainly jump a lot of hurdles, and join the proper playing field in African banking.”
Private equity group Carlyle is one member of the consortium, a source familiar with the matter told Reuters this week following media reports of the U.S. fund’s interest.
Barclays said this year it would sell down its 62 percent stake in Barclays Africa to focus on other divisions. While its business is mainly in South Africa, it has operations in Botswana, Ghana, Kenya, Mauritius, Mozambique and Seychelles.
Atlas said there was no certainty a transaction would be completed but if discussions with investors resulted in more substantive negotiations with Barclays, Diamond and co-founder Ashish J. Thakkar would recuse themselves from the talks.
Shares in Barclays Africa rose 1.2 percent by 1445 GMT while shares in Atlas Mara were up 4.9 percent, but remain down 18 percent so far this year amid a dim outlook for African banking.
“We share your pain, our money is where our mouth is,” Diamond told investors on Tuesday in reference to his and other senior executives’ investments in Atlas’s declining shares.
Founded in 2013, Atlas made four acquisitions in 2014 and now has operations in Botswana, Mozambique, Zambia, Zimbabwe, Rwanda, Tanzania and Nigeria.
But some of those countries have felt the brunt of the global slump in commodity prices, which has sapped government budgets and caused the likes of Zambia and Mozambique to turn to the International Monetary Fund for support. [nL5N17H32A]
Atlas Mara earlier on Tuesday reported profit before tax of $19.2 million for 2015, compared with a pretax loss of $58 million in 2014.
(Additional reporting by Andrew MacAskill and Karin Strohecker; editing by Sinead Cruise and David Clarke)
ACCRA (Reuters) – New Bank of Ghana’s Governor Abdul-Nashiru Issahaku said in his first domestic speech on Tuesday that bringing down inflation and reducing interest rates were his main priorities but that achieving those goals would take some time.
The Bank also remains committed to enabling commercial banks to scale up lending to small and medium sized businesses and other sectors in order to boost gross domestic product growth, Issahaku said.
(Reporting by Matthew Mpoke Bigg; Editing by Joe Bavier)
