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South Africa grants first bourse licence in over 100 years

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

JOHANNESBURG (Reuters) – South Africa has issued its first stock exchange operating licence in more than 100 years, paving the way for a local company to compete with the Johannesburg Stock Exchange (JSE).

ZAR X Stock Exchange said on Wednesday it would start operating in September after securing approval from the Financial Service Board (FSB).

The bourse will be the second exchange after the more than a century old JSE, Africa’s biggest and most liquid stock market.

ZAR X plans to facilitate listings of restricted share schemes, currently trading over-the-counter (OTC), which the FSB ruled were in contravention of capital markets regulations.

 

(Reporting by Nqobile Dludla; Editing David Evans)

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The African CEO Forum 2016

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The first African CEO Forum Awards held within the continent sees new awards and renewed progress.

The 2016 African CEO Forum and its accompanying award ceremony was a benchmark event in the forum’s 4 year history. Taking place from March 21st to the 22nd, this was the first time the business networking event was held within Africa. The Ivory Coast was chosen to play host to the annual conference of African CEO’s, bankers and developers that aims to continue the continent’s economic growth and innovation.

“We concluded deals worth $30 million”.

Since the inaugural forum of 2012, investors and business figures from across Africa have used the event to form new commercial opportunities, broker deals and establish a stronger network of communication and development among the men and women who are steering African development through the 21st Century.

Official figures indicate that since the first edition of the CEO forum, 70% of all participants have come away having identified new business ventures or actually concluded new deals, with the likes of Felix Bipko of the African Guarantee Fund, finalizing deals worth $30 million in only the first year of the forum’s existence.

The Ivory Coast – progress in the face of adversity

After the third edition of the African CEO Forum broke all attendance records, the 2016 conference aimed to not only break old records but break new ground in bringing the forum to African soil for the first time. The Ivory Coast seemed an obvious choice given that it is seen as the driving force behind the integration of the 15 nations that make up the Economic Community of West African States (ECOWAS), an area that has had the highest economic growth in Africa over the past 5 years.

African CEO Forum founder and President, Amir Ben Yahmed explained the choice of the host nation further:

“[W]e have chosen a country and a region that is showing clear signs of robust economic development. The fact that the African Development Bank is based there …was a further contributing factor.”

However, when terrorist attacks shook the nation on March 14th, the event seemed in jeopardy. But a strong united stance from both the organizers and key political figures within Africa ensured that progress and development continued to triumph over individuals trying to use fear to derail stability.

“We continue our mission.”  – Amir Ben Yahmed

A resolute stance was immediately taken in the wake of the attacks as the organizers made it clear that the event would go ahead and a strong message of solidarity was sent when the respective presidents of The Ivory Coast and Ghana, Alassane Ouattara and Dramani Mahama, confirmed their attendance.

With over 800 participants from across Africa, the forum was a triumph that continues to grow and open up new horizons for African commerce and trade.

The 2016 event added to the existing structure of debates and meetings by introducing new “Deal Rooms” that allow smaller meetings between investors and company owners to forge new links, exchange ideas on fostering growth of their businesses and to put pen to paper on new deals.

“Our future is bright and belongs to us all” – Oba Otudeko.

As always, the forum hosted its annual award ceremony in which a panel of carefully selected figures within African business select the winners of various awards from African CEO of the year to Private Equity Investor of the Year. This year also saw a new award for Young CEO of the year.

Oba Otudeko of the Honeywell Group won CEO of the Year and accepted the award from one of the forum’s major sponsors, Jay Ireland, CEO of General Electric Africa.

Sebastien Kadio-Morokro of Petro-Ivoire was awarded the maiden Young CEO of the Year by Akinwumi Ayodeji Adesina, President of the African Development Bank.

Dangote Group won the African Company of the Year and was presented with their trophy by African CEO Forum President Amir Ben Yahmed.

BGFI Bank was awarded with the African Bank of the Year accolade by Adama Koné, the Ivorian Minister of Economy and Finance.

Emerging Capital Partners took home the prize for the Private Equity Investor of the Year, and were presented with the title by Cheikh Oumar Seydi, the regional director of the International Finance Corporation.

Heineken were rewarded with the title of International Corporation of the Year.

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Glencore to invest $1.1 bil in Zambia, kwacha gains

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

LUSAKA (Reuters) – Glencore will invest over $1.1 billion in Zambia to sink three copper mine shafts with new technology that will extend mine life by over 25 years, pushing the kwacha to its highest in two months.

By 1040 GMT the currency of Africa’s number 2 copper producer had gained 1.3 percent to 11.1100 per dollar, its firmest level since Jan. 19.

“The news from Glencore obviously sent a positive signal but overall we are seeing a lot of dollar supply with very little demand,” analyst Maambo Hamaundu said.

Glencore plans to make the investments between now and 2018 and it was expected that Mopani Copper Mines (MCM) would be turned into a world-class mining operation by 2023, it said.

“We firmly believe that we shall be able to overcome the challenges that we face today as a company and become profitable and operationally efficient,” Mopani said in a statement.

Glencore was fully committed to Mopani and had invested over $3 billion in upgrading infrastructure and in major capital expansion programmes since 2000, Mopani said.

An electricity shortage in the southern African country and weaker copper prices have put pressure on Zambia’s mining industry, threatening output, jobs and economic growth.

 

(Reporting by Chris Mfula; Editing by Susan Thomas)

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Nigeria talks to Chevron, Total and ENI to revamp refineries

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

ABUJA (Reuters) – Nigeria is in talks with oil majors Chevron, France’s Total and Italy’s ENI to get help revamping the ailing refineries in Africa’s top crude producer, its oil minister said on Tuesday.

The West African nation has been trying to restart its outdated refineries in Port Harcourt, Warri and Kaduna to end its dependency on costly fuel imports. For weeks, motorists across the country have been queuing to get petrol.

Emmanuel Ibe Kachikwu, who also heads state oil firm NNPC, said OPEC member Nigeria wanted to privatize the refineries within 12 months following repairs.

“We have gotten commitments from some of the majors. (ENI’s) Agip has indicated interest to work with us on Port Harcourt, Chevron on Warri,” he told the Senate or upper house. “We are talking to Total on Kaduna.”

Kachikwu has previously said NNPC was looking at partnerships or takeovers.

“We are advertising just in case there are better terms out there,” he said, adding that NNPC was also seeking partners to run pipelines and fuel depots as joint ventures.

NNPC had managed to repair the pipelines feeding the Port Harcourt and Warri refineries, he said. Kaduna is fed by a pipeline from Warri.

Kachikwu said that from next week on fuel queues would disappear.

He said NNPC had reached deals with oil majors, with which it works in joint ventures, to help make up for a shortage of dollars due to a slump in oil revenues hindering fuel imports.

“The major international upstream oil companies have indicated their willingness to support major oil marketing companies with some of the required foreign exchange,” Kachikwu said.

“As of today, we have been able to work, in collaboration with the majors…with them to see how they can sell us foreign exchange for the naira components they require for their local operations,” he said, without giving details.

In February, Kachikwu told Reuters NNPC was in talks with oil majors and banks to raise capital for new drilling and to repay its debt accumulated from years of mismanagement. The debt had fallen to $3 billion by December, down from $3.5-$4 billion, he said on Tuesday.

President Muhammadu Buhari fired the NNPC board and appointed Kachikwu last year to overhaul the company, whose opaque structures have allowed corruption and oil theft to flourish.

 

(Reporting by Camillus Eboh; Writing by Ulf Laessing; Editing by Hugh Lawson)

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South Africa’s Eskom rules out bond issue for now: CEO

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JOHANNESBURG (Reuters) – The boss of South African utility Eskom has ruled out for now issuing bonds to help fund $21 billion of new power plants, saying on Tuesday the credit market was not favourable.

The state-owned company, which provides virtually all of South Africa’s electricity, is building three new power plants to help shore up power reserves, and expects to add 5,620 megawatts (MW) to the network by 2018.

“We will only issue a bond based on market conditions. At the moment they don’t seem very favourable,” chief executive Brian Molefe told Reuters on the sidelines of a company function.

Molefe, drafted in last April from state rail and freight firm Transnet to stabilise the power producer and help it keep the lights on, said Eskom was instead in talks with banks about multi-lateral loans.

“We have the option of going to banks and DFIs (development finance institutions) for multi-lateral loans, which is what we are negotiating now,” he said.

But Molefe said the Eskom, whose Ba1 credit rating is under review by Moody’s for potential downgrade, was not under any liquidity pressure because it had raised enough money to cover its capital needs for both the 2016 and 2017 fiscal years.

Eskom faced a crippling cash crunch last year that forced the government to inject nearly 80 billion rand in equity. The utility also had to impose almost daily rolling power cuts that hurt economic growth to prevent the grid from collapsing.

Eskom has said it does not expect power cuts this year.

($1 = 15.4771 rand)

 

(Reporting by Tiisetso Motsoeneng; Editing by Mark Potter)

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Ghana central bank governor says he will retire end-March

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ACCRA (Reuters) – Bank of Ghana governor Henry Kofi Wampah will retire at the end of March, he told Reuters on Tuesday, cutting short a four-year term during which he struggled to rein in inflation and stem the decline of the cedi currency.

Wampah, whose term officially ends on Aug. 5, said he had informed President John Mahama of his intention to leave early, adding that it would give his successor time to settle in before presidential and parliamentary elections planned for November.

 

(Reporting by Kwasi Kpodo; Editing by Joe Bavier)

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U.S. to press Nigeria on foreign exchange rate flexibility

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

WASHINGTON (Reuters) – The United States said on Monday it would press Nigeria in talks this week to adopt a more flexible foreign exchange rate to boost growth and investment in Africa’s largest economy.

U.S. Assistant Secretary of State for Africa, Linda Thomas-Greenfield, told an audience at the U.S. Institute of Peace that Nigeria should ensure that the value of the naira currency versus the U.S. dollar was “more realistic.”

“While most people complain about the possibility of there being a devaluation, people are already operating on a devalued currency, and the only people who are not, are people who are doing it officially,” Thomas-Greenfield said.

“Our recommendation is, and we will have discussions about it … that they should look at the exchange rate and try to make the exchange rate more realistic to what the value of the naira is to the dollar,” she added.

She spoke before talks in Washington to be launched by Secretary of State John Kerry on Wednesday and which will focus on Nigeria’s economy, security and development.

Nigeria faces its worst economic crisis in decades as the falling price of oil has slashed revenues, prompting the central bank to peg the currency and introduce curbs to protect foreign exchange reserves, which have fallen to an 11-year low.

Some members of Nigeria’s central bank monetary policy committee have said the naira should be devalued.

Thomas-Greenfield said the parallel currency market in Nigeria was “alive and well,” warning that a rigid exchange rate, capital controls and import bans could undermine President Muhammadu Buhari’s efforts to expand economic growth and fight corruption. Buhari has rejected the idea of devaluing the naira.

“Capital controls that limit access to foreign exchange rewards insiders and undermines the stated goals of Nigeria to increase domestic production because both Nigerian and expat investors alike tell us many businesses are unable to obtain the capital to purchase badly needed intermediate goods,” she said.

The naira trades some 40 percent below the official rate on the black market versus the dollar. The central bank last year pegged the exchange rate to curb speculative demand for the dollar and conserve foreign exchange reserves after it restricted access to hard currency for imports of certain items, frustrating businesses.

The International Monetary Fund called on Nigeria to lift the curbs and let the naira reflect market forces more closely, as the restrictions have significantly affected the private sector.

 

 

(Reporting by Lesley Wroughton; Editing by Tom Brown and Peter Cooney)

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Exxon Mobil in talks to buy into Eni’s giant Mozambique gas field

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MILAN/LONDON (Reuters) – Exxon Mobil is in talks to buy a stake of around 15 percent in Italian oil major Eni’s giant Area 4 gas field in Mozambique, two sources familiar with the matter said. Exxon is seen as a front-runner to buy into Eni’s gas development and this would be the U.S. firm’s first big acquisition since the oil price collapse. Area 4, in which Eni holds a 50 percent operating stake, is located in Mozambique’s Rovuma Basin, where gas in place amounts to some 85 trillion cubic feet — one of the richest gas discoveries of recent times.It will feed a series of onshore LNG export plants, mainly supplying Asian markets. ENI said previously it aimed to sell around 15 percent of the field.

Two sources said Exxon was in talks to buy a stake of that size, one of whom said Eni was also negotiating with other firms. “I am upbeat a deal will be reached fairly soon,” the second source said. A banking source familiar with the matter said Exxon was interested in buying Eni’s whole 50 percent stake, while a fourth source said Exxon was looking at unspecified stakes in all Eni holdings up for sale, also including assets in Egypt and elsewhere in Africa. Exxon and Eni declined to comment. Eni, a front-runner among the majors in finding reserves, said earlier this month it would sell 7 billion euros of assets to 2019, most from farming down prize acreage. But it aims to hang on to operatorship of the fields. “The disposals will be mainly through the dilution of our stakes in recent and material discoveries,” CEO Claudio Descalzi said earlier this month, picking out Mozambique and Egypt as prime candidates. Descalzi said the group was not far from disposal in Mozambique, where it was holding talks with “a lot of interested parties”. Sales talks have got bogged down in recent years after crashing oil and gas prices drove a wedge between buyers’ and sellers’ price expectations, industry sources have said. Eni has been in talks with several buyers including China’s Huadian Corp, sources have said. The huge productive capacity of Eni’s Mozambique acreage attracted peak valuations two years ago, when Eni sold 20 percent to China’s CNPC for $4.2 billion, amid strong competition for reserves.

 

(Reporting by Oleg Vukmanovic and Stephen Jewkes in Milan, Ron Bousso and Freya Berry in London, Terry Wade in Houston; editing by John Stonestreet)

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Laughing Cow goes to Africa

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Bel Group, the third largest cheese-maker in the world increases sales and production on the continent, including a new pre-fabricated factory in Ivory Coast to produce The Laughing Cow cheese.

Bel Group, the world’s third largest cheese-maker and producer of popular The Laughing Cow cheese (La Vache qui Rit), launched a miniaturized production operation in Ivory Coast in an innovative pre-fabricated factory.

The French cheese-maker, which also has production plants in Morocco and Algeria, has found a growing market in Africa, selling more than two billion single-serving portions of Laughing Cow cheese in 2015.

The new plant in Abidjan, which began production in December 2015, was designed, assembled and tested at Bel Group’s research center in Vendome, France before it was shipped as a kit to the Ivory Coast in 14 containers. The factory was constructed “like a Lego,” said Bel CEO Antoine Fievet.

Company miniaturizes production process

Before designing the plant, Bel Group spent three years figuring out how to miniaturize its production process so that it could prefabricate plants as it seeks to grow its local operations in key markets where import processes are expensive or cumbersome.

The Abidjan plant, located in the industrial area of Yopougon, will produce 100,000 portions of cheese daily for sale in Ivory Coast, Bel said. The 4,200-square-meter plant, which cost $3.4 million, can manufacture 20 million cheese servings annually.

Bel patents factory design

“This unique plant once again demonstrates the expertise of Bel in miniaturization and the innovation capacity of our industrial teams,” Hubert Mayet, Bel director general of industrial operations and technology, research and innovation, said.

Mayet said the plant employed 12 people with an expansion to 20 planned for 2016.

Bel will import raw material for producing cheese, Bel said. “If success is to go, we can easily increase the size of the plant and will launch other products,” Fievet said.

Bell called the pre-fabricated factory “unprecedented in the cheese industry. Bel, which has patented the concept out of fear that competitors might copy it, said pre-fabricated factories could soon be deployed in other key market locations.

Plants in Morocco, Algeria

In addition to the new plant in Ivory Coast, Bel employs a total of 3,500 people in factories in North Africa and Egypt. Bel Group also has operations in Turkey and Iran, and the company operated in Syria until civil war broke out.

In Morocco, Bel cheese is the market leader, selling brands including The Laughing Cow, Kiri and the Children.

The company in August 2015 acquired a nearly 70 percent stake in one of Morocco’s largest dairies, Salfilait, which processes and sells fresh milk and dairy products under the brand name Jibal.

Bel Group CEO Antoine Fievet said “Bel is proud of its success in Morocco built with the help of historical local partners. The group welcomes this new partnership with renowned a Moroccan industry and responds fully to its strategic development goal.” He called the two companies “close cousins.”

Tangier plant launched in 1970s

Bel has operated in Morocco since the 1970s with a plant in Tangiers that employs about 1,500 people.

In Algeria, Bel employs about 1,000 people at a production facility in Algiers. It established the operation Bel Algeria operation in 2001.

Bel is the third largest cheese-maker in the word after Lactalis and Kraft.

Founded in 1865 in France, Bel, now headquartered in Paris, has 28 production plants worldwide and distributes its products in 133 countries, including 44 countries in Africa.

laughing cow

400 million customers

According to Bel, 400 million consumers globally partake of its cheeses each year and 10 million portions are consumed each day. In addition to The Laughing Cow, major brands include Kiri, Mini Babybel, Boursin and Leerdammer.

Bell also launched operations in the United States, opening a plant in Brookings, South Dakota with capacity to produce 20,000 tons of cheese a year in order to meet strong U.S. demand for Mini Babybel cheese. Bel Groups sales in the United States increased by 40 percent between 2013 and 2015.

World-wide, the company reported sales of nearly $4 billion in 2014, an increase of more than 20 percent from the year before.

In 2015, Bel reported a revenue increase of nearly 6 percent to nearly $4.2 billion.

International markets accounted for much of that group with increases of 29 percent in the Americas and Asia. Net income increased by 50 percent to $205 million.

Large share of company growth in Africa

Bel said about 63 percent of the company’s growth in volume came from Africa in 2015, which saw an increase in sales of 8 percent on the African continent, generating $475 million in revenue.

The company has operated in Africa for more than 50 years and sees the continent as a further growth area for sales.

”Bel is already a leader in Africa, but the continent still offers numerous untouched markets worth exploring,” the company said.

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South Africa assets soften, investors risk-wary ahead of long weekend

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JOHANNESBURG (Reuters) – South African assets ended a shortened trading week on the backfoot on Thursday, with expectations of higher U.S. interest rates hurting the rand and investors taking no chances before the four-day Easter weekend.

In equities, shares in mobile networks operator MTN blazed the downhill trail, sliding over 10 percent as they traded ex-dividend and on the emergence of new complications in its efforts to cut the size of a hefty fine it faces in Nigeria.

Nigeria’s parliament has launched a probe into whether the telecoms regulator can reduce a fine slapped on MTN for missing a deadline to disconnect unregistered SIM card users, a lawmaker said on Thursday.

The move might complicate efforts by Africa’s biggest cell phone operator to reduce the fine, which had originally amounted to $5.2 billion and was cut by Nigeria’s telecoms regulator to $3.9 billion in December.

Overall, investor appetite for South African assets was dimmed by the prospect of getting caught out ahead of a four-day holiday weekend.

“People don’t want to go into the long weekend holding the rand. There is risk aversion all round but South Africa, including equities, has been hit quite badly,” said Bart Stemmet, an analyst at NKC African Economics.

The benchmark Top-40 index slipped 0.57 percent to 46,349.01 while the wider All-share index declined 0.47 percent to 52,323.78. It was the third straight session that South African stocks ended in the red.

Trade volumes were thinner than usual with around 211 million shares changing hands.

At 1520 GMT, the rand traded at 15.5650 per dollar dollar, 1.33 percent weaker from Wednesday’s New York close of 15.3600. Government bonds were mixed, with the yield for the benchmark instrument due in 2026 flat at 9.37 percent.

 

(Reporting by Ed Stoddard and Olivia Kumwenda-Mtambo; Editing by Tom Heneghan)

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