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Bank of China targets Africa with Mauritius banking licence

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

PORT LOUIS (Reuters) – The Mauritius central bank said it has issued a banking licence to Bank of China, the first Chinese bank licensed to operate on the Indian Ocean island.

Zhang Xiaoqing, who is leading a team setting up the Mauritius unit, said Bank of China wanted to provide financial services to African businesses and serve multinationals and others doing business between China and Mauritius.

Bank of Mauritius Governor Ramesh Basant Roi told reporters on Friday the bank was expected to start operations in the next few months but did not give a date.

Mauritius has a growing financial industry and has been promoting the territory as a base for businesses working in Africa and beyond.

 

(Reporting by Jean Paul Arouff; Editing by Edmund Blair and Alexander Smith)

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South Africa’s rand weakens on Zuma showdown, stocks open flat

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

JOHANNESBURG (Reuters) – South Africa’s rand weakened against the dollar early on Friday as investors turned focus to a political scandal that has jolted President Jacob Zuma’s government and a potential sovereign ratings downgrade.

At 0702 GMT, the rand traded at 15.2400 per dollar dollar, 0.46 percent weaker from Thursday’s New York close of 15.1700.

The currency had rallied more than 3 percent to its strongest in more than a week on Thursday after the central bank hiked interest rates.

“Factors to consider are any news on the political front, over the long weekend the ANC (African National Congress) is holding its NEC (National Executive Committee) Lekgotla and we await any news from Moody’s who are currently in South Africa,” Nedbank analysts said in a note, referring to a meeting of the top brass of the ruling party.

Analysts from Moody’s credit rating agency were due to complete their three-day visit to South Africa on Friday after putting its Baa2 rating on review, according to the Treasury.

Investors fear further political uncertainty could hasten a downgrade, with Fitch and Standard & Poor’s already rating the country just one step above junk status.

The government has been jolted this week by suggestions that a wealthy family with close ties to Zuma may have been behind his decision to sack the country’s respected finance minister Nhlanhla Nene in December.

Zuma, who is due to hold a three-day meeting with top ANC officials from Friday, has denied being influenced by anyone in the appointment of cabinet ministers.

On the stock market, the benchmark Top-40 index was flat in early trade, sliding 0.02 percent.

In fixed income, the yield for the benchmark instrument due in 2026 down 3 basis points to 9.145 percent.

 

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

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Africa’s richest man Dangote bids for Peugeot Nigeria stake

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

LAGOS (Reuters) – Aliko Dangote, Africa’s richest man, has teamed up with two Nigerian states to bid for a majority stake in Peugeot Automobile Nigeria (PAN) Limited, a local joint venture with the French automaker, the governor of Kaduna State said on Thursday.

Governor Nasir El-rufai said the states of Kaduna and Kebbi along with development lender Bank of Industry (BoI) and Dangote have submitted bids for the stake which AMCON, Nigeria’s state-backed “bad bank”, is looking to sell.

 

(Reporting by Oludare Mayowa; writing by Chijioke Ohuocha; editing by Jason Neely)

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Zimbabwe expects first IMF loan in nearly two decades this year

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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Morocco Jan-Feb trade deficit rises 10.1%

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

RABAT (Reuters) – Morocco’s trade deficit rose 10.1 percent to 21.16 billion dirhams ($2.17 billion) in the first two months of 2016 compared with a year earlier, due to higher imports, the foreign exchange regulator said on Wednesday.

The trade gap was up from 19.23 billion dirhams at the end of February 2015, as equipment imports rose 14.4 percent to 15 billion dirhams, data showed. Wheat imports jumped 44.2 percent from a year earlier to 2.35 billion dirhams as harsh weather hit the local harvest this year.

It is the first time the deficit has risen in more than 18 months as the North African kingdom has been taking advantage of lower energy prices. Morocco is a net energy importer.

Energy imports fell 21.1 percent to 7.1 billion dirhams, it said.

Total exports rose 1.2 percent from a year earlier to 36.3 billion dirhams, led by an 10 percent rise in auto exports. Phosphate sales fell 8.3 percent to 5 billion dirhams.

Tourism receipts rise slightly by 1.1 percent, while remittances from the 4.5 million Moroccans living abroad were flat at 9.4 billion dirhams. Foreign direct investment rose 6.2 percent to 5.36 billion dirhams.

 

Figures are in billions of dirhams:

 

Jan-Fev Jan-Fev Jan

2016 2015 2016

 

EXPORTS 36.29 35.85 18.32

IMPORTS 57.45 55.08 25.68

BALANCE -21.16 -19.23 -7.36

MIGRANT

REMITTANCES 9.39 9.39 4.86

TOURISM

RECEIPTS 7.47 7.39 3.79

FOREIGN DIRECT

INVESTMENT 5.36 5.05 2.13

 

($1 = 9.7652 Moroccan dirham)

 

(Reporting By Aziz El Yaakoubi; Editing by Toby Chopra)

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

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

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

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

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

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

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

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

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

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

The Tribunal is expected to make a final decision soon.

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

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

 

(Reporting by Zandi Shabalala; Editing by James Macharia)

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The Middle East connects on social media

15 March 2016 Comments (1) Business, Featured, Middle East

Facebook and WhatsApp are the most popular social platforms. But more people in the region are using new tools for sharing photos and videos.

On the 27th day of Ramadan last year, millions of people around the world were able to see photos and videos taken by pilgrims in Mecca during a social media campaign that gave non-Muslims a rare glimpse of worshippers in the holy city.

The #Mecca_live campaign, in which 300,000 people used Snapchat and Twitter to capture or distribute images, was emblematic of the growing use of social media in the Middle East and North Africa.

Facebook and WhatsApp dominate social media in the Arab world. But there is growing use of new tools for capturing sharing photos and videos, content that can cross boundaries of cultures and language in the diverse region.

#mecca_live

Social platforms enable consumer outreach

Several studies have documented to rise in social media in the Middle East and North Africa. Information about usage is important for businesses and institutions that want to reach users at a time when digital and social media are changing practices and attitudes in the region, especially among young people.

Businesses, news organizations, and other institutions that want to understand and connect with the region’s growing market and figure out how to direct their efforts need to understand social media usage, said Damian Radcliffe, a University of Oregon journalism professor who compiled the most recent report.

While Facebook is the dominant social platform in a number of countries, WhatsApp, Instagram and Snapchat have pockets of popularity, Radcliffe writes in his fourth annual report, “Social Media in the Middle East: The Story of 2015,” Radcliffe looks at data from a variety of sources to outline social media usage in the region.

Facebook has 80 million users in region

Facebook has about 80 million users in the region, which has a total population of more than 350 million, and is adding more than one million new users a month. By comparison, the United States has 195 million Facebook users.

Egypt has the most Facebook users – 27 million – or about a third of the nation’s population.

At the same time, the United Arab Emirates has the most active Facebook user base. On average users spend an hour a day on Facebook, compared to 40 minutes globally, according to Facebook. With a population of nearly 10 million, the UAE has nearly four million Facebook users, or about 40 percent of the total population.

Other nations with large Facebook user bases are Saudi Arabia, with 12 million users, about 40 percent of the population, and Iraq, with 11 million users or about a third of the country’s residents.

Facebook widely popular

A 2015 study found that Facebook is also the most popular social platform in the Kuwait, Oman, Iraq, Palestine, Jordan and Tunisia in addition to Saudi Arabia and the UAE.

WhatsApp, a messaging service acquired by Facebook in 2014 for $19 billion, is the leading platform in Lebanon, Sudan and Algeria, the study said.

The two platforms are equally popular in Qatar, Bahrain, Yemen, Lebanon, Syria, Egypt and Libya.

Radcliffe noted that WhatsApp is being used for more than text messaging. He said it is increasingly used to discuss different interests from religion to cooking to news and is becoming a platform for e-commerce.

#mecca_live

#mecca_live

Photo-sharing popular

Instagram, a photo-sharing platform that Facebook bought in 2012 for $1 billion, has 25 million users in the Middle East and North Africa.

One marketing expert attributed Instagram’s growing popularity to the fact that visuals cross language and cultural boundaries.

“No one country behaves and speaks with the same language or dialect and they certainly don’t have the same dynamics in terms of economy, language, lifestyle, religion, and ethnicity,” Ema Linaker said.

Saudi Arabia has 10.7 million Instagram users, while there are 3.2 million in Egypt and 2.2 million in the United Arab Emirates.

Video viewing on the increase

Videos are also becoming a staple of social media.

The region is the fastest growing consumer of videos on Facebook with consumption is twice the global average.

Periscope, a live-streaming application launched last year by Twitter, is popular in Turkey. Turkey has the highest use of Periscope of any country in the world after the United States. Istanbul, Ankara and Izmir are among the top 10 cities for Periscope use.

Periscope has a strong connection to Turkey. Its inventor created the application after a he visited then country when civil unrest erupted in 2013. Unable to get a street-eye view of Istanbul protests on traditional media, he came up with the idea of creating an easy-to-use live-streaming application.

According to Google data, video viewing on YouTube is also increasing. The amount of time spent watching videos on YouTube increased by 80 percent and the region is second only to the United States in online video viewership

Twitter less popular

Twitter, meanwhile, has very mixed adoption. On the high end, more than half of all social media users in Saudi Arabia and UAE have Twitter accounts although actual daily usage is quite low in Saudi Arabia.

Jordan, Palestine, Syria and Libya have low Twitter penetration but their users are very active.

Twitter users are mostly young, with people aged 18-24 accounting to 45 percent of users in the region.

Among young, digital access change attitudes

Digital and social media are having a profound impact on young people around the globe and no less in the Arab world.

Born between 1977 and 1997, they are tech savvy and account for 40 percent of the population of the region.

Access to information and debate on digital and social platforms is propelling them away from the traditional perspectives of their elders, according to Booz & Company, a strategy consulting firm that has surveyed thousands of young people in the region.

“These young people are far more active as consumers and as critics. They are involved more directly than their parents in the media they consume and purchase, and they are more outspoken about society, economics, and politics.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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