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

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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

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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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Telecom Egypt net profit jumps 111% after tax changes

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CAIRO (Reuters) – Telecom Egypt reported a 111 percent jump in 2015 net profit after corporate tax changes, the state-owned landline monopoly said in a statement on Monday.

Net profit rose to 2.999 billion Egyptian pounds ($383 million) from 1.419 billion, it said.

The company said it was helped by a fall in the corporate income tax rate to 22.5 percent from 30 percent retroactively as of January 1, 2015, and changes to the taxation of dividends.

“Additionally the increase of income from investment by 35 percent year on year contributed positively to the bottom line,” the company said.

Revenue reached 12.184 billion pounds, up from 12.157 billion the previous year.

($1 = 7.8300 Egyptian pounds)

 

(Reporting by Ehab Farouk; writing by Asma Alsharif; editing by Jason Neely)

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Sharjah launches Sheraa entrepreneurship center

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Sheraa_2

2016 brings the launch of entrepreneurship centre “Sheraa” based in Sharjah, complete with royal inauguration.

In an increasingly competitive commercial world, most countries are recognizing that to ensure a successful economic future they must invest in companies and the people creating them. Hence, it was with pride that the emirate of Sharjah welcomed His Highness Shaikh Dr Sultan Bin Muhammad Al Qasimi, Member of the Supreme Council and Ruler of Sharjah, to attend the official launch of the Sheraa, the Sharjah Entrepreneurship Centre.

On the 17th of January, 2016, an official ceremony took place inaugurating the opening of the center at the American University of Sharjah. An initiative of Sharjah Investment and Development Authority (Shurooq), it aims to encourage and support aspiring entrepreneurs. Simultaneously it hopes to boost the profile of the emirate, as an innovative and sought after place to start an enterprise.

“Here at Sharjah, we are witnessing the birth of a new initiative for the future of the nation,” explained HE Marwan bin Jassim Al Sarkal, CEO of Shurooq.

Why Sharjah?

A long standing hub for commerce, the emirate of Sharjah is the third largest in the United Arab Emirates, estimated to have a population of around one million. Its long history, dating back 6,000 years, is steeped in trading, fishing and pearling. Now Sharjah’s main trade is crude oil and gas, while the economy benefits from a variety of means such as tourism, education and logistics.

Sharjah

Sharjah

Nestling so close that it is regarded as a suburb of Dubai, this bustling country is one of the wealthiest in the UAE, and represents 48% of the UAE’s total Industrial Sector. Its geographical location is also ideal for trade and commerce with Europe, Africa and Asia.

Also known as the “rising sun,” the emirate is becoming well known for its emerging business talent and support of. Acknowledging the role enterprise has had on advancing many other countries, HE Marwan Bin Jassim Al Sarkal expressed his hopes for the UAE. “According to the Entrepreneurship and Development Institute, UAE occupied first place in supporting entrepreneurship and we strive to achieve first place internationally in this sector,” he said. It is in this spirit, to support and nurture, that Sheraa has been conceived.

About the University

Set up as a facility to not only educate but also as an investment in the future of Sharjah, the overall goal is to make a difference, to improve the prosperity of the economy and to develop its society. Highlighting this ambition during the opening ceremony Sheikha Bodour Bint Sultan Al Qassimi, Chairperson of Shurooq, confided that the investment in Sheraa, “reflects our complete belief in the ability of our youth to make a difference and positively contribute in the enhancement of our economy and development of our society,” she said.

So what can a young student of Sheraa expect from the course to help lead them in this positive direction? With an emphasis on innovation, creativity and development, encouragement will be given to explore ideas. Meanwhile students are to be directed in how to apply their visionary concepts in the business world, practical knowledge of the working business climate will be taught as well as assistance given to find the right business path within the emirate. The hope is that students will be inclined to remain in Sharjah, with the incentive of possible help to jump-start their projects from established entrepreneurs within the UAE.

Future

Recognizing the current trend of the business world and how to move forward positively into the future, Sheraa is clear in its aim: to produce creative and innovative business men and women. The university will run cutting edge programs, adapting to the ever changing business climate.

As fast as technology progresses so too does business and it is with this in mind that Sharjah wants to ensure they are forerunners in the field. Already renowned for trade, culture and fossil fuels, the emirate is looking to carve a new niche for itself. To enter onto the global market as a key player will not only ensure other countries are unable to monopolize on the sector but in addition, that foreign businesses will not move in and corner the market. Sheraa is just a step towards ensuring continuing prosperity for the Emirate of Sharjah and the young men and women of the future.

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Fastjet warns on full-year results

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(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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Nigeria says producers to meet in Moscow, sees dramatic impact

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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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IMF says in advanced talks with Tunisia over $2.8 bil credit

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TUNIS (Reuters) – The International Monetary Fund and Tunisia are in the advanced stages of talks over a $2.8 billion credit over four years to help support the country’s economic reform programme, an IMF delegation said on Thursday.

A visiting IMF delegation said at the end of its mission that it would now focus on fine-tuning reform priorities and financing needs for this year.International lenders have been demanding Tunisia cut public spending, reduce deficits and introduce reforms that help create sustainable jobs and growth.

“Moving ahead with economic reform is crucial as the Tunisian economy confronts several significant challenges. Economic growth is held back by investors’ wait-and-see attitude and regional uncertainties,” the IMF said in a statement.

Five years after overthrowing autocrat Zine El Abidine Ben Ali and sweeping in democratic change, Tunisians are still struggling with an economy unable to deliver the jobs and reforms their revolution promised.

Three major militant attacks last year, including two on foreign visitors, have battered the tourism industry, while a week of rioting earlier this year has worried Western partners looking to help the North African state.

 

(Reporting by Tarek Amara; writing by Patrick Markey; Editing by Toby Chopra)

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

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

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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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South Africa’s economy slows further, ratings eyed

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PRETORIA (Reuters) – Disappointing economic growth in South Africa at the end of 2015 is likely to heighten fears its credit rating will be cut to “junk” and further unnerve investors concerned about President Jacob Zuma’s handling of the economy.

Data from Statistics South Africa on Tuesday showed the continent’s most industrialised economy expanded 0.6 percent in the final quarter, slowing slightly from the previous three months as the agricultural and manufacturing sectors shrank. Economists polled by Reuters had expected a rise of 0.8 percent.

“With all expectations that 2016 will be weaker still, this signals decelerating growth momentum in South Africa for three consecutive years, highlighting some of the long-standing concerns of the ratings agencies,” said Standard Chartered’s head of Africa research, Razia Khan.

The rand nevertheless rose 1 percent against the dollar, tracking other emerging market currencies higher as uncertainty over the pace of further U.S. interest rate hikes tempers the dollar’s momentum.

Credit rating agencies have said South Africa is at risk of a downgrade that could take it below investment grade.

The Treasury has warned such a move could trigger a sharp reversal of foreign capital flows on which South Africa relies to finance its huge current account deficit and precipitate a recession.

Fitch and Standard & Poor’s currently rate South Africa BBB-, one notch above “junk”, while Moody’s assigns a slightly higher Baa2 grade.

On a year-on-year basis, the economy grew 0.6 percent from 1 percent in October to December compared with a Reuters poll forecast of 0.4 percent.

More sluggishness is expected in 2016 as a severe drought persists and global demand for South African exports including gold and other metals remains depressed.

The government forecasts growth of 0.9 percent this year compared with an estimated 1.3 percent in 2015, which would be the lowest rate of expansion since South Africa emerged from a recession in 2009.

 

NERVOUS

Investors are also nervous about economic policymaking after Zuma’s sudden firing in December of finance minister Nhlanhla Nene in favour of a relatively unknown lawmaker precipitated a plunge in the rand and other South African assets.

To halt the sell-off, Zuma brought back Pravin Gordhan as his third finance minister in a week, but recent media reports have suggested a rift between the president and Gordhan, who won investors’ respect during a previous stint in the job.

Gordhan outlined an austere budget last week that was aimed at avoiding credit rating downgrades but which failed to reassure investors.

Zuma, who faces his second no-confidence vote in a year on Tuesday over what the opposition Democratic Alliance called his reckless handling of the economy, has denied he and Gordhan are at war.

Highlighting the economy’s weakness, separate data on Tuesday showed new vehicle sales fell by 8.1 percent year-on-year in February, their third consecutive monthly contraction.

Electricity prices could also drag on growth after the energy regulator allowed state-owned power firm Eskom to raise tariffs by 9.4 percent in the 2016/17.

“These data make it less likely that the Reserve Bank will follow up January’s 50 basis points interest rate hike with another rate rise this month, despite the deteriorating inflation outlook,” Capital Economics analysts said in a note.

The South African Reserve Bank has been hiking interest rates to tame rising inflation, despite weak growth.

The bank will announce its second interest rate decision of 2016 on March 17.

 

(By Olivia Kumwenda-Mtambo. Editing by James Macharia and Catherine Evans)

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