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Eskom names short-term suppliers for Arnot coal-fired plant

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

JOHANNESBURG (Reuters) – South Africa’s Eskom will use coal from Glencore, South32 and five other suppliers to power the Arnot power station, including Exxaro Resources with whom it did not renew a 40-year contract in December, the utility’s spokesman said in a Twitter post on Tuesday.

The short-term supply agreements are separate from the list of bidders for the new long-term contract, the outcome of which Eskom said it will announce before the end of the first quarter of this year.

Eskom listed lesser-known Tegeta, Keaton Energy, Hlagisa Mining and Umsimbithi Mining as the other short-term suppliers to the 2,100 MW Arnot plant.

 

(Reporting by TJ Strydom; editing by Jason Neely)

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Sasol to start drilling in new Mozambique oil and gas fields

1 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Sasol has received the green light from Mozambique to develop more oil and gas fields in the southern African state, the company said on Monday, without disclosing how much the project will cost.

Mozambique is sitting on huge gas reserves and developing liquefied natural gas export projects is expected to bring tens of billions of dollars to the impoverished state.

The petrochemicals giant, which makes 40 percent of its revenue from oil, said the project, about 600 km (372 miles) north of the capital Maputo, will be rolled out in stages. The first phase will include an oil, liquefied petroleum gas and gas project adjacent to its Pande and Temane fields.

Natural gas from Pande and Temane fields, in which Sasol holds a majority stake, is currently produced and processed at a central facility before being transported on an 865 km pipeline to gas markets in Mozambique and South Africa.

Sasol President and Chief Executive David Constable said the project was a “major milestone in further developing natural resources, which will significantly benefit Southern Africa.”

Gas projects being developed by Italy’s Eni and U.S. energy firm Anadarko will be given the final go-ahead by the end of this year, the state-run National Hydrocarbon Company (ENH) said on Sunday.

 

(Reporting by Peroshni Govender; Editing by James Macharia)

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Ugandan inflation eases to 7.6% year-on-year in January

1 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Uganda’s inflation eased to 7.6 percent year-on-year in January from a revised 8.4 percent a month earlier, helped by a slowdown in food inflation, the statistics office said on Monday.

The Uganda Bureau of Statistics (UBOS) said annual food inflation had slowed to 12.7 percent in January, from 13.8 percent in December.

Core inflation – which excludes food, fuel, electricity and metered water – decreased to 7.1 percent in January from 7.6 percent in December, UBOS said in a news conference.

On a monthly basis, headline prices rose 0.1 percent in January after rising 0.2 percent in December.

David Bagambe, a trader at Diamond Trust Bank, said that, despite the decrease in inflation, the central bank was unlikely to start easing its policy stance because it needed to maintain high yields on its debt instruments to manage liquidity.

“For now, the central bank is more concerned about the huge amount of liquidity in the system than the small changes in inflation,” he said.

 

 

 

 

(Reporting by Elias Biryabarema; Editing by Kevin Liffey)

 

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Egypt’s NBE bank sold $2.5 bil in 3 months to cover imports

31 January 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

SHARM AL-SHEIKH, Egypt (Reuters) – Egypt’s biggest lender, the state-owned National Bank of Egypt, provided more than $2.5 billion to cover import payments in the last three months as the country faces a currency crisis, Chairman Hisham Okasha told Reuters in an interview.

Egypt, which depends heavily on imports, has been suffering from a worsening dollar crunch since a 2011 uprising drove away foreign investors and tourists, both major sources of hard currency.

In its latest effort to curb dollar spending on imports, Egypt announced on Sunday it would raise tariff rates on a series of goods from Feb. 1.

“During November, December and January we opened letters of credit worth more than $2.5 billion to meet import payments,” Okasha told Reuters on the sidelines of a banking conference in Sharm al-Sheikh.

In December, the central bank said it sold $7.6 billion in previous weeks to help importers pay for goods. It was not clear whether NBE’s dollar injection was part of the central bank’s $7.6 billion.

No comparative figures for letters of credit opened were immediately available as banks are not required to disclose them.

The central bank has been keeping the pound artificially strong at 7.7301 pounds to the dollar, burning through its reserves which tumbled to around $16.4 billion in December from $36 billion in 2011.

In order to fight a black market the central bank imposed a cap of $50,000 a month on dollar deposits at banks, making it harder for importers to open letters of credit and clear cargoes.

It later raised the cap to $250,000 but only on specific imports of essential goods, capital machinery and manufacturing components and medicines.

Okasha also said his bank aims to increase its deposits and loans portfolio by around 15 percent by the end of 2015/16.

The bank’s loans portfolio was around 140 billion pounds in June 2015, while deposits were 447 billion pounds.

“Deposits reached more than 485 billion pounds by the end of December 2015 while loans reached around 178 billion pounds,” Okasha said.

 

(Reporting by Ehab Farouk; Writing by Asma Alsharif; Editing by Raissa Kasolowsky)

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Cargo drones, an economic revolution for Africa?

29 January 2016 Comments (0) Africa, Business, Featured

Africa drone

Cargo drones come to Africa and it could mean an economic revolution for the continent

Drones are now part of our modern consciousness, our everyday reality. Having had a sinister reputation from the association with warfare, their potential is now being harnessed for good.

The development of cargo drones is currently underway across the globe, sparking interest from pioneering technological heavyweights like Google and Amazon, as the revolutionary form of delivery transport.

Cargo drones are essentially un-piloted flying robots that carry medium sized goods. There are different styles to fit different purposes and sizes vary between 3-6 meters in length.

Top internet retailer, Amazon, said on their website that soon viewing cargo drones will be, “as normal as seeing mail trucks on the road today.”

For Africa this could mean far more than how a parcel is delivered. Their use has been put forward as a possible boost for the continent’s economy.

Leapfrogging the problem of infrastructure in Africa

With Africa’s rapid economic growth comes the need to build and improve infrastructure. It is estimated that Africa’s shortfall is a much-needed $50 billion per year in this sector. There simply is not enough money to build the roads and lay the new train lines required to keep up with increasing trade.

John Ledgard, the director of Afrotech and long-time Africa correspondent of the Economist has a plan. The futurist thinker sees a way to combat the gridlock that African trade is otherwise unquestionably going to face, failing spending $93 billion a year on financing infrastructure. He hopes to unlock the sky by eventually linking east to west.

Afrotech plans to fill the gap in Africa’s transportation by using cargo drones and their very own aerial highway. Starting by setting up routes in Rwanda, Tanzania and Uganda, eventually all parts of Africa will be connected. The initiative from Ecole polytechnique fédérale de Lausanne (EPFL) in Switzerland, is working with architects Foster + Partners to create the drone-ports for the routes which hope to be set up by the end of 2016.

“The Droneport project is about doing ‘more with less,’ capitalizing on the recent advancements in drone technology,” said Lord Foster, chairman and founder of Foster + Partners.

The biggest to the smallest airport in the world

Foster + Partners, responsible for the creation of the world’s largest airport in Beijing, China, will now create what could be considered in effect, the world’s smallest airport. Three dome shaped buildings will comprise the Droneport that will rest on Rwanda’s red earth. Designed to run on clean energy, it will eventually provide employment for the surrounding community.

Rwanda was chosen for the trial because the terrain is difficult to travel through and very little air traffic flies over. From here half the country will be reachable via the cargo drone routes. Prioritizing medical and time sensitive cargo initially, Ledgard has a clear vision of how the project will mature. Phase 1: mainly hospitals and humanitarian emergencies. Phase 2: industries that provide spare parts and building equipment.

“Phase 1 and 2 would be enough to make the drones useful contributors. But the real reason for the technology,” says Ledgard “is Phase 3, when the drones will better connect businesses with customers across Africa.”

 

Jonathan Ledgard

Jonathan Ledgard

Turbulence expected

All going to plan, this could be the making of the developing Africa. Inevitably there are valid causes for concern and tangible doubts, but no one is more aware of them than Ledgard himself. He openly cites the areas that may be of concern but says most risks are small or can be overcome and that it is an improvement on current affairs.

Important for Africa is whether it can adopt this new technology quickly enough to make it beneficial. It will need several aspects to come together: the army to ensure security, government leaders of regional economic groupings to put free trade into practice and laws to be passed allowing fully independent drone flight. With Africa united, this could truly be an economic revolution for the future.

“Cargo drones can affordably and precisely collapse time and space….in a city environment you want to collapse time and in a rural environment you want to collapse space,” said Jonathan Ledgard.

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East African Breweries to make more cheap beer as taxes rise

29 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s East African Breweries Ltd (EABL) expects a hike in beer excise duty to hit demand in its home market in the coming months and will raise output of a lower-taxed cheap brand in an attempt to offset the impact, its CEO said on Friday.

Last month, Kenya lifted the excise tax by 43 percent to 100 shillings ($0.9785) per liter of beer, driving up retail prices by at least 20 shillings per bottle.

“Kenyan consumers are incredibly price sensitive so moving up by 20 shillings is a big deal,” said Charles Ireland, group CEO of EABL, which is controlled by Britain’s Diageo.

The hike in excise duty, designed to shore up government revenues, was the first one in four years.

“I would prefer that we saw a more regular increase which was smaller rather than an irregular increase, which is bigger, because I think the impact for consumers and the trade would be more manageable,” Ireland said.

EABL plans to boost the output of its cheaper Senator Keg beer, which is taxed at a rate of 10 shillings per litre, to offset the impact of the taxes on mainstream and premium beers.

Sales of Senator Keg, which is dispensed in mugs from barrels in bars, recovered during the company’s fiscal first half to December, after the government rowed back on a 2013 decision to tax it at the same rate as mainstream beers such as Tusker.

“We have got some additional capacity coming online so we will be able to sell more Senator into the market in the (fiscal) second half,” Ireland said.

Beer exports into South Sudan, which plummeted 74 percent in the first half due to civil conflict, were not expected to rebound soon, the chief executive said.

“The outlook is bleak. I don’t think that South Sudan will improve in the short-term,” he said.

EABL boosted its interim dividend by a third, as net debt fell and the company generated more cash, and Ireland said it would keep rewarding shareholders if profit growth was maintained.

First-half profit after tax from operations rose 16 percent as sales grew and net finance costs dropped by 38 percent.

“I hope it will continue, and if it does, we will be kind of looking to make sure our shareholders benefit from that performance,” Ireland said.

“We are getting into a decent shape from a balance sheet perspective.”

($1 = 102.2000 Kenyan shillings)

 

(By Duncan Miriri. Editing by Mark Potter)

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Tanzania finalises land deal for delayed LNG project

29 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

DAR ES SALAAM (Reuters) – Tanzania said on Friday it had finalised a land acquisition for the site of a planned liquefied natural gas (LNG) plant and was now working to compensate and resettle villagers to move forward on a long-delayed project.

Tanzania’s natural gas reserves are estimated at more than 55 trillion cubic feet (tcf) and the central bank believes 2 percentage points would be added to annual economic growth of 7 percent simply by starting work on the huge plant that would draw in billions of dollars of investment.

BG Group, being acquired by Royal Dutch Shell, along with Statoil, Exxon Mobil and Ophir Energy plan to build the onshore LNG export terminal in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC). They aim to start it up in the early 2020s.

But their final investment decision has in part been held up by delays in finalising issues related to the site.

“After securing the title deed, the law requires the owner to pay compensation to the relevant parties based on a valuation done by the chief government valuer,” TPDC said in a statement.

TPDC now owns title deed for some 2,071.705 hectares of land that have been set aside for the construction of the planned two-train LNG terminal at Likong’o village in the southern Tanzanian town of Lindi, which is located close to large offshore gas finds.

Another 17,000 hectares of land around the site for the proposed LNG terminal has been allocated for an industrial park.

The land was bought from large landowners and some individual villagers.

Tanzania’s new president, John Magufuli, has promised more urgency in decision-making, responding to a frequent complaint from businesses. One example has been delays in finalising a site for the multi-billion dollar LNG plant that will exploit huge offshore gas finds.

Oil companies were unable to gain access to the site until the land purchase, analysts say.

“The next key thing to watch is how quickly a host government agreement is executed between the Tanzanian government, TPDC and IOCs (international oil companies),” Ahmed Salim, senior associate at consultancy Teneo Intelligence, said in a note to clients.

East Africa is a new hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda and major gas reserves discovered in Tanzania and Mozambique.

Mozambique’s plans to build an LNG plant have moved more swiftly. With other LNG projects moving ahead around the world, the best deals for long term gas sales contracts will likely be secured by those who come on stream first, analysts say.

 

(Reporting by Fumbuka Ng’wanakilala; Editing by Drazen Jorgic and Mark Potter)

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Moody’s says yuan use may benefit Zimbabwe, sees limitations

28 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Moody’s said on Thursday plans by Zimbabwe to increase the circulation of the Chinese yuan could lift investment from the world’s second largest economy but may not be enough to strengthen investor confidence and improve competitiveness.

Zimbabwe abandoned its currency in 2009 after inflation reached 500 billion percent and adopted foreign currencies, anchored by the United States dollar, to tame runaway consumer prices and start an economic recovery.

The U.S. dollar is widely used, along with the rand currency of neighbouring South Africa and the finance minister and central bank governor said last month Zimbabwe would now increase the use of the yuan.

“The renminbi’s use will likely facilitate greater levels of foreign direct investment from and bilateral trade with China by reducing transaction costs and exchange rate risk,” Moody’s said in a report on Zimbabwe.

China has in the last few years invested more than $1 billion in Zimbabwe, becoming the largest investor after the Southern African nation was shunned by the West over its human rights record.

Moody’s, which has never rated Zimbabwe, said widespread use of the yuan could be limited by a population which has more confidence in the U.S. and is suspicious of other currencies after the traumatic experience with the Zimbabwe dollar.

 

(Reporting by MacDonald Dzirutwe; Editing by James Macharia)

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HeroTel wants to consolidate Wi-Fi service in South Africa

28 January 2016 Comments (0) Africa, Business, Featured

Alan-Knott-Craig-Jnr

The startup, with $4.75 million in capital, believes a single network will benefit consumers with more consistent service at lower costs.

Hundreds of small wireless providers are competing to connect Internet users in South Africa, but a new player has a different vision.

Instead of starting one more competing company, HeroTel founder Alan Knott-Craig Jr. wants to connect as many existing Internet providers as possible to form a national wireless network.

HeroTel hopes to consolidate the fragmented landscape of wireless Internet providers under a single brand. Knott-Craig said this would enable more consistent service for consumers at lower costs and aid expansion of service to areas that currently do not have broadband access.

HeroTel, launched in August 2015, has raised $4.75 million in investment capital and hopes to have a national footprint by April. Knott-Craig said he hoped the company would become the “Capitec of telecoms,” referring the South African banking network.

Knott-Craig, 38, is a South African entrepreneur and former CEO of the social network Mxit. He also founded Project Isizwe, a nonprofit that wants to put free Wi-Fi within walking distance of every South African.

Over the course of two years, the Isizwe Project has successfully turned the South African city of Tshwane (Pretoria), population 2.9 million, into the continent’s largest free public Wi-Fi network.

The network has 750 sites and more than 20 percent of the buildings in Tshwane are within walking distance of Wi-Fi, Knott-Craig said. One million people were to be connected by the end of 2015 with the entire population within walking distance of free Wi-Fi by 2017.

Knott-Craig believes that municipal governments should take responsibility for providing Wi-Fi to their citizens just as the governments provide electricity, sanitation and roads.

South-Africa Wi-Fi

South-Africa Wi-Fi

 

200 wireless providers operate in South Africa

In the private sector, he said there are about 200 wireless service providers operating in South Africa and the business is profitable. Revenues total about $53 million a year with profit margins of approximately 30 percent.

The problem, Knott-Craig said, is that consumers will demand greater wireless speeds at lower prices so a network makes more economic sense than a fragmented marketplace of providers.

Currently, Knott-Craig said, Wi-Fi speeds are doubling. But the cost to the consumer stays the same when it should be decreasing, he contends.

“People want fast reliable, affordable broadband, that’s all they want, and they don’t want you to feel like you’re doing them a favor by arriving to fix it,” he said.

Knott-Craig said South consumers now pay about 600 rand ($35) a month for 10 megabytes per second. He projected they will pay the same amount for 100 megabytes by 2017.

Five million households lack broadband access

He said HeroTel would use unlicensed spectrum, which is the same as the spectrum home and office consumers use for Wi-Fi.

In addition to improving service for existing customers, Knott-Craig believes pooling the resources of existing providers will enable the network to bring Internet access into about five million households that do not have broadband. Only about 400,000 of these are reachable by fiber-optic broadband, he said.

For the rest, he said, unlicensed spectrum Wi-Fi is the obvious answer because it is inexpensive, he said. “That’s why the HeroTel strategy makes sense.”

According to the Internet Architecture Board, South Africa has approximately 33.5 million Internet users, representing 61 percent of the population as of December 31, 2014.

Getting more people connected to the Internet will be good for all of South Africa, Knott-Craig said. “The more people in South Africa that are on the grid, whether it is the poor or the rich, the faster our economy can grow,” he said.

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South African mines post lowest annual death toll of 77

28 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

PRETORIA (Reuters) – South Africa’s mines minister Mosebenzi Zwane said on Thursday that 77 workers were killed in mining accidents in 2015, the lowest number on record and down from 84 in 2014.

South Africa’s mines are the deepest and among the most dangerous in the world but industry fatalities have been falling, a trend rooted in improved safety practices and a shrinking labour force as production declines.

 

(Reporting by Tiisetso Motsoeneng; Writing by Ed Stoddard; Editing by James Macharia)

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