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Nigeria says its oil refineries produce nothing

17 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria, aiming to boost its crude output, is still grappling with decrepit refineries that fail to produce fuel, which it has to import, the head of state oil firm the Nigerian National Petroleum Corporation (NNPC) said on Thursday.

Oil production is forecast to reach 2.1 million barrels of oil per day (bpd) this year and should rise to 2.4 million bpd next year, Emmanuel Ibe Kachikwu told reporters, though none was being refined domestically.

“In October we had zero performance (from refineries), we didn’t produce anything,” Kachikwu said. “As of now the refineries are still not working. We are going to try and repair them.”

In an apparent attempt to lower fuel subsidy costs amid sharply lower oil revenues, Kachikwu said refined products would be sold in a band between 87 and 97 naira per litre that is adjusted based on crude prices. Prices are currently set at 97 naira per litre regardless of market prices.

“So it’s no longer subsidy as in the air, it’s not a static number,” he said. “Probably once in quarter we say what is the price of crude, how can we reflect (it) in the price of the product to make sure we don’t pass the ceiling of 97 (naira).”

In November, the country’s top refinery official told Reuters that Nigeria aimed to produce up to 30 percent of its domestic gasoline needs by the first quarter of 2016 following an overhaul of the refineries.

Kachikwu reiterated Africa’s top oil producer was trying to secure external funding to revamp the refineries before considering their sale. “We cannot sell the refineries in their present state. They will be worth nothing.”

President Muhammadu Buhari, also oil minister, has made refurbishing the country’s dilapidated refining system a priority as he seeks to reform an industry hampered by mismanagement and corruption.

 

(By Camillus Eboh. Reporting by Camillus Eboh; Writing by Ulf Laessing; Editing by David Holmes and William Hardy)

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Mali produces 2.45 mil tons of rice

17 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

BAMAKO (Reuters) – Mali has produced 2,451,321 tonnes of rice as it approaches the end of the 2015/16 harvest, up 13 percent from last season but short of an initial forecast, government statistics showed on Thursday.

The landlocked country, the second-largest rice producer in Africa behind Nigeria, will largely finish harvesting this month and continue marketing its production next year.

The remaining harvesting is unlikely to add significantly to the season’s total output.

“The increase this year is generally explained by good rain, an increase in planted land, new strains like ‘Nerica’, the use of more fertiliser especially with the help of subsidies,” said Balla Keia, head the rural development ministry’s statistics division.

Last season, the West African country produced 2,166,830 tonnes of paddy rice and had projected a record 2,599,450 tonne rice crop, with a surplus of 285,000 tonnes above expected domestic consumption.

 

(Reporting by Tiemoko Diallo; writing by Makini Brice; editing by Joe Bavier and Jason Neely)

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South Africa’s rand eases after U.S rate hike, stocks rise

17 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s currency weakened on Thursday after the United States central bank raised its key lending rate, while Moody’s decision to change its outlook on Pretoria’s credit rating to negative also pressured local assets.

By 0700 GMT the rand had weakened 0.27 percent to 14.9750 per dollar, giving up some of the gains of the previous two sessions sparked by the naming of Pravin Gordhan as finance minister.

Government bonds firmed, with the yield on the benchmark paper due in 2026 shedding 12 basis points to 9.4 percent.

On the equities market, the benchmark Top-40 index opened up 1.3 percent at 44,305 points.

While markets had anticipated the 25 basis points rate hike by the U.S. Federal Reserve, emerging market assets still suffered, put under pressure by the hawkish tone of Fed Chair Janet Yellen’s speech.

“After knee-jerk weakness the dollar has gained significantly,” Rand Merchant Bank currency analyst John Cairns said in a note. “We suspect this will pressure USD/ZAR to the upside through the course of the day.”

Yellen said further monetary tightening would be gradual and data-dependent, while pointing out an improved economy and labour market, raising the likelihood of more hikes in 2016.

Moody’s cut its outlook on South Africa to “negative” from “stable” late on Tuesday, citing structural challenges in the mining industry and increasing political pressures on the budget.

In local data, South Africa’s statistics agency publishes producer price inflation data for November at 0930 GMT.

 

(Reporting by Mfuneko Toyana; Editing by Ed Cropley)

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Sinochem signs 10-year deal to buy oil from Angola’s Sonangol

16 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

BEIJING/LONDON (Reuters) – China’s state-run Sinochem Group said on Wednesday it had signed a deal with Angolan state-owned producer Sonangol to buy crude oil for more than 10 years.

The statement on the Chinese company’s website did not give details of the supply amount or other financial details, but trading sources said the agreement was for four or five cargoes per month, which would make the company one of the largest holders of monthly contracts to buy Angolan crude.

There are currently around 15 cargoes given to these so-called term buyers each month from Angola’s export programmes of roughly 55 cargoes.

The deal is a coup for Angola, as OPEC members fight for market share, particularly in China, the world’s largest energy consumer.

While payment terms were not disclosed, sources said the deal directly related to loans that the Chinese government has given to Angola as its commodity-reliant economy struggles with the more than 60 percent drop in crude oil prices over the past year.

Along with the chairman of Sonangol, Angola’s financial minister, Armando Manuel, was present at the signing of the deal, as was Zheng Zhijie, president of China Development Bank.

A year ago, China agreed to lend Sonangol $2 billion to expand oil and gas projects, and Angolan President Jose Eduardo dos Santos was in China in June seeking a two-year moratorium on debt repayments along with financing for a variety of projects, including a $4.5 billion hydropower scheme.

But the deal is also likely to push out another term contract holder, sources said. Sonangol has to trade some of its oil on a spot basis in order to establish prices for term agreements.

 

(By Chen Aizhu and Libby George. Editing by Christian Schmollinger and David Holmes)

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South Africa markets extend relief rally on new finance minister

16 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African assets remained in favour on Tuesday with local markets extending the previous session’s rally after Pravin Gordhan was named as finance minister, which stemmed last week’s sell-off.

The rand firmed to well below the 15 mark against the dollar, while banking stocks climbed again after surging almost 9 percent on Monday.

By 1500 GMT, the rand had gained 0.9 percent to 14.9595 per dollar, just off its firmest since Nhlanhla Nene was unexpectedly axed as finance minister by President Jacob Zuma last Wednesday, a move that triggered a market meltdown.

Investors were deeply troubled by Zuma’s appointment of the untested David van Rooyen to the crucial Treasury post, forcing an abrupt U-turn on Sunday when the president gave the job to Gordhan, who was finance minister from 2009 to 2014.

The rand also benefited from greenback selling as local traders sought to unwind long-dollar positions ahead of a meeting of the U.S. Federal Reserve, whose policy committee (FOMC) is expected to raise interest rates on Wednesday.

“The local markets definitely don’t want to run the massive risks over the holiday and the FOMC, so we’re seeing large profit-taking from long-dollar positions today,” said the chief trader at Bidvest Bank’s currency desk, Ion de Vleeschauwer.

South African markets will be closed on Wednesday for a public holiday.

The dollar slipped to a seven-week low against a basket of currencies on Tuesday amid growing jitters over the message the Fed will seek to send on interest rates on Wednesday, buoying most emerging market currencies.

South African government bond yields fell across the curve on Tuesday, extending the previous session’s rally. At 1500 GMT, the yield on the benchmark paper due in 2026 had shed 45 basis points to 9.55 percent.

On the equities front, banking stocks added another 2.94 percent, bringing the Banks’ Index to 5,966.64. It remains about 9 percent below the levels it had reached before Nene’s shock sacking last week.

The banking rally helped pull the benchmark Top-40 Index up 0.66 percent to 43,701 while the wider All-share index added 0.72 percent to 48,429. Trade was robust with around 322 million shares changing hands.

 

(Reporting by Mfuneko Toyana and Ed Stoddard; Editing by Tom Heneghan)

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Zimbabwe platinum mines seek lower royalty fees amid low prices

15 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe should reduce the royalty fee levied on platinum producers from the current 10 percent to help mining firms offset the impact of low prices, the country’s mining chamber has said.

Zimbabwe has the world’s second largest known deposits of platinum after South Africa but mines have struggled with low prices, a black empowerment law forcing mines to sell more than 50 percent of the business to locals, and power shortages.

In a commentary on the 2016 budget presented to parliament in November, the Chamber of Mines said royalty fees charged on the local divisions of Anglo American Platinum and Impala Platinum should be cut.

“The platinum sector requires support in the form of royalty reduction to restore viability, especially during this period of depressed prices,” the mining chamber said in a statement seen by Reuters on Tuesday.

Platinum prices are near seven-year lows of about $850 an ounce, hobbled by slowing demand in top consumer China and as the Volkswagen’s emissions-cheating scandal weighs on market sentiment.

Zimbabwe charges the 10 percent royalty rate on gross platinum sales. The government expects platinum production to increase to 468,791 ounces next year from 423,288 this year.

A 15 percent platinum levy on raw exports was deferred to January 2017 to allow mines to build smelters and base metal refineries, a move the mining chamber welcomed.

“In 2016, the sector will continue to be weighed down by depressed commodity prices, power shortages, inadequate capital and an unsustainable cost structure, compounded by high electricity tariffs, high cost of funding and sub-optimal royalty,” the chamber said.

 

(Reporting by MacDonald Dzirutwe; editing by Ed Stoddard and David Clarke)

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African Development Bank approves $1.5 billion loan to Egypt

15 December 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – The African Development Bank (AfDB) has approved a $1.5 billion loan to Egypt to be paid out over three years, International Cooperation Minister Sahar Nasr told Reuters on Tuesday.

The first $500 million of the loan will arrive within days, said Nasr, and will go toward the government’s economic development programme and national projects.

“We have a competitive economic reform programme that started more than a year back and based on that we are taking the first tranche,” Nasr, a former World Bank official, told Reuters by telephone.

Egypt expects to receive an additional $1 billion from the World Bank by the end of the year to support the budget and could discuss potential IMF financing once parliament convenes, Nasr told Reuters previously.

“The bank’s approval today is a strong message affirming that the Egyptian economy is moving at a steady pace towards achieving comprehensive development and confirms that the bank is confident in the government’s reform process,” said AfDB representative Leila Mokaddem.

A foreign currency shortage has crippled import activity this year and the country has scrambled to find new sources of dollars as shipments have piled up at ports and manufacturing has slowed.

Foreign currency reserves, which stood at about $36 billion before the 2011 uprising that toppled veteran ruler Hosni Mubarak, were $16.42 billion at the end of November despite billions of dollars in Gulf Arab aid that Egypt has received since mid-2013.

 

(Reporting by Lin Noueihed; Writing by Eric Knecht; Editing by Mark Trevelyan)

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Kenya’s shilling steady, importers cautious about buying dollars

14 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s shilling was steady in early trading on Monday, with most importers holding off from dollar purchases to see if the currency would strengthen below the 102 level.

By 0715 GMT, the shilling was quoted at 102.05/25 to the dollar, little changed on Friday’s close of 102.10/102.20.

The shilling had strengthened below 102 last week before demand for dollars from energy importers made it weaken.

“Most other importers are waiting to see if the market will dip again below 102 before they come into the market,” one trader at a commercial bank said.

Investors were also acting cautiously before a rate decision on Wednesday by the U.S. Federal Reserve, when it could raise rates. “That (decision) will probably give the market direction,” the trader said.

 

 

(Writing by Edmund Blair)

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Coastal erosion washes away beaches, threatens tourism in Senegal

13 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

SALY, Senegal (Reuters) – The European winter is the high season for tourism in Senegal as visitors flock to its sea and sun to escape the cold, yet since last year the doors of the luxury Hotel Espadon have been closed.

Its swimming pool has turned a swampy green. The skeletons of old parasols poke out from the sand and the sea gnaws at the foundations of its pretty beachfront rooms.

The problem is not high prices or mismanagement but coastal erosion that is blighting the West African country’s coast.

The Atlantic has washed away beaches, forcing hotels to make a drastic choice: save their property by building sea walls that block the view or let the water rise and risk losing everything.

“Every day I receive tourists who come to see if it’s true what they say about the Hotel Espadon’s current state,” said Sonore Khadim Tall, the building’s superintendent. “They can’t believe their eyes and some of them even cry.”

As a Paris summit focuses on climate change it is tempting to place the whole blame for Senegal’s erosion on rising sea levels but reckless building on beaches compounds the problem, said Papa Goumbo Lo, head of Senegal’s national institute for scientific research.

The problem arises when builders construct too close to the beach or extract coastal sand for projects, exacerbating erosion and rendering buildings vulnerable to tides.

 

POSTCARD OF BEACH

Tourism accounts for 11 percent of Senegal’s economy, but over time erosion could affect the country as a whole, given that two thirds of the population live in the coastal region around the capital Dakar.

Other countries in the region are affected. Gambia’s 15 coastal hotels are at risk due to erosion. Nigeria’s environment ministry has launched a programme to fight erosion and Ghana, which has 1 million annual visitors, has built a 30-km sea wall.

Around 1 million people also visit Senegal every year and in 2014 the government set itself the goal of tripling that number.

Saly, where the Espadon is located, is one of the country’s biggest tourist hubs but risks missing out. Since 2010, the town 50 km (32 miles) southeast of Dakar has lost 30 metres of beach.

Ousmane Diop, head of environment and client relations at the nearby Filaos Hotel, said visitors who return to the hotel these days are drawn by loyalty to the staff rather than the beach.

Only a postcard of the beach remains and the water is accessible across a ramp beside a sea wall.

“If we hadn’t built the wall, the ocean would have been in the restaurant,” Diop said, pointing at an open-air dining area with a sea view.

 

MAN DESTROYS NATURE

Tourism in West Africa has already been hit by perceptions of insecurity in countries like Mali, where Islamist militants attacked a luxury hotel on Nov. 20, and disease, after Ebola killed thousands in Guinea, Liberia and Sierra Leone.

Senegal tried to offset the problem in May by scrapping visa requirements and halving airfare taxes.

But numbers from the World Travel and Tourism Council show visits have been flat this year compared to last year and tourism employees in Saly say their numbers are down. Many hotels along the coast closed early last season.

Ibou Sakro Thiandoum, president of Saly’s natural resource commission, called for greater central government action, saying, “We are orphans here.”

For his part, Ernest Dione, national coordinator for the Ministry of the Environment, defended government initiatives, pointing to its study on erosion and an emergency action plan.

It is possible to recover lost beaches through the use of wave breakers and other tools but it is expensive, Lo said.

The work has started in Saly, where boulders line the shore to break waves. Some beaches have already been recovered but the process stands incomplete for lack of funds.

These initiatives are inadequate and to solve the problem beach homes responsible for erosion in the town should be torn down, said Ousmane Diouf, an artist at the Filaos hotel.

“As long as man destroys nature, he destroys himself,” he said.

 

(By Makini Brice. Editing by Matthew Mpoke Bigg and Estelle Shirbon)

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Stef Wertheimer: Manufacturing Peaceful Coexistence in Israel

12 December 2015 Comments (0) Business, Featured, Middle East, Politics

Stef Wertheimer

Israeli industrialist Stef Wertheimer, founder of Iscar and Blades Technology, is investing millions in industrial parks to diffuse Arab-Jewish conflict.

Born in Germany in 1926 a decade before his family was forced to flee the Nazis to what was then British-Mandate Palestine, Stef Wertheimer is an Israeli industrialist who believes that his country’s problems and solutions lie in economics. Over the last 30 years, the billionaire has invested millions of his own personal wealth in building industrial parks and training programs for Arabs across Israel, in the hope of using job creation and lowered economic disparity to foster peaceful coexistence between Arabs and Jews.

The International Metalworking Companies Group and Blades Technology

Now aged 89, Wertheimer’s early academic career was short lived. He was expelled from school aged 14, and instead started working in a camera-repair shop. Later, in the lead-up to Israel’s War of Independence in 1948, he made weapons for the Jewish underground. And after the war, in which he served as a pilot and a member of the Palmach strike force, he set up a small metal tool-cutting factory in a garage in his garden in Nahariya. The city, Israel’s northernmost, is in an underdeveloped, largely agricultural and Arab region, about which Wertheimer says: “There were no jobs, this area was agricultural, and I decided that I had to do something on my own”.

He named his small operation Iscar, and within five years, the company was exporting precision carbide cutting tools to Europe and the US. Today, it is one of the world’s top two companies in the field, and its automotive, aerospace, and electronics industry customers include General Motors and Ford. It is also now the largest of 15 companies that make up Wertheimer’s International Metalworking Companies (IMC), a Group valued at $10 billion, with 140 subsidiaries in 61 countries around the world, employing over 10,000 people.

Wertheimer further expanded his manufacturing holdings in 1968, when the Israeli government asked him to make blades for the Israeli Air Force following a French weapons embargo. In the years following, Iscar Blades (now Blades Technology Ltd.) has similarly become one of the world’s largest in its field. With a valuation of $1 billion, its customers include Rolls-Royce and General Electric.

Wertheimer solidified his position as one of Israel’s most respected businessmen in 2006, when Warren Buffett’s conglomerate holding company, Berkshire Hathaway, bought an 80% stake in IMC for $4 billion. It was Buffet’s first purchase outside of the US, and he went on to buy the remaining 20% of the company in 2013 for $2.05 billion. The Wertheimer family (Wertheimer’s son Eitan started running day-to-day operations at Iscar in 2004) also sold its 51% stake in Blades Technology in 2014. And the deals have made Wertheimer the head of the wealthiest family in Israel and the country’s third wealthiest man, with an estimated net worth of $5.6 billion.

Tefen Industrial Park

Tefen Industrial Park

The Tefen Industrial Park

In the late 1970s, Wertheimer also served a term in the Knesset, Israel’s parliament. It was during this time that he decided that there may be a different route to achieving peace and stability in Israel: one centered on industry and job creation. Acting on his idea, in 1982 he established a residential community near Nahariya, Kfar Vradim, and later the same year moved the Iscar plant to the nearby industrial zone, Tefen. In 1984, the Tefen Industrial Park was officially inaugurated, marking Wertheimer’s first park dedicated to helping Arab and Jewish Israeli entrepreneurs set up export-focused industrial initiatives. “I started looking for a way to influence the Arab population in Israel, Jordan and the Palestinian areas by developing industry,” says Wertheimer. “The idea of industrial parks in the Middle East and on the borders between Israel and its neighbors is that the parks will bring industry and provide jobs, which will keep people busy working, instead of engaging in terrorism”.

The Tefen Industrial Park now hosts 20 companies, and also offers a post service, a shared dining hall, landscaped gardens, a collection of vintage cars, a tennis court, and a school that educates students in industry and innovation. Wertheimer, whose own main office is on the site, has also created art and German-Jewish history museums.

Expanding Israel’s Industrial Export Output

His unique philosophy stems from the country’s problem of economic disparity. Israel’s 1.7 million Arab citizens make on average 58% of the income of their Jewish counterparts. Arab men make 69% of the income of Jewish men. And there are three times less Arab women in the labor force than Jewish women. The Arab population is also largely excluded from Israel’s current tech boom, which this year has seen $9 billion in tech mergers and acquisitions.

Based on the five principles of export, education, coexistence, community, and culture, Wertheimer has now established six further parks in typically Arab dominated regions – five in Israel (in Tel Hai, Omer, Dalton, Lavon, and Nazareth) and one in Turkey. The industrial parks, which Wertheimer calls “capitalistic kibbutz”, also run training programs before placing the workers in jobs, and recruit Arab and Jewish entrepreneurs for industrial entrepreneurship courses to create Arab-Jewish partnerships. Firms also receive benefits encouraging the employment of professionally educated Arabs. The parks have so far generated and supported 260 companies, which have seen an average yield of $200,000 in sales per employee, higher than Israel’s average. And Wertheimer also has plans to add another park aimed at the Bedouin, one of the region’s poorest communities.

Yitzhak Rabin, former Israeli prime minister and 1994 winner of the Nobel Peace Prize, said: “With 20 more industrial parks like these, it would be possible to double the industrial export output of Israel. This would completely change the economic, social and security situation.” Wertheimer has also been honored for his work. He was awarded Israel’s highest honor, the Israel Prize, in 1991. In 2010, he received the Oslo Business for Peace Award. And Germany has bestowed both the Federal Cross of Merit and the Buber-Rosenzweig medal for his work in advancing peace through entrepreneurship.

Not everyone agrees that an economic solution will solve Israel’s problems, but Wertheimer is fully committed to a future trying to do just that.

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