LAGOS (Reuters) – Nigeria’s Access Bank swapped a total of $150 million with two foreign lenders in January, central bank data showed.
The Nigerian bank exchanged $50 million with U.S. lender JP Morgan at 400 naira per dollar and another $100 million with South Africa’s ABSA at 329 naira, data showed.
(Reporting by Chijioke Ohuocha)
By Tiisetso Motsoeneng
JOHANNESBURG (Reuters) – Africa’s biggest mobile phone operator MTN Group promised to pay a dividend in 2017 on Thursday, sending its shares surging as investors shrugged off a loss that underscored its risks in investing in frontier markets.
Founded with the help of Pretoria at the end of white rule in 1994, MTN is seen as one of post-apartheid South Africa’s biggest commercial successes but clashes with regulators in recent years have raised questions about governance and hobbled growth.
MTN reported a $108 million annual loss, its first in two decades, hit by a regulatory fine in Nigeria and unfavourable currency moves.
MTN agreed to pay a fine of 330 billion naira ($1.1 billion), reduced from $5.2 billion, in June last year after a prolonged legal battle to end a dispute in Nigeria over missing a deadline to cut off unregistered SIM cards.
The fine claimed by Nigeria, MTN’s most lucrative but increasingly problematic market, wiped 10.5 billion rand ($770 million) from 2016 earnings.
Shares in MTN jumped more than 10 percent to 129.11 rand as its chairman said the losses would not be repeated and promised to keep dividends flowing.
MTN, held by many investors for its dividends, said it would pay 700 cents per share this year after declaring a similar amount for 2016.
“If you strip out the Nigerian fine, which is a once off thing, and forex moves, this company is not in a such bad shape operationally,” said Momentum SP Reid Stockbrokers’ analyst Sibonginkosi Nyanga.
Without one-off and non-operating items, which include about 6 billion rand in forex losses, MTN would have managed a profit, albeit 14 percent lower than 2016’s earnings.
MTN’s executive chairman Phuthuma Nhleko called the loss, at 77 cents per share, a “black swan event”.
“For even the most successful companies, you do have black swan events in your history and this was it. We hopefully are not going to see something like this again,” Nhleko told Reuters on the sidelines of the company’s results presentation.
However, MTN also faces an investigation by Nigerian lawmakers on whether it illegally repatriated $14 billion between 2006 and 2016.
MTN has denied any wrongdoing and Nhleko dismissed the allegations on Thursday as baseless.
The crux of the latest Nigerian allegations is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law, and therefore the repatriation of returns on those investments was deemed illegal.
($1 = 13.0003 rand)
(Additional reporting by TJ Strydom; Editing by James Macharia/Ruth Pitchford)
TUNIS (Reuters) – Tunisia’s central bank has kept its key interest rate unchanged at 4.25 percent, the bank said on Thursday.
The bank last cut its main interest rate in October 2015, from 4.75 percent.
(Reporting By Tarek Amara; Editing by Gareth Jones)
MAPUTO (Reuters) – Mozambique will seek to negotiate a restructuring of part of its debt, its prime minister said on Wednesday.
The southern African nation is struggling to repay loans of more than $2 billion that were not approved by parliament or disclosed publicly.
“We will negotiate with the creditors to restructure these debts,” said Prime Minister Carlos Agostinho do Rosario, adding that the nation wants to honour its debts “in a balanced way”, the state news agency reported.
(Writing by TJ Strydom; editing by John Stonestreet)
NAIROBI (Reuters) – Kenya’s inflation rate jumped in February, data showed on Tuesday, as acute drought drove food costs sharply higher.
Inflation rose to 9.04 percent year-on-year – above the government’s target range – from 6.99 percent in January, the Kenya National Bureau of Statistics (KNBS) said. Month on month it rose to 1.80 percent from 1.00 percent.
KNBS said the food and non-alcoholics drinks index gained 3.28 percent on the month and 16.50 percent on the year, as staples including maize flour, milk and potatoes rose in price.
That segment accounts for 36 percent of Kenya’s inflation basket.
The East African nation is experiencing an acute drought with an estimated 2.7 million people in need of food aid.
February’s annual reading left inflation well above the medium-term target range of 2.5-7.5 percent.
“This is a worryingly high CPI print…, much higher than the market consensus. While this is likely to be food-related, it does create a dilemma for the central bank,” Razia Khan, chief economist for Africa at Standard Chartered Bank in London, said in an emailed comment.
In late January the central bank held its benchmark lending rate at 10.0 percent, saying inflation was expected to remain within the government’s preferred band in the short term.
(Reporting by George Obulutsa; editing by John Stonestreet)
NAIROBI (Reuters) – Kenya’s energy industry regulator has overruled environmentalists’ objections to Amu Power Company’s planned 1,000 megawatt (MW) coal-fired power plant in the country’s coastal region.
Amu Power, backed by a consortium that includes Centum Investments and a group of Chinese companies, was initially expected to begin construction of the plant in Lamu in December 2015.
However, environmental group Save Lamu Natural Justice raised concerns about the effect the plant would have on marine life in the region, prompting the Energy Regulatory Commission to delay issuing Amu Power an electricity generation licence for the project.
The Energy Regulatory Commission said in a legal notice seen by Reuters on Tuesday that it had reviewed the views of the group and other interested parties and was satisfied that all environmental concerns would be handled adequately.
It also said that landowners who would be relocated to make way for the plant did not oppose the plant’s construction and that the government was handling their compensation.
“Taking the above reasons into account, the Commission disallowed the objection,” the Energy Regulatory Commission’s legal notice said.
Construction of the plant is expected to take 30 months once it starts.
The project is part of a plan launched in 2013 to add 5,000 MW of power to Kenya’s installed electricity generating capacity by this year. The capacity stands at 2,341 megawatts at present.
The Amu Power consortium also includes Kenya’s Gulf Energy and Chinese trio China Huadian Corporation Power Operation Company, Sichuan Electric Power Design and Consulting Company, and Sichuan No. 3 Power Construction Company.
(Reporting by George Obulutsa; Editing by David Goodman)
By Chijioke Ohuocha and Ulf Laessing
LAGOS (Reuters) – Nigeria’s economy contracted 1.5 percent in 2016 due to lower oil revenues and a shortage of hard currency, the National Bureau of Statistics said on Tuesday, its first annual contraction in quarter of a century.
Africa’s largest economy slid into recession in the second quarter of 2016 as a slump in crude prices hammered the OPEC member’s public finances and battered the naira currency. Crude sales make up two-thirds of government revenue.
“This contraction reflects a difficult year for Nigeria, which included weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency,” the statistics office said in a report.
The International Monetary Fund had predicted Nigeria’s economy would shrink 1.8 percent in 2016. A Reuters poll forecast a 1.2 percent contraction..
Fourth-quarter national output shrunk by 1.3 percent, it said. However, non-oil sector production fell by only 0.33 percent during the three months to end-December.
Oil production – Nigeria’s economic mainstay – fell to 1.833 million barrels a day last year after 2.13 million bpd in 2015, it added, blaming militant attacks in the Niger Delta oil hub.
Vice President Yemi Osinbajo said in a statement the GDP data suggested Nigeria was “well on its way out of recession”.
“The expectation is that this trend and the slowing down of month-on-month inflation will enable an early return to positive growth in the economy,” the statement said.
DOLLAR RESERVES RISING
Nigeria has been running short of dollars as a result of lower foreign exchange earnings, which has weakened the local currency on the black market, where it trades far lower than the official interbank rate of 305 naira.
Foreign exchange reserves rose to a more than 19-month high of $29.45 billion as of Feb. 24, central bank data showed on Tuesday, but still remain far off their peak of $64 billion in August 2008.
Though the central bank has stepped up dollar supply in recent days after effectively devaluing the naira for private individuals, the currency still trades at a more-than 30 percent premium on the black market.
A Reuters poll last week showed analysts expect policymakers may devalue the naira soon, but won’t fully relinquish control over it.
Cobus de Hart, senior economist at NKC, said he expected the economy to recovery slowly, driven by higher government spending on infrastructure and increased oil production.
The government targets an annual growth rate of 7 percent GDP by 2020, as part of its medium-term economic recovery.
But the strength of the recovery will depend on the pace at which authorities can put in place much-needed reforms, said Razia Khan, chief economist for Africa at Standard Chartered Bank.
“The very shallow contraction in non-oil GDP growth in Q4 2016, raises hope of a more meaningful recovery in non-oil GDP in Q1 2017, buoyed both by improved budget spending and some improvement in FX availability.”
(Additional reporting by Felix Onuah and Oludare Mayowa; Editing by Richard Lough)
NAIROBI (Reuters) – Japan’s Mitsubishi Hitachi Power Systems said on Tuesday it and two other firms had won an power generation plant order including two 70 megawatt turbines from Kenya Electricity Generating Company.
Last year, KenGen said it expected to start the construction of the 140 MW plant, known as Olkaria V, in July 2016, with the aim of connecting the geothermal power plant to the grid by the end of 2018.
Olkaria is in Kenya’s Rift Valley.
“Mitsubishi Hitachi Power Systems, together with Mitsubishi Corporation and H. Young & Company (East Africa) Ltd, have received a full-turnkey order to provide power generation facilities to … KenGen, including two sets of 70 megawatt(MW) class steam turbines, generators and auxiliaries,” it said in a statement on its website.
KenGen aims to add 720 MW of electricity generating capacity between now and 2020 at a cost of just over $2 billion, with most of the energy coming from geothermal sources.
Kenya and Japan said last year Olkaria V was being financed by a 46 billion yen ($410 million) loan.
($1 = 112.2100 yen)
(Reporting by George Obulutsa; Editing by Greg Mahlich)
By Mathieu Rosemain
BARCELONA, Spain (Reuters) – French telecoms network operator Orange will continue to see slow growth in revenues in the Middle East and Africa this year, its regional business chief said.
The company sees the region as key to its future, especially since it sold its mobile operations in Britain and Switzerland, but is struggling to turn it into a strong growth driver as talks with a potential partner in Iran drag on and economic conditions in some African markets remain challenging.
Orange’s revenue growth in the region halved to 2.6 percent last year, a performance that was deemed disappointing by several industry analysts after the operator published its full-year earnings last week.
Bruno Mettling, Orange’s deputy CEO and head of operations for the region, indicated growth this year in the Middle East and Africa, where the company is present in 21 national markets, is unlikely to be much higher.
“In 2017, we think that we’ll have a growth that is at least identical, or even higher,” he said in an interview at the Mobile World Congress in Barcelona on Monday.
The former French monopoly should also add to its 120 million customers in the region, he said.
Orange’s revenue and profitability in the region suffered last year from the devaluation of the pound in Egypt, where it has more clients than in France.
They were also hit by the Democratic Republic of Congo’s decision to ask for identification of the country’s mobile customers, which led to a decrease in the number of SIM cards.
Talks with Iran’s largest mobile operator, Mobile Telecommunication Company of Iran (MCI), meanwhile are “very far” from reaching a final agreement, Mettling said.
The discussions, which were revealed last year, first aim at a commercial agreement.
“It’s very long, it’s very slow, it’s very complicated,” Mettling said.
Orange plans to consolidate its Tunisian operations for the first time in its accounts this year, after taking a controlling stake of Orange Tunisia, in which it currently holds a 49 percent stake, Mettling said.
It also aims to partner with Vivendi’s pay-TV unit Canal Plus to develop digital terrestrial television in several sub-Saharan countries, after the two groups were pre-selected in a tender in Ivory Coast.
($1 = 0.9432 euros)
(Reporting by Mathieu Rosemain; Editing by Georgina Prodhan and Susan Fenton)
PORT LOUIS (Reuters) – Mauritius’ tourism revenues are expected to rise 3.8 percent this year after a jump in 2016, the country’s statistics office said on Monday.
Tourism is a valuable source of foreign exchange for the island, known for its luxury spas and India Ocean beaches.
Statistics Mauritius said it expected tourism revenue to climb to 58 billion rupees ($1.64 billion) in 2017, less than an earlier forecast of 59 billion rupees.
Last year tourism earnings were 55.9 billion rupees.
It forecast visitor arrivals to rise 6.8 percent this year to 1.34 million from 1,275,227 million in 2016. The statistics office said the room occupancy rate rose to 73 percent last year from 70 percent in 2015.
($1 = 35.3200 Mauritius rupees)
(Reporting by Jean Paul Arouff; Editing by Clement Uwiringiyimana/Jeremy Gaunt)
