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Cash-starved Burundi reports stronger inflow from domestic taxes

8 August 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

KIGALI (Reuters) – Tax revenues in Burundi rose by almost 13 percent last month compared with a year ago, official data showed on Monday, a boost for the economy following a year of unrest linked to the re-election of President Pierre Nkurunziza.

More than 450 people have been killed in violence and more than a quarter of a million people have fled to neighbouring countries since Nkurunziza was re-elected for a third term in the small east African country in what the opposition said was a violation of the constitution.

A strong inflow from domestic taxes as well as modest revenue from coffee and tea exports have become vital for the aid-dependent country, particularly since Belgium and the European Union, key donors, cut external aid over the past year.

Tax collection rose to 50.2 billion francs ($30.32 million), up from 44.7 billion francs collected in July 2015 and well up on the target of 47.1 billion francs, the semi-autonomous revenue authority (OBR) said in a report.

Political unrest held back tax collection last year. Recovery of tax arrears had helped tax collection this year and the fight against tax evasion had been more effective, officials said.

Cumulative tax receipts from January to July jumped to 355.9 billion francs versus 333.03 billion francs the same period last year.

“The OBR reiterates its commitment to continue its mission of maximizing tax collection to support the country’s economy,” it said.

In the 2016 budget, the government foresaw grants falling by almost 50 percent compared to 2015.

($1 = 1,655.9000 Burundi francs)

 

(Reporting by Patrick Nduwimana; Editing by George Obulutsa and Richard Balmforth)

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South Africa’s business confidence rises to 96.0 in July

8 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s business confidence index rose to 96.0 points in July from 95.1 in June, lifted by a firmer rand and improvements in export volumes and retails sales, a South African Chamber of Commerce and Industry (SACCI) survey showed on Monday.

“South Africa experienced stronger merchandise export trade in June and July 2016, while the rand gained a healthy plus 10 percent on a weighted rand exchange rate against the U.S. dollar, British pound and the euro,” SACCI said in a statement.

SACCI, however, said it was concerned that the International Monetary Fund (IMF) and the South African Reserve Bank had lowered economic growth projections for Africa’s most industrialised country.

“A concerted effort will be necessary to avoid even tighter economic conditions in 2017 as such lower economic growth holds additional repercussions for public finance, unemployment and the real cost of borrowing,” SACCI said.

The IMF expects South Africa’s economy to grow by 0.1 percent this year, while the central bank cut its 2016 growth forecast to zero.

 

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

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Wage strike starts at South Africa power utility Eskom, supplies stable

8 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Workers downed tools Monday at three South African power stations with more set to follow as a wage strike began at state-run utility Eskom, but the company said its operations had not yet been impacted and branded the stoppage illegal.

Paris Mashego, NUM’s energy sector coordinator, told Reuters that wage talks with the utility were in deadlock over the weekend. Eskom provides almost all the power to Africa’s most industrialised economy but it was not immediately clear what impact the strike may have on its ability to keep the lights on.

An Eskom spokesman said operations had not yet been impacted and reiterated the utility’s view that its members are prohibited by law from striking.

“Across all of our 27 power stations everything is operating as normal at this stage,” spokesman Khulu Phasiwe said.

“And no one from Eskom is allowed to go on strike because we are defined as essential service providers. Technically anyone who is not at work today will have to explain themselves to their bosses,” he said.

He added that Eskom did not feel that negotiations had collapsed. The utility is offering pay hikes of 7 to 9 percent while NUM is looking for increases ranging from 12 to 13 percent.

Phasiwe also said NUM members early on Monday morning had blocked roads leading to the Arnot power station east of Johannesburg but police had been called in and the roads were now clear.

NUM has around 15,000 members at Eskom, close to a third of its workforce.

The stoppage coincides with a wage strike by around 15,000 workers in the petrochemical industry that has led to some shortages and was entering its second week on Monday.

 

(Reporting by Ed Stoddard; Editing by James Macharia)

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Nigeria fine pushes MTN to first interim loss, dividend cut

5 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

By Tiisetso Motsoeneng

JOHANNESBURG (Reuters) – Africa’s biggest mobile phone operator MTN Group Ltd cut investor payouts by almost 50 percent as it reported its first-ever half-yearly loss after taking a hit from a hefty regulatory fine in Nigeria.

MTN agreed in June to pay a 330 billion naira ($1.05 billion) fine in a settlement with Nigeria for missing a deadline to cut off unregistered SIM cards from its network.

MTN said the fine, a third of the proposed initial penalty, wiped 10.5 billion rand ($768 million) — 474 cents per share — from headline earnings, South Africa’s main measure of profit, in the first six months of the year.

MTN had in any case been struggling to accelerate subscriber and profit growth as years of price wars and regulatory pressure hit margins and weakening economies squeezed consumer income.

“What you have here is a company that was gung-ho about Africa, where the operating environment has become difficult but they have shot themselves in both feet by losing control of the key markets and not paying attention to regulators,” said one MTN shareholder, who declined to be named.

MTN, held by many investors for its dividend flows, will pay out 250 cents per share for the first half of the year, down nearly 50 percent on a year earlier.

However, the company said full-year dividend could top the previously forecast 700 cents per share if operating conditions materially improve.

INTO THE RED

The headline loss came in at 4.9 billion rand, or 271 cents per share, in the six months. This is compared with headline earnings of almost 12 billion rand, or 654 cents per share, a year earlier.

MTN also said the results were affected by unfavourable currency swings, underperformance in its home market and in Nigeria, where it had to cut off another 4.5 million SIM cards to comply with local registration requirements.

Founded with the South African government’s help after the end of apartheid in 1994, MTN had been seen as one of post-apartheid South Africa’s biggest commercial successes.

It has hired Vodafone European head Rob Shuter to lead its development, aiming to persuade its millions of clients to use their handsets for everything from shopping, paying bills to storing money.

Shuter, who will take over as chief executive by next July, replaces Sifiso Dabengwa who resigned last November after Nigeria imposed the penalty — which will be paid by the Nigerian business in the local currency.

Nigeria has been trying to halt the use of unregistered cards over concerns they are being used for criminal activity, including by Islamist militant group Boko Haram.

Shares in MTN, which had dropped by nearly one-third since October when Nigeria imposed the fine, see-sawed as investors digested the earnings statement.

They rose as much as 2.5 percent shortly after the market opened, before retreating to trade 2.8 percent lower at 129.8 rand as of 0930 GMT.($1 = 315.0000 naira)

($1 = 13.6714 rand)

(Editing by Jane Merriman/Keith Weir)

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Morocco jobless rate falls year/year to 8.6% in second quarter

5 August 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

RABAT (Reuters) – Morocco’s jobless rate fell to 8.6 percent in the second quarter this year from 8.7 percent in the same period last year, mostly on employment growth in the construction and services sectors, official figures showed on Friday.

Services, building activity and industry added 149,000 additional jobs to help offset 175,000 jobs lost in the agricultural sector due to a severe drought, the High Planning Commission added.

The government expects the 2016 cereal harvest to fall sharply after last year’s record crop of 11 million tonnes due to bad weather and more farm job losses are expected in 2016.

The woes of the farm sector have put further pressure on the Moroccan government, which is already facing protests over austerity measures.

The industrial sector created 38,000 jobs, the data showed. Construction and services added 70,000 and 41,000 jobs respectively, more than in previous years, a sign that the Moroccan economy has started to recover from years of recession caused largely by the euro zone debt crisis. The euro zone is Morocco’s main trade partner.

However, jobs created by construction and services are mostly precarious, the agency warned.

The Finance Ministry has forecast the economy will grow this year by less than 2 percent, slowing from 4.4 percent in 2015. However, the planning agency said the drought would drag growth down to 1.3 percent in 2016.

Informal labour abounds in Morocco, making it hard to produce reliable employment figures.

 

 

(Reporting By Aziz El Yaakoubi; Editing by Ralph Boulton)

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Cameroon’s 2015/16 cocoa production rises 16% y/y

4 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

YAOUNDE (Reuters) – Cameroon’s cocoa production rose nearly 16 percent year-on-year to 269,495 tonnes in the 2015/16 season, National Cocoa and Coffee Board (NCCB) data released on Thursday showed.

Africa’s fourth-largest cocoa producer has targeted annual production of 600,000 tonnes by 2020. The 2016/17 season opened on Wednesday.

The 2015/16 figure surpassed the central African country’s previous record of 240,000 tonnes during the 2010/11 season. Output since then has fluctuated due to pests, crop diseases and a prolonged dry season.

Cameroon’s government is trying to encourage young people and women to grow the crop and to prevent illegal export to neighboring countries.

Last year, Cameroon announced plans to double its cocoa processing capacity to about 30 percent of its total production, by adding 10 new processing units.

Cameroon’s cocoa season runs from Aug. 1 to July 1. The main harvest is from October to January/February, followed by a light crop harvest period from April/May to June/July.

 

 

(Reporting By Sylvain Andzongo; writing by Aaron Ross; Editing by Adrian Croft and Alexandra Hudson)

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South Africa’s rand hits 9-month high as election results trickle in

4 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand touched a nine-month high against the dollar and government bonds firmed on Thursday as the smooth running of local government elections and expectations that interest rates in leading economies will remain low boosted sentiment.

At 1104 GMT, the rand traded at 13.7100 per dollar, 1.44 percent firmer from its New York close on Wednesday, its strongest level since Oct 29.

The yield for the benchmark government bond due in 2026 dipped 10.5 basis points to 8.55 percent.

“You can attribute some of the movements to the smooth running of the elections without any major incidence of violence or reports of cheating. On the day (the rand) is outperforming other emerging currencies against the dollar,” ETM market analyst Ricardo Da Camara said.

South Africans cast their votes in local elections on Wednesday and the opposition Democratic Alliance (DA) led in three major cities on Thursday as votes were counted, threatening to deal the biggest electoral blow to the African National Congress (ANC) since the end of apartheid two decades ago.

The ANC – which ended white-minority rule when it swept to power in the country’s first democratic elections in 1994 – held a big lead in the national count.

“It’s not entirely clear that the DA is good and the ANC is bad but the market generally welcomes more contested democracy,” Nomura analyst Peter Attard Montalto said.

Other traders said the rand also got support from investors seeking higher yields after the Bank of England cut interest rates for the first time since 2009 on Thursday, while near-term U.S. rate hike prospects cool.

On the bourse, stocks also gained with Sappi surging more than 7 percent after the paper maker reported an eight-fold jump in quarterly profit as of 1117 GMT.

The blue-chip JSE Top-40 index was up 0.3 percent at 45,671 and the broader All-share index added 0.3 percent to 52,650.

 

(Reporting by Tiisetso Motsoeneng and Olivia Kumwenda-Mtambo; Editing by Ed Cropley and Richard Balmforth)

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AB InBev to dominate top jobs after SABMiller deal

4 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Anheuser Busch InBev managers will take all but one of 19 key positions following the brewer’s $100 billion-plus takeover of rival SABMiller, according to details of the transaction announced on Thursday.

The deal, sweetened last week to help make up for a drop in the British currency, has been approved by both companies’ boards but still needs to be voted on by shareholders, some of whom oppose the deal.

AB InBev is known for its cost-cutting and centralized control, which some analysts have said may be tough to impose on all corners of SAB’s business, with its joint ventures and equity stakes in markets such as Turkey and Africa.

AB InBev, the maker of Budweiser and Stella Artois, said the new company – which has yet to be named – would continue to be based in its home town of Leuven, Belgium, while its operations would be managed from New York.

SAB’s offices in Woking, outside of London, will be kept open for a transitional period, but its central London headquarters will be wound down. The bulk of SAB’s European businesses are being sold as part of the deal.

“It looks as if all the SAB group and regional HQs will be eventually phased out,” said Bernstein Research analysts.

The new company will be run by teams of “functional chiefs” and “zone presidents”, both reporting to AB InBev Chief Executive Carlos Brito. All but one of those 19 positions will be held by current AB InBev executives.

There was no mention of roles for SABMiller’s CEO Alan Clark or finance chief Domenic De Lorenzo in the new company.

Of SAB’s 576 corporate roles in the UK, 523 are in Woking and 51 in London.

AB InBev said SAB’s general counsel John Davidson, human resources director Johann Nel and managing director for Africa Mark Bowman, had agreed to stay for a transition period of at least six months to help with “integration, talent retention and stakeholder management”.

The new company will be organised into nine geographical zones, with existing SABMiller hubs in Miami, Hong Kong and Beijing phased out within a few months after deal closes, which is expected in October.

AB InBev has agreed to sell SAB’s western European brands Peroni, Grolsch and Meantime, to Japan’s Asahi. It has also pledged to sell SAB’s Eastern European business, which includes the Pilsner Urquell brand, though a buyer has not been agreed.

SAB’s joint ventures in the United States and China will be taken over by their respective partners when the deal goes through.

 

(By Martinne Geller. Additional reporting by Mamidipudi Soumithri in Bengaluru; Editing by Adrian Croft and Mark Potter)

 

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Uganda says to grant oil production licences to France’s Total

3 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Uganda’s cabinet agreed on Wednesday to allow the energy ministry to grant three oil production licences to France’s Total, the presidency said.

Commercial crude reserves were discovered in the east African country a decade ago but production has been repeatedly delayed amid wrangling over taxation and field development strategy.

The absence of key infrastructure, such as a crude export pipeline, has also slowed progress to production.

According to a statement issued by the president’s office, the cabinet approved a request from the minister of energy to allow the issue of three petroleum production licences to Total E&P.

The licences cover the Ngiri, Jobi-Rii and Gunya fields in the Albertine rift basin, the area along the country’s border with the Democratic Republic of Congo.

The licenses will be valid for 25 years and can be renewed for an additional 5 years, the presidency said in the statement.

Total is the second oil firm to be offered a production license after one of its partners, China’s CNOOC.

Tullow Oil, which also co-owns fields with Total and CNOOC, has also applied for production licences and has been waiting for approval for years.

In April, Uganda agreed with Tanzania to jointly develop a pipeline to the Indian Ocean port of Tanga to help export Uganda’s crude reserves, which are estimated at 6.5 billion barrels.

 

 

(By Elias Biryabarema. Editing by Louise Heavens)

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Ghana lawmakers back budget funding bill; breach terms of IMF deal

3 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ACCRA (Reuters) – Ghana’s parliament on Tuesday overwhelmingly rejected a core condition of a $918 million International Monetary Fund (IMF) aid deal on Tuesday, breaching the terms of a three-year programme meant to fix an economy dogged by high public debt.

The lawmakers passed the Bank of Ghana (BoG) Amendment Bill to allow central bank financing of the government’s budget deficit up to a ceiling of 5 percent of the previous year’s total revenue, instead of the zero financing demanded by the IMF.

Until now the bank was authorised to finance the deficit at up to 10 percent of revenue.

Implementation of the zero financing requirement is one of the targets the government was expected to meet in order for the Fund to conclude Ghana’s third programme review and disburse the next tranche of aid.

However, Deputy Finance Minister Cassiel Ato Forson told Reuters that, despite the law, the government will not finance its deficit with central bank funds.

“We have demonstrated enough that the government is committed to expenditure control and we will remain on course, irrespective of today’s decision by parliament,” he said.

 

 

(Reporting by Kwasi Kpodo; Editing by Aaron Ross and John Stonestreet)

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