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Africa’s richest man Dangote bids for Peugeot Nigeria stake

17 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Aliko Dangote, Africa’s richest man, has teamed up with two Nigerian states to bid for a majority stake in Peugeot Automobile Nigeria (PAN) Limited, a local joint venture with the French automaker, the governor of Kaduna State said on Thursday.

Governor Nasir El-rufai said the states of Kaduna and Kebbi along with development lender Bank of Industry (BoI) and Dangote have submitted bids for the stake which AMCON, Nigeria’s state-backed “bad bank”, is looking to sell.

 

(Reporting by Oludare Mayowa; writing by Chijioke Ohuocha; editing by Jason Neely)

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Kenya aims to cut 50 bil shillings from net 2015/16 spending

17 March 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

NAIROBI (Reuters) – Kenya’s Treasury has sent parliament supplementary spending plans for the fiscal year ending in June that introduce net cuts of about 50 billion shillings ($493 million), the finance minister told Reuters on Thursday.

The government had forecast a budget deficit of 8.7 percent of gross domestic product for 2015/16, which unnerved investors. Draft figures released in February showed a revised 2015/16 deficit of 8.1 percent, falling to 6.9 percent in 2016/17.

Finance Minister Henry Rotich said in a short telephone interview that the supplementary figures sent to parliament had increased spending in some areas, such as security, but these were outweighed by cuts elsewhere.

“We are increasing spending in some areas and cutting in others but, overall, cuts are more than increases, so we have a net cut of around 50 billion (shillings),” he said.

President Uhuru Kenyatta’s political coalition dominates parliament and is expected to back the revised numbers.

When the 2015/16 budget was announced last year, expenditure including interest payments was forecast at a little over 2 trillion shillings. The International Monetary Fund has urged the government to narrow the deficit. [nL5N16N0KK]

Rotich said last month that the government would cut net domestic borrowing for 2015/16 by a quarter to 168.2 billion shillings as a result of spending cuts prompted by sluggish revenue collection.

($1 = 101.3500 Kenyan shillings)

 

(Reporting by Duncan Miriri; Editing by Kevin Liffey)

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Zimbabwe expects first IMF loan in nearly two decades this year

16 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe expects a loan from the International Monetary Fund(IMF) in the third quarter of this year, the first since 1999, after paying off foreign lenders by the end of June, the central bank governor said on Wednesday.

President Robert Mugabe’s government last week agreed to major reforms including compensation for evicted white farmers and a big reduction in public sector wages as the government tries to woo back international lenders.

Central bank governor John Mangudya said the IMF would decide the exact amount of the loan to issue at a later date. The fund had agreed to double the amount available for Zimbabwe, known as a financial quota, to $984 million, he said.

“We are talking about the third quarter, that’s when you see most of the action happening,” Mangudya told Reuters in an interview, referring to when Harare expected the loan.

Zimbabwe would also receive an $896 million loan from an unnamed country to pay off arrears to the World Bank.

In addition, the African Export-Import Bank would provide $601 million for Harare to clear arrears to the African Development Bank (AfDB).

Zimbabwe would then receive the same amount as a grant from the AfDB, Mangudya said.

The Southern African country’s foreign debt stands at $8.3 billion, of which $1.8 billion is arrears.

Zimbabwe is trying to emerge from years of international isolation, largely blamed on Mugabe’s policies, including the seizures of farms from white farmers.

The worst drought since 1992 has left 4 million Zimbabweans facing hunger.

Mangudya said the drought had forced the government to lower its growth target for 2016 to below 2 percent from 2.7 percent. The IMF and World Bank forecast growth of 1.4 percent and 1.5 percent respectively.

Once Zimbabwe clears its arrears, it would be ready for rating by international ratings agencies, with a view to issue international bonds in future, said Mangudya.

Mangudya said he supported the government’s decision to take over diamond mining in Marange because the government was receiving little money from the operations.

“After the rating we will then go for the Eurobonds and all to raise money on the international capital markets,” he said.

The government had issued $250 million in treasury bills to raise money for its operations in 2015, Mangudya said, adding that the bank would soon start holding public auctions of treasury bills to enhance transparency in state borrowing.

The central bank also issued $1 billion in bills last year to creditors of the bank, which owes $1.35 billion.

 

(By MacDonald Dzirutwe. Editing by James Macharia and Tom Heneghan)

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Morocco Jan-Feb trade deficit rises 10.1%

16 March 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

RABAT (Reuters) – Morocco’s trade deficit rose 10.1 percent to 21.16 billion dirhams ($2.17 billion) in the first two months of 2016 compared with a year earlier, due to higher imports, the foreign exchange regulator said on Wednesday.

The trade gap was up from 19.23 billion dirhams at the end of February 2015, as equipment imports rose 14.4 percent to 15 billion dirhams, data showed. Wheat imports jumped 44.2 percent from a year earlier to 2.35 billion dirhams as harsh weather hit the local harvest this year.

It is the first time the deficit has risen in more than 18 months as the North African kingdom has been taking advantage of lower energy prices. Morocco is a net energy importer.

Energy imports fell 21.1 percent to 7.1 billion dirhams, it said.

Total exports rose 1.2 percent from a year earlier to 36.3 billion dirhams, led by an 10 percent rise in auto exports. Phosphate sales fell 8.3 percent to 5 billion dirhams.

Tourism receipts rise slightly by 1.1 percent, while remittances from the 4.5 million Moroccans living abroad were flat at 9.4 billion dirhams. Foreign direct investment rose 6.2 percent to 5.36 billion dirhams.

 

Figures are in billions of dirhams:

 

Jan-Fev Jan-Fev Jan

2016 2015 2016

 

EXPORTS 36.29 35.85 18.32

IMPORTS 57.45 55.08 25.68

BALANCE -21.16 -19.23 -7.36

MIGRANT

REMITTANCES 9.39 9.39 4.86

TOURISM

RECEIPTS 7.47 7.39 3.79

FOREIGN DIRECT

INVESTMENT 5.36 5.05 2.13

 

($1 = 9.7652 Moroccan dirham)

 

(Reporting By Aziz El Yaakoubi; Editing by Toby Chopra)

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South Africa’s anti-trust authorities concerned over job cuts after Sibanye acquisitions

15 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Competition Tribunal said on Tuesday it was weighing its approval of Sibanye Gold’s plan to acquire platinum mines over concerns that 510 jobs could be lost if the deals proceed.

Sibanye last year said it would buy Anglo American Platinum’s labour-intensive and costly Rustenburg mines and Aquarius Platinum.

Both transactions were approved by the Competition Commission, which investigates deals for any anti-trust issues, on condition that no jobs would be lost and the firms would keep the black empowerment policy to protect small businesses.

The government has set empowerment goals to redress the absence of South Africans excluded from the mining industry under apartheid in a policy meant to spread economic wealth to the black majority.

Sibanye has sought to have these conditions amended to allow for layoffs, the Competition Tribunal, which makes a final ruling on proposed mergers or acquisitions, said in a statement.

Sibanye argued in favour of layoffs at a hearing held by the Tribunal on Monday that was attended by unions, reports said.

Sibanye’s CEO Neal Froneman was quoted by Business Day newspaper as saying the deal might not proceed without retrenchments.

Froneman was not available to comment when Reuters tried to reach him.

The Tribunal is expected to make a final decision soon.

About 250 job would be lost through the merger with a further 260 jobs expected to be cut should Sibanye combine all its mining operations and head offices with the target companies, causing an overlap of important positions.

Competition Tribunal spokeswoman Chantelle Benjamin said labour unions and the Competition Commission lobbied for jobs to be cut only after three years while Sibanye proposed two years. She said most of the jobs lost would be at the head offices and senior management.

 

(Reporting by Zandi Shabalala; Editing by James Macharia)

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Kenya secures $1.5 bil IMF standby facilities in case of shocks

15 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – The International Monetary Fund (IMF) has approved two-year standby facilities for Kenya worth about $1.5 billion, which can be drawn on if the East African nation faces unforeseen shocks.

“The Kenyan authorities have indicated that they will continue to treat both arrangements as precautionary,” the IMF said in a statement issued late on Monday after the completion of discussions with Kenya on replacing existing facilities.

The funds comprise a standby arrangement worth about $990 million and a standby credit facility worth about $495 million.

The IMF said Kenya only intended to draw on them if it faced “exogenous shocks” that led to a balance of payments need.

The Central Bank of Kenya calmed volatility in the markets last year after hiking its benchmark lending rate by 3 percentage points to 11.50 percent. It has also increased foreign reserves without turning to the IMF standby loan.

So far this year, the shilling has been firm, appreciating by about 0.6 percent against the U.S. dollar. On March 10, reserves stood at $7.33 billion, the equivalent of 4.7 months import cover, up from $7.1 billion at the end of 2015.

“Kenya’s recent growth performance remains robust and the outlook is positive,” IMF Deputy Managing Director Min Zhu said in the statement.

At the end of last year, Kenya has estimated growth for 2015 at between 5.8 to 6.0 percent, lower than originally expected but still higher than the 2014 figure of 5.3 percent.

“Despite positive policy steps undertaken under the current Fund-supported program, the economy remains vulnerable to shocks, reflecting less favorable global financial market conditions, as well as continued security threats and potential extreme weather events,” the IMF deputy managing director said.

The IMF said cutting the budget deficit was a key step to contain risks, while still supporting major infrastructure projects and providing essential health and education needs.

Kenya’s budget deficit for the financial year 2015/16 ending on June 30 is forecast at 8.1 percent of gross domestic product, falling to 6.9 percent in 2016/17, draft Finance Ministry figures have shown. [nL8N15G1VC]

The East African nation has ramped up spending in recent years to build a modern railway, roads and electricity plants, driving up the deficit and unnerving investors.

 

(Reporting by Duncan Miriri and Edmund Blair; Editing by Richard Borsuk)

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South Africa turns on Saudi-built solar to cut coal reliance

14 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa and Saudi Arabian ACWA Power launched a $328 million solar power plant in the Northern Cape province on Monday, as Africa’s most industrialised country rushes to expand its power supply and cut its coal reliance.

The Bokpoort Concentrated Solar Power (CSP) Project, developed by a consortium led by ACWA Power, is set to provide 1,300 megawatts per hour, powering more than 200,000 homes, a statement from media firm OLB said.

Construction of the plant began in 2013, following a successful bid by ACWA Power, as part of South Africa’s plan to expand the use of renewable energy.

“It is aimed at providing energy security and diversified energy. It instils confidence that major green projects are going to be built in South Africa,” said the Department of Trade and Industry’s (DTI) deputy director general Yunus Hoosen.

Chronic energy shortages are pushing the government to seek alternative sources of electricity from state-owned power utility Eskom’s coal-powered stations that take much longer to build.

Eskom, which provides virtually all of South Africa’s power, is facing a funding crunch as it races to bring new power plants online.

With year-round sunshine and thousands of miles of windswept coast in South Africa, investors are warming to the renewable energy potential, with 66 projects completed or underway since the government launched a first bid round four years ago. [L5N0W61SY]

Bokpoort CSP plant is the first in a series of investments that ACWA Power is making in the power sector in South Africa, said the DTI.

The company expects to commence construction on the 100 MW Redstone concentrated solar power project, also in Northern Cape, later this year and is awaiting the outcome of tender submissions for a 300 MW coal-fired plant in Mpumalanga province in eastern South Africa.

 

(Reporting by Nqobile Dludla; Editing by James Macharia and Alexander Smith)

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S.African rand slides as appetite for emerging assets wanes, stocks rise

14 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand fell against the dollar as appetite for emerging assets was dented by a firming dollar in cautious trade ahead of the interest rate decision on Thursday.

By 0925 GMT the rand had slipped 0.82 percent to 15.3475 per dollar, reversing a run that took the currency towards 15.00, a level it has not breached in nearly three months.

Measured against a basket of major currencies, the greenback was 0.2 percent firmer.

With a dearth of data due in the session traders expect direction later in the week from the local release of an interest rate decision on Thursday.

“You have the FOMC and then the local interest rate decision. And in the trading world we’re limited to the scenarios we have on hand,” said trader at WWC Securities Marten Banninga.

“If you look at some of the forecasts its looks like its 50/50,” Banninga said.

A Reuters poll of 30 economists expects the South African Reserve Bank (SARB) to leave its benchmark lending rate at 6.75 percent after hiking by 50 basis points in January, despite rapidly rising inflation.

A rates decision on Wednesday by the United States central bank is also set to determine emerging market flows as investors look for clues on the pace of rate hikes in the world’s top economy.

Bonds were also weaker, with the government paper due in 2026 adding 1 basis point to 9.125 percent.

Stocks were higher, with the JSE securities exchange’s Top-40 up 1.5 percent to 46,464 points.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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South Africa’s MTN offers $1.5 bil to settle Nigeria fine

11 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – South African telecoms firm MTN Group has offered $1.5 billion to settle a much larger fine from Nigerian regulators for missing a deadline to disconnect unregistered SIM card users, a document seen by Reuters shows.

Africa’s biggest mobile phone group has been in talks with Nigerian authorities to have the $3.9 billion penalty reduced and last month made a “good faith” payment of $250 million towards a settlement.

In a letter to the Nigerian government from MTN’s lawyer, former U.S. Attorney General Eric Holder, the company proposed a 300 billion naira ($1.5 billion) settlement to be paid through a combination of government bond purchases, cash instalments and network access to the Nigerian government.

Holder said in the letter, dated Feb. 24, the offer “ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria.”

Johannesburg-based MTN said on Friday talks with the Nigerian government were ongoing.

“MTN has previously advised shareholders not to make decisions based on press reports and MTN again urges its shareholders to refrain from doing so,” it said.

Nigeria’s telecoms ministry had no immediate comment.

In its annual results last week, MTN said it had put aside $600 million to cover a deal over the fine, which was originally set at $5.2 billion on the basis of charging $1,000 for every unregistered SIM card.

Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.

The fine, equating to more than twice MTN’s annual average capital expenditure over the past five years, came months after Muhammadu Buhari was swept to power after an election campaign which pledged tougher regulation and a fight against corruption.

Shares in MTN, which makes about 37 percent of its sales in Nigeria, were little changed at 147.53 rand at 0839 GMT, after rising more than 2 percent shortly after the market opened.

($1 = 199.0000 naira)

 

(By Camillus Eboh. Additional reporting by Zandi Shabalala in Johannesburg; Writing by Tiisetso Motsoeneng; Editing by Mark Potter)

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Old Mutual says to split up, asset management sale eyed

11 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Anglo-South African financial services group Old Mutual Plc said on Friday it would split up into its four main businesses, strengthening expectations of the sale or listing of its UK asset management arm.

The break-up of the company, which is listed in London and Johannesburg and has insurance, asset management and banking operations, follows a strategic review announced in November, when former Standard Bank executive Bruce Hemphill took over as chief executive.

Changes to the regulatory environment in Europe and South Africa have made the company, which started out in 1845 as a life insurance firm in Cape Town, more complex to run, it said in a statement.

“It’s a costly structure with insufficient synergies to justify those costs,” Hemphill said.

Old Mutual’s solvency capital ratio under new European rules was 135 percent, lower than many of the other major insurers that have reported earnings so far this year.

The group said it had not yet decided how it would go about spinning off the units but that it expected the separation to be largely completed by the end of 2018.

The company’s four units are Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank Group and OM Asset Management.

It said it planned to cut its majority stake in Nedbank to a minority one.

Old Mutual’s shares have risen since Sky News reported the break-up plans last weekend, and said private equity firms had tabled a multi-billion pound cash bid for Old Mutual Wealth.

Analysts said the unit would be worth 3-4 billion pounds.

The group said its pretax adjusted operating profit for 2015 rose 4 percent in reported currency terms to 1.7 billion pounds ($2.4 billion).

($1 = 0.7004 pounds)

 

(By Carolyn Cohn and Noor Zainab Hussain. Additional reporting by Soumithri Mamidipudi in Bengaluru; Editing by Rachel Armstrong and Mark Potter)

 

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