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South Africa’s January headline CPI rises to 6.2% year-on-year

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

JOHANNESBURG (Reuters) – South Africa’s headline consumer inflation quickened more than expected to 6.2 percent year-on-year in January, compared with 5.2 percent in December, data from Statistics South Africa showed on Wednesday.

On a month-on-month basis, prices rose 0.8 percent compared with an increase of 0.3 percent in the previous month.

Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, edged up to 5.6 percent year-on-year in January from 5.2 percent in the previous month, while also rising to 0.7 percent month-on-month.

The consensus for January headline CPI was 5.93 percent, according to a Reuters poll.

 

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

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Kenya replaces Mombasa port management amid smuggling probe

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

NAIROBI (Reuters) – Kenya Ports Authority said on Monday it had replaced senior managers at Mombasa port in response to pressure to tackle drug and ivory smuggling at East Africa’s main trade gateway.

Masden Madoka, the port’s chairman, said managing director Gichiri Ndua and five other senior managers had been sent into early retirement and several others were likely to follow.

There are no suggestions any of the six were directly involved in smuggling, though Madoka said investigations into corruption were ongoing.

“There have been complaints levelled against the KPA (Kenyan Ports Authority) and it was time such drastic action was taken,” he told journalists.

Ndua could not be reached for comment, despite several attempts to contact him by telephone.

The Indian Ocean port is a vital artery for East African trade, handling fuel and other imports for landlocked neighbours including Uganda and South Sudan. The region’s main exports, tea and coffee, are also shipped out of Mombasa.

Western diplomats say it is also the main exit point for ivory poached in East Africa and smuggled to Asia, and has become a key entry point of Afghan heroin bound for Europe via East Africa.

Officials of the port and other government agencies there have faced frequent and widespread accusations of colluding with rogue importers and exporters, depriving Kenya of tax revenues.

While there have been no convictions, the port has become a focal point for a campaign by President Uhuru Kenyatta to boost economic growth by improving efficiency and fighting criminal cartels.

Madoka said Catherine Muturi, who was the port’s general manager for finance and administration, has been appointed acting managing director.

In another effort to curb smuggling, Madoka also said all transit cargo coming through Mombasa would be cleared within the port. At present, some containers bound for outside Kenya are cleared at privately run container freight stations located outside the port.

The government shut down two such stations last month.

 

(By Joseph Akwiri. Writing by Drazen Jorgic; editing by John Stonestreet)

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South Africa’s Impala Platinum sees up to 20% fall in H1 profits

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

JOHANNESBURG (Reuters) – South Africa’s Impala Platinum said on Monday it expected half-year profits to fall by as much as 20 percent due to lower rand prices for its main commodity.

Headline earnings per share – a measure of profit which strips off certain one-off items – will be between 50 cents and 59 cents, a decline of between 20 percent and 10 percent.

Impala, the world No. 2 producer of the metal used for emissions-capping catalytic converters in cars, said the rand prices for platinum are down 15 percent compared to a year earlier causing the decline in profits.

Shares in Implats, which have more than halved in value over the last year, fell 0.74 percent to 35 rand by 1500 GMT.

 

(Reporting by Zandi Shabalala; Editing by James Macharia)

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Ugandan police arrest opposition leader Besigye, fire teargas

15 February 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

KAMPALA (Reuters) – Ugandan police on Monday arrested opposition leader Kizza Besigye and fired teargas to disperse hundreds of his supporters in capital Kampala, a witness said, in a move likely to stoke tensions ahead of Thursday’s presidential election.

Besigye was arrested after the police asked him and his supporters to use a different route during their march into central Kampala, according to a witness at the rally.

“They wanted him to use another road which was far away from where he wanted to go. Police then started firing teargas and arrested (Besigye) with two other opposition leaders,” said the witness.

 

(Writing by Drazen Jorgic; Editing by Toby Chopra)

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Nigeria in talks with oil majors to repay debt, invest in refineries

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

ABUJA (Reuters) – Nigeria is in talks with oil majors and banks to raise capital for new drilling and to repay up to $4 billion in debt that the state oil firm has accumulated over years of mismanagement, the firm’s head told Reuters.

Emmanuel Ibe Kachikwu, who is also the minister of state for petroleum, said he wanted to increase output to up to 2.5 million barrels per day by the end of 2016. Currently, the OPEC member pumps 2.3 million bpd.

President Muhammadu Buhari has made reforming the oil sector a priority as a slump in oil prices hammers the economy. The former military ruler has fired the NNPC board and appointed Kachikwu to overhaul a company whose opaque structures have allowed corruption and oil theft to flourish.

Nigeria’s oil and gas output has been relatively stagnant as big offshore projects have been held up by much-delayed government funding and uncertainty over fiscal terms.

Africa’s biggest economy produces oil with foreign and local firms through production-sharing contracts and joint ventures (JVs) but investments have been held up because NNPC has been unable to pay its part: bills have been piling up since 2012.

Kachikwu said debt as of November stood at $3.5-$4 billion, which NNPC wanted to cut through deals such as a $1.2 billion multi-year drilling financing signed with Chevron in September.

“The target is that over 2017, we’ll begin to look at zero,” he said in an interview, referring to debt and the goal of ending the need for JVs to depend on NNPC cash.

NNPC was in talks with oil majors such as Italy’s Eni and oil traders Vitol and Gunvor, seeking partnerships to revamp assets such as refineries after decades of neglect. Cash-strapped for years, it reported a loss of 267.14 billion naira ($1.3 billion) for 2015.

“My ideal would be to bring in third party capital, do a joint investment and management of the refineries and work out a pay-out process over 5 to 6 years basically on lifting of some portion of the finished products,” Kachikwu said.

He added that the government would also advertise concessions for pipelines and depots next month.

 

RAISING FUNDS

NNPC was also looking into revamping joint ventures with local firms to boost productivity but this would depend on the Petroleum Industry Bill (PIB), a project to revamp the sector held up in parliament for years.

Kachikwu said NNPC was in talks with the Senate to speed up the process by splitting the PIB into three parts covering governance, taxation and business items such as oil block licensing.

NNPC would also restructure strategic alliance agreements held by Atlantic Energy to raise funds for oil blocks sold by Royal Dutch Shell.

The controversial deals were signed under the previous oil minister Diezani Alison-Madueke, who was briefly arrested in London last year on suspicion of corruption. [nL5N1223TQ]

Former central bank governor Lamido Sanusi alleged that Atlantic’s deals were one route through which tens of billions of dollars in oil revenues were diverted from state finances.

Kachikwu said NNPC expected to conclude a deal within two months for a new partner to pay up to $1.3 billion to take over the Atlantic agreements. The blocks were originally sold to indigenous oil companies by Shell.

“I’m saying to Atlantic, sorry, you’re out because there’s been a breach,” he said. “Whoever comes in has to give a sign-in fee almost equivalent to what I’ve lost … we’ll have a massive increase in volume out of those fields, we’re going to have 150,000 to 200,000 bpd from the current 40,000 to 50,000 bpd.”

 

(Reporting by Julia Payne; Editing by Ulf Laessing and Ruth Pitchford)

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EU says it is ready to lend Tunisia 500 mil euro

12 February 2016 Comments (0) Latest Updates from Reuters, Middle East, Politics

TUNIS (Reuters) – The European Union said on Friday it was ready to lend Tunisia 500 million euros in 2016-2017 to cope with its economic difficulties, weeks after violent protests erupted in the North Africa country to demand jobs.

Tunisia has been hailed as the success story of the 2011 Arab Spring revolts for its transition to democracy, but economic development and reforms have failed to keep pace with the political changes since the fall of autocrat Zine El-Abidine Ben Ali.

 

(Reporting by Tarek Amara; editing by Patrick Markey and Kevin Liffey)

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ArcelorMittal South Africa seeks power producer to build new plant

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

JOHANNESBURG (Reuters) – ArcelorMittal South Africa is looking for an independent power producer to build an 800 megawatt gas-fired power station on land at its Saldanha steel works to help ensure its survival, Chief Executive Paul O’Flaherty said.

ArcelorMittal, which is reviewing its Saldanha operation partly due to high electricity costs, is willing to take as much as 220 MW of the plant’s capacity and the company is in talks with other industrial users and the government to sign long- term contracts for the rest.

Building an independent power plant is vital for the survival of Saldanha, O’Flaherty told Reuters, adding that state-owned utility Eskom’s rising electricity prices were unaffordable.

Electricity accounts for nearly a third of costs at Saldanha, the company’s newest and only export-focused plant, compared with less than 10 percent for the rest of the company.

“An environmental impact study is underway on our land,” O’Flaherty said adding that ArcelorMittal South Africa would not own the project.

On Friday, the company reported a slightly narrower loss than expected, sending its shares soaring.

There are also expectations that the government will give local steelmakers further protection beyond the 10 percent steel import tariff agreed in August.

Shares in ArcelorMittal South Africa were up a further 12.74 percent at 6.99 rand by 1200 GMT on Friday.

 

(Reporting by TJ Strydom and Thekiso Lefifi; Editing by Greg Mahlich)

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South Africa’s rand slides as President’s speech disappoints

12 February 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

JOHANNESBURG (Reuters) – South Africa’s rand weakened on Friday after President Jacob Zuma’s state-of-the-nation address that analysts and economists said did not deal with concerns raised by rating agencies.

By 0645 GMT the rand had slipped 0.7 percent to 15.9100 per dollar, pushed lower by the president’s failure to address investor worries over fiscal policy as well weak mining and manufacturing data.

Bonds also weakened, with the benchmark paper due in 2026 adding 7 basis points to 9.24 percent.

“There was only limited recognition of the current economic malaise with an overplaying of success of past policy targets,” said Peter Attard Montalto, head economist for emerging markets at Nomura International.

Analysts said ratings agencies were keen to hear the president announce a clear plan detailing how South Africa would improve economic growth, predicted at only 0.9 percent in 2016 by the central bank.

On Thursday, data from the statistics agency showed mining production declined 0.3 percent in December, while manufacturing grew slightly in the same month.

“The impact of the commodity price rout has been disastrous for domestic mining industry,” analysts at NKC African Economics said in a note.

“Unfortunately, new Mineral Resources Minister Mosebenzi Zwane offered little in the way of viable relief strategies when he addressed Mining Indaba earlier this week.”

Stocks opened higher, with the JSE Top-40 blue-chip index adding 0.65 percent to 42,324 points in early trade.

 

(Reporting by Mfuneko Toyana; Editing by Biju Dwarakanath)

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South Africa’s Woolworths to conserve cash as growth slows

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

JOHANNESBURG (Reuters) – South African retailer Woolworths Holdings Ltd will aim to conserve cash as growth slows in its home market, Chief Executive Ian Moir said on Thursday.

Shares in the retailer slid to a two-month low despite posting a 30.6 percent jump in first-half profit.

Woolworths, which sells upmarket food and clothing, warned rising interest rates in South Africa would further pressure consumers in Africa’s most advanced economy, where it makes nearly 60 percent of its sales.

“It would be more conservative, in what is a volatile environment, to offer scrip rather than cash,” said Woolworths Chief Executive Ian Moir, referring to dividends paid in shares rather than cash.

Shareholders will have a choice between a scrip and a cash dividend, the company said.

If all shareholders chose scrip, Woolworths would have 1.5-1.6 billion rand more for investment and to pay off debt, Moir said.

The company is committing capital to its expansion plans in Australia, said Moir, where it last year bought department store chain David Jones.

South Africa’s retailers are battling to boost sales as consumers check spending, though Woolworths has done better than rivals due to its appeal to high-income customers.

But a severe drought in southern Africa and the weaker rand is expected to stoke food price inflation, and though higher maize prices should not have a direct impact on higher income shoppers, their spending could sag.

“When we see food inflation coming through, our customers, even at the upper end, tend to buy less items,” said Moir.

Sasfin Securities analyst Alec Abraham said though Woolworths posted good operational results, Moir’s downbeat comments on South Africa’s growth outlook might have contributed to the share price fall on Thursday.

Earnings per share were affected by costs to acquire David Jones and the dilutive effects of share issues to finance the transaction and a black empowerment deal.

Headline earnings per share, the most widely watched profit measure in South Africa, which strips out certain one-off items, were up 30.6 percent at 253.5 cents for the six months ended Dec. 31.

Shares in Woolworths were down 7.5 percent at 86.37 rand by 1050 GMT, compared with a 2.1 slide in the JSE’s benchmark Top-40 index.

 

(Reporting by TJ Strydom; Editing by Subhranshu Sahu and Mark Potter)

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Mauritius business confidence bounces back in last quarter of 2015

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

PORT LOUIS (Reuters) – Higher sales volumes boosted business confidence in Mauritius during the last quarter of 2015 after a decline in the previous quarter, a survey of leading private-sector companies showed on Thursday.

The Mauritius Chamber of Commerce and Industry’s quarterly confidence index climbed 6 percent to 93.4 points. However, the index remained well below the long-term average of 100 points since the third quarter of 2012.

The Indian Ocean island’s economy grew by an estimated 3.4 percent in 2015, down from a forecast of 3.6 percent issued in September. Statistics Mauritius forecast growth at 3.9 percent this year with an expected rebound in the construction sector.

Chamber economist Renganaden Padayachy said 49.1 percent of business leaders interviewed in the survey said expansion and diversification prospects into new markets were the main growth drivers in the last quarter of 2015.

“A majority of enterprises are confident for 2016 and expect an improvement in their business this year,” he told a news conference.

 

(Reporting by Jean Paul Arouff; Editing by Drazen Jorgic and Dale Hudson)

 

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