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Nigeria gives MTN two weeks to pay $5.2 billion fine

31 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS/JOHANNESBURG (Reuters) – Nigeria’s telecoms regulator on Friday gave MTN Group two weeks to pay a $5.2 billion fine imposed on Africa’s biggest mobile phone company for failure to cut off millions of users with unregistered SIM cards.

The Nigerian Communications Commission (NCC) imposed the penalty on Monday on MTN’s Nigeria unit, the group’s biggest market by subscribers, sending the phone operator’s stock tumbling by about 20 percent this week, though they bounced 2 percent by midday Friday.

The fine comes months after Muhammadu Buhari swept to the helm of Africa’s biggest oil producer after a campaign in which he promised tougher regulation and a fight against corruption.

The telecoms regulator said MTN failed to disconnect subscribers with unregistered or incomplete SIM cards, after ordering all network operators to do so. NCC said only MTN had failed to comply with the directive.

An NCC source has said the regulator’s decision was based on advice from Nigeria’s state security service, which suspected unregistered SIM cards were being used for criminal activity in a country facing Islamic militant group Boko Haram’s insurgency.

NCC spokesman Tony Ojobo said MTN had until Nov. 16 pay up, but the two sides were in talks to resolve the matter.

“The outcome of the discussion may affect the date. That’s why they are having the discussion so that they can reach a solution,” Ojobo said.

MTN declined comment.

 

INTERNAL SECURITY

Nigeria’s presidency and internal security agency were also involved in the talks, a regulatory source said. MTN Chief Executive Sifiso Dabengwa flew to Abuja to make what three sources familiar with the matter said was an attempt have the penalty reduced.

If it stands, the fine, almost a quarter of Nigeria’s 2015 budget of $22 billion, would wipe out more than two years of MTN’s annual profits.

It was unclear what would happen to MTN, whose Nigerian license is up for renewal in 2016, if the company fails to pay the fine, but NCC’s powers include revoking licenses.

Some analysts said the size of the fine risked damaging Nigeria’s efforts to shake off its image as a risky frontier market for international investors.

“Why this over-reaching regulation? It simply adds to perceptions about Nigeria as unfriendly place for foreign capital,” Vestact fund manager Sasha Naryshkine said in Johannesburg.

But Frost & Sullivan analyst Joanita Roos said the move helped, rather than damaged, Nigeria’s image. “The harsh action taken by regulators … does in fact protect and contribute positively to the reputation of the country.”

MTN also faces a Johannesburg bourse investigation on the timing of the announcement that it was facing the penalty. MTN’s confirmation came after news reports of the fine. South African companies are required to immediately disclose any price-sensitive information.

(By Chijioke Ohuocha and Tiisetso Motsoeneng. Additional reporting by TJ Strydom in Johannesburg; Editing by James Macharia and David Holmes.  Reuters)

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South Africa’s rand benefits from dollar weakness, stocks climb

30 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand edged up against the dollar on Friday, mainly reflecting the greenback’s weakness against a basket of currencies and also buoyed by data showing a narrower South African trade deficit in September.

The Top-40 index on the Johannesburg Stock Exchange ended in the black for the first time this week as traders showed appetite for resource shares and renewed confidence in Africa’s largest mobile operator.

The rand hit a session high of 13.7645, and was trading at 13.8375 by 1504 GMT, a 0.4 percent gain over Thursday’s close.

South Africa’s trade deficit narrowed sharply to 0.89 billion rand ($65 million) in September from a revised 10.14 billion rand shortfall in August, data from the national revenue agency showed.

The local currency was however still down 1.5 percent this week to the dollar, partly due to week-long protests against high university fees which highlighted the economic woes facing Africa’s most developed economy, and dented investor sentiment.

The rand has also been under pressure for much of this year, as investors anticipating the start of policy tightening in the United States dump high yielding but riskier emerging markets.

“A stronger-than-expected payrolls print next week could very well place further pressure on the rand,” BNP Paribas Cadiz Securities economist Jeffrey Schultz said, referring to U.S. jobs numbers due out next Friday.

On the debt market, the benchmark government bond due in 2026 edged higher, with the yield shedding 6 basis points to close at 8.34 percent.

South African stocks ended positive for the first time this week, driven by strong gains in the resource sector, spurred by an appetite for shares in Anglo American.

The diversified miner was the biggest winner on the blue-chip Top-40 index climbing more than 3 percent to end at 116.46 rand.

Shares in mobile giant MTN Group shot up as high as 3 percent, its first gains this week, after slumping about 20 percent since Monday when it was fined $5.2 billion for failure to cut off users with unregistered SIM cards.

MTN’s shares closed 2.2 percent up to 158.80 rand.

“The general feeling is that the fine will more than likely be reduced to something more manageable, like $1 billion,” Inkunzi Wealth Group senior trader, Petri Redlinghuys, said.

The Top 40 index rose 0.79 percent to 48,317 points while the All-share index was up 0.73 percent at 53,793 points.

Trade was tepid with 180 million shares changing hands, almost on par with last year’s daily average of 183 million.

 

(Reporting by Stella Mapenzauswa and Peroshni Govender; Editing by James Macharia, Reuters)

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Nigeria planning $25 bil infrastructure fund

30 October 2015 Comments (0) Africa, Latest Updates from Reuters, Politics

ABUJA (Reuters) – Nigeria plans to set up a $25 billion infrastructure fund to invest in the transport and energy sectors in Africa’s most populous nation, a spokesman for Vice President Yemi Osinbajo said on Thursday.

Laolu Akande said money for the planned fund would come from local and international sources including Nigeria’s sovereign wealth fund and domestic pension funds.

“The vice president disclosed that other sovereign wealth funds have already indicated an interest in the fund, which would be used to address the nation’s decaying road, rail and power infrastructures,” said Akande.

He did not say when exactly the fund would be set up.

The nation of 170 million people is Africa’s top oil producer, but it requires infrastructure development to help boost economic growth.

The West African nation’s economy, the biggest on the continent, has been hammered by the fall in oil prices. The country relies on crude exports for around 70 percent of government revenues.

Osinbajo, who has been asked to oversee economic policy by President Muhammadu Buhari, referred to the infrastructure fund proposals while speaking to diplomats, including ambassadors from Italy and Canada, the vice presidency said in a statement.

Osinbajo also reiterated the administration’s view that Nigeria’s currency, the naira, does not need to be devalued, the statement said.

“It is not a solution. We are not exporting significantly. The way things are, devaluation will not help the local economy,” he was quoted as saying.

His comments come days after former central bank governor Lamido Sanusi said Nigeria would have to devalue and loosen monetary policy to stimulate its economy.

The naira was officially devalued last November and underwent a de facto devaluation again in February.

Godwin Emefiele, the current central bank governor, has repeatedly said the currency was “appropriately” priced and has ruled out another naira devaluation.

 

(Reporting by Felix Onuah; Writing by Alexis Akwagyiram; Editing by Hugh Lawson, Reuters)

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Egypt’s GB Auto says output resumes after 20-day stoppage

29 October 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egyptian auto distributor GB Auto said on Thursday that production at some of its factories was halted for 20 days during September and October due to delays in supplies but is now back on track.

“GB Auto factories faced some turbulence in production during September and October due to delays of production input shipments which have led to the halting of production at some factories for 20 days,” the firm said in a bourse statement.

GB Auto said factories were now functioning in a “regular manner” due to the availability of production material.

Egypt is facing a currency shortage which is affecting the ability of businesses to import products.

GB Auto, Egypt’s largest listed auto assembler and distributor and the country’s distributor of tuk-tuks and motorbikes made by India’s Bajaj, has been affected by the currency crisis like many other companies in the country.

In August, the firm posted a 65 percent drop in its second-quarter net profit and said the currency shortage has depleted its inventory of some key models.

GB Auto made 22.4 million Egyptian pounds ($2.79 million) in the second quarter compared with 63.6 million in the same period a year earlier. [nL5N10L2EX]

(Reporting by Asma Alsharif, editing by David Evans, Reuters)

 

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Shell upbeat on Gabon Leopard Marin discovery, sees gas play

29 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – Royal Dutch Shell’s Leopard Marin discovery offshore Gabon may be a new commercial gas field, a senior company executive said on Thursday.

“Leopard is the first potentially commercial multi-TCF (trillion cubic feet) find in a new gas play and I think that is very exciting for us and for the government of Gabon,” Alastair Milne, Shell’s vice president exploration for Sub-Saharan Africa, told an industry conference in Cape Town.

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Burundi’s tea revenues up 64% in nine months to September

28 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

KIGALI (Reuters) – Burundi’s earnings from tea were up by nearly 64 percent in the last nine months as sales volumes and prices increased, boosted by a drop in Kenya’s output, a tea board official said on Wednesday.

Production in Kenya, the world leading exporter of black tea, can influence the regional market, while Burundi exports 80 percent of its tea through a regional weekly auction held in Mombasa.

Burundi’s state-run tea board (OTB) said it earned $27.3 million between January and September, up from $16.7 million in the same period last year and ahead of the $21.3 million it earned in the whole of 2014.

Exports are up at 8,959,321 kg of tea this year from 7,743,972 kg last year.

The tea industry has emerged largely unscathed from several months of political unrest over President Pierre Nkurunziza’s contested third term in office that has affected other sectors of the country’s fragile economy.

Tea is Burundi’s second-largest hard currency earner after coffee and employs some 300,000 smallholder growers in a nation of 10 million people.

“The combination of higher sales and a decline of Kenya’s tea production has boosted prices as well as earnings for Burundi’s tea,” OTB’s head of exports, Joseph Marc Ndahigeze, told Reuters.

The average export price per kg jumped to $3.05 from $2.16 in 2014, OTB said in its report.

 

(Reporting by Patrick Nduwimana; Editing by Edith Honan, Greg Mahlich, Reuters)

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Mauritius 3-year Treasury bond yield rises to 4.56%

28 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

PORT LOUIS (Reuters) – The weighted average yield on Mauritius’s three-year Treasury bond rose to 4.56 percent on Wednesday from 4.51 percent at a sale of a similar bond on Oct. 21, the central bank said.

Bank of Mauritius sold all the 1 billion rupees ($28.04 million) worth of debt it had offered. Bids totalled 2.625 billion rupees, with yield offers ranging from 4.25 percent to 5.14 percent.

The bond has a coupon rate of 3.72 percent and is due on Aug. 21, 2018.

 

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Total to resume South African offshore drilling next year

28 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – French oil major Total is expected to resume drilling offshore South Africa in the second half of 2016, part of a broader campaign to explore in Africa, a senior official said on Wednesday.

Total last year stopped drilling off the southern coast of South Africa after experiencing mechanical problems with its rig during high winds and rough seas in the Outeniqua Basin, about 175 km (109 miles) off the southern coast of South Africa.

“Our plan is to drill next year but only if those conditions are met. I think it is better to think second half than first half,” Kevin Mclachlan, Total’s senior vice president for exploration told Reuters on the sidelines of an African oil and gas conference in Cape Town.

Total is the operator of Block 11B/12B, where it holds a 50 percent stake in the field with equal partner CNR International, a subsidiary of Canadian Natural Resources Ltd.

Mclachlan said the company planned to drill between 10-15 wells over the next three years across the continent, including in Africa’s top two oil producers Nigeria and Angola.

 

(Reporting by Wendell Roelf; Editing by James Macharia, Reuters)

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EgyptAir to launch 10-year restructuring plan

27 October 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

DUBAI (Reuters) – EgyptAir, the state-owned flag carrier, is in final stages of launching an overhaul and expansion plan that will reverse its downturn and propel it towards growth, its chairman said on Tuesday.

“We’re developing a 10-year restructuring plan, which should be finalised by mid-December,” Sherif Fathi Attia, chairman and chief executive of EgyptAir Holding told Reuters on the sidelines of an industry conference in Abu Dhabi. Attia is optimistic the plan will get government approval.

The plan includes a network and fleet expansion and Attia said the airline could place aircraft orders in the first quarter of 2016. He said wide-body aircraft would account for 20 to 30 percent of its total order.

The airline has struggled to make a profit, facing setbacks during the 2008 financial crisis, which was followed by the turmoil after the overthrow of then-president Hosni Mubarak.

EgyptAir reported an annual loss of 2.20 million Egyptian pounds at the end of June 2011, the last results the group published since the revolution.

The turnaround project, that could see changes in middle-management, aims for profitability at the end of the current fiscal year.

Attia ruled out initial public offering for the company, which had previously been under consideration.

EgyptAir is part of a group of seven companies which includes EgyptAir Cargo. It currently has a fleet of about 66 aircraft and flies to about 162 countries.

(By By Nadia Saleem, Reuters)

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Kenya’s Housing Finance Jan-Sept pretax profit up 7%

27 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters

kenya housing finance

NAIROBI (Reuters) – Kenyan mortgage lender Housing Finance Group posted a 7 percent rise in nine-month pretax profit on Tuesday, helped by growth in net interest income.

Pretax profit rose to 1.1 billion shillings ($10.8 million)for the nine months to Sept. 30. Net interest income rose 24 percent to 2.72 billion shillings, it said in a statement.

Housing Finance said net loans and advances to customers rose to 51.71 billion shillings from 43.27 billion shillings, with net non-performing loans falling by a fifth to 2.7 billion shillings.

Housing Finance’s earnings per share fell to 2.98 shillings from 4.15 shillings in the same period last year. It declared a dividend per share of 0.65 shillings, down from 0.75 shillings.

It did not give a reason for the fall in earnings per share, but it conducted a rights issue in March in which it offered 116.67 million new shares, raising 2.95 billion shillings.

(Reporting by George Obulutsa; Editing by Anand Basu, Reuters)

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