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Spotify enters into the South African market

13 March 2018 Comments (0) Actualites, Africa, Business, Economy, Entertainment and Lifestyle, Technology

JOHANNESBURG (Reuters) – Global music streaming provider Spotify launched its services in South Africa on Tuesday, marking its entry into Africa, where there is a rapid uptake of smartphones and improving telecommunications infrastructure.

The Swedish company, launched in 2008 and available in more than 60 countries, is the biggest music streaming company in the world and counts services from Apple Inc, Amazon.com Inc and Alphabet Inc’s Google Play as its main rivals.

The South Africa launch comes as Spotify prepares for a direct listing of its shares on the New York Stock Exchange, which will allow investors and employees to sell shares without the company raising new capital or hiring Wall Street banks to underwrite the issue.

“We believe South Africa is a wonderful country to start in,” Spotify Managing Director in Middle East and Africa Claudius Boller told Reuters on the sidelines of the launch.

“We looked at the technology landscape, we looked at the maturity and actually South Africa is seen globally as a very important music market.”

Spotify also has aspirations to branch out into the rest of Africa, Boller said, without committing to timelines or geographies.

An increase in connectivity across South Africa, helped by higher investment in infrastructure, as well as a growing uptake in credit cards and bank accounts has drawn global video and music streaming providers.

Its music streaming market is dominated by players such as Apple Music, Google Play, France’s Deezer and Simfy Africa, with only a few local operators such as mobile phone operator’s MTN and Cell C with MTN Music+ and Black.

Internet and entertainment firm Naspers also recently launched music streaming platform Joox, from China’s Tencent, in which it holds a 33 percent stake.

In its filing to list its shares, Spotify said its operating loss widened to 378 million euros ($465.32 million) in 2017 from 349 million euros.

($1 = 0.8123 euros)

 

(Reporting by Nqobile Dludla; editing by Jason Neely and Pritha Sarkar)

 

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Kenya raises $2 bln Eurobond but concerns over deficit linger

22 February 2018 Comments (0) Actualites, Africa, Economy, Infrastructure, Politics

NAIROBI (Reuters) – Kenya shook off a downgrade and the loss of access to an IMF standby credit facility to raise a $2 billion dollar bond at competitive yields, but market participants said on Thursday it still needs a credible plan to tackle its fiscal deficit.

Kenya received $14 billion worth of bids. It took just $1 billion in a 10-year note with a yield of 7.25 percent, and another $1 billion in a 30-year tranche with a yield of 8.25 percent, Thomson Reuters news and market analysis service IFR reported.

“They were in line with the yield curve,” said a fixed income trader in Nairobi.

The eventual yield reflected a tightening of the initial pricing area by about 30 basis points. It was close to the comparative yields for other African sovereigns like Nigeria, the trader said.

Last week, credit ratings agency Moody’s downgraded Kenya’s debt rating to B2 from B1 while officials were in the middle of the bond roadshow abroad, angering the government.

More bad news emerged on Tuesday, after the International Monetary Fund said it had frozen Kenya’s access to a $1.5 billion standby facility last June, after failure to agree on fiscal consolidation and delay in completing a review.

“They (the government) were able to weather the knocks of the Moody’s downgrade and the IMF issue,” said Aly Khan Satchu, a Nairobi-based independent trader and analyst.

But he warned that the government needed to convince investors it has a plan to tackle the fiscal deficit.

“People are worried about debt-to-GDP ratios and they want to see a stronger language about how this will be addressed,” he said.

Kenya’s total debt is about 50 percent of GDP, up from 42 percent in 2013. It has borrowed locally and abroad to build infrastructure like a new railway line from Nairobi to the port of Mombasa.

The finance ministry has published a plan to lower its fiscal deficit to 7 percent of GDP at the end of this fiscal year in June, from 8.9 percent in 2016/17, and to less than 5 percent in three years’ time.

Satchu said it was not enough for investors. They want to see more targeted infrastructure investments that will ensure a return, and attempts to reign in a ballooning public service wage bill and other recurrent expenditure.

“We have got to walk the talk. We are not even talking the talk yet,” he said.

 

(By Duncan Miriri. Editing by Katharine Houreld and Toby Chopra)

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Ethiopia plans to offer firms shares in road projects: finance minister

19 July 2017 Comments (0) Latest Updates from Reuters

By Aaron Maasho

ADDIS ABABA (Reuters) – Ethiopia plans to offer shares in its road-building and maintenance projects to private investors, its finance minister said on Tuesday, the latest step to open up and modernise the state-led economy.

The Horn of Africa country has over 113,000 kilometres (68,0000 miles) of paved roads and plans to increase that to 220,000 kilometres by 2019/20, official data showed.

“We do not have private-run roads. Through public-private partnerships, the private sector is interested to develop roads,” Minister of Finance and Economic Development Abraham Tekeste told Reuters in an interview.

“Through this arrangement, we could work to share the risks and create an environment whereby the private sector can recoup returns on its investment.”

The move to partly liberalise the sector follows Ethiopa’s decision to offer foreign companies stakes in the government-operated Ethiopian Shipping and Logistics Services Enterprise early this year and its energy sector in 2013.

Ethiopia is one of the fastest-growing economies in Africa, but the expansion has mainly been fuelled by huge public investment. The spending has gone into roads, schools, new highways and dams for hydroelectric power.

It opened an electrified railway linking the landlocked nation to a port in neighbouring Djibouti this year.

Abraham said the government expected gross domestic product to grow 11 percent in the 2016/17 fiscal year, up from 8 percent the previous period.

Earlier this month, Ethiopia’s parliament passed a 320.8 billion-birr ($13.9 billion) budget for the 2017/18 financial year (July 8-July 7), an increase of nearly 17 percent on the previous year. About a quarter of that amount is set to be spent on roads.

The International Monetary Fund has said Ethiopia needs to attract more private investment to maintain growth. But the government has in the past tended to brush off such advice and said it would keep charge of key sectors.

“Why do we continue to invest in infrastructure? To make private investment feasible. With no roads, private investment will not be worthwhile,” Abraham said.

Though starting from a low base, foreign investment has also been rising the last five years, including for farms producing flowers and other horticultural products for export and in textiles.

Abraham said Ethiopia took in over $3 billion in foreign direct investment last year and expected that number to rise by the end of this year.

 

 

(Editing by Duncan Miriri, Larry King)

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Engie and Thales will design the Dakar Regional Express railway line

13 August 2016 Comments (0) Africa, Business, Featured

rail track

The French companies Engie and Thales have won the design contract for Senegal’s new Dakar Regional Express Railway project.

The French companies Engie and Thales were recently announced as the winners of the lucrative design contract for Senegal’s vaunted new Dakar Regional Express railway line. The two companies are well established within Africa, but had to fight off stiff competition from several other bids in order to secure the contract with Senegal’s government. The announcement of their successful bids was made on July 27th by APIX, the Senegalese Agency for Investment Promotion and Public works, and the lucrative deal is valued at around $251 million.

The route ahead

The Dakar Regional Express Railway project was first announced in 2014, as part of the Senegalese government’s “Emerging Senegal” program, which aims to boost the nation’s economic and social development. The railway line will connect Senegal’s capital city, Dakar, with the new international airport, Blaise Diagne, and the city of Diamniadio.

The first part of the project will see the construction of the longest section of 36 km between Dakar and Diamniadio. After this, an additional 15 km of line will be built between Diamniadio and the new Blaise Diagne international airport.

The total 55 km distance, between Dakar and the airport, will be covered in around 45 minutes, with 14 stations en-route, and the trains will reach speeds of 160 km/h. The service is also intended to have 3 lines, with 2 for standard passenger trains, and the other for freight transport.

Construction is expected to begin in the final quarter of this year, and to take 26 months, meaning that trains should begin service at the end of 2018. By the end of 2019, the government expects the service to have carried around 115,000 passengers.

The construction work and civil engineering will be carried out by a French, Senegalese and Turkish consortium. The companies making up the consortium are the local Senegalese group CSE, France’s Eiffage Company, and Turkey’s Yapi Merkezi. However, the design and integration of the electrics and communications, alongside overall project management is what has fallen to Engie and Thales.

Engie and Thales the winning duo

Engie and Thales both have a long-standing involvement in African projects. Engie, formerly known as GDF Suez, is a renowned company within the field of electrical power, and has designed and developed renewable energy projects in Africa for 50 years. Engie’s expertise in electrical energy and energy efficiency is evidently pertinent to the Dakar rail project, and its existing presence in Africa will have also aided its bid. The company employs 154,950 people, and had a turnover of over $77.8 billion in 2015.

Likewise, Thales is a company with a recognized body of work within Africa, having worked across multiple fields around the continent for 30 years. However, its know-how, in rail signaling and telecommunications in land transport, is clearly of most significance to the decision to grant the group the dual contract. Thales is already involved in the rail industry in 5 African nations, and employs 62,000 people across 56 countries, with a turnover of $15.6 billion last year.

While the exact split of the $251 million contract between the 2 French corporations is not known, they released a joint statement saying, “Engie and Thales have been selected…for the design and construction of infrastructures and systems of the new Dakar Regional Express Train, for a contract in the amount of 225 million euros”

The teams’ responsibilities

Engie and Thales will now be responsible for multiple aspects of the Dakar Regional Express’ design and development. Aside from designing the systems and providing management, Engie and Thales are also responsible for integrating all aspects of the rail service.

One of the major areas in which their combined expertise will be utilized is the management of the fiber-optic communications network that will connect the trains to the command center. Train signaling, power supply, and providing technical supervision for all train station equipment are also core responsibilities that the French companies have.

Engie and Thales won the contract in the face of strong bids from various competitors, including two Chinese companies, China Railway Construction Company and China Road & Bridge Corporation.

Senegal’s government will be hoping that the combined proficiency of the French duo will ensure that a major part of their bold “Emerging Senegal” project will soon be a reality.

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Nigeria says it paid contractors to finish economy-boosting projects

29 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – A Nigerian minister said on Friday the government had paid contractors 63.16 billion naira ($200 million) to finish delayed infrastructure projects, in an apparent bid to ease fears over the future of the schemes meant to boost the struggling economy.

Work on a series of road, power and other programmes had slowed or halted as the government struggled to make payments, amid delays in passing the national budget and foreign currency shortages.

Power, Works and Housing Minister Babatunde Fashola told an infrastructure conference in London that “63.16 billion naira have been paid out to contractors to finish infrastructure projects since the budget” was passed in May.

He did not say whether that covered all the outstanding payments. But the comments will come as a relief to contractors, many of whom were not paid for months.

They will also signal to foreign investors that there is some movement in the supply of money, which has been problematic over much of the last year due to foreign currency curbs introduced to conserve forex supplies.

The 6.06 trillion naira ($19.24 billion) budget tripled capital expenditure from the previous year in a bid to stimulate Africa’s biggest economy which is going through a crisis caused by low oil prices.

Nigeria’s economic development has been held back by erratic electricity provision and a poor road network, all of which falls under Fashola’s remit.

It was not clear whether the funds referred to by Fashola were part of the budget allocation.

Earlier this month the budget minister said Nigeria’s first quarter revenues reached only 55 percent of the government’s target due to recent attacks on oil and gas facilities in the southern Niger Delta energy hub.

 

($1 = 315.0000 naira)

 

(By Karin Strohecker. Writing by Alexis Akwagyiram; Editing by Andrew Heavens)

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Nigeria signs $80 bln of oil, gas infrastructure deals with China

1 July 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria has signed oil and gas infrastructure agreements worth $80 billion with Chinese companies, the West African country’s state oil company said on Thursday.

Nigeria, an OPEC member which was until recently Africa’s biggest oil producer, relies on crude sales for around 70 percent of national income, but its oil and gas infrastructure is in need of updating.

The country’s four refineries have never reached full production because of poor maintenance, causing it to rely on expensive imported fuel for 80 percent of energy needs.

These problems have been exacerbated by a series of attacks on oil and gas facilities by militants in the southern Niger Delta energy hub which pushed production down to 30-year lows in the last few weeks.

Oil minister Emmanuel Ibe Kachikwu, who also heads the Nigerian National Petroleum Corporation (NNPC), has been in China since Sunday for a roadshow aimed at raising investment.

“Memorandum of understandings (MoUs) worth over $80 billion to be spent on investments in oil and gas infrastructure, pipelines, refineries, power, facility refurbishments and upstream have been signed with Chinese companies,” said NNPC in a statement.

NNPC added the China roadshow was “the first of many investor roadshows intended for the raising of funds” to support the country’s oil and gas infrastructure development plans.

Earlier this week, NNPC said oil production had in the last few days risen by around 300,000 barrels per day (bpd) to 1.9 million bpd, due to repairs and no attacks having been carried out since June 16.

Goldman Sachs, in a report published on Wednesday, said a “normalization” in Nigerian oil production would put pressure on global oil prices and may mean prices will average less than $50 a barrel during the second half of 2016.

 

(Reporting by Alexis Akwagyiram; Editing by Mark Potter)

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Sub-Saharan Africa rail projects promise to increase trade

26 April 2016 Comments (0) Africa, Business, Featured

uganda railway

Rail projects proposed or under way on the southern continent will cost an estimated $60 billion.

Railway projects totaling more than $60 billion are proposed or under way in sub-Saharan Africa.

That estimate comes from Terrapin, which is organizing a major rail conference June 28-29 in Johannesburg. According to Terrapinn, projects in Uganda, Namibia, Batswana, Mali, and Nigeria have the largest budgets, ranging from $8 billion up to nearly $14 billion each.

One massive project is a 3,000-kilometer rail line that will link Benin, Burkina Faso,

Niger, Ivory Coast, Nigeria, Togo and Ghana.

These nations and mining companies that operate within them are funding the project as the mining industry seeks to increase mineral exports from 109,000 tons a year to 3.4 million tons in 2020, a 30-fold increase.

Without rail network, transport expensive

The lack of a cross-border rail network has made transport expensive, especially in land-locked countries such as Niger, which derives 11 percent of its gross domestic product from mining, and Burkina Faso, which derives 13 percent of GDP from mining.

The rail network also is expected to boost trade among the linked nations and drive economic development in other sectors.

Nigeria also has ambitious plans for domestic rail lines, including one linking Lagos and Kano and another between Lagos and Calabar along the coast. Both were designed to ease commuter congestion and facilitate transport of goods.

However, plans were thrown into doubt in April when the Nigerian National Assembly removed $300 million in funding for the coastal project from the 2016 budget. Funding for a third line between Idu and Kaduna was severely reduced as well.

New line will transport coal

Meanwhile, Botswana and Namibia in southern Africa, are seeking private investment to build a 1,500-kilometer rail line that would transport coal from land-locked Botswana’s fields to Namibian ports on the Atlantic coast.

The project was estimated to cost $15 billion when first proposed in 2011. In 2015, the two countries staffed an office to begin looking into legal and cross-border issues that will have to be addressed.

In Mali, China has agreed to finance an overhaul of a rail line linking the capital of Bamako to Dakar in Senegal. Renovation of the 1,300-kilometer rail line will cost a total of $2.5 billion.

China will also train engineers and technicians and overhaul more than 20 train stations and domestic routes.

China will build Ugandan network

China will also play a role in development of a light-rail commuter network in the Ugandan capital of Kampala. The two countries in December signed an agreement for the China Civil Engineering Construction Corporation to build the first phase of the project at a cost of about $440 million.

Plans call for a 240-kilometer network with rail lines from the city center to Entebbe, Nsangi, Wakiso and other towns surrounding the capital. To ease traffic congestion, Uganda also launched an experimental commuter rail line in December between Kampala and Namanve.

Terrapinn listed the following countries with projected rail costs in its report: Uganda ($13.8 billion), Namibia-Botswana ($10 billion), Mali ($9.5 billion), Nigeria ($8.3 billion), Mozambique –Malawi ($4.4 billion), South Africa ($4.3 billion), Kenya ($4 billion), Angola ($3.3 billion), Cameroon ($2.9 billion), Zambia ($1 billion), Democratic Republic of the Congo ($630 million), Zimbabwe ($450 million), Ghana ($300 million), and Tanzania ($40 million).

Terrapinn earlier this year reported a boom in rail development in the Middle East and North Africa with proposals and projects estimated at more than $350 billion, with a number of high-speed rail lines under way.

Railways are vital to economic growth

According to the African Development Bank, railways have an important role to play in the economic development of the continent.

“Rail transport is inevitably critical to support economic development. Unless this mode of transport is developed, Africa may not realize its full potential in exploiting its abundant natural resources and wealth,” the bank said in a 2015 report.

However, the African Development Bank report said the poor condition of rail and rolling stock in many African countries is undermining the potential of rail systems to make a strong contribution to economic growth.

Unfortunately, the ability of African countries to attract investment for railway upgrades has been mixed, it said.

However, the report said support for investment in rail infrastructure will grow as African production of goods and minerals increase and as environmental concerns are heightened.

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Rail projects for Middle East, North Africa total $350 billion

15 February 2016 Comments (1) Africa, Business, Featured, Middle East

high speed rail saudi arabia

The region is experiencing a boom in development of railways to drive economic growth and benefit the environment. 

High-speed rail travel is on a fast track in the Middle East and Northern Africa. More than $350 billion in rail projects are under way in the region.

The estimate represents major rail projects in 16 countries, according to Terrapinn Middle East, which is organizing the 10th annual Middle East Rail conference in Dubai March 8 and 9.

Rail travel has become increasingly appealing in the region as a greener alternative to auto or air travel.

While the United Arab Emirates recently delayed work on a high-speed rail project, other governments that are facing budget deficits because of the oil glut prioritize rail projects as a way to improve trade and increase tourism to boost their economies.

Saudi Arabia builds high-speed line

One of these countries, Saudi Arabia accounts for about one third of the total spending with projects totaling $118.9 billion.

A major Saudi project is the $55 million Haramain high-speed rail project, which will connect the holy cities of Mecca and Medina with Jeddah, the country’s commercial capital and second largest city. Following delays, it is expected to begin operations in early 2017.

Kingdom wants to boost religious tourism

The Saudis see rail development as key to the nation’s ambitions to attract more tourists, especially to the holy sites.

The Saudi kingdom drew 16 million tourists in 2014 and wants to double that number by 2030, according Fadh Al Rasheed, group CEO of King Abdullah Economic City.

The Saudis also are building a $12 billion four-line commuter rail network in Jeddah as well as a $22 billion six-line network in the capital of Riyadh.

UAE project sees delays, staff reductions

While most projects are moving forward in spite of financial problems brought on by sharp reductions in oil prices, the United Arab Emirates in January suspended the bidding process for the second stage of its $11 billion Etihad Rail project and cut a third of its workforce. A project spokesman said the aim was to streamline operations before moving forward with bids.

Terrapinn said United Arab Emirates planned on spending $27 billion for metro rail, a tram and long-distance freight and passenger rail.

ethiad rail

Gulf States plan integrated network

Saudi Arabia and the UAE have agreed with four fellow states in the Gulf Cooperative Council to build an integrated high-speed rail network linking their countries by 2018 at a total estimated cost of $200 billion. The other partner nations are Bahrain, Kuwait, Oman and Qatar.

The goal is to create an efficient regional network of freight and passenger rail lines.

The railway network will yield environmental benefits for the region and create new jobs while reducing dependence on more expensive air or auto travel, according to Feras Shadid, a rail asset management consultant.

According to Terrapinn Bahrain has allocated $12.9 billion for rail; Kuwait, $17 billion, Oman, $16 billion, and Qatar, $46.7 billion.

China will help Iran build a high-speed line

With the lifting of sanctions, Iran is planning to develop a high-speed rail line linking the cities of Tehran, Qom and Isfahan. Terrapinn said Iran plans to spend $24.6 billion on rail projects.

China last month agreed to give Iran financial help with its high-speed rail line as part of an agreement to significantly increase trade to $600 billion in the next 10 years. China also wants to build a high-speed line linking the two countries.

Algeria, Egypt and Morocco plan rail development

Algeria, with a Terrapinn estimate of $34.4 billion, is developing light rail systems in Algiers, Oran and Constantine. While the projects have been delayed because of lost oil revenues, they are currently expected to be fully operational by 2020.

Egypt, with an estimate of $30.9 billion in spending, has projects including $1.5 billion to build a rail line linking 6th of October City to Cairo.

Morocco has an estimated $10 billion in projects, including a high-speed rail line that will connect Tangiers to Casablanca.

Farther south, Nigeria has $75 billion in rail projects, according to Terrapinn. High-speed rail service between Abuja and Kaduna is scheduled to begin operations in March. The line has nine stations.

Terrapinn also listed the following countries and their rail spending: Djibouti and Ethiopia ($4 billion shared), Iraq ($14 billion), Jordan ($3.8 billion), Lebanon ($500 million).

Major rail convention planned in March

Terrapinn released the estimates in advance of Middle East Rail 2016, the largest conference and expo devoted to rail projects in the region.

About 9,000 rail operators, government officials and contractors are expected to attend the March 8-9 event at the Dubai International Exhibition & Convention Centre. The expo will feature 300 exhibitors.

High-speed rails, or “bullet trains,” travel at significantly faster speeds than traditional trains. They can reach speeds of up to 350 kilometers per hour. They have been developed in Europe and East Asia.

Meanwhile, the boom in rail construction in the Middle East has caused worker shortages in other parts of the world.

For example, officials in Chennai, India said they have trained rail workers only to see them leave for higher paying jobs in the Middle East during the last two years, causing interruptions and delays.

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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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