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South African supermarket chain Pick n Pay to expand into Nigeria

26 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African supermarket operator Pick n Pay plans to expand into Nigeria next year through a partnership with a local conglomerate, as it seeks to reduce its reliance on its home market, it said on Tuesday.

Pick n Pay already operates in Botswana, Zimbabwe and Namibia and plans to open new stores in Ghana next year. Like many other South African companies it wants to expand further across the continent amid sluggish economic growth at home.

The retailer, which reported a 26 percent jump in annual earnings on Tuesday, said it would take a 51 percent stake in a Nigerian joint venture with conglomerate A.G. Leventis, which runs a food business. It did not disclose the size of the investment.

“We are not suddenly going to explode onto the scene in Nigeria next year but we are going to start the process of looking at all those things,” Pick n Pay’s CEO Richard Brasher told a results briefing, adding that he was aware of tough trading conditions in Nigeria and would not expand hastily.

Nigeria is Africa’s biggest economy but some South African companies that expanded into the west African country, including Dairy products maker Clover Industries and fashion retailer Truworths, have either pulled out or scaled down due to a scarcity of hard currency to import spare parts and raw materials.

Brasher said Pick n Pay was taking a long-term view of Africa’s most populous nation.

“If you’re in the retail business and you are an African business its hard to ignore Nigeria,” he told Reuters.

Gryphon Asset Management analyst Reuben Beelders said he backed Pick n Pay’s conservative approach to Nigeria.

“People have realised that Africa is not just going to be a pot of gold at the end of the road, it’s a lot of graft and it’s going to need long-term investment rather than something that happens quickly,” Cape Town-based Beelders said.

Pick n Pay has lost ground in South Africa to rivals such as market leader Shoprite, after failing to invest in new stores. But Brasher, a former UK head of Tesco who took over in January 2013, is implementing a plan to win back market share.

Pick n Pay said headline earnings per share (EPS) rose 26.4 percent from a year earlier to 224.04 cents in the year to the end of February, helped by cost-cutting measures. Headline EPS, a measure that excludes certain one-off items, is the profit figure most widely used in South Africa.

The company declared a final dividend of 125.20 cents per share, bringing the year’s total payout to 149.40 cents, 26.5 percent higher than the previous year.

Shares in Pick n Pay, which are up nearly 30 percent over the last year, inched up 0.58 percent to 69.89 rand by 1215 GMT.

 

(By Zandi Shabalala. Editing by James Macharia and Susan Fenton)

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South Africa’s MTN pays former CEO $1.6 million after resigning over Nigeria fine

25 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s MTN paid its former chief executive officer Sifiso Dabengwa 23.7 million rand ($1.6 million) after he resigned over a record fine imposed on the company by Nigerian authorities.

Dabengwa quit in November after Nigerian authorities imposed a $5.2 million fine on MTN’s Nigerian unit in October.

He was awarded a total payout of 40.6 million rand, MTN said in its annual report on Monday.

Non-executive chairman Phuthuma Nhleko was then named executive chairman of Africa’s biggest mobile phone group for a period of six months, to help resolve the fine.

MTN has since managed to negotiate the penalty down to $3.9 billion but is still hoping to reduce it further.

MTN’s share price has been down almost 20 percent since October when the fine was imposed. The stock had fallen 1.21 percent at 145.59 rand by 1407 GMT.

Last year, 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.

($1 = 14.4865 rand)

 

(Reporting by Nqobile Dludla and Tanisha Heiberg; Editing by James Macharia

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South Africa’s former finmin Nene appointed as advisor at Thebe Investment

22 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Former finance minister Nhlanhla Nene has been appointed as an advisor at Thebe Investment Corporation to help roll-out the firm’s growth plan, his second private sector job in a week.

Nene said on Thursday in an interview with Business Day TV that his appointment will be full-time for a term of two years effective from next month.

“This is interesting that I find myself in the public sector again,” he said.

“It’s going to be an interesting journey and provide me with an interesting opportunity of finding a symbiotic relationship between the private sector and public sector.”

On Monday, Asset management group Allan Gray appointed Nene as a non-executive director, hoping to tap his strategic and leadership skills.

President Jacob Zuma fired Nene, who was keen to rein in government spending in Africa’s most industrialised economy, in December, replacing him with little-known David van Rooyen.

Days later, Zuma appointed Pravin Gordhan as finance minister, giving South Africa its third finance chief in a week after a selling frenzy in the markets.

 

(Reporting by Nqobile Dludla; Editing by James Macharia)

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Shell says theft from its Nigerian oil pipeline network fell in 2015

18 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Theft of crude oil from the pipeline network of Shell’s Nigerian subsidiary fell to 25,000 barrels per day (bpd) in 2015, the company said on Monday, roughly 32 percent less than the previous year.

The number of sabotage-related spills on the SPDC network also declined to 93 in 2015, compared with 139 the previous year, Shell said in its annual sustainability report.

It attributed the decrease to divestments in the Niger Delta and increased surveillance and security by the Nigerian government, but said theft and sabotage were still responsible for around 85 percent of spills from SPDC operations.

President Muhammadu Buhari has said theft siphons as much as 250,000 bpd of crude of its roughly 2 million bpd of production and last week promised to crack down on groups responsible for pipeline attacks.

Still, the issue has continued to plague the country. Shell currently has a force majeure in place on Forcados crude oil exports following an attack on a subsea pipeline in February, while Italian oil major ENI reportedly declared force majeure on Brass River exports late last week.

 

(Reporting by Libby George and Karolin Schaps; Editing by Mark Potter)

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Folorunsho Alakija: A portrait of a billionaire

18 April 2016 Comments (1) Africa, Featured, Leaders

Folorunsho Alakija

Businesswoman, fashion designer and even a marriage counselor; Folorunsho Alakija won’t be retiring any time soon.

Folorunsho Alakija is not only the second richest woman in Africa but she has also been listed as one of the most powerful 100 women in the world by Forbes magazine. This is a businesswoman who takes diversified interests to a quite remarkable level, as Alakija is not only involved in oil mining and fashion design but has even written books on marriage counseling and started up her own ministry.

So how did this 64 year old Nigerian woman end up in such a position of wealth and influence?

Folorunsho Alakija: “Many have asked how I got to where I am”

Alakija arrived into the world on July 15th 1951, born into a large family in which her father had an incredible 52 children. Alakija and one of her sisters were sent to school in the United Kingdom at the age of 7 and remained there for 4 years.

Although she returned to Nigeria for her high school education, Alakija made her way back to the UK as a young adult where she studied to be a secretary and also took up a fashion design course at the American College in London and the Central School of Fashion.

Alakija began her first job in 1970, working as a secretary for Sijuade Enterprises and then 4 years later moved on to become the Executive Secretary to the Managing Director of First National Bank of Chicago (now First City Monument Bank).

From this point on, determination, hard work and the confidence to take risks are what saw Alakija’s career go far beyond her formal qualifications. While she did not have a degree, diligence and natural talent helped her carve out increasingly senior roles in the corporate world. Within two years of joining the bank, Alakija was promoted to the Head of Corporate Affairs and subsequently rose further into the company hierarchy by becoming Office Assistant to the Treasury Department.

While many people would have been happy to continue such a progression in the corporate world, Alakija wanted to use her creativity and took a gamble by leaving the security of her career to launch her own fashion house in 1983. The Rose of Sharon House (originally named Supreme Stitches) was an almost immediate success and made Alakija a household name in Nigeria as she promoted traditional prints and Nigerian styles in her clothing.

A move from the finance sector into fashion design might seem unusual, but Alakija’s massive success has been built upon her willingness to take calculated risks and in 1991 she made another bold move into yet another arena.

“A truly family business”

In 1991, Alakija ventured into the oil industry and although her prospecting license was not granted until 1993, it was the move that would turn a successful career into one that made billions. Alakija’s company Famfa Oil acquired 60% of a lucrative block of coastal oil that came to fruition in 1996 when Texaco (now Chevron) approached her to broker a deal. Negotiations lasted 3 months, but at the end of it Alakija had a deal with a multinational oil company and Famfa Oil became a juggernaut in African business. Famfa is, as Alakija states, a “family business” in that her husband of 40 years is the chairman and their four sons are the Executive Directors.

Having been happily married for four decades and being a devout born-again Christian, it is perhaps unsurprising that Alakija is saddened by the world’s increasing divorce rates. What might be more surprising about a billionaire businesswoman is that she decided to try and address this by writing a book on marriage counseling and by regularly giving speeches around Nigeria to try and help provide advice on how to make marriage work.

“A burning desire to help the less privileged and needy”

Helping people is something that is important to Nigeria’s richest woman and her huge financial clout has meant that she is able to do a lot more than write books. In 2008, The Rose of Sharon Foundation was launched to allow Alakija to invest in the futures of widows and orphans in Nigeria. Scholarships and interest-free loans aim to help those with very little prospects have a chance at changing their own fortunes.

There have been 9,000 medical and engineering scholarships thus far and in addition to this work, Alakija has provided 21 clinics for treating tuberculosis across the country, 21 science laboratories and is in the process of designing the building of two schools that will bear the name of her foundation.

Alakija’s career has been extraordinary by any standards and yet with her foundation, public speaking and the ministry she launched in 2004, there is no sign of her slowing down any time soon. And it is her religion that she insists is behind her success and her passion to keep working and promoting her belief in her faith. Although many people might look to her ingenuity, brave decision making and talent, Alakija says “Though many have claimed that I have become their role model, I assign all the glory to God.”

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Nigerian lawmakers to question presidency over long-overdue budget

14 April 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

Nigerian President Muhammadu Buhari

ABUJA (Reuters) – Nigerian lawmakers said on Wednesday they planned to hold talks with the presidency over the 2016 budget bill, which has yet to be signed into law by President Muhammadu Buhari after being passed by parliament last month.

The announcement suggests further delays before the legislation takes effect in Africa’s biggest economy and top oil producer, which is going through its worst crisis in years brought on by the slump in global crude prices.

Buhari withdrew his original budget bill in January because of an unrealistic oil price assumption and flaws in the draft. Lawmakers approved an amended proposal last month but only submitted headline figures rather than the whole document to the president’s office.

That prompted Buhari, who is currently in China, to say he would only sign the bill after checking it thoroughly.

Following closed-session talks by lawmakers in the lower house of parliament, a spokesman for politicians in that chamber said media reports about the contents of the budget submitted to the president last week had caused concern.

“We agreed as a chamber, as a House delegated the Speaker to please go ahead and engage the executive to identify the areas of concern,” said House of Representatives spokesman Abdulrazak Namdas.

He said there was particular concern about media reports that a proposed rail project linking the southwestern commercial capital, Lagos, with the eastern city of Calabar had been removed by parliament as part of their amendments.

Namdas said it “was not among the projects submitted by the President to the National Assembly”.

“Our own area of concern is that people say this thing was in the budget and we removed it. That is why we asked our speaker to liaise with the executive,” he said.

Last month Lai Mohammed, the information minister, said there was no rift between the executive and legislature over details of the budget.

 

(By Camillus Eboh. Writing by Alexis Akwagyiram; Editing by Hugh Lawson)

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Peugeot Nigeria: Rebirth and Revival thanks to Africa’s richest man?

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

Aliko Dangote

January 26th saw the closing of bids for AMCON’s controlling shares of Peugeot Automobile of Nigeria Ltd.

AMCON’s acquisition of PAN’s controlling shares in October 2012 is set to end as Nigeria’s so called “bad bank” opens its shares of PAN up to bidders. Africa’s wealthiest man, Aliko Dangote, is ready to step up to the challenge.

January 2016 saw AMCON (the Asset Management Company of Nigeria), Nigeria’s so called “bad bank”, look to sell its stake in PAN (Peugeot Automobile of Nigeria Ltd.), and they began to invite bids from investors. AMCON currently owns a 79.3% controlling interest in PAN.

PAN was founded in 1972 as a joint venture between the French automaker and the Nigerian government, with the goal being to manufacture and market vehicles under the brand name of Peugeot.

Peugeot NigeriaDuring the 1980s PAN was profitable and produced upwards of 90,000 cars yearly. However, due to the influx of cheap, second-hand vehicles that began to come in to the country from Asia, the company began losing profits. This led to the sale of the controlling stake in the company, by the Nigerian government, to investors in 2006.

Unfortunately, the new investors did not fare well and managed to accumulate bad debt during their leadership, leading to AMCON’s acquisition of the majority share in the company in October 2012.

“Following the accumulation of huge non-performing loans (NPL) indebtedness to banks, in October 2012, the AMCON acquired the debts of the company and converted a portion to equity to help restructure the firm,” Peugeot had said.

Aliko Dangote and his associates take center stage

Enter Aliko Dangote, President and Chief Executive Officer of the Dangote group. A man that also carries the distinction of being Africa’s richest man, as ranked by Forbes in 2015, with an estimated wealth of $17.3 billion.

Dangote is already active in the cement, oil, food, sugar and farming industries, and now has his sights set on the automotive industry. Aliko Dangote has teamed up with the Nigerian States of Kaduna, and Kebbi, as well as the development lender Bank of Industry (BOI) to bid for the shares now up for sale by AMCON.

Governor Nasir El-Rufai told a conference, “We have submitted bids for the carmaker… with Aliko Dangote on board together with BOI, Kebbi and Kaduna State, we are confident our bid will sail through.”

Bidding for the stake controlled by AMCON closed on January 26th, and Governor El-Rufai did not provide any further details.

On its website PAN stated that its assembly plant, which is located in Kaduna state, has Peugeot Citroen PEUP.PA as its technical partner, and it has the capacity to assemble 240 cars in a day.

Made in Nigeria

Meanwhile, the Nigerian government has been keen on promoting a “Made in Nigeria” industrial policy and ordered local car distributors to make plans for new assembly plants back in 2014. They threatened to begin imposing prohibitive import duties.

Jean-Christophe Quemard, who is the executive vice president for Peugeot in Africa and the Middle-East, met with President Muhammadu Buhari in November to discuss reviving local production.

Other automakers such as Germany’s Volkswagen, Renault-Nissan, and South Korea’s Kia motors have also announced plans to begin assembling their vehicles in Nigeria, which is currently Africa’s biggest economy.

Not to be outdone, the Ford Motor Company of the United States will set up an assembly plant in Nigeria in November. With a 5,000 vehicle annual capacity, the plan is to produce up to 10 vehicles each day for the local market and eventually move into export into West African countries.

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Nigeria’s inflation rises to almost 4-year high in March

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

LAGOS (Reuters) – Nigeria’s annual inflation rose to a near four year high of 12.8 percent in March from 11.4 percent in February, driven by a rise in food prices, the National Bureau of Statistics said.

Africa’s biggest economy is facing its worst economic crisis in decades fueled by the collapse in crude prices, which has slashed government revenues, weakened the currency and caused growth to slow. The economy grew 2.8 percent last year, its slowest pace in decades.

Food prices, which account for the bulk of the inflation basket, rose by 1.4 percent points to 12.7 percent in March, the bureau said on its website.

“The higher price level was reflected in faster increases

across all divisions,” the bureau said in a report.

The NBS expects inflation to end the year at 10.16 percent, above the central bank’s target upper limit of nine percent. The price index ended at 9.55 percent last year.

 

(Reporting by Ulf Laessing; Editing by Tom Heneghan)

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Nigeria wants to boost non-oil income by 87% to offset oil slump

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

LAGOS (Reuters) – Nigeria expects its non-oil revenues to nearly double this year as Africa’s top oil producer seeks to offset a slump in oil revenues, according to a presentation seen by Reuters on Monday.

President Muhammadu Buhari plans a record 6.06 trillion naira ($30.6 billion) budget to stimulate Africa’s biggest economy, which has been hammered by a fall in oil exports that had made up 70 percent of state income.

Funding of the budget with an expected deficit of 2.2 trillion naira has been so far unclear.

Detailing its plans, the government expects to generate 3.38 trillion naira ($17 billion) this year from non-oil sources, up 87 percent from 1.81 trillion naira in 2015, the presentation showed.

Corporate income tax collection is expected to exceed the 700 billion naira generated last year, while the government also aims to recover stolen Nigerian assets stashed abroad as part of efforts to crack down corruption, it said.

The biggest source of revenues this year will come from what the presentation called “independent revenue”, without providing further details.

President Muhammadu Buhari plans to squeeze informal small traders who make up almost half of GDP, this year to boost tax revenues by 33 percent.

On Saturday, Finance Minister Kemi Adeosun said Nigeria was considering the issue of Chinese Panda or Japanese Samurai bonds to help fund the budget.

The government also wants to switch its debt mix so that 40 percent of loans would be from abroad, compared to 16 percent now, the presentation showed. Loan repayments will be stretched.

Buhari has asked the United States for help in returning stolen Nigerian assets stashed in U.S. banks. In March, the U.S. said it had frozen more than $458 million of funds that the late military ruler Sani Abacha had stolen.

Nigeria has recovered about $1.3 billion of Abacha’s money from various European jurisdictions as of last year, with more than a third of that coming from Switzerland. Abacha also held assets in France, Britain and British offshore centers such as Jersey.

Nigeria has also held talks with China, the World Bank and other international institutions to get loans to fund his plans to roll out infrastructure projects.

($1 = 198.0000 naira)

 

(Reporting by Chijioke Ohuocha; Editing by Ulf Laessing and Toby Chopra)

 

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Buhari to check Nigeria budget “ministry by ministry” before signing

1 April 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

ABUJA (Reuters) – Nigeria’s President Muhammadu Buhari will check the 2016 budget bill passed last week “ministry by ministry” before signing it, he said on Thursday, signaling further delays before the legislation takes effect.

The budget for Africa’s top oil producer has been held up for months as Buhari had to withdraw his original bill, which set spending at a record $30 billion, in January, due to an unrealistic oil price assumption and flaws in the draft.

Lawmakers approved an amended bill last week that Buhari has yet to sign as parliament has so far only sent highlights of the new document to his office, a government official told Reuters on Tuesday.

“Some bureaucrats removed what we put in the proposal and replaced it with what they wanted,” Buhari said, according to a statement from his office.

“I have to look at the bill that has been passed … ministry by ministry, to be sure that what has been brought back for me to sign is in line with our original submission.”

On Thursday, the information minister said there was no rift between the executive and legislature on details of the budget. A day earlier, a senior lawmaker said parliament might need another week to work out details of the budget.

Buhari hopes the bill will revive the economy but officials have left open how it would be funded. The government has said it might sell Eurobonds or sign a loan deal with China and the World Bank but no deal has emerged.

Oil revenues, which make up about 70 percent of Nigeria’s income, have slumped, hammering the naira currency, halting development projects and leaving budget funding uncertain.

Nigeria has been trying to restart outdated refineries in Port Harcourt, Warri and Kaduna to end its dependency on costly fuel imports for around 80 percent of its energy needs.

Three of its four state-owned refineries were closed for five months in 2015 due to maintenance issues and vandalism.

On Thursday, the Nigerian National Petroleum Corporation

(NNPC) said it was committed to boosting refining capacity as it opened the technical bid for the location of new refineries within the nation’s existing refineries.

Anibo Kragha, NNPC chief operating officer for refineries, said the open bidding exercise demonstrated the determination of the government and state oil company to increase the country’s refining capacity from 445,000 barrels per day to 650,000.

“The aim is to leverage on the existing facilities to fast track the take-off of the refineries as soon as possible,” he said. NNPC said nine companies submitted bids.

 

($1 = 198.8000 naira)

 

(Reporting by Felix Onuah and Camillus Eboh; Writing by Ulf Laessing and Alexis Akwagyiram; Editing by Tom Heneghan)

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