20 Mar

Moti Doubles Zimbabwe Investments as Economy Seen Opening Up

Moti Group is preparing to double its investments in Zimbabwe to $500 million after the removal of Robert Mugabe as president in November saw the government adopt a more open approach to foreign companies.

Emmerson Mnangagwa, 75, who replaced Mugabe after the military briefly took control, has declared that “Zimbabwe is open for business” and has said he will ease the country’s local ownership rules and re-engage lenders such as the International Monetary Fund.

He is faced with an economy that has halved in size since 2000, a cash crisis that limits withdrawals from banks and an inability to pay government workers on time.

In partnership with Sakunda Holdings, a Zimbabwean company whose head Kudakwashe Tagwirei is linked to the ruling party, Johannesburg-based Moti plans to spend $250 million over the next four years in projects ranging from chrome-ore mining to fertilizer, diamond polishing and pharmaceuticals. The group has already invested about $250 million to date, mainly in mining.

The company wants to invest before elections scheduled for later this year after which more investors may come into the country and cause asset prices to rise, Zunaid Moti, the company’s 43-year-old chairman, said in an interview. The plans would make Moti one of the biggest investors in Zimbabwe.

“This is yesterday, that’s tomorrow,” Moti said, as he smoked a cigar in his Johannesburg office and compared mining potential in his home base of South Africa to that of Zimbabwe. “It’s virgin.”

Moti Group has also been approached by private-equity firm Carlyle Group to look at investment opportunities in the southern African country, he said. Carlyle declined to comment.

Moti Group has recently taken on British politician Peter Hain as an adviser to connect the company to “the right people in Europe, and more specifically in the U.K. when needed,” said Moti, who is considering selling as much as 25 percent of his business to selected investors at a later stage.

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16 Mar

Botswana Turns Power Exporter After a Decade of Imports

Botswana is exporting power for the first time in 10 years, a far cry from the days when Africa’s biggest miner of diamonds was forced to import as much as 75 percent of its needs.

State-owned Botswana Power Corp. started “limited” sales to the Southern African Power Pool’s auction platform, where regional utilities buy and sell electricity, Chief Executive Officer Stefan Schwarzfischer said in an interview Thursday.

Sales have been made possible by improved plant availability at the flagship 600MW Morupule B plant, which is now producing 450 megawatts and is expected to reach full capacity next month, Schwarzfischer said.

Exports will rise to a targeted 100 megawatts once the 120MW Morupule A plant is put back online in July, following a six-year refurbishment program, he said.

Botswana’s problems started in 2008 when its main provider, South Africa’s Eskom Holdings SOC Ltd., cut supplies citing a lack of power in its home market.

Botswana fast-tracked the Morupule B plant in response, but it was beset with construction problems and machine failures.

“Namibia and South Africa have been the buyers thus far through the SAPP platform,” Schwarzfischer said. “While we would want bilateral supply contracts, the countries we know could pay us don’t need it and those that need the power have problems paying.”

Source: https://www.bloomberg.com/news/articles/2018-03-15/botswana-turns-power-exporter-after-a-decade-of-imports

16 Mar

Ivory Coast Is Selling Africa’s Biggest Euro-Currency Bond

Ivory Coast sold 1.7 billion euros ($2.1 billion) of bonds Thursday in the biggest issuance in the common currency from an African government, according to a person familiar with the matter.

The West African nation’s amortizing deal was equally split between a tranche maturing in 2030 and paying 5.25 percent, and another due in 2048 with a yield of 6.625 percent, said the person, who asked not to be identified as they’re not authorized to speak about the matter.

Price guidance was around 5.375 percent for the shorter securities, which have an average life of 11 years, and 6.75 percent for the longer ones, which have a 29-year average maturity, said the person.

That’s the largest amount of euro debt issued by an African sovereign since at least the start of this century, when Bloomberg began compiling the data. It was also the second-biggest transaction in the currency from emerging markets this year, after Romania’s 2 billion euro-deal on Feb. 1. Investors placed 4.2 billion euros of orders, said the person.

Calls for comment to government spokesman Bruno Kone and Finance Minister Adama Kone went unanswered.

The world’s largest cocoa producer followed Egypt, Nigeria, Kenya and Senegal in tapping international markets before policy-tightening by the U.S. Federal Reserve lifts borrowing costs.

African sovereigns have now issued $12.8 billion of Eurobonds in 2018, already more than half the record $18 billion they managed last year and exceeding the total for the whole of 2016.

BNP Paribas SA, Citigroup Inc., Deutsche Bank AG and Societe Generale SA managed Ivory Coast’s sale.

Yields on the government’s 625 million euros of securities due in 2025, its only other bonds in the currency, fell four basis points to 4.26 percent by 8:52 a.m. in London.

Source: https://www.bloomberg.com/news/articles/2018-03-15/ivory-coast-is-said-to-sell-africa-s-biggest-euro-currency-bond

15 Mar

Ghana Cocoa Board Former CEO Charged for Causing Losses to State

The former chief executive officer of Ghana Cocoa Board, Stephen Opuni, has been charged for causing financial losses to the state during his tenure as head of the regulator, according to a justice ministry official.

The charges against Opuni, who was fired by President Nana Akufo-Addo in January 2017, were laid Wednesday at the High Court in Accra, the capital, Joseph Addo, a spokesman for the office of the attorney-general and the justice ministry, said by phone.

Several calls for comment to the mobile phone of Opuni didn’t go through.

Opuni allegedly agreed deals of 217 million cedis ($50 million) for the delivery of fertilizers from 2014 to 2016 with suppliers which he knew wouldn’t have been able to fulfill their contracts, Accra-based broadcaster Joy FM reported on its website, citing court papers that were signed by Chief State Attorney Evelyn Keelson on March 12.

Opuni also allegedly took an illicit payment of 25,000 cedis from one of the suppliers in October 2014, Joy FM reported.

Justice authorities brought the charges “because they believed there were infractions in the award of contracts during Opuni’s tenure,” Fiifi Boafo, a special assistant to current Ghana Cocoa Board CEO Joseph Boahen Aidoo, said in a broadcast on Citi FM.

The charges follow as the year-old administration of Akufo-Addo’s New Patriotic Party pledged to crack down on graft and hold public officials to account for the management of state funds during their tenure.

Opuni was appointed in 2013 by former President John Mahama of the National Democratic Congress.

The NDC said Wednesday that the charges against Opuni were made up, according to Joy FM. Ghana is the world’s biggest cocoa producer after neighboring Ivory Coast.

Source: https://www.bloomberg.com/news/articles/2018-03-14/ghana-cocoa-board-former-ceo-charged-for-causing-losses-to-state

14 Mar

Nigerian Inflation Slows for 13th Consecutive Month in February

Nigeria’s inflation slowed for a 13th consecutive month in February, but may still be too high for the central bank to start cutting rates from a record.

Consumer-price growth in Africa’s most populous nation decelerated to 14.3 percent from 15.1 percent in January, the Abuja-based National Bureau of Statistics said in an emailed statement. The median estimate in a Bloomberg survey was 14.6 percent. Prices rose 0.8 percent in the month.

Governor Godwin Emefiele said last month the Central Bank of Nigeria may reduce its benchmark from a record-high 14 percent before July if inflation drops closer to single digits. Price growth has exceeded the target range of 6 to 9 percent for 2 1/2 years partly due to increasing fuel and food costs, as well as a weaker currency that raised prices of imported goods.

The cost of gasoline increased an average 15 percent to 172.5 naira ($0.48) in February from a year earlier, according to NBS, which collects data including pump prices that are above the government’s official cap of 145 naira per liter.

The Monetary Policy Committee is scheduled to meet March 19-20 if at all, having missed its January gathering because it had insufficient members to form a quorum. That’s because lawmakers refused to confirm new members amid a political stalemate with President Muhammadu Buhari.

The committee has kept the policy rate at 14 percent since July 2016 as it tries to balance fighting inflation, propping up the naira, and supporting an economy that the International Monetary Fund forecast will expand 2.1 percent this year, strengthening a recovery after contracting in 2016.

Source: https://www.bloomberg.com/news/articles/2018-03-14/nigerian-inflation-slows-for-13th-consecutive-month-in-february

12 Mar

MTN Seeks to Cash In on IPO of Africa’s Biggest Tower Company

MTN Group Ltd. could cash in from an initial public offering of Africa’s largest telecommunication towers company by selling a stake valued by the wireless carrier at about 27 billion rand ($2.3 billion).

IHS Towers, of which Johannesburg-based MTN owns about 29 percent, is planning an IPO in New York, people familiar with the matter said last year.

If the tower operator goes ahead with the share sale and the valuation is appropriate, MTN will look to sell out, Chief Financial Officer Ralph Mupita said in an interview.

“It is not strategic to lock up so much capital,” the CFO said. While MTN’s stake in IHS Towers is important, its been earmarked by the company as an asset for sale, he said.

IHS, Helios Towers Africa LLP and Eaton Towers Ltd. are all looking to take advantage of high industry valuations to sell shares and fund expansion, the people familiar with the situation said in November.

Helios confirmed the plans earlier this month, saying it would seek an IPO in London and Johannesburg and expects at least 25 percent of its shares will be freely traded after the sale. IHS Towers declined to comment.

MTN, Africa’s largest mobile-phone company by sales, is planning to cut its debt, Mupita said. Borrowings rose to 57 billion rand ($4.8 billion) in 2017 from 52 billion rand the previous year. The shares rose 1.2 percent to 133.60 rand as of 3:30 p.m. in Johannesburg, valuing the company at 252 billion rand.

Source: https://www.bloomberg.com/news/articles/2018-03-12/mtn-seeks-to-cash-in-on-ipo-of-africa-s-biggest-tower-company

07 Mar

Tillerson Heads to Africa With Security, Not Aid, as U.S. Focus

Secretary of State Rex Tillerson begins his first official trip to sub-Saharan Africa with a pledge to help shore up trade, civic freedom and good governance in countries that President Donald Trump has harshly criticized.

U.S. budgetary priorities tell a different story. Tillerson heads to the continent with the Trump administration advocating cuts of more than a third in aid to African countries and programs, along with deep reductions to global health initiatives.

With several U.S. allies struggling to rein in Islamist extremist groups, and China increasingly making inroads on the continent, the U.S. security relationship will be the focus.

While the top U.S. diplomat has a broad itinerary on his five-nation trip, Africa experts say Tillerson’s planned stops in Ethiopia, Djibouti, Kenya, Chad and Nigeria underscore the emphasis on security — and away from the traditional U.S. role as advocate and partner for good governance and development.

“The common thread among them all is a security partnership,” said Jennifer Cooke, director of the Africa program at the Center for Strategic and International Studies. “The substance of what he conveys may be more diverse, but given the signals coming out of the White House and administration to date, I imagine that security is top of the order, along with cementing relationships with partners that the U.S. considers important security players.”

While Tillerson announced $533 million in new aid to fight famine and food insecurity on the continent in a speech Tuesday before his departure, State Department officials have downplayed the possibility of big announcements or new initiatives during the trip.

Adding to a sense of drift, U.S. exports to Africa in 2017 hit their lowest since 2006, according to U.S. Census Bureau figures, while senior State Department posts for the continent remain unstaffed.


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06 Mar

Sierra Leone to Vote Amid Discontent Over Ebola, Iron Ore

Sierra Leone will hold elections on Wednesday in which an unprecedented number of political parties will compete as discontent over the government’s handling of an economy battered by the Ebola outbreak has soared.

The vote marks a departure from a decades-old tradition that mainly divided the balance of power between the All People’s Congress and the opposition Sierra Leone People’s Party, with a newcomer, the National Grand Coalition, expected to win a significant amount of votes.

In total, 16 parties have put candidates forward in the West African nation of about 6.5 million people.

“The election has the potential to seriously disrupt the two-party system that has existed in Sierra Leone since independence” in 1961, said Charlotte King, an analyst of the Economist Intelligence Unit’s Middle East and Africa team.

As outgoing President Ernest Bai Koroma has to step down after two terms in office, his party has named Samura Kamara, a former foreign affairs minister who hails from the same northern district as Koroma, to run as its candidate.

Julius Maada Bio, who briefly ran the country in the 1990s as head of a military junta, will run for the SLPP. None of the candidates is expected to win the 55 percent majority of the votes required to secure victory in the first round.

“Patience is wearing thin,” King said. “The lack of jobs tends to be citizens’ primary concern, particularly in urban areas, but poor public service and high prices for basic goods are also pressing issues.”

In 2012, Sierra Leone was sub-Saharan Africa’s fastest-growing economy as Chinese and U.K.-based investors began developing its iron-ore reserves. But the double shock of a commodity price slump and the worst-ever Ebola epidemic the following year triggered the collapse of the two iron-ore miners in the country and left the economy in ruins.

Economic growth was about 6 percent last year, from a contraction of 20.5 percent in 2015, according to the IMF.

While Koroma scored some successes — he improved electricity supply and implemented free health care for children under five — his government has been dogged by corruption allegations.

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05 Mar

Nigeria’s Sticky Inflation Threatens to Frustrate Rate-Cut Hopes

Nigeria’s long-awaited interest rate-cutting cycle risks being short-lived if it starts at all.

Governor Godwin Emefiele said last month the Central Bank of Nigeria may reduce its benchmark from a record-high 14 percent before July if inflation drops closer to single digits.

But with fuel costs surging and government spending swelling before next year’s election, he may struggle to reach that threshold at a time when the pace of price growth is still just over 15 percent.

“With inflation remaining sticky, it is unlikely that the CBN would want to cut rates so soon,” Gaimin Nonyane, London-based economic-research head at Ecobank Transnational Inc., said by email.

Further complicating the picture is the Senate’s refusal to approve President Muhammadu Buhari’s nominees to the Monetary Policy Committee, which means the panel lacks a quorum to hold meetings to formally set rates, further delaying any hope of cuts. The MPC didn’t sit in January, and it’s not clear if the March 20 decision will be made.

The inflation rate in Africa’s most-populous nation rose to 15.1 percent in January from a year earlier and has exceeded the target range of 6 percent to 9 percent for 2 1/2 years. The statistics agency is due to release data for February on March 14.

Africa’s largest oil producer imports almost all its refined-fuel requirements because local capacity can’t match demand.

While higher crude prices have increased Nigeria’s revenue, they have also raised the cost of processed products, with the average gasoline price surging 27 percent in January from a year earlier.

The resultant fuel shortages prompted retailers to boost pump prices above the official cap of 145 naira ($0.40) a liter, adding to inflationary pressures.

“Unless fuel pricing is resolved, bouts of fuel shortages could keep prices sticky, feeding into other items,” said Razia Khan, head of macroeconomic research at Standard Chartered Bank Plc in London.

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01 Mar

Barclays Africa Returns to Absa Roots as Lender Revamps Strategy

Barclays Africa Group Ltd. is going back to its roots.

The Johannesburg-based bank plans to revert back to the Absa Group Ltd. name, as it was known before Barclays Plc took control of the company in 2005.

With the British bank’s stake now reduced to 14.9 percent, Barclays Africa is also embarking on a plan to double in size and capture at least 12 percent of banking revenues across the continent.

“We will stretch ourselves to develop the platform for double-digit growth and build momentum to accelerate delivery,” Chief Executive Officer Maria Ramos said on a conference call on Thursday. “

This is a critical period in which we will need to complete our separation from Plc, build and scale new capabilities, and rebuild our organizational and cultural foundations to capture growth.”

The lender, which has operations in 12 African countries, is forging its own path after Barclays Chief Executive Officer Jes Staley opted to reduce the British bank’s presence on the continent in favor of a trimmed-down investment bank focused on London and New York.

With the split on track, Ramos, 59, said she will consider appropriate acquisitions to support the company’s growth plan, explore strategic partnerships and new markets, and use technology so the lender’s operations become fully digitized.

While Barclays Africa hasn’t set timelines for reaching the goals, it will seek to support the new strategy by:

  • Creating a consumer-finance business across Africa to fill a “rapidly growing need,” Ramos said. “We’re going to target this opportunity with our core middle and affluent customers and fully expect to grow our base here.”
  • Building a payments hub. “Payments is a highly profitable area and is growing at 8 percent annually. Our payments hub needs to be simple and intuitive and work on a single platform across the continent. It also needs to be affordable.”

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