04 Apr

S.Africa mulling privatisation in Ramaphosa reform drive

South Africa will consider partially privatising struggling state-owned companies as part of wide-ranging reforms set in motion by President Cyril Ramaphosa since he came to power last month, the head of the National Treasury said on Saturday.

Dondo Mogajane said South Africa was at the end of a credit downgrade cycle after Moody’s held its investment-grade rating and raised its outlook on Friday, partly because of Ramaphosa’s plan to reform state companies.

“For me, I see it as the end,” Mogajane told Reuters in an interview.

“Moody’s are saying there are things we can do and these are the things we will be focused on,” he added, highlighting plans to stabilise debt, revamp state firms and boost growth in sectors such as agriculture and tourism.

A downgrade to a “junk” rating by Moody’s would have seen South Africa removed from Citi’s World Government Bond Index, and could have triggered up to 100 billion rand ($9 billion) in asset sales by foreign investors.

Investors have cheered Ramaphosa’s arrival and his choice of respected ministers in key roles, including former finance minister Pravin Gordhan as minister of public enterprises.

Gordhan is tasked with turning around state companies that have plunged public finances into crisis in recent years, including heavily indebted power utility Eskom and South African Airways (SAA), which is on the brink of bankruptcy.

“Why not?” Mogajane said when asked if it was possible parts of government-owned companies could be sold.

“There have to be new ways of looking at these things. Are we talking privatisation? Are we talking equity partnership? Let’s give an opportunity for new ministers to unpack what it means.”

Mogajane gave as theoretical examples the sale of 49 percent of SAA and of attracting private investors by splitting up the generation, transmission and distribution sections of Eskom, one the world’s biggest power utilities.

His comments are likely to go down badly with powerful trade unions, sections of the ruling African National Congress (ANC) and the Economic Freedom Fighters, a disruptive red-beret-wearing opposition party.

Read more at Reuters.com

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.

To read the full article, click here.

21 Feb

South Africa’s Inflation Rate Slows to 4.4% in January

South Africa’s inflation rate slowed in January, easing pressure on the central bank to maintain a tight monetary stance.

Inflation slowed to 4.4 percent from 4.7 percent in December, Pretoria-based Statistics South Africa said Wednesday in a report on its website.

The median of 14 economists’ estimates in a Bloomberg survey was for 4.4 percent. Prices rose 0.3 percent in the month.

Price growth has been within the Reserve Bank’s target range of between 3 percent to 6 percent for 10 months, the longest run since 2015.

The Monetary Policy Committee left its benchmark lending rate unchanged for the third straight meeting last month as the risk of a credit-ratings downgrade persists.

While the central bank has highlighted the rand as a key risk to price growth, it expects inflation to remain within the target band.

South Africa’s currency was one of the most volatile tracked by Bloomberg last year and has gained 8.6 percent against the dollar since Cyril Ramaphosa was elected to lead the ruling African National Congress in December.

Ramaphosa has since replaced Jacob Zuma as president of the country.

Core inflation, which excludes the prices of food, non-alcoholic beverages, energy and gasoline, slowed to 4.1 percent in January, from 4.2 percent.

Source: https://www.bloomberg.com/news/articles/2018-02-21/south-africa-s-inflation-rate-slows-to-4-4-in-january

07 Feb

Congo Seeks More Control of the Cobalt Market

The Democratic Republic of Congo will seek greater control of the global cobalt market by engaging directly with car and battery manufacturers, according to its largest state-owned mining company.

“I find it scandalous that when cobalt is discussed, and the explosion of electric vehicles, only the traders and consumers are referenced and Congo and Gecamines are not cited,” Gecamines Chairman Albert Yuma said in an interview in Cape Town.

The market seems to think that “the future of cobalt is in the hands of Glencore, Trafigura and CMOC but not the Congo or Gecamines,” Yuma said. “We legitimately want to control the cobalt market because it is ours.”

Congo accounts for about two-thirds of global cobalt supply and spot prices for the metal more than doubled on the London Metal Exchange last year.

The country isn’t benefiting from rallying copper and cobalt prices and plans to renegotiate partnerships with international mining companies, Yuma said earlier Monday.

Gecamines has already held a discussion with one large Chinese battery producer about establishing a joint venture to develop the state-owned miner’s cobalt concessions, Yuma said. It is also planning discussions with a Chinese car manufacturer, he added, declining to identify either company.

Consumers want to secure, stable, long-term supply and, unlike traders, don’t speculate on price, he said.

Source: https://www.bloomberg.com/news/articles/2018-02-05/congo-seeks-more-cobalt-market-control-as-batteries-drive-boom

06 Feb

This Stock Is Proof of How Much Egyptians Love Their Cigarettes

If money talks, the relationship between Egyptians and their cigarettes won’t be changing anytime soon.

Shares of Cairo-based Eastern Tobacco, which holds a monopoly on cigarette production in Egypt, have hit successive record highs, in both dollar and local-currency terms, after the company posted an increase of almost 161 percent in first-half profit.

Eastern Tobacco has been on an upward trend since Egypt let its currency float freely in November 2016 and started implementing an economic reform program to end a dollar shortage and narrow its budget deficit.

Since then, the stock has surged 373 percent, compared with 6 percent for the MSCI World Tobacco Index and 70 percent for Egypt’s benchmark gauge.

“The increase in profits is mainly due to pricing,” said Khaled Sadek, head of consumer and healthcare research at CI Capital. “They raised their ex-factory prices by about 40 percent compared to last year and they still have a big part of their inventory of raw tobacco from before the currency float which makes the cost low for them and the margins higher.”

Eastern Tobacco’s revenue in the first half increased 36 percent to 6.8 billion Egyptian pounds ($384 million), and costs rose 23 percent.

While the volume of sales fell between 7 percent to 10 percent since the price of cigarettes climbed in November, Chairman Mohamed Haroon sees them starting to return to normal in March, he said in an interview last week.

Mounting Gains

The new currency regime sent inflation to record levels and diminished the spending power of most Egyptians, but it also spurred the return of investor confidence and foreign inflows into the nation’s assets.

The tobacco producer became one of the most popular names among equity investors; it gained the most among the 30 members of the country’s EGX 30 index after Egypt Aluminium.

“Historically, people don’t stop smoking,” said Ahmed Hafez, the co-head of research at HC Brokerage in Cairo. “What happens usually is that they cut the number of cigarettes they smoke per day, and then they usually divert to the normal habits again. But we haven’t seen a prolonged impact on demand since price increases.”

To read the full article, click here.

05 Feb

ANC Calls for ‘Urgent’ Meeting of Officials After Zuma Talks

A committee of top officials from South Africa’s ruling party is due to meet a day after President Jacob Zuma reportedly told its most senior leaders that he wouldn’t step down.

Zuma’s refusal to resign is forcing the African National Congress to decide if it wants to recall him as national president, Business Day reported, without saying where it got the information. The National Working Committee can convene the larger National Executive Committee, which can order Zuma to step down.

“Everything is under control. There’s no crisis,” ANC Secretary-General Ace Magashule said by phone. An “urgent notice” sent to members of the NWC, a 26-member group that oversees the day-to-day operations of the party, scheduled the meeting for 2 p.m. on Monday in Johannesburg.

Deputy President Cyril Ramaphosa, 65, was elected as ANC leader in December, defeating Zuma’s preferred candidate and ex-wife, Nkosazana Dlamini-Zuma. While Zuma’s second and final term is only due to end next year, his immersion in a succession of scandals has eroded support for the ANC and many within the party’s ranks want him to go before he delivers the annual state-of-the-nation address on Feb. 8.

“There is huge pressure on the ANC to rein in President Jacob Zuma once and for all to show that they are very serious about due process being followed and the fight against corruption,” Sethulego Matebesi, a political analyst at the University of the Free State in the central city of Bloemfontein, said by phone.

“It will be a numbers game. There is a huge possibility that President Zuma may not deliver the state-of-the-nation address.”

The rand was 0.5 percent stronger against the dollar at 12.0290 by 10:51 a.m. in Johannesburg on Monday. The currency is the best performer in the world since Ramaphosa was elected, with investors expecting that Zuma would be replaced early.

While Zuma, 75, has survived numerous efforts to remove him from office, he faces the first no-confidence motion in parliament on Feb. 22 without being head of his party. Pro- and anti-Zuma groups plan to stage rival marches on the ANC’s Johannesburg headquarters on Monday.

Source: https://www.bloomberg.com/news/articles/2018-02-04/top-anc-committee-to-meet-after-talks-with-south-africa-s-zuma 

02 Feb

Ethiopia could be sitting on one of world’s great untapped gold deposits

To the west of Ethiopia near the Sudanese border lies a place called the Asosa zone. This may be the location of the oldest gold mine in the world. Dating back some 6,000 years, it provided a key source of gold to the ancient Egyptian empire, whose great wealth was famous throughout the known world. It may even have supplied the Queen of Sheba with her lavish gifts of gold when she visited King Solomon of Israel almost 3,000 years ago.

The excitement in this part of the world is more about the future, however. Some local inhabitants already make a living from prospecting, and several mining companies have been active in the area in recent years, too.

But what comes next could be on a much bigger scale: I have just co-published with my colleague, Owen Morgan, new geological research that suggests that much more treasure might be buried under the surface of this east African country than was previously thought.

Treasure trail

The Asosa zone is made up of flatlands, rugged valleys, mountainous ridges, streams and rivers. It is densely vegetated by bamboo and incense trees, with remnants of tropical rainforests along the river valleys. The zone, which is part of Ethiopia’s Benishangul-Gumuz region, is spotted with archaeological sites containing clues to how people lived here thousands of years ago, together with ancient mining pits and trenches.

Local inhabitants have long taken advantage of these riches. They pan for gold in Asosa’s streams and also extract the precious metal directly from outcropping rocks.

More substantial exploitation of the region’s riches dates back to the Italian invasion of the 1930s. The Italians explored the Welega gold district in West Welega, south-east of Asosa.

Haile Selassie, emperor of Ethiopia from 1930 to 1974, believed the country had the potential to become a global leader in gold. But when the revolutionary Derg government deposed him and the country plunged into civil war, gold mining disappeared off the agenda for a decade and a half. It took until the early 2000s before the government started awarding exploration licences.

Several mines are up and running, neither of them in Asosa. One is at Lega Dembi slightly to the east, owned by Saudi interests. The other, at Tigray in the north of the country, is owned by American mining giant Newmont, and just started production late last year.

More is already on the way: the beneficiary of the Italian efforts from the 1930s in Welega is the Tulu Kapi gold prospect, containing 48 tonnes of gold. This was most recently acquired in 2013 by Cyprus-based mining group KEFI Minerals (market value: roughly US$2.3bn).

As for Asosa, the Egyptian company ASCOM made a significant gold discovery in the zone in 2016. It published a maiden resource statement that claimed the presence of – curiously the same number – 48 tonnes of gold. Yet this only looks like the beginning.

Read more here: How We Made it in Africa

 

01 Feb

Nigeria’s Corn Output Expected to Fall 7% on Pests, Rising Imports

Nigeria’s corn output for the 2017-18 season will probably decline by as much as 750,000 metric tons due to the impact of pests and increased imports, the producers’ association said.

Africa’s most-populous country is estimated to produce 10 million tons of corn in the current season, 7 percent less than 10.75 million tons in the 2016-17 season, Tunji Adenola, president of the Maize Association of Nigeria, said in a Jan. 30 phone interview from the southwest city of Ibadan.

“Apart from imports, which is the major challenge to corn production in Nigeria, the two-year-old armyworm attacks ravaging farms has discouraged farmers from producing,” Adenola said. Those unable to compete with imported corn, which is cheaper, are being compelled to switch to other crops, he added.

Nigeria is Africa’s biggest corn producer after South Africa, whose 2017-18 output is estimated at 12 million tons, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.

Most of Nigeria’s corn is consumed locally as a staple, in feed for livestock and raw material in the food industry. The West African nation saw corn imports jump 33 percent in the 2016-17 season to reach 400,000 tons, according to the USDA.

President Muhammadu Buhari’s government aims to boost farming output and reduce the economy’s dependence on oil, which contributes two-thirds of government revenue in the country of more than 180 million people.

Source: https://www.bloomberg.com/news/articles/2018-01-31/nigeria-s-corn-output-seen-falling-7-on-pests-rising-imports

26 Jan

Zuma- Gupta Ties Under Spotlight in South African Graft Probe

A South African commission of inquiry will investigate whether President Jacob Zuma played any role in the Gupta family’s alleged offer of cabinet posts to people including former Deputy Finance Minister Mcebisi Jonas and other claims that they influenced state decisions.

The inquiry will be guided by the report of the nation’s former Public Protector Thuli Madonsela, according to its terms of reference published in the Government Gazette on Thursday.

She ordered the inquiry into allegations that the Guptas may have influenced cabinet appointments and received special treatment for a coal business linked to the family and one of the president’s sons. Zuma and the Guptas have denied wrongdoing.

Jonas said the Gupta family offered him the position of finance minister, two months before Nhlanhla Nene was removed from the post, sparking a drop in the rand and the nation’s bonds.

Last month, Deputy President Cyril Ramaphosa succeeded Zuma as head of the African National Congress and has pledged to clamp down on corruption in a bid to revive the ruling party’s flagging public support before general elections next year and boost investor confidence in the economy.

Some senior members of the ANC have called for the commission to probe allegations of undue influence over state decisions going back as far as 1994 and beyond, under the former all-white government. The terms of reference may be expanded or amended, according to the proclamation.

Madonsela said in November 2016 that Chief Justice Mogoeng Mogoeng should appoint the head of the inquiry because the president had a conflict of interest.

Zuma said earlier this month he would appoint the commission and abide by a court ruling that Mogoeng must select its leader.

This was after the High Court in December rejected Zuma’s arguments that he alone can set up the commission and ordered him to pay the cost of the case. Zuma accepted Mogoeng’s recommendation that his deputy, Raymond Zondo, head the commission.

The commission must submit its report and recommendations to the president within 180 days of its commencement, according to the gazette.

Source: https://www.bloomberg.com/news/articles/2018-01-25/zuma-gupta-ties-under-spotlight-in-south-african-graft-probe

23 Jan

Pence Defends Trump on Disparaging Comments About Africa

Jerusalem (AP) — U.S. Vice President Mike Pence on Monday defended President Donald Trump over his recent comments disparaging immigration from Africa and Haiti, telling The Associated Press that the president’s “heart” is aimed at a merit-based system that is blind to immigrants’ “race or creed.”

Pence, in an interview with the AP from Jerusalem, said the president was intent on implementing a merit-based system that encourages immigration by those who will “contribute to a growing American economy and thriving communities.”

“I know the president’s heart and I know that what President Trump wants to do is reform immigration to make our system one that puts the interests of America first,” Pence said.

He added that immigrants should be considered on their merits, “regardless of what country they come from or what their race and creed is.”

He was responding to reports that Trump, in a private meeting with legislators earlier this month, challenged immigration from “shithole” African countries, disparaged Haiti and said the U.S. should welcome more immigrants from countries like Norway.

The vice president also dismissed an adult film star’s account of a sexual encounter with Trump in 2006, questioning its validity.

“I’m just not going to comment on the latest baseless allegations against the president,” Pence said. “My focus is on serving the president, advancing the priorities of the administration, advancing American interests and that’s where it will stay.”

The Wall Street Journal last week reported that Trump’s personal lawyer brokered a payment to pornographic actress Stormy Daniels in October 2016 to prohibit her from publicly discussing the alleged affair before the presidential election.

Daniels’ real name is Stephanie Clifford. Trump’s attorney, Michael Cohen, has denied there was any relationship. He gave the Journal a statement from a person identified as Stormy Daniels denying receiving “hush money.”

The AP reported that a tabloid magazine held back from publishing her 2011 account of their relationship after Cohen threatened to sue.

To read the full article, click here.