15 Dec

Nigeria Takes $1 Billion From Oil Savings to Fight Militants

Nigeria will take $1 billion from a special account for oil-revenue savings to boost its war against Boko Haram Islamist militants in the country’s northeast.

Governors of the country’s 36 states met with the federal government as the National Economic Council to deliberate on the expenditure, according to Godwin Obaseki, governor of southern Edo state.

“The governors have given permission to the federal government to spend the sum of $1 billion in the fight against the insurgency,” he told reporters in Abuja after the meeting on Thursday. That will leave $1.32 billion remaining in the excess crude account, where oil income above budgeted estimates are saved, according to figures provided by the government.

Boko Haram militants, who are opposed to Western education and seek to impose their version of Islamic law in Nigeria, are in the eighth year of an insurgency that has left at least 20,000 people dead, according to the government. President Muhammadu Buhari won elections in 2015 with the defeat of the group among his key campaign pledges.

“We are getting closer to the elections and defeating Boko Haram was a major campaign promise; going in these elections without delivering on that promise will be tough,” said Freedom Onuoha, a senior political science lecturer at the University of Nigeria, in the southeastern town of Nsukka.

With a new vote approaching, some of these funds for security may find their way into the election campaign, Onuoha said. “The details of spending aren’t usually made public. That creates an opportunity, a smokescreen, that can be used to fund elections and other hidden spending,” he said.

Ambushing Troops

Concerns the government may misuse the money are misplaced, according Laolu Akande, a spokesman for Vice President Yemi Osinbajo, who represented the federal side at the meeting with governors. “Nigerians have come to appreciate that the Buhari administration is as one that is judicious with the management of the country’s resources and actively fighting corruption,” he said.

To read the full article, click here.

13 Dec

Africa’s Biggest Company Is Ready to Fix Its Tencent Problem

Naspers Ltd. Chief Executive Officer Bob Van Dijk said Africa’s largest company will consider “structural options” if the value gap with its stake in Tencent Holdings Ltd. persists.

Naspers has a 33 percent stake in Shenzhen, China-based internet giant Tencent, valued at about $158 billion, while Naspers itself has a market value of about $112 billion. The discount is “too high,” and has been accelerating in the past 20 months, Van Dijk said Tuesday in New York. Leaving aside Tencent, analysts place Naspers’ asset value at more than $180 billion, said Chief Financial Officer Basil Sgourdos.

Africa’s largest company by market value is considering using tools such as depositary receipts to access new pools of capital that are otherwise restricted to trade on the Johannesburg Stock Exchange, Sgourdos at the investor presentation. Naspers will also consider listing some underlying businesses to unlock further value, he said.

In October, veteran emerging-markets investor Mark Mobius said it should buy back Naspers stock. While repurchases could make sense when the company has more financial flexibility, right now it is focused on spending on expanding its businesses and on acquisitions, Sgourdos said.

Capital Outflows

The value gap with Tencent has widened in line with capital outflows from South Africa, where Naspers has its primary listing, Van Dijk said. It will be close to “impossible” for Naspers to move its listing from the Johannesburg Stock Exchange, which has also been protecting the company from hostile takeovers, he said.

Van Dijk has resisted pressure to sell Naspers’ holding in Tencent, a suggestion that has surfaced over the years.

The Cape Town-based company, which also owns Africa’s largest pay-TV business and newspapers, has been focusing on e-commerce and is now among the world’s largest investors in the space, backing ventures from Mail.Ru Group Ltd. in Russia to iFood in Brazil.

Naspers plans to accelerate the “path to profitability” of its e-commerce businesses and sees potential for initial public offerings of companies in its portfolio, Van Dijk said.

To read the full article, click here.

01 Dec

Angola Plans to Open Up Telecoms Industry to Foreign Bidders

Angola plans to sell a minority stake in a state-owned telecommunications provider and hold an auction for a fourth industry operator as new President Joao Lourenco shakes up the business environment and reduces the influence of his predecessor’s family.

The government of the oil-rich west African country has received several expressions of interest from local and foreign investors in the new telecommunications license, state-owned news agency Angop said, citing the country’s Ministry of Telecommunications Jose Carvalho da Rocha. The winning bidder will be able to offer fixed-line, mobile, internet and paid-television services, Rocha said.

A 45 percent stake in Angola Telecom will be sold, the minister said. The state-owned firm competes with Unitel SA, controlled by Isabel dos Santos, the former president’s oldest daughter and Africa’s richest woman. The third operator is Movicel Telecomunicacoes Lda, which is also privately owned.

The move comes as Lourenco seeks to distance Angola from the influence of former President Jose Eduardo Dos Santos and his family. Earlier this month, he fired Isabel Dos Santos from her position as as chair of state-owned oil company Sonangol, while the government told the state television station to cancel contracts for the management of a local and an international state-owned channel with two of Dos Santos’s younger children.

Tendering Process

The rules of the telecommunications license tender will be made available to investors by the end of the year and the Angolan state will retain a 45 percent stake in the new operator, said Rocha. The tender is expected to take more than three months, he said.

Lourenco became President of Africa’s second-biggest oil producer in September, replacing dos Santos, who was in power for 38 years. Lourenco has vowed to open up Angola’s economy to more competition and reduce corruption as it struggles to overcome an economic crisis that began soon after oil prices started to fall in 2014. Oil accounts for more than 90 percent of the country’s exports.

Auctions for new telecommunications licenses in Africa are rare, as most countries have already held privatization initiatives. The continent’s biggest wireless carrier by subscriber numbers is Johannesburg-based MTN Group Ltd., while Vodafone Group Plc unit Vodacom Group Ltd. is the largest by market value.

Zambia has also started the process of auctioning a fourth mobile-phone license. Vodafone is one of the interested parties, a person familiar with the matter said in September.

Source: https://www.bloomberg.com/news/articles/2017-11-30/angola-plans-to-open-up-telecoms-industry-to-foreign-bidders 

29 Nov

Africa Seeks Investment to Stem Migration as EU Summit Begins

European and African leaders gathering in Ivory Coast have an opportunity to confront one of the biggest sore points between the two continents: migration.

The two-day African Union-European Union summit begins Wednesday as Europe is grappling to stem the biggest wave of asylum seekers since World War II, with more people arriving by sea from African countries this year than from war-torn Syria. Anxiety over migration has stoked populism in Europe and driven electoral gains by far-right parties from France to Hungary.

“For the Europeans, it’s a priority because it’s also a domestic political issue and their electorate is very sensitive to this question,” said Gilles Yabi, head of policy group Wathi in Senegal’s capital, Dakar.

Yet few African leaders want to be seen as curbing migration in a region where going overseas is often considered a rite of passage and remittances are vital for economic survival. That’s why African Union member states favor talks that touch on broader issues such as economic development, security and trade relations, according to Yabi.

‘Concrete Projects’

French President Emmanuel Macron and German Chancellor Angela Merkel are expected to attend the summit in Abidjan. Among African leaders to join the talks are Nigeria’s Muhammadu Buhari and South African President Jacob Zuma.

Africa will only persuade its young people to stay if there are prospects for economic development on the continent, Moussa Faki Mahamat, president of the African Union Commission, told Radio France Internationale last week.

“We have to start at the root of the problem, with development, with concrete projects,” Mahamat said.

The views of African and European leaders on migration are fundamentally at odds, the International Crisis Group said in a report last month. “The European Union is doggedly focused on trying to prevent irregular migration, whereas the African Union is looking for ways to increase legal flows,” the Brussels-based research group said.

To read the full article, click here.

29 Nov

Paralysis Grips South Africa Government With ANC Facing Election

An acrimonious battle for control of South Africa’s ruling African National Congress has paralyzed several government departments, as ruling party leaders focus on electioneering and officials delay taking decisions until they learn who their new political masters will be.

The front-runners to replace Jacob Zuma as ANC leader next month are his deputy Cyril Ramaphosa and Nkosazana Dlamini-Zuma, the former chairwoman of the African Union Commission and Zuma’s ex-wife. The victor will probably also succeed Zuma as president in 2019, or even earlier if the party decides to replace him before his second term ends. Ramaphosa has stressed the need to reignite growth and restore investor confidence, while Dlamini-Zuma has called for the nation’s wealth to be more equitably distributed.

These are some of the key issues that are likely to remain in abeyance until after the ANC’s Dec. 16-20 elective conference:

1. Resolving a standoff over black mine-ownership laws

The government and mining companies have been locked in dispute for months over a new Mining Charter, which seeks to compel companies to maintain a minimum 30 percent black shareholding. The industry argues that the previous threshold of 26 percent should be retained and sales of stakes to black investors who subsequently divested should be taken into account when assessing their compliance. Court hearings on the dispute are due to resume Feb. 19. Ramaphosa has called for the standoff to be amicably resolved.

2. Allocating new broadband spectrum to mobile-phone companies

While mobile phone companies have been clamoring for additional spectrum, the telecommunications minister sued the industry regulator last year to prevent it from holding a planned auction, arguing that the sale was premature and proper regulatory procedures weren’t followed. The case remains unsettled. Telecommunication laws are meanwhile being amended to give the government greater control over spectrum allocation.

To read the full article, click here. 

28 Nov

Zimbabwe: Mnangagwa Dissolves Cabinet

President Emmerson Mnangagwa dissolved cabinet Monday and immediately appointed two allies to, in the interim, hold forte at two of the great offices of state – finance and foreign affairs.

Patrick Chinamasa returns to finance and Simbarashe Mumbengegwi to foreign affairs as the president puts together his new cabinet after assuming office last Friday.

The development comes as Zimbabweans eagerly await the new president’s cabinet line-up to see whether he will bring into government fresh blood or keep faith with veteran colleagues.

Talk has also centred on speculation over whether Mnangagwa would into government members of the opposition to help right the country’s battered economy.

Chinamasa and Mumbengegwi led the same ministries before they were demoted in a reshuffle by former president Robert Mugabe last month.

The reshuffle, which side-lined Mnangagwa’s allies leading to his dismissal by Mugabe was part of the events that culminated in Mugabe’s resignation last week.

A statement by cabinets secretary Misheck Sibanda Monday confirmed the appointments of Chinamasa and Mumbengegwi.

“The president … has dissolved cabinet, and is in the process of putting together a new team of cabinet ministers,” said Sibanda.

He added that Chinamasa and Mumbengegwi had been appointed acting ministers “to allow for uninterrupted services in critical ministries”.

In addition the normal Tuesday cabinet gathering would be replaced by a meeting between the new president and the permanent secretaries.

Meanwhile, Mnangagwa’s cabinet line-up will be keen examined for indications of the direction of travel for the new administration.

“The composition of the new government will show a clear path whether we continue with the status quo or the clear break with the past that we need to build a sustainable state. It’s a simple choice,” former finance minister and opposition leader Tendai Biti told Reuters news agency.

“Zimbabwe needs all hands on deck…We cannot continue reproducing these cycles of instability.”

However, for some analysts a coalition government is pointless for the opposition if, as Mnangagwa indicated, elections will go ahead as scheduled next year.

“If I were an opposition politician I would say: what’s in it for me? Unless I’m convinced I’m going to lose the election, I won’t participate,” business studies lecturer Professor Tony Hawkins told Reuters.

“He (Mnangagwa) might introduce technocrats from commerce and that will send out a signal of sorts… As far as the international community is concerned legitimacy is important. It’s a very delicate situation and he has very little room for manoeuvre.”

Source: http://allafrica.com/stories/201711280004.html 

28 Nov

Africa: Emmanuel Macron’s Mission in Africa – a New Approach?

The French president’s trip to Africa will attempt to demonstrate a new kind of politics as Macron seeks to break away from neocolonialism across the continent.

Emmanuel Macron wants to make things right. The newest resident of the Elysee Palace is seeking a clear departure from the policies of his predecessors – and he has appointed eleven honorary consultants to help him do it. The new Presidential Council for Africa (CPA), which is made up of mostly business representatives with an African background, has spent the past few weeks educating the French president on all of the major issues across the continent before he kicks off his tour of West Africa. The French foreign media has already learned that Macron will say different things than his predecessors.

Macron will begin his African charm offensive with a speech at the University of Ouagadougou in Burkina Faso to an audience of around 800 students, followed by a question-and-answer session. The location has been strategically chosen as the perfect place to announce his new Africa strategy.

“It’s a strong sign,” says Congolese political scientist, Tumba Shango Lokoho, who teaches at Paris-Sorbonne University. Macron aims to send a clear message that the future of Africa belongs to the younger generation, and they need to be supported. “If African youth are the future, they need an education and work prospects on the continent to advance the transformation of Africa,” says Lokoho.

But it’s no easy task. “France has long been pursuing a schizophrenic Africa policy,” he says. “There needs to be a renewal in discourse, but the African heads of state, who are often in office for a long time, are strategic partners in France.” It’s through them that France got involved, he says, adding that the goodwill of aging rulers alienated young Africans and civil society.

To read the full article, please click here.

28 Nov

South Africans to be hit with a R30 billion tax hike in 2018

Whether the ANC are pursuing free higher education like kamikaze pilots, or trying to add another room on to Nkandla, the party are now pushing for a huge tax hike to fill the holes in our economy, according to a report in Business Tech. 

There is a R40 billion gap in the country’s revenue, as identified by Malusi Gigaba in his mid-term budget speech. The government’s failure to stop tax dodgers – complimented by rampant corruption and lax regulations against avoidance – is now set to hit ordinary taxpayers right in their pockets.

They’ve effectively punctured their own tyres, and are now asking us to forfeit our own just so the ANC can continue their journey over the edge of a cliff.

Why a tax hike is planned for 2018

In total, they are looking to plug this rand black-hole over the next two years. South Africa’s shortfall actually stands at R80 billion. There is an expected R50 billion to come in expenditure cuts too.

This would equate to annual cuts in expenditure amounting to about R25 billion as well as revenue-enhancing measures amounting to about R15 billion, including where appropriate, tax measures, the presidency said in a statement.

A huge spanner in the works is the near-suicidal attempt to force through a free-fees plan for higher education. The Zuma regime are desperately trying to implement cost-free higher education. It’s noble in theory, but devastating in practice.

Areas facing cuts:
  • Social grants payments
  • Reducing the rollout of RDP houses
  • Freezing government wages
  • Halving the military budget

Tax hikes in the last two years have failed to deliver any expected revenue increases. 2015/16 failed to raise the predicted R18 billion, just as 2016/17 failed to earn the R28 billion it was forecast.

But, the third time is a charm right? Here’s the problem. Raising taxes has little-to-no effect on those that are causing the issue. If you aren’t cracking down on those avoiding tax, how are you going to get them to pay an increase?

Source:  https://www.thesouthafrican.com/south-africans-to-be-hit-with-a-r30-billion-tax-hike-in-2018/ 

27 Nov

South African Rand, Brazil Pension Saga Top Emerging-Market Bill

Emerging-market investors can almost always count on South Africa to keep them on their toes these days.

Rand-denominated bonds will trade Monday for the first time since S&P Global Ratings lowered the country’s local-currency debt to junk last week. Elsewhere in emerging markets, Brazil’s government is seeking to drum up support for the pension overhaul, Mexico will nominate a new central bank governor and India will release third-quarter economic data.

South Korea and Israel head a list of central banks setting interest rates. Policy makers in Angola, Ghana, Kazakhstan and Mauritius are also due to hold meetings.

South Africa  

Domestic bonds and the rand, among the worst performers in emerging markets this year, are likely to decline on Monday after S&P cut the nation’s local-currency debt to junk and Moody’s Investors Service warned it may do the same.

The yield on South Africa’s rand-denominated bonds due December 2026 has risen almost 80 basis points this quarter, the most since the three months ended December 2015.


Third-quarter economic data will show how quickly India recovered from a slowdown caused by a partial cash ban late last year. Gross domestic product increased 6.5 percent year-on-year, according to a Bloomberg survey of economists and analysts, from 5.7 percent in the three months through June.


Investors will keep a close eye on who will be nominated as central bank governor as Augustin Carstens prepares to leave at the end of the month. The median forecast of economists surveyed by Bloomberg is for the benchmark interest rate to remain unchanged at 76 percent until the second quarter of 2018. But traders on Thursday increased bets on a rate hike after Mexico’s inflation unexpectedly climbed in the first half of November.

To read the full article, click here.

22 Nov

South Africa Awaits $7 Billion Ratings Double Jeopardy

South Africa will confront the threat of a $7 billion debt selloff this week as it awaits two concurrent judgments on its credit status.

Opinion among economists is divided as to how stark a danger that is. Fifty-six percent of respondents in a Bloomberg survey said S&P Global Ratings will reduce its assessment on rand-denominated debt to the highest non-investment grade on Friday. Moody’s Investors Service, which is scheduled to make a decision, will likely leave it unchanged, according to three-quarters of those asked.

Should both companies cut, rand debt would fall out of gauges including Citigroup Inc.’s World Government Bond Index, sparking outflows of 80 billion to 100 billion rand, Citigroup economist Gina Schoeman said. This would raise borrowing costs for the nation that’s selling more debt to plug a widening budget gap.

Conflict in the ruling party in the run-up to its leadership election next month has hamstrung efforts to bolster the Africa’s most-industrialized economy, which had its second recession in less than a decade earlier this year. Business confidence is near the lowest in more than three decades amid allegations of corruption against state companies’ managers and politicians including President Jacob Zuma.

“Given the fraught political context in which South Africa finds itself, alongside the negative repercussions of downgrades in triggering ejection from key bond indices, we believe that the rating agencies will not rush to cement decisions to downgrade this month,” said Phoenix Kalen, director for emerging-markets strategy at Societe Generale SA in London.

The sustainability of the nation’s debt will be at risk unless government presents a credible fiscal-consolidation plan in 2018, Moody’s said after the mid-term budget last month.

While the outcome of the ruling African National Congress’s elective conference next month will be of interest to ratings companies, it’s the February budget that they’ll be watching for clues on the country’s debt direction, said Annabel Bishop, the chief economist at Investec Bank Ltd.

Read more: South Africa Awaits $7 Billion Ratings Double Jeopardy


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