stabilisation Archives - African Financial & Economic Data

20 Nov

Nigerian Economic Growth Quickens to 1.4% in Third Quarter

Nigeria’s economic growth accelerated in the third quarter as oil output increased. The gross domestic product of Africa’s largest crude producer expanded 1.4 percent in the three months through September from a year earlier, compared with a revised 0.72 percent in the second quarter, the Abuja-based National Bureau of Statistics said Monday in an emailed report. The median of 13 economists’ estimates in a Bloomberg survey was for 1.5 percent growth.

The economy contracted 1.6 percent in 2016, the worst annual slump in 25 years. The International Monetary Fund forecasts GDP growth of 0.8 percent this year and 1.9 percent in 2018 as output of oil, Nigeria’s biggest export, increases and as more foreign currency becomes available for factory imports.

Oil production increased to 2.03 million barrels a day in the third quarter from a revised 1.87 barrels a day, the statistics office said. The crude sector contributed 10.04 percent to real GDP, according to the NBS.

President Muhammadu Buhari asked lawmakers to approve a 16 percent increase in spending to 8.6 trillion naira ($23.9 billion) for 2018. Buhari wants to invest about one third of the budget in roads, rail, ports and power to boost the economy.

09 Nov

Aviation as a catalyst for growth in Africa

While Africa has one of the biggest populations in the world, its aviation industry is still small, representing only 2% of the global market. Despite all the major challenges ahead, this is an industry that has very big potential for future growth in Africa.

One of the reasons why African countries seem unable to attract a large amount of foreign investments, is that there is no direct airline connection to reach them. As a result, business travel and costs of doing business become prohibitive. Foreign investors are less likely to travel to distant and not easily accessible places, even if there are great opportunities. As a result, aviation in Africa should be considered a priority sector by the respective African governments so that it can boost the economic development of their countries.

Aviation as a pillar for economic growth

Being the biggest pan-African airline, Ethiopian Airlines has greatly contributed in making the Addis Ababa Bole Airport an aviation hub and a gateway to Africa. Similarly, for Kenya Airways, the Jomo Kenyatta International Airport in Nairobi is a springboard to access not only the east African region, but also the central and western part of Africa. As for South African Airways, from its Johannesburg base at OR Tambo International Airport, it covers most of the southern African region. Except for South Africa, where its economic growth stagnated in 2016 and eventually fell into recession in the first quarter of 2017, Ethiopia and Kenya grew at a very fast rate of 7.5% and 5.8% in 2016
respectively. In the north, Casablanca, Algiers and Tunis are the major gateways for Europe to access both the Maghreb region and the western African region.

As for the Middle East countries, Cairo is the major gateway to access the major African cities in the northern, eastern and western regions. All these aviation hubs in Morocco, Algeria, Tunisia and Egypt have contributed to the high growth rate of passenger traffic, increasing by 94%, 95%, 75% and 108% respectively from 2005 until 2015, according to data from the World Bank. Aviation is the critical link that not only connects Africa to the world, but also builds bridges among the various African countries. It is only when there are better airline connections, enabling the movement of goods and people, that business activities can flourish. With lower business travel costs, countries can then better attract foreign investors and create better business opportunities.

According to the United Nations Conference on Trade and Development (UNCTAD), the top-five African countries that had the biggest stock of foreign direct investment (FDI) in 2016, are South Africa, Egypt, Nigeria, Morocco and Angola, with US$136.8bn, $102.3bn, $94.2bn, $54.8bn and $49.5bn respectively. Of the five countries, only South Africa, Egypt and Morocco have a major national carrier.

29 Aug

Automotive outlook for Africa: Bumpy roads ahead?

The author, Richard Li, is a Singapore-based partner with Steel Advisory Partners, a management consulting firm that serves clients across industries. This article was produced for the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation.

In 2000, the overall African gross domestic product (GDP) was US$616bn. Since then, the continent has enjoyed a period of high economic growth and its GDP has risen massively by 245% to reach $2.1tn in 2016. Moreover, the World Bank recently started classifying countries according to their gross national income (GNI) and there are in fact 25 African countries that are in the middle income category in 2016.

To further sustain economic growth in Africa, there is a significant need for the transportation of goods and people. This means that there will be an accelerating demand for automotive vehicles in Africa, particularly in those middle-income countries that have a huge population mass, as well as a relatively high growth rate.

Africa, the last frontier market for automotive

According to the International Organisation of Motor Vehicle Manufacturers, there are only 44.8 million vehicles in Africa, representing only 3.5% of the global market. For Africa, with its population of about 1.2 billion, there were only 42 vehicles per 1,000 inhabitants in 2015. Compared to the global average, Africa is about 4.3 times less. This signals that there is an immense upside for market penetration in the automotive sector. Moreover, between 2014 and 2015, the automotive market in Africa grew at a relatively fast pace of 5.8%, compared to 1.9% and 2.4% for Europe and the United States respectively.

In terms of sales, in 2016, there were about 1.3 million vehicles sold in Africa, representing only 1.4% of the global market. The market is mainly dominated by two regions – Northern Africa and South Africa – with an 85% market share. South Africa sold about 547,000 vehicles, whereas for the Maghreb countries – Algeria, Morocco and Tunisia – together with Egypt, 575,000 vehicles were sold.

As for manufacturing capabilities,there is a lot of room for improvement, since Africa produces slightly less than 1% of all the vehicles in the world. Although South Africa has the biggest production capability with nearly 600,000 vehicles produced in 2016, manufacturing is stalling and is on a decline. Morocco is next with a capacity for 345,000 vehicles. These two countries represent about 91% of all vehicles manufactured in Africa. With increasing demand in other parts of Africa and with only small assembly facilities elsewhere, there are indeed many potential opportunities for automotive companies to further tap.

Challenges faced by the automotive sector

Africa is definitely not an easy market to deal with. The continent is not only geographically vast, but it is also a very fragmented market with 54 independent countries, each with their own market characteristics. In addition, since many African countries are still in the process of development, there is a dire lack of clarity in terms of soft infrastructure, such as proper regulatory frameworks, as well as economic policies for the development of industries.

The automotive sector is a capital-intensive industry that requires a long cycle for its development and for returns on its initial investments. On top of that, the captive market within specific countries may be too small to justify large-scale production facilities. Besides the lack of clear guidelines to attract investors in the automotive sector, the political instability in many African countries increases risk, thereby stifling and eventually halting the development of automotive manufacturing.

South Africa was the only African country that had been able to realise all the conditions needed for manufacturing automotive vehicles. With its population of nearly 56 million and a GNI per capita of $5,480, South Africa is the biggest automotive market in Africa – in terms of both production and sales of new vehicles. However, the recent political instability in South Africa is making global automotive companies think twice about whether they should invest further in the country. As a result of this inertia to reform and stimulate this sector, automotive companies may decelerate their future development plans there.

The Maghreb countries leading the way

The three Maghreb countries – Algeria, Morocco and Tunisia – are progressively focusing on boosting their automotive sector. Morocco has been the most successful, attracting French car manufacturers with the development of special industrial and economic zones. Renault and PSA Peugeot Citroën have committed €1.6bn ($1.9bn) and €600m ($705.7m) for their own production facilities respectively.

The Moroccan government is definitely steering the automotive industry in the right direction with the necessary framework and conducive environment needed for its development within the country. Morocco is pushing hard for the industry to rally further, aiming to produce one million vehicles by 2020. By then, its automotive exports will represent $10bn worth of vehicles to Europe and other parts of Africa. This sector will eventually represent 20% of the Moroccan GDP and create 160,000 jobs locally.

Algeria and Tunisia are also locations where French car manufacturers are setting up assembly plants. Germany’s Volkswagen is opening its plant in Algeria as well. With their close proximity to Europe, coupled with the right incentives and regulatory framework, European car manufacturers are finding it very appealing to be in these countries. Moreover, with a captive market of more than 87 million people among these three countries, selling locally helps to justify the necessary investments as well.

Potential opportunities in Africa

Africa can offer great opportunities to automotive companies, since more countries are slowly but steadily becoming more affluent. According to data from the World Bank, there were 12 countries in 2000 that might be considered as middle-income countries. Nowadays there are 25 middle-income countries across the continent. This represents a potential market size of approximately 656 million people. From 2006 until 2016, some of the countries that have significantly raised their GNI per capita are Ethiopia, Nigeria, Egypt, Kenya and Ghana, with an increase of 267%, 188%, 166%, 134% and 130% respectively.

Besides South Africa, the other top five most-attractive middle-income countries that have big populations, are Algeria, Egypt, Kenya, Morocco and Nigeria. These are probably the most promising markets since they have a combined population size of about 462 million, with a significant percentage being able to afford their own vehicles. The automotive industry can potentially crank and rev the growth engine of these countries further.

The African marketplace is gradually looking more attractive with the continent potentially being able to absorb many more vehicles than what it does currently. However, there are many obstacles that first need to be overcome. And African governments have to be committed to provide the right conditions for the automotive sector to flourish within their countries. With the right framework, this industry can not only be lucrative for the automotive companies, but at the same time, it can turbocharge the economic growth of African countries.

Richard Li is a Singapore-based Partner with Steel Advisory Partners, a management consulting firm that serves clients across industries. Having spent his working career in strategy consulting, he worked with various global clients and covers themes such as Corporate Strategy, Transformation, Digital Innovation and Risk Management. He can be contacted via the Steel Advisory Partners site. This article was specifically written for the NTU-SBF Centre for African Studies.

source from how we made it in Africa

29 Aug

Weathering Africa’s commercial real estate storm

The brilliant thing about working in Africa is the continent’s ability to change – and adapt – almost instantly. While at first glance this is often interpreted as a challenge or a risk, the importance of adopting a “glass-half-full approach has never been more essential than in Africa’s current real estate environment”, says Gerhard Zeelie, head of Africa property finance at Standard Bank.

In Africa, things can change very quickly.

In May last year, for example, Nigeria was in the throes of a US dollar liquidity crisis. Barely 12 months later this is largely resolved. Just as tweaking foreign exchange regulations along with positive market changes improved liquidity in Nigeria, an uptick in the oil and copper prices coupled with market-friendly, transparent forex regimes could, equally as easily, change Luanda or Lusaka’s commercial real estate prospects – overnight. Similarly, large global energy investments touted for Mozambique are currently dispelling default-driven negative sentiment as investors again turn positive about the region.

“The variables that threaten risk in Africa are equally what contributes to making the continent such a rich landscape of opportunity – especially in the continent’s real estate sector,” says Zeelie.

Africa’s commercial real estate sector is currently, without doubt, a tenants’ market. Despite a more settled Naira and easing USD liquidity in Nigeria, challenges importing goods – until recently prohibited for foreign currency allocation – is keeping smaller businesses and retailers under pressure, forcing landlords to continue offering tenants discounts, or capped USD-based deals. New malls remain at 50-60% occupancy levels as “tenants shy away from the more expensive USD-based rentals, or remain unsure of whether they will be able to get prohibited, non-essential, stock through ports”, says Zeelie.

Similar concerns follow the office rental environment as businesses adopt a wait-and-see attitude, deferring office moves, upgrades and corporate office expansions.

These kinds of challenges mean that commercial real estate developers are struggling to convert Africa’s resilient consumer demand into competitive rentals. “This is not only constraining income in the sector but also leading to a depreciation in the value of the continent’s real estate stock as, increasingly, space in new developments stands empty or achieves lower rentals than before,” observes Zeelie.

The intensity of the storm in the continent’s commercial real estate sector varies.

In Nairobi, for example, “a better regulatory setting, an easier business environment more generally, and a more diverse economy – with multiple earners of foreign exchange – collectively contribute to a more resilient tenant profile and higher occupancy, even though vacancies exist in certain nodes and sectors”, says Zeelie.

Kenya, or, more correctly, Nairobi’s commercial real estate market, is, however, the exception rather than the rule in Africa.

When projects don’t perform as anticipated, African commercial real estate developments require more patient funding structures which can be achieved through the correct ratio between debt and equity. “Projects conceived in earlier, more positive, business environments on very different numbers, for example, should be restructured,” says Zeelie. While a restructure will often involve a higher level of equity finance, “the bank should also display some flexibility in its approach”, he adds.

For example, if financiers have a view on how long negative conditions may last in certain markets they may be able to extend the tenors or repayment terms of financing facilities – provided there is not a significant deterioration in the risk. Or, if clients have access to shareholder funds, it might be cheaper to put more hard currency into the structure. There may also be options to convert debt into local currency, provided there is enough liquidity in the market.

“Another solution could be to negotiate upfront payment of the present value of all lease payment with key tenants,” says Zeelie. Over the long term this provides these tenants with predictability – and probably a discount – while injecting much needed capital, now, into commercial real estate financing structures, enabling landlords to manage rentals with smaller clients in the short term.

source from How We Made It In Africa

29 Aug

Is the African mining sector becoming uninvestable?

At the recent Africa Forum hosted by Hogan Lovells, in London, a number of common, positive themes came through: Africa is a continent of endless possibilities and opportunities; Africa has significant natural and human resources which can be unlocked for the benefit of all Africans; and the investability of many African countries has improved, for various reasons, including mature banking, finance and legal institutions, investment-friendly policies and regulatory frameworks, and national development plans which demonstrate governmental support for sustainable infrastructure and development.

Why then, within the context of a mostly positive view of investment in Africa, is the question posed whether the African mining and natural resources sector, is becoming uninvestable?

Firstly, positive views of investment in Africa don’t always extend to the mining and naturals resources sector. While it is often acknowledged by stakeholders that the mining and natural resources of a country can contribute meaningfully to growth, development and transformation, there is a growing questioning of the impact of mining on aspects such as the environment, host communities, social structures, tourism, and industries such as agriculture, versus the benefits that often flow from mining and beneficiation operations. As the voices of concern increase and develop, the benefits that flow from mining and beneficiation operations are likely to be questioned, even further.

Secondly, the recent mining policy and regulatory changes in Tanzania and South Africa have brought into sharp focus the fragility of investment decisions relating to so-called frontier markets, such as Tanzania, and emerging markets, such as South Africa.

With a decrease in the number of investable frontier markets (equity and bond markets which are typically smaller than emerging markets and where there is less liquidity) and investment instability in emerging markets, such as South Africa, the recent events in these two countries are more concerning.

Tanzanian president, John Magufuli, signed into law the Natural Wealth and Resources Bill 2017, and the Natural Wealth and Resources Contracts Bill 2017, on 3 July, 2017. These laws, which were fast-tracked though the Tanzanian parliament, in a matter of weeks, have far-reaching consequences for foreign companies with investments in Tanzania, one of the continent’s largest gold producers.

There has been extensive investment in Tanzania’s gold mining industry, with a large percentage of the investment, focused on prospecting operations, which are of course critical in the creation of a pipeline that can be converted into mines, in the future. Many of these investors are listed in Australia, and the Australian Stock Exchange took the drastic step of suspending trading of various junior mining companies, following the announcement of the enactment of the laws, by President Magufuli. The uncertainties flowing from the new laws are likely to impact on these junior mining companies, who are focused on exploration, quite dramatically and it will make capital raising exercises extremely difficult, if not impossible. Where ownership of mining assets in a company are put at risk, this is likely to scare off would-be investors, and make existing investors exercise extreme caution.

Key changes brought about by the new legislation in Tanzania include the following:

The Tanzanian government is given the right to re-negotiate or dissolve current mining contracts with multi-national companies
The state will be required to own at least 16% of mining projects
Export royalties have been increased
The Tanzanian government can reject a mining company’s valuation where the government believes that the transfer price is too low, and the Tanzanian government is entitled to purchase the consignment of the minerals, at the price declared by the mining company
The right to international arbitration is removed
The Tanzanian government is also pushing for compulsory listing of mining companies on the Dar es Salaam Stock Exchange, with the complexities that this will bring, particularly because of the potentially small pool of investors who can take up the public offerings.

While multi-national mining companies with investments in Tanzania continue to engage with the Tanzanian government, some of the multi-national companies have declared disputes with the Tanzanian government and are referring these disputes to arbitration. None of this is good for the Tanzanian mining sector.

On 15 June, 2017, the South African minister of minerals, Mosebenzi Zwane published the “Reviewed Broad-Based Black Economic Empowerment Charter for the South African Mining and Minerals Industry, 2016″, (“Mining Charter 3“).

The response was immediate, dramatic, and far reaching. It is estimated that mining stocks lost approximately R50bn (US$3.8bn) in value, following the announcement, with the rand losing ground, and the Chamber of Mines, the body that represents the majority of the mining companies, launching legal proceedings against Minister Zwane. The grounds of challenge go to the heart of the minister’s powers and functions under the mining legislation and the Constitutionality of Mining Charter 3.

While Minister Zwane has labelled the legal challenge as being anti-transformation, the Chamber of Mines and other bodies representing mining interests have consistently expressed the position that the industry is committed to transformation, that the industry has demonstrated its commitment through the implementation of appropriate programmes of transformation – including in respect of the host communities through the social and labour plans, which are a requirement under the mining laws, but that the targets in the Mining Charter must be achievable, sustainable, and the timeframe should take into account the reality that the mining industry finds itself in, with the spectre of further job losses in the near future (while figures vary, the suggestion is that in excess of 80,000 direct jobs have been lost, in the industry, over the last three to five years. Various South African mining companies have recently announced proposals for further job losses, which may exceed 20,000 direct jobs).

Mining Charter 3 made significant amendments to the transformation requirements under the previous versions of the mining charter. Key changes include the following:

Holders of new prospecting rights must have a minimum of 50% plus one black person shareholding
A holder of a new mining right must have a minimum of 30% black person shareholding (up from the previous 26%)
The 30% black person shareholding in new mining rights must be distributed amongst three beneficiaries, namely a minimum of 8% for employee share ownership plans, a minimum of 8% for mine communities to be held in a community trust, and a minimum of 14% to Black Economic Empowerment entrepreneurs
For employee share ownership plans, a minimum of 8% for mine communities to be held in a community trust, and a minimum of 14% to Black Economic Empowerment entrepreneurs
A holder of a new mining right must pay a minimum of 1% of its annual turnover in any given financial year to the black person shareholders prior to, and over and above, any distributions to the shareholders of the holder
While there is limited recognition of the “once empowered, always empowered” principle, unless the historical Black Economic Empowerment transaction achieved 26% black shareholding or more, the historical transaction is not recognised
Where a historical Black Economic Empowerment transaction is recognised, the holder is required to top up the black person shareholding from the existing level to a minimum of 30% black person shareholding within 12 months;
Even where a holder of a mining right maintained a minimum of 26% black person shareholding as at 15 June, 2017, the holder is required to top up its black person shareholding to a minimum of 30% within 12 months from the date of publication of Mining Charter 3;
Minimum requirements are specified in relation to procurement, supplier and enterprise development. A holder is required to spend a minimum of 70% of total mining goods procurement spend on South African manufacturedgoods, with the 70%, being broken down into specified requirements. A minimum of 80% of total spend on services must be sources from South African-based companies, with the 80%, being broken down, into specified requirements;
A foreign supplier (a foreign controlled and registered company, supplying the South African mining and minerals industry with mining goods and services, which does not have at least a Level 4 DTI Code BEE Status, and 25% plus one vote black ownership) must contribute a minimum of 1% of its annual turnover generated from local mining companies towards the Mining Transformation and Development Agency;
Employment equity targets are increased, and there are specified requirements from board level, to core and critical skills.

There were glimmers of hope when, following negotiations between the Chamber of Mines and Minister Zwane, Minister Zwane agreed to suspend Mining Charter 3 pending the outcome of the legal challenge initiated by the Chamber of Mines. However, the following week, Minister Zwane published his intention to issue a notice placing a moratorium on all applications for new prospecting and mining rights, renewals of prospecting and mining rights, and ministerial consents in terms of Section 11 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 (“MPRDA”) (in summary where a right or an interest in a right is to be transferred or there is a change of control, ministerial consent is required).

The minister indicated his intention to issue the moratorium notice under Section 49 of the MPRDA which vests the minister with the authority to issue a notice prohibiting prospecting or mining in respect of certain geographical areas or certain minerals for a particular period, having regard to the national interest, the strategic nature of the mineral in question and the need to promote the sustainable development of the nation’s mineral resources.

The widely expressed view was that the minister had exceeded his powers under Section 49 of the MPRDA by intending to issue a blanket notice. Litigation was again initiated, and at the time of publishing this article, there is uncertainty regarding the status of the moratorium notice.

On a positive note, stakeholders across the spectrum, including the largest, recognised trade unions in the mining industry, have spoken out against the actions of Minister Zwane, and there have been widespread calls for his resignation or sacking.

But this of course does not remedy the turmoil which the South African mining sector finds itself in, and large scale job losses loom.

While the South African and Tanzanian mining sectors are in turmoil, this does not mean that Africa is uninvestable.

Africa has a significant and, often, thriving mining and minerals industry, providing millions of jobs and opportunities. It is also a source of significant foreign direct investment, and the mining sector remains a substantial contributor to the GDP of many African countries with the benefits that this brings to the growth of those economies.

It is likely that demand for certain precious metals will continue to grow, and that the demand for the so-called “battery metals” will grow exponentially. All of this creates opportunities for investors, provided that the investors have a proper understanding of the various risks that are faced in these investment opportunities.

The investability of Africa is likely to depend, significantly, on balancing the growing need for mineral resources while at the same time, addressing concerns that multi-national companies extract value without returning benefits for the host countries, and ensuring that the vast socio-economic benefits that can flow from mining operations, materialise.

Warren Beech is global head for mining at Hogan Lovells in Johannesburg. Jessica Black Livingston is a deputy for mining at Hogan Lovells in Denver.

from How We Made It In Africa

29 Aug

Swapping ‘rubbish’ for food in Dunoon

Cape Town – Every Tuesday morning between 09:00 and 11:00, a handful of Dunoon residents gather at the Recycle Swop Shop at Inkwenkwezi Secondary School, bringing material for recycling.

In a long steel container, food and household items, toiletries, and donated clothes line the shelves, GroundUp reported.

Residents are “paid” with tokens according to the amount of items delivered for recycling and the tokens are then exchanged for food and clothes.

For some 30 women, this is their only job and their only way of providing for their families.

Alice Mahase starts her day at 05:00 seeing to her children and household before she sets off to collect plastic, mostly bottles.

‘Something purposeful’

On Tuesdays she delivers it all to the Swop Shop in blue recycling bags.

“I don’t have a job and I don’t want to just sit at home. I have been with the shop for four years and every week I can buy some clothes, food and stuff for my baby”

Louise Vonofakidis, who has run the container shop for five years said this way residents who couldn’t find jobs could still “do something purposeful for their families”.

Groups of friends club tokens together so that they can buy in bulk, she said.

The collected materials are sold to a recycling depot and the money is used to buy the food and household goods for the token system. There is always a shortfall.

Corporate sponsorships help but the organisation has to cover the deficit, which is why the project is in need of more local business support.

Manager Riaan van der Westhuizen and his wife Maria launched the project seven years ago after meeting with Marilyn van der Velden, who started the first Swop Shop in Hermanus.

“The original Recycle Swop Shop started out as a project that uses recycling as a tool to ‘help children help themselves’ and to provide ‘a hand up rather than a hand out’,” said Van der Velden.

The project was adopted by an organisation in Durban, The Domino Foundation, which provided sponsorship and corporate exposure.

Earlier this year, the foundation sponsored a team in the Cape Argus Cycle Tour to raise awareness about the Dunoon project.

The Van der Westhuizens also ran a swop shop in West Bank near Kuilsrivier but due to security and safety reasons, it closed.

Today, the Swop Shop has a presence in Dunoon and at a primary school in Philippi. The project’s goal is to empower the community and benefit their environment.

from News24

29 Aug

Kwale titanium miner rebounds to Sh1.71bn full-year profit

Base Resources has rebounded to full-year profit of Sh1.71 billion (AU$21 million) for the period ended June 30 from $20.9 million (Sh1.70 billion) loss a year earlier, the Kwale-based miner announced on Monday.

The Australia-owned large-scale mining firm attributed the performance to increased sales volumes, rise in commodity prices and cost management measures.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 81 per cent to AU$109.7 million (Sh8.94 billion) from A$60.6 million (Sh4.94 billion) the year before.

The firm said sales revenue from the Kwale mine exports rose 28 per cent to AU$215 million (Sh17.53 billion) from AU$169 million (Sh13.78 billion) in June 2016, hitting a new record since it made first shipments in February 2014.

READ: Future starts to look up for titanium firm as prices soar

Ilmenite volumes rose by a marginal 4.4 per cent to 501,676 tonnes, rutile increased to 91,991 tonnes from 85,536 tonnes, while shipments of zircon climbed to 34,566 tonnes from 33,062 tonnes last year.

The company said it also sold 9,501 tonnes of low grade zircon, volumes which it did not ship last year. The minerals were sold at an average price of AU$338 per tonne (Sh27,560), a 19.86 per cent jump, it says.

In Summary

Base Resources attributed the performance to increased sales volumes, rise in commodity prices and cost management measures

source from Nation

29 Aug

‘Solar key to sustainable energy supply in Nigeria,’ says report

In the oil-soaked West African nation of 187 million people, solar is slowly infiltrating every part of society in Nigeria. It is awakening entrepreneurial instincts, giving life to innovative payment models, and promising to restore at least some faith in the government’s ability to bring electricity to citizens used to frequent blackouts or no power at all.

A recent report produced by Power Nigeria, which is taking place from 5-7 September at the Landmark Centre in Lagos, highlighted the need for additional solar capacity in the country and what challenges the country faces to achieve this.

In 2017, financial closure is expected on at least some of the 14 solar plant projects announced in July 2016. If successful, they’ll bring a total of 1.2GW to Nigeria, largely in the north, far from most conventional generation capacity.

Nigeria is Africa’s most populous country and has power capacity of roughly 5GW (at peak in February 2016), but dropped to less than half that in January 2017.

Half of Nigerians have no access to grid-based electricity. About 40% of Nigerian grid-powered businesses use supplemental energy. The rule of thumb is 1GW is needed per million people, in a fully developed economy. That means Nigeria has a 181GW deficit. The 1.2GW of solar doesn’t make a dent.

Yet Nigeria aims for renewables to supply 30% of output by 2030. The social consideration is significant in a country suffering terrorist violence in the north, energy vandalism in the south, and poverty levels of 70%. One business solution is to initially provide smart metres only to those who pay bills, and use that revenue to build the infrastructure and subsidise other end-users. Instead, there is a push to get everyone a smart meter at once.

Despite the push for utility-scale solar, much of Nigeria’s solar power may start off-grid. As Nigeria’s growing community of solar PV entrepreneurs will tell you, anyone with a diesel or petrol generator is a potential solar client. In 2016, Nigeria imported US$23m worth of solar panels, not including integrated or plug-and-play solar kits. That makes Nigeria the world’s second largest solar panel importer among emerging economies, behind India, according to Bloomberg New Energy Finance.

Most of those panels weren’t meant for utility-scale projects. Nigerians have long sought out their own electricity sources, but for most, solar is not an obvious solution. It’s deemed expensive, they can be serviced poorly, and public awareness is low.

To help tackle these issues and bring the discussion of solar to the forefront, the Power Agenda conference at Power Nigeria will dedicate a day of discussion to different aspects of the solar chain. Verticals such as rural, urban and hybrid solar will be covered, as well as a session on supporting solar in Nigeria and how pay-as-you-go and mobile payment systems are changing the power business model.

Some of the key speakers on the day are: Olu Ogunlela, co-Founder, Gridless Africa; Tinyan Ogiehor, technical advisor (Solar PV), Solar Nigeria Programme (UK DFID programme); Suleiman Yusuf, CEO, Blue Camel Energy; Ifeanyi Odoh, regional sales manager – solar business, Schneider Electric; and Wale Rafael Yusuff, head of sales – Nigeria, Clarke Energy.

The 2017 edition of Power Nigeria will be the largest to date and is set to attract over 100 exhibitors from 11 countries, offering visitors a first look of some of the latest products available on the market covering a range of products relating to power generation, transmission and distribution. This year, there has also been a significant increase in country pavilions from one to three with representation from Turkey, China and India.

Some of the standout exhibitors this year include Cummins, Polycab, GWB Energy, Schneider Electric, Sterling & Wilson and Skipper Seil.

Power Nigeria draws on the strengths of Informa Industrial Group’s geographical foothold in the Middle East and Africa through its partner events Electricx and Solar-Tec in Cairo, and Middle East Electricity in Dubai, which holds the title of world’s largest power event.

Power Nigeria will take place at a new purpose built exhibition venue in Lagos – Landmark Centre, Nigeria from the 5-7 September 2017. Visitor pre-registration can be done online at www.power-nigeria.com

from how we made it in Africa

22 Aug

Nigeria: Government Joins 71 Countries to Combat Tax Evasion

Lagos — Nigeria has joined 71 other countries to combat tax evasion as the Federal Inland Revenue Service has signed two major multilateral instruments.

These instruments are the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) and the Common Reporting Standard (CRS) Multilateral Competent Authority Agreement‎ (CRS MCAA).

Chairman, Mr. Tunde Fowler, Executive Fowler signed the agreements on behalf of Nigeria in Paris, with Mr. Ben Dickinson, head of global relations and development division of the Organisation for Economic Cooperation and Development (OECD), in attendance.

A statement issued by Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration (CTPA), said the signing of the agreements makes Nigeria the 71st jurisdiction to sign the MLI and the 94th jurisdiction to join the CRS MCAA.

The agreements will give Nigeria automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the country’s ability and those of the other countries to contain tax avoidance and evasion as well as share financial data.

The MLI is a legal instrument designed to prevent Base Erosion and Profit Shifting (BEPS) by multinational enterprises. It allows jurisdictions to transpose results from the OECD/G20 BEPS Project, including minimum standards to implement in tax treaties to prevent treaty abuse and “treaty shopping”, into their existing networks of bilateral tax treaties in a quick and efficient manner.

The text of the MLI, the explanatory statement and background information are available on OECD website along with the list of the 71 jurisdictions participating in the MLI and the position of each signatory under the MLI.

The CRS MCAA is a multilateral competent authority agreement based on Article 6 of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which aims to implement the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS) and to deliver the automatic exchange of CRS information between 101 jurisdictions by 2018.

The text of the CRS MCAA, background information and the list of the 94 signatories are available on OECD website. Saint-Amans explained that the agreements will provide “automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the ability of countries to contain tax avoidance and evasion.

It would be recalled that Fowler has said with the introduction of Voluntary Assets and Income Declaration Scheme (VAIDS), no Nigerian can evade tax payment.

According to him, the board has received positive response so far on the scheme. To improve tax compliance, the Federal Government said tax offenders stand to enjoy 29 per cent waiver on overdue taxes if they take advantage of VAIDS. The VAIDS programme is aimed at reducing tax payers’ liability and creates more awareness on the statutory function of every working citizen to pay tax.

The scheme which started July 1, offers a window for those who, before now, have not complied with extant tax regulations to remedy their positions by providing them limited amnesty to enable voluntary declaration and payment of liabilities.

source from allAfrica

21 Aug

A.P Moller Raises $550m for Africa Infrastructure Fund and Targets $1bn in 12 months

A.P. Moller Holding, a privately held investments company with approximately $20bn under management has launched a new infrastructure fund with a focus on Africa. The fund has received commitments of $550m from large Danish pension fund anchor investors including PKA, PensionDanmark and Lægernes Pension. Following first commitments, the fund will be open for additional institutional investors for the next 12 months with the goal of raising $1bn. It will focus on investments in infrastructure in Africa to support sustainable economic growth in the region while delivering an attractive return to its investors. The fund will be managed by A.P. Moller Capital, and will have a duration of 10 years with an initial target of 10 to 15 investments in total. According to AfCD typical investments are expected to range between $50 million and $200 million in size, with priority being given for opportunities in ten African countries, Nigeria, South Africa, Ghana, Egypt, Kenya, Cote d’Ivoire, Tanzania, Morocco, Ethiopia and Senegal.

Commenting on the capital raised so far, Kim Fejfer, Managing Partner and CEO of A.P. Moller Capital explained:

“We are very pleased with the significant support from the Danish pension funds and A.P. Moller Holding. Together, we will build and operate infrastructure business in Africa to support sustainable development and improvements in living standards across the continent. We will combine the best from industry in terms of project management and operational capabilities with the best from private equity in terms of agility and focus…”

Peter Damgaard Jensen, CEO at PKA:

“PKA has for many years invested in infrastructure both in Denmark and abroad. We have positive experiences investing in Africa and we have for a long time wanted to invest more on the continent. With this new fund we will be making infrastructure investments in Africa and get the opportunity to provide a good return to the pension savers and at the same time make a positive difference in line with the UN Sustainable Development Goals.”

Source from estateintel