Africa, African Development Bank, Ghana, Invesments, South Africa

Africa Focused News

by Dario Galluccio

Ghana: COCOBOD gets $1.2 billion to purchase cocoa beans

Parliament has approved a $1.2 billion loan facility for the Ghana Cocoa Board (COCOBOD) for the purchase of cocoa beans for the 2013/2014 crop season.

The credit facility is an arrangement between the Ghana COCOBOD and a consortium of several international and local banks with the Government of Ghana as the guarantor. The facility is to enable COCOBOD to raise funds to purchase 830,000 tonnes of cocoa from farmers for the crop season.

The lenders include the Bank of Tokyo-Mitsubishi UFJ, Credit Agricole Corporation and Investment Bank, First Rand Bank Limited, Nedbank Limited and Societe General.

The cocoa industry has contributed significantly to the economic development of Ghana over the years. In 2010, cocoa contributed about a quarter of the Gross Domestic Product (GDP), with the industry creating employment for millions of Ghanaians and has served as a major foreign exchange earner for the country over the years. Cocoa production has also increased significantly since the 1999/2000 crop season, reaching an all-time high of one million metric tonnes in the 2010/2011 crop season.

The increase in the levels of production requires substantial financial resources to enable the COCOBOD to finance the purchase of the cocoa beans; that was why the offshore syndicated trade finance arrangement was put in place in 1994 to secure a loan facility for that purpose.

East Africa: Delonex Energy will invest US$600 million

Delonex Energy Ltd, an energy sector company, plans to invest US$600 million in financing oil and gas projects in several African countries, including Mozambique.

One of the investment areas will be East Africa’s rift valley, which runs from the Red Sea through Ethiopia, Kenya, Uganda, Tanzania and Mozambique.

The main investor in this project is a consortium led by Warburg Pincus LLC, a private equity company, which previously financed Kosmos Energy allowing it to discover an oil field in Ghana.

Ghana: GPHA seeks 1.5 billion dollars for expansion

The Ghana Ports and Habours Authority, GPHA, requires $1.5 billionto expand the Tema Port.

The expansion, which is necessary to meet traffic growth, transshipment and transit demands will involve the dredging of the basin and access channel, construction of new break, dry and liquid bulk terminals and a new fruit container terminal among others.

The proposed project is to be financed through commercial loans, government of Ghana funding and public-private partnership.

South Africa: Investec approves $813 million debt for renewables

Investec Bank Plc said it’s able to provide 8 billion rand ($813 million) in debt funding for clean-energy projects in South Africa as the country adds wind and solar output. The money would be used to finance plants in the nation’s third renewables bidding round.

South Africa, seeking to cut dependence on coal for power, intends to add 3,725 megawatts of renewable-energy capacity by the end of 2016 with five tenders. That may help state utility Eskom Holdings SOC Ltd. meet demand as it struggles to fund maintenance and expansion in the continent’s biggest economy.

The second round attracted bids from Electricite de France SA (EDF), Tata Power Co. and Acciona SA (ANA). The deadline for submissions in the third is Aug. 19.

Investec has participated in about 20 billion rand of financing for South African clean-energy and renewable ventures so far, including 6.4 billion rand of debt.

Ghana: Financial institutions will access 700-million euro facility

From August 2013, various financial institutions, agents and merchants can access part of a 700-million euro facility to roll out branchless banking infrastructure.

The credit facility, provided by the German agency KFW, will be available for the deployment of e-zwich hybrid Automated Teller Machines (ATM), hybrid Point of Sales (POSes) devices, merchant e-zwich cards as well as agent e-zwich cards and related logistics.

Head of Business Development at GhIPSS, Mrs Mary Dei Sarpong ,said the facility from KFW was a four-year concessionary loan with a year’s grace period, and is to help financial institutions undertake branchless banking by deploying ATMs and POSes, which can accept both e-zwich cards and normal ATM cards.

She said banks, savings and loans companies and rural and community banks as well as merchants and agents could access the loans via application forms on the GhIPSS website. Mrs Dei Sarpong explained that while the banks could access the loans directly, the savings and loans companies, as well as merchants and agents would only be able to do so through their sponsoring banks. She also mentioned that individual rural and community banks could apply for the loan through the ARB Apex Bank.

Kenya: World Bank will finance Kenya, South Sudan road project

The World Bank has pledged to finance Kenya’s Lodwar-Nadapal link-road project to South Sudan, a key infrastructure that will boost trading activities between both nations.

In an official statement, the bank’s Lead Transport Specialist for Africa, Josephat Sasia, said the construction which is part of the Eldoret Napal 595-kilometre project embarked upon by the World Bank, will be administered by the Kenyan National Highways Authority as an initiative to improve Kenya’s infrastructure.

Sasai disclosed that the cost of the project is yet to be ascertained, pending the completion of designs – which is slated for September – but noted that the funds will be disbursed by the apex bank through its regional transport facilitation programme. He, also, expressed optimism over the quality and pace of infrastructural development in the country, stating that the economy stood a better chance of developing through infrastructural expansion.

Earlier this year, the World Bank partly funded a 960km stretch of road connecting the two East African states and has so far disbursed an estimated $1.2 billion for various infrastructural projects across the East African country.

Kenya: Boom for East Africa economy as Kenya removes roadblocks

The Kenyan government has removed roads blocks along its roads to Rwanda. The roadblocks have been a cause for delays when transporting goods to Rwanda. The presence of many traffic police officers in the over 25 roadblocks has also been linked to increasing bribery and other corrupt practices. The move is a boost to the East African common market which came into force in 1st July 2010. Known as The East African Protocol, the agreement was passed by heads of the five member countries; Kenya, Uganda, Tanzania, Burundi and Rwanda.

The removal of the roadblocks comes at a time when massive economic gains awaits the region with the discovery of oil deposits in Northern Kenya and Uganda. More gold deposits have also been discovered in Tanzania. Free flow of goods, labor, capital and services are some of the key pillars of a free market economy as envisaged in the East African Protocol.

Africa: Marriott, Starwood and Hilton increase their investments

Marriott International Inc. (MAR), Starwood Hotels & Resorts Worldwide Inc. (HOT) and Hilton Worldwide Inc. are turning to Africa, where a growing middle class and rising travel are fueling the fastest pace of hotel development in the world.

Marriott, that plans 3,900 rooms at 22 hotels, has increased the number of hotel rooms it plans on the continent by 55 percent from last year. For Starwood, which plans to increase its number of properties in Africa to 50 by 2016 from 38 today, the revenue per available room in Africa and the Middle East is the highest of any region worldwide, the average room rates were $209.87 in the fourth quarter. The high-end Transcorp Hilton Abuja, in Nigeria’s capital, commands some of the steepest management fees in the world for its operator, according to Lagos, Nigeria-based hotel-consulting firm W Hospitality Group, in fact in Abuja, a shortage of high-end hotels combined with rising demand allows Hilton to charge more than $400 a night for its rooms and lets the hotelier collect some of the highest management fees in the world.

Hotel investors and operators, finding growth slowing in mature European and U.S. markets, are expanding in Africa as the continent is buoyed by increasing trade with countries including China and rising demand for services such as lodging. More than half of Africa’s countries probably will post gross domestic product growth of 5 percent annually through 2016.

Africa: Tourism growth

Tourism revenue in Kenya is forecast to rise to more than 100 billion shillings ($1.15 billion) this year from 96 billion shillings in 2012, the country’s tourism authority said last month. In South Africa, tourist arrivals rose 10 percent to a record 9.19 million last year, driven partly by an increase in visitors from Asia, President Jacob Zuma said in April.

When it comes to Africa, many people have tended to focus on the negative — the wars, the corruption,” Ward of W Hospitality said in a telephone interview. “But there is not that much opportunity left in the more-developed markets like Europe and in the U.S. for new hotel developments. Today, Africa is seen as a big blank block on the map where hotel companies need a presence in.”

With seven of the 10 fastest-growing countries in the next five years likely to be in Africa, average growth on the continent probably will outpace Asia’s, according to IMF data.

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