REPORT OF WEDNESDAY 09/10/13
By Dario Galluccio
This Blog is sponsored by http://www.reflexecogroup.com
Ghana: Pension savings seen rising fivefold driving sales
The end of a monopoly by Ghana’s state-owned pension fund is poised to boost savings fivefold by 2017, helping revive the nation’s corporate bond market and end a drought in initial public offerings.
According to Ekow Fynn-Aikins, regulations officer at the National Pensions Regulatory Authority in Accra, the retirement industry, with assets of 1.06 billion cedis ($484 million) in 2012, may jump to 5.5 billion cedis over the next four years.
While the Ghana Stock Exchange’s Composite Index (GGSECI) has climbed 68 percent this year, the best performance in Africa, the bourse’s last IPO was more than two years ago. No company has sold bonds on the domestic market since 2008.
“There’s a perceived demand out there for new issues,” Sam Mensah, chairman of the Ghana Stock Exchange and an adviser at the Finance Ministry, said in an interview. “It’s still early days and we’ll have to wait for the pension industry to grow to know exactly what their impact can be.”
Since Ghana implemented a 2010 law in December compelling employers to commit more toward workers’ pensions and set aside contributions for private money managers for the first time, volumes on the bourse surged 75 percent as of June. The number of pension managers increased to 45 from zero when the authority began registering last year.
Nigeria: $41.3m provided for agro-processing exports
A total of N6.6 billion ($41.3 million) has been provided by the Nigerian Export-Import Bank (NEXIM) to fund the activities of Agro-processing export businesses across the country. The bank noted that the funds were offered from August 2009 to April 2013, adding that it had also disbursed over N12 billion ($75.02 million) to manufacturers for export purposes, mostly those which display the ‘Proudly Nigeria’ emblem on their products.
The bank is looking to enhance Nigeria’s non-oil sector growth by providing the necessary capital required to boost regional trade, noting that Nigeria agricultural sector – which contributes over 40 percent to GDP – is a critical area in diversifying the economy.
Ghana: GCB grows interest income
Ghana Commercial Bank Ltd (GCB), by virtue of its wide distribution over the length and breadth of the country, has managed to grow its interest income by 47 per cent over the 2011 figure of Gh¢256.62 million. The growth is not only attributed to the bank’s intricate network of branches but also to the bank’s ability to introduce innovative products and services onto the market while carefully exploiting growth opportunities on the financial terrain.
GCB ended the 2012 financial year with a record interest income value of GH¢376.09 million which distinguishes the bank, even from its fellow tier one banks in terms of fund mobilisation and ultimately interest income.
The bank extended its impressive financial performance for the full year (2012) into the current financial year.
For the first six months of operations, the bank recorded a total interest income of GH¢256.76 million, representing a growth of 71 per cent compared to the prior period. The premier bank in Ghana saw its profits before tax growing by 81 per cent despite significant growth recorded in operating expenses as well as interest expenses.
For the half year period, GCB’s net profit after tax was GH¢90.43 million, representing a growth of 80 per cent year on year.
Tanzania: Isles courts Chinese investors
The Zanzibar First Vice- President, Seif Sharif Hamad, has asked investors from China to establish businesses in the Islands, saying there are ample opportunities in the tourism sector.
“We would love to have investors from China to invest in tourism including eco-tourism in Pemba Islands. The investment climate is conducive,” said Hamad to China Councillor General in Zanzibar, Mr Xie Yun Liang.
The Vice-President informed the ambassador that Zanzibar also welcomes investments in deep-sea fishing. Liang, who was recently appointed to the post, visited Hamad for familiarization.
“The government has been improving infrastructure which include expansion of the Zanzibar International Airport, roads, and having stable supply of electricity,” he said.
Ambassador Liang welcomed the offer saying that the historical relationship between China and Zanzibar would be further cemented by the coming of investors from China.
Ghana: MPC projects 9% end-year inflation
The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) is projecting that the end year inflation rate for the economy will hinge above the nine per cent target in the last quarter of 2013. According to the committee, although the inflation forecast had improved recently, the central path remained slightly above the upper limit of the target band, which is a possible increase above the nine per cent.
Even though inflation had declined in August, upside risks remained following the further adjustment in petroleum prices and transport fares in September and early October.
These risks could however be moderated by an improved harvest, relative stability in the foreign exchange market supported by the syndicated cocoa loan, and subdued global inflation, as a result the bank is of the view inflation could move back to the target range by the first half of 2014.
Inflation has been on the rise for six consecutive months, that is from January to July, recording the highest rate of 11.8 per cent, and fell marginally to 11.5 per cent at the end of August.
Uganda: To seek investor to build $2.5 Billion oil refinery
Uganda is looking for a lead investor to develop a refinery estimated to cost $2.5 billion, two weeks after issuing its first production license to China National Offshore Oil Corp. as it seeks to exploit reserves.
The investor, either a company or a group of them, will be named by April and will take an interest of as much as 60 percent in the facility, which is proposed to have capacity of 60,000 barrels a day, Robert Kasande, an assistant commissioner in the Energy Ministry, said today by phone from Entebbe, near the capital, Kampala.
Uganda, classified as one of the world’s poorest nations by the World Bank, discovered oil in 2006 and has an estimated 3.5 billion barrels of crude, according to the Energy Ministry. London-based Tullow Oil Plc (TLW), Cnooc and France’s Total SA (FP) are jointly developing the finds. The country has sub-Saharan Africa’s fourth-biggest oil reserves.
The government’s stake in the facility will account for as much as 40 percent, and the nation has invited Kenya, Rwanda, Burundi and Tanzania, which are partner countries in the East African Community, to buy an interest of as much 10 percent in the facility from Uganda, he said.
World Bank cautions Ghana on rising debt
The World Bank has cautioned Ghana against its rising debt, which it says has the tendency to stifle the country’s economic growth and deepen poverty.
Ghana’s debt currently stands at GHc43.9 billion (49.5 per cent of Gross Domestic Product (GDP)) at the end of August 2013.
Presenting the economic strides for countries in the African sub-region at a teleconference beamed from Washington in the United States of America (USA) to Accra, the Deputy Regional Chief Economist of the World Bank Africa Region, Mr Francisco Ferreira, attributed Ghana’s rather high financial deficit to an increase in the country’s infrastructure development and pro-poor programmes.
The economy of Ghana is still facing liquidity challenges, with both revenue receipts and expenditure falling below their targets, nine months into the year. The only exception is compensation for workers, which has overshot its target by 2.2 per cent, but Mr Diop indicated that the country could take charge of the situation if it improved its macroeconomic output.
Tanzania: Inflation down to 6.1 percent
The inflation rate went to over two and half years’ low rate of 6.1 per cent last month, showing that the country’s economy is on the right track. National Bureau of Statistics (NBS) indicates that the inflation descended from 6.7 per cent of August to 6.1 per cent in September, this year. The decline, according to NBS, was supported by all four major measures of inflation index – energy, food and non-food and non-energy – that also decreased satisfactorily in September.
The new National Consumer Price Index released by NBS for September also indicated that the Annual Inflation Rate for energy and fuels has decreased to 9.6 per cent in September compared to 15.2 recorded in August.
While the Tanzania rate descends to a pleasing level, in Kenya and Uganda the inflation rate climbed up in September to 8.29 per cent and 8.0 per cent from 6.67 per cent and 7.3 per cent in August respectively.
Tanzania’s inflation rate averaged 7.72 per cent from 1999 until 2013. It reached an all time high of 19.8 per cent in December, 2011 and a record low of 3.4 per cent in February, 2003.
Nigeria, Brazil: To sign MoU on trade, investment
Nigeria and Brazil in Abuja signed a Memorandum of Understanding (MoU) to strengthen their bilateral cooperation on trade and investment. The Minister of Industry, Trade and Investment, Mr Olusegun Aganga, signed on behalf of Nigeria, while Mr Ricardo Shaefer, his Brazilian counterpart on Development, Industry and Foreign Trade, signed for his country. The News Agency of Nigeria (NAN) reports that the agreement aims at strengthening bilateral cooperation on the promotion and facilitation of trade and investment between the two countries.
According to Aganga, the agreement goes beyond trade and investment to include industrial cooperation and financing as well as how both countries can double their trade volume. The minister listed the sectors covered by the MoU to include infrastructure, power, automobile, agriculture and sugarcane to sugar among others.
“This agreement will cover cooperation in all these areas including how we double trade between the two countries, and of course how we attract investment into strategic areas of the economy.”
- World Bank cautions Ghana on rising debt (ghanabusinessnews.com)
- World Bank cautions Ghana on rising debt (modernghana.com)
- Nigerian bank to takeover ICB Ghana – BoG (ghanabusinessnews.com)
- ICB Ghana To Be Taken Over By First Bank Of Nigeria (spyghana.com)
- Republic Bank now single largest shareholder in HFC Bank Ghana (caribbean360.com)
- Uganda Seeks Investor to Build $2.5 Billion Oil Refinery (bloomberg.com)
- Ghana Pension Savings Seen Rising Fivefold Driving Sales – Bloomberg (bloomberg.com)
- Republic Bank now holds 40% stake in Ghana’s HFC Bank (ghanabusinessnews.com)
- More jobs in sight as Nissan to build cars in Nigeria – Financial Times of London (transformationwatch.com)
- World Bank forecasts drought in Nigeria (kaykayjabari.wordpress.com)