REPORT OF TUESDAY 15/10/13
by Dario Galluccio
This Blog is sponsored by http://www.reflexecogroup.com
Africa shows interest in Zimbabwe
Fellow African countries are continuing to show keen interest in bringing their investments into Zimbabwe, an investment expert has said. Traditionally, Asian and European countries have been known to invest in Zimbabwe. Imara Zimbabwe executive director Mr Tino Kambasha told that large African capital firms are now showing a lot of interest in the country. He added that the fact is that one cannot ignore Zimbabwe and its large consumer base anymore as many equity fund managers are eager to explore opportunities for strong capital growth and high equity yields.
A Kenyan private equity firm, Fanisi Capital, announced recently that it will launch its second fund of US$100 million to be invested in new markets across Southern Africa before the end of next year, a company official said. Botswana Stock Exchange-listed retail group Choppies Enterprises last week announced the acquisition of 49 percent of an unnamed Zimbabwean supermarket chain comprising 10 stores.
Ghana: Mumuadu Rural Bank doubles profit
Mumuadu Rural Bank, with its headquarters at Osino in the Eastern Region, last year recorded an after-tax profit of GH¢1,146,040, as against GH¢681,164 made in 2011, an increase of 95.47per cent. Deposits also rose from GH¢13,685,229.70 to GH¢17,785,105.35 (29.95 per cent) while investments rose from GH¢3,536,092.65 to GH¢3,709,715.06 within the same period. Such gains, especially profit, according to the chairman of the Board of Directors of the bank, Mr Seth Adom-Asomaning, made it possible to increase loans and advances from GH¢9,843,500 to GH¢14,270,526 in the year under review.
Africa: Tourism to boom
Africa’s tourism sector is set to boost economic growth, create new jobs and outpace other regions for new tourism investments. A World Bank report, which made this known, indicated that Africa’s tourism industry is expected to directly employ 6.7 million people in the region by 2021. Sub-Saharan Africa, it noted, earned over $36 billion from tourist visits in 2012 accounting for 2.8 percent of the region’s Gross Domestic Product (GDP).
Themed, ‘Tourism in Africa: Harnessing Tourism for Growth and Improved Livelihoods,’ it said the continent attracted 33.8 million visitors in 2012, up from a low of 6.7 million in 1990.
The report said tourism accounted directly or indirectly for one in every 20 jobs in sub-Saharan Africa in 2011, and is one of the few industries on the continent in which women are well represented as employees and managers.
Makhtar Diop, World Bank Vice President for Africa, said Africa’s private companies are increasingly attracting regional and international investment and the returns on investment in Africa are among the highest in the world. He advised African governments to improve transport, electricity, infrastructure and other key services to develop tourism for more broad-based growth and improved livelihoods.
The report highlighted the potential of African countries to improve and expand their tourism sector, and suggested that 33 of sub-Sahara Africa’s 48 countries currently have the capacity for tourism success through establishing strong political support for developing the industry and attracting increased private investment to help finance and sustain it.
The report said African countries can compete with other tourist-rich regions of the world if they can effectively plan for and integrate tourism into their economies.
Ghana: Citizens Rural Bank records impressive gains
The Citizens Rural Bank, Nsawam, last year recorded a profit before tax of GH¢ 137,532.00 as against GH¢ 50,796 in 2011, showing a 100 percent increase. Mr Emmanuel Yevenyo, Acting Chairman of the Board of Directors, disclosed this at the Fourth Annual General Meeting (AGM) of the Bank at Nsawam at the weekend. The bank’s asset book stood at GH¢ 2,260,329.00 from GH¢ 1,232,205.00 in 2011. Mr Yevenyo said the bank’s customer deposit saw a slight improvement from GH¢ 1,109,364.00 to GH¢ 1,975,351.00.
Mr Yevenyo said out of the 137 rural banks operating in Ghana, the Citizens Rural Bank was at the 41st position saying it could do better. Mr Kwadwo Aye Kusi, Managing Director of the ARB Apex Bank, advised the bank to put in place pragmatic and realistic programmes and policies such as risk management, staff training and product development and customer service to ensure its sustainability.
Nigeria: Oando receives $815m offer for ConocoPhillips buyout
Pan-African energy corporation, Oando Inc., says it has received credit facility offers of up to $815 million for the buyout of ConocoPhillips’ $1.790 billion worth Nigerian onshore assets. The American energy company had agreed to sell its Nigerian operations to Oando December last year, after 46 years of operation in the oil-rich West African country.
According to a Newswire, the Lagos-headquartered company, which already made an initial deposit of $400 million to ConocoPhillips, said the loan support would comprise a $465 million Reserve Based Lending Facility made by BNP Paribas, Standard Bank and Standard Chartered Bank; and another $350 million Senior Secured Loan, jointly arranged by First Bank Capital and First City Monument Capital.
Commenting on the offers, Chief Executive Officer of Oando, Pade Durotoye said they were significant steps towards the buyout adding that the company “will now proceed to the final stage of concluding the financing required for the purchase.”
Considered as Nigeria’s leading integrated energy solutions providers, Oando engages in every aspect of the energy value chain, from exploration, production to marketing, distribution and power generation.
Ghana: Government optimistic meeting revenue targets
Government is optimistic of meeting revenue targets with new tax hikes despite present difficulties with collection of the taxies. Government is basing its optimism on business activities that picked up in the last quarter of this year.
In August this year, government introduced three new taxes to address revenue shortfalls. These include the National Stabilization Levy and Customs and Excise Bill – however the third bill, Special Import Bill, is yet to be laid before Parliament.
The state has so far been able to collect GH¢ 25 million from the GH¢ 371 million revenue target. There are fears the country might not realize the revenue target because of a slowdown in business activities, as well as smuggling activities at the ports; but Deputy Minister of Finance, Kweku Ricketts-Hagan said the Ministry has instituted measures to ensure the GH¢ 371 million target is realised.
“Taxes may be the main revenue stream but there are other revenue streams as huge as taxes that also come – so it becomes a case of prioritinsing your expenditure”, he said.
Meanwhile, banks, mining firms, telcos and other financial institutions would by the end of this month be giving away 5% of their profits as Stabilization Levy.
Nigeria: Total to fund contractors under $7.5Bn initiative
Total E&P Nigeria Limited and Total Upstream Nigeria Limited, in partnership with 8 banks have launched a $7.5 billion Nigerian Contractors’ Initiative (NCI) to create a sustainable funding channel for the energy giants’ local contractors.
Based on the Memorandum of Understanding (MoU) which is in line with the Nigerian local content policy, the contractors, which include vendors and suppliers, will sufficiently receive capital which also will be domiciled with the partnering banks. Total MD/CEO Mr. Guy Maurice, said over the weekend the MoU provides for sustainable funding relationship between the banks and Total’s indigenous contractors.
Mr. Jibril Aku, the Managing Director of Ecobank Nigeria, one of the partnering banks, explained the finance programme would help sustain the contractors and help them play a more active role in the oil and gas sector.
The partnering lenders for the NCI include Ecobank Nigeria, Zenith Bank, Diamond Bank, Guaranty Trust Bank (GTBank), United Bank for Africa (UBA), Standard Chartered Bank, Access Bank and Fidelity Bank.
Ethiopia: To launch Eurobond
Ethiopian Prime Minister, Hailemariam Desalegn says his country is planning to launch a Eurobond once it secures its credit rating, but it will not open its telecoms and banking sectors to foreigners as revenue drawn from both sectors helps fund development of infrastructure.
Foreign appetite for African bonds has been strong as investors scramble for high yields. However, Prime Minister Desalegn’s declaration may disappoint foreign investors who had hoped for a paradigm shift from the state-led policies of former Prime Minister Meles Zenawi, who died last August.
The Prime Minister told journalists that he would stick to a policy that has kept the telecoms monopoly in state hands and the banking sector – dominated by three state institutions – off limits to foreigners, as income or financing from those entities is being used to develop the country’s infrastructure. Dasalegn also said that the East African nation is willing to harness the international debt market by issuing an external bond to relieve the country’s foreign currency shortage.
According to him, Ethiopia will also launch other bonds alongside Eurobond.
Although Prime Minister Desalegn did not give an exact date on when the country will get a credit rating, he hinted that it is at a critical stage alongside the issuance of the bond. A credit rating allows countries to access funds outside their country. The possession of a good credit rating attracts Foreign Direct Investment because it gives investors information about the economic stability of the country they are investing in.
Meanwhile, Ethiopian State Minister of Finance and Economic Development, Abraham Tekeste said the Ethiopian economy grew by 9.7% in the past fiscal year. Ethiopia, sub-Saharan Africa’s fifth largest economy, expects FDI of about $2 billion a year through 2015.
Zambia: More investors target mining sector
Several Chinese investors have expressed interest in investing in Zambia’s mining sector through the United Nations (UN) South-South Cooperation initiative, Commerce, Trade and Industry Minister Emmanuel Chenda has said.
Mr Chenda said in an interview that on the sidelines of the recently held UN General Assembly in the United States of America (USA), he met with several potential investors, among them Chinese, who expressed interest in setting up mineral exploration ventures in Zambia.
Meanwhile, Mr Chenda said the benefits of Government’s intervention to remove the subsidy on fossil fuels has started paying off as a number of other renewable forms of energy are being identified. The minister reiterated that maintaining the subsidy on fuel could have negatively affected the country’s capacity to generate energy from other sources.
- Sub-Saharan Africa attracts 33.8 million visitors from tourism in 2012 – World Bank (ghanabusinessnews.com)
- Africa’s Tourism Set to Boost Economic Growth, Create New Jobs, and Now Outpace Other Regions for New Tourism Investment (appablog.wordpress.com)
- World Bank expects 4.9% strong economic growth in sub-Saharan Africa end of 2013 (ghanabusinessnews.com)
- World Bank cautions Ghana on rising debt (modernghana.com)
- Why tech giants are investing in Africa (bbc.co.uk)
- Africa Must Benefit From its Mineral Resources (atlantablackstar.com)
- Fast-food giants want pizza the action in Africa (charlesomache.wordpress.com)
- Into Africa: The risks and opportunities for financial services professionals (news.efinancialcareers.com)
- Africa Continues to Grow Strongly but Poverty and Inequality Remain Persistently High (appablog.wordpress.com)