REPORT OF THURSDAY 24/10/13
by Dario Galluccio
This Blog is sponsored by http://www.reflexecogroup.com
Ghana: Nigeria’s gas supply insufficient for energy push
Ghana has reaffirmed plans to develop its gas resources, which will aid a steam-driven thermal power generation push, as gas supply from Nigeria proves insufficient.
The West African Transnational Gas Pipeline (WAGP), established in 1982 to supply gas from Nigeria to neighbouring countries, was billed to provide 70 million cubic feet daily to Ghana, but currently delivers 50 million cubic feet — well below the agreement. In addition, the country’s demand for gas, which will drive an increase in energy output, has risen well above the maximum supply the regional pipeline can potentially offer, hence the need to develop its own resources.
The West African Gas Pipeline as designed today can only give us 170 million cubic feet. We need extra investment to be able to move from 170 to 240 in order to realise the full potential of that pipeline,” said Kirk Koffi, a deputy chief executive of the Volta River Authority (VRA), Ghana.
According to Koffi, the future of Ghana’s energy was dependent on its ability to meet the local gas consumption, noting that the country could no longer rely on irregular supply from its West African neighbour.
Nigeria: Stock Exchange records $213.5m increase in market cap
The Nigerian Stock Exchange (NSE) has recorded a N34 billion ($213.5 million) rise in its market capitalization, following positive returns on several blue chip stocks.
Tuesday’s trading, 22th October, at the bourse revealed a 0.29 percent appreciation from N11.905 trillion ($74.76 billion) at the start of business, to close at N11.939 trillion ($74.97 billion). An outcome that strengthens the Exchange’s target for a $1 trillion market cap by 2016. According to analysts, the stock appreciation is a result of its positive year-end earnings.
Companies that topped the gainers list include Forte Oil, which led the chart with a N6.58 ($0.04) gain to close at N70.88 ($0.45). Other gainers were Guinness Nigeria, with N6.06 ($0.038) to close at N246.02 ($1.54), and Nigerian Breweries, up to N176 ($1.1) after a N4 ($0.025) appreciation. Indigenous oil firm, Conoil, also managed a N1.92 ($0.012) gain to end the day N40.48 ($0.25).
Ghana: BoG disseminates 2012 Foreign Capital flow survey
Ghana continues to attract a significant share of total Foreign Direct Investment (FDI) flows to Sub-Saharan Africa (SSA), a survey conducted by the Bank of Ghana (BOG) has shown.
The BOG’s 2012 Foreign Private Capital flows survey which was launched in Accra on Wednesday by the first Deputy Governor, Mr Millison Narh, indicated that in 2012, Ghana was ranked as the third highest recipient of FDI flows in SSA during 2011 by the World Investment Report on account of the newly developed Jubilee Oil field. However, FDI inflows to Africa in general, declined for the third successive year, though at a much slower pace to 42.7 billion US dollars in 2011 from 43.1 billion US dollars; but excluding North Africa FDI inflows to Sub-Sahara African increased to 37 billion dollars in 2011 from 29 billion dollars in 2010.
The survey sample was selected among entities in all the regions except the two upper regions with the objective of capturing Ghanaian enterprises with foreign direct investment and borrowing. At the launching of the survey, the findings, together with data obtained from monetary and financial sources for private cross border liabilities, showed that the economy recorded total external liabilities of 27.9 billion dollars in 2011, from 24 billion dollars in 2010. “This reflected an accumulated inflow liability position of cross border capital of 3.9 billion dollars in a year”.
Nigeria: Tiger Brands pushes for 70% stake in Dangote Flour Mills
Tiger Brands Limited, a leading South African foods company, seeks to increase its stake in Dangote Flour Mills (DFM) to 70 percent.
At a recent Nigerian Stock Exchange filing, Tiger Brands, which currently holds 63.35 percent in the company, indicated interest in buying an additional 332.5 million ordinary shares of 50 kobo each at N9.50 per share from minority shareholders to bring its stake to 70 percent. According to a report, Dangote Group will retain a 10 percent, Tiger Brands 70 percent, while other investors will have 20 percent.
Following the earlier acquisition of the 63.3 percent, the CEO of Tiger Brands, Mr. Peter Matlare, said he was “pleased with the successful conclusion” of the transaction, saying it would present growth opportunities for both organisations. He said the company would “go up to a maximum of 70 percent in total, leaving the balance in Nigerian hands.”
Rwanda: Chinese investors interested by Rwandan opportunities
A delegation of 20 Chinese investors from Zhenjiang Province has arrive in the country to assess the investment opportunities. While meeting officials from Rwanda Development Board (RDB), the group expressed interest in establishing light manufacturing plants for instance for the production of textiles. RDB CEO Valentine Rugwabiza noted that Rwanda is ready to assist them in their quest to invest in the country.
“Rwanda-Chinese relations are built on 46 years of continually improving commercial and diplomatic relations, and Rwanda offers one of the best business environments in the world which means that our government will provide you with all the required assistance as you plan to invest in Rwanda,” Rugwabiza said.
The head of the Chinese delegation, Justin Yifu Lin, a former chief economist and Senior Vice president at the World Bank and now a professor of Economics at University of Peking, China, said that investors want to tap into Rwanda’s labor force by creating factories that provide employment to thousands.
Helen Hai, an expert on China-Africa Investments, said that they were impressed by Rwanda’s efforts to facilitate investment in terms of business-friendly procedures and steady infrastructural development.
Rwanda has witnessed increased Chinese investment over the last five years, with over $219 million invested in sectors like construction, tourism and agriculture.
Ghana: 98% of working population economically active
According to the latest Ghana Living Standards Survey Labour Force report, only about 1.9 percent of the economically active population is unemployed.
The report says 75.7 percent of persons who are 15 years and above are economically active. The unemployment rate among 15 years and above is however higher in urban areas- about 3.6 percent than rural areas. The jobless rate is also higher among females-3.8 percent than males. It is higher among the age group 15-24 compared with 1.7 percent for the aged group 25-44 years.
A total of 21,554 persons were captured of which 10,486 were men and 11,068 were women.
With regard to the sector employment, 52.0 percent of persons who are 15 years and older are engaged in agriculture, forestry and fishing. It is followed by wholesale and retail trade with 15.9 percent. 46.8 percent of the employed persons are self employed without employees.
Kenya: Real Estate investment trusts rules fail to pique market interest
Four months after the Real Estate Investment Trusts regulations were gazetted, the Capital Markets Authority is yet to register any Reit scheme or Reit managers. The regulations were created to introduce a new tool in the capital markets to spur investments, while allowing more people to own a share of the real estate market through the Nairobi Securities Exchange.
CMA is however yet to receive a single application from promoters seeking establishment of Reit schemes, a sign that the hype in the build up to the regulations may have been artificial as they are yet to pique investors’ interest. It has also not registered any Reit manager, signalling it will take longer before the first Reit is listed at the NSE. The CMA has however issued checklists and application forms for registration of Reit schemes, managers and trustees to guide the process.
Reits are meant to enable the public to buy unit trusts of listed schemes at the NSE and earn dividends from their investments. They have been structured into D-Reits (for developers) and I-Reits (for income).
The regulator said it is working closely with market participants to ensure clarity on regulatory requirements and address preliminary queries in order to encourage uptake of the new product.
South Africa: More funding for infrastructure projects
South Africa is to channel additional public funding into a number of priority infrastructure projects in the transport, communications and energy sectors, Finance Minister Pravin Gordhan told Parliament. Presenting his medium term budget policy statement in Cape Town, Gordhan said that billions of rands would be spent on the country’s digital broadcast migration project, rolling out new train coaches, and refurbishing research facilities for nuclear research.
As expected, Gordhan allocated additional funding to support the Passenger Rail Agency of South Africa’s procurement of new rolling stock. The agency plans to purchase more than 300 six-car trains over the next decade, with initial deliveries expected in 2015/16. More investment was expected in other areas of transport, Gordhan said.
“Projects that will get under way soon include a new dam in the Eastern Cape, rehabilitation of the main roadway between the Eastern Cape and KwaZulu-Natal, and a new coal-fired power station” he said.
Sierra Leone: IMF approves $96m credit facility
The International Monetary Fund (IMF) has approved a $96 million 3-year enhanced credit facility for Sierra Leone, as it plans to support economic development and poverty reduction in the country. When disbursed, the fund will assist in facilitating the country’s growth and investment plans.
Sierra Leone, which was torn apart by a civil war that lasted 11 years, is slowly recovering. Investor and consumer confidence have continued to rise, adding impetus to its economic recovery. Commending the West African nation’s progress, the IMF noted that the country, which has a population of over six million people, still faced several social and economic challenges, urging its government to step up efforts in strengthening public financial management.
Mr Min Zhu, IMF’s Deputy Managing Director, said the commission would seek to improve these conditions by enhancing revenue mobilisation. According to him, the country has achieved strong macro-economic gains in recent years, and the “facility would be critical to propel its fiscal strategy.” He listed remarkable components in Sierra Leone’s economic strategy, including tax administration improvements and the adoption of a comprehensive fiscal regime for the natural resources sector.
Zhu concluded by revealing that with the approval, the country could get around $13.7 million as first instalment.