REPORT OF FRIDAY 11/10/13
by Dario Galluccio
This Blog is sponsored by http://www.reflexecogroup.com
Ghana: Road fund jumps up by GH¢9m within six months
Ghana’s total Road Fund accrual from January to June this year, stood at GH¢126 million, representing an increase of about GH¢9 million over the amount recorded during the same period in 2012, the Minister of Roads and Highways, Alhaji Amin Amidu Sulemani, has announced.
He attributed the increase in the revenue inflow to regular field visits by the ministry to ensure that funds were being collected in conformity to laid down procedures and paid into the designated bank account.
The improved revenue generation into the Road Fund for the maintenance of the road networks came at a time when a total of GH¢706 million, under the 2013 Budget, was approved for the Road sub-sector, out of which about GH¢350 million had been released as at June 2013, according to him.
Alhaji Sulemani told members of the Progressive Road Contractors Association (PROCA) in Accra: “As a result of the many interventions that have been made in the sector since the last couple of years, the condition mix of the road network has improved from 29% good, 27% fair and 44% poor in 2000, to 43% good, 25% fair and 32% poor as at end of 2012.”
Nigeria: Barclays to expand operations ‘cautiously’
Barclays Bank CEO, Anthony Jenkins said the British banking group is planning to expand its footprint in Africa’s second largest economy, Nigeria without making a large or expensive acquisition in the country.
We have a rep office there. We do some business in Nigeria and we are going to grow that business and I think quite cautiously over time, and then we will see what opportunities present themselves,” Jenkins said.
Although Barclay does not have much representation in Nigeria, it is likely to launch corporate banking in Nigeria like it did with First Rand’s Rand Merchant Banking (RMB) in order to tap into the opportunities being presented by multinational companies looking to invest in Africa. RMB previously had a representative company but was awarded a merchant banking license in Nigeria last year.
Jenkins said all options are still open as the bank has not decided whether to apply for a license or acquire some business in the country. He also noted that there are opportunities for corporate banking.
We have quite a footprint from the African continent and so bringing our corporate customers to Africa is going to be a very important strategic focus for us and that’s the unique advantage of Barclays because we have got a global footprint and we have got the presence. If you put those two things together it’s a very powerful combination. So a lot of this is about execution and accelerating the pace of execution within the context of the aspiration to be the Go To Bank,” Jenkins said.
Ghana: To participate in Dubai Corporate Leaders Summit
Ghana will participate in an International Conference dubbed: Dubai’s Corporate Leaders Summit in Dubai to learn tried-and-tested strategies and techniques that nurture and inspire high branded global organizations and teams whilst participants enjoy their leisure in the extravagant and luxurious city of Dubai.
This “Dubai Corporate Leaders Summit” is scheduled to take place, from December 7 – 14, 2013 on the theme “Becoming The Next Global Leader”. Other countries confirmed to attend the summit include Nigeria, Cameroon, Zimbabwe, Nepal, Pakistan, Malaysia, Hong Kong, China, Liberia, London, South Africa and Ethiopia.
Senior representatives from several international companies have also confirmed participation in this summit. QualityRole FZ LLC is the headline coordinator of the “Dubai’s Corporate Leaders Summit” in collaboration with QualityRole Ghana.
The summit will bring together business professionals from around the world and diplomatic representatives from Africa, Asia, South America and Europe to learn and share the proven techniques that nurture and inspire those who have led and continue to do so in organizations that continue to succeed.
Africa: Developed markets rate hikes to reduce African portfolio
A surge in interest rates in the developed markets – the Eurozone and US – could damper portfolio inflows that African states are enjoying right now, it has emerged.
However, David Lashbrook, the head of Africa Investment Strategies at Momentum Global Investment Management, said the reduction in portfolio inflows would not certainly lead to major strain in those African markets. Portfolio inflows refer to investments in a range of securities, bonds and other types of investment strategies in a particular country. The African continent has many rapidly growing economies in the globe. This means they can fight their way out of debt.
Nigeria is by far the most liquid fixed income market in Africa outside of South Africa and its local and hard currency bonds feature in JPMorgan’s GBI Emerging and EMBI indices respectively. Because of this, Nigeria’s bonds sold off more than many other African bonds during the EM sell off in Q2 of this year,” Lashbrook said in a statement.
Late last week, the European Central Bank (ECB) left interest rates unchanged at 0.5 percent, preferring not to react, at least for now, to indications of a swelling financial strain in the Eurozone. Mario Draghi, the president of the ECB, said his bank will maintain rates at “current or lower levels” for a longer spell.
With smaller FX (foreign exchange) reserves and twin current account and budget deficits, Kenya could be seen as more vulnerable. Yet, the country withstood the flight of foreign capital before March’s election and Kenya’s local currency bonds…rallied during the second quarter because the base rate was cut by 1% to 8.5% in the face of declining inflation,” Lashbrook concluded.
Ghana: Petroleum sector to see a $20 Billion investment over the next 5 years
Ghana’s Oil and Gas Industry is projected to attract a $20 billion investment in the next five years on the many discoveries that have been made. This was disclosed by the deputy Minister of Energy and Petroleum, Dr. Ben Dagadu, in Accra at the launching of a book titled ‘Oil and Gas Ghana’.
He stated that the government, since the discovery of oil, had taken measures to see to it that the petroleum sector was run efficiently to ensure that the resource benefits all Ghanaians.
In this wise, the deputy Minister said several legislations such as the Petroleum Revenue Management Act and the Petroleum Commission Act had been worked out to provide direction and clarity for the management of oil revenues and for regulating the sector. The Minister noted that in order to build the capacity of Ghanaian entrepreneurs, small and medium scale enterprises – which form major stakeholders in the industry – for the realization of this goal, the Ministry together with the Jubilee Partners had established the Enterprise Development Centre (EDC).
Rwanda, Uganda: Ties Stronger
Uganda has made economic progress over the years both as a country and as a core believer in the region’s integration process, especially as its ties with Rwanda gets ever stronger, Amb. Richard Kabonero has said.
The Ugandan High Commissioner to Rwanda was hosting his compatriots working and living in the country as well as well-wishers at his residence in Nyarutarama, Kigali, to celebrate Uganda’s 51st Independence anniversary.
“We have been growing despite some shocks and challenges. We have made tremendous investments in infrastructure and energy. At regional level, Uganda has played a big role in promoting peace in the region, including hosting nine summits that seek peace in the DR Congo,” Amb. Kabonero said.
He said bilateral ties between Uganda and Rwanda will always remain strong through collaboration on several development projects.
Ghana: Fall in gold, cocoa prices to devalue cedi
The Ghana cedi is set to come under serious pressure again over the projected fall in prices of gold and cocoa on the international market. The World Bank in a recent report noted that Ghana’s earnings from the exports of gold and cocoa will drop substantially in the days ahead. The bank based its predictions on the huge fall in prices of the two commodities in the coming months.
The country over the years has depended on hard currencies earned from exports from gold and cocoa to finance imports and shore up the local currency’s value.
Dr. Joe Abbey, an Economist, states that with less earnings from exports and an less controlled imports, “the Bank of Ghana would have to draw down on its holding of foreign exchange to meet the gaps”.
Despite its stability, the Ghana cedi is currently the second most depreciated currency in Africa, according to the latest Ecobank report on the performance of currencies in Africa. The report puts the cedi’s rate of depreciation at 14.5 percent, second to the Lesotho’s Loti of 19.3.
Nigeria: To plan regular Bond sales in bid to build yield curve
Nigeria is planning to raise debt abroad regularly as Africa’s largest oil producer seeks to develop a benchmark for borrowers, Finance Minister Ngozi Okonjo-Iweala said.
The government returned to international debt markets for the first time in two years in July, issuing $1 billion in five-year and 10-year Eurobonds. The country now plans to raise $100 million by selling so-called diaspora bonds targeted at citizens living overseas.
If it succeeds, we’ll do more,” Okonjo-Iweala said, adding that the sale will take place in the first quarter of next year. “We intend to enter the market on a regular basis because we’re trying to build a yield curve.”
Nigerians abroad would have sent $21 billion home by the end of 2013, according to World Bank figures, and the government wants “to tap some of that,” Okonjo-Iweala said. The nation is stepping up debt sales to finance infrastructure as it faces inadequate budget allocations for capital spending.
The yield on Nigeria’s $500 million in Eurobonds due July 2023 dropped 18 basis points this month to 5.94 percent yesterday, the lowest level since July 23, according to data compiled by Bloomberg.
The Nigerian economy may expand 6.75 percent next year, compared with an estimate of 6.5 percent in 2013, Okonjo-Iweala said. The budget deficit will stay little changed at 1.9 percent of gross domestic product, she added.
Ghana: Turkey to build industrial parks
Turkey is to construct two industrial parks at Accra and Kumasi respectively beginning next year at a cost of over $300 million.
Outgoing Charge d’Affairs of Turkey Embassy in Accra, Simay Erinoglo, speaking to journalists in Accra, said the two projects, which are designed to attract many Turkish investors into Ghana would be funded by the Turkish Exim Bank.
The Ankara Chamber of Industry and the Ghana National Chamber of Commerce & Industry signed an agreement to that effect recently. Ms Erinoglo said Turkish exports to Ghana last year recorded $223.5 million while it imported $303.5 million worth of goods from Ghana. For the first six months of 2013, Turkey exported $103.6 million worth of goods to Ghana while it imported $128.9 million worth of goods from Ghana.
Ms Erinoglo said Turkish investors were eyeing a number of projects in the various sectors of Ghana’s economy, including construction. Also, it intends to help with the construction of an international airport. In the health sector, Turkey wants to assist with the construction of eight pre-fabricated hospitals at a cost of $118 million.
The Turkish Development Agency (TIKA) is working on a lot of projects in Ghana, she indicated. Turkish investors are hesitant to come over to Ghana to invest because of the monstrous land acquisition challenges, she stated.
Cape Verde: AfDB approves $24m budget support loan
The Board of Directors of the African Development Bank Group, approved a €15-million general budget support loan for Cape Verde, to help the country finance its Public Corporate Governance and Investment Promotion Support Programme (PAGEPPI). The Programme aims to help Cape Verde consolidate its macroeconomic framework and foster growth by improving public corporate governance in State-owned enterprises and promoting private investment.
The PAGEPPI’s operational objectives are to improve public corporate governance so as to streamline public expenditure and promote private investment to spur economic growth and foster job creation.
On completion, the Programme is expected to strengthen public corporate governance and improve the operational and financial performance of State-owned enterprises. This will help to reduce the burden on the State budget and corresponding risks on public finances. The Programme is also expected to clarify the State’s role as both a shareholder and a regulator as well as to implement international and local investment promotion measures that will create a more attractive environment for economic activities and private sector development. The Programme will enhance Cape Verde’s overall development strategy which rests on economic diversification based on competitive clusters. In particular, it will support governance and private sector development reforms that constitute two main pillars of the government’s Growth and Poverty Reduction Strategy Paper (GPRSP) 2012-2016.