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Africa Focused News

REPORT OF TUESDAY 27/08/13

by Dario Galluccio

This Blog is sponsored by http://www.reflexecogroup.com

Kenya: Barclays agrees to $13m oil exploration deal

With Kenya on its way to becoming the first East African oil producing nation after discovering oil last year, petroleum exploration companies are vying for a position in the race to secure local production fields. This became evident as Barclays bank agreed to fund, Marriot Drilling Africa Limited (MDAL), an oil exploration company and subsidiary of UK-based Marriot Drilling Group in a $13 million oil exploration financing agreement and said the funds will be used to acquire an oil drilling rig.

According to some analysts, the 5 year deal makes Barclays bank the first in East Africa to finance an oil exploration project, though other investment houses have struck deals to finance other oil support servicing projects.

Recently, Kenya-based multi business investment company, TransCentury, provided a Sh1 billion ($11.43 million) war chest for its engineering Civicon Group, to provide oil field services (OFS) support. Similarly, Nigeria’s GT Bank acquisition of 70 percent stake in Fina Bank can be linked to a strategic foresight into penetrating Kenya’s oil and mineral sectors.

These alliances will help fasten the growth rate of the East African oil and gas industry as well as provide financial institution sand oil firms with a mutually beneficial collaboration.

Ghana: Government will sell long-dated bonds to finance projects

Government will soon begin selling 15 and 20 years bonds specifically to finance infrastructure projects in the country. The sale of these long-dated bonds by government is part of plans to reduce the country’s heavy dependence on donors and local banks for infrastructural projects.

Finance and Economic Planning Minister, Seth Terpker, told his outfit is analysing how these bonds would fare on the market before issuing them. He notes that a careful analysis of the long-dated bonds market will guide government towards making the best returns on them.

Ghana: Government will transform districts into industrial hubs

The government has initiated moves to turn the various districts in the country into industrial hubs. The initiative under the Rural Enterprises Programme (REP) together with related services is intended to drive the expansion of economies, nurture entrepreneurship, create technological dynamism, foster productivity, generate employment and contribute to increased agricultural productivity. The Minister of Trade and Industry, Mr Haruna Iddrisu, announced this when he distributed some vehicles and office equipment to 31 selected districts in the country.

The REP provides an opportunity for the districts to provide the enabling environment for rural enterprise development. The items distributed were mainly funded under the International Fund for Agricultural Development (IFAD) loan. The total cost including handling charges of the vehicles was US$980,000 while that of the computers was US$175,000.

Ghana: Government will support 20 local businesses and industries

Twenty local businesses and industries are to receive stimulus support packages through the Export Development and Agricultural Investment Fund (EDAIF), as part of the major fiscal and policy decisions of Government in the 2014 budget statement, HarunaIddrisu, Minister of Trade and Industry has announced. The support package, which it is said will be given in the form of grants or loans, is expected to assist in the growth of local businesses and industries as part of government’s determination to help create much more favorable competition and a level playing field — thus enabling local industries to take advantage of regional and international markets.

The Association of Ghana Industries (AGI) has been identified as the body to determine which businesses and industries benefit from this direct package. However, ahead of its execution, beneficiaries are advised to endeavour to make good use of the funds made available to them and so ensure growth of their businesses.

Ghana: Ghana-US trade equals $817m in first-half 2013

Ghana and the United States recorded a two-way bilateral trade worth $817 million during the first-half of 2013. The US exported into Ghana, traded goods worth $594 million and imported $223 million value of goods during the first six months of the year, according to the figures compiled by the US International Trade Commission from official statistics of the US Department of Commerce.

Ghana’s trade export to the US during the period was mainly under the African Growth and Opportunity Act (AGOA) as the trade balance between both countries reduced to $370.9 million from $540 million during the same period in 2012. The trade balance between Ghana and the US in the first-half is the highest among countries in sub-Saharan Africa (SSA) that trade with the Americans.

In 2012, during the same period, trade between Ghana and the US was $856 million.

Zimbabwe: NRZ Seeks U.S $2 Billion for Rehabilitation

The National Railways of Zimbabwe (NRZ) requires US$2 billion for the full rehabilitation of railway lines over a period of 10 years, the parastatal’s public relations officer has said. Speaking at the Harare Agricultural Show Mr Fanuel Masikati said: “For us to have a complete rehabilitation of our railway lines over a period of 10 years, we need US$2 billion but US$400 million is needed in the short to medium term,”he said.

He said also this year Government allocated the NRZ US$9 million for railway lines rehabilitation.

Liberia: Government concludes deals with China and India

The Liberian Government says it has concluded financing deals for some of its major construction projects here with the Governments of China and India. Finance Minister Amara Konneh and delegation returning from separate bilateral talks with Chinese and Indian Export-Import (EXIM) Banks said discussions were fruitful and that all is set to fast track the loans for the project.

The discussion in India looked at the terms and conditions of a US$144 million concessional loan facility intended to finance a 373 km of transmission and distribution lines, and 2 power sub-stations. The lines will run from the Liberian border with the Ivory Coast through Ganta to Gbarnga, and from Gbarnga to Zorzor, Kakata and Buchanan.

In China, the delegation met with the President of China EXIM Bank and the heads of Corporate and Concessional banking departments to discuss the possibility of securing a loan package to finance key infrastructure projects including the pavement of the Gbarnga-Mendicorma and the Ganta-Fishtown highways; a new terminal and runway for the Robert International Airport (RIA), and the consolidation of power transmission and distribution (T&D) lines in the Monrovia area.

The Government has decided to work exclusively with the China EXIM Bank on this financing instrument because it has facilities that are more suitable to the needs of Liberia. These facilities include concessional loans not tied directly to the awarding of any concession.

Ghana: GSE records good performance for first half

The Ghana Stock Exchange (GSE) for the first six months of the year has recorded a very impressive performance as against the whole of last year. The two market indices, the GSE Composite Index and the GSE Financial Stock Index which are used to measure the performance of the market have recorded remarkable upward movements. From January to July 2013, the GSE Composite Index stands at 61.39 per cent, as against 6.06 per cent for the whole of 2012. The GSE Financial Stock Index equally stands at 61.66 per cent, as against 0.53 per cent for the entire 2012.

Total market capitalisation of the bank for the period under review stands at GH¢55.78 billion as against GH¢54.95 billion in 2012 with domestic capitalisation doubling from GH¢5.57 billion to GH¢10.57 billion. Total volume of trade is equally on the rise. At the close of business on July 31, total trade stood at 209.16 million as against 218.13 million, for the whole of last year. In terms of value, total trade stands at GH¢230.51 million, as against GH¢102.2 million for the whole of last year.

Reviewing the market, Bloomberg and other international news wire service described the market as “best performing market in Sub-Saharan Africa”.

Listed companies also recorded significant price increases during the first half year. Out of the 34 companies, CAL Bank Limited led the gainers with 194 per cent followed by Enterprise Group Limitedwith 191 per cent, BENSO Oil Palm Plantation LIMITED, 150 per cent, Ghana Commercial Bank Limited, 134 per cent, and PZ Cussons Ghana Limited, 122 per cent. Seven companies gained more than 50 per cent in their share price while eight companies gained above 10 per cent. Eleven companies maintained their prices with only four recording some level of depreciation.

South Africa: Economy expands slower than expected at 3%

South Africa’s economy grew at a slower pace than economists predicted in the second quarter as mining and farming output slumped. Gross domestic product rose an annualized 3 percent, the fastest pace in a year, compared with 0.9 percent in the first three months of the year.

Strikes and slumping consumer and business confidence may limit growth in Africa’s largest economy in the second half of the year, according to the Reserve Bank, which has kept its benchmark repurchase rate at 5 percent for more than a year to keep inflation under control. The bank in July lowered its forecast for economic growth for this year to 2 percent from 2.4 percent.

Mining contracted an annualized 5.7 percent in the second quarter from the previous three months, while agriculture fell 3.7 percent, the statistics agency said. Manufacturing, which makes up about 15 percent of the economy, surged 11.5 percent as production rebounded from the first quarter, when plant maintenance and fire-related stoppages curbed output.

Nigeria: World Bank will assist with GDP rebasing

Nigeria will be assisted by the World Bank, International Monetary Fund (IMF), Africa Development Bank, and other world development partners to produce a current and accurate GDP figure, the country’s Statistician-General, Dr. Yemi Kale has said. The proposed GDP rebasing will help correct Nigeria’s fiscal planning and economic policies at the Federal, state and local government levels which have been consistently hinged on an obsolete Gross Domestic Product (GDP) baseline carried out since 1990.

Rebasing, which is the process of replacing the present price and quantity structure of the base year used to compile real measures of GDP with a new or more recent price structure, involves changing the price and quantity base for individual process and quantity relatives, updating weights used in aggregating individual quantity relatives into sub-indexes and aggregating these sub-indexes into more aggregated indexes.

According to Statistician-General, the proposed rebasing will help Africa’s second-largest economy plan and measure development better. According to reports, Nigeria is poised to overtake South Africa as Africa’s largest economy after the exercise.

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