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by Dario Galluccio

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Kenya: Standard Bank, ICBC raise $108m debt facility heavy fuel plant

Standard Bank Group and the Industrial and Commercial Bank of China (ICBC) have concluded a $108 million debt financing package with Triumph Kenya to construct a 83MW heavy fuel oil plant in the east African nation. As mandated co-lead arrangers, CfC Stanbic Bank, a member of Standard Bank Group, provided $28 million of debt funding while ICBC supplied $80 million. The ICBC finance portion will be for the plant, currently being built 25km from Nairobi.

Kenya Power also signed a 20-year agreement with Triumph to purchase power from the plant, which will be a crucial supplier to the utility during times of drought when the country’s hydroelectric generating capacity becomes constrained.

The World Bank’s Multilateral Investment Guarantee Agency (MIGA) will provide $102.5 million in breach of contract insurance should Kenya Power fail to honour its 20-year power purchase agreement with Triumph. MIGA’s insurance will also cover the Government of Kenya’s obligations under the Government of Kenya Letter of Support.

Kenya has historically relied on hydropower for most of its electricity needs and has a current installed generating capacity of 1,672 MW, compared with peak power demand of 1,330 MW. The nation’s economy has expanded at an average rate of 4-5 percent over the last 3 years.

Africa: Middle-income status is not bye bye poverty

Transitioning to middle-income status does not signal the end of poverty as the majority of the world’s poor still live in middle-income countries, the World Bank and the IMF have said at their latest Development Committee meeting, a forum that advises the two institutions.

In many developing countries, growth has been accompanied by rising inequality,” a communiqué from the meeting said, warning that if countries do not sustain the building of “shared prosperity”, growth will eventually be obstructed — causing instability and reducing upward mobility. “Job-creation, especially for youth and women, and private sector development are key for inclusive growth,” the meeting agreed.

Middle-income countries — defined as nations with a per capita gross national income of US$1,026 to US$12,475 — account for one-third of global GDP and 73 percent of the world’s poor people. (Ghana, with a per capita income of US$1,563, is considered among lower middle-income countries.)

The World Bank Group has in recent times been warning about growth in developing countries not impacting ordinary citizens, particularly in Africa — one of the fastest-growing regions of the world. In its latest edition of Africa’s Pulse, a twice-yearly analysis of the issues that are shaping Africa’s economic prospects, the bank said inequality in Africa remains “unacceptably high and the rate of reduction unacceptably slow”.

To ensure Africa’s growth benefits its people, the bank advises that more attention should be paid to areas like agriculture, where the poor are mostly found. It also endorses social safety nets, like direct cash transfers to the most vulnerable segments of society.

Nigeria: Fitch rates economy stable

Fitch Ratings, an international independent rating agency, rated Nigeria’s economic outlook as stable. The agency also affirmed the country’s long-term foreign and local currency IDRs and senior unsecured bond ratings at ‘BB-‘ and ‘BB’ respectively, while the short-term foreign currency IDR was rated ‘B’ and Country Ceiling at ‘BB-‘. This vote of confidence on the prospects of the Nigerian economy is coming a few days after another respected international rating agency, Standard & Poor’s also affirmed a strong and positive rating for the management of the economy.

According to the agency, the affirmation reflects the following key rating drivers, a gross domestic product (GDP) growth of 6.4 per cent in the first half of 2013, noting that though lower than the level in 2012, the country showed resilience in the face of exogenous shocks.

The agency noted the non-oil economy had slowed but still grew by 7.9 per cent in 2012 and 7.6 per cent in the first half of 2013. The agency expressed optimism that non-oil growth should pick up in the second half of 2013, as normal weather had resumed and the authorities had responded to the security problems. Reforms to the electricity and agriculture sectors could start to boost potential growth.

Other key drivers of the rating, as highlighted by the agency, included inflation rate, which had remained in single digits all year – the lowest in five years and the longest stretch of single digit inflation since 2008. Also, policy rates were unchanged and the Central Bank of Nigeria (CBN) had the twin aims of achieving single-digit inflation and maintaining exchange rate stability. Fitch also adjudged public finances as remaining comfortable and estimated a general government deficit of around 1.8 per cent of GDP this year and next.

Ghana: Fitch downgrades … From B+ to B

Fitch has downgraded Ghana from a B to a B, largely because of the government’s difficulty in managing the rising wage bill and of the increased debt to GDP ratio pose short-term challenges to the economy. Ghana was put on a B (negative) outlook in February this year and has since been under continuous assessment by Fitch, which had expressed concern over several factors affecting the short-term health of Ghana’s economy.

While experts recognise Ghana’s bright prospects in the medium term, it is believed that the government will struggle with controlling the fiscal situation over the next 18 months.

The outlook for post-2015 looks much better,” a sources,close to the rating agency, said, citing Ghana’s removal of subsidies on petroleum products as helping the fiscal situation, but continued subsidies on utilities, especially power, posed challenges for fiscal stability and growth going forward.

South Africa: Eskom wins R1.3 billion French solar loan

France is to lend €100-million (R1.3-billion) to South African state company Eskom to help finance a 100 megawatt (MW) concentrating solar power plant near Upington in the Northern Cape. Eskom and the French Development Agency (AFD) agreed, during French President Francois Hollande’s state visit to South Africa, to facilitate the signing of the loan.

Eskom chief executive Brian Dames said in a statement that the Upington CSP project, one of Eskom’s first commercial-scale renewable energy projects outside of its existing hydro portfolio, “puts us on a path towards reducing our carbon footprint and investing in a sustainable energy future”. The Upington CSP project is expected to deliver an annual energy production of 525 GWh and will be sufficient to power 200 000 homes.

Ghana: Government to review utility tariff hikes

With worries over the tariff increment, President John Mahama has announced that government has set up a technical committee to review the recently announced tariff hikes. The technical team will consider the issue and make recommendations to government in order to avert threats and ultimatums issued by organized labour since the Public Utility Regulatory Authority (PURC) announced the increases a fortnight ago. President Mahama who was speaking at the launch of the 4th Ghana Policy Fair appealed to the organized labour groups to withdraw their ultimatum while government attempts to deal with the issue.

Nigeria: Agreements establishment of local transformer assembly plant

As part of its 4Africa Initiative, Microsoft Corporation has announced the expansion of the Microsoft Ventures partnership programme into Africa. Microsoft Ventures was introduced in June this year as a coordinated global effort to offer tools, resources, expertise and routes to market for startups through partnerships with accelerators around the world.

The company has selected 88mph as its first African accelerator partner. 88mph was chosen for its proven model of helping launch and secure funding for innovative African startups. Together, Microsoft and 88mph will work to provide startups with mentorship, technology guidance, seed funding, joint selling opportunities and more.

Microsoft Ventures takes a holistic approach to helping startups get off the ground through a community evangelism programme including Microsoft BizSpark, an accelerator program and a seed fund that works with startups worldwide.

The expansion into Africa was conducted as part of the recently launched Microsoft 4Afrika Initiative and will therefore prioritise startups in key sectors including agriculture, education and healthcare. Startups will be selected based on the globally established criteria of Microsoft Ventures: Applying companies must have a full-time founding team, a bold vision for tackling a real problem, technologically driven solutions and less than $1 million raised, Microsoft International said.

Ghana: Atuabo gas project 72% complete

The Chief Executive Officer (CEO) of the Ghana Gas Company, Dr. George Sipa Yankey, says 72 percent works on the Western Corridor Gas Infrastructure Development project ongoing at Atuabo in the Western Region is complete. He said although the project would not be completed as scheduled in December due to initial financial constraints and loss of some construction materials in turbulent sea in South Africa early this month, his outfit was hopeful that the project would be completed by March next year.

Dr. Yankey said frequent meetings would be held by partners in the petroleum industry, especially those in the management chain, to share information on the project in order to increase understanding and transparency. He noted that the implementers of the project had assembled the best companies in the petroleum industry from Aecom in the US, Thermo Design Engineering from Canada, Yokogawa from Japan, Technip from France and Worley Parson from the United Kingdom to support Sinopec of China to complete the project.

He maintains that the gas infrastructure project was important to the development aspirations of the country since it would half the $3million dollars the VRA spent in purchasing crude oil daily for power generation.

Kenya: Coca-Cola increases stake in juice franchise

Coca-Cola Export Corporation has increased its stake in Kenyan subsidiary, Coca-Cola Juices Kenya Limited (CCJK), to 66.03 percent through bottling companies that sell its products in the region after local shareholders failed to participate fully in a rights issue. A report by Kenya’s Competition Authority’s Director General, Wang’ombe Kariuki, confirmed this saying: “The Competition Authority authorises the proposed acquisition of 66.03 percent of the issued shares of Coca-Cola Juices Kenya Limited by the Coca-Cola Export Corporation”.

The remaining 37.07 percent stake belongs to local shareholders including bottling firm like Kisii Bottlers, Mount Kenya Bottlers, Rift Valley Bottlers, Coast Bottlers and Nairobi Bottlers.

In the past, Coca-Cola functioned as a marketing support company to CCJK, leaving the production and supply function of its soda brands to the bottling firms. However, with the additional stakes acquired, the beverage company will deepen its role beyond publicity as the deal gives it full control of the local juice company.

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Ghana: Nkrankwanta Area Rural Bank posts growth for 2012

The Nkrankwanta Area Rural Bank in the Dormaa-West District of the BrongAhafo Region last year posted a strong performance despite macro-economic challenges coupled with sluggish growth in the cocoa industry, which is the main economic activity in the operational territories of the Bank. Total assets of the Bank went up from approximately GH¢1.6million in 2011 to about GH¢2.7million in 2012, representing an increase of 68%. The bank’s 2012 investments saw a 67% increase to GH¢1,420,000 from the GH¢850,000 of the previous year. Short-term lending to government investments, especially in Treasury bills, remains the major income source for the bank.

Edmond Joseph Akomian, Chairman of the Board of Directors who announced this during the 4th Annual General Meeting of shareholders, attributed the small growth of the Bank’s profit to the low rate of Treasury bills, increased computerisation of its agencies, and poor performance of the special Akuafo Cheque system.

Kenya: CFC Stanbic Bank partners Aeolus to build wind power plant

Kenya’s CFC Stanbic Bank has partnered Aeolus Kenya (AKL) – a member of the Power Africa initiative led by the United States President Barack Obama- to build a Sh12.9 billion ($150 million) wind power plant in Kinangop, Kenya. The proposed power plant will be the largest wind power generation project to be built in sub-Saharan Africa to date, outside of South Africa. It is expected to come on line in mid-2015.

The wind project has already been registered under the United Nations’ Clean Development Mechanism.

The Kinangop Wind Plant which will provide electricity to approximately 150,000 Kenyan households, will add a further 60MW to Kenya’s 1,672MW national power grid.

According to CfC Stanbic Bank’s East Africa Head of Debt Solutions and Infrastructure Finance, Kwame Parker, “The project is designed to provide a clean source of electricity to Kenya. It will not only contribute to the social and economic development of Kenya, but will also significantly help ease the energy supply deficit that the country is grappling with.”

Ghana: Number 1 priority remains Cocoa

Vice President Paa Kwesi Bekoe Amissah-Arthur says the cocoa sector is still a top priority in government’s medium- to long-term growth plans despite the fortunes of the crop facing difficult times.

Mr. Amissah-Arthur said government remains committed to implementing a broad number of policy measures to support the cocoa sub-sector. These measures, he added, will in the long-term ensure efficiency through streamlining of activities, interventions and programmes and contribute to growth of the sector.

The Vice-President, speaking at this year’s Ghana Cocoa Festival in Accra, said the measures will help consolidate gains the country has made in the sector. He said an increase in local cocoa consumption will serve as a further boost to the sector.

COCOBOD recently announced an agreement with the Netherlands Embassy and three other institutions to stem the huge revenue losses arising out of the black-pod menace. The initiative, which has the Ghana Cocoa Growing Research Association Limited, Mars Incorporated and Mondelez International as partners, will make available over US$400million toward the production of new varieties of cocoa that can withstand the disease.

The crop has been a top foreign exchange earner for the country, grossing some US$2.8billion in export earnings in 2012, making it the third-highest foreign exchange earner after oil and gold.

Ghana: Improved energy will push forward growth

Mr. Emmanuel Armah Kofi Buah, Minister of Energy has said that the vigorous expansion of various energy programmes is to increase power production as well as support the growth and expansion of all the weak sectors of the national economy. He said government is rolling-out the various programmes and projects, particularly in the Western Region, as part of the energy expansion drive — which is geared toward positioning the sector to play the critical role expected for directing Ghana’s effort toward industrialisation.

Speaking at the World Tourism Day at Nkroful in the Ellembelle District of the Western Region, he noted that the country’s oil and gas sector is currently underdeveloped. According to him, the discovery of oil and gas in commercial quantities on the Western Region culminated in an influx of people — the stage is set for integrated tourism development in the region, so that instead of a potential threat from oil and gas activity to our environment, oil and gas activities will be made conducive to our situation and be a blessing to our environment.

Ghana: EU to support agriculture production

The European Union (EU) is to support Ghana to revolutionalise its agricultural production.

Mr Dacian Ciolos, EU Commissioner for Agriculture and Rural Development, who made this known in Accra, said the support would be in the form of financial and technical interventions.

“Agriculture is not only an economic issue, but also a social issue and this calls for the support,” he said. Stressing that the EU would take Ghana’s agricultural development objectives into consideration.

Dr Yemi Akinbamijo, Manager of Forum for Agricultural Research in Africa (FARA) said the partnership between EU and Ghana, which is under negotiation would take place from 2014- 2020. He said, it is a period for the promotion of agriculture and security.

Dr Akinbamijo said : agriculture would provide greater help to reduce poverty if done properly; pointing out that production, trading, finance, as well as infrastructure, education, science and technology and regional integration; are the seven pillars of FARA, which would be used to develop Ghana.

Africa: Standard Bank, Platinum Circle partner to provide business support

Standard Bank DRC, a member of Standard Bank Group, has agreed a strategic partnership with Platinum Circle – a Singapore-based business group – that will place Africa on the agenda of corporations, governments and intergovernmental organizations involved in the Future Global 100 (FG100) Initiative.

Launched in 2011 by Platinum Circle, the Initiative is a global program that shapes the future of the global economy, national markets, business and industries through the collective input of leaders from business, governments and intergovernmental organizations, gathering over 700 all-encompassing leaders to chart the Future Global Agenda.

Standard Bank will be working closely with Platinum Circle to anchor the FG100 Initiative in Africa and spearhead the Inaugural Africa Meeting in 2014, bringing top African leaders together with members of Platinum Circle worldwide including those in Singapore.

The strategic partnership between Standard Bank and Platinum Circle will pave the way for implementing the FG100 Initiative into Africa, by serving as an important forward- looking reference for foreign business and government leaders regarding Africa’s economic outlook and operating environment.

Ghana: GIPC investment drive gets results

Ghana’s energy challenges will soon witness a massive improvement as United States Energy Company Symbion power commits to construct a 450 megawatts of power in Ghana.

A memorandum to that effect has already been signed between Ghana and Symbion power. The realization of this agreement came to light after months of negotiation between Symbion and the Ghana Investment Promotion Center, whose chief executive, Mawuena Trebah, led.

Under the letter of Intent signed by the energy minister, Emmanuel Kofi Buah, and the chief executive officer of Symbion Power, Paul Hinks; Symbion power proposed to finance the establishment of a 450 megawatts combined cycle energy facility to meet the need of an expanded energy facility in Ghana. The Volta River Authority on its part on behalf of Ghana is expected to give prompt and fair consideration to the Symbion proposal within the requirements of the country’s laws and policy.

Ghana: Oil production hits 115,000 barrels daily

Daily oil production hit 115,000 barrels per day in June 2013, significantly higher than the projected average for the year, the African Center for Energy Policy (ACEP) report on Government Compliance with the Oil Revenue Management Act in the 2013 budget has revealed. Total oil revenue of GH¢1.15 billion also far exceeded the projected target by GH¢362.3 million.

The report urged government to initiate discussions with Sabre Oil and Gas to recover the capital gains tax from the sale of its stake in offshore blocks.

It also indicted the 2013 budget for failing to capture capital gains tax as one of the revenue streams. It added “the Petroleum Income Tax Law should be harmonized with the Internal Revenue Act.”

Released by the Executive Director of ACEP Mohammed Amin Adam, the report also said the projected transfers to the Ghana Petroleum Holding Fund will be exceeded when the data on petroleum is released.

Ghana: Government commits GH¢350 million towards road sector

Government has since June released GH¢ 350 million for the road sub-sector out of the GH¢ 706 million allocated in the 2013 budget. Alhaji Amin Amidu Sulemani, Minister of Roads and Highways, said the Ministry has also improved upon revenue generation into the Road Fund for maintenance works. The total fund accrued from January to June was GH¢ 126 million, an increase of GH¢ 9 million over the amount recorded during the same period in 2012.

Alhaji Sulemani, who made this known during the inauguration of the Progressive Road Contractors Association (PROCA), urged members as well as the Association of Road Contractors to unite for the growth of the industry.

Mrs Joana Adjei, National President of PROCA promised to run an open door policy as well as an all inclusive administration to make the association stronger. She said the new administration would help revive the training programmes of the Association.

Mrs Adjei said majority of contractors are suffering as a result of delayed payment for work done. Mr Michael Aidoo, the outgoing President of PROCA advised the new executives to take criticism in good faith.

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Ghana: BoG to introduce Chinese Yuan onto the FX market

The Bank of Ghana will before the end of this year introduce the Chinese Yuan onto the exchange rate market. It will become the second currency from Asian to be quoted by the Bank of Ghana’s daily interbank forex exchange market. The Japanese Yen is presently the only currency from Asia that trades with the Ghana Cedi on the interbank forex exchange market.

The selling of the Yuan was necessitated by the growing demands of the Chinese currency as well as the need to give support to the Ghanaian business community in order to avoid exchange rate losses. Previously, the absence of the Chinese Yuan in Ghana compelled Ghanaian traders to use the US dollar in trading with their Chinese counterparts.

Ghana: Economy set to pick up

The economy is expected to pick-up in the weeks ahead as the conclusion of the election petition hearing gives a lift to investor confidence. Though geopolitical events may see crude prices pose some upside risks, it is likely a compromise may be reached. The uptick in the prices of gold and cocoa is also projected to bolster government finances while on the currency front; the Cedi may be propped-up from recent inflows. On the money market, rates are expected to head southwards as the inflows strengthen the Central Bank’s ability to bring money market rates down.

Additionally, plans by the government to replace expensive short-term borrowing costs with cheaper long-term funds may tilt rates down in the weeks ahead. Investors are thus expected to continue locking-in long-term rates on the back of the foregoing.

As the Central Bank’s Monetary Policy Committee (MPC) meets this week it is likely it may keep its Policy Rate unchanged or trim it marginally. The Cedi’s recent stability, sliding money market rates and the drop in inflation are also expected to inform the MPC’s decision making.

The major concerns going forward would be the increases in utility tariffs and agitations on the labour front. Already, businesses are sweating on higher fuel costs and borrowing rates.

In other news, inflation fell in August, the first time in seven months on the back of falling food prices. Month end inflation for August stood at 11.5 per cent down from 11.8 per cent in July. Inflation has edged up since February following the upward adjustment of fuel prices and the weakening Cedi. However, recent inflows from loans for cocoa purchases and the sale of Eurobonds in July has seen the local currency gain some stability as foreign-currency reserves have been given a boost.

However, the world economy made some gains during the month of August with most of the major economies releasing strong economic numbers.

Ghana: Union Savings & Loans record 400% growth in profitability

Union Savings and Loans (Union) has recorded a 400% growth in its profitability this year alone as it embarks on steady branch network expansion to drive financial inclusion in Ghana. Managing Director of Union, Philip Oti Mensah announced this at the opening of a new branch at Ashaiman, which is just one of six planned for this year alone.

The company recently commissioned its headquarters at Dzorwulu in Accra and plans to open four more branches, comprising of two in Accra (Dome and Dzorwulu), and one each in Kumasi (Angloga junction) and Takoradi.

The MD of the company noted that the approvals for the branch expansion was testimony of the confidence the Bank of Ghana (BOG) had reposed in Union’s integrity and ability to expand and serve more Ghanaians with its innovative, down to earth and exceptional service.

He recalled the bank’s vision to be among the top three Savings and Loans companies in Ghana by 2015, saying that on the path to achieve that vision, Union had so far grown its loan portfolio by more than 200% to GHC15million, adequately financed by its deposit portfolio of over GHC17million.

Zimbabwe: Firms for South Sudan investment talks

Zimbabwean companies have been invited to attend the South Sudan Investment Conference to be held in Juba on December 4 and 5 this year. South Sudan acting Charge d’Affaires in Zimbabwe Mr Watts Nyirigwa told New Ziana that he had written to the Zimbabwe National Chamber of Commerce inviting it to attend the conference.

Mr Nyirigwa said areas that Zimbabwean companies could invest in included oil exploration, mining, agriculture, health and infrastructure.

He added that numerous opportunities existed in South Sudan as the country did not yet have any industries since it attained independence barely two years ago.

Ghana: VRA to issue $500 million bond next year

The Volta River Authority (VRA) has disclosed that it will early next year issue a bond to raise about $500million. This will be the first time in the history of the country that a utility provider will be issuing a bond.

Key players in the financial sector and other stakeholders have on several occasions descended on the utility providers to reduce their dependency on government by raising their own funds through the capital markets. The latest was the recommendation by the national bond market committee for VRA, Ghana Water Company and Electricity Company of Ghana (ECG) to issue bonds to fund their operations and infrastructural projects.

In line with this, Chief Executive Officer of the VRA, Kweku Awotwi said the board of the Authority has given approval for the issue of the bond to raise funds on the international market.

He added that the VRA might possibly “go out to the international capital market. We haven’t set a firm timetable yet but we are planning early next year.” Mr. Awotwi also mentioned that the proceeds from the issue will be used to fund three key projects of the authority to increase the supply of power to the national grid.

Africa: Property market offers great investor prospects

Standard Bank believes that Africa’s residential property market proffers profitable prospects for investors. Africa’s biggest bank by assets believes that investors that will gain from this African market are those that have the ability to advance and manage housing stock in Africa’s thriving inner city complexes.

Gerhard Zeelie, the head of real estate finance for Rest of Africa at Standard Bank, says the fast development in reply to the growth in the number of people in Africa is bolstering demand for residential rental stock in Africa.

Standard Bank’s educated guess is that Mozambique’s economy will experience the most robust growth at 7.7 percent in 2014. It will be trailed by Tanzania at 7.1 percent, Ghana at 7 percent, Nigeria at 6.9 percent, Kenya at 6.2 percent and Uganda at 6.1 percent.

Zeelie says prospective venture capitalists in Africa’s residential rental market should have the ability to build good housing stock. According to Zeelie, the biggest demand will possibly be for one or two bedroom properties at monthly rentals of between $800 to $1,800 a month.

Ghana: Government accesses US$500m CDB facility

The government has accessed about $500 million of the Chinese Development Bank (CDB) loan of $3 billion, mainly to fund the construction of gas infrastructure projects at Atuabo in the Western Region.

The loan had been earmarked for a number of projects, including the refurbishment and upgrading of railway lines on the Western Corridor; the expansion of the Tema and Takoradi ports, construction of major road infrastructure in the Western, Eastern, Volta, Ashanti and Greater Accra regions, as well as the construction of landing beaches for the fishing industry.

A Deputy Minister of Finance, Mr Kweku Ricketts-Hagan, told that all knotty issues surrounding the CDB loan had been settled and various government agencies were preparing and designing projects to draw down on the remaining funds.

Majority of the funding released went to fund the gas processing plant being constructed by the Ghana Gas Company Ltd.

Ms Kairuki said the report by itself can prove beyond the doubt that Tanzania was really committed to improve her investment environment.

Tanzania: Dar Outruns Kenya in FDI race

Tanzania has outperformed and replaced Kenya as the favourite investment destination for corporates in the East African Community (EAC). Speaking to journalists in Dar es Salaam on Rand Merchant Bank’s (RMB) Global Investment Bank 2013 report (2013 Global Investment Banking Report), the Executive Director of Tanzania Investment Centre (TIC), Ms Juliet Kairuki, said Tanzania has also retained its position in the list of top 10 destinations in Africa.

She said Tanzania and Kenya are the only other East African countries to be included in the list of top ten destinations for corporate investment in Africa and that they are the most attractive for private capital investment in general. According to the TIC boss, Rwanda, though excluded from the list of top 10, has improved its attractiveness and is ranked 12th while Uganda is ranked number 16th and Burundi ranked number 41st.

Nigeria: Investors woo Unity Bank as Wanka retires

In what financial analysts posit as an impressive leap within a slow moving economic environment, Unity Bank Plc recorded 24 per cent increase in its 2013 half-year pre-tax profit.

This is coming close on the heels of the departure of Alhaji Ado Yakubu Wanka, the managing director of the bank. His voluntary retirement was disclosed to newsmen by the Nigerian Stock Exchange (NSE) penultimate week.

There are strong indications that the bank’s performance, despite increasing regulatory pressure and significant local and international economic slow-down, may have attracted the attention of foreign and domestic venture capitalists keen on investing in high potential financial service operations in Nigeria.

Investigations have revealed that top contenders include the Lagos-based Verod Capital Management, Development Partners International – based in the UK, and Bank of Africa, an intercontinental banking and investment conglomerate. Reports indicate that the investors are looking to partner with Unity Bank which is currently expanding its business reach and growing its market share in Nigeria’s under-exploited, yet lucrative retail banking sector.

Checks suggest that Development Partners International (DPI), which was established in London in 2007, has indicated willingness to make a commitment of up to $200 million in Unity Bank plc, even as the investor currently manages a $400 million private investment fund and is in the process of raising a further $500 million in investment funds.

South Africa: Inflation rises to 6.4% in August

South Africa’s annual inflation rate rose to 6.4 percent in August, well above the central bank’s target.

Statistics South Africa said consumer prices ticked up from the corresponding rate of 6.3 percent in July, the main driver being an 8.7-percent hike in transport costs.

The inflation announcement comes one day before the South African Reserve Bank will announce its latest interest rate decision. The monetary policy committee is expected to keep the key repo rate at five percent.

Inflation is likely to decrease in September and October, following petrol price cuts, said Annabel Bishop, an analyst at Investec Group Economics in Johannesburg, in a note.

Low consumer and business confidence combined with weak domestic demand continues to plague growth in the country, beset by a weak rand and labour strife.

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Ghana: Producer price inflation drops

Ex-factory prices reduced from the 7 percent recorded in July 2012 to 5 percent in July 2013 year-on-year, representing a decrease of 2.0 percentage points.

According to Government Statistician, Dr Philomena Nyarko, who officially launched the producer price index (PPI) for July 2013, the month-on-month change in producer prices between June 2013 and July 2013 was also -0.5 percent.

Dr. Nyarko said the producer price inflation in the Mining and Quarrying sub-sector decreased substantially by 11.7 percent. She noted that producer price inflation for the manufacturing sector which constitutes more than two-thirds of total industry increased to 10.9 percent from a rate of 10.6 percent in June this year, adding that the rate for the utilities sub-sector decreased marginally by 0.39 percentage points in July 2013.

Ghana: Public debt stock up by 39.8 percent

Ghana public debt stock has increased by 39.8 percent over the 12 month period ended June 2013. The figures from the Central Bank show that cumulatively, the stock of total public debt stood at GH¢39,053.3 million representing 43.9% of Gross Domestic Product (GDP) at the end of June 2013. This represents an increase of 39.8 per cent over the GH¢27,942.6 million recorded at the end of June 2012. Of the total public debt, domestic debt constituted 53.4 per cent and external debt 46.6 per cent.

Africa: Standard Bank partners MasterCard to expand Africa market reach

MasterCard has signed a 5 year agreement with Standard Bank Group, one of South Africa’s leading banks, which will offer the financial payment service a larger customer network, expanding its services across Africa.

According to an official statement, the partnership will “expand the remit of MasterCard across the African countries where Standard Bank is present and leverages the use of several MasterCard products and services, including MasterCard Advisors, to further optimise Standard Bank’s distribution platforms, introduce new product offerings and drive cost efficiencies.”

Standard bank currently has operations in over 18 countries across Africa, and offers several MasterCard credit services.

The US-based payment service company hopes to exploit the bank’s vast presence in both leading and emerging markets across the continent.

Africa: Retail industry spending will hit $1.3trillion by 2030

In recent times, the retail industry in Africa has seen tremendous growth, and its combined spending power has been said to reach an all time high of $1.3 trillion by 2030.

According to CEO Financial Derivatives Ltd, Bismarch Rewane, this is as a result of rising purchasing power, strong appetite for consumer goods, and high growth potential driven primarily by its large population.

Rewane said that these predicted growth won’t come hitch free as investors are increasingly becoming attuned to facts that could mitigate growth.

Changes continue to occur in the West African state’s retailing, with sales reaching an estimated $117.4 billion in 2012, making it the second-largest retail market in Sub-Saharan Africa.

Analysts believe Africa is set to experience greater momentum in the retail sector in years to come.

Ghana: Government receives more oil money

The government has raked in US$422.77 million through the lifting of crude oil at the jubilee field for the first six months of the year.

The Ghana National Petroleum Corporation (GNPC) on behalf of Government lifted four crude oil parcels with a total cargo value of US$ 422.77 million compared to two liftings in the second half of 2012 that had a total cargo value of US$ 214.45 million.

Ghana needs $1.2bn to finance infrastructural gap

Ghana requires 1.2 billion dollars annually to bridge its financing gap. Speaking at the listing of the 750 million dollars Euro-bond on the Ghana Stock Exchange, Mr. Tekper said “the need to develop the capital market in Ghana cannot be overemphasized more especially the wide infrastructural gaps which constraints our developments efforts as a country can only be closed when we tap into long term financing options such as the capital markets, both domestic and foreign. The listing which makes Ghana the second after South Africa to list a sovereign bond on its market opened with a yield of 8.135 percent, higher than the coupon rate of 7.875 percent.

Chairman of the National Bond Committee, Mike Cobblah said the historical listing of the instrument will attract multinational companies to list on the Accra Bourse. Managing Director of the Ghana Stock Exchange, Kofi Yamoah also expressed happiness about government’s commitment to deepen the bond market.

16.5 million dollars of the 750 million dollar Euro-bond is held by local investors.

Djibouti: AfDB will fund Geothermal Project

African Development Bank (AfDB) has agreed a $7.5 million finance deal with Djibouti for the development of a geothermal exploration project in the region of Lake Assal. According to the bank’s Regional Integration Director, Alex Rugamba – who stood in for the Vice-President, Infrastructure, Private Sector and Regional Integration – the project will provide the French speaking nation a more convenient and cost friendly source of energy.

The funds will come in two forms – a $5.3 million and $400,000 loans from AFDB soft loans arm, African Development Fund, and a $1.8 million grant from the Sustainable Energy Fund for Afria (SEFA), an official statement revealed.

The first phase of the project – which involves exploration and appraisal drilling – will be handled by the government, while the private sector will lead the production drilling, steam gathering system, electricity production and transfer to the national grid phase.

Rwanda: BK profits increase by over 21%

Bank of Kigali posted a 21.3 per cent rise in net profits during the first half of this year. The bank registered Rwf7.3b in profits, Rwf1.3 billion more than was posted during the same period last year, James Gatera, the bank’s chief executive officer, has said.

He said despite the increasing competition, the bank’s total assets grew by 5.9 per cent quarter-on-quarter and 13.9 per cent year-on-year to Rwf356.3b by the end of June this year.

Gatera attributed the growth to a steady business environment the country is experiencing and innovation that has enabled them to deploy new IT-based solutions to reach more people. He projected the bank, the biggest by asset size and clients, would most likely double its profit by the end of the year if the situation does not change.

Ghana: GFZB attracts US$790m investment for first eight months

The Ghana Free Zone Board (GFZB) which aims to provide a one stop shop service centre for free zone investors has attracted proposed capital investment of US$ 790 million for the first eight months of the year. This was made possible through the registration of 23 new free zone companies in the country. The proposed capital investment has translated in to over 31,000 direct jobs in the country.

Of this investment Lonrho – a British company-brought in US$540 million for the establishment of a free port complex at Atuabo in the Western Region which has created about 300 jobs.

Hajia Hanatu Abubakar-Bimi, Head of Investor Support Services said this was made possible due to the political stability that the country has continued to enjoy for some time now.

At the recent African Global Economic and Development (AGED) Summit, she said two companies expressed interest in establishing in Ghana; oil and Gas Company and a shea- butter company.

The purpose of The AGED Summit was to promote bilateral Foreign Direct Investment, International Trade, Cultural Exchange and Tourism between the 54 individual countries of the continent of Africa. Delegates from the United States, Asia, Africa and the African Diaspora representing political & social organizations, businesses & investment groups, the arts and cultural associations, education, international trade and tourism attend the AGED Summit.

South Africa: Mining law revisions are to attract investment

Changes to South African mining laws are intended to attract investment by creating favourable opportunities for the platinum industry. Defence of the Amendment Bill follows criticism from companies that revisions would tighten governmental control on the country’s lucrative mining industry.

“The objective of the Amendment Bill is not intended to strangulate investment opportunities enjoyed by our partners in development,” explained Minister of Mineral Resources Susan Shabangu at a Perth conference.

She added that labour laws will provide regulatory certainty for the investment community and clarify the employer and employee relationship.

The mining industry still accounts for over half of South Africa’s exports, but has seen rising tensions among workers unions over the last 18 months. South Africa’s government claims that employers’ rights are protected under the terms of the Labour Relations Act, which is a balance for revisions, such as those outlined in the Amendment Bill.

Africa: Growing through FDI and local partnerships

While foreign direct investment (FDI) into Africa dipped somewhat over the past two years, it is forecast that it will increase by more than 10% in 2013. Investment into Angola, Mozambique and South Africa appears to be the most prominent, according to the African Economic Outlook 2013 report.

The report posits that the higher FDI will play a role in driving economic growth in Africa — of 4.8% in 2013 and 5.3% in 2014.

Africa has indeed made great strides in terms of instilling democracy and increased business professionalism in many countries, allowing it to align itself with other continents. This makes it increasingly attractive to countries looking at taking FDI into Africa, which in turn contributes greatly to substantial improvements in the quality of human life on the continent.

Access Bank, Accra, Africa, Business, China, Coal, DHL Express, Diamond, East Africa, Germany, Ghana, Invesments, Kenya, Nigeria, Sierra Leone, Sub-Saharian Africa, Uncategorized, United States, US, USA, West Africa, World Bank

Africa Focused News


by Dario Galluccio

This Blog is sponsored by

Kenya: from nowhere plans East Africa’s first Oil exports

Kenya is headed to become the first oil exporter in East Africa, moving in less than five years from being a have-not nation to the regional leader in cutting reliance on energy suppliers such as Royal Dutch Shell Plc.

After Tullow Oil Plc (TLW) discovered oil last year, Kenya is set to start shipments in 2016, overtaking neighboring Uganda, where Tullow found crude more than seven years ago. The U.K. explorer plans to start pumping in Kenya as soon as next year, Chief Operating Officer Paul McDade said in an interview. Kenya’s deposits may top 10 billion barrels, according to the company, more than three times the U.K.’s remaining reserves.

Oil will allow Kenya to “diversify export earnings and act as a catalyst for infrastructural spending, especially on the transport network,” Phumulele Mbiyo, regional head of macroeconomic research at Nairobi-based CfC Stanbic Bank Ltd., a unit of Standard Bank Group Ltd., said . “The shilling is expected to benefit from inflows of foreign exchange and reduced spending on fuel imports.”

Sierra Leone: Diamond exports sees 43% increase in H1

African diamond exporter, Sierra Leone says it shipped out diamonds worth $102 million in the first half (H1) of the year, a 43 percent rise as compared to the $71 million gained from exports during the same period last year. According to the country’s National Mineral Agency (NMA), the increase – which provided the government with a tax windfall in excess of $5 million – was largely influenced by the improved level of productivity from its major diamond miner, Koidu Holdings and further highlights the growing advancement in channeling diamonds through the government.

At the end of the first half of 2013, exports exceeded those of 2012 by 42.95 percent, an improvement of $30.71 million,” Ibrahim Mohmed, who oversees the diamond sector at the NMA, told.

The total diamonds exported amounted to 331,471 carats valued at $102 million,” he added.

Kenya: International acquisition of local firms profit entrepreneurs

Recent acquisition of Kenyan companies by foreign multinationals will provide multi-billion-dollar windfalls for local entrepreneurs, experts reveal.

Findings suggests that several billionaire entrepreneurs are selling their stakes in local companies to foreign firms eager to tap into the East African market and have a preference for acquisition as a faster and cost efficient medium of entry into the region.

According to Business Daily, sporadic deals in the past year have attracted multinationals from across Africa, Asia and Europe with concluded acquisitions involving firms such as Fina Bank, Mercantile Insurance, Kenya Data Networks (KDN) and Swift global. Other potential buyout deals include that of AccessKenya, Scangroup, KenolKobil, CMC Holdings, and Resolution Insurance.

Analysts have noted that most agreements are aimed at generating capital for cash-strapped firms or at providing expertise in resource and operational management to ensure sustainable business development for the growing economy.

Ghana: Trade Between Ghana-Germany Is Pegged At €1.25b For 2013

Trade between Ghana and Germany currently stands at €1.25 billion as at the end of March 2013. This was made known by President John Mahama last week when he hosted the outgoing German Ambassador to Ghana, Dr. Renate Schimkoreit.

Germany is one of Ghana’s biggest trading partners in the European Union.

According to President Mahama, Germany has given Ghana €132 million out of the total portfolio of €184 million support pledge it made for the period between 2012 and 2015, reports the Ghana News Agency.

Germany’s funding in Ghana has been in major areas such as renewable energy, health, agriculture, land administration project among others.

Nigeria: To Sign $3.7bn coal project deal with Chinese firm

Nigeria’s president, Goodluck Jonathan says nothing stops the country from exploiting its abundant coal reserves for quality power generation if properly harnessed.

Nigeria is endowed with abundant coal reserves of the required quality necessary for power generation. And so there is no reason why we should not exploit that sector.”

Nigeria’s coal reserve is put at about 360 metric tonnes.

The president also stressed on the importance of the solid mineral sector and the need to harness it in order to create jobs, wealth and increase the foreign direct investments in the economy.

During the workshop, HTG-Pacific Energy Consortium and Ministry of Mines and Steel Development signed a $3.7 billion deal for a coal to power project at Ezimo Coal Block in Enugu State and a 1,000 megawatts coal power generating plant. The MoU represents the first step to building plants that will generate additional 1200 mega watts of electricity to the national grid.

Nigeria’s Minister of Power, Prof. Chinedu Nebo, said a greater part of the funds required to carry out the project will be borrowed from foreign banks.

Ghana: Blue Rose to build 500 affordable housing units

The company has already constructed about 300 houses in 2012, and is set to continue at this rate for the years to come and thus, accomplish its mission of being the leader in the real estate industry in providing quality and affordable housing. The company, which has Mr Eric Ebo Acquah as its Chief Executive Officer, believes it is a basic human right for every individual to own their own home and is thus, committed to making this a reality.

Africa: Standard Bank will open offices in Ethiopia, Ivory Coast

Standard Bank, Africa’s biggest lender by assets, is poised to open up representative offices in Ethiopia and the Ivory Coast, it merged earlier this week. Banks first open representative offices in the targeted countries before setting up shop and opening up a branch network offering a suite of their products.

By the time Standard Bank decides to go full steam ahead and start full-suited operations in the two countries, the lender would have increased its African operations to 20. It currently has operations in 18 African countries.

The lender is paying more attention to Africa because it is planning to take advantage of opportunities that will be proffered by the growing middle class in the continent. Standard Bank has disposed of its operations in the United Kingdom, Russia and Argentina to focus on the African continent.

In the past couple of years, Ethiopia has been seen as having great prospects for foreign banks. This is in view of the fact that it is Africa’s second most populous country.

Ghana: Access Bank will mobilize GH¢100m

Access Bank (Ghana) Ltd has set out to mobilize a total of GH¢100 million over the next three months, as it launches a promotion to encourage savings with the bank and help deepen the savings culture in the country.

Between now and November 15, existing and potential Access Bank customers would be required to deposit a minimum of GH¢200, and keep a minimum account of GH¢500 within the three-month period.

Ghana: DHL to expand in Africa

Leading international express and logistics company, DHL Express has stated that it will continue to invest in Sub-Saharan Africa. To strengthen its 32-year relationship with Ghana, DHL’s Sub-Saharan Africa Managing Director, Charles Brewer last Friday met key stakeholders, customers, employees and the media to explain the company’s future direction.

Despite the current global economic uncertainty, DHL expects the African region to deliver,” said Mr. Brewer.

He also said “As we see the continent ‘surge’ as a result of sector investment, increased consumer spending and economic activity, the future is still bright for the continent. Ghana is an attractive market for us and with the GDP growth rate 7 percent presents a major opportunity. The opportunity for us is to expand our footprint within the country and service semi-urban and rural areas so that anyone-from a student to a small business- can access our network and the over 220 countries and destinations that we serve.”

Ghana: US$1.44bn World Bank funds undisbursed

The World Bank Group has committed over US$2.24 billion to 27 various ongoing projects and programmes in the country. Out of the amount the country has been able to access only US$802.09 million, representing about 35.71 per cent of the committed funds as of June this year. This leaves US$1.44 billion undisbursed.

According to the World Bank, progress towards implementing 14 out of the number are satisfactory, four are rated ‘moderate unsatisfactory’, with 11 others being ‘moderate satisfactory’. Out the 27 projects, which cut across all sectors of the economy, the World Bank has assigned various ratings to 25 of them.

Many of the projects are those that the country badly needs either to close its infrastructure gap or provide and expand basic needs and utilities for its people.

The projects include Ghana Commercial Agriculture Project; the Public, Private Partnership; the Ghana Health Insurance Project; Ghana partnership for education, and the Ghana skills and technical development project.Others are the Micro, Small and Medium scale Enterprise project; the Land Administration Project; the Statistical Development Programme; Statistical Service reforms; the oil and gas capacity building; the Ghana Energy Development and Access Project (GEDAP); various phases of the West Africa Power Pool and the Urban Transport project.

The rest are Social Opportunities Project; the Transport sector project; the e-Ghana Project; Sustainable Land and Water Management; the Urban, and the Sustainable rural water and sanitation project, the West Africa Fisheries and other regional based projects on transportation and trade facilitation.