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2017

February 2017

28 February 2017

Green bond to steer Rwanda to boost agriculture

By Staff Writer | The Exchange

Infrastructure development is one of Rwanda’s agenda seen as a possible stronghold to move closer to vision 2020. The agricultural infrastructure of the country is quite “immature” and in need of financial breakthrough should it succeed. One of the forces they can induce is the green investment.

Green investment is associated with socially responsible investment with aim of going green. Green investment can include both direct and indirect investment for environmentally sustainable projects to achieve sustainable Infrastructure for agriculture.

One of the possible ways is financing through green bonds issuance. So, what is a Green Bond? A green bond is a tax-exempt bond issued by federally qualified organizations or by municipalities for the development of brownfield sites. Rwanda could generate funds through green investment and issue of green bonds for developing agricultural infrastructure.

Agriculture in Rwanda accounts for a third of Rwanda’s GDP; constitutes the main economic activity for the rural households (especially women) and remains their main source of income. This sector meets 90% of the national food requirements and in return generates more than 50% of the country’s export revenues.

In agriculture, there is lot of potential through development of sustainable agriculture projects, irrigation projects, land conservation and water management projects. Green bonds could be used as good alternative for financing such projects in Rwanda.

African Development bank issues green bonds for funding energy efficiency and renewable energy projects in Africa.

South Africa is one of the African countries using funds generated through green bonds to finance its renewable energy projects.

In Rwanda, National Bank of Rwanda and commercial banks through capital market could issue long term green bonds to develop agriculture infrastructure and renewable energy projects in agriculture as well. It will help in enhancing the country’s agriculture output, trade surplus as well as achieving concept of green economy.

Source: https://asokoinsight.com/news/green-bond-to-steer-rwanda-to-boost-agricu...

28 February 2017

Nigeria unveils $20 billion ‘Gas Revolution Industrial Park’

By Staff Writer | ESI Africa

On Monday, Nigeria’s acting President, Yemi Osinbajo, represented by his spokesperson, Laolu Akande, announced a public-private partnership industrial plan.

The gas industrial park, valued at $20 billion will be dedicated at the development of gas-based industries in the Niger Delta region, local media Premium Times reported.

Tagged the Gas Revolution Industrial Park (GRIP), the plan is reported will be developed by a consortium comprising the GSE&C of South Korea, the China Development Bank, Power China and several other global operators from Asia and the United Arab Emirates in the Middle-East.

Osinbajo stated in his address that the project, to be located at Ogidigben, Delta State, is envisaged to be a regional hub for all gas-based industries.

Gas Revolution Industrial Park

Akande further stated that the project sits on 2,700 hectares with fertiliser, methanol, petrochemicals, and aluminium plants located in the park that has already been designated as a Tax Free Zone by the federal government.

“Under the plan presented today by the consortium to the acting President, about $20 billion would be invested to develop the Gas Revolution Industrial Park, and generating 250,000 direct and indirect jobs in the process.

“The industrial park would be a cluster for several industries in one location benefiting from an efficient, cost-competitive and abundant supply of natural gas, proximity to a deep sea port and centralised utilities, and services such as uninterrupted power, world class telecommunications and processed water,” he said.

Gas Reserves

Akande continued: “The park, originally conceived by NNPC, is located about 60km from Warri, and is about 1km away from the operational base of Chevron Nigeria Limited. It will be connected to over 18 trillion Cubic Feet of gas reserves in fields such as Odidi, Okan, Forcados, located within a 50km radius.

“It is equally planned that the park will be connected to Nigeria’s most dominant gas pipeline network-ELPS, enabling supply of gas to and from the park.”

Osinbajo was quoted as saying: “we already have a Steering Committee in place, chaired by the Honourable minister of state for petroleum resources and that shows the level of our commitment. We are unwavering.

“We take the project very seriously and glad to see you are committed and ready to make several other commitments. This is a process that we intend to see happen.”

Source: https://asokoinsight.com/news/nigeria-unveils-20-billion-gas-revolution-...

28 February 2017

Medu Capital takes 15% stake in South Africa’s HeroTel

By Anna Lyudvig | Africa Global Funds

Medu Capital, a private equity company focused on established medium sized owner-managed businesses, has acquired a 15% stake in Hero Telecoms (HeroTel) at an enterprise value of R495m.

Siya Nhlumayo, Partner at Medu Capital, told Africa Global Funds, that the firm identified the telecommunication sector as an attractive sector to investment its private equity capital largely due to the fundamentals, in particular for wireless internet service providers (WISPS), over the medium to long term.

“HeroTel is an ideal entry into telecoms for Medu due to HeroTel’s track record in successfully executing its acquisitive growth and organic growth strategy. Further, there was great alignment with the management team of HeroTel,” he said.

“They control the business and the subscription proceeds from the Medu investment is going into the business to fund further growth. HeroTel was looking for a partner with capital, track record for institutionalising owner managed businesses and has the empowerment credentials,” he added.

HeroTel was established in 2014 with a mission to consolidate the wireless internet service provider (WISP) market and connect South Africa to high-speed wireless internet.

At the time of Medu Capital’s acquisition, HeroTel has successfully concluded acquisitions of nine WISPs, thus establishing a footprint in KwaZulu Natal, Western Cape, Mpumalanga, North-West Province, Limpopo and Gauteng.

The capital raised from the Medu Capital investment will be utilised to further HeroTel’s investment and acquisitive growth strategy.

Nhlumayo said that HeroTel is looking to grow organically: “It has acquired nine wireless internet service providers over the last three years and they are all experiencing sustainable growth.”

“There is an opportunity to make further acquisitions as part of the regional expansion and customer acquisition. Medu will support HeroTel should further capital be required to fund new acquisitions,” he said.

When asked about investment plans for 2017, Nhlumayo said that Medu is still investing in third fund and has a few deals in various sectors on its pipeline.

“We continue to pursue investment opportunities that meet our investment criteria,” he said.

Medu Capital invests at least R50m in established businesses that require equity risk capital and/or BEE partners.

The company has a record of investing in 25 businesses in diverse sectors including retail, manufacturing, industrial services, chemicals, plastics, transport, construction, mining, healthcare, technology, telecommunications and education.

Source: https://asokoinsight.com/news/medu-capital-takes-15-stake-in-south-afric...

28 February 2017

Shell mulls integrating renewables into its sub-Saharan Africa operations

By Antony Kiganda | Construction Review Online

Oil super major Shell mulls integrating renewables into its operations across sub-Saharan Africa, a senior company official said.

Shell’s new business development manager for the region, Tayo Ariyo, asked the wider oil and gas industry to invest in renewables “as a way of enabling access to energy in far-flung sites”.

“As an industry we must concentrate on developing lower carbon solutions, and we must swiftly invest in renewables, like solar, hydro and wind,” said Ariyo. “This will necessitate the development of pioneering new partnerships and business models that flawlessly incorporate renewables into the energy mix.

“The sort of project we should be doing more of in Africa is what Shell presently has in Oman – a hybrid gas-solar project that Shell employed in the Amal oilfield,” she said during a speech at International Petroleum Week in London.

In 2012, Shell invested in GlassPoint Solar, a US company that utilizes solar-thermal technology to help recovery of hard-to-extract oil deposits.

GlassPoint’s thermal enhanced oil recovery (EOR) system is designed to generate the steam required to help get at heavy oil that is too thick to be pumped to the surface using usual methods.

A 7MW pilot of the system was first installed by Petroleum Development Oman (PDO) at a site in the Middle Eastern sultanate. PDO later revealed plans for the giant 1.02GW Miraah solar-thermal plant that was intended to help oil extraction at the Amal field from 2017.

“Gas use was cut by 80% in the oilfield activity, which means we could utilize what we saved somewhere else,” said Ariyo.

Now Shell is eyeing related projects to power up its African oil projects, though Ariyo gave no information about where and when this technology could be executed.

She said: “Gas and renewables is the ultimate joint venture to tackle the challenge brought on by amplified energy demand.

In order to have triumph, we need new trusted affiliations between governments and industry in order to guarantee access to energy is a certainty for Africans in Africa.”

“Thus, as an industry, we have to keep on making substantial investments across all sectors, as well as oil and gas, and renewables. But we will need to do all this while extenuating climate change issues,” she said.

Source: https://asokoinsight.com/news/shell-mulls-integrating-renewables-into-it...

28 February 2017

Road linking Ethiopia and South Sudan to be constructed

By Antony Kiganda | Construction Review Online

Two major roads linking Ethiopia and South Sudan are set to be constructed following the signing of an agreement by the two countries.

Ethiopian Prime Minister Hailemariam Desalegn and South Sudanese President Salva Kiir last week signed several bilateral agreements that include the immediate commencement of construction of two major road links.

They agreed that the construction will commence with immediate effect, to start the construction of the Gamebella – Pagak – Palouge and Dima – Raad – Boma – Bor roads.

“When they get the peace back and the economy gets stronger, they will pay us back,” said Mr Hailemariam, indicating that Ethiopia would finance the construction of the roads within South Sudan.

They said once the project is over the two countries’ trade agreement will be on the rise and that will see the locals improve their lives.

The south Sudan counterpart added that they will ensure that they get more funds so that the project can be easily completed within the time frame that they will agree on.

“We are neignbours and we must ensure that the two countries promote each other through working closely towards achieving the goals that we have set” he added
On the trade protocols he said that the construction of both roads on the Ethiopian side was complete.

The two leaders signed a total of eight memorandums of understanding, covering energy, preferential trade, border trade protocol, health, communications, information and media.

Mr Hailemariam noted that the agreement on energy and electricity was meant to connect South Sudan to the national grid in Ethiopia, to enable the former buy electric power from the latter.

They said that they will ensure that they partner so that they can improve all the sectors that they believe each of the country has strength on.

Source: https://asokoinsight.com/news/road-linking-ethiopia-and-south-sudan-to-b...

28 February 2017

Merger talks between Airtel and Tigo completed (Ghana)

By Njirani Muchra | Business & Financial Times, Ghana

The thebftonline.com has gathered that, the much-anticipated merger between Airtel Ghana (Airtel) and Millicom International Cellular (Tigo) has been completed.

The merger processes which began last year, got finalized early this year [2017], as the formal announcement on the completion of the process is expected to made soon.

What is not clear is what the shareholding structure of the new company will be with the merger.

Bharti Airtel has been in talks with rival Millicom International Cellular for a possible merger in Ghana for some time now.

The merger some industry watchers say has come about, due to Airtel’s inability to make profit since entering the continent in 2010, even after engaging in brutal tariff war, to improve operations in Ghana and Africa at large.

With this merger between Airtel and Tigo, the combined entity replaces Vodafone to become the second largest telecom operator in Ghana, in an intensely competitive market led by the South Africa-based operator MTN.

When it comes to who will be made the CEO of the new company, it is unclear who will be at the helm of affairs. We all await which of the two companies’ CEO will be appointed to lead following the merger. Currently Lucy Quist is the CEO of Airtel Ghana while Roshi Motman runs Tigo as the CEO.

Figures from the National Communications Authority (NCA) the regulator for the telecom industry shows that, as at the end of 2016, the total number of mobile voice subscriptions increased from 35,008,387 as at the end of the previous year to 38,305,078 as at the end of December 2016 representing a 9.42% increase over the previous month of November 2016. The total penetration rate for the month under review was 136.34%.

Industry Performance

Tigo as at December 2016 mobile voice subscriptions decreased from 5,365,318 as at the end of November 2016 to 5,339,052 at the end of December 2016. This indicates a percentage decrease of 0.49%. Their market share for the month under review was 13.94%.

At the end of December 2016, Airtel’s voice subscriptions decreased from 4,649,934 as at the end of the previous month to 4,591,051. This represents a percentage decrease of 1.27%. Their total market share for the month under review was 11.99%.

Glo recorded a decrease in their mobile voice subscriptions as figures decreased from 750,751 as at the end of November 2016 to 695,306 at the end of December 2016. This represents a percentage decrease of 7.39%. Their total market share for the month under review was 1.82%.

Expresso’s mobile voice subscriptions decreased from 95,548 as at the end of November 2016 to 93,599 as at the end of December 2016. This represents a percentage decrease of 2.04%. Their total market share for the month under review was 0.24%.

Meanwhile MTN continues to lead in voice subscriptions for the period recording 19,296,157 which represents a percentage increase of 2.82% from November 2016’s figure of 18,766,106. MTN’s market share for the month under review was 50.37%.

They are followed by Vodafone. It recorded a decrease in their mobile voice subscription of 8,289,157 as at the end of December 2016. This represents a percentage decrease of 0.18% from November 2016’s figure of 8,304,783. Vodafone’s market share for December 2016 was 21.64%.

Source: https://asokoinsight.com/news/merger-talks-between-airtel-and-tigo-compl...

2017

February 2017

27 February 2017

Heavyweights weigh down Zimbabwe Stock Exchange main index

By Staff Writer | The Source Zimbabwe

The Zimbabwe Stock Exchange this week slipped 1,56 percent to 134,83 points while the mining index gained 0,26 percent to close at 60,89 points on the back of the losses recorded by Delta and Econet.

Delta and Econet lost 0,9 percent and 17,65 percent to close at 81,25 cents and 14 cents respectively. Old Mutual, Innscor and Seedco lost 1,43 percent, 2,1 percent and 3,2 percent in that order.

Simbisa and National Tyre Service lost 1,52 percent and 12,2 percent respectively, while Mashonaland Holdings and Cafca retreated by 0,5 percent and 0,3 percent.

Barclays lost 4,34 percent while Meikles retreated 15 percent.

Leading the gainers pack were Colcom and PPC which picked up 1,39 percent and 0,85 percent to close at 36,5 cents and 59 cents respectively.

BAT and National Foods added 0,33 percent and 0,1 percent to trade at 1,505 cents and 351,25 cents in that order.
Riozim drove the mining index gaining 0,62 percent to close 32,7 cents. The rest of the counter -Bindura, Hwange and Falgold were unchanged at 4 cents, 3 cents and 1 cent in that order.

Market capitalisation declined by 1,51 percent to $3,76 billion, while market turnover decreased by 3,67 percent to $2,34 million with average daily trades of $467,652 in the week under review.

Foreigners remained net sellers, disposing of shares worth $1,46 million against purchases of $259, 258.

Source: https://asokoinsight.com/news/heavyweights-weigh-down-zimbabwe-stock-exc...

2017

February 2017

24 February 2017

NWU SCHOOL OF BUSINESS AND GOVERNANCE ECONOMIST PROF RAYMOND PARSONS: Budget 2017/2018 Press Release

MEDIA STATEMENT - IMMEDIATE RELEASE
22 FEBRUARY 2017


'THE 2017/18 BUDGET SPEECH EMBODIES A TOUGH MESSAGE ABOUT THE ECONOMY AND REINFORCES FINANCIAL PROBITY', SAYS NWU SCHOOL OF BUSINESS AND GOVERNANCE ECONOMIST PROF RAYMOND PARSONS


'The Budget speech to Parliament today by Finance Minister Pravin Gordhan was generally a realistic, balanced and predictable analysis of the socio-economic challenges in general, and the fiscal difficulties in particular, faced by SA. Apart from promoting inclusive growth, the 2017/18 Budget has also had to seek to close the fiscal 'gap' of about R28 billion still remaining in SA's public finances. This has been done mainly through the widely anticipated increases in taxation at selected levels, embodying a tough message about the SA economy.

The basic test of the Budget decisions will be their net impact on business and consumer confidence. The overall emphasis in the Budget speech on improving SA's growth prospects must be endorsed, as must the Minister of Finance's insistence on enlarging the role of public-private sector collaboration in further unlocking SA's growth potential. Yet even if the optimistic growth forecasts in the Budget are accepted, it remains clear that current weak growth strains everything else, including 'radical economic transformation'.

The Finance Minister rightly insists that it is imperative that SA breaks out of its 'low growth trap'. The Budget nonetheless appears to have been more successful in balancing the State's books than in immediately boosting inclusive economic growth, as many of the drivers of economic growth lie outside the control of the National Treasury (NT). Translating fiscal resources into tangible outcomes still also requires urgent and efficient implementation by the public sector as a whole, as well as ensuring that State funds are effectively spent. What SA therefore needs to avoid is drifting into a negative 'tax-and-spend' cycle, which will ultimately weaken economic performance. The imbalance here is that about two-thirds of the current 'fiscal consolidation' appears to be coming from tax measures, whereas approximately only one-third stems from spending ceilings and other fiscal disciplines. The danger exists that aggressive taxation may then eventually defeat its own ends by diminishing the future income to be taxed, unless renewed growth boosts tax revenues. SA probably needs at least about a 2-3% growth rate to limit the future tax burden.

The decisive message nonetheless to be taken from the 2017/18 Budget is that, despite recent political pressures, SA's fiscal policy remains highly predictable and in safe and responsible hands. The NT continues to display a strong commitment to financial probity in SA's public finances. These reassurances remain essential to the maintenance of confidence in good governance in SA. The risks and uncertainties around the expected Cabinet reshuffle are highly relevant to the future role of the NT as a trusted custodian of taxpayers' funds'.

ENDS

Prof Raymond Parsons
 

2017

February 2017

21 February 2017

Africa Confidential Weekly News Update

This week we start in Cape Town with renewed speculation about a cabinet reshuffle as Finance Minister Pravin Gordhan prepares to read his budget and then to Somalia where the IMF has promised the new government it will back a debt relief scheme. In Gambia, jubilation at President Adama Barrow's inauguration was tinged with some concern about the stability of the transition and a third high-ranking member of the South Sudan government has quit in a week, alleging ethnic bias. Finally, Nigeria's government gets a vote of confidence from investors despite the month-long absence of President Muhammadu Buhari.

SOUTH AFRICA: Zuma positions his money man ahead of budget speech
For political insiders the news that Brian Molefe, the disgraced former head of the state power company Eskom, has been 'deployed to parliament' could mean only one thing: President Jacob Zuma wants to appoint his friend as a minister or deputy minister.

Under the country's proportional representation system, party leaders can choose whom they send to parliament as MPs at will. The word for months has been that President Zuma wants to sack Finance Minister Pravin Gordhan, who is due to read the budget tomorrow (22 February), and replace him with someone more pliable, or to find a way to rein him in. 

Molefe fits the bill. He wept at a briefing at Eskom after he was named in a report on state capture by Public Protector Thuli Madonsela. She had revealed that there were 58 phone calls between Molefe and the Gupta family when their company Tegeta was buying the Optimum Coal mine, which had a lucrative supply contract with the state utility. 

Molefe's defenders say at least he had the decency to resign after Madonsela had pointed to the conflict of interest. Now, he is back in the game, courtesy of Zuma's plans for another cabinet reshuffle.

Although Zuma has the constitutional right to sack Gordhan and replace him directly with Molefe such a move could provoke strong opposition from other senior ministers and figures in the African National Congress. 

A plausible alternative for Zuma would be to replace the current Deputy Finance Minister, Mcebisi Jonas, with Molefe, who could act as a brake on Gordhan or at least report on what he is doing. Jonas could then be moved to the currently vacant spot of Deputy Trade Minister. That could still panic the markets, pushing down the rand against the dollar again and forcing up interest rates – to say nothing of prompting a ratings downgrade later this year.

In terms of economic rationality, this makes no sense when Finance Minister Gordhan is due to read the budget under some of the toughest financial conditions for more than a decade. Yet according to the dictates of the power game now being played at the top levels of government it is just part of the political calculus. 

SOMALIA: The IMF talks debt relief and new currency notes
After his surprise selection by parliament, new President Mohamed Abdullah Mohamed 'Farmajo' has received another endorsement from a more unexpected quarter – the International Monetary Fund. Not only is the IMF willing to back the introduction of new Somali shilling notes, due to come into circulation this year alongside the US dollar, it is also willing to help the country negotiate a deal to get relief on some of the US$5.3 billion it owes to major creditors.

Remonetising the national currency – almost all the Somali banknotes in circulation are counterfeit – would be an important step towards economic normalisation for President Mohamed's new government. The Kenya Commercial Bank has already applied to set up in Mogadishu. Somalia currently receives about $2.5 billion a year in remittances from its highly entrepreneurial diaspora, dotted around Africa, Europe and North America.

THE GAMBIA: Mass arrests of Jammeh supporters
The formal inauguration of President Adama Barrow at Banjul's Independence Stadium last Saturday (18 February) to popular acclaim has not calmed concerns about the stability of the regime and its relations with its neighbours. The guest of honour was Senegal's President Macky Sall, who has been asked to keep some of his soldiers in Gambia to consolidate the transition after the departure of defeated President Yahya Jammeh.

The European Union has already announced an aid package worth $80 million for Barrow's government; some French officials have long suggested that a closer union between Senegal and Gambia would make sense. Yet four days before Barrow's inauguration, Britain's passionately anti-EU Foreign Minister Boris Johnson turned up in Banjul to fete the new government. Johnson said Britain would fast-track Gambia's return to the Commonwealth; Jammeh had taken Gambia out of the organisation labelling it 'colonialist'. 

And there are residual supporters of Jammeh and his Alliance for Patriotic Reorientation and Construction. Police arrested about 50 of Jammeh's supporters in Kafenda, one of his strongholds, after violent arguments with a contingent returning from the inauguration. 

SOUTH SUDAN: More senior officers quit Salva's government claiming discrimination
The resignation of Khalid Ono Loki claiming ethnic bias is the third top-level departure from President Salva Kiir's government in the past week. It follows the resignations of General Thomas Cirillo Swaka and Minister of Labour Gabriel Duop Lam. Their common complaint is that Salva's government is blatantly biased in favour of his own Dinka people. Khalid Ono, who headed the military court system, extended this criticism to the head of South Sudan's army, General Paul Malong, accusing him of covering up crimes such as murder, rape and theft.

This comes at a time of chronic economic difficulties for the Juba government: it has lost almost all its oil revenues due to the resurgence of conflict last June. Drought and war have hit food supply and the UN has officially declared famine in parts of the country. Inflation was reckoned to have hit over 800% last year. 

More than three mn. of the country's 11 mn. people were forced from their homes by fighting last year; 100,000 face starvation and 1 mn. are on the brink of famine, says the World Food Programme. Up to 400,000 have fled across the border to Uganda whose government says it's struggling to cope. 

NIGERIA: Vice-President Osinbajo reaches out as Buhari's health worries continue
Several investors who last week snapped up a billion-dollar Eurobond launched by Nigeria told Africa Confidential last Friday (17 February) that they were unfazed by the month-long absence of President Muhammadu Buhari from his country on medical grounds. They pointed to the orderly transfer of power, during Buhari's absence, to Vice-President Yemi Osinbajo.

A consummate technocrat and part-time pastor with no independent political base, Osinbajo has pressed ahead with the business of government. Last week his team was preparing the launch of an economic recovery plan and he led a delegation to the Niger Delta to reinforce a government agreement with local militant groups.

However, Osinbajo is treading a fine line between assuring Nigerians and outsiders that there is no power vacuum during Buhari's absence and overplaying his hand politically. Some investors say the financial team launching the bond had suggested that further exchange rate reforms were likely to be announced later in the month, probably as part of the recovery plan. So far, President Buhari has shown no sign of resiling from his long-held opposition to a sharp devaluation of depreciation of the Naira.

2017

February 2017

20 February 2017

BCA Member Speaks on Nigeria's Eurobond on the BBC World Service

Make sure you listen to Actis speaking on the BBC World Services Morning Programme (February 17th) regarding the recent Nigerian Eurobond being floated on the London Stock Exchange. See here: http://www.bbc.co.uk/programmes/p04sf9hz