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March 2017

01 March 2017

Japanese automaker Isuzu buys 57.7% stake in GM East Africa (Kenya)

By Staff Writer | Business Daily, Kenya

Japanese automaker Isuzu Motors Limited has bought out General Motors’ 57.7 per cent stake in General Motors East Africa (GMEA) for an undisclosed sum.

The transaction will see the motor dealer change its name to Isuzu East Africa in April to reflect the change of control.

Most of the dealer’s sales are bus, pick-ups and truck brands of the Japanese multinational whose status shifts from a vehicle supplier to an owner.

Detroit-based GM will also take away its Chevrolet franchise from GMEA as part of the termination of the alliance between the two automakers.

“Isuzu Motors General Motors have reached an agreement that Isuzu will invest in General Motors East Africa. Isuzu is making this investment with the intention of expanding its commercial vehicle production and sales in Eastern Africa,” Isuzu said in a statement.

Isuzu’s partners in GMEA are Centum Investments with a 17.8 per cent stake, ICDC (20 per cent), and Itochu Corporation (4.5 per cent).

The deal comes at a time when the dealer has steadily grown its market share in the local new vehicle market to a record 35 per cent last year, with Isuzu brands representing more than 95.6 per cent of the sales.

Source: https://asokoinsight.com/news/japanese-automaker-isuzu-buys-57-7pc-stake...

01 March 2017

Vodacom $226 million IPO to break Tanzania capital records

By Staff | The Citizen, Tanzania

The Capital Markets and Securities Authority (CMSA) has given Vodacom Tanzania the go-ahead to sell its shares to the public later this month.

CMSA Public Relations Officer Charles Shirima confirmed to The Citizen yesterday that the authority approved Vodacom’s prospectus on Monday, paving the way for the firm’s initial public offer (IPO) at the Dar es Salaam Stock Exchange (DSE).

“What I can say is that we have endorsed Vodacom’s IPO. I cannot reveal details of what is in the prospectus because the rules and regulations don’t allow me to do that,” he said.

A senior official of the lead manager, Orbit Securities Limited, told The Citizen that the IPO would start within two weeks.

“It’s ‘all systems go’. We received the approval letter on Monday and will later today (yesterday) meet with the issuer (Vodacom) to consult on some details. We expect the IPO to start in the next two weeks. By tomorrow (today) we might be able to announce the exact date of the IPO,” Orbit Securities General Manager Simon Juventus said.

He added that the logistics of printing and distributing copies of the prospectus nationwide were being sorted out.

“Tanzania is a big country. We have to print enough copies of the prospectus for distribution countrywide before we can hold the IPO.”

Vodacom Tanzania Managing Director Ian Ferrao also confirmed the development.

“Vodacom Tanzania confirms that the Capital Markets and Securities Authority (CMSA) has approved Vodacom Tanzania Plc’s prospectus ahead of its Initial Public Offer (IPO) and subsequent listing of 25 per cent of its shares on the Dar es Salaam Stock Exchange (DSE),” he said in a statement yesterday.

Mr Ferrao added that Vodacom plans to raise Sh476 billion ($226 million) by selling 560 million shares at Sh850 per share.

The IPO is expected to raise the biggest sum in the history of capital markets in the country, breaking the record set when the East Africa Breweries Limited (EABL) IPO raked in Sh122 billion after offering 20 per cent of its shares in 2012.

The National Microfinance Bank IPO raised Sh63 billion in 2008 when the equivalent of 42 per cent of the lender was sold through DSE.

Upon listing at the DSE, Vodacom Tanzania will boost DSE’s market capitalisation by 2.4 per cent to about Sh20.6 trillion, according to an analysis conducted by Bloomberg News Agency based on data from the bourse.

Vodacom, with a 31 per cent market share of the mobile market in the country, becomes the first telecoms firm to qualify to sell its shares to the public as required by the Electronic and Postal Communications Act (Epoca), 2010 as amended in 2016. The Act gave mobile telephone companies until December 31, 2016 to sell at least 25 per cent of their shares to the public.

Other companies that sought to comply with Epoca are Millicom International Cellular SA (Tigo) and Bharti Airtel Ltd.

However, their applications have stalled. Tigo is embroiled in an ownership dispute in court, while Airtel has some issues to sort out with regard to its prospectus.

Mr Shirima said yesterday that Airtel was yet to submit a revised prospectus.

Tanzania Telecommunications Company Limited has yet to submit its application to CMSA.

Source: https://asokoinsight.com/news/vodacoms-share-sale-set-for-this-month-tan...


February 2017

28 February 2017

Burundi to wait longer for Southern African Development Community membership

By Brian Ngugi | Africa Review

Burundi will have to wait longer to join the Southern African Development Community (SADC) after a ministerial meeting ruled against immediate admission of the country to the 15-member regional bloc.

Tanzania’s Foreign Affairs and East African Cooperation Minister Augustine Mahiga said Burundi’s application was assessed by the Inter-State Politics and Diplomacy Committee of SADC’s Organ on Politics, Defence and Security Cooperation, which convened in Dar es Salaam on February 24, 2017.

Mr Mahiga said Burundi, currently locked in a political turmoil, had been directed to put its house in order first before its request could be considered.

Umbrella Opposition

However, President Pierre Nkurunziza’s government last week once again refused to attend peace talks to negotiate with the main umbrella opposition movement, the National Council for the Restoration of Arusha Agreement and Rule of Law (CNARED) — which is exiled in Brussels. The talks are mediated by former Tanzania President Benjamin Mkapa.

Should Burundi join Tanzania as a member of the SADC, the move could complicate the direction the East Africa Community takes for the remaining phases of integration.

Source: https://asokoinsight.com/news/burundi-to-wait-longer-for-southern-africa...

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...


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...