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January 2017

11 January 2017

Uganda’s economy expands by $375 million

By Staff Writer | The Exchange

The size of Uganda’s economy expanded by Shs163.280 billion in the first quarter of 2016/17 financial year supported despite slowdown in GDP growth rate.

Newly released statistics by Uganda Bureau of Statistics (Ubos) indicates that the quarterly GDP at current prices for the first quarter 2016/17 is estimated to have grown by approximately Shs52 billion from Shs21.528 billion estimated for quarter four of 2015/16.

Uganda remains predominately an agriculture country despite the underdevelopment in agricultural sector and its subsequent decline in its share contribution to the total GDP in the last 10 years.

Giving highlights on Uganda’s economic growth performance, director macroeconomic statistics at Uganda Bureau of Statistics recently, Dr Chris N. Mukiza said: “The share of value added in the agriculture sector grew to 23.7 per cent, whereas that of industry sector dropped to 19.4 per cent and services declined to 48.8 per cent during the first quarter of 2016/17.”

In terms of the total value (size) of Uganda’s GDP at market prices Dr Mukiza said it was Shs14.027 trillion in first quarter down from Shs14.049 trillion in the fourth quarter of 2015/16.

However, it when comes to quarterly GDP growth computed statistics shows that Uganda’s economic growth rate for 2016/17 shrunk by 0.2 per cent compared to 0.6 per cent registered in the fourth quarter of 2015/16.

The decline in Uganda’s economic growth in the first quarter is attributed to poor performance in some key sectors of the economy, which registered contraction during the period.

Dr Mukiza said the decline in real GPD is largely from contraction in agriculture where its value added is estimated to have declined by 1.1 per cent in the first quarter of 2016/17, following the earlier decline by 1.0 per cent in the previous quarter four of 2015/16 financial year.

“The contraction is attributed to declining value added in cash crop and food crop growing activities; for instance, cash crops declined by 5.5 per cent and food crop declined by 0.8 per cent from earlier decline by 1.3 per cent in quarter four of 2015/16,” he said.

Dr Mukiza added: “Other activities that declined are forestry, fishing, livestock activities, and agricultural support services.”

However, Dr Mukiza said the service sector value added remained stable at Shs7.239 trillion in the first quarter of 2016/17, similar to the value added registered in quarter four of 2015/16.

He explained that this was because of the increase in value added of trade and repairs, information and communication, real estate, education, human health and social work, transportation and shortage and accommodation was offset by a reduction in value added in public administration and finance and insurance services.

In the value added industrial sector, he said the sector grew by 1.3 per cent in the first quarter of 2016/17 from the 2.7 per cent decline in quarter four of 2015/16.

“The main driver to this growth were construction which grew by 9.2 per cent, electricity by 2.3 per cent water grew by 2.0 per cent and mining and quarrying activities by 0.9 per cent. However value added of manufacturing activities declined by 4.6 per cent on account of poor performance of cash crop and food crops that resulted in a decline in agro processing industries,” he said.

Uganda’s overall economic outlook in terms of growth remains largely unchanged from the earlier projections. The International Monetary Fund projects that the real GDP growth rate forecast will be around 5 per cent for 2016/17, 5.5 per cent for 2017/18, and 6.0 per cent for 2018/19.

Source: https://asokoinsight.com/news/ugandas-economy-expands-by-375-million

11 January 2017

Mauritius-based firm acquires Movenpick Hotel (Ghana)

By Bernard Busulwa | Joy Online (Ghana)

A Mauritius-based investment fund has acquired the Movenpick Ambassador Hotel Accra from Kingdom Holding Company (KHC).

The transaction, according to a press release by the new owners, Quantum Global Investments Africa Management Ltd, was closed on December 28, 2016.

The transaction marks the most sizable open-market hotel transaction in Sub-Saharan Africa, notes Quantum Global.

“Complementing Quantum Global’s already significant African investment portfolio the value proposition of this transaction is underpinned by its status as one of the largest hotel and mixed-use properties in West Africa occupying an exceptional position in both business and touristic segments of the African hospitality market,” said the release.

Quantum Global’s Group CEO, Jean-Claude Bastos de Morais, remarked that the acquisition of Movenpick Ambassador Hotel in Accra, one of sub-Saharan Africa’s most successful hotels, is a great testament to the strength of the Group’s Hotel Fund and its growing portfolio.

QG Africa Hotel LP is a $500 million investment vehicle which aims to capitalise on the emerging opportunities in the hospitality sector.

The fund is a long-term direct equity investor in hotel projects across sub-Saharan Africa, including greenfield and brownfield operations. The investment activities include construction, conversions, acquisition and renovation of hotel projects across sub-Saharan Africa.

It is managed by Quantum Global Investments Africa Management Ltd.

“The hospitality industry across Africa is an indicator of the vitality and attractiveness of key locations across the continent and we look to further take advantage of those opportunities and generate value-added returns for our investors,” he said.

Sitting on a 16 acres (6.5 hectares) site of landscaped gardens in Accra’s Central Business District, Movenpick Ambassador Hotel Accra comprises extensive food and beverage as well as conference facilities making it the largest 5-star conference hotel in Ghana.

The 5-star hotel is also complemented by retail as well as office facilities that form part of a unique environment, valued by tenants as well as hotel guests.

Adrian Leuenberger, Managing Director, Group Head of Asset Management, Quantum Global, said Movenpick Ambassador Hotel Accra has demonstrated outstanding growth through the highly-rated and reliable delivery of world class hospitality facilities to its international and local customers.

“We are delighted with this major acquisition and are looking forward to a very promising future.”

Source: https://asokoinsight.com/news/mauritius-based-firm-acquires-movenpick-ho...


January 2017

10 January 2017

Kenya set to remain a hotspot for private equity investments in East Africa

By Brian Ngugi | Business Daily, Kenya

Kenya has been tipped to remain a hotspot for private equity (PE) with global deal makers expected to be attracted by an improved business environment.

Analysts at Cytonn see the financial services, information and technology sectors as some of the key areas set to interest investors on the back of good returns.

“We remain bullish on PE as an asset class given the abundance of global capital looking for opportunities in Africa, the attractive valuations in private markets compared to public markets and better economic growth in Sub-Saharan Africa compared to global markets,” it said a new outlook on Monday.

“The year saw an increase in PE deals in the region, with the first three quarters registering 140 deals. In 2017, we expect a continuation of this trend, especially in Kenya, which remains an attractive destination for investors.”

Thirty three of the private equity deals in 2016 in East Africa had a disclosed value totalling Sh48 billion and, 14 of them with value of Sh30.6 billion came from Kenya.

The firm notes the improvement in ease of doing business, high return potential across all sectors, a well-diversified economy and consolidation in sectors such as financial services has created an avenue for increased PE activity.

In the financial services sector the analysts expect activity to be driven by consolidation in the banking industry and innovations.

Of key focus in 2017 for the sector will be the consolidation in the banking sector, which has already begun, with three deals recorded in 2016, notes Cytonn.

Source: https://asokoinsight.com/news/kenya-set-to-remain-a-hotspot-for-private-...

10 January 2017

Afreximbank admits Chad as member

By Brian Ngugi | Business Daily, Kenya

Chad has ratified the agreement on the establishment of the African Export-Import Bank (Afreximbank) to become the newest member of the continental trade finance bank.

The ratification was done by Chadian President Idriss Deby.

“The ratification of the Agreement marks the full activation of Chad’s membership of Afreximbank and allows the Bank to fully deploy its programmes and facilities in the country to stimulate trade activities and develop value-added exports across its economic sectors.

It also opens up opportunities for the Bank to provide much-needed financing for the construction of trade-enabling infrastructure in the country,” said the multilateral lender in a statement.

Members of the bank numbered 43 as at May 2016. Current Afreximbank participating states include Angola, Benin, Botswana, Burkina Faso, Cameroon, Cape-Verde, Chad, Côte d’Ivoire, Democratic Republic of Congo, Egypt, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea Bissau, Kenya, and Lesotho.

Others are Liberia, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Republic Of Congo, Rwanda, Senegal, Seychelles, Sierra-Leone, Sudan, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe.

The agreement on the establishment of Afreximbank concluded in 1993 in Abidjan requires countries that did not sign it before it came into force should first issue an instrument of acceptance and accession, and then formally ratify the agreement in order to fully activate membership as participating states.

Participating states become shareholders when they acquire shares in the bank. Afreximbank shareholders are a mix of public and private entities divided into four classes and consist of African governments, central banks, regional and sub-regional institutions.

Others are private investors and financial institutions, as well as non-African financial institutions, export credit agencies and private investors.

Class “A” shareholders are African states, African central banks and African public institutions, including the African Development Bank.

Source: https://asokoinsight.com/news/african-trade-finance-bank-admits-chad-as-...


January 2017

06 January 2017

South Sudan plans to increase oil production

By Johnson Kamungire | Africa Review

South Sudan plans to increase its oil production in the coming days, authorities have revealed.

The move follows better global oil prices promised by The Organization of the Petroleum Exporting Countries (Opec).

Opec is the body that co-ordinates petroleum policies among member countries, in order to secure fair and stable prices for petroleum producers.

Mayom Alier, South Sudan’s deputy head of mission in United Arab Emirates confirmed the decision by Juba on Wednesday while addressing the media.

South Sudan heavily relies on oil revenue to fund its national projects since the country became independent in 2011.

“We are planning to increase oil production as oil prices go up to increase our revenue and expand the ways of oil industry.

“Rise in oil prices is good news for us South Sudanese,” Mr Alier said.

South Sudan oil production capacity has fallen below 130,000 barrels per day from more than 350,000 barrels per day before the 2013 political turmoil.

The country last year deployed more boots to guard the operational oil areas in Upper Nile region amid sporadic clashes between rebels and government forces that affected oil production.

Recently, the oil Minister in Juba, Ezekiel Gatkuoth announced that South Sudan currently has 3.5 billion barrels of oil reserves.

Source: https://asokoinsight.com/news/south-sudan-plans-to-increase-oil-production

06 January 2017

Chapel Hill Denham converts Equity Fund to Money Market Fund (Nigeria)

By Onome Ohwovoriole | Nairametrics

Chapel Hill Denham will hold an Extra Ordinary General Meeting (EGM) on Thursday 26th of January 2017.

The primary agenda will be the conversion of its equity fund Nigeria Global Investment Fund (NGIF) into a money market fund. Tough economic conditions have led to the federal government ramping up borrowing.

Thus leading to a jump in money market rates. Nigerian equity market been bearish for the second year running, closing 2016 at -6.17%. Year to date return is -2.47% as at yesterday. Chapel Hill Denham is a leading investment banking, securities trading and investment management firm.

The firm has handled various landmark transactions including consulting for the CBN as well as being involved in the setting up of Asset Company Of Nigeria (AMCON).

Source: https://asokoinsight.com/news/chapel-hill-denham-converts-equity-fund-to...


January 2017

05 January 2017

At least one rival for Kagame in 2017 election (Rwanda)

By Staff | The East African

Rwandan opposition politician Frank Habineza has been week nominated by his Democratic Green Party of Rwanda (DGPR) to challenge President Paul Kagame for the presidency in the 2017 election.

By this action, the party has abandoned its earlier threat to boycott the election after its demands for electoral reforms were snubbed by the government.

Explaining the change of tact, the party said participation was more beneficial than a boycott.

The move hardly elicited political excitement in a country where the major opposition parties have cast their lot with the incumbent. This largely sets the tone for the poll slated for August 3-4, 2017.

Fall from Heaven

The Green Party became the first opposition party to name a presidential aspirant, and its contender became the second after President Kagame, who threw his hat into the ring in January, just after the constitutional amendment that allowed him to run for a third term.

“We want to bring democracy to this country. Democracy does not fall from heaven, it will not come from America or Europe, we are the ones who must fight for it,” Mr Habineza said in his acceptance speech.

The Green Party is the only one that opposed the reform of the Constitution, which was finally adopted in December 2015.

“After deliberations within the party’s political bureau we concluded that participating in the elections was more beneficial than boycotting despite the existing challenges,” said Mr Jean Claude Ntezimana, the party’s secretary-general in a statement.

The Greens, as the party is popularly known, had early this year petitioned the electoral commission and parliament, seeking amendments to the election law to embrace a combination of ballot and electronic voting to “guarantee more transparency and confidence in the Electoral Commission”.

They also wanted election observers to be allowed to be present at all the polling and tallying centres and the media to announce results after they have been declared at all the levels.

The party had also sought amendment of Article 28, which requires a party to garner at least 5 per cent of the votes cast to qualify for government funding, and Article 24, which bars parties from receiving foreign aid.

The party stressed that the clauses favour the strong parties.

Political Exposure

Mr Habineza and the Greens say they have greater chance of becoming the next tenants of “Urugwiro Village”.

“I think people are tired of having had the same president for 20 years. They want change and I have strong support within the army, the police and the people. So I think we have a great chance now,” he was quoted by the Swedish newspaper Dagen as saying.

The party is looking to win its first seats in parliament, and get political exposure as “side benefits”.

With a claimed membership of 200,000 in 18 of the country’s 30 districts, officials say funding will be met by contributions from members through fund raising campaigns.

“We want to put an end to the monotony in the Rwandan parliament and give Rwandans a vibrant opposition that will hold the government accountable,” said Mr Ntezimana.

Source: https://asokoinsight.com/news/at-least-one-rival-for-kagame-in-2017-elec...


January 2017

04 January 2017

Volkswagen opens assembly plant in Kenya

By Antony Kiganda | Construction Review Online

German vehicle maker Volkswagen (VW) officially unveiled its assembly plant in Kenya as it strengthens its presence in emerging markets.

During the inauguration of the assembly plant VW showcased its first locally assembled passenger vehicle, dubbed Polo Vivo.

The plant is expected to produce cars for Kenya as well as the wider East African market. The company announced a return to Kenya after almost four decades out. The company’s last engagement with Kenya dates back to 1977.

The company’s CEO Herbert Diess said, “Today marks a milestone in relations between Kenya and German industry. The new Volkswagen production here in Thika stands for great jobs, leading technologies and strategic investment. But it is more than just a plant, this opening could be the start point of a bigger economic success story in Africa.”

Kenyan President Uhuru Kenyatta said the investment by the vehicle firm was in line with government’s policy to industrialize the country’s economy.

Meanwhile, the German vehicle firm has launched plans for a ride sharing service in Rwanda as it seeks to take advantage of surging car demand in the continent

Volkswagen expansion into East Africa is expected to create employment and help communities build capacity for the entire automotive sector.

Source: https://asokoinsight.com/news/volkswagen-opens-assembly-plant-in-kenya

04 January 2017

AfDB commits $74.9 million for Dar es Salaam-Maputo road network

By Antony Kiganda | Construction Review Online

African Development Bank Group (AfDB) has approved US$71.8mn grant and US$3.1mn loan to the Mozambique government for the construction of an asphalted 70km road section in Northern Mozambique, to improve the road network and connectivity with Tanzania.

The AfDB chief transport engineer, Aymen Osmani said the project is key for traders and road users, who transport goods between Tanzania and Mozambique.

“Following the completion, they will benefit from more direct and shorter journeys to the ports of Pemba in Mozambique and Mtwara in Tanzania, effectively enhancing regional trade,” he said. The new road will extend the paved road recently built in the Tanzanian side, financed by an AfDB project approved in 2012.

This phase concerns a 70km road section which starts at Negomano, located adjacent to the Ruvuma River, the natural frontier with Tanzania. The section ends in the locality of Roma.

The project will open up the isolated part of the country, contributing to the economic growth and the eradication of poverty, as well as foster cross border trade and reinforce regional integration. The road segment Mueda – Negomano represents a missing link on the transport corridor between Mozambique and Tanzania.

The Bank will finance the paving of the road for phase I.

The improvement of the road will reduce from three to one hour the time to travel between the two localities. That first phase will be complemented by a second one, planned to start in 2019, which will connect Roma to Mueda and includes the construction of a one stop border post.

“The Bank is well positioned to support such development of regional corridors and road infrastructure due to its ability to coordinate programmes and projects across countries,” he said.

The outcomes of the project will significantly contribute to attaining the goals of the Bank’s High Five (Hi-5s) in the regions concerned, contributing to ‘Integrate Africa’ explained Amadou Oumarou, director of transport and ICT department of the AfDB.

Source: https://asokoinsight.com/news/afdb-commits-74-9-million-for-dar-es-salaa...


January 2017

03 January 2017

Nigerian Petroleum Development Company owes $3 billion in taxes and royalties

By Staff | This Day

The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC),owed the federation N68.2 billion and $3.3 billion in taxes and royalties from its oil and gas operations, respectively.

NEITI made this known in its 2014 annual audit report of activities in Nigeria’s oil and gas sector which was published on Friday in Abuja.

The report also stated that the NNPC was yet to reimburse the Petroleum Products Pricing Regulatory Agency (PPPRA) up to N3.9 billion it claimed for subsidy on importation of petrol in 2012, but which was eventually found to be an over-recovery by the corporation and expected to be repaid.

Covering activities in the sector for 2014, the report indicated that Nigeria earned $55.5 billion from the 797million barrels (mb) of oil, which it produced in the year under review, but noted that there were operational anomalies it discovered in the activities of the NPDC.

Besides, the NEITI report noted that, of the total volume of crude oil produced in the country for the period, NNPC lifted 350 million barrels (mb) for export and domestic utilisation on behalf of the federation, while the balance was lifted by various contractual arrangement producers.

Flagging off the NPDC’s activities it considered unwholesome and which it said resulted in revenue loses to the country, the report said, total outstanding balances of unremitted funds by the company (NPDC) were N68.2 billion and $3.3billion for taxes and royalties respectively.

This, it pointed out, comprised $451.4 million and $15.2 million royalty on oil and royalty on gas respectively. It also includes $991 million for PPT (petroleum profit tax), PAYE (pay as you earn) of N42 million, WHT (withholding tax) of N17.1 billion, education tax of N15.7 billion, VAT (value added tax) of N7.0 billion, NDDC (Niger Delta Development Commission) levy of N28.3 billion and $81.0 million.

The NEITI said while the failure of NPDC to remit these revenues amounted to short-changing the country especially in terms of funds for development, the NNPC, which is NPDC’s parent company did not respond to requests for further information on this by its auditors.

It also stated that the Department of Petroleum Resources has conducted a ‘Good and Valuable Consideration’ in respect of the four divested Oil Mining Leases (OMLs) 60, 61, 62 and 63, which was assigned to the NPDC in 2012 in the Nigeria Agip Oil Company (NAOC) joint venture, and placed their financial values at $2.225 billion, however, adding that the NNPC was contesting it.

“The Good and Valuable Consideration in respect of the divested OMLs 60, 61, 62 and 63 was received from DPR in the third quarter of 2016 valued at US$2.225 billion. NNPC has accordingly written to DPR requesting further engagement to ascertain the basis and assumptions that went into the valuation as to the reasonableness of the amount taking cognisance of all associated risks and assess its impact on the NNPC bottom line.

“While waiting for the determination of the Good and Value Consideration, NNPC has already remitted about US$1.3 billion straight to the Federation Account from the gas revenue derived from the assigned assets from January 2013 to date,” it noted.

On the fuel subsidy over-recovery by NNPC, the report stated: “N3.981 billion of debts as a result of over-recovery under Petroleum Support Fund Scheme (PSPF) in 2012 was outstanding. NNPC has been in contact with PPPRA on the issue and acknowledge the amount as being due for payment, it has remained outstanding due to challenges with the corporation’s liquidity. NNPC management has also informed the PPPRA of its commitment to settle the said amount.”

According to NEITI, publishing the annual report was in accordance with the global Extractive Industries Transparency Initiative (EITI) standards which encourage implementing countries to release their independent industry audit reports at most two years in arrears. Nigeria is signatory to the EITI ideals.

Source: https://asokoinsight.com/news/neiti-nigerian-petroleum-development-compa...