OPEC, Allies End Meeting with no Vow to Boost Supply

OPEC and allied oil producers including Russia ended their meeting on Sunday with no formal recommendation for any additional supply boost.

Oman’s Oil Minister Mohammed bin Hamad Al-Rumhy and Kuwaiti counterpart Bakhit al-Rashidi told reporters that producers had agreed they needed to focus on reaching 100 percent compliance with production cuts agreed at an OPEC meeting in June.

That effectively means compensating for falling Iranian production. Al-Rumhy said the exact mechanism for doing so had not been discussed.

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Nigeria: Oil Unions Threaten Nationwide Strike

The two main oil unions in Nigeria have prepared their members for possible nationwide industrial action over a staffing dispute with Chevron, they said on Saturday.

Nigeria, an OPEC member, is Africa’s largest oil producer and crude sales make up around two-thirds of government revenues in West Africa’s largest economy. The dilapidated state of its refineries means the country imports most of its refined fuel.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) accused U.S. oil major Chevron of attempting to sack thousands of Nigerian workers in violation of their contracts.

“NUPENG and PENGASSAN will not hesitate to embark on nationwide industrial action on this matter and we have already placed our members on red alert should the management of Chevron remain recalcitrant or adamant to rescind its anti-labour decision,” the unions said in a joint statement.

NUPENG President William Akporeha stated that  the industrial action referred to would be a nationwide strike by members of the unions, who cover a broad range of jobs across the country’s oil industry.

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South Africa: Ramaphosa Outlines Economic Rescue Measures

The president of South Africa, Cyril Ramaphosa,  announced a multi-billion-dollar stimulus programme on Friday, earmarking funds for job creation and infrastructure development as he seeks to make good on a pledge to revive the country’s ailing economy.

Speaking a day after the central bank disappointed some in his ruling African National Congress (ANC) party by not cutting interest rates, Ramaphosa said the government needed to put the funds at its disposal to better use.

“We have to resort to reprioritising our budget,” Ramaphosa stated, adding that there was no room to increase spending or borrowing.

He said 50 billion rand ($3.5 billion) of “re-prioritised expenditure and new project-level funding” would be used to boost economic growth and create jobs, and the government would also launch a 400 billion rand ‘medium-term’ infrastructure fund.

“The central element of the economic stimulus and recovery plan is the reprioritisation of spending towards activities that have the greatest economic effect,” he said.

When he took over in February from Jacob Zuma, whose term of office was plagued by scandal, Ramaphosa staked his reputation on economic revival and he received a warm welcome from investors in part due to his strong ties to the business community.

But having stagnated for a decade, Africa’s most industrialised economy slipped further in the second quarter by entering recession for the first time since 2009, while the rand has weakened.

The local currency briefly extended gains after Ramaphosa’s speech before slipping back to trade 0.31 percent firmer against the dollar.

Ramaphosa said the infrastructure fund would attract finances from development institutions and banks, private lenders and private sector and ordinary investors.

Finance Minister, Nhlanhla Nene told the same event that the 50 billion rand fund would come from under-performing government programmes. He gave no detail and it was also not clear how much of the money would be new funding and how much would be shifted from other projects.

South Africa needs faster economic growth to reduce its 27 percent unemployment rate and alleviate poverty and inequality, which are stoking instability ahead of national elections next year.

But the central bank on Thursday also cut its gross domestic product forecast for 2018 and said there was little leeway in monetary policy to boost the economy beyond the new growth figure while the outlook for inflation had deteriorated.

Land and mining ownership reforms set in motion by Ramaphosa have also unnerved investors, and after an initial rally following his election as ANC leader in December and state president in February, business confidence has wavered.

Ramaphosa said the country’s economy would be put on a firmer footing by the measures he announced on Friday.

“Our economic challenges are huge and our difficulties are severe and in the end will take extraordinary effort and they will also take some time,” he said. “For several years our economy has not grown at the space we needed to create enough jobs.”

Some analysts Reacted

“This was a political speech. There was very little economics in it,” Nic Borain, an independent political analyst said.

“It was a balancing act, although the market and other observers would have been looking for something more decisive. The real details will come in Nene’s budget in October.”

Warren Landgridge, a grain option trader at Riddermark Capital, said investing in agriculture would be a good move.

“It could only be beneficial for the country in the long term if money can be allocated to helping and equipping farmers,” he said.

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Nigeria: Polaris Bank Takes Over Skye Bank

The Central Bank of Nigeria (CBN) has revoked the licence of Skye Bank Nigeria Plc.

CBN Governor and the Managing Director of the Nigeria Insurance Deposit Corporation (NDIC), Godwin Emefiele, disclosed this on Friday at a media briefing in Lagos.

He also announced the change in the name of Skye Bank to Polaris Bank which takes over the bank.

Also read: Nigeria: Inflation Rises for the First Time After 18-month Decline

He said an injection of N786 billion has been made into the bank with the Asset Management Corporation of Nigeria (AMCON) has been directed to commence the sale process of the bank from Monday.

The revocation of Skye Bank’s operating licence follows the Central bank’s decision to pause its injection of funds processes in the lender.

The regulators maintain that customers deposits safe as management and members of staff will be retained under the new ownership structure.

Meanwhile, the share price of Skye Bank on Friday gained 4.05 percent at 77 kobo.

The stock is expected to be placed on suspension from Monday in accordance with bridge bank procedures.

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Nigeria “Suspends” Plans to Launch New National Airline

Nigeria will not be getting a new national carrier in December or early 2019 as previously planned. The national minister for aviation tweeted yesterday evening (Sept. 19) that plans for the airline has been suspended. The plans for the new carrier, named Nigeria Air, completed with a logo unveiling, were announced at Farnborough, a renowned international aviation exhibition in London back in July.

The government claimed it would not own more than 5% of the airline, ceding control to private investors expected to invest $300 million in the new airline at inception. It’s unclear if the government ever found investors for its private partnership.

However, the plan for a new airline was given a lukewarm reception by Nigerians who have seen a string of previous national airline run aground . The most recent carrier, Air Nigeria, shuttered operations in 2012 after running up 35 billion naira ($96 million) in debt.

Undertaking a major capital intensive project with notoriously slim margins in a difficult market was also unlikely to win unanimous public support especially as Nigeria’s government struggles to fund record budgets and pay workers’ salaries. To win public support, much of the government’s rhetoric in pushing plans for a national carrier has been hinged on national pride.

Also Read; Egypt Signs Oil, Gas Exploration Deal with Shell, Petronas

It’s a trend that is prominent across the continent as several countries actively pursue plans for national carriers despite evidence of financial struggles. South Africa’s national airline, for example, has not generated profits since 2011 and has required cash injections to stay afloat. But in solitary contrast, Ethiopia Air has grown to become the continent’s largest and most successful airline.

A quicker way to boost aviation across the continent is liberalizing air routes and cut high airport fees and local taxes, according to 2014 study by the International Air Transport Association (IATA). It projected that opening routes between 12 key African countries could add an extra $1.3 billion to the continent’s annual GDP. And the African Union has finally set on that course with the establishment of the Single Africa Air Transport Market in January.

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Nairobi Ranked Sixth Wealthiest Africa City

Nairobi is East Africa’s wealthiest city and the sixth in Africa after Durban, Cape Town, Cairo, Lagos and Johannesburg, a new report says.

The study by New World Wealth and AfrAsia Bank from Mauritius estimated Nairobi’s privately held wealth at Sh5.4 trillion with its growth driven by financial services, retail, tourism, fast moving consumer goods, telecoms, real estate and construction.

Nairobi attracts high Net Worth Individual ((HNWIs) for business and investments while Mombasa is mentioned as home to hospitality and luxury investments along its expansive beaches as well as highly preserved buildings recognised globally as World Heritage Sites.

Wealthy billionaires’ injection of funds into local investments has propelled demand for lettable space making Nairobi the most expensive city in East Africa where space goes for an average of Sh190,000 per metre square. Mombasa’s lettable space is charged at Sh170,000.

Read Also; IMF Lauds Kenya’s Strong Foreign Exchange Reserves

Tanzania’s Dar es Salaam is home to Sh2.5 trillion privately held wealth followed by Kampala with Sh1.6 trillion while Mombasa has Sh800 billion worth of investments, notably in hospitality chains and affluent luxury beach houses.

Kenya’s open-ended policy allowing capital inflows and property ownership for African billionaires with easy visa regulations appear to have endeared it to HNWI individuals, but its politics adversely affected its growth in the past year recording the lowest growth in the region at two per cent.

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IMF Lauds Kenya’s Strong Foreign Exchange Reserves

The International Monetary Fund (IMF) considers that Kenya’s external position is strong, its representative in Nairobi said on Friday, adding that the Fund would continue to support its reform efforts even though a stand-by loan deal has expired.

Kenya had secured a six-month extension in March of the $989.8 million arrangement. However, the IMF set conditions for a further extension, including the repeal of a cap on commercial lending interest rates which was imposed in 2016, a move that parliament rejected in a finance bill last month.

The President of the country, Uhuru Kenyatta sent the bill back to parliament on Thursday night, but what happens next regarding the rate cap is not yet clear.

IMF representative Jan Mikkelsen confirmed what the government said on Thursday: that the deal was over.

“The second review of the IMF-supported program has not been completed, and the program will expire today,” he stated.

“It should be stressed that Kenya’s external position remains strong and foreign exchange reserves are at a very comfortable level.”

Foreign exchange reserves stood at $8.56 billion at the end of last week, equivalent to 5.71 months’ worth of Kenyan imports, central bank data showed. The bank is required by law to hold reserves worth a minimum of four months of import cover.

The central bank expected the current account deficit to shrink to 5.4 percent of gross domestic product at the end of this year, from 5.8 percent in June, Governor Patrick Njoroge said in July.

Kenyan officials have played down the significance of the expiry of the deal, which was agreed in 2016 to help cushion the economy in case of unforeseen external shocks that could upset the balance of payments. No funds were ever drawn down.

However, Finance Minister Henry Rotich said on Thursday that talks with the Washington-based fund would now focus on the next type of facility Kenya could secure.

“The IMF will continue to support Kenya’s reform efforts through policy advice and capacity development,” Mikkelsen said.

Kamau Thugge, the principal secretary at the finance ministry, had said on Thursday that the expiry would not hurt the economy.

Rotich tried to repeal the rate cap in his June budget, but parliament voted to keep the upper limit while getting rid of a minimum deposit rate it had previously imposed.

The cap was aimed at helping small traders borrow at affordable rates, but has had the opposite effect, with banks saying they cannot price risk to small and medium enterprises (SMEs) properly while the cap is in place.

As a result, lending to the private sector fell from 9.3 percent in 2016 to 2.4 percent last year.

Kenyatta is due to address the nation on Friday, after rejecting the finance bill which also sought to postpone a widely unpopular tax on fuel.

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Egypt Signs Oil, Gas Exploration Deal with Shell, Petronas

Egypt has signed a deep-water oil and gas exploration deal with Royal Dutch Shell and Malaysia’s Petronas worth around $1 billion for 8 wells in the country’s West Nile Delta, the petroleum ministry said on Saturday.

The country also signed a second $10 million deal with Rockhopper, Kuwait Energy and Canada’s Dover Corporation for exploration in the Western Desert, a ministry statement said.

Egypt aims to be a regional hub for the trade of liquefied natural gas (LNG) after a string of major discoveries in recent years including Zohr, which holds an estimated 30 trillion cubic feet of gas.

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Nigeria: Inflation Rises for the First Time After 18-month Decline

Nigeria’s inflation has risen for the first since it started its decline in January 2017.

This is according to the latest inflation report published by the National Bureau of Statistics on Friday.

According to the report, the rate at which prices of goods and services increased in August rose to 11.23% from 11.14%.

“The consumer price index, (CPI) which measures inflation increased by 11.23 percent (year-on-year) in August 2018. This is 0.09 percent points higher than the rate recorded in July 2018 (11.14) percent and represents the first year on year rise in headline inflation following eighteenth consecutive disinflation in headline inflation,” the report read.

“Increases were recorded in all COICOP divisions that yielded the Headline index. On month-on-month basis, the Headline index increased by 1.05 percent in August 2018, down by 0.08 percent points from the rate recorded in July 2018 (1.13) percent).”

In July, Bismarck Rewane, economic analyst, had predicted that the inflation numbers would increase in August.

“The rate of moderation in inflation is slowing which means that we are getting close to the point of deflation,” he had said, commenting on July’s inflation numbers.

“When you annualise the month on month inflation, it actually comes out at 15.94%, that is disturbing and that is going to affect the discussions at the MPC meeting today and tomorrow.

“Also important is 17 consecutive months of annual decline in inflation but it’s now getting to the point when it will start going up again. Month on month inflation is more current than year on year inflation.”

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Zimbabweans Face Hard Times as Bread Price Goes Up

Top food processor Innscor Africa Limited announced on Thursday a 10% increase in its bread prices beginning this coming weekend as signs of a tough life for Zimbabweans begin to show under a new Emmerson Mnangagwa led government.

This was revealed in a company notice to distributors under its bread making Bakers Inn unit by company Sales and Marketing Executive Caleb Musodza.

“This letter serves to inform you that the price list for Innscor Africa Bread Company Zimbabwe (Pvt) Ltd t/a Bakers Inn bread effective Saturday 15 September 2018 will be as follows: standard loaf all variants wholesale delivered $1, recommended retail price $1.10,” read the notice.

The Grain Millers Association of Zimbabwe (GMAZ) has sounded the alarm over dwindling stocks of wheat arguing the Reserve Bank of Zimbabwe has failed to avail enough foreign currency for the importation of the grain.

GMAZ chair, Tafadzwa Musarara told the media Thursday the grain milling industry is currently saddled with a US$87 million foreign debt to wheat, rice and salt suppliers.

The looming bread increase is likely to spotlight on the new Zanu PF administration’s capabilities to relieve crisis-weary Zimbabweans of the hardships they have endured since the economy went on a spiral under former President Robert Mugabe at the turn of the century.

MDC leader Nelson Chamisa, who vehemently disputes his controversial defeat to Mnangagwa July 30, has dared his Zanu PF opponent to rule the country without his blessings, insisting the country’s administration does not enjoy any confidence from business and ordinary locals.

“There would be an economic hara-kiri right now if there was no political rape on July 30. Rape has consequences and this failing economy is what we are now suffering from,” he said.

Chamisa added, “The economy is freezing and even fuel is in short supply. What is more in short supply is market confidence. Business is not settled because elections were tampered with. You can change statistics of elections, but you cannot tamper with figures in economics.”

Apart from price increases, continued hardships have manifested in the cash crunch which remains critical in the country, nearly six weeks since Zanu PF won the election.

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Kenya: President Says Controversial Fuel Tax is Necessary, Proposes 8% Cuts

The President of Kenya, Uhuru Kenyatta on Friday explained that the unpopular tax on fuel was necessary, even as he proposed to cut it from 16% to 8%.

His government faced a strike by some fuel dealers, anger among commuters and a lawsuit after it triggered a hike in transport and fuel prices by imposing the 16 percent value added tax on all petroleum products on Sept. 1.

Kenyatta explained that the Finance Bill 2018 that was presented to him on Thursday was ‘good politics, but bad leadership’.

Kenyatta, who is serving his second and final term, told Kenyans that the 2010 constitution that championed devolution to boost service delivery, substantially increased the cost of running government.

‘”Having transferred over a trillion shillings to county govts since 2013, we’ve seen major improvements in service delivery and improvements in the lives of Kenyans,” said Kenyatta.

The president said his government will ‘protect and entrench devolution’ regardless of the cost.

Kenyan then highlighted the development objectives that have been realised through the revenue collected from taxes, including infrastructure and healthcare projects.

Following the widespread anger that followed the implementing of the 16% tax on petroleum products, the president said he would compromise, describing his actions as “balancing between short-term pain and long-term gain”.

‘”I have heard and understood your concerns, which is why I have proposed, as part of my memorandum, to cut VAT on petroleum products by 50%, from 16% to 8%.”

Explaining that the tax cut would ensure that a financing gap continues to exist, Kenyatta said several austerity measures would be implemented across different departments of the government.

“The cuts target less essential spending, such as hospitality, foreign and domestic travel, training and seminars, and similar categories,” said Kenyatta, who on Thursday announced the restructuring of the country’s police service designed to reduce duplication and waste.

While several Kenyans had argued that they were opposed to paying more taxes because of the rampant corruption in Kenyatta’s government, the president sought to assure that ‘the taxes will be used well.

“I have increased funding to the judiciary to speed up the completion of cases concerning corruption and economic crime,” assured Kenyatta.

“Further, I have increased the allocation to the Office of the Director of Public Prosecution…I expect these bodies to work together to help us restore our faith in public institutions.”

Parliament will hold a special sitting on the bill on Sept. 18 to reconsider the finance bill “together with the reservations of the president”, said a gazette notice signed by Justin Muturi, the speaker of the national assembly on Thursday.

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Australia’s New Treasurer to Get Tough on Financial Regulator

Australia’s new federal treasurer, Josh Frydenberg, criticized the conduct of the corporate regulator and promised it powers to speed up compensation for mistreated customers.

In a round of interviews with newspapers published on Saturday, Frydenberg said he would demand answers from the Australian Securities and Investments Commission (ASIC), over mounting troubles in the financial services sector.

“I’m appalled by the behavior that has been exposed through the banking royal commission,” Frydenberg told Guardian Australian.

Flexing its muscle amid the criticism, ASIC on Friday sued Australia and New Zealand Banking Group Ltd over a troubled A$2.5 billion (1.4 billion pounds) share placement.

Frydenberg, a former energy minister who became treasurer in last month’s major overhaul of the center-right government, told the Australian Finiancial Review Weekend the remediation changes were needed to compensate aggrieved customers.

“A new ASIC remediation power, as recommended by the ASIC capability review, and accepted in principle by the government, is one potential solution to ensure better and speedier consumer outcomes,” he added.

Frydenberg also said he would be willing to extend the Royal Commission inquiry, if needed. The Commission is due to present to government its interim report on Sept. 30th.

He also said company tax cuts for big business, a policy abandoned last month, would not be reconsidered, but the government would focus on a deregulation agenda that would streamline approvals process for big businesses.

“The big focus for me is going to be on the productivity agenda, and the productivity agenda involves cutting regulation which is really important to business,” he said.

Frydenberg told Guardian Australia the government plans a series of big spending initiatives, such as more cash for Catholic schools, healthcare and the national disability insurance scheme. He said, however, that the government still has a target of balancing the budget in 2019-2020.

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Power, Fuel Subsidies Gulping Nigeria’s Resources – US

Nigeria is pouring scarce resources required to fix critical sectors such as education and health care services into subsidies on petroleum products and electricity, the United States Agency for International Development has said.

The USAID Country Mission Director, Stephen Haykin, who represented the US Ambassador to Nigeria, Stuart Symington, said this at the 10th Anniversary. Colloquium of the Financial Nigeria Magazine in Abuja on Tuesday. Haykin said the inability of the country to recover the cost of electricity as well as the failure to recover the full cost of production from pump prices of petroleum products meant that critical resources were being diverted instead of being invested in critical needs in education and health care.

He stated, “One proximate cause of poor health, education and nutrition standards is low public expenditure. This, in turn, is related to very low public revenues due in fact to low tax rates and weak systems for tax collection. “Low social spending is also as a result of transfers from government to petroleum and power sectors, because fuel and electricity tariffs are below cost recovery levels.” Attributing poor social development to crises across the country, Haykin said, “Fiscal, trade and other micro-economic policies tend to act as breaks on private sector initiatives on economic growth. Weak governance due to inadequate capacities or lacks of checks and balances also slows social and economic development.” Also speaking at the event, a former Minister of Health, Muhammad Pate, said that about 40 per cent of under-five children in Nigeria were experiencing stunted growth.

Read Also;  South Africa: Apex Bank Head Warns Against Populist Policies

Pate, who is currently an adjunct professor of global health at the Duke University, in his keynote presentation noted that the Nigerian political elite were serving themselves rather than the people. He said, “After extracting almost a trillion dollars’ worth of oil since our national independence, we have a situation where poverty is going on. We have effectively squandered an opportunity to utilise the natural resources that we obtain purely by chance, not by hard work”.

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South Africa: Apex Bank Head Warns Against Populist Policies

“South Africa should avoid populist economic policies and prioritize strategies that lead to sustainable growth and job creation,” said the country’s Reserve Bank Governor Lesetja Kganyago.

“The central problem is avoiding the temptation to pursue economic policies that have short-term, populist benefits but long-term costs,” Kganyago wrote in an opinion piece in the Johannesburg-based Business Times.

He said that such decisions result in higher public or private debt to finance consumption, which is contributing to recent market contagion.

Africa’s most industrialised economy entered a recession in the second quarter, with the rand weakening to a two-year low.

The currency’s rapid depreciation reflects a perception that “South Africans are discussing policies that risk undermining the macro framework rather than inducing stronger economic growth and job creation,” according to Kganyago.

He said that “another task is to get more out of our public spending — ridding institutions of corruption and improving health and education outcomes.”

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Uber-Rival, Careem Expands Services into Sudan

Middle East ride-hailing firm Careem said on Sunday it had started a service in Sudan, one of few international companies to enter the country since U.S. economic sanctions were lifted last year.

Sudan is grappling with an economic crisis as a foreign currency shortage and an increasingly expensive black market for dollars weakened its ability to import and made prices soar.

Careem, which said its services were now available in Sudan’s capital Khartoum, has hired 10 Sudanese employees and signed up hundreds of drivers to its app to launch operations.

The company expects to have as many as 30 employees in Sudan and be present in at least one other city in the northeast African country by the end of the year.

“My goal and aim is to cover as many (cities) as possible in the next one or two years,” Careem’s Managing Director for Emerging Markets Ibrahim Manna told Reuters by phone.

Sudan has the potential to be one of Careem’s biggest markets in terms of number of trips taken due to the population size and demand for transportation services, he added.

Careem will compete against several local ride-hailing apps, such as Tirhal, but not Uber Technologies itself, which does not operate in the country.

Dubai-based Careem is Uber’s main Middle East rival, competing in most of the region’s major cities including Cairo, Dubai, and Riyadh. Last year it became the first ride-hailing firm to operate on the Israeli-occupied West Bank.

Careem plans to reinvest revenue earned in Sudan back into the country over the next two to three years as its grows its business there, Manna said.

Remitting cash from Sudan can be difficult due to the country’s hard currency shortage.

International banks remain cautious about doing business with Sudan which remains on the United States list of state sponsors of terrorism – alongside Iran, Syria, and North Korea – despite the U.S. lifting economic sanctions.

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China Extends a to Botswana Loan, Cancel Debt

China has agreed to extend a loan to Botswana for rail and road infrastructure as well as writing off some debt, Botswana’s President Mokgweetsi Masisi said on Saturday.

Speaking at the airport on his return from this week’s China-Africa forum in Beijing, Masisi said Botswana had made a pitch to China and “I am happy to report that, judging from what President Xi Jinping told me, we were successful”.

In addition to the loan and a debt cancellation of 80 million pula, China has also offered a 340 million pula ($31 million) grant, he said.

“We got a little bit more than just the loan,” he told reporters.

He did not disclose the size of the loan, but last week the ministry of finance said Botswana was seeking a 12 billion pula ($1.09 billion) loan for transport infrastructure.

Botswana is the world’s leading producer of diamonds by value. Chinese companies, mostly state owned, are largely into construction in Botswana such as dams and roads.

The bulk of the loan is expected to fund the Mosetse-Kazungula railway line project, which will link the central part of Botswana to the tourism hub in the northwest.

The railway line will also promote regional trade as it will connect Botswana to Zambia via the Kazungula Bridge, currently under construction.

China’s Xi offered another $60 billion in financing for Africa on Monday and wrote off some debt for poorer African nations, while warning against funds going toward “vanity projects”.

Speaking at the opening of the forum, Xi said the financing would include $15 billion in aid, interest-free loans and concessional loans, a $20 billion credit line, a $10 billion special fund for China-Africa development, and a $5 billion special fund for imports from Africa.

Equatorial Guinea to Ban Oil Services Companies Over Local Jobs

Oil and gas services firms Schlumberger, Subsea 7 and FMC face being banned from working in Equatorial Guinea if they do not commit by the end of this month to create more jobs for locals, an oil ministry source said on Friday.

The move is part of crackdown by the African country to enforce local content laws that have been in place since 2014 and which has already grounded CHC Helicopter.

Subsea 7 said it is aware of the increased focus on local content. “We continue to work closely with authorities to ensure we meet all applicable local regulations,” a Subsea 7 spokeswoman said.

Schlumberger and FMC did not respond to phone calls or emails for comment.

In July, the OPEC member and one of Africa’s top oil producers ordered petroleum operators, including Exxon Mobil, to cancel contracts they held with Canadian-based CHC Helicopter for flouting local content laws meant to create jobs.

The source confirmed that CHC Helicopter will not be working in the country from next year, ending a working relationship dating back more than three decades.

“The ministry is aggressively looking at the second phase, with three additional companies that will have the same fate if they don’t get their act together in one month, by the end of September,” said the source, who requested anonymity because they were not authorized to speak to the media.

“Schlumberger, FMC and Subsea 7 are really in the last stage of being asked by the ministry for the operators to cancel their contracts and tender new ones for new companies to do the work, especially because they are not complying with local content.”

Equatorial Guinea’s national content regulations of 2014 state that agreements must make provisions for capacity building and give preference to local companies when awarding service contracts in the African country.

OPEC, Non-OPEC Panel to Discuss Sharing Oil-Output Boost

An OPEC and non-OPEC technical committee will later this month discuss proposals for sharing out an oil-output increase, sources familiar with the matter said, a tense topic for the producer group after it decided in June to ease supply curbs.

A panel called the Joint Technical Committee will on Sept. 17 consider proposals on distributing the agreed output increase of 1 million barrels per day, the sources said.

The discussion had earlier been planned for next Tuesday.

“The talks will look at various mechanisms” to reach the required production level, a source said.

If resolved, the talks could lead to an easing of tensions within the Organization of the Petroleum Exporting Countries.

Iran had been against the June decision, which came amid pressure from U.S. President Donald Trump to reduce oil prices.

There are four proposals on how to distribute the increase, presented by Iran, Algeria, Russia and Venezuela, one of the sources said, suggesting agreement will not be straightforward.

One idea, to share it pro-rata among participating countries, is unlikely to be approved by Russia and Saudi Arabia since it would give them less than the supply boosts of 300,000 and 400,000 bpd that they respectively want, the source said.

OPEC, Russia and other non-members agreed in June to return to 100 percent compliance with oil output cuts that began in January 2017. Months of underproduction in Venezuela and elsewhere had pushed adherence above 160 percent.

The June meeting concluded with a deep disagreement between Saudi Arabia and Iran, longtime rivals in OPEC.

Saudi Arabia said the decision implied a reallocation of extra production from countries unable to produce more to those, such as Riyadh, that can. Iran, facing a forced cut in its oil exports because of U.S. sanctions, disagreed.

The proposals will next be presented to ministers attending a monitoring meeting in Algeria on Sept. 23, sources said.

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Zimbabwe: President Names Former Banker Finance Minister

The President of Zimbabwe, Emmerson Mnangagwa appointed former banker, Mthuli Ncube as finance minister on Friday.

The president kept Winston Chitando in charge of mining, placing two technocrats at the helm of plans to rescue the country’s battered economy.

The 75-year-old leader is under pressure to rebuild an economy hit by lack of foreign investment, unemployment above 80 percent and acute dollar shortages that have hobbled some imports.

Mnangagwa won a disputed vote on July 30, the first election in the southern African nation since Robert Mugabe was removed by the army last November after nearly four decades in power.

In appointing Ncube, Mnangagwa wants to show the international community that he is giving priority to the economy and moving away from the Mugabe years where important cabinet posts were given on patronage lines.

“It sounds very encouraging especially on the choice of finance minister. That’s a very good foundation for the country’s economic recovery prospects,” said John Robertson, a Harare-based independent economist.

Ncube, 55, is a former chief economist and vice president at the African Development Bank (AfDB) and was also a lecturer in finance at the London School of Economics and Wits Business School in South Africa.

He founded Zimbabwe’s Barbican Bank and asset management company, which were, however, put into administration by the central bank in 2005 after only two years of operations. The bank’s license was later canceled.

Ncube will be tasked with crafting an economic recovery program as well as coming up with strategy to pay off Zimbabwe’s $1.8 billion arrears to the World Bank and AfDB.

Mnangagwa appointed eight new faces to his cabinet but there was no place for long serving ministers Patrick Chinamasa, Obert Mpofu, David Parirenyatwa and Simon Moyo.

“We would want to grow, modernize and mechanize our economy. We believe in the next five years, we will be able to transform our people into middle income citizens,” Mnangagwa told reporters after his chief secretary announced the cabinet list.

Mnangagwa had earlier received support from former President Robert Mugabe who said he now accepted him as Zimbabwe’s legitimate leader after initially accusing him of leading a “disgraceful” de facto coup that ended his near four-decades rule last year.

On the eve of the July 30 vote, Mugabe, 94, said he would vote for the opposition to remove Mnangagwa’s “military government”, expressing bitterness toward his one-time allies in the ruling ZANU-PF party.

N1.8bn Deduction From Stanbic IBTC in National Interest- CBN official

The Central Bank of Nigeria (CBN) says the alleged deduction of N1.886 billion fine from Stanbic IBTC Bank’s account was in done in national interest.

An official of CBN, who pleaded anonymity while confirming this to the national media in Lagos, said he could not immediately give details, but the apex bank would issue a statement on the matter later.

The CBN had, on August 28, ordered MTN to refund $8.1 billion repatriated from their Nigerian operations to offshore investors.

Four banks, Citibank, Diamond Bank, Stanbic IBTC and Standard Chartered Bank, were fined N5.87 billion for allegedly issuing irregular certificates of capital importation (CCIs) on behalf of some MTN offshore investors.

Stanbic IBTC had denied the allegations, it did not violate any regulation on money remittances.

Standard Chartered Bank was fined N2.4 billion; Stanbic IBTC, N1.8 billion; Citibank Nigeria, N1.2 billion and Diamond Bank, N250 million.

The management of Stanbic IBTC Bank, had on Friday, alleged that the apex bank unilaterally deducted N1.886 billion from its account as a fine imposed on the bank.

Chidi Okezie and Bridget Oyefeso-Odusami, secretary and acting head, marketing and communications of Stanbic IBTC Bank, made this known in a statement.

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China to Restructure Some Ethiopia’s Loans

China has agreed to restructure some of Ethiopia’s loans, including a loan for a $4 billion railway linking its capital Addis Ababa with neighbouring Djibouti,  Ethiopia’s Prime Minister Abiy Ahmed said on Thursday.

“During our stay, we had the opportunity to enact limited restructuring of some of our loans. In particular, the loan for the Addis Ababa-Djibouti railway which was meant to be paid over 10 years has now been extended to 30 years. “Its maturity period has also been extended,” Abiy told reporters in the Ethiopian capital Addis Ababa, upon return from a summit in China.

While in China where he joined other African leaders for the Forum on China – Africa Cooperation, FOCAC, Abiy and his team held several high-level meetings with officials. In his remarks, Abiy highlighted that China has been our steadfast ally in the effort to build an economically advanced and socially inclusive Africa. He met with President Xi Jinping, his counterpart Prime Minister and also with the China EXIM bank.

Read Also; Nigeria Signs $328m ICT Agreement with China

At the meeting, they discussed strengthening cooperation & partnership on Foreign Direct Investments (FDI). They agreed to look into restructuring of Ethiopia’s loans. The Bank’s Chairperson also appreciated Ethiopia’s recent economic reforms, Abiy’s chief of staff said in a tweet on September 2. Abiy stopped in Eritrea on his way back from China. He held talks with President Isaias Afwerki and signed a tripartite agreement between Ethiopia, Eritrea and Somalia with the Somali leader flying into Asmara to join them on Wednesday.

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Nigeria Air’s Take-off Date By December Still Feasible — NCAA

The Director General, Nigerian Civil Aviation Authority, Capt. Muhtar Usman, has said the proposed national carrier, Nigeria Air will begin operations by December this year as proposed by the Federal Government.

Usman told journalists earlier this week that as far as the NCAA could deliver on the two major certificates, the Air Transport Licence and the Aircraft Operators Certificate, within the 90 days stipulated by law, the airline was still on track for the December take -off.

“We still have more than 90 days to the end of the year, so it is still feasible, all things being equal. I am just talking from the regulatory point of view,” he added. Usman stated that criticisms about the proposed national carrier project had also reduced as most Nigerians were beginning to understand and buy into the idea .

The DG said the project was still ongoing , adding that the government and other relevant stakeholders were working round the clock to ensure a successful take -off. He stated, “The Nigeria Air project arrangements will continue until it is delivered to the Nigerian people; even though people are now quiet about it, it does not mean that the project has stopped at all.

READ ALSO; Nigeria: Aero Contractors Increase Flights

“It is a process, the process is ongoing and it is transparent as people can see, it is to get the best for Nigeria. Nigerians have been yearning for the gaps created by the lack of a strong and viable carrier that will meet the demands and potential of both the domestic market, regional and the international markets to be filled.”

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South Africa’s Slide into Recession is a “Transitional Issue” – Ramaphosa

South Africa’s slide into recession is a “transitional issue” from which the economy will soon recover, President Cyril Ramaphosa said in comments published this week, repeating promises for a stimulus package to reignite growth. Ramaphosa has staked his reputation on reviving the economy after a decade of stagnation under his predecessor, scandal-plagued Jacob Zuma, whom he replaced in February.

Ramaphosa suffered a major disappointment when data showed on Tuesday that the economy had shrunk 0.7 percent in the second quarter, unexpectedly tipping the country into its first recession since 2009. “All these things that are happening now are transitional issues that are going to pass.” Ramaphosa was quoted by local news agency Eyewitness News as saying, in his first comments on the recession shock.

“I will be meeting with the business community soon, so that we rally everyone together and pull our country out of the situation that we are in,” added Ramaphosa, who was attending a China-Africa summit in Beijing when the data was released. The rand has slumped more than 5 percent against the dollar this week and government bonds have sold off steeply, also hurt by the turmoil on Turkish and Argentinian financial markets.

READ MORE; Kenya: Tax Increase On Petroleum Products Burdens Masses

Several foreign banks have slashed their growth forecasts for South Africa to less than 1 percent this year. In a statement issued on Wednesday, Ramaphosa’s party, the ruling African National Congress, said the recession was the result of a “prolonged trend of slowdown in economic growth”. It said there was an urgent need for measures to reverse the economic decline and suggested there could be tax credits for companies which support job creation.

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Nigeria: Aero Contractors Increase Flights

Aero Contractors, a state-controlled Nigerian aviation company says it has expanded its operations with the delivery of more aircraft to its fleet.

According to national media, Ado Sanusi, CEO of the company, said the number of flights to Abuja from Port Harcourt, Sokoto, Asaba, Port Harcourt and Kano from Lagos have been increased.

He said the airline will as from September 17 start flying daily on the Abuja-Port Harcourt-Abuja route.

Sanusi said the airline will also increase flights from three times weekly to three daily flights on the Lagos-Abuja-Lagos and Lagos-Port Harcourt routes.

“The airline has also increased its Lagos-Kano flights, which at present is five times a week by adding another flight on Sundays,” he said.

“So from the above date it will be operating six times weekly to Kano from Lagos.

“Also from September 15, Aero will increase its flights from Lagos to Asaba which at present runs six times weekly to daily flights,” Sanusi said in a statement on Saturday in Lagos.”

He explained that the airline, which operates Lagos-Asaba-Abuja-Lagos flights six times a week, has added another flight on Saturday for Lagos-Asaba-Lagos only.

“We now have two Boeing B737-500 series, Boeing B737-400 series (which will be rolled off C-check next week) and Bombardier Dash 8-300 series,” Sanusi said.

“Aero has added another aircraft in its rotary (helicopters), which is AW 139 Helicopter to Aero fleet. So it now has AW 139 and AS 365 which are fully operational.

“We have expanded our schedule because we have additional aircraft and we are also expecting more.

“When we deliver more aircraft, we increase our destinations. What we have done largely now is to increase our frequencies as we increased in capacity.”

Kenya: Tax Increase On Petroleum Products Burdens Masses

As soon as news went round that the Kenya Revenue Authority (KRA) had effected the 16 percent VAT on petroleum products Kenyans started feeling the pinch.

Passengers who spoke to the state media said that the effects of the new tax had started kicking in.

Many of them pleaded with Members of Parliament to come to the rescue of Kenyans.

“I have been forced to pay Sh1,000 and not the usual Sh800 for my journey to Kisii. This is very expensive for me,” said Thomas Okemwa, a traveller.

On Saturday at exactly 2pm, at Githurai bus terminus in Ngara, touts promptly hiked bus fare from the normal Sh20 at to Sh40.

The touts could be heard loudly complaining about the added tax as they beckoned passengers to board the buses.

“Things are going to worsen and it is time people start planning well,” Gabriel Kamau, told state media.

He said that they had been caught unawares and their managers only asked them to increase fare by Sh20 until a review is made next week.

‘Boda boda’ riders in Nairobi also said that they will soon review fare to various destinations within the capital.

“We shall also charge extra because we are also here trying to make a living,” said Walter Mose a boda boda rider.

The additional 16 percent tax has come to effect despite a move by parliament to suspend it till September 2020.

Nigeria Signs $328m ICT Agreement with China

Nigeria has signed a $328 million agreement with China on the National and Communication Technology Infrastructure Backbone (NICTIB) Phase 11.

The NICTIB 11 project is aimed at developing information and communications technology in Nigeria.

Garba Shehu, senior special assistant to President of Nigeria, Muhammadu Buhari on media and publicity, disclosed this in a statement on Saturday.

The national media reports that the agreement was signed when President Buhari arrived in Beijing, China, for the 2018 Forum on China–Africa Cooperation (FOCAC), with the Chinese President Xi Jinping witnessing the signing.

The NICTIB 11 project, the statement said, will be executed by Galaxy Backbone Limited and Huawei Technologies Limited (HUAWEI) while funding will come from the Chinese EXIM Bank.

“The bank facility is for the development of NICTIB 11 project which is consistent with the current administration’s commitment to incorporating the development of ICT into national strategic planning under the National Economic Recovery and Growth Plan (ERGP),” the statement read. 

“President Buhari and his Chinese host will also witness the signing of the MoU on One Belt One Road Initiative (OBOR).”

In 2013, the Chinese president had proposed the initiative of building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road, with a view to integrating the development strategies of partnering countries.

During the FOCAC Summit, the Nigerian delegation is also expected to sign no fewer than 25 MoUs.

“These include those proposed by the Nigerian Investment Promotion Commission (NIPC), Nigerian National Petroleum Corporation (NNPC), and Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA),” the statement read.


African Leaders Trooping to Beijing for 2018 FOCAC Summit

Presidents and heads of government across Africa are already in or arriving in the Chinese city of Beijing for a high-level summit hosted by the Chinese government.

The Forum for Africa-China Cooperation, FOCAC, summit is a meeting between the two partners and is largely premised on ways to increase diplomatic, economic and bilateral ties.

It officially kicks off on September 3 through to September 4. This year’s edition is themed “China and Africa: Toward an Even Stronger Community with a Shared Future through Win-Win Cooperation.”

The summit is seen largely as key diplomatic event hosted by China this year and attended by the largest number of foreign leaders to date. African leaders already in Beijing have held different levels of talks with their Chinese counterparts signing deals and also meeting investors.

This year is the third time the summit has convened, following the inaugural 2006 summit in Beijing and the 2015 summit in Johannesburg, said Chinese State Councilor and Foreign Minister Wang Yi.

African leaders and the chairman of the African Union (AU) will be in attendance, and the United Nations (UN) Secretary-General will be the esteemed guest, joined by 27 international and African groups as observers.

The interest in the forum is a result of China’s growing influence on the African continent and proves the FOCAC has been pragmatic and efficient, analysts said.

“Established 18 years ago, FOCAC has led international cooperation with Africa and has become a significant marker of South-South cooperation,” said Li Dan, director of Africa Studies Center of China Foreign Affairs University.

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Ethiopian Cargo’s New Route Linking Africa to the Americas

Ethiopian Airlines  have announced a new route for its cargo services with a landmark route connecting Africa with South and North America, the airline said in a statement.

The twice weekly service will be to the Colombian capital Bogota from the Spanish city of Zaragoza with a stopover in the city of Miami in the United States.

The service commenced on August 29 and will be executed by their B777-Freigther. It is the latest addition to Ethiopian’s footprints which are very strong in the area of passenger transportation.

The Miami International Airport (MIA) also expressed excitement at the Ethiopian route which it said was between Addis Ababa and MIA describing it a route ‘creating the first cargo-only route between Africa and MIA.’

Commenting on the new cargo flight, Mr. Tewolde GebreMariam, Group CEO of Ethiopian Airlines, said: “We are very pleased to see Zaragoza, Miami and Bogota joining our fast expanding freighter network in the Americas.

“With the new service, Ethiopian will carry Inditex high-end textile products from Zaragoza to the Americas. In line with our strategic roadmap, Vision 2025, we will keep on expanding our cargo destinations worldwide, thereby facilitating trade and economic growth among different regions of the world.”

According to Ethiopian, its “Cargo & Logistics Services currently serves over 44 international destinations in Africa, the Gulf, Middle East, Asia, the Americas and Europe, and boasts the largest trans-shipment terminal in Africa and one of the biggest ten in the world with an annual capacity of about 1 million tons.”

The airline is Africa’s largest Aviation Group and is also a SKYTRAX certified Four Star Global Airline. It bosses the air travel market and holds shares in over a dozen national airlines. It is a wholly government owned enterprise that is likely to undergo a level of privatization under new reforms being championed by Prime Minister Abiy Ahmed.

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Nigeria: NAFDAC Planning a Decade Limit on Imported Drug Registration

The National Agency for Food, Drug Administration and Control (NAFDAC) says it is planning to place a 10-year limit on registration of imports on pharmaceuticals to encourage local production of drugs.

Christianah Adeyeye, NAFDAC director general, made this known at a stakeholders’ meeting tagged: “A Date with the Director- General, NAFDAC” on Friday in Lagos.

The NAFDAC boss said that the agency would increase its vigilance activities and spot checks to ensure consistent product quality.

“We have developed relevant guidelines and documents to enhance pharmaco-vigilance and post-marketing surveillance activities in the country,” she said.

“This has been evidenced by the series of alerts issued by the agency in the face of threats as well as the recall of some products in the interest of public health.”

Adeyeye said the agency is determined to reduce the incidence of substandard and falsified products as well as the smuggling and abuse of various products.

“We are doing so many things to address the issue of drug abuse by laying an embargo on the importation of codeine through inspections and surveillance,” the DG said.

“We are planning nationwide campaign on drug abuse, going to secondary schools to talk about the effect of drug abuse which is going to be a yearly campaign.”

Commenting on the agency’s plans, Okechukwu Akpa, chairman, Pharmaceutical Manufacturers Group of Manufacturers Association of Nigeria (PMG-MAN), said: “We are happy with the 10 years limit on registration of imports because it will help us manufacture more drugs, boost and have more commitment to Nigeria’s economy.

“Many countries such as India, China and Malaysia are into making their drugs and that is why they growing economically and their health system are good.

“We are over 180 million in Nigeria and we keep increasing, protecting our local drugs will help us to provide job opportunities for Nigerians and the well-being of people.”

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GSM Clocks 17years, More Emphasis on Data

Seventeen years on, Nigeria’s mobile telephony (GSM) sector has put up an impressive performance, raising telephone subscriber base from just over 400,000 in August 2001 to 162 million in June 2018, generating thousands of direct jobs and several thousands of indirect ones, raising internet penetration, giving verve to online and electronic transactions, making significant contribution to GDP, improving the way we live and lifting investor confidence in the country, despite hiccups here and there.

The Nigerian Communications Commission (NCC) which is the telecommunications industry regulator, remitted N1333.4 billion to the consolidated revenue fund of the Federal Government in 2017.

The National Bureau of Statistics report confirmed that the Nigerian telecommunications sector, during the second quarter of 2017, contributed 9.5 percent to the GDP in contrast to 9.1 per cent contribution in the first quarter of the year.

“Sub-Saharan Africa’s mobile industry is showing strong progress in achieving the targets of the SDGs, predominantly through increased connectivity and access to information, but also through the delivery of services, such as mobile money, that increase productivity, improve well-being and reduce poverty,” says John Giusti.

GSM  debuted in 1982 as a pan-European communication technology and had since spread beyond the frontiers of Europe to other jurisdictions including Africa. Nigeria, therefore, came late to the party. The good news, however, is that though a late entrant into the GSM market, Nigeria has outpaced many countries across the globe in terms of market size and telephone penetration.

The first GSM service rolled out in August 2001 following a successful Digital Mobile Licence, DML, auction conducted in January of the same year by the nation’s telecom regulator, the Nigerian Communications Commission, NCC. That auction, the first in Africa, was adjudged transparent and world-class by both the World Bank and the International Telecommunications Union (ITU). The NCC had placed the asking price for each licence at a conservative $100 million. But at the end of the auction, each licensee paid as high as $285 million.

As revenues from voice services dwindle over the years, Nigeria’s four mobile networks, MTN, Glo, Airtel and 9mobile are paying more attention to data services. The emphasis is on LTE technology.

LTE (Long-Term Evolution) is a standard for high-speed wireless communication for mobile phones and data terminals, based on the GSM/EDGE and UMTS/HSPA technologies. It increases the capacity and speed using a different radio interface together with core network improvements.

In a major push for data revenues, MTN which is the market leader signed a N200 billion seven- year Medium term loan agreement with a consortium of local banks, with FBN Quest acting as a facility agent.

The largest operating telecommunications company in Nigeria, declared that the loan raised from 12 Nigerian banks will be used for expansion and improvement of data services where it sees a major part of its revenue growth coming from in the future.

Speaking at the signing, Chief Executive Officer, MTN Nigeria, Ferdi Moolman, expressed enthusiasm at the completion of the agreement, saying it signposts MTN’s commitment to and confidence in Nigeria, and the strength of the strategic collaboration between MTN Nigeria and local financial institutions, that will help deepen and broaden the provision of ICT services in Nigeria.

“The signing of this loan facility is a major landmark in our expansion programme in which we are making significant investments. The facility will enable us evolve the network to deliver convergent and superior quality, drive voice capacity expansion and data service penetration, maintain optimal capital structure and funding level that support growth and expansion,” Moolman said.

“Making it possible for people to connect to each other and the world, find and share information and ideas, create and access new digital services and reimagine old services. This partnership puts in place infrastructure that empowers commerce, industry and the provision of public services,” Moolman said.

MTN’s debt increased to 69.8 billion rand as of the end of June, compared with 57.1 billion rand six months earlier.

Kunle Awobodu, MTN Nigeria’s Chief Financial Officer, told BusinessDay that; “although MTN has the most expansive fibre network in the country, there is an issue with fibre cuts and attack. Therefore, we need to protect our network in a way that even when we get attacks, our network doesn’t go down. We are going to invest in ring-fencing our coverage all over Nigeria and also invest in fibre infrastructure so that high speed data can reach the rural parts of the country.”

Industry watchers say that MTN’s continuous investment in growth and expansion of services shows extreme confidence in the Nigerian market. They also say that the N200 billion loan syndication is a marker as to the strength of Nigerian banks to service telecommunication businesses which are capital intensive investment areas.

“Our revenue base is still largely dominated by voice which contributes about two third of our total revenue, but what we are beginning to see is that people are not making calls as much as they used to, and are more interested in data based applications, so, as we transition into this movement, we need to invest in our network. Our view is that we must prepare for the future. If a big portion of our revenue is going to come from data and from digital services in the future, we have to start that investment now, and that is why we have taken the medium term loan,” Awobodu said.

The loan facility is structured with a two-year moratorium and a repayment plan of five years and is denominated in Naira.

MTN had in 2013, raised a total of N239 billion in loans for expansion which is said to wind down in 2019.

“We raised the loan locally and that loan is winding down next year. We have kept to the loan servicing agreement and all the repayments have been made as at when due. Final payment will be done in 2019,” Ishmael Nwokocha, MTN’s General Manager, Corporate Treasury Finance.

According to Awobodu, MTN already has Long Term Evolution (LTE) frequency in some parts of the country.

“We actually have LTE frequency, but the more frequency you have, the better services you can provide and it also helps us in terms of the coverage that we can give to the populace. So we keep looking for opportunities in the market to give us services to the outer part of Nigeria with better network quality.

“What we are doing with our LTE services is that we plan to expand. We started with three cities; Lagos, Abuja, Port-Harcourt and we expanded to reach about nine or 10 cities in total, but we have cities that are still not on 4G and we would like to expand into those cities, and this is part of why we are doing this CAPEX expansion,” he said.

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Beijing Summit to Push Africa Economic Progress

African and Chinese experts expect further steps to be taken at the Forum on China-Africa Cooperation scheduled for 3-4 September in Beijing.

This is to be achieved through the implementation of the “Belt and Road” initiative, which aims to accelerate Africa’s economic transition.

The Mombasa-Nairobi, Addis Ababa, Djibouti railway lines and other infrastructure projects have become flagship projects in Africa.

As part of the development of new silk roads, China and African countries have jointly built a number of economic and trade cooperation and development zones.

The African Union Commissioner for Rural Economy and Agriculture, Josefa Leonel Correa Sackoa says African countries could learn from China’s achievements in reform, openness and poverty reduction.

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Ethiopia Secures $1 bn World Bank Support Due to Peforms – PM

Ethiopian Prime Minister Abiy Ahmed says the World Bank will provide $1 billion in direct budget support to the country in the next few months. Abiy was addressing his first press interaction since coming into office.

According to him, the deal with the global finance body had been reached because of ongoing reforms in the country. “This is due to the reforms taking place in the country,” he told the press in Addis Ababa on Saturday.

The World Bank and other donors suspended budgetary support after a disputed and violent election in 2005.

Abiy has announced a series of economic and political changes since taking office in April. In other issues he promised free elections in 2020 for the nation of 100 million people, where parliament now has no opposition lawmakers.

Ethiopia has over the past years being one of Africa’s fastest growing economies according to the bank and the International Monetary Fund. Its economy was however more state driven a situation Abiy is seeking to reverse with plans of significant privatisation.

Abiy last met with the World Bank boss in Washington DC during his diaspora tour that saw him visit three states in the United States. He also met with the IMF boss on the same trip as both parties discussed ways of improving relations.

“PM Abiy met today with World Bank Group President Jim Young Kim in DC. They had discussion on a range of issues including: future of disruptive technology, human capital, sustainable debt financing and risk of debt distress. Dr Kim said WBG is ready to provide a robust support to Ethiopia,” his chief of staff tweeted on July 27.

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Nigeria’s External Debt Flat in Q2 2018

Nigeria’s total debt portfolio as at 30th June 2018 stood at N22.38 trillion ($72.2 bn), according to data obtained from the Debt Management Office (DMO).

This debt stock composition comprises both external and domestic debt (FG+States+FCT) at $22.08bn and N15.63tn ($51.12bn) as at Q2 2018.

However, while the countries total domestic debt stock saw a decline of 2.1 percent from N15.96tn in Q1 2018 to N15.63tn as at Q2, the external debt was flat at $22.08bn all through the 2nd quarter.

This is because, unlike in Q1 when it raised US$2.5bn to supplement the $3bn it raised November last year, the Federal government did not tap the Eurobond market

The FGN’s external debt obligations at end-June amounted to US$22.08bn, equivalent to 5.9 percent of 2017 GDP. This includes the external borrowings of the state governments, which are necessarily guaranteed by the FGN.

In 2017, the DMO came up with a debt restructuring strategy aimed at increasing external debts from 23 percent to 40 percent, and cutting down on domestic debts from 77 to 60 percent so as to free up capital for the private sector.

In line with this externalization strategy, the N1.95trn deficit in the FGN’s 2018 budget is to be covered by external and domestic borrowings of N850bn (US$2.8bn) and N790bn respectively as well as unspecified privatization proceeds of N310bn.

The debt office said the federal government had so far borrowed a total of N410 billion locally to finance the N9.12 trillion 2018 budget, which was assented to on June 19 by President Muhammadu Buhari. According to the DMO Director General, Patience Oniha, there had been no foreign borrowing so far to support the 2018 budget.

The debt office also said it has sent the request for a proposal to banks for an international bond offering that will see it raise as high as $2.8billion Eurobond to finance the 2018 budget, but it is waiting for the legislative arm of government to give a nod for the new borrowing.

The ratio of the domestic debt to external debt is inching towards the target of 60:40 and the target of 75:25 between long-term domestic debt and short-term domestic debt.

The ratio between domestic and external debt stood at 70:30 compared to 72:28 in December 2017

The above variables had resulted in lower interest rates for the benchmark FGN securities from about 18.5 per cent in January 2017 to 11-14 per cent in the first half of 2018.

A small decline in obligations to the World Bank Group was balanced by a rise in debt due to bilateral creditors, notably the Exim Bank of China and Germany’s KFW (state-owned development bank).

ICM are again the largest creditor group, and are likely to remain so due to the FGN/DMO policy of externalization of debt. From a financing perspective, it is worth noting that 60.1 percent of the debt stock is due to multilateral and bilateral creditors on concessional terms.

There has been a surge in warnings about the sustainability of Nigeria’s public debt stock, some of them influenced by regret that commercial borrowings come without policy conditionality. At current levels, the FGN can comfortably service external debt of US$22bn from the earnings accruing from oil production of +/-2.0 mbpd.

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Niger, Benin Republic Pay $10m Electricity Bill to Nigeria

Two international customers, Benin Republic and Niger, have paid $10.1m to Nigeria to settle their electricity bill.

This was disclosed by the market operator arm of the Transmission Company of Nigeria (TCN) during the August power sector stakeholders’ meeting.

The two neighbouring countries made the payments for their outstanding energy debt through their respective power companies.

NIGELEC of the Republic of Niger paid $3.79m while the Community Electric du Benin (CEB), an international electricity firm co-owned by the governments of Bénin and Togo, paid $6.32m.

Under an international treaty, Nigeria supplies power to both countries through the TCN and Nigerian Bulk Electricity Trading (NBET) Plc.

In June, data from the market operator showed that electricity delivered to the international customers and Ajaokuta Steel was 229,487.29MW/h, while energy delivered to bilateral customers was 95,939.31MW/h.

In July, Babatunde Fashola, Nigeria’s minister of power, works and housing, warned that the country would stop supplying electricity to the international customers if they didn’t pay their bills.

“We issued disconnection notices and that is why I’m asking the NBET to go and collect your money because we have duties, obligations and international agreements with them as brother and sister nations,” the minister had said.

“But that does not mean they will not pay us if they are defaulting. So, we have issued letters to them to pay their bills, and from time to time, they pay.”

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Eritrea Permits new port for potash trade after Ethiopia peace deal

Eritrea is considering a new port on its coast line with the aim of helping export potash from mines being developed in the country and from neighbouring Ethiopia, the Bloomberg news portal reports.

The port is to be situated at the Bay of Anfile, located some 75 kilometers east of a Colluli potash project being operated by Dankali Limited of Australia.

The report cited a mines ministry official, Alem Kibreab, as saying that a feasibility study was underway to pick a site for the proposed port.

The start of construction was, however, envisaged about five years after the mine starts operating there because according to plans, “To begin (construction), the company has to make money.”

Dankali Ltd. On August 22 announced that its Social and Environmental Management Plans (SEMPs) for the Colluli Potash Project in Eritrea had been agreed on and finalized after a review process.

Its executive chairman Seamus Cornelius said: “We are committed to having a significantly positive impact in Eritrea. Colluli stands to provide significant social and economic benefits, creating hundreds of permanent jobs for Eritrean nationals and catering for community interests.”

The project is 100%-owned by Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

Colluli contains deposits of high-grade fertilizers suitable for use on fruit and coffee trees and vegetables, according to Danakali’s website. It’s situated in the Danakil Depression, a geological area that stretches into Ethiopia and is regarded as an ’emerging potash province,’ the company said.

Impact of Ethio-Eritrea peace deal, cutting journey to Massawa

The Dankali executive chairman also told Bloomberg by phone the impact that recent diplomatic efforts had boosted their work in the area.

“Those discussions have accelerated” following the Ethio-Eritrea peace deal, he said. “With the rapid changes and the rapid improvement in the geopolitical situation, things we weren’t thinking were possible in the past are now possible.”

Ethiopian Prime Minister Abiy Ahmed and Eritrean president Isaias Afwerki in July signed a peace agreement that saw the two neighbours bring an end to decades of hostilities and the restoration of friendly ties between them.

Till the proposed port is completed, exports will have to depend on the existing Massawa Port located some 230 kilometers from the mines.

On their part, Ethiopian exports if they opt to use Eritrea will have a shorter journey to Massawa or to Anfile Bay, much shorter that the over 790 kilometers journey to use the Tadjoura Port in Djibouti.

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‘Nigeria’s Economy Still Struggling’ – Director-General of NBS

The director-general of the National Bureau of Statistics (NBS) Yemi Kale, says Nigeria’s economy has not recovered from the 2016 recession.

Speaking on a programme on Arise TV on Saturday, the statistician-general of the country said the conflicts between farmers and herdsmen dragged down the gross domestic report in the first quarter of 2018.

“I am not going to give the final figure because the work is not even completed but from the numbers I am seeing, it is looking quite flat,” he said.

“Surprisingly, but I expected the numbers should be much better it is looking very similar to the first quarter. I think the economy is still struggling out of recession and that is what the numbers are showing.

“For example, we have seen challenges in agriculture because of the clashes that are happening in different parts of the country. Obviously, if people cannot go to the farms, it is going to be a problem.

“Agriculture is not just crops; when you destroyed a farmland or even cattle rearing is also part of agriculture, so the back and forth are affecting both crop production and livestock and agriculture is the biggest part of our GDP and that is slowing down the economy.”

However, Kale said the projection of the International Monetary Fund (IMF) that the economy will grow by 2.1% by the end of 2018 is achievable.

Commenting on the recent Liveability ranking by the Economist Intelligence Unit, Kale said it is unfair for Lagos to have gotten such ranking.

According to the NBS DG, rankings like that use certain indicators like education and health which are generally poor in Nigeria.

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Uber to Push Further into East Africa

Uber, the global ride-hailing company, is considering expanding into two other East African countries before the end of 2018, focusing on low cost services like Chap Chap in Kenya, the company said on Friday.

In Kenya, East Africa’s richest economy per capita, Uber competes with Estonian ride-hailing firm Taxify, Nairobi-based Mondo Ride and Little, which has a partnership with telecoms operator Safaricom.

Nairobi was the first city in Africa in which Uber piloted a low-cost, quick-trip option Chap Chap, using 300 small brand-new Suzuki Altos as a less expensive alternative to regular cars on the Uber app.

There are now more than 400 Chap Chaps, which means “faster” in Kiswahili, on the roads in the capital of Kenya, Uber’s second-largest market in sub-Saharan Africa.

“We are focusing hard on Chap Chaps,” Uber’s East Africa general manager Loic Amado said in an interview, calling the service “a tremendous success so far”.

The lower price is possible because the Alto is more fuel-efficient than the average car an Uber driver uses.

Amado said that the popularity of its low cost services has led Uber to consider expanding into two other countries in the region before the end of 2018. He declined to give details.

In March Uber extended its low-cost options to include a motorcycle service in Uganda’s capital and rickshaws in Tanzania’s capital.

“You are able to get a much bigger piece of the population in touch with your technology and then it’s easy to afterwards add the additional products like uberX or more premium (products),” Amado said.

The company said that it has 311,000 active monthly riders in the region with 9,000 active drivers. It operates in four cities in Kenya and neighboring Tanzania and Uganda.

To address rider’s safety concerns, Uber has introduced rider insurance for uberBoda in Kampala and Nairobi, Amado said.

It is also differentiating itself by offering services like UberEats, which launched in May in Kenya’s capital and has 100 partner restaurants, Amado said.

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Tanzania: Manufacturers of Substandard Goods to be Sanctioned

Substandard products in the country will soon be expelled if they fail to improve the quality of the products to the required standards.

The Executive Director of Tanzania Bureau of Standards (TBS) Professor Egid Mubofu said the bureau has embarked on a mission to ensure production of quality goods fit for sustaining the industrialisation in the country.

“The nation is currently on the movement of making Tanzania an industrial state, and TBS as the authority in charge we ought to ensure the products manufactured are of good quality for exports as well as for the domestic market,” he said.

To start with, TBS has embarked on a campaign aimed at educating manufactures, creating awareness and standardisation on counterfeit and substandard goods.

“After the campaign, TBS will take stern measures against (manufacturers) who will not heed the call for production of goods that meet the required standards. The measures will be launched soon after the campaign,” he stated.

Prof Mubofu was speaking at the start of the campaign in Dar es Salaam where he met Anxinfa Company– manufacturers of iron sheets. According to the TBS Boss, the company which is among the manufacturers of substandard products has been warned and given a time-frame to improve the quality of the products.

“We have discussed with them the challenges that led them into producing substandard products and agreed on them to take various measures to improve the products as soon as possible,” he said.

He however said the company had been fined 20m/- and directed to ensure the substandard iron sheets produced by the company are removed from the market and directed for other usage.

TBS Quality Assurance Officer Mr Lazaro Msasalanga said that the company had over 7000 counterfeit iron sheets worth 132m/- .

He said TBS has thus directed the company not to sell the products for intended job but direct the other usages that will not institute any harm to the consumers.

On the other hand, the Director of Anxinfa Company Mr Weng Junxian thanked TBS for meeting the company pledging to adhere to directives issued by the TBS boss.

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‘Nigeria Controls 70% of West, Central African Economies’ says a Maritime Economist

The chairman of Nigerian Ports Consultative Council (PCC), Kunle Folarin, says Nigeria controls 70 percent of the economies of West and Central Africa.

He made the statement on Friday at the third annual maritime conference holding in Lagos.

Folarin, who is also a maritime economist, said Nigerian dominance was far from the formal trade alone and would certainly be bigger if “we consider the informal trade aspects of cargo movements”.

He said ships’ traffic into Nigeria by latest data was over 5,307 units per annum.

“The potential is certainly bigger when we consider the capacity of cargo traffic to Nigeria’s landlocked neighbours such as Niger Republic and Chad,” he said.

“In the real terms, over 85 per cent by value of all the goods and services that entered Nigeria came through the seaports.

“The current aggregate value exceeds $15 billion a year through normal import order. Nigeria also imports over two million tonnes of non-oil cargo yearly.

“It is therefore, no doubt that the maritime sector’s performance is indeed a major contributor to the economy and must be given attention when discussing port costs and port charges.”

He recalled that the available port infrastructure in the 1970s could not handle more than 12 vessels at a time in Apapa Port Complex, which resulted to long queue of ships waiting to berth.

Folarin said in 1970, ship owners incurred huge running cost and this led to demurrage as a result of penalties put in place by the chartered parties.

He said the port cost and charges reform policy of the federal government started in 1993 by the ministry of finance apparently to address the issue of rising costs in the delivery of port services and several others.

The PCC boss said port concession system started in 2006 by transferring operations of public sector activities to the private sector to improve productivity and achieve competitiveness at the ports.

He said that there was a need for the port industry to be truly productive, competitive and earn a hub status in the region, adding that otherwise, Nigerian ports would continue to perform at best a little above average.

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Nigeria: Foreign Exchange Inflow Hits $91b In 2017

The Central Bank of Nigeria (CBN) says the aggregate foreign exchange inflow into the country increased to $91 billion in 2017.

The apex bank revealed this in its Draft 2017 Annual Report published on Wednesday.

It said the figure represents anm increase of 45 per cent, from the $62.75 billion recorded in 2016.

According to the report, inflow through the CBN was $42.17 billion while inflow through autonomous sources amounted to $48.33 billion dollars.

At the same time, aggregate FOREX outflow from the economy increased by 31.8 per cent to $33.68 billion, compared to the total of $25.55 billion reported in 2016.

The CBN attributed the increase in foreign exchange inflow to its sustained intervention at the inter-bank and Bureau de Change segments of the FX market.

The report read in part, “Aggregate foreign exchange inflow into the economy rose by 45.0 per cent to US$91.00 billion, compared with US$62.75 billion in 2016. A disaggregation showed that inflows, through the CBN and autonomous sources, were US$42.17 billion and US$48.33 billion, constituting 46.3 and 53.7 per cent, respectively, of the total.

“A further analysis showed that foreign exchange inflow, through the CBN, rose to US$42.17 billion, compared with US$21.07 billion in 2016. A breakdown of foreign exchange inflow, through the CBN, showed that earnings from crude oil export increased by 1.9 per cent to US$10.37 billion, above the level in 2016.

“The development was attributed to price and output of crude, both of which rose relative to the preceding period. Similarly, the non-oil component of the inflow, through the Bank, rose by 192.2 per cent to US$31.80 billion in 2017, above the level in the preceding year. This was due mainly to: increase in foreign exchange purchases; government debt proceeds; securities lending cash collateral; and TSA and third-party receipts.”


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Egypt: Hajj Plans Jeopardised by Higher Fees

The number of Egyptians who will make the holy pilgrimage to Mecca has dropped by 20%, with only 64,000 of Egypt’s 80,000 hajj quota, Parliamentary Affairs Minister Omar Marwan told state news agency.

Mahmoud Aouni has always wanted to make the hajj pilgrimage to the holy city of Mecca in Saudi Arabia, an important religious duty for all Muslims, but says he might never be able to do so now because of Egypt’s economic woes.

“They say charity begins at home. In the current economic climate, that’s where it stays,” said Aouni, a 47-year-old youth ministry worker who like many Egyptians has been forced to put off his plans indefinitely by the rising cost of living.

All Muslims are expected to join the annual hajj at least once in a lifetime, provided they are physically and financially able. But many Egyptians have been badly hit by soaring prices, especially of fuel and electricity, as the government slashes state subsidies under IMF-backed economic reforms.

Even wealthier pilgrims are now finding the journey more difficult after Saudi Arabia and Egypt both imposed additional fees for Muslims repeating the lesser pilgrimage to Mecca, known as the ‘umrah’, within three years.

Ahmed Ibrahim, a tourism ministry official who works on its hajj committee, said the number of Egyptians performing the umrah, which can be done at any time of the year, had dropped by almost 50 percent in 2018 from last year.

“It’s because of the economic situation and the umrah fees. Egypt and Saudi’s decision to make people who want to do it more than once pay more has meant many people simply aren’t going back again,” he said.

Officials at Cairo airport said several flights to Saudi Arabia’s Jeddah airport ahead of the pilgrimage, which starts next week, culminating in the Eid al-Adha feast, had been cancelled.

Saudi Arabia set a 2,000 riyal ($533) fee for Muslims performing the umrah journey for a second time within three years. This year Egypt also raised its own fee for citizens planning to make a second umrah pilgrimage.

Pilgrimage costs have doubled to 60,000 Egyptian pounds ($3,361) for people travelling on economy packages by land, while luxury packages – which include flights, upmarket accommodation and other services – have increased to 152,000 Egyptian pounds from 100,000 last year, hajj companies say.

Hamada Radi a 55-year-old civil servant, said the total pilgrimage can end up costing as much as 120,000 Egyptian pounds (around $6,700).

“Plane ticket prices have gone up, and the hajj fees here and in Saudi also, so it is those with money who get to go,” he said. “But it is in my plans. God willing, I will do the haj when I can get things together.”

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Zimbabwe: $1m Gold Disappears From Armoury

Gold worth about $1 million has disappeared from an armoury at Plumtree Police Station in Matabeleland South Province, in what ranks as arguably the biggest theft from a police station.

The gold, weighing 28,5kg, was being kept as an exhibit at the station since September 2015.

Sources said the total value of the stolen gold was $970 000 and nothing was recovered.

The yellow metal was being kept at the police station after Border Control and Minerals Unit intercepted it at Plumtree Border Post from a man who sought to smuggle it into Botswana.

The unknown suspect tore khaki paper in which the gold was wrapped and stole all of it, leaving the papers in a bucket in the armoury.

The theft was discovered on Wednesday at around 11am by officers who were on duty.

Sources said the theft came to light as police officers were searching for two missing rifles that had been booked in the charge office.

When an officer went to check at the armoury for the missing rifles, he was surprised to find the armoury door not locked.

“When he proceeded to the armoury intending to open the armoury, he observed that there was a key inserted on the key hole of the armoury door,” said a source.

“Officers discovered that the door was not locked. One of the officers who had knowledge about the gold kept in the armoury as an exhibit proceeded to the bucket where the gold weighing 28,5297kg was kept wrapped in a khaki paper and discovered that the khaki paper was torn and the gold was missing.

“However, the khaki papers were left in the bucket.” Investigations were under way.

Contacted for comment yesterday, Police chief national spokesperson Senior Assistant Commissioner Charity Charamba said she was checking on the matter.

However, in 2015, Snr Asst Comm Charamba said the gold which was being kept at the Plumtree Police Station was seized from a suspect identified as Pudohope James Rove who was arrested trying to smuggle it into Botswana.

She said the suspect had hidden the gold in a secret compartment in his vehicle’s loading box.

Snr Asst Comm Charamba said then that the suspect was driving a Toyota Hilux truck and was on his way to Botswana when he was intercepted at the exit gate after completing all Immigration and Zimra formalities.

Police detectives who were on duty stopped the vehicle and conducted a search.

They discovered a false compartment in the loading box and upon carrying further searches, they discovered 76 pieces of smelted gold which had a total weight of 28,541kg.

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