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REPORT OF THE LAST WEEK (from 29/07/13 to 02/08/13) 

by Dario Galluccio

Ghana: Eurobond to fund 157 road projects

A part of the $1 billion raised from the international capital market in New York on Thursday will fund one hundred and fifty seven road projects; additionally, the government will use part of the money to build infrastructure in all the new 46 districts. 

To be precise a Deputy Minister of Information and Media Relations, Mr Felix Ofosu Kwakye, said $284 million from the money would be used to fund road projects and other projects captured in the 2013 budget. He mentioned the Apam-Akam road in the Central Region, the Fian-Wahabu road in the Upper West Region, the Goaso-Kukuom road and the Berekum town roads in the Brong Ahafo Region as some of the projects that would be funded from the money. The deputy minister said general infrastructure, including clinics, schools and offices, would be executed in all the new 46 districts.

Ghana: Japanese investors explore opportunities in Ghana

Dr Omani Boamah, Minister of Communication, received a 20- member Japanese delegation, so he has pledged Government’s commitment to deepen relations with Japan. The minister said the two countries have enjoyed fruitful working relations in the past and expressed the hope that this would continue as Japan has expressed its resolve to support Ghana’s Information and Communication Technology (ICT) sector. 

The delegation is in the country to explore investment opportunities in the areas of ICT, Energy, Transport and other sectors of the economy.

Mr Takeshi Hata, NEC Corporation Manager for Europe, Middle East and Africa and a member of the delegation, expressed the desire to provide ICT expertise to the GMSD. He lauded Ghana for its strides especially in the areas of good governance and economic stability. The delegation is in Ghana following the investment opportunities President John Dramai Mahama presented at the 5th Tokyo International Conference on African Development.

Tanzania: Bank M assets expand, hit half trillion

Bank M Tanzania, the fastest growing bank in the market, has marked its sixth anniversary with a big bang as its total assets hit the half a trillion mark.

The bank, which opened its doors on July 27, 2007, celebrated its sixth anniversary on Saturday, with 532bn/- assets. “We are marking six years of growth, growth in all aspects”, the bank’s Deputy Chief Executive Officer, Ms Jacqueline Woiso.

She said during the past six years, the bank has grown in terms of not only balance sheet but also profitability, citing this year’s impressive performance. The bank has in seven months of operations posted a profit of 9.13bn/-, indicating that the 2013 will be a highly profitable year for the bank.

The bank, priding itself as among the fastest growing financial institutions in the domestic market, has grown geometrically from the balance sheet of mere 31.19bn/- at the end of 2007, to 67.59bn/- in 2008 and 106.51bn/- in 2009. The bank assets swelled to 193bn/-, 310bn/- and 421bn/- in 2010, 2011 and 2012, respectively.

India, Nigeria: To enhance economic partnership

Utility service provider, Umeme, is targeting the capital markets to raise over $170 million (about Shs438 billion) to finance its investments.

The energy utility firm last week said it needs to make significant investments worth $440 million (about Shs1.1 trillion) in the next five years, part of which will be raised during the this season.

Kenya: New infrastructure to ease city traffic

The government says it has finalized plans to upgrade the city’s infrastructure to ease traffic congestion and improve the living conditions of the residents. Addressing at St James ACK Buruburu, Deputy President William Ruto said key stakeholders in the Nairobi County met last week to map out ways of implementing the ambitious project that will see at least 100,000 new and modern housing units constructed for the low income earners.

“We want to transform the city within the next three years and we have already identified development partners with whom we intend to roll out the project in Ziwani, Mbotela, Bahati ,Maringo and other estates in Nairobi’s Eastland’s suburb,” he said.

He revealed that the government had developed a road map to ease traffic congestion in major city routes to reduce the time workers lost while commuting to their duty stations.

The Deputy President added that the government had introduced a Railway Development Levy to revive and improve the rail network in the capital.

Ghana: Benefits from Cuba relations

Mr Kwesi Quartey, Deputy Minister for Foreign Affairs over the weekend said government benefits from her bilateral relations with the Cuban government especially in the area of health and education. Mr Quartey said thousands of African students have received medical and educational support in Cuba and had returned to the continent to help their communities.

South Africa: H&M signs lease for store

South African weekly Sunday Times said in an article re-run on daily Business Day’s website that the Swedish retailer has signed a lease for a store in a mall that is due to open in 2015 in Johannesburg.

An H&M spokeswoman, which has yet to open a store in Africa, said South Africa is one of many markets it finds interesting but declined to comment further. The company opened its first store in the southern hemisphere in Chile earlier this year.

Sunday Times, which is part of the same media group as Business Daily, did not disclose its sources. H&M was also searching for suitable store locations in Cape Town, it reported.

H&M’s biggest rival, Zara owner Inditex (ITX.MC), opened its first Zara store in Africa, in South Africa, in 2011.

Ghana: Fitch rates Ghana’s Eurobond B+

Fitch has rated Ghana’s newly issued $750 million Eurobond B+. The rating is in line with Ghana’s ‘B+’ Long-term foreign currency Issuer Default Rating, on which the Outlook is Negative, Fitch said in an email July 26, 2013.

>Fitch on February 15, 2013 revised Ghana’s Outlook to Negative, affirming it ‘B+’. It was to reflect the country’s worsening trend in public finances. During 2012 Ghana’s fiscal deficit widened to 12.1% of GDP in the run up to the December election, the ratings agency said.

Ratings agency, Moody’s also rated the ten-year bond ‘B 1’.

This second sovereign Eurobond was issued last week with a coupon of 7.875%.

Nigeria: Ecobank will exceed $310m agricultural sector loan

Ecobank Nigeria says it plans to grow its agricultural sector loan to over N50 billion ($310 million) by 2014. Citing it’s policy to support the growth and development of the industry. Ecobank Country Head, Agric and Export Finance, Abel Ajala, said the bank had introduced “concessionary interest rates” for its agriculture financing scheme.

He added that the bank has developed a robust agriculture and export unit operated by high quality professionals to ensure for an easy risk assessment of loans and adequately provide measures to guarantee beneficiaries utilize funds diligently.

The reason behind the bank’s focus on the sector, according to Mr Ajala, stemmed from its need to checkmate the impending food crisis on the continent, noting that the pan-African bank’s support cuts across the entire agricultural value chain.

Ethiopia: Hauwei sign $700m mobile network deal

Ethiopia has signed a $700 million mobile phone deal with China’s Huawei Technologies to improve the telecoms infrastructure in the country. The agreement, which is half of a $1.6 billion project split between Huawei and ZTE is expected to double phone users in the country to 56 million.

Ethiopia’s Minister of Communications and Technology, Debretsion Gebremichael stated that “this deal will deliver 4G high-speed broad band network. Although our target is 40 million, now including 3G, we will get to 56 million by 2015”, he said.

World Bank posits that Africa’s rapidly expanding telecoms industry has come to symbolize its economic growth, with subscribers across the continent increasing from a mere 25 million in 2001 to 650 million in 2012.

Before now, Telecoms in Ethiopia was considered a monopoly with only Ethio Telecoms as its only mobile phone operator in a country of more than 80 million people. The new deal with the Chinese firm is expected to boost the sector.

According to the minister, other operators like South Africa’s MTN Group have been granted operation licenses.

Ghana: Singapore consolidates trade ties

Investors from Singapore have strengthened bilateral trade ties with their Ghanaian counterparts following the signing of a Memorandum of Understanding (MoU) and the opening of its Overseas Centre in Accra.

The Singapore investors are in the country by courtesy of their external trade facilitating agency, the International Enterprise (IE) Singapore, and were led by the Singapore Senior Minister of State for Trade and Industry and National Development, Mr Lee Yi Shyan.

The IE Singapore’s Accra Overseas Centre aims to boost economic collaboration by accelerating trade and investment cooperation in the ECOWAS sub-region focusing on the logistics and oil and gas consumer sectors. Also, the Singaporean investors are focusing on infrastructure, oil and gas and the manufacturing sector to help drive the growth of the Ghanaian economy.

Mozambique: Thailand seeks to double trade

Mozambique and Thailand have agreed to a series of measures to strengthen bilateral cooperation. The accords cover technical cooperation, diplomatic visa exemptions, hydrocarbon development, economic cooperation and tourism. Currently, trade between the two countries stands at 180 million US dollars a year. These new measures could see trade double over the next five years.

The signing of the accords in Maputo on Monday followed the arrival of the Prime Minster of Thailand, Yingluck Shinawatra.

The Prime Minister will also visit Tanzania and Uganda before returning to Thailand to attend the new session of parliament on Thursday.

Ghana: To create 2.3 million jobs in Aluminium sector

Ghana is set to create more than 2.3 Million jobs under the Integrated Aluminium Project, which has been described as the key to growing the economy with a capital injection of about $8 billion. Under the Integrated Aluminium Project, an Aluminium refinery is to be constructed to refine the rich bauxite deposit at Nyinahin into alumina, would then be processed into aluminium by VALCO, and sold to the several downstream industries as aluminium ingot and billet.

It is believed the project hold the key to transforming Ghana’s economy by bringing in benefits, far more than the nation currently receives from oil.

The Nyinahin mine with bauxite deposit of 700MT, valued at $17.5billion , is estimated to create about 98,000 jobs whiles the aluminium refinery expected to produce about 350metric tones of alumina, will generate about 19,000 jobs.

Ghana: First Rand still interested in acquiring a bank

South Africa’s biggest finance group, First Rand says it is still interested in acquiring a bank in Ghana despite failing to take over Merchant bank.

This is because Ghana remains a priority for the group’s expansion drive.

The Social Security and National Insurance Trust (SSNIT) last month announced that it was unable to reach an agreement with First Rand over Merchant Bank’s sale. The Trust added that it is now looking for new suitors for the Bank.

Kenya: Brazilian entrepreneurs ready to invest

The businessmen, representing multi-billion dollar operations, included oil and gas company Queiroz Galvao, aerospace conglomerate Embraer Defense & Security, diversified engineering, construction and chemicals outfit Odebrecht, manufacturers Randon and Agropeucaria Foletto & Alimentos, the globe’s largest private rice farmer.

An executive from Argentinian agriculture products firm Rizobacter, which is looking to expand to Kenya, accompanied the Brazilians who held an exhibition in Nairobi this week as part of their exploration of business opportunities in Kenya.<

The entrepreneurs are keen to use Kenya as a major regional hub and launching pad for their enterprises in this part of the world.

Nigeria: To attract N480 billion investment for sugar production

In line with the country’s desire to grow the industrial sector, the Minister of Industry, Trade and Investment, Olusegun Aganga, has said the country attracted $3 billion (about N480 billion) investment into the sugar sector since the implementation of the National Sugar Master Plan (NSMP). The approval of the NSMP by the Federal Executive Council (FEC) on the 19th September 2012 had raised the country’s profile, making it to rank among the top five exporters of sugar in Africa.

Aganga also noted that the gains made through the development of the manufacturing sector had led to a reduction on the country’s dependence on oil and gas, saying N305 billion was generated from non-oil export within the first quarter of 2013.

NSMP has stimulated investments of $3 billion thus far. NSMP is targeting the production of 1.7 metric tonnes of sugar; creation of 117,181 direct jobs; generation of 411.7 megawatts of electricity; total forex saving of up to $565.8 million annually from savings from sugar production and fuel importation.

Ghana: To list Eurobond on local exchange

Ghana will list the second Eurobond it secured this week on the country’s local bourse next month, says the chairman of the governing council of the Ghana Stock Exchange (GSE), Dr Sam Mensah. Speaking in New York after Ghanaian finance officials concluded the Eurobond sale, Dr Mensah said the decision will give local investors an opportunity to actively trade in the bond as well as helping to boost the development of the GSE.

South Africa: Mondelez ventures into South African market

Food group Mondelez International has announced that it will start business operations in South Africa. A possible competition in South Africa’s food and beverage sector seem likely as it has been controlled by JSE-listed Tiger Brands and AVI. Mondelez manufactures Cadbury sweets and chocolates, Oreo biscuits and Stimorol.

This news comes shortly after another the world’s second biggest clothing retailer, Hennes & Mauritz (H&M), announed that it is poised to set up shop in Johannesburg, South Africa. Last week, it was reported that H&M will open up a new shop in the Mall of Africa in Johannesburg and plans are already afoot to open another in Cape Town’s V&A Waterfront.

Nigeria: To begin online business registration

Nigeria is a step closer to launching its global online business registration platform, as it moves closer to divesting from the oil and gas sector. The soon-to-be-launched platform will allow Nigerians living in the diaspora or foreigners planning to register their businesses in Nigeria to register their businesses in Nigeria from any part of the world within the next two months.

Nigeria’s Minister of Industry, Trade and Investment, Olusegun Aganga confirmed this at the 2013 Ministerial platform in Abuja on Tuesday, saying, “Global online business registration will take off in two months’ time. This will ensure that anyone can register their businesses in Nigeria from any part of the world and also make payment without necessarily coming to Nigeria.”

Studies have found that the creation of new businesses is a significant indicator of the level of economic growth and development of a country; in addition to the job creation and wealth generation that come with it.

The country’s foreign direct investment currently stands at $7 billion.

East Africa: Uganda builds new refinery, Kenya upgrades

Plans to construct a new refinery in Uganda and upgrade an existing one in Kenya are already afoot, according to an oil and gas analyst. Jeffrey Kerr, the managing oil and gas analyst for GlobalData, said this has led to an amazing corporation between Kenya, Uganda, Congo, Rwanda and Burundi and improved relations between the countries.

Kerr added that government delegates from these countries and three global oil firms have agreed to corporate in the erection of this 30 mbd refinery in Hoima, Uganda.<

The construction of the new refineries in Uganda and the improvement of an existing one in Kenya has been prompted by estimates that the need for “aggregated” processed oil products in East Africa could more than double in 2025.

Ethiopia: FDI to Ethiopia second best in Africa

Japan says the fact that Ethiopia achieves 1 billion dollar Foreign Direct Investment (FDI) flow in to the country shows how focused the government is to develop the sector.

Hiroyuki Kishino, Ambassador of Japan to Addis Ababa, says Ethiopia has given priority to food security, infrastructure development, human resource development and FDI to make significant transformation as part of its 5 year strategic plan. The Ambassador takes the development of the FDI to show the progress happening saying in just a couple of years Ethiopia’s FDI grows from 300 million dollar to 1 billion dollar, which he labeled as significant upward spiral.

FDI is expected to facilitate technology transfer in the industry sector, bring in huge capital and machineries, create employment opportunities and increase global market share.

Ghana: Bank of Ghana stays policy rate at 16%

The Bank of Ghana (BoG) has maintained the policy rate at which it lends to commercial banks at 16 per cent for the third quarter of the year. This was after it assessed economic activities in the country and policies put in place to prevent prices of goods and services from rising constantly.

The Monetary Policy Committee of the bank, chaired by the Governor, Dr Henry Kofi Wampah, told that the bank was satisfied with the policies put in place by the government to check increases in general price levels, hence the decision to maintain the rate at 16 per cent.

Angola: Be promoted to list of middle-income states

According to a United Nations (UN) official, Angola, Africa’s biggest oil producer behind Nigeria, may be promoted to a list of middle-income countries that get better terms from international lenders such as the World Bank.

“Angola will make it to the middle-income category because it has a growing economy, the government is moving toward the right direction and it has the financial capacity to invest,” the director of the UN Africa Division for Least Developed Countries, Tesfachew Taffere, said.

Angola, a member of the Organisation of the Petroleum Exporting Countries, wants to diversify its $114bn economy away from crude, which makes up almost all of its exports and 80% of tax revenue. Middle-income status will help it rebuild from a 27-year civil war that ended in 2002 by gaining access to risk and credit guarantees that lower the cost of public investments containing private funding.

South Africa: DuPont Pioneer acquires 80% stake in a seed company

DuPont said that it completed its purchase of an 80 percent stake in South Africa-based competitor Pannar Seed Limited, giving the chemical and agricultural giant an opportunity to expand its reach throughout Africa.

DuPont said the acquisition of Pannar by DuPont Pioneer, its agricultural seed unit based in Johnston, Iowa, would allow it to tap into Pannar’s insight into Africa while giving the U.S. firm access to the company’s corn genetics that have been specifically tailored for the region. Pannar would be able to use Pioneer’s genetics library and corn breeding and biotechnology work.

Financial terms of the deal were not disclosed.

Ghana: Vivo Energy adds Shell Ghana Limited to its group

Vivo Energy, the company formed by Vitol, Helios Investment Partners and Shell to distribute and market Shell-branded fuels and lubricants across Africa, has acquired a majority shareholding in Shell Ghana Limited.

The company, which will be renamed Vivo Energy Ghana, will be headed up by Fred Osoro as Managing Director. He will take over from Vincent Richter, the former acting Managing Director

Christian Chammas, CEO of Vivo Energy, said: ‘Ghana is an important market and a growing economy which is set to benefit from significant developments in the energy sector. We are acquiring a business with great potential; a long history in Ghana, a high calibre workforce and a large and diversified customer base. Vivo Energy is looking forward to serving our Ghanaian customers and investing in the business, to ensure it realises its full potential under Fred Osoro’s leadership.’

The Shell brand has been in Ghana for 85 years and Shell has been the leading marketer of fuels and lubricants. Vivo Energy Ghana has a storage capacity of 8,300m³ and 124 retail stations with the majority offering Shell Cards and convenience retail stores. Over the years, the company expanded its portfolio by acquiring Texaco in 1988. Vivo Energy Ghana employs 134 people but the business provides indirect employment to over 1,000 people. The company is recognised as the leader in the oil industry especially championing and setting standards for safety in sales and distribution.

Africa: Obama works to extend AGOA

The Obama administration has indicated that it is working with the United States Congress to extend the Africa Growth & Opportunity Act (AGOA) programme, which is set to expire by 2015.

Florizelle Liser, Assistant U.S. Trade Representative for Africa in the Office of the United States Trade Representatives, stated: ‘We recognize that AGOA can do so much more. We have to look at how we can fulfill its promise and potential, and as AGOA is extended, we want to make sure that Africans are in a position to compete in the global economy.’

The African Growth and Opportunity Act (AGOA) was enacted in 2000 and permits 39 eligible African countries to export most products duty-free to the United States.

AGOA aims to promote economic development and better integrate African economies into the world trading market. Additionally, it intends to create a platform for governments, the private sector and civil society to expand business links and build trade capacity between the United States and Africa.

Total exports under AGOA have risen more than 300 percent since the programme began.

Though 84% of the United States’ AGOA imports were petroleum products, its non-oil imports from sub-Saharan Africa amounted to $4.7 billion in 2012 more than a 250% rise since AGOA’s start.

Ethiopia: Hailemariam confers with Kenyan investors

Prime Minster Hailemariam Desalegn meets Kenyan business delegation at his office to look into interest of Kenyan investors wanting to invest in Ethiopia. They are here to see the opportunities for themselves to decide their involvement in investment. Mr. Hailemariam explains how Kenya and Ethiopia are working to integrate their economies after a special economic agreement signed recently to ease business transaction between the two neighborly countries.

The electric transmission line, the road and rail lines under development are evidences of the ambitions between these two countries, and businesses in both countries can benefit from such developments, Hailemariam remarks.

Nigeria: Airtel and FirstBank launch mobile payment platform<

Telecommunication service provider, Airtel Nigeria has partnered FirstBank Plc to launch Firstmonie Talkmore, a mobile payment service platform, for the country’s citizens. The platform, which was made official after the signing of an MoU on Tuesday, in Lagos, will allow subscribers on the Airtel network to send and receive money, buy airtime, pay bills and carry out other forms of transactions without owning a bank account. And the mobile operator has stated its confidence that the innovation will revolutionize the mobile payment industry

The partnership, according to both firms, is the first major collaboration between leading operators in the nation’s telecom and banking industries and follows a recent partnership between Airtel and the bank’s insurance company, FBNLife Insurance, on the unveiling of PAD14Life.

Tanzania: Investors exhibit high appetite for treasury bills

Despite the end of month obligations, the twelve-month Treasury Bills auction that the Bank of Tanzania (BoT) conducted on Wednesday was oversubscribed by 63.6 per cent. According to the auction results, the total amount tendered jumped to 237.34bn/- against 145bn/- sought by the central bank at an average interest rate of 14.18 per cent.

However, despite the oversubscription, the government ended up taking only 210.32bn/-. It is common that most investors fulfil end of month obligations including the disbursement of tax, salary and other statutory payments, cutting down the share of investments in the government papers. But the situation was contrary and the auction was oversubscribed, a sign of excessive liquidity in the market. The bank report states further that there was a higher appetite for 364-day bills but there was no appetite for 35 day.

Rate of return has been one of the major determinants in drawing attention of investors’ appetite on the treasury bills auction although in some past tenders, little changes were noticed despite hiked interest rates leading to under subscription.

Commercial banks have remained to be the giant investors in government securities, contributing over 60 per cent of the total market share. Pension Funds, insurance and few micro-finance institutions firms are among the key investment players in the instruments.

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