REPORT OF LAST WEEK (from 30/09/13 to 04/10/13)
by Dario Galluccio
This Blog is sponsored by http://www.reflexecogroup.com
Ghana: GIPC is working to promote the growth of local businesses
The Ghana Investment Promotion Council (GIPC) has explained that the centre is not only interested in Foreign Direct Investment but is also seriously interested in promoting Ghanaian businesses to attract investment and grow the economy.
Speaking at a general meeting of the Sekondi-Takoradi Chamber of Commerce and Industry (STCCI), he explained GIPC is providing direct promotion support to identified local investment project sponsors to solicit international as well as local investment partnerships.
>Our mission is to attract private domestic and foreign investments and to transform Ghana into a broad-based industrial and export-led economy through aggressive investment promotion activities,” said Mr. Isaac Ebo Newton, an Official of GIPC.
Ethiopia: Reykjavik Geothermal to build 1000MW power plant
US-Icelandic geothermal development company, Reykjavik Geothermal (RG), has agreed to build a 1000MW geothermal plant in Ethiopia to help the East African nation harness its energy potential. The power plant which will be built in Ethiopia’s Corbetti Caldera region is part of President Barack Obama’s $7 billion Power Africa initiative which seeks to double electricity supply on the continent. The geothermal plant will be Ethiopia’s first independent power plant project and it is expected to be one of the world’s largest geothermal power plant.
The deal will also make Reykjavik Geothermal Ethiopia’s first independent power producer, while the Corbetti project will be the largest single geothermal plant ever built in Africa, RG Chairman, Michael Phillip said.
Reykjavik Geothermal, a company that has helped build power plants in about 30 countries globally expects to invest $4 billion over an 8-10 years period. It has been working with Ethiopian Electric Power Corporation (EEPCO) and various government ministries for the past two years to finanlise the purchase agreement. The geothermal development company will build and operate up to 1000Megawatts of geothermal in two 500MW phases. While the first 10MW of power will be online in 2015 with an additional 100MW in 2016; the full 500MW will be operational in 2018.
Ghana: Industrialization process depends on energy sector
Government intends to use the energy sector as a springboard to develop other sectors of the economy, Mr Armah Kofi Buah, Minister of Energy and Petroleum, has stated. Mr Buah was speaking at a durbar to celebrate this year’s World and National Tourism Day at Nkroful in the Ellembele District of the Western Region at the weekend. The celebration was under the theme: “Tourism and Water: Protecting our Common Future”.
Mr. Buah said the tourism sector must take advantage of the numerous oil and gas projects in order to strengthen its position as a critical sector of the economy. He said the hospitality industry could take advantage of the oil and gas projects to expand and create jobs for the country’s teeming youth.
Nigeria: China to build $1.3 Billion Zungeru power plant
Nigeria has signed a $1.3billion deal with two Chinese state companies, China National Electrical Equipment Corporation (CNEEC) and Sinohydro Consortium, to build the Zungeru power plant. The deal will help to put an end to the chronic electrical power supply shortages that continues to slow growth in Africa’s second-biggest economy. The plant, which is scheduled for completion by 2018, will help add 700 MegaWatts (MW) electricity to Nigeria’s current 4600MW.
The Zungeru power plant in Niger state (about 150km to federal capital, Abuja) was first conceived in 1982, but was abandoned due to lack of funds. Now, 75 percent of the fund needed for the project will be supplied by China’s Exim bank while Nigerian government will foot the rest of the bill.
This project will create thousands of jobs for Nigerian engineers, technicians and artisans during the construction phase…. it will also boost the economy,” Nigeria Finance minister, Ngozi Okonjo-Iweala said at the signing of the deal.
According to Nigeria’s Finance Minister, Ngozi Okonjo-Iweala, the loan being finalised was part of the $3bn approved by China at interest rate of less than 3 percent.
President Jonathan and Chinese president, Xi Jinping had met in July 2013 over the signing of the accords between the governments to facilitate $1.1 billion in low interest loans for infrastructure projects in Nigeria.
Uganda: China wins $2 billion oil deal
China’s state-owned CNOOC has secured a $2-billion deal to develop a petroleum field in Uganda and help propel the east African nation into the club of oil-producing countries, an official said Friday. “This is a major breakthrough as a country,’ Uganda’s junior energy minister Peter Lokeris told AFP, confirming that a deal had been reached earlier this month with the China National Offshore Oil Corporation.
Uganda has oil reserves estimated at 3.5 billion barrels but the path to production has been a bumpy one since deposits were discovered in 2006 near its border with the Democratic Republic of Congo. Such reserves have the potential to radically alter Uganda’s economy and could eventually as much as double the national income.
Ghana: Petroleum prices to go down
Motorists will experience a little over 4 percent decrease in the price of fuel at the pumps. Diesel users will save a little over 2 percent at the pumps. The latest move follows a revision of the prices of petroleum products by the National Petroleum Authority (NPA). Petrol is now GHC 2.22 a lite while Diesel is going for GHC 2.18 a lite.
However prices of premix fuel and kerosene have been revised upwards. A litre of premix fuel is now going for about 98 pesewas which is up by almost 23 percent. While kerosene is now GHC 1.59 up from the GHC 1.28 leading to almost an 8 percent increase.
Ghana: GDP Pegged At 7.4%
Ghana’s economy is expected to grow provisionally at 7.4 percent for the year, the Ghana Statistical Servic (GSS) said. Speaking at a media conference, Dr Philomena Nyarko, Government Statistician, said it is likely government could achieve its target growth in 2013 due to expected increases in oil production.
Dr Nyarko stated that the real quarterly Gross Domestic Product (GDP) growth for the second quarter of the year was 6.1 percent year-on-year. Non-oil GDP was 5.8 per cent while the total value and services amounted to $44.2 billion with a per capita income of $1,667, she said.
Dr Nyarko added that the services remain the largest sector, contributing about half of the GDP. The services sector growth rate however fell to 9.2 per cent from 10.2 per cent in 2012 on the account of positive increases in information and communication activities, real estate, professional, administrative and support service activities. This was followed by the industry sector 2.5 per cent while the agriculture sector showed a negative growth of 3.9 per cent.
Meanwhile, the annual producer price inflation fell for the fifth consecutive month to 4.7 per cent year-on-year in August from 5.0 per cent in July.
Tanzania: Northern Zone invites investors
Tanzania Investment Centre (TIC) has reaffirmed its continued commitment to support local and foreign investors who want to invest in Northern Zone regions and other places in Tanzania. The TIC Executive Director, Ms Juliet Kairuki told journalists during a recent Northern zone Investment Forum that her centre is ready to receive and help all those with interest to invest in the Northern regions of Manyara, Tanga, Kilimanjaro and Arusha.
She noted that the forum has enabled investors, business community and entrepreneurs to learn about the investment opportunities available in the Northern Zone and the government’s role in initiating investment projects. She said that during the past 12 years, Tanzania has performed well in attracting huge investment projects in agriculture, tourism, industries, communication, infrastructure and transport. Within that period, a number of those projects have risen from 178 to 869 in 2012; 53 per cent of these projects are wholly owned by Tanzanians. The projects have contributed on the increase of capital from 874 million US dollars up to 12 billion dollars within that period.
The two-day forum that was opened by Premier Mizengo Pinda attracted over 1,500 international and local investors plus officials from the government, private sector, religious leaders, ambassadors and high commissioners and other development stakeholders.
Ethiopia: Premier called Western companies to invest
PM Hailemariam Desalegn has called upon western companies to take part in the positive investment regime in Ethiopia. Noting that investors from Africa, Asia, and the Middle East have already established themselves, the PM urged representatives of American businesses he met in New York to consider investing in Ethiopia’s untapped investment potential.
Prime Minister Hailemariam has also explained Ethiopia’s investment policies, regulations and incentive; and responded to questions raised by the attendees of the event regarding ICT, banking services and privatization of state owned public enterprises. In a study presented in Prime Minister Hailemariam’s meeting with representatives of American businesses, manufacturing, mining, construction, hotel and tourism, and healthcare were identified as areas of engagement promising to the American businesses.
Routinely praised for its pro-poor development policies, Ethiopia has been one of the fastest growing economies in the world for the past ten years. And although the share of Foreign Direct Investment to as a share of the GDP growth has not been satisfactory, recent trends have shown a significant hike in the amount of annual foreign direct investments. The government’s focus on attracting FDI as a means of stocking up capital and technology transfer has paid off dramatically. FDI stood at 300 million USD in 2010, and three years on it has now reached at an incredible 1 billion USD, making Ethiopia the second biggest destination for FDI in Africa, next to South Africa.
Among the countries of origin in Ethiopia’s inflow of foreign investment, emerging economies and other countries from Africa, Asia and the Middle East hold the lion’s share. And western companies are expected to enter Ethiopia and invest in the numerous possibilities shortly.
Mozambique: Government open to French investment
Mozambican President Armando Guebuza declared in Paris on that Mozambique is open to new French initiatives in various spheres of cooperation, particularly in economic matters, and in security in the Mozambique Channel.
Briefing the Mozambican journalists accompanying the visit, Deputy Foreign Minister Henrique Banze, said it had been agreed at the meetings to deepen cooperation between Mozambique and France in various spheres. ‘This is a very fruitful and promising visit’, said Banze. ‘Our President has shown openness and the two sides have agreed that cooperation should be deepened. The assessment is that relations are good, but there is space to expand them’.
During his meeting with the business representatives, Guebuza praised the work of some of the French companies already operating in Mozambique, said Banze. He also noted that others want to enter the Mozambican market, including Air France. Should Air France decide to re-open the Maputo-Paris route, this will give travellers to Europe a convenient alternative to the current routes (via Lisbon, Johannesburg, Nairobi or Addis Ababa).
Ghana to net-export power in four years
The President of the republic of Ghana, John Dramani Mahama has revealed that, Ghana will become a net-exporter of power within the next four years given the pragmatic and practical measures the government is putting in place to solve the energy crisis in the country. The President assured the Independent Power Producers, willing to invest in the energy sector of his unflinching government commitment to create an enabling environment for their business to flow efficiently, which would help mitigate the current energy crisis the country is facing.
The President made these remarks at a town hall meeting hosted for him at his hotel in New York City, to interact with Ghanaians across the United States. Speaking on the current state of the various sectors of the Ghanaian economy President Mahama noted that, the Ghanaian economy is moving at a faster pace, hence the government is targeting 8 percent growth rate per year. And expressed hope and optimism that, “Ghana will progress to a middle income status in the next eight years.” Touching on the transport sector, he disclosed that, “95 percent of our transports are dominated by the road sector, and there is the need for the government to revamp the rail sector, which adds to the GDP of any country.” He noted that the government has taken over the Tema Shipyard from the Malaysian investors, with the intention to revamp and re-invigorate it, so that all the ships in West African will use it to dry-dock in Ghana.
He also expressed government commitment to revamp Tema Oil Refinery to enable Ghana’s crude oil be refined right within the Ghanaian shores which will create more jobs for the unemployed youth.
Angola: To lead investment attraction in SADC
Angola is in a privileged position as compared with the other countries of the Southern Africa Development Community (SADC) regarding attraction of Foreign Direct Investments (FDI), as it combines its economic potential with political stability.
This was said Tuesday, 1st of October, in Luanda by the economist Fiel Constantino.
Speaking to Angop, Fiel Constantino, who was speaking about the country’s FDI, said Angola’s political stability places the Democratic Republic of Congo in a second position, despite the neighbouring country’s huge economic potential. As to the continent’s strongest economy, South Africa, with an also stronger political stability and recognised established democracy, the specialist said it has not an economy as great as the above mentioned countries, as it is nearing exhaustion and more and more becoming an FDI emission economy.
Nigeria: Irish firms to invest in Nigeria
Various Irish companies would soon invest in Nigeria, Irish High Commissioner to Nigeria, Mr. Patrick Fay has said. Fay, who disclosed this during a recent launch of a premium product – the Irish Mayor – in Abuja, said efforts are being made to boost commerce between Nigeria and Ireland. He stressed that, as part of efforts to enhance the economic ties between both countries, the Irish Minister for Trade and Development would, in November 2013, lead a trade delegation to Nigeria.
He said: “We are trying to develop the link and make it stronger. To do that, we are working closely with the Nigerian Ambassador in Dublin and the Department of Foreign Affairs to work together to develop our trade.”
Africa: India wants early trade pact with African nations
India has pitched for early conclusion of the preferential trade pact with African nations, which is expected to help enhance business ties between India and minerals rich countries of the continent. Commerce and industry minister Anand Sharma urged his South African counterpart Rob Davies to expedite the much delayed India-SACU preferential trade pact that will reduce tariffs on several key products. Sharma is in Johannesburg for the third Indo-Africa Trade ministers meet. The Southern African Customs Union (SACU) consists of Botswana, Lesotho, Namibia, South Africa and Swaziland.
India has been waiting for the response from the African side on its proposal of an average margin of preference of 70%. This means imports from SACU will be subject to a tariff 70% lower than the most favoured nation rate.
The bilateral trade target of $100 billion by 2015 and $200 billion by 2020 is a modest one and is certainly achievable, Sharma said. Air connectivity and visa related issues were the two other concerns raised at the second India-Africa Business Council ( IABC) meet here, co-chaired by Bharti group chairman Sunil Mittal. Indian business chamber FICCI is the institutional partner of the council.
Sharma assured that the air connectivity issue has been taken up at the highest level and that Air India will resume its flights to Africa from 2014 onwards.
South Africa: Debt could grow to 63% of GDP by 2020
South Africa should set a debt target to improve the credibility of its fiscal policy as slower economic growth makes it difficult to keep the budget deficit under control, the International Monetary Fund said.
Government debt may stabilise at about 47% of gross domestic product in five years, with a 10% chance that the ratio can reach 63% by 2020, the Washington-based lender said in its annual Article IV country report, published on its website today.
Determining an appropriate debt benchmark remains highly controversial,” the IMF said. “Given South Africa’s outlook, the magnitude of macroeconomic and fiscal shocks, and cross- country comparisons, reducing the debt-to-GDP ratio to around 40 percent by 2020 would allow the country to rebuild adequate fiscal space.”
Falling tax revenues and spending pressures contributed to a widening in the budget deficit to 5.1 percent of GDP in the year through March, prompting the government to increase borrowing. Finance Minister Pravin Gordhan forecast gross debt will reach 45 percent of GDP in the year through March 2016 from an estimated 42 percent last year.
While the state’s agreement to limit wage increases for the next three years to 1 percent and to set explicit expenditure ceilings were positive, “the government’s poor record in controlling the wage bill and potential spillovers from high wage demands in other sectors represent downside risks,” according to the report.
Angola: Huila invests AKZ 950 Million
The government of southern Huila province will invest in 2014 roughly AKZ 950 Million Kwanza (about 10$ million) for construction of cultural and religious infrastructure in the municipalities of Lubango, Chicomba, Chibia and Caluquembe. The information is part of a report from Huila government that reached Angop on Thursday, 3rd of October, which says that the construction of this infrastructure is part of the Public Investment Programme.
The report adds that 60 million Kwanzas will be spent on rehabilitation of the head Office of Evangelic Church Sinodal of Angola (IESA) in Lubango and the construction Catholic Church in Kola, Caluquembe Municipality. It is also part of the Public Investment Programme for 2014, the construction of regional museum of Huila/Lubango), house of Culture, as well as the rehabilitation of boarding school from catholic church in Chicomba.
Nigeria: FG, World Bank Micro Projects gulp N28.7 Billion
The federal government has revealed that it has spent over N28.72 billion in the execution of micro-projects, under a joint partnership programme with the World Bank and twenty six state governments in the country. The National Coordinator of the Federal Support Unit, an arm of the Presidency supervising the implementation of the scheme, Mr. Chidi Onuoha, while giving a recent update on the performance of the development initiative in Abuja, said about 5,464 community-driven projects have been completed since the inception of the programme in 2009.
He listed some of the benefiting states to include, Kogi, Benue, Imo, Abia, Ebonyi, Enugu, Cross River, Akwa Ibom, Edo, Bauchi Adamawa, Ekiti, Kwara and Ondo. Onuoha said the projects were executed based on eight sectoral interventions, including education, water supply, transport, health, rural electrification, socio-economic, gender and vulnerability, and environment.
According to Onuoha, the micro project initiative had received a start-off fund of $200 million from the World Bank, and it has since committed 98 per cent of the amount as part of the Bank’s counterpart funding of the various community development projects in the participating 26 states. Also as at June this year, contribution from the 26 states is N5.8 billion out of the expected N13 billion counterpart funding obligation.
Ghana: To rank first with highest yield on Treasury bills
Investors looking for higher return on their investment could turn to Ghana’s securities market. This is because the country has been ranked number one with the highest yield on its 91-day and 182-day Treasury bills among 12 countries surveyed.
Out of the 12 countries surveyed by Ecobank Research, Ghana recorded an interest rate of 21 and 21.34 percent respectively on its fixed income securities. Malawi and The Gambia followed suit with interest rates of 14.92 and 20.17 percent and 14.76 and 16 respectively on their 91-day and 182-day Treasury bills. Sierra Leone and South Africa recorded the least rates of 3.36 and 7.05 and 5.05 and 5.31 percent respectively on their 91-day and 182-day Treasury bill rates.
Meanwhile, the Bank of Ghana is expected to issue a new 7-year bond next month. This underlines the Central Bank’s aim of extending the yield curve to develop the bond market.
Interest rates remain high particularly at the short end of the yield curve, at around 22 percent for the weekly Treasury bills.
Ghana: Digicraft to explore new markets
Digicraft, an indigenous advertising and marketing communications company, has expressed its commitment to explore new markets beyond the boundaries of Ghana. According to the founder and Chief Executive Officer of the company, Mr Kwaku T. Danso-Misa, the move forms part of the company’s resolve to face new challenges and to increase its profitability.
‘We are willing and ready to take up the challenges of this new age, one that defines competition in a global setting and not just a local one. In moving forward, we will spread our wings wider and totally consolidate our gains or equity we have as a brand’, he said.
Mr Danso-Misa admitted to the competition within the industry but noted that the company only saw competition as one ‘for space in people’s minds. It is about creating something that is memorable, sustainable, coherent, flexible and ultimately adds value and we are ready for that at all times’.
On his part, the General Manager, Mr Kwasi Danso-Misa, attributed the company’s growth since its inception to hard work, dedication and teamwork. ‘Our strategy has always been aligned with the thinking of their client and their consumers. In effect, it explains simplicity and effectiveness in communication, as well as quick turnaround time is what separates Digicraft from the rest,’ he said.
Botswana: London-based De Beers Operation moved to Botswana
World’s biggest Diamond miner, De Beers, will move its entire $6 billion-a-year “sales operation” from London to the Botswana capital of Gaberone. The global newswire reported that this meant that 85 workers out of 300 staffers based in London would be moved to the country with a 230 000-strong population. The decision, taken almost three years ago, cost the company over $120 million, which included the construction of flashy offices in Gaborone.
This comes after many years of talks between the government of Botswana and De Beers, which is owned by the mining giant Anglo American.
The Southern African country of Botswana is the biggest producer of gem diamonds and it is where the world’s richest mines are located including the famous Jwaneng. It is believed that the move to Botswana will put to trial Botswana’s capability to advance people expertise and reduce jobless rate in the country. Unemployment rate stands at about 18 percent in Botswana.
Africa: Godrej to expand business In Africa with more acquisitions
Indian-based international conglomerate, Godrej Consumer Product Ltd (GCPL) has announced that it is in discussions to take over more businesses in Africa as part of its expansion plan on the continent. Godrej which already has manufacturing plants in four African countries including Nigeria, South Africa, Kenya and Mozambique wants to expand its manufacturing footprint to Tanzania and Uganda. GPCL Chairman, Adi Godrej confirmed this move saying the firm is in talk with some local firms in the country.
GPCL is betting on the African continent to drive its international sales via acquisition.
Africa accounts for majority of GPCL international revenue. In the year ended June 30, its revenue from Africa stands at R214 Crore. As at 2012, Godrej said the group is growing at 25-30 percent rate in Africa with an investment worth over $3.3 billion.
With presence across 14 African countries, Godrej has over 10,000 employees on the continent.
Ghana: BoG predicts 6% inflation in March 2014
The Bank of Ghana is projecting inflation within the band of 6 and 10 percent by the end of March next year. It has already projected 11.5 percent end year inflation while government is targeting between 7 and 11 percent rate. The Central Bank’s latest forecast is based on the exchange rate, energy prices, crude oil assumptions and the fiscal policy stance.
Inflation dropped for the first time this year to record a rate of 11.5 percent in August. The relative stability of the Ghana Cedi to the US Dollar appeared to have impacted on the decline of the price levels. This is because the non food inflation went down from 15.4 percent in July to 14.2 percent in August. However, the food inflation went up despite the beginning of the food harvest season. The monthly change for August was -0.7 percent.
Nigeria: World Bank approves $300m mortgage facility
The World Bank has approved a $300 million International Development Assistance (IDA) credit facility for Nigeria to aid low-income citizens own homes, through affordable mortgages. The World Bank, which disclosed this at its Abuja office, said the project would support the establishment of a mortgage liquidity scheme that will generate long-term funds for borrowers who fall in the middle and lower class categories in the country, guardian reported.
This project will directly benefit new home owners who struggle to find available cash to purchase long-term mortgage” said World Bank’s task team leader Michael Wong, adding that the project was expected to also create jobs in construction, designs, finance and other sectors throughout the country. Adding to this was Marie Francoise Nelly, World Bank’s Country Director for Nigeria who said; “The Nigerian financial system has quickly grown and is becoming increasingly integrated into a global financial system.
The coordinating Minister and Minister of Finance of the federation, Dr Ngozi Okonjo-Iweala had in April revealed that the Global body had agreed to assist Nigeria reintroduce mortgages and was ready to lend the Giant of Africa up to $300 million to realise the goal.
Kenya: To diversity exports to Egypt
The Exports Promotion Council (EPC) now plans to diversify the country’s exports to Egypt in order to increase trade and investment in both countries. Exports Promotion Council Director Bramwell Simiyu says Egypt is a medium sized economy and there is need to leverage on other opportunities available. Simiyu says tea accounts for 95 percent of exports to Egypt and the council is looking at introducing horticulture, livestock, beverages and services to export to Egypt’s exports.
“With the instability in Egypt in the recent past, unless we are able to diversify the product menu, we stand a risk of losing out on other opportunities that are there,” he said.
Simiyu says currently, Kenya’s imports almost double exports to Egypt, and the council is working to reverse the trade imbalance.
He says the council’s new strategy is to take advantage of the local and regional markets, pointing out the nearer markets are better, and expanding away from the traditional goods to products like human resources as well as sports tourism. He says the entry conditions for the regional market are much more flexible and by focusing on products produced by Small and Medium Enterprises (SMEs) achieving a 20 percent increase in exports every year will be realized.
Nigeria: Foreign investors plan U.S.$16 Billion investment in Delta
The Delta State government has attracted more than 16 billion dollars worth of investment for its export free zone, which is expected to create some 500,000 jobs. The state governor, Dr Emmanuel Uduaghan, said in Warri, Delta State that investors from Saudi Arabia and India are ready to invest in petrochemical and fertiliser plants. He also said that the Koko Export Free Zone had been approved by the Federal Government and the issue of approval for Warri Export Free Zone was still being pursued.
He said that it was the nature of Koko as an export free zone that attracted the investors since the Federal Government/NNPC Master plan approved three states, namely, Rivers State, Delta State and Akwa Ibom State for such projects.
The governor said that the Delta State government has done much in Koko by ensuring the approval of its status as an export free zone, ensuring peace and following closely the gas master plan. He said that already, the state government has prepared grounds for the free zone by putting in place the Asaba Airport, which would assist investors to fly their equipment into the state.
Uduaghan said that the strategic location of Koko also would assist cargo shipping through the Benin River. Uduaghan said that the Federal Government would tackle the dredging of the Benin River to allow bigger vessels to get to Koko, adding, “‘transport infrastructure is very critical”.
Kenya: Unilever plans Sh17 Billion investment
Unilever, the Anglo-Dutch manufacturer, plans to invest €150 million (Sh17.6 billion) in a new manufacturing plant in Kenya, global chief executive officer Paul Polman has said. Polman told President Uhuru Kenyatta at State House Nairobi that the planned investment will cater for the company’s expanding interests in the greater eastern African region, including in Ethiopia and Tanzania. The investment will also result in skill and technology transfer opportunities, as well as creating hundreds of jobs for Kenyans, he added.
The CEO said the company also planned to expand its existing factories in the lush hill-top farmlands of Kericho, to increase the amount of teas processed there to 50,000 tonnes per year from the current 30,000 tonnes. Unilever was also working with researchers on how to raise tea yield on Kenyan farms by up to 40 percent.