Africa Brief: Business News from around the continent
Pepkor plans to double its presence in Nigeria by 2018
PEPKOR, the local clothing retailer bought by Steinhoff International for $5.7 billion (R68bn) in 2014, plans to double its presence in Nigeria with 10 store openings a year through to 2018.
The company opened its first outlet in Africa’s most populous country in 2012 and would have 31 stores by July, Deon Conradie, Pepkor Nigeria’s general manager, said on April 27 in his office in Lagos.
The clothing and footwear chain planned to sustain that growth rate over the next three years, he said. ‘”Our prices are low and we cater for that middle-to-bottom market, which is the fastest growing,” Conradie said. “There’s a need for somebody to supply that market.”
Publication: THE STAR BUSINESS REPORT; Author: Yinka Ibukun
Spotlight on cross-border trade with Swaziland
Illicit trafficking in smuggled goods like medicines and tobacco continued to plague cross-border trade between South Africa and Swaziland, Thomas Moyane, Commissioner of the South African Revenue Service (Sars), said at a meeting with Swazi customs authorities last week.
Moyane also discussed measures to counter money laundering with his Swazi counterpart, Dumisani Masilela, Commissioner General of the Swaziland Revenue Authority.
“The matter of dealing with the vexing questions of an illicit economy with attendant negative consequences deserves our two countries’ urgent attention.
“Let alone that these goods pose serious health challenges, they also rob the fiscus of its due. Accordingly, it is very important that we work together to deprive life to this illicit economy,” said Moyane at a press conference.
Publication: THE STAR BUSINESS REPORT; Author: LEWIS SIMELANE
Region sells $9.2bn in Eurobonds
African corporations are the latest beneficiaries of the global hunt for yield. Companies in the world’s least-developed continent issued S2.8 billion (R33.7bn) of dollar-denominated debt in 2015, the best start to a year since 2011, as investors take their search for returns further afield amid dwindling gains elsewhere. Last year, sub-Saharan Africa’s sovereigns sold a record $9.2bn of Eurobonds. Interest in African debt is being driven partly by falling yields in other emerging markets, in turn spurred by record-low developed-nation interest rates. US Treasuries, the benchmark for dollar-denominated debt globally, offer investors 2.05 percent for 10 years. South Africa’s FirstRand Bank sold 5500m of five-year notes to yield 4336 percent on April 23,129 basis points more than similar-maturity debt from Turkiye Garanti Bankasi.
Publication: THE STAR BUSINESS REPORT; Author: Bloomberg
BP declares force majeure
BP Has declared force majeure on oil output from Angola’s Saturno stream after a production problem earlier in the week, a company spokesman said on Friday, the second outage in two months. BP confirms that force majeure was declared on FPSO PSVM on April 30,” the company spokesman said. The production outage and force majeure at Saturno follows an earlier disruption in March. PSVM consists of the Plutao, Saturno, Venus and Marte fields.
Publication: THE STAR BUSINESS REPORT; Author: Reuters
A May Day appeal to workers
Ghana’s President John Dramani Mahama on Friday appealed to workers not to make demands that could derail an International Monetary Fund (IMF) assistance package in the runup to elections next year. The IMF last month approved a three-year $918 million (R11 billion) deal aimed at tackling Ghana’s wide public deficit, growing public debt and high inflation. Mahama is expected to face a strong opposition challenge in a presidential election next year. The government overshot its 2012 budget deficit target by nearly 100 percent ahead of the last election, due in part to a larger-than-anticipated wage bill. The president said the success of the IMF programme depended on strict adherence to prescribed spending restrictions. “This will require sacrifices on our part,” Mahama told workers at a Labour Day rally in the capital Accra. Mahama said the first $114.8m tranche of the IMF package had already been disbursed.
Publication: THE STAR BUSINESS REPORT; Author: REUTERS
Barclays insurance enters Kenya and eyes Ghana
Barclays Africa Group said it now planned to expand its insurance business in Ghana after formally entering Kenya’s life insurance market.
The group expects Barclays Life Assurance Kenya to be a base to expand to East African countries such as Tanzania and Uganda, where it has banking operations.
“For us the key market was to first expand to Kenya and secondly to shift the attention to Ghana. That’s the next priority,” Willie Lategan, the CEO for wealth, management and insurance at Barclays Africa, said.
Publication: BUSINESS DAY; Author: PHAKAMISA NDZAMELA
Capitec looks solid for the long haul
When African Bank collapsed last year the response of investors in other unsecured lenders was fear. Capitec, in particular, saw its share price fall as some shareholders considered African Bank’s demise to be evidence that the business model was fatally flawed. Depositors and bond-holders also hesitated.
Six months later and those initial fears have been proved profoundly wrong. Capitec has rapidly moved into the space left by African Bank and has never looked stronger. The share price reflects that after a dip last August when its rival was placed under curatorship, it has rallied strongly, up 165% over the last six months, trouncing every other counter on the JSE.
African Bank is still open for business but its appetite for riskier loans has waned and the volumes it is lending have fallen sharply. The bigger banks have also taken a step back from unsecured lending. After moving into the space aggressively for a few years, they started backtracking in early 2013 when loan performance came short of what their models had predicted.
Publication: BUSINESS DAY; Author: Stuart Theobald
Eskom getting tough on freeloaders
Eskom has piled pressure on municipalities, who owe it more than R9 billion, to pay their debt or face a possibility of massive power cuts this winter. It has warned Soweto residents that they are next on its list.
Soweto, the country’s largest township with an estimated population of more than five million people, owes Eskom more than R4bn alone.
Eskom spokesman, Khulu Phasiwe, said only 180 000 Soweto households were supplied directly by Eskom, while the rest were serviced by the City of Johannesburg metropolitan council.
Publication: THE STAR BUSINESS REPORT; Author: Sechaba ka’Nkosi
About David Okwara
Africa, Africa brief, Africa challenges, Africa opportunities, African countries, agriculture, challenges, development, East Africa, economic growth, economy, Ethiopia, FDI, financial services, Foreign Direct Investment, foreign investment, Ghana, KPMG Africa, Oil and gas, private equity, sub-Saharan Africa