Africa Brief: Growth rate, KFC and Zimplats expansions, sub-Saharan Africa inflows, and more
African region to grow 6.6%
Excluding South Africa, Sub-Saharan Africa is said to grow at 6.6% this year. When including SA’s 30% weighting in the Sub-Saharan Economy, the growth rate falls to 5.4%. President of the African Bank Donald Kaberuka says the dynamic in Africa is good however, there are risks when you consider the global environment.
He has positive view of South Africa, commenting it has great institutions, infrastructure and a sound financial system. He also believes growth in South Africa will happen when the Government successfully distributes the wealth to the South African people equally, and when education in the impoverished areas is given a first class facelift.
Donald goes on to dismiss the controversy over Nkosazana Dlamini-Zuma’s appointment as chairman of the African Union Commission, appreciating her as the right person for the job.
For the full story, read African region to grow 6.6% by Elissa Jobson, published in Business Day on 15/01/2013.
KFC eager to spread wings in Africa
Fast food players eye Africa. Food companies hoping to cash in on Africa’s burgeoning middle class, whose disposable income is rising rapidly. According to McKinsey consumer-facing industries in Africa are expected to grow by more than $400bn by 2020.
KFC has plans to extend its reach to Zimbabwe, Tanzania and Uganda in 2013. Key risks of trading in Africa include the lack of real-estate, currency volatility, and red tape. Local players Spur Corporation and Famous Brands have a significant presence on the continent.
For the full story, read KFC eager to spread wings in Africa by Zeenat Moorad, published in Business Day on 15/01/2013.
Zimplats to finish plant expansion in April
Zimplats, Zimbabwe’s biggest platinum producer, will complete the expansion of a recovery plant, processing ore from a new 2-million-ton underground mine, on schedule in April, according to CEO Alex Mhembere. The $460m project will increase annual production to 270,000oz from 187,000oz last year.
“The second stage, which is underground mining development, will reach full production in 2015 as originally planned,” Mr Mhembere said. Zimbabwe, which has the biggest platinum and chrome reserves after South Africa, does not have a refinery and most of Zimplats’ platinum is processed at Impala Platinum’s plant near Johannesburg. Impala, which owned 87% of Zimplats, last Friday signed the terms to sell 51% to black Zimbabwean citizens.
For the full story, read Zimplats to finish plant expansion in April by Godfrey Marawankyika, published in Business Day on 15/01/2013.
Expansion of power station hits a snag
A multimillion-dollar deal between Zimbabwe Power Company (ZPC) and Chinese-owned Sino-Hydro for the expansion of Kariba South power station has been delayed amid indications the deal document breached procurement regulations. The delay will affect work on the expansion of the power station, which was expected to increase power generation by 300MW.
“The actual contract was for $355m, but the total price that we signed the contract for was $390m, including contingencies,” said Wu Yifeng, at SinoHydro Zimbabwe.
For the full story, read Expansion of power station hits a snag by Ray Ndlovu, published in Business Day on 15/01/2013.
Cash flows into sub-Saharan Africa ‘set to rise’
Net capital inflows to sub-Saharan Africa are projected to nearly double from $43.4bn in 2008 to $86.1bn in 2015. The bulk of these inflows are foreign direct investment, which tends to be less volatile than portfolio flows. These inflows will promote infrastructure development, and hence job creation.
Having a strong domestic demand, steady remittance flows, high commodity prices, and increased export volumes were supportive of the region’s growth in 2012. There are domestic risks that could affect the region’s growth such as labour dispute, monetary policy tightening and political unrest as well as foreign risks such as weaker growth in China, ongoing fiscal consolidation in the eurozone and the US could potentially derail the region’s growth prospects.
For the full story, read Cash flows into sub-Saharan Africa ‘set to rise’ by Helmo Preuss, published in Business Day on 16/01/2013.
About David Okwara
Africa, African Bank, Alex Mhembere, consumer-facing industries, economic growth, fast food, Impala Platinum's plant, Kariba South power station, key risks, KFC, platinum, power station, Sino-Hydro, South Africa, sub-Saharan Africa, Tanzania, Uganda, Zimbabwe, Zimbabwe Power Company, Zimplats, Zimplats to finish plant expansion, ZPC