Africa Brief: Local food firms eye expansion in rest of Africa, Zimbabwe to start joint ENRC mine and more…
Jonathan’s political woes are taking toll on oil-rich Nigeria’s currency
Nigerian President Goodluck Jonathan’s political troubles are increasing pressure on the central bank of Africa’s second-largest economy to devalue its currency, risking higher prices on all goods from food to oil. While Nigeria is the continent’s biggest producer of crude, it must import 70% of its fuel needs because of inadequate refining capacity. That leaves the nation vulnerable to swings in exchange rates, leading the central bank to manage its currency, the naira, in a trading range against the dollar. The peg is becoming more difficult to defend as a schism in the ruling party pushes the naira’s six-month volatility to 6.72%, the most since June last year.
Sub-Saharan Africa’s second most-traded currency fell 2.4% this year as central-bank governor Lamido Sanusi warned of increasing demand for dollars to be used for political patronage before elections in 2015.”In the run-up to 2015, we’re going to see a lot of investors using that as an excuse to just exit the market,” said Wale Okunrinboye, an analyst at Asset St Resource Management,- which manages more than $2.8bn. The naira weakened to 163.9 against the dollar on September 10, its lowest since December 2011 based on closing prices, and was at about 159.90 yesterday. Six-month volatility in the naira has jumped from a low for the year of 2.62% on February 22. Price swings can wipe out the profit they get from the interest-rate differential.
For the full story read, Jonathan’s political woes are taking toll on oil-rich Nigeria’s currency by Chris Kay published by Business Day 23/10/2013
Local food firms eye expansion in rest of Africa
South African retailers’ expansion into the rest of Africa is increasing the availability of and demand for quality agricultural produce and processed food products, the MD of logistics firm DHL Express SA, Hennie Heymans, said yesterday. According to a report by the World Bank released in March, the size of Africa’s food and beverage market is projected to reach $l-trillion by 2030 more than three times the current market, which is worth $313bn. The expected growth of Africa’s food and beverage market “highlights the growing market and many opportunities for South African agribusiness and related value chain role players to expand into Africa,” Mr Heymans said. However, a lack of infrastructure was a constraint, as the lack of access roads hindered the delivering of produce to the market. “Removing logistical barriers will increase productivity and improve service delivery greatly,” Mr Heymans said.
For the full story read, Local food firms eye expansion in rest of Africa by Nick Hedley, published by Business Day on 24/10/2013
Zimbabwe to start joint ENRC mine
Development Corporation (ZMDC) is set to start a metal production programme with Eurasian Natural Resources Corporation (ENRC) and a Chinese firm on concessions taken from Anglo American Platinum (Amplats) and Impala Platinum Holdings (Implats). A venture with ENRC, controlled by businessmen from Kazakhstan and the government of the former Soviet republic, is due to start producing platinum in the first quarter of next year. An exploration report from an alliance with the Chinese company, previously identified as Norinco International Co-operation, is due by year-end. “Everything is on course” for the venture with ENRC to start production … by April, Jerry Ndlovu, MD of the state-owned ZMDC, said yesterday in Harare. The spot price of platinum fell 0.8% to $1,438.20 an ounce in London yesterday morning. ENRC shares were unchanged at 2207p.
Zimbabwe will produce about 365,000 ounces of platinum as well as other metals found in the ore this year from mines owned by Amplats Implats and Aquarius Platinum, according to the country’s Chamber of Mines. Those companies, whose other assets are in SA, are the only producers of the metal in Zimbabwe.
For the Full story read, Zimbabwe to start joint ENRC mine by Godfrey Marakwanyika, published by Business Day on 24/10/2013
Working with Africa is vital for SA to use its strengths
In the lead-up to the medium-term budget policy statement yesterday Tim Harris, the DA’s finance spokesman, laid out a concise plan as to what Finance Minister Pravin Gordhan should focus on. It highlighted the deficits on the current account and the national budget balance as the major problems to be addressed in South Africa and included suggestions such as infrastructure development, abolition of exchange controls, increased competition, and decreased spending on ineffective state-owned entities.
One area where I agree wholeheartedly with Harris is his suggestion to open up South Africa to trade with Africa. Not only is there huge benefit to be gained in the market for exports as many African countries continue to stabilise politically and their economies continue to grow, but opportunities exist in working alongside other Africans and what they have to offer. Immigration is seen as a problem, but we should rather be looking at what potential these foreigners bring with them.
The debate around growth in South Africa should not centre on what the government is spending on but, at each instance, whether the government should be spending at all. The government must be the enabler, not the executor.
For the full story read, Working with Africa is vital for SA to use its strengths by Pierre Heistein published by The Star, Business Report on 24/10/2013.
Lagos rail project battles to advance
A walk along the 2km of light rail that Lagos authorities have managed to build in three years gives a sense of how hard it is to impose order on one of Africa’s most chaotic cities. The biggest headache, however, is travel. The transport authority says there are 9 million road trips a day in the city. The $2.5 billion (R24.5bn) light rail project is behind schedule because there is barely a stretch of land that is not inhabited. Thousands of illegal settlements have been destroyed this year. No one has been compensated. Fashola’s defenders say slums must be removed for projects like the light rail, but critics say the heavy-handed approach shows a lack of sensitivity to the poor..
For the full story, read Lagos rail project battles to advance by Tim Cocks, published by The Star Business Report on 24/10/2013