Africa Brief: Tanzania reviews its mining contracts, Rwanda crafts laws that aim to expand financial sector and more…
Tanzania reviews its mining contracts
Tanzania was reviewing mining contracts to ensure the government got a bigger share of revenue.
Africa’s fourth largest gold producer was talking to mining companies to get higher taxes and royalties. The aim is to change provisions to generate more revenue for the state. African Barrick Gold already agreed to pay 0.3% service levy and The Tanzanian-focused firm also agreed to pay higher royalties in 2012. The government is in talks with other mining companies for similar contract reviews. Major mining companies such as AngloGold Ashanti and Petra Diamonds operate in Tanzania. The government is also planning on taking new legislation to parliament to govern its fast-growing energy sector. Analysts said delays in approving this legislation could hinder future investments.
by Reuters published by The Star, Business Report on 02/06/2014
Rwanda crafts laws that aim to expand financial sector
Rwanda would shortly allow derivatives to be traded on its stock exchange as well as a new investment code.
This country wants to develop its capital market and attract more investors. Even though its stock exchange is just three years old. A law has recently been passed allowing the trading of derivatives on their exchange. Rwanda is also planning on issuing another bond after its successful bond issue last year.
by Duncan Miriri published by The Star, Business Report on 02/06/2014
Zimbabwe back in recession-experts
Spending in Zimbabwe by consumers is very low, factories are shutting down and the economy is heading for recession.
Speaking to a Zimbabwean trader he says his profits and sales have decreased dramatically. It has only been 5 years since Zimbabwe emerged from recession and it appears its occurring again. Foreign currency has dried up, investors are getting mixed signals from the government and factories are only operating at 40% capacity. After abandoning its currency a few years ago and adopting a multi-currency system investments in the country have picked up. This fuelled agriculture in the country. However all this progress is jeopardised as sales are declining, 15 factories have closed down and consumer prices have dropped. Zimbabwe is in a rut once again and there is no clear way to get out of it.
by Brian Statham published by The Star, Business Report on 02/06/2014
Zimplats refinery plans fall short- official
A $100m investment by Zimplats in upgrading its refinery was not enough to meet demands.
Zimplats said Impala platinum was going ahead with refurbishment of its refinery, this project is expected to take two years to complete. However is not deemed to be sufficient says a top government minister. Zimbabwe’s three major platinum mining firms are all owned by South-African based countries. Zimbabwe has also expressed unhappiness regarding a proposal setup by Implats for a new refinery because the government said they did not provide a solid plan as to how they intend to build it.
They are still doing a feasibility study. Bindura Nickel Corporation said they are willing to work with the platinum producers to upgrade its facility to produce platinum ore. However there has been no progress with the negotiations. Yet they said they will continue with the upgrades with or without the platinum producers. The government is now considering a plan to build a platinum refinery with Russian investors. The platinum producers said production must reach 500 000 ounces per year to sustain building a refinery but the government has rejected this. However production is 400 000 ounces per year and they have plans in place to increase this. It is crucial for the government to provide clarity on the indigenisation regulations in order to attract more investors.
Excerpt from Zimplats refinery plans fall short – official, published by The Star, Business Report 02/06/2014
African failure opens the skies to Gulf airlines
The fuselage will be delivered to SAA in less than eight weeks’ time. However it does not seem near completion but airbus officials say there is no doubt that it will be ready. This airbus is one of two about to go into service in SAA. These airbuses are replacing the Boeing 737-800’s that were in fleet before. It is said that the airbus could save millions in pilot and on-board training. Airbus officials say air traffic is likely to double in the next 15 years. However this is not great for an emerging market like Africa, which is expected to be the driver behind air traffic growth. Africa’s failure to manage air transport has opened the door to various Gulf airlines.
by David Furlonger published in Business Day on 29/05/2014
Zambia Railways eyes export-capacity boost
Zambia railways will seek millions from the government to increase copper shipped by train. They will increase the haul from 10 000 tonnes a month to 240 000 tonnes. This increase would happen by adding to capacity between mines, smelters and refineries. Government-owned Zambia Railways began a trial route earlier this month which was very important as it was the shortest route from the copper belt to a port.
by Matthew Hill published in Business Day on 29/05/2014
Zimbabwe’s 100% control act under way
Zimbabwe demands 100% local control over its minerals and land due to planned changes to its empowerment law. The finance minister said his comments will add to the confusion. The Zanu-PF has long tried to increase black ownership in the economy. Even though a law was amended as it was unclear what was meant by the word control. It is also unclear whether this will affect the existing investors such as Impala Platinum.
by Reuters published in The Star, Business Report on 29/05/2014
Competition regulators in Africa demand respect
Africa’s developing economies present an intriguing investment opportunity. There seems to be a lot of optimism surrounding Africa’s growth. However there are nonetheless various challenges that must be considered with due diligence. Competition regulation however plays a big part in Africa’s growth and development. As between 1990 and 2013, 26 African countries enacted competition laws. Botswana has a growing competition authority and Kenya has recently announced its intention to probe the agricultural sector and to investigate the edible oils market. Both Namibia and Mauritius have announced plans to bolster their cartel busting capabilities. Last month the African competition forum tabled reports on the sugar, poultry and cement sectors. Competition laws are becoming increasingly important and these authorities demand to be taken seriously.
by Chris Charter published in The Star, Business Report on 29/05/2014
Germany slow to start its African ventures
German industries representatives have a tough time getting business in Luanda as most contracts go to bigger companies. Only about 15 German companies have set up business in Angola. Of Germany’s $9bn investment in Africa, $8bn is channelled to South Africa. The idea in Germany is that South Africa and Nigeria are the only places where there is money in the African continent. They are however slowly starting to overcome their caution.
With a new African policy guideline in place Germany is trying to get a spot in the sun.
Germany’s late arrival should boost its own exports and signal that Africa’s economy can move up the value chain. Germans can competitively enter the renewable energy market in Africa.
Africa’s rising consumption will create more demand for local products and increase domestic growth. The Germans caution is seen as a guarantee of the commitment needed to develop the local industry. It is certain they are here to stay.
by Stephen Brown published in The Star, Business Report on 29/05/2014
Ethiopia may delay WTO plan to shield its service industries
Ethiopia may delay plans to join the WTO in 2015 if it is required to liberalise its telecoms and banking industries sooner than it would like. Questions have been asked as to when the service sector will be open international competition. Ethiopia has lured many investors but laws deny outside firms to access areas viewed as politically sensitive. Washington said it’s committed to renewing its African growth and opportunities act that will give Ethiopia-textiles preferential access to US markets. Various companies such as Diageo, Hennes & Mauritz, Unilever and Nestle’ show great interest in Ethiopia. A US management consulting firm has announced its deal to run Ethiopia’s new cash and carry. New WTO rules adopted in 2012 lowered the bar for joining for least developed countries.
by Binyam Tamene published in The Star, Business Report on 29/05/2014
Ghana: PPI accelerates to 31.5% rate
The increase in the PPI was due to a rise in manufacturing costs together with a decline in the cedi currency.
Excerpt from Ghana: PPI accelerates to 31.5% rate, published by The Star, Business Report on 29/05/2014