July 2 2018
IFC, a member of the World Bank Group, has announced a new $1bn debt financing for Indorama Eleme Fertilizer & Chemicals, Nigeria.
The investment will be used for the construction of a new fertilizer line that will expand Indorama’s capacity of urea fertilizer to more than 2.8 million tons.
Sérgio Pimenta, IFC Vice President for Middle East and Africa, said: “IFC aims to support Nigeria’s efforts to strengthen its manufacturing base and improve stability of its financial system through greater foreign exchange earnings from exports. With Indorama Eleme, IFC is also a partner in helping farmers in West Africa increase their food production and incomes.” IFC will directly lend $100m and mobilize an additional $850m of loans from other developmental financial institutions and commercial banks.
Another $50m in financing will be available from IFC’s Managed Co-Lending Portfolio Program.
Joining IFC as Joint Mandated Lead Arrangers (including as lenders) are European Investment Bank, YES BANK, CDC Group PLC, African Development Bank, Bank of Baroda and Standard Bank.
Also supporting the financing are Standard Chartered Bank; Bangkok Bank; FMO; DEG; PIDG company, the Emerging Africa Infrastructure Fund; PROPARCO; ICICI Bank Limited; and Citibank.
The large number of participating banks signals a strong endorsement of the project, Indorama, and the country by the syndicated loan market lending though a blend of IFC A and B Loans and uncovered facilities. “Nigeria has enormous potential to achieve agricultural self-sufficiency and food security which is evident from the multi-fold increase in domestic fertilizer consumption after the start of Indorama’s first plant. Nigeria has also become a major hub for urea exports. With Line 2, we aim to further expand our ability to provide competitively priced and high-quality fertilizer to farmers in West Africa and across the globe. Indorama is looking forward to continue contributing to Nigeria’s economic development”, said Manish Mundra, CEO, Indorama Africa. Significant amounts of natural gas are wasted in Nigeria due to gas flaring.
According to the World Bank, over the past three years Nigeria has flared an average of 750 million cubic feet per day of associated gas.
Utilization of gas for downstream chemical industries such as fertilizer helps reduce gas flaring, a contributor to greenhouse gas emissions associated with climate change.
Indorama Eleme Fertilizer & Chemicals is a subsidiary of Indorama Corporation, one of Asia’s leading chemical holding companies with subsidiaries and affiliates in Asia, Africa, CIS and the Middle East manufacturing Polyethylene, Polypropylene, Polyesters, Fertilisers, Textiles and Synthetic Disposable Gloves.
Amit Lohia, Group Vice Chairman, Indorama Corporation, said: “This financing reflects our strong partnership with IFC over a span of almost three decades. We are extremely pleased to bring our financial partners to Nigeria on the back of this strong partnership.”
July 4 2018
The Overseas Private Investment Corporation (OPIC), the US Government’s development finance institution, has launched its Connect Africa initiative, which will mobilize more than $1bn to projects that support transportation, communications, and value chains in Africa over the next three years.
The announcement comes as OPIC’s President and CEO Ray W. Washburne embarks on his first official travel to the continent.
“Africa is home to many of the world’s fastest-growing economies and presents both a great need for investment and a great opportunity for American businesses,” Washburne said.
“But, too many barriers remain to the flow of goods and services. By focusing on connectivity, we’re not only helping build means for economic development, but also laying the foundation for future trade partners.”
Connect Africa will focus on three areas in order to further integrate Africa into the global market:
Transportation and Logistics
• Infrastructure development supports commerce by making it easier and more efficient to move goods within countries and across borders. Connect Africa will focus on facilitating investments in roads, railways, ports and airports, as well as logistics, including elements such as vehicles, warehouses, and cold storage units.
Information and Communications Technology
• Technology is transforming the way people work, communicate, access information, and educate their children. The initiative will focus on technologies that provide access to information through telecommunications, including internet, wireless networks and mobile phones.
• Africa requires greater investment in order to better take advantage of global and regional value chains. The initiative will focus on facilitating investments supporting processing raw materials and helping products reach consumers.
During his travel, Washburne will travel to Zambia, Rwanda, South Africa, Uganda, and Kenya where he will meet with Heads of State and visit several OPIC projects supporting economic development in Africa.
Sub-Saharan Africa is a region of focus for OPIC, comprising more than one-quarter of the Agency’s $23bn active portfolio.
As part of its Fiscal Year 2019 budget proposal, the Trump Administration highlighted the need for the United States Government to modernize its approach to development finance to help grow aspiring partners, promote economic relationships, and increase investment in regions important to American interests
July 5 2018
Forty-nine of the 55 member states of the African Union have signed the Continental Free Trade Area Agreement.
The AU chairman Rwandan President Paul Kagame made the announcement on Monday during the closing ceremony of the 31st African Union Summit in Mauritanian capital Nouakchott.
South Africa, Sierra Leone, Namibia, Lesotho and Burundi signed the African Continental Free Trade Area (AfCFTA) agreement in Nouakchott, bring the number of countries that have inked the deal to 49.
Chad and the Kingdom of eSwatini joined four other countries that have ratified the agreement.
The AfCFTA will come into effect after 22 countries ratify it.
It will be the largest free trade area that creates an African market of over 1.2 billion people with a GDP of $2.5 trillion.
The deal has four legal instruments: The framework agreement establishing the AfCFTA; the protocols on trade in goods; protocol in trade in services; and the protocol in dispute settlement.
The agreement is expected to remove taxes from up to 90 per cent of the 200 items traded on the continent, making them cheaper for consumers.
July 12 2018
Djibouti has launched the Djibouti International Free Trade Zones (DIFTZ), Africa’s biggest trade zone that will comprise a total investment of USD 3.5 billion and span an area of 4,800 hectares.
This Free Trade Zone, which already hosts 21 companies, is expected to enhance trade in the Horn of Africa and strengthen Djibouti’s position as a trade and logistic hub. It is connected to the main ports of Djibouti, and provides benefits such as zero corporate, income and value added taxes.
At a ceremony held at the Free Zone, President Ismael Omar Guelleh hailed the scheme as the culmination of infrastructure projects “boosting Djibouti’s place in international trade and commerce”.
The Horn of Africa nation, located at the mouth of the Red Sea and Suez Canal, in 2017 unveiled three new ports and a railway linking it to landlocked Ethiopia, as part of its bid to become a global trade and logistics hub.
Somalia’s president, Mohamed Abdullahi Mohamed, hailed the free-trade zone as a “victory for East Africa”, in comments echoed at the ceremony by Prime Minister Abiy Ahmed and presidents Paul Kagame of Rwanda and Omar al-Bashir of Sudan.
The zone, which is connected to Djibouti’s main ports, aims at diversifying the economy, creating new jobs and luring foreign investment through tax-free incentives and full logistical support.
The pilot phase launched on Thursday comprises a 240-hectare site.
The project hopes to see foreign companies setting up manufacturing plants within the zone, adding value to products instead of merely importing and exporting raw materials.
“The volume of goods travelling to East Africa keeps increasing. Every time a product arrives in the continent without being transformed it is a missed opportunity for Africa,” said Aboubaker Omar Hadi, chairperson of the Ports and Free Zones Authority.
A row of Djiboutian and Chinese flags fluttered side by side above the freshly painted bright yellow walls surrounding the expansive project – a symbol of the tiny country’s close ties to the Asian giant whose loans have funded its lightning-fast infrastructure growth.
Djibouti – which is also the site of China’s only overseas military base – is a critical part of China’s “Belt and Road” global infrastructure initiative and in a prime position along what has been dubbed the “Maritime Silk Road”.
The free trade zone is being run by Djibouti, the majority shareholder, along with three Chinese companies: the China Merchants Group, Dalian Port Authority and Chinese big data company IZP.
July 13 2018
As part of its expansion plan on the African continent, Portugal’s biggest construction firm, Mota-Engil, said it plans to invest $1.8 billion in the Nigerian construction market.
Manuel Antonio Mota, Chief Executive Officer of Mota’s Africa unit, disclosed this during an interview with Bloomberg. He noted that the timing to enter Nigeria was “just right”, citing higher demand for building projects as increase in oil prices bolsters the state coffers of oil producers in Africa.
In his words:
“The projects in Nigeria that are currently on the table vary between 20 million euros to 1.5 billion euros”.
Under this new venture, Mota-Engil will hold 51 percent of Mota-Engil Nigeria Ltd. while the Shoreline Group, will hold the remaining stake.
Mota-Engil announced earlier that it planned to enter new markets in Africa including Ghana, Kenya, Uganda, and Zambia. It said it is seeking $5 billion of contracts on the continent. The company recently announced plans to invest $36 million in Zambia.
Mota-Engil has halted plans for its initial public offering, following a failed attempt in 2014 due to deteriorating market conditions. Previously it had revealed plans to float at least 25 percent of its share capital in a public offering on the London Stock Exchange.
Shoreline group is an indigenous power solutions company with Power Generation and Power equipment manufacturing activities.
The company is one of several Nigerian producers that bought fields in the oil-rich Niger-Delta after international producers including Royal Dutch Shell withdrew amid persistent attacks on infrastructure. The company didn’t pump oil for a year following the closure of the Forcados terminal in February 2016. Flows resumed after the link was reopened in June last year.
Mota-Engil is a Portuguese group in the sectors of civil construction, public works, port operations, waste, water, and logistics.
The group comprises of 228 companies within three major business areas – Engineering and construction, Environment and Services and Transport concessions – operating in 21 countries through its branches and subsidiaries.
July 16 2018
Madagascar’s leader and the acting president of the Common Market for Eastern and Southern Africa (Comesa) Hery Rajaonarimampianina has welcomed Tunisia to the regional bloc.
The northern African nation was said to have fully met the admission requirements, and thus officially became the the 20th Comesa member state.
President Rajaonarimampianina and the Tunisian Foreign Affairs minister, Mr Khemaies Jhinaoui, signed the admission documents at the 20th Comesa Summit in Lusaka, Zambia on Wednesday.
“I invite Tunisia to positively contribute to the Comesa’s development, to the tripartite free exchange zone Comesa-EAC-SADC, and the continental free exchange zone under the auspice of the African Union,” stated President Rajaonarimampianina.
The Comesa’s new secretary-general, Ms Chileshe Kapwepwe, took up her role on Wednesday, following the expiry of the term of Mr Sindiso Ngwenya.
Zambia’s Chileshe Kapwepwe taking the oath of office as the secretary-general of the Common Market for Eastern and Southern Africa (Comesa) in Lusaka on July 18, 2018. PHOTO | MADAGASCAR PRESIDENCY
Ms Kapwepwe, a Zambian, is the first woman to hold the Comesa secretary-general’s position.
President Rajaonarimampianina also presented awards to several African journalists whose works highlighted the Comesa activities.
Comesa is the largest regional economic organisation in Africa with 21 member states, after the admission of Tunisia and Somalia.
It has a population of about 390 million. The bloc has a free trade area and launched a customs union in 2009
The theme of this year’s summit at the Mulungushi International Conference Centre was: Comesa: Towards Digital Economic Integration, and is designed to rally member states towards the full adoption of digital technologies.
July 17 2018
The Central Bank of Nigeria (CBN) yesterday disclosed that trading in the Chinese Renminbi would commence before the end of this month.
A top CBN official, who disclosed this in a chat with THISDAY, said the CBN was finalising modalities for the trading in the Chinese currency.
This followed a $2.5 billion bilateral currency swap agreement signed in May between the CBN and the People’s Bank of China (PBoC).
According to the source, the CBN wants to ensure that the regulations around the trading of the Renminbi are tightened so as not to create any room for arbitrage and currency manipulation.
“All hands are on deck, all the work is being done and in the next two weeks trading will commence.
“There will be very marginal discount to encourage people to go for it. But the discount will be so small as not to encourage arbitrage, but encourage those who really want to do so that they can get an advantage for embracing the Renminbi currency,” the source added.
The CBN recently held town hall meetings in some cities in the country in its bid to woo businesses importing goods from China to use the Yuan instead of the United States dollar in its effort to support its naira currency and boost reserves.
Officials said the deal was aimed at reducing reliance on the dollar and “as such, reduce the pressure on the naira-dollar exchange rate.”
Under the swap arrangement, the central bank would hold N720 billion in an account in favour of the PBoC while the Chinese central bank would hold 15 billion Yuan, implying an exchange rate of N48 to the Yuan.
The bank also said the move was aimed at encouraging Chinese firms buying local raw materials and semi-finished goods to pay in naira.
THISDAY had reported that First Bank of Nigeria Limited, Stanbic IBTC, Standard Chartered Bank (SCB) and Zenith Bank Plc had been appointed the settlement banks for the bilateral currency swap deal.
Meanwhile, the CBN has warned that hard times now await hawkers of the naira, especially those who exchange new currency notes for old ones at motor parks or parties and other social functions.
CBN over the weekend in Ibadan assured economic agents such as the marketers, merchants, shopping malls, supermarkets of the bank’s continuous and direct supply of huge volumes of the banknotes to traders’ unions.
The development, according to the acting Director, Currency Operations Department, CBN, Mrs. Priscilla Eleje, was to ease difficulties being encountered by the traders and customers occasioned by the inadequate circulation of the lower denomination banks notes like N200, N100, N50, N20, N10 and N5.
Eleje who was represented at the public sensitisation and enlightenment campaign on CBN direct intervention on lower denomination banknotes at the Alesinloye market by a Deputy Director of the bank, Mrs. Olufolake Ogundero, added that the bank recognises the important role markets play in economic transaction hence the need for ease accessibility of the lower denominations to carry out economic transactions.
She said the objectives of the CBN’s intervention was principally to ease accessibility and consequently address the dearth of these denominations in circulation adding that the disbursement has commenced in Abuja and was being extended to Lagos, Kano, Enugu, Onitsha, Ibadan, Yola, Gombe, Katsina and Jos.
Eleje added: “It is a criminal offence punishable by six months imprisonment or a fine of N50,000 or both to sell, spray or mutilate the banknotes. It is also a criminal offence which attracts five years imprisonment without an option of fine for anybody to counterfeit the naira. The naira is our pride as a country. So respect it.”
The Ibadan zonal Controller of the bank, Mr. Musibaudeen Olatinwo, said since a large number of the businesses deal in Fast Moving Consumer Goods (FMCG) and service, the CBN would henceforth supply the banknotes directly to the Joint Traders Association of Oyo State and major retail outlets to meet the high demand for the notes.
Olatinwo said the intervention was timely because of the experience of scarcity of lower denominations in circulation due to hoarding and racketeering, saying: “The CBN has tried to increase the supply of these notes only for it to be diverted from its expected users and sold in the open market.
The leader of the market women in the state, Mrs. Labake Lawal, assured the CBN of the cooperation of her members, stressing that “we will comply strictly with the agreed guidelines and utilise the banknotes for the intended purpose.”
July 20 2018
UAE Exchange, a leading global money transfer, foreign exchange and payment solutions brand, announced the rebranding of its Africa operations as “Unimoni”. The announcement was made by Promoth Manghat, Executive Director of Finablr and Group CEO, at an event held in Nairobi, Kenya, in the presence of dignitaries, partners and other guests.
Short for ‘Universal Money’, the new brand “Unimoni” reflects the company’s aspirations to strengthen its global presence and provide a broader spectrum of innovative financial services to its customers.
Following the announcement, Unimoni will be launched across Botswana, Kenya, Rwanda, Seychelles, Tanzania, Uganda and Zambia, subject to regulatory approvals.
As part of its Africa growth strategy, Unimoni plans to be present in 14 African markets by the year 2020, and has developed a healthy pipeline of digital payment solutions designed to cater to the specific needs of the African customers.
Promoth Manghat, Executive Director of Finablr, said,“Home to some of the fastest growing economies globally, Africa holds tremendous potential and is a critical component of our growth strategy as a group. We will continue to invest in enhancing the breadth of our reach and depth of our operations in the African continent. As a group, we have earmarked USD 100 million in investments to support our growth and expansion efforts in Africa over the next decade. ”
As Unimoni, the company plans to facilitate seamless and connected experiences for customers and pave the way towards sustainable development and inclusive growth of the various African markets.
Through its category-leading brands such as Unimoni, UAE Exchange, Travelex and Xpress Money, the Finablr network extends across 45 African markets. With 29 branches in Africa offering affordable money transfer and foreign exchange services, Unimoni plans to significantly increase its retail footprint over the coming years.
Additionally, the brand is also making aggressive investments in customer-focused technology innovations as well as collaborating with ecosystem partners to provide an enhanced service proposition to its customer base.
Speaking about the future expansion plans for its Africa operations, Allen Semboze, Regional Head Africa, Unimoni, said,“The next few years are going to be very eventful for us at Unimoni, as we set out to achieve our ambitious growth strategy. We are in advanced discussions with various ecosystem partners including Mobile Network Operators and aggregators to develop new money transfer solutions.
He added, “These services will be available in four of our seven markets in Africa by the second half of 2018. We are also working on developing our digital capabilities including an online remittance platform, a white-label solution for our corporate customers and an online forex solution. While we are adopting a phased approach towards our growth in Africa, all these offerings will be live by 2020 across all our African markets.”
The rebranding exercise follows an earlier announcement made by noted UAE-based businessman and philanthropist, Dr. Bavaguthu Raghuram Shetty, Founder and Chairman of the UAE Exchange Group. In April 2018, Dr. Shetty launched “Finablr”, a holding company which, subject to regulatory approvals, aims to bring together his global portfolio of category-leading financial services brands including Unimoni, UAE Exchange, Travelex and Xpress Money under one umbrella.
July 25 2018
Old Mutual Plc returned to its roots on Tuesday when it listed its $11 billion African financial services business in Johannesburg, a move which largely completes a major overhaul of the company.
The group also simultaneously listed on three regional exchanges to complete the return to its African roots.
The 173-year old group has been disentangling its conglomerate structure created after a series of acquisitions since it moved its headquarters and primary listing to London in 1999.
Chief executive Bruce Hemphill set the break-up in motion in 2016, saying the company’s four main businesses — a U.S. asset manager, a British wealth manager, an African financial services division and a South African bank — would achieve higher investor ratings as separate entities.
The financial conglomerate broke into four independent businesses namely Old Mutual Emerging markets (OMEM), NedBank Group, Old Mutual Wealth (OMW) and Old Mutual Asset Management as part of a strategy to unlock and create significant long-term value as well as removing the significant costs arising from the previous structure.
Old Mutual Plc’s African financial services business, Old Mutual Ltd, listed roughly 5 billion shares on Tuesday. They traded at 29.39 rand each during the session, valuing the company at roughly 145 billion rand ($10.7 billion).
Old Mutual Ltd, now the parent to what is left of Old Mutual plc, has a standard listing in London, and secondary listings on the stock exchanges of Malawi, Namibia, and Zimbabwe.
It is expected that Old Mutual plc shares will be delisted from the Johannesburg Stock Exchange, the Namibian Stock Exchange, the Zimbabwe Stock Exchange and the Malawi Stock Exchange on 29 June 2018.
The company also had its secondary listing in Zimbabwe — where it opened its first office 120 years ago — on Tuesday at an event officiated by the finance minister, Patrick Chinamasa.
Secondary listings on the Namibian Stock Exchange and the Malawi Stock were expected also on Tuesday.
Hundreds of Old Mutual Ltd’s employees, blowing green vuzuzelas and beating drums, danced through the streets of Johannesburg ahead of the listing.
“What’s most exciting about our listing as an independent, standalone entity is that it enables us to unlock shareholder value and create a business with a strong strategic focus on sub-Saharan Africa,” Old Mutual Ltd’s chief executive Peter Moyo said.
Old Mutual, which traces its roots back to the mid-19th as South Africa’s first mutual aid society with 166 members, has already sold its U.S. asset management business and on Monday separately listed its U.K wealth arm, renamed Quilter.
The break-up is part of a growing global trend for conglomerates to hive off bits of their businesses, sometimes in response to pressure from activist investors.
General Electric said earlier on Tuesday it would spin out its healthcare business and sell its stake in oil firm Baker Hughes, leaving the U.S. company focused on jet engines, power plants and renewable energy.
“The nice thing about this Old Mutual break up is that you now have a vehicle that’s purely emerging market, if you want to buy that, and another vehicle that’s purely UK,” Michael Treherne, a portfolio manager at Vestact, said.
Later this year, Old Mutual’s African business will spin off part of its 53 percent interest in South Africa’s fourth largest lender, Nedbank.
Old Mutual, which will retain a roughly 20 percent stake in Nedbank, bought into the bank in 1986 when it was forced by apartheid South Africa’s strict capital controls into being a major shareholder in several local companies.
The company’s head office in London will be wound down this year. It has been cutting staff in London since it first announced the demerger two years ago. Staff numbers in London are expected to fall to around 40 this year from 120, Old Mutual has said.
July 27 2018
Nigeria’s quest to improve power supply will receive US $1.57 bn donor support from the World Bank, African Development Bank AfDB, Japan International Cooperation Agency (JICA) and French Development Agency.
The fund will be used for the Transmission, Rehabilitation and Expansion Programme ,TREP of the Transmission Company of Nigeria TCN for an initial 20,000 MW in the next four years.
TCN Managing Director, Usman Mohammed said the programme which was approved by the federal government was designed to steadily grow, stabilize and modernize Nigeria’s transmission network to take more electricity from generation companies, to distribution networks.
“In the last one year, we have been able to deliver a 20-year least-cost transmission plan, present a generation adequacy report which is part of the requirement of the function of system operation, and we have been able to also audit TCN from 2010 to 2016 and now working to deliver the 2017 audit,” said Mohammed.
Nigeria’s current electricity situation continues to be problematic, with the highest generation put at about 4,000MW, far below the national need. According to the National Bureau of Statistics, the inability of Nigeria to meet the electricity requirement has adversely affected industrial growth and also caused the closure and relocation of many companies.
TCN will host a workshop to review the plan to procure and install new supervisory control and data acquisition (SCADA) and electricity management system (EMS) for the national grid.Mr Mohammed further disclosed that TCN had set aside a US $65 m to procure the brand new SCADA and EMS, adding that the facility would help it manage the grid efficiently.