HIGHER pricing and an increase in volumes saw Tanzania’s earnings from gold exports rise 42% in the year to November, said Reuters.
Citing the east African country’s central bank, the newswire said gold exports rose to $2.14bn in the year to November from $1.51bn during the same period in 2018. Tanzania is Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali.
“The increase in volume exported is partly associated with government actions to effectively manage mining activities in the country,” the bank said, without giving details on the volume exported. Total exports rose 12% year-on-year to $9.53bn in the year ending November, said Reuters.
The bank said earnings from tourism, another major foreign exchange earner, rose to $2.52bn in the year to November from $2.45bn in the same period a year earlier.
Tanzania’s minerals legislation has been altered in the last two years to allow for greater state equity participation as well as increases in levies and taxes. The Tanzanian government, led by President John Magaguli, has also recently emerged from a bruising conflict with the former Acacia Resources over unpaid tax allegations.
After having had a large portion of its gold production blocked by the Tanzanian government, Acacia Mining was eventually taken over by its majority shareholder Barrick Gold which has subsequently agreed a joint venture with the government.
More Info Gold exports from Tanzania rise 42% in year to November on the back of higher pricing
Natural gas: Africa could provide 20% of global needs by 2025
In its latest report on Africa’s energy outlook for 2020, the African Energy Chamber, an inter-professional grouping of energy and mining companies in Africa, focuses in particular on the export potential of African natural gas, whose exports in liquefied form will increase significantly.
The gigantic discoveries made over the past decade in Mozambique, Tanzania, Senegal and Mauritania have revealed a total of 200 trillion cubic feet (Tcf) of gas reserves, enough to supply two-thirds of current world demand for 20 years. In addition, there are 200Tcf of proven reserves in Nigeria.
- In 2018 sub-Saharan Africa provided 10% of the global production of liquefied natural gas (LNG), equivalent to 28 million tonnes per year (mtpy).
- Analyst Akap Energy forecasts that by 2025 this African production capacity will have increased by 150% to reach 84 mtpy.
- That is 15 to 20% of the world market.
Such growth will depend on investment of more than $75bn, two-thirds of which will be injected into Mozambique.
This prospect is made possible by the fact that, after a decade in which there was a shortage of major investment projects, African gas is attracting new interest from international majors such as Total, ExxonMobil and Shell.
- The main investments are concentrated on the east coast of the continent, due to the proximity of production areas to major Asian import markets, despite the high costs involved.
Floating liquefaction plants
The $50bn to be committed to Mozambican LNG between 2017 and 2025 by Exxon and Anadarko (currently being acquired by Total) is proof of this.
These LNG projects are also rapidly mobilising significant financing, such as the Senegalese-Mauritanian offshore gas field project at Grand Tortue, discovered in 2015, which could come on stream in 2020, the report says (but in 2022 according to our information) thanks to a $10bn investment from BP and Kosmos Energy.
Finally, while investments are less significant, countries with insufficient reserves to install onshore power plants, such as Cameroon, Ethiopia and Equatorial Guinea, are committing to the use of floating liquefaction plants, with production start-ups announced as early as 2020.
More Info Africa could provide 20% of global gas needs by 2025
EAC economies to end the year with alarming debt ratios – IMF
JAMES ANYANZWA 4 NOVEMBER 2019
A main boulevard in Bujumbura city. The IMF says that surging public debt-to-GDP ratios for Burundi, Kenya, Rwanda, Tanzania and Uganda has left them highly exposed to greater rollover and exchange rate risks. FILE PHOTO | NMG
This has seen the International Monetary Fund raise a red flag over the rate at which East African countries are accumulating debt.
The region’s economies have fallen into a financial fix as they attempt to fund persistent budget deficits and implement mega infrastructure projects against a backdrop of declining revenue collection.
As a result, the economies have resorted to massive borrowing, both from the domestic and international markets to quench their loan appetite, with fears that the increasing uptake of commercial loans could push most of them into debt distress.
“An over-reliance on commercial public debt exposes sovereign balance sheets to greater rollover and exchange rate risks. Also, an increase in debt from domestic creditors could crowd out financing for private sector projects,” said the IMF.
So far Kenya, Uganda and Tanzania are among the top 50 countries in the world that are highly indebted to China, according to US-based research firm Brookings Institution.
According to Brookings, countries are now shifting away from official multilateral creditors who come with stringent conditions to non-concessional, (commercial) debt with relatively higher interest rates and lower maturities.
But this trend is raising concerns around debt sustainability given the possibility of higher refinancing risks and foreign exchange risks.
The IMF, in its regional economic outlook report for sub-Saharan Africa released last week, says that surging public debt-to-GDP ratios for Burundi, Kenya, Rwanda, Tanzania and Uganda has left them highly exposed to greater rollover and exchange rate risks.
“With several countries facing increased foreign exchange and refinancing risks, it is critical to enhance debt management frameworks and transparency,” says IMF.
In May, Kenya went for a third Eurobond raising Ksh210 billion ($2.1 billion) to pay off other maturing debt obligations, finance development programmes and fund government operations.
In September, the country’s lawmakers also voted to increase the government’s borrowing ceiling to Ksh9 trillion ($90 billion) in the current 2019/2020 fiscal year, breaching the EAC debt ceiling on debt accumulation, which is set at 50 per cent of the GDP.
According to the IMF, EAC countries will close 2019 with very high debt-to-GDP ratios.
Burundi’s ratio will reach a high of 63.5 per cent from 58.4 per cent last year. It will be followed by Kenya and Rwanda whose debt-to-GDP ratios are expected to increase to 61.6 per cent and 49.1 per cent from 60.1 per cent and 40.7 per cent respectively during the same period.
The debt-to-GDP ratios for Uganda and Tanzania will increase to 43.6 per cent and 37.7 per cent from 41.4 per cent and 37.3 per cent respectively.
Kenya, Uganda and Tanzania are among the top 50 countries in the world that are highly indebted to China.
The EAC Monetary Union protocol, which was signed by the regional heads of states in November 2013, sets a 50 per cent debt-to-GDP ratio as the convergence criteria for the attainment of a single currency regime whose 2024 deadline is currently a subject of review by the member states.
Government debt as a per cent of GDP is an important economic parameter used by investors to gauge the country’s ability to make future payments on its financial obligation thereby affecting the country’s borrowing costs and government bond yields, according to economists at Trading Economics.
According to the IMF, further fiscal consolidation is needed over the medium term among regional economies to reduce debt vulnerabilities and create fiscal space for development needs.
Kenya and Uganda’s total debts as at June stood at $58.1 billion and $12 billion respectively. Tanzania’s public debt stood at $36.78 billion in the same period according to the Bank of Tanzania.
Finance and Planning minister Philip Mpango attributed the increase to new loans secured to fund infrastructure projects such as construction of the terminal III of the Julius Nyerere International Airport, power generation projects, and the construction of roads, bridges and the standard gauge railway line.
In Rwanda, increased public investment, real exchange rate depreciation and government guarantees have aided a surge in national debt according to the World Bank.
According to Brookings Institution, concerns about an impending debt crisis in Africa are rising alongside the region’s growing debt levels.
As of 2017, 19 African countries had exceeded the 60 per cent debt-to-GDP threshold set by the African Monetary Co-operation Programme for developing economies, while 24 countries had surpassed the 55 per cent debt-to-GDP ratio suggested by IMF.
According to the IMF, despite the stabilisation of debt dynamics, public debt vulnerabilities remain elevated in some African countries.
More Info EAC economies to end the year with alarming debt ratios
Tanzania denies hiding information on suspected Ebola cases
DAR ES SALAAM (Reuters) – Tanzania denied on Thursday it was withholding information from the World Health Organisation (WHO) on suspected cases of Ebola, saying it was not hiding any outbreak of the disease in the country.
“Reports suggesting that Tanzania has not been transparent about suspected cases of Ebola and is not sharing information with the WHO are false and should be ignored.”
Last month WHO said Tanzania had refused to provide detailed information on suspected Ebola cases.
The organisation said it was made aware on Sept. 10 of the death of a patient in Dar es Salaam, and was unofficially told the next day the person had tested positive for Ebola. [nL5N26D084]
This week the United States and Britain issued travel advisories to their citizens against Tanzania amid persisting Ebola concerns.
Days before WHO’s rebuke of Tanzanian authorities the head of the U.S. Centers for Disease Control and Prevention travelled to the country at the direction of U.S. Health Secretary Alex Azar, who had also criticised the country for not sharing information.
Mwalimu said Tanzania has investigated some 28 suspected cases of Ebola over the past year, including two cases in September, but they all tested negative.
She said they had shared that information with WHO.
“We are committed to implement international health regulations in a transparent manner,” said Mwalimu.
Authorities in east and central Africa have been on high alert for possible spillovers of Ebola from the Democratic Republic of Congo, where a year-long outbreak has killed more than 2,100 people.
Tanzania and DRC share a border that is separated by a lake.
Reporting by Fumbuka Ng’wanakilala; editing by Elias Biryabarema and David Evans
Uganda – Tanzania Business Forum 2019 being held at Julius Nyerere International Convention Center (JNICC)
The East African Business Council (EABC), in partnership with Tanzania Private Sector Foundation (TPSF) and Private Sector Foundation Uganda (PSFU) is pleased to invite you to Uganda – Tanzania Business Forum that will take place from 6th – 7th September 2019 at Julius Nyerere International Convention Centre in Dar es Salaam, Tanzania. The event offers a platform for businesses to share their experiences, explore investment opportunities across the borders, create business to business networks and to identify and discuss challenges in the presence of the Heads of State, government ministers and policymakers.
This first of its kind, this joint forum will feature an exciting selection of plenary sessions featuring contemporary, relevant discussions about how best to exploit investment opportunities and overcome bottlenecks to bilateral trade between Uganda and Tanzania.
Register your attendance online at https://businessforum.biz/about/
At the planned Trade and Investment Exhibition that will be officially opened by the Heads of State, businesses will have the opportunity to showcase their products and services to leading businesses and key public sector officials. Registration and accreditation to participate in the Uganda Tanzania Business Forum and the Trade and Investment Exhibition as well as registration for participation will be managed online at www.businessforum.biz
SADC SUMMIT 2019: Summit agrees on measures to stimulate regional development
MONDAY AUGUST 19, 2019
The Sadc chairperson, President John Magufuli, and Namibian President Hage Geingob (right) sign one of the four protocols adopted by the 39th Sadc Summit in Dar es Salaam yesterday. PHOTO | ERICKY BONIPHACE
In Summary
They include resource mobilisation to accelerate industrialisation and infrastructure development, as well as stepping up action against trade barriers, red tape and corruption.
“Our focus remains accelerating growth to improve the livelihoods of millions of our people,” said President John Magufuli, the new Sadc chair, as the high-profile event came to an end.
In that vein, the member countries of the bloc signed a new protocol on industrialisation that seeks to attract more investments through innovation and new technologies.
“Industrialisation to boost trade remains key in our development agenda,” he told the closing session of the two-day summit at the Julius Nyerere International Convention Centre (JNICC).
Dr Magufuli implored fellow leaders in the 16-nation bloc to take action against barriers to cross-border trade and red tape, saying they hampered the flow of trade and investments.
The annual economic growth of the vast region, covering one third of African continent’s land surface and with a population of 327 million, has not been any better. Last year, the bloc recorded an average GDP growth of 3.1 per cent, which is below the African continental average of 3.5 per cent and also lower than other regional blocs in Africa.
Beside the protocol on industrialisation, the summit, hosted by Tanzania for the second time, signed three other protocols aimed at tackling cross-border crime.
These are the protocol on inter-state transfer of sentence offenders, amendment of a protocol on extradition of suspects and legal assistance in crime matters.
The summit also agreed to establish a disaster risk reduction body to identify, assess and reduce the risk of disasters in the region.
President Magufuli, who assumed the Sadc chairmanship on Saturday, said the fight against corruption was among a raft of measures agreed upon in order to stimulate trade and investments in the region.
He announced that in resource mobilisation, member states have pledged to contribute $31 million to support this year’s expenditure budget of the Sadc secretariat.
For the 2019/2020 financial year, the secretariat of the regional body based in the capital of Botswana, Gaborone, has budgeted to spend a total of $74 million for its activities.
The new Sadc chair was firm on his resolve to ensure that the funds budgeted for the organisation were spent to implement projects that would improve the livelihoods of the people.
He also challenged Sadc member countries to remit their annual budget contributions to the organisation as agreed, noting that delay or failure to remit money would paralyse integration efforts. Unlike the East African Community (EAC), budgetary contributions in the Sadc region are based on economic strength of member countries. For the EAC, the partner states contribute equally. The summit agreed to make Kiswahili the fourth official language of Sadc. Currently, the official languages are English, French and Portuguese, reflecting the diversity of the region.
More Info SADC SUMMIT 2019
SADC Industrialization Week to help ease regional trade
Next week will see the beginning of 4th annual SADC Industrialization Week taking place in Dar-es-Salaam, Tanzania. The week-long event will operate under the theme, ‘A conducive business environment for inclusive and sustainable industrial development’. One of the main focuses of the conference will be to go through the SADC Industrialization Strategy and Roadmap and to identify projects that can be jointly implemented by the public and private sectors within the SADC member states. Tanzanian Minister of Industry and Trade, Innocent Bashungwa joins CNBC Africa for more.
Barrick, Acacia finally in accord
Barrick and Acacia Reach Buyout Deal, Ending Long Standoff
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Acacia shares rallied as much as 20% after deal announcement
- Deal may pave the way to solving Acacia’s dispute in Tanzania
The two companies said Friday that they reached a deal for Barrick to buy the roughly 36% stake in Acacia it doesn’t already own. Barrick sweetened its offer to win over Acacia shareholders, some of whom had decried the previous bid as too low. The new offer has an implied value of about 232 pence per Acacia share, a 24% premium to the closing price on Thursday.
“Given all the circumstances, this is possibly the best outcome,” Acacia’s acting Chief Executive Officer Peter Geleta said by phone.
The agreement paves the way for Barrick to negotiate with Tanzania in hopes of resolving a public battle that crippled Acacia’s operations in the country, where it runs three gold mines. Acacia hopes the talks will help set up a “new partnership” with the Tanzanian government, Geleta said.
“I’m pleased that after engaging with shareholders, Barrick has reconsidered its initial offer,” said James Goldstone, a fund manager at Invesco, which holds less than 1% of Acacia. “It’s a compromise,” he said, without elaborating on how his fund would vote.
Acacia Mining North Mara mine.
Its biggest challenge came two years ago, when Tanzania imposed an export ban on two of Acacia’s units and handed the miner a $190 billion tax bill. Since then, the company’s position in the country has deteriorated further, with the government saying in May it would no longer allow Acacia to manage its mines in the country and will only work with Barrick.
Just this week, Tanzania ordered Acacia to stop using a waste-storage facility at its core gold mine, which could disrupt production.
More Info Barrick and Acacia Reach Buyout Deal
Safaricom CEO Bob Collymore dies in Nairobi, aged 61
Safaricom chief executive, Mr Bob Collymore. He died on the morning of July 1, 2019. FILE PHOTO | NMG
Safaricom Chief Executive Officer Bob Collymore has died at his home early morning on July 1, 2019, Safaricom chairman Nicholas Nganga said in a press statement.
The Guyanese-born British citizen took a medical leave in October 2017 to fight cancer and resumed work in July 2018.
“He had been undergoing treatment for this condition since then in different hospitals and most recently at Aga Khan Hospital in Nairobi. In recent weeks, his condition worsened,” the statement says.
A screen grab of the Safaricom statement following CEO Bob Collymore’s death.
Collymore, 61, is survived by widow Wambui Kamiru Collymore and four children.
Following news of his death, Twitter was flooded with condolence messages.
Tanzania government cuts all ties with Acacia
According to Acacia Mining, discussions between Barrick Gold Corporation and the Tanzania government to resolve disputes between itself and the government are making significant progress. Sadly, Acacia Mining has been excluded from these discussions and expects massive changes to its structure moving forward as Tanzania has no interest in engaging directly with the company.
Barrick has provided Acacia with a set of documents which it has indicated have been extensively negotiated but not yet finalised.
Barrick has also provided the company today with a letter from the Acting Chairman of the Tanzania government negotiating team who have been in discussions with Barrick, dated 19 May 2019, addressed to Acacia’s three operating companies, Bulyanhulu Gold Mine Limited, North Mara Gold Mine Limited and Pangea Minerals Limited.
This letter states that the government is resolved that it will not execute final agreements for the resolution of the company’s disputes if the company is one of the counterparties to the agreements, and that it will only sign such agreements “if satisfied that substantial changes have been made to the management style of the operating companies and of their shareholders”.
Acacia also notes that it has received today an indicative proposal from Barrick to acquire all the issued and to be issued share capital of the company not already owned or controlled by Barrick.
The consideration would be in the form of new common shares in Barrick, with Acacia shareholders receiving 0.153 of a new common share of Barrick for every ordinary share in Acacia.
The board is considering these developments, and will be taking steps to seek clarification of the Tanzania government’s position.
For now, Acacia shareholders are strongly advised to take no action.
This announcement by Acacia was made without the consent or approval of Barrick.