A year after it lifted a moratorium on fracking, South Africa’s government is poised to issue exploration licenses for shale gas. The move is heating up the debate on the impcat of the process.
South Africa is believed to have some of the world’s biggest reserves of shale gas, providing an important potential source of energy for the coal-dependent nation. Unfortunately, they are found in the vast Karoo region – a sparsely-populated semi-desert stretching across the heart of the country, which is staunchly defended by environmentalists. Read more
Less than three years since civil war erupted in Ivory Coast it’s back to business as usual. Growth rates are now among the highest in Africa and the west African nation is set to return to international capital markets as it looks to finance infrastructure projects and pay off debt. Read more
No-one likes a large tax bill, especially in arrears.
London-listed Randgold and Mali’s government are heading for international arbitration at the International Center for Settlement of Investment Disputes over a disagreement over around $60m in tax connected to Randgold’s Loulo gold mine. Read more
EM health starts here
Towering above the Manhattan skyline, the 50th floor of JPMorgan’s headquarters is as remote from Africa as you can get. But during the UN General Assembly every September, the capital of high finance becomes a capital of international development as heads of state, philanthropists and multinational companies mingle in New York.
This week, the world’s top investment bank by revenue announced its lead role in the launch of $100m Global Health Investment Fund, a partnership with the Bill and Melinda Gates Foundation and a punchy list of public donors and private financiers. A way of using CSR to drum up business, or good for the world? Or perhaps a bit of both? Read more
By Adam Green of This is Africa
This week, a new company – Soma Oil and Gas – signed an exploration deal with the Mogadishu-based federal government of Somalia. The agreement came as a surprise. The government had previously abstained from signing such deals, fearing they would inflame ongoing territorial tensions (which the UN also warned about).
But it could also ratchet up tensions between the federal government and the two semi-autonomous northern provinces, Somaliland and Puntland, as well as between major oil companies, which have licenses dating back to the early 1990s, and new ones who are signing their own, often in overlapping territories. All told, the Horn of Africa is quickly becoming a spaghetti soup of deals. Read more
Why change a winning formula? The International Finance Corporation was successful when it launched its first naira-denominated bond earlier this year, raising $76.3m after orders came in for more than double the original $50m offering. Now it’s back for seconds. And thirds.
The private sector arm of the World Bank will launch a series of bonds totaling $1bn in a bid to create more liquid capital markets in Africa’s second biggest economy, officials told beyondbrics. Read more
Kenya may have avoided the dreaded ‘resource curse’ afflicting many of its African peers, but that leaves the government with painful revenue-raising choices, such as the controversial recent attempt to raise taxes on mobile money transfers.
But the country might not be as resource-barren as it once seemed. Read more
Rio Tinto may have breathed a sigh of relief on Wednesday when Guinea’s mining minister, Mohamed Lamine Fofana, admitted it would miss a production target of 2015 due in part to the infrastructure challenges of the Simandou mega-project.
But Guinea’s president, Alpha Condé, on Friday overruled Fofana, insisting there was no change in the timeline. So the time pressure is back on then? Read more
Africa has the lowest internet penetration rate globally, but some of the world’s tech giants think they may have touched a magic formula for the rollout of broadband on the continent.
The ‘white spaces’ technology being deployed by Microsoft could bring “almost 80 per cent of Kenya’s population online over the next three years,” according to Fernando de Sousa, who heads up the company’s 4Afrika initiative.
Bearing in mind that Kenya’s population has grown to just over 40m, that’s a fairly substantial number. Read more
Africa is on the verge of a supermarket boom thanks to the (comparatively) freewheeling spending habits of its citizens and spending on food.
But any retailer or producer thinking about Africa may be too late – the investment and deals are already underway, according to Mohit Arora, director of agricultural banking at Standard Bank. Read more
Zimbabwean president Robert Mugabe’s plan to hold a general election by June 29, when the current parliament will be dissolved, looks increasingly like a pipe dream. Do the maths and you’ll see that it is impossible for the country to hold a vote before the end of July at the earliest, the country’s finance minister Tendai Biti said.
“It’s a processing issue which will determine the date of the election,” he told beyondbrics from the sidelines of a talk at Chatham House, the think tank. “It is not possible to have elections before at least the end of July”. Read more
Last November, GlaxoSmithKline topped the Access to Medicine Index for the third year running, commended for its equitable pricing policy in emerging markets and a pro-access approach to licensing and patents.
You can be forgiven for feeling puzzled – the ranking marks a big turnaround for a company which little more than a decade ago was public enemy number one in Africa and elsewhere. How did that happen? Read more
While infrastructure and access to finance are well-known constraints on African firms’ competitiveness, a new study has identified a less obvious burden: political monopoly.
Although political stability might been seen as a positive to investors, single-party states are not cutting it when it comes to getting ahead with business. Read more
Travel anywhere in Africa, and three brands are ubiquitous: Manchester United, Coca Cola and DHL. But the latter of the three – already present in 52 African markets – is not ubiquitous enough, it seems.
This week, DHL tripled their African service points from 300 to 1,000, aiming for 10,000 in the medium term through partnerships with telecommunications and technology companies, and post offices. Read more
Africa’s fast-growing personal care and beauty markets are prompting ambitious innovation plans from two of the sector’s giants, Unilever and L’Oreal, both looking to capture the expanding middle classes.
But you can’t just take all your western or Asian products and sell them in Africa – new, tailored ranges are needed. Read more
Olam, the Asian agribusiness, is looking to test out an ambitious diversification plan in Africa. In a way, it shouldn’t be a surprise – Olam started in Africa as part of an Indian conglomerate producing cotton for Nigerian markets, before it began exporting agri-commodities, and eventually morphing into a fully fledged rubber-to-cashews business listed in Singapore.
It is in Africa where the company is looking to branch out into fertiliser plants, plantations and consumer goods, according to Ranveer Chauhan, managing director and regional head for Olam in Africa. Read more
With confidence tanking across western economies, it’s no surprise that the world’s biggest consumer-facing industries have been looking elsewhere for growth. And it was more of the same for Diageo on Thursday, as it announced that its strongest sales and profits increases for the last half year came from developing countries.
The maker of Baileys and Guinness saw global sales grow 5 per cent to £6.04bn over the second half of 2012, with operating profits up 11 per cent to £2.05bn. But its fastest growth rates came from Africa and Latin America, as emerging consumers pour back its international spirit and local beer brands. Read more
The choice of target in the recent bloody hostage standoff in Algeria was not by chance. By attacking the gas sector, jihadist terrorists went for maximum impact. Energy accounts for 98 per cent of Algeria’s exports and 70 per cent of tax revenue, with the In Amenas plant accounting for 12 per cent of the country’s gas output.
It is unlikely to prompt any large-scale pull-out by foreign companies, but the events cap a longer term deterioration in the operating environment of Africa’s biggest natural gas producer, where new investment has all but dried up, with steadily decreasing numbers of successful oil round awards. Read more
Mozambique is one of the much-sought after ‘M3’ emerging markets trio, along with Myanmar and Mongolia, with major offshore gas finds as well as large mineral deposits.
But mining is not as simple as setting a digger to work. While the country has around 23bn tonnes of coal, the infrastructure needed to support the extraction is starting from scratch. Any company that underestimates the costs can come unstuck, as Thursday’s resignation of Rio Tinto boss Tom Albanese shows. Read more
To date, the story of China’s growing presence in Africa has been mostly narrated by western media, African newspapers, and a universe of blogs, websites and social media outlets. Often, it is framed in the context of land-grabbing, resource-snatching, neocolonialism and invasion.
So perhaps a different perspective might be provided by China Daily? The state-run paper is launching a weekly Africa edition, and is keen to put its side of the story. Read more