<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106917267-1627376925447-gettyimages-969639316-SOUTH_AFRICA_PORT-1.jpeg" alt="" class="wp-image-410779" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106917267-1627376925447-gettyimages-969639316-SOUTH_AFRICA_PORT-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106917267-1627376925447-gettyimages-969639316-SOUTH_AFRICA_PORT-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/106917267-1627376925447-gettyimages-969639316-SOUTH_AFRICA_PORT-1-140x80.jpeg 140w" sizes="(max-width: 740px) 100vw, 740px" /><figcaption>Transnet
Bloomberg | Bloomberg | Getty Images</figcaption></figure>



JOHANNESBURG, Oct 25 (Reuters)&nbsp;&#8211;&nbsp;South African state logistics group Transnet said cable theft had spiked during a strike by its staff this month, further hobbling a freight rail service whose poor performance was already costing exporters billions of rand annually.



Transnet workers went on a&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N3171F3&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">12-day strike</a>&nbsp;over a wage claim from Oct.6, hitting ports and freight rail services in Africa&#8217;s most advanced economy.



Before the strike, Transnet&#8217;s rail freight services were operating&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2WK5KH&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">below capacity</a>&nbsp;due to shortages of locomotives, poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism.



During a media briefing on Tuesday, Transnet executives said cable theft had increased due to low levels of security staff during the strike, particularly on the container corridor &#8211; which runs between commercial hub Johannesburg and the port of Durban on the Indian ocean &#8211; which lost 12 kilometres of cable during the walkout.



&#8220;We are looking at a 22% increase in cable theft just on the container corridor over the course of the strike,&#8221; said Rudzani Ligege, Transnet managing executive for operations in the area.



There were also isolated incidents of vandalism of locomotives during the early stages of the strike, Marius Bennett, Transnet&#8217;s general manager for security, said.



Despite the nearly two-week strike, Transnet said it still aims to haul 60 million tonnes of coal in its financial year through March 2023.



&#8220;We are working tirelessly to continue the improvements that we started to see before the strike started,&#8221; said Ali Motala, managing executive for Transnet Freight Rail&#8217;s north corridor, which hauls thermal coal from mines to Richards Bay Coal Terminal.



Transnet&#8217;s freight rail service had operated at 18% of capacity during the strike, officials said, leaving exporters, especially miners, counting huge losses.



The&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N31E0H8&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Minerals Council</a>&nbsp;of South Africa said each day of the strike cost miners 815 million rand ($44 million) in lost export revenue.



($1 = 18.4930 rand)



(Reporting by Helen Reid and Nelson Banya; Editing by Kirsten Donovan and David Holmes)

106917267-1627376925447-gettyimages-969639316-SOUTH_AFRICA_PORT-1

South Africa’s Transnet says cable theft rises sharply during strike

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/GettyImages-462743612-820x546.jpg" alt="" class="wp-image-412999" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/GettyImages-462743612-820x546.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/GettyImages-462743612-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/GettyImages-462743612-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/GettyImages-462743612-768x511.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/GettyImages-462743612-1536x1022.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/GettyImages-462743612-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>A general view of the headquarter of the embattled South African main electricity provider ESKOM is pictured on February 4, 2015 in Johannesburg. South Africa power supply was under &#8220;extreme&#8221; pressure on February 2, 2015 and likely to remain so until end of the week after a technical fault at the country&#8217;s sole nuclear plant, electricity utility Eskom said. AFP PHOTO/GIANLUIGI GUERCIA (Photo by Gianluigi GUERCIA / AFP) (Photo by GIANLUIGI GUERCIA/AFP via Getty Images)</figcaption></figure>



JOHANNESBURG, Oct 25 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s finance minister is expected to announce a plan to take on part of power utility Eskom&#8217;s mammoth debt in a mid-term budget on Wednesday, although analysts say the legally complex transfer will take time to execute.



State-owned Eskom has been mired in financial crisis for years and has a roughly 400 billion rand ($21.69 billion) in debt it cannot afford to service.



It has required recurring government bailouts that have placed public finances under huge strain, with officials grappling with different ways to solve the problem.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N2ZD1B5&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Economists say a large portion of Eskom&#8217;s debt needs to be absorbed by the state to make it financially stable.



&#8220;Anything less than 150 billion rand would be deemed insufficient,&#8221; said Isaah Mhlanga, chief economist at Alexforbes&nbsp;AFHJ.J.



BNP Paribas analysts said getting bondholder buy-in for the debt transfer would be critical.



Economists are also watching whether Finance Minister Enoch Godongwana unveils new support measures for the poor, as civil society groups have lobbied for the introduction of a universal basic income grant.



The Institute for Economic Justice, a Johannesburg-based think tank, says a grant of 350 rand a month introduced during the COVID-19 pandemic should be increased to the food poverty line of more than 660 rand a month, which could cost the state an additional 30 billion rand a year.



Some economists believe a temporary extension of the 350 rand Social Relief of Distress grant could be funded by higher-than-expected revenue from mining taxes.



But overall, analysts expect the government to stick to a conservative fiscal policy, as economic growth is expected to remain weak in the coming years and global financing conditions are seen tightening.



&#8220;We expect the fiscal consolidation strategy to be sustained, providing fiscal certainty and sustainability,&#8221; local bank FNB said in a research note.



A&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N31L3KO&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Reuters poll</a>&nbsp;predicted buoyant mining receipts would allow Godongwana to give a narrower budget deficit forecast for this fiscal year.



($1 = 18.4449 rand)



(Reporting by Kopano Gumbi; Editing by Alexander Winning and Jason Neely)

SAFRICA-ELECTRICITY-NUCLEAR-ECONOMY-ENERGY

Eskom debt plan in focus at South Africa’s mid-term budget

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-820x461.jpg" alt="" class="wp-image-400641" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>A collection of mixed denomination South African rand coins sit in an arranged photo in Johannesburg, South Africa, on Thursday, June 22, 2017. South Africas inflation rate rose for the first time this year in May after food-price growth quickened from the slowest pace since December 2015. Photographer: Waldo Swiegers/Bloomberg via Getty Images</figcaption></figure>



The rand weakened in early trade on Tuesday, as local issues such as power cuts and deadlocked wage talks weighed on sentiment.



At 09:22 the rand traded at R18.47 against the US dollar, 0.46% weaker than its previous close.



“The rand started the new week off by reversing all of Friday’s gains, and is once again poised to test the R18.50/$ mark in the days ahead,” ETM Analytics said in a research note, adding the rand on Monday recorded its biggest one-day decline since June.



Analysts flagged power outages that have become the norm. They added public sector wage negotiations and political contestation in the lead-up to the African National Congress (ANC) December leadership conference among rising risks.



The government’s benchmark 2030 bond was little changed in early deals, with the yield up 0.5 basis point to 11.045%.

South African Economy As Inflation Rate Rises For First Time In 2017

Rand drops as power cuts, wage talks weigh

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="548" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/XITIO74YJBM5XNTYYV6EQSSGSY-820x548.jpg" alt="" class="wp-image-420760" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/XITIO74YJBM5XNTYYV6EQSSGSY-820x548.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/XITIO74YJBM5XNTYYV6EQSSGSY-300x201.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/XITIO74YJBM5XNTYYV6EQSSGSY-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/XITIO74YJBM5XNTYYV6EQSSGSY-768x514.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/XITIO74YJBM5XNTYYV6EQSSGSY.jpg 960w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg, file. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, Oct 24 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s rand fell on Monday, following other emerging market currencies, as the U.S. dollar held firm amid global economic uncertainty.



At 1538 GMT, the rand&nbsp;ZAR=D3&nbsp;traded at 18.4275 against the dollar, 1.75% weaker than its previous close.



The U.S. dollar&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N31P11I&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">made gains</a>&nbsp;against other major currencies, with the dollar index&nbsp;=USD&nbsp;up about 0.13% at 111.97.



A further escalation of the Russia-Ukraine war, policy worries in China following President Xi Jinping&#8217;s appointment of loyalists to the government, and Britain&#8217;s contest for a new prime minister, have all unsettled markets in recent days.



&#8220;South Africa&#8230; continues to see a score of risks from the external environment, including ongoing monetary policy tightening in advanced economies, which is driving rising domestic borrowing costs, while high inflation also adds to the pressure on bond yields,&#8221; Investec analyst Annabel Bishop said in a research note.



She said domestic factors including problems at state logistics group Transnet and state power utility Eskom had also contributed to rand weakness.



This week, local investor attention turns to the South African government&#8217;s mid-term budget. A&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N31L3KO&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Reuters poll</a>&nbsp;published on Friday predicted the National Treasury would be able to trim this year&#8217;s projected budget deficit thanks to buoyant mining receipts.



Shares on the Johannesburg Stock Exchange fell, weighed down by market heavyweights Naspers&nbsp;NPNJn.J&nbsp;and Prosus&nbsp;PRXJn.J, which slumped 17.40% and 15.19%, respectively.



They hold a near 29% stake in Tencent Holdings&nbsp;0700.HK, whose shares fell along with other prominent Chinese tech companies, as President Xi&#8217;s new leadership team sparked investor concerns over private sector growth.



Overall on the stock exchange, the Top-40&nbsp;.JTOPI&nbsp;index closed 1.06% lower, while the broader all-share&nbsp;.JALSH&nbsp;index ended down 0.86%.



The government&#8217;s benchmark 2030 bond&nbsp;ZAR2030=&nbsp;was down, with the yield up 2.5 basis points to 11.050%.



(Reporting by Anait Miridzhanian and Bhargav Acharya; Editing by Mark Potter)

XITIO74YJBM5XNTYYV6EQSSGSY

South African rand weakens as dollar firms amid economic uncertainty

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="603" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/OFWW5BLDIFLJHPYC72PP4SIQTU-820x603.jpg" alt="" class="wp-image-420750" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/OFWW5BLDIFLJHPYC72PP4SIQTU-820x603.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/OFWW5BLDIFLJHPYC72PP4SIQTU-300x220.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/OFWW5BLDIFLJHPYC72PP4SIQTU-122x90.jpg 122w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/OFWW5BLDIFLJHPYC72PP4SIQTU-768x564.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/OFWW5BLDIFLJHPYC72PP4SIQTU-1536x1129.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/OFWW5BLDIFLJHPYC72PP4SIQTU-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>FILE PHOTO: A woman walks past the entrance to the Dubai Financial Market, June 17, 2013. REUTERS/Jumana El Heloueh</figcaption></figure>



DUBAI, Oct 24 (Reuters)&nbsp;&#8211;&nbsp;Dubai&#8217;s Emirates Central Cooling Systems Corporation (Empower) plans to launch its initial public offering next week, company executives said on Monday.



Empower is the fourth state-linked entity to seek a listing this year in Dubai in a programme aimed at boosting investor interest in the domestic stock exchange.



Reuters reported in May that&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2XH164&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Empower invited banks</a>&nbsp;to pitch for roles in the IPO.



Shareholders Dubai Electricity &amp; Water Authority (DEWA)&nbsp;DEWAA.DU&nbsp;and Emirates Power Investment will offer a 10% stake, equivalent to 1 billion shares.



DEWA will sell 7% and Emirates Power 3%, giving them holdings of 63% and 27%, respectively, following the IPO, if the offering size is not increased.



Subscriptions open on Oct. 31, when the price range will be announced, and close on Nov. 7. Final pricing will be set on Nov. 9 and Empower&#8217;s shares, which will have a nominal value of 0.10 dirhams ($0.0272), are expected to begin trading on Nov. 16.



Empower is &#8220;having extensive discussions with local, regional and international investors and we will continue to have this conversation&#8221; until Nov. 9, said CFO Ramesh Ramadurai.



Dubai&#8217;s deputy ruler, Sheikh Maktoum Bin Mohammed,&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N2RS1OZ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">announced plans in November</a>&nbsp;to list 10 government-linked entities.



Empower plans to pay a minimum of 850 million dirhams in dividends in each of the first two fiscal years after the IPO, it said in a statement.



&#8220;After the October 2024 distribution, the company expects to pay a sustainable dividend in line with the growth of the business,&#8221; Empower added.



Citi&nbsp;C.N, Emirates NBD Capital&nbsp;ENBD.DU&nbsp;and Merrill Lynch International&nbsp;BAC.N&nbsp;are joint global coordinators and EFG Hermes joins them as joint bookrunner.



&#8220;We have about 80% of Dubai&#8217;s market,&#8221; CEO Ahmad Bin Shafar said, adding the company planned to expand in the United Arab Emirates and Saudi Arabia, Oman, Bahrain and Egypt.



($1 = 3.6729 UAE dirham)



(Reporting by Yousef Saba and Hadeel Al Sayegh; Editing by Kim Coghill Tom Hogue, Kirsten Donovan)

A woman walks past the entrance to the Dubai Financial Market

Dubai to offer 10% of Empower in fourth state-linked IPO

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="485" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/UG2CJXXF5ZMAJAPHQ5UYZO7IRY.jpg" alt="" class="wp-image-420746" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/UG2CJXXF5ZMAJAPHQ5UYZO7IRY.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/UG2CJXXF5ZMAJAPHQ5UYZO7IRY-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/UG2CJXXF5ZMAJAPHQ5UYZO7IRY-135x90.jpg 135w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption>Addis Ababa police officers holding the Ethiopian national flags, in Addis Ababa, Ethiopia, June 19, 2021. REUTERS/Baz Ratner</figcaption></figure>



NAIROBI, Oct 24 (Reuters)&nbsp;&#8211;&nbsp;An Ethiopian government delegation and rival Tigray forces were due to meet in South Africa for the first formal peace talks since war broke out two years ago.



The talks will take place as Ethiopian forces and their allies make significant battlefield gains in the northern Tigray region, where they have captured&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N31J1ML&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">several large towns</a>&nbsp;in the past week.



The war is rooted in a power struggle between the federal government and Tigray authorities, who led the country&#8217;s ruling coalition until Abiy Ahmed became prime minister in 2018.



The conflict has killed thousands, displaced millions and left hundreds of thousands on the brink of famine.



Ethiopia&#8217;s government said in a statement its delegation had left for South Africa to participate in the talks, which are being mediated by the African Union.



&#8220;The Government of Ethiopia views the talks as an opportunity to peacefully resolve the conflict and consolidate the improvement of the situation on the ground,&#8221; it said.



Kindeya Gebrehiwot, a spokesman for the Tigray forces, said the Tigrayan delegation had already arrived.



He said on Twitter the focus of the talks would be on immediate cessation of hostilities, unfettered humanitarian access, and the withdrawal of Eritrean forces, who have fought alongside Ethiopian federal troops during the conflict.



The Tigray delegation is being led by one of its top generals, Tsadkan Gebretensae, and spokesman Getachew Reda, an official familiar with the talks told Reuters.



The delegation arrived on Sunday on a U.S. military aircraft, accompanied by the U.S. special envoy to the Horn of Africa, the official said.



Both sides had committed to the talks in South Africa earlier this month, but they were delayed for&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AN6N2X401A&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">logistical reasons</a>.



(Reporting by Nairobi Newsroom; Editing by Alexander Winning)

UG2CJXXF5ZMAJAPHQ5UYZO7IRY

Ethiopia government, Tigray forces to meet for first peace talks since conflict began

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="540" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/S5LZY64NRJN3PBETOPLEHJD2FY-820x540.jpg" alt="" class="wp-image-420742" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/S5LZY64NRJN3PBETOPLEHJD2FY-820x540.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/S5LZY64NRJN3PBETOPLEHJD2FY-300x198.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/S5LZY64NRJN3PBETOPLEHJD2FY-137x90.jpg 137w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/S5LZY64NRJN3PBETOPLEHJD2FY-768x506.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/S5LZY64NRJN3PBETOPLEHJD2FY-1536x1011.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/S5LZY64NRJN3PBETOPLEHJD2FY-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>FILE PHOTO: South Africa&#8217;s President, Cyril Ramaphosa, speaks during the launch of the new Sandvik Khomanani manufacturing site at Khomanani in Kempton Park, Johannesburg, South Africa, September 9, 2022. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



CAPE TOWN, Oct 23 (Reuters)&nbsp;&#8211;&nbsp;South Africa will overhaul its anti-corruption strategy and ensure the independence of prosecutors, President Cyril Ramaphosa said on Sunday, responding to recommendations from a state inquiry into alleged corruption under his predecessor.



A judicial commission of inquiry was established to examine allegations of high-level graft during former President Jacob Zuma&#8217;s nine years in power from 2009 to 2018.



&#8220;The people of South Africa are tired of corruption and want it to end,&#8221; Ramaphosa said in a live television broadcast. &#8220;As a country, we are emerging from a dark and difficult period.&#8221;



The&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N2TK3KX&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">inquiry found</a>&nbsp;Zuma had allowed businessmen close to him &#8211; brothers Atul, Ajay and Rajesh Gupta &#8211; to plunder state resources and influence policy, commonly known as &#8216;state capture&#8217; in South Africa.



The Guptas deny any wrongdoing and have left the country but face extradition proceedings in Dubai. Zuma denies wrongdoing and at one stage refused to cooperate with the inquiry, leading to his imprisonment in July 2021 for contempt of court.



Inquiry reports said investigations, which implicated ANC politicians and company executives, found rampant graft across key economic sectors including state-owned companies such as power utility Eskom and freight and logistics group Transnet.



Evidence uncovered by the inquiry can be used by authorities to pursue criminal charges.



Ramaphosa said of plans to overhaul South Africa&#8217;s anti-graft strategy: &#8220;Through the implementation of the actions contained in this response, we can start a new chapter in our struggle against corruption.&#8221;



In a letter addressed to the Speaker of the National Assembly, Ramaphosa said his response outlined steps government will take to catch suspects and other reforms.



Ramaphosa, who served as deputy state president under Zuma, testified at the inquiry that he chose to &#8220;remain but resist&#8221; rather than resign when allegations surfaced.



(Reporting by Wendell Roelf; Editing by David Goodman and Edmund Blair)

FILE PHOTO: South African President Cyril Ramaphosa attends the launch of the new Sandvik Khomanani manufacturing site

President Ramaphosa outlines anti-graft plans after inquiry

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="469" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/C3BN6J3R5NJGXKF6WUDFBOSEWA.jpg" alt="" class="wp-image-420705" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/C3BN6J3R5NJGXKF6WUDFBOSEWA.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/C3BN6J3R5NJGXKF6WUDFBOSEWA-300x193.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/C3BN6J3R5NJGXKF6WUDFBOSEWA-140x90.jpg 140w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption>A local walks past electricity pylons during frequent power outages from South African utility Eskom, caused by its aging coal-fired plants, in Orlando, Soweto, South Africa, September 28, 2022. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



JOHANNESBURG, Oct 21 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s plan to kick-start its transition from coal to renewable energy will need $46.5 billion, more than five times the $8.5 billion Western nations have pledged to the project over the next three to five years, three people familiar with the matter told Reuters.



The sources said the investment plan,&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N3170J2&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">submitted to donor countries this month</a>, is provisional and the figures could change ahead of the agreement being signed.



It is not yet clear how the remaining $38 billion will be funded or how the bill breaks down. One source said private sector investors would step in, another said it would be a mix of private, bilateral and multilateral funders.



One said the African Development Bank Group was expected to make a big commitment.



&#8220;The Bank continues to work with South Africa to explore concessional financing options to support South Africa&#8217;s just energy transition,&#8221; the African Development Bank Group said in an emailed statement, when asked about its commitment.



Vincent Magwena, a spokesperson for the presidency, the only South African authority that can speak on the matter, said he could not discuss details of the plan until it is publicly presented.



&#8220;At this stage we are not in a position to provide comment on the funding details,&#8221; he said, declining to confirm the total cost.



Negotiators are racing to complete the deal before United Nations climate talks next month in Egypt, where it could serve as a model for other emerging economies seeking to wean themselves off coal with Western support.



If successful, South Africa&#8217;s plan will see Africa&#8217;s most industrialised nation gradually shut down its polluting coal-fired power stations and mines, replacing them with wind turbines and solar panels at a significantly faster rate than it was planning to do before the partnership with the United States, Britain, France, Germany and the European Union.



South Africa is also seeking to become a hub for so-called green hydrogen and electric vehicle manufacturing &#8212; both of which could attract significant private sector investment.



<h2 class="wp-block-heading" id="h-going-to-happen">&#8220;GOING TO HAPPEN&#8221;</h2>



South Africa is the world&#8217;s 13th biggest carbon emitter, pumping out 452 million tonnes of CO2 in 2020, according to the latest data from the non-profit Global Carbon Atlas that put it four places in front of Britain, an economy eight times as big, and ahead of Mexico and Australia.



But it is also blessed with some of the world&#8217;s best sun and wind resources, and vast stretches of land on which to harvest them.



Coal makes up four-fifths of South Africa&#8217;s power generation, so turning state utility Eskom to renewables is a priority for the government. But the issue is politically divisive, as unions fear the loss of some 90,000 coal jobs. Any plan will have to offset these job losses, officials say.



Even so, the tide may be turning.



&#8220;The facts are that there is no new coal being built, and &#8230; no bank will fund new coal in South Africa, not even the Chinese banks,&#8221; energy analyst and managing director at South Africa&#8217;s EE Business Intelligence consultancy, Chris Yelland, said.



&#8220;The only new thing happening right now is wind and solar and battery storage &#8230; The energy transition is going to happen.&#8221;



Moving South Africa&#8217;s economy into greener energy will require vast funds in the longer term, with some analysts estimating at least&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2XI1B1&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">$250 billion</a>&nbsp;over the next three decades.



(Editing by Alexandra Zavis and David Evans)

C3BN6J3R5NJGXKF6WUDFBOSEWA

South Africa’s energy transition plan needs $46.5 bln, five times pledges – sources

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="545" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/3206470630_fa29d3d824_b-820x545.jpg" alt="" class="wp-image-420695" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/3206470630_fa29d3d824_b-820x545.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/3206470630_fa29d3d824_b-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/3206470630_fa29d3d824_b-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/3206470630_fa29d3d824_b-768x511.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/3206470630_fa29d3d824_b.jpg 1024w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Photo: via Flickr</figcaption></figure>



CAPE TOWN, Oct 21 (Reuters)&nbsp;&#8211;&nbsp;Mozambique expects to ship its first liquefied natural gas (LNG) exports to Europe from the Eni-operated Coral Sul floating plant later this month or early November, petroleum regulator INP said on Friday in a supply boost for the energy-starved region.



BP&#8217;s&nbsp;BP.L&nbsp;LNG tanker, British Sponsor, has already arrived offshore northern Mozambique, said Welligence Energy Analytics in a note, with all of Coral Sul&#8217;s annual gas output of 3.4 million tonnes contracted to BP for 20 years on a free-on-board basis.



&#8220;Regarding the LNG export, it will be for European markets since BP is committed to take the gas resources to Europe,&#8221; said the National Petroleum Institute (INP) in an emailed response to Reuters.



The new LNG cargoes will help alleviate a tight global LNG market and gas shortages in Europe as winter looms following Moscow&#8217;s February invasion of Ukraine and Russia&#8217;s later decision to curb gas pipeline supplies into major European Union economies.



As part of its exploration activity offshore Mozambique, Eni discovered Coral South gas field in 2012 and took its final investment decision in 2017, pledging to start producing gas using a floating LNG plant after five years.



Thanks to a fast-track strategy led by CEO Claudio Descalzi, Eni has been able to stick to its original schedule despite the pandemic and supply chain issues.



The exports from Mozambique, which neighbours South Africa, will help transform its economy as billions of dollars pour into the country to develop massive offshore gas fields in its deepwater Rovuma basin.



But a sustained violent insurgency inland with links to Islamic State has scared off investors, as French oil major TotalEnergies last year declared force majeure on its $20 billion LNG project amid rising attacks in the north of Cabo Delgado province.



The five-year old conflict has claimed more than 4,000 lives and displaced around one million people said the World Bank, which expects economic growth to accelerate in the medium term, averaging 5.7% between 2022 and 2024, as LNG production starts.



In January, TotalEnergies CEO Patrick Pouyanne said on a visit to Mozambique that he hoped to restart its Afungi project this year, although INP said the company&#8217;s return would likely be next year, depending on security assessments.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N2UB5G5&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



&#8220;We are satisfied with the improvement of stability in Cabo Delgado Province &#8230; We are expecting Total to return by next year,&#8221; INP said on Friday.



The regulator said ExxonMobil, which had indicated it would only resume a final investment decision on its own LNG project in Area 4 of the Rovuma basin once Total had lifted its force majeure, was also seen returning to its project early in 2023.



&#8220;This also means that we won&#8217;t have stranded resources in Rovuma Basin at the same time that we know that natural gas is playing an important role as an energy for transition,&#8221; it said.



INP will launch a new oil and gas licensing round next year with details still to be worked out. The winners of the current 6th bidding auction is on track to be announced on Dec. 30, it added.



(Reporting by Wendell Roelf; additional reporting by Francesca Landini in Milan; Editing by Mark Potter)

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Mozambique’s first LNG exports to Europe seen by early November

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/VSK3CMYCOBJEZPSNCZU3SKCID4-820x547.jpg" alt="" class="wp-image-419486" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/VSK3CMYCOBJEZPSNCZU3SKCID4-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/VSK3CMYCOBJEZPSNCZU3SKCID4-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/VSK3CMYCOBJEZPSNCZU3SKCID4-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/VSK3CMYCOBJEZPSNCZU3SKCID4-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/VSK3CMYCOBJEZPSNCZU3SKCID4.jpg 960w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>A shopper leaves a Walmart store in Bradford, Pennsylvania, U.S. July 20, 2020. REUTERS/Brendan McDermid</figcaption></figure>



JOHANNESBURG, Oct 21 (Reuters)&nbsp;&#8211;&nbsp;In 2011, U.S. retail giant Walmart Inc&nbsp;WMT.N&nbsp;made a bet on Africa, buying a majority stake in South African retailer Massmart&nbsp;MSMJ.J&nbsp;in what many investors saw as a step toward dominating the continent&#8217;s vast untapped market.



It didn&#8217;t go according to plan.



More than a decade later, Massmart&#8217;s balance sheet is burdened with debt, its books are deep in losses and it&#8217;s drowning in lease obligations on commercial properties.



From its late entry into e-commerce to an ill-fated foray into fresh foods, Walmart&#8217;s African journey over the last decade has been a string of missteps, compounded by economic headwinds and the COVID-19 pandemic.



But instead of walking away, as it has from failures in&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AP:4295905494&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Britain</a>&nbsp;and Germany, Walmart is doubling down with a plan to&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N3050AJ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">take full control</a>&nbsp;of its African problem child, which it unveiled in August.



The strategy &#8211; according to nine analysts, investors and sources with direct knowledge of Walmart&#8217;s plans &#8211; is firstly to build Massmart into a force able to see off its brick and mortar rivals and then win a looming battle against Amazon for the future of African e-commerce.



&#8220;Walmart plans to bring its entire e-commerce enterprise and expertise into Massmart,&#8221; said a source close to the buyout plan. &#8220;Big investment is required to keep it relevant.&#8221;



De-listing,&nbsp;the source told Reuters, will allow Walmart to make direct capital injections and swallow more losses without pressure from impatient Massmart shareholders, who have not received dividends in three years.



The prize: the world&#8217;s last, largely untapped retail market, boasting a billion consumers and growing household spending.



&#8220;We continue to see opportunity in Massmart and the impact the business can have, providing people across the region with greater access to goods and services they want,&#8221; Walmart International President Judith McKenna said in response to emailed questions this month.



She did not provide further details on the company&#8217;s strategy in Africa.



<h2 class="wp-block-heading" id="h-from-paradigm-to-turnaround">FROM PARADIGM TO TURNAROUND</h2>



Not everyone is convinced.



&#8220;Walmart&#8217;s entry was going to be a new paradigm for African consumers,&#8221; said the source close to the buyout. &#8220;But that didn&#8217;t happen.&#8221;



Instead, Massmart&#8217;s units outside South Africa struggled with foreign exchange risk, tricky regulatory environments and macroeconomic volatility.



In South Africa, meanwhile, competitors upped their game, said Jean Pierre Verster of Protea Capital Management, which manages funds with exposure to Massmart shares.



&#8220;Walmart realised that other retailers in South Africa &#8211; the likes of Shoprite&nbsp;SHPJ.J, Pick n Pay&nbsp;PIKJ.J&nbsp;et cetera &#8211; are very astute retailers and they can&#8217;t just push them over,&#8221; he said.



Game &#8211; Massmart&#8217;s underperforming general merchandise business, which sells everything from furniture to cellphones &#8211; was slow to develop an e-commerce offering, leaving it unprepared for a pandemic-induced boom in online shopping. And supermarket rivals handily fended off its<a href="https://www.reutersconnect.com/all?search=all%3AL1N2PR11Q&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">&nbsp;push into fresh and frozen food</a>.



Former South African President Jacob Zuma&#8217;s nine-year corruption-plagued tenure, meanwhile, tanked consumer sentiment.



By 2019, Massmart was loss-making. When COVID-19 struck, Walmart was forced to pump in 4 billion rand ($219 million).



Since Walmart, which tops the Fortune 500 ranking of U.S. companies by revenues, first announced plans to buy into the South African retailer in 2010, Massmart&#8217;s share price has dropped 60%.



&#8220;The more disappointing part is not just the fact that they didn&#8217;t make it in Africa,&#8221; said Achumile Mashalaba, an analyst at South African fund manager Ninety One, which does not hold Massmart shares. &#8220;They&#8217;ve gone backwards.&#8221;



<h2 class="wp-block-heading">WHAT NOW?</h2>



In August, Walmart launched a 6.4 billion rand ($350 million) bid for the 47% of Massmart shares it does not already own, valuing it at a premium of over 50%.



Going forward, according to a source in contact with Massmart management, Walmart&#8217;s brick and mortar focus will likely be on wholesale merchandiser Makro and hardware chain Builders &#8211; Massmart&#8217;s two better-performing brands.



Massmart is already&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2VA0GX&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">planning</a>&nbsp;an expansion to capture more of South Africa&#8217;s 455 billion rand wholesale and home improvement markets. Then there&#8217;s the Game headache.



After starting the&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N31608M&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">process of closing stores</a>&nbsp;in East and West Africa this month, Walmart must now decide on the future of Game&#8217;s loss-making South African business.



Its big bet, however, will be on e-commerce.



&#8220;Our strategy consists in creating and expanding an e-commerce offer for all three formats &#8211; Game, Builders and Makro,&#8221; Walmart said in response to emailed questions.



Just 2.2% of Massmart&#8217;s sales came from online retail in 2021 due to the company&#8217;s late start and Africa&#8217;s relatively underdeveloped market. By comparison, of Walmart International&#8217;s nearly $101 billion in total net sales, $18.5 billion were related to e-commerce.



Recent acquisitions of on-demand marketplace OneCart and delivery company Wumdrop may help. Massmart&nbsp;has also started&nbsp;leveraging&nbsp;Walmart&#8217;s group-wide e-commerce infrastructure.



Earlier this year, an internal Amazon.com Inc&nbsp;AMZN.O&nbsp;memo detailing its expansion plans, including a maiden foray onto the continent via South Africa, leaked to media.



The pending battle with its global rival looms over Walmart&#8217;s e-commerce strategy for Massmart, several shareholders told Reuters.



&#8220;Amazon is coming and competition in that market is only going to intensify,&#8221; said Marlo Scholtz, portfolio manager at Sanlam Investments, a leading Massmart shareholder.



&#8220;So you need to be there and be there early.&#8221;



Amazon declined to comment for this story.



While Walmart lags behind Amazon in U.S. e-commerce market share, it&#8217;s been more successful against the world&#8217;s largest e-commerce retailer in China and India.



Africa may indeed present Walmart with another growth opportunity. But don&#8217;t expect an immediate continental contest, said a source involved in Walmart&#8217;s initial Massmart stake acquisition.



&#8220;Walmart needs to get South Africa right,&#8221; he said. &#8220;If it is going into Africa, it is going to go to Africa very slowly.&#8221;



Africa&#8217;s e-commerce potential is a tough nut to crack. Logistics &#8211; from warehousing to last-mile delivery &#8211; represent a major hurdle in cities that often lack street names or house numbers. And, despite the official establishment of the African Continental Free-Trade Area in 2019, cross-border trade within the continent remains cumbersome and expensive.



While Walmart can now firmly set the direction at its South African unit, its track record outside the United States is spotty. Success stories in markets like Mexico are offset by struggles in others, including Europe, South Korea and Japan.



&#8220;To believe Walmart will be successful in markets outside the U.S. requires believing that what&#8217;s important in the U.S. is the same thing as what&#8217;s important abroad,&#8221; said David Klink, senior equity analyst at Huntington Private Bank, which holds more than $45 million in Walmart shares.



&#8220;That&#8217;s not always the case.&#8221;



($1 = 18.3035 rand)



Massmart&#8217;s share price performance<a href="https://tmsnrt.rs/3evoUrz" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/3evoUrz</a>



Performance of major South African retailers Performance of major South African retailers<a href="https://tmsnrt.rs/3PXu1NO" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/3PXu1NO</a>



(Reporting by Nqobile Dludla in Johannesburg, additional reporting by Promit Mukherjee in Johannesburg and Arriana McLymore and Siddharth Cavale in New YorkEditing by Joe Bavier and Daniel Flynn)

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Walmart doubles down on Africa despite a decade of frustration

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="570" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/02/KYOIC7PHVNMEBMT2WPSIUAHK6U-820x570.jpg" alt="" class="wp-image-415303" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/02/KYOIC7PHVNMEBMT2WPSIUAHK6U-820x570.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/02/KYOIC7PHVNMEBMT2WPSIUAHK6U-300x208.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/02/KYOIC7PHVNMEBMT2WPSIUAHK6U-130x90.jpg 130w, https://cms.cnbcafrica.com/wp-content/uploads/2022/02/KYOIC7PHVNMEBMT2WPSIUAHK6U-768x534.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/02/KYOIC7PHVNMEBMT2WPSIUAHK6U.jpg 960w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>European Union flags are seen outside the EU Commission headquarters in Brussels, Belgium November 14, 2018. REUTERS/Francois Lenoir/File Photo</figcaption></figure>



WINDHOEK, Oct 20 (Reuters)&nbsp;&#8211;&nbsp;Namibia has provisionally agreed on a deal with the European Union to sell its rare earth minerals, critical to the renewable energy sectors, mines and energy minister Tom Alweendo said on Thursday.



<a href="https://www.reutersconnect.com/all?search=all%3AL8N2YI3YU&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">EU and Namibian officials told Reuters in July</a>&nbsp;they were planning a deal on hydrogen and minerals as the bloc works to reduce its dependence on Russian energy.



&#8220;In principal we have agreed on conditions, whatever the materials, we are going to process them here,&#8221; Alweendo said about the approaches being taken to ensure the southern African country reaps the benefit of its resources.



Namibia has significant reserves of rare earth minerals such as dysprosium and terbium needed for permanent magnets in the batteries of electric cars and wind turbines.



The European Union wants easier access to minerals in Namibia, and plans geological projects to explore the resources of a country which is nearly as big as the combined territory of France and Germany, an EU official told Reuters in July.



Alweendo said there was demand for the southern African country&#8217;s rare earth metals to power the global transition to green energy.



Namibia aims to position itself as a renewable energy hub in Africa, also thanks to its&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30I0BQ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">vast potential for solar and wind energy to produce green hydrogen</a>.



($1 = 1.0203 euros)



(Reporting by Nyasha Nyaungwa; Editing by Anait Miridzhanian and Aurora Ellis)

KYOIC7PHVNMEBMT2WPSIUAHK6U

Namibia, EU reach provisional deal on rare earth minerals

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg" alt="" class="wp-image-413529" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-160x90.jpeg 160w" sizes="(max-width: 740px) 100vw, 740px" /></figure>



CAPE TOWN, Oct 20 (Reuters)&nbsp;&#8211;&nbsp;Uganda&#8217;s national oil company (UNOC) expects to secure the funding for a $5 billion crude pipeline that the European Union is opposed to, by early next year, UNOC&#8217;s chief executive told Reuters on Thursday.



In February, TotalEnergies&nbsp;TTEF.PA&nbsp;and its partner China National Offshore Oil Corporation&nbsp;0883.HK&nbsp;signed a final investment decision with Uganda and Tanzania to kick-start investments worth more than $10 billion to&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N31B292&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">produce and export</a>&nbsp;Uganda&#8217;s crude.



Part of that investment will involve&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30Y2TF&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">a $5 billion pipeline</a>, criticized by the EU which has passed a parliamentary resolution seeking to delay the project, that will help ship landlocked Uganda&#8217;s crude to world markets via a port on Tanzania&#8217;s Indian Ocean coast.



The EU resolution warns that the pipeline and associated infrastructure would displace about 100,000 people, jeopardise water resources and endanger protected marine areas in Tanzania.



&#8220;We haven&#8217;t yet attained financial close for EACOP but anticipate this will be attained by Q1 2023. The cost of the project is about $5 billion,&#8221; Proscovia Nabbanja, chief executive of UNOC said on the sidelines of an African energy conference in Cape Town.



She said the project is financed at a debt-to-equity ratio of 60/40 and UNOC&#8217;s share of the funding stood at around $308 million, which the ministry of finance has committed to pay.



Nabbanja said due diligence has been conducted and there was a lot of appetite from lenders to invest in the project. She did not divulge who the potential lenders might be.



&#8220;All the interventions have been put in place to make sure we curb emissions, the IFC standards and Equator Principles have been adapted and the due diligence that was done by the lenders, the appetite still does exist to secure the $3 billion debt component&#8221;, she said.



(Reporting by Wendell Roelf; Editing by Elaine Hardcastle)

Uganda expects to secure $5 bln oil pipeline funding early 2023

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-820x615.jpg" alt="" class="wp-image-375629" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-1536x1152.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-1110x833.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-696x522.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-1068x801.jpg 1068w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-1920x1440.jpg 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Sasol_Garage_in_Boksburg-600x450.jpg 600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Photo: via Flickr</figcaption></figure>



Oct 20 (Reuters)&nbsp;&#8211;&nbsp;South African petrochemical firm Sasol&nbsp;SOLJ.J&nbsp;on Thursday declared force majeure on the supply and export of certain products because of a strike at state-owned logistics firm Transnet.



Transnet workers went on&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N31K1OR&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">strike</a>&nbsp;for nearly two weeks from Oct. 6 over a wage dispute, paralysing freight rail and port operations and throttling exports from Africa&#8217;s most advanced economy.



Sasol, the world&#8217;s biggest producer of fuel products from coal and a chemicals manufacturer, said the strike affected the movement of raw materials and products between its plants and ports.



&#8220;As a result, Sasol has declared force majeure on the local supply and export of certain chemical products. Production rates at selected plants in Secunda and Sasolburg have been impacted,&#8221; Sasol said in a statement.



The company said it was not yet able to quantify the impact on its South African value chains &#8220;as the extent and timing to clear the backlogs across the port and rail system remain uncertain&#8221;.



Sasol&#8217;s Natref fuel refinery had not suffered any disruption during the strike, it said.



(Reporting by Nelson Banya; Editing by Robert Birsel)

Sasol_Garage_in_Boksburg

Sasol declares force majeure for some items because of strike

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="555" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-820x555.jpg" alt="" class="wp-image-420644" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-820x555.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-300x203.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-133x90.jpg 133w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-768x519.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-1536x1039.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/HJDYMEREYFLQFPCH6PHBFH2UTA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>FILE PHOTO: Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration</figcaption></figure>



JOHANNESBURG, Oct 19 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s financial watchdog has classified cryptocurrency assets as financial products, a notice in the government gazette said on Wednesday, enabling them to be regulated.



In the brief notice, the Financial Sector Conduct Authority (FSCA) said a crypto asset, which it referred to as &#8220;a digital representation of value&#8221;, must be regulated in South Africa from the date of publication.



Regulations that the authorities have said they planned to introduce include applying foreign exchange controls and licensing crypto trading companies.



Financial watchdogs across the globe have been grappling with how to regulate new digital currencies and tokens, the prices of which have fallen since November last year.



Crypto assets are not issued by a central bank, but are capable of being traded, transferred or stored electronically.



South African Reserve Bank (SARB) Deputy Governor Kuben Naidoo&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2XA2CZ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">told Reuters in May</a>&nbsp;that regulation of crypto assets was in the offing and might come into force within nine to 15 months, after regulators said they intended to do so in November 2020.



He added the SARB wanted regulation of crypto assets to prevent theft, money laundering and undermining of monetary policy because an ubiquitous cryptocurrency could weaken the authority of the central bank.



&#8220;This was the first legal step that was required to bring the crypto asset industry within the South African legal framework,&#8221; Brent Petersen from Easy Crypto, a crypto buying and selling platform, said in a note.



He added the declaration would apply to crypto trading platforms, as well as those that provide advice or intermediary services for the buyers and sellers of digital financial assets.



(Reporting by Rachel Savage; Writing by Anait Miridzhanian; Editing by Mark Potter)

Illustration shows representations of cryptocurrencies

South Africa moves to regulate crypto assets￼

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="558" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/GettyImages-459296780-820x558.jpg" alt="" class="wp-image-403905" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/GettyImages-459296780-820x558.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/GettyImages-459296780-300x204.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/GettyImages-459296780-768x523.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/GettyImages-459296780-1536x1045.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/GettyImages-459296780-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>An embossed logo of South Africa&#8217;s Reserve Bank sits on a document folder during a news conference with Lesetja Kganyago, governor of South Africa&#8217;s reserve bank, in Pretoria, South Africa, on Thursday, Nov. 20, 2014. Reserve Bank Governor Lesetja Kganyago kept South African borrowing costs unchanged in his debut policy meeting as Reserve Bank governor, reinforcing his pledge for continuity. Photographer: Dean Hutton/Bloomberg via Getty Images</figcaption></figure>



LONDON/JOHANNESBURG, Oct 19 (Reuters)&nbsp;&#8211;&nbsp;Sub-Saharan African banks are increasingly worried about funding costs, an annual survey published on Wednesday found, as soaring interest rates both on the continent and globally make financing more expensive.



The cost of local currency funding was now the top worry for Sub-Saharan Africa&#8217;s banks, according to a survey by the European Investment Bank of 70 institutions that account for 30% of the African continent&#8217;s assets.



Central banks from Nigeria to Kenya, Ghana and South Africa have aggressively raised interest rates in a bid to tame inflation and give some support to currencies that have been hammered by the U.S. dollar this year.



&#8220;The main concerns for banks are the cost of local currency funding, competition from the non-banking sector and deteriorating asset quality,&#8221; the EIB&#8217;s report said.



Banks were surveyed between April and June, meaning that the impact of the war in Ukraine had already begun to shape perceptions.



The most significant deterioration in asset quality was reported in small and medium enterprise (SME) loan books whereas loans given to larger firms were holding up better so far.



The percentage of banks with a significant share of nonperforming corporate loans (NPLs) is close to 21% overall but 37% of banks have a significant share of NPLs in their SME loan books.



Headline NPL figures do not tell the whole story either as there are now significant amounts of loans under moratoriums or restructuring which do not necessarily get counted in NPL figures.



More than one-third of banks have more than 10% of their loan book for small and medium firms under moratoriums. Two-fifths of banks have more than 10% of their SME book restructured although for many of those it is more than 20%.



Central Africa, which includes countries like Cameroon, Central African Republic, Chad, Democratic Republic of Congo, and Gabon, the region with the greatest existing issues with nonperforming loans at 19% of gross loans, is roughly 10 percentage points higher than the other regions, each of which have NPL ratios of 8–9%.



Central Africa (13%) and West Africa (16%) also have lower capital to risk-weighted asset ratios than East Africa (19%) or Southern Africa (19%), meaning they have less capacity to absorb any new problems related to asset quality.



&#8220;The concerns regarding non-performing loans cited by a large share of responding banks could mean that they expect NPL ratios to increase, even before this is reflected in official data,&#8221; the report said.



African banks&#8217; main concerns<a href="https://tmsnrt.rs/3VyT7GS" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/3VyT7GS</a>



African NPLs<a href="https://tmsnrt.rs/3CJZNJD" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/3CJZNJD</a>



(Reporting by Marc Jones in London and Rachel Savage in Johannesburg; Editing by Matthew Lewis)

South Africa’s New Reserve Bank Governor Lesetja Kganyago

African banks increasingly worried about funding costs, survey shows

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="580" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/PLRBGBS2KJOR3BUKREQSX4INBA-820x580.jpg" alt="" class="wp-image-420633" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/PLRBGBS2KJOR3BUKREQSX4INBA-820x580.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/PLRBGBS2KJOR3BUKREQSX4INBA-300x212.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/PLRBGBS2KJOR3BUKREQSX4INBA-127x90.jpg 127w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/PLRBGBS2KJOR3BUKREQSX4INBA-768x543.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/PLRBGBS2KJOR3BUKREQSX4INBA.jpg 960w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>The logo of French oil and gas company Total is seen on a truck transporting fuel in Durban, South Africa February 7, 2019. REUTERS/Rogan Ward</figcaption></figure>



DAKAR, Oct 19 (Reuters)&nbsp;&#8211;&nbsp;Africa must build oil and gas pipelines, liquefied natural gas (LNG) terminals, distribution hubs and gas-fired power plants over the next 20 years to unlock its energy market of over 600 million people, officials, executives and analysts say.



But the rapid shift in the rest of the world towards renewable energy means that countries in the region that boast vast untapped hydrocarbon reserves and depend on exporting those resources for revenue and attracting investment funding, will face increasing challenges.



Some projects are underway, and more are needed, according to six officials, investors and experts, but challenges including financing, security and coordination are vast.



&#8220;We have been hearing that by 2030 developed nations will no longer need our oil and gas,&#8221; Gabriel Mbaga Obiang Lima, Equatorial Guinea&#8217;s hydrocarbons minister, told a recent oil conference in Senegal&#8217;s capital, Dakar.



&#8220;The question is, what are we going to do if we can no longer sell to Europe, America or Asia?&#8221;



At least eight memorandums of understanding (MOU) have been signed in recent weeks for major oil and gas infrastructure networks that would criss-cross the continent, targeting export, domestic, and regional markets.



Obiang Lima said that by 2030, African fossil fuel producers&#8217; main market will be Africa itself, and without it they were likely to be left with stranded assets.



He was presenting the Central Africa Pipeline System (CAPS), a new 6,500-km oil and&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30F3DA&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">gas network</a>&nbsp;with hubs, terminals, and storage facilities expected to stretch from Chad to Angola and inland into Rwanda.



&#8220;The objective of the project is to create areas where we can transport, store, distribute and create petroleum hubs. The best example of this is Rotterdam,&#8221; he said.



Other projects include a trans-Sahara gas project involving&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N2Z91LM&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Nigeria, Algeria, and Niger</a>&nbsp;who have revived decades-old talks. The 4,000 km, $13 billion&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30M3LG&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">pipeline</a>&nbsp;could send up to 30 billion cubic metres a year of gas to Europe.



Senegal and Mauritania on Oct. 15, signed four MOUs with Nigeria and Morocco for the estimated $25 billion Nigeria-Morocco Gas Pipeline project, while construction is underway on the 2,000 km Niger-Benin oil pipeline.



<h2 class="wp-block-heading" id="h-domestic-first">DOMESTIC FIRST</h2>



Africa holds around 13% of the world&#8217;s natural gas and 7% of its oil but has the world&#8217;s lowest per capita energy use.



Although renewables could play a major role in Africa&#8217;s energy supply in the years ahead, governments say they need fossil fuels for baseload power generation that will power industries. Africa is home to 60% of the best solar resources globally, yet has only 1% of installed solar capacity.



Energy demand is expected to grow rapidly over the next two decades, 30% higher than today, compared with a 10% increase globally, consultancy McKinsey said in a report in June.



While projects like the trans-Sahara and Niger-Benin pipelines are focused on exports, potentially boosted by moves in Europe to wean itself off Russian energy, Obiang Lima and others said it was a chance to develop regional markets.



Besides the 678-km West Africa gas pipeline completed in 2008, linking Nigeria, Benin, Togo and Ghana, few regional oil and gas projects exist to take products where they are needed.



Senegal, which joins the continent&#8217;s oil and gas producing club next year, and others, have laid out gas development plans which include terminals, pipelines for domestic and regional markets, and conversion of coal-fired power plants to gas.



But most African countries, including major crude producers such as Nigeria, still depend on imported refined products because local and regional oil and gas&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2XB0SX&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">infrastructure is poor</a>.



How countries finance these vast projects remains unanswered. U.S. climate envoy John Kerry has&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N30M62I&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">cautioned against</a>&nbsp;long-term oil and gas infrastructure investment in Africa, urging countries to turn to renewables instead.



Mickael Vogel, head of research at pan-African energy investment research firm Hawilti, said focus should be on developing domestic gas markets and infrastructure before anchoring it to bigger regional network if needed.



Citing the example of independent oil and gas producer Perenco in Cameroon, Vogel said companies should start with gas-to-power generation, then liquefied petroleum gas, and expanding to small-scale LNG for export, and finally gas to industries.



&#8220;Once you have that in place, you can develop the gas market further, then the domestic infrastructure can anchor regionalisation. I think it should start with the domestic component,&#8221; Vogel said.



<h2 class="wp-block-heading">FINANCING, CHALLENGES</h2>



Obtaining financing to develop Africa&#8217;s vast oil and gas projects will remain a challenge in the absence of strong domestic markets, the International Energy Agency (IEA) said in its June report.



&#8220;Africa&#8217;s track record for gas projects in this regard is not encouraging,&#8221; the IEA said, citing delays in TotalEnergies&#8217; Mozambique project and in the Senegal-Mauritania gas project.



&#8220;These problems are weighing on the prospects for investment decisions for other African LNG projects in the pipeline.&#8221;



But Omar Farouk, Secretary General of the African Petroleum Producers&#8217; Organisation, told an oil conference earlier this month that he was confident energy projects in the continent will get financing.



&#8220;Funding requirements for the oil and gas industry in Africa far exceeds the capacity of any one individual country in Africa. However, when we pool our resources together we can raise financing to sustain the industry in the continent.&#8221;



He said his organisation, which is backing the CAPS pipeline, has partnered with the Africa Import Export Bank to fund an energy bank, which will have around &#8220;$6 billion in its kitty&#8221; to fund projects.



Finding gas and laying pipes across the continent may prove easy, said an oil executive who focuses on Africa. He added that keeping assets safe could prove the biggest challenge, including in places like Nigeria, where militant violence and oil theft are common.



Another challenge would be for countries to set aside historical differences to unlock the wider market and to offer regulatory stability needed for investments of up to 30 years, said another regional oil and gas expert who requested anonymity.



Previous plans for major regional projects such as large-scale refineries have been thwarted by rivalries, ending in countries constructing small refineries that eventually failed, the expert added.



(Reporting by Bate Felix, Additional reporting by Wendell Roelf in Cape Town; editing by David Evans)

PLRBGBS2KJOR3BUKREQSX4INBA

Renewables shift lays bare Africa’s energy dilemma

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="485" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/R37TCSAKPFIJDHRCNT5XGT3KNM.jpg" alt="" class="wp-image-420625" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/10/R37TCSAKPFIJDHRCNT5XGT3KNM.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/R37TCSAKPFIJDHRCNT5XGT3KNM-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/10/R37TCSAKPFIJDHRCNT5XGT3KNM-135x90.jpg 135w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption>The logo of MTN is pictured in Abuja, Nigeria, September 11, 2018. REUTERS/Afolabi Sotunde/File Photo</figcaption></figure>



JOHANNESBURG, Oct 19 (Reuters) – South African mobile operator Telkom said on Wednesday bigger rival MTN Group had terminated talks to buy the former in what would have created the country’s biggest telecoms company.



Telkom said it could not offer MTN assurances to enter into exclusive talks sought by the country’s second biggest telecoms service provider.



MTN said in a separate statement that the companies were unable to reach agreement on a deal.



In July, MTN had offered to buy its smaller rival in a stock or cash-and-shares deal.



But a month later, data network provider rain, partly owned by South African billionaire Patrice Motsepe, proposed a merger with Telkom. It withdrew the offer later only to come back last month with a revised offer asking Telkom to buy it out.



“MTN terminated discussions… as Telkom was not in a position to provide MTN with assurances around exclusivity,” Telkom said in a statement.



The talks between Telkom and MTN were at an early stage and had not progressed to due diligence, Telkom said, adding that it had not received any binding offer from MTN. 



(Reporting by Promit Mukherjee in Johannesburg and Radhika Anilkumar in Bengaluru; Editing by Tomasz Janowski and Emelia Sithole-Matarise)

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Reuters

South Africa’s Transnet says cable theft rises sharply during strike

Eskom debt plan in focus at South Africa’s mid-term budget

Rand drops as power cuts, wage talks weigh

South African rand weakens as dollar firms amid economic uncertainty

Dubai to offer 10% of Empower in fourth state-linked IPO

Ethiopia government, Tigray forces to meet for first peace talks since conflict began

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South Africa’s energy transition plan needs $46.5 bln, five times pledges – sources

Mozambique’s first LNG exports to Europe seen by early November

Walmart doubles down on Africa despite a decade of frustration

Namibia, EU reach provisional deal on rare earth minerals

Uganda expects to secure $5 bln oil pipeline funding early 2023

Sasol declares force majeure for some items because of strike

South Africa moves to regulate crypto assets￼

African banks increasingly worried about funding costs, survey shows

Renewables shift lays bare Africa’s energy dilemma

Telkom says bigger rival MTN has terminated buyout talks

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South Africa moves to regulate crypto assets