<p>Irregular expenditure by South African government departments swelled 80 percent to 43.4 billion rand ($3 billion) in the 2015-16 financial year, Auditor-General Kimi Makwetu said on Wednesday.</p>
<p>South Africa is trying to rein in spending and trim debt in the face of sluggish economic growth and looming decisions by major ratings agencies that could see it lose its investment grade status, a development that would lift borrowing costs.</p>
<p>Makwetu said in a statement after releasing his annual report that most of the irregular spending, which would have accounted for about 3 percent of total government spending, stemmed from non-compliance with regulations on the procurement of goods and services.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads16"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads15"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads14"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads13"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads12"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads11"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads10"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads9"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads8"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads7"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads6"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads5"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads4"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads3"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads2"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>&#8220;Due to a lack of transparency and competitiveness, it remains to be seen whether prices are not inflated in the procurement processes,&#8221; the statement said.</p>
<p>Expenditure deemed &#8220;fruitless and wasteful&#8221; increased 14 percent since 2013-14 to 1.37 billion rand, the statement said, without providing a comparison to the 2014-15 financial year.</p>
<p>Makwetu said poor management, shoddy probes into allegations of financial transgressions, and vacancies that remain unfilled in key positions such as accounting officers, were &#8220;the root causes of &#8230; weaknesses in financial and performance management and the poor audit outcomes.&#8221;</p>
<p>Makwetu recommended improved monitoring of expenditure, the provision of compliance checklists to monitoring units and supervisors, and the implementation of formal codes of conduct but stopped short of calling for a probe.</p>
<p>The Treasury did not immediately comment on the report.﻿</p>
<p> </p>


Irregular South Africa government expenditure up 80 pct

<p>Freeport-McMoRan Inc said on Wednesday it had wrapped up the $2.65 billion sale of its stake in the Democratic Republic of Congo&#8217;s Tenke mine, and the company&#8217;s chief executive said he hopes negotiations will ease objections of Congo&#8217;s state miner to the deal.</p>
<p>The CEO, Richard Adkerson, told Reuters in an interview that the surprise victory of Donald Trump in the U.S. presidential election had triggered &#8220;fund buying&#8221; of copper, bringing the metal&#8217;s price closer to fundamentals in a market that he said was now &#8220;essentially balanced.&#8221;</p>
<p>Last week, benchmark copper prices recorded their biggest weekly gain since 2011, fueled largely by Trump&#8217;s promises of infrastructure spending. Copper is used in everything from wiring to construction.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>Adkerson called the rally a &#8220;pleasant surprise&#8221; that could help the Arizona-based company &#8211; the world&#8217;s largest publicly listed copper producer &#8211; pay off its bloated debt sooner. A 10-cent rise in the price of copper in 2017 would translate into $300 million to $350 million in extra cash, he said.</p>
<p>&#8220;It&#8217;s too early, way too early&#8221; to consider any new expansions, Adkerson said, speaking in Freeport&#8217;s Lima offices ahead of a trade summit that Peru is hosting this week.</p>
<p>&#8220;There&#8217;s a lot of uncertainty about this near-term movement and where things are going,&#8221; Adkerson said.</p>
<p>It was also too early to say what Trump would mean for mining companies after taking office, Adkerson said.</p>
<p>&#8220;We&#8217;re going to be very interested in who the secretary of state is,&#8221; Adkerson said. &#8220;We&#8217;re going to be working with them to help support our business in places&#8230;around the world.&#8221;</p>
<p> </p>
<p>LEGAL DISPUTE STILL LOOMS</p>
<p>As part of its efforts to lower its debt, Freeport announced in May that it was selling its 56 percent stake in Tenke to China Molybdenum.</p>
<p>But state miner Gecamines, which owns 20 percent of the mine, has opposed the sale, saying it was not informed beforehand of the plans and had the right to make the first offer on any sale.</p>
<p>Freeport&#8217;s deal had been delayed for months by minority mine owner Lundin Mining Corp, which had the right to supplant China Molybdenum&#8217;s offer, sell its stake, or do nothing.</p>
<p>That barrier was eliminated Tuesday when Lundin said it would sell its 24 percent stake to Chinese private equity firm BHR Partners for about $1.14 billion in cash.</p>
<p>Freeport was working with Gecamines to resolve their dispute and would prevail in arbitration if talks fail, Adkerson said.</p>
<p>Adkerson also said he was confident Indonesia would modify its planned ban on unfinished metals exports.</p>
<p>&#8220;They&#8217;re working on something,&#8221; Adkerson said. &#8220;I wouldn&#8217;t want to predict exactly how they do it, I&#8217;ll just say I&#8217;m confident that they&#8217;ll find a way for us to continue exports of copper concentrate.&#8221;﻿</p>
<p> </p>


Freeport wraps up $2.65 bn Congo mine sale

<p>Johannesburg has been ranked the most popular destination city in Africa for the fourth year, according to the 2016 Mastercard Global Destinations Cities Index.</p>
<p>The city is expected to welcome 3.6 million international overnight visitors in 2016, a 6.2 percent increase on last year’s 3.39 million visitors. Cairo in Egypt is the second most visited African city with 1.5 million international overnight visitors followed by Cape Town (1.4 million visitors), Casablanca in Morocco (1 million visitors), and Durban (831,000 visitors).</p>
<p>Tourism remains an important driver of South Africa’s economy, and the steady rise in visitor numbers indicates how the City of Gold’s fascinating mix of iconic attractions is proving ever more compelling to today’s international traveller. Visitor spend is an increasingly important source of revenue for the city’s hospitality, retail, transport, sports and cultural sectors.</p>
<p>The Index provides more than a ranking of the 132 most visited cities around the world. It projects visitor volume and spend estimates for the 2016 calendar year, while delivering a deeper understanding of how people travel and spend around the world. The 13 African cities ranked in the Index are Johannesburg, Cape Town, Durban, Cairo, Casablanca, Accra, Nairobi, Beira, Dakar, Kampala, Lagos, Maputo and Tunis.</p>
<p><img loading="lazy" decoding="async" src="/media/19261785/africa_city.png" width="582" height="311" alt="Africa City"/>﻿</p>
<p>Of Johannesburg’s expected international overnight visitors, 373,000 will travel from London in 2016. Harare (294,000), Frankfurt (233,000), Maputo (185,000) and Paris (163,000) round out the list of the top five cities that send visitors to Johannesburg. Only 18% of Johannesburg’s international visitors are from outside the Middle East and Africa region.</p>
<p>Johannesburg also comes out tops in Africa in terms of international visitor expenditure, with travellers expected to spend US$1.73 billion in 2016. Londoners are expected to spend the most (US$285 million), followed by visitors from Paris (US$155 million), Harare (US$106 million), Frankfurt (US$84 million), and Maputo (US$41 million).</p>
<p>According to the City of Johannesburg, the Index rating affirms Johannesburg’s position as the economic capital and heartbeat of trade and economic activity on the African continent.</p>
<p>“As the strong numbers of visitors from our neighbouring countries shows, Johannesburg is one of the continent’s most important business, cultural and economic hubs. Tourism is a priority industry for us and a pillar of our economic growth strategy for the years ahead,” says City of Johannesburg Executive Mayor <em>Councillor </em>Herman Mashaba.</p>
<p>“The index confirms Johannesburg’s status as a destination that attracts repeat visits due to its continually evolving tourism offering, from popular shopping destinations such as our malls to a wide range of lifestyle, sporting and business events.”  </p>
<p>Cape Town and Durban are ranked number three and eight in terms of expenditure in Africa, with international visitors expected to spend US$1 billion and US$288 million respectively.</p>
<p><strong>New Insights into Purpose of Travel and Local Spend</strong></p>
<p>For the first time, the 2016 Index explores whether visitors travel for business or leisure and provides insights into how international visitors spend their time and money.  It reveals that more than three quarters (75.6%) of total visitors to Johannesburg are travelling for leisure, while just less than a quarter (24.4%) are travelling on business.</p>
<p>Shopping is one of South Africa’s key attractions for international tourists, accounting for nearly 44% of the money visitors spend in Johannesburg and Cape Town. This is a higher proportion than any other African city and on par with major world shopping destinations such as London (46.7%) and Tokyo (43.1%).</p>
<p>Visitors to Johannesburg will spend around 14% on accommodation and the same amount on food and beverages. A further 10% of international visitor expenditure will be spent on local transport, and 11.5% on local services.</p>
<p><strong>The world’s top destination cities</strong></p>
<p>Bangkok, the top-ranked destination city by international overnight visitor arrivals, is projected to receive 21.47 million international overnight visitors in 2016, just ahead of second-ranked London, with 19.88 million visitors. Paris (18.03 million), Dubai (15.27 million) and New York (12.75 million) complete the top five. ﻿</p>
<p><img loading="lazy" decoding="async" src="/media/19261792/city_visits_598x846.jpg"  width="598"  height="846" alt="City Visits"/>﻿</p>
<p> </p>


Africa's most visited cities

<p>Around the world, farmers can attest to the devastating impact that climate change is having on agriculture. Whether they’re in the US, Vietnam or South Africa, heat waves, droughts or heavy rains are disrupting water supplies, ruining harvests and affecting food availability and prices.</p>
<p>We can only imagine what will happen to our agriculture and food systems if the earth’s temperature increases by 2-4°C. The prospect threatens to reverse gains in food security and economic growth. It threatens our ability to feed 9 billion people by 2050. And it will remove all chance of achieving the Sustainable Development Goal of eradicating poverty.</p>
<p>Addressing this challenge is a priority for world leaders meeting this week in Marrakech for the United Nations climate change conference. We therefore welcome the Moroccan Government’s Adaption of African Agriculture initiative (AAA) to help build the resilience of the continent’s agriculture.</p>
<p>It is particularly pertinent that this conference is on African soil. While all countries will feel the impact of climate change, Africa will perhaps feel it most. The continent’s agricultural productivity has long lagged behind the rest of the world. Crop yields grew across Asia from 1960 onwards, lifting hundreds of millions out of poverty, but stagnated in Africa where cereal yields stayed largely unchanged for the 30 years of the green revolution.</p>
<p>As a consequence, many African countries have met increased demand for food through overseas food imports, a wasted opportunity given that the continent boasts 60% of the world’s available arable land. This over-reliance on imports is also a risk, as trade restrictions and price hikes in volatile times leave populations at risk of food insecurity.</p>
<p>If climate change isn’t tackled, Africa will simply never begin to fulfil its potential. It will only make things harder for the continent’s millions of smallholder farmers who rely on farming for their income or livelihood. According to the AAA initiative, the slump in crop yields could reach 20% in 2050, even if global warming is contained under 2°C.</p>
<p>The good news is that we know investment in agriculture works and we have seen encouraging progress. Research from the Alliance for a Green Revolution in Africa (AGRA) shows how governments that invested 10% of spending in agriculture and supported the sector, have seen productivity and GDP rise, and poverty rates decline since 2005.</p>
<p>So we have an opportunity and a duty to act &#8211; to create a resilient and sustainable agriculture system that supports smallholders and builds the continent’s food security. Reforming African agriculture will not only mean it can finally feed more people and contribute to growth but also that it does not itself exacerbate climate change – since we know agriculture sectors account for one-fifth of global greenhouse gas emissions.</p>
<p>Momentum has been building for several years now with promising public and private sector initiatives such as Grow Africa, AGRA, the Malabo Declaration, the New Alliance, and now the triple AAA initiative. African governments have committed to allocate at least 10% of public expenditure to agriculture.</p>
<p>Agriculture is also increasingly seen as an engine of economic growth and a source of jobs for the continent’s large youth population. The Zimbabwean businessman Strive Masiyiwa has noted that the continent’s food market could be worth US$1 trillion in just 15 years.</p>
<p>Businesses such as Olam are supporting farmers directly &#8211; last year, 140,000 farmers and 300,000 hectares benefited from training on sustainable soil management. Unilever, through its relationship with Olam and other suppliers, is committed to sourcing raw materials sustainably, improving the lives of millions of family and smallholder farmers in its supply chains worldwide.</p>
<p>Despite these initiatives, agriculture continues to receive insufficient support to face climate change. Africa receives under 5% of funds available to tackle climate change. On top of that, adaptation measures receive less than 20% of public funds, as the majority of funding goes to emission-cutting measures. We have a situation where the sector that will be hit worst by climate change is the least well-resourced to manage its effects.</p>
<p>To help catalyse these initiatives and mobilise the funding and wider support to make African agriculture a success story, the private sector needs to play a central role. We know that businesses’ long-term performance depends on having a reliable supply of high-quality, safe and affordable food.</p>
<p>It is also a great opportunity – the Business and Sustainable Development Commission estimates that companies could unlock US$2.3 trillion a year in the food and agriculture sectors, securing a seven-fold return if they invest US$320 billion in sustainable business models each year.</p>
<p>Agriculture is a complex activity, bringing together smallholders, business and the public sector &#8211; so we must work together.  An opportunity like COP22 is one of the few chances to stand together and set a new direction. If we act now, we won’t just protect agriculture from climate change, we’ll feed the continent, create jobs and help realise the Sustainable Development Goals. We’ll leave nobody behind.</p>
<p>Sunny Verghese is co-founder and Group CEO of <a href="http://olamgroup.com/">Olam International</a>.</p>
<p><a href="https://twitter.com/PaulPolman">Paul Polman</a> is CEO of <a href="https://www.unilever.com/">Unilever</a> and Chairman of the World Business Council for Sustainable Development. ﻿</p>
<p> </p>
<p> </p>


Africa's food market could be worth US$1trn in 15 years, this is how…

<p>Around 14 million people will need humanitarian help in the former northeast Nigerian stronghold region of Boko Haram militants and tens of thousands of children will be at risk of dying from famine, a U.N. official said on Tuesday.</p>
<p>The Islamist militant group has killed 15,000 people and displaced more than 2 million from their homes during a seven-year insurgency in Africa&#8217;s most populous nation and biggest energy producer.</p>
<p>Nigerian military forces backed by those from neighbouring states have pushed Boko Haram back to the northeast&#8217;s vast Sambisa forest in the last few months, enabling aid workers to access areas previously controlled by the jihadists. That has revealed thousands of people living in famine-like conditions.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads2"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>&#8220;Next year 26 million people will be affected by the ongoing crisis and 14 million of these will need international and national humanitarian assistance,&#8221; Peter Lundberg, U.N. humanitarian coordinator for Nigeria, told a news conference.</p>
<p>He added that there were 75,000 children who, &#8220;if we don&#8217;t do something rapidly and seriously&#8230; are going to die in the few months ahead of us&#8221;.</p>
<p>UNICEF, the U.N. children&#8217;s agency, said in September that 75,000 children could die in northeast Nigeria over the next year if they did not receive aid. A total of 400,000 children aged under five could suffer severe malnutrition in the three states worst hit by the insurgency, it said.﻿</p>
<p> </p>


Humanitarian help needed for about 14 milliion Nigerians

<p>Zimbabwean human rights lawyers asked the High Court on Tuesday to strike down a decree by President Robert Mugabe allowing the introduction of &#8220;bond notes&#8221;, which have raised fears of a return to a local currency.</p>
<p>Mugabe used his presidential powers on Oct. 31 to amend the Reserve Bank of Zimbabwe Act, designating bond notes as legal tender that will be equivalent to the U.S. dollar.</p>
<p>Zimbabwe scrapped its own currency in 2009 after inflation hit 500 billion percent, wiping out savings.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>The central bank says bond notes are meant to ease crippling cash shortages, but this is stoking concerns it could open the door to rampant printing of cash, as happened in 2008.</p>
<p>In a court application, the Zimbabwe Lawyers for Human Rights {ZLHR) asked the court to set aside Mugabe&#8217;s decree arguing that the veteran leader had no authority to do so.</p>
<p>ZLHR lawyer Dzimbahwe Chimbga said presidential powers were only used in emergencies and the bond notes law was not an emergency since the government first announced their introduction in May this year.</p>
<p>&#8220;He usurped the powers of parliament by making himself the lawmaker and in any event the Presidential Powers Act does not allow him to act in a manner that he did,&#8221; Chimbga said.</p>
<p>The High Court is expected to hear the case this week.</p>
<p>Zimbabwean banks are limiting daily withdrawals to between $40 and $100 due to cash shortages, which has also seen some firms struggle to repatriate dividends and pay foreign debts.</p>
<p>Memories are still fresh of the hyperinflation considered by the International Monetary Fund as the worst for any country not at war.</p>
<p>The crisis led to the release of the 100 trillion dollar Zimbabwean dollar note &#8211; the single largest known bill to be printed by any central bank. Shoppers carried stacks of money in plastic bags as prices changed several times daily.</p>
<p>The introduction of the U.S. dollar as the official currency in 2009 halted the sky-high and accelerating inflation.﻿</p>
<p> </p>


Zimbabwean lawyers take Mugabe to court over bond notes

<p>Ericsson is betting that fast-growing demand for mobile Internet services in sub-Saharan Africa will also boost sales for the world&#8217;s biggest mobile telecoms equipment maker, the Swedish company&#8217;s regional president said.</p>
<p>&#8220;If you look at growth in mobile broadband penetration, it&#8217;s going in the right direction. It is at about 35 percent right now and that&#8217;s going to grow at 21 percent per year over the next six years,&#8221; Jean-Claude Geha told Reuters in an interview.</p>
<p>Ericsson is struggling in most other regions where its customers are further advanced in developing 4G mobile broadband networks and demand for equipment for the next generation of even faster and more widely connected 5G networks is still years away.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads7"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads6"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads5"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads4"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads3"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads2"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>But African mobile network operators such as MTN Group and Kenya&#8217;s Safaricom are still in the process of modernising and expanding their networks to give more and more people access to the Internet.</p>
<p>The region, home to more than 1 billion people, contributes 4 percent of Ericsson&#8217;s annual sales of $27 billion but Geha said the company was seeing percentage sales growth rates there that were &#8220;closer to double-digit than single-digit&#8221;.</p>
<p>&#8220;We are building 17 4G networks across the region and we&#8217;re still building a lot of 3G and modernising some of the 2G networks,&#8221; Geha said. &#8220;We are expecting in the next five to six years at least 80 percent of deployed infrastructure to be 3G and 4G mobile broadband.&#8221;﻿</p>
<p> </p>


Ericsson bets on fast-growing broadband demand in Africa

<p>Congo state miner Gecamines signed over its royalty rights at one of the country&#8217;s largest copper mines in January last year to an offshore company owned by Israeli billionaire Dan Gertler, according to a copy of the contract obtained by Global Witness and reviewed by Reuters.</p>
<p>The London-based advocacy group said in a statement on Tuesday that the lost royalties from the Kamoto Copper Co (KCC) project could cost heavily indebted Gecamines up to $880 million by 2030, about a fifth of Congo&#8217;s annual budget.</p>
<p>&#8220;It&#8217;s troubling that the state miner Gecamines has signed away rights to potentially huge flows of cash that should go towards building Congo&#8217;s future,&#8221; Global Witness said.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads6"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads5"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads4"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads3"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads2"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>Gertler&#8217;s Fleurette Group, which holds a minority stake in KCC alongside its majority shareholder, Glencore, and Gecamines, confirmed in a statement that Africa Horizons Investment Ltd (AHIL), a wholly owned subsidiary of Fleurette, bought the rights from Gecamines but did not say for how much.</p>
<p>However, its statement called Global Witness&#8217;s report &#8220;damaging and defamatory&#8221;, saying Fleurette stands to lose money from the transaction owing to a fall in copper prices and KCC&#8217;s suspension of production in September 2015, both unforeseen events that occurred after the deal was signed in January.</p>
<p>&#8220;Global Witness is showing either a total lack of understanding of even the most basic business and valuation principles, or a brazen attempt to manipulate data to suit a pre-determined narrative,&#8221; a Fleurette spokesman said.</p>
<p>The Fleurette spokesman said the royalty rights acquired by AHIL expire in early 2019 &#8211; not in 2030, as Global Witness assumes in its calculation &#8211; pointing to a provision in the original 2008 accord between KCC, Gecamines and a Glencore subsidiary under which KCC&#8217;s payments of the royalties owed to Gecamines could stop in March 2019.</p>
<p>Global Witness said Fleurette &#8220;has not been able to show that the agreement will definitely end by 2019,&#8221; and called on it to publish the full terms of the deal with Gecamines.</p>
<p>Gecamines&#8217; chairman and interim director-general, who both signed the deal, did not respond to requests for comment.</p>
<p>In a statement on the AHIL transaction, Glencore said: &#8220;KCC acted in accordance with the instructions it received from Gecamines and was not involved in the discussions between AHIL and Gecamines.&#8221;</p>
<p>Campaign groups have repeatedly accused Gertler of exploiting his friendship with Democratic Republic of Congo President Joseph Kabila to acquire mining assets at bargain rates before selling them at a mark-up &#8211; charges he denies.</p>
<p>Reuters was unable to determine if Gertler&#8217;s friendship with Kabila has played a role in his ability to procure mining rights in Congo. The minister of mines said only that he was unaware of the Global Witness report.</p>
<p>The Congolese government has repeatedly denied that their relationship gives Gertler privileged access.</p>
<p> </p>
<p>CONTROVERSIAL DEALS</p>
<p>It was not clear in the contract whether Gecamines received any compensation for ceding the royalty rights to AHIL, whose address in the contract is listed in the Cayman Islands, although Fleurette said it did pay an unspecified amount.</p>
<p>Glencore suspended production at KCC, the third-largest copper mine in Africa&#8217;s largest producer of the metal, in response to a global downturn in prices. It says it expects to resume production in early 2018.</p>
<p>As a result, Fleurette said, it expects to lose a significant amount of money on the deal.</p>
<p>Global Witness stood by its calculation of the value of the deal, saying it was based on information on the website of the Toronto Stock Exchange, where KCC is listed.</p>
<p>&#8220;This shows projected potential royalty payments for the life of the mine as totalling $1.596bn. Royalties are paid to the state at a rate of 2 per cent and to Gecamines at a rate of 2.5 per cent. Gecamines’ share of the total royalties amounts to approximately 55.6 per cent of $1.596bn, or $887m,&#8221; it said.</p>
<p>Gertler has been at the centre of several controversial Gecamines sales before. According to the Africa Progress Panel, headed by former U.N. Secretary-General Kofi Annan, Congo lost out on $1.36 billion in potential revenue between 2010 and 2012 in five mining deals involving Gertler.</p>
<p>He denied any wrongdoing in those deals.</p>
<p>U.S. authorities, which reached a $412 million settlement in September with the hedge fund Och-Ziff Capital Management LLC for its role in bribing African officials, said in the case that &#8220;an infamous Israeli businessman with close ties to government officials&#8221; paid over $100 million in bribes to Congolese officials from 2005 to 2012. A source close to the case at the time identified him as Gertler.</p>
<p>Fleurette group declined to comment on the case.</p>
<p>Gertler has long denied paying bribes and says his investments have contributed to Congo&#8217;s economic development.﻿</p>


Congo state miner signed over royalties to Israeli billionaire

<p>Exxon Mobil Corp is negotiating with Chad over a record $74 billion fine the U.S. oil company was told to pay by a court in the central African nation over unpaid royalties, Bloomberg reported on Tuesday.</p>
<p>Exxon has appealed the Oct. 5 court ruling, but the appeals court hearing has been delayed because of the talks, Bloomberg reported, citing a lawyer for Exxon. (<a href="http://bloom.bg/2fRpf5n">bloom.bg/2fRpf5n</a>)</p>
<p>Exxon declined to comment.</p>
<p>The court decision fined a consortium led by Exxon over 44 trillion CFA francs ($73.44 billion) &#8211; nearly four times BP&#8217;s Deepwater Horizon settlement and roughly seven times Chad&#8217;s annual gross domestic product.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads2">The consortium, which includes Malaysian state oil firm Petronas and Chadian oil company SNT, were found to owe the country nearly 484 billion CFA francs ($808 million) in royalties, according to the court judgment.</div>
</div>
</div>
<p>It did not explain why the penalty amounted to more than 90 times that amount.</p>
<p>The unpaid royalties stem from a dispute over fees, sources in the Chadian Finance Ministry have told Reuters. The Finance Ministry, they said, is seeking a 2 percent royalty fee from the consortium, a rate the defendants have said is higher than the agreed level.</p>
<p>Petronas and SNT could not immediately be reached for comment.</p>
<p> ($1 = 599.1400 CFA francs)</p>
<p> (Reporting by Vishaka George in Bengaluru and Ernest Scheyder in Houston; Editing by Sai Sachin Ravikumar and Sandra Maler)﻿</p>


Exxon in negotiations with Chad over record $74 bln fine

<div>Dis-Chem is due to list on the JSE on 18 November 2016. While the group was founded in 1978 by the Saltzman family with their first pharmacy opening, its growth profile has taken off in recent years with the store base tripling since 2008 (28 stores). The group has ambitious growth plans yet, with identified opportunities for doubling the store base over the next 5-8 years. Despite Dis-Chem’s comparatively smaller store base (100 vs Clicks’ 500), the</div>
<div>group’s retail market share is similar to Clicks (which has smaller stores). We expect further market share gains in the years ahead, driven by maturation of existing stores (1/3 are not yet mature) as well as a robust new-store pipeline. Our key gripe with the business is its inferior cash-flow generation compared to Clicks, but further scale could possibly resolve this issue.</div>
<div></div>
<div><strong>READ: </strong><a href="/news/financial/2016/11/15/dis-chem-listing/">Dis-Chem attracts billions ahead of Friday&#8217;s listing﻿</a><br /><strong>Valuation</strong></div>
<div>Dis-Chem plans to list at a price range of R16.25-R20.25/share. This implies a equity market value of R15.7bn at the mid-point of the range post listing, equating to a trailing EV/EBITDA multiple of 15.5x (12-month EBITDA to August 2016). Under the new capital structure (detailed below), we estimate the group is likely to earn 70cps of HEPS to February 2017, placing the stock on a 26x P/E to FY17 on the basis of the mid-point of the offer range. It is important to note, however, that the final placement price may be outside of this range – if this is the case, we believe it is likely to be above the guided range due to what is a well anticipated and sought-after new listing.</div>
<div></div>
<div><strong>The offer</strong></div>
<div>The group is offering 238.4m shares in the listing (27.5% of the total issued share capital at listing), raising R4.325bn in the process (the mid-point of the valuation range). This is to</div>
<div>be deployed as follows:</div>
<div> R700m will be utilised to reduce debt (currently approximately R2.2bn).</div>
<div> Acquisitions of CJ Group and minority interests in 9 partner pharmacies – R460m.</div>
<div> A share repurchase totaling R3.575bn from existing shareholders prior to listing in order to achieve the required free-float of 28.3% on listing. Post-listing and repurchase, the Saltzman family will own 53% of the equity.</div>
<div></div>
<div><strong>Strong earnings growth profile likely</strong></div>
<div>We believe Dis-Chem is poised to sustain strong growth in earnings in the coming years.</div>
<div> Not all existing stores have reached maturity (one-third of existing stores have been open for less than four years), so same-store sales should remain strong, driving margin</div>
<div>leverage on existing stores.</div>
<div> The group is planning to open 100 stores over the next 5-8 years, and the return on capital on new stores is exceptional. A typical store should cost R20m (capex+initial working capital) and contribute ~R12m in EBIT within four years (&gt;60% ROCE), with break-even coming within one year. To put this into perspective, this means that each year the group is adding an extra 15%-20% (R100m+ PAT) to group profit potential at store maturity from new openings alone. So, while new stores might initially lose money, the group also has previously new stores maturing every year (hence those losses are falling out of the base).</div>
<div> The group already generates a 53% return on equity and given the rate of investment into new stores and a dividend policy of 40% payout, we expect earnings on a trend basis to grow by 25% per annum. This is provided that store-targets and trading densities are achieved.</div>
<div></div>
<div><strong>Conclusion</strong></div>
<div>Dis-Chem is clearly an exceptional business that has a unique opportunity to grow aggressively through a store roll-out plan that will see it gaining further share from independent pharmacy chains, and likely from Clicks too. The valuation is rich at a 12-month forward 22x P/E multiple (26x to Feb &#8217;17), but if growth plans come to fruition, investors could still do well from this initial heady valuation level. Assuming pricing at the mid-point of the guided range, we prefer Dis-Chem to Clicks and would advocate a switch. We do, however, caution that demand is likely to be high and investors are unlikely to receive their full (or even partial) allocation.</div>
<div></div>
<div><strong>What about the working capital?</strong></div>
<div>
<div>We have one gripe with the business relative to its peer, Clicks, and this pertains to the level of cash generated by the group in recent years (per disclosure in the pre-listing</div>
<div>statement). This may seem an unfair comparison given Clicks’ exceptional cash-conversion profile, but it is nonetheless worth pointing out that Dis-Chem appears to have a slower-moving stock cycle, and it also doesn’t have quite as favourable creditor terms as its peer. Given the very high return on capital, this is only a problem to the extent that investors want dividends as investing into working capital at these rates of return is not a bad idea.</div>
<div></div>
<div>Furthermore, the high absorption of cash into working capital in recent years is also likely impacted by the fast pace of store openings relative to the installed base – while store openings will remain strong, they will likely slow relative to the size of the group.</div>
</div>
<div></div>
<div><img loading="lazy" decoding="async" src="/media/19261359/dischem1_600x666.jpg"  width="600"  height="666" alt="Dischem1"/>﻿</div>
<div></div>
<div>
<div>The above cash conversion profile highlights that it would be challenging for Dis-Chem to sustain a dividend payout significantly more generous than is currently mooted unless 1) working-capital days improve; and 2) the growth profile of new-store openings slows materially. It is also worth pointing out from Figure 1 that, despite a higher GP margin, Dis-Chem’s retail division operating margin trails that of Clicks by more than 100bps. This is likely due to the lifecycle phase of their stores, and we would expect margin accretion as stores mature.</div>
<div></div>
<div>We note that Clicks currently maintains a dividend pay-out ratio of 70%, but will likely grow its EPS at a materially slower pace. In any event, when comparing the investment case of the two businesses, dividend yield is unlikely to be a material sway factor given that neither stock possesses very attractive yield – in the case of Clicks, due to a very high valuation (fwd 24x by our forecasts).</div>
<div></div>
<div>As demonstrated in Figure 2 below, we estimate that Dis-Chem is cheaper than Clicks Group on a forward P/E basis, but it also shows appreciably stronger growth potential.﻿</div>
</div>
<p> <img loading="lazy" decoding="async" src="/media/19261366/dischem2.png" width="567" height="266" alt="Dischem2"/>﻿</p>


Top-rated analyst gives his investment view on one of S.A's most anticipated listings: Dis-Chem

<p>JOHANNESBURG (Reuters) &#8211; South Africa&#8217;s Dis-Chem Pharmacies has raised 4.4 billion rand ($310 million) in a share placement ahead of its listing on the Johannesburg Securities Exchange, valuing the chain at almost 16 billion rand, the firm said on Tuesday.</p>
<p>Founded by chief executive Ivan Saltzman and his wife Lynette, Dis-Chem has tapped an uncertain equity market as it looks to take on larger rival Clicks Group and retailers Shoprite and Pick n Pay, which also have pharmaceutical retail operations.</p>
<p>Dis-Chem, which will trade on the bourse from Nov. 18, said it had received 18.50 per share &#8211; the middle of the range of its offer &#8211; for a 27.5 percent stake in the business.</p>
<div class="teads-inread">
<div>
<div class="teads-player">Dis-Chem said it will use the proceeds of the offer to repurchase shares from existing shareholders, for the repayment of the company&#8217;s debt and general corporate purposes.</div>
</div>
</div>
<p>($1 = 14.1805 rand)</p>
<p>(Reporting by TJ Strydom, editing by Louise Heavens)﻿</p>
<p> </p>


Dis-Chem attracts billions ahead of Friday's listing

<p>Mauritius is the fastest growing wealth market in Africa and one of the five fastest growing wealth markets worldwide. This was revealed in the New World Wealth report on the country.﻿</p>
<p>According to the report, the island also boasts some of the most exclusive real estate in Africa, and is now considered to be one of the top five prime property hotspots in Sub-Saharan Africa along with the likes of Cape Town and Umhlanga. </p>
<p> Read the full study: ﻿</p>
<p> <a href="/files/MauritiusResearchBrochure.pdf">www.cnbcafrica.com/files/MauritiusResearchBrochure.pdf﻿</a></p>
<p> </p>


The rise of Mauritius: Africa's fastest growing wealth market

<p>South Africa&#8217;s Chamber of Mines said on Tuesday that a Labour Court decision overturning a government-imposed safety stoppage at an AngloGold Ashanti mine placed limits on the power of state inspectors. </p>
<p>The industry in the world&#8217;s top platinum producer has for years complained that government inspectors have been imposing arbitrary work stoppages over safety, costing billions of rand in lost output and putting mines and jobs on the line.</p>
<p>The ruling concerned a Section 54 safety stoppage &#8211; named for the regulation they fall under &#8211; at AngloGold&#8217;s Kopanang mine last month.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>The judge found that the blanket stoppage of the entire mine because of infractions related to tramming and the storage of explosives in one section &#8211; Level 44 &#8211; was disproportionate and should have been applied to just that area of the operation.</p>
<p>&#8220;We believe that the Labour Court has, in this case, clarified the limits on the powers of the inspectorate,&#8221; The Chamber of Mines said in a statement.</p>
<p>The industry has in the past sought to persuade the Department of Mineral Resources to avoid what it calls &#8220;unjustified stoppages&#8221; that are compounding industry losses in a sector struggling with a commodities price slump.</p>
<p>The department of mineral resources did not immediately respond to emails and phone calls for its response to the court ruling, which was made on Friday.</p>
<p>The mines ministry has justified the blanket stoppages, saying on several occasions that they are needed to save lives.</p>
<p>With an unforgiving geology, South Africa is home to the world&#8217;s deepest mines where workers labour up to 4 km (2-1/2 miles) beneath the surface.</p>
<p>Nevertheless, the industry had been making great safety strides, with mining deaths falling for eight straight years &#8211; until this year, with a spike in deaths that has raised red flags. ﻿</p>
<p> </p>


South Africa's mining chamber says court decision limits power of safety inspectors

<p>South African Paralympic gold medallist Oscar Pistorius has been moved to a prison better suited to his rehabilitation while serving a six year jail term for murdering his girlfriend, a prison service spokesman said on Monday.</p>
<p>Pistorius has been moved to the Atteridgeville correctional centre, on the outskirts of the capital Pretoria, from the nearby Kgosi Mampuru remand centre.</p>
<p>&#8220;The issue is about access to rehabilitation programmes,&#8221; department for correctional services spokesman Manelisi Wolela said.</p>
<p>&#8220;A remand detention facility has no rehabilitation programme because everyone there is assumed innocent and therefore cannot be subjected to rehabilitation programmes.&#8221;</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads5"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads4"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads3"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads2"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>The athlete, known as the Blade Runner for his carbon-fibre prosthetics, was treated for wrist injuries in August but prison services said he denied trying to kill himself.</p>
<p>Pistorius was sentenced to six years in prison in July after being found guilty of murdering his girlfriend Reeva Steenkamp on appeal last December.</p>
<p>The track star originally received a five-year sentence for a manslaughter conviction, that was upgraded to murder on appeal.</p>
<p>State prosecutors are challenging Pistorius&#8217; latest six year sentence, arguing it was too lenient as it was less than half the 15-years they sought.</p>
<p>Pistorius says he shot dead Steenkamp by accident after mistaking her for an intruder in his house.﻿</p>
<p> </p>


Pistorius moved to different prison for better rehabilitation

<p>Telkom SA, South Africa&#8217;s biggest fixed-line phone company, said on Tuesday its half-year profit rose 19.7 percent, buoyed by its mobile business and the consolidation of its enterprise division. </p>
<p>Headline earnings per share (HEPS) for the six months to the end of September rose to 336 cents from 280.6 cents a year earlier. Headline earnings are the main profit gauge in South Africa and exclude certain one-off and non-trading items.</p>
<p>Telkom, which is 40 percent government owned, has been struggling to boost its mobile business to offset the falling use of landlines. In 2015 it walked away from an acquisition of Cell C after the firms failed to agree on a price.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>The company, which launched its mobile phone business five years ago, said the mobile division contributed positively to core profit (earnings before interest, tax, depreciation and amortisation) for the first time.</p>
<p>Shares in the company jumped as much as 7 percent in early trade and were up 3.8 percent at 62 rand by 0730 GMT.</p>
<p>Operating revenue jumped 20.6 percent to 20.2 billion rand($1.4 billion) while net operating revenue was up 3.3 percent.</p>
<p>&#8220;The consolidation of Business Connexion, as well as the satisfactory performance of the company&#8217;s mobile business, drove revenue performance during the six months,&#8221; Chief Executive Officer Sipho Maseko said in a statement.</p>
<p>Telkom merged its business division with IT firm Business Connexion (BCX), which it acquired last year.</p>
<p>Mobile data revenue increased 43.2 percent to 1.01 billion rand from 711 million rand in 2015. Mobile voice and subscriber revenue rose 30 percent to 520 million rand from 400 million rand while active mobile users climbed 42 percent. Fixed-line voice usage and subscription revenue fell 4 percent.</p>
<p>&#8220;Our mobile business has been able to establish itself as a meaningful player in the market. We intend growing our scale in the mobile market through focusing on the post-paid and data market in which we are already making inroads,&#8221; said Maseko.</p>
<p>Telkom had a complete overhaul of its mobile services in the form of FreeMe, which includes free text messages and free phone calls to any network, the launch of new stores and lower prices for data.</p>
<p>The company declared an interim dividend of 131 cents per share.</p>
<p>($1 = 14.3059 rand)﻿</p>
<p> </p>


Profits in South Africa's Telkom climb in H1

<p>Africa Oil and its partners in Kenya will drill up to eight exploration and appraisal wells starting from December to boost proven resources and improve financing prospects for field development and an export pipeline, an executive said.</p>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads1"></div>
</div>
</div>
<div class="teads-inread">
<div>
<div class="teads-player" id="teads0"></div>
</div>
</div>
<p>The group, which includes Tullow Oil and Maersk, initially planned to build a single pipeline to connect Ugandan oil fields and the Kenyan project to Kenya&#8217;s coast, but Uganda opted to build its own pipeline via Tanzania.</p>
<p>Africa Oil Chief Executive Keith Hill told Reuters building a standalone pipeline for Kenya &#8220;makes us much more dependent on our own resources for justifying and financing that pipeline&#8221;, encouraging further drilling to firm up oil discoveries.</p>
<p>The South Lokichar Basin in north Kenya is now estimated to have 766 million barrels of recoverable contingent oil resources.</p>
<p>These are classed as 2C resources, covering proven and probable resources, while 1C covers proven resources.</p>
<p>&#8220;If we could get to a billion barrels of 2C and say 300-350 million of 1C those would give us a pipeline tariff and lending base which would work very well for us,&#8221; he said, without giving current estimates for 1C resources.</p>
<p>The latest drilling programme will begin with two exploration wells, the first to be spudded in early December, followed by two appraisal wells to make further assessments of existing finds. Depending on results, four more exploration wells will follow.</p>
<p>About one well a month will be drilled.</p>
<p>Hill, speaking from the United States, said he would have &#8220;really high confidence that both those thresholds&#8221; for 2C and 1C resources would be achieved if all eight wells were drilled.</p>
<p>The partners aim to secure a final investment decision for the Kenyan project by late 2018, with full production expected to start about three years later, he said.</p>
<p>Kenya plans to start small-scale production in 2017, involving trucking about 2,000 barrels per day to the coast.</p>
<p>Full-scale projection requires a 890 km (560 mile) pipeline, costing about $2.1 billion.</p>
<p>The government said last month it aimed to sign a joint development deal for the pipeline soon.</p>
<p>Tullow has a 50 percent stake in the Kenya project, while Africa Oil and Maersk each own 25 percent of the two blocks where discoveries were made in 2012.﻿</p>
<div></div>
<p> </p>


Drilling to begin in Kenya with Africa Oil & partners

<p>Botswana has changed its consumer price index base year to 2016 from 2006 and modified how it calculates inflation to factor in changes in consumption patterns, a Statistics Botswana official said on Tuesday.</p>
<p>The changes are expected to be factored into the October CPI figures due out this week, acting manager of national accounts and prices Phaladi Labobedi said.</p>
<p>New products in the CPI basket included tablets, USB flash drives and second hand cars. Rebasing and the change of weightings and products would not have a significant statistical impact, he said.</p>
<p>Botswana&#8217;s annual consumer inflation was 2.8 percent in September.﻿</p>
<p> </p>


News

Irregular South Africa government expenditure up 80 pct

Freeport wraps up $2.65 bn Congo mine sale

Africa's most visited cities

Africa's food market could be worth US$1trn in 15 years, this is how…

Humanitarian help needed for about 14 milliion Nigerians

Zimbabwean lawyers take Mugabe to court over bond notes

Ericsson bets on fast-growing broadband demand in Africa

Congo state miner signed over royalties to Israeli billionaire

Exxon in negotiations with Chad over record $74 bln fine

Top-rated analyst gives his investment view on one of S.A's most anticipated listings: Dis-Chem

Dis-Chem attracts billions ahead of Friday's listing

The rise of Mauritius: Africa's fastest growing wealth market

South Africa's mining chamber says court decision limits power of safety inspectors

Pistorius moved to different prison for better rehabilitation

Profits in South Africa's Telkom climb in H1

Drilling to begin in Kenya with Africa Oil & partners

Botswana changes consumer inflation index

News Tips

Advertise With Us

News

Irregular South Africa government expenditure up 80 pct

Freeport wraps up $2.65 bn Congo mine sale

Africa's most visited cities

Africa's food market could be worth US$1trn in 15 years, this is how…

Humanitarian help needed for about 14 milliion Nigerians

Zimbabwean lawyers take Mugabe to court over bond notes

Ericsson bets on fast-growing broadband demand in Africa

Congo state miner signed over royalties to Israeli billionaire

Exxon in negotiations with Chad over record $74 bln fine

Top-rated analyst gives his investment view on one of S.A's most anticipated listings: Dis-Chem

Dis-Chem attracts billions ahead of Friday's listing

The rise of Mauritius: Africa's fastest growing wealth market

South Africa's mining chamber says court decision limits power of safety inspectors

Pistorius moved to different prison for better rehabilitation

Profits in South Africa's Telkom climb in H1

Drilling to begin in Kenya with Africa Oil & partners

Botswana changes consumer inflation index

News Tips

Advertise With Us

Newsletters