Africa in brief

Angola's deficit to shrink by end of 2018

Angola’s fiscal deficit will have shrunk to less than 1% by the end of the year, while its battered currency has reached equilibrium thanks to an economic stabilisation programme, central bank Governor Jose de Lima Massano said on Monday.

With oil accounting for more than 90% of its exports, Angola’s economy has been battered since the 2016 oil price tumble, and falling production has recently added to its woes. Faced with poorer than expected economic growth this year, the country sought financial support from the International Monetary Fund in August.

However, the macroeconomic stabilisation plan launched since the new government under President João Lourenço came to power just over a year ago had helped improve the situation, Massano told Reuters in an interview. The fiscal deficit, which stood at 7% at the end of 2017, will have shrunk to around 1% by year-end, he said.

“We allowed the currency to depreciate by over 46% and when we started the year our currency was one of the top five over-valued currencies,” Massano said on the sidelines of the FT Africa Summit in London.

Mozambique signs oil exploration agreements

The Mozambican government said on Monday it had signed oil exploration agreements with US energy firm Exxon Mobil and Russia’s Rosnef

Mozambique’s National Petroleum Institute, an energy regulator in the southern African country, said the government was preparing to sign similar agreements with South Africa’s Sasol and Italy’s Eni.

The agreements could lead to as much as US$700 million of investment in Mozambique as the energy firms are expected to drill a minimum of 10 wells, eight in deep water and two onshore, the institute added.

The firms earlier won oil tenders as part of Mozambique’s fifth licensing round in 2014.

Heavily-indebted Mozambique is hoping its oil and natural gas resources will help it recover from a debt scandal that saw it cut off from multilateral and foreign donors.

More than US$30 billion is expected to be invested in Mozambique’s gas sector to build capacity to produce 20 million tonnes per year of liquefied natural gas.

-Nampa/Reuters

Zimbabwe miner to sue central bank

Zimbabwe’s gold miner RioZim on Tuesday said it would take legal action to force the central bank to pay it in US dollars for part of its output, signalling impatience by mining companies over acute dollar shortages afflicting the economy.

The shortages have worsened since 2016 and are the biggest concern for foreign investors seeking a foothold in Zimbabwe, which is trying to recover after 20 years of economic hardship under former leader Robert Mugabe.

RioZim, which operates three gold mines, a nickel refinery and holds minority shares in the Rio Tinto-run Murowa Diamonds, said the Reserve Bank of Zimbabwe (RBZ) had for some time failed to pay US dollars to the miner, breaching its own policy.

The RBZ governor could not be reached for comment because he was travelling to Indonesia for World Bank and IMF meetings.

Mines sell their gold to the RBZ-owned Fidelity Printers and Refiners, which then export it. According to RBZ policy, gold mines, from October 1, can retain 30% of their dollar sales, down from 50% before that date.

-Nampa/Reuters

No need for government cash over next year by Eskom

South African state-owned power firm Eskom does not require government cash injections over the next 12 months, the country’s public enterprises minister Pravin Gordhan said on Monday.

Cash-strapped Eskom is critical to Africa’s most industrialised economy as it supplies more than 90% of its power but is also one of its most indebted state firms.

“They (Eskom) have got enough liquidity for the next year, and they don’t require any cash from the government side,” Gordhan told Reuters on the sidelines of the FT Africa Summit in London.

He added that job losses weren’t currently on the table at the power firm either.

-Nampa/Reuters