South Africa

MTN’s Nigeria fix promises longer-term headaches

2 Jan 2019

The African phone giant has paid $53 mln to settle an $8 bln dispute with Abuja. That looks like a cheap way of maintaining good relations in its most important market. But the speed of the resolution, and modest size of the penalty may encourage further interference.

East Africa will buck global great rift trend

20 Dec 2018

Twenty-five years after genocide, Rwanda’s economy is motoring sufficiently to need new markets. The potential inclusion of Ethiopia would make East Africa a single market of 250 million people. If it prospers, it would provide a useful counterpoint to global balkanisation.

Eskom creditors may yet share South Africa’s pain

17 Dec 2018

Plans to fix a $30 bln debt crisis at the state power group hurt everybody but bondholders. Besides a state bailout and tariff hikes, the utility wants to cut a third of its wage bill. Union pressure and weak government finances mean private lenders could have to take a loss too.

South African blackouts mask $30 bln power problem

6 Dec 2018

State giant Eskom is rationing electricity supplies while seeking debt relief from the government. Big staff cuts would shrink losses and help assuage nervous bond investors. That will be tough for President Cyril Ramaphosa, but may be the only way to keep the lights on.

Review: Why too much banking can hurt

9 Nov 2018

In African nations and elsewhere, excessive mineral wealth has imposed costs on ordinary people. Nicholas Shaxson argues that banking and financial markets can also be too much of a good thing. Read past the occasional harangue, and “The Finance Curse” makes an intriguing case.

Naspers’ Vision Fund-lite carries less baggage

5 Nov 2018

The South African internet giant’s $8 bln answer to SoftBank’s mega-fund is quietly taking shape. Besides shunning the limelight, the Cape Town-based firm also lacks Masayoshi Son’s Saudi connection. Some of its early punts haven’t done too badly either.

South African boring is once again interesting

2 Nov 2018

New rules for the Rainbow Nation’s struggling mining industry strike a decent balance. Making investors bear less of apartheid’s social legacy will stop the sector’s decline. Taking the affirmative action shackles off explorers might even create some much-needed growth.

South Africa offers markets a too-friendly face

9 Oct 2018

New finance chief Tito Mboweni is one of the country’s most respected black economists, and his decade at the helm of the reserve bank adds credibility to Cyril Ramaphosa’s government. Ties to Goldman Sachs, though, could make him a target for political criticism at home.

Mattress Firm is the stuff of retail nightmares

5 Oct 2018

The bed store owned by South Africa’s Steinhoff is filing for bankruptcy protection, and blame spreads wider than a king-sized duvet. Overexpansion, underpricing, predatory online rivals and Chinese dumping make for a fable about how retailers can fail even in a healthy economy.

Fastjet turbulence flags African continental drift

28 Sep 2018

The airline set up by easyJet founder Stelios Haji-Ioannou needs equity after Tanzanian intransigence. A bet on Africa’s growing middle class, it underplayed local resistance. Hostility to foreign capital means less investment, fewer cross-border firms and lower growth.

Trump lands too late to spoil China’s Africa party

26 Sep 2018

The U.S. president has come to recognise how far behind the country has fallen on the continent. Doubling development funding to counter cheap Chinese credit smacks of knee-jerkism. It’s also unlikely to thwart Beijing, while putting American taxpayers on the hook for $60 bln.

Naspers takes first step to shrinking Tencent gap

18 Sep 2018

The South African group is valued at a hefty discount to its $120 bln stake in the Chinese internet giant. Floating its African TV unit should therefore provide some relief to frustrated investors. To unlock more value, though, Naspers may need to shed its remaining operations.

Investec fund float could attract predators

14 Sep 2018

The Anglo-South African financial group is listing its asset management arm in London. Decent growth and increased focus should support a healthy valuation. With assets of 109 billion pounds, it may also make a choice morsel for a bigger rival.

South Africa slump comes at worst possible time

4 Sep 2018

The first recession in nearly a decade is a blow for President Cyril Ramaphosa. Barring a sharp recovery, it will be harder to control debt and push through reform. Jittery emerging market investors and an election in eight months put his credibility as economic saviour at risk.

China and Africa struggle to kick debt habit

3 Sep 2018

President Xi Jinping pledged another $60 bln to the continent while warning against the kind of binges that have led countries to default. Yet Africa shows no sign of restraint, and China’s lending remains opaque. Accusations of debt-trap diplomacy are likely to linger.

UK-Africa trade is tiny plaster for Brexit wounds

28 Aug 2018

Prime Minister Theresa May hopes deeper ties with the continent will help cushion the blow of leaving the EU. But UK trade with sub-Saharan Africa is less than 3 pct of what it exchanges with Europe. With Nigeria and South Africa in the doldrums, prospects for growth look slim.

South Africa has thin defense against Trump thump

24 Aug 2018

The U.S. president’s complaint about the killing of white farmers didn’t much rattle markets, but South Africa’s trade-dependent economy can’t afford a fight with the White House. The only comfort: leader Cyril Ramaphosa is more business-friendly than his ousted predecessor.

Steinhoff swaps sovereignty for a lifeline

19 Jul 2018

A debt deal with creditors means the scandal-hit retailer is close to removing the imminent threat of default. Lenders have to wait three years to get paid. But on paper they get a higher payout, a say on asset sales and returns that might otherwise go to shareholders.

U.S. salvo at Glencore has unintended consequences

12 Jul 2018

A request for details on anti-corruption practices wiped more than $6 bln off the commodities giant's value in a week, raising questions over its future. Yet action is not without a sting for Washington too - if it leaves China even more dominant in resource-rich trouble spots.

Steinhoff payout may test South Africa reform zeal

27 Apr 2018

Hedge funds piled into 1.6 bln euros of the failed retailer’s bonds betting that its healthy South African unit will honour them. The fallout from Steinhoff’s collapse may make a payout politically tricky, and challenge new President Cyril Ramaphosa’s market-friendly credentials.