News and economy
How low can South Africa go in 2017?
Some analysts say all the way to junk (but there’s some good news)
S&P is likely to downgrade South Africa’s sovereign credit rating to junk status by mid-2017, according to analysts, translating into higher interest payments, a weaker rand and higher cost of living for South Africans. The country was spared a downgrade at the last review but remains just one notch above junk. There is some good news for SA though — manufacturing output rose, a somewhat surprising, 2.9% year on year in November 2016 after a 2.7% decline in October and projections are that there will be a maize surplus this year after last year’s drought-induced deficit. Meanwhile, President Jacob Zuma has signed several financial bills including some on tax and insurance into law.
A mining industry watchdog is demanding Nigeria’s state oil company, Nigerian National Petroleum Corporation (NNPC), settle a total sum of $4.977 billion in withheld public revenues. In related news, the NNPC announced that the Kaduna, Port Harcourt and Warri refineries had resumed production of kerosene and diesel. Nigeria’s oil minister is prioritizing revamping local refineries.
The government of Kenya is seeking to raise at least $1.05 billion through syndicated loans to plug a budget deficit. The World Bank projects the deficit will grow from 7.2% of GDP in 2015–16 to 9.6% in the 2016–17 financial year.
Namibia’s annual consumer inflation was unchanged at 7.3 percent year-on-year in December while Angola’s inflation quickened to 41.95% year-on-year in December from 41.15% in November.
Corporate news
Woolworths had a tough Christmas season. Overall sales increased by just 6.7% compared with the prior year. The retailer expects first-half profit to drop by between 2.5 percent to 7.5 percent.
Glencore can go ahead to acquire an additional stake in the Democratic Republic of Congo’s Mutanda Mining project. The mining giant owns 69% of project and the rest is held by Israeli billionaire Dan Gertler’s Fleurette Group.
The government of Senegal has imposed a new cement tax of $4.84 per ton of cement. The move will affect Dangote Cement, owned by Nigerian billionaire Aliko Dangote, which operates one of three cement manufacturers in the country.
