Ghana hits Fitch for doubting its deficit-reduction plan

Ghana's finance ministry criticised the Fitch ratings agency on Thursday for saying a deficit-reduction plan outlined in last week's annual budget was not aggressive enough and risked missing its target.

Ghana President

   Fitch downgraded Ghana's sovereign rating on Oct. 17 to B from B+ over concern the country was not doing enough to tackle a budget deficit that surged to 11.8 percent of gross domestic product in 2012.
   Ensuring macroeconomic stability is vital for President John Mahama's government as it seeks to bolster the West African country's reputation as one of the continent's most dynamic economies. Ghana has outlined a multi-year plan to reduce the deficit to 6 percent but acknowledges it is likely to overshoot its first target, which was to reach 9 percent in 2013.
   "We disagree with Fitch Rating's position that the consolidation measures announced in the budget will not effectively address the Ghana fiscal challenges experienced in the past two years," a finance ministry statement said.
   "The view by Fitch Ratings that Ghana's credit-worthiness has been eroded is questionable. Ghana does not have any debt- servicing problems. All debts are honoured whenever they fall due," the statement said.
   A shortfall in non-oil imports and a domestic energy crisis were the main reasons Ghana's finances were expected to slip in 2013, the government statement said. It added that medium-term Ghana's prospects for fiscal stability were good.
   Fitch's statement on Monday said it did not think the budget plan to reduce the deficit to 8.5 percent in 2014 would effectively address the deterioration in government finances over the past two years.
   Ghana produces gold, cocoa and oil, but Fitch also cast doubt on the government's ability to expand its revenue base. The agency noted that Finance Minister Seth Terkper's budget pushed back by one year to 2016 the date for consolidating the deficit to 6 percent.

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Asia Rice-Vietnam prices jump, Thai price widens on weaker baht

 Rice prices in Vietnam stand near their highest in nearly a year, fed by hopes the country could win contracts to supply 500,000 tonnes of the grain to the Philippines, while prices in Thailand have widened as political protests took a toll of its currency, traders said on Wednesday.

A Rice plantation

   If Vietnam wins Manila's rice tender, prices in Thailand could soften as its harvest gathers pace. But Vietnam's higher prices may prevail only briefly, since the entire Philippine volume will not have to be delivered this year, traders said.
   Vietnam's 5-percent broken rice rose on Wednesday to $415 to $425 a tonne, free-on-board Saigon Port, nearing a one-year high after its bid was below rival offers from Thailand and Cambodia in the Philippine tender.
   The variety was last offered at $440/tonne on Dec. 5, 2012.
   The 25 percent broken rice also increased to $385 to $390 a tonne, FOB basis, from $375 to $380 last Wednesday. This week's price is the highest since Jan. 2, 2013 when the variety stood at $390 to $395 a tonne, based on Reuters data.
   "Prices have been rising after the tender, while warehouses have sold much of their stocks to China, leaving litte grain available," a trader at a European firm in Ho Chi Minh City said.
   The first shipment to the Philippines must be at least 120,000 tonnes and arrive by Dec. 31, though the rest could be delivered early in 2014, Manila's grain procurement agency, the National Food Authority, has said.
   "We will have to wait until early December, when the market realises the actual need for loading, and then prices can stabilise," the trader in Ho Chi Minh City said.
   Rising prices have prompted other buyers to hold back on purchases, traders in Vietnam said.
   Vietnam's exports of rice in the period from January to November have dropped 16 percent from a year ago, to 6.3 million tonnes, the government said on Tuesday.
   But the export volume excluded a figure of 1.2 million tonnes sold across the land border to China, according to Vietnamese industry officials' estimates.
   Last year Vietnam shipped a record volume of 8.02 million tonnes of rice, retaining its rank as the world's No. 2 exporter, while India took the top spot, dislodging Thailand to third place.
   Thailand's common grade 5 percent broken rice widened to $410 to $420 per tonne this week, due mainly to a weaker exchange rate, against $420 a week ago, before grain harvested in the country's main 2013/14 crop floods the market this month.
   Thailand's central bank unexpectedly cut its benchmark interest rate on Wednesday, saying political tension was affecting investor confidence and there was no sign of exports recovering. The baht fell after the move to 32.10 per dollar, its weakest since Sept. 11.
   "The protests have caused the exchange rate to become weaker, so it looks as if the prices will continue to be cheaper at this point," a Thai trader said.
   He said sales of parboiled rice to Africa also provided support to Thai rice prices.
   Last week traders said 10,000 tonnes of Thai parboiled rice were sold to Benin and Nigeria. They said the demand would not boost prices in the long run, due to rising supply.

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Foreign holdings of Nigerian bonds surge nearly fivefold in a year

Foreign investors' holdings of Nigerian bonds swelled nearly fivefold to an estimated $5.4 billion in the year after the country's inclusion in a benchmark JP Morgan local currency bond index, according to figures obtained by Reuters.

DMO director, Nwankwo

   Africa's second-biggest economy joined JP Morgan's Government Bond Index-Emerging Markets (GBI-EM) on October 1 last year, becoming the second African country after South Africa to be included in the index, which has $220 billion in assets under management benchmarked against it.
   At the end of September 2012, offshore investors held approximately $1.2 billion in Nigerian bonds, which jumped to around $5.4 billion as of September 30 this year, according to figures provided by a market source who asked not to be named.
   Foreign holdings of Nigerian Treasury bills, already popular before the inclusion, increased during the same period to $6.2 billion from $3.9 billion.
   Five Nigerian bonds are part of the GBI-EM, which does not include Treasury bills, up from three initially.
   Africa's top crude oil producer now has a weighting of just under 2 percent in the index. It also joined the Barclays Emerging Market Bond Index in April this year.
   The inclusion of Nigeria in global bond indices has raised the visibility of one of the continent's most developed debt markets among offshore investors. Increased foreign inflows have helped stabilise the naira while enabling the country to diversify its investor base and reduce its borrowing costs.
   But growing foreign participation could also heighten Nigeria's vulnerability to changes in international investor sentiment, especially once the U.S. Federal Reserve begins tapering its quantitative easing programme.
   FIXED INCOME OVER EQUITIES
   While foreign inflows into the equities market have traditionally exceeded fixed income inflows, the data indicates that the latter now dominate.  
   Foreign bond and T-bill holdings, at $11.6 billion, now represent around a quarter of Nigeria's debt stock, more than double the proportion in September 2012. Nonresident equity holdings stood at $10.3 billion as of September 2013.
   In South Africa, nonresident holdings of government bonds reached 38 percent of its debt stock this year, a threefold increase since 2007.  
   Analysts at FBN Capital quoted Nigeria's Debt Management Office (DMO) last week as saying foreign holdings of government debt, including T-bills, had reached $5.1 billion at the end of 2012, compared with $500 million at the start of that year.
   Senior officials at the DMO did not respond to requests for comment on what the latest figures were.
   JP Morgan said its prediction that Nigeria's inclusion in the GBI-EM index would attract at least $1.5 billion into its bond market will have been easily surpassed.
   "With $220 billion benchmarked to the GBI-EM and a Nigeria weight of 2 percent, we estimate about $4 billion in benchmarked investor money in Nigerian bonds at the moment," said Giulia Pellegrini, JP Morgan strategist for sub-Saharan Africa.
   Investors have been attracted to Nigeria's bond market due to the country's improving macroeconomic fundamentals and high yields relative to other GBI-EM members, said Pellegrini.
   The average weighted yield on Nigerian bonds was 12.74 percent as of October 31, according to JP Morgan, while those of index peers Mexico and South Africa were 6.01 percent and 7.9 percent respectively.
   But Nigeria was also touched by the market volatility after the Fed indicated in May it would begin scaling back its bond buying stimulus.
   Foreign bond and Treasury bill holdings fell to $11.8 billion in June from a peak of $13.7 billion the previous month, the data indicates, though they have since risen.
   Fears of increased spending ahead of presidential elections in 2015 and the likely departure next year of central bank governor Lamido Sanusi at the end of his term may moderate demand for Nigerian debt in the coming months, Pellegrini said.
   "Looking into 2014, international investors' appetite for Nigerian local bonds may further moderate on the expectation of Fed QE-tapering and, domestically, a possibly looser fiscal stance, the expected change in leadership at the central bank and the 2015 elections coming closer," she said.

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Ecobank in row over anonymous email, hacking allegations

 Pan-African lender Ecobank has sued a top executive who left the company this month, naming him in a civil complaint in Togo as the author of an anonymous email accusing Chief Executive Thierry Tanoh of mismanagement.

Ecobank CEO, Tanoh

   The executive, David Lawson, denied to Ecobank that he wrote the email and said he had been unfairly dismissed. He accused Ecobank executives including Tanoh of hacking his phone and email account in a fruitless search for evidence against him. The company denies wrongdoing.
   The row comes as Ecobank tries to shore up confidence in its governance after a Nigerian industry watchdog began investigating the way it reported financial results. The bank's chairman quit last month, saying it wasn't appropriate for him to stay given the company's ongoing reviews of governance.
   Ecobank has been viewed by investors as an African success story for its strong growth and expansion beyond its Togo base into 33 African countries. It made record profits last year.
   One member of Ecobank's board told his colleagues in an email seen by Reuters that Lawson's hacking allegations were a cause for concern and could get the bank into trouble.
   Lawson, who left as head of strategy on Nov. 8, was a member of the Group Executive Committee that runs Ecobank and reports to its board.
   A spokesman for Ecobank Transnational Incorporated (ETI), as the bank is officially known, declined to discuss the circumstances of Lawson's departure.
   Lawson told Reuters on Monday: "In the panel's attempt to implicate me in this affair ...(it) resorted to the illegal acts of phone tapping, email hacking, stalking and invasion of privacy".
   He said that at a disciplinary hearing about the email, fellow executives pressed him repeatedly to name board members who they suspected of being his accomplices in the matter. He called the hearing an "illegal kangaroo court".
   Lawson said he had emailed Ecobank's executive committee and board on Nov. 11, stating that he had a recording of the disciplinary hearing that showed the committee discussing details about him and his communications that it could only have obtained by hacking his email and bugging his phone.
   
   LAWSUIT SAYS EMAIL TRACED TO GHANA CYBERCAFE
   The bank's suit says Lawson wrote the anonymous email to senior executives on Aug. 31 accusing Tanoh of paying himself an inflated bonus for work done in the months before he took office at the start of this year.
   CEO Tanoh, a former vice president of the World Bank's International Finance Corporation, said in September he was forgoing any bonus as part of efforts to restore confidence given the Nigerian investigation.
   The Aug. 31 email, which is entitled "Major corporate governance issues at Ecobank" and has been seen by Reuters, said Ecobank was "at risk" because of poor leadership.
   It was sent from a cybercafe in Ghana and police there have identified Lawson from a security video at the cafe at the time the email was sent, Ecobank said in its lawsuit.
   The First Class Tribunal of First Instance in Togo's capital, Lome, has adjourned the case until Feb. 14.
   A South African member of Ecobank's board, Sipho Mseleku, contacted other board members on Nov. 11 to express concern over Lawson's hacking allegations against the company.
   "Such invasion of privacy is not only illegal but also criminal. This reminds me of Apartheid days in South Africa," Mseleku said in an email seen by Reuters.
   "This is likely to put the institution in further trouble. The institution cannot solve problems through illegal means," Mseleku said. He did not respond to a request for comment and his email did not state explicitly that he believed Lawson's hacking allegations were accurate.
   The Ecobank spokesman, Jeremy Reynolds, confirmed Mseleku's email and said: "I can give you a categorical denial that there has been any phone tapping or email hacking". Reuters was unable to determine how other board members responded to Mseleku's email.

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Nigerian inflation could fall to 5 pct by end of 2015-c.bank

Nigeria's central bank hopes to meet its longer term inflation target of 5 percent by the end of 2015, but remains concerned about a possible surge in fiscal spending ahead of elections that year, Deputy Governor Kingsley Moghalu said on Tuesday.

CBN Governor, Sanusi

   Inflation in Africa's top oil exporter is at a five-year low of 7.8 percent and the central bank recently lowered its inflation target for next year to between 6 and 9 percent.
   However, it held interest rates at 12 percent a week ago due to concerns about the inflationary impact of pre-electoral spending.
   The bank had previously stated its goal of reducing inflation to 5 percent in the medium to long term but had not given a timeframe.
   "We certainly hope to reach the 5 percent target by the end of 2015 (or) 2016," Moghalu told Reuters on the sidelines of an event to launch his new book, "Emerging Africa".
   Moghalu said a rate hike was not inevitable but the bank wanted to leave the option open as Nigeria gets closer to the 2015 polls seen as likely to loosen the fiscal purse strings.
   "If we see huge pre-election spending, if we begin to see supplementary budgets, if we begin to see things that make it clear that money supply will increase...then we would have to consider the possibility of a rate rise," he said.
   While increased foreign portfolio investment has helped support the naira, the bank does not want these inflows to dominate Nigeria's foreign exchange reserves, Moghalu added.
   Foreign investors' holdings of Nigerian bonds swelled nearly fivefold to an estimated $5.4 billion in the year after the country's inclusion in JP Morgan's benchmark GBI-EM local currency bond index, according to figures obtained by Reuters. [ID:nL5N0JA21O]
   Holdings of Nigerian debt, including Treasury bills, by offshore investors reached $11.6 billion as of September 2013, while nonresident equity holdings stood at $10.3 billion.
   "We don't want too much of our foreign reserves to be portfolio flows but we are not opposed to portfolio flows because they have been helpful in backing up the exchange rate," Moghalu said.
   The bank is studying mechanisms to mitigate the risk of significant capital outflows should the U.S. Federal Reserve start scaling back its quantitative easing programme, he added. He declined to give further details.
   Addressing journalists earlier he said monetary policy was made more difficult by Nigeria's singular dependence on oil.
   Exports of oil and gas account for around 80 percent of government revenues and 90 percent of foreign exchange.
   "The value of the currency is not backed up by the production of concrete manufactured goods," he said.
   "Continued reliance on oil just makes the country so vulnerable to exogenous macroeconomic shocks."
   Growing shale oil production in the United States and new oil discoveries in other African nations like Ghana, Kenya and Uganda would only make Nigeria more vulnerable, he suggested.

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Nigerian T-bill yields fall slightly

 Yields on Nigeria treasury bills fell marginally by around 0.15 percentage points across all tenors at a primary auction last week, where the central bank sold 99.93 billion naira ($630.04 million) worth of the debt with 3-month to one year maturities.
   The central bank sold 20.64 billion naira in 91-day treasury bills at 10.7 percent, 15 basis points lower than the 10.89 percent it attracted at the previous auction on Nov. 6.
   A total of 25 billion naira in the 182-day paper was sold at 11.45 percent against 11.60 percent previously, while 54.29 billion naira in the 364-day paper was sold at 11.64 percent compared with 11.8 percent previously.

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Thailand offers generous terms on $2.4 bln rice bond

Thailand launched a 75 billion baht ($2.36 billion) bond on Monday that it needs to fund rice subsidies, offering generous terms as it tries to avoid adding fuel to protests in Bangkok.
   The government needs the money to pay rice growers, a traditional bastion of support that is at risk as farmers have not been paid for their grain since the subsidy scheme was renewed at the start of October.
   About 1,000 anti-government demonstrators forced their way into Thailand's Finance Ministry on Monday and protest leaders called for the occupation of government buildings in an escalating bid to topple Prime Minister Yingluck Shinawatra.
   The state Bank of Agriculture and Agricultural Cooperatives (BAAC) will use the bond, its biggest ever, to pay farmers for rice bought at above market prices in a subsidy scheme that has cost the government 680 billion baht so far.
   But it was not clear whether it would be able to sell the entire amount on concerns over the cost of the rice scheme and given the political uncertainty.
   Underwriters set early price guidance of 31 to 39 basis points over comparable Thai government bonds, according to IFR Markets, a unit of Thomson Reuters.
   To attract investors the issue also specifies the government will pay the principal and the interest, unlike BAAC's other outstanding state guaranteed bonds, IFR said.
   "I'm not sure if the government can successfully issue this, there's a lot of political concern and the issue size is quite big," said a fund manager with the domestic units of an international asset management firm.
   "Normally, 40 basis points over government would be okay but with the situation now?"
   Thailand's finance ministry said last week it would borrow from banks or allow them to bid on the unsold portion if institutional interest fell short.
   BAAC, which funds the rice scheme, has sold about 123 billion baht ($3.9 billion) of debt this year but had to cancel three auctions last month.
   Chularat Suteethorn, director general of the Public Debt Management Office (PDMO), said demand for the bond was "so far, so good." Asked whether BAAC would pull the bond given the demonstrations, Chularat said it was too early to say.
   The three-year bond, due November 2016, will be used to pay for the main harvest while a second smaller issue will be needed for the subsequent crop. BAAC is offering the bond at a price guidance of 3.45 percent to 3.53 percent, IFR said.    
   "I've talked to other fund managers and they also think although the bond is guaranteed by the government, they don't want to support the rice buying scheme because it's not transparent," said a bond dealer at a domestic bank.
   Thailand buys rice at 15,000 baht a tonne, well above market rates. The subsidies are popular among farmers whose support swept Shinawatra to power in 2011 in a landslide election.
   They are the cornerstone of economic policies aimed at lifting rural incomes to stimulate consumption in the mould of her brother, ousted prime minister Thaksin Shinawatra. He funneled money into villages through cheap loans and a debt moratorium for farmers while in power from 2001 to 2006, creating a knock-on effect on the whole economy.    
   In the secondary market, the yield on three-year government bonds rose 11 basis points to 3.26 percent on Friday, partly in response to the BAAC offer. It was at 3.23 percent on Monday.

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Nigerian growth quickens in Q3, oil output recovers

Nigeria's economic growth quickened to 6.8 percent year-on-year in the third quarter, while oil output in Africa's biggest producer recovered but remains well below capacity, statistics showed on Monday.

Nigeria finmin, Okonjo-Iweala

Africa's second largest economy grew faster than the 6.18 percent in the second quarter this year due to a strong performance in the agriculture, construction and telecommunication sectors, the national bureau of statistics said in a report.
The OPEC-member's crude oil output rose to an average of 2.26 million barrels per day (bpd) in the third quarter, up from 2.11 million bpd in the second quarter, but down on the 2.52 million bpd produced in the third quarter last year.
Widespread oil theft and pipeline outages in the restive Niger Delta have cut up to 400,000 bpd from oil production this year. Oil exports account for 80 percent of government revenues and 95 percent of foreign exchange earnings.
Nigeria is growing as an investment destination due to its huge potential consumer population of almost 170 million and improved fiscal and monetary stability.

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South Africa's Nampak buys Nigerian packaging plants for $301 mln

South Africa's Nampak Ltd agreed on Monday to pay $301 million to buy a Nigerian beverage can manufacturer plus an option to purchase a plastic packaging facility.
The acquisition of Alucan Investment Ltd forms part of the packaging firm's stated intention to boost sales from outside its home market.
Nampak has said it aims to grow its sales contribution from the rest of Africa to 35 percent from about 20 percent now.
Under the deal, Nampak has a 10-year option to buy related company involved in rigid plastic packaging in Nigeria, if and when the owner decides to sell.  
The company also said it was considering the expansion of its Angolan can manufacturing facility to meet growing demand in the oil-rich southern African country.
Alucan Investments Ltd makes cans for the beer, malt and the soft drink industry with capacity to make 1.1 billion cans per year.
Shares in Nampak rose 3.5 percent to 31.83 rand by 0805 GMT, outpacing a 0.4 percent rise in the JSE All-share index

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Oil prices under threat from demand pressures in coming months: IEA

The global oil market is currently well supplied but growing demand
pressures and ongoing disruptions in some OPEC producing countries could soon
reverse a recent spate of softer oil prices, the International Energy Agency
said Thursday.
     In its latest monthly oil market report, the IEA also raised its
estimates for world oil demand growth this year and warned that oil demand is
poised for a seasonal increase in the coming months.
     "For now global oil markets seem well supplied," the IEA said. "(But) if
seasonal cycles in crude and product demand are any guide, the recent easing
of prices may be relatively short-lived."
     Noting a softening in global oil prices since September, the IEA
said that the impact of surging North American production and sharply lower
refining runs may soon be reversed. Front-month Brent crude was trading under
$108/b earlier Thursday, a fall of more than $8/b since recent September
highs. In New York, NYMEX crude futures was trading about $93.50/b, close to
$17/b lower than in early September.
     End-user demand is now on the verge of a seasonal ramp-up, and refinery
crude throughputs are poised for a "steep" rebound in November and December,
the IEA said.
     "Meanwhile production problems in Libya and Iraq, among others,
continue to relentlessly fester, and may prove more market-supportive in a
context of rising demand than they have been during the recent season," the
IEA said.
     The IEA raised its global oil demand growth estimate by 45,000 b/d to 91
million b/d for 2013 to reflect signs of higher-than-expected oil product
deliveries, particularly in Europe. It said several countries accounted for
adjustments to demand figures for August, led by Chinese Taipei, the UK,
Turkey and Belgium.
     As a result, the 2013 demand growth forecast was also raised by 50,000
b/d to 1 million b/d.
     For 2014, global oil consumption is expected to average 92.1 million b/d
in 2014, little changed from last month's report, but the forecast growth rate
was trimmed by a marginal 30,000 b/d to 1.1 million b/d, the IEA said.

     RECORD NON-OPEC SUPPLY
     The IEA said global supplies in October rose 600,000 b/d to 91.8 million
b/d, with a surge in non-OPEC output only partially offset by lower OPEC
production.
     Helped by booming US shale output, non-OPEC supplies in October jumped
month on month by 740,000 b/d to reach a record 55.53 million b/d, the IEA
said.  
     On Wednesday, the US Energy Information Administration said the country's
domestic production in October exceeded its imported crude for the first time
in 18 years, hitting 7.7 million b/d.
    Including biofuels, the US is estimated to have already surpassed Russia
as the world's biggest non-OPEC liquids producer and the IEA believes the US
will replace Saudi Arabia as the world's biggest oil producer in 2015.
     Based on the latest production data, the IEA raised its non-OPEC supply
growth estimate for 2013 by 100,000 b/d 1.3 million b/d. The 2014 forecast was
increased slightly to 1.8 million b/d.
     OPEC crude oil supply in October fell for the third month running, down
105,000 b/d at 29.89 million b/d, with Saudi cutbacks leading the downturn.
     Saudi Arabia's oil production averaged 9.75 million b/d in October, down
370,000 b/d from the previous month and below the 10 million b/d mark for the
first time in three months, the IEA said.
     As a result of the lower production, the IEA estimated OPEC's effective
spare capacity at 3.32 million b/d in October compared with 2.90 million b/d
in September.
     Iraqi crude oil output partially recovered in October, up 150,000 b/d at
2.97 million b/d, but the IEA noted that worsening security problems in recent
weeks will likely hit output this month.
     Meanwhile ongoing security related setbacks in Libya and Nigeria are
continuing to hamper output from the OPEC producers.
     Libyan oil production was estimated to have growth by 150,000 b/d to
average 450,000 b/d in October but fell again to 250,000 b/d in early November
amid worsening political turmoil and labor disputes, the IEA said. Nigerian
output was estimated to have fallen slightly in October, down 55,000 b/d to
1.99 million b/d.
     The IEA also noted that OPEC ministers are expected to maintain their
formal 30 million b/d production ceiling originally agreed in January 2012
when they meet next week in Vienna.
   
     OIL STOCKS RISING
     The IEA said its "call" on OPEC crude was unchanged for the fourth
quarter and full-year 2013, at 29.6 million b/d and 30 million b/d,
respectively. The call for the first quarter of 2014 was also unchanged at
28.6 million b/d, which is 1.4 million b/d below the group's output target.
     On stocks, the IEA said OECD stocks rose counter-seasonally by 8.6
million barrels in September, reversing August's draw, to end the month at
2.67 billion barrels.
     The build was in contrast to the 15.5 million-barrel five-year average
draw for the month, the IEA said. Preliminary data points to a 7.6
million-barrels draw in total October oil inventories, weaker than the 16.0
million-barrel five-year average draw for the month, on the back of plunging
refined product inventories.
     The IEA also cut its forecast for Q4 global refinery crude by 555,000
b/d on "plummeting" European crude throughputs. Weak margins and seasonal
plant maintenance slashed European crude runs in October taking runs to their
lowest level since April 1989, the IEA said.
     European crude runs sank to 11.3 million b/d in September, their lowest
level since April 1991, the IEA said, noting the level was also some 1.1
million b/d below year-earlier levels.
     Preliminary data for the US, Japan and Europe suggest OECD runs slumped
by a further 1.3 million b/d in October, it said.
    Global refining throughputs for Q4 are now projected at 76.7 million b/d,
up 0.4 million b/d year on year

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Kenya cuts retail fuel prices for second month in a row

Kenya's energy regulator reduced retail fuel prices for petrol, diesel and kerosene for the second straight month on Thursday, a welcome respite for policymakers with inflation lying outside the government's preferred upper limit.

Fuel station

   Fuel prices have a significant impact on inflation in east Africa's biggest economy, where the economy depends heavily for diesel for transport, power generation and agriculture, while kerosene is used in many households for lighting and cooking.
   The Energy Regulatory Commission (ERC) cut the maximum price of super petrol in Nairobi by 3.40 shillings per litre to 108.87, while it lowered the price of diesel by 1.22 shillings per litre to 103.25.
   The price of Kerosene will fall by 2.22 shillings per litre to 82.79.
   Kenyan inflation slowed to 7.76 percent in the year to October from 8.29 percent a month earlier, but still hovers above the government's preferred band of 2.5-7.5 percent.
   The changes take effect on Nov. 15 and will be in force for a month. The regulator reviews domestic energy prices every month, with adjustments made depending on fluctuations in international energy prices.

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South Africa's vehicle transport workers go on strike

South African vehicle transport workers have gone on strike to press for higher wages, a union official said on Thursday, in the latest blow to an industry still reeling from crippling  stoppages in August and September.
   About 3,000 workers aligned to the South African Transport and Allied Workers Union (SATAWU) are demanding annual wage increases of 12 percent over a two year period but the industry is offering 10 percent for next year and 8 percent in 2015.
   Vehicle transport workers move vehicles by road to ports for export and to dealerships around the country.
   The strike will affect the local distribution operations of car makers BMW, Volkswagen AG, Nissan and Mercedes-Benz while also impacting on vehicle imports into South Africa.
   A protracted strike in the industry will affect year end vehicle sales.
   The auto industry, which accounts for 6 percent of GDP, has been hit by strikes in recent months and BMW said in October the "inherently unstable" labour situation in Africa's biggest economy had forced it to freeze expansion plans.

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Nigeria's "bad-debt bank" AMCON posts 2012 after-tax loss of $5 bln

Nigeria's state-backed "bad bank" tasked with absorbing lenders' bad debts, AMCON, reported a 2012 loss of 822.9 billion naira after taxes on Wednesday, three years after it was formed in the aftermath of a financial crisis.

AMCON boss, Chike-Obi

It was a substantial improvement on the after-tax loss of 2.37 trillion naira that the Asset Management Company of Nigeria posted as of December 2011.
But the loss was still equivalent to around a sixth of the annual budget of Africa's second-biggest economy.
AMCON, which expects to conclude by mid-2014 the re-privatisation of three banks nationalised after a 2009 financial crisis, said in its financial statement that the lenders had a combined worth of about 100 billion naira, representing about 5.7 percent of its assets.
The bank was set up to absorb bad debts left over from a financial crisis that nearly bankrupted nine lenders until the central bank spent about $4 billion to bail them out.
It said it purchased about 10,000 loans representing about 45 percent of its 2.85 trillion naira worth of total assets.
AMCON said it had restructured half of its portfolio of bad loans and that about half of those restructured assets were performing. It said it had collateral for the non-performing ones.
The bank said it had 300-400 billion naira of its assets in real estate, and about 200 billion in equity of both listed and unlisted companies.
AMCON has said it will retire 2 trillion naira worth of bonds to cut its liabilities by 35 percent and repay bondholders in December 2013 with cash and treasury bills.
The bank is seeking prospective investors to buy 100 percent of Enterprise Bank, the first of the three nationalised lenders to be put up for sale.

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