Kenya Airways says tourism slump may have bottomed out

Annual pretax loss widens to 29.71 bln shillings
Airline picks Afrexim Bank to arrange financing
Shares fall 16 pct
Kenya Airways sunk deeper into the red in the year through March, sending its shares plummeting on Thursday, but CEO Mbuvi Ngunze said the tourism slump that sparked the losses may have bottomed out.
The airline, part-owned by AirFrance-KLM has faced rising debts due to new plane purchases and has been in the red for the past three years as Kenya's tourism industry was hammered by Islamist militant attacks in the country.
The carrier, one of Africa's largest, said its pretax loss widened to 29.71 billion shillings ($293 million) for 2014/15, from 4.86 billion shillings a year earlier, hurt by higher fleet and financing costs and an unrealised fuel hedging loss.
Passenger numbers rose 12.4 percent to 4.18 million, boosted by Jambojet, a low-cost carrier launched in April last year, but the impact was blunted by lower yields on passenger revenue.
The carrier said its planes are often not full and increased competition from Gulf carriers forced it to discount some of its fares.
Ngunze said leisure travel might start to pick up as Britain and some other countries had lifted warnings against travel to the Kenyan coast where many resorts are located.
"The leisure travellers particularly from Europe, with the adjustments in travel advisories, you'll probably see them in the back end of the year and into next year," he told Reuters after an investor briefing.
The airline has appointed Cairo-based African Export-Import Bank (Afreximbank) to arrange a $200 million bridging loan and advise it on long-term capital raising, he said.
"This financing is critical for us," Ngunze said.
Kenya Airways' shares plunged 16 percent in reaction to the results, and have now lost 50 percent in the past five months on mounting concern about its financial position.
Chris Kirubi, director of Kenyan investment firm Centum Investment Company and a shareholder in Kenya Airways, called for the airline to be de-listed from the stock market.
"You cannot run a business like this on loans. This is a totally under-capitalised business," he said during an investor briefing with the airline's management. He would not disclose how many Kenya Airways shares he owns.
The carrier is also selling seven older planes and some land and it expects to raise another $100 million from the sale. Total debts stood at 130 billion shillings at the end of March against a negative equity of 6 billion shillings.
"We had growth of the fleet which was not matched by revenue growth," Finance Director Alex Mbugua said, referring to the purchase of Boeing 787 Dreamliner planes, starting in 2013.
Kenya Airways plans to launch direct flights to the United States after U.S. President Barack Obama announced during his visit to Kenya at the weekend that the two countries were in talks on the issue. The talks are expected to conclude by September, Ngunze said.
Fleet ownership costs doubled to 25.93 billion shillings, mainly due to an impairment of 5.58 billion shillings from a writedown in the value of Boeing 777-200s aircrafts on sale.
The firm booked an unrealised loss of 5.78 billion shillings from its fuel hedging after the slide in the price of crude. ($1 = 101.4 Kenyan shillings)

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Shell cuts 6,500 jobs, slash capital spending on oil price

Royal Dutch Shell is cutting 6,500 jobs in Nigeria and at the rest of its global operations and will reduce capital spending by 20 per cent this year, as the oil company takes dramatic action in response to the plunge in oil prices.
The Anglo-Dutch group announced on Thursday its investment this year would decline $7bn from last year’s levels to about $30bn, a bigger drop than forecast just three months ago, as it axed and postponed new projects.
It expected to make further reductions to operating costs in 2016 after a 10 per cent fall this year.
The action comes amid savage cost-cutting and industry-wide moves to push back billions of dollars of spending on new projects following the collapse in crude prices over the last year. Some $200bn of spending on major oil and gas projects has now been deferred since the crude price began falling, a decline that accelerated when Opec opted not to cut output in the face of soaring US prodiction.
Shell reported a 37 per cent fall in second-quarter earnings to $3.8bn on a current cost of supplies basis excluding identified items — a measure of profits preferred by analysts. This compared with $6.1bn in the same quarter last year and beat analysts’ expectations.
The company pointed to improved refining margins and a strong downstream result, where profits more than doubled from $1.3bn to $3bn, that offset the impact of sharply lower crude prices — down now to $53 a barrel from last summer’s peak of $115.
Profits from exploration and production fell 78 per cent to $1bn and its Americas arm suffered a loss. Output declined 11 per cent to 2.7m barrels of oil equivalent a day from year ago levels.
In a statement updating investors on its proposed £55bn takeover of rival BG Group, Shell said that the deal was “on track” and the combined group would be reshaped on completion.
“We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery,” said Ben van Beurden, chief executive. “We’re taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders.
The reshaping of the combined group would include “reduced exploration spend, a fresh look at capital allocation in longer term plays, and asset sales spanning upstream and downstream. This should concentrate our portfolio into fewer, higher value positions, where we can apply our know-how with better economy of scale.”
The company warned that the oil price downturn could last “for several years”, taking a more bearish outlook on the crude price than only a few months months ago, and said its planning assumptions reflected “today’s market realities”. It saw the “potential” for a return to a $70 to $90 price in the medium term.
Shell said it anticipated a 6,500 reduction in staff and contractor job numbers in 2015 and forecast capital investment to be about $30bn, or $3bn less than it expected in April. The “pro-forma” budget for the enlarged group would be $35bn next year, less than projected previously.
This reflected “cost reductions, project cancellations and re-phasing of growth options”. It follows similar moves by other “supermajors” as they grapple with an industry downturn some have likened to the slump of 1986.
Shell said it would continue to “review both the ongoing projects under construction, and the medium term investment options, to balance returns, affordability and medium term growth potential.” Among the projects that are going ahead is Appomattox in the US Gulf of Mexico.
It expected asset sales to reach $20bn for 2014 and 2015 overall – and announced the sale of a one third stake in Showa Shell to Japan’s biggest second refiner Idemitsu for $1.4bn. The dividend stayed at 47 cents a share.
Analysts were upbeat, pointing to the strong contribution from Shell’s downstream operation – a common theme for the majors for whom the manufacture of refined oil product act as a hedge against lower crude prices – tougher cost control and the cuts to capital spending.
“It’s another strong beat,” said one. “The market will wait for the analyst presentation to take a final view on this. Shell will no doubt argue that the synergy numbers – and implied ‘breakeven’ oil price for the BG deal – are better than currently estimated.”
Shares in the group have under-performed those of rivals amid concern that Shell will struggle to make the BG deal work if oil prices stay low. Senior executives have responded by stressing to investors that more savings are to come and that the deal works at $70 as well as $90 a barrel.

CULLED FROM BUSINESSDAY

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Nigeria's Port Harcourt refinery restarts, product pipeline fixed

Nigeria's Port Harcourt refinery has started ramping up production following maintenance, state oil company Nigerian National Petroleum Corporation (NNPC) has said, a key development to help the cash-strapped country reduce costly fuel imports.
NNPC also said it had repaired a pipeline carrying gasoline to Lagos that it was forced to shut after an explosion last week near the town of Arepo in southwestern Ogun state.
Nigeria has a refining capacity of 445,000 barrels per day from three refining companies. An 18-month phased rehabilitation began in October 2014, meant to allow the refineries to keep running for most of the period.
But due to a lack of crude supplies from the state oil company, the whole system has been shut down since the last quarter of 2014. The private firm that delivers the feedstock by sea said NNPC stopped supplying them in November for unknown reasons.
The rolling upgrade is expected to finish around March 2016, a senior source at NNPC familiar with the matter said.
President Muhammadu Buhari has made revamping the refineries a priority after years of neglect under previous administrations.
Africa's biggest crude producer has been hit hard by the sharp drop in global oil prices last year.
EXPENSIVE IMPORTS
Buhari hopes to significantly reduce the country's dependence on expensive gasoline imports brought in via an expensive graft-ridden subsidy scheme and crude-for-product swap contracts that are being investigated for potentially short-changing the government.
The 125,000 bpd Warri refinery was the first to ramp up in early July and is expected to run at about 60,000 bpd, the head of NNPC refining said earlier this month.
The Port Harcourt Refining Co consists of two plants but only the newer one has resumed and will run at about 90,000 bpd of its 150,000 bpd capacity.
Most of Nigeria's refining capacity is in the oil-rich delta region but it has a northern plant in Kaduna, expected to restart towards the end of August. Only one of its two crude distillation units will run at about 30,000 bpd as the other requires foreign crude oil.
Combined output is expected to supply 8 million liters per day of gasoline or 20 percent of domestic demand in the near term.
The older plant at Port Harcourt with a 60,000 bpd is expected to restart towards year end, the NNPC source said.
Further ramp-ups will be hampered by dilapidated infrastructure. A 2012 report by the National Refineries Special Taskforce, citing consulting firm Aon Energy Risk Engineering, said nearly $9 billion would be needed to repair the supply and distribution chain across the country.

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Nigeria's securities regulator to crack down on errant traders

The new head of Nigeria’s Securities and Exchange Commission (SEC) has vowed to enforce tough new measures on those who flout capital markets rules in a bid to attract investors.
Weak regulation and impunity by offenders in the past has hampered growth with some operators witholding funds belonging to investors after transactions due to uneccessary delay in remitting their funds, leading to loss of confidence.
The commission last month suspended BGL Group, a stock broking firm after it was found guilty of witholding investors funds worth 5.8 billion naira ($29 million).
"We must operate within the rule of the game... any operator who cross the line will be sanctioned," Mounir Gwarzo, who was appointed director general in June to replace Arunma Oteh as head of the capital market in Africa's top economy, said on Wednesday.
Gwarzo said the commission was concerned about the downturn in the market and was doing everything possible to strengthen the market and boost local investors participation.
"We are not happy about the performance of the market, but we recognise the fact that the market is not insulated from happenings in the economy," Gwazo said.
Sub-Saharan Africa's second-biggest stock index has fallen progressively since June on falling global oil prices leading to depreciation of the local currency and introduction of tight control on the foreign exchange market by the central bank.
Some offshore investors have express concern that weak global oil price could lead to further fall in local currency and cause the erosion of their investment.
The regulator and the stock exchange are working out measures to further reduce transaction fees to boost investors interest in the capital market, the SEC director general said.

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S.Africa's Eskom says may import power from Mozambique

South African power utility Eskom could import some electricity from Mozambique to fill a supply gap in Africa's most advanced economy, a coal conference heard on Tuesday.
Willem Theron, business development manager of Eskom's southern Africa transmission group, said the state-run utility planned an extra 6,250 megawatts (MW) of power could be added to two new coal-fired plants, Medupi and Kusile.
"It is assumed that some of the power can be through imports," Theron told the conference in the Mozambique capital Maputo.
Theron said one possibility for electricity imports was Mozambique, which has enough supplies to build coal-based power stations, and Botswana.
Eskom is battling to keep the lights on in Africa's most advanced economy and frequently has to resort to implementing power cuts to prevent the grid from being overwhelmed.

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Nigeria's "bad bank" AMCON to publish list of loan defaulters

Nigeria's "bad bank" AMCON on Monday asked loan defaulters to immediately square their accounts or it would publish their names in line with a directive by the central bank.
    The central bank in April directed lenders to give bad debtors three months to square their accounts, otherwise they would be named in the media and barred from taking part in Nigerian currency and government debt markets.
    Asset Management Corporation of Nigeria (AMCON) warned bad debtors on Monday that if loans remained unpaid, it will take steps to recover the debts including by legal means. It advised debtors not to assume it will forgive their indebtedness.
    It also asked bad debtors to present restructuring plans, it said in a statement.
    AMCON was set up in 2010 to absorb non-performing loans in exchange for government bonds, after the central bank injected $4 billion to rescue nine lenders from collapse six years ago.
    The central bank has since set an upper limit of 5 percent for non-performing loan ratio for the industry. Before the 2009 bailout non-performing loans ratio stood in double digits.
    Top Nigerian commercial lenders including Stanbic IBTC, Diamond Bank, First Bank and Skye Bank, have all given notices to bad debtors to pay up.
    The bad bank this year said it had recovered 57 percent of bad debts, estimated around 1.8 trillion naira from over 12,000 debtors of commercial lenders in Africa's top economy.

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Nigeria gross govt revenues rise for 2nd month in June, offshore debt rises

Nigeria's gross government revenues rose for the second consecutive month in June to 485.95 billion naira ($2.44 billion), up 33 percent from May, the finance ministry said.
The total for distribution to the three tiers of government was 518.542 billion naira including a 6.33 billion refund by the state oil company, value-added tax of 64.99 billion naira and an exchange rate gain of 6.69 billion naira.
In May, Nigeria received 324.06 billion naira in revenues and distributed 409.35 billion naira between the federal, state and local governments.
The balance of the Excess Crude Account stood at $2.207 billion, up from $2.078 billion on June 23.
International oil prices rose at the end of April and benchmark Brent futures were sustained in the $60s a barrel before falling again into the $50s a barrel at the start of July.
Africa's biggest oil producer depends on oil sales for about 70 percent of its government revenues.
Anastasia Daniel-Nwoabia, permanent secretary of the finance ministry, said revenues were negatively impacted by a shutdown of pipelines feeding the Nembe and Forcados crude export terminals.
Shell declared force majeure on exports of the Forcados crude stream in early May due to leaks on the main pipeline. The force majeure was lifted in mid-July.
Meanwhile Nigeria's foreign debt stood at $10.32 billion in the first six months of the year, up 10 percent from $9.38 billion in the same period of last year, the Debt Management Office (DMO) said on Monday.
Offshore debt in naira terms showed a 39.1 percent rise to 2.03 trillion naira, due to a weaker currency which lost 20.9 percent during the period, the government agency said.
The DMO said domestic debt stood at 8.39 trillion naira ($43 billion) by end-June against 7.42 trillion naira a year earlier.

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Nigeria tech enclave springs up in Lagos suburb

At first glance, Yaba is like many other parts of Nigeria's sprawling commercial capital: a cacophony of car horns and shouting street vendors, mingling with exhaust fumes and the occasional stench of sewage.
But in between the run-down buildings in this seemingly inauspicious part of Lagos, a city of around 21 million, tech start-ups are taking root and creating a buzz that is drawing international venture capitalists and more established digital firms.
"They're all clustering in Yaba. The momentum is there," said Sim Shagaya, CEO of Konga, which has become one of Africa's biggest online retailers after being set up in 2012.
Konga's decision to move in 18 months ago was a major boost for Yaba, which draws on a pool of talent from the nearby University of Lagos and Yaba College of Technology.
African tech centres are a recent phenomenon that mix web business concepts borrowed from other parts of the world with start-ups focused on African problems to create opportunities in areas such as mobile payments and e-commerce.
Notable examples are Kenya's 'Silicon Savannah', South Africa's 'Silicon Cape' and Rwanda's 'kLab' in Kigali, but in many instances they struggle to achieve critical mass by giving birth to the few successful start-ups that will in turn attract more talent and money.
However, Yaba also has a growing number of established tech companies, underpinning hopes that the area, where rents are relatively cheap, might breed success.
Konga is just one of several to move away from the lagoon city's affluent island business districts of Victoria Island, Lekki and Ikoyi to the suburb on the Lagos mainland.
Africa Internet Group, backed by Germany's Rocket Internet, South African mobile phone giant MTN and Sweden's Millicom, moved six of its tech firms, including Hellofood and Easy Taxi, to Yaba last December.
"We knew the ecosystem of start-ups and ventures here was really thriving," said Guillaume Leblond, managing director of Hellofood, a two-year-old food delivery platform.
BEATING THE TRAFFIC
Even though Yaba's inner city location might constrain its long-term growth, Leblond said the move to Yaba cut commuting times since most employees cannot afford to live in the expensive island business districts and reside on the mainland.
Gesturing to a dozen young adults hunched over laptops in an open plan office, he said most staff were University of Lagos graduates introduced via personal connections.
Investors have taken an interest in several start-ups based in the district in the last few months.
In May, Nigerian hotel booking company hotels.ng got seed funding from the EchoVC Pan-Africa Fund and the Omidyar Network, founded by eBay mastermind Pierre Omidyar.
Then in June, Andela, a Yaba-based company that trains and then outsources software programmers and developers, received financing from Boston-based venture capitalists Spark Capital.
Andela, which launched last year, has so far selected 70 people from more than 12,000 applicants to participate in the programme that co-founder Jeremy Johnson said would, over time, create a bigger pool of developers in Nigeria's workforce.
"We're preparing brilliant young people not only to compete for opportunities in the years ahead, but to build the companies that will transform Africa," he said.
BIG MARKET
The potential market size of Africa's most populous nation, makes Nigeria, with around 170 million people, an attractive location.
"From an investor's perspective, Nigeria is so much bigger. The Kenyan market is very small," said Kresten Buch who has invested in tech start-ups in South Africa, Kenya and Nigeria.
The gross domestic product of Lagos state alone, for example, is bigger than the entire economies of Kenya or Ghana.
However, Yaba started life in a similar way to other African tech enclaves in 2010, with one building earmarked as an incubator for talent supported by overseas investors, in this case the Co-Creation Hub (CCHub), backed by the founder of eBay.
The government chipped in with another building in 2013, the Information Technology Developers Entrepreneurship Accelerator (iDEA), for would-be entrepreneurs to get access to docking stations, meeting rooms and mentors.
Google and Microsoft ran coding workshops, while a deal between CCHub, the Lagos state government and local telecoms firm MainOne brought cheap high-speed Internet via fibre optic cable.
Even though it is Africa's biggest economy and top oil producer, Nigeria's Internet speeds and network coverage have lagged behind other countries such as Ghana and Kenya.
But that in itself is an opportunity, with a 2013 report by consultancy McKinsey suggesting that only 1.5 percent of Nigeria's nearly $500 billion economy took place online.
"Nigeria has the advantage of having a very big local market," Buch said. "You can get very big by just looking at Nigeria."

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With milk and roses, Africa woos private equity funds

Private equity deals in 2014 second-highest on record
Investors focus on rising middle-class consumers
Money flows spreading beyond South Africa
For a graphic:
From milk churning in Zimbabwe to rose growing in Ethiopia, private equity investments in Africa have returned to pre-crisis levels and should keep rising as funds seek bumper returns in far-flung markets.
Private equity deals in Africa totalled $8.1 billion last year, the second highest on record after the $8.3 billion posted in 2007, according to the African Private Equity and Venture Capital Association (AVCA).
This year could be even bigger as investors tired of low returns in developed markets look to cash in on the rapidly emerging middle-class consumers in Africa - home to many of the fastest growing economies in the world.
Private equity deals in Africa between 2007 and 2013 earned 60 percent more than the MSCI emerging market index, AVCA says.
Traditionally private equity buyouts in Africa have been supported by development organisations but there are signs over the last year that global funds are taking more aggressive steps to tap into a continent of 1 billion people.
"The growth story in Africa is compelling," said John van Wyk, head of Africa at Actis, an emerging-market focused fund with around $4.6 billion under management.
"Global funds are realising they need to have some sort of Africa strategy and that hasn't always been the case."
Large U.S. private equity firms, including TPG and Kohlberg Kravis Roberts (KKR), have made their first investments in Africa over the last year.
The New York State Common Retirement Fund, one of the largest U.S. pension funds and worth around $180 billion, said in April it could invest up to $5 billion in Africa over the next five years to boost returns and diversify its portfolio.
TPG said in June it would invest up to $1 billion in African companies under a tie-up with Sudanese billionaire Mo Ibrahim's Satya Capital, which has interests ranging from healthcare in Nigeria to manufacturing in Tanzania.
ETHIOPIAN ROSES
Investments are focused on fast-moving consumer goods, financial services, healthcare and telecommunications. Bigger funds are looking at infrastructure projects, including filling massive unmet electricity demand across Africa.
KKR last year invested $200 million in Afriflora, a rose farm in Ethiopia, one of the fastest growing economies in Africa and home to the continent's second largest population.
Though interest in Africa is rising it comes off a very low base with even large funds raising only around $1 billion, a meagre sum compared with developed markets
More money was raised in India last year than in all the 55 countries in Africa.
"While there has been more capital raised, it's low compared to other geographies," said Marlon Chigwende, managing director of Carlyle's sub-Saharan African business.
High returns are also far from guaranteed. Food and drinks giant Nestle offered a dose of reality last month, saying it was cutting 15 percent of its workforce in Africa because it had over-estimated the growth of the middle-class.
Still, middle-class households in 11 key sub-Saharan African countries, excluding South Africa, are set to triple to 22 million by 2030, according to Standard Bank.
"Things can take a long time in Africa so people should not expect instant or easy results. You have to have the knowledge and be selective," Chigwende added.
OUT OF SOUTH AFRICA
Many funds believe African investments have longevity because money is increasingly flowing to markets outside South Africa, which has the continent's most developed economy and deepest financial markets but is suffering from sluggish growth.
Nigeria and Ethiopia, the two most populous countries in Africa, are often cited as new opportunity areas.
Verod, a small Nigerian private equity firm, earned 15 times its investment this year when it sold its stake in GZI Industries, an aluminium can manufacturer.
Blackstone, which has a $5 billion joint venture with Africa's richest man, Aliko Dangote, hired respected former Nigerian central bank governor Lamido Sanusi as chairman of the board of its Africa infrastructure fund this year.
Crucially, it is getting easier to get money out of Africa.
There were 40 private equity exits in Africa 2014, the highest in eight years, including the continent's largest ever when Steinhoff agreed to buy retailer Pepkor for around $5.7 billion, providing an exit for private equity firm Brait.
Corporate buyers still account for half of exits but buyouts by other private equity players are increasingly common and countries like Nigeria and Kenya are promising to deepen their stock markets to make IPOs easier.
While optimism is increasing, there remain major obstacles for investors in Africa, from huge infrastructure and skills deficits to lingering political instability.
"There is risk everywhere. There is risk on Wall Street," said Muvirimi Kupara, head of Spear Capital, a Zimbabwean fund with interests in dairy processing. "He who dares wins."

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Nigerian central bank keeps benchmark rate at 13 pct

Nigeria's central bank kept its benchmark interest rate on hold at 13 percent on Friday, saying concerns about rising inflation and expected normalisation of U.S. interest rates meant monetary policy in Africa's biggest economy had to remain tight.
    Governor Godwin Emefiele said the bank's monetary policy committee voted 8-4 in favour of keeping the rate at its current level, one of the world's highest benchmark borrowing rates. Its last move was in November.
    The decision had been predicted by most of the 20 analysts polled by Reuters last week.
    Emefiele also said the naira, which has lost around 15 percent against the dollar over the last year with an official devaluation in November and a de facto one in February, was "appropriately priced" at its current level of 197.
    The bank has curbed interbank access to hard currency over the last few months in a bid to keep the naira on an even keel, although the restrictions have angered investors and frustrated companies that need dollars for imports.
    Emefiele rejected the idea of loosening the FX curbs, saying the central bank could not adopt an "indeterminate policy" of currency depreciation.
    The weak currency has put pressure on inflation, which at 9.2 percent is above the upper limit of the central bank's target range. However, Emefiele said he believed this trend in price rises to be transient.
    Emefiele also kept the cash reserve requirement on public and private sector deposits unchanged at 31 percent.

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Nigerian interbank rates rise on cash shortage

Nigeria's interbank lending rates rose on Friday to an average of 12 percent from 9.25 percent last week after a series of cash outflows from the banking system drained liquidity.
Traders said interbank rates hit 30 percent in early trade following cash withdrawal by state-owned energy company NNPC and central bank's cash reserves requirements (CRR) debit as well as large open market operations bill sales by the regulator.
"(The) market rate went as high as 30 percent today on cash shortage, before some banks were credited with CRR surplus, bringing down rates to an average of 12 percent," a trader said.
The central bank had debited some lenders for unspecified amounts to meet their CRR but later credited some bank accounts with surplus from the debit, putting more cash into the system.
Secured Open Buy Back (OBB) traded at 12 percent on Friday, up from 9 percent last week and 1 percentage point below the 13 percent central bank's benchmark rate.
Overnight placement also climbed to 12 percent from 9.5 percent from last week.
Traders said rates should ease next week as a portion of budgetary allocations for the month of June is still being expected to filter into the money market by mid-week.

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Nigerian bond yields eye rates call

Nigeria's debt market could take its cue from the central bank's rate decision due later on Friday.
Bond yields fell across some of the heavily traded maturities this week due to strong buying pressure from investors covering their positions after the Debt Management Office sold fewer than expected bonds last week.
Nigeria sold bonds worth 44 billion naira ($221 million) at auction last week, short of the target of 70 billion naira initially set by the debt office.
"The market has been bullish because some investors were covering their over-sold positions prior to the last auction because the debt office sold below market expectations," one dealer said.
"We are expecting that the outcome of the rate decision at today's MPC will drive the market going forward. If nothing changes, then the market will continue to hover around the present level," another dealer said.
Yields fell the most on the longest tenor 2034 debt, down to 14.36 percent on Friday, from 14.85 percent on Monday.
The benchmark 2024 paper fell to 14.82 percent from 14.91 percent, while the 2022 debt fell to 14.79 from 14.91 percent.

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IFC Invests in Africell to Expand Telecommunications in Africa

The International Finance Corporation (IFC), a member of the World Bank Group, on Friday said it will invest $35 million in telecom operator, Africell, to support the expansion and upgrade of mobile networks in Gambia, the DRC, Sierra Leone and Uganda.
Africell is an emerging telecommunications operator, with a customer base in some of Africa’s most challenging markets. Since its launch in 2001, Africell has become the leading mobile network provider in Gambia and in Sierra Leone, and is expanding rapidly in the Democratic Republic of Congo and in Uganda.

The new financing will enable Africell to expand its coverage and services.
IFC’s investment is part of a syndicated loan of $150 million, arranged by Deutsche Bank and supported by the Public Investment Corporation SOC acting on behalf of Government Employees Pension Fund, Banque Libano Francaise, EcoBank RDC and other investors.
“Africell is at the forefront of the mobile expansion in Africa and aims to become one of the leading telecom players in the continent”, said Ziad Dalloul, Africell’s Chairman and CEO. “Our partnership with IFC and other international financing organizations is another milestone in Africell’s
endeavor to further its social and development role in the markets it operates.”
“In developing countries, access to telecommunications can help boost productivity, improve the delivery of basic services and encourage transparency and accountability. IFC’s investment in Africell supports a fast-growing company which is committed to providing high quality,
affordable mobile services to African consumers”, said said IFC’s Anikó Szigetvári, Head, Africa and Latin American TMT Group.
During the last 10 years, IFC has invested over $1 billion in 37 mobile phone projects spanning 15 countries in Africa. IFC’s current investment focus in Africa’s telecommunication sector is aimed at improving the availability and reliability of affordable communications services, supporting the adoption of new communication technologies, and promoting technology-enabled innovation and entrepreneurship. 

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Nigeria's forex reserves rise 5.6 pct month-on-month by July 22

Nigeria's foreign exchange reserves rose $30.69 billion by July 22, up 5.6 percent from $29.03 billion a month earlier, latest data from the central bank.
However, the forex reserves of Africa's top crude exporter were down20.9 percent from $38.8 billion a year ago.
The growth in reserves for the month was attributed to efforts of the present government to plug leakage and demand management by the central bank.
The central bank restricted access to foreign exchange by last month and introduced tight control of the foreign exchange market to curb speculation and conserves forex reserves.

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Oil tanker industry calls for immediate end to Nigeria ship ban

A ban on 113 oil tankers by Nigerian state oil company NNPC must be lifted immediately as no grounds have been given for the measure, the global oil tanker industry association said in a letter of protest.
NNPC issued a letter on July 15, citing a directive from President Muhammadu Buhari, which said the vessels, mainly VLCC crude oil tankers, were banned from calling at Nigerian crude oil terminals and also from Nigerian waters with immediate effect.
Industry association INTERTANKO, whose independent members own the majority of the world's tanker fleet, said in a letter to NNPC, dated July 22, that there were no "evidence or grounds" given for the ban.
"INTERTANKO protests in the strongest possible way that these bans should be lifted with immediate effect until grounds and evidence for the ban have been given to each vessel and vessel owner/operator, and the owner/operator has had an opportunity to respond," General Counsel Michele White wrote in the letter.
Since taking office in May, Buhari has been working to fulfil a campaign promise to tackle corruption, particularly in the oil industry. He has dissolved the NNPC board and ordered an investigation into a scheme through which the country swaps crude for oil products such as gasoline.
"The timing of the ban is clearly a political signal to show the Buhari administration is clamping down on oil theft," said Alex Vines, head of the Africa Programme at Chatham House.
"The challenge now is for the Nigerian authorities to provide credible proof that these indexed vessels were engaged in illicit activities."
A sample of 75 vessels on the list that Reuters tracked showed only around 14 had been to Nigeria or neighbouring countries in the last 180 days.
INTERTANKO'S White said the list of banned tankers was "not exhaustive and already further tankers are being added".
"Our current understanding is that these ships may have been targeted due to a failure to provide official outturn figures at their last call and/or commercial differences between load and discharge figures for cargo and free water," White said in a separate note to members.
"This may also however be part of a general crackdown by President Buhari on corruption in Nigeria's maritime, oil and gas, financial services and security sectors, including illegal bunkering and fuel sales."
White said after INTERTANKO had spoken with its members in some cases the ship had not called in Nigeria for several years, or at all.
"In others, the ship has changed ownership since her last call in Nigeria," White said.
"Members have also advised that some oil majors are attempting to introduce charterparty clauses requiring the owner to warrant that the vessel is not subject to any Nigerian bans or restrictions due to failure to report any outturn figures for prior voyages."
INTERTANKO said it had advised members to avoid such a provision.
"Owners whose vessels are blacklisted will have to be careful that they do not commit to trading to Nigeria whilst the threat of detention hangs over them," said Stephen Askins with shipping law firm Tatham Macinnes.
"It is likely further vessels will be subject to the blacklisting," he said in a note.

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Algeria cuts spending, sees energy revenues falling 50 pct this year

Algeria will trim spending in its 2015 budget by 1.35 percent, expecting a slump in oil prices to reduce its energy earnings 50 percent, the government said on Thursday.
Oil and gas account for 95 percent of Algeria's exports and energy revenues make up 60 percent of the budget.
The government expects economic growth outside oil and gas to reach 5.1 percent, unchanged from an initial forecast early this year, the cabinet said in a statement.
Inflation is expected to be 4 percent in 2015, up from the 3 percent initially expected, it said. The budget is now based on an oil price of $60 a barrel, much lower than the $90 initially anticipated.
Oil and gas earnings are expected to drop to $34 billion from the $68 billion earned in 2014, the statement said.
Imports are projected at $57.3 billion for this year, exceeding by far exports for the first time.
The supplementary budget law sets spending at 7,692 billion dinars, down from 7,588 billion dinars ($112 billion) approved earlier this year.
Aiming to avert social unrest, the government has said the drop in energy revenues would affect social programmes. The country, with a population of 40 million, spends heavily on subsidies, including cereals, milk, medicine, cooking gas, electricity and housing.
Algeria posted a trade deficit of $7.78 billion for the first half of 2015, compared with a $3.2 billion surplus a year earlier. It imports most goods it needs, including food, medicine and manufacturing parts.
Its foreign exchange reserves, usually used to finance deficits, dropped by $19 billion to $159 billion in the first quarter of the year.
In a bid to "rationalize" expenditures, the government has been trying to restrict imports and offer incentives for domestic producers.
The supplementary budget law sets taxes on profits for import firms at 26 percent, higher than the 23 percent imposed on construction and tourism.
Taxes on profits for production companies has been reduced to 19 percent from 23 percent.

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Nigeria cbank tweaks FX peg again, naira falls in black market

Nigeria's central bank adjusted its exchange rate peg on Thursday to 197 naira against the dollar from the 196.95 it set last week, data on the bank's website showed.
The adjustment is the fifth since the bank introduced a tight controls on the foreign exchange market in February. The bank said at the time it would sell dollars only at 198 naira to customers through the interbank based on direct orders by banks.
The local currency traded at 199.50 to the dollar on the interbank market at 1047 GMT, compared with the 197 per dollar rate it closed at on Wednesday.
At the parallel market, the naira slid to 243, down 0.83 percent from the previous day.
The persistent decline of the naira in the parallel market followed the introduction of new measures by the central bank last month, restricting access to hard currency at the interbank in a bid to conserve dwindling foreign exchange reserves.
Dealers said the outcome of a rate-setting meeting of the central bank due on Friday could affect the naira.
A Reuters poll showed the bank could hold interest rates for now.

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Nigerian naira steady ahead of rate-setting meeting

Nigeria's naira was stable on Tuesday as the central bank deployed a new measure to curb speculation on the currency.
Traders also said expectations that the central bank could make pronouncements on the forex exchange market at its monetary policy committee meeting on Friday were supporting the naira.
"Demand for the dollar slowed down a bit today and the naira recovered due to speculations the central bank could intervene in the market this week ahead of its monetary policy meeting," one dealer said.
The currency closed at 197 to the dollar on the interbank market, unchanged from Thursday's closing level. Markets were closed in Nigeria on Friday and Monday for public holidays.
The naira was trading at 240 to the dollar at the parallel market, compared with 241 per dollar on Thursday.
Traders said the central bank had asked bureau de change operators to request dollar buyers to provide their Bank Verification Number (BVN), a new biometric identification for commercial banks customers, in a bid to curb speculative bids.
Operators said the move was meant to help the central bank trace all transactions in the foreign exchange market.
Nigeria's central bank sells an average of $80 million to bureau de change operators each week, while operators also source dollars from individuals and corporations.
Another trader said the directive on the inclusion of a verification number in all transactions could discourage people from entering the foreign currency market, exacerbating the dollar shortage and increasing pressure on the naira.
Demand for the dollar rose sharply at the parallel market after the central bank banned some importers from accessing hard currency at the official interbank market last month. That led to a scramble for dollars in the unofficial market.
A Reuters poll showed Nigeria would hold interest rates for now and wait until September to raise them.

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Bharti Airtel says no plan to exit Africa, despite Orange talks

Bharti Airtel Ltd, the biggest Indian cellphone carrier, has no plans to exit Africa, it said on Tuesday, despite announcing exclusive talks with France's Orange to sell four of its units there.
Orange said on Monday it was in discussions to buy Bharti subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone, triggering market speculation that this might be a first step towards a complete Bharti exit.
But the Indian group said on Tuesday that the operations put on the block represented a relatively small percentage of its overall Africa business. A sale, it said, would help it "establish a sharper focus" on the remaining countries.
"We remain fully committed to our Africa operations and will continue to invest in its growth and building a profitable business and accordingly have no plan to exit," the company said in a statement, in response to a query from Reuters.
Bharti ventured into Africa in 2010 with the $9 billion purchase of Kuwaiti telecom Zain's  cellular assets in 15 countries, at a time when growth in its home market had started slowing and a price war was hurting carriers.
But high costs of operations there squeezed margins, meaning Bharti has yet to turn a profit in Africa.
The sale of operations in four countries, which accounted for around 16 percent of its African revenue in the 2014 fiscal year, should also help Bharti cut down a net debt burden of $10.7 billion as of March. Bharti's debt had been swollen by the Africa buy.
Bharti Airtel's stock rose as much as 5.4 percent on Tuesday to its highest since October 2009 as analysts said a possible Africa exit could lead to a re-rating of the stock.
Bharti is also selling its mobile phone masts in several African countries, again to cut down debt. It has so far raised $1.3 billion from the sale in five countries.

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Nigeria interest rates on hold for now, to rise in September

• Nigeria's central bank to hold rates on Friday
• CBN to hike to 13.25 pct in September, 13.75 pct in November
• Poll data: 

The Central Bank of Nigeria will leave interest rates on hold this week and instead wait until September to raise them, putting the timing of its next policy move in line with the United States Federal Reserve, a Reuters poll showed on Tuesday.
A majority of the 20 analysts polled in the last week said Nigeria's central bank will hold rates on Friday at 13 percent, where they have been since November, and one of the highest benchmark borrowing rates in the world.
But the CBN will opt for a hike to 13.25 percent in September, the same month the Fed is widely expected to raise its federal funds rate for the first time in nearly a decade, from a much lower 0-0.25 percent.
"It (the CBN) is likely to be swayed by market reactions to a likely U.S. Fed rate hike in September," said Rafiq Raji, an independent Africa analyst based in Lagos.
"A September-December 2015 window for a decision makes it more likely the CBN would decide on a potential naira devaluation at its September (meeting)," said Raji.
Nigeria's weak currency in turn will put more pressure on inflation, which at 9.2 percent is already above the upper limit of the CBN's target range.
That is likely to trigger another 50 basis-point rate rise to 13.75 percent at the central bank's November meeting, the Reuters poll found.
The naira lost about 15 percent last year, with devaluations in November and February. The poll showed analysts expect the currency - currently around 199 per dollar - to weaken to 225.50 per dollar in a year.
Raji said a potential rate hike would probably be ineffective if not made in tandem with a naira devaluation, a move that would discourage demand for dollars and imports.
Authorities have recently focused on curbing access to hard currency on the official interbank market for importers of some goods, introducing stringent restrictions - but that has not gone down well with investors who have called for a relaxation.
JPMorgan, which runs the most commonly used emerging debt indexes, has said it will eject Nigeria from its Government Bond Index by year-end unless it restores liquidity to currency markets.
Nigeria's economy relies heavily on its oil industry and the plunge in crude prices has done it no favours. Nigeria's gross domestic product is expected to grow by just 4.4 percent this year and then 5.2 percent in 2016.
GDP grew by just under 4 percent in the first quarter of this year, a sharp slowdown from the same period last year. 

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Ghana wants to issue bigger $1.5 bln Eurobond - minister

Ghana wants to issue a Eurobond of up to $1.5 billion - higher than an originally planned $1 billion - by September for debt financing and budget support, deputy finance minister Cassiel Ato Forson said on Tuesday.
The minister did not go into the reasons for the increase, but it had been approved by the International Monetary Fund, a senior government official told Reuters, requesting not to be named.
Ghana's finance minister Seth Terkper was presenting a reviewed 2015 budget including the larger Eurobond to parliament on Tuesday.
The government of the cocoa, gold and oil-producing West African nation had planned to issue the $1 billion Eurobond by the end of June, but has been pushed back to September.

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So your friend wants to borrow money? here’s what to do

You love your friends and family, and you’d do absolutely anything to help them.

Then one day, your friend is late on rent and asks to borrow N50,000 from you. He promises to pay you back when he gets his next paycheck, but you’re not so sure.

You’re worried that loaning out money could put a strain on your relationship — but you really want to help your friend in his time of need.

What should you do?

Just say no

As someone who’s been burned by loaning money to loved ones, I highly caution you against it.

You see: When you lend money, your relationship is going to change. Your friend will feel indebted to you (because he will be). Hanging out together will feel awkward until the loan is paid off — and if the loan goes unpaid, your relationship could be ruined. There’s so much that can go wrong when you decide to loan money to family and friends.

Instead of giving out money, tell your friend how much you’d like to help but that you don’t have the money or don’t want to ruin your relationship.

Take it from me: It’s a horrible feeling to know money has ruined one of your relationships.

Or give the money away

I know what it’s like to want to help a loved one. Especially when you recognize that help is truly needed, it’s hard to stand by and watch. But here’s the thing: If your friend has fallen on financial hardships, it’s pretty unlikely that he’s going to be able to pay you back.

If you have the resources, just give them the money — no strings attached. Tell your friend to pay it forward one day, when he’s in the position to do so.

If you must loan, get it in writing

If you don’t have the ability to give away money, and really want to help them, then be sure to get your loan terms in writing.

A funny thing happens when you loan money: The borrower and lender seem to remember the original circumstances differently. Or at least that’s what happened to me.

To prevent confusion and possible arguments, get the loan amount, payment terms, and interest in writing. Have both parties sign the contract, with a copy for each to keep. Now when any questions pop up, you can just refer to the signed contract.

Conclusion

Be aware that there are some serious consequences to loaning money to friends and family. Even though all intentions may be good in the beginning, things can go sour quickly. Before you open up your wallet, make sure you know what you’re getting into.

CULLED FROM BUSSINESSDAY

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Nigerian interbank rates ease on matured treasury bills

Nigeria's interbank lending rates eased to 9.25 percent on average on Thursday, better than the 10 percent where it closed last Friday after the central bank repaid matured treasury bills to investors, traders said.
Traders said the central bank injected about 124 billion naira ($623.27 million) in matured open market operation notes into the banking system on Thursday, boosting liquidity in the market and helping to push down borrowing costs among banks.
Overnight placement had hit 15 percent on Wednesday after the state-owned energy firm NNPC recalled a portion of its deposits from banks to its central bank account.
"The NNPC recalled over 100 billion naira from the system this week, with some banks scrambling for funds to cover their position," one dealer said. "The pressure has reduced today with the inflow of matured treasury bills funds into the system."
Lenders' balance with the central bank reduced to 118 billion naira in credit on Thursday compared with 201 billion naira a week ago, traders said.
The secured open buy back rate fell to 9 percent from 10 percent last week, 4 percentage points lower than the central bank's lending rate of 13 percent.
Overnight placement declined to 9.5 percent from 10.5 percent last week.
Traders said rates should ease further next week as a portion of budgetary allocations for the month of June is expect to hit the system.
Nigerian markets will be closed on Friday, July 17, and Monday, July 20, for public holidays.

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S.African mobile operator MTN agrees deal to end two-month strike

• Agrees guaranteed bonus payments
• Yet to reach deal on monthly wages

South African mobile operator MTN Group and union leaders reached a deal over bonuses on Thursday, ending a two-month strike that disrupted the supply of some new mobile phones in its home market.
About 2,000 workers led by the Communications Workers Union (CWU) downed tools in May at Africa's biggest mobile phone operator, demanding an 8 percent pay rise and 16 percent bonus payment.
The CWU said it had agreed to an 8 percent bonus payment this year and 12 percent next year. Both payments are guaranteed and not related to the performance of the company.
"Members are expected to go back to work within two days after the signing of the agreement," CWU General Secretary Aubrey Tshabalala said.
The two parties failed to reach a deal on monthly wages, but the CWU has said it would accept MTN's 8 percent offer if performance conditions are removed.
MTN, along with its rivals in Africa's most advanced economy, is trying to contain costs in the face of tough competition that has hit profit margins.
The company, which reported a 9 percent increase in full-year profit in March, employs about 6,500 people in its home market, where it trails rival Vodacom by subscriber numbers.
The end of the strike follows the appointment of Mteto Nyati as chief executive of the South African business after the resignation of Ahmad Farroukh last week.

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Cash-strapped Nigeria to keep fuel subsidies for another quarter

Nigeria will stick with costly fuel subsidies for now as new President Muhammadu Buhari says investigating corruption is a bigger priority than scrapping price caps on domestic fuel.
Buhari was advised by his transition committee to end the subsidy programme, which critics say is expensive, inefficient and open to abuse from corrupt operators.
Some say scrapping it is more pressing than ever, given a cash crunch that has forced the government to bail out state and local entities that could not cover debt payments and salaries.
But the country has issued a list of companies allowed to import under the scheme for the third quarter, with almost no changes to the firms or volumes of fuel involved, which will be just over 1.5 million tonnes of gasoline.
"I have received ... literature on the need to remove subsidies, but much of it has no depth," Buhari, who was elected in March, said in a statement.
Poor security, sabotage, vandalism, corruption and mismanagement - not necessarily subsidies - are the most serious problems of Nigeria's oil sector, he added.
Pan-African lender Ecobank estimates the cost of fuel subsidies for the coming quarter will exceed the 100 billion naira ($503 million) allocated for the full year, hitting 103 billion naira, based on oil prices near $57 a barrel.
The government also owes 159 billion naira in back payments to importers, which it promised last week to pay, meaning the continuation would require more money.
Buhari said he would "carefully review all the submissions he had received on the need to remove the subsidies".
Nigeria, Africa's largest oil producer, exports nearly 2 million barrels per day of crude oil, but relies almost entirely on imports for the 40 million litres per day of gasoline it consumes.
Some of those imports come via a programme to swap crude for oil products, which is the subject of a government corruption investigation.
The administration also aims to revamp the country's ailing refineries, which have been neglected for years and had not run at all for at least eight months, to provide at least 20 percent of its gasoline consumption.
But for now, it will keep compensating importers for the gap between market prices and the government-imposed price cap for gasoline and kerosene.
"It's too sensitive at the moment," one trader said. "There are institutions involved in the gasoline supply that, if they ceased, could create a vacuum that might create shortages in the near term."
Concerns over subsidy payments earlier this year caused fuel shortages that grounded flights, led to long queues at petrol stations and even brought mobile phone companies and banks to a standstill.
Traders and analysts say Nigeria cannot afford to keep the scheme going – particularly given the steep drop in oil prices on which the government relies for 70 percent of its budget.
According to the International Monetary Fund, the payments accounted for an average of 2.5 percent of Nigeria's gross domestic product from 2006-2012, and external audits have also revealed billions in "duplicate claims".
Dolapo Oni, head of energy research with Ecobank, said the move "shows it will take some time to make the changes" Buhari has discussed in the petroleum sector.
"It's not fiscally possible to continue the subsidies. It's not a question of if they will be removed. It is a question of when," Oni said.

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Nigeria's Seven Energy secures $495 mln to boost gas supply

Oil and gas firm Seven Energy has secured a $495 million loan from a consortium of Nigerian and international lenders to help fund its spending to supply gas to the domestic market, an adviser on the deal said on Wednesday.
Seven Energy, an indigenous Nigerian company, plans to buy gas fields along with the related infrastructure and pipelines so it can sell gas into the domestic market for use in power generation and industrial consumption.
Demand for gas in Africa's biggest economy is expected to rise to 3 million standard cubic feet (scuf) per day by 2017 as gas-fired power plants ramp up generation, industry officials say. Gas demand has risen to 1.2 billion scuf per day four times the 300 million of six years ago.
Nigeria privatised its electricity sector 18 months ago in a bid to end decades of blackouts which have hampered economic growth. Most of the plants sold were gas-fired and operating below capacity due to inadequate gas supply.
Accugas Limited, a wholly-owned subsidiary of Seven Energy, processes and distributes gas in Nigeria. It has already invested $1 billion in related projects in the southeast.
Seven Energy's senior secured term loan is provided by: First Bank , Ecobank  United Bank for Africa , Union Bank , FCMB , FBN Bank UK and Union Bank UK, the financial adviser said in a statement.
Last year, the oil and gas company secured $255 million from equity investors, including Singapore state investor Temasek Holdings, to help build up its gas business.
Part of the new debt will also be used to refinance existing loans and fund working capital.
Rival firm Seplat, listed in Lagos  and London , is aiming to have a 20 percent share of the domestic gas market by 2018. It plans to increase gross output from about 120 million scuf per day to 400 million by 2017.

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Nigeria can't avoid devaluation - S&P

Nigeria will have to devalue its currency at some stage, possibly by more than 15 percent, ratings agency Standard & Poor's said on Wednesday, though it saw the adjustments as likely to be gradual.
Investors have seen a devaluation of the naira as long overdue for Africa's largest economy and biggest oil exporter, which has been battered by the recent tumble in crude prices.
Following devaluations in November and February, authorities have focused recently on curbing access to hard currency on the official interbank market for importers of some goods, introducing stringent restrictions three weeks ago.
But those measures just delay the inevitable, said Ravi Bhatia, director of sovereign ratings at Standard & Poor's.
"Another devaluation is inevitable... they will have no option but to devalue," said Bhatia at a media briefing.
Many investors are positioning for a devaluation of around 15 percent. Bhatia said that sounded "reasonable", though even more might be needed.
Non-deliverable forwards - derivatives used to hedge against future exchange rate moves - reflect expectations of currency weakening: six-month NDFs price the naira at 233 per dollar, some 18 percent weaker than the central bank pegged rate of 196.95 on Tuesday.
On Wednesday, the naira hit another record low of 242 against the dollar on the parallel market operated by dealers in bureaux de change, down 0.42 percent from Tuesday. The naira has been hitting record lows on the parallel market since the latest central bank measures introduced three weeks ago.
Bhatia did not expect the adjustment to be done in one go.
"I think at this stage the plan is to move in increments, not to do a 'one big step' devaluation like they would in the old days," he said.
The central bank has said it is in no mood to devalue the naira, given the risks to inflation from a weaker currency, and that it will not be focusing on the thinly traded parallel market when determining the exchange rate.
Investors have also been nervous Nigeria might lose its place in the benchmark GBI-EM local currency debt index. Bhatia said this was a "real possibility", although he expected the government to adjust policy enough to maintain its membership.
"At some point they have to decide: do they want to go with their policies or do they want to stay in, and at the moment they are trying to do both, and it has worked," said Bhatia.
"But there are issues there, and it is a concern."
JPMorgan warned in June it could eject Nigeria from its benchmark index by year-end unless it restored liquidity to currency markets in a way that allowed foreign investors to transact with minimal hurdles.
In March, Standard & Poor's cut its rating on Nigeria to B+, changing its outlook to "stable".

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Nigeria's Access Bank sees retail banking turning to profit - CEO

Nigeria's Access Bank expects its retail banking business to turn to profit this year, contributing up to 10 percent to profit before tax next year and 20 percent by 2018/19, Chief Executive Herbert Wigwe has said.
Wigwe said most of its 350 branches would become profitable this year after it regained market share following the acquisition of rival lender Intercontinental Bank three years ago.
"Before the end of 2018/19 we would see what would be a 20 percent contribution from retail," Wigwe told Reuters in an interview in Lagos, referring to profit before tax.
However, he said the lender was cautious about creating risk assets this year and was targeting 10 percent loan growth due to domestic market conditions and high interest rates.
It grew loans 20 percent last year.
Two years ago, the top tier lender said it aimed to grow its customer base to between 15 million and 20 million across its African markets by 2018, from around six million, as it shifted its focus to retail banking.
The bank, which jumped to fourth position out of 21 Nigerian lenders from ninth in 2007, said it expected to sign on two million customers and another two million through its cards product, Wigwe said.
Access Bank shares, which fell 24.2 percent last year, ended flat at 5 naira on Tuesday.
Wigwe said the bank successfully concluded a rights issue despite low sentiment in the stock market and foreign investors' apathy due to worries over the naira currency amidst lower oil prices which slashed government revenues.
He declined to give further details pending the approval of the offer by regulators. Access Bank launched a cash call last November to raise 68 billion naira from existing shareholders.
Nigerian lenders have been shoring up their balance sheets in preparation for the adoption of stricter international capital requirements, which would otherwise see capital ratios for most of them drop by between 100 and 400 basis points.
Rival lender Stanbic IBTC said on Tuesday it aimed to carry out a 20.4 billion naira ($102.6 million) rights issue this year and seek shareholders' vote to distribute a scrip dividend to boost its capital base.

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Nigeria's Stanbic IBTC aims to carry out 20.4 bln naira rights issue this year

Nigeria's Stanbic IBTC aims to carry out a 20.4 billion naira ($102.6 million) rights issue this year and seek shareholders' vote to distribute a scrip dividend to boost its capital base, the lender said on Tuesday.
Chief Executive Sola David-Borha said she expected increased regulatory pressure to weigh on industry profits this year and that the bank had revised its 2015 loan growth down to 10 percent, the lower end of its guidance range.
Loans have grown 4 percent in the first six months of this year.
The mid-tier lender said its South African parent bank Standard Bank was supportive of the cash call and that a price for the share sale would be set after regulatory approvals had been received.
"If we are successful with the scrip dividend, assuming 50 percent of shareholders go for it ... together with the rights issues, we should be able to maintain adequate capital," Chief Financial Officer Arthur Oginga told an investors call.
The bank's capital adequacy ratio stood at 10 percent. Return on equity (ROE) fell to 14.2 percent for the first half, compared with 28.9 percent a year ago. It forecast ROE to reach 18 percent by year-end.
Nigerian lenders have been shoring up their balance sheets in preparation for the adoption of stricter international capital requirements, which would otherwise see capital ratios for most of them drop by between 100 and 400 basis points.
Rival lender United Bank for Africa last week said it had raised 11.5 billion naira ($57.8 million) by selling new stock to existing shareholders to bolster its capital base.
Shares in Stanbic IBTC fell 3.81 percent to 24.79 naira, underperforming the broad index, which ended down 0.81 percent, its tenth day of losses.
Stanbic last week said its first-half pretax profit fell 52 percent to 9.53 billion naira ($47.90 million) and cut its interim dividend.
The lender said central bank rules tightening access to dollars on the official interbank market impacted its foreign currency and fixed income trading business as well as a slowdown in foreign portfolio investors.

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Nigeria inflation rises to 2-1/2 year high on food prices

Nigeria's consumer inflation rose by 0.2 percentage points to 9.2 percent in June compared with the same month last year, its highest rate since February 2013 and above the central bank's targeted upper limit.
The figure released on Tuesday was in line with that forecast by a Reuters poll of analysts last week.
Food inflation edged higher to an annual 10.0 percent in June, up 0.2 percentage points from May, as disruptions to fuel distribution affected food prices.
"(The) irregularity of the supply of Premium Motor Spirit (gasoline) continues to impact food prices," the National Bureau of Statistics (NBS) said.
It added that a delayed rainy season and resulting late harvest has also been putting upward pressure on prices.
Major cities in Africa's biggest economy suffered acute fuel shortages in May arising from disputes over subsidy payments.
Worries that the new government elected in March would not honour previous subsidy debts prompted some importers to stop fuel imports and distribution. The shortages disrupted key services including telecommunications, banking and aviation.
The government last week agreed to pay the outstanding subsidy-related debt. Africa's biggest oil producer relies almost wholly on imports for its 40 million litres a day petrol consumption owing to a neglected refining system.





The NBS in March said it expected inflation to inch up to around 9 percent this year, from its January forecast of 8.78 for 2015, following a currency devaluation meant to counter the impact of lower revenues from crude oil, Nigeria's main export.

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Nigeria's president sacks all four defence chiefs

Nigeria's President Muhammadu Buhari sacked his army, navy, air force and defence chiefs on Monday, a widely anticipated move as the former general has made crushing Islamist militant group Boko Haram his top priority.
Replacements would be announced later on Monday, the presidency spokesman said.
Since his inauguration in May, Buhari has moved Nigeria's defence command centre to Maiduguri, the birthplace of the jihadi sect, and is setting up the headquarters for a multi-national joint taskforce in Chad's capital N'Djamena.
In June, Amnesty International accused Nigeria's military of systemic human rights abuses and the deaths of 8,000 prisoners and called for an investigation into many top military officials including the army and air force chiefs.
Former President Goodluck Jonathan was heavily criticised for his inability to deal with the six-year insurgency in the northeast of Africa's biggest oil producer which has killed thousands and displaced 1.5 million people.
Army morale hit an all time low under Jonathan and it was not until the start of 2015 that the militants were finally pushed out of most areas with the help of foreign mercenaries, troops from neighbouring countries and new equipment.
But Nigerians saw Jonathan's victories as too little too late.
The outgoing officials are: Chief of Defence Staff, Air Marshall Alex Badeh; the Chief of Army Staff, Major General Kenneth Minimah; the Chief of Naval Staff, Rear Admiral Usman Jibrin and the Chief of Air Staff, Air Vice Marshall Adesola Amosu, the spokesman said.

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OPEC sees more balanced oil market in 2016

• OPEC sees world oil demand growth to increase in 2016
• U.S. oil output growth to fall sharply next year
• "More balanced market" likely in 2016 - OPEC

 The global oil market should be more balanced next year as China and the developing world increase oil consumption while supply of shale oil from North America and other regions grows more slowly, OPEC said on Monday.
In its monthly report, the Organization of the Petroleum Exporting Countries said it expected world oil demand to increase by 1.34 million barrels per day (bpd) in 2016, up from growth of 1.28 million bpd this year.
World oil demand growth should outpace any increase in oil supply from non-OPEC sources and ultra-light oils such as condensate, increasing consumption of OPEC crude oil, it said.
"This would imply an improvement towards a more balanced market," OPEC's in-house economists said in the report.
OPEC said it expected demand for its own crude oil to rise by 860,000 bpd in 2016 to 30.07 million bpd. But it cut its estimate of demand for its crude this year by 100,000 bpd to 29.21 million bpd.
Oil prices are now around half their levels of a year ago with global crude oil benchmark Brent trading at around $58.50 a barrel by 1100 GMT on Monday, down from a peak above $115 in June 2014.
Lower prices have squeezed high-cost oil producers and brought a sharp fall in the number of oil exploration rigs in operation, particularly across North America.
OPEC said supply of oil from non-OPEC producers was expected to grow by only 300,000 bpd in 2016, down sharply from growth of 860,000 bpd this year.
U.S. oil output, which has seen rapid increases over the last five years thanks to the development of huge shale resources by "fracking", is expected to log much more modest supply growth in 2016.
"Total U.S. liquids production is expected to grow by 330,000 bpd, just one third of the growth of 930,000 bpd expected this year," it said.
World oil supply has grown much faster than demand this year, led by OPEC as its core members in the Middle East Gulf attempt to build market share, leading to higher inventories.
Saudi Arabia, in particular, has pushed up its oil production to record highs, industry sources say.
OPEC estimated, based on figures from secondary sources, that its own group crude oil output rose 283,000 bpd to 31.38 million bpd in June, led by Iraq, Saudi Arabia and Nigeria.
It said Saudi Arabia had told it that it pumped 10.56 million bpd last month, up 231,000 bpd from May.

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Lafarge applies for licence to supply Nigeria's electricity grid

Lafarge Africa said on Friday it had applied to Nigeria's energy regulator for a licence to generate 260 megawatts of electricity to supply to the country's grid.
Nigerian Electricity Regulatory Commission (NERC) is licensing so-called embedded power companies to try to end electricity shortages, one of the biggest constraints to investment and growth in Africa's largest economy.
Embedded power companies are not primarily power generating groups, but generate extra power from their operations and can sell the surplus to the grid or distribution companies.
Dangote is also in discussions with NERC to sell excess electricity generate from its cement plant to the grid, a source at the NERC told Reuters.
Dangote was not immediately available to comment.
Nigeria is reforming its power sector to try to put an end to power outages, which means many of the country's 170 million people only get power for a few hours a day.
It broke up the government's monopoly on power generation and distribution two years ago by privatising the industry to try to attract foreign investors. But power generation has stagnated at about half of total capacity.
Lafarge Africa, Finland's Wartsila and the World Bank's IFC agreed in September to build a 220 megawatt gas-fired power plant in the country to boost electricity supplies, at a cost of $400 million.
Nigeria is also in talks with Russia's state-owned Rosatom to build nuclear power plants

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Nigerian bonds seen higher returns at auction

Yields on Nigerian debt are expected to reflect the trend on the secondary market at an auction next week where the government plans to raise 70 billion naira ($352 million) in 5- and 20-year bonds.
 "We expect the July 2034 bond to fetch around 15 percent at the auction next week in alignment with what the market is currently doing," one senior trader said.
 Nigeria plans to sell 70 billion naira worth of bonds next week, its seventh debt auction this year.
Traders said the bond market has been quiet after massive sell-off by some offshore investors who were reacting to the central bank's foreign exchange curbs for some importers.
The central bank last month restricted access to forex by some importers in its bid to protect its foreign reserves.
The yield on the benchmark debt maturing in 2024 rose to 15.02 percent on Friday from 14.87 percent a week ago.
The yield on bond maturing in 2022 rose to 15.02 percent against 14.82 percent, while the yield on the bond due to mature in 2016 fell to 14.43 percent from 14.61 percent last week.

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Nigeria's UBA raises $58 mln from rights issue

Nigeria's United Bank for Africa (UBA) said on Friday it had raised 11.5 billion naira ($57.8 million) by selling new stock to existing shareholders to bolster its capital base.
The bank said the rights issue was fully subscribed. It issued one new share for every 10 already held at 3.50 naira per share, a discount to Thursday's close of 4.25 naira.
Nigerian lenders have been shoring up their balance sheets in preparation for the adoption of stricter international capital requirements, which would otherwise see capital ratios for most of them drop by between 100 and 400 basis points to near the regulatory minimum of 16 percent.
"With this additional equity, UBA has fortified its capital base ahead of the full implementation of Basel II, which requires (a) higher capital buffer for banks," the lender said.
Shares in the bank, which fell 52 percent last year, were down 1.65 percent at 4.13 naira.
Rival lender Fidelity Bank on Monday raised 30 billion naira through an unsecured bond at 16.48 percent, to fund increased lending to small businesses and retail clients.
Skye Bank has said it will raise 50 billion naira via a rights issue by the third quarter to expand its loan book, after it sold 100 billion naira worth of commercial notes in March.
Nigeria's banking sector index, which accounts for around 40 percent of total stock market capitalisation, has lost 0.47 percent so far this year, having shed 22 percent last year due to the heavy burden of tighter regulation which crimped profits.

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Nigeria naira hits fresh low on black market as govt funds hit currency

Nigeria's naira hit fresh lows against the dollar on the parallel market on Friday, after a government liquidity injection to help cash-strapped states offset a funding crisis hit the currency, traders said.
The currency of Africa's biggest economy fell to a new record low of 240 on the parallel market, down 2.1 percent on the day, as persistent dollar shortages continued, two traders said.
Aminu Gwadabe, president of Nigeria's Bureau de Change association said he saw an increase in demand on Friday as individuals tried to convert their naira to dollars.
The government on Tuesday said it will pay out $2.1 billion to reduce a growing backlog of debts and restructure short-term loans owed by its states after declining oil prices cut revenues.
"There is a lot of demand with the recent injection of cash by the government. Part of the funds is being converted to dollars," Gwadabe told Reuters.
Before the liquidity injection, the naira has weakened steadily on the black market.
The central bank two weeks ago tightened access to dollars on the official interbank market, which analysts say risked diverting demand to the unofficial black market, worsening investor perceptions about policy.
On the interbank market, the naira traded at 199.45 at 1037 GMT on Thursday, near central bank's pegged rate of 196.95.
On Thursday, the bank said it would not be focusing on the thinly-traded parallel market when determining the exchange rate, adding that people preferred to use the unofficial market for undocumented transactions.

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Nigeria's electricity ambitions "not remotely realistic" - report

• Power shortages one of biggest brakes on economy
• Sector could attract billions a year in investment
• President Buhari made ambitious election promises
• Realistic targets key to attract investment - report

The Nigerian government's ambitions for improving electricity supplies are "not remotely realistic", a report by experts advising the presidency says, an early blow to one of President Muhammadu Buhari's most important reform promises.
Chronic power shortages are one of the biggest constraints on investment and growth in Africa's largest economy. Fixing the problem was one of the key battlegrounds during campaigning ahead of a presidential election Buhari won in March.
Buhari, 72, and his opponent Goodluck Jonathan both promised to massively increase power supplies, building on a relatively successful $2.5 billion partial privatisation in 2013.
Buhari's All Progressives Congress pledged in its manifesto to increase supplies from 3,600 megawatts (MW) currently to 20,000 MW within four years and 50,000 MW within ten years, which would meet the demands of Nigeria's 170 million people.
However, reaching 20,000 MW by 2020 is "not even remotely realistic" and "setting unrealistic targets dilutes discipline", according to a 54-page report entitled "The Energy Blueprint" obtained by Reuters.
A spokesman for Buhari said he had not seen the report, which is being produced for the government by power industry experts, but he said the government's energy policy was still being put together.
Asked whether the government would adopt the targets in the manifesto, Femi Adesina said: "We need to wait until the policy on energy has been unfolded."
The paper says Nigeria could produce 6,500 MW by 2020, which would mean matching India's supply growth of 7 percent.
This could rise to 8,500 MW if Nigeria could equal China's 14 percent electricity output growth.
Even these targets will require quick action on multiple reforms and billions of dollars of investment, it said.
Buhari has inherited a problem that has plagued Nigerian governments for decades and the promises he made for power improvements were more modest than his predecessor.
Despite holding the world's seventh largest gas reserves, Nigeria produces less than a tenth of the amount of electricity South Africa provides for a population a third of the size.
Solving the problem would likely reduce business costs by up to 40 percent and push growth in Africa's biggest oil producer well into double-digits, experts say.
There is potential for Nigeria to attract tens of billions of dollars of investment into the power sector given the huge unmet demand from industry and the public, the report says.
Respected companies such as Siemens and Manila Electric have already invested in privatised assets and energy majors including Shell, Exxon Mobil and Italy's ENI are willing to supply ample gas supplies, if government sets competitive prices.
To attract all the investment required, however, government must free up credit to unlock gas supplies, reduce pipeline sabotage, end political interference in the private sector and install top management teams.
The dilapidated transmission network, connecting power stations to local distributors, will require $2.3 billion a year for a decade to expand grid-access. This can only be achieved by partial or full privatisation, the report says.
The report recommends simplifying the seven ministries with policy-making powers that could impact the power programme, something that appears to fit into Buhari's broader plans to streamline government and cut costs.
Some $40 billion has gone into several power reform drives in the last 20 years, industry experts say, much of it wasted.

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Nigeria cbank not focused on naira hitting new lows on black market

Nigeria's central bank said on Thursday it would not be focusing on the thinly-traded parallel market when determining the exchange rate, despite the naira hitting record lows on the unofficial market since last week.
The naira fell to a low of 235 to the dollar on the parallel market on Thursday, 1.50 naira down on the day, as dollar shortages persisted, one trader said.
"There is need to deemphasize the parallel market. How can less that one percent be determinant of the rate? Most of those going that way are those that don't want to be documented," central bank spokesman Ibrahim Muazu said.
The central bank, worried about rising inflation, has said it is in no mood to devalue the naira again, after it tightened access to hard currency for the import of a wide range of goods.
Since the measures, the naira has weakened steadily on the black market.
Analysts say the measures risked diverting dollar demand to the black market, worsening investor perceptions about policy in Africa's biggest economy and delaying a decision to devalue the naira to fully reflect weak prices for Nigeria's oil exports.
Aminu Gwadabe, president of Nigeria's Bureau de Change association told Reuters that people were buying dollars on the parallel market to protect themselves against further naira weakness.
On the interbank market, the naira traded at 199.45 at 1210 GMT on Thursday, near central bank's pegged rate of 196.95. Investors questioned how long the bank's rate could hold there, when the currency was trading further and further away on the parallel market.
Muazu said the official interbank market had the capacity to handle legitimate dollar transactions but that people preferred to use the unofficial parallel market for undocumented transactions.
The central bank has spent around $5 billion since January defending the naira, hit by last year's plunge in oil prices.
On Wednesday, the central bank said its foreign exchange reserves had started to recover gradually with its management of dollar demand and government's effort to plug all leakages.
Spot reserves stood at $31.89 billion on July 7, the spokesman said, however central bank's moving average data showed reserves at $29.63 billion on July 7.

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Nigeria's naira at new low on black market as dollar shortage persists

Nigeria's naira was quoted at a new record low of 235 to the dollar on the black market on Thursday, 1.50 naira down on the day, as dollar shortages persisted, one trader said.
Aminu Gwadabe, president of Nigeria's Bureau de Change association told Reuters that people were holding dollars to protect themselves against further naira weakness.
The naira ended at 196.95 on the official interbank market on Wednesday.

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Nigeria govt to pay $800 mln subsidy debt on oil products-trade body

 The Nigerian government has agreed to pay outstanding subsidy-related debt to oil product importers, a trade body spokesman said on Wednesday.
"They agreed to pay the remaining balance last week. Nothing has come yet but maybe this or next week. It's 159 billion naira" ($800 million), Yakubu Suleiman, spokesman for the Independent Petroleum Marketers Association of Nigeria, said.
He said he was present at a meeting last Thursday with the permanent secretaries of finance, oil and the state agency regulating the costly subsidy scheme for gasoline and diesel.‎
Nigeria, one of Africa's top producers of crude oil, subsidises gasoline and other fuels. The country must import the bulk of the 40 million litres a day that it consumes owing to a neglected refining system.
An acute fuel shortage crippled Nigeria in April and May as fuel importers shut their depots to press their case. Importers were worried that the new government, elected in March, would not honour the debt.
The presidency did not immediately respond to a request for comment.
Nigerian President Muhammadu Buhari is expected to review closely the subsidy scheme, which was revealed to have paid out over $6 billion in fraudulent claims in 2012.

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Nigerian stocks fall to 3-month low as naira weakness persists

Nigerian stocks fell to a three-month low and the naira hit a new record low on the parallel market on Wednesday, as investors who were worried about a shortage of dollars on the currency market sold shares, traders said.
    Nigeria's stock market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, dropped for the sixth consecutive day as investors pulled out of equities to short-dated Treasury bills in search of yield.
    Investors had hoped for a sustained rally after smooth elections in March. But markets have taken a hit from worries over the continued slide in the naira and the impact of persistently low oil prices on government finances.
    "We believe the uncertainties within the forex market may have triggered further sell-offs by foreign portfolio investors," said Ayodeji Ebo, head of research at Afrinvest.
    "The persistent pressure and increased (dollar) demand suggest a devaluation of the naira is imminent," he added.
    The central bank, worried about rising inflation, has said it is in no mood to devalue the naira again, after it tightened access to hard currency for the import of a wide range of goods.
    Since the central bank measures, the naira has weakened steadily on the parallel market, hitting a new record low of 233.50 to the dollar on Wednesday.
    On the interbank market, it traded near the central bank's pegged rate of 196.95 naira. Investors questioned how long the bank's rate could hold there, when the currency was trading further and further away on the parallel market.
   
    DOLLAR SHORTAGE
    People were buying dollars to protect themselves against further naira weakness, said Aminu Gwadabe, president of Nigeria's Bureau de Change association.
    Analysts say naira weakness would hurt consumer good firms who rely on imports of raw materials. Ebo said investors had priced in lower profits as a result.
    The all-share index shed 1.19 percent on Wednesday, 10.4 percent lower than its 2015 peak, which it hit on April 2 after Muhammadu Buhari won a closely fought presidential election.
    But Sub-Saharan Africa's second biggest stock market has drifted lower since as investors wait for policy direction on issues such as the naira and petroleum investment.
    The index of Nigeria's top five oil stocks declined 2.65 percent on Wednesday, weighing on the all-share index. The top two decliners were Oando and UBA <UBA.LG>, each down more than 5.5 percent.
    The most liquid 5-year bond yield rose to 15.01 percent on Wednesday, up from 14.20 percent two weeks ago, when the central bank introduced new rules and close to its pre-election quote of 15.5 percent in March.

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America is the best place in the world to be a female entrepreneur

The United States (US) is the best place to be a female entrepreneur, closely followed by Canada, Australia, Sweden and the UK, according to new research .
The report, compiled by ACG Inc and sponsored by Dell, looks at a series of factors in order to determine which countries provide the best environment for women running their own businesses. As well as analysing the overall business environment within the country, the report looks at several gender-focused factors. These include the level of access to education, banking, training and the internet, as well as the number of women starting businesses or in leadership positions within other organisations.
Although the US comes top overall, the report highlights the lack of funding available to US women: in 2014 just 3 percent of female-owned businesses received venture capital. It also points out that in Silicon Valley, the country's most famous entrepreneurial hub, just one in ten tech startups are led by women.
The report looks at 31 countries in total, with Bangladesh (31) and Pakistan (30) coming bottom due to lack of access to education and finance for women.
However, some countries have managed to grow a strong community of female entrepreneurs even without the infrastructure required. Nigeria comes 23rd overall, brought down by its general business environment, which requires that a country isn't hindered by regulation or corruption and has capital available for business growth. However, women in Nigeria start businesses at nearly the same rate as men (nine female startups to ten male startups). This puts them at the top of the pack for potential entrepreneur leaders, even if those entrepreneurs face difficulties when it comes to scaling their businesses.
The UK came fifth overall, receiving praise for its business environment and the amount of support and funding available to female-run businesses. However, the research does reference the Burt Report , published in February 2015, which shows that while the necessary infrastructure is there for women entrepreneurs, problems such as unconscious bias and less visibility still hold women back.
In order to support greater entrepreneurship, the report encourages all countries to instigate a gendered public procurement process and to monitor the gender split of entrepreneurs within their region. The research suggests that one thing that could hold female entrepreneurs back is that lucrative government contracts are given to trusted suppliers, rather than new blood. This can lead to a lack of diversity amongst suppliers.
The report also encourages the media to profile more female entrepreneurs and for the women themselves to use their own experiences and networks to raise awareness of the problems female business owners can face.

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Entrepreneur eyes cafes in West to profit from African coffee

• Good African plans cafes in Washington, London
• African firms struggle to create global brands
• Adding value to products is a challenge across Africa

 Andrew Rugasira has worked for more than a decade to sell coffee in a way that will be more profitable to Africans, starting with a firm packaging roasted beans in Uganda and now working on plans to open cafes abroad.
The Ugandan entrepreneur's goal resonates across a continent that has long sold commodities that are processed and consumed in industrialised nations, such as cocoa for chocolate or beans for espressos, while Africans get a fraction of the profits.
From his outlets in Kampala, Rugasira wants to expand his Good African Coffee cafes to Washington DC, London, and other African capitals.
The idea is to sell cappuccinos and lattes with a 'Made in Africa' story to draw customers who might otherwise go to America's Starbucks or Britain's Costa.
"When you add value you retain not just the financial value in country but you create jobs, businesses pay more taxes and that's how you develop the economy," he told Reuters.
But Rugasira's efforts to break into international markets, which began when he set up his firm in 2003, highlight the challenges facing African businesses as they seek to add more value and turn a local product into a global brand.
British supermarkets Tesco and Sainsbury's, which initially bought his packaged coffee, have taken it off their shelves. And there is no guarantee his cafes will find it easy in markets with established international chains.
"Whether you can scale that up and be up against a behemoth like Starbucks, which really knows the coffee business and the retail business, that's an incredibly tall order," said Victoria Crandall, an analyst for Africa's Ecobank.

RETURNING VALUE
While Brazil, Vietnam and Indonesia are the world's top coffee exporters, coffee is big business in east Africa, which produces some of the world's finest arabica and robusta beans.
In Uganda, Africa's biggest exporter and the eighth biggest exporter globally, about 500,000 small farmers grow coffee. It is Uganda's biggest commodity export, accounting for up to 30 percent of the country's foreign exchange earnings.
But Rugasira says less than 0.5 percent of the value of a cup of coffee sold in the West is earned by the bean growers.
Rugasira is undaunted. His coffee beans may have struggled to draw supermarket browsers, but he said cafes offer a bigger shop front to entice customers keen to try something new and ready to support sustainable development.
"As a small company we do better when we interface with customers directly than putting a product on a shelf," he said in a telephone interview from Kampala.
"Part of our brand is to have a conversation around some of the development issues in Africa. We're an ethical brand that speaks to a specific and a conscious consumer," he added.
Good African Coffee says it shares 50 percent of all the company's profits with farmers in the fields. The firm pays about 25 percent above the average market price to its network of 14,000 coffee farmers, according to Rugasira.
The next step includes opening a cafe in the smart Washington DC district of Georgetown by the end of 2015 and another in London by 2016.
He also aims to tap a growing taste among Africa's middle classes for coffee. Outside a few places like Ethiopia, which consumes more than half the coffee it produces, few Sub-Saharan African markets have a taste for the drink. That is changing.

AFRICAN CHAINS
In Kenya's capital Nairobi and other centres, local chains are growing, such as Java cafe and Dormans, a coffee producer since 1950, that has been expanding its branded cafes.
The Nigerian chain Cafe Neo tells customers on its website that it is "celebrating the return of coffee to its African roots." It has outlets in Lagos and one cafe in Kigali, the capital of Rwanda.
Rwanda's own Bourbon coffee, which says it is "bringing profits back to the hands of the coffee farmers," has eight locations globally, including in the United States.
Yet even if such African chains are starting to branch out, cracking the market beyond the continent may be tougher.
Rugasira, educated at a British university, has faced his other challenges in convincing investors his brand is marketable and can overcome challenges of working from a land-locked country with poor transport connections.
"Agriculture is perceived to be high-risk," he said. "There isn't enough patience and institutional accommodation. Yet it has the highest potential."
But he says African entrepreneurs need to keep pushing to succeed in building international brands that add value if they want to secure higher returns on their commodities.
"Empowerment and community transformation require more than just better prices for third-world growers," he said. "They necessitate linking African farmers to African processors."

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