Emerging Markets: Africa

 

Roundup

 

By Antonio Guerrero

 

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Ghana looks to diversify exports beyond cocoa

After years of seeing foreign investors flee amid a plummeting economy and political upheaval, Zimbabwe may be about to reverse the outflow with its impending privatization of Zimbabwe Steel & Iron (Zisco), the country’s sole steel producer. Arcelor Mittal, the world’s largest steelmaker, has made a bid through its South African subsidiary for the state-owned company, which is currently operating at less than 10% of capacity. Arcelor Mittal South Africa is Africa’s largest steel producer. Zimbabwean finance minister Tendai Biti says a successful Zisco privatization could pave the way for other foreign investments. Zimbabwe posted a 40% economic contraction between 2000 and 2007.

 

The Nigerian government has presented an amnesty offer to rebels in the oil-producing Niger Delta. The offer went into effect on August 6 and expires October 4. Militants accepting the offer must surrender at designated areas and begin a program for reinsertion into civil society. There is also a weapons-for-cash component. Rebel attacks, aimed at forcing the government to increase the share of oil revenues transferred to the Niger Delta, has led to a more than 20% drop in oil exports since 2006. Output has fallen from 2.36 million barrels per day (bpd) in 2007 to a current one million bpd, driving revenue from last year’s $2.2 billion monthly average to $1 billion in January 2009. Oil accounts for 98% of Nigerian exports.

 

Ghana’s 8.5% dollar-denominated Eurobonds due 2017 are poised to extend their gains, as new oil finds and increased international assistance are improving the country’s economic outlook. The bonds soared 93% between November 2008 and July 2009. Ghana is the world’s second-largest cocoa exporter and Africa’s second-largest gold miner. It plans to begin extracting oil by next year and expects to produce 500,000 bpd by 2014, for which it signed a development plan for new oil fields with a group of international oil companies. The IMF and World Bank have agreed to provide the government with a combined total of more than $1.5 billion to support its balance of payments and tackle poverty.

 

 

 

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