Emerging Markets Roundup: Africa

Roundup

 

By Antonio Guerrero

 

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South Africa’s central bank: Shareholders to get less control

Nigeria has secured a $915 million concessionary loan from the World Bank to help the government fund infrastructure development projects. Funds will be drawn between 2010 and 2015, though the government may tap no more than $180 million this year. The government is still said to be eyeing a 10-year $500 million debut global bond issue this year, to be denominated in naira. Proceeds will be used to plug government finances, with the 2010 federal budget expected to carry a deficit of more than 5%.


Angola has disappointed some investors who were awaiting the country's proposed $4 billion bond sale on international markets. The government decided to suspend its plan to seek a credit rating ahead of the placement, which has been shelved in favor of between $1.5 billion and $2 billion to be raised at home. Last year authorities announced plans to tap global markets with a two-part deal via JPMorgan Chase, for which they initiated talks with Standard & Poor's and Moody's for a rating. Proceeds were to be used to compensate for falling oil prices that reduced state revenues. Finance minister Carlos Lopes says the sovereign has scaled back its program, slashing its intended issuance in half and deciding to remain local.


The South African government, which allows private investors to acquire shares in the nation's central bank, is changing its rules to ensure the bank remains independent and that shareholders do not exercise undue influence over its operations. The bill, approved by the cabinet and pending parliamentary approval, allows the president to reappoint the bank's governor and deputy governors for terms of up to five years, creates a panel to vet board members, increases the number of board seats from 14 to 15 and allows the government to appoint four instead of three members. Some shareholders are demanding a hike in dividend payouts, which authorities claim is a push for greater control. Private shareholders get a fixed dividend of 10 cents per share, which they feel should be adjusted for inflation.

 

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