Roundup
By Antonio Guerrero
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Game on: South Africa prepares for the 2010 World Cup |
This year’s FIFA Soccer World Cup in South Africa will inject nearly $7.5 billion into the nation’s economy, according to a study by the auditing firm of Grant Thornton. The study predicts the event will generate some 415,000 new jobs. While much of the capital injection will come from infrastructure projects, the government stands to gain $2.5 billion in tax income. Meanwhile, the Congress of South African Trade Unions (Cosatu), the nation’s largest labor organization, is calling on the government to eliminate inflation targeting and peg the rand to the US dollar at a fixed rate, in the hopes of kick-starting an economic recovery and helping to reduce unemployment, which stands at around 25%.
Reacting to market volatility after Dubai’s late-2009 troubles, the government of Angola was expected to delay its $4 billion debut bond issue on international markets to early this year. The bond will mark sub- Saharan Africa’s largest-ever debt issue, and the government was set to have to pay a premium rate, as it opted to offer the bonds without a credit rating. According to Standard Bank, Africa’s largest lender, a BB- rating for the issue, likely to have a 10-year maturity and a coupon of just under 10%, would be fair. Proceeds from the placement will be used to finance the government’s construction program, which has been hit by falling oil prices. Oil accounts for 80% of government revenue.
Investment banker Adebayo Ogunlesi was appointed non-executive chairman of the African Finance Corporation (AFC), a Nigeria-based regional financial institution established in 2007. Ogunlesi, who is also chairman and managing partner of Global Infrastructure Partners (GIP), a $5.64 billion private equity fund that recently acquired London’s Gatwick Airport, plans to focus on setting a pan-African infrastructure agenda. The AFC has a capital base of more than $1 billion but got off to a rocky start. Its president was fired in 2008 after no projects had been financed a year after its launch.
