Summer vacations are knocking at the door and the feeling was already present on African markets with the vast majority closing the week in green.
The DSE gained 2.33%. The Tanzanian government submitted three bills to parliament on Thursday that would allow it to force mining and energy companies to renegotiate their contracts. According to President Magufuli, the reforms will increase transparency and revenues. The president deplored that the companies have not been paying their fair share of taxes. The bills follow the recommendations of a committee investigating Tanzania’s gold industry which called for a revamp of the country’s mining, gas and fiscal codes. BG Group, part of Royal Dutch Shell, Exxon Mobil, Statoil and Ophir Energy are the companies that could potentially be impacted. Mining companies that could be affected by the proposed law changes include AngloGold Ashanti, Acacia Mining Plc and Petra Diamonds.
The World Bank expects Zambia’s economy to grow by 4.1% in 2017 and by close to 5% by 2019. However, the lender cautioned that stricter spending controls were needed to ease the country’s large debt burden. In its report, it stated that “further efforts are needed to improve budgetary controls and better withstand fiscal pressures if the national debt is to remain at sustainable levels”. The LuSE gained 0.28%.
In South Africa, AngloGold Ashanti announced it is considering cutting 8,500 jobs which represent around 30% of its workforce in an attempt to restructure its South African mines. The company stated that it South African gold mining operations had experienced “heavy, and ultimately unsustainable, losses”. This comes only days after new rules announced by the government to raise the minimum threshold for black ownership of mining companies to 30% from 26%. The JSE gained 0.21%.
Fuel prices have been increased by Egypt’s Ministry of Petroleum on Thursday. This represents the second increase since the currency was floated in November, as part of a plan to cut state subsidies to ease the budget deficit. According to the Ministry, subsidies for petroleum products in 2017-2018 will fall to EGP 110 bn from EGP 145 bn. The EGX30 showed a mixed performance this week (-0.16%) with on the one hand Talaat Mostafa Group surging almost 6% after the company’s CEO was released after nine years in prison and on the other hand heavy weight Commercial International Bank declining by 1.31%.
