Crypto News: Next Africa: Another rescue attempt

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South African President Cyril Ramaphosa's government has stepped in to help another flailing state company. The rescue package will hopefully spare the economy from further damage that's being wrought by Transnet.

ArcelorMittal's local unit announced plans this week to shut its long steel products business and lay off as many as 3,500 employees. It blamed the ports and freight-rail monopoly for wrecking the nation's logistics network and driving up its costs.

The Transnet control tower at Cape Town harbor. Photographer: Rodger Bosch/AFP/Getty Images

The job cuts are another blow to an economy that has one of the highest unemployment rates in the world and is reeling from incessant blackouts that stifle businesses and have forced others to spend big on solar power and generators.

Transnet's woes have hit the mining industry, the bedrock of exports and a major employer, the hardest.

Anglo American is considering retrenchments at two South African units because of declining platinum-group metal prices and bottlenecks in getting its iron ore out the country. Subsidiary, Kumba, says third-quarter ore sales fell 12%.

Rival Sibanye Stillwater warned in October that it may shed more than 4,000 jobs at some of its South African platinum operations.

The failings are clear to see: Deliveries to Transnet's main coal export hub are on track for the lowest in at least three decades and nearly 100 ships were waiting at sea last week for a spot to dock due to gridlock at ports.

The inefficiencies cost the economy almost $22 billion in 2022, according to budget data.

Granted, the problems are not all of the company's making. Sabotage and copper cable theft often require urgent repairs, prompting private firms to hire security to guard the nation's rail lines.

Yet the accelerating decline followed a decade of mismanagement and corruption that gutted it of skills and laden it with what's now a 130 billion rand ($7 billion) debt pile.

The government had promised to step in and on Friday offered Transnet a 47 billion rand guarantee facility to spur a turnaround, and to service its liabilities.

While the money will help, it may not be the quick fix Africa's most industrialized economy desperately needs. — Ntando Thukwana

Key stories and opinion:
South Africa Agrees $2.5 Billion Support Package for Transnet
ArcelorMittal Cuts 3,500 South Africa Jobs as Demand Craters
South African Export Coal Rail Deliveries Face Sixth Annual Drop
Anglo Consults South Africa as It Weighs Platinum, Iron Job Cuts
Ships Pile Up With 100 Vessels Waiting at South African Ports

Click here to watch the latest edition of Africa Amplified, Bloomberg TV's new monthly show focused exclusively on the continent.

It's a climate crisis playing out across Ivory Coast and Ghana, the heavyweights of cocoa, with consequences for global food inflation and the cost-of-living squeeze. Incessant rains have turned dirt roads into impassable swamps, knocked flowers off before they bud and fostered breeding of a fungal infection that turns rugby ball-sized pods into black mush. Ghana's output of the chocolate ingredient is expected to be the lowest in 13 years and Ivory Coast's the smallest in seven, catapulting wholesale prices to their highest in decades.

A pile of harvested cocoa pods showing signs of black pod disease in Kwabeng, Ghana. Photographer: Paul Ninson/Bloomberg

Kenya's decision to scrap plans to sell a dollar bond make it all but certain that 2023 will close without a single international offering from a nation in sub-Saharan Africa. The sales drought shows the disproportionate impact that higher US interest rates are having on the continent, as surging borrowing costs force African governments to tighten belts, restructure debts or seek alternative funding.

Russia is stepping up its pursuit of closer ties with Africa by offering digital expertise in a strategy backed by President Vladimir Putin's daughter. Officials from around three dozen countries from the continent have been invited to Moscow to meet with Russian IT specialists and investors pitching digital services aimed at improving governance. Putin is expanding his outreach to Africa as the Kremlin seeks closer ties with countries of the Global South to counter the impact of US and European sanctions over its war in Ukraine.

Katerina Tikhonova, Putin's daughter, speaks via video link during the St. Petersburg International Economic Forum in 2021. Photographer: Andrey Rudakov/Bloomberg

President Joe Biden sought to showcase America's commitment to Africa as he hosted his Angolan counterpart, João Lourenço, in Washington on Thursday. But the meeting rather highlighted his unfulfilled pledge to visit the continent. Biden has worked to revitalize US-Africa ties to counter growing Chinese and Russian influence, yet Africa's leaders still waiting for a presidential trip are concerned the continent is again taking a back seat to other geopolitical priorities. "I have been there and I will be back," the US president said when asked by a reporter if he would visit Angola.

The planet has been so hot in 2023 that even before the year ends, the World Meteorological Organization has declared it the warmest ever recorded. That makes success at the COP28 climate summit that's started in Dubai that much more important. In positive news, nearly 200 nations agreed on how to run a fund designed to help vulnerable countries deal with more extreme weather stoked by global warming, and rich nations pledged at least $260 million to start the program.

Poor rains triggered the worst drought in four decades in Ethiopia, Somalia and Kenya. Photographer: Eduardo Soteras/AFP/Getty Images

Jonathan Oppenheimer has taken full control of Nigeria's biggest beverage can-maker, betting on a revival in Africa's largest economy. His company bought the shares it didn't own in GZ Industries from Affirma Capital. The acquisition is likely to help Oppenheimer, whose billionaire family founded mining giant Anglo American and turned De Beers into the world's largest diamond producer, shape GZI's growth in sub-Saharan African.

Next Africa Quiz — Which African nation complains it's missing out on concessional funding needed to deal with the fallout from climate change because it is considered too wealthy? Send your answers to gbell16@bloomberg.net.

Data Watch

Nigeria will spend more on servicing its debt next year than on building new schools or hospitals. President Bola Tinubu outlined 2024 expenditure plans projected at 27.5 trillion naira ($34 billion), of which 30% will go toward repaying loans.
BP exited one of its gas fields in Senegal earlier this month because of disagreement over the use of the commodity, the Senegalese government said. The field, Yakaar-Teranga, holds an estimated 25 trillion cubic feet of gas.
Zambian inflation accelerated to 12.9% in November, a 20-month high, as a slump in the value of the kwacha raised the cost of imported goods like cereals, vehicles and spare parts.

November has been good to South Africa's rand for the past five years. This time is different. It declined against the dollar last month, one of only four emerging-market currencies to weaken. That's in contrast to its performance since 2018, when it strengthened four out of five times in November.

Coming Up

Dec. 5 South Africa third-quarter GDP data, Kenya interest-rate decision, November PMI country reports for Kenya, Uganda, Mozambique, Zambia and South Africa
Dec. 6 Interest rate decisions for Uganda and Namibia, Ghana PMI
Dec. 7 Botswana interest-rate decision, South Africa third-quarter current-account data, central bank reserves for November & consumer confidence for the fourth quarter, Mauritius inflation
Dec. 8 Tanzania inflation for November

"You can't go from electricity to darkness, that's not good for your economy, it's not good for communities," South African Environment Minister Barbara Creecy said in an interview ahead of the COP28 climate talks. "You can't give people a promise that some green jobs will be created somewhere to people who have existing well-paid industrial jobs. So create the alternatives first and begin the transition afterwards."

Barbara Creecy. Photographer: Islam Safwat/Bloomberg

As scores of young tax agents went door-to-door in Nairobi's Eastleigh district, shopkeepers shifted nervously — President William Ruto's ambitious plans to boost revenue had come to the Kenyan capital's main shopping stretch. As the agents, touted by the government as "paramilitary trained," moved in pairs down bustling 1st Avenue, they registered dozens of shops onto the tax rolls after checking their books and determining average sales figures. The move comes as governments across Africa mobilize to boost tax collection amid an acute funding squeeze, and several countries have introduced levies or adjusted taxes higher. Ruto's aggressive push to tackle debt and narrow the fiscal deficit has earned him a nickname: Zakayo — Swahili for the biblical chief tax-collector Zacchaeus.