<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147863877-820x547.jpg" alt="" class="wp-image-481574" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147863877-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147863877-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147863877-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147863877-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147863877-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147863877-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Ajay Banga, president of the World Bank Group, speaks during an event at the annual meetings of the International Monetary Fund (IMF) and World Bank in Washington, DC, US, on Tuesday, April 16, 2024. The International Monetary Fund inched up its expectations for global economic growth this year, citing strength in the US and some emerging markets, while warning the outlook remains cautious amid persistent inflation and geopolitical risks. Photographer: Samuel Corum/Bloomberg via Getty Images</figcaption></figure>



NAIROBI, April 30 (Reuters)&nbsp;&#8211;&nbsp;World Bank President Ajay Banga said he expects donor countries to meet a request by African leaders to make record contributions to a low-interest facility for developing nations, saying these were not handouts but investments in the future.



African heads of state called on Monday for rich nations to help raise at least $120 billion for the International Development Association (IDA) at a conference to be held in Japan in December.



That would be a record for IDA, which offers long-term loans to developing nations and operates on a three-year cycle. The last round of fund-raising in 2021 raised $93 billion.



The target amount of $120 billion means donors will have to put up about $30 billion since the World Bank can borrow $3 for every dollar raised.



&#8220;There is no doubt that all the donor countries have their own challenges and their own fiscal responsibilities. But I think they all value the effect of contributing to IDA,&#8221; Banga said in an interview on Monday.



African nations account for more than half of the 75 that tap the IDA facility. Many are grappling with heavy debt burdens and climate disasters but struggle to access affordable financing on international markets.



That makes access to IDA loans crucial, the African leaders said.



Banga said rich countries should recognise that giving generously is in their own interest, citing examples of once-poor countries like China and India that have graduated from IDA recipients to become major economies.



&#8220;I think the most important message is actually that this is not a handout,&#8221; he said. &#8220;If Africa develops well, Africa has a lot to offer the world.&#8221;



(Reporting by Duncan Miriri; Editing by Aaron Ross and Nick Macfie)

Spring Meetings Of The International Monetary Fund And World Bank

World Bank chief expects rich nations to meet African donation requests

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="534" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-154793123-820x534.jpg" alt="" class="wp-image-481529" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-154793123-820x534.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-154793123-300x195.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-154793123-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-154793123-768x500.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-154793123-1536x1000.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-154793123-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A visitor descends stairs outside the offices of Anglo American Plc in the Marshalltown district of Johannesburg, South Africa, on Friday, Oct. 26, 2012. Anglo American Plc Chief Executive Officer Cynthia Carroll , the first woman, external hire and non-South African to hold the job, will quit after Anglo lost $14 billion in value in the more than five years she was in charge. Photographer: Chris Ratcliffe/Bloomberg via Getty Images</figcaption></figure>



JOHANNESBURG/LONDON, April 30 (Reuters)&nbsp;&#8211;&nbsp;BHP Group&nbsp;BHP.AX&nbsp;can&#8217;t cherry pick Anglo American&nbsp;AAL.L&nbsp;assets without paying a hefty premium, Anglo investors told Reuters, concerned that they stand to lose heavily by holding shares in South African subsidiaries.



The world&#8217;s No. 1 miner is weighing up its next move after its initial $39 billion takeover proposal for smaller rival Anglo was rejected last week. The proposed premium was 31% on Anglo&#8217;s implied value.



BHP has proposed that Anglo sell its shares in units Anglo Platinum (Amplats)&nbsp;AMSJ.J&nbsp;and Kumba Iron Ore&nbsp;KIOJ.J&nbsp;as an option to exit the South African assets it doesn&#8217;t want included in the deal.



Anglo said the unsolicited proposal significantly undervalued the company and introduced uncertainty, complexities and execution risk.



If the BHP proposal goes ahead, Anglo investors &#8220;could be stuck with three pieces of paper for a deal that could take a long time to close,&#8221; a source at a Cape Town-based fund manager told Reuters.



The process to de-merge South African assets could take as long as 18 months, the source added, due to various regulatory processes that the transaction would need to go through. There is a risk that South African regulatory authorities, particularly its central bank, could be concerned about capital outflows from foreign investors not willing to hold the shares, the source added.



&#8220;BHP could just make it a clean offer and then it&#8217;s up to them to deal with the un-bundling of the shares,&#8221; the source said. &#8220;When the deal goes through they un-bundle Amplats and Kumba to their shareholders.&#8221;



Amplats and Kumba&#8217;s share prices could also come under significant selling pressure if the units were demerged, as several shareholders would not be able to hold the stocks as these are in South Africa, another source familiar with the companies said.



The majority of shares in Kumba and Amplats are sitting in liquid hands, the source said. &#8220;So the 30% premium is going to get eaten up by the loss on those other shares tanking.&#8221;



<h2 class="wp-block-heading" id="h-cherry-picking">CHERRY-PICKING</h2>



&#8220;I think it (the current bid) &#8230; places all of the risk on Anglo shareholders,&#8221; said Django Davidson, partner and portfolio manager at Hosking Partners, which holds shares in Anglo.



&#8220;BHP wants to buy the good bits without any of the friction of disposing of the bad bit. It&#8217;s by no means clear what the de-mergers would mean for the relationship with the South African government and what the underlying commodity prices will do over that period,&#8221; Davidson added.



BHP has until May 22 to submit a binding offer and investors anticipate the company to sweeten its bid.



&#8220;BHP is seeking to make Anglo some sort of an agent for their own deal,&#8221; Shane Watkins, Chief Investment Officer at All Weather Capital, said.



All Weather Capital holds shares in Anglo and BHP and Watkins said the nation&#8217;s central bank is unlikely to approve the transaction if Anglo opts to de-merge its South African units.



&#8220;Anglo must tell BHP they don&#8217;t like the deal or that they should buy the whole company, BHP can&#8217;t cherry-pick,&#8221; another source said.



(Reporting by Felix Njini and Clara Denina; Editing by David Evans)

Anglo American Plc’s South African Headquarters As CEO Cynthia Carroll Quits

As BHP weighs firm bid for Anglo, investors fret over cherry-picking assets

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="562" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ETXNXR4WXZLLPG724P5NBV5VPA-820x562.jpg" alt="" class="wp-image-481513" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ETXNXR4WXZLLPG724P5NBV5VPA-820x562.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ETXNXR4WXZLLPG724P5NBV5VPA-300x206.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ETXNXR4WXZLLPG724P5NBV5VPA-131x90.jpg 131w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ETXNXR4WXZLLPG724P5NBV5VPA-768x526.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ETXNXR4WXZLLPG724P5NBV5VPA-1536x1052.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ETXNXR4WXZLLPG724P5NBV5VPA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Visitors to the BHP (formerly known as BHP Billiton) booth speak with representatives during the Prospectors and Developers Association of Canada (PDAC) annual convention in Toronto, Ontario, Canada March 4, 2019. REUTERS/Chris Helgren</figcaption></figure>



LAUNCESTON, Australia, April 29 (Reuters)&nbsp;&#8211;&nbsp;BHP Group&#8217;s proposed takeover of rival miner Anglo American is one of those rare instances where a mega-merger actually makes strong business sense, but it will be difficult to pull off to the satisfaction of all parties.



BHP&nbsp;BHP.AX, the world&#8217;s largest mining company, offered $39 billion last week to buy Anglo&nbsp;AAL.L, a move the London-listed miner that grew out of South Africa rejected as &#8220;significantly&#8221; undervalued.



The expectation now is that BHP may boost its offer, or other buyers for Anglo, or parts of its diversified portfolio, may emerge.



Much of the media attention has focused on Anglo&#8217;s copper assets as the lure for BHP, with a combined company becoming the world&#8217;s largest producer of the industrial metal with a share of around 10%.



In effect, BHP&#8217;s bid is largely seen as a massive vote of confidence in the future of copper, which is essential to the energy transition given its properties as a conductor and its resistance to corrosion.



The bid may also be a tacit admission on BHP&#8217;s part that buying copper assets is far easier than trying to find them and develop new mines.



Anglo has interests in three copper mines in Chile and its production in the 2023 financial year was 507,000 metric tons, which resulted in underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.452 billion.



The London-listed miner also has a 60% share in the Quellaveco mine in Peru, which gave it production of 319,000 tons and EBITDA of $1.781 billion.



This gave Anglo total copper output of 826,000 tons and EBITDA of $3.233 billion, or 32% of the group&#8217;s total for 2023.



BHP&#8217;s copper business is more diversified, with operations in Chile, Peru, Australia and the United States, and in the 2023 financial year production was 1.717 million tons for an underlying EBITDA of $6.65 billion.



For the sake of argument, assume Anglo&#8217;s copper earnings can be maintained and the copper price remains stable, it would take about six years for the earnings to pay off half of BHP&#8217;s current offer price for Anglo.



Of course, it&#8217;s likely that there would be some cost synergies, and it&#8217;s also probably the case that copper prices rally, especially if the energy transition starts to accelerate.



That would make Anglo&#8217;s copper assets more valuable to BHP as the return would be over a shorter time period.



Of course, this assumes that BHP&#8217;s view of Anglo&#8217;s assets is that copper is effectively half of the worth of the total company, even though its only 14.5% of underlying EBITDA.



The question for investors looking at BHP&#8217;s proposed takeover of Anglo is how much are Anglo&#8217;s non-copper assets worth, can they be disposed of effectively, or integrated into the wider group.



<h2 class="wp-block-heading" id="h-coal-iron-ore">COAL, IRON ORE</h2>



The asset that fits best with BHP&#8217;s existing portfolio is Anglo&#8217;s metallurgical coal mines in Australia&#8217;s Queensland state.



BHP, through its alliance with Japan&#8217;s Mitsubishi, is the world&#8217;s largest exporter of the coal used primarily to make steel, while Anglo ranks third.



Combining their assets would create a dominant metallurgical coal player, so much so that the deal is likely to attract scrutiny from regulators, especially in countries like Japan, which source the vast bulk of their coal from Australia.



The current BHP proposal foresees Anglo&#8217;s South African iron ore assets, held through Kumba Iron Ore&nbsp;KIOJ.J, and the platinum mines of Anglo American Platinum&nbsp;AMSJ.J, being divested and distributed to shareholders.



This may present problems for the South African authorities, but it&#8217;s also a sad reflection of how international companies are no longer keen on assets in the country that was once renowned as a centre of mining excellence.



Iron ore is BHP&#8217;s biggest earner, and the high-grade material produced by Kumba would be useful in the portfolio, but South Africa&#8217;s political risk and crumbling infrastructure make it unattractive.



Anglo&#8217;s Brazilian iron ore operations also offer high-grade ore, which BHP could integrate or seek to sell off.



Platinum is a commodity that may struggle in the energy transition, given its use in catalytic converters for internal combustion engine vehicles.



Anglo&#8217;s other interests, such as diamonds through De Beers, and manganese through Samancor, could most probably be sold to existing partners: the Botswana government for De Beers and South 32&nbsp;S32.AX&nbsp;for the manganese.



Overall, the mechanics of the deal seem to make good sense for BHP.



They can be made to make sense for Anglo&#8217;s shareholders if the offer is raised high enough so that they can&#8217;t say no.



Winning over various regulators across several countries may be far more tricky, and compromises may be needed, and that could end up undermining the very logic of the deal in the first place.



Disclosure: At the time of publication Clyde Russell owned shares in BHP Group as an investor in a fund.



The opinions expressed here are those of the author, a columnist for Reuters.



(Editing by Miral Fahmy)

A worker is seen at Anglo American’s Los Bronces copper mine in Chile

BHP’s Anglo buyout makes business sense if the price is right: Russell

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="800" height="533" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG230SK-OZATP.jpg" alt="" class="wp-image-481227" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG230SK-OZATP.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG230SK-OZATP-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG230SK-OZATP-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG230SK-OZATP-768x512.jpg 768w" sizes="(max-width: 800px) 100vw, 800px" /><figcaption class="wp-element-caption">President of Togo Faure Gnassingbe is seen during the ECOWAS Authority of Heads of State and Government 54th Ordinary Session in Abuja, Nigeria December 22, 2018. REUTERS/Afolabi Sotunde/File Photo</figcaption></figure>



LOME, April 29 (Reuters)&nbsp;&#8211;&nbsp;Voting got under way in legislative elections in Togo on Monday following approval of constitutional reforms by the outgoing parliament that could extend the 19-year-old rule of President Faure Gnassingbe.



Under a new charter adopted in March introducing a parliamentary system of government, the president will be elected by parliament instead of by universal suffrage.



Details about the assembly&#8217;s election of the head of state remain unclear as yet, although under the new constitution the parliament will appoint a position described as president of the council of ministers, who will have extensive authority to manage the coastal West African nation&#8217;s government affairs.



Monday&#8217;s vote had been pushed back twice because of a fierce backlash from some opposition parties who called the constitutional changes a political manoeuvre to allow Gnassingbe to extend his tenure for life.



Over four million people are registered to vote for 113 lawmakers among 2,352 candidates. Polls opened at 0700 GMT and provisional results are expected from Tuesday.



Regional elections are also taking place.



Opposition parties are taking part, hoping to gain seats that will enable them to challenge Gnassingbe&#8217;s UNIR party after they boycotted the last legislative poll and left it effectively in control of parliament.



Togo has seen years of resistance to the Gnassingbe family&#8217;s grip on power. The president was first elected 19 years ago to succeed his father, Gnassingbe Eyadema, who took office in a coup in 1967.



Violent police crackdowns on political demonstrations have been routine under Gnassingbe &#8211; reelected in a 2020 landslide disputed by the opposition &#8211; as they were during his father&#8217;s rule.



Several other African countries have pushed through constitutional and other legal changes in recent years allowing their presidents to extend their terms in office.



Monday&#8217;s vote, initially set for April 20, was postponed twice to allow for consultations on the new constitution.



Amendments unanimously approved in a second parliamentary vote earlier this month shortened presidential terms to four years from five with a two-term limit.



This does not take into account the time already spent in office, which could enable Gnassingbe to stay in power until 2033 if he is re-elected when his mandate expires in 2025. He has not yet stated his intentions.



Some opposition parties and civil society groups renewed calls for protests after the second vote, sparking small-scale demonstrations last week.



(Reporting by Alice Lawson; Writing by Sofia Christensen, Editing by William Maclean)

FILE PHOTO: President of Togo Faure Gnassingbe is seen during the ECOWAS Authority of Heads of State and Government 54th Ordinary Session in Abuja

Togo votes for a new parliament with stronger say in governance

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-820x547.jpg" alt="" class="wp-image-481198" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">NAIROBI, KENYA &#8211; APRIL 29: Ajay Banga, President of the World Bank, speaks to the audience during the IDA for Africa Heads of State Summit on April 29, 2024 in Nairobi, Kenya. (Photo by Patrick Meinhardt/Getty Images for Global Citizen)</figcaption></figure>



NAIROBI, April 29 (Reuters)&nbsp;&#8211;&nbsp;African leaders on Monday called for rich countries to commit record contributions to a low-interest World Bank facility for developing nations that they rely on to help fund their development and combat climate change.



Donors will make their cash pledges to the International Development Association (IDA), a World Bank institution that offers loans with low interest rates and long tenures, at a conference to be held in Japan in December.



&#8220;We call on our partners to meet us at this historic moment of solidarity and respond effectively by increasing their IDA contributions&#8230; to at least $120 billion,&#8221; Kenya&#8217;s President William Ruto told a meeting of African leaders and the World Bank to discuss IDA funding.



African economies were facing a &#8220;deepening development and debt crisis that threatens our economic stability, and urgent climate emergencies that demand immediate and collective action for our planet&#8217;s survival,&#8221; Ruto said.



He cited Kenya&#8217;s own devastating floods and a severe drought affecting Southern African nations such as Malawi.



If the donors pledge the minimum amount suggested by African leaders, it will be a new high after the last round of fundraising in 2021, which raked in $93 billion.



IDA lending operates on a three-year cycle, which is usually preceded by donors making their contributions at a global meeting.



IDA offers low interest rates loans to 75 developing nations around the world, the World Bank said, with more than half of them in Africa.



The funding is used by governments to boost access to energy and healthcare, invest in farming and also build critical infrastructure such as roads.



Ajay Banga, the president of the World Bank, promised to cut down &#8220;burdensome&#8221; rules that govern lending to nations under the IDA, to make it more efficient and to deliver funds to borrower nations faster.



&#8220;We believe a simpler and reimagined IDA can be deployed with more focus to make meaningful impact,&#8221; he said.



(Reporting by Duncan Miriri; Editing by George Obulutsa and Alex Richardson)

IDA for Africa Heads of State Summit

African leaders seek record World Bank financing to combat climate change

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-820x461.jpeg" alt="" class="wp-image-481182" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024.jpeg 1600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Borge Brende, president of the World Economic Forum (WEF). Bloomberg | Bloomberg | Getty Images</figcaption></figure>



Borge Brende, president of the World Economic Forum, gave a stark outlook for the global economy saying the world faces a decade of low growth if the right economic measures are not applied.



Speaking Sunday at WEF’s “Special Meeting on Global Collaboration, Growth and Energy for Development” in Riyadh, Saudi Arabia, he warned that global debt ratios are close to levels not seen since the 1820s and there was a “stagflation” risk for advanced economies.



“The global growth [estimate] this year is around 3.2 [%]. It’s not bad, but it’s not what we were used to — the trend growth used to be 4% for decades,” he told CNBC’s Dan Murphy, adding that there was a risk of a slowdown like that seen in the 1970s in some major economies.



“We cannot get into a trade war, we still have to trade with each other,” he explained when asked about avoiding a period of low growth.



“Trade will change and global value chains — there will be some more near-shoring and friend-shoring — but we shouldn’t lose the baby with the bathwater &#8230; Then we have to address the global debt situation. We haven’t seen this kind of debt since the Napoleonic Wars, we are getting close to 100% of the global GDP in debt,” he said.



He said governments needed to consider how to reduce that debt and take the right fiscal measures without getting into a situation where it kicks off a recession. He also motioned persistent inflationary pressures and that generative artificial intelligence could be an opportunity for the developing world.



His warning chimes with a recent report from the International Monetary Fund which noted that global public debt had edged up to 93% of GDP last year, and was still 9 percentage points higher than pre-pandemic levels. The IMF projected that global public debt could near 100 % of GDP by the end of the decade.



The Fund also singled out the high debt levels in China and the United States, saying loose fiscal policy in the latter puts pressure on rates and the dollar which then pushes up funding costs around the world —exacerbating pre-existing fragilities.



Earlier this month, the International Monetary Fund raised its global growth forecast slightly, saying the world economy had proven “surprisingly resilient” despite inflationary pressures and monetary policy shifts. It now expects global growth of 3.2% in 2024, up by a modest 0.1 percentage point from its earlier January forecast.



WEF’s Brende said Sunday that the biggest risk for the global economy is now “the geopolitical recession that we are faced with,” highlighting recent Iran-Israel tensions.



“There is so much unpredictability, and you can easily get out of control. If Israel and Iran escalated that conflict, we could have seen an oil price of $150 overnight. And that would of course be very damaging for the global economy,” he said.

107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024

WEF president: ‘We haven’t seen this kind of debt since the Napoleonic Wars’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="510" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-820x510.jpg" alt="" class="wp-image-481179" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-820x510.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-300x187.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-145x90.jpg 145w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-768x478.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-1536x955.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Workers talk on their mobile phones, as a Maersk container is transported by a train, near a port of Barcelona, Spain April 26, 2024. REUTERS/Nacho Doce/File Photo</figcaption></figure>



ABUJA, April 28 (Reuters)&nbsp;&#8211;&nbsp;Nigeria secured a $600 million investment in seaport infrastructure from Danish shipping company A.P. Moller-Maersk&nbsp;MAERSKb.CO, the presidency said in a statement on Sunday.



The investment was secured during a meeting between President Bola Tinubu and Moller-Maersk Chairman Robert Maersk Uggla on the sidelines of a World Economic Forum meeting in Saudi Arabia.



&#8220;We believe in Nigeria, and we will invest $600 million in existing facilities and make the ports accommodating for bigger ships,&#8221; the Nigerian presidency quoted Uggla as saying during the meeting.



Nigeria has promised to revamp its ports, including in the commercial capital Lagos, to ease congestion that frustrates businesses.



Tinubu said during the meeting that his government would support the modernisation and automation of its ports to improve trade, reduce corruption and boost efficiency.



&#8220;A bet on Nigeria is a winning bet. It is also a bet that rewards beyond what is obtainable elsewhere,&#8221; he said. &#8220;We need to encourage more opportunities for revenue expansion and minimize trans-shipments from larger ships to smaller ships.&#8221;



(Reporting by Felix Onuah in Abuja and Kanjyik Ghosh in Bengalulu, Writing by MacDonald Dzirutwe; Editing by Lisa Shumaker and Matthew Lewis)

FILE PHOTO: Workers talk on their mobile phones as a Maersk container is transported by a train near a port of Barcelona

Nigeria secures $600 million Maersk investment in seaport infrastructure

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-820x461.jpg" alt="" class="wp-image-480295" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097.jpg 1920w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chris Ratcliffe | Bloomberg | Getty Images</figcaption></figure>



Elliott Management has built a roughly $1 billion stake in miner Anglo American in recent months, a person familiar with the matter told CNBC.



Anglo American shares were up 5% on the news Friday.



News of the activist’s position comes as the $43 billion, London-based miner faces takeover interest from BHP, a mining giant with worldwide operations. Anglo rejected BHP’s $39 billion takeover offer Friday morning, saying BHP’s offer “significantly undervalues Anglo American and its future prospects.”



Anglo American declined to comment. The company is one of the largest producers of copper in the world.



BHP’s bid would have called for the spinoff of Anglo American’s South African subsidiaries. The metal plays a critical role in the worldwide transition to clean energy, and is used in the manufacture of EVs and wind turbines.



Anglo American chairman Stuart Chambers noted in the company’s rejection that copper represented “30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products,” there was more value to be created for shareholders in the months and years ahead.



Elliott’s position was first reported by Bloomberg.



Elliott has extensive experience with mining companies, including at suitor BHP in 2017. The activist urged the company to spin off its petroleum businesses and ditch its primary listing in Australia in favor of one in London.



BHP initially rejected those proposals, before exiting the oil business in 2021. The Australian miner is one of the largest in the world, with a market cap of $145 billion and mining sales of $53.8 billion in 2023.



CNBC’s Karen Gilchrist contributed reporting.

103389971-GettyImages-154793097

Elliott takes $1 billion stake in Anglo American as miner faces takeover interest

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-820x547.jpg" alt="" class="wp-image-480263" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Nico Muller the CEO of Impala Platinum, attends the Platinum Group Metals (PGMS) Industry Day in Johannesburg, South Africa April 10, 2024. REUTERS/Ihsaan Haffejee/File Photo</figcaption></figure>



April 26 (Reuters)&nbsp;&#8211;&nbsp;Impala Platinum&nbsp;IMPJ.J&nbsp;could cut 3,900 jobs as it restructures its South African operations due to lower metal prices, the miner said on Friday, with the news likely to pile more pressure on the government weeks before a general election.



Mining companies in the world&#8217;s top platinum supplier are shelving expansion projects, closing some operations, and letting go of thousands of workers in a bid to preserve cash as some metal prices plunge.



Implats said it was resorting to jobs cuts as its cost savings, deferment of capital projects, and a voluntary severance scheme had &#8220;not sufficiently offset the impact of persistently lower prices&#8221; on the business.



Platinum is 7% down so far this year, while palladium is 10% lower since the beginning of the year.



&#8220;This has significantly undermined Implats&#8217; financial position, which in turn threatens future job security for the entire workforce,&#8221; Implats CEO Nico Muller said in a statement.



South African miners have also been impacted by a myriad of local challenges including power cuts and a crisis at the state port and freight rail company.



Job losses are hot-button issues in the lead-up to the May 29 election, where polls suggest the African National Congress could lose its parliamentary majority for the first time since the end of apartheid.



Implats&#8217; restructuring could potentially affect 9% of the miner&#8217;s workforce at its Rustenburg, Marula and the newly acquired Bafokeng operations. It also targets a 30% reduction in head office costs, the company said.



In February, Implats&#8217; rival Anglo American Platinum (Amplats) AMSJ.J announced plans to lay off 3,700 people, while Sibanye Stillwater SSWJ.J has said it will cut about 2,000 jobs in its platinum operations.



Amplats&#8217; parent company, Anglo American AAL.Lrejected rival miner BHP Group&#8217;s BHP.AX $39 billion takeover proposal on Friday, saying the bid significantly undervalued the London-listed miner and its prospects.



(Reporting by Felix Njini and Nelson Banya; Editing by Olivia Kumwenda-Mtambo and Mark Potter)

FILE PHOTO: Platinum Group Metals (PGMS) Industry Day in Johannesburg

Implats weighs 3,900 job cuts in South Africa as price rout takes toll

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="550" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-820x550.jpg" alt="" class="wp-image-480246" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-820x550.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-300x201.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-134x90.jpg 134w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-768x515.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-1536x1031.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">File photo: Local residents walk past the Reserve Bank of Zimbabwe (RBZ) ahead of the launch of a gold coin, in Harare, Zimbabwe, July 25, 2022. REUTERS/Philimon Bulawayo/File photo</figcaption></figure>



HARARE, April 26 (Reuters)&nbsp;&#8211;&nbsp;Zimbabwe is arresting black market forex dealers they accuse of distorting exchange rates as the country prepares for its new gold-backed currency to enter circulation next week.



Two weeks ago, black market traders would openly solicit customers at street corners but constant police raids since have driven the thriving alternative forex market underground.



Zimbabwe, which launched a new gold-backed currency called Zimbabwe Gold (ZiG) in early April, dumping the troubled Zimdollar, fears that a black market which thrives on charging premiums will weaken the new currency.



While the ZiG has enjoyed stability on the formal market since its introduction, trading at ZiG 13.3 to a dollar, black market traders are already charging a 65% premium to the dollar.



Keen to establish trust in the new currency to bring down high inflation and secure a new IMF programme by demonstrating sound economic management, the government has threatened brute force to shut down the street currency traders.



&#8220;We wouldn&#8217;t want you to end up being crippled after being attacked,&#8221; Vice President Constantino Chiwenga said in a message to black-market dealers at a political gathering on Tuesday.



Secretary for finance George Guvamatanga said Zimbabwe&#8217;s treasury classifies any illegal forex dealing as money laundering.



More than 70&nbsp;black-market&nbsp;forex dealers arrested in the southern African country&#8217;s capital Harare last week have been refused bail.



&#8220;My colleague was taken in last week and that was the last we heard from him. I hear he was denied bail. It is no longer safe out here,&#8221; one dealer told Reuters.



&#8220;I don&#8217;t pick up unknown calls anymore, or entertain clients that I do not know. These police officers are coming here undercover and in plainclothes. If you entertain them, you will be gone in no time,&#8221; said another dealer.



However, economists questioned whether the police crackdown will be enough to restore confidence in the local currency.



&#8220;I think for a currency, its a matter of confidence. People need to be confident in that currency and also need sustained stability in order for them to accept it,&#8221; said independent economist Happiness Zengeni.



Zimbabwean authorities hope the new currency will help shore up an economy that has suffered severely from low commodity prices and the impact of the El Nino-induced drought.



The central bank will put new ZiG banknotes and coins into general circulation on April 30.



(Reporting by Nyasha Chingono; editing by Olivia Kumwenda-Mtambo and Mark Heinrich)

Local residents walk past the Reserve Bank of Zimbabwe

Zimbabwe pounces on illicit forex dealers ahead of new currency debut

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="515" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-820x515.jpg" alt="" class="wp-image-480200" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-820x515.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-300x188.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-143x90.jpg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-768x482.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-1536x964.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The Anglo American logo is seen in Rusternburg October 5, 2015. Picture taken October 5, 2015. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



MELBOURNE/LONDON, April 26 (Reuters)&nbsp;&#8211;&nbsp;Anglo American&nbsp;AAL.L&nbsp;rejected rival miner BHP Group&#8217;s&nbsp;BHP.AX&nbsp;31.1 billion pound ($39 billion) takeover proposal on Friday, saying the bid significantly undervalued the London-listed miner and its future prospects.



&#8220;The BHP proposal is opportunistic and fails to value Anglo American&#8217;s prospects, while significantly diluting the relative value upside participation of Anglo American&#8217;s shareholders relative to BHP&#8217;s shareholders,&#8221; Anglo Chairman Stuart Chambers said in a statement.



Reuters reported on Thursday, citing two sources, that Anglo&#8217;s management did not consider the proposal as attractive, as some investors and analysts dismissed it as opportunistic.



BHP, the world&#8217;s largest listed mining company, on Thursday offered Anglo&#8217;s shareholders 25.08 pounds per share, a premium of 31% to the market close on Wednesday, sending the London-listed target&#8217;s shares up 16%.



A condition of its proposal is that Anglo first distributes to shareholders its stakes in Anglo American Platinum&nbsp;AMSJ.J&nbsp;and Kumba Iron Ore&nbsp;KIOJ.J, both of which operate in South Africa where BHP has no assets.



Anglo on Friday said the structure on offer was &#8220;highly unattractive&#8230;given the uncertainty and complexity inherent in the Proposal, and significant execution risks.&#8221;



BHP had no immediate comment on Anglo&#8217;s rejection. Anglo shares were down 0.6% in early trading.



BHP&#8217;s shares closed 4.6% lower in Australia on Friday. The company&#8217;s Australian stock did not trade on Thursday as the country&#8217;s share market was closed for a holiday.



&#8220;With regards to a price, I think it&#8217;s pretty clear that the initial shot fired is just that. It’s just the first shot &#8211; it&#8217;s not their best and final,&#8221; said Todd Warren, a portfolio manager at Tribeca Investment Partners in Sydney, which holds shares in Anglo.



&#8220;We would need to see more money on the table before we sold our shares,&#8221; he said.



Questions about jurisdictional risks in South Africa and other regions, and concerns that Anglo American&#8217;s businesses are lower margin than BHP&#8217;s led to a share sell off, said RBC Capital Markets analyst Kaan Peker in Sydney.



&#8220;That uncertainty I think is resulting in a bit of a reduction on what investors are willing to pay for forward earnings,&#8221; Peker said.



South Africa is scrutinising BHP&#8217;s proposed offer for Anglo, a government spokesperson said, with the deal likely to concern officials the coming weeks before a general election where the governing party&#8217;s majority is at risk.



Some BHP investors also remained to be convinced over the merits of the deal.



&#8220;I am a bit surprised that the deal is not an agreed deal. It likely means BHP will need to offer more to win over shareholders and management and risks creating unhelpful animosity,&#8221; said Brenton Saunders, a portfolio manager at Pendal.



&#8220;The deal is complicated in that Anglo has a complicated structure with a number of moving parts like AngloPlats, Kumba and De Beers. It’s not clear how BHP adds value to the deal if it is required to offer considerably more.&#8221;



Consensus is growing that BHP will have to sweeten its offer to get the deal done. BHP has until May 22 to make a binding bid.



BHP CEO Mike Henry and executives including Chief Financial Officer Vandita Pant will be briefing investors next week, fund managers said. BHP did not respond to a request for comment on the meetings.



A deal, if successful, would be the largest mining takeover globally in 2024 and in the top 10 largest deals for the sector ever, according to LSEG data.



<h2 class="wp-block-heading" id="h-antitrust">ANTITRUST</h2>



Attention is shifting now to antitrust concerns, with industry sources citing regulators in key BHP customers China, for copper, and Japan and India, for steel-making coal, as potential hurdles for the deal.



&#8220;If MOFCOM acted on Glencore/Xstrata then surely it will act here,&#8221; said one resources lawyer, referring to China&#8217;s commerce ministry, who declined to be named because the subject was sensitive.



Glencore GLEN.L was forced to sell its interest in Xstrata&#8217;s Las Bambas copper project in 2013 to clear a final hurdle set by Chinese regulators for the $35 billion dollar deal.



BHP CEO Mike Henry has repeated many times in the nearly two years since Australia&#8217;s Queensland state hiked its coal royalties that the miner will not put fresh investment into its metallurgical coal business because of the lack of consultation.



That could fuel concerns around supply security for Japanese customers in particular, and cause regulators to take a close look, said Lloyd Hain of consultancy AME Group.



&#8220;The Japanese want to know long term that they are going to maintain security of supply and also volume.&#8221;



(Reporting by Melanie Burton in Melbourne, Scott Murdoch in Sydney and Clara Denina in London; additional reporting Archisma Iyer in Bengalaru; Writing by Miyoung Kim; Editing by Sonali Paul, Neil Fullick and Jamie Freed)

FILE PHOTO: The Anglo American logo is seen in Rusternburg

Anglo American rejects BHP’s $39 bln takeover proposal

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ICSZXDHRHZMVNCNJGLBWY6KOGA-820x547.jpg" alt="" class="wp-image-479979" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ICSZXDHRHZMVNCNJGLBWY6KOGA-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ICSZXDHRHZMVNCNJGLBWY6KOGA-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ICSZXDHRHZMVNCNJGLBWY6KOGA-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ICSZXDHRHZMVNCNJGLBWY6KOGA-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ICSZXDHRHZMVNCNJGLBWY6KOGA-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/ICSZXDHRHZMVNCNJGLBWY6KOGA.jpg 1920w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A vendor sells cassava flour at a traditional market in Bariga district, in Lagos, Nigeria January 15, 2021. Picture taken January 15, 2021. REUTERS/Temilade Adelaja/File Photo</figcaption></figure>



JOHANNESBURG, April 25 (Reuters)&nbsp;&#8211;&nbsp;Inflation in key African economies will slow into next year but remain stubbornly high in Nigeria due to sporadic flooding and difficult terrain for the naira currency, a Reuters poll found.



The acute shortage of dollars in much of the continent including Angola, Nigeria and Zambia has often put home inflation under significant strain due to a reliance on single commodity currency inflows such as crude oil and copper.



Still, the poll of 15 analysts taken in the past week showed inflation would moderate more in countries with better diversified sources of dollar revenues such as Kenya.



Inflation in Nigeria is expected to quicken to 29.1% this year from an average of 24.5% last year, before it slows to 17.2% next year. It hit a 28-year high of 33.2% in annual terms last month.



Nigeria central bank governor Olayemi Cardoso raised the monetary policy rate by 200 basis points to 24.75% last month after a 400 basis point hike in February.



Even with a more coherent monetary policy now in place, and potential naira stability, Nigerian inflation will only fall slowly this year, Citi wrote in a note to clients.



The high inflation rate reflects ongoing elevated food price inflation which accounts for around 50% of the CPI basket and is only marginally impacted by monetary policy, Citi added.



High food price inflation is a result of flooding seen in many parts of the country in recent years, the rising cost of fertilizer and continuing insecurity in many food-producing regions.



Ghana inflation averaged 40.3% last year, but is expected to slow markedly to 18.7% this year and then to 12.1% in 2025.



Angolan inflation is forecast to slow to last year&#8217;s average of 13.6% next year from 23.7% this year, while in Zambia it was seen slowing to 8.0% in 2025 from 12.3% this year.



Inflation in Kenya will remain one of the most-tamed in the region apart from South Africa, slowing to an average of 5.6% next year compared with 6.3% this year, the poll found.



Standard Chartered said it lowered its inflation forecasts last week to allow for recent Kenyan shilling appreciation and improved food prices.



A separate poll earlier this month predicted inflation in South Africa would slow to 4.6% next year from 5.1% this year.



(Reporting by Vuyani Ndaba, Editing by William Maclean)

FILE PHOTO: A vendor sells cassava flour at a traditional market in Bariga district, in Lagos

Inflation in key African economies to slow into next year

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107406139-1714028329607-gettyimages-81814144-garljk052k-820x462.jpeg" alt="" class="wp-image-479881" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107406139-1714028329607-gettyimages-81814144-garljk052k-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107406139-1714028329607-gettyimages-81814144-garljk052k-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107406139-1714028329607-gettyimages-81814144-garljk052k-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107406139-1714028329607-gettyimages-81814144-garljk052k-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107406139-1714028329607-gettyimages-81814144-garljk052k.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Miners carrying out operations. Graeme Williams | Gallo Images Roots Rf Collection | Getty Images</figcaption></figure>



Mining giant BHP Group on Thursday said it had made an all-share takeover offer for rival Anglo American, valuing the smaller company at £31.1 billion ($38.9 billion).



Anglo American shares leapt at the market open and were 12% higher at 9 a.m. in London.



The company confirmed it had received an “unsolicited, non-binding and highly conditional combination proposal,” which it said it was reviewing with advisers.



Australia-based BHP, the biggest listed miner according to Companies Market Cap, said that the deal would deliver 0.7097 BHP shares per Anglo American share to Anglo American’s ordinary shareholders.



A combination of the firms would form a juggernaut in copper mining and the world’s largest player in the space which would supply 10% of global output, according to a Reuters analysis. Anglo American has a huge copper operation based in South America and a production target for the metal of 730,000 to 790,000 tons in 2024. This compares with a copper output aim between 1.7 million and 1.9 million for BHP over the same period.



Mining firms are seeking to shore up copper supplies over the years ahead due to projected shortages and the metal’s key role in the energy transition, with uses in electric vehicles, power grids and wind turbines.



The mining industry has experienced an uptick in merger and acquisition activity over the last four years as companies position themselves for changing demand patterns.



BHP in 2022 merged its dual-floated business into a single legal entity with a primary listing in Australia.



Markets had closed before the announcement Thursday morning.



The proposal would entail divestments by Anglo American to its shareholders of its stakes in South Africa-based Anglo American Platinum Limited and Kumba Iron Ore Limited.



“The combination would bring together the strengths of BHP and Anglo American in an optimal structure. Anglo American would&nbsp;bring its assets and long-term growth potential. BHP would bring its higher&nbsp;margin cash generative assets&nbsp;and growth projects along with its larger free cash flows and stronger balance sheet,” BHP Group said.

107406139-1714028329607-gettyimages-81814144-garljk052k

Anglo American shares pop 13% after BHP Group’s $39 billion takeover bid to form mining juggernaut

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107383266-1709738325082-gettyimages-2055746202-AFP_34KV84R-820x462.jpeg" alt="" class="wp-image-479878" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107383266-1709738325082-gettyimages-2055746202-AFP_34KV84R-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107383266-1709738325082-gettyimages-2055746202-AFP_34KV84R-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107383266-1709738325082-gettyimages-2055746202-AFP_34KV84R-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107383266-1709738325082-gettyimages-2055746202-AFP_34KV84R-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107383266-1709738325082-gettyimages-2055746202-AFP_34KV84R.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">US Federal Reserve Board Chairman Jerome Powell arrives to testify at a House Financial Services Committee hearing on the “Federal Reserve’s Semi-Annual Monetary Policy Report,” on Capitol Hill in Washington, DC, March 6, 2024.  Mandel Ngan | Afp | Getty Images</figcaption></figure>



With the economy humming along and the stock market, despite some recent twists and turns, hanging in there pretty well, it’s a tough case to sell that higher interest rates are having a substantially negative impact on the economy.



So what if policymakers just decide to keep rates where they are for even longer, and go through all of 2024 without cutting?



It’s a question that, despite the current conditions, makes Wall Street shudder and Main Street queasy as well.



“When rates start climbing higher, there has to be an adjustment,” said Quincy Krosby, chief global strategist at LPL Financial. “The calculus has changed. So the question is, are we going to have issues if rates remain higher for longer?”



The higher-for-longer stance was not what investors were expecting at the beginning of 2024, but it’s what they have to deal with now as inflation has proven stickier than expected, hovering around 3% compared with the Federal Reserve’s 2% target.



Recent statements by Fed Chair Jerome Powell and other policymakers have cemented the notion that rate cuts aren’t coming in the next several months. In fact, there even has been talk about the potential for an additional hike or two ahead if inflation doesn’t ease further.



That leaves big questions over when exactly monetary policy easing will come, and what the central bank’s position to remain on hold will do to both financial markets and the broader economy.



Krosby said some of those answers will come soon as the current earnings season heats up. Corporate officers will provide key details beyond sales and profits, including the impact that interest rates are having on profit margins and consumer behavior.



“If there’s any sense that companies have to start cutting back costs and that leads to labor market trouble, this is the path of a potential problem with rates this high,” Krosby said.



But financial markets, despite a recent 5.5% sell-off for the S&amp;P 500, have largely held up amid the higher-rate landscape. The broad market, large-cap index is still up 6.3% year to date in the face of a Fed on hold, and 23% above the late October 2023 low.



<h2 class="wp-block-heading" id="h-higher-rates-can-be-a-good-sign"><a></a>Higher rates can be a good sign</h2>



History tells differing stories about the consequences of a hawkish Fed, both for markets and the economy.



Higher rates are generally a good thing so long as they’re associated with growth. The last period when that wasn’t true was when then-Fed Chair Paul Volcker strangled inflation with aggressive hikes that ultimately and purposely tipped the economy into recession.



There is little precedent for the Fed to cut rates in robust growth periods such as the present, with gross domestic product expected to accelerate at a 2.4% annualized pace in the first quarter of 2024, which would mark the seventh consecutive quarter of growth better than 2%. Preliminary first-quarter GDP numbers are due to be reported Thursday.



For the past several decades, higher rates have not been linked to recessions.



On the contrary, Fed chairs have often been faulted for keeping rates too low for too long, leading to the dot-com bubble and subprime market implosions that triggered two of the three recessions this century. In the other one, the Fed’s benchmark funds rate was at just 1% when the Covid-induced downturn occurred.



In fact, there are arguments that too much is made of Fed policy and its broader impact on the $27.4 trillion U.S. economy.



“I don’t think that active monetary policy really moves the economy nearly as much as the Federal Reserve thinks it does,” said David Kelly, chief global strategist at J.P. Morgan Asset Management.



Kelly points out that the Fed, in the 11-year run between the financial crisis and the Covid pandemic, tried to bring inflation up to 2% using monetary policy and mostly failed. Over the past year, the pullback in the inflation rate has coincided with tighter monetary policy, but Kelly doubts the Fed had much to do with it.



Other economists have made a similar case, namely that the main issue that monetary policy influences — demand — has remained robust, while the supply issue that largely operates outside the reach of interest rates has been the principle driver behind decelerating inflation.



Where rates do matter, Kelly said, is in financial markets, which in turn can affect economic conditions.



“Rates too high or too low distort financial markets. That ultimately undermines the productive capacity of the economy in the long run and can lead to bubbles, which destabilizes the economy,” he said.



“It’s not that I think they’ve set rates at the wrong level for the economy,” he added. “I do think the rates are too high for financial markets, and they ought to try to get back to normal levels — not low levels, normal levels — and keep them there.”



<h2 class="wp-block-heading"><a></a>Higher-for-longer the likely path</h2>



As a matter of policy, Kelly said that would translate into three quarter-percentage point rate cuts this year and next, taking the fed funds rate down to a range of 3.75%-4%. That’s about in line with the 3.9% rate at the end of 2025 that Federal Open Market Committee members penciled in last month as part of their “dot-plot” projections.



Futures market pricing implies a fed funds rate of 4.32% by December 2025, indicating a higher rate trajectory.



While Kelly is advocating for “a gradual normalization of policy,” he does think the economy and markets can withstand a permanently higher level of rates.



In fact, he expects the Fed’s current projection of a “neutral” rate at 2.6% is unrealistic, an idea that is gaining traction on Wall Street. Goldman Sachs, for instance, recently has opined that the neutral rate — neither stimulative nor restrictive — could be as high as 3.5%. Cleveland Fed President Loretta Mester also recently said it’s possible that the long-run neutral rate is higher.



That leaves expectations for Fed policy tilting toward cutting rates somewhat but not going back to the near-zero rates that prevailed in the years after the financial crisis.



In fact, over the long run, the fed funds rate going back to 1954 has averaged 4.6%, even given the extended seven-year run of near-zero rates after the 2008 crisis until 2015.



<h2 class="wp-block-heading"><a></a>Government spending issues</h2>



One thing that has changed dramatically, though, over the decades has been the state of public finances.



The $34.6 trillion national debt has exploded since Covid hit in March 2020, rising by nearly 50%. The federal government is on track to run a $2 trillion budget deficit in fiscal 2024, with net interest payments thanks to those higher interest rates on pace to surpass $800 billion.



The deficit as a share of GDP in 2023 was 6.2%; by comparison, the European Union allows its members only 3%.



The fiscal largesse has juiced the economy enough to make the Fed’s higher rates less noticeable, a condition that could change in the days ahead if benchmark rates hold high, said Troy Ludtka, senior U.S. economist at SMBC Nikko Securities America.



“One of the reasons why we haven’t noticed this monetary tightening is simply a reflection of the fact that the U.S. government is running its most irresponsible fiscal policy in a generation,” Ludtka said. “We’re running massive deficits into a full-employment economy, and that’s really keeping things afloat.”



However, the higher rates have begun to take their toll on consumers, even if sales remain solid.



Credit card delinquency rates climbed to 3.1% at the end of 2023, the highest level in 12 years, according to Fed data. Ludtka said the higher rates are likely to result in a “retrenchment” for consumers and ultimately a “cliff effect” where the Fed ultimately will have to concede and lower rates.



“So, I don’t think they should be cutting anytime in the immediate future. But at some point that’s going to have to happen, because these interest rates are simply crushing particularly low-income-earning Americans,” he said. “That is a big portion of the population.”

107383266-1709738325082-gettyimages-2055746202-AFP_34KV84R

Why the Fed keeping rates higher for longer may not be such a bad thing

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="517" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-820x517.jpeg" alt="" class="wp-image-416545" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-820x517.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-300x189.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-143x90.jpeg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-768x484.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-1536x969.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-scaled.jpeg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A participant stands near a logo of World Bank at the International Monetary Fund &#8211; World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018.
Johannes Christo | Reuters</figcaption></figure>



DAR ES SALAAM, April 24 (Reuters)&nbsp;&#8211;&nbsp;The World Bank has suspended new disbursements from a $150 million fund to expand a national park in southern Tanzania, a spokesperson said on Wednesday, after the lender received allegations of killings and evictions by rangers last year.



Two anonymous complainants have accused rangers from the Ruaha National Park of extrajudicial killings, enforced disappearances, evictions, torture and cattle seizures perpetrated against local villagers, according to the World Bank&#8217;s independent complaints mechanism.



&#8220;The World Bank is deeply concerned about the allegations of abuse and injustice related to the&#8230; project in Tanzania,&#8221; a spokesperson said in a statement. &#8220;We have therefore decided to suspend further disbursement of funds with immediate effect.&#8221;



Government spokesman Mobhare Matinyi said the allegations were false but that the government was investigating &#8220;to see if there was any misconduct from any staff so that it takes appropriate action&#8221;.



He said the suspended final tranche of the loan amounted to $25 million.



Several Tanzanian government initiatives to expand tourism have faced criticism from human rights advocates, including in the north of the country where thousands of Maasai have been evicted from their traditional homelands.



A report last year by the Oakland Institute, a California-based think-tank, accused Ruaha park rangers of sexual violence, and said local communities&nbsp;across&nbsp;Tanzania were bearing the cost of generating tourism revenues under the guise of protecting the environment.



The government says expanding the tourism sector is key to economic development and that it has provided fair compensation to people evicted from their homes.



The World Bank project was approved by its board in 2017 and is expected to end in February 2025.



(Editing by Hereward Holland and Gareth Jones)

106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report

World Bank suspends Tanzania tourism fund over abuse allegations

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/IMF-World-Bank-to-proceed-with-annual-meetings-in-Morocco-in-October-820x547.jpg" alt="" class="wp-image-427563" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/IMF-World-Bank-to-proceed-with-annual-meetings-in-Morocco-in-October-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/IMF-World-Bank-to-proceed-with-annual-meetings-in-Morocco-in-October-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/IMF-World-Bank-to-proceed-with-annual-meetings-in-Morocco-in-October-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/IMF-World-Bank-to-proceed-with-annual-meetings-in-Morocco-in-October-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/IMF-World-Bank-to-proceed-with-annual-meetings-in-Morocco-in-October-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/IMF-World-Bank-to-proceed-with-annual-meetings-in-Morocco-in-October-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo</figcaption></figure>



ABUJA, April 23 (Reuters) &#8211; Nigeria&#8217;s central bank sold $15.83 million to exchange bureaus at a more favourable naira rate than the official market, it said on Tuesday, the second such sale in April and the fourth this year as it moves to boost the supply of foreign currency.



The official market quoted the naira currency&nbsp;NGN=D1&nbsp;at 1,315 per dollar at 1326 GMT, LSEG data showed.



The central bank sold $10,000 each at 1,021 naira per dollar to 1,583 currency exchange operators to meet demand for eligible end-user foreign exchange needs, instructing them to resell at a mark-up not more than 1.5% above the purchase price.



This strategy injects liquidity into the market while attempting to control the naira exchange rate which fell to a record low in February, but is starting to strengthen.



The naira has surged sharply against the dollar, both on the official and parallel markets, after the central bank raised interest rates and lifted restrictions on foreign participation at its fixed-income auctions.



The bank has since started a rate tightening cycle and increased yields on short-term treasury bills to attract foreign investors.



Central bank Governor Olayemi Cardoso has said the bank does not intend to prop up the currency, adding that the roughly $2 billion fall in reserves in the last two months had nothing to do with defending the currency.



(Reporting by Elisha Bala-Gbogbo; Editing by Mark Potter)

FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington

Nigeria’s central bank sells $15.83 million to exchange bureaus

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="536" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-820x536.jpg" alt="" class="wp-image-479372" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-820x536.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-300x196.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-768x502.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-1536x1003.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A view shows the logo of South Africa&#8217;s central reserve bank, at the reserve bank offices in Pretoria, South Africa, January 26, 2023. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, April 23 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s central bank said on Tuesday that the path back to 4.5% inflation would probably be &#8220;bumpy and protracted&#8221; after setbacks in the disinflation trajectory in recent months.



The South African Reserve Bank (SARB) has held its main interest rate at 8.25%&nbsp;ZAREPO=ECI&nbsp;since May 2023, keeping policy restrictive to try to steer inflation towards the midpoint of its 3% to 6% target band.



In March headline inflation slowed to 5.3% in annual terms ZACPIY=ECI from 5.6% in February.



In a biannual review of its monetary policy stance, the bank said the slower pace of disinflation partly reflected normalising services components and elevated inflation expectations.



Administered prices continue to exert substantial upward pressure on headline inflation, it said in its April Monetary Policy Review.



The SARB, which is in discussions with the National Treasury about lowering its inflation target, also said in the document that it had modelled the impact of targeting 3.0% inflation over a five-year timeframe.



That modelling showed the economic growth rate decreased by about 0.3 percentage points relative to the baseline, but the decline was quickly reversed and surpassed as growth strengthened more than the initial weakening.



The central bank added markets now expect the repo rate to remain unchanged this year.



(Reporting by Kopano Gumbi; Editing by Alexander Winning)

featured

World Bank chief expects rich nations to meet African donation requests

As BHP weighs firm bid for Anglo, investors fret over cherry-picking assets

BHP’s Anglo buyout makes business sense if the price is right: Russell

Togo votes for a new parliament with stronger say in governance

African leaders seek record World Bank financing to combat climate change

WEF president: ‘We haven’t seen this kind of debt since the Napoleonic Wars’

Nigeria secures $600 million Maersk investment in seaport infrastructure

Elliott takes $1 billion stake in Anglo American as miner faces takeover interest

Implats weighs 3,900 job cuts in South Africa as price rout takes toll

Zimbabwe pounces on illicit forex dealers ahead of new currency debut

Anglo American rejects BHP’s $39 bln takeover proposal

Inflation in key African economies to slow into next year

Anglo American shares pop 13% after BHP Group’s $39 billion takeover bid to form mining juggernaut

Why the Fed keeping rates higher for longer may not be such a bad thing

World Bank suspends Tanzania tourism fund over abuse allegations

Nigeria’s central bank sells $15.83 million to exchange bureaus

South Africa c.bank: path to 4.5% inflation likely ‘bumpy and protracted’

News Tips

Advertise With Us

featured

World Bank chief expects rich nations to meet African donation requests

As BHP weighs firm bid for Anglo, investors fret over cherry-picking assets

BHP’s Anglo buyout makes business sense if the price is right: Russell

Togo votes for a new parliament with stronger say in governance

African leaders seek record World Bank financing to combat climate change

WEF president: ‘We haven’t seen this kind of debt since the Napoleonic Wars’

Nigeria secures $600 million Maersk investment in seaport infrastructure

Elliott takes $1 billion stake in Anglo American as miner faces takeover interest

Implats weighs 3,900 job cuts in South Africa as price rout takes toll

Zimbabwe pounces on illicit forex dealers ahead of new currency debut

Anglo American rejects BHP’s $39 bln takeover proposal

Inflation in key African economies to slow into next year

Anglo American shares pop 13% after BHP Group’s $39 billion takeover bid to form mining juggernaut

Why the Fed keeping rates higher for longer may not be such a bad thing

World Bank suspends Tanzania tourism fund over abuse allegations

Nigeria’s central bank sells $15.83 million to exchange bureaus

South Africa c.bank: path to 4.5% inflation likely ‘bumpy and protracted’

News Tips

Advertise With Us

Newsletters