A local company, the Great Consolidated Diamond Ghana (GCDGL), on Tuesday took over the operations of Ghana Consolidated Diamonds, which closed operations in August 2007 due to financial and technical difficulties. The government had said in January it had shortlisted three companies to acquire the diamond miner. The new owner said it would establish an integrated diamond mining and diamond processing industry and would invest over USD 100mn in a five-year programme to achieve its immediate objective of providing jobs for 2,000 workers and ultimately 50,000 people directly and indirectly.

USA's Anadarko Petroleum and UK's Tullow Oil jointly announced the discovery of light oil in Akasa-1 well offshore Ghana, thus increasing the resource potential of the area.  In separate statements, Anadarko and Tullow said the quality of oil is similar to that found in the Jubilee and Mahogany East areas. Anadarko Senior Vice President Bob Daniels said after the successful appraisal, they expected the Akasa-1 discovery along with previous discoveries to potentially anchor an additional development on the block. Tullow CEO Adrian Heavey in turn said the company would double its dividend due to its "strong performance and record results."

The country's only refinery SIR got a USD 130mn credit line from a group of West African banks, one of the participating lenders, Banque Atlantique de Cote d'Ivoire, said. SIR had suffered financial problems even before the post-election crisis of late 2010 and early 2011, and was further affected as it included on the list of companies on which EU imposed sanctions during the crisis. The credit was made available to the company last week, Reuters quoted Banque Atlantique's managing director as saying. No further details were provided.

President Kibaki yesterday nominated Mr. Githu Muigai as the new Attorney General in a move to reform the judicial sector and boost public confidence in the Judiciary. Mr. Muigai replaces outgoing attorney general Amos Wako who has served in this capacity for the last 20 years. Mr. Muigai's nomination will now go to parliament for vetting. Mr. Muigai is part of the Law faculty at the University of Nairobi and has served as a commissioner on the now defunct Constitution of Kenya Review Commission. He also played a major role in arguing the case filed by former Mau Mau freedom fighters against the British Government. Mr. Muigai's had also been nominated by President Kibaki in January this year, however PM Odinga fought the nominations stating that he had not been consulted. The President was forced to withdraw the nominations and new nominations have since been undertaken with the leadership of the Judicial Service Commission. The government is trying hard to implement judicial reforms in accordance with the new constitution and build the public's confidence in the judicial sector. The former Attorney General is viewed by the public as not having effectively dealt with corruption.

Shell declared force majeure on Bonny oil exports for the rest of this month, as well as September and October. The measure took effect yesterday. It follows production shit-ins as a result of several leaks along a pipeline in Bayelsa, caused by suspected sabotage. No information has been provided about the exact volume of production affected, but the Bonny exports were planned to average 190,000 bpd in September and 216,000 bpd in October. Total Nigerian exports will thus decline from the scheduled 2mn bpd in September and 1.85mn bpd in October.

Consumer price inflation accelerated to 5.3% y/y in July compared to a 5% y/y print in June, according to a data release from Statistics SA. The print is slightly above consensus expectations, with a Reuters poll forecasting a 5.2% y/y rate. In m/m terms, consumer prices increased by 0.9%, up from a 0.4% m/m increase in the prior month, while on a 3-month annualised basis, CPI growth now stands at 7.2%, up from the 4.8% increase in the prior month and now above the central bank's target band of 3-6%. This month's data reflects a further acceleration in food price inflation, which along with fuel and electricity prices remains the major factors driving the acceleration in headline inflation thus far this year.

In m/m terms, food prices increased by 0.6% m/m, while the annual rate of inflation for this component accelerated to 7.5% from 7.3% in the prior month. The m/m increase was largely driven by meat and fish prices, offset to some degree by m/m declines in prices for fruit and vegetables. Notably, processed food price inflation at 8.9% y/y is higher than unprocessed food price inflation of 6.2% y/y and to some extent likely reflective of the influence of secondary pressures stemming from the rise in inputs such as labour and electricity over the past year. Given the recent pricing dynamics for a number of agricultural commodities, both globally and domestically, there remains some upside risk to food price inflation at the consumer level over the medium term. The other major contributor to the higher CPI print this month was the annual adjustment in municipal rates, which saw the housing and utilities component jump 3.1% m/m, with the annual rate accelerating to 6.9% y/y from 6.8% y/y in the prior month.

On the positive side, transport prices decreased by 0.3% m/m, which reflected the slight decline in regulated fuel prices during the month. Nevertheless, given last year’s low base, the annual rate of inflation for this component still accelerated to 5.3% y/y from 5.2% y/y in the prior month. Regulated fuel price rose in August and will place some modest further upward pressure on CPI next month, although the recent stabilisation in international fuel prices suggests that the pressure from this component may diminish somewhat after the August report.

Other features of this month's release include a 0.3% m/m increase in clothing and apparel related prices, which given the low base saw the annual rate of inflation for this component accelerate to 2.2% y/y from 1.9% y/y in June. On the positive side, demand-side components such as household contents (0.1% m/m) and personal care products (0% m/m) reflected little or no price pressure. This will help offset concerns over possible secondary price pressures gaining traction. However, with the currency now weakening on a y/y basis, the full effect of secondary price pressures, stemming from recent labour and energy input cost increases, may yet take effect in the second-half of the year.

Miscellaneous goods and services, which include financial services and personal care products, reported a 0.5% m/m increase in July, with the annual rate accelerating to 4.4% y/y from 4.2% y/y in the prior month. This component is most sensitive to inflationary expectations, and given the tentative evidence which suggests that expectations may be rising once again, it appears likely that the overall rate of inflation for this component will also accelerate further in coming months.

Today's report will not impact significantly on market expectations given the central bank’s renewed concerns over the growth outlook as well as more recent stabilisation in international oil prices and little evidence as yet of any meaningful secondary price pressures. As a result, the central bank is still seen as most likely to remain on hold for the rest of the year and given yesterday’s comments from central bank governor Marcus, the possibility of future rate cuts should the economic outlook deteriorate further, cannot be ruled out. The governor’s concern over the growth outlook at this time, suggests that even if inflation were to surprise on the upside, the MPC may still choose to hold off from raising interest rates. This will make forecasting monetary policy increasingly difficult, as the commitment to the central bank’s inflation target does not appear to be a key driver of monetary policy at present.

ANC Secretary-General Gwede Mantashe has said that senior leaders of the party would be willing to meet again with the executive leadership of its youth wing, the ANC Youth League, ahead of the anticipated internal disciplinary hearing of its controversial leader Julius Malema. Malema has been charged with bringing the ANC into disrepute and if found guilty, might be suspended from the party. Following the end of the ANC’s four-day National Executive Committee (NEC) meeting yesterday, media reports said that some NEC members had continued to express support for Malema arguing for the charges to be dropped.

The formalisation of charges against Malema represents a boost for President Jacob Zuma and his own chances of re-election as party president at the ANC's next electoral conference in December 2012. Malema, seen as part of the nationalist faction, has been agitating for Zuma to be replaced as ANC leader by current deputy president Kgalema Mothlanthe at next year's party congress. The outcome of the disciplinary hearing and whether Malema will indeed be suspended from the ANC may therefore have an important bearing on the outcome of next year's anticipated succession battle and contest for the top leadership positions in the ANC.

Central bank governor Gill Marcus yesterday expressed concern over the outlook for domestic growth amid the ongoing global economic crisis. Notably, Marcus said that if the global economy slowed markedly, local policymakers would act appropriately, appearing to suggest that the central bank would be prepared to cut rates despite elevated inflation readings. Marcus sounded a dovish tone by saying that the recent acceleration in inflation had been mainly driven by food and electricity prices and that overall demand-side price pressures remained low. Marcus noted recent retail sales data, which along with other recent activity data is pointing to a marked slowing in output growth since Q1.

Marcus's comments appear consistent with the view that the central bank is likely to place concerns over the growth outlook ahead of its existing inflation target mandate. Despite the poor growth outlook, inflation is still expected to accelerate further in coming months and may yet breech the 6% upper ceiling on the bank's target. Although, a rise in primary input costs such as food, fuel and electricity, has indeed been the main driver of the CPI acceleration this year, there is, in the context of large real wage increases, a growing likelihood that secondary price pressures will develop. This is particularly relevant given the less flexible and competitive nature of the South African economy, which has been prone to periods of stagflation in the past. Marcus's dovish tone in this context and apparent willingness to cut interest rates despite the inflation outlook will bring into question whether the central bank's existing inflation targeting mandate is still valid.

Minister for Agriculture, Professor Maghembe told a stakeholders meeting organized by Tanzania Cashew nut Board in Dar es Salaam yesterday that selling of raw cashew nuts has been banned hence exporters should ensure that they process the commodity before exporting. Furthermore exporters who do not comply with the policy will pay hefty penalties. The decision has been taken as government seeks to add value to the commodity before sending it abroad to create jobs and increase earnings.

Tanzania produces over 100,000 tons raw cashew nuts per annum and exports them mainly to India, China and Thailand, which process the commodity and exports it to Europe and North America. Maghembe said the country has enough cashew nuts processing factories hence no need to export raw nuts, which creates jobs in Asia and helps to tame poverty as earnings from processed nuts are higher.

Gross tax revenue collections totalled UGX 605.9bn in June, against a target of UGX 602.bn representing a surplus of just over UGX 3.8bn or 0.6%, according to a performance analysis report by the Ugandan Revenue Authority (URA). Net revenues for the month totalled UGX 575.7bn against a target of UGX 575.9bn. Looking at the breakdown, gross domestic tax collection totalled UGX 348.3bn against the target of UGX 377bn, with direct tax (income & corporate taxes) performing at 96.5% of the target and indirect taxes at 81.6%. Collections and fees totalled UGX 1,977bn, representing 121% of the target, while international trade taxes totalled UGX 234.6bn against a target of UGX 205.9bn. June marked the final month of the 2010/11 fiscal year, with the URA recording a cumulative surplus of UGX 80bn over the target for the whole year, while tax collections were UGX 908.5bn higher y/y. Revenues in 2011/12 are projected to increase by around 17% to UGX 9,800bn, of which UGX 6,330bn is budgeted to come from domestic revenues (primarily tax revenues UGX 6,170bn).

UK-based oil explorer Tower Resources says it is on track to spud a well in Uganda in Q4 after completing seismic survey over its Block 5. In a statement released by the company they noted that a high resolution aerial survey conducted in 2010 indicated that the area is expected to be favourable for the generation of hydrocarbons. A 2D seismic programme, which was based on this survey, was completed on 4 August and the data is currently being processed and interpreted with a suitable well location expected to be identified in September for initial scudding. To date all oil discovered in Uganda has only been made by Tullow and Heritage Oil in the Lake Albertine Rift. After purchasing Heritage’s Ugandan oil assets, Tullow has now partnered with China-based CNOOC and French based Total, with initial oil production expected to begin next year and full production of between 150,000 to 200,000bpd expected by 2015. Tullow has said that Uganda could eventually become one of the top 50 oil producers in the world.

The energy ministry signed a USD 650mn implementation agreement with the Lunzua Power Authority (LPA) to develop a hydro-power project in the Northern Province of the country. The project will see the construction of 93 MW hydro-power plant at Kabwelume Falls, a 151 MW plant at Kundabwika Falls and the construction of a 330 KV High voltage transmission line from the two power plants in the town of Kasama. A 66 KV line will also be constructed at the hydro-power stations that will join the existing national grid at Zesco’s (state-power utility) Kawambwa substation in Luapula Province. The project is expected to be launched by 2013 and completed by 2016 and is expected to provide a significant economic boost to the relatively remote Northern Province. The LPA has said the project will be funded through debt and equity financing.

President Rupiah Banda is expected to win the presidential election in September, according to a survey conducted by research and political consultancy group the Management Intelligence Organisation (MIO). According to the survey results, Banda is expected win at least 35% of the vote on September 20, with the opposition candidates expected to win a cumulative 40% of the ballot, while 25% of the registered voters will not turn up to cast their votes. According to the MIO, Michael Sata of the Patriotic Front (PF) is tipped to be Banda’s biggest challenger, with Hakinde Hichilema of the United Democratic Alliance (UDA) expected to place third. Look at the provincial breakdown, Banda is expected to win 30% of votes in Lusaka, 40% in the Copperbelt, 90% in Eastern, 80% in North-Western and 80% in the Central Province, highlighting the ongoing strong support in rural areas. The PF is expected to win 65% in the Northern Province, 35% in Lusaka and 50% in the Coppebelt. The MIO noted that while in the past the UPND had recorded victories across Southern Province, the tables appear to be turning in favour of the MMD, with most southerners generally conceding that their home party has little chance this time around, hence the decision to vote MMD. According to research recently released by Business Monitor International (BMI), Banda is also expected to retain power.

Fin Min Tendai Biti has hinted that banks maybe be exempted from selling majority stakes to black Zimbabweans under the 51% black empowerment law if the ministry of indigenization accepts his ministry's proposals. Biti said that banks are different from mining companies as banks are conveyors of capital, while mining companies sit on non renewable natural resources. Biti response follows last weeks ultimatum issued by Indigenization Minister Saviour Kasukuwere to six mining companies and to two commercial banks (Barclays and Standard Chartered) to resubmit ‘acceptable' empowerment plans within two weeks, or risk losing their licenses. The ultimatum to the banks has since resulted in a dramatic public row with the governor of the Reserve Bank of Zimbabwe, Gideon Gono who said that the ultimatum had caused severe panic in the banking sector and in the economy in general.

A controversial economic empowerment and indigenisation law that came into force last year requires foreign-owned firms with operations in Zimbabwe to sell at least 51% of their shares to locals or face a host of punitive measures including fines, imprisonment or having their licences cancelled. The law has divided the unity govt between President Robert Mugabe and PM Morgan Tsvangirai. Tsvangirai has said that the law will discourage investment but Mugabe insists the law is necessary to place control on the economy in the hands of black Zimbabweans.