East Africa Business in Brief (Africa Report n°33 – August-Sept 2011)

 

Heinecken BGI : Blame it on the botte

 

Ethiopia is the next battleground for international brewers. Following Diageo and Castel’s advance, Heineken has purchased two state brewers: Harar Brewery and Bedele Brewery. BGI Ethiopia is furious to have missed out on the two breweries, and is planning a new assault on the north of the country, signing an agreement with Raya Brewery to establish a facility in Tigray state.

 

East Arica : Currencies in trouble

 

Uganda’s shilling slumped to its lowest-ever rate against the US dollar on 30 June as East Africa’s currencies struggled to meet rising local demand for greenbacks amid mounting inflation. It cost Ush2,680 to buy a dollar in late June, around 20% more than the same time last year. Low dollar exchange rates are good for exporters, but punish consumeg6rs as the price of imported goods soars. Uganda posted a 17-year inflation high of 16% in May, dropping slightly to 15.8% in June. On 6 July, in a move aimed at reining in inflation to its 5% target, the Bank of Uganda introduced a Central Bank Rate, set at 13% for July.

 

The Kenyan shilling has also come under pressure. Police fired tear gas to disperse around 100 protes tors from the ‘Unga Revolution’ group, who took to the stress on 7 July against high food and fuel prices. Analysts have put the currency slump down to demand for dollars from importers as global oil prices climb. An import tax was removed from maize to cope with food shortages.

 

Tanzania’s shilling picked up slightly in early July after a steady decline that saw it drop 10% against the dollar in the first six months of 2011.

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