IGIHE

Category: Economy

  • World Bank announces $57 billion in financing for Africa

    {The World Bank has announced $57 billion in financing for sub-Saharan Africa over the next three fiscal years.}

    Of that total, $45 billion will come from the International Development Association, the World Bank fund that provides grants and interest-free loans for the world’s poorest countries.

    {{G20}}

    The package will also feature an estimated $8 billion in private sector investments from the International Finance Corporation, a private-sector branch of World Bank, and $4 billion will come from the International Bank for Reconstruction and Development, the bank’s unit for middle-income nations, World Bank president Jim Yong Kim said in a statement.

    Germany, which hosted a meeting of the G20 countries Friday and Saturday, said that a partnership called “Compact with Africa” would be a priority of its presidency this year of that club of powerful nations.

    Of all the countries in Africa, only South Africa is a G20 member.

    {{VISIT}}

    “This represents an unprecedented opportunity to change the development trajectory of the countries in the region,” Kim said.

    “With this commitment, we will work with our clients to substantially expand programmes in education, basic health services, clean water and sanitation, agriculture, business climate, infrastructure and institutional reform,” he added.

    Kim left for Rwanda and Tanzania on Sunday in a show of World Bank support for the entire region.

    The new financing from the International Development Association will target 448 projects that are already underway in sub-Saharan Africa.

    The region accounts for more than half of the countries eligible for this kind of financing from the IDA, the bank said.

    World Bank President Jim Yong Kim. The banks has announced $57 billion in financing for Africa.

    Source:AFP

  • ‘EAC Transport corridors vital’

    {As the East Africa region grows fast in Africa, policies to promote transformation of transport to economic corridors should be put in place to facilitate more dynamic movements of people, goods, services and money.}

    Presenting the working paper on ‘Dynamism and Future prospects of Economic Corridors in the East African Region’, Chairperson for DAIMA Associates Limited, Prof Samuel Wangwe, said in the recent years new economic movements have emerged. “Growth poles which are an agglomeration of production, logistics and consumption centres have also emerged.

    Those growth poles have been connected more deeply through transport corridors and by so doing those corridors have been transformed from simple transport corridors to economic corridors,” he noted. He said planning the corridor development and its surrounding area can maximise development benefits through engagement of public-private partnership for sustainability.

    DAIMA Chairperson said prioritising economic potential available in transportation corridors should be given priority by creating friendly business and trade policies.

    Expounding further he said through absorbing energies from Indian and Arabic world across the Indian Ocean, the region has witnessed more dynamic movements of people, goods, service and money along the economic corridors. As the corridor will not grow without doing anything, he said developing master plan to study them and growth poles was important.

    The plan will assist in implementation of projects and executing the transformation of process. Japanese International Cooperation Agency (JICA), Senior Representative, Mr Amatsu Kuniaki, said they commissioned DAIMA Associates to produce the working paper with interest in looking at the new features of those transformations in the EAC region.

    “EAC regional integration would inject dynamism into the EAC economies through economies of scale and more efficient deployment of factors of production,” he noted.

    Mr Kuniaki said it was also important to develop the East Coast of the region by developing the ports of Lamu, Mombasa, Bagamoyo, Dar es Salaam and Mtwara,” he said. He added that by developing new industrial complexes as in Tanzania’s Bagamoyo and Mtwara special economic zones.

    Source:Daily News

  • Career Opportunity at AB Bank

  • Go slow on regional integration – IMF Chief warns

    {The International Monetary Fund (IMF) Managing Director, Ms. Christine Lagarde advised the East African countries in pursuit of integration to go slow on the project. The countries within East Africa, Kenya, Uganda, Tanzania, Rwanda and Burundi have been integrating over the years with projection to have a political federation in about 20 years. The caution from the IMF chief is coming from the lessons that Europe has had to have especially after the United Kingdom held a referendum and the people chose to exit the European Union.}

    “Coming from the European Union and a country that is part of the Euro area, I would certainly stress that, hasting slowly is probably the best way to go and consolidate one step at a time and make sure that the steps you have taken are actually solid, sustainable and will take you the next level. Don’t rush to integration. Infrastructure integration, market integration, custom integration.

    Those are the steps that have been taken and are being taken,” Ms. Lagarde said while addressing a joint press conference with President Museveni at State House Entebbe on Friday afternoon.

    She did point out that integration had its advantages and was perhaps one of the best options for the country to pursue its growth agenda. Uganda’s largest trade market for exports is East Africa but more significantly South Sudan. South Sudan was in March 2016 given the green-light to join the EAC.

    Uganda also trades with the EAC and also enjoys lower tariffs on exports to the COMESA region, another regional body on the continent. Lagarde noted that Uganda had enormous potential for growth if it is part of a regional grouping.

    The EAC is also pursuing a single currency and monetary union in order to further facilitate trade within the region. President Museveni noted that African countries needed to integrate further if they are to reap the benefits. He criticized countries that are taking isolationist policies and questioned how long they can sustain the inward approach.

    “Those who are pushing isolationist policies will not be able to sustain the prosperity of their people. For us we are definitely working for the common market of East Africa and you see how much it is helping us. For instance, we produce 4 million tonnes of maize and we consume only one million. If we did not have that common market, that industry would have collapsed,” he said.

    He pointed out that the isolationist strategy implemented by some countries would fail.

    The joint press conference was addressed after both President Museveni and Ms. Lagarde held bilateral talks that discussed among others Uganda’s economic progress as it attempts to reach middle-income status by 2020. Lagarde has been in the country for the last two days on an official visit.

    IMF Managing Director, Ms Christine Lagarde.

  • UK will leave EU single market, says Theresa May

    {Theresa May announces plans for a clean break from EU bloc and promises that politicians will vote on final Brexit deal.}

    Britain will leave the European Union’s single market but will “seek greatest possible access to it” as it exits the bloc, Theresa May has announced.

    In a highly anticipated speech, the UK prime minister said on Tuesday that it was necessary to make a clean break and not opt for anything that “leaves us half-in, half-out” because that would mean “not leaving the EU at all”.

    The UK will not “hold on to bits of membership”, nor seek associate or partial membership of the bloc, she said announcing her plans, but promised that the country’s parliament would get to vote on a final deal on Britain’s exit from the EU, or Brexit.

    “I can confirm today that the government will put the final deal that is agreed between the UK and the EU to a vote in both houses of parliament before it comes into force,” May said.

    The country would seek a “phased process” for leaving the EU following two years of formal negotiations to “avoid a disruptive cliff edge” for businesses, she said, adding that she would start the procedures by the end of March.

    “It is in no one’s interests for there to be a cliff edge for business or a threat to stability as we change our existing relationship to a new partnership with the EU,” May said.

    “By this, I do not mean that we will seek some form of unlimited transitional status in which we find ourselves stuck forever in some kind of permanent political purgatory.”

    May also said the UK would seek a “new and equal partnership” with Europe.

    “We see a new and equal partnership between an independent, self-governing, global Britain and our friends and allies in the EU,” she said.

    May said that the UK would guarantee the rights of EU citizens who were already living in Britain and the rights of the British nationals in other member states.

    However, she added: “Brexit must mean control of the number of people who come to Britain from Europe.”

    Gabriel Siles-Brügge, a lecturer in the Department of Politics and International Studies at the University of Warwick, told Al Jazeera that May’s plans for the new deal with the EU were highly unrealistic.

    “What’s particularly interesting is that she has talked about some sort of a new membership to the customs union which involves not having to accept the common commercial policy and not having to accept the common external tariffs,” he said.

    “Basically Britain would have some sort of an arrangement whereby it participates in the customs union but in a sense not be bound by all of its rules.

    “I think that is a very unlikely arrangement.”

    There was a thinly veiled threat in May’s remarks suggesting that punitive action was not good for either the EU or Britain.

    A majority of British voters decided to leave the EU in a referendum in June last year.

    May also used her speech to appeal for reconciliation between the 48 percent of those who wanted to stay in the EU and the pro-Brexit 52 percent.

    But the gap between “remainers” and “leavers” appears as wide as ever.

    In a statement, Andrew Blick, a lecturer in politics and contemporary history at King’s College London, said the speech “makes the break look less ‘clean’ than we are being encouraged to believe … From a constitutional perspective, this negotiation is being treated as largely about trade.

    “In fact, it will have immense consequences for the legal and political system of the United Kingdom”.

    Possible tax breaks

    Philip Hammond, the treasury chief, has suggested Britain would consider offering a break on corporation taxes if necessary, to encourage investment.

    Jeremy Corbyn, UK opposition leader, said May appeared to be warning that she was ready to turn the UK into a “low-corporate taxation, bargain-basement economy off the shores of Europe” if the EU did not give her everything she wanted.

    “She makes out this is a negotiating threat to the 27 EU countries, but it’s actually a threat to the British people’s jobs, services and living standards,” Corbyn, the leader of the Labour Party, said.

    The British pound rallied after May’s speech. The currency was recovering from steep losses earlier in the week, trading 2.2 percent higher at $1.2309.

    On Monday, it was as low as $1.20, a near 31-year low.

  • Libya’s oil production up to 708,000 bpd, a three-year high

    {Libya’s oil production is up to 708,000 bpd, a three year high, the National Oil Corporation’s (NOC) chairman Mustafa Sanalla revealed. Sanalla made the revelation yesterday during his visit to the Jalo oil production area in south east Libya where he met with local dignitaries and civil society organizations.}

    During the visit, Sanalla discussed local development and environment issues in the region and said that the region suffered from huge neglect and needed the state to support it. To underscore this need, Sanalla visited the local A&E hospital built by the NOC and ENI which, although handed over to the Ministry of Health in 2013, was yet to be opened.

    Sanalla also laid the foundation stone to a local Petroleum Institute which he hoped would aid development and training in the region.

    Meanwhile, Sanalla continued his media attack on fuel smuggling and its effects on Libyans. In an earlier statement released by the NOC, Sanalla expressed his condolences for the death of a Libyan family by carbon monoxide poisoning as a result of using charcoal for heating due to power cuts and fuel shortages.

    ‘‘I was pained very much by what I heard about the story being reported about the death of a whole Libyan family by suffocation as a result of power cuts’’.

    ‘‘This family represents the thousands of miserable cases that poor Libyan citizens suffer’’ as a result of fuel smuggling or demonstrations preventing oil production.

    In the same vain, Brega Marketing, the NOC’s fuel distribution company, announced that it was increasing deisel distribution by 2.5 million litres in view of the cold weather and power cuts so as to meet increased demand for heating. Cooking gas cylinder distribution will also be increased.

    The company said that it will also be initiating ‘’strong’’ anti-smuggling measures to prevent fuels going into the black market.

    Brega also announced that it was rolling out the installation of a number of Point of Sale (POS) machines at petrol stations so that customers can pay with their debit cards. This move is aimed at mitigating the current cash crises at Libyan banks. Cooking gas cylinder distributors will also have POS systems in the next phase, Brega revealed.

    NOC chairman Sanalla during his visit to Jalo said that Libya’s oil production had reached a three-year high of 708,000 bpd

  • Coffee sector privatization spells misery to over 4 million Burundians

    {The World Bank has forced Burundi government to privatize the coffee industry. With private managers advancing their own interests, millions of farmers continuously lose their once main source of income.}

    Privatization of the coffee sector in Burundi continues to bring woes to farmers. The latter fear coffee production will be worse this year. They complain that INTERCAFE (a private authority in charge of consultation between coffee producers, middlemen and exporters) has been late in providing them with pesticides and fertilizers.

    “All Burundian coffee farmers did not get fertilizers. Neither have we got pesticides for the second phase of coffee spraying. All this happens while we, farmers, are made to pay 60% of the products’ price”, says Joseph Ntirabampa, the chairman of CNAC MURIMA W’INSANGI, a collective of associations of coffee farmers of Burundi.

    Speaking on behalf of INTERCAFE, Oscar Baranyizigiye denies responsibility and says the delay was ultimately due to the lack of foreign currencies by importers of the products.

    The representative of Burundian coffee farmers demands that INTERCAFE stops deducting the cost of the products from the farmers’ share. He wants farmers themselves to be allowed to directly buy fertilizers and phytosanitary products.

    The importance of coffee in the Burundian national economy cannot be overestimated. Being particularly appreciated on the international market, Burundian coffee provides more than 50% of export revenues. It is also a source of living for roughly 600.000 households of over 4 million people, mainly peasants.

    Despite its importance, the coffee sector suffers from an increasing decline. A study conducted in 2012 showed that coffee production decreases by 40% every year.

    The causes of the decline include among others, the lack of interest of farmers partly due to poor returns from their crops and the lack of backing and supervision. The lack of fertilizers and pesticides also has a lot to do with the drop in production.

    World Bank is to blame

    The current problem of lack of fertilizers and phytosanitary products and the decline in returns are due to the privatization of the coffee sector imposed on the government of Burundi by the World Bank.

    The privatization made the situation of coffee farmers even worse as it excluded them from the sector and put almost all coffee washing stations and the trading in the hands of foreign firms like Webcor and Armanjaro.

    Now the chairman of CNAC asks the government to sell the remaining washing stations to Burundians.
    In 2013, two Special Rapporteurs of the High Commissioner for Human Rights, Cephas Lumina and Olivier De Schutter deplored the fact that the privatization of the coffee industry had a potential negative impact on farmers.

    “There are worrying signs that the interests of coffee farmers have not been taken into account in the reform process despite the opening of coffee farmers’ organizations to a reform of the sector which would allow them to move up the value chain”, said the experts.

    The President of Burundi, Pierre Nkurunziza, has recently regretted that “the population suffers from the reforms of the coffee sector” because the private managers of the sector have sought their interests over the farmers’.

    The two UN rapporteurs regretted “that the Bank continues to consider that it is not required to take human rights into account in its decision-making processes, whereas the policies it recommends have very concrete impacts on the rights and Livelihoods of coffee farmers ”

    The chairman of CNAC asks that the government and other actors of the coffee industry jointly evaluate the outcomes of the privatization of the industry.

    Burundi President, Pierre Nkurunziza, said efforts to reshape and reinvigorate the sector are being made.

    The gradual decline of coffee production and the low returns make the situation of millions of Burundians worrying.

  • Oil prices surge as OPEC reaches production deal

    {Oil price jumps to $50 as OPEC members agree to cut production by 1.2 million barrels per day from January 2017.}

    The global oil price has jumped to more than $50 a barrel after the Organization of the Petroleum Exporting Countries (OPEC) agreed to bring its oil output down by 1.2 million barrels per day (bpd) from January, the cartel’s president Mohammed bin Saleh al-Sada said.

    The agreement among OPEC countries was reached at a meeting in Vienna on Wednesday and it marked the first time since 2008 that the cartel cut its production, limiting it to 32.5m bpd.

    “With the cooperation and understanding of all member countries, we’ve been able to reach an agreement,” Sada, also Qatar’s energy minister, said.

    “We came to the understanding that the market needs to be rebalanced. It would need courageous decisions from OPEC members, and with support of some key non-OPEC countries.”

    The organisation’s biggest producer Saudi Arabia has agreed to reduce its output by half a million barrels per day.

    Oil prices dropped to about $26 a barrel earlier this year after it had reached $115 some 18 months earlier.

    Major oil producers Russia and the United States are not members.

    Sada added non-member Russia has committed to reducing its output by 300,000 barrels per day, half of a hoped-for 600,000 barrels per day from outside the cartel.

    The cuts include Iraq reducing output by 200,000 bpd to 4.351m bpd. Kuwait, Venezuela, and Algeria have agreed to monitor compliance with the OPEC agreement.

    Following the announcement, brent crude futures rose $3.79 to $50.17 a barrel, an 8.2 percent gain.

    “This is a major step forward and we think this is a historic agreement, which will definitely help rebalance the market and reduce the stock overhang,” Sada said.

    He also said the deal will help lift global inflation accelerate to a “more healthy rate”, including in the US.

    It finalises a preliminary deal struck in September in Algeria when OPEC agreed to cut production, but left the details to clear up later. Negotiations got bogged down in a game of poker between OPEC’s three biggest producers, Saudi Arabia, Iraq and Iran on who would do the heavy lifting.

    Iraq had said it did not want to pump less crude because it was short of money to fight the armed ISIL group. It also disputed how much it actually produced.

    Iran has only been able to freely export oil since last year’s nuclear deal came into force in January, and wants to return to pre-sanctions output levels.

    The decision marked the first time since 2008 that the cartel has cut its production

  • Zimbabwe note launch stokes currency fears

    {Zimbabwe has launched its own money for the first time since the country’s dollar was abandoned seven years ago amid rampant inflation.}

    The bond note, which is worth one US dollar – the country’s main currency since 2009 – is raising fears of a return to the ill-fated local dollar.

    The move, first announced in May, has fuelled some of the biggest protests in a decade against President Mugabe.

    The government has issued the bond note to tackle a worsening cash shortage.

    It hopes the cash substitute, which is legal tender in Zimbabwe but is not valid outside the country, will halt the flow of US dollars going overseas.

    Initially, an amount worth $10m is being introduced into circulation in two and five dollar denominations.

    Why Zimbabweans are spending the night outside banks

    Business groups have welcomed the move as a way of boosting economic growth.
    However, major opposition parties, workers and civil society groups are planning further protests this week.

    And in the run-up to the notes’ release, Zimbabweans queued for hours to withdraw their US dollars amid fears the bond notes would not be able to keep parity.

    The Reserve Bank of Zimbabwe has always steered clear of referring to the new bond notes as currency.

    For ordinary Zimbabweans, memories of the collapse and demise of the Zimbabwean dollar in 2009, and the hyperinflation that caused its destruction, still rankle.

    So, it’s a question of “when is a currency not a currency?”

    Withdraw from a bank today in Zimbabwe and you’ll be issued with bond notes, which are officially interchangeable with the US dollar at a rate of one to one.

    You can take the notes to the shops and exchange them for goods. All very well and good, you’d think.

    But what a currency needs is confidence, and on the streets of Harare there seems to be precious little of that.

    There were few alternatives for the Reserve Bank – the economy is experiencing a chronic shortage of US dollars, which have been the main currency of use for the past seven years.

    But such is the fear that the bond notes will be unable to hold their parity with the dollar that their introduction has sparked the largest anti-government protests in years.

    If the current experiment with bond notes even looks like taking a step backward to the hyperinflation of seven years ago, not only will the economy’s very survival be in jeopardy, so too will the government’s.

    Zimbabwe’s central bank has assured people the notes’ release will be controlled, including weekly withdrawal limits of $150 worth.

    Under a proposed law, anyone found guilty of defacing the notes could face up to seven years in prison.

    They will become one of nine currencies accepted as legal tender in the country.

    Zimbabwe’s 2008-9 hyperinflation crisis in numbers

    An egg cost 50 billion Zimbabwean dollars in 2008

    A loaf of bread cost the same as 12 brand new cars would have cost ten years previously

    Inflation rates reached 231,000,000%

    To keep up with the rising prices, a 100 trillion dollar note was issued – enough for a weekly bus ticket – before the Zimbabwean dollar was scrapped in 2009

  • Rodrigo Duterte vows to free economy from oligarchs

    {Outspoken president has shown no qualms about confronting conglomerates that dominate the Philippines’ economy.}

    Philippine President Rodrigo Duterte says he is taking steps to open up the economy to new players and foreign investors – particularly in the power, energy and telecoms sectors – to share its wealth and limit corruption and protectionism.

    He spoke on Wednesday after his arrival home from a summit in Peru of the 21-member Asia-Pacific Economic Cooperation (APEC), the leaders of which issued a joint statement committing to fight “all forms of protectionism”.

    The outspoken former mayor has shown no qualms about confronting oligarchs and conglomerates who dominate the Philippine economy, which is growing at one of the world’s fastest rates, buoyed by consumption and remittances.

    “The only way to make this country move faster to benefit the poor is really to open up communications, the air waves and the entire energy sector,” Duterte told a news conference in his home city of Davao.

    “Or else, you can count on your fingers the power players of this country. I would not say that they are the elite.”

    He added: “I would like just to send this strong message: it’s about time that we share the money of the entire country and to move faster, make competition open to all.”

    Investors in the Philippines have complained often of regulations that can restrict foreign investment in various areas, among them telecoms and utilities.

    Numerous sectors of the economy are dominated by local tycoons, with foreigners absent in many areas.

    “The only way for deliverance of this country is to remove it from clutches of the few people who hold the power and money,” Duterte said.

    His comments suggest he intends to follow through on threats to stamp out protectionism, having warned the telecoms duopoly of Philippine Long Distance Telephone Co and Globe Telecom to shape up, or face new competition.

    Philippine mobile internet and voice services are ranked among Asia’s slowest and most intermittent.

    “We are finalising our plans to open up the information and communications technology industry to new players in order to promote competitiveness and quality of service,” Duterte said in a prepared statement.

    “We are now also looking into regulatory requirements and institutional arrangements to hasten the entry of new players into the power industry and energy sectors.”

    Duterte further said he had received assurances from his Chinese counterpart Xi Jinping that the implementation of a series of investment deals agreed in October would be accelerated.

    Rodrigo Duterte says it's time 'the elite' share the Philippines' wealth