{President Barack Obama spoke with French President Francois Hollande on Monday about the Greek crisis, agreeing on the importance of resuming work toward an agreement on a financing and reform package for Athens, the White House said.}
The leaders said their economic teams were in close contact and were monitoring developments in Greece and financial markets, the White House statement added.
{The Government of Rwanda through the National Bank of Rwanda (BNR) has successfully issued a 10 year treasury bond worth 10 billion Rwandan Francs, the 2nd issuance this year, following its commitment for a regular quarterly issuance since last year. }
The issuance was a success with a subscription level of 228.19% and the number of retailers increasing from 22 in February 2015 to 32 in May, 2015.
BNR has once again employed book-building method to determine the price of the bond. The book was opened on Monday May 25, 2015 and closed on Wednesday May 27, 2015 where the final price was announced at a yield of 13.0% with an annual coupon rate of 12.925% paid semi-annually.
This bond attracted both foreigners and domestic investors. From 55 applications received at BNR, retailers and individual investors account for 2.4%, banks 20.9% and institutional investors 76.7% of the total amount offered. Overall, foreign participation accounts for 30% of the issued amount.
In a bid to stimulate the activities at the Rwanda Stock Exchange and promote the development of capital market, the bond has been issued at a discount price of 99.574 to give incentives for those investors who will be willing to trade their bond on secondary market from Tuesday June 2, 2015.
{Until the 20th century, they were Europe’s biggest imperial powers. Today, France, the UK, Belgium, Spain, Germany and Portugal are spending the bulk of their Official Development Assistance (ODA) budgets on their former colonies. The EurActiv network reports.}
For France, the world’s fourth biggest donor, Overseas Development Assistance (ODA) is aimed at its former colonies in Africa.
According to the latest data from the Organisation for Economic Cooperation and Development (OECD), the top seven countries French receiving ODA are Morocco, China, Vietnam, the Cote d’Ivoire, Colombia, Senegal and Kenya. Of those, only China, Colombia and Kenya were not part of France’s former empire.
It is unclear why China is a relatively large recipient of French aid. The Asian giant is also an important provider of aid to poorer countries, especially in Africa.
{{Francophonie an official criterion for aid}}
“France always had a colonial and linguistic focus on ODA,” explained Christian Reboul of Oxfam France. “But it’s legitimate, because the former French colonies in Africa are de facto the poorest countries in the world. There is a consistency in that decision,” he added.
Since 2014, Francophonie is the official goal of French development policy. First, after the last cabinet reshuffle in April 2014, the portfolios of development and Francophonie were merged into one, led by the new secretary of state, Annick Girardin.
>> Read: French development aid and Francophonie make unlikely bedfellows
That same year, France adopted its first legislation on development aid. It focused ODA on priority regions; sub-Saharan Africa and the southern Mediterranean get 85% of French development aid. Francophonie, as a goal of development policy, is part of the law.
“It’s politically easier to target Francophonie, than a former colonial empire, but at the end it’s exactly the same,” observed Reboul.
Within this region, the French government has identified 16 poor countries: Benin, Burkina Faso, Burundi, Djibouti, Comoros, Ghana, Guinea, Madagascar, Mali, Mauritania, Niger, Central African Republic, the Democratic Republic of Congo, Chad, Togo and Senegal.
These 16 countries, identified as priorities because of their poverty, will receive at least 50% of available aid grants.
Among these 16 priority countries, only Ghana and Mauritania do not have French as an official language. But all of them are part of the International Organisation of the Francophonie
More importantly, only three of them were not French territories. Congo and Burundi were colonised by Belgium, and Ghana was ruled by the United Kingdom.
“Actually, Ghana is maybe the only example in that list [that] doesn’t have anything to do with Francophonie, and has a level of development far above the rest,” says Reboul.
Middle income countries in Asia, Latin America, and the Caribbean are also supported by French development policy, but through loans, or economic partnership more than grants.
But the figures can be confusing. In 2012, within the top ten recipients of French ODA, none were targeted as priorities, and most of them were fast-developing, like the Cote d’Ivoire, Brazil, China, Morocco and Vietnam.
“This gap can be explained by France having very strong volumes of loans and very weak volumes of grants in its ODA,” explained Christian Reboul.
The share of grants in the overall French ODA is modest. In 2013, out of the €9.8 billion for public development aid, only €312 million were grants for bilateral projects, or 3.2% of the French budget.
{{The UK is Europe’s leading donor}}
The UK is Europe’s leading donor for ODA. Last year, Britain gave $19.4 billion (€18 billion), making it the second largest aid donor in the world, after the US. The UK is also one of only five member states to have met the UN target of 0.7% for ODA.
However, a 49-page report on UK’s ODA makes no mention of under what guidelines decision makers favour certain recipient countries and not others.
According to latest data of the Organisation for Economic Cooperation and Development (OECD), the top seven countries where UK ODA goes to are Pakistan, Ethiopia, India, Bangladesh, Nigeria, Afghanistan and Tanzania. Of UK aid recipients, only Afghanistan and Ethiopia have not been British colonies.
Speaking to EurActiv, the Department for International Aid (DFID) recognised that of the 20 countries that received most UK aid in 2013 seven are former British colonies and one is currently a British Overseas Territory.
A spokesperson explained that it was up to the next government to define priorities for ODA in the same way as the outgoing cabinet did in 2011. At that time, it was mentioned that “as a result of the Review [the UK government has] decided to focus aid more tightly on the countries where the UK is well placed to have a significant long-term impact on poverty”.
{{Belgium: Love/hate relationship}}
Belgium, a relatively small country of 11 million, is the 14th biggest aid donor in the world, according to latest OECD data.
The top seven countries where Belgian aid goes to are the Congo, Burundi, Rwanda, the Palestinian territories, Mali, Mozambique and Vietnam. The first three countries, which receive the vast majority of Belgian aid, are former Belgian colonies.
The Belgian authorities stress that the country’s ODA has increased by 3.3% compared to 2013, and has stayed at 0.45%, which is slightly above the EU average of 0.42%.
According to Minister of Development Cooperation Alexander De Croo, the Belgian aid effort should concentrate more on the least developed countries, as well as on Sub-Saharan Africa. However, Belgium’s relationship with its former colonies is far from being an easy one.
With the DRC, a 2008 visit by Karel De Gucht, Belgium’s former foreign minister, exposed the lack of transparency in the exploitation of the country’s mineral resources, calling it “a country where the state is absent”. De Gucht was subsequently declared persona non grata, and it took a long time before fences were mended.
With Rwanda, relations are even worse. In January 2015, De Croo announced his intention to place stricter conditions on assistance to developing countries, following his government’s decision to suspend part of its aid to Rwanda.
Belgium decided to withhold €40 million in aid, after deciding that the Rwandan government had failed to meet commitments to increasing transparency, good governance and freedom of the press.
{{Spain: Strategic interest}}
The first seven beneficiaries of Spanish aid are Peru, Morocco, Colombia, Salvador, Nicaragua, Ecuador and Bolivia. Only Morocco wasn’t a Spanish colony. However, Spain has interests in the Western Sahara, a disputed territory bordering Morocco, which it ruled between 1884 and 1963.
Asked if Spain was giving priority to former Spanish colonies in Latin America, an official declined to answer, and referred instead to documents from the country’s Agency for International Cooperation (AECID), a government department subordinate to the Ministry of Foreign Affairs.
Among the criteria for disbursing Spanish aid is the need to contribute where international effort is deemed insufficient, and where the Spanish impact could be greater.
Due to the economic crisis, Spain has dramatically reduced its ODA. Consequently, the concept of “geographical concentration” has been introduced, in order to focus on specific regions and on a smaller number of countries.
Instead of the 50 countries in the so-called Third Master Plan of Spanish development aid for 2009-2012, there was only 23 countries in the Fourth Master Plan (2013-2016).
“This is why we shall concentrate in geographic areas where Spain has more strategic interest: Latin America, Northern Africa, Western and sub-Saharan Africa,” wrote José Manuel García Margallo in the introduction to the Fourth Master Plan.
{{Portugal: Amost all aid goes to former colonies}}
But the most striking example is Portugal, where almost all the country’s aid goes to former colonies. The first seven are Cabo Verde, Mozambique, Angola, East Timor, Sao Tome and Principe and Guinea Bissau, all of them former Portuguese colonies.
On the other extreme, Germany, a country which has had fewers colonies than any of the other colonial empires, does not prioritise its former territories.
Germany transferred €10.6 billion development assistance to third countries in 2013. The top recipient is Afghanistan with €459.7 million, followed by India (€450.4 million), China (€315.0 million), and Syria (€257.1 million).
Far lower amounts go to former German colonies. Tanzania receives €139.2 million, Cameroon €89.4 million, and Namibia €27.5 million. The amount paid to Togo makes up €23.2 million, to Samoa €3.8 million.
NGOs criticise the German government for paying development assistance to the wrong countries. Instead it should focus on the fight against extreme poverty in its budget allocation, the campaigning organisation ONE said. 50% of funds should be given to Least Developed Countries (LDCs), referring to the 48 poorest countries in the world.
“To this day, many top receivers of German development aid continue to be G20 countries and newly industrialised countries,” Andreas Hübers, a political advisor at ONE told EurActiv Germany.
{{
Source: euractiv.com}}
{{WASHINGTON, April 13, 2015}} – {Sub-Saharan Africa’s growth will slow in 2015 to 4.0 percent from 4.5 percent in 2014, according to World Bank projections released today.
}
This downturn largely reflects the fall in the prices of oil and other commodities, notes Africa’s Pulse, a twice-yearly World Bank Group analysis of the issues shaping Africa’s economic prospects released today at the start of the World Bank Group’s 2015 Spring Meetings, which will draw the world’s finance and development ministers to Washington, DC, for talks on the state of the global economy and international development.
The 2015 forecast is below the 4.4 percent average annual growth rate of the past two decades, and well short of Africa’s peak growth rates of 6.4 percent in 2002-08. Excluding South Africa, the average growth for the rest of Sub-Saharan Africa is forecast to be around 4.7 percent.
“Despite strong headwinds and new challenges, Sub-Saharan Africa is still experiencing growth. And with challenges come opportunities,” says Makhtar Diop, World Bank Vice President for Africa. “The end of the commodity super-cycle has provided a window of opportunity to push ahead with the next wave of structural reforms and make Africa’s growth more effective at reducing poverty.”
{{African exports still dominated by primary commodities}}
Sub-Saharan Africa is a net exporter of primary commodities. Oil is the most important commodity traded in the region, followed by gold and natural gas. Over ninety percent of the total exports of eight major oil-exporting countries come from the three biggest exports of each country, which represent nearly 30 percent of their GDP. But the recent price declines are not confined to oil, and Africa’s Pulse reveals that the prices of other commodities are now more closely correlated both with oil prices and with one-another. As a result, terms of trade are declining widely among most countries in the region. The 36 African countries with expected terms-of-trade deterioration are home to 80 percent of the population and 70 percent of the economic activity in the region.
That said, the continent’s huge economic diversity is also mirrored in the impact of commodity price declines – even among oil producers. In Nigeria, for example, although the economy will suffer this year, growth is expected to rebound in 2016 and beyond, driven by a relatively diversified economy, and a buoyant services sector. Low oil prices will continue to weigh down on prospects of less diversified oil exporters such as Angola and Equatorial Guinea. In several oil-importing countries, such as Cote d’Ivoire, Kenya and Senegal, growth is expected to remain strong. In Ghana, still high inflation and fiscal consolidation will weigh on growth. In South Africa, growth continues to be curtailed by problems in the electricity sector.
Foreign direct investment inflows were subdued in 2014, reflecting slower growth in emerging markets and declining commodity prices. African countries continue to tap international bond markets to finance infrastructure projects: Cote d’Ivoire returned to the market this February; and Ethiopia had a debut issue in December 2014. Although debt burdens remain generally manageable, debt-to-GDP ratios for countries with increased bond market access have picked up in recent years. Uncertainty about future global monetary conditions are an additional reason for caution.
“As previously forecast, external tailwinds have turned to headwinds for Africa’s development. It is in these challenging times that the region can and must show that it has come of age, and can sustain economic and social progress on its own strength. For starters, recent gains for the poorest Africans must be protected in those countries where fiscal and exchange rate adjustments are needed.” says Francisco Ferreira, the World Bank’s Chief Economist for Africa.
{{New and Old Risks to Africa’s Economic Future }}
Persistent conflict in a number of areas, and recent violence by extremist groups such as Boko Haram and Al Shabaab pose security risks with the potential to undermine development gains. Also, the Ebola outbreak in Guinea, Liberia, and Sierra Leone has highlighted preexisting weaknesses in the health systems of the three most affected countries, as well as others.
Although substantial progress has been made against the Ebola epidemic, it remains premature to declare victory until there are zero cases left. A World Bank study released in January estimated that the three hardest-hit countries (Guinea, Liberia and Sierra Leone) will face at least $1.6 billion in forgone economic growth in 2015, and social costs in terms of nutrition, health and education are equally severe. The Bank Group has mobilized about $1 billion in financing to date for the three countries hardest hit by Ebola.
{{Policy Challenges Remain}}
The fiscal policy stance is expected to remain tight throughout 2015 in most net oil-exporting countries across the region, as countries take measures to rein in spending in light of anticipated lower revenues. While capital expenditures are expected to bear the brunt of expenditure measures, recurrent expenditures, including fuel subsidies, will also be reduced. Despite these adjustments, fiscal deficits are likely to remain high. Fiscal deficits are also expected to remain elevated in net oil-importing countries.
“Large fiscal deficits and inefficient government spending remain sources of vulnerability for many countries of the region. It is urgent that these countries strengthen their fiscal positions and fortify their resilience against external shocks,” says Punam Chuhan-Pole, a World Bank Lead Economist for Africa and co-author of Africa’s Pulse.
Beyond macroeconomic policies, the report stresses the need across the region for structural reforms to ignite and sustain productivity growth in all sectors, and to foster a job-creating, inclusive process of structural transformation. Boosting fundamentals such as lower transport costs, cheaper and more reliable power, and a more educated and skilled labor force will benefit all sectors.
In fiscal year 2015, the World Bank delivered $15.7 billion in new lending for over 160 projects across Africa. They include a new record of $10.2 billion in zero-interest credits and grants from the International Development Association (IDA), the World Bank’s fund for the poorest countries, representing the highest level of IDA delivery by any region in the World Bank’s history.
{The next president of the African Development Bank (AfDB) must improve the livelihoods of the continent’s poorest people, address huge energy shortages and fill infrastructure funding gaps, according to the bank’s outgoing president, Donald Kaberuka.}
“For the next leader of the bank … inclusion and broad-based growth is absolutely the number one [item on the] agenda,” says Kaberuka, who steps down in May after presiding over the bank for a decade.
With worsening levels of inequality and soaring population growth across Africa, Kaberuka calls on the biggest lenders to African countries to refocus their efforts on providing services and opportunities for the poor.
“How do you ensure that everything [financing institutions do] asks the question: does this reach the ordinary citizen in our countries? Not simply, Senegal [has] 10% GDP growth – and a taxi driver says, ‘Well, I can’t eat the GDP’,” he says.
For Kaberuka, a Rwandan who served as his country’s finance minister from 1997 to 2003, navigating the bank through the 2008 financial crisis and helping it to keep its credit rating intact are among his proudest achievements.
But plenty of challenges remain for the bank and for the continent. “Each time I land in a rich African country, I count the number of private jets and I think, what could be the origin of this wealth? It’s unlikely to be enterprise or innovation,” says Kaberuka.
“The test of a nation is not how many millionaires you have, it is how many millions of people you [lift] from poverty into the middle class.”
The test of a nation is not how many millionaires you have, but how many millions you lift out of poverty …
Donald Kaberuka
Kaberuka also warns that Africa’s economic development is being choked by chronic energy shortages: “Today, in every single African country, from South Africa to the north, the biggest impediment to economic growth is energy,” he says.
He adds that the continent must find an extra $92bn every year to fill its infrastructure funding gap – to build new roads, schools, hospitals and airports.
Kaberuka has said climate change is one of the “greatest calamities” Africa faces, but he is encouraged by successful solar projects in Morocco and windfarms in Kenya. The AfDB has an investment policy to finance renewable and non-renewable energy projects in equal measure.
Kaberuka defends African countries using non-renewable energy sources. “It is hypocritical for western governments, who have funded their industrialisation using fossil fuels … to say to African countries: ‘You cannot develop dams, you cannot develop coal, just rely on these very expensive renewables,’” he says.
With oil, gas and mineral production at the forefront of Africa’s economic growth, Kaberuka has called for better management of the continent’s natural resources. China, the main buyer of Africa’s oil and minerals, has taken a prominent role in financing infrastructure projects, leading some to question the AfDB’s place in Africa’s funding ecosystem.
Last year, the bank announced a $2bn partnership with the People’s Bank of China, known as the Africa Growing Together Fund, which will use AfDB’s policies, procedures and safeguards to help African governments strike better deals with Chinese investors.
But Kaberuka stands by the progress the bank has made under his stewardship, and shrugs off the suggestion that he could have done more for Africa’s poor. “Infrastructure is now 60% of everything we do, and we backed the mission of the bank, which was creating the single market in Africa,” he says.
Regional integration has been an AfDB priority since its founding in 1964. Despite a number of false starts, Kaberuka is “very confident” that regional blocs such as the East African Community (EAC) and the Economic Community of West African States (Ecowas) will realise long-held ambitions to tighten political unions and merge into a single market.
But last week the Tanzania president, Jakaya Kikwete, said the “slow progress” towards the EAC’s common market was “discouraging” to citizens of Kenya, Rwanda, Tanzania, Uganda and Burundi, which make up the bloc.
Kaberuka bemoans the minimal role African governments have played in the Ebola crisis. The early stages of the response saw “thousands of NGOs with all these huge vehicles with radio antennas, but there was no involvement of communities or governments”, he says, adding that the AfDB’s priority has been to channel funds to governments dealing with the crisis. So far, the bank has given $230m to Guinea, Liberia and Sierra Leone, he says.
The final cost of the Ebola crisis will be about $3.2bn, according to Kaberuka. He applauds the international response to Ebola, describing it as “people putting their politics on the side, dealing with the problem”. But he criticises African governments for “failing to explain to the communities how Ebola could be contained”.
The AfDB will elect its next president in May. Eight candidates – from Nigeria, Ethiopia, Tunisia, Chad, Cape Verde, Sierra Leone, Zimbabwe and Mali – have been named.
The next president will be judged by their ability to spread Africa’s economic growth and lift people out of poverty, says Kaberuka. “Think of a citizen looking at power lines going above them, and they live in darkness because they can’t afford [electricity].”
{{The Guardian}}
{Rwanda’s economy is expected to grow by 7.5 percent in 2015 and 7.7 percent in 2016, according to the latest Rwanda Economic Update published on Wednesday by the World Bank.}
“Falling oil prices are expected to contribute to lower inflation but also to a more stable exchange rate, an improved balance of payments, and smaller electricity subsidies. Moreover, economic stability in turn increases policy flexibility,” said Carolyn Turk, the World Bank, Country Manager for Rwanda.
The updated focuses on Rwanda’s agriculture and its impressive gains over recent years.
However, it describes how risks such as pests, adverse weather, plant diseases, and price volatility have created significant economic losses that could have been avoided.
“Agricultural risks are low in Rwanda compared to neighboring countries. Nevertheless, they can have important consequences for sector productivity, growth, and the government’s efforts to transform the sector,” said Toru Nishiuchi, the World Bank’s Economist and the Task Team Leader for the Economic Update.
According to Nishiuchi, risks to the agricultural sector caused production losses worth $1.2 billion between 1995 and 2012, about 2.2 percent of Rwanda’s total annual agricultural production.
These risks do not have to turn into losses-identifying these risks allows the government to manage them effectively through a set of prioritized interventions, Nishiuchi added.
{{APA News}}
Rwanda’s economy recovered from a slowdown experienced in 2013 and recorded a growth rate of 7.8 percent in the fourth quarter of 2014 from 6.1 percent experienced in the first quarter of the same year, reports said on Tuesday.
The impressive performance was attributed to an increase in financing by the banking sector as result of accommodative monetary policy implemented by the central bank.
Speaking to hundreds of public and private economy actors on Tuesday, the Governor of National Bank of Rwanda, John Rwangombwa, reiterated that the economy is evolving toward surpassing projected growth.
“High economic growth was achieved with low and stable inflation on the account of sustained and well-coordinated monetary and fiscal policies coupled with limited inflationary pressures from trading partners and easing international commodity prices especially oil prices,” Rwangombwa said.
“Total turnovers of industry and services sectors increased by 12.7 percent in the last quarter of 2014 from 9 percent recorded in the third quarter, while the rate of economic activities skyrocketed to 12.5 percent from 2.9 percent,” Rwangombwa added.
Star Africa
{The 2014 edition of the African Development Bank’s [African Development Report->http://www.afdb.org/en/knowledge/publications/african-development-report/], on the theme of “Regional integration at the service of inclusive growth”, was officially launched Tuesday, December 16 at the Bank’s headquarters in Abidjan. }
In her opening address, AfDB Secretary General and Vice-President Cecilia Akintomide emphasized how “Africa’s regional integration is a major pillar in the Ten-Year Strategy of the Bank, which is celebrating its 50th anniversary in 2014 as Africa’s premier development finance institution.”
Presenting the report, AfDB’s Acting Chief Economist and Vice-President Steve Kayizzi-Mugerwa highlighted the themes developed in it: regional integration and inclusive growth, regional institutions, regional infrastructure, regional migration, regional financial integration and value chains.
Indeed, this report puts regional integration under the spotlight as being necessary for Africa’s development, recalling that this is an aspiration dating back to the independence period in the 1960s. Critically examining the developments that have marked these last 50 years in terms of economic and political integration, the publication underscores how much it needs to be stepped up. The world may well be radically changing, but African integration remains as topical as ever, concludes the Report, which also highlighted how much integration could stimulate sustained, inclusive growth.
The development of distribution networks and regional trade within global and African value chains into which the continent fits, institutional challenges, infrastructure – both tangible and “intangible” – indispensable to interconnect markets and boost competitiveness, strengthened financial systems, were among the challenges to the continent’s integration that were examined in the report.
The launch of the publication was also the occasion for a Davos-style discussion with three AfDB Executive Directors, Abdallah Msa, (representing Benin, Burkina Faso, Cape Verde, the Comoros, Gabon, Mali, Niger, Senegal and Chad), Dominic O’Neill (Italy, Netherlands and the United Kingdom) and Shehu Yahaya (Nigeria and São Tomé and Principe), and by Marlène Kanga, AfDB Central Africa Regional Director, and Sylvain Maliko, Acting Director of the AfDB’s NEPAD Regional Integration and Trade Department.
All five discussed the increase in migratory flows, while obstacles to mobility never cease to appear (particularly in Central Africa), and the looming gap between regional integration policies depending on whether they are carried out at national or regional levels.
The panellists did, however, note some progress, particularly with regard to infrastructure development and the free movement of persons, especially in the east and west of the continent.
To close the launching ceremony, AfDB President Donald Kaberuka focused on the respective national policies of African states: “More than infrastructure, it is political will that boosts regional integration in Africa,” he said, before recalling that over the last 10 years the Bank had been ceaselessly financing road infrastructure throughout the continent, with the aim of interconnecting countries. He also lamented the fact that the Regional Economic Communities (RECs) seemed to be working disparately, struggling from a lack of coordination and resources to implement initiatives to further integration, because far too often national interests take precedence over regional ones.
“I recommend that all those interested in the challenges of regional economic integration in Africa and the opportunities arising from this integration read this report,” said Kaberuka. “The Bank will continue to play a leading role in supporting the economic integration of Africa, while helping regional economic communities to create dynamic and attractive regional markets, so that every country in the continent, including the most landlocked and fragile, can benefit from interactions with global markets and from intra-African trade.”