Category: Economy

According to the IMF, South Africa is set to become Africa’s biggest economy with a GDP of $373 billion, displacing Egypt with a GDP of $347 to the second place in the wake of the country’s series of currency devaluations.

A sharp devaluation of currency and high inflation has also been attributed to Nigeria’s fall to fourth place in the latest IMF economic forecast. This is a big blow to the country’s economy which ranked as Africa’s largest in 2022.

The IMF’s World Economic Outlook estimates Nigeria’s gross domestic product at $253 billion based on current prices this year, a spot behind energy-rich Algeria at $267 billion.

Reacting to the forecast on Tuesday, South Africa’s President and leader of the African National Congress (ANC) Cyril Ramaphosa termed the news of his country’s economic growth as impressive.

“We have now become the largest economy on the African continent, with Nigeria and Egypt having been up there and having their challenges and now South Africa being the largest economy in the continent,” President Ramaphosa.

He expressed his confidence that the rankings would influence foreign investments in South Africa.

“That position in itself attracts more investors, because they see that this is a country that is reforming various processes and it’s a country going somewhere. We have a clear destiny of where we are going as a country and that’s why we are attracting investors,” he added.

Ethiopia, whose GDP is estimated to hit $205 billion, ranks fifth, with Morocco ($152 billion) and Kenya ($104 billion) taking sixth and seventh place respectively.

Other countries that made it to the list of top 10 largest economies in Africa are Angola ($92 billion) Cote d ‘Ivoire ($86 billion) and Tanzania ($79 billion).

Speaking at a press conference held on 29th March in Beijing, under the theme “Promoting High-Quality Development,” Mr. Wang Weizhong, the Governor of Guangdong, shed light on the province’s strategic advancements and future prospects.

As he explained, Guangdong’s journey towards high-quality development is deeply rooted in the directives of CPC’s General Secretary and President of China, Xi Jinping, emphasizing the province’s pioneering role in reform and development.

The guiding principle, as outlined by the General Secretary, is for Guangdong to lead in constructing a new development pattern, focusing on high-quality development as its core task.

This vision was encapsulated in the Guangdong-Hong Kong-Macao Greater Bay Area’s development, aiming to serve as a strategic support point and a demonstration area for high-quality development and Chinese-style modernization.

Governor Wang Weizhong detailed the “1310” strategic deployment, aiming to anchor Guangdong’s leadership role in development through reform, opening up, and innovation, while making breakthroughs in ten key areas. This strategic approach has been pivotal in seizing opportunities brought forth by technological revolutions and industrial transformations, setting a blueprint for “recreating a new Guangdong.”

Guangdong’s economic milestones are impressive, with a GDP reaching 13.57 trillion yuan (over 2.5 trillion US$), maintaining its position as China’s leading economic province for 35 consecutive years. This economic prowess is coupled with significant efforts in expanding investment, promoting consumption, and stabilizing foreign trade to achieve a targeted economic growth of 5% in 2024.

The construction of the Guangdong-Hong Kong-Macao Greater Bay Area marks a significant stride towards deepening reforms and opening up, creating a synergistic effect across the region. This initiative is bolstered by major infrastructural developments and the collaborative efforts with Hong Kong and Macao to position the Bay Area as a world-class economic hub.

Innovation and the cultivation of new productive forces are at the heart of Guangdong’s strategy for high-quality development. With leading positions in industrial enterprises, high-tech firms, and intellectual property rights, Guangdong is steadfast in its commitment to the real economy and manufacturing, aiming to develop new trillion-level industrial clusters.

Moreover, the province’s dedication to ecological sustainability and the well-being of its residents underscores the holistic approach to development. Efforts in ecological construction and improving people’s livelihoods through the “Ten Major Projects for People’s Livelihood” exemplify the province’s commitment to a green and equitable development path.

The province’s journey is a blueprint for others, showcasing the possibilities of sustainable development in the 21st century. With its eyes set on the future, Guangdong welcomes the world to witness its transformation, inviting global audiences to explore the charm and vibrancy of a region at the forefront of China’s march towards modernization.

IMF staff and the Rwandan authorities on Friday, March 22, 2024, announced that they had reached staff-level agreement on policies needed to complete the third reviews of Rwanda’s Policy Coordination Instrument (PCI) and program under the Resilience and Sustainability Facility (RSF), and the first review of the Stand-by Credit Facility (SCF) arrangement.

The declaration followed the conclusion of a two-week mission led by Ruben Atoyan, who visited Kigali from 11–22 March, 2024, to discuss the authorities’ policy priorities and progress on reforms regarding the reviews.

The conclusion of the mission paves the way for the consideration of the report by the IMF Executive Board in May this year.

Upon completion of the review by the Board, Rwanda would have access to SDR 57.5 million (equivalent to about US$ 76.6 million or Rwf99 billion) under the RSF and SDR 66.75 million (equivalent to about US$ 88.9 million or Rwf115 billion) under the SCF.

At the conclusion of the mission, Mr Atoyan praised Rwanda’s economic gains and resilience, notwithstanding the challenging external environment.

“The 2023 GDP growth continued to be robust at 8.2 percent year-on-year, on the back of strong performance in services and construction, as well as recovery in food crop production in the second half of the year. Inflation decelerated sharply in recent months. Headline inflation was 4.9 percent in February 2024, down from the peak of 21.7 percent in November 2022, owing to appropriately tight monetary policy stance and favorable developments in food prices as agricultural production rebounded at the end of last year,” Mr Atoyan stated.

“The current account deficit widened due to strong food and capital goods imports, along with lower-than-expected coffee exports. The Rwandan franc depreciated by 18 percent against the US dollar in 2023, a necessary step towards facilitating the much-needed external adjustment.
International reserves stood at 4.4 months of prospective imports at end-2023, providing a helpful buffer against external shocks.”

He, however, warned of potential risks and shocks which could adversely affect the country’s economic outlook.

“Deepening of geopolitical fragmentation, another spike in global energy and food prices, or slowdown in trading partners’ growth would weigh on the outlook. Longer-than-expected tight global financial conditions could adversely affect the availability of external financing. Also, already committed grants under the UK Migration and Economic Development Partnership continue to face legal uncertainties and could result in some budget pressures and lower FX inflows if they do not materialize,” he warned.

The IMF official called for deliberate measures to cushion the effects of the 2023 May floods, while also supporting the credible and balanced fiscal consolidation over the medium term.

He also recommended adoption of a comprehensive tax reforms that leverage synergies between tax policy and tax compliance to help create fiscal space for the country’s much-needed developmental spending.

“Expenditure rationalization will need to focus on enhancing the efficiency of public investment, better targeting of subsidies, and digital delivery of public services. The medium-term fiscal framework should be improved by further strengthening fiscal risk management and enhancing the transparency of fiscal accounts,” he added.

Notably, RSF provides affordable long-term financing to countries undertaking reforms to reduce risks to prospective balance of payments stability, including those related to climate change and pandemic preparedness, while PCI is a non-financing instrument open to all IMF member countries.

On the other hand, SCF provides financial assistance to low-income countries (LICs) with short-term balance of payments needs.

This industrial park transcends mere manufacturing and innovation spaces, embodying a dynamic emblem of international collaboration, technological progress, and the mutual economic growth of China and Germany within the broader narrative of China’s economic reforms and global engagement.

The inception of the Beijing China-Germany Industrial Park was driven by the aspiration to not only fortify the economic bonds between China and Germany but also to spotlight innovation, sustainability, and shared prosperity. It aims to meld Germany’s technological excellence with China’s manufacturing strength, serving as a vibrant hub for both.

Strategically located within China’s expansive economic terrain, the park enjoys prime access to both local and global markets—a deliberate decision mirroring the foresight of its initiators and the Chinese government’s ambition to establish a nationwide network of such parks to accelerate the country’s economic globalization and integration.

The partnership within the park epitomizes a significant shift in China’s economic approach, transitioning from a mainly inward focus to a strategy embracing globalization. It not only attracts direct investment from Germany but also facilitates technology exchange, skill enhancement, and innovation, significantly benefiting the local and wider economy.

Since its establishment in 2021, the Beijing China-Germany Industrial Park has achieved remarkable milestones, with an annual industrial output reaching 35 billion yuan (around US$5 billion), demonstrating the substantial benefits of international cooperation.

As of November 2023, officials indicated that over 100 German companies had established operations within the park.

The park is setting its sights on expanding its German business presence to more than 150 companies, including over 30 leading niche enterprises, by the end of 2025, with a goal to elevate the annual industrial output to exceed 50 billion yuan.

Housing German giants like Mercedes-Benz, BMW, Ameco, Allianz, ottobock, starmix, ROPA and BOSCH among others, the park is situated in the Shunyi District, heralding it as the foremost national-level German cooperation park within the Beijing German-China Economic and Technological Cooperation Demonstration Zone.

This park is at the forefront of facilitating German exchange activities, constructing a national-level German cooperation platform, and linking resources for German national cooperation.

It collaborates with local governments, industrial associations, universities, research institutes, and companies from both nations to carve new avenues for Sino-German economic and technological partnership.

Beijing, uniquely positioned with policies like the ‘Integrated National Demonstration Zone for Opening Up the Services Sector’ and the Pilot Free Trade Zone, leverages its openness to global businesses.

Ranked among the world’s most livable cities, Beijing offers a fertile environment for international enterprises, buoyed by an integration of premium resources, a conducive business climate, and abundant opportunities.

The city hosts over 45,000 foreign-invested enterprises from more than 160 countries and regions, along with 35,000 permanent foreign country offices, over 4,000 regional headquarters, Research and Development (R&D) centers, and 55 Fortune Global 500 company headquarters, cementing its status as a global economic and innovation hub.

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According to BNR, the decision reached during the Monetary Policy Committee (MPC) meeting aligns with the inflation projection and the risks identified and with the aim of achieving lasting inflation stability in the upcoming quarters.

The Central Bank has disclosed that inflation is projected to remain within the band of 2 to 8 percent, averaging close to 5 percent.

However, it disclosed that several potential risks could affect this outlook , including geopolitical tensions such as the ongoing wars in Ukraine and in the Middle East, disruptions in the Red Sea that may influence international commodity prices, and weather-related challenges that could affect future agriculture sector performance.