Economic Diversification to be Highlighted at Africa CEO’s Forum

Still basking in the euphoria of successes recorded in its last six editions, the 2018 Africa CEO Forum, recognised as the biggest and most important meeting of Africa’s private sector, is scheduled for Monday and Tuesday, March 26 and 27, 2018, in Abidjan, Cote D’Ivoire.

The focus of the event, which brings together more than 1,200 personalities, all key industrial, financial and political decision-makers from over 60 countries, including Nigeria, will be on the opportunities offered by disruptive technologies to stimulate growth and employment in the continent, thereby sparking a new era for the private sector.

For the first time, the forum is devoting an exclusive panel discussion to the Nigerian economy, during which the diversification model that has given the country’s economy a shot in the arm will be analysed in-depth, as well as, how it can inspires other African economies.

In a statement by the Forum’s Communication Manager, Abdoul Maïga, he said African countries’ past attempts at diversification have not always been successful, which is why the Africa CEO Forum will shed light, not only on the reasons for this, but also on the reforms needed to overcome economic stagnation, as well as revitalise growth prospects.

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He said: “At a time, when Nigeria is still struggling to break free of its dependence on oil, which still accounts for more than 90 per cent of its export earnings, its economy is starting to see an improvement and prospects are looking better for the country’s businesses.

Numerous companies have emerged in the finance, technology, agriculture, entertainment and industrial sectors.

From Yaba district startups to rice mills in Kano and the burgeoning automotive sector, there is a growing list of companies, whose performance is no longer tied to oil prices.

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US President Signs Chinese Trade Tariff Memo

United States’ President Donald Trump has signed an executive memorandum enacting a range of tariffs on trade partner China in a move which could have a serious impact on the technology industry.

The Memo was signed into effect late yesterday following what the US government has described as ‘an investigation of China’s laws, policies, practices, or actions related to technology transfer, intellectual property, and innovation’

The tariffs described in the presidential memorandum are claimed to be payback for the nation’s pressure tactics in transferring technology outside the US, restricting US firms’ abilities to licence Chinese technology, systematic investment in and acquisition of US companies with a view to large-scale technology transfer, and -most tellingly- that it ‘conducts and supports unauthorised intrusions into, and theft from, the computer networks of U.S. companies which provide the Chinese government with unauthorised access to intellectual property, trade secrets, or confidential business information, including technical data, negotiating positions, and sensitive and proprietary internal business communications, and they also support China’s strategic development goals, including its science and technology advancement, military modernisation, and economic development.’

ALSO READ: China to Retaliate Against US with $3bn Tariffs

The tariffs cover an estimated $60 billion of Chinese imports, including numerous products related to the technology sector which, given the amount of material produced in China for consumption in the US, could be a major blow for technology companies around the world.

China, meanwhile, has suggested that it could hit back with tariffs of its own, with the Chinese Ministry of Commerce stating that ‘China will certainly take all necessary measures to resolutely defend its legitimate rights and interests,’ though it prefers to ‘sit down and talk calmly’ first.

If a trade war erupts, the cost of various goods and services will rise -not just in the US, but globally. For some nations, however, it could prove an opportunity to get a foot in the door and take over importation and exportation of goods and materials which are now too expensive to source from China or the US.

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China to Retaliate Against US with $3bn Tariffs

Chinese authorities on Friday proposed higher tariffs on 128 United State’s products with a value of $3 billion, as a response to recent US tight measures against China.

The proposal suggested around 15% tariffs on US goods like wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng and 25% on US pork and recycled aluminum goods, a statement by China’s Ministry of Commerce showed.

This move came after US President Donald Trump on Thursday signed up to $60-billion tariffs on Chinese imports.

ALSO READ: Economic Recovery Could Be Hit if US-China Trade War Escalates – Rajan

China’s decision to impose $3-billion tariffs is “very cautious” and does not suggest a global trade war, US Trade Representative for China Affairs, Timothy Stratford said, indicating that US exports to China total $115.6 billion

“They want to show that they have taken note of U.S. actions and are going to be strongly resisting, but they don’t want to be seen as escalating things further,” Stratford added.

Furthermore, data analysis firm Complete Intelligence CEO, Tony Nash noted that China’s response is significant, but does not represent “a lot in terms of the total US-China relationship.”

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South Africa Makes Formal Request for Exclusion from US Metals Tariffs

South Africa’s Trade and Industry Minister, Dr Rob Davies, has made a formal submission to the United States of America, requesting the exclusion of South Africa from the imposition of tariff on steel and aluminium products.

A provision allowing for country-based exclusions from a 25% increase in the steel tariff and a 10% duty on aluminium product imports to the US was included in a proclamation signed by President Donald Trump on March 8.

The proclamation immediately excluded Canada and Mexico from the protective measures, implemented on 23 March. The US President subsequently granted exemptions for the European Union, Argentina, Brazil, South Korea and Australia, while announcing a new set of additional tariffs against China.

“South Africa notes with concern that it is not excluded from the application of the duties on steel and aluminium,” the Department of Trade and Industry said in a statement on Friday.

The imposition of the duties, the department added, would have a negative impact on productive capacity and jobs in a sector already suffering from global steel overcapacity.

“In addition, South Africa notes with concern the different treatment of trading partners, which will have an effect on the competitiveness of South African steel and aluminium products in the US.”

The Steel and Engineering Industries Federation of Southern Africa (SEIFSA), meanwhile, expressed concern that South Africa, and other developing countries, could become casualties in a “proxy trade war between the US and China”.

SEIFSA chief economist, Dr Michael Ade, said the exclusion of South Africa, as well as several other countries from the initial list of countries to be exempted on the basis of being close “allies”, was suggestive that the Americans were using protectionism as a weapon to threaten and intimidate certain countries or a bloc of countries.

“While the world anxiously awaits China’s response to the US trade restrictions within the next 15 days before the proclamation becomes effective, there is no denying the fact that the ripple effect on the global economy of a belligerent tit-for-tat response from China will be huge,” Ade said.

In its submission, South Africa argued that its exports of primary mineral and metal products, such as ferroalloys, vanadium, manganese, base and precious metals, had been a source of key input materials for the “exceptional technological development in the US advanced manufacturing industries”.

It also emphasised that the country’s yearly exports of aluminium products were equivalent to only 1.6% of total US aluminum imports. These products, the submission added, consisted of specialised aluminium sheet, coil and plate for processing in the US automotives, battery and aerospace industries.

In addition, it highlights that, of the 33.4-million tons of steel imported into the US in 2017, imports from South Africa amounted to only 330 000 tons, or less than 1% of total US imports and 0.3% of total US steel demand of 107-million tons.

“As such, South Africa does not a pose a threat to US national security and to the US steel and aluminium industries, but is a source of strategic primary and secondary products used in further value-added manufacturing in the US contributing to jobs in both countries.

ALSO READ: Economic Recovery Could Be Hit if US-China Trade War Escalates – Rajan

South Africa also assured the US that inputs for all steel and aluminium product exports to America were sourced from local producers and that South Africa’s robust customs-control system prevented circumvention.

South Africa acknowledged the adverse effects of global steel overcapacity and noted that its domestic steel sector had been severely impacted by low-priced steel and steel-product imports, which had led to the imposition of duties on primary steel imports into South Africa and as a result, they has implemented a number of trade remedy measures.

“In addition, South supports and participates in the Organisation for Economic Cooperation and Development and G20 multilateral process to achieve outcomes of a fair, sustainable and viable steel industry in the future.”

The DTI (Department of Trade and Investment) states that various direct engagements had already taken place with the US, including a meeting between Ambassador Mninwa Mahlangu with the White House National Security Council Staff, the State Department and the Office of the US Trade Representative in this regard.

In addition, Davies held a teleconference with Ambassador CJ Mahoney, the Deputy United States Trade Representative for Investment, Services, Labor, Environment, Africa, China and the Western Hemisphere on 22 March.

“The Department of Trade and Industry continues to engage the industry on the matter and will pursue further discussions with the US on this issue,” the DTI added.

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Kenya Govt to Lift Uganda Poultry Ban

The government of Kenya will lift the ban on poultry products from Uganda after 15 months embargo, allAfrica reports.

The 15-month embargo which led to the prohibition of chicken and eggs from accessing Kenya’s Ksh500 million ($5 million) market after outbreak of a viral disease.

The Deputy Director of Veterinary Services, Michael Cheruiyot, stated that the move to lift the ban preceed talks with Uganda and an assessment that ascertained the neighbouring country is now free of avian influenza disease.

In August 2017, the Ministry of Agriculture allowed three Ugandan firms to export their products to Kenya having met the safety conditions that would allow them to sell their eggs and chickens locally.

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Dr Cheruiyot, while speaking yesterday in Nairobi during the launch of a report on Business Benchmarks on Farm Animal Welfare by World Animal Protection, said:  “We have been in discussion with Uganda and agreed that we are going to lift the ban completely following eradication of the virus in Uganda.”

He explained that the two countries had agreed to fast track the process of lifting the ban so that trade can go back to normal.

The report focused on global food companies including international brands operating in Kenya such as Dominos, Subway, Burger King and Carrefour, which have committed to improvement of the welfare of chickens.

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Economic Recovery Could Be Hit if US-China Trade War Escalates – Rajan

Raghuram Rajan, Professor of Finance in the University of Chicago, Booth School of Business, advised that one should stay away from trade war particularly at a time when the economy the world over was in the process of recovery.

The global economic recovery could be hit if the trade war between the US and China escalate, the renowned economist and former Reserve Bank of India Governor Professor Rajan said today.

“There are very worrisome scenarios here. I think we should not take this lightly. I do hope that better sense sort of prevails and we move off from a full-fledged process of one country doing it and the other country reacting and so on.

“I don’t want to use the word trade war. I don’t think they are there yet. But I do think that it is very important that we stay away because it could harm the current recovery which has been beneficial all over the world significantly.

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“And for it to do that at a time when the US is quite strong and has got full employment is going quite reasonably, it seems to me that this is not the time that we should do it,” the former RBI governor told reporters in response to a question related to trade war.

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Egypt: Foreign Minister Travels to India to Discuss Bilateral Relations

The foreign minister of Egypt, Sameh Shoukry travelled to India on Wednesday to lead the country’s delegation in the seventh round of the joint committee between the two countries.

The foreign minister spokesman, Ahmed Abu Zeid mentioned in an official statement that the joint committee will commence its meetings on Thursday, followed by ministerial level meetings on Friday.

The spokesman explained that the visit aims to address bilateral relations in all fields and means to develop them, in addition to regional and international issues of mutual interest.

ALSO READ: Forty-Four Countries Sign the Free Trade Deal

The visit comes within the framework of historical relations between the two countries and Egypt’s keenness to develop cooperation with India in all areas, which Abu Zeid said was reflected in a series of meetings between President Abdel-Fattah El-Sisi, the leader of Egypt and Indian Prime Minister Narendra Modi since 2015.

The foreign minister will meet with the PM Modi during his visit to deliver a message from President El-Sisi on means of reinforcing bilateral relations between the two countries.

He will also participate in the economic forum organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) in cooperation with the Egyptian Commercial Office in New Delhi

The spokesman valued the mutual cooperation as one that holds special importance especially in light of around 451 Indian companies investing in Egypt with total investments exceeding $3 billion.

Trade between the two countries totalled $4 billion in 2017.

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DR Congo Govt to Hold Meeting With Mining Companies

The government of DR Congo has decided to hold open talks on Friday with mining companies about implementing some of the most contentious provisions in a new mining code that hikes taxes and royalties in the face of objections from industry.

The president of the country, Joseph Kabila signed the new code earlier this month, replacing the previous 2002 law.

Foreign investors in DR Congo, which include Glencore, Randgold, China Molybdenum and Ivanhoe, said it would scare off investment and violate existing agreements.

President Kabila, in a meeting before signing the code, assured the companies their concerns would be discussed in follow-up talks to draft regulations for the sector.

Martin Kabwelulu, the country’s Minister of Mines told reporters on Wednesday that the talks with major companies present in DR Congo, which is Africa’s top copper producer and mines more than half the world’s cobalt, would begin on Friday at 0900 GMT.

According to a work plan Kabwelulu sent to the companies, the negotiations will be divided into six “pillars” running from March 16 to April 24, with a preliminary draft of the regulations to be completed by May 2. Government officials have already begun work on pillar 1.

The regulations must be adopted by the government within 90 days of the code’s signing, precisely on June 7.

The work plan sets aside 25 days, from March 27 to April 24, for discussions on the fiscal and customs regimes, including the new code’s so-called stability clause, which is the most contentious point between the government and industry.

Miners enjoyed a 10-year protection under the former code’s stability clause against changes to the fiscal and customs regime but those were annulled by the new law, which says that its provisions enter into effect immediately.

The companies still hope the government will honor the 10-year exemptions but Congolese officials have said no compromises reached in the talks can contradict provisions in the code.

The work plan refers only to “the guarantee of stability of the revised mining code (five years for new mining rights)” and not to protection for mining titles that existed under the previous code.

It also calls for discussions about royalty increases, which would raise payments up to five-fold on metals designated “strategic substances” by the government.

The Prime Minister, Bruno Tshibala appeared to preempt those discussions last week by saying cobalt, whose price has more than tripled in the past two years due to rising demand for electric vehicles, would be declared a strategic substance and that copper could be as well.

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Forty-Four Countries Sign the Free Trade Deal

Nothing less than 44 African countries have signed the free trade deal aimed at paving the way for a liberalised market for goods and services across the continent.

The African Continental Free Trade Area (AfCFTA) which is an agreement cast in the mold of the European Union’s version was signed during the 10th Ordinary Session of African Union Heads of State summit held in the Rwandan capital, Kigali today, Wednesday.

The AfCFTA gives birth to the world’s largest free trade area since the World Trade Organisation which was formed in 1995.

Nineteen presidents were present whiles a number of Prime Ministers and government representatives also signed for their respective countries.

“This agreement is about trade in goods and services. These are the kinds of complex products that drive high income economies,” Rwanda’s President, Paul Kagame said in a remarks on Tuesday.

ALSO READ: President of Rwanda Hosts African leaders to Sign Free Trade Deal

The theme of the AU Extraordinary Summit was: “Creating One African Market,” which falls under the Agenda 2063 of the continent.

According to estimates, if all 55 members states of the AU ratify it, the agreement will bring together 1.2 billion people with a combined gross domestic product (GDP) of more than 2 trillion US Dollars.

Uganda’s Yoweri Museveni did not attend the summit but the Foreign Affairs minister attended and signed the deal, while Nigerian president Muhammadu Buhari failed to attend and did not sign.

Concerned analysts said President Buhari may have caved under pressure from local labour unions and big corporations who have opposed the treaty saying it would harm the local economy.

An analyst, Alpha Sy said: “If Nigeria does not join, it will have an impact definitely. Nigeria is 190 million population country, it’s a large economy. So we hope that Nigeria will not pull out of it.

“Nigeria had already been part of the process of building it, we think it’s just maybe one step back that they are taking to review.”

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Free Trade Deal is the Saviour of the Continent – Obasanjo

The former president of Nigeria, Olusegun Obasanjo has urged African leaders to embrace the continental free trade deal that is to be signed in Rwanda today, saying it is where the salvation of the continent lies.

“That is where our salvation lies, trading amongst ourselves and consequently developing our economies. The agreement will inspire a change a perception of the continent by the rest of the world,” he said.

The former president also argued that the free trade deal would demonstrate the reality of the shift from aid to trade for the continent.

ALSO READ: President of Rwanda Hosts African leaders to Sign Free Trade Deal

While speaking on the sidelines of the ongoing African Union summit, Obasanjo said the signing and implementation of the African Continental Free Trade Area (AfCFTA) will enable a shift from dependence on assistance to increased trade.

He stressed that it would also act as a signal to the rest of the world that Africa is looking for sustainable business.

African heads of state are meeting in Kigali, Rwanda to sign the deal that commits countries to removing tariffs on 90 percent of goods, liberalise services and tackle “non-tariff barriers” which hamper trade between African countries, such as long delays at the border.

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Bank of Zambia Seeks to Improve Saving Culture

The Bank of Zambia has launched the Financial Literacy Week with a aim to improve on the culture of saving.

The Governor of Bank of Zambia, Denny Kalyalya who made a statement in Lusaka during the launch said there is need to develop values of saving at a tender age even when one has low income level.

Kalyalya said the event which is tagged “Save, Invest, Insure; for a better life! is meant to increase awareness on increased saving.

He said the event also aims at making sure that the general citizenry is made part of the campaign and increase the knowledge base.

He further stressed that when majority of people saves there is likely to be sustainable contribution to those saving as they will invest the money saved.

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Explaining the importance of savings,  Kalyalya mentioned that saving will not only help one to invest in their lives but will also give one a better future where they can lean on in times of financial strain.

He said the financial services sector remained an important sector to the Zambian economy with annual contribution to Gross Domestic Product (GDP) of about 3 percent over the last three years.

The governor assured that with concerted efforts on financial inclusion and financial literacy awareness programmes, the financial sector is bound to grow and increase its contribution to GDP even further.

He said the situation is further made easy if one also makes sure that they insure all their assets and the money that they have worked for.

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Morocco Govt to Close Down Abandoned Mines

The government of Morocco has pledged to close all abandoned mines in Jerada, a city in the Oriental region of northeastern in the country.

The promise came after several months of social unrest in the former mining city of about 43,506 population and 8,953 households.

The city of Jerada, which was statistically ranked among the poorest in the kingdom has experienced waves of peaceful demonstrations since the deaths of two brothers in December, who were trapped in an abandoned mine shaft, as they tried to mine coal illegally .

Another two additional deaths under similar circumstances sparked anger and indignation among residents in the economically devastated town.

Protesters have demanded “economic alternatives” to “death mines”, from which hundreds of miners have struggled to make a living despite their closure in the late 1990s.

The Secretary general of the region’s police headquarters, Abderrazzak El Gourji told AFP in an interview that there are more than 3,200 wells in Jerada, but only 200 to 300 are active.

“The others, which are abandoned and present a clear danger, will all be closed,” he stated.

He said a development programme for the region would see 3,000 hectares (7,400 acres) of land set aside for agricultural projects as well as the construction of a new industrial zone.

“All promises are realistic and achievable, and what was not achievable was rejected… it’s easy to calm people with promises, but tomorrow you have to implement it,” stated Gourgi.

According to him, the development measures announced by the government in February were “welcomed” by political parties, local representatives, local and protest leaders.

“But there were people among the (protesters) who never sought a solution, who never tried to sit around a table,” he added.

Demonstrations resumed again earlier this month after authorities arrested protest leaders, prompting the ministry of interior to ban all “illegal demonstrations” in the town.

The residents of Jerada organised a mass march on Friday without any incident, and said further actions were planned for the coming days.

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Egypt Govt Approves 2018/19 Budget

The Prime Minister of Egypt, Sherif Ismail disclosed that the government has approved its 2018/19 fiscal year budget on Sunday.

The approved fiscal plan targets a budget deficit of 8.4 percent of Gross Domestic Product (GDP).

According to the statement from the cabinet, the budget would target GDP growth of 5.8 percent.

In the mean time, the country’s Minister of Finance, Amr El Garhy explained earlier today to Reuters that the country expects GDP growth between 5.3 and 5.4 percent in the third quarter of the 2017-2018 fiscal year.

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The Planning Minister, Hala al-Saeed stated that the economy grew by around 5.3 percent in the second quarter.

According to World bank’s 2017 report, the macroeconomic conditions of the country were showing signs of stabilisation following the liberalisation of the exchange rate.

The 2018/19 fiscal year budget of Egypt starts in July ends in June.

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IMF Approves New $157 Million Credit Arrangement for Burkina Faso

The Executive Board of the International Monetary Fund (IMF) has approved a new three-year arrangement under the Extended Credit Facility (ECF) for Burkina Faso for SDR 108.36 million (about US$157.6 million or 90 percent of Burkina Faso’s quota) in support of the country’s economic and financial reform programme.

The programme aims to achieve a sustainable balance of payments positions, inclusive growth, and poverty reduction by creating fiscal space for priority security, social and infrastructure investment spending. It is also aimed at helping to catalyse official and private financing and build resilience to future economic shocks.

The Executive Board’s decision will enable an immediate disbursement of SDR 18.06 million (about US$26.3 million). The remaining amounts will be phased over the duration of the program, subject to semi-annual reviews.

Following the Executive Board discussion on Burkina Faso’s request, Deputy Managing Director Mitsuhiro Furusawa, and Acting Chair, made the following statement:

“Burkina Faso faces significant development challenges, which have intensified in the recent period due to security shocks and social unrest. The authorities are making strong efforts to improve security and meet the expectations of the population in the context of limited resources through the implementation of their national development strategy.

“The economic outlook is broadly favourable but also contains downside risks. Economic growth has accelerated and revenue collections have improved. The main risks to the outlook stem from security and domestic challenges.

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“The authorities’ commitment to West African Economic and Monetary Union (WAEMU) convergence criteria concerning the overall fiscal deficit, revenue mobilisation, the wage bill, and debt is welcome. The fiscal framework underpinning the new program, while ambitious, provides a credible path toward meeting the WAEMU convergence criterion for the overall fiscal deficit by 2019.

“The program is premised on the creation of fiscal space by increasing revenue mobilisation through improved tax administration and new tax policy measures and by seeking to contain the public-sector wage bill. The budget also needs to be protected against the accumulation of contingent liabilities in the energy sector, including by setting a timeline for the implementation of the automatic pump fuel price adjustment mechanism.

“It is of the utmost important to improve the quality and efficiency of investments through prioritisation and cost-benefit analysis for projects, including public-private partnerships (PPPs). There is also a need for strengthening the legal and institutional framework for public investment management and PPPs. The authorities’ decision to refrain from resorting to pre-financing arrangements in view of the fiscal risk such arrangements entail is welcome.”

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Namibia: Annual Inflation Decelerates to 3.5%

The All-Items Index for February 2018 was estimated at 130.7 compared to 126.3 registered in February last year, an increase of 4.4 index points.

According to the latest information from the Namibia Statistics Agency (NSA), the annual inflation rate for the month of February 2018 decelerated to 3.5% down from 7.8% recorded in February of the preceding year, representing a slowdown of 4.3 percentage points. During the month of February 2018, the main drivers of the annual inflation rate were education 9.9%, transport 6.6%, and health 6.2%.

February 2018 annual inflation rate recorded a notable slowdown in the price levels of Food and non-alcoholic beverages from 11.3% to 2.0%; communications from 6.0 percent to -0.1%; housing, water, electricity, gas and other fuels from 9.6% to 3.2%; furnishings, household equipment and routine maintenance of the house from 8.5% to 0.1%.

On a monthly basis, the inflation rate slowed to 0.1% compared to 1.6% registered in the previous month.

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Inflation is calculated based on a basket of goods and services containing a representative sample of the goods and or services commonly consumed in a country, and weighted in accordance with the relative percentage of expenditure allotted to each of the said goods at household level. The price of these goods and services are then tracked over time, to illustrate the change in the cost of living over time. As spending patterns change, new products and services are added to the basket, and the basket re-weighted so as to better capture the current spending patterns of the consumer at the current point in time.

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Key Issues Raised at The 2018 Africa Business Conference in Harvard Business School

In marking this year’s edition of the Africa Business Conference –the 20th hosting since inception in 1998- members of the Africa Business Club at the Harvard Business School, between March 2nd and March 4th, 2018, played host to well over 1,000 passionate students and professionals from across the globe to discuss and debate important topics on business in Africa.

This time, the annual conference which remained the world’s largest student-run event focusing on business in Africa was held at the Harvard Business School Campus in Boston, MA. The theme of the event tagged “Values and Value Chains: Africa in a New Global Era” centred on the incredible opportunities and developments happening in Africa.

Discussing on the theme, preeminent keynote speakers, expert panelists, and conference delegates hammered on the need for Africans to design support schemes for promising African entrepreneurs through grants and expert coaching in a way to further grow Africa’s economy. In a bid to set the pace, a brief Venture Competition and a Startup Lab was organised during the conference to experiment on the suggested concept.

For the 20th anniversary, the conference exhaustively focused on the incredible opportunities and developments happening in Africa while setting aside time to expatiate exclusively on how individuals, businesses, and the continent at large engage within the larger global ecosystem.

ALSO READ: Nigeria: IMF Gives Mixed Verdict On Economy, Reforms

Following the narrative of business as it evolves in Africa, the conference revealed how the global landscape is changing at a seemingly more rapid pace than ever before, hence emphasising why so much pressure has been noticed in recent times all around Africa.

With Africa’s rich history, resources, values, and institutions, it was reiterated across board why stakeholders, government officials and business persons must rally in support of growth and noticeable development to provide a global dialogue with unique perspectives and ideas that contribute towards making the continent and the world a better, more inclusive, place.

On the floor of the event, it was noted however that much of the existing conversations around Africa’s current and growing economic prowess over-emphasises its resource potential of a large and growing middle class of consumers which only translate into a passive receptacle to whom globalisation can be “brought to” or “done to.”

In addition, the conference also featured discussions that focused on Africa’s potential as a hub for secondary and tertiary industries. The deliberation pointed out Africa’s record of low entrenched technologies or distribution channels or legacy infrastructure and how this must not be totally considered as a disadvantage. It recommends, instead, that this seeming shortage should sufficiently spur Africans to be more creative as they constantly think about sustainable solutions that address the continent and the world’s ever-growing needs.

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Nigeria: IMF Gives Mixed Verdict On Economy, Reforms

Nigeria’s economy remains vulnerable, though policies and favourable oil prices have helped it to overcome a recession. Disclosing this position yesterday, the International Monetary Fund (IMF) noted that the economy is yet to receive boost from policy implementations that could make it withstand the shocks that previously pushed it into a recession.

The organisation described lower oil prices and high interest rates as the main downside risks, while insecurity, delayed fiscal policy response, and weak implementation of structural reforms make up the domestic perils. Explaining its verdict at the end of an economic review of the country, tagged ‘2018 Article IV,’ the IMF admitted that new reforms under the Economic Recovery and Growth Plan have aided the business environment. It, however, said they have not impacted substantially on non-oil and non-agricultural activities, inflation, banking sector vulnerabilities, unemployment and poverty.

According to the review, Nigeria retains its higher fiscal deficit, driven by weak revenue mobilisation, amid continued tight domestic financing conditions that have raised bond yields, and crowded out private sector credit.

The fund’s directors warned that rising banking sector risks, possibly caused by huge non-performing loans, deserve attention. They also commended the Central Bank of Nigeria’s commitment to help banks increase capital buffers by stopping the dividend payments of weak and most affected ones.

They called for an asset quality review to identify potential capital needs and noted that an enhanced risk-based banking supervision, strict enforcement of prudential requirements, and a revamped resolution framework would help contain risks.

IMF’s Managing Director and Chairman, Christine Lagarde, in her summary of the directors’ views, said new foreign exchange measures, rising oil prices, attractive yields on government securities, and a tighter monetary policy have contributed to better foreign exchange availability, increased reserves to a four-year high and contained inflationary pressures.

“Economic growth reached 0.8 per cent in 2017, driven mainly by recovering oil production. Inflation declined to 15.4 per cent year-on-year by end-December, from 18.5 per cent at end-2016. Higher oil prices are supporting the near-term projections. But medium-term projections indicate that growth would remain relatively flat, with continuing declines in per capita real GDP under unchanged policies,” she said.

Noting that Nigeria would record a growth of 2.1 per cent in 2018, Lagarde said the improved outlook for oil prices is expected to provide relief for the country from pressures on external and fiscal accounts.

This would be helped by the full year impact of greater foreign exchange availability and recovering oil production, even as foreign reserves are tending towards $44 billion.The IMF projected a reduced growth of 1.9 per cent for the country in 2019. And the non-oil sector will record a marginal increase in Gross Domestic Product from 1.3 per cent in 2018 to 1.5 per cent in 2019, an indication of slow development in the sector.

The report notes that renewed import growth would reduce gross external reserves despite continued access to international markets. The IMF called for urgent comprehensive and coherent policy actions and a growth-friendly fiscal adjustment that focuses on non-oil revenue mobilisation and rationalises current expenditure, to reduce the ratio of interest payments to revenue.

It also urged the authorities to create space for priority social and infrastructure spending and warned that the ongoing efforts to improve tax administration must include ambitious tax policy measures and reforms in Value Added Tax, and rationalising of tax incentives.

The outlook may continue to look good as Indonesia has expressed willingness to become a major buyer of Nigeria’s crude oil. The United States had been one of the highest buyers of Nigeria’s sweet crude, demanding as high as 700,000 b/d in the 2000s and reaching a record figure of 1.31 million b/d in February 2006. The figure, however, has dropped significantly in recent times.

According to The Guardian, the Head of Economic Affairs of the Indonesian Embassy, Dwiyatna Widinugraha, who led a delegation on a courtesy call to the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Baru Maikanti, in Abuja yesterday, said the country is interested in increasing its purchase of crude oil from Nigeria.He said that Indonesia, with a population of more than 250 million people, needs about 1.6 million barrels of crude oil daily to meet its growing energy requirements.

Anizar Burlian, the Vice President of Pertamina, Indonesia’s national oil company, said they were in Abuja to concretise arrangements. “Over the years, we have bought huge amount of crude oil from Nigeria. We are extremely happy to buy more Nigerian crude oil, which is globally rated to be of a very high grade and which is very suitable for our refineries,” he said.

He added that they are also interested in investment opportunities in the upstream, midstream and downstream sectors of the Nigerian oil industry. NNPC’s Group General Manager, Crude Oil Marketing Division (COMD), Mele Kyari, said the corporation would continue to assist Indonesia in the supply of crude oil, noting that a government-to-government arrangement is feasible through the presidency.

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