Investing in Africa Agricultural Sector: the Solution to Importation

The crazy level at which African countries import things was reiterated by the president of Zimbabwe, President Emmerson Mnangagwa, while addressing the delegates at the Southern African Confederation of Agricultural Unions (SACAU) annual meeting in Victoria Falls. Hear him: ‘it is regrettable that African countries spend between $30 billion and $50billion annually on imports of agricultural products, instead of developing the productive capacities necessary for trade’.

According to the United Nations’ 2015 World Population Prospect Report, 2.4 billion people are projected to be added to the global population between 2015 and 2050, with 1.3 billion in Africa alone. Which means by 2050, Africa will house more than half of the world’s population and as at now no preparation is being made on how it will feed its 1.3 billion population by 2050. What about the now? 2050 is still some years ahead; what are the African leaders doing to stop, or at least, reduce the importation of finished agricultural products. Currently, Africa is still unable to feed itself and depends on importation of products to feed its people. What will happen by 2050, if a stop is not put to this trend?

The potential for growth in Sustainable Agriculture in Africa is well understood, but has not been realised. Currently, the agro-allied industry (in primary processing) accounts for nearly half of all economic the activity in sub-Saharan Africa. At the same time, the continent spends $30bn to $50bn each year importing food and still has significant food risk and nutritional deficiencies in many parts of the region.  This is despite the fact that the continent holds much of the world’s potential agricultural land (Africa has 65% of the world arable land).

According to the United Nations Food and Agriculture Organisation (UN FAO), Africa spends $35 billion in importing food, and it is projected that the number will grow to $110 billion by 2025. Africa is importing what it should be producing, creating poverty within the region and consequently creating jobs for the people in other continents while its people lack opportunities.

It is interesting to note that African countries import numerous agricultural products which are also, ironically, produced locally. The rise of imports for these Agricultural products has been attributed to the inability to produce enough to satisfy growing local demand, due to low yields and relatively low levels of productivity.  Furthermore, over 80% of Africa’s agricultural products are being produced by smallholder farmers who produce 70% of the continent’s food supply, according to FAO.

Taking a look at Agricultural exports, one discovers that African countries mainly export cocoa, edible fruit and nuts, coffee and tea and vegetables to the rest of the world. The main agricultural importing countries of the African export are the United States, China, Germany, Netherlands and the United Kingdom.

African countries do not feature under the top supplying countries for any of these markets. If Africa is serious about changing from agricultural product importers, then addressing the following issues are of paramount importance: innovation in production technology, the cost of inputs (energy and fertilisers), management of changes in climatic conditions (e.g. access to water through irrigation), knowledge transfer and capacity building, investment in agriculture and agriculture-related infrastructure (credit facilities, transportation networks, cold-storage facilities and communication networks) and access to information.

ALSO READ: Questions on Nigeria’s 2017 Budget

Governments and leaders in Africa (past and present) should (have) know(n) that if there is one thing the continent should not be found lacking in, it is food. It is shameful that, with the large arable fertile land, expansive body of waters and other enviable endowments, Africa cannot feed itself. That such a humongous amount of foreign exchange is being expended in importing food is a serious minus for the leadership of the component countries in Africa.

Agriculture is also a major component for Africa becoming an industrialised continent, in the sense that its raw materials are needed in production of other commodities. Africa has come of age and its agricultural practices should be driven by research, mechanisation and modern technology to steer it away from remaining rudimentary.

Becoming a net-exporter of agricultural products should be the worthy vision of African governments and leaders. Of course, diligent planning, development of appropriate strategies, deployment of sufficient resources and unflinching commitment by the governments and the citizenry will be the game-changers for the realisation of multiple objectives of food security, industrialisation and foreign exchange earnings. Thus, African leaders should henceforth stop using agriculture as a mere propaganda tool. They should put their hands on the plough and never look back. All those foreign long sleeved shirts, locally made agbadas and tunics need to be rolled up for work; the continent cannot remain hungry when there are seeds, lands and technology around.

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Questions on Nigeria’s 2017 Budget

Nigeria’s Minister of Finance, Kemi Adeosun, was so overjoyed on Sunday that she took to her twitter account to say the Nigerian Federal Government will be closing the 2017 budget with an excess of N1.5 trillion on capital expenditure.

The 2017 budget was the second budget to be presented by the President Muhammadu Buhari administration, tagged budget of recovery and growth. It was based on  crude oil benchmark price of US$42.5 per barrel; an oil production estimate of 2.2 million barrels per day and an average exchange rate of N305 to the US dollar; a target Gross Domestic Product (GDP) growth rate of over 2 per cent and a target inflation rate of single digit. Additionally, there was a deficit of N2.36 trillion (about 2.18 percent of GDP. A total of N2.24 trillion was budgeted for capital expenditure.

Having said that, I would like to state that Nigeria’s problem is not the budgets; the problem is in the implementation. It is one thing to roll out a budget, it is another thing to implement it and achieve positive results. National development is predicated on effective implementation of national budgets.

It might be necessary, at this juncture, to ask how far the 2017 budget went in alleviating some of the endemic problems in Nigeria. When I say the 2017 budget, I don’t just mean the federal budget but all the state budgets put together. As a matter of fact, every year, 38 budgets are rolled out including the Federal Government’s, the 36 states’ and the Federal Capital Territory’ (FCT).

To what extent did the budgets alleviate the problem of poor electricity, water supply, healthcare, education, dilapidated roads, unemployment, insecurity, etc? Are Nigerians faring better now compared with last year before the 2017 budget was passed? What systematic changes have occurred? What systematic solutions have been provided or are ongoing? What difference has occurred in the life of the Nigerian in the street?

The chronic failures of budgets across the country is heart-breaking. That is why pessimists call budgeting in the country an ‘annual ritual’. That has been the case since 1999, when the present democratic dispensation began and it was thought that the era of military impunity was over. Indeed, our rogue budgets are merely rituals; they seem not to be made to change anything, but to simply recycle a government to-do.

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And really, how can there be any improved change when on an annual average, 70% of these budgets go for recurrent expenditure while only 30% is for capital expenditure? How can a developing country like Nigeria develop when only a fraction of the annual budgets is put for capital projects? Faced with corruption, neither the recurrent budget nor the capital spending achieves its target. The inability of many state governments to pay salaries, pension benefits and other entitlements to workers underscores the failure of recurrent expenditure.

Every year, budgets are rolled out by the federal and 36 states governments, including the FCT. Each level prepares budgets based on what suites its purpose. There is no common ground for integrated national development. Nigerians hear about the trillions of naira earmarked for expenditure but hear nothing again about how the money was spent. The same governments that announced the budgets with fanfare at the beginning won’t utter a word at the end about what happened to the money. So where is the accountability on the part of the president with the highest level of integrity?

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Somalia’s Charcoal Industry: Economic and Environmental Implication

The UN Security Council has noted on several occasions that ‘charcoal exports from Somalia are a significant revenue source for Al Shabaab and also exacerbate the humanitarian crisis’. Recent estimates by the Monitoring Group on Somalia and Eritrea show that upwards of 40% of Al Shabaab’s funding comes from various forms of involvement with the illegal Somali charcoal trade. There are indications that this has not substantially changed.

Charcoal is made by burning wood in an enclosed area at high temperatures. In Somalia, this is usually done in small space dug out of the earth and enclosed with concrete blocks and brush piled on to seal in the air. This is either done by local Somalis who have no other economic options, or sometimes by local militias with chainsaws. They then sell the charcoal in bags usually weighing about 25kg each to militias to transport to a port.

However, considering the charcoal industry has been behind deforestation in other parts of Africa, one can assume that, with the lack of any oversight or restrictions, the charcoal trade will have a devastating effect on Somalia’s forests. This is also likely to increase the occurrence of desertification in Somalia, depriving pastoralists of grazing land and farmers of cultivatable areas. Income from the charcoal trade also provides important financing for some warlords and faction leaders, enabling them to maintain their strength and continue their predatory regimes. While predatory militias profit from the charcoal industries, it is the more powerful businessmen that are the real power behind the industry. This section of society is powerful enough to hold a veto over any political arrangement that threatens their interests. Thus, any attempts to halt the charcoal industry must court the very businessmen that profit the most from it.

Unfortunately, as forests become sparser but demand in the Gulf States continues or even rises with other fuel costs, intense competition may ensue over controlling the remnants of Somalia’s charcoal industry. There has already been conflict between clans over the charcoal trade, and this will only become more likely as competition intensifies. As deforestation and desertification limit the availability of other natural resources, conflict around these is likely to rise, as well. Somalis who rely on the acacia forests for their livelihood will see their opportunities for supplementing their income decrease, as game dies out, desertification hurts farming, and the eventual destruction of the acacia groves will also end their ability to supplement their income by participating in the charcoal trade. With charcoal supplies shrinking, the cost of fuel for domestic use will also continue to rise, raising the cost of living for Somali families.

The charcoal trade in Somalia takes a heavy toll on the acacia forests of southern Somalia, as traders’ clear-cut entire swaths of forest for shipment to Gulf States. The process of turning cut wood into charcoal is also a rough, dirty process that pollutes the air, although in a very local fashion. While the impact on the global environment and global warming is negligible at best, the ramifications of the charcoal trade on the local environment and the livelihoods of Somalis are drastic.

The Gulf States consumption of charcoal affects Somalia because of its unique political situation, it is unable to handle the increased demand for charcoal in an environmentally sound way. This situation has risen because of the confluence of several factors. First, the Gulf States banned the destruction of their local forests in the late 1980s and early 1990s, creating demand for charcoal imports. Additionally, they also banned Somalia’s primary export at the time, cattle. This dealt Somalia’s economy a tough blow, and pushed many into the charcoal trade. Second, Somali descended into a situation of statelessness where, after 1996, it was possible to export charcoal without concern for the environmental impact. Finally, systems for conducting business without a state have emerged in Somalia that makes their role in international commerce possible.

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While the deforestation occurs in Somalia and Somalis feel the environmental impact exclusively, this situation would not be present without the demand for charcoal from Gulf States. Somalis have relied on charcoal as a source of energy for centuries, but have been able to balance domestic consumption with environmental preservation. This increased demand, combined with the lack of a central authority in southern Somalia, has led to the recent environmental crisis.

The conflict over Somalia’s coal is indirect as it deals with the issue of the increasing scarcity of sources of charcoal. As climate change increase rates of desertification in arid and semi-arid areas like Somalia, and populations grow, they will continue to put pressure on the forested areas in southern Somalia. However, the charcoal industry, obviously, has an even more rapid and devastating effect. What contributes to how much charcoal is produced is a complex interaction between several factors. First, without the demand from Gulf States, the opportunities for such huge profits would not drive actors in the charcoal industry. Compounding this is the lack of other economic opportunities, making participating in the charcoal industry an even more attractive option. Finally, what has the power to control the charcoal industry are governments and regional authorities that have power and legitimacy. Only an effective ban encompassing all of Somalia’s important ports and charcoal producing areas will be able to counter the destructive short-term logic of exploiting Somalia’s acacia groves for charcoal exports.

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Nigeria’s Currency Swap with China: Prospects and Implications

For diverse stakeholders in the Nigerian economy, the Federal Government’s recent currency swap deal with China holds both bright prospects and grave implications for Nigeria, even as the naira inched up against the dollar at the weekend parallel market.

President Muhammadu Buhari, during his official trip to the world’s second largest economy, struck a naira and yuan swap deal, scripted to ease trade transactions between both countries and devoid of current exchange challenges with the United States dollar.

The currency swap deal consists of an agreement between two central banks, at least one of which must be an international currency issuer, to swap their currencies. The central banks party to the swap transaction can lend the proceeds of the swap, against collaterals they deem adequate, to the commercial banks within their jurisdiction, to provide them with temporary liquidity in a foreign currency.

The news of the currency swap agreement between Nigeria and China seems to have, immediately, captivated the public attention. Basically, the swap implies that China would set aside billions of dollars equivalent of its currency (the Renminbi) from which Nigerian importers could directly exchange their naira at pre-determined exchange rates, without first procuring dollars to complete the transaction. Regrettably, Nigeria has not published the amount, nor tenor and applicable exchange rates for transactions and settlements under the swap arrangement.

Nonetheless, while briefing State House correspondents on the gains of the China trip, Foreign Affairs Minister, Geoffrey Onyeama, suggested that the celebrated agreement was not a ‘currency swap’ as widely reported, but a recruitment of Nigeria into a partnership ‘that would facilitate China’s drive to internationalise its currency’. So, for Nigerians, according to Onyeama, it has given them (their economy) greater opportunities so that those wannabes who cannot readily access dollars can now also import, notwithstanding the shortage of dollars.

However, Lin Songtian, a senior official of the Chinese Foreign Ministry, also noted that the deal on Yuan transactions ‘means that the Renminbi is free to flow among different banks in Nigeria, and the Renminbi has been included in the foreign exchange reserves of Nigeria’.

In order to facilitate rapid Yuan acceptance in our sub-region, Nigeria as hub, will invariably host a clearing house with affiliation to the People’s Bank of China to allow the Renminbi to become a common settlement currency which can be used for bilateral loans or aid. Ultimately, a new bank with affiliation to the China bank will be established and dedicated to intermediate Yuan transactions in the sub-region, as a product of the currency swap.

Furthermore, China’s official news agency reported that President Xi Jinping had expressed interest in economic co-operation with the Nigerian delegation, particularly in areas like oil refining and mining. However, it is not yet clear if the currency swap deal also implies that China will pay for Nigeria’s crude oil in naira or Yuan.”

Ultimately, this currency deal will bolster our Renminbi reserves, but this may lead to a corresponding drop in our dollar reserves; ironically however, China may readily depreciate its Yuan to promote the export price competitiveness of its products in the United States and other dollar denominated markets. Unfortunately, therefore, Nigeria’s increasing Renminbi reserves would also become devalued and would buy less and less dollars than before. It is instructive that China is already in similar bilateral currency swap agreements totalling RMB 3.137tn (about $500bn) with 31 Central Banks, including the UK and South Africa, and the trade volume with these countries has since exceeded RMB 11tn after the swap agreements.

Nonetheless, according to the CBN Governor’s observation, ‘‘we are working to encourage our exports of raw materials to China in order to reduce the trade imbalance’ which is presently, clearly, heavily skewed against Nigeria with an annual import bill of about $15bn payable to China. However, it is not yet clear how Nigeria’s industrial production and output will ever become internationally competitive enough to reduce this trade imbalance, particularly when domestic inflation rate is trending at over 12 per cent while cost of funds to industries and other businesses presently exceeds 20 per cent”.

Expectedly, this arrangement would increase the value of Chinese exports to Nigeria well beyond the present $15bn, but will unfortunately, also challenge Nigeria’s desire to diversify its economy by adding value to its local agricultural and raw materials output.

ALSO READ: Ten Worst Countries to Start a Business in Africa

The downside is that the Chinese buying agencies with surplus naira liquidity in Nigeria will outbid local industries to monopolise supply sources of the local agricultural and raw materials and subsequently cart these away to China as exports for processing into a multitude of finished products which will be ultimately re-exported to Nigeria at much higher cost. In contrast, this may be counterproductive to Nigeria’s abiding desire to become a robust industrial economy by adding value to our agricultural and raw material products before export.

The Central Bank of Nigeria should put some measures in place to guide the naira against the yuan because in the short run, the deal is beneficial to Nigeria but on the long run, if certain measures are not put in the place, the economy might see the negative impact of the deal.

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Ten Worst Countries to Start a Business in Africa

There are many business moguls or small scale business entrepreneurs who love to go to different places to pitch their business tents in countries across the African continent. Such one need to know the economies that are a ‘no-no’ for businesses, based on certain realities.

Economies are ranked on their ease of doing business from 1-190. A high rank (low numerical value) indicates the better, usually simpler, regulations for businesses and stronger protections of property rights. This shows that the regulatory environment is more conducive to the establishment and operation of a local firm.

Despite the vast opportunities in Africa, it remains a daunting place to start and run a business. Credit facilities are limited, electricity costs a fortune, overhead costs are throat cutting. The continent is blessed with numerous natural resources; yet, and so far, little have been achieved with such blessedness. The overall success of any country can be linked to the ability of the country to provide an enabling environment and ample opportunities for its citizenry. Majorities of the countries with least opportunities are suffering from political unrest, war, poverty e.t.c.

So, here comes the dreaded list…

  1. Somalia

Somalia, a country with a population of 14.3 million, has a land mass of 637,657sq km completes the list of the worst countries to start a business in the world, ranking the least with a large numerical value of 190. The Horn of Africa, which was known as an important commercial centre, has recently become a shadow of itself. After several political unrest and a prolonged civil war, the country has been inching towards stability, but the new authorities still face a challenge from Al-Qaeda-aligned Al-Shabab insurgents. The country is popularly known for it various natural disasters ranging from, tsunami and flood to drought and others. It takes 187 days to start a business in the country, including getting electricity and 150 days to register for property. The US and Western nations have warned individuals to avoid travelling to Somalia because of the high level of unrest and attacks in the country; currently, the country is not an ideal place to start a business despite the land being viable and virgin.

  1. Eritrea

Eritrea won independence from Ethiopia in 1993 after a 30-year war. Bordered by Sudan, Ethiopia and Djibouti, it occupies a strategic area in the Horn of Africa but remains one of the most secretive states in the world.The Horn of Africa is disturbed by prolonged periods of conflict and severe drought which have adversely affected the economy and it remains one of the poorest countries in Africa. Eritrea has a numerical value of 189 in ease of doing business in the world rank, it takes 184 days to start a business with 187 days to get electricity and 178 days to register a property before any business can kick-off in the country.The economy with a population of 5.6 million has seen hundreds of thousands of citizens fleeing the country because of human right abuse. Eritrea has faced many economic problems, including lack of financial resources and chronic drought, worsened by restrictive economic policies. For any business to thrive in any environment there must be an enabling environment in terms of amenities and security, unfortunately Eritrea has failed in such perspectives.

  1. South Sudan

A  country of more than 13 million people, Sudan also makes up the list of the worst economies to start a business. South Sudan is known for their prolonged civil war in the country which  is disrupting what remains of the economy. The country has a high numerical value of 187 in doing business world rank; days needed to start business is 181, with 187 days needed to get electricity and 181 days to register for property in the country. The  market structure of the economy is not well-organised, therefore, property rights are insecure and price signals are weak. The country has little infrastructure, about 10,000 kilometers of roads, but just 2% of them are paved. Electricity is produced mostly by diesel generators which costs a fortune. Without the needed amenities business will be a struggle in that part of the world, so, for now South Sudan is a no go area for business minded individuals.

  1. Libya

Libya is mostly desert and known to be an oil-rich country but did not make the list of best countries to start a business despite its richness, call that a resource curse? The country has a value of 185 in ease of doing business world rank: 167 days to start a business, 130 days to get electricity and 187 days to register a property in the country. The country which started well after the discovery of oil has experienced a stalling in development as a result of political chaos and insecurity. The leaders have hindered economic development by failing to use its financial resources to invest in national infrastructure. Libya suffers from widespread power outages in its largest cities, caused by shortages of fuel for power generation. Many governments advise against traveling to Libya due to its serious state of political and social instability. So, safety first before business.

  1. Central African Republic

Central African republic which is predominantly a subsistence agriculture, forestry and mining based economy, has been prone to conflict since independent from France. The country is rich in diamonds, gold, oil and uranium but enlisted among the worst countries to start a business in Africa, with a numerical value of 184. It takes 188 days to start a business, 183 days to get electricity and 169 days to register for property. The high rate of abuse of human rights and conflict put the economy among the list of worst places to start a business venture.

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  1. Congo DR

Despite being a vast country with numerous resources the country is clouded with civil war and corruption. The country sees itself placed among the worst countries in the Africa to start a business with a numerical value of 182 ease of doing business world rank. 62 days are needed to start a business with 175 days to get electricity and 158 days to register for property in the country. Recently, the economic conditions slowly began to improve as the government reopened relations with international financial institutions, international donors and implementing reforms. However, the progress of the economy remains slow because of political instability, bureaucratic inefficiency, corruption, and patronage. These menaces have dampened international investment prospects in the country.

  1. Chad

The Central African nation also made the list of worst economies to start a business in Africa. The landlocked nation appears on the list due to some economic disadvantages: taxes, freedom (personal and trade), technological readiness and red tape. The ease of doing business world rank is 180, the days needed to start a business is 185 with 177 days to get electricity and 159 days to register a property in the country. The rapid falling prices of energy have further hindered Chad, which relies on oil for more than half of its exports. The country has been marked by instability, inadequate infrastructure, and internal conflict.

  1. Congo Republic

The  sub-Saharan Africa country which is sometimes referred to as Congo-Brazzaville has been plagued with civil wars and militia conflicts, little wonder the country couldn’t escape being tagged as one of the worst countries in Africa to do business in. The country is 179 in ease of doing business world rank, has 177 days to start a business, 181 days to electricity and 177 days to register property in the country. There is a serious bottle-neck in administration when a business venture is to be established in the country. The social and political unrest also contributed to the difficulty in having a conducive environment in the economy.

  1. Guinea Bissau

The country has rich natural reserves in gold, diamonds, bauxite and iron ore, but GDP per capita is one of the lowest in the world at $1,300 and the trade deficit is 24% of GDP. The economy ranks poorly on taxes, monetary freedom, investor protection and innovation. The country has a value of 176 in doing business world rank, 178 days to start a business with 180 days to get electricity and 120 days to register for property in the country. The economy is disadvantaged by limited economic prospects, weak institutions which results in low investments prospects.

  1. Angola

Angola is one of Africa’s major oil producers, yet it was not left out in the horrid list of worst economies to start businesses in. The ease of doing business world rank is a huge numerical value of 175 with 134 days needed to start a business, 165 days to get electricity and 172 days to register a property in the country. With a population of about 29 million people, Angola is striving to tackle the physical, social and political legacy after being ravaged with 27-year civil war. The continuous fall in oil prices has slowed down the improvement in the economy, thereby, making investment and business struggle to thrive in the country.

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Oando Plc Records Full Year after Tax Profit of N20bn

Oando Plc has consolidated on its 2016 gains by recording a higher profit for the year ended December 31, 2017. The indigenous integrated energy company, on Friday, announced its audited results for 2017, showing revenue of N497.422 billion, compared with N455.746 billion in 2016.

The company reduced cost of sales from N426.99 billion to N409.341 billion in 2017. Also, administrative expenses declined from N109 billion to N77.89 billion, while net finance cost reduced from N51 billion in 2016 to N33.78 billion in 2017.

Consequently, profit after tax soared from N3.913 billion to N19.77 billion in 2017, showing an increase of 405 per cent. Oando Plc’s net debt reduced to N217.1 billion from N230.6 in the comparative period of 2016.

This comes in the wake of oil prices on an upward trajectory, an improved operating environment, the exit of a 13 month long recession and most importantly the continued strengthening of their business model through the effective implementation of the company’s strategic initiatives of growth through their dollar earning upstream portfolio; deleverage through asset divestments and the expansion of in-house oil export trading business.

OER (Oando Energy Resources) recorded an average production of 39,556 boe/day in the 3 months ended March 31, 2018 compared to 38,125 boe/day in the comparative period of 2017. Improved production was primarily due to increased production at Ebendo as a result of the Trans Forcados pipeline, which was down in the same period in 2017; therecwas also an increased production at OMLs 60 to 63 as a result of reduced sabotage and crude theft activities, which necessitated a shut-in on production lines in the comparative period of 2017.

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This was primarily due to significant reductions in gas production and delivery caused by the rupturing of Gas Transmission System (GTS-4) gas line and pipeline and terminal constraints at its OMLs 60 to 63. The upstream business recorded a net profit of N26.33 billion ($86.1 million) compared with N91.83million ($0.3 million) in the comparative period of 2016.

Oando’s affiliate, Axxela, recorded an 11 per cent increase in natural gas deliveries in 2017. This achievement, according to the company, was in spite of restricted gas supply in H1 2017 due to the sabotage of upstream gas supply facilities by militants.

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Ethiopia to Host Ministerial Conference on African Free Trade

The capital of Ethiopia, Addis Ababa, will host a ministerial conference on African Continental Free Trade Area (AfCFTA).

The conference which will consist African Ministers of Finance, Planning and Economic Development is to kick start May 11-15, 2018.

The conference will center on the theme: “African Continental Free Trade Area; creating fiscal space for jobs and economic diversification.”

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Key topics like: agriculture and Africa’s transformation, financing and an integrated strategy for the Sahel priorities for tackling Illicit Financial Flows in Africa will be deliberated on during the conference.

There are hopes that the ministerial conference will enact a workable road-map to set the deal rolling and implementable beyond paper works.

Recall that the African Continental Free Trade Area (AfCFTA) was signed by 44 countries in Kigali, Rwanda, March 21.

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World Bank Supports Djibouti to Improve Public Service Through Tech

World Bank has announced support for the ongoing efforts of Djibouti to leverage digital technology to bring government closer to citizens and improve the impact, transparency and efficiency of its public administration.

With a $15 million credit from IDA, the fund of World Bank for the poorest countries, the new project will help the roll out of digital systems to make it easier for citizens to access services, and for more efficient tax and customs administration to boost government revenues.

The four-year Public Administration Modernization Project will help the government implement the reforms, establish the legal framework and adopt the technologies necessary for digital transformation.

A principal goal will be to unify the current variety of social registries into a single, integrated national identity system (e-ID) which citizens can use to access all public services.

By the end of the project, the aim is to enroll half the population in the e-ID system, with women, who are significantly underrepresented in current identity systems, representing half of the enrolled.

The Minister of Economy and Finance of Djibouti, Ilyas Moussa said: “Djibouti has heard the call for improved services, and is committed to using the tools of e-government to respond to it.”

“Working in partnership with the World Bank, we have developed a strategy for modernising our public administration and reaping the benefits of greater transparency, inclusion and efficiency offered by digital technology,” he stated.

Along with supporting the publication of and access to available services through the government’s portal, the project will fund the piloting of a Citizen Service Center (CSC).

The CSC will offer broadband connections and function as a one-stop-shop for knowledge of and how to access services. Citizens will be consulted on the design of the CSC, to ensure they are accessible to vulnerable populations such as women, the disabled and those in rural areas.

The World bank Country Director for Egypt, Yemen and Djibouti, Dr. Asad Alam stated: “Djibouti is putting its citizens at the heart of its digital transformation. Giving citizens access to information, and the tools for holding government accountable are critical steps toward improving public services, and are central goals of the public administration modernization project.”

The project will also support the use of digital technology to increase the efficiency of tax and customs administration. The development of e-Tax and e-Customs will promote fairness and predictability, while mobilizing domestic revenues.

Digital systems remove the need for physical interactions between citizens and officials, which can often be an opportunity for corruption.

The World Bank’s portfolio in Djibouti consists of nine IDA-funded projects totaling US$105 million. The portfolio is focused on social safety nets, energy, rural community development, urban poverty reduction, health, education, governance and private sector development, with particular emphasis on women and youth.

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Trump Secures First Major Trade Deal with South Korea

President Donald Trump of the United State of America has secured his first major trade deal with South Korea ahead of planned nuclear talks with North Korea.

The Trump administration said on Tuesday that the United States and South Korea had agreed to revise their six-year-old trade pact.

Officials said the revised deal widened US access to South Korea’s car market while providing American manufacturers protection from South Korean imports.

Trump had previously called the original South Korea pact a job killer.

The new deal doubles -to 50,000- the cars each US automaker can export annually to South Korea, reduces bureaucratic barriers to American products and extends a 25 percent US tariff on South Korean pickup trucks until 2041.

South Korea escapes the new 25 percent tariff on imported steel but must accept quotas on steel shipments to the United States.

The agreement, cobbled together quickly with only a few rounds of negotiations under Trump’s threat of withdrawal, will include a side-letter that requires South Korea to provide increased transparency of its foreign exchange interventions, with commitments to avoid won devaluations for competitive purposes.

The currency deal, final details of which are still being negotiated between the U.S. Treasury and South Korea’s Ministry of Strategy and Finance, is considered a ‘side letter’ that will not be enforceable with trade sanctions.

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

Many US lawmakers, particularly Democrats, had opposed the 2015 Trans-Pacific Partnership trade deal because it had a similar currency manipulation side-agreement that could not be enforced.

Nonetheless, the revised US-South Korean Free Trade Agreement, known as KORUS, would be the first US trade deal in force with a currency side-deal, and would not need congressional approval, the officials said.

The officials confirmed that South Korea agreed to cut its steel exports to the United States by about 30 percent in exchange for the rest being excluded from steel tariffs. Korean aluminum producers would still be subject to Trump’s 10 percent tariff on aluminum.

Other countries also must agree to similar quotas to escape tariffs, but the size of the limits would vary. The United States is negotiating with Canada, Mexico, Brazil, the European Union, Australia and Argentina.

One official said it was ‘not a one-size fits all kind of thing’ and added that the South Korean quota was agreed due to its ‘unique’ position in steel exports. South Korea imports and processes significant amounts of Chinese-made steel, much of which is under anti-dumping and anti-subsidy tariffs.

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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.

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

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.

ALSO READ: Nigeria’s GTBank Declares N200bn PBT, Proposes N2.40/Share Dividend

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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