Tag Archives: global

21 Feb

South Africa’s Inflation Rate Slows to 4.4% in January

South Africa’s inflation rate slowed in January, easing pressure on the central bank to maintain a tight monetary stance.

Inflation slowed to 4.4 percent from 4.7 percent in December, Pretoria-based Statistics South Africa said Wednesday in a report on its website.

The median of 14 economists’ estimates in a Bloomberg survey was for 4.4 percent. Prices rose 0.3 percent in the month.

Price growth has been within the Reserve Bank’s target range of between 3 percent to 6 percent for 10 months, the longest run since 2015.

The Monetary Policy Committee left its benchmark lending rate unchanged for the third straight meeting last month as the risk of a credit-ratings downgrade persists.

While the central bank has highlighted the rand as a key risk to price growth, it expects inflation to remain within the target band.

South Africa’s currency was one of the most volatile tracked by Bloomberg last year and has gained 8.6 percent against the dollar since Cyril Ramaphosa was elected to lead the ruling African National Congress in December.

Ramaphosa has since replaced Jacob Zuma as president of the country.

Core inflation, which excludes the prices of food, non-alcoholic beverages, energy and gasoline, slowed to 4.1 percent in January, from 4.2 percent.

Source: https://www.bloomberg.com/news/articles/2018-02-21/south-africa-s-inflation-rate-slows-to-4-4-in-january

25 Jan

Rand Cracks 12 per Dollar First Time Since ’15 as Optimism Grows

South Africa’s rand traded below 12 per dollar on Wednesday for the first time since May 2015, extending a rally sparked by an improving domestic political environment and supported by global risk-on sentiment and the greenback’s retreat.

The currency advanced as much as 0.9 percent to 11.9265 per dollar, and traded 0.7 percent stronger at 11.9462 by 11:52 a.m. in Johannesburg. That brings gains in the past three months to 15 percent, the most out of 31 major currencies tracked by Bloomberg.

The yield on rand-denominated government bonds due December 2026 fell four basis points to 8.32 percent, the lowest since March.

The election of Cyril Ramaphosa as head of the ruling African National Congress in December, setting him on a path to take over from President Jacob Zuma, has fueled optimism South Africa may avert further credit-rating downgrades as the new leadership takes steps to root out corruption and stimulate the ailing economy. Inflows into the nation’s stocks market are running at record levels.

“Investors are loving us at the moment,” said Phillip Pearce, a trader at TreasuryOne Ltd. in Johannesburg. “The dollar is taking a pounding and global markets are still on the hunt for yield. There’s not a lot of risk going now. South Africa seems like a good bet.”

The rand could appreciate to as low as 11.50 per dollar if Zuma is removed from office, Pearce said. The probability of the rand reaching that level this quarter rose to 49 percent on Wednesday, from 19 percent a month ago, according to Bloomberg’s forecast model based on prices of options to buy or sell the currency.

‘Better Space’

South Africa is in a “much better space” now than when previous credit-rating actions took place, and can avert further downgrades this year as lawmakers assert their authority to hold the executive to account, South Africa’s central-bank governor, Lesetja Kganyago, said on Wednesday.

To read the full article, click here.

23 Jan

Pence Defends Trump on Disparaging Comments About Africa

Jerusalem (AP) — U.S. Vice President Mike Pence on Monday defended President Donald Trump over his recent comments disparaging immigration from Africa and Haiti, telling The Associated Press that the president’s “heart” is aimed at a merit-based system that is blind to immigrants’ “race or creed.”

Pence, in an interview with the AP from Jerusalem, said the president was intent on implementing a merit-based system that encourages immigration by those who will “contribute to a growing American economy and thriving communities.”

“I know the president’s heart and I know that what President Trump wants to do is reform immigration to make our system one that puts the interests of America first,” Pence said.

He added that immigrants should be considered on their merits, “regardless of what country they come from or what their race and creed is.”

He was responding to reports that Trump, in a private meeting with legislators earlier this month, challenged immigration from “shithole” African countries, disparaged Haiti and said the U.S. should welcome more immigrants from countries like Norway.

The vice president also dismissed an adult film star’s account of a sexual encounter with Trump in 2006, questioning its validity.

“I’m just not going to comment on the latest baseless allegations against the president,” Pence said. “My focus is on serving the president, advancing the priorities of the administration, advancing American interests and that’s where it will stay.”

The Wall Street Journal last week reported that Trump’s personal lawyer brokered a payment to pornographic actress Stormy Daniels in October 2016 to prohibit her from publicly discussing the alleged affair before the presidential election.

Daniels’ real name is Stephanie Clifford. Trump’s attorney, Michael Cohen, has denied there was any relationship. He gave the Journal a statement from a person identified as Stormy Daniels denying receiving “hush money.”

The AP reported that a tabloid magazine held back from publishing her 2011 account of their relationship after Cohen threatened to sue.

To read the full article, click here.

22 Jan

Zimbabwe President Seeks to Woo Lenders by Paying Loan Arrears

Zimbabwe is committed to repaying arrears to external lenders so that it can resume support programs with institutions such as the International Monetary Fund and end years of isolation from global capital markets, said the country’s president.

Emmerson Mnangagwa, the 75-year-old who took over as leader of the southern African country in November after the military pressured Robert Mugabe into resigning, said one of his priorities is reintegrating his country into the global financial system.

The economy has halved in size since 2000, credit lines from most lenders have been withdrawn and infrastructure has crumbled.

 Zimbabwe owes about $9 billion to lenders such as the World Bank and African Development Bank and has fallen behind in payments, with arrears recently amounting to about $1.8 billion.
If his bid to revive the economy is to succeed, Mnangagwa will need access to billions of dollars of support.
“There are limitations to engaging with Bretton Woods institutions — the limitations are as a result of our arrears with those institutions but they are giving positive indications that they would want to accommodate us,” he said in an interview in his office in the capital, Harare, last week.
“We shall recommit ourselves to paying our debts, our arrears. I believe that they will embrace us in the same manner they are embracing other countries.”
Re-engaging with international lenders would be a first step for the Zimbabwean government, which is also considering a debut international bond sale so that it can invest in infrastructure.
“If this succeeds, we would really need a substantial injection into our economy, in particular into the productive economy,” he said.
“Basically a capital injection into capital projects. Infrastructure development is what we want: dams, roads.”
Still, the Zimbabwean leader demonstrated little appetite for cutting costs in the manner that the IMF and other lenders have urged.
The country’s more than 500,000-strong civil service accounts for about 90 percent of budget expenditure, crowding out investment in much-needed projects such as restoring the capital’s water supply and fixing its roads.
To read the full article, click here.
19 Jan

South Africa Holds Rate as Rand, Inflation Risks Persist

The South African Reserve Bank kept its benchmark lending rate unchanged for a third consecutive meeting as the risks of a credit-rating downgrade persist, muddying the outlook for the rand and inflation.

The central bank’s Monetary Policy Committee maintained the repurchase rate at 6.75 percent Thursday, in line with the estimates by all but seven of the 20 economists surveyed by Bloomberg.

The bank cut the rate for the first time in five years in July to support an economy that entered its second recession in almost a decade in the first quarter of 2017 and has struggled to mount a strong recovery.

Inflation has been inside the target band for eight months and the rand — among the world’s most-volatile currencies — has strengthened since the ruling party elected Deputy President Cyril Ramaphosa as its new leader in December, spurring hope that policy uncertainty and political turbulence will dissipate.

“We do see an improved inflation and growth outlook thanks to a stronger performance in the currency but a lot of risk factors still exist, both on the political front as well as on the credit-ratings front,” said Jeffrey Schultz, BNP Paribas’s senior economist.

S&P Global Ratings and Fitch Ratings Ltd. cut the country’s debt to junk in 2017, and a reduction of rand bonds by Moody’s Investors Service could trigger an exclusion of the country’s rand debt from Citigroup Inc.’s World Government Bond Index.

The effect of this on rand bond yields “could be significant, but the extent to which a universal downgrade is already priced in remains unclear,” Governor Lesetja Kganyago told reporters in the capital, Pretoria. The government’s challenge is to “find ways to finance the deficit in a growth-positive manner, and at the same time convey a credible commitment to structural reforms.”

The bank expects inflation to remain within the target band of 3 percent to 6 percent until at least the end of 2019, reaching a low of 4.4 percent in the first quarter of this year.

To read the full article, click here.

19 Jan

Nigeria Moves Closer to Energy Overhaul With New Oil Bill

Nigeria’s House of Representatives passed a bill governing the country’s energy sector after the Senate did so in May, taking Africa’s top oil producer one step closer to a much-awaited overhaul of the key industry.

The Petroleum Industry Governance Bill now awaits President Muhammadu Buhari’s signing to become law.

The bill will “promote openness and transparency in the industry by clarifying the rules, processes, and procedures that govern the oil and gas sector,” Senate President Bukola Saraki said in a statement Thursday.

“After nearly two decades of back-and-forth, near-misses and ‘near-passages’, the 8th National Assembly finally reached a milestone.”

Delays in passing the new laws created a climate of uncertainty that has cost the country as much as $15 billion a year in lost investment, the Petroleum Ministry has said.

Lawmakers still need to pass two more pieces of legislation to complete an overhaul that will replace current laws. One focuses on new oil taxes and the other seeks to address longstanding grievances by oil-producing communities in the Niger River delta.

Saraki promised to pass those “very soon.” He said in June that the two related bills would be enacted by last month.

Nigeria holds an average 55 percent stake in joint ventures run by Royal Dutch Shell Plc, Exxon Mobil Corp, Chevron Corp., Total SA and Eni SpA. These account for more than 80 percent of total oil production, which generates at least two-thirds of government revenue.

The West African country pumped 1.68 million barrels of crude per day in December, according to its oil ministry, and is yet to reach full capacity of 2.2 million daily following disruptions caused by militant attacks from 2016.

Source: https://www.bloomberg.com/news/articles/2018-01-18/south-africa-holds-rate-as-downgrade-inflation-risks-persist

19 Jan

New President Plans Zimbabwe Revival by Restoring Economy, Democracy

Zimbabwe’s new president, Emmerson Mnangagwa, has a plan to revive one of the world’s worst-performing economies and end its isolation: pay compensation to white farmers whose land was confiscated, sell bonds to rebuild infrastructure and hold internationally acceptable elections.

It’s a tall order for a man who served more than half a century at the side of former President Robert Mugabe and was a key figure in a government that oversaw an economy that halved in size since 2000 and the collapse of the agricultural industry.

Yet, Mnangagwa, a 75-year-old former spy chief, remains optimistic he can win lender support and tap international capital markets.

“Can we not do it? We think we should do it,” he said of a potential bond sale in an interview Thursday in Harare, the capital. He wore a gray suit in an office decorated with photographs of himself as a young man and there’s a crocodile-themed mug, a reference to his nickname earned during the liberation war against white-minority ruled Rhodesia. “We really need a substantial investment in the productive economy.”

Mnangagwa’s rise to power was problematic. After seemingly Mugabe’s heir apparent for decades, in recent months he clashed with the president’s wife, Grace, and finally fled the country on Nov. 6 after she accused him of plotting a coup.

That day, he was fired as vice president, and two hours later he learned that his life was in danger. He set out for the eastern border with Mozambique and crossed the frontier with his son and three soldiers.

“I could not use the formal border so I used the informal one which resulted in me walking for over 30 kilometers at night,” he said, adding that some tracks were filled with land mines. “Because I am a former guerrilla I understand the area, I operated there.”

To read the full article, click here.

17 Jan

Africa: Data On Canadian Immigrants From ‘Shithole’ Countries Might Surprise Trump

Defenders of Donald Trump say his “shithole countries” remark regarding people from Africa, Haiti and other nations was just Trump being Trump – the president may have used salty language, but it’s really just his way of saying the United States should have a merit-based immigration system like Canada’s.

A generous interpretation of Trump’s comments are that immigrants from certain so-called “shithole” countries — African nations, Haiti and El Salvador — are not typically highly skilled or economically self-reliant, and if admitted would need to depend on the state.

In fact, Trump apologists — and the president himself — might be surprised by what the economic data says about immigrants who come to Canada from the “shithole” countries.

John Fredericks, who was Trump’s campaign chair in Virginia, told CNN that immigrants from those countries “come into the United States and they do nothing to increase the prosperity of the American worker.

They lower wages or go on welfare and extend our entitlement system … . Australia and Canada have a merit-based system. You know why they do that? Because they want to bring people into their country who are going to enhance the prosperity of their citizens.

Trump himself tweeted a similar sentiment.

The conclusion we are expected to make, it seems, is that if the United States was to adopt a purely merit-based system, immigrants would not come from these countries — they would come from countries like Norway, and immigrants from these Norway-like countries would not put pressure on blue-collar U.S. workers because they would be highly skilled and, more importantly, they wouldn’t be a drain on the system because they would be economically self-reliant.

A merit-based system

Canada offers an opportunity to take a look at this hypothesis because our points-based immigration system screens immigrants on merit to a large degree. So when we screen immigrants on merit, who do we let in and how do they do?

To read the full article, click here.

17 Jan

Cape Town’s day zero moves forward again, less than 100 days until taps shut off

Patricia de Lille confirmed that day zero will now happen earlier than predicted, on April 21 2018. This means that just 95 days remain until the taps are shut off.

The news comes after a spike in water usage hit the municipality. After a positive week previously, consumption has jumped from an average of 578 million litres per day to 618 million litres per day.

A heatwave doesn’t exactly help the situation (nor does fighting with your own government), but de Lille also pointed out that less residents are meeting the usage targets of 87 litres per day, per person. Just 39% of citizens kept within their limits, a slump of 15% from seven days ago.

The Mayor issued a rallying call for the City, and assured inhabitants that everything possible is being to help avert the taps being turned off. However, Capetonians must keep saving water:

“Today I want to call on all Capetonians to do more to save water. There are only 95 days left before we reach Day Zero.”

“Day Zero has moved a day closer this week to 21 April 2018. Day Zero is when the City will be forced to turn off most of the taps and every resident will have to queue for 25 litres of water per day.”

The only way Cape Town can avoid Day Zero is if every single resident saves water. But this is not the case. For each day that Cape Town uses more than 500 million litres, the city moves closer to Day Zero.

The only way Cape Town can avoid Day Zero is if every single resident saves water. But this is not the case. For each day that Cape Town uses more than 500 million litres, the city moves closer to Day Zero.

“Dam levels have dipped to 28,7% percent this past week – down by one percentage point. Only about 18,7% of this water is usable as the last 10% is difficult to abstract from the dams.”

“The City has ramped up pressure management to drive down consumption – aiming to stretch our water supply past the winter rainy season.”

To read the full article, click here.

17 Jan

Mauritius Battens Down as Cyclone Heads for Island Nation

Mauritius closed its main airport and stock exchange as the Indian Ocean island nation braced for the arrival of a cyclone packing winds of up to 120 kilometers per hour.

Tropical cyclone Berguitta is situated about 300 kilometer (186 miles) northeast of Mauritius and heading toward it at a speed of about 7 kilometers per hour, the country’s meteorological services said in a statement on its website.

The storm is forecast to make landfall overnight, it said. “Berguitta represents a direct threat to Mauritius,” the service said.

The tropical cyclone is the third this month to form in the south-west Indian Ocean. Tropical Cyclone Ava battered the island of Madagascar on Jan. 5, leaving at least 42 people dead and 150,000 others displaced, according to country’s disaster-management office.

The Red Cross activated its disaster response team for Mauritius and La Reunion, a French-administered island 227 kilometers southwest of Mauritius that is also threatened by the storm.

“This dangerous cyclone puts at risk hundreds of lives in Mauritius and La Reunion,” it said. “Our teams in both countries are prepositioning relief items to support communities who may need food, shelter and first aid services.”

Mauritius’s Sir Seewoosagur Ramgoolam International Airport was shuttered from 7 a.m., state-owned Airports of Mauritius said Wednesday in an emailed statement.

The Stock Exchange of Mauritius said Tuesday it would remain closed Wednesday if the storm warning was upgraded to Class III.

SBM Holdings Ltd., owner of Mauritius’ second-biggest lender, switched off automated teller machines from 8 p.m. on Tuesday, citing the weather.

Source: https://www.bloomberg.com/news/articles/2018-01-17/mauritius-shuts-down-as-cyclone-warning-upgraded-to-class-3