<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/2Y6XTVFSZVPOPO5NVBOIEAEKKY-1-820x615.jpg" alt="" class="wp-image-475886" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/2Y6XTVFSZVPOPO5NVBOIEAEKKY-1-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/2Y6XTVFSZVPOPO5NVBOIEAEKKY-1-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/2Y6XTVFSZVPOPO5NVBOIEAEKKY-1-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/2Y6XTVFSZVPOPO5NVBOIEAEKKY-1-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/2Y6XTVFSZVPOPO5NVBOIEAEKKY-1-1536x1152.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/2Y6XTVFSZVPOPO5NVBOIEAEKKY-1-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">People carry bags of relief grains at a camp for the Internally Displaced People in Adadle district in the Somali region, Ethiopia, January 22, 2022. Picture taken January 22, 2022. Claire Nevill/World Food Programme/Handout via REUTERS/File Photo</figcaption></figure>



DAKAR, April 12 (Reuters)&nbsp;&#8211;&nbsp;Soaring prices have helped fuel a food crisis in West and Central Africa, where nearly 55 million people will struggle to feed themselves in the coming months, U.N. humanitarian agencies warned on Friday.



The number facing hunger during the June-August lean season has quadrupled over the last five years, they said, noting that economic challenges such as double-digit inflation and stagnating local production had become major drivers of the crisis, beyond recurrent conflicts in the region.



Among the worst-affected countries are Nigeria, Ghana, Sierra Leone, and Mali, where around 2,600 people in northern areas are likely to experience catastrophic hunger, said the World Food Programme, U.N. children&#8217;s agency UNICEF, and the Food and Agriculture Organization in a joint statement.



&#8220;The time to act is now. We need all partners to step up &#8230; to prevent the situation from getting out of control,&#8221; said Margot Vandervelden, WFP&#8217;s acting regional director for West Africa.



Due to the food shortages, malnutrition is alarmingly high, the agencies said, estimating that 16.7 million children under the age of five are acutely malnourished across West and Central Africa.



The region&#8217;s heavy dependence on food imports has tightened the squeeze, particularly for countries battling high inflation such as Ghana, Nigeria, and Sierra Leone.



Policies should be introduced to boost and diversify local food production &#8220;to respond to the unprecedented food and nutrition insecurity,&#8221; said Robert Guei, the FAO&#8217;s Sub-regional Coordinator for West Africa.



(Writing by Alessandra Prentice; Editing by Peter Graff)

WFP warns millions facing hunger as driest weather in decades ravages Horn of Africa

Nearly 55 million people face hunger in West and Central Africa

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-820x547.jpg" alt="" class="wp-image-423556" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Illustration photo shows a two-rand coin above a South African flag April 12, 2017. REUTERS/Thomas White/Illustration</figcaption></figure>



JOHANNESBURG, April 12 (Reuters) &#8211; South Africa&#8217;s rand weakened in early trade on Friday against the U.S. dollar, which hovered near a five-month high as traders heavily scaled back bets for a slew of U.S. rate cuts this year.



At 0715 GMT, the rand traded at 18.7550 against the dollar&nbsp;ZAR=D3, about 0.2% weaker than its previous close.



The dollar&nbsp;=USD&nbsp;was trading up almost 0.4% against a basket of global currencies.



&#8220;The geopolitical risks in the Middle East remain high, and this is spurring further demand for the dollar,&#8221; said Andre Cilliers, Currency Strategist at TreasuryONE, estimating that the rand would trade in an 18.65/18.90 range for the day.



There was some positive economic data this week to support the local currency, which has been battered by power cuts and political uncertainty ahead of a May election. South Africa&#8217;s mining and manufacturing output rose in February, and business confidence held steady at an improved level.



On the stock market, the Top-40&nbsp;.JTOPI&nbsp;index was up 0.88% while the broader all-share&nbsp;.JALSH&nbsp;was up 0.78% in early trade.



South Africa&#8217;s benchmark 2030 government bond&nbsp;ZAR2030=&nbsp;was weaker in early deals, with the yield up 2.5 basis points to 10.715%.



(Reporting by Nellie Peyton; Editing by Tomasz Janowski)

Illustration photo of South African rand

South African rand weakens against strong dollar

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-820x547.jpg" alt="" class="wp-image-423316" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A man walks past the International Monetary Fund (IMF) logo at its headquarters in Washington, U.S., May 10, 2018. REUTERS/Yuri Gripas/</figcaption></figure>



WASHINGTON, April 11 (Reuters)&nbsp;&#8211;&nbsp;IMF chief Kristalina Georgieva on Thursday said higher U.S. interest rates were not great news for the rest of the world and could become a worry if they continued for a long time, but she thought the U.S. Federal Reserve was acting prudently.



Georgieva, speaking at an event hosted by the Atlantic Council, said the U.S. government could also look at taking other measures to ensure that the U.S. economy was not overheating, but gave no details.



&#8220;Higher interest rates for the rest of the world is not great news. Higher interest rates make the U.S. more attractive so financial flows come here and that leaves the rest of the world somewhat struggling,&#8221; she said.



Higher rates also drove the value of the dollar higher, which meant other countries&#8217; currencies were weaker.



&#8220;If it continues for a long time, it could become a bit of a worry in terms of financial stability,&#8221; she said.



Consumer level inflation data for March released on Wednesday was unexpectedly strong, casting further doubt on the Fed’s current forecast of rate cuts at some point later this year.



The unfavorable price pressure data comes as other reports also pointed to sturdier inflation over the start of the year, challenging the Fed’s most recent projections that penciled in three rate cuts this year.



Minutes from the U.S. Federal Reserve showed officials worried that progress on inflation may have stalled, and a longer period of tight monetary policy would be needed to tame it in the world&#8217;s largest economy.



Investors who had earlier expected a rate cut in June now see September as a likelier timing for the easing cycle to begin, following a third consecutive stronger-than-forecast reading on consumer inflation.



Georgieva said the U.S. economy had been successful because it was more innovative, opening space for entrepreneurship at a time of accelerating technological change.



The U.S. labor market had also held up well, with labor supply boosted by immigration, which in turn helped keep wage growth under control, she said.



The Biden administration&#8217;s Inflation Reduction Act and earlier COVID aid had helped support growth, she said, adding that the International Monetary Fund saw some scope for the U.S. government to address lingering inflation and work toward a soft landing for the economy.



&#8220;So fasten your belts,&#8221; she said. &#8220;At some point we will be landing.&#8221;



(Reporting by Andrea Shalal; Editing by Bill Berkrot)

FILE PHOTO: Man walks past the IMF logo at HQ in Washington

IMF head says higher US rates could become a worry if they persist

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg" alt="" class="wp-image-420118" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The new economic measures laid out by the U.K. government “will likely increase inequality”, according to a spokesperson from the International Monetary Fund.
Yuri Gripas | Reuters</figcaption></figure>



ADDIS ABABA, April 11 (Reuters)&nbsp;&#8211;&nbsp;Ethiopia may have to decide on a big currency devaluation sooner rather than later to secure a rescue loan from the International Monetary Fund (IMF), which left the country last week without reaching a much-needed deal with authorities.



East Africa&#8217;s most populous country, already struggling with high inflation, became the third African state in as many years to default on its debt in December.



Ethiopia hasn&#8217;t received any IMF funds since 2020 and its last lending arrangement with the fund went off track in 2021. The federal government and a rebellious regional authority signed a deal in late 2022 to end a two-year civil war.



The IMF, which said progress was made during its latest visit, has not said that currency reform is necessary for its support. But the Fund usually favours flexible, market-determined exchange rates. Ethiopia has requested $3.5 billion of support from the IMF, sources told Reuters last year.



Chronic foreign currency shortages and a tightly controlled exchange rate has allowed a black market to flourish, on which the birr currently trades at between 117 and 120 per dollar, more than double the official rate of around 56.7&nbsp;ETB=.



&#8220;It seems that the Ethiopian authorities have found accepting the demands of the IMF hard,&#8221; said Abdulmenan Mohammed, an Ethiopian economic analyst based in Britain.



&#8220;The Ethiopian authorities are worried about devaluation of the birr, (which) would have serious negative economic repercussions, including soaring inflation&#8230; and surging foreign currency denominated debts in terms of birr.&#8221;



<h2 class="wp-block-heading" id="h-playing-hardball">&#8216;PLAYING HARDBALL&#8217;</h2>



In early 2021, Ethiopia requested a debt restructuring under the G20&#8217;s Common Framework, a process established in response to the COVID-19 pandemic to bring in newer creditor countries like China and India. But progress was initially delayed by the civil war.



The country&#8217;s external debt was $28.2 billion at the end of March, based on government data.



In August 2023, it secured a debt payments suspension from its largest bilateral creditor China, which from 2006 to 2022 committed to lending the country $14 billion, according to Boston University&#8217;s Chinese Loans to Africa Database.



The rest of Ethiopia&#8217;s bilateral creditors followed suit in December, but said they could cancel the relief if Ethiopia did not get an IMF deal by March 31. When the deadline lapsed, it was extended to June 30.



There are widely varying estimates of the size of currency devaluation the IMF would accept, that could pave the way for a deal.



Irmgard Erasmus of research firm Oxford Economics said that she expects a weakening of 15% to coincide with an IMF staff-level deal on a bailout loan, a prerequisite for its external debt restructuring moving forwards.



&#8220;We retain the view that the IMF will require a good faith measure that solidifies Ethiopia&#8217;s intent to implement a more flexible FX (foreign exchange) regime,&#8221; she said in a note to clients. &#8220;(This) will set the scene for a series of stepwise devaluations on the path to FX liberalisation and monetary policy reform.&#8221;



More than one currency adjustment is likely, the first between 30-50%, said Connor Vasey, a consultant at J.S. Held, pointing to Egypt, which devalued its pound 38% and secured a larger IMF loan in March.



The Ethiopians probably prefer a more gradual devaluation but have a weak negotiating position, Vasey said, after a previous IMF loan programme expired in 2021, amid the conflict and concerns about the country&#8217;s ability to pay its debts.



&#8220;Ethiopia is coming into the meeting room with the IMF that is playing hardball and saying, &#8216;You don&#8217;t really have a foot to stand on, in terms of negotiating down our position,'&#8221; he said.



Nonetheless, Vasey said he expected Ethiopia to secure an IMF deal soon.



&#8220;There&#8217;s an international push to get this all lined up. It&#8217;s just a question of sequencing of the reforms,&#8221; he said.



An IMF spokesperson pointed to comments made earlier this month by spokesperson Julie Kozack, who responded to direct questions on why Ethiopia did not secure a loan during the visit and whether it is likely to get one at the Fund&#8217;s Spring Meetings next week in Washington DC.



&#8220;The team made substantial progress,&#8221; she said. &#8220;These discussions are continuing and will continue at the upcoming Spring Meetings.&#8221;



Ethiopian government officials did not respond to requests for comment. Authorities are committed to FX reform, state finance minister Eyob Tekalign told Reuters in October 2022.



&#8220;The exchange rate unification remains one important policy goal,&#8221; he said at that time. &#8220;But we are just doing it gradually.&#8221;



(Reporting by Rachel Savage in Johannesburg and Dawit Endeshaw in Addis Ababa; Additional reporting by Duncan Miriri in Nairobi, Editing by Karin Strohecker and Jane Merriman)

107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico

Ethiopia faces tough devaluation decision to secure IMF bailout

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="573" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/54OZJBBSHVOAZPY7PBW3ZKRWYU-820x573.jpg" alt="" class="wp-image-475533" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/54OZJBBSHVOAZPY7PBW3ZKRWYU-820x573.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/54OZJBBSHVOAZPY7PBW3ZKRWYU-300x210.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/54OZJBBSHVOAZPY7PBW3ZKRWYU-129x90.jpg 129w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/54OZJBBSHVOAZPY7PBW3ZKRWYU-768x537.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/54OZJBBSHVOAZPY7PBW3ZKRWYU-1536x1074.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/54OZJBBSHVOAZPY7PBW3ZKRWYU-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A seagull flies past a second-hand vehicle trader WeBuyCars Buying Pod in Cape Town, South Africa, April 10, 2024. REUTERS/Esa Alexander/FILE PHOTO</figcaption></figure>



JOHANNESBURG, April 11 (Reuters)&nbsp;&#8211;&nbsp;WeBuyCars made its market debut on Thursday, giving the South African secondhand vehicle trader a market capitalisation of 8.3 billion rand ($441 million) on the Johannesburg Stock Exchange.



Chief Executive Faan van der Walt, standing next to his brother and co-founder Dirk, blew into the African kudu horn as the opening share price of 20 rand was announced on the JSE.



WeBuyCars marks the second JSE listing of 2024, with others including Pick n Pay&#8217;s PIKJ.J discount grocery retailer Boxer, and food producer RCL&#8217;s RCLJ.JRainbow Chicken expressing interest to list at some point.



Shares in WeBuyCars traded as high as 20.85 rand, up from its initial public offering (IPO) price of 18.75 rand.



Van der Walt said the brothers had never imagined listing the family-owned business when they started it in 2001, but now that WeBuyCars was big enough, the time was right.



&#8220;There is still a lot of space for us to grow,&#8221; Van der Walt told Reuters. &#8220;We&#8217;re well positioned, we have the tech, we have the people, we have the footprint so we strongly believe that we can double up again in the next five years,&#8221; he added.



WeBuyCars, which has a market share of 10% to 12% in South Africa is targeting about 23% by 2028, and also aiming to sell 22,000 cars per month, up from 14,000 currently.



With 15 branches and 74 buying pods or kiosks at shopping centres, WeBuyCars plans to open in Rustenburg, Bloemfontein and East London in the near future, Van der Walt said.



WeBuyCars was unbundled from Transaction Capital&nbsp;TCPJ.J&nbsp;and listed separately in order to unlock value and give an option to invest directly in the secondhand car retailer.



Transaction Capital will use the proceeds from various capital raisings to settle holding company level debt.



($1 = 18.8293 rand)



(Reporting by Nqobile Dludla; Editing by Alexander Smith)

South Africa’s second-hand vehicle trader WeBuyCars lists on the Johannesburg Stock Exchange

WeBuyCars marks South African market debut with share price rise

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-820x462.jpeg" alt="" class="wp-image-475494" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Flag of China on dark blue background Da-kuk | E+ | Getty Images</figcaption></figure>



China will remain the largest growth engine for the world economy in spite of its slowdown, the Asian Development Bank said.



“China is obviously going to still be important for some time to come. They still account for nearly half of GDP in Asia Pacific,” ADB’s chief economist Albert Park said in a press conference for the bank’s Asian Development Outlook report.&nbsp;



“Although growth is moderating, and we are expecting it to continue moderating in the coming years… it’s likely to contribute the most growth of any economy in the world to global growth,” said Park.



ADB forecasts China to post annual GDP growth of 4.8% in 2024, lower than the government’s target of “around 5%.” China’s economy expanded 5.2% in 2023, matching the official target of around 5%.



Even with slower growth, ADB data estimated China will account for 46% of growth in developing Asia in 2024-2025.



China currently accounts for 18% and 48% of global and Asian GDP, respectively, based on purchasing power parities exchange rates, a metric used by the ADB, World Bank and International Monetary Fund.



<h2 class="wp-block-heading" id="h-what-about-india"><a></a>What about India?</h2>



India’s stellar economic trajectory has led many to tout the country’s role as a technology and manufacturing powerhouse and an attractive alternative to China. The South Asian nation’s economy recently expanded at its fastest pace in six quarters, surpassing expectations with 8.4% growth in the October to December quarter of the current financial year 2023-24.



“India’s importance to growth in the region is increasing,” Park told CNBC via email. ADB expects the country’s growth to be the highest in the region, at 7% in 2024 and 7.2% in 2025. 



While India’s economy is undoubtedly a “bright spot,” it is still smaller than China’s, said Park. On the PPP exchange rate metric, the economist noted China’s economy is still about two and a half times that of India.&nbsp;



“So on that benchmark, it will take a long time, I think, for India to really drive global growth,” he added.



Additionally, growth in advanced economies is expected to slow this year, with ADB forecasting U.S. GDP growth to dip to 1.9% from last year’s 2.5%, and Japan’s to grow 0.6% compared to 1.9% in 2023.



The bank in its report also said it expects developing Asia’s growth this year to be slightly stronger than its December projections, as healthy domestic demand offsets the slowdown in China.&nbsp;&nbsp;



In spite of rising energy prices, inflation is also expected to moderate in Asia-Pacific from 3.3% in 2023 to 3.2% this year.

107352556-1703848030465-gettyimages-1423009563-china

China will remain the world’s No. 1 growth driver, says the Asian Development Bank

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-820x547.jpg" alt="" class="wp-image-475259" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Produce is seen at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger/File Photo</figcaption></figure>



The consumer price index accelerated at a faster than expected pace in March, pushing inflation higher and likely dashing hopes that Federal Reserve will be able to cut interest rates anytime soon.



The CPI, a broad measure of goods and services costs across the economy, rose 0.4% for the month, putting the 12-month inflation rate at 3.5%, or 0.3 percentage point higher than in February, the Labor Department’s Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones had been looking for a 0.3% gain and a 3.4% year-over-year level.



Excluding volatile food and energy components, core CPI also accelerated 0.4% on a monthly basis while rising 3.8% from a year ago, compared to respective estimates for 0.3% and 3.7%.



Stock market futures slumped following the report while Treasury yields spiked higher.



Shelter and energy costs drove the increase on the all-items index.



Energy rose 1.1% after increasing 2.3% in February, while shelter costs, which make up about one-third of the weighting in the CPI, were higher by 0.4% on the month and up 5.7% from a year ago. Expectations for shelter-related costs to decelerate through the year have been central to the Fed’s thesis that inflation will cool enough to allow for interest rate cuts.



Food prices increased just 0.1% on the month and were up 2.2% on a year-over-year basis. There were some big gains within the food category, however.



The measure for meat, fish, poultry and eggs climbed 0.9%, pushed by a 4.6% jump in egg prices. Butter fell 5% and cereal and bakery products declined by 0.9%. Food away from home increased 0.3%.



Elsewhere, used vehicle prices declined 1.1% and medical care services prices rose 0.6%.



The report comes with markets on edge and Fed officials expressing caution about the near-term direction for monetary policy. Central bank policymakers have repeatedly called for patience on cutting rates, saying they have not seen enough evidence that inflation is on a solid path back to their 2% annual goal. The March report likely confirmed worries that inflation is stickier than expected.



Markets had expected the Fed to start cutting interest rates in June with three reductions in total expected this year, but that shifted dramatically following the release. Traders in the fed funds futures market pushed expectations for the first cut out to September, according to CME Group calculations.



″“There’s not much you can point to that this is going to result in a shift away from the hawkish bent” from Fed officials, said Liz Ann Sonders, chief investment strategist at Charles Schwab. “June to me is definitely off the table.”



The Fed also expects services inflation to ease through the year, but that has shown to be stubborn as well. Excluding energy, the services index increased 0.5% in March and was at a 5.4% annual rate, inconsistent with the Fed’s target.



″This marks the third consecutive strong reading and means that the stalled disinflationary narrative can no longer be called a blip,” said Seema Shah, chief global strategist at Principal Asset Management. “In fact, even if inflation were to cool next month to a more comfortable reading, there is likely sufficient caution within the Fed now to mean that a July cut may also be a stretch, by which point the US election will begin to intrude with Fed decision making.”



Later Wednesday, the Fed will release minutes from its March meeting, providing more insight into where officials stand on monetary policy.



Multiple Fed officials in recent days have expressed skepticism about lowering rates. Atlanta Fed President Raphael Bostic told CNBC that he expects just one cut this year, likely not coming until the fourth quarter. Governor Michelle Bowman said an increase may even be necessary if the data do not cooperate.

FILE PHOTO: Grocery store in Washington

U.S. consumer prices rose 3.5% from a year ago in March, more than expected

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-820x462.jpg" alt="" class="wp-image-475230" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1.jpg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Shoppers are seen in a Kroger supermarket on October 14, 2022, in Atlanta, Georgia.  Elijah Nouvelage | AFP | Getty Images</figcaption></figure>



A closely watched Labor Department report due Wednesday is expected to show that not much progress is being made in the battle to bring down inflation.



If so, that would be bad news for consumers, market participants and Federal Reserve officials, who are hoping price increases slow enough so that they can start gradually cutting interest rates later this year.



The consumer price index, which measures costs for a wide-ranging basket of goods and services across the $27.4 trillion U.S. economy, is expected to register increases of 0.3% both for the all-items measure as well as the core yardstick that excludes volatile food and energy.



On a 12-month basis that would put the inflation rates at 3.4% and 3.7%, respectively, a 0.2 percentage point increase in the headline rate from February, just a 0.1 percentage point decrease for the core rate, and both still a far cry from the central bank’s 2% target.



“We’re not headed there fast enough or convincing enough, and I think that’s what this report is going to show,” said Dan North, senior economist at Allianz Trade North America.



The report will be released at 8:30 a.m. ET.



<h2 class="wp-block-heading" id="h-progress-but-not-enough"><a></a>Progress, but not enough</h2>



North said he expects Fed officials to view the report pretty much the same way, backing up comments they’ve been making for weeks that they need more evidence that inflation is convincingly on its way back to 2% before rate cuts can happen.



“Moving convincingly toward 2% doesn’t just mean hitting 2% for one month. It means hitting 2% or less for months and months in a row,” North said. “We’re a long way from that, and that’s probably what’s going to show tomorrow as well.”



To be sure, inflation has come down dramatically from its peak above 9% in June 2022. The Fed enacted 11 interest rate hikes form March 2022 to July 2023 totaling 5.25 percentage points for its benchmark overnight borrowing rate known as the federal funds rate.



But progress has been slow in the past several months. In fact, headline CPI has barely budged since the central bank stopped hiking, though core, which policymakers consider a better barometer of longer-term trends, has fallen about a percentage point.



While the Fed watches the CPI and other indicators, it focuses most on the Commerce Department’s personal consumption expenditures index, sometimes referred to as the PCE deflator. That showed headline inflation running at 2.5% and the core rate at 2.8% in February.



For their part, markets have grown nervous about the state of inflation and how it will affect rate policy. After scoring big gains to start the year, stocks have backed off over the past week or so, which have seen sharp swings as investors tried to make sense of the conflicting signals.



Earlier this year, traders in the fed funds futures market were pricing in the likelihood that the central bank would start reducing rates in March and continue for as many as seven cuts before the end of 2024. The latest pricing indicates that the cuts won’t start until at least June and not total more than three, assuming quarter-percentage point increments, according to the CME Group’s FedWatch calculations.



“I don’t see a whole lot here that is going to move things magically the way they want to go,” North said.



<h2 class="wp-block-heading"><a></a>What to watch</h2>



There will be a few key areas to watch in Wednesday’s report.



Beyond the headline numbers, trends in items such as shelter, airfares and vehicle prices will be important. Those areas have been bellwethers during the current economic cycle, and moves either way could suggest longer-term trends.



Economists at Goldman Sachs expect outright declines across air travel-related items as well as vehicle sticker prices, and see smaller shelter cost increases, which make up about one-third of the CPI weighting. A New York Fed survey released Monday, however, showed a sharp uptick in expectations for rental costs over the next year, which is bad news for policymakers who frequently have cited decelerating housing costs as the cornerstone to their easing inflation thesis.



Similarly, the National Federation of Independent Business survey for March, released Tuesday, showed confidence among small businesses at its lowest level in more than 11 years, with owners citing inflation as their top concern.



“Inflation is cumulative, and that’s why prices still feel high,” North said. “People still can’t believe how high prices are.”



Gas prices also could play an important role in the CPI release after rising 3.8% in February. Though the gasoline index is relatively unchanged over the past two years, it’s still up more than 70% from April 2020 when the brief Covid-driven recession ended. Food is up about 23% during the same period.

107139885-1666645552719-abc1

A crucial report Wednesday is expected to show little progress against inflation

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/VYRWOXIFAFINVMT3XJTBLOGTZQ-820x547.jpg" alt="" class="wp-image-475173" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/VYRWOXIFAFINVMT3XJTBLOGTZQ-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/VYRWOXIFAFINVMT3XJTBLOGTZQ-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/VYRWOXIFAFINVMT3XJTBLOGTZQ-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/VYRWOXIFAFINVMT3XJTBLOGTZQ-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/VYRWOXIFAFINVMT3XJTBLOGTZQ-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/VYRWOXIFAFINVMT3XJTBLOGTZQ-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Anna Bjerde, Managing Director for Operations of The World Bank, attends the Asia-Pacific Economic Cooperation (APEC) CEO Summit in San Francisco, California, U.S., November 15, 2023. REUTERS/Carlos Barria/File Photo</figcaption></figure>



WASHINGTON, April 9 (Reuters)&nbsp;&#8211;&nbsp;The World Bank Group&nbsp;unveiled a&nbsp;framework&nbsp;on Tuesday&nbsp;for measuring the results of its development work with 22&nbsp;indicators&nbsp;in what a top official called an important advance in the bank&#8217;s push to increase transparency and accountability.



Anna Bjerde, the World Bank&#8217;s managing director of operations, said&nbsp;the&nbsp;scorecard would allow its shareholders and the people it serves&nbsp;to better&nbsp;see, measure and track the impact of the bank&#8217;s lending and grants.



&#8220;A vision and mission are really great, but unless you can translate it into actions and measure it, then it&#8217;s quite aspirational, and we also want it to be operational,&#8221; Bjerde told&nbsp;Reuters.



The&nbsp;U.S.&nbsp;and other major shareholders have pushed the World Bank&nbsp;to improve how it helps&nbsp;countries address issues such as climate change and pandemic preparedness.



It has already added the phrase &#8220;livable planet&#8221; to its mission statement and reduced the number of its projects to focus on more programmatic and transformational projects.



The scorecard includes 22 global indicators &#8211; down from 150 on a previous instrument &#8211; for poverty, prosperity and a livable planet, as well as themes such as gender equality, inclusion of youth, and how people live in fragile, conflict-affected areas.



It will enable a closer look at development outcomes by adopting a more &#8220;people-centric&#8221; approach, Bjerde said.



For the first time, the work of all World Bank institutions &#8211; including the International Finance Corp and the International Bank for Reconstruction and Development &#8211; will be tracked through the same set of indicators.



“It’s a real game changer, providing a new guidepost that our teams can rally around, and provides full visibility on how well we are tackling the most difficult challenges like poverty, climate change, fragility and food insecurity,&#8221; Bjerde said.



The bank sees the scorecard as part of its push to focus on outcomes, not inputs, for instance by measuring the number of people that actually use financial services, not just how many have access.



The bank is still working out the detailed methodologies to calculate the scores in each of the 22 indicators, she said, with half to be released in June and the rest in October.



The first batch will include data on how many people have access to electricity worldwide, and social safety net programs.



The data will include transparent data broken down by gender, regions, age and whether people are in fragile and conflicted-affected countries.



Drilling in like that will allow the bank, its shareholders and clients to &#8220;see how we&#8217;re doing but also where we need to double down,&#8221; she said.



(Reporting by Andrea Shalal; Editing by Josie Kao)

FILE PHOTO: APEC Summit in San Francisco

World Bank unveils new scorecard to measure accountability

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Y4ZRO6HDHJLMJN6BQVVOUBSW3M-820x547.jpg" alt="" class="wp-image-474957" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Y4ZRO6HDHJLMJN6BQVVOUBSW3M-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Y4ZRO6HDHJLMJN6BQVVOUBSW3M-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Y4ZRO6HDHJLMJN6BQVVOUBSW3M-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Y4ZRO6HDHJLMJN6BQVVOUBSW3M-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Y4ZRO6HDHJLMJN6BQVVOUBSW3M-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/Y4ZRO6HDHJLMJN6BQVVOUBSW3M-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: An aerial view shows the headquarters of the Central Bank of Brazil (C) in Brasilia January 20, 2014. REUTERS/Ueslei Marcelino/File Photo</figcaption></figure>



KAMPALA, April 9 (Reuters)&nbsp;&#8211;&nbsp;Uganda&#8217;s foreign exchange reserves fell by about 12% between June 2023 and January this year because of external debt payments and the central bank&#8217;s inability to buy foreign currency due to a slide in the Ugandan shilling&nbsp;UGX=.



Reserves dropped from $4.07 billion in June to about $3.58 billion at the end of January, reaching 3.4 months of import cover excluding oil project-related imports, the central bank said on Tuesday in its State of the Economy report.



The Bank of Uganda targets foreign exchange cover of 4 months of imports, excluding oil projects, an International Monetary Fund staff report published in March said.



Uganda&#8217;s rising public debt, more than half of which is external, has been eating up a growing share of revenues and hitting other spending priorities like education and health.



Total public debt stood at $24.7 billion, 60% of which was external, at the end of 2023, finance ministry figures show.



The Bank of Uganda said foreign reserves could rise due to expected inflows from budget support loans, but that the outlook for the country&#8217;s balance of payments was fragile.



&#8220;Delayed disbursement of expected budget support loans, higher-than-projected government expenditure on imports, and &#8230; tight global and domestic financial market conditions may disrupt the reserve build-up programme,&#8221; it said.



(Reporting by Elias Biryabarema; Editing by Alexander Winning and Alexander Smith)

FILE PHOTO: Aerial view shows the headquarters of the Central Bank of Brazil in Brasilia

Ugandan foreign exchange reserves drop 12% due to debt payments

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-820x461.jpeg" alt="" class="wp-image-463959" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724.jpeg 1600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Federal Reserve Chairman Jerome Powell testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled “The Semiannual Monetary Policy Report to the Congress,” in Dirksen Building on Thursday, March 7, 2024.
Tom Williams | Cq-roll Call, Inc. | Getty Images</figcaption></figure>



The U.S. Federal Reserve is determined not to reduce interest rates too soon — and some economists say recent data has pushed a summer cut completely off the table.



Friday’s jobs report reiterated the seemingly unwavering strength of the U.S. labor market and suggested further need for Fed caution. All eyes will now be on Wednesday’s consumer price index, after February’s annual inflation rate of 3.2% came in slightly higher than expected.



It comes as a growing number of market participants have raised the possibility of no rate cuts at all this year, including Minneapolis Fed President Neel Kashkari who said last week that no reductions were a possible scenario if inflation continued to move sideways.



George Lagarias, chief economist at&nbsp;Mazars, told CNBC on Monday that rate cuts in the summer were now looking much less likely.



“Personally, I wouldn’t be surprised if we saw less rate cuts and pushed more towards the end of the year,” he told “Squawk Box Europe” on Monday.



“This is a strong economy. Make no mistake, it is backed by debt and somewhat by overburdened credit cards, but it is a strong economy. So the Fed will struggle to find the case to cut rates soon.”



Market pricing reflects the ongoing uncertainty, with the probability of a rate cut now under 50% for both June and July, according to the CME’s FedWatch tool — significantly lower than at the start of the month.



“The Fed has been punishing itself ever since 2021 when ‘team transitory’ ostensibly got it wrong. &#8230; What they feel is that they can’t get it wrong again, which means that they’re more likely to err on the side of caution,” Lagarias added.



Despite this, he said it remains “very likely” that there will be rate cuts this year.



“They do have some room to cut, but they don’t want to get it wrong. They do not want to be the Fed that cut rates as inflation kept beating expectations. So they want to see more data toward the right direction and they are willing to wait,” Lagarias added.



<h2 class="wp-block-heading" id="h-no-rate-cuts"><a></a>No rate cuts?</h2>



Speculation that there could be no interest rate reductions this year has been growing, although economists remain divided.



Torsten Slok, chief economist at Apollo Global Management, said last month that he doesn’t expect any cuts as the U.S. economy is “simply not slowing down,” and top U.S. asset manager Vanguard has no rate reductions as its base case for the year.



Whereas former Federal Reserve Vice Chairman Roger Ferguson told CNBC last week he sees a 10%-15% chance of no cuts this year.



Other analysts and economists are still backing the Fed’s own signaling in March that it expects three quarter-percentage point cuts this year.



Based on current growth and inflation forecasts, Goldman Sachs Chief Economist Jan Hatzius told CNBC on Friday he would “expect some rate cuts based on what Chair Powell and other Fed officials have said.”



“The timing of that of course is going to depend on near-term data, on the reaction function from the Fed but under our forecast I would be quite surprised if we didn’t get rate cuts this year. Quite surprised.”

107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724

‘They can’t get it wrong again’: Economists are increasingly uncertain about Fed rate cuts this year

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="571" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/YNH43WBRZBKVHDDQ3KLQGQUX2E-820x571.jpg" alt="" class="wp-image-474865" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/YNH43WBRZBKVHDDQ3KLQGQUX2E-820x571.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/YNH43WBRZBKVHDDQ3KLQGQUX2E-300x209.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/YNH43WBRZBKVHDDQ3KLQGQUX2E-129x90.jpg 129w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/YNH43WBRZBKVHDDQ3KLQGQUX2E-768x535.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/YNH43WBRZBKVHDDQ3KLQGQUX2E-1536x1070.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/YNH43WBRZBKVHDDQ3KLQGQUX2E-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A girl carries a container of water at a coltan mine in Kamatare, Masisi territory, North Kivu Province of Democratic Republic of Congo, December 1, 2018. REUTERS/Goran Tomasevic/File Photo</figcaption></figure>



JOHANNESBURG/WASHINGTON, April 9 (Reuters)&nbsp;&#8211;&nbsp;The U.S. must boost commercial ties with African countries to curb reliance on China for supplies of critical minerals, a Washington-based think tank said on Tuesday.



&#8220;U.S. economic and national security depend on securing a reliable supply of critical minerals, including from Africa,&#8221; the United States Institute of Peace said in a report.



The U.S. is almost 100% reliant on &#8220;foreign entities of concern,&#8221; mainly China, for key critical minerals, it said, and must come up with own sources of supply to avoid being shorthanded and vulnerable to China&#8217;s export curbs.



Western mining companies are lagging Chinese rivals in the race to tap Africa&#8217;s abundant mineral resources, key to sectors from electric vehicle manufacturing to defence industries.



To counter China&#8217;s head start in Africa, Washington must roll out &#8220;more vigorous commercial diplomacy with a keen eye toward building critical minerals partnership in Africa,&#8221; the 76-page report said.



One option for the U.S. would be to increase commercial diplomacy in countries such as Democratic Republic of Congo, the world&#8217;s No. 1 cobalt supplier, and Zambia, Africa&#8217;s second-largest copper producer, it said.



The competition for securing minerals in Africa is heating up as cash-rich Middle East firms join the race.



While Western mining companies still see hurdles in investing in countries such as Congo, which lacks vital infrastructure such as roads and adequate electricity, Chinese miners have strengthened their grip in the country and are broadening investment throughout Africa.



The International Development Finance Corporation said in February it could scale up project financing in Africa to help reduce the risk of investing in countries including Congo that some investors still perceive as high risk.



Unlocking U.S. investment in Congo could be helped by reopening its consulate in Lubumbashi that closed in the 1990s after the end of the Cold War, Tuesday&#8217;s USIP report said.



The government also needs to prioritize full development of a memorandum of understanding with Congo and Zambia which could help guide U.S. private investors across the battery metals supply chain, it said.



The U.S. has stepped in to back the Lobito Corridor, a rail link from the central African copper belt that&#8217;s key to export of metals through Angola&#8217;s Lobito port.



The U.S. is &#8220;simply not on, or even near, par in competing with China&#8221; for critical minerals investment and diplomacy in Africa, and needs to take a vigorous approach, USIP said.



Jose Fernandez, the U.S. State Department&#8217;s under secretary for economic growth, energy, and the environment said last month the U.S. holds regular talks with Congo state miner Gecamines.



Still, the U.S. government is unlikely to match the resource levels and the mining ecosystem that China wields in winning mining contracts, USIP said, though &#8220;concerted U.S. efforts to land U.S. mining investment in Africa can succeed.&#8221;



(Reporting by Felix Njini in Johannesburg, Ernest Scheyder in Houston and Daphne Psaledakis in WashingtonEditing by Peter Graff)

FILE PHOTO: A girl carries a container of water at a coltan mine in Kamatare, Masisi territory, North Kivu Province of Democratic Republic of Congo

US must boost Africa ties to secure key minerals, report says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="595" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/5XI6ICZ6JRKC7A43NJRHTXVLBI-820x595.jpg" alt="" class="wp-image-474665" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/5XI6ICZ6JRKC7A43NJRHTXVLBI-820x595.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/5XI6ICZ6JRKC7A43NJRHTXVLBI-300x218.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/5XI6ICZ6JRKC7A43NJRHTXVLBI-124x90.jpg 124w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/5XI6ICZ6JRKC7A43NJRHTXVLBI-768x557.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/5XI6ICZ6JRKC7A43NJRHTXVLBI-1536x1114.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/5XI6ICZ6JRKC7A43NJRHTXVLBI-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A wilted maize crop is seen in Mumijo, Buhera district east of the capital Harare, Zimbabwe, March 16, 2024. REUTERS/Philimon Bulawayo/File Photo</figcaption></figure>



HARARE, April 8 (Reuters)&nbsp;&#8211;&nbsp;Mandisireyi Mbirinyu, 70, and her 13-year-old grandson Tinotenda sit in the blistering sun, shelling the few maize cobs they managed to retrieve from land parched by a drought ravaging southern Africa.



&#8220;The grain I have is only enough for the next two months. It is going to be hunger from here on,&#8221; Mbirinyu told Reuters at her farm in Shamva, 90 km (56 miles) north of Zimbabwe&#8217;s capital Harare.



Mbirinyu considers herself lucky. She at least managed to harvest a few bags of maize from her sparsely irrigated plot &#8211; most crops around this area were a write-off.



Southern Africa is reeling from its worst drought in years, owing to a combination of naturally occurring El Nino &#8211; when an abnormal warming of the waters in the eastern Pacific radiates heat into the air leading to hotter weather across the world &#8211; and higher average temperatures produced by greenhouse gas emissions.



Weather across the world produced record-breaking extremes in 2023 as climate change amplified the impacts of El Nino.



A study in October last year even suggested that climate change may now be as significant a factor in triggering El Nino conditions as natural causes like sun rays.



Aid agency Oxfam warned last week that more than 24 million people in southern Africa face hunger, malnutrition and water scarcity because of the drought.



Last season Mbirinyu harvested 14 tonnes of maize and sold some to the national grain company; this year she&#8217;s wondering whether there will be enough to feed her own family.



In neighbouring Malawi, crop theft has become a problem as food sources dry up. In Kuntaja village, near the airport of the commercial capital Blantyre, Osten James makes a living for his family of five by guarding other people&#8217;s maize gardens, after his own were torched by heat.



&#8220;The owners are trying to save the little maize that survived the heat from thieves,&#8221; said James.



Zambia, Malawi and Zimbabwe have all declared a state of disaster.



&#8220;The maize has failed,&#8221; Ulaliya Radson, a Malawian farmer said. &#8220;Last year I harvested 10 bags and as you can see in this field, I won&#8217;t even manage half of that,&#8221; she added, gesturing towards a parched patch.



(Reporting by Nyasha Chingono in Shamva and Frank Phiri in Blantyre; Editing by Tim Cocks, William Maclean)

FILE PHOTO: Villagers collecting food aid in rural Zimbabwe

Southern Africa faces hunger as el Nino drought kills crops

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="600" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7EUCZ6RKSVIQDGLZGVKYD2BO74-820x600.jpg" alt="" class="wp-image-474643" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7EUCZ6RKSVIQDGLZGVKYD2BO74-820x600.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7EUCZ6RKSVIQDGLZGVKYD2BO74-300x220.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7EUCZ6RKSVIQDGLZGVKYD2BO74-123x90.jpg 123w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7EUCZ6RKSVIQDGLZGVKYD2BO74-768x562.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7EUCZ6RKSVIQDGLZGVKYD2BO74-1536x1124.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7EUCZ6RKSVIQDGLZGVKYD2BO74-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A woman walks past the Reserve Bank of Zimbabwe building in Harare, Zimbabwe March 1, 2024. REUTERS/Philimon Bulawayo/FILE PHOTO</figcaption></figure>



HARARE, April 8 (Reuters)&nbsp;&#8211;&nbsp;Zimbabwe&#8217;s new gold-backed currency started trading on Monday amid doubts that the country&#8217;s third such re-launch in a decade will have any more success in ending repeated, crippling bouts of high inflation.



The Zimbabwe Gold (ZiG) was announced on Friday by the central bank with an initial rate of 13.56 to $1, replacing the Real Time Gross Settlement Dollar (RTGS), which had lost about 80% of its value this year and had been trading at 28,720 to $1 before the change.



Bank balances were transferred into the new currency over the weekend while their customers will have 21 days to do so, and the new banknotes will enter circulation at the end of this month, according to the Reserve Bank of Zimbabwe.



The RTGS, also known as the Zimdollar&nbsp;ZWL=, was launched in 2019 after a decade of dollarisation, which included so-called bond coins and bond notes, notionally pegged to the U.S. dollar and introduced in 2014 and 2016 respectively.



However, the Zimdollar struggled to gain trust and this year&#8217;s precipitous slide pushed annual inflation above 55% in March&nbsp;ZMBCPY=ECI, raising fears of a return to the 2007-2009 era of hyperinflation under former president Robert Mugabe.



&#8220;There was dire need for drastic change in the Zimbabwean monetary system,&#8221; Jacques Nel at research firm Oxford Economics said in a note to clients.



The central bank statement on Friday correctly identified the most pressing problems, said Nel.



&#8220;A lack of credibility in both the domestic currency and the framework that governed it &#8211; but it is that same lack of credibility that casts doubt over the effectiveness of these new measures,&#8221; he added.



Commercial banks were using the new official exchange rate on Monday, according to Reuters enquiries. It was not immediately clear whether the currency, which the central bank described as &#8220;structured&#8221; and &#8220;anchored by a composite basket of foreign currency and precious metals (mainly gold) held as reserves&#8221;, would be able to retain this value.



Nor was it given that companies and citizens would accept it as a form of payment and a store of value. Some 80% to 85% of transactions are currently carried out in foreign currencies, according to the central bank.



&#8220;Zimbabwe has an insufficient $285 million of hard currency and gold reserves,&#8221; Hasnain Malaik of research firm Tellimer said in a note. &#8220;To fix the economy, Zimbabwe needs to address these root causes of its problems.&#8221;



These problems include central bank funding of government, unsustainable fiscal deficits, debt arrears and Western sanctions, and Malaik said it was not clear whether any would be addressed under the current ruling ZANU-PF party.



(Reporting by Nyasha Chingono and Rachel Savage, Editing by Karin Strohecker and Tomasz Janowski)

A woman walks past the Reserve Bank of Zimbabwe building in Harare

Zimbabwe’s new ZiG currency starts trading, credibility doubts linger

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="540" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/DIWUE6H53FK55N7IANRDIEK5BA-820x540.jpg" alt="" class="wp-image-474616" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/DIWUE6H53FK55N7IANRDIEK5BA-820x540.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/DIWUE6H53FK55N7IANRDIEK5BA-300x197.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/DIWUE6H53FK55N7IANRDIEK5BA-137x90.jpg 137w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/DIWUE6H53FK55N7IANRDIEK5BA-768x506.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/DIWUE6H53FK55N7IANRDIEK5BA-1536x1011.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/DIWUE6H53FK55N7IANRDIEK5BA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Street vendors are seen serving customers in Camama, on the outskirts of the capital Luanda, in Angola, August 20, 2022. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



JOHANNESBURG, April 8 (Reuters)&nbsp;&#8211;&nbsp;Economic growth is set to rise for the next two years in Sub-Saharan Africa, but not enough to make a significant dent in poverty on the continent, the World Bank said in a report on Monday.



The region&#8217;s economy is set to expand 3.4% this year and 3.8% in 2024 as falling inflation boosts private consumption, up from 2.4% in 2023, the World Bank said in its biannual Africa&#8217;s Pulse report.



Many countries in Sub-Saharan Africa were hit hard by the shocks of COVID-19 and Russia&#8217;s war in Ukraine, which pushed up inflation at the same time as rising global interest rates made borrowing prohibitively expensive. Drought and conflict have also affected swathes of the region.



&#8220;Growth is set to bounce back in Sub-Saharan Africa but the recovery is still fragile,&#8221; the report said. &#8220;The pace of economic expansion in the region remains slow and insufficient to have a significant effect on poverty reduction.&#8221;



&#8220;Per capita GDP growth of 1% is associated with poverty reduction of only 1% in the region, compared to 2.5% in the rest of the world.&#8221;



South Africa&#8217;s growth rate is forecast to double in 2024, but just to 1.2%, while Angola&#8217;s is set to pick up to 2.8% from 0.8% last year, driven mainly by the non-oil sector amid falling oil production.



The East African Community region, in contrast, is expected to grow 5.3% this year, due to strong growth in Kenya, Rwanda, Uganda and the Democratic Republic of Congo.



West Africa&#8217;s biggest economy, Nigeria, is forecast to grow 3.3% this year, below its long-term average.



Zambia defaulted on its external debt in 2020, followed by Ghana in 2022 and Ethiopia late last year.



Sub-Saharan Africa&#8217;s public debt-to-GDP ratio is forecast to fall from 61% in 2023 to 57% this year, but more than half of countries are still in or at high risk of debt distress, the report said.



It noted that external borrowing was still more expensive than before the pandemic, despite costs starting to fall.



&#8220;Typically when countries are in these situations, another big shock could send a lot of these countries into these types of financial crises and therefore default,&#8221; Andrew Dabalen, the World Bank&#8217;s chief Africa economist, said in a press briefing, but added, &#8220;We can&#8217;t tell if there&#8217;s going to be another default or not.&#8221;



(Reporting by Rachel Savage; Editing by Sharon Singleton)

FILE PHOTO: Street vendors are seen serving customers in Luanda

Sub-Saharan Africa growth not enough to dent poverty, says World Bank

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-820x547.jpg" alt="" class="wp-image-474613" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Jamie Dimon, chief executive officer of JPMorgan Chase &amp; Co., during a Bloomberg Television interview on the sidelines of the JPMorgan Tech Stars Leadership Forum in London, UK, on Monday, Oct. 2, 2023. &#8220;Your children are going to live to 100 and not have cancer because of technology,&#8221; Dimon said. Photographer: Jason Alden/Bloomberg via Getty Images</figcaption></figure>



Jamie Dimon, the veteran CEO and chairman of JPMorgan Chase, said he was convinced that artificial intelligence will have a profound impact on society.



In his annual letter to shareholders released Monday, Dimon chose AI as the first topic in his update of issues facing the biggest U.S. bank by assets — ahead of geopolitical risks, recent acquisitions and regulatory matters.



“While we do not know the full effect or the precise rate at which AI will change our business — or how it will affect society at large — we are completely convinced the consequences will be extraordinary,” Dimon said.



The impact will be “possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet.”



Dimon’s letter, read widely in the business world because of his status as one of the most successful leaders in finance, hit a wide variety of topics. The CEO said that he had ongoing concerns about inflationary pressures and reiterated his warning that the world may be entering the riskiest era in geopolitics since World War II.



But his focus on AI, first mentioned in this format in a 2017 shareholder letter, stood out. The technology, which has gained in prominence since ChatGPT became a viral sensation in late 2022, can generate human-sounding responses to queries. Enthusiasm for AI has fueled the meteoric rise in chipmaker Nvidia and helped propel tech names to new heights.  



JPMorgan now has more than 2,000 AI and machine learning employees and data scientists, Dimon said. But the technology could ultimately touch all of the bank’s roughly 310,000 employees, assisting some workers while replacing others.



“Over time, we anticipate that our use of AI has the potential to augment virtually every job, as well as impact our workforce composition,” Dimon said. “It may reduce certain job categories or roles, but it may create others as well.”



This story is developing. Please check back for updates.

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon Interview

Jamie Dimon says AI may be as impactful on humanity as printing press, electricity and computers

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="598" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-820x598.jpg" alt="" class="wp-image-474536" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-820x598.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-300x219.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-123x90.jpg 123w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-768x560.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-1536x1120.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Oracle Chairman Larry Ellison Getty Images</figcaption></figure>



Every tech company is talking up its AI opportunity. Oracle is no exception. But during an earnings call in March, Oracle’s Larry Ellison laid out a future market opportunity focused on a major customer that investors may think about less often that Fortune 500 companies.



The Oracle founder, former CEO and current chairman and chief technology officer, sees national and state government applications being run on platforms like Oracle Cloud Infrastructure to a much greater degree than today, and indicated that it’s starting to happen in a variety of ways.



“We talk about, you know, winning business with companies. For the first time, we’re beginning to win business for countries,” Ellison said. “We have a number of countries where we’re negotiating sovereign regions with the national government.”



Major tech companies vying for massive government contracts in the cloud are nothing new. Microsoft and Amazon had a lengthy battle over a cloud deal with the Department of Defense, and both those AI players as well as Oracle and Google ended up all in on a $9 billion DoD contract in 2022.



But Ellison went further in his prediction when speaking with analysts on the recent earnings call, saying “Every government, pretty much every government, is going to want a sovereign cloud and a dedicated region for that government.”



Oracle, which works with Nvidia and Microsoft on generative AI capabilities, has already helped use cloud tech to cut red tape for countries. One example Ellison gave was Albania. It is trying to ascend to the European Union with the help of chatGPT, with the generative AI helping to decipher and summarize its laws and aid the country in what it needs to change in order to be compliant with E.U. regulations.



“It took Serbia eight years to harmonize their laws to be able to join the E.U.,” Ellison said. “Albania is facing the same thing, but with generative AI, we can read the entire corpus of the Albanian laws and&nbsp;actually harmonize their laws with the EU in probably more like 18 months to two years.”



Some analysts are skeptical of Ellison’s talk as being anything more than typical C-suite rallying for a key business unit. Oracle shares are up about 21% YTD, but Barclays analyst Raimo Lenschow expressed concern about lower OCI growth during its latest earnings, which could “worry investors, as this is the main investment story.”



A version of future featuring cloud services and artificial intelligence-powered solutions can make government more efficient. Ellison said for starters, redundancy is a focus for government, in the case of disaster and disaster recovery. But it’s also moving into health care information and internet access projects.



Countries including Serbia are standardizing on Oracle Cloud Infrastructure and using generative AI for processes like automating health care. Deals related to delivery of internet services in partnership with Elon Musk’s Starlink to remote areas are taking place in Kenya and Rwanda, where OCI and Starlink are mapping rural farms to see which crops are growing in what area, and if they are getting enough nutrients like nitrogen and water. “These maps are AI-assisted, help them plan their agricultural output and predict their agricultural output, predict markets, the logistics of the agricultural output, doing all of all of those things as next-generation national applications,” Ellison said.



Food security, rural school and rural hospital internet access, are other examples of what Ellison said are among the “all sorts of interesting new AI applications out there that you’ve probably never heard of before, at least I hadn’t heard of before until these last 12 months now that we’ve worked on and we’re now in the process of delivering.”



He also mentioned automation of vaccination programs, and other healthcare program “across the board.”



“We’re living in a world where like data and information is the gold of the future,” said Dan Gardner, CEO of digital strategy agency Code and Theory. “If the government can get access and action on that their data faster, why would we want to slow that down? We want that to be as efficient as possible. A lot of that is like mundane human resources, that maybe those people could be doing something else that is way more valuable.”



Cloud and generative AI applications allowing countries to give rural areas internet access could increase educational opportunities and create more economic value. It could also allow citizens to have more insight into government processes, said Tapan Parikh, Cornell University associate professor. “One thing technology’s always been good at is potentially making bureaucracies more efficient, or at least more transparent internally,” he said.



<h3 class="wp-block-heading" id="h-black-mirror-governments">‘Black Mirror’ governments</h3>



But the push to move more government processes to the cloud is also opening the door to new risks, especially as countries trust newly developed generative AI systems. While they may make processes faster than ever, there are bound to be mistakes as the technology develops and could make citizen data accessible to cyber criminals. “We shouldn’t use these technologies as an excuse to not maintain oversight and control over political processes,” Parikh said. “Certainly, I think that’s a very important thing, particularly when you’re dealing with countries that may not have the same kind of governance capacity.” Oracle did not respond to a request for additional comment on Ellison’s earnings call discussion.



“There’s the ‘Black Mirror’ bad side of it: Big Brother, data wars, AI warfare and all that stuff,” Garder said. “As far as like removing red tape and being more efficient and getting better use out of crops across the country, that’s incredible. That’s the multiplier of humanity that could really improve because of AI.”



AI raises a host of concerns.



Gardner pointed to the proliferation of more generative content in an election year around the world and all the issues related to tech-enabled interference. “Maybe it’s not like chips on the ground. But it’s data security, authentication of who you are, who governments are, what content you’re viewing, all the connection points between financial systems, and AI governance. Using AI as a tool of destruction is quite scary.”&nbsp;



“No big government in the world can afford to move all of their services and especially critical ones like defense, taxes, health care, completely into the cloud and into the hands of gen AI,”&nbsp;said Simone Bohnenberger, chief product officer at cloud company Phrase. “It’s just not in the realm of, I think it’s not responsible to do that. The potential risks outweigh the benefits of doing that.“ OpenAI, which created ChatGPT, is mostly trained on existing content on the internet. That could pose a problem, especially when text from lesser known languages like Albanian need to be analyzed, Bohnenberger said. “If you look at the World Wide Web or the internet, the vast majority of content there’s English, I think a quarter of the content is English, followed by Chinese,” she said. “Albanian is a minority. It’s very questionable for me how well that actually works for a small country like Albania and like an outlier language, because there’s just not much data you can train a model on. And if you don’t have much data, then the outputs will be very messy.”



Then there’s security and data risks with allowing foreign companies access to citizen data, Parikh said. Even the U.S., with all its resources, has been vulnerable to data hacks, including a recent February incident with contractor CGI Federal which exposed personally identifiable information on employees. The recent battle between the U.S. and China over TikTok is an example of how control of sensitive consumer data can be interjected into geopolitics. “I think certainly that’s a concern going forward for countries who are working with vendors from different countries,” Parikh said.

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featured

Nearly 55 million people face hunger in West and Central Africa

South African rand weakens against strong dollar

IMF head says higher US rates could become a worry if they persist

Ethiopia faces tough devaluation decision to secure IMF bailout

WeBuyCars marks South African market debut with share price rise

China will remain the world’s No. 1 growth driver, says the Asian Development Bank

U.S. consumer prices rose 3.5% from a year ago in March, more than expected

A crucial report Wednesday is expected to show little progress against inflation

World Bank unveils new scorecard to measure accountability

Ugandan foreign exchange reserves drop 12% due to debt payments

‘They can’t get it wrong again’: Economists are increasingly uncertain about Fed rate cuts this year

US must boost Africa ties to secure key minerals, report says

Southern Africa faces hunger as el Nino drought kills crops

Zimbabwe’s new ZiG currency starts trading, credibility doubts linger

Sub-Saharan Africa growth not enough to dent poverty, says World Bank

Jamie Dimon says AI may be as impactful on humanity as printing press, electricity and computers

Oracle’s Larry Ellison thinks every government will want to build a ‘sovereign’ AI cloud in the future

News Tips

Advertise With Us

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