South Africa’s economy faces major challenges and government needs to win back the confidence of businesses and investors by tackling policy uncertainty and corruption, central bank governor Lesetja Kganyago said on Thursday.
<img loading="lazy" decoding="async" class="aligncenter wp-image-22134 size-full" src="http://cnbc.africa/wp-content/uploads/2017/01/lesetja_kganyago_sarb.jpg" alt="S.Africa cbank's Kganyago says little policy space to boost demand" width="800" height="612" />
Kganyago said in a speech at an investor conference in New York that weak business confidence had shaved an estimated one percentage point off South Africa’s economic growth last year.
He said that the central bank would like to see inflation expectations anchored at around 4.5 percent, compared with 5.1 percent now. The volatile rand currency is the biggest risk to inflation forecasts, Kganyago said.
“Inflation today in South Africa is within the target. The highest it should be in terms of our forecast is 5.2 percent,” he said in a subsequent interview with Reuters.
“That gives us room within the inflation target band&#8230;Inflation could rise but would remain within our inflation target,” Kganyago said.
The Governor of the South African Reserve Bank deflected questions on where he thought interest rates would move, saying there is no target.
The central bank kept its benchmark repo rate at 6.75 percent on Sept. 21, defying expectations at the time of a cut based upon easing inflation pressures and a sluggish recovery from a recession in the first half of the year.
“Everybody talks about are you close to neutral or off neutral? When the world over, nobody knows what neutral is because the world as we know it is different from the world we knew before the global financial crisis. Everybody is trying to find neutral,” he said.
The central banker, in his position since 2014, said that inflation would remain in the 3 to 6 percent target zone for the next two years.
“We are currently at 4.8 percent and the outlook is that inflation will average 5 percent this year. But we still expect to reach the bottom of 4.6 percent in the first quarter of next year. Over the policy horizon of 2018 and 2019, the highest inflation will be is 5.2 percent for the year,” he said.
With inflation remaining subdued, Kganyago also highlighted the improvements in the narrowing current account deficit. He said indications are that for the third quarter it should remain, at worst in the 2 percent area.
”And at best could actual decline as low as 1 percent.
<div class="Attribution_attribution_o4ojT" data-reactid="57">
Reporting by Joe Brock in Johannesburg and Dnaiel Bases in New York; Editing by Toby Chopra and Grant McCool
</div>

South Africa’s economy faces major challenges: central bank head

Zandre Campos | ABO Capital
The history of the African continent is long and complicated and it has impacted the current generation of Africans. Today, many Africans tend to have a very negative mentality. Despite the fact that Africa has a growing consumer market, a rapid evolution in technology, and robust growth prospects, people still tend to focus on the negative.
In order for Africa to become a global leader, the mindset of its inhabitants needs to change. Positive attitudes help maximize performance and often have a ripple effect on others. African’s need to stop focusing on the destructive history of the continent and the undesirable elements that still remain. Instead they need to focus on the aspects that make Africa the great place it is and the will help move the continent forward.
Diversification
The oil crisis has forced the oil-producing countries to face some serious financial difficulties. But, it also forced them to look into different forms of revenue and diversify their economies. There are several industries in Africa that can be developed and help propel growth including tourism, healthcare, industrialization and agriculture. The decreased oil prices are the motivation countries need to push Africa to the top of the global economy.
New Leadership
People are often afraid of change, but it can be a good thing. New leadership can infuse countries with the motivation needed to move forward. Angola recently elected a new President after 38 years, and instead of focusing on the constructive impact the new leader may have, Angolans are reluctant and doubtful that it will bring any positive change. The new president, João Lourenço, is 63 and younger than Angola’s previous president and many other African presidents. Lourenço has been involved in the political environment, but avoided corruption scandals, and has enough experience to bring Angola and Africa to the next level. He can help Angola continue to follow the growth path it has been on. A younger president is good for a country because they look at problems in different ways and bring a level of freshness to the position. Angolans should consider that a new leader will help rejuvenate the country and improve the economic condition.
Growing, Young Population
While the rest of the world is aging, Africa is young. <a href="https://www2.deloitte.com/content/dam/Deloitte/ng/Documents/consumer-business/the-deloitte-consumer-review-africa-a-21st-century-view.pdf">Deloitte</a> found that 20% of the population, or some 200 million people, are between the ages of 15 and 24, and that figure is expected to rise to 321 million by 2030. A working-age population is associated with favorable rates of GDP growth and Africa is expected to have the world’s largest working-age population of 1.1 billion people by 2034, according to the <a href="https://www.weforum.org/agenda/2016/05/what-s-the-future-of-economic-growth-in-africa/">World Economic Forum</a>.
Urban Expansion
Over the next decade, 187 million Africans will live in cities where productivity is three times higher than in rural areas. Past urban expansion led to increased household and business consumption. Between 2010 and 2015 household consumption grew faster than the continent’s GDP growth rate. Consumers are expected to continue spending more money and urbanizing which helps diversify and strengthen economies.
African Entrepreneurialism
The entrepreneurial spirit in Africa is booming. Because of the massive job losses following the Great Recession, many Africans returned home and developed an entrepreneurial spirit because of the lack of native jobs. Entrepreneurism is high in Rwanda, where businesses can be started in 48 hours, compared to other countries where it takes an average of 11.1 days. Rwanda’s economy was paralyzed after the Genocide, but their GDP is expected to rise 7.5% this year alone, according to <a href="http://eng.imirasire.com/Report/article/rwanda-ranked-the-6th-with-the">Imirasire.com</a>.
Europe and several other continents have histories that are full of strife. Germany currently has the strongest economy in Europe, but that was not the case following WWII and the collapse of the Berlin Wall. Germany and other countries and continents have been able to leave the past behind and move forward and there are several reasons for Africans to do the same. Instead of focusing on the negative aspects associated with the continent’s history, Africans should look forward and focus on all the reasons the continent will prosper. Changing mentalities is necessary to achieve a complete economic transformation. When the mentality is changed, Africa will flourish and impact the world.

Op-Ed: Change an African’s Mentality, Change the Continent

<div style="display: block; position: relative; max-width: 640px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5489126481001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
In efforts to support Africa’s growth, manufacturer of heavy machinery, CAT made a commitment with dealers to invest more than $1 billion in the continent between 2017 and 2021.

CAT to invest $1billion in Africa by 2021

JOHANNESBURG (Reuters) &#8211; The steep decline in South Africa&#8217;s business confidence is a setback to economic growth recovery and will dampen investment, ratings agency Moody&#8217;s said on Monday.
&#8220;Reduced business confidence implies reduced investment, which would negatively affect growth in South Africa’s already-weak economy, and will ultimately make fiscal consolidation more challenging,&#8221; Moody&#8217;s senior analyst Zuzana Brixiova said in a research note.
(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)
&nbsp;

South Africa’s low business confidence setback to growth recovery: Moody’s

Olivia Kumwenda-Mtambo | JOHANNESBURG
South Africa&#8217;s recession took economists by surprise, but for clothing shop owner Hans Setlhabi the gloomy numbers confirmed what he already knew &#8211; chronic unemployment and lofty inflation have shattered consumer confidence.
&#8220;I wasn&#8217;t surprised to hear about the recession. I saw that the economy was going down last year,&#8221; said 38-year old Setlhabi, staring at shelves piled high with clothes offered at discount prices.
&#8220;People don&#8217;t have money and for those who come in, they buy cheaper items and not the expensive ones.&#8221;
South Africa sank into recession for the first time in eight years in the first quarter, hit by weakness in consumer sectors such as wholesale, retail and accommodation.
The economic turmoil is piling pressure on President Jacob Zuma, who faces calls to step down from within the ruling African National Congress (ANC) as a string of corruption scandals, party infighting and sky-high unemployment erode public support ahead of elections in 2019.
The persistence of poverty and joblessness 23 years after the end of apartheid is also stoking anger, with unrest dubbed &#8220;service delivery protests&#8221; &#8212; taking place frequently.
Unemployment is at a 14-year high of 27.7 percent.
The government&#8217;s response to the gradually building economic crisis is due to be laid out later this week when Finance Minister Malusi Gigaba briefs the media how he will address the economic challenges.
Economists had expected the economy to expand, helped by a recovery in mining and agriculture, but surprise contractions in the rest of the economy led it to shrink.
Rising unemployment, high interest rates and a drop in purchasing power after a drought last year have all driven consumer prices up and hammered consumer confidence.
&#8220;I used to go into a shop and fill a trolley with groceries to last my family a month but that&#8217;s not happening anymore,&#8221; said 68-year old Mabule Modiba, a retired salesman who recently started driving a taxi to make ends meet.
&#8220;I thought I was done working, but now I also have to look after my grandchildren because my kids don&#8217;t have jobs.&#8221;
South Africa&#8217;s inflation rose to 7 percent early 2016, breaching the central bank&#8217;s target of 3-6 percent, but has now eased to 5.3 percent as food price rises slow.
The Treasury has said the recession introduced &#8220;significant downward bias&#8221; to this year&#8217;s growth estimate of 1.3 percent, up from 0.3 percent in 2016. It means growth is more likely to fall than rise.
It also said that any policies introduced to combat the recession would be made within the current budget framework, in which South Africa aims to cut its budget deficit to 3.3 percent of national output in the next three years from the current 3.8 percent.
ZUMA&#8217;S PROMISE
To stem falling voter support for the ANC, Zuma has vowed to redistribute economic wealth to the poor, but this will be almost impossible with an economy contracting.
The ANC lost major cities in its worst ever local election results last year and opposition parties are becoming increasingly confident of ousting the party of Nelson Mandela at a parliamentary vote in 2019.
&#8220;What (the recession) does do is show what is at stake,&#8221; Nomura analyst Peter Attard Montalto said.
&#8220;If there can’t be reform, we are on this path where the ANC will lose power because they cannot create jobs.&#8221;
Unbridled lending fuelled a consumer frenzy that helped the South African economy grow by an average 5 percent a year in the five years before the 2009 recession.
But stricter lending rules since 2015, which require borrowers to produce bank statements and proof of income before retailers can grant them in-store credit accounts, have excluded some from buying on credit.
Results from clothing and furniture retailers such as Mr Price, Truworths and The Foschini Group show they have lost a combined total of 1 billion rand ($78 million) in sales since new rules were implemented.
Active credit accounts fell to 54 million in the first three months of the year, from a high of nearly 58 million in 2015.
&#8220;Consumers had to become conservative and try to live within their means, given the high risk that the economic environment could deteriorate further,&#8221; said Elize Kruger, an economist at NKC African Economics.
There is no relief in sight for traders like Setlhabi after a central bank official said cutting interest rates was not the answer to dragging South Africa out of recession. 
&#8220;I don&#8217;t see myself surviving if the economy doesn&#8217;t pick up,&#8221; Setlhabi said.
&#8220;If nothing changes in the next two to three years, then I will have to sell the shop.&#8221;
($1 = 12.8976 rand)
(Additional reporting by TJ Strydom and Olwethu Boso; Editing by Joe Brock/Jeremy Gaunt)
&nbsp;

For South Africans, economic pain hit long before recession

BERLIN (Reuters) &#8211; The Organisation for Economic Co-operation and Development (OECD) and the African Development Bank (AfDB) expect economic growth in Africa to pick up this year and next.
Presenting their latest forecasts at the sidelines of a G20 Africa summit in Berlin, both organisations forecast gross domestic product (GDP) to expand by 3.4 percent this year after 2.2 percent in the previous year.
For 2018, OECD and AfDB expect the upturn to gain further momentum with a predicted expansion rate of 4.3 percent.
(Reporting by Gernot Heller; Writing by Michael Nienaber; Editing by Andrea Shalal)
&nbsp;

Growth in Africa to pick up this year and next: OECD & AfDB

The idea that the economic “pie” can grow indefinitely is alluring. It means everybody can have a share without limiting anybody’s greed. Rampant inequality thus becomes socially acceptable because we hope the growth of the economy will eventually make everybody better off.
In my <a href="http://panmacmillan.co.za/catalogue/wellbeing-economy/">new book</a> “Wellbeing Economy: Success in a World Without Growth” I point out that the “growth first” rule has dominated the world since the early 20th century. No other ideology has ever been so powerful: the obsession with growth even cut through both capitalist and socialist societies.
But what exactly is growth? Strangely enough, the notion has never been reasonably developed.
For common sense people, there is growth when – all things being equal – our overall wealth increases. Growth happens when we generate value that wasn’t there before: for instance, through the education of children, the improvement of our health or the preparation of food. A more educated, healthy and well-nourished person is certainly an example of growth.
If any of these activities generate some costs, either for us individually or for society, we should deduct them from the value we have created. In this logical approach, growth equals all gains minus all costs.
Paradoxically, our model of economic growth does exactly the opposite of what common sense suggests.
<h2>Negative values of growth</h2>
Here are some examples. If I sell my kidney for some cash, then the economy grows. But if I educate my kids, prepare and cook food for my community, improve the health conditions of my people, growth doesn’t happen.
If a country cuts and sells all its trees, it gets a boost in GDP. But nothing happens if it nurtures them.
If a country preserves open spaces like parks and nature reserves for the benefit of everybody, it does not see this increase in human and ecological wellbeing reflected in its economic performance. But if it privatises them, commercialising the resources therein and charging fees to users, then growth happens.
Preserving our infrastructure, making it durable, long-term and free adds nothing or only marginally to growth. Destroying it, rebuilding it and making people pay for using it gives the growth economy a bump forward.
Keeping people healthy has no value. Making them sick does. An effective and preventative public healthcare approach is suboptimal for growth: it’s better to have a highly unequal and dysfunctional system like in the US, which accounts for <a href="http://www.pbs.org/newshour/rundown/health-costs-how-the-us-compares-with-other-countries/">almost 20% of the country’s GDP</a>.
Wars, conflicts, crime and corruption are friends of growth in so far as they force societies to build and buy weapons, to install security locks and to push up the prices of what government pays for tenders.
The earthquake in <a href="https://www.theguardian.com/environment/2017/feb/03/fukushima-daiichi-radiation-levels-highest-since-2011-meltdown">Fukushima</a> like the <a href="https://www.theguardian.com/environment/2011/apr/20/deepwater-horizon-key-questions-answered">Deep Water Horizon oil spill</a> were manna for growth, as they required immense expenditure to clean up the mess and rebuild what was destroyed.
<h2>Disappearing growth</h2>
Against this pretty grim depiction, you may ask yourself: where is the good news? Well, the good news is that growth is disappearing, whether we like it or not. Economies are puffing along. Even China, the global locomotive, is <a href="https://www.theguardian.com/business/2017/jan/20/chinese-economic-growth-dips-to-67-the-slowest-for-26-years">running out of steam</a>.
And consumption has reached limits in the so-called developed world, with fewer buyers for the commodities and goods exported by developing countries.
Energy is running out, particularly fossil fuels, and even if polluting energy sources were endless – as some supporters of shale gas, or fracking, suggest – global agreements to fight climate change require us to eliminate them soon.
As a consequence, mitigating climate change forces industrial production to contract, thus limiting growth even further. What this means is that, on the one hand, growth is disappearing due to the systemic contraction of the global economy. On the other, the future of the climate (and all of us on this planet) makes a return of growth, at least the conventional approach to industry-driven economic growth, politically and socially unacceptable.
<h2>Window of opportunity for change</h2>
Even the <a href="http://www.independent.co.uk/news/business/news/imf-fears-global-economy-is-suffering-secular-stagnation-10161154.html">International Monetary Fund</a> and mainstream neoliberal economists like Larry Summers agree that the global economy is entering a “<a href="https://blogs.wsj.com/economics/2017/05/25/secular-stagnation-even-truer-today-larry-summers-says/">secular stagnation</a>”, which may very well be the dominant character of the 21st century.
This is a disastrous prospect for our economies, which have been designed to grow – or perish. But it is also a window of opportunity for change. With the disappearance of growth as the silver bullet to success, political leaders and their societies desperately need a new vision: a new narrative to engage with an uncertain future.
In my new book, I argue that as we begin to recognize the madness behind growth, we start exploring new paths. These include: forms of business that reconcile human needs with natural equilibria; production processes that emancipate people from the passive role of consumers; systems of social organisation at the local level that reconnect individuals with their communities and their ecosystems, while allowing them participate in a global network of active change makers.
This is what I call the “wellbeing economy”. In the wellbeing economy, development lies not in the exploitation of natural and human resources but in improving the quality and effectiveness of human-to-human and human-to-ecosystem interactions, supported by appropriate enabling technologies.
<h2>Fulfilling lives</h2>
Decades of research based on <a href="https://www.amazon.com/Happiness-Lessons-Science-Richard-Layard/dp/0143037013">personal life evaluations</a>, <a href="http://www.springer.com/cn/book/9783319391007">psychological dynamics</a>, <a href="http://www.adultdevelopmentstudy.org/">medical records</a> and <a href="http://www.millenniumassessment.org/en/index.html">biological systems</a> have produced a considerable amount of knowledge about what contributes to long and fulfilling lives.
The conclusion is: a healthy social and natural environment. As social animals, we thrive thanks to the quality and depth of our interconnectedness with friends and family as well as with our ecosystems. But of course, the quest for wellbeing is ultimately a personal one.
Only you can decide what it is. This is precisely why I believe that an economic system should empower people to choose for themselves. Contrary to the growth mantra, which has standardised development across the world, I believe an economy that aspires to achieve wellbeing should be designed but those who live it, in accordance with their values and motives.
This article is part of a series to be published following the release of Lorenzo Fioramonti’s <a href="http://panmacmillan.co.za/catalogue/wellbeing-economy/">new book</a>: Wellbeing Economy: Success in a World Without Growth (MacMillan South Africa).

Op-Ed: Growth is dying as the silver bullet for success. Why this may be good thing

Elias Biryabarema | NAIROBI
The International Monetary Fund has slashed its projection for Burundi&#8217;s economic growth this year to nil and projected just 0.1 percent in 2018.
It gave no specific reason for the 2017 revision from 2 percent, but Burundi has been suffering from a severe drought like much of the wider region.
The poor, central African nation&#8217;s economy has also been battered by almost two years of political instability triggered by President Pierre Nkurunziza&#8217;s decision to seek a third term.
He secured re-election in July 2015 but some of his opponents who insist extension of his rule violated the country&#8217;s constitution
The government has said it expects the economy to expand by 2.9 percent this year after shrinking in 2016.
But continuing instability has forced Burundi to rely on modest revenues from coffee and tea exports for foreign exchange after some western donors who blame the government for not acting to end the violence suspended aid.
http://cnbc.africa/news/east-africa/2016/07/22/burundi-faces-foreign-exchange-shortage/
(Writing by Elias Biryabarema; editing by Duncan Miriri/Jeremy Gaunt)

IMF paints bleak picture for struggling Burundi

Uncertainty over government policies and a slowdown in the private sector cut Tanzania&#8217;s gross domestic product growth to an estimated 6.9 percent in 2016 from 7.2 percent the previous year, the World Bank said on Tuesday.
Growth is still supported by substantial government investment in infrastructure, including a standard gauge railway, new roads and expanding the ports.
But investors have been unnerved by unpredictable policies from the government of President John Magufuli, nicknamed &#8220;The Bulldozer&#8221; for his pugnacious governing style. A steep drop in money supply and a spike in non-performing loans have also hampered private sector credit growth.
&#8220;Policy adjustments, if they occur frequently, could cause uncertainty for the private sector, and this uncertainty could dampen private sector investment decisions,&#8221; the World Bank said in its latest economic update for Tanzania.
&#8220;The government should pay more attention to, and be more explicit about, the potential unintended consequences of government policies on the private sector.&#8221;
It said Tanzania&#8217;s economic growth in 2016 probably slowed to 6.9 percent, slightly below the government forecast of 7.2 percent. Government officials were not immediately available for a comment.
Tanzanian banks have tried to shield themselves against a steep rise in non-performing loans by creating a large buffer in the form of high interest rates, increasing the cost of borrowing, it said.
The World Bank said government cost-cutting measures, including restricting travel for officials, could hurt the private sector.
&#8220;Government meetings in tourist resorts have been banned &#8211; an example of how public administration reforms could also impact the private sector, which relies significantly on government demand,&#8221; it said.
After coming into office in November 2015, Magufuli launched a crackdown on tax evasion targeting large companies. Some foreign investors say they could now scale back operations or expansion plans because of tougher demands placed on firms, including higher tax bills.
&#8220;The negative business sentiment indicators point to the need for the government to promptly engage in public-private dialogue on investment climate,&#8221; the bank said.
(editing by Katharine Houreld/Jeremy Gaunt)

Tanzania’s economic growth slowed by policy uncertainty: World Bank

<a href="http://www.cnbc.com/jon-fortt/" rel="author">Jon Fortt</a> | <a href="http://twitter.com/@jonfortt">@jonfortt</a>
Among the many business lessons Jeff Lawson has learned, there&#8217;s this: Don&#8217;t expect to get things done if you wait until you&#8217;re perfectly prepared.
Lawson is co-founder and CEO of <a class="inline_quotes" href="http://data.cnbc.com/quotes/TWLO" target="_self" data-gdsid="160228" data-inline-quote-symbol="TWLO">Twilio</a>, a company that makes it easy for apps to contact you. (Ever wonder how you can send a text to your Uber driver in the app, or get one in OpenTable when your seat is ready? Twilio does that.)
Twilio went public last summer at the New York Stock Exchange, and is now worth about $2.5 billion. As it pushes to make apps communicate better, the scrappy San Francisco company has developed a culture that favors boldness and taking initiative, and frowns on perfectionism.
Fortt Knox caught up with Twilio&#8217;s CEO at a tech conference in Barcelona, Spain to talk about his journey from curious kid in the Detroit suburbs to CEO of a public tech company. Among the things our podcast loves about Lawson&#8217;s story?
It&#8217;s about the setbacks as much as the successes, and learning along the way.
Here&#8217;s some of what he shared on the latest episode:
https://soundcloud.com/forttknox/lawson
Ask for the Keys
Lawson likes to tell a story about his grandfather, who worked in a factory and needed to earn more money.
&#8220;He went to the owner and he said, &#8216;I need to make more money, how do I do that,'&#8221; Lawson said. &#8220;The guy said &#8216;I don&#8217;t have any other jobs. The only job I have is driving the truck. Do you know how to drive the truck?&#8217; My grandfather&#8217;s answer was, &#8216;Give me the keys.'&#8221;
What his grandfather didn&#8217;t mention was that he&#8217;d never driven a truck before in his life. But he got the job, figured it out, made more money.
Chalk it up to genetics or coincidence, but in middle school Lawson started a company shooting video footage of weddings. Then, he used the proceeds to buy more sophisticated equipment.
&#8220;The best way to learn something new,&#8221; he said, &#8220;is to commit yourself to doing it.&#8221;
You&#8217;ve Got to Love It
There were some false starts. In college during the dotcom boom, Lawson learned software development and started a company that sold for millions of dollars … in stock. He thought he&#8217;d made it big, but when the bubble popped, his windfall vanished.
Later, he got the opportunity to be founding chief technology officer of StubHub, a ticket sales company that would later sell to eBay for $310 million. But Lawson didn&#8217;t stick around for the payoff.
&#8220;It was a fine business, but I wasn&#8217;t the customer and I didn&#8217;t feel passionately that the world needed the product we were building.&#8221; He wasn&#8217;t a concert goer, so he didn&#8217;t feel inspired to keep working on it. &#8220;As an entrepreneur, I think you need that.&#8221;
Hindsight being what it is, it&#8217;s easy to fault Lawson for missing his share of a nine-figure payday. But remember, he&#8217;s got a share of a 10-figure payday in Twilio.
Knowledge and Reputation
So how did Lawson do it? How did he rebound from a missed nine-figure payday cleanly enough to do himself one better? First he made another valuable mistake or two, which you&#8217;ll learn about listening to this Fortt Knox episode.
More important though, he was able to focus on the two most important assets he was building in each of these experiences.
&#8220;The best thing that we have as we go through our careers is our knowledge and our word – our reputation,&#8221; Lawson says. &#8220;If you&#8217;re constantly building those two things, I think generally speaking, good things end up happening to people.&#8221;
http://cnbc.africa/news/international/2017/03/17/warren-buffetts-20-slot-rule-will-make-insanely-successful-wealthy/

First get started, then get smarter – Founder-CEO’s secret to success

By Kwasi Kpodo
Ghana&#8217;s central bank slashed its benchmark interest rate on Monday by two percentage points to 23.5 percent, noting signs inflation was trending downwards, in a move that may help spur lending and business activity.
Ghana was for years one of Africa&#8217;s fastest-growing economies but growth slumped in 2014 due to falling commodities prices, high inflation, a big budget deficit and public debt. As inflation eases, the bank can lower the cost of borrowing.
The size of Monday&#8217;s rate cut came as a surprise. It was the biggest by the bank since December 2006 and follows a 50 basis-point reduction in January.
<blockquote>&#8220;The (Monetary Policy) Committee noted that underlying inflation pressures have eased considerably and inflation is projected to trend downwards toward the medium term target,&#8221; Bank of Ghana Governor Nashiru Issahaku told a news conference.</blockquote>
The central bank has a medium-term inflation target of 8 percent, plus or minus 2 percentage points.
&#8220;There are indications that growth is likely to remain significantly below potential which, alongside an improved inflation outlook, provides some scope for monetary policy easing,&#8221; Issahaku said.
Ghana&#8217;s government took power on Jan. 7 and inherited a weak macro-economic position. It says stabilising the national finances is a top priority and a prerequisite for restoring rapid economic growth through a boost to the private sector.
The Bank is independent but Monday&#8217;s reduction serves President Nana Akufo-Addo&#8217;s purpose to find ways to stimulate private sector growth, economists said.
It is unlikely, however, to lead to a reduction of commercial rates in the short term in part because a gap remains between the bank rate and the benchmark 91-day treasury bill, which stood at 17.5103 percent on Friday, economists said.
&#8220;There was a huge mismatch that had to be corrected &#8230;. (But) in the real world, not much has changed,&#8221; said Joe Jackson of Dalex Finance, a non-bank financial institution in Accra.
&#8220;Commercial bank lending rates will not come down. The challenge is that the fundamentals haven&#8217;t changed,&#8221; he said.
Inflation stood at 13.2 percent in February, but the government said it is confident it can meet its 2017 end-year inflation target of 11.2 percent. There was little movement in the cedi against the dollar, which stood at 4.3650 at 1357 GMT.
The government is to renegotiate targets set in a $918-million International Monetary Fund programme aimed at helping Ghana stabilize its economy.
(Writing by Matthew Mpoke Bigg; Editing by Tom Heneghan)

Ghana central bank slashes benchmark interest rate

Dakar, Senegal &#8211; The fast rate at which Africa is urbanising– one of the fastest in the world – is giving African decision and policy makers an opportunity to rethink the path urbanization has so far trod on and chose one which will contribute to Africa achieving the continental targets for inclusive growth and transformation.
The Economic Report for Africa 2017, which was launched this weekend during the Africa Development Week – with the theme “Urbanization and Industrialization for Africa’sTransformation” – says that Africa has so far followed its own path of urbanization, which is weakly linked to structural transformation. This has resulted in the loss of many opportunities for enhanced growth and productivity, for poverty reduction and for social development.
“Urbanization in many African countries has not been driven by improving agricultural productivity,” says the Report. “Most countries are urbanizing rapidly amid declining or stagnant industrial output and low agricultural poverty.”
But with Africa now approaching 50% urbanization, governments at all levels have to make hard choices for the scale and type of investments they need to make, and for the spatial pattern and urban form they want to see, says the Report.
Governments are encouraged to take advantage of the changing patterns of urban consumption and rising demand for manufactured and processed goods to conceive and implement industrialization policies to cater for such needs. The largely unmet urban housing needs also provide an opportunity to improve living conditions and generate construction and service jobs.
The report argues that because of its multi-dimensional implications, urbanization should be anchored in national development plans that would harness it through a strategic cross-sectoral policy framework.
Governments also need to better manage urban form, improve public land management and the efficient functioning of property markets, streamline social housing programs, prioritize strategic infrastructure investments and place industry at the front rank for local economic development, says the Report.
It would also be important to back urbanization and industrialization policies by financing and institutional set ups that allow for coordinated implementation and budgetary support.
Capacity building should also be givenconsideration in urbanization and industrialization projects since the paucity of knowledge and evidence remains one of the biggest challenges in harmonizing urban and industrial development. “It is vital to develop tools to guide policy makers, planners and practitioners in formulating and implanting urban and industrial policies in a coordinated way, as they focus on national targets of growth and transformation,” concludes the Report.

African Development Week: Africa’s tough choices for urbanization

Nigerian lawmakers aim to pass the 2017 budget by the end of March, the president of the upper house of parliament said on Tuesday, following a meeting with President Muhammadu Buhari.
The budget lays out plans to pull Africa&#8217;s largest economy out of its first recession for 25 years, largely prompted by low global prices for the oil it produces and by attacks on energy facilities in the OPEC member&#8217;s Niger Delta oil hub last year.
Buhari, a 74-year-old former military ruler who has faced rising disenchantment over his handling of Nigeria&#8217;s economy, presented his record 7.298 trillion naira ($23.21 billion) budget to lawmakers in December.
&#8220;This month is our deadline to finish work on the budget and return it to the executive,&#8221; Senate President Bukola Saraki said after the meeting with Buhari and the head of parliament&#8217;s lower house. &#8220;We are working very hard to ensure we meet that deadline.&#8221;
The budget must be agreed by lawmakers before the president can sign it into law.
The 2016 budget became law in May last year after being delayed by several weeks of wrangling between the government and the Senate.
Saraki said he had also briefed Buhari at their meeting on the activities of parliament during the president&#8217;s lengthy absence due to illness.
Buhari resumed his presidential duties on Monday after spending seven weeks in Britain on medical leave for an undisclosed ailment.
Saraki said the issues discussed with Buhari had included &#8220;stability in the Niger Delta&#8221; and the $1 billion Eurobond issued by Nigeria last month.
Vice President Yemi Osinbajo drove policy implementation in Nigeria, Africa&#8217;s most populous nation, during Buhari&#8217;s absence.
($1 = 314.5000 naira)
(Writing by Alexis Akwagyiram; Editing by Gareth Jones)

Nigeria aims to pass 2017 budget by end of March

S&amp;P Global Ratings reiterated its concerns on Tuesday about weak economic growth, political tensions and policy reform in South Africa, which faces the prospect of downgrades to its sovereign credit ratings which would raise the cost of borrowing.
The political temperature has been rising in Africa&#8217;s most industrialised economy ahead of the ruling African National Congress (ANC) party&#8217;s key policy and leadership conferences this year, to chart the country&#8217;s economic and political course. A successor to President Jacob Zuma as head of the party is due to be elected at the ANC&#8217;s conference in December.
&#8220;If we see a lot increasing political tensions, infighting in state institutions which could derail the government’s plans in boosting economic growth then that can impact on our forecasts on growth,&#8221; Gardner Rusike, S&amp;P associate director told a conference.
S&amp;P has cited &#8220;political turmoil and tension&#8221; before and the issue clearly remains high on the investment radar screen.
Growth has also been a persistent concern. South Africa&#8217;s economy grew by 0.3 percent in 2016 versus 1.3 percent in 2015, well short of the government&#8217;s target of 5 percent.
(Reporting by Olivia Kumwenda-Mtambo; Writing by Ed Stoddard; Editing by James Macharia)
&nbsp;

S&P reiterates growth, policy & politics as concern to South Africa rating

The breaking news on the evening of the 07 March 2017, was that R24 million had been stolen from a plane at O.R Tambo International Airport.
The armed robbery occurred around 7:45 pm. The robbers had disguised themselves as uniformed police and carried fake ACSA permits.
The previous large heist at O.R Tambo happened in 2006, and involved R100 million in foreign currency. ACSA has
In the age of social media, Twitter was flooded with tweets about this tragic event. OR Tambo is the most important point-of-entry by air in Southern Africa and it is the regional hub for Southern Africa, with millions of visitors passing through it.
The World Economic Forum’s Travel &amp; Tourism Competitiveness Report always highlights that safety and security concerns as among the key reasons for a dampened demand for travel to South Africa.  Low levels of personal safety and security therefore lead tourists to consider other destinations, and this robs the country of the developmental potential of tourism.
The recent acts of xenophobia do very little to create confidence in the country for citizens and tourists. A country that cannot manage its internal affairs such as safety and security, and has Internally Displaced People (IDPs) because of xenophobic violence, becomes a failed state. Tourism is able to create labour intensive jobs because the growth of tourism leads to more jobs. The low barriers of entry for the majority of
On the other hand, tourism leads to more jobs and that in turn leads to economic growth. The low barriers of entry for the majority of tourism-related sectors means that it’s attractive for entrepreneurial activity for small and medium enterprises that create jobs at a faster pace. While the latest news is that the South African economy contracted in the fourth quarter of 2016, the tourism industry is oblivious to that reality as perennial growth is the order of the day. In 2016, tourism achieved a compounded growth of 13%, which is unheard of in a country that is struggling to achieve a mere 1% growth rate. Tourism has succeeded in a difficult enabling environment, whilst other sectors such as mining have experienced perennial decline further exacerbated by low commodity prices, and labour instability that had increased the cost of labour. Tourism has outperformed all
In 2016, tourism achieved a compounded growth of 13%, which is unheard of in a country that is struggling to achieve a mere 1% growth rate. Tourism has succeeded in a difficult enabling environment, whilst other sectors such as mining have experienced decline further exacerbated by low commodity prices and labour instability, which has also increased the cost of labour. Tourism has outperformed all
Tourism has outperformed all other economic sectors in South Africa for more than 10 years, and today is the number one foreign exchange earner, hence we call tourism the ‘’new gold’’. Our economy has changed, moving from production (mining, manufacturing) towards consumption (tourism, banking) which are services located in the tertiary sector of the economy, which are experiencing an upward trajectory in growth. South Africa must spend more time and resources in sectors of the economy that have more of a competitive advantage, and tourism is such a sector. South Africa is arguably the most beautiful country in the world, as we have the natural resource base above the soil to attract the world, as South Africa is basically a ‘’World in One Country’’. A favourable visa system remains a major stumbling block for tourists that wish to travel to South Africa. For many Africans, it’s much
However, an unfavourable visa system remains a major stumbling block for tourists who wish to travel to South Africa. For many Africans, it’s much easier to get an American visa than a South African visa, which means that business tourism events such as continental meetings are being taken to other African countries because South Africa is increasingly being seen as an impenetrable fortress.
Opportunities for shopping and leisure tourism are being missed. Just the previous week, the tourism industry had descended at Sandton Convention Centre for the business tourism exhibition #MeetingsAfrica17, where South Africa was showcasing its open for business tourism, a market that is high yield and not price elastic. The Department of Home Affairs must be commended for the 90 days visa-free travel between South Africa and Russia. This means that Russians can be actively attracted to destination South Africa.
Air access to bring more flights to South Africa would ensure that tourism increases its growth from 13% to possibly 50% if a more favourable environment is created for tourism. This crisis must not let us despair, it is pregnant with opportunities to demand a Commission of Inquiry into what happened at the OR Tambo International Airport. This is once again an opportunity for the tourism industry to indicate that the Tourism Safety Initiative (TSI) demands that we work closely to ensure safety and security for our tourist across the tourism value chain. An improvement in the safety and security for tourism primarily benefit the locals who will have better policing. The Tourism Crisis Management Plan must now kick-off as we seek to restore confidence in South Africa.
&nbsp;
Unathi Sonwabile Henama teaches tourism at Tshwane University of Technology and writes in his personal capacity.

Op-Ed: Will massive O.R Tambo heist affect tourism to South Africa?

Activity in Kenya&#8217;s private sector barely grew last month as slower credit growth and an ongoing drought in the country weighed on output, hiring and sales, a survey showed on Friday.
The Markit Stanbic Bank Kenya Purchasing Managers&#8217; Index (PMI) dropped to 50.1, a record low since the survey began in January 2014, down from 52.0 in January. A reading above 50.0 marks growth.
&#8220;The ongoing drought and decline in private sector credit access will inevitably lead to deterioration in business conditions within the Kenyan private sector,&#8221; said Jibran Qureishi, regional economist for East Africa at Stanbic.
Like other countries in the region, Kenya is experiencing a drought that has hurt farming and left millions in need of food aid. Qureishi said if there is inadequate rainfall from next month, firms will face a tougher situation.
&#8220;This month&#8217;s historic low reading is symptomatic of these risks that we are flagging&#8230; we may potentially see an entrenched slowdown within the business operating environment,&#8221; he said.
Private sector credit growth, which started weakening at the end of 2015 after the central bank toughened supervision, stood at 4.3 percent in December, the central bank said, far below the double-digit growth rate it considers ideal.
 
Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.
To subscribe to the full data, click on the link below: <a href="http://www.markit.com/Contact-Us">www.markit.com/Contact-Us</a>
For further information, please phone Markit on +44 20 72602454 or email economics@markit.com
 
(Reporting by Duncan Miriri; Editing by Toby Chopra)﻿

Kenya private sector activity slows down due to drought

Nigeria&#8217;s gross domestic product contracted by 1.5 percent in 2016, the National Bureau of Statistics said on Tuesday
Africa&#8217;s largest economy slid into recession for the first time in 25 years in the second quarter of 2016 as a slump in crude prices hammered the OPEC member&#8217;s public finances. Crude sales make up two-thirds of government revenue.
Fourth quarter output shrank by 1.3 percent, the statistics office said.
 
(Reporting by Chijioke Ohuocha and Ulf Laessing)﻿

growth

South Africa’s economy faces major challenges: central bank head

Op-Ed: Change an African’s Mentality, Change the Continent

CAT to invest $1billion in Africa by 2021

South Africa’s low business confidence setback to growth recovery: Moody’s

For South Africans, economic pain hit long before recession

Growth in Africa to pick up this year and next: OECD & AfDB

Op-Ed: Growth is dying as the silver bullet for success. Why this may be good thing

IMF paints bleak picture for struggling Burundi

Tanzania’s economic growth slowed by policy uncertainty: World Bank

First get started, then get smarter – Founder-CEO’s secret to success

Ghana central bank slashes benchmark interest rate

African Development Week: Africa’s tough choices for urbanization

Nigeria aims to pass 2017 budget by end of March

S&P reiterates growth, policy & politics as concern to South Africa rating

Op-Ed: Will massive O.R Tambo heist affect tourism to South Africa?

Kenya private sector activity slows down due to drought

Nigeria's economy contracted by 1.5 pct in 2016

News Tips

Advertise With Us

growth

South Africa’s economy faces major challenges: central bank head

Op-Ed: Change an African’s Mentality, Change the Continent

CAT to invest $1billion in Africa by 2021

South Africa’s low business confidence setback to growth recovery: Moody’s

For South Africans, economic pain hit long before recession

Growth in Africa to pick up this year and next: OECD & AfDB

Op-Ed: Growth is dying as the silver bullet for success. Why this may be good thing

IMF paints bleak picture for struggling Burundi

Tanzania’s economic growth slowed by policy uncertainty: World Bank

First get started, then get smarter – Founder-CEO’s secret to success

Ghana central bank slashes benchmark interest rate

African Development Week: Africa’s tough choices for urbanization

Nigeria aims to pass 2017 budget by end of March

S&P reiterates growth, policy & politics as concern to South Africa rating

Op-Ed: Will massive O.R Tambo heist affect tourism to South Africa?

Kenya private sector activity slows down due to drought

Nigeria's economy contracted by 1.5 pct in 2016

News Tips

Advertise With Us

Newsletters