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Kenya’s improved production reduces sugar imports

Excess sugar from outside the 19-member COMESA bloc attracts 100 percent import duty

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Customers shop at a store of a Kenyan supermarket chain - AFP

Official data from Kenya’s sugar directorate indicates that Sugar imports dropped by 71 per cent in 2018 compared to 2017.

The volume of the sweetener imported in 2018 declined to 284,169 from 989,619 tonnes in the previous year when acute shortage compelled the State to remove import duty.

In May 2017, the country opened a duty-free window for imports to bridge local deficit, this led to the markets being flooded with cheap sweeteners

Reduction in import of sugar has been attributed to the impact of governments policies on customs taxes and improved production

In Kenya, excess sugar attracts import duty at the rate of 25 percent if obtained from 19-member Comesa bloc and 100 percent if it comes from outside. 

According to the report, improved production implies that the sector is recovering from the severity of drought the industry suffered the previous year.

But even with improved production, consumer sugar prices have remained high in retail shops despite sufficient supply and a decline in factory prices since September last year.

It’s been observed that most retail shops are selling different brands of a two-kilogramme pack at between KSh230 and KSh240, which implies the falling factory prices have not reflected on the shelves.

Sugar is one of the items in Kenya’s food basket used in calculating the cost of living levels. 

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Zimbabwe declares interim RTGS dollar sole legal tender

The RTGS dollar was introduced in February 2019 as a first step towards a new currency by the year’s end

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Zimbabwe declares interim RTGS dollar sole legal tender
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Zimbabwe has adopted its interim currency as the country’s sole legal tender on Monday in a bid to stem black market demand for foreign currencies.

The RTGS dollar was introduced in February 2019 as a first step towards a new currency by the year’s end. This is a main part of President Emmerson Mnangagwa’s plan to stabilise an economy racked by inflation and widespread shortages.

According to the official statement, “the British pound, United States dollar, South African rand, Botswana pula, and any other foreign currency shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe”.

The latest variation of the domestic currency, the RTGS, has struggled to gain trust among large corporations and everyday Zimbabweans. Economic analysts fear 2009 may repeat itself with the interim currency.

Last week, the International Monetary Fund (IMF) requested that the central bank allows the RTGS to float freely so that exporters could sell dollars at the interbank rate rather than surrender them to the central bank

On the official interbank rate, the RTGS currency was pegged at 6.2 but on Monday, it traded between 11 and 12 against the dollar on the unofficial market.

But, Zimbabweans are complaining that goods and services are still being priced in other currencies. While more than 80% of Zimbabweans earn RTGS dollars, goods ranging from bricks to rentals, car parts and many groceries have their prices pegged in U.S. dollars.

Inflation has climbed to a decade high 97.86%, eroding salaries and savings and causing Zimbabweans to fear a return to the hyperinflation of 2008 when the rate reached 500 billion per cent.

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Nigeria’s central bank will keep controversial FX system

Emefiele added that the bank also hopes to continue working with the Deposit Money Banks to improve access to credit

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Nigeria's central bank will keep controversial FX system

The Central Bank of Nigeria (CBN) has announced its plan for the next five years. The current governor of the bank, Godwin Emefiele stated the five main focal points of his second term to drive the Monetary Policy roadmap throughout 2019-2024 at the CBN Headquarters in Abuja.

In his words, “our priorities at the CBN over the next 5 years are the following; preserve domestic macro-economic and financial stability; foster the development of a robust payments system infrastructure that will increase access to finance for all Nigerians, thereby raising the financial inclusion rate in the country”, he says.

Emefiele added that the bank also hopes to continue working with the Deposit Money Banks to improve access to credit for not only smallholder farmers and MSMEs, but also consumer credit and mortgage facilities for bank customers.

“Our intervention support shall also be extended to our youth population who possess entrepreneurship skills in the creative industry. This group deserves our encouragement. We shall also during this intervening period encourage our Deposit Money Banks to direct more focus in supporting the Education Sector”.

Related: Nigeria’s apex bank to offer seven-year loans to youth corps members

In addition to these, there is also a need to grow the country’s external reserves and lastly, support efforts at diversifying the economy through the various intervention programs in the agriculture and manufacturing sectors.

The CBN Governor said he was confident that when implemented, the aforementioned measures will help to insulate the economy from potential shocks in the global economy.

Related: Senate confirms Emefiele for second term as Nigeria’s Central Bank governor

“In my second term in office, part of my pledge is to work to the best of my abilities in fulfilling these objectives,” he adds.

Emefiele was first appointed by former President Goodluck Jonathan in 2014 and was retained after Buhari assumed office in 2015.

On May 8, President Muhmmdu Buhari informed the Senate in a statement that he had decided to nominate the CBN governor for a second term.

Related: Nigeria’s Central Bank governor named for second term

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West Africa Crude-Nigerian OSPs boost seller confidence

In Angola, around half a dozen cargoes remain for July loading, while the preliminary programme for August added another 45 cargoes

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West Africa Crude-Nigerian OSPs boost seller confidence
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Nigeria has increased its official selling price (OSP) for major crude grades on perked-up demand. Nigeria’s National Petroleum Corporation significantly raised the July OSP for major grades, Bonny Light 156 cents per barrel last month, to 204 cents and Qua Iboe, from 171 cents per barrel, to 215 cents.

The move shows the new confidence in Nigerian barrels of oil has been selling to Europe in June, due to shortfalls hitting competing North Sea fields. But at least, 20 cargoes remain for July loading, as preliminary August programmes were awaited imminently.

In Angola, around half a dozen cargoes remain for July loading, while the preliminary programme for August added another 45 cargoes.

China’s Unipec is still offering West African cargoes on the Platts Window after doing so for several grades last month, partly to attract market attention due to slow demand and also to offload unwanted crude.

Asian refining margins for 10 parts per million (ppm) gasoil, a key middle distillate refined from heavier Angolan barrels, slipped on Friday as crude prices rose, a sign that Asian demand for heavier West African (WAF) crude may remain sluggish in the interim.

Finalization of state oil company, Sonangol’s term allocations was expected, with sellers keen to see price markdowns for later selling of July cargoes to be continued into August. But as China draws down stocks of Iranian crude it bought in bulk in April ahead of U.S. sanctions, traders say Angola might be sought after especially as new commercial tanks are expected to come online very soon.

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