Connect with us

Business News

Tanzania denies blocking release of disputed IMF report

The IMF projected a rate of GDP growth of around 4-5 percent in the medium term, should current policies continue.

News Central

Published

on

Photo credit; AFP

Tanzania on Tuesday, denied blocking the publication of a critical International Monetary Fund report that accuses President John Magufuli’s government of undermining economic growth with “unpredictable and interventionist” policies. 

In the leaked report, the Fund says a weak business environment and the implementation of projects that may not have high rates of return were likely to constrain annual GDP growth. 

“The government is still holding consultations with the IMF. We have not blocked the report in any way whatsoever”, Tanzania’s finance and planning minister, Philip Mpango, told parliament. 

According to The IMF in Washington consultations with government had been taking place, and it was up to the government to consent to the publication of the report. The IMF does not comment on the contents of leaked reports, it added. 

Mpango said its on-going talks with the IMF were aimed at incorporating Tanzania’s views into the final report before its official publication. 

Magufuli’s government has embarked on an ambitious program of industrialization, but foreign investment in the country has fallen after contentious government interventions in the mining and agriculture sectors. 

The IMF projected a rate of GDP growth of around 4-5 percent in the medium term, should current policies continue. 

That forecast differed from the government’s projection that the economy will grow by 7.3 percent in 2019 after an estimated 7.2 percent expansion last year. 

“Delays or little progress in implementing structural reforms, unpredictable and interventionist policies, and a rushed scaling-up of public investments that may not have a high rate of return will have a detrimental effect on growth and development,” the IMF report stated. 

The report further states that there were weaknesses in official data with other indicators pointing to a more subdued pace of economic activity.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading
Click to comment

Leave a Reply

Business News

Africa’s smaller economies secure 13-year fragile sector protection

The LDCs, which constitute over 50 per cent of Africa’s 54 countries, are still heavily dependent on the trade taxes to fund their national budgets

Published

on

Africa’s smaller economies secure 13-year fragile sector protection

Africa’s 32 Least Developed Countries (LDCs) have secured a 13-year reprieve to protect their sensitive economic sectors from duty-free imports under the African Continental Free Trade Area (AfCFTA) agreement, in a major concession aimed at securing their ratification of the deal.

The matter of tariff concessions has been a sticky issue for the LDCs, which have expressed fears that implementation of the AfCFTA agreement beginning July 1 next year will lead to heavy revenue losses.

The LDCs, which constitute over 50 per cent of Africa’s 54 countries, are still heavily dependent on the trade taxes to fund their national budgets.

READ: Africa Continental Free Trade Area (AfCFTA) launched

Only about 15 per cent of trade by African countries takes place within the continent, with most commodity-dependent countries shipping out their goods to global partners.

“Despite low levels of intra-Africa trade, tariff revenue is still an important source of government revenue, and remains an important measure to reduce import competition and so protect domestic industry,” says Benedict Musengele, the acting Director-in-Charge of Trade, Customs and Monetary Affairs Department at the Comesa Secretariat.

Tariffs –

Tariff liberalisation is, however, only expected to lead to a limited expansion in intra-Africa trade.

Exchange of goods and services on the continent is still highly concentrated within the regional economic communities (RECs), with more than half of the total trade taking place in the Southern African Customs Union (SACU), and more than 65 per cent in the Southern African Development Community (SADC).

READ: African leaders set to sign landmark trade deal at AU Summit

The 13-year reprieve comes at a time when the Africa Export-Import Bank (Afreximbank) has announced a $1 billion financing facility to support countries to adjust in an orderly manner to the sudden revenue losses as a result of the implementation of the AfCFTA agreement.

The AfCFTA member-countries have agreed to liberalise 90 per cent of their tariff lines with the remaining 10 per cent divided into two categories, where 7 per cent are classified as sensitive products, while three per cent is to be totally excluded from the requirement to liberalise.

Tariff liberalisation –

It is argued that although the AfCFTA, which was officially launched at the 12th Extraordinary Summit of the African Union in Niamey, Niger July 7, enjoys considerable political support, individual member states still face difficult choices.

Africa’s economies vary considerably in size, levels of economic development and diversification and without exception, they face challenges to create jobs, develop their industrial sectors and diversify their production capacity.

READ: Africa’s continental free trade deal: Single market on the horizon?

Trade agreements –

The launch of the AfCFTA seeks to create a single market of over 1.2 billion people and open up markets with a combined $3 trillion in GDP, which is currently dominated by Nigeria, South Africa and Egypt. All the countries, except Eritrea, have signed the agreement, while 27 have ratified it.

The idea to launch the AfCFTA was mooted in 2012 to promoting country-to-country trade, boost economic growth, increase the competitiveness of the continent’s economies and create employment. Negotiations were launched in Johannesburg, South Africa in 2015, where the heads of states and governments issued a timeline of two years to complete the negotiations.

READ: Africa Free trade deal set for take-off following Gambian ratification

The negotiations were completed in December 2017 in Niamey, Niger and the report presented to the heads of states and governments in January 2018, leading to a signing ceremony on March 21, 2018 in Kigali Rwanda, where 44 countries immediately signed up.

On April 29, the agreement received the minimum threshold of 22 ratifications for it to come into effect.

However, the pact legally came into force on May 30 in line with the provisions of the agreement which binds member countries to put into operation the free trade area 30 days from the day the 22nd country ratified the agreement.

READ: Nigeria and Benin sign landmark AfCFTA deal at AU Summit in Niamey (Updated)

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Business News

Nigeria’s border closure sparks tension after price hike of rice

The price of rice has skyrocketed, from ₦9,000 for a 50-kilo sack, to ₦22,000, meanwhile, Nigeria’s minimum monthly wage is ₦18,000

Published

on

Nigeria's border closure sparks tension after price hike of rice
This picture shows a bowl of imported rice at Ajara market, in Badagry, near Lagos, on September 6, 2019. - The days of heaping 50-kilo sacks of rice across the saddle of their motorbike and slipping a few notes to a customs officer are now gone. With Nigeria having snapped its borders shut, the legions of motorbike riders who used to satisfy the nation's hunger for imported rice are lucky at best to sneak through a few packets of Basmati. (Photo by Benson IBEABUCHI / AFP)

The days of heaping 50-kilo sacks of rice across the saddle of their motorbike and slipping a few notes to a customs officer are now gone.

With Nigeria having snapped its borders shut, the legions of motorbike riders who used to satisfy the nation’s hunger for imported rice are lucky at best to sneak through a few packets of Basmati.

The smugglers risk more than just jail time if they try to force or sneak across the border.

“They shoot us and kill us like goats,” said Adewole, who asked for his full name not to be published, stuttering with anger.

The some 3,000 sacks of rice per day that motorbike riders estimate they previously smuggled across the border from Benin have slowed to a trickle.

As a result, the price of rice has skyrocketed, from ₦9,000 for a 50-kilo sack, to ₦22,000, a price higher than Nigeria’s minimum monthly wage of ₦18,000.

The border closure is part of President Muhammadu Buhari’s plan to end Nigeria’s economic dependence on oil, by developing domestic agriculture and industry.

With cheap goods — smuggled or imported — long having hampered domestic producers, Buhari ordered a partial closure of the border with Benin in August. 

This month, the borders with all neighbouring countries have been shut completely.

“The Nigerian borders will remain closed until the countries sharing borders with Nigeria” accept conditions put in place for the country’s economic policies on what is imported, warned Hameed Ali, comptroller general of the Nigeria Customs Service.

‘Protectionist’ – 

Analyst Adedayo Ademuwagun, of the Lagos-based consultancy Songhai, called the border closure an “extreme level protectionist policy”.

Nigeria's border closure sparks tension after price hike of rice

He said that the move was built on the idea that, instead of encouraging development with incentives, one can bring it about by necessity.

“They expect that by creating a gap in the supply, the industry should grow,” said Ademuwagun.

“But it’s not what’s happening.”

Nigeria has pursued this type of development strategy before, with some success.

Former President Olusegun Obasanjo, who was in office from 1999 to 2007, banned cement imports.

That helped local producers flourish, including Obasanjo protege Aliko Dangote, who now heads a multi-billion-dollar cement empire.

‘Not an island’ – 

Buhari may have trouble repeating that outcome, however, as the situation with rice shows.

Nigeria has been ramping up rice production, with local output rising by 60 per cent since 2013, according to official figures, although specialists say they are inflated.

Nigeria's border closure sparks tension after price hike of rice

But at 4.8 million tonnes last year, local rice production was still not enough for the 190 million Nigerians, who spend about a tenth of their food budget on the staple.

Beyond quantity, there is also the issue of quality.

“It’s the imported rice people love,” said one trader at the market in Badagry, a coastal town between the capital Lagos and Benin. 

“Nigerian rice is not good enough and too expensive.”

If you can get it.

The border closure means Nigeria is choked off from supplies until the next harvest by local farmers. 

The Badagry market, usually teeming with activity thanks to its location near the border, now lacks its usual hubbub.

Not only is there almost no rice to be had, there is almost no macaroni, cooking oil, or sugar either.  

“We can’t depend only on local production,” said market director Todowede Baba Oja.

“No one is on an island. We depend on one another. This suffering is getting out of hand.”

Even the butcher who sells locally-produced beef is having trouble, as his customers have little left for meat after paying higher prices for staples.

People have “no more money”, he said.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Business News

Uganda and Rwanda revisit trade talks

The meeting was aimed at boosting diplomatic relations between the two East African neighbours

Published

on

Uganda and Rwanda revisit trade talks

Officials from Uganda and Rwanda on Monday met in Kigali following a Memorandum of Understanding signed by the two countries in Angola in August.

The meeting was aimed at boosting diplomatic relations between the two East African neighbours.

The two sides were seen to be at loggerheads for some time earlier this year, culminating in the closure of their borders.

The August MoU included agreements on regional co-operation and security, setting the pace for the improvement of political and trade relations between Uganda and Rwanda.

The two leaders also agreed to “resume as soon as possible the cross-border activities between both countries, including the movement of persons and goods, for the development and improvement of the lives of their population”.

The Ugandan delegation is led by Foreign Affairs minister, Sam Kutesa while his counterpart in Rwanda spearheads the opposite delegation.

Angola and DR Congo played a key role in bringing the Ugandan and Rwandan sides to the negotiating table.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

New stories delivered to your phone

Click here to have news stories delivered to your phone or mail. You can also share your stories with us. Join our mailing list here.

Continue Reading

Trending