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Tunisia to receive $247 million IMF loan tranche

The IMF approval will open the way for Tunisia to sell bonds worth up to $800 million this year.

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Tunisia to receive $247 million IMF loan tranche
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The International Monetary Fund on Wednesday, approved the payment of a $247 million loan tranche to Tunisia, the sixth under its loan program with the North African country, according to Minister of Reforms, Taoufik Rajhi.

Tunisia struck a deal with the IMF in December 2016 for a loan program worth around $2.8 billion to overhaul its ailing economy. It included steps to cut chronic deficits and trim bloated public services.

Related: Court nullifies secret loans taken by Mozambique government

This will bring total disbursements to about $1.6 billion since 2016. 

The IMF approval will open the way for Tunisia to sell bonds worth up to $800 million this year.

Tunisia needs around $2.5 billion in external financing in 2019, officials said.

The country has been hailed as the Arab Spring’s only democratic success because protests toppled autocrat, Zine El Abidine Ben Ali in 2011 without triggering violent upheaval, as happened in Syria and Libya. 

Related: Kenya seeks $750 million World Bank loan for budget support

But since 2011, nine cabinets have failed to resolve Tunisia’s economic problems, which include high inflation and unemployment, and impatience is rising among lenders such as the IMF, which have kept the country afloat 

The IMF had wanted Tunisia to freeze public-sector wages – the bill for which doubled to about 16 billion dinars ($5.5 billion) in 2018 from 7.6 billion dinars in 2010. 

In order to cut the energy deficit demanded by the IMF, the government last March, raised fuel prices, the fifth hike in 12 months. 

The parliament also approved last April, a law to raise the retirement age for civil servants by two years and impose social security taxes on employees and employers, another key reform demanded by the country’s international lenders to stabilize its finances.

Related: IMF, Congo Republic provisionally agree on three-year loan deal

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International partners set to boost northern Nigeria’s leather industry

The partners will develop a leather tannery aimed at improving the production capacity of indigenous entity, Sokoto Shoe

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International partners set to boost northern Nigeria’s leather industry

In a bid to revitalise the region’s traditional leather sector, Sokoto state, in northern Nigeria has attracted international partnership towards the development of a leather tannery aimed at improving the production capacity of indigenous entity, Sokoto Shoe.

The latest firms to seek business opportunities are UK-based Pan African Enterprises and Asia-based Simple Factory Group, a footwear producer- a marriage of convenience credited to the state government’s Sokoto Investment Company Limited.

With a target of 2000 shoes per day, the output increase and further boost in quality could position Sokoto Shoe as a leading player in the leather goods industry increasing the continent’s export potential.

Nigeria’s leather industry is a network of production clusters with a concentration in a number of its cities such as Kano, Aba, Lagos, Sokoto and Onitsha. Leather produced from these centres are fashioned into footwear, bags, belts, and houseware by local workers.

While Nigeria exports a lot of its finished products, (estimates place its annual revenue at $100 million), the country imports about 5 times this value, leading local producers to compete with foreign manufacturers.

The country’s capacity to take up a large share of the global leather industry is, however, immense with its huge cattle population and age-long leather working tradition.

The partnership inches closer to accessing manufacturing and supply-chain advantages in the footwear sector to develop northern Nigeria’s productive capacity. Operations are expected to begin next year.

PAE’s chief executive, Dawn Spetale says “Simple is a natural partner for us to develop our vision in Nigeria with Sokoto Shoe”

“Teaming up with such a well-established producer allows us to leverage its networks, experience and marketing know-how from the past 30 years.

We’re excited that some of our staff will get training in Asia through Simple, as this will greatly enhance our production capacity and quality control from the outset,” Spetale adds.

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World’s biggest marine diamond mining vessel to be financed by African banks

Nedbank Namibia, RMB Namibia, Standard Bank, ABSA and Bank Windhoek agreed to provide 80% of the funding for the ship

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African banks to finance World’s biggest marine diamond mining vessel
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Five African commercial banks have partnered in a $375 million financing deal to build a new diamond mining vessel for a subsidiary of Anglo American’s diamond unit, De Beers. 

Nedbank Namibia, RMB Namibia, Standard Bank, ABSA and Bank Windhoek agreed to provide 80% of the funding for the ship, which will be the world’s largest of its type. 

Debmarine Namibia – a 50-50 joint venture company between De Beers and the government of Namibia – will provide the balance of $94 million. 

The ship, to be known as the AMV3, will be the seventh in the Debmarine Namibia joint venture’s fleet, which mines high-quality diamonds from the ocean floor using hi-tech surveying equipment. 

The AMV3 has the capacity to add 500,000 carats of annual production from 2022, and is expected to contribute 2 billion Namibian dollars ($137.64 million) a year in taxes and royalties to the Namibian treasury in its first five years of production.

“The highest quality diamonds in the world are found in our ocean,” Debmarine Namibia Chief Executive Otto Shikongo said in a statement. 

“With this investment, we will be able to optimize new technology to find and recover diamonds more efficiently and meet growing consumer demand”.

Nedbank Namibia, which facilitated the arrangement, will contribute 40% of the financing and will also provide currency hedging for the deal, according to Karl-Stefan Altmann, an executive at Nedbank Corporate and Investment Banking and Treasury.

Mining, of which uranium and diamonds are a major part, contributed 14% of Namibia’s gross domestic product in 2018, according to the latest annual report of Namibia’s Chamber of Mines. 

Diamonds also accounted for 14% of Anglo American’s core profit in 2018.

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Zimbabwe’s inflation soars, stocks hit record high

Stocks are rising because local investors are desperate to hedge against inflation

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Zimbabwe's inflation soars, stocks hit record high | News Central TV
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Zimbabwe’s stock market has hit a record high, for all the wrong reasons as the country’s Industrial Index rose 5.6 per cent on Monday to extend its gain this quarter to 80 per cent.

Stocks are rising because local investors are desperate to hedge against inflation, which accelerated to 98 per cent in May. Prices are rocketing amid a scarcity of foreign exchange, which is causing shortages of fuel, medicine, and other imported goods.

In Zimbabwe, investors’ fears about inflation are heightened by a plunging currency.

The RTGS$, which the government de-linked from the U.S. dollar in February, has sunk about 57 per cent since March on the black market.

On the streets of Harare, the capital, it trades at 9.7 against the greenback. That compares with the central bank’s official and much stronger rate of 6.08.

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