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Sunday, 19 January 2020
Sunday, 19 January 2020 15:23

Rwanda GDP to grow 8% in 2020 -IMF

Rwanda's economy is expected to grow by 8% this year and in 2021 versus an estimated 8.5% in 2019, boosted by private investment and trade, the International Monetary Fund (IMF) said.

The small East African nation's economy relies largely on agriculture, tourism and mining. The government also forecasts it will grow 8.5% in 2019.

It grew 11.9% in third quarter versus 7.7% in the third quarter of 2018, reflecting an improved performance in manufacturing, construction and services.

"Upside risks (to growth) are a continuation of strong private investment, more regional trade, and growth payoffs from large public investment projects," the IMF said.

Factors that could slow growth include high fuel prices, unpredictable weather and regional issues, the IMF said in a statement late on Friday.

It did not elaborate on those regional issues.

Early last year, Rwanda closed its main border crossing with neighbouring Uganda. It was briefly re-opened to cargo trucks in June but then closed again.

Rwandans were banned from travelling to Uganda, which has accused Rwanda of effectively imposing a trade embargo.

In August, the two countries' presidents signed a pact agreeing the two sides would respect each other's sovereignty, refrain from action that destabilises the other's territory, and resume cross-border activities.

 

Published in Economy

The second edition of the Global Investment in Aviation Summit (GIAS 2020), scheduled to take place on January 27-29, is expected to showcase huge development projects and infrastructure investments in the global aviation sector.

According to a statement by Strategic Events and Exhibition, as the aviation sector is growing, countries are investing billions of dollars towards expanding existing airports and building new ones.

"The aviation sector is experiencing significant and rapid growth in air transport and airport construction and expansion, leading to the growth of regional and global economies, particularly in the Asia-Pacific region and the Middle East, the world's fastest growing market, although Europe still maintains strong growth prospects until 2040," the conference organiser said.

Last week, the International Air Transport Association (IATA) announced that globally, passenger demand rose 3.1 per cent in November, compared to 3.0 per cent reported in October. Middle Eastern airlines posted the strongest performance, as passenger demand rose by 7.4 per cent. African airlines posted the second-strongest performance of the month. IATA also provided results for travel demand, showing that the global demand growth rose by 3.3 per cent in the same period under review.

A forecast by the IATA shows that passenger numbers will rise to 4.72 billion in 2020, up 4.0 per cent from the 4.54 billion passengers recorded in 2019.

The event organiser said United Arab Emirates (UAE) and other countries are keen on taking advantage of the significant increase in passenger traffic to develop airport infrastructure.

“The authority seeks to increase airspace capacity by adding more routes to neighbouring countries and introducing a new navigation management system this year,” said His Excellency Saif Mohammed Al Suwaidi, Director-General of the General Civil Aviation Authority (GCAA) in the UAE. “The UAE has so far invested $270 billion (AED1 trillion) on the development of airport infrastructure projects across the country and a fleet of 884 commercial aircraft.”

Al Suwaidi, also emphasised the need to inject more money in order to keep pace with massive and successive developments in the sector. In its statement, Strategic Events and Exhibition noted that more data will be provided at the GIAS 2020, which will hold in Dubai and be attended by key industry players.

The GIAS was launched in 2018 to foster a sustainable civil aviation system. More than 850 international delegates and 120 investors from 60 countries, including Saudi Arabia, US, UK, India, Germany, France, participated at the first edition of the summit.

 

Credit: Financial NigeriaFinancial Nigeria

Published in Travel & Tourism

Nigeria and five other English-speaking West African countries have condemned the decision of their French-speaking counterparts to unilaterally rename the CFA Franc as ECO by 2020.

This came as the French President Emmanuel Macron during a recent visit to Ivory Coast announced at a joint news conference with the Ivorian President that France is working towards revamping the CFA franc.

CFA Franc, known as “Colonies Francaises d’Afrique,” was established in 1945.

The currency was initially pegged to the French franc, but has been linked to the euro since 1999.

CFA Franc is used by eight states in West and Central Africa that is Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo.

The revamped currency will be renamed the “ECO” in 2020.

During the news conference, Macron, described colonialism as a “grave mistake and a fault of the republic”.

On his official Twitter, he added that the move to drop the CFA franc is part of France’s plan to rebuild relations with its former African colonies.

However, the six English-speaking West African countries issued the condemnation of the action of their French-speaking counterparts at the end of a crucial extraordinary meeting of their ministers of finance and governors of their central banks on Thursday.

They met in Abuja under the West African Monetary Zone (WAMZ) on the ECOWAS single currency programme.

The communiqué released at the end of the meeting was read on behalf of other member countries by Nigeria’s Minister for Finance, Budget and National Planning, Zainab Ahmed.

The six countries involved in the meeting are Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.

According to the communique, they took note of the declaration by the Chairman of the Authority of the Heads of State and Government of the West African Economic and Monetary Union (WAEMU) on December 21, 2019, to unilaterally rename the CFA Franc as ECO by 2020.

“WAMZ Convergence Council wishes to emphasize that this action is inconsistent with the decision of the Authority of the Heads of State and Government of ECOWAS for the adoption of the ECO as the name of an independent ECOWAS single currency.

“WAMZ Convergence Council wishes to reiterate the need for all ECOWAS member countries to implement the decision of the Authority of the Heads of State and Government towards the implementation of the revised roadmap of the ECOWAS single currency programme.

“WAMZ Convergence Council would be recommending an extraordinary summit of the Authority of the Heads of State and Government of the WAMZ member states will be convened soon to discuss this matter and other related issues,” the communiqué concluded.

 

Credit: New TelegraphNew Telegraph

Published in Bank & Finance

South African President Cyril Ramaphosa has announced plans to reduce his administration’s fiscal distress, with a decision to cut thousands of telecommunications jobs.

LEFTIST POLICY

Indirectly employed by the government through one of its many state-owned enterprises (SOEs), cutting 3,000 jobs represents the beginning of promised steps to return South Africa to economic sustainability.

Two decades ago, Telkom, South Africa’s state-owned giant, was the largest by infrastructure development and most sophisticated on the continent.

Like power-producer Eskom and many others, Telkom is a shadow of its former self and struggling to make ends meet.

The cause has been a combination of prescribed “black economic empowerment” through the deliberate preference for formerly disadvantaged people and of the ruling African National Congress’ (ANC) leftist policy of cadre deployment.

Often these two processes have overlapped but they have meant that highly skilled people have had to give way to replacements.

While a fair number of such appointments have worked out, many have not.

NEAR-COLLAPSE

This has affected national, provincial and local governance — and is one of the reasons there has been mounting unhappiness in communities lacking basic services, leading to protests.

In the vital SOEs, which dominate the economy and which are effective monopolies, the governance failure and accompanying corruption have run rampant and caused collapses or near-collapses requiring state bailouts.

But there is no more money for such bailouts and South Africa cannot borrow any more without the entire sovereign debt of the country falling into ‘junk’ status.

In an address to the ANC rank and file last weekend, Ramaphosa made it plain that in providing service directly or indirectly through employment in SOEs, accountability would be the watch word.

According to international ratings like the World Bank and IMF, the government and its SOEs are around 10-15 per cent overstaffed.

However, Ramaphosa’s union allies hate the idea of retrenchment.

GROUNDED PLANES

Combined with residual elements involved in former president Jacob Zuma’s “state capture” project of looting, the unions say they will not let Ramaphosa do what he must.

They are trying, through the Congress of South African Trade Unions, to halt any retrenchments. They also want Eskom removed from SOE minister Pravin Gordhan’s control.

However, the unions have the recent experience of South African Airways (SAA) to consider.

Strike action by ANC-aligned unions grounded planes for days — long enough to win the pay increase the unions were demanding, but also to throw the broke airline into a terminal crisis.

SAA is in business rescue at Ramaphosa’s insistence. With a deadline this weekend for it to find $139 million to remain operational, the airline may be liquidated.

If so, thousands of jobs will be lost, rather than perhaps hundreds if rescued.

The unions, having won the battle for an increase, pushed the airline to the edge and may have lost the war in terms of jobs.

SOUL OF ANC

At the core of ANC’s internal disputes about what to do to rescue the economy are divergent views.

The issue lies between the business-friendly lobby in ANC led by Ramaphosa, and those inclined to a hardline socialist agenda.

The result is a war over jobs which has become the proxy battlefield for the real struggle under way, being that for the heart and soul of the ANC — and therefore of the future of South Africa.

This week, Gwede Mantashe — once a leading unionist and currently ANC chairman and a minister — has been saying things directly contrary to Ramaphosa about getting South Africa out of the power-generation crisis.

The country is broke and faces costly ratings downgrades if it does not cut government jobs.

Consequently, Ramaphosa and his team are acting. Some 129 cases related to corruption have emerged from Eskom alone, and have gone for prosecution.

1,000 CASES

More than 1,000 internal disciplinary cases are in the process within the power producer.

The question is whether Ramaphosa can do enough against the backdrop of a weakening global economy to prevent a meltdown.

And then there is a crucial local government election a little more than a year out.

How the struggle for power and for control over ANC — and therefore over South Africa’s destiny — plays out will tell if the country becomes a failed state or emerges as a shining example of a modern developing nation, as Ramaphosa promised.

Erasmus writes from Pretoria. This email address is being protected from spambots. You need JavaScript enabled to view it.

Credit: Daily Nation

CHRIS ERASMUS
Published in Economy
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