Madagascar’s President Andry Rajoelina gave a long, televised address last weekend praising the benefits of artemisia, a herbal remedy increasingly promoted as a treatment for Covid-19. It's also gaining traction in other African countries. But the World Health Organization has warned it must be tested for efficacy and adverse side effects.
During a one-and-a-half-hour speech on Sunday, Rajoelina sat next to an artemisia plant, a bottle of artemisia tonic and boxes of Covid-Organics, the branded artemisia products that he is promoting as a treatment for the coronavirus.
“Clinical trials of artemisia-based injections on new Covid-19 patients will start next week,” said Rajoelina, saying that any criticism of the plant-based remedy must stop, according to RFI’s correspondent in Antananarivo.
The president called for people to continue following measures put in place to stop the spread of the virus. But much of Rajoelina’s address focused on artemisia. He talked about increasing production of the plant and setting up a factory to process it over the next month.
“This plant can treat lots of diseases. If we don’t act quickly, other researchers will overtake us,” said Rajoelina, as reported by RFI correspondent Laetitia Bezain.
Authorities in other African countries have expressed interest in using artemisia in the fight against Covid-19.
Tanzania’s President John Magufuli said he was in touch with Madagascar’s government and had despatched an airplane to pick up supplies of artemisia.
Following a video conference with Rajoelina, Congo Brazzaville’s President Denis Sassou Nguesso said his country would also import artemisia and adopt the Covid-Organics treatment, according to government spokesman Thierry Moungalla.
Senegal on 24 April placed its first order, depicted in a social media post by Madagascar’s leader.
The scramble for artemisia
The Malagasy authorities are not the only ones to see the potential benefit of artemisia in the struggle against Covid-19 – Germany’s Max Planck Institute of Colloids and Interfaces and US company ArtemiLife Inc are also working on tests.
The study, conducted in Denmark and Germany, focuses on the same plant as the one cultivated and processed in Madagascar – artemisia annua. The plant materials for the test are being provided by ArtemiLife Inc, a Delaware-based company, that says it has fields growing artemisia outside Lexington, Kentucky.
ArtemiLife is advertising two products containing artemisia annua – tea and coffee. The company recommends that customers take the products twice daily “to maintain an active shield and to maximize the benefits”.
A 30-day supply of ArtemiCafe is to be available for sale at 91 euros and ArtemiTea for 73 euros. Customers are encouraged to register their interest on the ArtemiLife website since the products are currently in development and not yet on sale.
The company says these products are “not intended to diagnose, treat, cure, or prevent any disease”. ArtemiLife says their claims about artemisia have not been evaluated by the US Food and Drug Administration.
Centuries-old malaria treatment
Artemisia annua has long been used for the treatment of malaria. The plant's antimalarial properties were first identified in 340 BC as part of traditional Chinese medicine, according to expert Zhou Yiqing from the Institute of Microbiology and Epidemiology of the Chinese Academy of Military Medical Sciences.
Zhou's research in the 1970s led to the plant's application against the mosquito-borne disease.
Artemisia was selected for further research from a list of herbs and traditional medicines used to treat malaria screened by experts.
The research, known as Project 523, involved two groups pursuing antimalarial drug development: one investigating synthetic medicine, the other examining traditional remedies.
Project 523 first isolated the compound artemisinin from the plant and then ran clinical trials confirming its antimalarial effects.
Researchers later identified the molecular structure of artemisinin and discovered more derivatives, eventually producing the first artemisinin-based combination therapy (ACT) for malaria, known as Coartem.
ACT therapy combined artemisinin with another active ingredient to provide different actions within the same treatment. ACTs are considered by the World Health Organization (WHO) to be the most effective antimalarial medicines available today.
Artemisia in fight against HIV and SARS?
Artemisia has been researched for many other medicinal uses besides combatting malaria, perhaps providing some guidance as to its possible use in treatment of Covid-19.
A study by researchers at Leiden University and the University of Basel published in the Journal of Ethnopharmacology looked at artemisia tea infusions and their activity in combatting HIV.
Chinese researchers in July 2005 published a study exploring the use of herbal extracts for antiviral properties in treatment of Severe Acute Respiratory Syndrome (SARS), a respiratory illness caused by a coronavirus.
The research, published in the Antiviral Research journal by experts at different institutions and companies in Beijing, identified four herbal extracts, including artemisia, that could be considered as candidates for the development of drugs for treatment of SARS.
Threatening the pharmaceutical industry
Artemisia is the subject of some questions surrounding its use against malaria, notably the form of treatment administered –either a tea infusion based on plant extracts, or artemisinin, which is usually produced by pharmaceutical companies through a chemical process of semi-synthesis.
A January 2019 documentary produced by France 24 asked whether the use of artemisia tea infusions for malaria treatment was discouraged and subject to pressure by big pharmaceuticals.
The documentary suggested that offering infusions based on the plant could threaten the business of synthetic ACT treatments produced by drugs companies.
At forefront of this battle is Congolese doctor Jérôme Munyangi from the faculty of medicine at the University of Kolweri-Lualaba.
Munyangi has conducted research in the Democratic Republic of Congo comparing tea infusions to an ACT treatment using a combination of artesunate, a derivative of artemisinin, and amodiaquine, another commonly used antimalarial drug.
The large-scale, double blind randomised clinical trial was published in the Phytomedicine journal in April 2019. It concludes that infusions of artemisia annua and artemisia afra, another species of the plant, provide better outcomes than the ACT treatment.
Fears over drug resistance
However, the WHO in its guidance on malaria treatment warns against using artemisinin as an oral monotherapy. It says this promotes the development of drug resistance to artemisinin as a treatment.
Use of the artemisia plant is outlawed in France. The French health ministry has warned about a lack of rigorous, methodically controlled clinical trials proving its effectiveness. The National Agency for the Safety of Medicines and Health Products (ANSM) has previously acted to ban products based on artemisia.
French non-governmental organisations such as La Maison de l’Artemisia continue to promote the plant’s use as a malaria treatment, claiming “the plant can save millions of lives”. The NGO focuses on countries in sub-Saharan Africa, encouraging the use of artemisia as a tea infusion, although it warns people from outside malaria-endemic countries against taking it.
Malaria and Covid-19 not the same
Artemisia’s use in treating malaria is clearly beneficial in the fight against the deadly parasite, although some raise questions about the exact nature of the treatment. But its use in combatting malaria does not necessarily mean it will be effective against Covid-19.
The African Union bloc said it was in contact with Madagascar with a view to obtain technical data regarding the safety and efficiency of artemisia used to treat Covid-19, according to a statement.
“It was agreed that the member state would furnish the African Union with necessary details regarding the herbal remedy,” the AU said on Tuesday.
The Africa Centres for Disease Control and Prevention (Africa CDC) would “review the scientific data gathered so far on the safety and efficacy", the AU added.
Frank van der Kooy, who led the research on artemisia and treatment of HIV at Leiden University and the University of Basel, told RFI that he could not continue this work due to a lack of funding, while research on its use against SARS must be “cautiously interpreted”.
“At the moment we are therefore not sure if artemisia annua/afra will be active against Covid-19 but I do believe it warrants conducting clinical trials, which in turn needs funding,” said van der Kooy, who currently works at North-West University in South Africa.
The WHO is careful not to rule out the possible use of artemisia as a treatment for Covid-19, saying it should be tested for its efficacy and adverse side effects.
“Africans deserve to use medicines tested to the same standards as people in the rest of the world,” the WHO said in a statement published on Monday. “Even if therapies are derived from traditional practice and natural, establishing their efficacy and safety through rigorous clinical trials is critical.”
“Many plants and substances are being proposed without the minimum requirements and evidence of quality, safety and efficacy. The use of products to treat Covid-19, which have not been robustly investigated can put people in danger, giving a false sense of security and distracting them from hand washing and physical distancing which are cardinal in Covid-19 prevention,” the WHO added.
Access Bank Plc deny's news making rounds that it would sack 75 per cent of its workforce and as well close over 300 branches.
The bank denied this in a statement signed by Mr Sunday Ekwochi, its Company Secretary, posted on the Nigerian Stock Exchange (NSE) website.
It said the closure of a bank branch was an action that required the approval of the Central Bank of Nigeria (CBN).
According to the bank, it has not applied for nor obtained the approval of CBN for the closure of its branches as widely speculated.
“The bank has only suspended operations in some branches following the directive by the CBN.
“At the onset of the COVID-19 pandemic lockdown, we suspended in-branch operations at different locations as directed by the CBN and in line with business continuity plans at vulnerable spots; whilst we continued to provide services through our alternative digital platforms.
“In line with the phased re-opening of the economy effective May 4, following the Presidential directives, they have resumed in-branch services in some of our affected branches in a programmed manner to ensure the health and safety of our employees and customers.
“This is also necessary to provide relevant contingency should there be any incident arising from the pandemic.
“We deny in its entirety the baseless and twisted speculation that the bank is sacking 75 per cent of its workforce,” said the statement.
It noted that based on the impact of the COVID-19 pandemic, not all its branches would be fully open for in-branch services until later in the year.
“This has made it impossible for many of our outsourced workers to perform duties as usual.
“We have commenced engagement with various stakeholders with a view to ensuring that they provide the relevant services and optimum manpower as may be required by the bank on an on-going basis,” it added.
The bank, however, assured its esteemed stakeholders that it would continue to ensure that its actions and decisions are guided by fairness, justice, equity and good conscience.
Tesla Inc. Chief Executive Officer Elon Musk listed two of his California homes for sale Sunday, days after announcing that he would get rid of most of his possessions.
He’s seeking a combined $39.5 million for the Bel Air properties, including one that was previously owned by the late Gene Wilder, according to the listings on Zillow. Both are for sale by owner.
Musk, 48, posted more than a dozen tweets in less than 75 minutes on Friday, including one in which he said he’s selling “almost all” of his physical possessions. In another, he said he believed Tesla’s stock price was too high, prompting a 10% plunge on the day.
As for high-end Los Angeles real estate, it’s not exactly a seller’s market at the moment. Sales of luxury homes already were suffering from a supply glut and weak demand before the coronavirus pandemic stopped most showings. Fewer buyers were coming from China, Russia and the Middle East amid international tensions, and limits on state and local tax deductions dampened the appeal of owning California homes for wealthy U.S. buyers.
With demand slowing, more and more would-be sellers are taking their homes off the market, said Beverly Hills real estate agent Jade Mills. But shrinking inventory means some homes will still find buyers.
“People are still having to move and relocate, even within California,” she said. “I’m seeing people still having to buy and sell. This isn’t necessarily bad timing.”
Even with Friday’s stock swoon and the pandemic, Musk and Tesla are having a pretty good 2020.
The shares surged 68% this year through Friday, helping to boost his net worth by $8.3 billion, the second-most of anyone in the 500-member Bloomberg Billionaires Index, after Amazon.com Inc.’s Jeff Bezos, the world’s richest person. Musk ranks No. 24 on the list, with a $35.9 billion fortune. Tesla rebounded Monday, advancing 4.7% to $734.08 at 1:38 p.m. in New York.
Musk bought the two homes in 2012 and 2013 for a total of about $24 million. They form part of a five-house collection he owns overlooking Bel-Air Country Club.
In 2018 he turned to Morgan Stanley for $61 million of mortgages. The two homes he’s now looking to unload account for about $26.3 million of that total.
Bel Air is among the most expensive districts in Los Angeles. The median home value in the 90077 ZIP code is $2.78 million, according to Zillow. Notable Bel Air homeowners include Treasury Secretary Steven Mnuchin and Beyonce.
Since President Muhammadu Buhari came to power in Nigeria in 2015, anti-corruption has been at the heart of his administration. However, a lot of effort is focused on grand corruption at the higher levels of governance and politics. There is less emphasis on the less-talked-about but vulnerable areas such as the health sector.
We have been involved as researchers in an extensive study of health sector corruption in Nigeria. The study interacted with front-line health workers and health policy makers and managers. The aim was to systematically identify the different types of corruption occurring in the Nigerian health sector, and rank them based on how damaging they can be to the health sector.
The drivers and potential solutions to these health sector corruption problems were also identified, as well as recommendations on how to mitigate corruption in the sector. In the end we hope to explore and bring to the fore feasible grassroots solutions to the problem of health sector corruption in Nigeria.
In the war against COVID-19, health system resilience, accountability and integrity are more important than ever. The health systems of some high-income-countries have become overwhelmed by the rising number of infected persons and deaths from the disease. Weaker, corruption-prone and less resilient health systems of many low and middle income countries are even more vulnerable. Some may even collapse.
Research has underscored the vulnerability of Nigeria’s health system. A consistently solid and accountable health system has eluded the country. The requisite health resources are also in short supply.
The reality is that citizens, health workers and international development partners worry that Nigeria’s health system is very weak and may be unable to adequately combat COVID-19.
Money management issues
Contributing to the weakness of the system is the federal and state governments’ very low budgetary allocation to the health sector.
Nigeria’s health sector appropriation in the 2020 budget is 4.5% of the total federal budget, about N427.3 billion. This is far below the 15% agreed in the 2001 Abuja Declaration, when African Union member countries pledged to improve spending on their health sector and urged donor countries to scale up support.
Following recent collapse in the international price of crude oil, the budget has now been revised downward.
Concerns about budget are valid. But of equal weight is the issue of the optimal management of presently allocated funds. This continues to be an underlying problem.
In a paper published last year health workers and decision makers set out to explain the reasons that corruption persists in the healthcare sector.
They identified the top 49 corrupt practices in the Nigerian health system. These included absenteeism, procurement-related corruption, under-the-counter payments, health financing-related corruption, and employment-related corruption.
Discussions with health workers in an ongoing study on COVID-19 spanning different regions in Nigeria echo these findings. Health workers have indicated that there are structural and facility-level corruption and accountability issues that they have to work with routinely. These compromise their efforts to do their jobs as healthcare providers, including containing COVID-19 and its impacts.
We also found that there were high levels of distrust in the government, poor welfare conditions for health workers and health service users, and a lack of proper equipment.
What needs to be done
Patricia Garcia, a leading figure on global health issues, believes that for most developing countries, “with more money comes more corruption”.
Nigeria is certainly a case in point.
So what can be done about it?
The previous journal publication on Nigeria noted that front-line workers and policymakers agreed that tackling corrupt practices requires a range of approaches.
Garcia herself advocates an incremental approach to tackling the problem.
We could start from the bottom up, taking small steps. We need rigorous research methods to prove or disprove that a strategy works. Addressing and ending corruption will require the participation of researchers from several disciplines and multiple approaches, and the commitment of funders to supporting serious research. Corruption in global health should not continue as an open secret, it has to be confronted and brought to light.
The rapid spread of COVID-19 in Nigeria calls for sincerity on the parts of the authorities, the health workers and citizens. It also demands vigilance from civil society organisations and the mass media to foster accountability.
During the Ebola outbreak, Transparency International reported how systemic corruption in West Africa’s health sector undermined the response. Unfortunately, the lessons seem to have parted with the epidemic. We hope that lessons from dealing with COVID-19 will strengthen the health system in Nigeria and put in place stiff anti-corruption measures.
We will undertake further studies on health system corruption and accountability through a new project that is funded by the UK’s Joint Health System Research Initiative, entitled “Understanding and eliminating health sector corruption impeding UHC at district level in Nigeria and Malawi: institutions, individuals and incentives”.
Obinna Onwujekwe, Professor of Health Economics and Policy and Pharmaco-economics/pharmaco-epidemiology in the Departments of Health Administration & Management and Pharmacology and Therapeutics, College of Medicine, University of Nigeria; Charles Orjiakor, Lecturer , University of Nigeria, and Prince Agwu -, Researcher in the Department of Social Work, University of Nigeria
Oil prices rose on Tuesday, extending gains from the previous session, on expectations that fuel demand will begin to recover as some U.S. states and nations in Europe and Asia start to ease coronavirus lockdown measures.
West Texas Intermediate (WTI) crude CLc1 futures rose as much as 8.2% to a three-week high of $22.06 per barrel and were up 6.5%, or $1.33, at $21.72 at 0454 GMT. The U.S. benchmark is on a five-day win streak that started on April 29.
Brent crude LCOc1 futures hit a high of $28.57 a barrel and were up 4.8%, or $1.31, at $28.51. Brent is up for a sixth straight day.
Prospects improved for fuel demand as some U.S. states and several countries, including Italy, Spain, Portugal, India and Thailand, began allowing some people to go back to work and opened up construction sites, parks and libraries.
"Considering ... the depths of demand destruction, markets are probably inclined to take any good news relatively quickly," said Daniel Hynes, senior commodity strategist at Australia and New Zealand Banking Group.
Reflecting hope that the oil industry may have passed the worst point of coronavirus-induced lockdowns, hedge funds and money managers were buyers of petroleum derivatives for a fifth straight week to the week ended on April 28.
Still, global oil demand probably collapsed by as much as 30% in April, analysts have said, and the recovery is likely to be slow, especially with airlines expected to remain largely grounded for months to come.
Australian national carrier Qantas Airways' (QAN.AX) Chief Executive Alan Joyce said on Tuesday that "international travel demand could take years to return to what it was."
"Travel demand is essentially zero for the foreseeable future," United Airlines Holdings Inc spokesman Frank Benenati said. The Chicago-based carrier plans to cut at least 3,400 management and administrative positions in October.
With Saudi Arabia, Russia other major producers and companies slashing output, the market shrugged off a decision by a Texas energy regulator to abandon his proposal for a 20% output cut in the United States' biggest oil-producing state.
"The intent in itself was positive - but it was always going to be a long shot," Hynes said.
U.S. crude oil stockpiles were seen rising for a 15th consecutive week, while inventories of oil products also likely built last week, a preliminary Reuters poll showed.
Citi analysts expect that as demand returns significant production curtailments will turn the record inventory builds of the second quarter into record draws in the third quarter.
In a time of crisis, such as the current COVID-19 pandemic, people’s willingness to donate money increases significantly, however, the beneficiaries of these donations, such as funds and non-profit organisations (NGOs), are often less than transparent about the tax implications for donors.
Equally, most people seem ignorant of the rules that govern donations especially with the fast changing financial policies government in implementing in response to COVID-19 support – whether in the case of private donations, or payroll giving – and that these can be used as a way to claim tax deductions or reduce your payable tax, based on supporting various approved section 18A causes, or the Solidarity Fund.
Giving is a critical part of society, it’s what makes society more just and pleasant. However, it is worrying when charity funds pop up, especially during a time of crisis, and simply appeal to people to donate, with the promise of a tax benefit.
But we need to be clear, as society, about what tax deductions are allowed and how this works, especially in times such as these, when people feel that it is important to give towards a cause. It’s an emotive issue, but it cannot be based on a knee-jerk reaction. Donations should form part of your financial planning. A tax calculator can help you determine what tax rebates you can expect from donations
It is highly misleading to set up a fund and declare that all donations are tax deductible, without laying out the parameters and regulations that govern donations, as per Section 18A of the Income Tax Act.
Know the limits
In South Africa, companies that wish to donate funds need to know that legislation only allows for an amount of R10 000 a year to be used to gain a tax rebate. Above that amount, the donation will get taxed at 20% on their donation, however Section 18A Approved organisations, with A Public Benefits Organisations status, are exempt from this limit. This is a separate tax and is managed as such. In the case that you give an employee R12 000 as a donation (from the R10 000 limit), you will be required to pay 20% on the 2k. If the donations is to an PBO, then the amounts donated are exempt from the limit, however the claim amount is capped at 10% of taxable income per year, and if amounts are given over the 10%, the ‘tax saving’ will be carried forward to the next financial year.
Similarly, individuals are can give up to R100 000 a year tax free, after which they will also have to pay tax 20% for non deductible donations between R100 000 to R3.5 million and then a tax of between 20-25% applies on any amount donated above the R100 000. Donations to SARS approved Section 18A Public Benefit Organisations are excluded from the limit too, and again other limits do apply on your ‘tax saving’ planning for donations. Such as the 10% that can be claimed per year. Donations to the Solidarity Fund have a limit of 20% and the donation cap for employees, giving through payroll giving, may be going up from 5% to around 33%, which is a substantial tax saving for the donor.
It is, therefore, important to dispel the initial confusion that is created by funds and Section 18A approved organisations that are marketed as tax deductibles, when people are not savvy enough to know the limits. In fairness, people should be given a chance to decide how much they can donate, and manage their tax more effectively.
Perhaps some of the confusion around donations and tax rebates speaks to the underlying regulation around taxation, and that it is not really followed in a lot of cases. The legislation has been around for as long as NGOs have been collecting donations. Yet, only a few of them manage their Section 18A certificates diligently, others will only do it when asked. This means that society is missing out hugely on tax savings.
Becoming more savvy about the tax implications of donating money and donating amounts that allow donors – both individual and corporate – to take advantage of tax rebates is not only good for the taxpayer, but also for the beneficiaries. If donations are based on sound financial planning, it allows people to build relationships with causes and support them in the long term. While you get your tax benefit, the beneficiaries can plan their work better, based on expected donations.
I would also call for more transparency from the side of NGOs and charity funds. In many cases, money is given, but then there is no one to account for where this money goes or what exactly it is being used for. Funds donated should contribute to several key issues in South Africa. Donor’s don’t need to know where the funds go; however, transparency in this regard will go a long way in further donations. Yet – despite protocols being in place for donations – numbers are often misrepresented, and money is seldom accounted for at the level required
Companies, regulators, charities and individuals need to work together to get greater clarity in this area, and this conversation needs to happen soon. In some respects, the regulations are unclear, yet we expect people to continue donating.
During a time of crisis, charities and funds become our go-to places to help others. Perhaps we should start looking at the business of donating a bit more seriously.
This is not the first time ratings agencies have adopted a procyclical approach – that is, one in which bad news is simply piled on bad news.
During the 2008 global financial crisis, ratings agencies were accused of aggressively downgrading countries whose economies were already strained. Reports by the European and US Commissions found evidence that their decisions worsened the financial crisis.
Nobel laureate Joseph Stiglitz has also accused rating agencies of aggressively downgrading countries during the 1997 East Asian financial crisis. The downgrades were more than what would be justified by the countries’ economic fundamentals. This unduly added to the cost of borrowing and caused the supply of international capital to evaporate.
In addition to the issue of timing, the effectiveness and objectivity of the rating methodology continues to be questioned by policymakers. Their methodological errors in times of crisis, together with the unresolved problem of conflict of interests, leave both issuers and investors vulnerable to losses.
The procyclical nature of ratings needs to be put under check to avoid market panic. The devastating effects they add on economies that are already strained has to be challenged. The coronavirus pandemic is yet another episode to prove this.
Ten African countries have been downgraded since the COVID-19 pandemic started – Angola, Botswana, Cameroon, Cape Verde, Democratic Republic of the Congo, Gabon, Nigeria, South Africa, Mauritius and Zambia.
But, in my view, the downgrade decisions reflect monumental bad timing. I would also argue that, in most cases, they were premature and unjustified.
Since international rating agencies have tremendous power to influence market expectations and investors’ portfolio allocation decisions, crisis-induced downgrades undermine macroeconomic fundamentals. Once downgraded, like a self-fulfilling prophecy, even countries with strong macroeconomic fundamentals deteriorate to converge with model-predicted ratings. Investors respond by raising the cost of borrowing or by withdrawing their capital, aggravating a crisis situation.
South Africa was stripped of its last investment grade by Moody’s. The rating agency cited a rising debt burden of 62.2%, which was estimated to reach 91% of GDP by fiscal 2023; and structurally weak growth of less than 1%, which was estimated to shrink to -5.8%. It was hoped that Moody’s would delay its rating action to see the impact of the coronavirus onshore and the country’s policy responses. The procyclical effect of the downgrade magnified the impact of the lockdown. Fitch further pushed it deep into junk a week later.
Fitch cut Gabon’s sovereign rating to CCC from B on 3 April 2020. The rationale for the downgrade was that agencies expected the risks to sovereign debt repayment capacity to increase due to liquidity pressure from the fall in oil prices.
Moody’s revised Mauritius’s sovereign rating outlook from Baa1 stable to negative on 1 April 2020. Moody’s said the downgrade was driven by the expectation of lower tourist arrivals and earnings due to the coronavirus. Both would have a negative impact on the country’s economic growth.
Nigeria was downgraded by S&P from B to B- on 26 March 2020. The reason was that COVID-19 had added to the risk of fiscal and external shock resulting from lower oil prices and economic recession. Yet the investment grades of Saudi Arabia and Russia were spared.
S&P also downgraded Botswana – one of the most stable economies in Africa – which had an A rating. The agency cited weakening fiscal and external balance sheets due to a drop in demand for commodities and expected economic deceleration because of COVID-19. Botswana’s downgrade came four days after it went into a lockdown and before it had recorded a confirmed case of COVID-19.
These downgrades deep into junk impose a wave of other problems, worse than COVID-19. They cut sovereign bond value as collateral in central bank funding operations and drive interest rates high. Sovereign bond values are grossly discounted, at the same time escalating the cost of interest repayment instalments, ultimately contributing to a rise in the cost of debt. A wave of corporate downgrades also follows because of the sovereign ceiling concept – a country’s rating generally dictates the highest rating assigned to companies within its borders.
In response to the procyclical COVID-19 induced downgrades, African countries need to implement these four measures.
First, to curb the procyclical nature of rating actions that disrupt markets by triggering market panic, the timing of rating announcements needs to be regulated. Regulators of rating agencies such as the Financial Sector Conduct Authority in South Africa have the power to determine the timing of rating. In times of crisis, rating agencies should defer publishing their rating reviews as markets have their way of discounting risk when fundamentals are conspicuously changing.
Second, the rules of disclosure and transparency should be enhanced during rating reviews. Rating methodologies, descriptions of models and key rating assumptions should be disclosed to enable investors to perform their own due diligence to reach their own conclusions.
Third, in collaboration with other market regulatory bodies in the financial markets, transactions that unfairly benefit from crisis-driven price falls should be restricted. This includes short-selling of securities – a market strategy that allows investors to profit from securities when their value goes down.
Lastly, African countries need to develop the capacity for rigorous engagement with rating agencies during rating reviews and appeals. They need to make sure that the agencies have all the information required to make a fair assessment of their rating profiles.
The African Union and its policy organs need to fast track the adoption of its continental policy framework of mechanisms on rating agencies’ support for countries. This will assist them to manage the practices of rating agencies.
Royal Dutch Shell has cut its dividend for the first time since the 1940s after a first-quarter loss – and warned virus-ravaged oil prices will take time to fully recover.
The Anglo-Dutch group sank into a $24-million ($29.5-million) net loss in the three months to March – when oil went into freefall on tumbling demand and a price war between producers Saudi Arabia and Russia.
That contrasted sharply with profit after tax of $6.0 billion in the same period a year earlier, the London-listed giant added in a statement.
Earnings on a current cost-of-supplies (CCS) basis – stripping out changes to the value of oil and gas inventories – sank 46 percent to $2.9 billion in the reporting period, Shell said.
The energy titan, which axed spending last month in response to the oil crash, said it had slashed its shareholder dividend by 65 percent to 16 cents per share, from 47 cents in the fourth quarter.
“As a result of COVID-19, there is significant uncertainty in the expected macroeconomic conditions with an expected negative impact on demand for oil, gas and related products,” Shell said.
“Furthermore, recent global developments and uncertainty in oil supply have caused further volatility in commodity markets.”
It warned that the pandemic would spark a difficult second quarter — with no price bounceback in prospect.
“It would be too naive at this point in time to say: we know what is happening, this is just another downturn, things will bounce back, and we will get to where we were before,” van Beurden told Bloomberg TV.
“I think that would be an inappropriate conclusion to draw at this point in time.”
The coronavirus pandemic is likely to last as long as two years and won’t be controlled until about two-thirds of the world’s population is immune, a group of experts said in a report.
Because of its ability to spread from people who don’t appear to be ill, the virus may be harder to control than influenza, the cause of most pandemics in recent history, according to the report from the Center for Infectious Disease Research and Policy at the University of Minnesota. People may actually be at their most infectious before symptoms appear, according to the report.
After locking down billions of people around the world to minimize its spread through countries, governments are now cautiously allowing businesses and public places to reopen. Yet the coronavirus pandemic is likely to continue in waves that could last beyond 2022, the authors said.
“Risk communication messaging from government officials should incorporate the concept that this pandemic will not be over soon,” they said, “and that people need to be prepared for possible periodic resurgences of disease over the next two years.”
Developers are rushing to make vaccines that may be available in small quantities as early as this year. While large amounts of vaccine against the 2009-2010 flu pandemic didn’t become available until after the outbreak peaked in the U.S., one study has estimated that the shots prevented as many as 1.5 million cases and 500 deaths in that country alone, the report said.
The report was written by CIDRAP director Michael Osterholm and medical director Kristen Moore, Tulane University public health historian John Barry, and Marc Lipsitch, an epidemiologist at the Harvard School of Public Health.
South Africa is seeking to create a new thriving national airline out of the ashes of its current state-owned carrier, which is technically insolvent and on the brink of being placed in liquidation by administrators.
An ideal replacement for South African Airways would have both public and private owners, maintain the country’s trade connections and make a profit, the Department of Public Enterprises said in a statement on Friday. The plan has the backing of SAA’s near 5,000-strong workforce, the ministry said, without mentioning the business-rescue team that has been running the airline since December.
“The old SAA is dead, there is no doubt about that,” Public Enterprises Minister Pravin Gordhan said by phone from Pretoria, the capital. “But what will take its place may be some or all of the old SAA and maybe some other airlines too.”
SAA’s administrators, led by Les Matuson and Siviwe Dongwana, were working on a recovery plan for the perennially loss-making carrier before the Covid-19 crisis forced the grounding of all aircraft. They began the process of liquidating the airline last month after the government refused to provide a bailout package, and have asked all employees to agree to severance packages.
That offer remains on the table, a spokeswoman for the administrators said when asked to comment on the DPE’s statement. Labor groups have yet to sign up to any deal, and two of the biggest have approached the Labour Court to have the retrenchment notices deemed illegal, according to the News24 website.
The National Union of Metalworkers of South Africa and the South African Cabin Crew Association argue that as the business-rescue practitioners haven’t submitted their recovery plan for SAA, widespread job cuts are inappropriate, News24 said.
South Africa’s whole aviation industry has been plunged into crisis by the coronavirus pandemic. SA Express, part of the wider SAA group, has been placed in provisional liquidation, while low-cost operator Comair Ltd. said on Thursday it’s selling assets and in talks with lenders to shore up a precarious financial position.
FlySafair, another budget carrier, is calling for the state to waive fees while planes are unable to fly to help the industry shore up cash reserves. South Africa is operating a phased reopening of the economy after imposing a strict lockdown to contain the coronavirus, but the resumption of domestic air travel is expected to be far down the agenda.
Gordhan didn’t give details on how a new SAA could be created, calling it a “complex issue.” He praised the current version’s efforts transporting medical supplies and repatriating citizens stranded by the coronavirus, saying South Africa needs “a national flag carrier that is a source of pride.”