WASHINGTON (Reuters) – Zimbabwe has cleared its 15-year-old financial arrears with the International Monetary Fund, a first step towards a new IMF loan program for the drought-stricken, cash-starved country, the Fund said on Thursday.

Zimbabwe settled obligations of about $107.9 million by transferring part of its cash holdings at the IMF to the Fund’s Poverty Reduction and Growth Trust, IMF spokesman Gerry Rice said in a statement. Zimbabwe had been in continuous arrears since 2001, he added.

“Zimbabwe is now current on all its financial obligations to the IMF,” Rice said.

However, a new IMF loan program for Zimbabwe cannot be considered until the country clears more than $1 billion in World Bank arrears and another $600 billion-plus owed to the African Development Bank.

A spokesman for the World Bank could not immediately be reached for comment on Thursday night on the funds’ status of Zimbabwe.

The next step towards an IMF loan would be consideration by the Fund’s executive board of a formal proposal to lift remaining remedial measures imposed on Zimbabwe because of the arrears.

“Access to IMF resources would first require the establishment of a credible plan to clear arrears with other IFIs and with bilateral creditors, in line with applicable Fund policies,” the IMF said in a statement. “It would also require implementing a strong reform agenda to restore economic stability and foster sustained and inclusive growth.”

(Reporting by David Lawder; Editing by Sherry Jacob-Phillips)

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LUSAKA (Reuters) – Zambia’s economy should grow three percent this year, little changed from 2015, while the fiscal deficit will widen after Africa’s second largest copper producer was hit by depressed metal prices, Finance Minister Felix Mutati said on Thursday.

Zambia’s fiscal deficit will top 10 percent of Gross Domestic Product this year, up from 8.1 percent in 2015, after state spending rose due to infrastructure projects, emergency power imports and subsidies, Mutati told parliament.

Zambia began talks with the International Monetary Fund in March about a potential aid package after agreeing the budget deficit was not sustainable. The government hopes to conclude a programme with the IMF in the first quarter of next year.

The value of Zambia’s exports has fallen substantially due to lower commodity prices, putting pressure on external reserves which have dipped to $2.3 billion from $3.1 billion in July 2015.

“Tighter liquidity and high cost of borrowing have weighed on the private sector, threatening growth prospects,” said Mutati, adding that electricity prices, inflation and policy uncertainty had hobbled the mining sector.

(Reporting by Chris Mfula; Editing by Joe Brock and James Macharia)

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JOHANNESBURG (Reuters) – South Africa’s central bank has set the bar very high for ending a policy tightening cycle that has seen it raise lending rates by 200 basis points since early 2014, governor Lesetja Kganyago said on Thursday.

The bank sees consumer inflation, currently at 6.1 percent, averaging 6.4 percent in 2016, outside of its target range of 3-6 percent.

(Reporting by Oliiva Kumwenda-Mtambo; Writing Mfuneko Toyana; Editing by James Macharia)

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CAIRO (Reuters) – President Abdel Fattah al-Sisi issued a decree establishing a Supreme Investment Council aimed at encouraging much-needed investment in Egypt, the state news agency said on Tuesday.

It will be chaired by Sisi and its decisions are binding on all ministries and public bodies.

Egypt has been trying to attract investment needed to restore growth since the 2011 uprising, which ushered in protracted political turmoil and scared away tourists and foreign investors – key sources of hard currency.

In comments on CBC television channel, Investment Minister Dalia Khorshid said the government would submit an investment law to parliament within next month.

“The draft of the law is ready…and we want to finish it during the next month,” Khorshid said.

The government has been working on a new investment law it hopes will slice through Egypt’s notorious red tape and make it easier and quicker for foreign investors to do business.

The decision to establish the council, published in the Official Gazette on Sunday, said its members will include the prime minister and the Central Bank governor and ministers of defence, interior, finance, investment, trade, justice and the head of the General Intelligence Service.

The board will meet every two months upon the chairman’s invitation and the decisions will be made by voting with a majority. The president will take the decision in case the votes are equal.

The council’s roles include following up on the execution of investment plans, development of major economic projects and projects that partner with the private sector.

(Reporting by Ahmad Elhamy and Ali Abdelatti, Writing by Amina Ismail)

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DUBAI (Reuters) – Emirates airline could reduce the frequency of its flights to African cities or cut routes completely if current economic and financial challenges on the continent continue, President Tim Clark told reporters on Tuesday.

Foreign airlines flying to Nigeria have started to refuel abroad because jet fuel supplies there have become more expensive and scarce as the country battles a hard currency shortage.

Emirates has started a detour to Accra, Ghana to refuel its daily Abuja-bound flight, a spokesman said last month; the airline had already cut its twice-daily flights to Lagos and Abuja to just one.

“In certain African countries, the currencies have really gone down, so we’re reflecting on a number of these to look at where it’s just not worth us to travel,” Clark said on the sidelines of an International Air Transport Association event.

He added that Emirates’ load factor – a measure of capacity utitlisation – for the rest of 2016 and 2017 would probably be in the mid-70s to low-80s in percentage terms, although there would be some peaks and troughs in that time.

(Reporting by Tom Arnold; Writing by David French; Editing by Andrew Torchia)

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JOHANNESBURG (Reuters) – Two South African former tax service employees who have been charged with fraud alongside Finance Minister Pravin Gordhan asked the state on Monday to review the charge, the National Prosecution Authority (NPA).

Oupa Magashula and Ivan Pillay worked under Gordhan during his tenure as boss of the South African Revenue Service (SARS) from 1999 to 2009.

Opposition parties and critics have described the accusation as part of a ploy to muzzle the Treasury, which has been critical of the political influence yielded by allies of President Jacob Zuma.

The NPA said it had invited Gordhan to make representations regarding the charges to its head, Shaun Abrahams, by Tuesday afternoon.

Gordhan said on Friday he considered such review pointless because he doubted the “ability or willingness” of the NPA to give him a fair hearing.

Gordhan has been summoned to appear in court on Nov. 2 on charges that he broke the law when he granted early retirement to Pillay and then re-hired him as a consultant.

(Reporting by Mfuneko Toyana; Editing by John Stonestreet)

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