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IMF tells Ghana to adopt new revenue plan before April review

Comments (0) Actualites, Africa, Economy, Politics

ACCRA (Reuters) – Ghana must legislate new measures to boost revenues by at least 0.5 percent of gross domestic product before the IMF reviews a $918 million credit deal next month, the Fund said.

The West African nation must also outline plans to clean up the financial sector and show stronger commitment to cut debt, including limiting its next Eurobond for budget support to $500 million, IMF said in a document seen by Reuters.

Finance Minister Ken Ofori-Atta said last week the government planned to issue up to $2 billion of sovereign issuance by June to pay down debt that hit 68.7 percent of GDP last November and help finance the 2018 budget.

Ghana is seeking a combined fifth and sixth review of the IMF programme in early April, government and IMF sources told Reuters. The fifth review, originally scheduled for December, had delayed pending implementation of benchmark structural reforms.

“Parliament to adopt revenue measures equivalent to 0.5 percent of GDP (one billion cedis) by March 31 and do more later,” the Fund said. The document, dated Feb. 26, formed the basis for talks between an IMF staff mission and the government this week.

The mission left Accra on Thursday after discussing the actions required for the next review, as well as other reforms needed to exit the programme early next year. It is unclear if the talks were conclusive.

Ghana, which exports cocoa, gold and oil, is in its final year of the programme, designed to stabilise an economy dogged by high inflation and debt, and low growth.

The Fund said the government must publish by end of March an agreement between the Finance ministry and Bank of Ghana to reinforce zero financing of the budget deficit, a core condition of the programme.

The government of President Nana Akufo-Addo, inaugurated in January 2017 said it inherited $2.3 billion in accumulated debt owed to power utilities and has launched long-term bonds for repayment. It is also probing unpaid contract arrears of around $1.6 billion.

The IMF said while the country made progress, the central bank must adopt a fully market-based foreign exchange management policy and cut non-performing loans.

The government aims to cut the budget deficit to 4.5 percent of GDP in 2018 from a revised 6.3 percent while inflation is projected to fall to 8.9 percent. It sees GDP growth at 6.8 percent from a projected 7.9 percent in 2017.


(Reporting by Kwasi Kpodo; editing by John Stonestreet)

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Kenya raises $2 bln Eurobond but concerns over deficit linger

Comments (0) Actualites, Africa, Economy, Infrastructure, Politics

NAIROBI (Reuters) – Kenya shook off a downgrade and the loss of access to an IMF standby credit facility to raise a $2 billion dollar bond at competitive yields, but market participants said on Thursday it still needs a credible plan to tackle its fiscal deficit.

Kenya received $14 billion worth of bids. It took just $1 billion in a 10-year note with a yield of 7.25 percent, and another $1 billion in a 30-year tranche with a yield of 8.25 percent, Thomson Reuters news and market analysis service IFR reported.

“They were in line with the yield curve,” said a fixed income trader in Nairobi.

The eventual yield reflected a tightening of the initial pricing area by about 30 basis points. It was close to the comparative yields for other African sovereigns like Nigeria, the trader said.

Last week, credit ratings agency Moody’s downgraded Kenya’s debt rating to B2 from B1 while officials were in the middle of the bond roadshow abroad, angering the government.

More bad news emerged on Tuesday, after the International Monetary Fund said it had frozen Kenya’s access to a $1.5 billion standby facility last June, after failure to agree on fiscal consolidation and delay in completing a review.

“They (the government) were able to weather the knocks of the Moody’s downgrade and the IMF issue,” said Aly Khan Satchu, a Nairobi-based independent trader and analyst.

But he warned that the government needed to convince investors it has a plan to tackle the fiscal deficit.

“People are worried about debt-to-GDP ratios and they want to see a stronger language about how this will be addressed,” he said.

Kenya’s total debt is about 50 percent of GDP, up from 42 percent in 2013. It has borrowed locally and abroad to build infrastructure like a new railway line from Nairobi to the port of Mombasa.

The finance ministry has published a plan to lower its fiscal deficit to 7 percent of GDP at the end of this fiscal year in June, from 8.9 percent in 2016/17, and to less than 5 percent in three years’ time.

Satchu said it was not enough for investors. They want to see more targeted infrastructure investments that will ensure a return, and attempts to reign in a ballooning public service wage bill and other recurrent expenditure.

“We have got to walk the talk. We are not even talking the talk yet,” he said.


(By Duncan Miriri. Editing by Katharine Houreld and Toby Chopra)

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Algeria GDP growth at 3.9% in 2015

Comments (0) Business, Latest Updates from Reuters, Middle East

ALGIERS (Reuters) – Algeria’s economy grew by 3.9 percent in 2015, up from 3.8 percent the previous year, boosted by higher output in agricultural sector, the government said.

Last year’s growth was slightly higher than the 3.8 percent government forecast and the 3.7 percent International Monetary Fund (IMF) expectations.

Algeria relies heavily on oil and gas, which make up 60 percent of the state budget and 95 percent of total exports.

After the fall in crude oil prices, which has significantly hit its finances, Algeria has been trying to diversify the economy through incentives to develop the non-petroleum sector but those efforts are still in their infancy.

Hydrocarbon sector grew 0.4 percent last year after a 0.6 percent decline in 2014, according to the National Statistics Office data released on Sunday.

Growth in the non-oil sector stood at 5.5 percent in 2015 slightly lower than the 5.6 percent the previous year.

But agriculture output grew 7.6 percent, up from 2.5 percent in 2014, the figures showed. Algeria’s grain output in 2015 reached 4 million tonnes, a 14.3 rise from 20114.


(Reporting by Hamid Ould Ahmed Editing by Jeremy Gaunt)

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Namibia’s GDP growth slows to 5.7 pct in 2015

Comments (0) Africa, Business, Latest Updates from Reuters

WINDHOEK (Reuters) – Namibia’s economy grew by 5.7 percent in 2015 compared with a revised 6.3 percent expansion in 2014, data on the statistics agency’s website showed on Thursday.

The manufacturing sector is estimated to have declined by 7.1 percent during 2015, while mining industry recovered, shrinking by only 0.1 percent compared to 6.2 percent decline in the previous year, Namibia Statistics Agency said.


(Writing by Mfuneko Toyana; Editing by Olivia Kumwenda-Mtambo)

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Zimbabwe needs up to 8% growth in next decade to revamp economy

Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe needs an annual growth rate of up to 8 percent over the next 10 to 15 years to revamp its economy, Finance Minister Patrick Chinamasa said on Thursday, in addition to other reforms agreed with an International Monetary Fund delegation.

On Wednesday, Chinamasa said President Robert Mugabe had agreed to major reforms, including compensation for evicted white farmers and a big reduction in public sector wages as the government tries to woo back international lenders.

Chinamasa said that new loans from international lenders will only come if the drought-stricken Southern African nation showed the capacity to introduce a raft of economic reforms.

“Any reform agenda is painful. The journey we have travelled has been difficult and will remain difficult,” Chinamasa told a forum discussing Zimbabwe’s future prospects.

Chinamasa and Reserve Bank governor John Mangudya are leading Zimbabwe’s re-engagement with international lenders and the finance minister has previously said he has had to overcome divisions within Mugabe’s cabinet to pursue that process.

Zimbabwe is trying to emerge from more than a decade of isolation that saw the IMF, World Bank and African Development Bank freeze lending in 1999. Western powers imposed sanctions on Mugabe’s government over allegations of vote rigging and human rights abuses. Mugabe rejects the charges.

The IMF executive board will on May. 2 consider Harare’s plan to repay $1.8 billion in arrears. Chinamasa said he was seeking clear commitments from the IMF that clearing the arrears would trigger new financial aid.

“As I stand before you I am in buoyant spirits because I know that the measures that we are taking will exploit and realize the full potential of this country. We just need an uninterrupted process of reform,” said Chinamasa.


(Reporting by Macdonald Dzirutwe; Editing by James Macharia)

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Rwandan economic growth to slow to 6.8% in 2016

Comments (0) Africa, Business, Latest Updates from Reuters

KIGALI (Reuters) – Rwanda’s economic growth rate will ease to 6.8 percent in 2016 from 7.1 percent in 2015, the World Bank said on Friday, noting the slow implementation of the country’s budget.

Rwanda maintained “steady growth and macroeconomic stability” for much of 2015, the bank said in a report, adding that the aid-dependent country had benefited from low oil prices.

“Downside risks have been increasing, both externally and domestically,” Yoichiro Ishihara, the bank’s senior economist for Rwanda, said in a statement. “On the domestic front, delayed execution of the budget and inadequate financing for development are of concern.”

Rwanda is one of the economies in the region that investors have hailed for solid fundamentals, including low debt and inflation.

The growth rate averaged 8.2 percent from 2006 to 2012 in the landlocked state, which has become a favourite with international investors two decades after the 1994 genocide.


(Reporting by Clement Uwiringiyimana; Editing by Edith Honan and Hugh Lawson)

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Mali economic growth to rise to 6% in 2016

Comments (0) Africa, Business, Latest Updates from Reuters

BAMAKO (Reuters) – Mali’s economy will grow 6 percent this year, bolstered by agricultural and mining production, the ministry of economy and finance said on Tuesday, up from an expansion of 4.9 percent in 2015.

According to preliminary figures, the West African nation produced 8.04 million tonnes of grain this season, up from 6.98 million in 2014-2015, and 550,370 tonnes of cotton, an increase from 548,000 tonnes in 2014-2015.

“The prospects are good,” Oumar Diall, head of Mali’s forecasting and economic analysis division, told Reuters. “The growth performance will be particularly in agricultural cotton but also gold exports,” he added.

President Ibrahim Boubacar Keïta said last month that Mali produced 50 tonnes of gold in 2015 and hopes to produce more in 2016 as new mines comes online, though no specific forecast has been given.

The projected economic growth this year would represent a turnaround for Mali, one of the region’s leading cotton producers, whose growth slipped to 4.9 percent last year, down from 7.2 percent in 2014.

Malian government forces are embroiled in a conflict with Tuareg separatists in the north of the country. Although a peace deal was signed last June, mediators have struggled to enforce it and militants have continued to stage deadly attacks including at a hotel in the capital Bamako in November.


(Reporting by Tiemoko Diallo, writing by Edward McAllister; editing by Gareth Jones)

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Rwanda’s economic growth to slow to 6.3% this year

Comments (0) Africa, Business, Latest Updates from Reuters

KIGALI (Reuters) – Rwanda’s economic growth is likely to slow to 6.3 percent this year from an estimated 7 percent last year, mainly due to smaller expansions in the agriculture, construction and services sectors, the central bank chief said on Thursday.

Governor John Rwangombwa told a news conference the slower rate of expansion was partly due to the effects of El Gino rains.

“Agriculture has a big hand in that slight reduction from 7 percent to 6.3 percent,” he said, putting growth in the sector, one of the main drivers of the economy, at 5.1 percent this year compared with a projected 5.5 percent last year.

Rwangombwa said the service sector was expected to expand 7.1 percent this year after growing 7.3 percent in the first three quarters of last year.

He added the construction sector was also seen slowing compared with last year.

He said inflation was expected to remain within the 4.5 and 5.5 percent range during the year.

Rwanda’s urban inflation rate, a key indicator for the central bank, was unchanged at 4.5 percent in January compared with the previous month.


(Reporting by Clement Uwiringiyimana; Writing by George Obulutsa; Editing by Hugh Lawson)

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Zambia economic growth seen at 3.7% in 2016

Comments (0) Non classé

CAPE TOWN (Reuters) – Zambia’s economy is expected to grow by 3.7 percent this year, largely stable from last year and is seen expanding by more than four percent in 2017, the deputy finance minister said on Wednesday.

Christopher Mvunga also said the central bank had not intervened in the market to stabilise the struggling kwacha by selling dollars.

“We are not using reserves by any means to stabilise the kwacha, absolutely not,” Mvunga told Reuters in an interview at a mining conference in Cape Town.

The World Bank has said Zambia’s GDP growth will fall below 4 percent this year due to a combination of domestic and international pressures but expansion in Africa’s second-largest copper producer will pick up in subsequent years.


(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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Ivory Coast set for GDP growth of 9.8% in 2016

Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Ivory Coast’s economy will grow by 9.8 percent this year, up from 9.5 percent in 2015, Budget Minister Abdourahmane Cisse said during a news conference on Thursday.

The world’s top cocoa grower, and French-speaking West Africa’s largest economy, has averaged growth of around 9 percent over the past four years, according to the government, as its economy has rebounded from a decade of political turmoil and civil war. The International Monetary Fund last year predicted average growth of 8.4 percent in 2015 and 2016.


(Reporting by Loucoumane Coulibaly; Writing by Joe Bavier)

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