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Saturday, 17th November 2018
8:10:02pm

Economy

Articles related to economy

Ghana is on track to exit its almost $1.0bn bailout programme with the International Monetary Fund by the end of the year, finance minister Ken Ofori-Atta said on Thursday.

"We are now on course to exit the IMF programme by the end of this year," he said in a speech to parliament presenting the 2019 budget proposal.

"We are grateful to the IMF and are determined to maintain a combination of economic discipline and vibrancy that will ensure that we will not have to be rescued in that manner in the future."

The minister said Ghana was also on course to achieving its fiscal deficit target of 3.7% of GDP for the year, as it works to convince investors it is committed to sound economic policies. 

Gross domestic product is on track to expand 5.6% in 2018 and 7.6% in 2019, he added.

President Nana Akufo-Addo's New Patriotic Party came to power calling for economic reform after his predecessor John Dramani Mahama was forced to go to the IMF for a bailout three years ago.

The new government has worked to chip away at Ghana's debt and curtail the deficit.

"The deficit projection for 2019 - at 4.2% of GDP - is helped by the recent GDP rebasing," said Razia Khan, Africa economist at Standard Chartered.

"What matters far more for the purposes of debt sustainability will be whether primary fiscal surpluses can be comfortably achieved."

-AFP

The World Bank has scrapped a plan to loan Tanzania $300 million after the country reaffirmed its policy of banning pregnant girls from school and recently made it a crime to question official statistics, a bank official said on Wednesday.

The Washington-based lender decided against presenting the education program related to the loan to its board for approval last month, the official said.

Tanzanian authorities did not answer calls for comment on Wednesday.

President John Magufuli’s government has been condemned by rights groups and Western governments for what they say is its growing authoritarianism and intolerance of dissent. The government has rejected that criticism.

Tanzania has banned pregnant girls from attending state primary and secondary schools since 1961. Last year, Magufuli reaffirmed that policy and said that as long as he was president no pregnant student would be allowed to return to school.

“The World Bank supports policies that encourage girls’ education and make it possible for young women to stay in school until they reach their full potential,” the Bank said in an e-mailed statement.

“Working with other partners, the World Bank will continue to advocate for girls’ access to education through our dialogue with the Tanzanian government.”

Last month, the World Bank also criticised new Tanzanian legislation which will punish anyone who questions official statistics, saying the law will undermine the production of useful, high-quality data. 

The attorney general said at the time that the changes were needed to enforce standards.

Last week, the World Bank suspended visiting missions to Tanzania, according to an internal note seen by Reuters, after an official in Dar es Salaam threatened to launch a crackdown on homosexuals.

The foreign ministry said the official’s anti-gay campaign represented his own views and not government position.

-Reuters

The International Monetary Fund (IMF) projects that Namibia’s GDP will contract in 2018, pushing out its forecast for growth to next year when it sees support from strong mining production and a rebound in construction activities.

Namibia’s economy is forecast to contract 0.2 percent this year, down from a previous forecast of 1 percent growth, due to a weak performance in the manufacturing and construction sectors, the finance ministry has said.

The diamond and uranium producer’s economy contracted by 0.9 percent in 2017.

Geremia Palomba, who led the IMF team, said growth would gradually recover.

“After years of robust growth, the economy has entered a recession phase...IMF staff anticipates that the economy will recover gradually,” Palomba said in a statement

He said growth would strengthen at a long-term rate of about 3 percent, but gave no specific time frame. He added that growth would be below the average recorded in recent years, held back by low productivity growth and stagnant competitiveness. 

Namibia’s GDP has averaged 4.29 percent since independence in 1990

Palomba said the downside risks to the IMF’s outlook included lower-than-expected revenue from the Southern Africa Customs Union (SACU), slower growth recovery, and fiscal slippage.

-Reuters

Inflation in Zimbabwe soared last month to its highest level since 2008, official data showed on Tuesday, after a severe dollar shortage led to a surge in prices of food, drinks and clothes.

The annual inflation rate shot up to 20.85 percent in October, statistics agency Zimstat said, from 5.39 percent in September after the dollar shortage led to a collapse in Zimbabwe’s parallel ‘bond note’ currency, triggering sharp price hikes in many goods and services.

That has sent a ripple of fear among citizens still traumatised by the hyperinflation era, which ended when Zimbabwe was forced to abandon its currency and adopt the U.S. dollar in 2009.

Some businesses in Zimbabwe are now demanding cash in U.S. dollars only and have raised prices by more than three times for the majority of Zimbabweans who pay for their goods using the bond note, mobile money or bank cards.

On a monthly basis, prices jumped by 16.44 percent in October from 0.92 percent in September, Zimstat said.

“This was expected after the jump in prices we saw last month but it’s more than what I had forecast,” said Tony Hawkins, a professor of business studies at the University of Zimbabwe.

“Authorities will probably say its a one-off spike but how many people are going to believe that? It now makes a mockery of the official inflation forecast of 5 percent next year.”

Prices of basic goods like meat, cooking oil and flour rose when the value of the bond note and electronic dollars collapsed on the parallel market last month, leading to panic buying by consumers.

Zimstat stopped publishing official inflation data in September 2008 when it reached 236 million percent, but the International Monetary Fund put the figure at 500 billion percent. The statistics agency resumed running inflation figures in February 2009.

Finance Minister Mthuli Ncube said on Oct. 2 the budget deficit, which is expected to reach double digits this year, was fuelling inflationary pressures and could hobble the economy. 

The economic crisis is a major challenge for President Emmerson Mnangagwa, who won a disputed vote on July 30 in the first election in the southern African nation since Robert Mugabe was removed by the army a year ago after nearly four decades in power.

Teachers unions last week petitioned the government to pay them in U.S. dollars or increase their salaries saying the cost of living had increased beyond their wages.

-Reuters

Zimbabwe wants to reduce its budget deficit to 4 percent of gross domestic product in 2019, down from an 11.1 percent forecast this year through various expenditure cuts, Finance Minister Mthuli Ncube said on Thursday.

The deficit widened after President Emmerson Mnangagwa’s government cranked up spending by increasing public sector salaries and purchasing farming inputs for rural farmers ahead of a disputed July 31 presidential election.

Ncube told members of parliament during a pre-budget briefing that the government would stop the central bank’s quasi-fiscal operations such as providing direct funding for projects, review annual bonuses to the public service, cut foreign travel and perks for senior officials.

Ncube said the government would also partially sell or list its shares in telecoms, banking and mining companies it owns in a period of six to nine months from now. 

Past efforts by former finance minister Patrick Chinamasa to rein-in spending under Robert Mugabe’s rule failed, partly due to lack of political support, analysts say.

Ncube is under pressure to push through the reforms needed to lift Zimbabwe’s stricken economy and attract foreign lenders.

Zimbabwe, which dumped its currency for the U.S. dollar in 2009, is facing acute dollar shortages, which has seen prices of imported goods, including medicines spiral in recent weeks.

-Reuters

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