Major International Business Headlines Brief::: 22 June 2020

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Major International Business Headlines Brief::: 22 June 2020

 


 

 


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ü  U.S. farming body and Zambian firm partner aim to boost crop yields

ü  New Development Bank provides South Africa with $1 bln COVID-19 loan

ü  IMF approves $148 million emergency credit for Guinea

ü  Poorest countries to save $12 bln in 2020 debt relief - World Bank

ü  Rwanda GDP growth slows to 3.6% in Q1 2020 from 6.1% in same period last
year

ü  Nigeria levies $598 mln from banks via cash ratio debit ahead of FX
auction

ü  South Africa unions reject SAA rescue plan over job cuts

ü  Barrick Gold alerts authorities after fake news release claims it sold
Lumwana mine

ü  South African rand recovers after sell-off, stocks edge up

ü  S.Africa's bad debts may hit highest ever level of 10% due to virus

ü  Black business managers still underrepresented, says study

ü  New rules to protect British firms amid virus

ü  Poorer households funding lockdown with debt, says think tank

ü  US China cold war 'bigger global threat than virus'

ü  Quarantine rules for some countries set to be relaxed

ü  UK debt now larger than size of whole economy

ü  Brexit: UK plans to keep post-transition trade with EU flowing

ü  Aer Lingus to cut up to 500 jobs due to pandemic

 

 

 

 

 

 


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U.S. farming body and Zambian firm partner aim to boost crop yields

LUSAKA (Reuters) - An American non-profit organisation has launched a $40
million joint venture with one of Zambia’s top farm suppliers to boost crop
yields and food security as farmers struggle to access finance amid the
COVID-19 pandemic, the local company said on Sunday.

 

The chairman of African Green Resources (AGR), Zuneid Yousuf, said the
private sector deal with U.S-based African Fertiliser and Agribusiness
Partnership (AFAP) included a scheme supporting 250,000 mainly subsistence
farmers to double their maize yields and help feed around 10 million people
in Zambia and the southern African region.

 

“AFAP’s role is not only sourcing fertiliser guarantees and credit lines,
but to also act as an adviser for downstream activities like value
addition,” Yousuf told Reuters in his Lusaka offices.

 

   Credit packages for seed, fertiliser and training will be provided to the
farmers, while plans are also being made to use soya beans and maize to
produce animal stock feed, among other products, Yousuf said.

 

   In the 2018/2019 crop season, Zambia’s national average yield rate for
maize was 2.52 tonnes per hectare, far below Egypt at 8 tonnes and South
Africa at 4 tonnes.

 

   Zambia’s 2019/2020 season maize production is projected to increase to
over 3.3 million tonnes from around 2 million tonnes in the previous season
but is still below potential, Yousuf said. [nL8N2D948V]

 

   The southern African nation is rebuilding an agriculture sector hit hard
by a recent drought, with small-scale subsistence farmers who produce over
90% of Zambia’s maize, losing access to markets and seeing a dip in
productivity as they battle the impact of the COVID-19 outbreak.

 

Zambia has reported 1,416 confirmed coronavirus cases and 11 deaths.

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

New Development Bank provides South Africa with $1 bln COVID-19 loan

CAPE TOWN (Reuters) - The New Development Bank established by the BRICS
group of emerging nations has approved a $1 billion COVID-19 emergency loan
to South Africa to help reduce the socio-economic impacts of the pandemic,
the National Treasury said on Saturday.

 

South Africa was already in recession before the pandemic wreaked further
havoc in Africa’s most industrialised economy.

 

“The COVID-19 emergency program loan to South Africa will be provided in
response to the urgent request and immediate financing needs of the South
African government,” the Treasury said in a statement.

 

Finance minister Tito Mboweni is expected to unveil an emergency budget with
major changes to spending and revenue forecasts in parliament on Wednesday.

 

The government this week further relaxed two months of tough restrictions as
it looks to support the economy.

 

After detecting its first case in March, infections and deaths have spread
across South Africa. As of Friday the country had 87,715 confirmed COVID-19
cases and 1,831 deaths.

 

Brazil, Russia, India, China and South Africa are members of the New
Development Bank.

 

 

 

 

IMF approves $148 million emergency credit for Guinea

DAKAR (Reuters) - The International Monetary Fund (IMF) has approved $148
million in emergency credit to Guinea to bolster the West African country’s
economy during the COVID-19 pandemic, it said in a statement.

 

“Worsening global conditions and a rapidly spreading local outbreak have
deteriorated Guinea’s short-term growth prospects and hindered mining
exports and tax revenues,” the IMF said.

 

 

Poorest countries to save $12 bln in 2020 debt relief - World Bank

NEW YORK (Reuters) - The world’s poorest countries could save over $12
billion owed to sovereign and other creditors this year through their
participation in a debt-relief program, with Angola alone saving some $3.4
billion, according to estimates published Friday in a new database from the
World Bank.

 

The savings under the COVID-19-linked Debt Service Suspension Initiative
(DSSI) will be short-term, since the initiative only provides for suspension
of debt payments through the end of the year. It postpones those payments
until a later date but does not cancel them outright.

 

The second-largest saver among eligible DSSI countries would be Pakistan,
with $2.4 billion, followed by Kenya with $802 million, according to the
data here

 

In terms of savings compared with gross domestic product, Bhutan would reap
the most benefits from the plan with 7.3% of GDP savings, followed by Angola
at 3.7% and Djibouti at 2.5%.

 

Besides each country’s estimated savings, the database includes details on
debt owed to multilaterals like the International Monetary Fund as well as
on official and non-official bilateral debt disbursed and debt service due
per year.

 

IMF and World Bank officials have warned that the COVID-19 pandemic will hit
developing and emerging markets particularly hard given high levels of debt,
sharp drops in oil and other commodity prices and insufficient healthcare
systems.

 

The DSSI is backed by the G-20, the World Bank, the IMF and the Paris Club
of sovereign lenders. The database provides a new level of transparency
about debts and creditors, including China, which has become one of the
largest creditors in Africa and elsewhere over the past two decades.

 

The Jubilee Debt campaign has estimated the cancellation of poor countries’
debt payments, including to private creditors, would free over $25 billion
for the countries this year, or $50 billion if extended through 2021.

 

The United Nations, many African countries and civil society groups have
called for the debt relief to be extended for two years to allow countries
to recover more fully from the economic shock of the pandemic.

 

 

 

Rwanda GDP growth slows to 3.6% in Q1 2020 from 6.1% in same period last
year

NAIROBI (Reuters) - Rwanda’s economic growth slowed to 3.6% year-on-year in
the first quarter of this year from 6.1% in same period last year, hit by
effects of the novel coronavirus, the statistics office said on Friday.

 

The statistics office said on its Twitter account among the sectors whose
performance deteriorated during the period include agriculture, industry and
service. It said second quarter will be hit even harder, with recovery
expected in the next two quarters.

 

Rwanda has 646 confirmed cases of COVID-19, with two deaths, according to
health ministry data.

 

 

 

Nigeria levies $598 mln from banks via cash ratio debit ahead of FX auction

ABUJA (Reuters) - Nigeria’s central bank has collected 216 billion naira
($598 mln) from banks with excess cash holdings as part of measures to
support the naira currency, banking sources said on Friday.

 

The naira has come under intense pressure in recent months during the
coronavirus pandemic, a sharp fall in the price of oil - Nigeria’s main
export - and departing foreign investors, causing a large financing gap.

 

The currency has been hitting new lows on the over-the-counter spot and
black markets since March after the central bank adjusted its official rate,
implying a 15% devaluation, to absorb the impact of an oil price crash.

 

The naira traded at 385 on the official market this week, weaker than a
quoted rate of 361, backed by the central bank.

 

Banking sources told Reuters the liquidity withdrawal came before a foreign
currency auction on Friday.

 

Results of the auction were due later in the day.

 

“The central bank is trying to manage the FX rate using the CRR (cash
reserve ratio),” one banker said, adding that the debits had become frequent
and over the 27.5% limit.

 

He said offshore lenders were the most affected on the levies since they
don’t operate retail business and are debited from their corporate deposits
or borrowings.

 

The bank is selling forex to importers and individuals with dollar expenses
to keep its economy afloat. But it is yet to resume forex sales to investors
that have sold assets and need to leave the country.

 

The central bank did not respond to a request for comment.

 

($1 = 361.00 naira)

 

 

 

South Africa unions reject SAA rescue plan over job cuts

JOHANNESBURG (Reuters) - Two South African unions on Friday rejected job
cuts proposed to rescue South African Airways, which has cost the government
more than a billion dollars to stave off bankruptcy and will cost it about
half that again to reform.

 

State-owned SAA went into a form of bankruptcy protection in December, and
since then state-appointed administrators have been trying to see what they
can salvage.

 

Unions had been in discussions with them and had previously accepted that
some job cuts would be necessary.

 

The current plan, which would involve laying off about 90% of staff leaving
just 1,000 jobs, will cost at least 10 billion rand ($573.9 million). That
is on top of the 20 billion rand that has been spent just keeping the
airline afloat in the past three years.

 

But The National Union of Metalworkers of South African (NUMSA) and the
South African Cabin Crew Association (SACCA), angered by what they said was
mismanagement of SAA by executives, on Friday rejected staff severance
packages as too small and job cuts as too wide-ranging.

 

NUMSA is one of the biggest unions in South Africa, a country in which trade
unions wield sizeable political power since the national umbrella union is
an alliance partner of the ruling party.

 

“These workers cannot be sacrificial lambs and we cannot allow for a
situation where they must pay for this crisis,” the two unions said in a
statement.

 

“We reject with contempt the announcement that only 1,000 employees will be
retained ... as it is tantamount to unleashing a job loss blood bath,” they
added.

 

The unions said they would seek redress in labour courts.

 

SAA has failed to turn a profit since 2011 owing to an expansion into
competitive, loss-making global routes and a fleet of excessively
fuel-hungry planes. Its problems were exacerbated when it had to suspend
commercial passenger flights in March due to COVID-19.

 

($1 = 17.4242 rand)

 

 

 

Barrick Gold alerts authorities after fake news release claims it sold
Lumwana mine

JOHANNESBURG/LUSAKA (Reuters) - Barrick Gold on Thursday said there is
“absolutely no truth” in a news release circulated on social media in Zambia
claiming the gold miner sold its Lumwana copper mine.

 

The fake press release, dated June 15, claimed Barrick had sold its Zambian
copper mine to Metalinvest Capital Corporation and Zambia’s National Pension
Scheme Authority (NAPSA) for $895 million in cash.

 

“We don’t know who’s behind this and we have alerted the relevant securities
regulators and law enforcement authorities,” a Barrick spokeswoman told
Reuters in a statement.

 

NAPSA - a government-owned pension fund - issued a statement saying it had
not entered into any such transaction nor been involved in any such
discussions.

 

“We would like to urge members of the public to ignore the said press
release and treat it with the contempt it deserves,” the acting director
general wrote, adding that the pension fund would seek to ensure the
perpetrators were prosecuted.

 

Metalinvest has no knowledge of the deal and is launching its own
investigation, founder and director Mohamed Matongo said in an email to
Reuters.

 

“It has come as a great surprise to me that my company name is being
mentioned in a transaction that we have no knowledge about,” he said.

 

Barrick was last year seeking buyers for its Lumwana copper mine, but in
February Chief Executive Mark Bristow told Reuters he would not necessarily
sell it, and might instead look for a partner in Zambia or a deal with a
copper processor.

 

 

 

South African rand recovers after sell-off, stocks edge up

JOHANNESBURG (Reuters) - South Africa’s rand firmed against the U.S. dollar
early on Friday, recovering from the previous session’s tumble when global
risk sentiment had been dented by fears of a second wave of coronavirus
infections.

 

The rand was trading up 0.6% at 17.3525 per dollar by 1545 GMT, having
fallen more than 1% on Thursday.

 

South African-focused investors are awaiting a supplementary budget
pencilled in for June 24, when Finance Minister Tito Mboweni is expected to
unveil a major shake-up in spending and revenue forecasts for the
recession-hit economy.

 

“It is going to be a massive task for Mboweni to juggle the country’s costs
and, therefore, it is certainly prudent to take some positioning off the
table given the potential for disaster,” Standard Bank chief trader Warrick
Butler said in a note.

 

“It is easy to put the risk back on once the dust has settled.”

 

South Africa’s economy was in bad shape before the COVID-19 pandemic struck.
A strict nationwide lockdown from late March has since curtailed production
across key sectors such as mining and retail, with the central bank
predicting a 7% contraction in gross domestic product this year.

 

On the stock market, the Top-40 index was up 0.9% while the broader
all-share index rose 0.7% in early trade.

 

In fixed income, the yield on the long-dated government bond due in 2030 was
down 1.5 basis points at 9.315%.

 

The Johannesburg Stock Exchange (JSE) ended the week slightly higher as
optimism around reopening of economies soothed some worries over the
continuing spread of the coronavirus.

 

The benchmark all-share index was up 0.43% to end the trading week at 54,171
points and the top 40 companies index closed up 0.37% to 49,770 points.

 

A major boost to the market came from a rise in gold prices that gained 1.2%
on the day and lifted JSE’s gold index, which represents the top five gold
mining companies in South Africa, almost 8%.

 

 

 

S.Africa's bad debts may hit highest ever level of 10% due to virus

JOHANNESBURG (Reuters) - South Africa’s bad debts could hit 10% of bank
lending this year, its banking association director said on Thursday, which
would be the highest ever and well above the 6% seen during the 2008/9
financial crisis.

 

South Africa had already slipped into recession before the coronavirus
pandemic struck and struggling consumers and businesses have been hit hard
by the impact of the virus and the lockdown that it prompted.

 

“So far, we are working with the numbers of 10% NPLs (non-performing loans)
which may deplete the capital buffers,” said Bongiwe Kunene, managing
director of the Banking Association South Africa, adding that this estimate
was based on the aggregate amount of members’ lending books seen as at risk.

 

That stood at over 400 billion rands worth of lending, her presentation
showed.

 

For comparison, South Africa’s NPLs ratio stood at 4.3% last month,
according to the CEIC global economic data service, which says the 6% seen
in 2009 is the highest ever ratio.

 

South Africa’s major banks, some of the biggest on the continent, have said
they expect a sharp rise in bad debts and for profits to slip by at least
20% this year.

 

However, the lenders are generally better capitalised than international
peers and say they have sufficient buffers to weather the storm.
Shareholders and analysts also believe banks are unlikely to breach
regulatory capital minimums.

 

Kunene said that, so far, banks had provided 7 billion rand in lending to
4,800 small coronavirus-hit firms under a government-backed loan scheme, and
banks were discussing changes to increase take-up. It could also be extended
to non-bank financial providers, she said.

 

Lenders could also extend the term of relief measures already offered to
customers over the last three months, such as payment holidays, she said.

 

Lender FirstRand said separately on Thursday qualifying customers would be
able to extend payment breaks by a further three months.

 

 

 

Black business managers still underrepresented, says study

Efforts to increase the number of black managers at British companies have
stalled, according to a business group.

 

Just 1.5% of top bosses at UK companies are black.

 

That compares to 3% of the population of England and Wales.

 

While the ratio is an improvement on the 1.4% of 2014, there is much ground
still to cover, said Sandra Kerr, race director at Business in the
Community, which has campaigned for workplace racial equality for 25 years.

 

"It is clear that black people continue to be under-represented at a senior
level," she said.

 

"Black livelihoods matter and employers need to take urgent action to ensure
that their organisation is inclusive and a place where people of any ethnic
background can thrive and succeed."

 

'My African name stopped me getting job opportunities'

The new figures coincide with the 72nd anniversary of the arrival of HMT
Empire Windrush, which brought workers from the Caribbean to the UK.

 

Employers should make their companies welcoming to black workers, said
Sandra Kerr, race director at Business in the Community

They also come amid global protests over racial inequality and as some older
British companies come to terms with their historical links with the slave
trade.

 

Pub chain Greene King and insurance market Lloyd's of London apologised for
those ties last week.

 

One of Greene King's founders owned a number of plantations in the
Caribbean.

 

Meanwhile, maritime insurance - which was focused on Lloyd's - thrived on
the trans-Atlantic slave trade.

 

Board member shortage

Lloyd's has said it will donate to charities representing black, Asian and
minority ethnic (BAME) groups.

 

Greene King said it would make a "substantial investment to benefit the BAME
community".

 

In March, a report from the Carnegie Trust, University College London's
Centre for Longitudinal Studies and Operation Black Vote said young BAME
members are 47% more likely to to be on a zero-hours contract.

 

The researchers compared the experiences of 25-year-olds in England.

 

They looked at people who are white, as well mixed-race, Indian, Pakistani,
Bangladeshi, Black African and Caribbean, and other minority ethnicities,
sometimes collectively known as BAME workers.

 

That report followed research from February that about a third of FTSE 100
firms have no ethnic minority board members.--BBC

 

 

 

New rules to protect British firms amid virus

The government will introduce new measures on Monday to protect businesses
critical to public health from foreign takeovers.

 

Changes to legislation would give ministers extra powers to protect those
needed to help in future pandemics, who might be struggling now.

 

The new powers will cover firms such as pharmaceutical companies.

 

Business Secretary Alok Sharma said: "The UK is open for investment, but not
for exploitation."

 

The government already has the power to scrutinise takeovers for several
reasons, including national security or financial stability. It may block a
takeover or seek assurances from a buyer about their plans for a company.

 

But changes to the 2002 Enterprise Act will mean that the government can
intervene if a business that is involved in a pandemic response - a personal
protective equipment (PPE) manufacturer, for example - is the target of a
takeover by a foreign firm.

 

They will also expand the government's ability to scrutinise takeovers
involving companies who work in artificial intelligence or encryption
technology.

 

"I think it is a significant development," Peter Harper, partner in the
competition, EU and trade team at law firm Eversheds Sutherland, told the
BBC. "It gives them a greater power to intervene."

 

"The government's track record of intervention has basically increased over
time," he said.

 

So far, the government hasn't stopped a deal based on national security
grounds, he said, but they have imposed conditions on buyers.

 

It brings the government into line with countries like France, Germany,
Italy and Spain, he said, where the EU has been keeping a stricter eye on
potential purchases.

 

'Critical businesses'

The economic disruption caused by the Covid-19 pandemic "may mean that some
businesses with critical capabilities are more susceptible to takeovers",
the Department for Business, Energy and Industrial Strategy said in a
statement.

 

"These powers will send an important signal to those seeking to take
advantage of those struggling as a results of the pandemic that the UK
government is prepared to act where necessary to protect our national
security," Mr Sharma said.

 

It follows the April announcement of European Union (EU) plans to help block
foreign takeovers of European firms struggling with the virus downturn. It
wants to allow governments to invest in "weak" companies, which could
include some form of ownership.

 

While it called them "measures of last resort", the European Commission said
it was consulting member states.

 

In March, the European Commission issued guidelines to ensure a strong
EU-wide approach to foreign investment screening "in a time of public health
crisis and related economic vulnerability".

 

The UK formally left the EU on 31 January, but is currently in a transition
period until the end of the year. During this period, the UK will continue
to follow all of the EU's rules and its trading relationship will remain the
same.--BBC

 

 

 

Poorer households funding lockdown with debt, says think tank

Lower-income households are using savings and borrowing more during the
coronavirus lockdown, while richer families are saving more as eating out
and trips abroad are banned.

 

That's according to research from the Resolution Foundation, a think tank.

 

Lower-income households are twice as likely as richer ones to have increased
their debts during the crisis, it said.

 

Workers in shut down parts of the economy have average savings of £1,900, it
found.

 

That compares to the £4,700 buffer of someone who has been able to work from
home during the lockdown.

 

"Pre-coronavirus Britain was marked by soaring wealth and damaging wealth
gaps between households," said George Bangham, economist at the Resolution
Foundation.

 

"These wealth divides have been exposed by the crisis. While higher-income
households have built up their savings, many lower-income households have
run theirs down and had to turn to high-interest credit."

 

Wealth gaps across the country have also grown, with London and the South
East accounting for 38% of all wealth between 2016 to 2018, up from 32% a
decade earlier.

 

Wealth inequality remains almost twice as high as income inequality, it
adds.

 

Impact on young people

Last month, the think tank found that young people are most likely to have
lost work or seen their income drop because of Covid-19.

 

More than one in three 18 to 24-year-olds is earning less than before the
outbreak, it found.

 

It said younger workers risk their pay being affected for years, while older
staff may end up involuntarily retired.

 

Last year, a different think tank, the Institute for Fiscal Studies, found
widening inequalities in pay, health and opportunities in the UK are
undermining trust in democracy.

 

It warned of runaway incomes for high earners but rises in "deaths of
despair", such as from addiction and suicide, among the poorest.--BBC

 

 

 

 

US China cold war 'bigger global threat than virus'

The deepening cold war between the US and China will be a bigger worry for
the world than coronavirus, according to influential economist Jeffrey
Sachs.

 

The world is headed for a period of "massive disruption without any
leadership" in the aftermath of the pandemic, he told the BBC.

 

The divide between the two superpowers will exacerbate this, he warned.

 

The Columbia University professor blamed the US administration for the
hostilities between the two countries.

 

"The US is a force for division, not for cooperation," he told me in an
interview with BBC's Asia Business Report.

 

"It's a force for trying to create a new cold war with China. If this takes
hold - if that kind of approach is used, then we won't go back to normal,
indeed we will spiral into greater controversy and greater danger in fact."

 

Tensions grow

Mr Sachs's comments come as tensions between the US and China are continuing
to grow on several fronts - not just trade.

 

This week President Trump signed legislation authorising US sanctions
against Chinese officials responsible for the repression of Muslims in
Xinjiang province.

 

And in an interview with the Wall Street Journal President Trump said he
believed China might have encouraged the international spread of the virus
as a way to destabilise competing economies.

 

The Trump administration has also targeted Chinese companies, in particular
Chinese telecoms giant Huawei, which Washington says is being used to help
Beijing spy on its customers. China denies this, as does Huawei.

 

But President Trump's tough stance on China and Huawei may have all been
part of a political ploy to get himself re-elected - at least according to a
new book by former National Security Advisor John Bolton.

 

Professor Sachs agrees that targeting Huawei was never simply a security
concern.

 

"The US lost its step on 5G, which is a critical part of the new digital
economy. And Huawei was taking a greater and greater share of global
markets.

 

"The US concocted in my opinion, the view that Huawei is a global threat.
And has leaned very hard on US allies... to try to break the relations with
Huawei," he said.

 

Tensions flare

The US is not the only country that China has been locked in conflict with.

 

This week tensions have flared at the India-China border, with at least 20
Indian soldiers killed in some of the worst violence the two sides have seen
in almost fifty years.

 

Meanwhile, China has been actively funding economic projects in Pakistan,
Myanmar, Sri Lanka and Nepal - India's closest neighbours - which have
rankled fears in Delhi that Beijing is trying to cut off its influence in
the region.

 

Mr Sachs admitted that China's rise is of concern to its neighbours in Asia
- especially if it doesn't do more to assuage fears that it is trying to
grow in a peaceful and cooperative way.

 

"Do I believe that China could do more to ease fears which are very real? I
do," he told me.

 

"The big choice frankly is in China's hands. If China is cooperative, if it
engages in diplomacy, regional cooperation and multilateralism, in other
words - soft power - because it is a very powerful country
. then I think
that Asia has an incredibly bright future."---BBC

 

 

 

Quarantine rules for some countries set to be relaxed

The government is planning to relax its travel quarantine rules in early
July for some countries.

 

UK officials are talking to their counterparts in Portugal, France, Italy,
Greece and Spain.

 

However, the UK hopes to make an announcement on 29 June that it has secured
a number of "travel corridors".

 

The government had previously said that the quarantine would be reviewed
every three weeks and 29 June marks the end of the first three-week period.

 

A travel corridor would mean that two people travelling in both directions
between two countries would not have to self-isolate after they travel.

 

The first travel corridors could come into force on 4 July, although that
date is by no means confirmed.

 

Even if certain routes are exempt, the travel quarantine for people arriving
from other destinations will remain in place.

 

A senior aviation source has told the BBC that the quarantine could remain
throughout the summer for anyone arriving from countries which do not have a
travel corridor with the UK.

 

New UK travel quarantine rules a stunt, says Ryanair boss

What's the chance of going on holiday?

Portugal's foreign minister previously said that anyone in the UK thinking
of going to Portugal this summer would be "most welcome" despite the
coronavirus pandemic.

 

Augusto Santos Silva said he hoped an "air bridge" between the UK and
Portugal could be secured by the end of June.

 

However, the broader travel quarantine is expected to remain in place.

 

What are the new rules?

·         People arriving in the UK should drive their own car to their
destination, where possible, and once there they must not use public
transport or taxis

·         Arrivals must not go to work, school, or public areas, or have
visitors - except for essential support. They are also not allowed to go out
to buy food, or other essentials, where they can rely on others

·         Those arriving in England, Wales and Northern Ireland could face a
fine of £1,000 if they fail to self-isolate for the full 14 days, while they
face a £480 fine in Scotland. The maximum fine for repeat offenders in
Scotland is £5,000.

 

 

Anyone arriving from the Republic of Ireland, the Channel Islands or the
Isle of Man does not have to complete a form or enter quarantine upon
arrival in the UK.

 

There are also exemptions for workers in some industries such as road
haulage and medical professionals who are providing essential care.

 

The travel industry has been vocal in its criticism of the government's
quarantine rules, warning that the isolation period will deter visitors and
put jobs at risk. Some airlines were in the early stages of legal action.

 

The manufacturing industry has also highlighted that fewer flights will
restrict imports and exports, which will have a knock-on effect for the
freight industry, as well as hampering the recovery of some businesses.

 

Despite criticism from businesses, Home Secretary Priti Patel said that the
measures were "proportionate" and being implemented "at the right time" when
they came into effect on 8 June.--BBC

 

 

 

UK debt now larger than size of whole economy

The UK's debt is now worth more than its economy after the government
borrowed a record amount in May.

 

The £55.2bn figure was nine times higher than in May last year and the
highest since records began in 1993.

 

The borrowing splurge sent total government debt surging to £1.95trn,
exceeding the size of the economy for the first time in more than 50 years.

 

Chancellor Rishi Sunak said the figures confirmed the severe impact the
virus was having on public finances.

 

"The best way to restore our public finances to a more sustainable footing
is to safely reopen our economy so people can return to work.

 

"We've set out our plan to do this in a gradual and safe fashion, including
reopening high streets across the country this week, as we kickstart our
economic recovery," he added.

 

Income from tax, National Insurance and VAT all dived in May amid the
coronavirus lockdown as spending on support measures soared.

 

This is the first time debt has been larger than the size of the economy
since 1963, but it is not as high as the post-war peak of 258% in 1946-47.

 

Record high

The deficit - the difference between spending and tax income - for the first
two months of the financial year (April and May) is now estimated to have
been £103.7bn, £87bn more than in the same period last year, another record.

 

But the ONS estimates borrowing for the 2020-21 financial year will dwarf
that at £298bn. That would be the largest deficit since World War Two.

 

It cautioned that due to the coronavirus, its official estimates were
subject to greater than usual uncertainty.

 

The Office for National Statistics had previously said that April's
borrowing figure was the highest since records began in 1993, but it
subsequently revised the figure down to £48.5bn from £62bn.

 

The revision was due to higher than expected income from taxes and national
insurance, as well as the spending on the Coronavirus Job Retention Scheme
being lower than originally estimated.

 

Where do governments go when they need money?

Alex Tuckett, senior economist at consultants PwC, pointed to the 46% fall
in the amount of VAT collected in the month, although it said the biggest
issue for the government's finances was the £29bn it spent on the various
support schemes for the economy.

 

"In the near term, there are signs the economy is recovering as the country
re-opens, and this should boost tax receipts.

 

"However, these figures remind us that Chancellor Rishi Sunak faces a
difficult backdrop to any summer fiscal event."

 

Samuel Tombs at Pantheon Economics said the emergency support measures had
placed a "colossal burden" on the public finances.

 

In a release packed with striking figures, he singled out the fact the
government had needed to raise more cash in the first two months of this
fiscal year than in total in any prior 10 fiscal years.

 

Busting the overdraft, with a borrowing figure nine times as high as a year
ago is not an easy thing for any government to swallow. In his first full
year as Chancellor, Rishi Sunak is on track for the biggest public sector
deficit since World War Two,

 

But it is, he reckons, a price worth paying to prevent a bigger cost to the
economy, in terms of lost jobs and output. Billions have been pumped into
supporting millions of jobs, and many businesses, while, on the other side,
tax receipts have plunged. Those lifelines will be wound down in the coming
months, and the government can borrow cheaply on financial markets to fund
them.

 

But what happens next? As lockdown is eased, the Treasury is watching
closely, knowing the recovery may need extra support - perhaps tax cuts or
more spending. That will present the government with more bills - but
failing to provide more help risks an even higher cost.

 

The chancellor is to present some sort of statement before Parliament ceases
for the summer in July - that won't be a full Budget but may contain some
measures to boost the recovery. The tough choices aren't over yet.--BBC

 

 

 

Brexit: UK plans to keep post-transition trade with EU flowing

The way British businesses trade with the European Union is set to change
fundamentally at the end of the year.

 

The UK left the EU on 31 January but remains in the single market and
customs union until 31 December, while the two sides try to hammer out a
trade agreement.

 

The end of the so-called transition period in December will mean EU rules
will no longer directly apply in Great Britain and the goods trade between
them will be governed by new rules.

 

But these will only be introduced gradually.

 

Last week, the government announced that relaxed controls will apply for
goods coming into the UK from the EU for a period of six months.

 

These will apply whether the UK and the EU conclude a free trade agreement
before the end of the year or not.

 

Unlike last year, when the difference between a deal and "no deal" was the
difference between continuing the same arrangements and a sudden reset of
the two sides' trading relationship, the gap between the two outcomes is
smaller.

 

But many of the challenges are the same.

 

So what are the new rules that will apply at the end of the transition and
why are they being implemented?

 

On the way in

The temporary regime announced by the government applies to goods arriving
into the UK via ports like Dover.

 

And they apply only to trade directly between the EU and Great Britain, not
Northern Ireland.

 

Trade across the land border between Republic and Northern Ireland, and
Northern Ireland and the rest of the UK is covered by the special
arrangements under the withdrawal agreement.

 

The Northern Ireland protocol, as it is known, applies until the UK and the
EU agree to replace it or the devolved assembly at Stormont votes to end it.

 

Unless special procedures apply, traders normally have to submit customs
documentation that lists information about their goods they are importing
and pay any tariffs or duties that are due up front at the border.

 

But under the government's plan, the requirement to do this would be put on
hold for up to six months after import.

 

Businesses would keep a record of what goods they had imported in their
books and pay the tariffs due subsequently.

 

The government says this is designed to help businesses, with special
consideration given to the impact of coronavirus on their ability to
prepare.

 

But Dr Anna Jerzewska, an associate fellow at the UK Trade Policy
Observatory and an international customs consultant, told the BBC "the main
benefit is to help manage borders".

 

At "roll-on roll-off" ports like Dover, which in normal times manages the
movement of approximately 2.5 million lorries moving in both directions,
"speed is crucial," she added.

 

"Any delay in terms of the traffic moving on and off the ferry will cause
traffic delays.

 

"One thing this announcement does is help to manage that so that everything
can be done quickly at the border."

 

A deal could help ease the demands made on traders and would likely mean
that trade between the UK and EU would be completely tariff-free.

 

But goods would still have to prove that they qualify for the tariff
exemption and most checks would still apply.

 

Plants, animals and more

Extra controls typically apply to plants or animals and the things we make
out of them because they pose a larger risk to health.

 

The UK plans to implement these checks for goods coming into the UK from the
EU but, much like customs, only after a delay of six months.

 

Immediately after the end of transition period, the UK will not be checking
most plant and animal products that enter through ports.

 

Only high risk products will be required to submit a notification that they
are going to be imported at the start and from April this will apply to all
products of animal origin - like meats and honey - as well as plants.

 

For products coming from the EU, this will be the first time that these
checks have applied. That comes with its challenges.

 

In a similar way to "no deal" Brexit preparations at the end of last year,
the concern centres on potential delays created by new checks and
disruptions in supply.

 

"For a lot of sensitive products, like poultry, fish and pet food, border
control agents will open up the lorry, open up products and undertake
inspections and that takes time to come back from the laboratory," said
Dominic Goudie, the head of international trade at the Food and Drink
Federation, an industry body.

 

"That threatens 'just in time' supply chains but also it starts the clock
ticking on product shelf life."

 

Difficulties are also related to where these checks take place.

 

In the EU, plants and products of animal origin have to enter via border
control post where the checks take place and the UK plans to have a similar
system.

 

Many of the UK's ports lack the correct facilities - or the space - to carry
out these checks.

 

The government has committed to building the necessary infrastructure but
this will take time.

 

Sites need to be identified, planning permission granted and facilities
built to the right specification.

 

And where there isn't space for these facilities, such as at Dover, where
the town and the port are hemmed in by cliffs, the posts will need to be
built inland.

 

Managing exports

The checks necessary to move goods from the UK to the EU are down to
European law and the EU's customs code.

 

Traders hoping to export their goods to the European Union will have to fill
out and submit customs documentation and complete further checks for
sensitive goods.

 

In France, customs authorities have devised a pre-notification system for
trucks coming from the UK.

 

Only lorries that have the right customs paperwork are allowed to board the
ferry in Dover or other ports along the south coast of England.

 

While on board, goods are matched to the lorries they are on and a
colour-coded system tells drivers whether they require further checks: Green
for "no", orange for "yes".

 

Some ports are concerned that increases in the time that it takes to check
lorries could lead to tailbacks and traffic jams.

 

The possibility that companies not used to completing customs paperwork
might turn up at the port without the proper documentation is a further
cause for concern.

 

In Portsmouth, port authorities are working to revive plans to triage trucks
arriving at the port that were developed for a "no deal" Brexit.

 

Portsmouth's port director Mike Sellers. said the lack of space - there are
just 13 lorry-lengths between the port entry and the motorway slipway -
means "there will still be a need for pre gate checks".

 

"Triage reduces the risk of a lack of trader awareness and freight turning
up at our gate without the right documentation and causing delays."

 

The size of the logistical challenge depends to an extent on the volume of
traffic, he added.

 

"Predominantly the crossings are booked. As one ferry leaves we don't have
one arriving. Were in a good position in terms of resilience.

 

"We don't have the same challenges as Dover or the channel tunnel. They're
on a turn-up-and-go basis."

 

Making it work

Alongside details of the checks that will apply after the end of the
transition period, the government announced that it was pumping a further
£50m into preparing the customs intermediaries sector.

 

Intermediaries and freight forwarders are the professionals who help guide
consignments through customs.

 

It has been estimated that the UK will need another 50,000 customs agents to
deal with the potential increase in declarations for imports and exports.

 

But the UK government has said it is not able to estimate how many new
customs agents have been hired and it is unclear how close the UK is to
matching that target.

 

A lack of agents would "slow everything down" says Robert Keen, director
general of the British International Freight Association, an industry body
which represents customs intermediaries.

 

"If the freight volumes were the same this year as they were last year we
would certainly need a lot more intermediaries.

 

"But given the coronavirus crisis it is unclear what volume of trade will be
moving."--BBC

 

 

 

Aer Lingus to cut up to 500 jobs due to pandemic

Irish airline Aer Lingus is set to cut as many as 500 jobs due to the
coronavirus pandemic.

 

The carrier said it had been operating at five percent of its capacity due
to lockdown restrictions.

 

It said the uncertainty caused by the 14-day quarantine period for arrivals
had also contributed.

 

The company said the pandemic had had a "catastrophic' effect on its
business, saying the Irish government could have done more to help.

 

"Ireland has failed to take steps that other European member states have
taken they have progressively restored transport services and connectivity
in response to a European Commission invitation to do so," said an airline
statement.

 

"The requirement to reduce the size of the airline in response to the crisis
means that today Aer Lingus has issued a notification to the Minister for
Employment Affairs and Social Protection regarding proposed collective
redundancies in the airline.

 

"Aer Lingus has informed the minister that headcount reductions of up to 500
employees across the business are anticipated," it continued.

 

The trade union Fórsa said it would seek talks with Aer Lingus management,
saying its priority was to minimise job losses.--BBC

 

 

 

 

 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


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