Major International Business Headlines Brief::: 14 October 2020

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Major International Business Headlines Brief::: 14 October 2020

 


 

 


 <http://www.finsec.co.zw/> 

 


 

 


 

 

ü  Ikea to buy back used furniture in recycling push

ü  Covid-19: Chinese trade grows as others struggle amid pandemic

ü  EU gets $4bn bargaining chip in US trade row

ü  Airlines and airports in fresh aid package plea

ü  iPhone 12: Apple makes jump to 5G

ü  Firms have 'head in sand' over post-Brexit trade, says minister

ü  IMF upgrades 2020 economic forecast but warns of a slower 2021

ü  US movie chain AMC warns it is running out of money

ü  Unemployment rate hits highest level in three years

ü  SA Govt can take place in national economic recovery with “copy and paste” cadastre

ü  Nigeria: Senators Clash Over 2021 Budget Proposals

ü  Nigeria: 774,000 Jobs - Govt Shifts Recruitment to November 1

ü  Nigeria: IMF Raises Nigeria's GDP Projection, Forecasts 4.3% Contraction

ü  Rwanda Approves Cannabis Production

ü  Kenya's Debt Repayment Headache Growing Daily

 

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

Ikea to buy back used furniture in recycling push

Ikea, the world's biggest furniture business, is planning a second-hand furniture venture.

 

The Swedish giant will next month launch a scheme to buy back your unwanted Billy bookcases, and certain other of its furniture items you no longer need or want.

 

Under the plan, it will offer vouchers worth up to 50% of the original price, to be spent at its stores.

 

The "Buy Back" initiative will launch to coincide with Black Friday.

 

"By making sustainable living more simple and accessible, Ikea hopes that the initiative will help its customers take a stand against excessive consumption this Black Friday and in the years to come," it said in reference to 27 November, when lots of retailers offer discounts on their products.

 

The international scheme will see customers given vouchers to spend at Ikea stores, the value of which will depend on the condition of the items they are returning.

 

Customers must log the item they wish to return and will then be given an estimate of its value.

 

"As new" items, with no scratches, will get 50% of the original price, "very good" items, with minor scratches, will get 40% and "well used", with several scratches, will get 30%.

 

They should then return them - fully assembled - to the returns desk where they will be checked and the final value agreed.

 

The offer, which will run in 27 countries, applies to furniture typically without upholstery, such as the famous Billy bookcases, chairs, stools, desks and dining tables.

 

Ikea said that anything that cannot be resold will be recycled.

 

Ikea plans to have dedicated areas in every store where people can sell back their old furniture and find repaired or refurbished furniture.

 

The company started its first collection in 1948 and some vintage Ikea products have become collectable in recent years.

 

Auction websites carry a number of Ikea designs from previous decades, and some are on sale for thousands of pounds.

 

Rising demand

The company has been testing out furniture reselling in Edinburgh and Glasgow for more than a year.

 

Ikea, which has been taking steps to become more environmentally friendly, says it aims to become "a fully circular and climate positive business by 2030".

 

A "circular" business is one which reuses or recycles materials and products.

 

Earlier this month the group announced plans to open a record number of stores this year.

 

The Swedish company and its franchisees will open 50 stores worldwide - including in the UK - adding to the 445 stores currently run by the brand.

 

Ikea's biggest franchisee said demand was rising after lockdown as people seek to do up their homes.

 

Its latest figures showed sales in the year to August were €39.6bn (£36bn).--BBC

 

 

 

 

Covid-19: Chinese trade grows as others struggle amid pandemic

China has recorded strong growth in trade, while other major economies still struggle with the impact of coronavirus.

 

Exports in September rose 9.9%, while imports grew 13.2%, official data show.

 

The rush of imports cut China's usually meaty trade surplus - the amount by which exports exceed imports - to $37bn from $59bn in August.

 

Most other large economies are expected to suffer large contractions as lockdowns and public fear cut spending.

 

But the data suggests a rapid recovery in China from an initial reduction in overseas orders sparked by the pandemic.

 

China was the first country to be hit by the coronavirus outbreak, reporting the first cases late last year.

 

The world's second biggest economy saw a sharp decline in the first three months of 2020 amid strict lockdown measures, before bouncing back in July.

 

Analysts say the recovery in trade since then has been driven by a surge in international demand for home electronics, medical devices and textiles, including personal protective equipment.

 

However, they warn some of this demand could begin to fall.

 

In the year up to the end of September, China's combined imports and exports with other nations reached 23.12 trillion yuan ($3.4tn, £2.6tn), up 0.7% and reversing the hit the country took in the early days of the coronavirus pandemic.

 

In August, the Japanese economy was revealed to have shrunk at its fastest rate on record, partly because of a fall in exports. The US economy saw its fastest contraction in decades in July.

 

Meanwhile, the International Monetary Fund (IMF) is forecasting a somewhat less severe recession than it predicted in June for the global economy.

 

But the IMF says in its World Economic Outlook that the global economy is still in deep recession and the risk of a worse outcome than in its new forecast is "sizable".

 

The predicted global economic contraction is more moderate than the IMF envisaged four months ago, at 4.4%. That is followed by rebound of 5.2% next year, which is less than the previous prediction.

 

Next year's world downgrade is less than this year's upgrade.

 

The slightly less-bleak assessment reflects downturns in several large developed economies in the April-to-June quarter of the year that were not as severe as the IMF expected.

 

The return to growth in China, where the pandemic arrived first and was held back first, was stronger than expected.

 

China's biggest trading partner is the Association of Southeast Asian Nations, which includes Malaysia and Singapore.

 

Its next biggest customers were the European Union and US, China's General Administration of Customs said.--BBC

 

 

 

 

EU gets $4bn bargaining chip in US trade row

The European Union may impose new border taxes on up to $4bn (£3.08bn) in US goods annually as punishment for subsidies provided to Boeing, the World Trade Organization has ruled.

 

The decision is the latest step in a long-running feud between the US and EU over state subsidies for Boeing and EU rival Airbus.

 

Last year, the WTO cleared the US to impose tariffs on $7.5bn in EU items.

 

But the US said the EU should not move forward with tariffs of its own.

 

America's top trade negotiator Robert Lighthizer said the US had removed the offending subsidies for Boeing, tax breaks granted by the state of Washington, earlier this year.

 

The EU says the same is true of US tariffs imposed against subsidies to the A380 plane which is being taken out of production.

 

"Because Washington State repealed that tax break earlier this year, the EU has no valid basis to retaliate against any US products," Mr Lighthizer said. "Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a US response."

 

On Twitter, EU Trade Commissioner Valdis Dombrovskis said the EU would "immediately re-engage with the US" and strongly preferred a "negotiated settlement".

 

European officials have been pushing the US to remove the taxes the US imposed on European goods following the WTO ruling last year.

 

"Otherwise, we will be forced to defend our interests and respond in a proportionate way", Mr Dombrovskis added.

 

How did the US-EU aircraft fight start?

The EU first lodged its complaint with the WTO in 2005, following a similar filing by the US over EU support for Airbus.

 

WTO panels have found both sides at fault and authorised the US to retaliate last year, leading to new US duties of 15%-25% on European items such as aircraft, French cheese and Scotch whiskey.

 

The EU, which drew up a list of potential American targets for tariffs last year that included handbags and ketchup, had been awaiting a final decision from the WTO about how much of a punishment it could impose.

 

It must formally request authorisation from the WTO before moving forward with the duties.

 

The two sides have said they are trying to reach a settlement that would remove the border taxes, which hurt trade by making goods more expensive.

 

Both the EU and US now maintain they are in compliance with WTO rules.

 

In a statement, Airbus chief executive Guillaume Faury said the firm wanted the two sides to settle the fight and remove tariffs.

 

"Airbus did not start this WTO dispute, and we do not wish to continue the harm to the customers and suppliers of the aviation industry and to all other sectors impacted," he said. "It is time to find a solution now so that tariffs can be removed on both sides of the Atlantic."--BBC

 

 

 

 

Airlines and airports in fresh aid package plea

Airline and airport groups have called on governments around the world to provide fresh aid packages for the beleaguered aviation industry.

 

They said they also want current quarantine arrangements to be replaced with a new testing regime.

 

Without these things, they said, the industry faces collapse.

 

The International Air Transport Association warned that airlines around the world faced a fall in revenues this year of $418bn (£322bn).

 

At the same event, Airport Council International (ACI) World said airports would see their own income fall by $104bn.

 

IATA director general Alexandre de Juniac said that financial aid packages granted by many countries to their aviation businesses earlier this year had been put together on the assumption that a recovery would be well underway by now.

 

That had not proven to be the case, and the sector was still suffering deep "financial trauma", he said.

 

"Without a second tranche of financial aid, many airlines will not survive the winter", he said.

 

Meanwhile ACI world director general Luis Felipe de Oliveira said that airports were also facing extreme financial pressure.

 

"We could see airports going bankrupt in a very short period of time", he said.

 

"ACI and IATA are aligned in calling for urgent government action to introduce widespread and coordinated testing of passengers to enable quarantine requirements to be removed.

 

"Without this action, it is not an exaggeration that the industry is facing collapse", he added.--BBC

 

 

 

iPhone 12: Apple makes jump to 5G

Apple has confirmed its iPhone 12 handsets will be its first to work on faster 5G networks.

 

The company has also extended the range to include a new "Mini" model that has a smaller 5.4in screen.

 

The US firm bucked a wider industry downturn by increasing its handset sales over the past year.

 

But some experts say the new features give Apple its best opportunity for growth since 2014, when it revamped its line-up with the iPhone 6.

 

"5G will bring a new level of performance for downloads and uploads, higher quality video streaming, more responsive gaming, real-time interactivity and so much more," said chief executive Tim Cook.

 

There has also been a cosmetic refresh this time round, with the sides of the devices getting sharper, flatter edges.

 

No charger

The higher-end iPhone 12 Pro models also get bigger screens than before and a new sensor to help with low-light photography.

 

However, for the first time none of the devices will be bundled with headphones or a charger. Apple said the move was to help reduce its impact on the environment.

 

"Tim Cook [has] the stage set for a super-cycle 5G product release," commented Dan Ives, an analyst at Wedbush Securities.

 

He added that about 40% of the 950 million iPhones in use had not been upgraded in at least three-and-a-half years, presenting a "once-in-a-decade" opportunity.

 

In theory, the Mini could dent Apple's earnings by encouraging the public to buy a product on which it makes a smaller profit than the other phones. But one expert thought that unlikely.

 

"Apple successfully launched the iPhone SE in April by introducing it at a lower price point without cannibalising sales of the iPhone 11 series," noted Marta Pinto from IDC.

 

"There are customers out there who want a smaller, cheaper phone, so this is a proven formula that takes into account market trends."

 

The iPhone is already the bestselling smartphone brand in the UK and the second-most popular in the world in terms of market share.

 

Apple's sales grow. Shipments (July 2019-June 2020).  .

If forecasts of pent up demand are correct, it could prompt a battle between network operators, as customers become more likely to switch.

 

"Networks are going to have to offer eye-wateringly attractive deals, and the way they're going to do that is on great tariffs and attractive trade-in deals," predicted Ben Wood from the consultancy CCS Insight.

 

Apple typically unveils its new iPhones in September, but opted for a later date this year. It has not said why, but it was widely speculated to be related to disruption caused by the coronavirus pandemic.

 

The firm's shares ended the day 2.7% lower. This has been linked to reports that several Chinese internet platforms opted not to carry the livestream, although it was still widely viewed and commented on via the social media network Sina Weibo.

 

Ceramic shield

Apple said the iPhone 12 has the same 6.1in (15.5cm)-sized screen as its predecessor, but it now uses OLED rather than LCD technology for richer colours. This has also helped the firm make the device 11% thinner and have smaller bezels.

 

It added that the screen was also higher resolution and used a "ceramic shield" to protect its display to offer "four times better drop performance".

 

A new A14 Bionic chip - the first to be built on a five nanometre process - is being used to carry out more advanced enhancements to photos.

 

The firm said it would deliver night-mode selfies without using the flash, as well as better deal with colour, contrast and noise in challenging settings.

 

It showed off a forthcoming mobile version of League of Legends as an example of the "console-quality games" it could now run smoothly.

 

The addition of a magnet array inside the phone's back will allow compatible chargers to "snap on", as well as accessories including a wallet to be held in place.

 

The iPhone Mini shares these features but in a smaller form.

 

"The Mini is an interesting move from Apple, which I would have expected [to come] next year - but the smaller phone trend is clearly picking up," commented Carolina Milanesi from Creative Strategies.

 

The iPhone 12 will start at £799 - a £70 gain on last year - and go on sale on 23 October.

 

The iPhone 12 Mini will start at £699 and be released on 13 November.

 

Depth sensor

Two steel-sided higher-end models have also been redesigned to feature bigger displays - the iPhone Pro goes from 5.8in to 6.1in, while the Pro Max goes from 6.5in to 6.7in.

 

They carry over the improvements made to the lower-end devices.

 

But they also gain a Lidar (light detection and ranging) scanner.

 

This creates depth-maps of the immediate environment, making autofocus in dim settings "up to six times faster". It can also be used for augmented-reality tasks, although these were given less emphasis.

 

The Pro Max's wide-angle rear camera lens has also been given a bigger sensor to improve low-light performance.

 

Both new Pro models now have at least 128 gigabytes of storage and are £50 cheaper than last year's devices, starting at £999 and £1,099.

 

5G follower

Samsung first launched a 5G-enabled Galaxy S10 phone back in February 2019, and Huawei, OnePlus and Google are among others to have added the capability too.

 

But experts say there has only been limited interest in the feature to date.

 

"Apple is rarely the first to launch new technologies but waits for a technology to be mature enough to build new customer experiences on top of it," commented Thomas Husson from the research company Forrester.

 

"I think we're slowly reaching this tipping point."

 

Apple said it had tested its devices at peak 5G speeds of 3.5 gigabits per second - which means a 20 gigabyte 4K movie could be theoretically downloaded in about 45 seconds.

 

However, it warned that users' experiences would vary by network and region, and the 5G facility would not always be switched on.

 

"The ability of the iPhone 12 to switch between 5G and 4G when the consumer needs, in order to preserve battery, does highlight that 5G connectivity clearly isn't necessary 100% of the time for consumers," remarked Stephen Mears from the consultancy Futuresource.

 

Mobile data graphic

image captionEach jump in communications tech has taken different mobile device behaviours mainstream

The UK was the second European nation to start rolling out 5G.

 

But while this has helped give it a lead, coverage remains sporadic.

 

In the US - Apple's largest market - 5G speeds are particularly slow. In fact, according to one study, downloads over Canada's 4G networks are typically faster,

 

In some countries, 5G has not yet become available to the public.

 

However, in China - Apple's second-biggest market - the government has encouraged its rapid deployment, and recently announced both Beijing and Shenzhen had achieved "full coverage".

 

"There's no question that a large part of Apple's decision to settle a legal dispute with [5G modem chip-maker] Qualcomm was predicated on the fact that it couldn't afford not to have 5G in 2020," Mr Wood told the BBC.

 

"China would have been the driving force behind that.

 

"But there will also have been pressure from major operators across the world who are investing heavily in 5G networks and recognise the fact that the iPhone is a strategically important product."

 

The really interesting announcements here all came down to speed: 5G-ready phones with faster chips inside them.

 

But Apple arguably failed to sell what you can actually do with all this power.

 

The one area it will definitely help with is mobile gaming, with quicker response times for multiplayer titles as well as better graphics.

 

And what else can 5G do? Well it could let you watch sporting events from multiple angles on your phone - one example the firm gave was of watching American football from seven camera feeds.

 

Or - using augmented reality - you could design a room with virtual furniture in real-time.

 

But as the chief of US network Verizon noted during a guest spot during the presentation: "Until now most people have taken a wait-and-see approach to 5G."

 

And the question is whether the public saw anything that would make them want to rush out and add it to their lives now.

 

Moreover, 5G networks in most countries are at best patchy - you won't be able to take advantage of the promised speed gains in many places.

 

In time, there are likely to be popular apps and games that are dependent on the tech.

 

And many gadget enthusiasts will be tempted to upgrade to an iPhone 12 or Android equivalent to be ready.

 

But they will be investing in the promise of what's to come, rather than what they can do today.

 

Apple also launched a new version of its smart speaker - the HomePod Mini.

 

It supports a wider range of voice commands than before as well as introducing a home intercom system.

 

The $99 voice-controlled device also adds a facility that detects when an iPhone is nearby to produce visual and vibration effects that simulate the effect of music flowing between the gadgets.

 

The first HomePod was launched in 2018, and has lagged far behind Amazon and Google's rival speakers to date.

 

There was no mention, however, of a Mac computer set to run off the A14 chip.

 

Nor was there mention of Bluetooth-based tracking tags or over-ear headphones, which have both been rumoured to launch soon.

 

This will likely lead to speculation that Apple will hold a further event before the end of 2020.--BBC

 

 

 

 

Firms have 'head in sand' over post-Brexit trade, says minister

A government minister has criticised businesses for taking a "head in the sand approach" when preparing for post-Brexit trade.

 

Treasury and Cabinet Office Minister Lord Agnew said traders "really must engage in a more energetic way" to be ready for the end of the transition period on 31 December.

 

But one industry leader called the comments "outrageous".

 

The UK and EU are still holding talks to negotiate a post-Brexit trade deal.

 

The UK's chief negotiator, Lord David Frost, is in Brussels for discussions, with No 10 saying he believed "there was still a deal to be done".

 

Prime Minister Boris Johnson said the talks were at a "crucial stage", but he has set a deadline of this Thursday to come to an agreement - after which he has said the UK is ready to "walk away".

 

The BBC understands the PM will speak to the European Commission President Ursula von der Leyen on Wednesday evening.

 

Germany's Europe Minister, Michael Roth, said on Tuesday that the EU was prepared for the "worst-case" no-deal scenario.

 

But both sides have said they want to get an agreement in place.

 

The UK entered an 11-month transition period when it left the EU on 31 January, meaning it continued to follow the bloc's rules while a trade deal was negotiated.

 

Talks have been taking place since March, but there are still sticking points on finalising a deal, including government subsidies to business - known as state aid - and fisheries.

 

If an agreement is not made by the end of the transition period, the UK will go on to trade with the bloc on World Trade Organisation rules - something the PM said on Tuesday "holds no fear", but critics worry will damage the economy.

 

Speaking in the Commons on Tuesday, Foreign Secretary Dominic Raab said "the scope and prospects for a deal are there" and he was "hopeful that we can close the gap".

 

But, he added: "Ultimately it will require the same goodwill, the same pragmatism and the same flexibility on the EU side that the United Kingdom and this prime minister have shown."

 

'Businesses are at stake'

Asked by Treasury Committee chair Mel Stride whether the UK would be in "the right position on day one" after the transition period when it came to trading, Lord Agnew said the country was in "reasonably good shape" when it came to customs issues.

 

But he said: "The bit that worries me the most is trader readiness".

 

Lord Agnew accused businesses of taking a "head in the sand approach" to preparing, which he said had been "compounded by what I'd call the quadruple whammy of two false alarms - the two [Brexit] extensions at the very last minute, then followed by Covid and now followed by the recession".

 

He added: "The traders are not as ready as they should be.

 

"And if there is one headline that I hope comes out of this appearance today, I hope it is to send another shot over traders bows to warn them that it is their businesses that are at stake from the first of January and they really must engage in a more energetic way."

 

'Frustrating months'

Labour MP Rushanara Ali, who sits on the committee, criticised the minister, saying it was "quite clear businesses are being set up for blame game if there are massive delays and disruptions when new customs arrangements come in on New Year's Day 2021".

 

Industry figures have also condemned the comments, with the chief operating officer of the Food and Drink Federation (FDF), Tim Rycroft, saying he didn't think it was "accurate or helpful for ministers to assert that traders have not engaged in Brexit planning".

 

He added: "If any traders have their head in the sand it's because, after many frustrating months awaiting critical answers, they probably think it's more likely they'll find those answers in the sand than they will from the government."

 

The deputy director general of business lobby group the CBI, Josh Hardie, said firms were "doing all they can to prepare for Brexit", but there needed to be "common sense and compromise" from the UK and EU.

 

He said the "best way to help preparations is to agree a deal in the coming weeks" as it will "give businesses more certainty on what they need to prepare for and allow government to focus on the key actions that will protect jobs".--BBC

 

 

 

 

IMF upgrades 2020 economic forecast but warns of a slower 2021

The International Monetary Fund (IMF) is forecasting a somewhat less severe recession than it predicted in June.

 

The change in the outlook applies to both the global economy and the UK.

 

But the IMF says in its World Economic Outlook that the global economy is still in deep recession and the risk of a worse outcome than in its new forecast is "sizable".

 

For Britain, the IMF now predicts the economy will decline by 9.8% this year. The June forecast was 10.2%.

 

However, the rebound expected next year is also more moderate. In the case of the UK, that downgrade is similar to the upgrade for this year.

 

The contraction the IMF predicts for 2020 in Britain would be the second deepest fall among the G7 group of largest rich economies. Only Italy is predicted to do worse.

 

Beyond the G20 India is likely to also likely to experience a deeper decline this year than the UK. So is Spain. Tourism-dependent economies are in a "particularly difficult spot", the report notes.

 

Government response

For 2021, the British forecast is only a partial recovery of 5.9%, which would leave the economy still smaller than last year.

 

The predicted global economic contraction is also more moderate than the IMF envisaged four months ago, at 4.4%. That is followed by rebound of 5.2% next year, which is less than the previous prediction. Next year's world downgrade is less than this year's upgrade.

 

The slightly less-bleak assessment reflects downturns in several large developed economies in the April-to-June quarter of the year that were not as severe as the IMF expected. The return to growth in China, where the pandemic arrived first and was held back first, was stronger than expected.

 

The outcome would have been weaker, the IMF says, had it not been for the sizable response from governments and central banks that maintained household incomes, protected cash flow for firms and supported lending.

 

The big departure from the pattern of upgrades is India and some developing economies in South-East Asia. India experienced a particularly sharp decline in economic activity in the second quarter of this year.

 

Africa 'needs $1.2tn' to recover pandemic losses

Extreme poverty 'set for first rise since 1998'

'Major setback'

The IMF warns that the global recovery is not assured while the pandemic continues to spread. Research the agency published last week suggested that the downturn was only partly attributable to lockdown restrictions on activity imposed by governments.

 

Much of it reflected voluntary social distancing by people reluctant to do things that expose them to increased risk of infection.

 

The implication of that is that a complete recovery needs more decisive progress in tackling the virus, such as a vaccine.

 

The report says that most economies will suffer lasting damage. There is likely to be what it calls "a major setback to living standards relative to what was expected before the pandemic". The IMF warns that extreme poverty is likely to rise for the first time in more than twenty years.

 

Inequality is also likely to increase, the report says. The crisis has particularly affected women, people with precarious employment, and those with relatively lower educational attainment.--BBC

 

 

 

US movie chain AMC warns it is running out of money

The world's biggest movie chain has warned it could run out of money by the end of the year, citing a plunge in film-going and delayed movie releases amid the coronavirus pandemic.

 

Despite reopening the majority of its theatres, AMC Entertainment Holdings said attendance remained down 85% in the US and 74% elsewhere.

 

AMC says it is looking to raise money.

 

The warning follows rival Cineworld's recent decision to temporarily close its cinemas in the US and UK.

 

AMC, which has previously said it is spending about $100m a month, told investors that it expected its cash to "be largely depleted by the end of 2020 or early 2021".

 

The amount of money needed is "material", the firm added.

 

"There is a significant risk that these potential sources of liquidity will not be realised or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the company is able to achieve more normalised levels of operating revenues," the firm warned in a filing with US financial regulators.

 

'We could lose movie-going forever'

AMC, which is controlled by Chinese conglomerate Dalian Wanda Group, operated more than 1,000 cinemas globally prior to the pandemic.

 

While most are in the US, it also has more than 300 international locations via its Odeon and UCI Cinema subsidiaries.

 

In the US, restrictions due to the virus have kept theatre capacity limited to 20%-40%. And in some key markets, such as California and New York, the firm's cinemas have not yet reopened.

 

The industry has also been rocked by decisions to postpone releases of big-budget films such as Wonder Woman 1984 and James Bond movie No Time To Die, which is now due for release in April 2021.

 

In a recent interview, Wonder Woman director Patty Jenkins warned that movie-going was facing a real threat of extinction.

 

"If we shut this down, this will not be a reversible process," she said. "We could lose movie theatre-going forever."--BBC

 

 

 

 

Unemployment rate hits highest level in three years

The UK unemployment rate has surged to its highest level in over three years as the pandemic continues to hit jobs.

 

The unemployment rate grew to 4.5% in the three months to August, compared with 4.1% in the previous quarter.

 

Meanwhile redundancies rose to their highest level since 2009, the Office for National Statistics (ONS) said.

 

It comes as the government prepares to impose tough local lockdown rules that will force some businesses to close, potentially leading to more job losses.

 

Who has been affected?

According to the ONS, an estimated 1.5 million people were unemployed between June and August, while redundancies stood at 227,000.

 

Jonathan Athow, the ONS's deputy national statistician for economic statistics, said there had been a "sharp increase" in those out of work and job hunting since March.

 

"Overall employment is down about half a million since the pandemic began and there are particular groups who seem to be most affected, young people in particular," he told the BBC's Today programme.

 

"[Of those out of work] about 300,000 are aged 16-24, so about 60% of the fall in employment... that's really disproportionate."

 

Mr Athow said the large number of redundancies had been focused on sectors such as hospitality, travel and recruitment.

 

The number claiming work related benefits, meanwhile, hit 2.7 million in September - an increase of 1.5 million since the beginning of the crisis in March.

 

Sophia Royle was a project manager working for an e-learning firm. She was put on furlough in May, but then made redundant at the end of August.

 

"The jobs market is now flooded with people that have been made redundant and are looking for jobs," she says.

 

The problem is that because of the changing nature of the market, she is no longer just competing against people who live locally.

 

"A lot of these jobs are remote. They're online," she says. "That means you're competing with the whole of the UK."

 

Sophia and her partner are worried about paying the mortgage. She is also six months pregnant and only qualifies for statutory maternity leave, which she will start receiving in December.

 

"I've stopped looking for jobs, because how can I approach someone with that piece of news, that I'm not going to be around in six weeks' time?" she says.

 

Most expect unemployment to rise further after the government's furlough scheme is replaced with a less generous wage support package in November.

 

On top of this, from this week tougher local restrictions will force pubs, bars and other hospitality and leisure businesses in England to close in the most infectious areas, as has already happened in parts of Scotland.

 

Bank of England Governor Andrew Bailey told the House of Lords Economic Affairs Committee that the second wave of coronavirus cases hitting the UK economy is likely to increase the long-term damage to the economy as businesses go bust and consumer behaviour changes.

 

"It's very hard at the moment, I have to be honest with you, to put an estimate on how much scarring there will be," Bailey told the House of Lords' Economic Affairs Committee.

 

"As Covid returns, and if the prospect is that it will go on for longer... the prospect of scarring could increase."

 

The government has offered to pay two thirds of workers' wages if their employer is affected, but some say this falls short.

 

"The fallout from the Covid-19 recession is intensifying," said Paul Dales, chief UK economist at Capital Economics.

 

"What's more, the prospect of the latest Covid-19 restrictions leading to the economic recovery stalling, if not going into reverse, means worse lies ahead."

 

Analysis from Citibank suggests the unemployment rate could hit 8.5% in the first half of 2021 - a level not seen since the early 1990s.

 

Holly Tucker, founder of e-commerce firm Not On The High Street, says she's looking for one thing in potential recruits: "Creativity."

 

"I want to be wowed by the application, whatever the role," she says. "I want to see the care, attention to detail and creativity in their application that I will want to see from them in their job every day."

 

She suggests a handwritten letter or an imaginative design as a good starting place.

 

"Some of my favourite CVs have gone the extra mile and showcased their work within their application and not just told me about it. Are you a video editor? Then send me a video CV. Are you an animator? Animate it! Are you a copywriter? Be bold and rewrite some of the brand's copy and show them how it should be!"

 

How to get a job: Top bosses share their secrets

 

What has the reaction been?

Trade union body the TUC says the UK is on the "precipice of an unemployment crisis" and called for more government support.

 

"Wage replacement should be 80% for businesses who have to shut," said general secretary Frances O'Grady.

 

"We need a more generous short-time working scheme for firms which aren't required to close but will be hit by stricter local restrictions. And self-employed people in local lockdown areas need help too."

 

Anneliese Dodds, Labour's shadow chancellor, said the government needed to fix the test and trace system and provide "fair funding" to local areas as soon as restrictions are applied.

 

Chancellor Rishi Sunak said he had been honest with people from the start that he would not be able to save every job during the pandemic.

 

"But these aren't just statistics, they are people's lives," he added.

 

"That's why trying to protect as many jobs as possible and helping those who lose their job back into employment, is my absolute priority."

 

He said for those who do lose their job, there would be new opportunities through apprenticeships, traineeships and the £2bn Kickstart scheme, as well as extra work search support.

 

The headline jobs numbers are beginning to catch up with grim jobs numbers elsewhere. Unemployment above 1.5 million and the rate at 4.5% represent considerable rises over the third quarter, and three year-highs, though still relatively low by international and historic standards.

 

The redundancy numbers were up in the quarter to August by a record, partly reflecting the start of the phased withdrawal of the furlough scheme.

 

There were some signs that the government's attempt to reopen and boost the economy had some impact. Payroll numbers stabilised, up a little, though still 629,000 down on March. Vacancies were up too during the month of "Eat Out to Help Out".

 

So these numbers reflect both the headline numbers catching up with the grim reality of the jobs market since the shutdown - but also a bump to certain parts of the economy in August. The numbers will continue to get tougher from here.--BBC

 

 

 

 

SA Govt can take place in national economic recovery with “copy and paste” cadastre

A NEW minerals cadastre for South Africa’s exploration and junior mining sector could be a “cut and paste” of other successful examples used globally, said Errol Smart, chairman of the Minerals Council of SA’s junior and emerging miners leadership forum.

 

“This isn’t rocket science; it’s what industries do around the world all the time. There are proven case studies that a person can cut and paste very quickly,” he said.

 

Smart, who is also MD of Sydney-listed Orion Minerals, was commenting at the Joburg Indaba, a mining conference, last week. He earlier said in his presentation that he had, with the Department of Minerals & Energy, completed a report for mines minister, Gwede Mantashe, on the adoption of a flow-through share incentive scheme.

 

 

The scheme would help mobilise funds for exploration, especially in highly prospective mineral regions, such as the Northern Cape. Smart said mining development ought to be a key component of South African president, Cyril Ramaphosa’s economic recovery plan, due to be made public later this week.

 

Flow-through shares enable exploration companies to renounce tax benefits that would be due from incurring exploration expenses, and pass the benefit to investors who buy shares in return.

 

“The simple logic is that for every R100 invested in exploration, R84 is spent locally in the area where you work. R32 ends up in the South African Revenue Service’s (SARS’) hands anyway in 12 months,” said Smart.

 

“I’m a dumb geologist; I’m not an accountant or auditor, but hell, all you have to do is ask [National] Treasury and SARS to give up R28 of corporate taxes in return for corporates investing R100 in exploration.”

 

Commenting on the cadastre, Smart said industry and government has to break down boundaries that had kept them apart in the past. “We must get beyond the ‘us and them’.

 

“The more we work collaboratively, the more we can get an outcome. We know there are technical impediments to overcome, but we have to free up money at a very difficult time,” he said.

 

“Let’s stop trying to invent our own wheel. Let’s adopt it for the South African environment. Man, a wheel has to be round and have rubber on it. Let’s just make sure we put South African rubber on it and we get going on the track.”

 

South Africa’s existing mining cadastre has been a failure, mining industry executives have said. PwC, a market research company, said earlier this month it was “broken”. New systems had to be put in place as South Africa only attracted 1% of the world’s global exploration expenditure, according to the Minerals Council South Africa.-mininmx

 

 

 

Nigeria: Senators Clash Over 2021 Budget Proposals

The Senate yesterday commenced the general debate on the 2021 N13.08 trillion Appropriation Bill with Senators holding divergent views over the viability of the budget proposals.

 

While most of the Peoples Democratic Party (PDP) senators who contributed to the debate faulted the budgetary estimates, their colleagues in the All Progressives Congress (APC) were of the opinion that the budgetary proposals can still bring about required recoveries in various sectors of the nation's economy as anticipated by President Muhammadu Buhari in the budget of "Recovery and Resilience".

 

The Senate Minority Leader, Senator Enyinnaya Abaribe, tore the budget estimates into shreds describing it as unrealistic and unimplementable.

 

He said the budget was dead on arrival as it is nothing but old news.

 

"This budget is nothing but what Fela called old news everytime, the same old news, nothing new".

 

 

According to him, "The 2021 Appropriation Bill proposes to spend N13.082 trillion, with expected revenue of N7.886 trillion and a deficit of N5.196 trillion. As with the other budgets over the last few years, it looks impractical and unimplementable".

 

"The major challenge, as with previous budgets, is with revenue and an overly optimistic revenue target. The 2021 budget hopes that the federal government will be able to generate almost N8trillion. If history is anything to go by, this projection looks impossible.

 

" In 2016, Nigeria had an approved budget with a revenue of N3.855 trillion. By the end of the year, the total retained revenue was only N2.621 trillion.

 

" This performance was a 32 per cent shortfall according to the budget implementation reports. In 2017, instead of trying to readjust to the reality of a difficult revenue situation, Government of Nigeria repeated the same overly optimistic exercise. The approved budget had a revenue of N5 trillion while actual revenue that year was only N2.37 trillion.

 

 

"This performance was a whopping 53 per cent shortfall. In 2018, Federal Government of Nigeria repeated the same thing by submitted a budget that expected revenue to jump from N2.37 trillion to N7.165 trillion. By the end of the year, actual revenue was only N3.48 trillion; a 51 percent shortfall. The story was the same in 2019 and 2020. In 2019 the revenue shortfall was 41 percent and so far in 2020 the shortfall is 38 percent.

 

"Here we are in 2021 and the submitted budget expects revenue to be N7.886 trillion. Based on the half year numbers, Nigeria would be lucky to realise N3.3 trillion in revenue in 2020 by the end of the year. Yet the Executive expects revenue to increase by over 200 percent in 2021.

 

"When the Executive announces a N13 trillion budget, the ministries and agencies take it as a signal that the largess can continue. A casual look at the Appropriation Bill contains items like SUVs for chief executives and fancy office buildings for agencies who really do not need them.

 

 

Earlier in his lead debate, Senate Leader, Senator Yahaya Abdullahi, who veered off the template of the debate described those clamouring for restructuring of the country as people seeking for dismemberment of the country before addressing the budgetary proposals and projections.

 

Commenting on the budget, the Senate Leader said:

 

"It is also important to note that a budget deficit of this size requiring more indebtedness is not healthy for the long-term development of the country, but this must be tolerated now because of the challenges of the times".

 

Opposition PDP senators like Ike Ekweremadu, Gabriel Suswam, Oker Jev, made their presentations against workability of the budget.

 

Ekweremadu tackled the Senate Leader over his comment that proponents of restructuring are seeking for dismemberment of Nigeria.

 

He said the leader got it wrong and withdrew the statement on his behalf.

 

On the budget, Ekweremadu posited that government external borrowing needs to be carefully revisited "especially loans being obtained from places like China because I know China will not forgive you if you don't pay back the loans you are taking to execute infrastructures across the country ".

 

Some APC Senators like Aliyu Sabi Abdullahi , Orji Uzor Kalu, Uba Sani , Adamu Aliero, Ibikunle Amosun, expressed hope in the workability of the budgetary proposals.

 

Senate Deputy Chief Whip, Senator Sabi Abdullahi described Abaribe's position on the budget as hilarious presentation, saying Nigeria would have been worse for if President Buhari's administration did not take over in 2015.-This Day.

 

 

 

 

Nigeria: 774,000 Jobs - Govt Shifts Recruitment to November 1

The federal government has rescheduled the commencement of the Public Works programme to November 1.

 

According to the Minister of State for Labour and Employment, Mr. Festus Keyamo (SAN), President Muhammadu Buhari, approved the rescheduling of the programme meant to engage 1, 000 persons from each of the 774 local government areas for menial jobs for three months.

 

Keyamo said the approval was based on his memo to the President informing him that most of the proposed project sites were still water-logged as the rains had not abated.

 

The programme, he noted, was designed for execution during the dry season when most of the project sites would be ready for work.

 

He said that capturing of those to be engaged by the selected banks has been progressing seamlessly across the 774 local government areas.

 

A statement issued yesterday by the spokesman, Ministry of Labour and Employment said "the minister also pointed out that the information regarding the banks attached to the specific local government areas could be found in the project's website: www.specificpublicworks.gov.ng."

 

It noted that more information is also available with the various state selection committees.-This Day.

 

 

 

Nigeria: IMF Raises Nigeria's GDP Projection, Forecasts 4.3% Contraction

The International Monetary Fund (IMF) has predicted that Nigeria's Gross Domestic Product (GDP) will contract by 4.3 per cent, which indicates an improvement compared with a negative GDP projection of 5.4 per cent it had predicted in its previous report in June.

 

This is coming as the federal government has stated that it is not considering the relief package offered by the World Bank for low-income countries in the wake of the COVID-19 pandemic in order not to worsen the nation's crippling debt situation.

 

IMF's Chief Economist and Director of Research Department, Ms. Gita Gopinath, disclosed the country's new GDP projection during a virtual media briefing to unveil the fund's World Economic Outlook (WEO) at the ongoing Annual Meetings of the IMF/World Bank in Washington DC.

 

 

The report titled: 'A long and difficult ascent, 2020 October,' however, predicted that the economy would grow by 1.7 per cent in 2021.

 

Also, during a separate media briefing to unveil the Global Financial Stability Report (GFSR), the Director of Monetary and Capital Market Departments, IMF, Mr. Tobias Adrian, said banks are in a safer position than the last global economic crisis, adding that the IMF is closely monitoring the concessionary loans given to Sub-Saharan Africa.

 

Speaking on the projection for Africa, Gopinath said: "Overall for the region, the numbers are close to what we had in June, -3 per cent in 2020 and 3.1 per cent in 2021. There is significant heterogeneity in the within the region. You have countries that are commodity exporters who have been negatively impacted not just by the pandemic but by the drop in oil prices.

 

 

"Nigeria is one of such case and then you have countries like South Africa where there has been a very big hit in terms of the pandemic and a collapse in activities because of the requirements of lockdowns. There is always a difference in countries that are more diversified, that seem to have better growth prospects than other."

 

She further added that the economic fallout of the COVID-19 pandemic would cause 20 million people in the continent to fall into extreme poverty.

 

She added: "It is also important to note that in Sub-Saharan Africa, the World Bank projects that over 20 million people will enter extreme poverty this year. These are very large numbers and several of these countries are also living with very high levels of debt distress."

 

Responding to a question about emerging countries going through foreign currency volatility, depleting foreign reserves and how fiscal and monetary tools could be adopted to overcome the crisis, she said there was a need for emerging economies to closely restructure their debt to reduce and seek debt relief if allowed.

 

 

She said: "This pandemic is triggering divergence across advanced economies, emerging and developing economies. They have been hit by the health crisis and they have been hit because they are oil exporters which had collapsed and more importantly, they just don't have the resources that advanced economies have to deal with this crisis.

 

"Because we don't have a financial crisis at this point, many emerging markets are able to borrow at record levels in foreign currency this year relative to previous years.

 

"But that is not going to be enough and there would be a need for continued international support for many countries in terms of concessionary financing, aide and there are going to be developing and low-income economies that would need debt relief and, in some cases, restructuring of debt to make sure they have the space to do the spending that they need."

 

On his part, the Division Chief, Research Department, IMF Mr. Malhar Nabar, said: "The oil exporters have also been hit very hard and the other commodity exporters such as South Africa has also been struggling through this crisis with deep contractions projected this year.

 

"But in terms of what the global outlook means for Africa, the partial recovery that we are projecting next year clearly has a beneficial impact on the outlook in terms of stronger external demand but one key element is that the external financial conditions which have been extremely tight for Sub-Saharan Africa over the past several months, a turnaround in those conditions and better access for Sub-Saharan African issuers to access external hard currency bond markets would actually, help with improving the outlook."

 

Continuing, in the GFSR, Adrian said the various interventions and loans given to SSA which amounted to $21 billion are closely monitored to ensure they are not mismanaged.

 

He said: "Since the start of the pandemic, the IMF has provided financing to 81 countries and the total new financing is about $100 billion. Poverty Reduction and Growth Trust (PRGT) countries, which are mostly in Sub-Saharan Africa received about $21 billion and this is concessional.

 

"It is extremely important for the money to get to the right people. And we are watching very carefully and we are watching very closely to make sure that all these loans go into the right hands."

 

FG Not Considering World Bank Relief Package, Says Ahmed

 

Meanwhile, the federal government is not considering the relief package offered by the World Bank for low-income countries in the wake of the COVID-19 pandemic in order not to worsen the nation's crippling debt situation.

 

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, gave the indication yesterday in Abuja.

 

In response to a question on whether Nigeria would consider the relief package in the face of dwindling revenue generation, the minister, who spoke during the public presentation of the 2021 budget proposals, said the package would not be considered, for now.

 

She noted that the conditions attached to the package were not favourable for the country, adding that Nigeria might opt for it if the conditions are relaxed later.

 

She said several loan agreements had been entered with various lenders, stating that seeking for debt relief would portray Nigeria as a country that cannot meet its debt obligations in the eyes of creditors.

 

She said: "For now, the answer is no; the reason being that we have assessed the offer and reviewed all the loans that we are committed with other countries that we borrowed from. We have to also first review all agreements we have with commercial lenders.

 

"It is not only Nigeria that was not able to access the loan because of the similar limitations that we have. The offer might trigger some inability of the borrowing countries to pay back."

 

Giving an insight into the performance of the 2020 Revised Budget, she disclosed that a total of N1.2 trillion had been released for capital projects and N2.14 trillion to meet debt service obligations provided for in the Revised 2020 Budget, as at the end of September.

 

During the period under review, the sum of N2.18 trillion was also expended as personnel cost, including pensions.

 

She disclosed that as at the end of August 2020, the federal government's revenue available for budget funding, which excludes government-owned enterprises (GOES) was N2.52 trillion, representing 71per cent target.

 

Of the N9.97 trillion appropriated on the expenditure side (excluding GOEs and project-tied loans), N6.25 trillion (representing 93.9 per cent of the pro-rata N6.65 trillion) was spent.

 

According to her, the Federal Government of Nigeria's (FGN) share of oil revenues during the review period was N1.105 trillion (representing 164 per cent performance over and above the prorated sum in the revised 2020 budget) while non-oil tax revenues totalled N831.41 billion (77 per cent of revised target).

 

Companies Income Tax(CIT) and ValueAddedTax (VAT) collections stood at N447.52 billion and N117.75 billion, representing 82 per cent and 62 per cent respectively of the pro-rata revised targets for the period.

 

Customs collections also stood at N266.14 billion (77 per cent of revised target) while other revenues amounted to N583.82 billion, of which independent revenues accounted for N281.81billion.

 

Giving a breakdown of the 2021 budget proposals, she stated that the aggregate revenue available to fund the N13, 08 trillion proposed 2021 budget is projected at N7.89 trillion (35 per cent more than the 2020 Revised Budget of N5.84 trillion).

 

The minister also defended the N5. 196 trillion 2021 budget deficit, which is 3.64 per cent of gross domestic product (GDP) and above the three per cent threshold prescribed by the Fiscal Responsibility Act (FRA).

 

She said several loan agreements have been entered with various lenders, adding that asking for debt relief would portray Nigeria as a country that cannot repay its indebtedness in the eyes of creditors.

 

Ahmed said that although the 2021 budget deficit exceeded the three per cent threshold, the government has not breached the law, adding that there is a provision in that Act that allows the government to surpass the threshold during "unusual times."

 

To promote fiscal transparency, accountability and comprehensiveness, the minister stated budgets of 60 GOEs are integrated in the FGN's 2021 budget proposal.

 

In aggregate, 31 per cent of projected revenues is to come from oil-related sources while 69 per cent is to be earned from non-oil sources.

 

The minister noted that, overall, the size of the budget has been constrained by relatively low revenues.

 

To enhance independent revenue generation and collection, the government, she said, will aim to optimise the potential, operational and collection efficiency of GOEs with a view to generating significantly higher revenues required to fund the FGN budget from this source.

 

She added that the current sub-optimal revenue performance of most GOEs will be addressed through the effective implementation of the enhanced performance management framework On whether government is considering issuing Eurobond in 2021, she said it is an option that is on the table.-This Day.

 

 

 

Rwanda Approves Cannabis Production

Rwanda has approved the cultivation and export of cannabis even as the use of the stimulant for medical or recreational purposes remains illegal in the country.

 

The government is targeting to grow its export earnings from the global cannabis market valued at the $345 billion according to analysts New Frontier Data.

 

The decision has caused confusion with some warning it could be detrimental to the youth if tough controls are not enforced.

 

Rwanda's Minister of Health Dr Daniel Ngamije said that despite the government's intention to profit from the production and export of marijuana, its use in the country is prohibited.

 

"This will not give an excuse for drug abusers and dealers. The law against narcotics is available and it will continue to be enforced," Dr Ngamije said on state-run television Rwanda Broadcasting Agency on Tuesday.

 

 

A Cabinet meeting, chaired by President Paul Kagame, on Monday approved regulatory guidelines on cultivation, processing, and export of "high-value therapeutic crops".

 

While The EastAfrican has yet to see the guidelines by press time, a source from the Rwanda Development Board (RDB) told the paper that cannabis is the crop referred to.

 

Last year, RDB had invited companies to bid for the development of medical cannabis in Rwanda with a focus on the export market.

 

Prohibition

 

The production or sale of cannabis is prohibited in Rwanda. Doctors are banned from prescribing it as medicine, and doing so could land them in jail for two years and a fine of about Rwf3 million (about $3000), under Article 266 of the Penal Code.

 

Use of the narcotics attracts a jail term of two years, while drug dealers face between 20 years to life in prison, and a fine of up to Rwf30 million ($30,000).

 

 

A day before the approval, three women in Rubavu District were arrested for drug peddling after they were caught with 1,800 pellets of cannabis.

 

Analysts say that the government's latest stance causes confusion and will require an amendment of the Penal Code as well as public sensitisation.

 

According to the law governing narcotics and psychotropic substances, authorisation of production, distribution and use of narcotic drugs shall be delivered if their use is limited to medical and research purposes only.

 

The law further states that every authorised private or public enterprise selected can only retain the quantities of narcotics drugs that are necessary for the smooth running of the enterprise.

 

These, analysts say, are contradictory.

 

"Basically, the government is authorising the production of illegal drugs. The Penal Code should have been amended before the government came up with this decision to allow the mass production of cannabis for export. The law must be clear because it is creating confusion," Louis Gitinywa, a constitutional lawyer based in Kigali told The EastAfrican.

 

"There should now be some form of legal framework to support this decision, and to explain to citizens how this will work."-East African.

 

 

Kenya's Debt Repayment Headache Growing Daily

Budget experts are now warn that Kenya risks surpassing its Sh9 trillion budget ceiling in the coming years as it continues to borrow heavily to finance the ever-ballooning budget deficits.

 

With at least Sh1 trillion, the gaping hole in the Sh2.79 trillion budget for the 2020/21 financial year, it means that the country will have to borrow heavily from local and foreign markets to finance it.

 

The International Budget Partnership (IBP) in its state of Kenya's public debt paper; the thin line between a rock and a hard place, notes that the government has to find ways to reduce the country's debt repayment burden by restructuring some of its loans.

 

"The country has to reduce commercial borrowing that has been more expensive and with shorter maturity periods," Mr John Kinuthia and Mr Abraham Rugo, joint managing partners at the IBP, warn in their October 2020 paper.

 

This comes as Kenya's debt repayment bill grows rapidly with the increasing proportion of ordinary revenue absorbed by debt becoming a serious threat to the country's critical service provision areas.

 

 

According to the 2020 Budget Policy Statement (BPS), the National Treasury has indicated that all additional resources in 2020/21 will be taken up by debt servicing and pensions.

 

Struggling SMEs

 

In the current financial year, the country is required to repay Sh904 billion in interest accrued from the public debt, which stands at Sh6.7 trillion as at the end of June 2020.

 

The public debt figure is equivalent to about 66 percent of the Gross Domestic Product (GDP).

 

With the expected dip in revenue collection caused by the global Covid-19 pandemic, the country is staring at difficult times ahead.

 

Struggling Small and Medium-sized Enterprises (SMEs) have not helped the situation.

 

 

The grim reality is that although the National Treasury had projected Kenya Revenue Authority (KRA) to collect Sh1.8 trillion in taxes, the target was revised to Sh1.62 trillion due to the Covid-19 effects.

 

But with the pandemic still biting, it is unlikely that the taxman will meet the set target.

 

But despite this expected shortfall, the country still has to spend Sh1.89 trillion to finance recurrent and development expenditures.

 

Ability to repay its debts

 

This includes Sh1.25 trillion on salaries and allowances of government employees and Sh637.64 billion for development expenditure during this financial year.

 

This implies that the only way out of the huge deficit is more borrowing from the local and external market.

 

"A country must engage in business that generates foreign exchange so that it is able to settle its foreign currency-based debt. Low export business in a country relative to what it owes could create a debt repayment problem for the country," Mr Kinuthia says.

 

 

Before the shift to an absolute figure of Sh9 trillion, the total public debt to GDP ratio was an indicator used to measure a country's ability to repay its debts.

 

This describes the proportion of a country's public debt relative to its total economic output.

 

Until the change, it had not been clear the threshold that mandarins at the National Treasury were applying.

 

This is despite the Public Finance Management (National Government) Regulations setting the limit at 50 percent of the GDP.

 

Funds from global bond markets

 

But even as this was the case, the Budget Review and Outlook Papers from the National Treasury set the upper threshold for Kenya at 74 percent in the 2017 edition before changing to 55 percent of the country's GDP.

 

In 2019, Parliament amended the PFM regulations completely shifting the threshold away from a base of GDP to a new limit based on an absolute figure of Sh9 trillion by June 2024.

 

Since 2014, when Kenya floated its first Sovereign bond and began its negotiations for a loan from the Exim Bank of China to finance the standard gauge railway, the size of the public debt has become a key issue of debate in the country.

 

During this period, Kenya has also been able to raise funds from global bond markets easily and attain infrastructure funding from other countries as well.

 

"Increasingly, the risk of Kenya breaching the debt sustainability measures that it is a signatory to, such as the East Africa Economic Convergence Criteria which set debt ceilings for the region, has dominated discussions on fiscal consolidation even as the government pursues an expansionary budget framework," Mr Rugo says.

 

According to Mr Rugo, these measures include standards on debt that are commonly considered global good practice.

 

"They provide a sense of a country's ability to repay its loans without adversely affecting other budget obligations especially those related to the delivery of basic and essential services," he says.-Nation.

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


–Zimplow

EGM

Virtual

15/10/2020 | 10:00 am

 


Falgold

EGM

1st Floor, KPMG Building, 133 Josiah Tongogara Avenue, Bulawayo

29/10/2020 | 10:00 am

 


Afdis

AGM

virtual

13/11/2020 | 12:20pm

 


Zimbabwe

National Unity Day

Zimbabwe

22/12/2020

 


 

Christmas Day

 

25/12/2020

 


 

Boxing Day

 

26/12/2020

 


 

New Year’s Day

 

01/01/2021

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of 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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