Major International Business Headlines Brief::: 06 June 2024

[Bulls n Bears]

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Major International Business Headlines Brief:::  06 June 2024 

 


                                                                                  

 

	
 


 

 


 

ü  Nigeria: Govt to Suspend Import Duties On Staple Food Items, Drugs, Others for 6 Months to Ease Inflation - Report

ü  Nigeria: Atiku Tackles Tinubu As Govt Projects N5.4trn for Fuel Subsidy in 2024

ü  Somalia: Somaliland Needs to Rethink Strategy Amid Djibouti's Growing Hostility

ü  Nigeria: Niger Mine Collapse - Insecurity Hindering Rescue of Trapped Miners - Official

ü  Uganda's Debt Burden Leaves Govt With Major Headache

ü  Nigeria: Can Unions Secure a Wage Deal Before Monday?

ü  Ghana: Cost of Living to Worsen As Fuel Prices Increase

ü  South African Rand Falls Due to Coalition Uncertainty

ü  Africa: Debt Relief Should Be the African Union's Focus At the G20

ü  Nigeria: No Plans to Revoke Licences of More Banks - CBN

ü  Russia's economy is growing, but can it last?

ü  Why Canadians are angry with their biggest supermarket

ü  Nvidia value surges past $3tn and overtakes Apple

ü  How Japan's biggest brewer aims to attract sober Gen Z

ü  Could AI put an end to animal testing?

ü  Ban fossil fuel ads to save climate, says UN chief

 


 

 


 <https://www.cloverleaf.co.zw/> Nigeria: Govt to Suspend Import Duties On Staple Food Items, Drugs, Others for 6 Months to Ease Inflation - Report

The Federal Government is considering a six-month suspension of import duties on staple food items, drugs, and other essential items as a measure to curb inflation, according to a report sent to President Bola Tinubu for review and approval.

 

Bloomberg reported that President Tinubu is yet to sign the document for implementation.

 

The Inflation Reduction and Price Stability Order, as outlined in the document, will mandate the Ministry of Finance and the Central Bank of Nigeria to devise a plan for offering low-interest loans to the agriculture, pharmaceutical, and manufacturing sectors.

 

"This productive deployment will ultimately improve outputs and reduce inflation," the document said.

 

The president is also likely to suspend value-added tax (VAT) on automotive gas oil, some basic food items and semi-processed staple food items such as noodles and pasta, raw-material inputs for the manufacture of food items, electricity and public transportation, as well as agricultural inputs and produce and pharmaceutical products for the rest of the year.

 

- Daily Trust.

 

 

 

Nigeria: Atiku Tackles Tinubu As Govt Projects N5.4trn for Fuel Subsidy in 2024

A former vice president, Atiku Abubakar, yesterday challenged President Bola Ahmed Tinubu to stop deceiving Nigerians about his administration's true position on petrol subsidy.

 

He said contrary to Tinubu's public posturing about petrol subsidy removal, the administration had been secretly paying trillions of naira for petrol subsidy.

 

According to him, subsidy payment under Tinubu's watch is likely to hit N5.4 trillion this year.

 

A draft copy report of the Accelerated Stabilization and Advancement Plan (ASAP) presented to Tinubu on Tuesday by the Minister of Finance, Wale Edun, showed that petrol subsidy was projected to gulp N5.4 trillion in 2024 as against the N3.6 trillion budgeted for the same intervention in 2023.

 

 

Tinubu had, during his swearing-in at Eagle Square, Abuja on May 29, 2023, declared that the fuel subsidy payment was gone; the step World Bank, International Monetary Fund (IMF) and other stakeholders applauded.

 

"At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024. This compares unfavourably with N3.6 trillion in 2023 and N2.0 trillion in 2022," the report said.

 

Edun said the fuel subsidy removal "is an ongoing process that depends on a combination of factors."

 

He said the government was working to ensure a complete elimination of fuel subsidies in the country's economy, adding that the policy direction of the government now focuses more on Compressed Natural Gas (CNG) to power energy in the country.

 

 

"Clearly, it is a combination of pivoting away from petroleum imports. Now, we are focusing more on CNG. It is an ongoing conversation, it is an ongoing process of ensuring that fuel subsidy is eliminated from the Nigerian economy, that is what Mr. President's intent is and that is what is being worked towards," he said.

 

In his reaction, Atiku asked Tinubu to stop deceiving Nigerians about his administration's true position on fuel subsidy, alleging that his trial-and-error policies have failed Nigerians.

 

"Ever since, it has been a bragging right of Tinubu and officials of his administration. I had in my statement reviewing the one year of the Bola Tinubu administration urged the government to come clean on the actual position of the subsidy policy.

 

"These were my exact words: '...provide clarity on the fuel subsidy regime, including the fiscal commitments and benefits from the fuel subsidy reform and the impact of this on the Federation Accounts.

 

"It is curious that since April 2024, fuel queues have mounted at many filling stations across Nigeria, and the infamous 'black market' has sprouted in several states. How much PMS is being imported and distributed, and at what cost? What is the implicit subsidy?"

 

"If the subsidy regime had been characterised by opaqueness, what would we say of a situation where the subsidy is still being paid under the cover without Nigerians in the know?

 

"Like millions of Nigerians, I was shocked to learn through media reports that the "government is still supporting downstream consumption."

 

"Now we know that expenditure on fuel subsidy may reach N5.4 trillion in 2024, compared to the N3.6 trillion spent in 2023, the same year that Tinubu claimed to have abolished fuel subsidy

 

"I wish to restate that Nigeria is not working, and what we have had in a little over a year is a cocktail of trial-and-error economic policies. Paying subsidies and lying about it is nothing to brag about. Nigerians deserve better than this deception."

 

- Daily Trust.

 

 

 

 

Somalia: Somaliland Needs to Rethink Strategy Amid Djibouti's Growing Hostility

The relationship between Djibouti and Somaliland has long been contentious, with Djibouti displaying consistent hostility towards its neighbour.

 

This hostility stems from two primary factors: fear of economic competition and Djibouti's regional defense strategies.

 

The World Bank's "Transport Global Practice the Container Port Performance Index 2022" ranks Berbera port second in Sub-Saharan Africa for performance, based on vessel time in ports.

 

This development has heightened Djibouti's fears, as it sees Berbera port as a formidable competitor. Another World Bank report, "Djibouti Country Economic Memorandum" (January 2024), warns that Djibouti's current economic model, reliant on a single sector (ports) and client (Ethiopia), is unsustainable.

 

 

The report explicitly states that the port of Berbera in Somaliland, along with the Berbera Corridor connecting to Ethiopia's hinterland, has emerged as a strong potential competitor to Djibouti.

 

Djibouti's economic concerns are compounded by its reliance on port revenues. In a democratic setup, competition is viewed as healthy, but in an authoritarian regime like Djibouti, it is seen as an existential threat.

 

This explains the hostile behaviour displayed by Djibouti towards Somaliland in the last six months, which Somaliland must address.

 

On the security front, Djibouti seeks to use Somalia and Somaliland as tools against Eritrea, with which it has an ongoing border dispute. Additionally, it aims to use both Somaliland and Somalia to suppress potential uprisings by the marginalised Afars in Djibouti.

 

 

Furthermore, Djibouti wants continued hostility between Somalis and Ethiopians, believing this will force Ethiopia to rely solely on Djibouti's ports, consolidating its economic and security interests.

 

However, this strategy is flawed, as Ethiopia has already been diversifying its port options and developing new relationships with Kenya and Sudan.

 

Despite these hostile stances, Somaliland's administration lacks a strategy to counter Djibouti's hostile policies. Since the Kulmiye party came to power, Somaliland has become closer to Djibouti, with politicians prioritising personal relationships over strategic interests.

 

However, this personal relationship has not yielded tangible benefits for Somaliland nor changed Djibouti's aim to force Somaliland into a union with Somalia, which Djibouti itself refused to join when it became independent in 1977.

 

 

To address the Djibouti challenge, Somaliland must adopt a new strategy that prioritizes strategic interests over personal relationships. Somaliland's leadership must recognize that Djibouti is more foe than friend and take the following steps to curtail its aggression:

 

1 Acknowledge that Djibouti and Somaliland's interests in the region are fundamentally different.

 

2 Develop alternative alliances with democratic forces in Djibouti.

 

3 Take strong public stands against Djibouti's policies hostile to Somaliland.

 

4 Focus on strategic interests in foreign policy.

 

By adopting these recommendations, Somaliland can counter Djibouti's undermining tactics and secure its rightful place in the region.

 

This requires a shift in Somaliland's foreign policy from a focus on personal relationships to strategic interests. Only then can Somaliland ensure its economic and security interests are protected, and its sovereignty is respected.

 

- Business Day Africa.

 

 

 

Nigeria: Niger Mine Collapse - Insecurity Hindering Rescue of Trapped Miners - Official

Those trapped include the site manager identified as Ibrahim Ishaku and dozens of mine workers.

 

Insecurity and difficult terrain are hindering rescue operations of miners trapped in a pit that collapsed on Sunday in Galadima-Kogo, Shiroro Local Government Area of Niger State, an official has said.

 

The Niger State Commissioner for Humanitarian Affairs and Disaster Management, Ahmed Yumu, who disclosed this on Wednesday, also said the ministry and other stakeholders were making efforts to rescue the trapped victims.

 

"The ministry in collaboration with other agencies and other professional stakeholders are doing their best in seeing that the trapped miners are rescued even though it's been over 24 hours since the collapse occurred," the ministry's spokesperson, Hanibu Wushishi, quoted the commissioner as saying, in a Wednesday statement.

 

"The rescue efforts are still on despite the difficult terrain, insecurity in the area and the possibility of more collapse if the rescue effort is not done professionally and cautiously.

 

 

"The commissioner and his permanent secretary once again appeal to artisanal miners to be careful on mining procedures and call on the relevant authorities to monitor, supervise and prevent the mining which is fast spreading to every nook and cranny of the state to avert future occurrence.

 

"The ministry appeals for patience, understanding and prayers from all Nigerlites and Nigerians for the successful rescue of these innocent artisanal miners," the statement said.

 

The mining site belongs to a company identified as African Minerals and Logistics Limited. It collapsed on Sunday following a downpour. Between 30 and 50 people are feared trapped in the pit.

 

One person was confirmed dead and seven others were rescued with severe injuries. Those trapped include the site manager identified as Ibrahim Ishaku and dozens of workers.

 

Artisanal mining is common in Niger State and many other parts of Nigeria. Such mining activities are poorly regulated. Poor locals often work in the mines, owned by local and foreign companies, without safety procedures.

 

- Premium Times.

 

 

 

 

Uganda's Debt Burden Leaves Govt With Major Headache

Some of the key targets that Uganda had set as part of its earlier grand plan on stemming the high levels of debt were wide of the mark, compounding an already difficult situation for government technocrats, and leaving ordinary Ugandans at the mercy of fate should any external shock such as Covid-19 re-emerge.

 

Uganda is experiencing unprecedented levels of debt, with the amounts growing at a pace that government had not anticipated. The ministry of Finance, Planning and Economic Development says public debt stood at Shs 93.38 trillion at the end of December 2023, up from Shs 80.77 trillion a year earlier, making it the highest amount ever.

 

To put this amount of debt in context, it means each Ugandan - be it a 90-year-old woman or a three-month-old baby - has a debt of close to Shs 2 million attached on them, some of which they have to pay. That amount, experts warn, will not drop anytime soon, and that should another crisis such as Covid-19 reappear, many fragile businesses will be bumped off the streets.

 

 

A country with a high debt level is usually faced with expensive loans from the commercial banks. Ultimately, this feeds into the inflation print, triggering a rise in the prices of goods and services.

 

In its earlier debt management strategy, Uganda government officials at the ministry of Finance, had set benchmarks for the level of interest payments it needed to pay, and which loans were maturing within a year. These benchmarks were meant to guide government on the solutions it needed in order to pay off its debt. It has emerged, however, that the government underestimated the gravity of the problem, and that the ceilings it set were easily breached.

 

According to the recently-released Medium Term Debt Management Strategy for 2024/2025 - 2027/2028 by the ministry of Finance, the government had projected that the interest payments it needed to pay in 2023 would not exceed 2.43 per cent as a percentage of the Gross Domestic Product.

 

 

However, that amount reached 2.88 per cent by the end of December 2023, making it hard for government to achieve its objective. According to government, interest payments consumed 22.2 per cent of the national revenue in 2023, compared to 14.2 per cent in 2019.

 

When it came to debt that was to mature within a year, government had projected that that figure would not surpass 3.17 per cent of the national budget. But in the year to December 2023, that amount was 3.63 per cent.

 

That government failed to keep its debt levels within the set targets begs a couple of questions: did government miscalculate the gravity of its debt problem? How did Uganda find itself in this situation in the first place?

 

>From the difficulty of failing to raise enough revenue during the difficult Covid-19 period and therefore resorting to borrowing more money from the profit-hungry domestic financial market, to government's reckless expenditure of its loans, there appears to be a raft of reasons as to why Uganda's debt problem will not abate anytime soon.

 

 

Top USA-based credit rating agency Moody's, which guides investors on the health and credit profile of economies, says Uganda's overreliance on the domestic financial market and non-concession sources of financing - both of which come with high interest rates on credit - have raised the country's level of debt to unprecedented levels.

 

Moody's also pointed to last year's decision by the World Bank to halt financing of new projects in Uganda over the country's perceived harsh legislation of the Anti-Homosexuality Act as a factor that has wiped out a substantial amount of cheaper credit.

 

Other experts also argue that the recent sanctions by the United Kingdom and the United States of America on Anita Among, the speaker of Uganda's parliament - a house that is supposed to pass any loan requests by government - could present a moral question on the lenders, some of whom could shy away.

 

Moody's, therefore, downgraded Uganda's rating to B3 from B2 recently, further raising fears among international lenders on the country's ability to pay back its loans. In downgrading Uganda's credit rating, Moody's has made it harder for Uganda to access cheaper credit.

 

What options, then, is Uganda left with to deal with its debt problem? The government, in its medium-term debt strategy plan, wants to limit the amount of loans it sources from the domestic market. One of the reasons for this, beyond the high rates in this market, is to also allow commercial banks more room to lend to the private sector.

 

Private sector credit boosts business growth, creates employment opportunities and generates tax revenue. Government has placed its hope in the country's oil and gas industry, which currently is at the development stage. Uganda is in the process of commercialising at least 1.4 billion barrels of oil.

 

The country, together with three other shareholders, is constructing a crude oil pipeline to a port in eastern Tanzania from where the oil will be loaded onto tanks and shipped to the international market.

 

Uganda has set a target of early 2025 for commercial production of oil to start. However, delays in civil works for the infrastructure of the oil project show that government will not achieve this schedule.

 

The most feasible option that government is left with then is to raise taxes, and lure more Ugandans into the tax bracket. Moody's stated: "Gradual improvements in revenue mobilisation capacity would, if further sustained, support fiscal consolidation efforts and could eventually provide relief to the debt affordability challenges faced by the government, but face execution risks."

 

It is envisaged that many Ugandans, who didn't participate in racking up a huge amount of the debts that government grapples with today, will feel cheated when asked to pay the new taxes that are expected to be announced in the new national budget next week. Enforcing these tax proposals is set to come with some resistance.

 

- Observer.

 

 

 

 

Nigeria: Can Unions Secure a Wage Deal Before Monday?

Nigerian unions have suspended a nationwide strike to allow for more wage talks with the government after their protests brought Nigeria to its knees, disrupting flights and shutting down the national power grid.

 

Nigeria's largest trade unions, the Nigeria Labor Congress (NLC) and Trade Union Congress (TUC) on Tuesday suspended nationwide industrial action for a week to allow consultations with the government.

 

Workers are calling for a higher minimum wage amid Nigeria's worst cost of living crisis in a generation, with double-digit inflation leaving many Nigerians struggling to afford food.

 

The unions had called the indefinite strike on Monday which led to airports not operating, the shutdown of the national power grid and the closure of public offices and schools.

 

Clock ticking

 

Tayo Aboyeji, an NLC secretary stated that "failure on the part of the government to conclude with labor within one week shall prompt the organized labor to resume the strike without further notice."

 

 

This is the fourth protest by the unions since Nigerian President Bola Tinubu took office in May last year expressing frustration over some of his reforms such as fuel subsidies, electricity hikes, and the unstable naira currency.

 

The unions demand a minimum monthly wage of 494,000 naira (around $330 or €300), up from the current 30,000 naira a month.

 

The government said late on Monday it was "committed to a national minimum wage that is higher than N60,000" and that the two sides would meet "every day for the next week" in order to reach a deal.

 

Wage hike would 'cripple' Nigeria's economy

 

Nigerian Minister of Information Mohammed Idris said in a statement that the current proposal for a wage hike would translate into an annual wage bill of 9.5 trillion naira for Nigeria's federal government.

 

 

"This is apart from its cost implications for subnational governments and private sector employees. Such a wage bill would cripple the Nigerian economy by leading to massive job losses, especially in the private sector," Idris said.

 

The government said they would continue to engage "in the context of these negotiations on behalf of the Nigerian people."

 

However, Dr. John Markus Ayuba, a former bank executive and former commissioner of finance in Nigeria's Kaduna State, told DW that the government's offer to the union is not enough for an average Nigerian to live by.

 

"The amount is way below what the average Nigerian requires to live well in this country, because I live in Nigeria and I know what it means," Ayuba said.

 

Ayuba added that if the unions accept this amount based on whatever arguments the government gives them, "They shouldn't even have started the strike if they were going to accept 60,000 naira as as the minimum wage."

 

 

Nigerians are 'fed up'

 

Roselyuba Anara, a member of the administration of the Nigeria Labour Council, told DW that the strike had long been in the making.

 

"The people are fed up. The suffering is too much, the hunger is too much, and the inflation is biting," she said, adding that the naira is useless as "prices, cost of food in the markets is so high that poverty has escalated."

 

Anara said Tinubu brought down the economy from the day he was sworn into government in May 2023 when he announced that fuel subsidies would be removed.

 

Tinubu's decision to abruptly end the subsidies led to a doubling of gasoline prices, rising food and transport costs and an increase in the price of imported products.

 

"How can you remove the first subsidy without preparing the people, without consultation [...] what concerns the marketwomen who sell pepper and tomatoes with the dollar?" Anara said. "It concerns her because if she sells her tomato for one naira that one naira cannot buy her food. That one naira cannot pay her transport, that one naira cannot buy her medication or even take care of her children then is useless."

 

Since taking office, Tinubu embarked on a bold set of economic reforms, which he argued were necessary and would bear fruit in the future.

 

However, the reforms, coupled with macroeconomic impacts following the COVID pandemic and amid Russia's war in Ukraine, have put additional upward pressure on inflation, which rose to an almost 30-year high of more than 30% this year.

 

Tinubu has shown himself as somebody who is the masses but what is happening at the moment is "a litmus test for us to see what happens in this instance," Dr. John Markus Ayuba told DW.

 

He also called the government that if sacrifices are to be made, it should be across the board including those in government.

 

"There have been persistent complaints about what the National Assembly members, the senators and the members of the House of Representatives are earning, nobody has attended to that rather," Ayuba said.

 

 

 

 

Ghana: Cost of Living to Worsen As Fuel Prices Increase

The cost of living in Ghana is expected to worsen following a fresh hike in petroleum prices. This development comes just days after the Public Utilities Regulatory Commission (PURC) announced utility tariff increases starting July 1.

 

Fuel price hikes typically lead to increased costs for goods and services, particularly those that depend on haulage trucks for transportation. Some oil marketing companies have already adjusted their prices: Shell is now selling a litre of petrol and diesel at GH₵14.84, while GOIL has increased its petrol price to GH₵14.60 from GH₵14.55, and its diesel price to GH₵14.75 from GH₵14.70.

 

The latest increase in petroleum products is primarily due to an upward adjustment in the Unified Petroleum Price Fund (UPPF) margin, following a directive by the National Petroleum Authority (NPA) to increase the margin from June 1, 2024. More oil marketing firms are expected to follow suit and raise their pump prices.

 

 

Market observers are questioning the rationale behind the NPA directive, which has denied consumers some relief despite a drop in global crude oil prices. Additionally, there are concerns that the global price of crude oil may rise in the coming months as oil producers cut production.

 

The Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+), agreed on Sunday to extend most of their deep oil output cuts well into 2025. This move aims to stabilise the market amid slow demand growth, high interest rates, and increased production by the United States.

 

Recently, Brent crude oil prices have been trading near $80 per barrel, below what many OPEC+ members need to balance their budgets. Concerns over slow demand growth in China, a major oil importer, and rising oil stocks in developed economies have also weighed on prices.

 

Currently, OPEC+ members are cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand. This includes 3.66 million bpd of cuts set to expire at the end of 2024, and voluntary cuts by eight members totaling 2.2 million bpd, expiring at the end of June 2024.

 

However, on Sunday, OPEC+ agreed to extend the 3.66 million bpd cuts by a year until the end of 2025 and prolong the 2.2 million bpd cuts by three months until the end of September 2024. This decision has sparked fears that global crude prices might increase, denying consumers in Ghana any chance of enjoying price reductions in the near future.

 

- Accra Times.

 

 

 

 

South African Rand Falls Due to Coalition Uncertainty

The South African rand fell on Tuesday as uncertainty around possible coalition partners persisted, a week after an election which saw the African National Congress lose its parliamentary majority for the first time in 30 years.

 

At 1414 GMT, the rand traded at 18.6475 against the dollar , about 0.7% weaker than its closing level on Monday. The dollar last traded around 0.21% stronger against a basket of global currencies. While we are seeing some strength returning to the dollar in a risk off start to the day, the rand has underperformed a broad basket of its currency peers, suggesting continued angst with regards to coalition uncertainties which persists," said Shaun Murison, a senior market analyst at IG. Talks on Tuesday about which parties it should approach to form South Africa's next government, with diametrically opposed Marxists and free-marketeers on the menu of options.

 

Political parties have two weeks to work out a deal before the new parliament sits and chooses a president, still likely to be ANC leader Cyril Ramaphosa since the party remains the biggest force. The rand today is erring on the side of caution, pricing in some of the economic risks a business unfriendly coalition may provide," Murison added. Source: Reuters

 

 

 

 

Africa: Debt Relief Should Be the African Union's Focus At the G20

To succeed, all six of the AU's G20 priorities depend on improving the fiscal health of indebted countries.

 

The African Union (AU) became a full member of the G20 in September 2023, a significant milestone representing 1.5 billion Africans. To make the most of this membership and align with the continent's Agenda 2063 development programme, the AU should use its influence to enhance Africa's debt sustainability.

 

Debt is a massive challenge for Africa. Currently, 23 African countries are in financial distress, and three have defaulted on their debts. When a country defaults, the consequences are severe and far-reaching. Like an individual missing loan payments, sovereign default triggers a cascade of detrimental effects, impacting economic stability, the populace's wellbeing, political stability, and the nation's global financial standing.

 

 

Since the COVID-19 economic fallout, various meetings have tried to address debt relief for low- and middle-income countries, particularly in Africa: the June 2023 Paris financing pact summit; December 2023 United Nations Climate Change Conference (COP28); and April 2024 International Monetary Fund and World Bank Spring meeting.

 

The G20's Common Framework for Debt Treatment ('Common Framework') has been at the heart of these efforts. Established in 2020, it was modelled on the Paris Club, an informal group of creditor nations founded in 1956. The Paris Club aims to find sustainable solutions to debtor countries' payment difficulties. It has restructured debt for many nations over the years.

 

 

The Common Framework initially sought to facilitate structured debt relief, ensuring that countries eligible for the Debt Service Suspension Initiative (DSSI) could manage and repay their debts. The DSSI, launched in 2020, temporarily suspended debt service payments for poor countries to help them manage the economic impact of the pandemic. When the DSSI expired in 2021, countries became dependent on the Common Framework for support.

 

Ethiopia, Chad and Zambia requested relief under the Common Framework in early 2021. Ethiopia reached an interim debt payment suspension agreement with bilateral creditors such as China, but its negotiations are still ongoing. Chad concluded a tentative arrangement at the end of 2022. In March 2024, Zambia became the first country to complete a restructuring under the G20's debt-rework architecture.

 

In January 2023, Ghana became the fourth country to seek treatment under the Common Framework. In January this year, it made significant progress by reaching a draft agreement with its official creditors to restructure US$5.4 billion of debt.

 

 

However, the Common Framework has several shortcomings. Bureaucratic hurdles and delays worsen economic challenges for countries in need. Zambia's process took over three years, causing unnecessary harm to its economy. African governments currently face a significant burden, paying 500% more in interest on capital market debt than they would if G20 leaders promptly implemented financial reforms.

 

A crucial consideration is the impact of a diversified creditor landscape on debt restructuring under the Common Framework. In 1996, Paris Club members held 39% of low-income countries' debts, but now have only 11%. The current landscape includes diverse actors like China and Saudi Arabia who are not part of the Paris Club and may prefer bilateral negotiations, which contrast with the Paris Club's collective approach. This divergence can delay resolutions further.

 

The Common Framework also lacks strong enforcement mechanisms or incentives for creditors to participate, since it's voluntary and non-binding. This results in inconsistent implementation and limited impact. The problem is worsened by insufficient comprehensive measures to address issues in borrowing countries. These include poor fiscal transparency and weak governance, which undermine the effectiveness of debt relief efforts.

 

The Common Framework focuses mainly on official bilateral creditors and doesn't require private creditors to participate. Although it encourages similar treatment from private creditors, their involvement is voluntary and not enforceable. This makes comprehensive debt restructuring difficult, especially in Africa, where 43% of external debt is owed to private creditors.

 

The AU's ascension to the G20 has created a pivotal moment for change. All six AU priorities for the coming three years depend on improving African states' fiscal health. These include: fast-tracking Agenda 2063; advocating for international financial institutions' reform; enhancing agricultural output; achieving a just energy transition; more trade and investment for rolling out the African Continental Free Trade Area; and improving Africa's credit rating to boost investment in vaccine manufacturing and pandemic response.

 

In its first year at the influential platform, the AU has a chance to prioritise debt relief. This aligns with its G20 priorities and addresses the urgent need to improve the Common Framework. While the framework has significant shortcomings, it does offer a platform to advance solutions.

 

Fast-tracking Agenda 2063 and international financial institution reform are crucial for Africa, but tackling the economic distress caused by debt burdens is paramount. The AU should prioritise specific reforms, such as enhancing transparency and consistency, streamlining negotiations, and introducing incentive mechanisms for creditor participation. This will lay the foundation for a better debt resolution framework and support sustainable development and economic growth. Improving Africa's credit rating will also attract investment in vaccine manufacturing and pandemic response.

 

While there are clear shortcomings in the Common Framework, the AU should focus on improving and optimising it rather than overhauling it entirely. By targeting immediate problems, the AU can build a strong foundation for substantial future advancements, ensuring that debt relief efforts truly benefit African nations and support their long-term economic health and stability.

 

Leveraging its new G20 membership, the AU can champion reforms that align with its broader goals and drive Africa towards its Agenda 2063 aspirations.

 

Jana de Kluiver, Research Officer, Africa in the World- ISS.

 

 

 

Nigeria: No Plans to Revoke Licences of More Banks - CBN

The Central Bank of Nigeria (CBN) says it has no plan to revoke the licences of more Deposit Money Banks (DMBs).

 

The Acting Director, Corporate Communications of the apex bank, Mrs Hakama Sidi-Ali, said this in a statement on Tuesday in Abuja.

 

Sidi-Ali's statement was a response to allegations in some quarters of plans to revoke the licences of Unity, Keystone and Polaris banks, following the withdrawal of the operating licence of Heritage Bank on Monday.

 

"The attention of the CBN has been drawn to some information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday.

 

"The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system.

 

"The Nigerian financial system remains safe, sound, and resilient.

 

 

"Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the Circular reviewing the minimum capital requirements for

 

Commercial, Merchant, and Non-Interest Banks (CMNIBs)," she said.

 

She said that the plans were currently being reviewed by the apex bank.

 

According to her, in addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalize, will result in increased capital for Nigeria's bank.

 

She said that it would enable them to provide much-needed credit to critical sectors of the economy.

 

"This will increase the financial system's contribution to the growth and development of a one trillion dollars Nigerian economy.

 

"The CBN will like to reassure all stakeholders of its unwavering commitment to ensuring the financial system's stability.

 

"Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness," the director said.

 

Recall that the CBN had, on Monday, announced revocation of the licence of Heritage Bank Plc with immediate effect.

 

It said that the action was in accordance with the apex bank's mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of the Banks and Other Financial Act (BOFIA).

 

It said that the board and management of the bank had not been able to improve the bank's financial performance, a situation which constituted a threat to financial stability.

 

- Vanguard.

 

 

 

 

Russia's economy is growing, but can it last?

Russia’s full-scale invasion of Ukraine in February 2022 not only sparked international outrage. It also triggered a wave of sanctions designed to weaken the Kremlin’s ability to wage war against its neighbour.

 

Russia’s assets abroad were frozen, its economy cut off from the global financial system, its energy exports targeted.

I can remember Western officials and commentators describing the sanctions as “crippling”, “debilitating” and “unprecedented”. With adjectives like these filling the airwaves, the situation seemed clear. There was surely no way that Russia’s economy would withstand the pressures.

 

Faced with the prospect of economic collapse, the Kremlin would be forced to back down and withdraw its troops. Wouldn’t it?

Twenty-seven months on, the war rages on. Far from being crippled, Russia’s economy is growing. The International Monetary Fund predicts that Russia will record economic growth of 3.2% this year. Caveats aside, that’s still more than in any of the world’s advanced economies.

 

“Debilitating” sanctions have not produced shortages in the shops. Russian supermarket shelves are full. True, rising prices are a problem. And not everything that used to be on sale still is - a string of Western companies exited the Russian market in protest at the invasion of Ukraine.

 

But many of their products still find their way into Russia through a variety of routes. If you look hard enough, you can still find American cola in Russian stores.

 

CEOs from Europe and America may no longer be flocking to Russia’s annual showcase economic event - but the organisers of this year’s St Petersburg International Economic Forum (once referred to as Russia’s Davos) claim that delegates from more than 130 countries and territories are taking part.

 

Instead of folding under the weight of Western sanctions, the Russian economy has been developing new markets in the East and the Global South.

 

All of which allows Russian officials to boast that attempts to isolate Russia, politically and economically, have not succeeded.

 

“It looks like the Russian economy managed to adjust to very unfavourable external conditions,” says Yevgeny Nadorshin, senior economist at PF Capital. ”Without any doubt sanctions broke a lot in the mechanism of operation inside the economy. But a lot has been restored. Adaptation is happening.”

 

Workaround

Does this mean that sanctions have failed?

“The big issue was our understanding of what sanctions can and cannot do,” says Elina Ribakova, senior fellow at the Peterson Institute for International Economics.

 

“It’s not like flipping a switch and Russia disappears. What sanctions can do is to throw a country off balance temporarily until it finds the way to work around the sanctions, until it finds alternative ways to get shipments, or sell its oil. We’re exactly in that space where Russia has found a workaround.”

 

Moscow has redirected its oil exports from Europe to China and India. In December 2022, G7 and EU leaders introduced a price cap plan aimed at limiting the revenue Russia earns from its oil exports, by trying to keep it below $60 a barrel. But Western experts concede that Russia has been able to circumvent this quite easily.

Getty Images A view from the oil company Tatneft in Tatarstan, Russia

 

The story of the price cap highlights a dilemma for the US and its partners.

Recognising that Russia is one of the largest players on the global energy market, they have tried to keep Russian oil flowing to avoid hiking energy prices. The result of that is that Moscow is still making money.

“In a way, we refused to properly sanction Russian oil,” Elina Ribakova concludes. “This price cap is an attempt to have our cake and eat it. The priorities are to allow Russian oil on to the market and to reduce Russia’s revenue. And when these two priorities conflict, unfortunately the first one wins. That allows Russia to raise a lot of revenues and continue with the war.”

 

Russia has become China’s biggest supplier of oil. But Beijing’s importance for Moscow extends far beyond energy exports. China has become a lifeline for the Russian economy. Trade between the two countries hit a record $240bn (£188bn) last year.

 

Walk around St Petersburg or Moscow and you don’t need to be an expert in economics to understand how important China has become to a sanctions-hit Russia. Electronics shops here are full of Chinese tablets, gadgets and mobile phones. Chinese car dealers now dominate the local car market.

 

Not that the Russian automobile industry is sitting twiddling its thumbs. At a business expo recently in Nizhny Novgorod, Russia’s Prime Minister Mikhail Mishustin was shown the brand new version of a classic Russian brand, the Volga. There was just one thing - the new Volga is based on a Chinese car, the Changan.

“Where was this steering wheel made? Is it Chinese?” enquired the prime minister, apparently irritated by the lack of Russian components.

 

“We want [the wheel] to be Russian,” he said.

Ultimately, however, it is not the automobile industry that is driving Russia’s economic growth.

Military spending is doing that.

Getty Images Vladimir Putin visits a tank factory in the Urals

 

Vladimir Putin visits a tank factory in the Urals

Since Russia launched what the Kremlin is still calling its “special military operation” in Ukraine, armaments factories have been working round the clock and more and more Russians have been employed in the defence sector.

That’s driven up wages in the military-industrial complex.

But spend big on the military and there’s less to spend on everything else.

“Longer term, you are destroying the economy,” believes Chris Weafer, founding partner of Eurasian consultancy firm Macro-Advisory. “There is no money going into future development.”

 

He says back in 2020 there was much discussion about the National Project programme, under which $400bn was to be spent on improving Russia’s infrastructure, transportation and communications. Instead, “almost all that money has been side-tracked to fund the military industrial-complex and support stability in the economy”.

 

More from InDepth

Nigel Farage’s return means turbulence for the Tories

Prince William's role is changing - what does he really want to do with it?

Evan Davis: Successful entrepreneurs don’t worry about being different

 

After more than two years of fighting, Russia’s economy has adapted to the pressures of war and sanctions. But the US is now threatening secondary sanctions on foreign banks aiding transactions with Moscow, and that is creating a whole new set of problems for Russia.

 

“Products have slowed down coming into Russia,” says Chris Weafer. “Spare parts are more difficult to access. Every day there are stories of banks in China, Turkey and the Emirates refusing to deal with Russian transactions, whether it’s money from Russia to buy goods or money going back to Russia in payment for oil or other imports. Unless this is resolved, Russia will have a financial crisis by the autumn.”

That’s why it would be wrong to conclude that Russia has beaten sanctions. Up till now it’s found ways of dealing with them, getting around them, reducing the threat from them.

But the pressure on the Russian economy from sanctions hasn’t gone away.-BBC

 

 

 

 

Why Canadians are angry with their biggest supermarket

Canada is searching for an international grocer to enter its domestic market, after years of anger from shoppers over high food prices, much of it directed at one of the big players. But would an Aldi or a Lidl solve the problem?

 

Late last year, Emily Johnson took to Reddit to share her frustration with how expensive food in Canada has become.

She fixated on one grocer in particular: Loblaw, the dominant food retailer in Canada, boasting nearly 2,500 stores.

Her Reddit group - named LoblawsIsOutofControl - was filled with photos of grocery items for sale at seemingly egregious prices, like C$40 ($29.36; £23.06) for 1.4 kilograms of chicken.

 

Soon after, Ms Johnson and others banded together to launch a nation-wide boycott against Loblaw, saying they were fed up with the disparity between rising food prices and record profits.

 

As anger grew, the grocer’s former president Galen Weston, who has defended the profits, became the de facto face of food inflation in Canada, thanks to his regular appearances in Loblaw commercials and his annual reported salary of C$8.4m.

 

Some even began selling T-shirts featuring a spoof “Roblaw$” logo, which were met with copyright infringement complaints from the grocer.

 

The boycott, which began in May and is set to continue indefinitely, has since sparked a national conversation on how groceries in Canada are priced, and why a company like Loblaw continues to be profitable as more Canadians struggle to afford food.

 

It has also ignited political pressure and scrutiny on the grocery practices of not just Loblaw, but other major grocers in the country.

 

“Groceries did not used to be such an issue but the prices have skyrocketed this past year so we’re going without anything frivolous,” Terra Suffel, a 49-year-old single mother of two living in Toronto, told the BBC.

Getty Images A rack of lamb on sale for C$41.81 at Loblaws in 2023

 

A rack of lamb on sale for C$41.81 at Loblaws in 2023

A C$200 shopping spree used to feed Ms Stuffel and her children for the entire week, she said. Now it barely covers lunch ingredients and much-needed pantry items.

 

“We can’t really afford much meat and our main protein is now eggs,” she said, adding that she, too, is boycotting Loblaw.

 

In response to frustrated Canadians like her, Canada’s federal innovation minister has since taken several overseas trips to woo an international grocer to set up shop in Canada, in an attempt to increase competition and therefore drive down food prices.

 

But experts say that any foreign grocer looking to enter Canada’s market faces an uphill battle to distinguish itself from existing players, and that the country’s unaffordability crisis may require a more complex fix.

Loblaw has responded to the boycott by saying they remain committed to be the “retailer of choice” for Canadians.

 

In a statement to the BBC, the company added that it was doing what it could to fight inflation and plans on opening more discount stores to make affordable food more accessible.

 

Prices in Canada v UK v US

Like many other countries, Canadians saw the cost of living go up after the Covid-19 pandemic thanks to supply-chain issues and labour shortages.

 

Although food inflation in Canada peaked at a lower mark, 11.4%, than in the UK and US, according to data by the Organisation for Economic Co-operation and Development, the overall figure does not tell the whole story.

A price comparison between the three countries of some everyday items suggests Canada is indeed more expensive for some of those regular shopping basket contents.

 

Canadians are also grappling with a currency that is plummeting in value compared to the US dollar, which has impacted both the price of food imported from the US, as well as Canadians’ overall purchasing power.

Rising interest rates, coupled with higher rent and home prices, have also pinched the wallets of many in Canada.

“People are feeling (the rising cost of food) because they are also feeling the rise of mortgage payments and other things,” said Jordan LeBel, a marketing professor with expertise in the food industry at Concordia University in Montreal.

 

A chart comparing grocery prices across the US, Canada and the UK

Another issue is the heavily consolidated nature of Canada’s grocery market, said Prof LeBel.

The country’s industry is dominated by three large companies: Loblaw (which operates Loblaw's stores), Empire (which operates Sobeys stores) and Metro.

 

They make up nearly 60% of the grocery market share while Walmart and Costco make up much of the rest.

In comparison, the US grocery market features more regional players. And while Walmart is by far the most popular chain across the country, there are more than a dozen other grocers meaningfully competing with it.

Similarly, the UK’s market is also diverse, with a total of 14 businesses turning over more than £1bn in groceries sales per year.

 

Prof LeBel said the Loblaw boycott is a signal from Canadians who are fed-up with the lack of choice and the country’s grocery behemoths, who lack an incentive to meaningfully tackle rising food costs.

 

Calling Aldi and Lidl

Francois-Philippe Champagne, Canada’s minister of innovation, science and industry, has been tight-lipped on which international grocers he has been trying to court.

 

But government documents obtained by the Wall Street Journal in April have named 12 potential stores, including Germany’s Aldi and Lidl, France’s Les Mousquetaires, and other companies from Turkey, Spain and Portugal.

 

Discount supermarket chain Aldi already has nearly 2,400 stores in the US. It is also the UK’s fourth largest supermarket.

 

Its chief competitor Lidl has a footprint in the UK and the US as well, though a smaller one than Aldi.

Despite their popularity in other countries, retail experts say entering the Canadian market comes with its own unique set of challenges.

 

“The classic mistake all foreign retailers make when coming to Canada is that they think it is the 51st US state,” said Amarinder Singh, a senior director at consulting firm Kantar.

In reality, Canadian shoppers are very different, he said.

 

Their needs vary regionally, he said, whether they live in Atlantic Canada or in British Columbia, or whether they call a major metropolitan city like Toronto home.

 

An Aldi store pictured here in Texas. The German company already has several US stores

Canada is also a highly multicultural country with 20% born elsewhere and a national grocer must target them to find success, Mr Singh said.

 

Another factor to consider is that Loblaw’s strong loyalty points programme covers 40% of Canada’s entire population.

“The issue is how you engage the shoppers, and how you steal the share from the Loblaws and Sobeys and Metros of the world, who have such a strong grasp on this market,” said Mr Singh.

 

Some have said the minister’s international tour is a bit of political theatre ahead of a consequential election for Canadians where the ruling Liberal Party is significantly lagging in the polls.

 

“Going after a big player, you have meetings, photo ops - it looks like you’re doing something,” Prof LeBel said.

A spokesperson from Minister Champagne’s office, Riyadh Nazerally, confirmed to the BBC that he has spoken to foreign retailers about “possible investments in Canada”, but no further details.

Canada is working on other measures, like reforming its Competition Act to make it more friendly to new entrants, he added.

 

Prof LeBel said he believes the government should also focus on building up already-existing regional players and small, local grocers.

 

Experts have said that the impact of the boycott on Loblaw is likely limited. Local, independent grocers around the country, however, appear to be benefiting, with some seeing a significant boost in traffic and sales since the beginning of May.

 

Supporting local players, Prof LeBel said, goes a long way in building the local economy and the fabric of a community, while improving competition in the market.-BBC

 

 

 

 

Nvidia value surges past $3tn and overtakes Apple

Nvidia's market value has surged past $3tn (£2.3tn), lifting the chipmaker ahead of Apple to become the second most valuable publicly listed company in the world.

The firm's share price rose more than 5% on Wednesday, to more than $1,224.

It extended a breathtakingly rapid climb that started last year, powered by bets that the US firm is positioned to be a major winner from a wave of investment in artificial intelligence (AI).

Its market value now sits just behind Microsoft, another key player in the industry thanks to its investments in Chat GPT-maker OpenAI.

 

Valued at "just" $2tn as recently as February, Nvidia sparked a new wave of share purchases after it announced plans last month for a so-called stock split.

The move will increase the number of shares by a factor of 10 and reduce their value accordingly, a change aimed at making shares more affordable to small-time investors.

Set to happen on Friday, it is expected to generate even more demand for the stock.

Founded in 1993, Nvidia was originally known for making the type of computer chips that process graphics, particularly for computer games.

 

Long before the AI revolution, it started adding features to its chips that it says help machine learning - all of which has helped it increase its market share.

 

It is now seen as a key company to watch to see how fast AI-powered tech is spreading across the business world, a shift boss Jensen Huang has declared the dawn of the "next industrial revolution".

His company has seen explosive growth, reporting sales of $26bn in the three months to 28 April - more than triple the same period in 2023, and up 18% from the previous three month.

 

Optimism about AI is one of the forces behind a broader market rally over the last year, which pushed the S&P 500 and the Nasdaq in the United States to new records on Wednesday.

 

Apple had appeared to be losing out earlier this year as sales growth stalled.

But in recent weeks, its shares have been buoyed by anticipation over how it plans to incorporate AI into its own strategy.

 

Shares in the firm rose 0.7%, giving it a market capitalisation of roughly $3tn, which is generally calculated by multiplying the number of shares in a company by its current share price.

 

 

 

How Japan's biggest brewer aims to attract sober Gen Z

For thousands of years, alcohol has been used as a social lubricant. In Japan, it is known as nommunication - a combination of the Japanese word for drink, nomu, and communication.

The idea is that drinking alcohol creates a more relaxed environment.

 

Businesses have even tackled difficult issues in pubs, rather than conference rooms.

The late former chairman of then-bankrupt Japan Airlines, Kazuo Inamori, explained in 2012 how he used beer to get his employees to open up.

 

But there is now a whole new generation that chooses not to drink as much. Multiple studies in the UK, the US and Australia show that people from Gen Z are more sober than their parents and grandparents.

In Japan, faced with declining alcohol tax revenues, the authorities even arranged a national competition, named Sake Viva!, in an effort to reverse the trend in 2022.

The sober generation does not only affect Japan's tax revenues, it also offers a whole new challenge for businesses that make and sell alcohol.

 

Atsushi Katsuki, chief executive officer of Asahi Group Holdings

"We have realised that younger people are increasingly choosing not to drink as much alcohol," said Atsushi Katsuki, the chief executive officer of Asahi Group Holdings.

 

However, Japan's biggest brewer sees this as both a risk and an opportunity.

"Our firm is quite unique because while the majority of our sales comes from beer and alcoholic beverages, we also have the capability to produce non-alcoholic beverages or soft drinks which gives us a competitive advantage," he said.

 

Asahi is also pushing its non-alcoholic and what it refers to as low alcohol offerings - such as alcohol-free beer or drinks with less than 3.5% alcohol - outside of its home market.

"By 2030, we want to double the share of beverages with zero or low alcohol to 20% of our overall beverage sales," he said.

They are already popular in its home market. Mr Katsuki said that alcohol-free beers account for 10% of Asahi's beverages sales in Japan as people avoid drink driving.

 

But the Japanese market is shrinking because of an ageing population and falling birth rates.

"Alcoholic beverages sales in Japan will continue to decline because we cannot go against the shrinking population, which means we cannot expect the Japanese market to grow massively," he said.

That means Asahi's main growth opportunities are overseas, and it has been expanding rapidly abroad for 15 years. Today, more than half of its sales are generated outside Japan.

 

One major market the firm has yet to tap is the US. The question is: can alcohol-free beer get as popular there as it is in Japan?

 

Vincent Ball Vincent Ball and Samantha Benaitis.Vincent Ball

Vincent Ball and Samantha Benaitis choose not to drink much alcohol

Vincent Ball and Samantha Benaitis are a 20-year-old couple who live in Jacksonville, Florida. In the US, laws relating to alcohol vary in different states but the minimum age for purchasing it is 21 across the country.

While those above the age of 40 in their families enjoy boozy nights, the Gen Zers do not drink much alcohol.

"I think drinking in moderation is perfectly fine," said Vincent, adding that he would enjoy having a beer after work but "not crazy parties".

 

"I just find other things more enjoyable, and I don't find drinking very important, especially in party settings."

For Samantha, it was a lesson learnt from seeing others drinking heavily.

"I definitely was influenced by everybody around me in my life getting way too drunk or hammered, and making mistakes that impact them for a lifetime rather than just for that night."

So instead, Samantha drinks kombucha - a fermented black or green tea, which is often flavoured - because "if you're just drinking water, I've been asked many times, oh, are you really just drinking water?"

To avoid peer pressure, would they drink alcohol-free beer? Their answer was a resounding "no".

Layla Neal Josie Ball.Layla Neal

 

Josie Ball, 18, says she understands why some people drink heavily

Asked how Asahi would tackle new, non-drinking, consumers like Samantha and Vincent, Mr Katsuki said the firm has learned an important lesson.

"We realised that we have been producing non-alcoholic beverages from the point of view of alcohol drinkers," he said, admitting that Asahi has not yet been particularly successful in appealing to non-drinkers.

"We’ve been collecting data in Japan by asking those who cannot or choose not to drink alcohol to understand what kind of products they want."

 

In a sign of uphill battle drinks companies face as they try to win over Gen Z, Vincent's younger sister, Josie, explained how she feels about people getting drunk.

"I definitely understand people who overdrink. Would I do it myself? I hope not because people kind of tend to make a fool of themselves when they overdrink."-BBC

 

 

Could AI put an end to animal testing?

>From animal lovers to laboratory technicians, no-one enjoys subjecting animals to scientific testing.

 

It is instead done to help ensure that drugs and other substances are safe for eventual human use.

Researchers have long sought non-animal alternatives. Artificial intelligence (AI) systems are now accelerating this work.

 

One application of AI in this field is simple but said to be proving effective – using it to trawl through all the existing and available global animal testing results to prevent the need for unnecessary new tests.

This is useful because it can be difficult for scientists to sift through decades of data to find and analyse exactly what they are after, says Joseph Manuppello, a senior research analyst at the Physicians Committee of Responsible Medicine, a US non-profit.

“I’m very excited about the application of AI models like ChatGPT to extract and synthesise all of this available data, and getting the most out of it,” he says.

 

Thomas Hartung is a toxicology professor at Johns Hopkins University in the US, and also the director of the Center for Alternatives to Animal Testing. He says: “AI is as good as a human, or better, at extracting information from scientific papers.”

 

When it comes to current animal testing, Prof Hartung says that the need to check new chemicals is one of the primary reasons. And with more than 1,000 such new compounds entering the market every year there are a lot to be tested.

 

Prof Hartung says trained AI systems are beginning to be able to determine a new chemical’s toxicity.

“Having tools available where we can press a button, and we get a preliminary assessment, which is giving us some flags of ‘here’s a problem’… will be enormously helpful.”

 

Prof Hartung adds that while software systems have long been used in toxicology, AI is providing an “enormous leap forward” in both power and accuracy.

 

“This is suddenly creating opportunities that were not there before,” he says, adding that AI is now involved in every stage of toxicity testing. AI is even being used to create new drugs in the first place.

 

Joseph Manuppello Joseph ManuppelloJoseph Manuppello

Joseph Manuppello says he is "excited" about how well AI can trawl through all the existing data

AI systems aren’t perfect at determining chemical safety of course. One problem is the phenomenon known as data bias.

 

One example of this is if an AI system and its algorithm have been trained using health data predominantly from one ethnic group.

The risk is that its calculations or conclusions may not be entirely suitable for people from another ethnic background.

 

But as Prof Hartung points out, testing human drugs on animals can sometimes be of little use.

For example, arthritis medicine Vioxx passed the animal testing stage, only to then go on and ultimately be withdrawn from sale after studies showed that long-term usage by humans led to an increased risk of heart attack and stroke.

 

On the other hand, some widely used medicines would have failed in animal tests, such as painkiller aspirin, which is toxic to rat embryos.

Prof Hartung concludes that in a number of cases AI is already proving to be more accurate than animal testing.

 

Thomas Hartung Thomas HartungThomas Hartung

Prof Hartung says that AI is providing "an enormous leap forward"

One AI project being built to try to replace the need for future animal testing is called AnimalGAN. Developed by the US Food and Drug Administration, the software aims to be able to accurately determine how rats would react to any given chemical.

 

The AI was trained using data from 6,442 real rats across 1,317 treatment scenarios.

 

A similar international project called Virtual Second Species is creating an AI-powered virtual dog, which is being trained using the data from historic dog test results.

Cathy Vickers is head of innovation at the UK’s National Centre for the Replacement, Refinement and Reduction of Animals in Research, which is part of the scheme.

 

She explains that new medicines are currently first tested both on rats and dogs to check for potential toxicity, before human trials potentially start.

Going forward the major challenge for AI testing is getting regulatory approval. Dr Vickers acknowledges that “full acceptance will take time”.

 

Yet Emma Grange, the director of science and regulatory affairs at pressure group Cruelty Free International, counters that animal testing should simply be banned, regardless of whether AI-powered alternatives are effective or not.

 

“At the moment, it is not clear how or if new technologies such as AI could contribute to actually ending testing on animals, rather than just reducing or refining such testing," she says.

“But we do know that the use of animals as models for the protection of human health and the environment is outdated science, and hope that ultimately AI can play a part in a transition away from using animals in any test or experiment.”

 

However, Kerstin Kleinschmidt-Dorr, chief veterinary officer at German pharmaceutical company Merck, says that animal testing cannot disappear overnight. Her firm is one of the sponsors of Virtual Second Species.

“The use of animals is necessary and for good reasons, mandatory in many aspects,” she says. “But we believe in a future where we will identify better animal testing free solutions to the unsolved problems requiring them today.”-BBC

 

 

Ban fossil fuel ads to save climate, says UN chief

The world's fossil fuel industries should be banned from advertising to help save the world from climate change, the head of the United Nations said on Wednesday.

 

UN Secretary General António Guterres called coal, oil and gas corporations the “godfathers of climate chaos” who had distorted the truth and deceived the public for decades.

Just as tobacco advertising was banned because of the threat to health, the same should now apply to fossil fuels, he said.

 

His remarks were his most damning condemnation yet of the industries responsible for the bulk of global warming. They came as new studies showed the rate of warming is increasing and that global heat records have continued to tumble.

 

Data from the EU's climate service confirms that each of the past 12 months set a new global temperature record for the time of year. The high temperatures were driven by human-caused climate change, although they were also given a small boost by the El Niño climate phenomenon.

 

Why is the world getting warmer?

What is El Niño and how does it change the weather?

Why does keeping global warming to 1.5C matter?

While a fading El Niño should soon bring a pause to the record-breaking sequence of months, temperatures will continue to rise in the long-term due to emissions of planet-warming gases from human activities.

Last year was the hottest on record and the World Meteorological Organization (WMO) said on Wednesday that the record could fall again as soon as this year.

A group of around 50 leading scientists separately reported that the rate of global warming caused by humans has continued to increase.

 

They found that ongoing high emissions of warming gases mean the world is moving closer to breaching the symbolic 1.5C warming mark on a longer-term basis.

To try to avert this outcome, the UN Secretary General has called for more rapid political action on climate change, and a “clampdown” on the fossil fuel industry.

“We must directly confront those in the fossil fuel industry who have shown relentless zeal for obstructing progress – over decades.”

 

He said many in the oil, gas and coal industries had “shamelessly greenwashed” with lobbying, legal action and massive advertising campaigns.

“I urge every country to ban advertising from fossil fuel companies,” he told an audience in New York.

“And I urge news media and tech companies to stop taking fossil fuel advertising.”

 

In response, representatives of fossil fuel groups said they were committed to reducing their emissions.

“Our industry is focused on continuing to produce affordable, reliable energy while tackling the climate challenge, and any allegations to the contrary are false,” said Megan Bloomgren, Senior Vice President of Communications at the American Petroleum Foundation.

 

UN Secretary General António Guterres has long been a critic of fossil fuel use, and is now calling for global ban on advertising by coal, oil and gas producers.

 

The UK Advertising Standards Authority has previously pledged to clamp down on misleading environmental claims, while the European Union recently announced a new law to tackle the problem.

Mr Guterres' call for an outright ban on all fossil fuel advertising goes further - but it has no legal standing, and the UN has no means of enforcing the idea.

 

However, it will be seen as a boost for campaigners who have fought against sponsorship and advertising from coal, oil and gas companies.

 

Both the Hay and Edinburgh book festivals have recently suspended sponsorship from investment company Baillie Gifford following controversy over links to fossil fuel firms.

Sport is one of the biggest areas of fossil fuel advertising and sponsorship, with football having a long association with oil and gas producers.

 

Concerns over human health have seen alcohol and tobacco sponsorship banned in football in the past, and green campaigners will be hoping that the support of Mr Guterres will see fossil fuels go the same way.

In his address, Mr Guterres stressed that time was of the essence, with the impacts of rising temperatures already being felt - such as the recent deadly heatwaves in Asia or the floods in South America.

Getty Two men paddle a makeshift canoe down a flooded street in Porto Alegre, BrazilGetty

 

Deadly floods hit Brazil last month, and scientists at the World Weather Attribution group said the heavy rain was made at least twice as likely by climate change

The record-breaking global heat means that average temperatures over the past 12 months have been 1.63C above "pre-industrial levels" of the late 1800s, according to Copernicus data.

"We are living in unprecedented times," says Carlo Buontempo, director of Copernicus.

 

This does not constitute a breach of the Paris climate agreement, in which nearly 200 countries pledged to try to keep temperature rises below 1.5C, in order to try to avoid some of the worst impacts of climate change.

That is because the Paris agreement is generally understood to mean a 20-year average - to smooth out natural variability. Taken as a whole, the past decade was about 1.2C warmer than pre-industrial levels.

 

Line graph showing rolling 365 day average of global air temperatures. For the first time on record, this has passed 1.5C for the year to date, and now sits at 1.63C. Temperatures have increased since the 1940s, where warming was around 0.2C.

 

But a new study released today by a group of leading climate scientists highlighted how close the world is getting to a long-term breach of the 1.5C mark.

 

They estimate that from the start of 2024 the world could only emit around 200 billion more tonnes of carbon dioxide (CO2) for a 50/50 chance of keeping warming to 1.5C - down from 500 billion tonnes at the beginning of 2020.

At current rates of emissions, this "carbon budget" could be exhausted by 2029 - although the world would probably not pass the long-term 1.5C mark until a few years later, because of warming effects from greenhouse gases other than CO2.

 

There are uncertainties about how exactly the climate system will react to these factors, and of course whether countries make urgent cuts to emissions.

 

"We have a bit of control over this as a society," says lead author Prof Piers Forster, director of the Priestley Centre for Climate Futures at the University of Leeds.

Despite the gloom, there has been some recent progress, with particularly rapid growth in renewable wind and solar electricity.

 

Greenhouse gas emissions are also showing signs of plateauing - but they are still at record highs.

They need to fall quickly if global targets have a chance of being met, with every fraction of a degree of warming worsening climate impacts.

 

"Every degree matters; every tenth of a degree matters," says Ko Barrett, WMO Deputy Secretary General.

"The difference between 1.5C and say 2C could mean [...] dire consequences, for coastal communities, for fragile ecosystems, and the biodiversity that is contained within them, and for glaciers and the frozen parts of the world."-BBC

 

 

 

-ENA.

 

 

 


 


 


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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 s 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 d from third parties.

 


 

 


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