Major International Business Headlines Brief::: 16 May 2024

Thu May 16 12:16:42 CAT 2024

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Major International Business Headlines Brief:::  16 May 2024 

ü  Africa: Cable Cuts Expose Vulnerabilities in Africa's Internet Infrastructure

ü  Nigeria: Minimum Wage - Labour Moves for Wider Coverage of Workers

ü  Uganda: Tanzania, Uganda Organize Business Forum to Boost Trade, Investment

ü  Nigeria: CBN Approves 14 New IMTOs to Boost Remittances

ü  Nigeria: Food Crisis Worsens As Inflation Soared to 33.69 Percent in April

ü  Nigeria: Senate Approves Tinubu's $500m World Bank Loan for Electricity Metres

ü  South Sudan On Edge As Its Neighbour's War Disrupts Oil Exports

ü  Africa: As Pollution Kills, Africa Needs Billions for Climate-Ready Stoves

ü  Niger: Can China Resolve Niger-Benin Border Dispute?

ü  Sudan: Telecommunications Blackout in Sudan: Parties to the Conflict Must End Collective Punishment and Enable Access to Life-Saving Telecommunications

ü  Could the US economy be doing too well?

ü  China's Nio unveils Tesla Model Y rival

ü  Easing US inflation stokes interest rate cut debate

ü  US brothers arrested for stealing $25m in crypto in just 12 seconds

 <https://www.cloverleaf.co.zw/> Africa: Cable Cuts Expose Vulnerabilities in Africa's Internet Infrastructure

The vulnerability of East Africa's countries was starkly revealed once again in the aftermath of the damage inflicted upon an undersea cable, leading to widespread internet outages across the region.

This incident marks the third cable cut this year, plunging millions of users in Kenya, Uganda, Tanzania, and Rwanda into a state of connectivity limbo.

The disruption caused by the severance of two vital submarine cables- the East Africa Submarine System (EASSy) and Seacom, resulted in significant delays in internet access, so much so that operations at the US embassy in Dar es Salaam had to be suspended.

EASSy spans a staggering 10,000 kilometres along the eastern coast of Africa, boasting nine landing stations strategically positioned in Sudan, Djibouti, Somalia, Kenya, Tanzania, Comoros, Madagascar, Mozambique, and South Africa.

Tanzania bore the brunt of the outage, experiencing the most severe disruptions, as evidenced by data from the Internet Outage Tracker, compelling the embassy to halt its services for a period of two days.

This latest incident follows a series of challenges earlier this year when connectivity in East Africa was hampered by damage sustained by three submarine cables traversing the Red Sea.

Internet users in East Africa have been grappling with intermittent connections since Sunday, May 12, 2024.

The International Cable Protection Committee attributes the damage to a probable encounter with the anchor of a cargo ship, allegedly targeted by the Yemen-based Houthi rebel group.

However, repair efforts have been impeded by ongoing tensions surrounding access rights to the affected waters.

Commenting on the situation, Bright Simons, research lead at the IMANI Center for Policy and Education in Ghana, lamented the lack of a comprehensive regional framework for telecom emergencies in East Africa, according to SemaFor news.

He noted that despite the region's advanced regional integration initiatives, similar to those seen in the Southern African Customs Union and Francophone units, the absence of such mechanisms has left operators scrambling to establish ad hoc cross-border arrangements.

- Business Day Africa.

Nigeria: Minimum Wage - Labour Moves for Wider Coverage of Workers

Organised Labour is making efforts to ensure more workers are covered by the upcoming National Minimum Wage, NMW, in its determination to reduce increasing cases of poverty across the country.

The now expired 2019 Minimum Wage Act, provided coverage for employers with seven and more employees,

Under the umbrella of the Nigeria Labour Congress, NLC, and its Trade Union Congress of Nigeria, TUC, a document sighted by Vanguard, noted: "We must try as much as possible to get more Nigerians covered by the minimum wage act by insisting that rather than that which prescribes coverage for workplaces with 7 and more employees, all Nigerian workers wherever they may work, must enjoy this national minimum wage.

The alternative may be to have a graduated national minimum wage that would cover the segment not captured by making theirs about 80 per cent of the agreed minimum wage. This may be better than leaving them out completely though the first option is preferable.

"It is time to insist that within the life span of the wage Act as agreed; it must be allowed to adjust upward according to the Central Bank of Nigeria, CBN, targeted rate of inflation and indeed, national productivity. This assures that real wages remain relatively constant over the period unlike what is now prevalent. This is based on the fact that most of the time; we calculate the minimum threshold anchored on indices from past experiences but future occurrences like increasing inflation which impacts CPI, CLI and others, are not factored into our demands.

"As average national income goes up, it is important that wage floor is raised by an agreed percentage of the increase to avoid increasing the inequality gap and have a more equitable and just national distribution of wealth. This ensures that workers have a fair proportion of the nation's wealth which they created.

"It is important for us to ensure that the negotiated outcome i.e. the set minimum wage is realistic and within the capacity of the social partners to pay. This is part of the sustainability principle of wage setting and we must find ways to avoid the pitfalls of the last review.

Despite the plethora of factors that may be used in justifying our demand for a new National Minimum Wage such as the various macro-economic indicators; inflationary rate, Exchange rate positions etc."

Exploitation of informal sector workers

According to NLC and TUC, "In Nigeria, amidst towering skyscrapers and winding alleyways, the informal economy thrives. Women dominate this vibrant ecosystem, constituting 75 per cent of its workforce.

Despite their resilience, they face legal recognition issues and resource constraints. Men also play a significant role, comprising 61 per cent of the workforce, contributing to economic activity.

However, the informal economy operates on the fringes of legality, leaving workers vulnerable to exploitation.

"Harassment and exploitation plague this workforce, yet they persevere. Government actions often exacerbate their plight, focusing on revenue generation rather than addressing basic needs.

Addressing the informal economy is vital for inclusive growth. Policies must formalize enterprises, granting legal recognition and access to services. Gender-specific interventions are crucial to combat challenges faced by women. Empowering this workforce will unleash economic potential, fostering a more equitable future. We urge all levels of government to immediately address over-taxation on informal workers. The drive for revenue should not burden those already exploited."

- Vanguard.

Uganda: Tanzania, Uganda Organize Business Forum to Boost Trade, Investment

The Uganda-Tanzania Business Forum 2024 is expected to uplift the trade volume and investment between the two countries.

The forum will be held in the country's business capital of Dar es Salam on May 23 and 24 this year in efforts to stimulate investment in manufacturing, logistics, trade, agribusiness, tourism, financial services and extractive sectors including oil and gases as currently the trade volume between Tanzania and Uganda stands at 400 million US dollars (about 1.04tri/-)

The business forum which will bring together participants from the private and public sectors is being organized by the Tanzania Investment Centre (TIC) and the Ugandan High Commission in Tanzania in collaboration with the Tanzania Private Sector Foundation (TPSF) and its counterpart, Private Sector Foundation of Uganda (PSFU).

Speaking at the press conference on Monday in the country's business capital of Dar es Salaam, TIC's Executive Director, Mr Gilead Teri said the forum underscores the six phase government's broad vision of attracting investments which in return can create jobs, stimulate trade, foster transfer of technologies and spur economic growth at large.

Mr Teri said the two countries have a long standing historic diplomatic relation which transcend to mutual economic cooperation encompassing partnership in constructing business infrastructures such as the multibillion East Africa Crude Oil Pipeline (EACOP) and trade through the Dar es Salaam and Tanga ports.

In that regard, he said the business forum is envisioned to stimulate trade and investment as businesspersons and investors from the two countries will use it as the platform for networking and identifying new potential areas for injecting capital.

"The platform will provide an opportunity for investors from Tanzania and Uganda to meet, discuss investment opportunities, exchange information as well as develop joint strategies on how to invest together," Mr Teri said.

Furthermore, he noted that the business forum will enable investors to familiarize with investment environment available in both countries and forge collaboration in the spirit of the East African Community (EAC).

Detailing the Ugandan Foreign Direct Investment in Tanzania, he said between 2014 and 2023 the country registered 26 projects worth 70 million US dollars (over 181bn/-) of which 13 projects worth 45 million US dollars (117bn/-) fell in the manufacturing sector, 6 projects are in transportation while the rest are in agriculture, commercial building and the services sectors which together created over 1100 jobs.

However, he reminded such economic engagements between Uganda and Tanzania are highly undervalued by the aforementioned figures.

"In my judgement, I think the reality in the ground is far much higher. The statistics are only for investors who came through TIC and registered their investment," he said.

For his part, Ugandan Deputy High Commissioner in Tanzania, Major General (rtd), Geoffrey Muheesi said the forum presents a unique opportunity for leveraging strength and resources between the two friend countries in bid of unlocking new opportunities for economic prosperity.

He said as of last year calendar the trade volume between the two countries reached almost 400 million US dollars (1.04tri/-) in which Uganda Export was 186 million US dollars (about 482bn/-) and its importation from Tanzania was 192 million US dollars (497bn/-).

Mr Muheezi said it is from that reason the Uganda Tanzania Business Forum 2024 is due to catalyse the bilateral trade relation by eliminating any form suspicion which undermines business growth.

"As we navigate the complexities of the global economy, the objective of this forum remains steadfast to attract investments between Uganda and Tanzania," he said.

Overtime, he said the two countries can overcome the challenges and seize existing opportunities by harnessing the collective comparative advantages between them.

Revisiting the historical friendship , Mr Muheezi who is also a military veteran appreciated the Tanzania's support accorded to Uganda for ending military rule under Mr Idd Amin Dada in 1978 during the Kagera War which today is as an indelible mark in over five decades of diplomatic relations.

Representative from the TPSF, Ms Kinanancy Seif who serves in the foundation's membership department noted that the upcoming forum will involve 350 participants of whom 200 are Tanzanians from both the private and public sectors and others 150 from Uganda.

She said this year business forum is scheduled to have Business to Business (B2B), Government to Business (G2B) and Government to Government (G2G) discussion and presentations.

Ms Seif called upon all members of the private community to make sure they participate at the forum.

More significantly, she noted that the registration is going on well through the TPSF's website.

Ms Seif said the 2024 forum themed "Enhancing our win-win bilateral relation" is the second event of this kind after that happened in 2019.

- Daily News.

Nigeria: CBN Approves 14 New IMTOs to Boost Remittances

The approval aims to strengthen the flow of foreign currency into the country through official channels.

The Central Bank of Nigeria (CBN) on Wednesday said that it has granted Approval-in-Principle (AIP) to 14 new International Money Transfer Operators (IMTOs) to enhance remittances.

Remittances, which involve transferring funds from overseas to families or individuals within the country, form a substantial part of Nigeria's foreign exchange inflows. They are crucial for maintaining economic stability and fostering growth.

According to a statement by the CBN's Acting Director of Corporate Communications, Hakama Ali, the approval aims to strengthen the flow of foreign currency into the country through official channels.

She emphasised that the addition of these IMTOs will contribute to increasing the availability of foreign exchange in Nigeria's official market.

"This will spur liquidity in Nigeria's Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira," she said.

According to her, the CBN viewed increasing formal remittance flows--one of the major sources of foreign exchange, accounting for over 6 percent of GDP--as a means of reducing the historical volatility in Nigeria's exchange rate caused by external factors such as fluctuations in foreign investment and oil export proceeds.

She said the increase in the number of IMTOs is one of the primary actions initiated by the CBN's remittance task force, overseen by Mr Cardoso as a collaborative unit pulling together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria.

Mrs Ali said the formation of the task force stemmed directly from an educational session with IMTOs during the World Bank/IMF Spring Meetings in Washington DC, USA, in April.

This group will convene regularly to execute plans and assess the effects of its actions on remittance inflows.

She also recalled the CBN Governor, Olayemi Cardoso earlier expressing confidence in the CBN's ability to double remittance flows into Nigeria within a year.

"We've set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach.

"We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry," Mr Cardoso was quoted as saying.

As of the end of the first quarter of 2024, the CBN recorded a total direct foreign exchange (FX) remittances of $282.61 million representing a $18.96 million decrease when compared to the $301.57 million diaspora remittances recorded in Q1 2023.

- Premium Times.

Nigeria: Food Crisis Worsens As Inflation Soared to 33.69 Percent in April

The prices of food commodities in the country rose by 40.53 per cent in the month of April, data from the National Bureau of Statistics (NBS) has shown.

NBS said the rise was 15.92 per cent points higher compared to the rate recorded in April, 2023 (24.61 per cent).

The report said the increase was influenced by increases in the prices of "millet flour, garri, bread, wheat flour (prepacked), semovita (which are under bread and cereals class), yam tuber, water yam, coco yam (under potatoes, yam and other tubers class), coconut oil, palm kernel oil, vegetable oil, etc (under oil and fat), dried fish sardine, catfish dried, mudfish dried (under fish class), beef head, beef feet, liver, frozen chicken (under meat class), mango, banana, grapefruit (under fruit class), Lipton tea, Bournvita, Milo (under coffee, tea and cocoa class)."

NBC, however, said the prices were down when compared to the month of March, as they increased by 2.50 per cent, which showed a 1.11 per cent decrease compared to the rate recorded in March, 2024 (3.62 per cent).

It attributed the reduction to the fall in the rate of increase in "the average prices of yam, water yam, Irish potatoes (under potatoes, yam & other tubers class), beer, local beer (under tobacco class), Milo, Bournvita, Nescafe (under coffee, tea, and coco class), groundnut oil, palm oil (under oil and fats class), egg, fresh milk, powdered milk, tin milk (under milk, cheese, and eggs class), soft drinks e.g. malt Guinness, Coca-Cola, etc, wine and fruit e.g., water melon, pineapple, banana, pawpaw, etc."

The increase was despite Nigeria's currency recording gains against the dollar in April.

Recall that the naira appreciated to N1,200 to a dollar in April, after crashing to over N1,600.

But Nigerians have complained that the appreciation did not reflect in the prices of goods and services which continued an upward trajectory.

On states' profiles, the report said the highest increase, year-on-year, was in Kogi (48.62 per cent), Kwara (46.73 per cent), Ondo (45.87 per cent), while Adamawa (33.61 per cent), Bauchi (33.85 per cent) and Nasarawa (34.03 per cent) recorded the slowest rise. On a month-on-month basis, however, the highest was in Lagos (4.74 per cent), Edo (4.06 per cent), and Yobe (3.99 per cent), while Kano (0.47 per cent), Adamawa (0.98 per cent) and Zamfara (1.50 per cent) recorded the slowest.

Also, the report stated that headline inflation was 33.69 per cent when compared to March, 2024, which was 33.20 per cent.

It noted that the movement of inflation in April, showed an increase of 0.49 per cent points when compared to the March, 2024, headline inflation rate.

MPC needs to soften monetary stance

-- Expert

Reacting to the report, the CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the persistent inflationary pressures in the economy remained a major cause for concern because of the implications for purchasing power and operating costs for businesses.

While noting that there was a decline in the month-on-month inflation both for headline inflation and food inflation, he said the key inflation drivers were yet to significantly moderate.

He said, "These include the naira exchange rate, transportation costs, logistics challenges, insecurity in farming communities and structural bottlenecks to production. These are largely supply-side issues which are being addressed by the fiscal authorities."

While urging the Central Bank of Nigeria (CBN) to peg the dollar rate at between N800 and N1,000, he noted that the move was important to reduce the pass-through effect of heightening trade cost on inflation.

He added that the exchange rate computation of import duty continued to be a major concern to businesses as it had become a major inflation driver and that the Monetary Policy Committee (MPC) should soften its monetary tightening stance for the time being.

He further said, "Businesses are yet to recover from the shocks of the recent bullish rate hikes. The monetary instruments should be put on pause while fiscal policy tools address supply side factors in the inflation dynamics."

- Daily Trust.

Nigeria: Senate Approves Tinubu's $500m World Bank Loan for Electricity Metres

Abuja — The Senate Wednesday approved a $500 million World Bank loan request by President Bola Tinubu to provide electricity metres for the citizens.

The fund was approved for the Bureau of Public Enterprises (BPE) after considering the report of the Committee on local and foreign debts.

The report was presented by the Vice Chairman of the Committee, Senator Haruna Manu.

The $500 million loan was part of the $7.94 billion World Bank loan which President Bola Tinubu sought the Senate's approval for on November 1, 2023.

It was under the 2022-2024 external borrowing plan. The President also sought the approval for €100 million then.

However, the Senate gave the approval to borrow $7.4 billion approved during its special plenary on December 30 after considering the report of the Committee on local and foreign debt.

Manu, while presenting the report, said the $500m for the BPE could not be approved because the agency did not appear before the committee to defend the proposal

He noted that the terms and conditions under which the loan was brought will not in any manner compromise the sustainability of Nigeria's economic growth or hinder the integrity and independence of Nigeria as a sovereign nation.

He said, "The Committee recommends that the Senate do approve the ongoing negotiations of the external borrowing in the sum of $500m for BPE; that the terforions of the loan from the funding agency be forwarded to the National Assembly before execution."

It will be recalled that the Senate had earlier put on hold the approval of the N$500m because the BPE was unavailable to defend it when it was scheduled to appear before its committees.

However, following the defence of the borrowing, the Senate on Wednesday gave its approval for the loan in unanimous decision presided over by its Deputy President, Sen. Barau Jibrin.

"The programme development objective of this project is to improve financial and technical performance of electricity distribution companies," the Senate report said.

After considering the report, the Deputy President of the Senate, Jibrin Barau, who presided over the meeting, ruled in favour of the loan request approval after a voice vote.

- This Day.

South Sudan On Edge As Its Neighbour's War Disrupts Oil Exports

Income from oil exports is critical to keeping South Sudan's factious elites together. The war in neighbouring Sudan has led earnings to fall precipitously, threatening instability in Juba and highlighting anew the need to bring the Sudanese conflict to a close.

South Sudan is facing an economic meltdown that could bring not only hardship but also political turmoil to a country already wracked with both. The civil war in Sudan has severely disrupted oil exports, depriving South Sudanese coffers of petrodollars, the government's main source of revenue. South Sudan seceded from Sudan in 2011, but the young country remains entirely dependent on its northern neighbour to get oil to international markets, using two pipelines to transport crude to Port Sudan on the Red Sea. Yet one of these pipelines, responsible for about two thirds of South Sudan's oil exports, broke down in February and will require months of complex repairs that must be made amid active combat. Absent stopgap measures, the consequences for South Sudan will be dire: the government will run out of money and the national currency's value will plunge. Chronic food shortages will worsen, presaging renewed instability and fighting. Regional and global partners should prepare to send emergency relief to South Sudan as they redouble efforts to end the war to the north.

A staggering 7.1 million of South Sudan's 12 million-strong population are acutely hungry.

When the Sudanese civil war erupted in April 2023, few doubted that it would cause enormous difficulties for South Sudan. Hundreds of thousands of people have fled southward to a country that cannot feed those who already live there. A staggering 7.1 million of South Sudan's 12 million-strong population are acutely hungry, while cross-border trade with Sudan has ground to a halt. The country's security is at risk as it becomes embroiled in the conflict. Destitute South Sudanese are now fighting on opposite sides of Sudan's war; some may carry their arms back home one day. South Sudan is also grappling with the difficult task of staying on good terms with both of Sudan's main belligerents - the paramilitary Rapid Support Forces (RSF) led by Mohamed Hamdan Dagalo "Hemedti" and the army headed by Abdel Fattah al-Burhan - so that neither turns against it.

A host of critical challenges confronted the government even before the outbreak of war in its neighbourhood. Preparations are lagging for elections scheduled for December, the first since independence. Other issues bedevilling the country's leaders range from the weak economy and rampant corruption to catastrophic floods and deadly clashes in much of the countryside. But it is the damaged pipeline and its financial effects that pose the most immediate threat to South Sudan's peace.

Oil is the glue that holds South Sudan's rivalrous political elites together even as it also finances much of the country's chronic violence. As Crisis Group reported in 2021, most of the wealth accrued from oil exports does not benefit the public. Rather, the proceeds underwrite a violent patronage network that President Salva Kiir uses to maintain an uneasy overall peace in a country that descended into its own civil war only two years after independence. Before the pipeline fell into disrepair, oil accounted for at least 85 per cent of national revenue. If the government is unable to sell the affected crude, Kiir will struggle to keep the currency afloat, hold together his security forces and stave off deadly unrest.

The Dramatic Drop in Oil Exports

The fighting in Sudan has its origins in the downfall of Omar al-Bashir's 30-year dictatorship in 2019. Anger about high bread prices swelled into massive protests demanding that he resign. Top generals and security officials arrested Bashir in April of that year, seizing the reins of government and eventually signing a power-sharing agreement with civilian leaders that was to culminate in elections and restoration of constitutional rule. In 2021, the transition abruptly ended when the army dissolved the civilian cabinet and took power into its own hands. But tensions between Burhan and Hemedti mounted, with the RSF resisting coming under army command. Their respective camps came to blows in April 2023, turning Sudan's capital Khartoum into a war zone and displacing millions. Although the pendulum has swung between the belligerents, both the army and the RSF now control vast areas encompassing crucial oil infrastructure.

War in Sudan put South Sudan's financial lifeline at risk. Sudan has long sold South Sudanese oil from an export terminal in Port Sudan as a means of collecting fees from Juba for the use of its pipelines. Before the war, Sudan's earnings from such fees were estimated at tens of millions of dollars a month. Separately, Juba agreed to pay Khartoum $3 billion in compensation for the oil infrastructure it inherited when it seceded in 2011, reportedly settling the last tranche in March 2022.

For some time, Sudan's two warring parties had incentives to keep South Sudan's oil flowing to the Red Sea terminal.

For some time, Sudan's two warring parties had incentives to keep South Sudan's oil flowing to the Red Sea terminal. When the army lost control of Khartoum, Burhan established his headquarters in Port Sudan, where his government continued selling Sudan's allotment of South Sudan's crude on international markets. For its part, the RSF has sought to portray itself as a protector of oil infrastructure while also quietly siphoning off crude and seeking under-the-counter payoffs from Juba as well. The RSF diverts oil from the al-Jaili refinery north of Khartoum, the country's sole such facility, which the paramilitary force captured in the war's early days. The army has responded by repeatedly striking the refinery, destroying its fuel depots and likely diminishing its value to the RSF.

Then, in February, part of the 1,400km pipeline that connects the Melut Basin oilfields in South Sudan's Upper Nile state to Port Sudan and is located in RSF territory broke down. The pipeline normally transports about 60 per cent of South Sudan's oil production. The malfunction occurred after the Sudanese company operating the pipeline - Bashayer Pipeline Company, or BAPCO - was unable to deliver diesel to a pumping station that keeps the waxy Dar blend of crude sufficiently heated to prevent it from congealing into an asphalt-like substance. This particular pumping station (one of many along the pipeline) is under RSF control, while BAPCO operates under Burhan's energy ministry.

On 10 February, BAPCO discovered a clog in the pipeline north of the station, prompting it to halt work and suspend a planned shipment of 600,000 barrels due 22-23 February. Technicians managed to flush the pipeline only to discover a rupture south of the pumping station two days later. They were able to reach the site after negotiating access with the RSF, which on 24 February released a video showing them at work patching the hole. But they then found that large sections of the pipeline north of the rupture and the station were clogged. On 16 March, Burhan's energy ministry declared force majeure on the pipeline, saying the war made it impossible for Sudan to meet its contractual obligations to South Sudan.

It is unclear why the company was unable to resupply the pumping station with diesel, but experts told Crisis Group that it was only a matter of time before pipeline maintenance became a problem. The two belligerents restrict access across the front lines, and the army does what it can to stop fuel from entering RSF-held areas. So far, attempts to flush the pipeline remotely with chemicals and pressure have only caused more ruptures and other damage. Some experts believe that parts of the pipeline will need to be replaced entirely. Many of those with direct knowledge of the situation say South Sudan's oil exports are unlikely to resume without a months-long ceasefire that allows technicians to repair and rebuild the pipeline on site. Even so, some Sudanese and South Sudanese officials express optimism that repairs could take place even amid the war, assuming both the main protagonists cooperate. In late April, a top Sudanese official promised that the pipeline would be fixed within two months. Industry sources nevertheless told Crisis Group that this timeline is unrealistic.

The bottom line is that South Sudan may well fail to get the pipeline fixed soon.

The bottom line is that South Sudan may well fail to get the pipeline fixed soon. There is no consensus among regional officials and analysts as to whether the RSF intentionally disrupted maintenance of the pipeline, but Hemedti has been playing hardball with South Sudan when it comes to the country's oil earnings and stance on the war. Although South Sudan professes neutrality in Sudan's war and has maintained relations with both sides, Hemedti perceives Kiir as too cosy with his enemy Burhan. Indeed, Kiir remains on good terms with Burhan, while his relationship with Hemedti seems increasingly frosty. RSF officials say they want South Sudan to cut off payments to Burhan's government by placing the transit-related fees in an escrow account until the war ends, a proposal that the Sudanese army would dismiss out of hand. Most observers, including informed ones, assume that Hemedti is driving up the price for his own parallel payoff, further squeezing South Sudan.

The one silver lining is that Sudan's other pipeline, which transports crude from South Sudan's Unity and Sudan's Heglig's oilfields to Port Sudan, continues operating - for now. The crude blend from these fields requires no heating and therefore less maintenance on the pumping station and related machinery. Still, many industry officials worry that this pipeline, too, will eventually malfunction given the difficulties of routine upkeep in wartime.

Fragile Finances

If South Sudan is unable to restore oil exports from the Upper Nile field soon, the currency will decline ever faster against the dollar while elite squabbling over the shrinking pot of oil money intensifies. In 2020, a slump in global crude prices triggered an economic crisis that prompted the government to secure a $550 million loan from the International Monetary Fund (IMF) in return for financial reforms. Against the IMF's advice, Juba began channelling the proceeds from the Unity fields to an off-budget slush fund known as the Oil for Roads project, controlled directly by Kiir. Ostensibly earmarked for infrastructure, this fund sucks up nearly a third of South Sudan's income. It is widely believed to supply much of the money Kiir doles out to keep South Sudan's rivalrous generals and warlords on his side.

Civil servants and soldiers, meanwhile, routinely go months without pay. At the time of publishing, most South Sudanese public employees had not received a salary since October 2023, after the government quadrupled public-sector wages to adjust for inflation. Even after the adjustment, a regular soldier now earns only $15 a month if he actually gets paid. Even South Sudan's political class, once flush with petrodollar largesse, admits adapting to a new era of austerity. Governance outside Juba is largely absent.

[A] major concern is that the slide of the South Sudanese pound will worsen the humanitarian crisis, given that the population largely survives on imported food.

A first major concern is that the slide of the South Sudanese pound will worsen the humanitarian crisis, given that the population largely survives on imported food. The head of South Sudan's central bank said in May that its hard currency reserves are now at an "historic low". Without petrodollars, the central bank is unable to support the currency, driving up the cost of food and fuel imports. Since February, the South Sudanese pound has lost almost half its value against the dollar. On top of that, getting aid deliveries into South Sudan risks becoming more complex as the government tries to levy new fees on relief supplies in order to fill state coffers, a measure that has angered the country's major humanitarian donors.

The second concern is political. If South Sudan cannot resume the bulk of its oil exports and proves unable to find an alternative source of income, Kiir will likely struggle to keep South Sudan's factious security elites in check. Without patronage, Kiir's allies could turn on him or on one another. Since South Sudan's political class has grown so weak, Kiir's survival now largely rests on the loyalty of power brokers within South Sudan's main security institutions, namely the presidential guard, the security service, the army and the police. Any sign of weakness in Kiir's camp could also tempt outsiders, including Sudan's main belligerents, to destabilise his government. Quiet jockeying to succeed Kiir, who is reportedly in poor health, has already begun. Even for Kiir, who over the years has proven adept at staving off challengers and managing dramatic oil price fluctuations, such meddling could prove overwhelming. It could also ratchet up violence in South Sudan's hinterland, given how much of that unrest stems from intra-elite quarrels in Juba.

Political disputes about South Sudan's first-ever elections slated for December muddy the picture further. Many South Sudanese expect the vote, promised as the final chapter of the country's 2018 peace deal, to be delayed due to a lack of preparations for the poll and disputes between politicians about the path forward. Indeed, South Sudan's recent history gives cause for concern. Many blame the elite divisions sown by South Sudan's sudden loss of oil revenue in 2012 (amid a standoff with Sudan over transit fees) for the civil war that erupted just over a year later as elections neared.

Responding to the Crisis

Ending the war in Sudan is the best way to prevent instability from rippling across its borders, and as Crisis Group has argued, will require unwavering diplomatic efforts from a number of countries. Meanwhile, the human cost of an economic catastrophe in South Sudan and the region's inability to handle another major crisis makes it vital that regional and international partners also turn their attention to South Sudan's worsening plight. They should stress the need to restore South Sudan's oil exports with those who have influence, such as the United Arab Emirates (UAE), which could encourage the RSF to cooperate toward that end, and also work to prevent more violence from breaking out in South Sudan. South Africa, an influential broker in South Sudan, should continue to mediate among the South Sudanese elite, as should neighbours Kenya, which launched its own mediation initiative in May between the South Sudanese government and exiled opposition groups, and Uganda. Should Juba's relations with either Hemedti or Burhan grow openly hostile, mediators should strive to limit the fallout and stop Sudan's war from spreading.

In the meantime, unless it secures foreign-backed loans to keep affairs of state running, South Sudan is on shaky ground. It is unclear which country might be willing to lend the hefty sums that would make up for lost oil revenue, though in some cases there may be a bilateral rationale for doing so. Juba could talk with China, whose 41 per cent stake in the Dar Petroleum Oil Company might give it an incentive to keep South Sudan's economy afloat. During the oil shutdown in 2012, Beijing helped Juba with loans. Still, China's recent lending to African countries has dropped sharply - and it has substantially reduced its dependence on South Sudanese oil in recent years.

The pipeline disruption appears to have disrupted negotiations for a multi-billion dollar [UAE] loan.

South Sudan is also trying to secure loans from the UAE, which has made massive investments in the region and has rising influence. The pipeline disruption appears to have disrupted negotiations for a multi-billion dollar loan, which started in late 2023, but Juba hopes to revive those talks while obtaining smaller, short-term loans to tide over the administration in the meantime. Any negotiations with the UAE are likely intertwined with South Sudan's discussions with the RSF about repairing the pipeline, given Abu Dhabi's close ties to Hemedti's force. In all these scenarios, however, creditors will worry about South Sudan's capacity to remain solvent until it is clear when the damaged pipeline will be fixed. South Sudan's chequered history paying its debts may also give them cold feet.

If President Kiir is unable to secure alternative revenue, outsiders should be wary of bailing out a system rotten to the core. If called on to shore up the country's finances, institutions like the IMF should consider stopgap support only if South Sudan's government ensures that more of its oil revenue enters the public coffers, where it could be used to rebuild basic administrative capacity as a first step toward reducing chronic violence and hardship throughout much of the country. Otherwise, the prevalence of slush funds drawing on oil revenues means elites will continue to jostle with one another for a cut of the pie, fuelling violence, even as foreign donors try to meet South Sudanese people's basic needs.

So long as South Sudan's financial straits are worsening and its political tensions heightening, donors and countries mediating in its neighbour's conflict should remain on high alert. While outsiders should continue to support the South Sudanese people's desire for elections, they should recognise that the current timetable appears non-viable. Pressing ahead with the present calendar runs too high a risk of further dangerous ruptures among the country's cash-starved elites, absent a new agreement on the path forward. Donors also need to keep a watchful eye on the immediate threat of famine in Sudan and South Sudan, and hike their support for international agencies, including the World Food Programme, which currently lack the funds to meet the overwhelming humanitarian needs in the region. Until mediators manage to halt the war in Sudan, stepped-up efforts to protect South Sudan from the collateral effects of that conflict are fast becoming an additional imperative.

-Crisis Group website.

Africa: As Pollution Kills, Africa Needs Billions for Climate-Ready Stoves

What's the context? A summit this week aims to kickstart Africa's push against polluting cooking stoves that hurt climate progress and people's health

Clean cooking summit seeks $4 billion in annual funding

Dirty stoves a major cause of harmful air pollution

Cooking accounts for 2% of global carbon emissions

LAGOS - Despite her well-honed sales pitch, Aanu Ajayi is often met by scepticism when out selling energy-efficient stoves in the Nigerian city of Lagos - highlighting some of the hurdles Africa faces in switching to climate-friendly cooking.

"I had to do live demos in their kitchens and restaurants before I could sell any of the stoves," Ajayi, 39, told Context as she unpacked the gleaming steel stoves from their boxes, adding that attitudes were slowly changing.

"The women see that it doesn't give out black smoke or heat up their kitchen like the firewood they use," she said.

Cooking accounts for 2% of plant-heating emissions - roughly as much as air travel or shipping - and air pollution from cooking with dirty fuels contributes to 3.7 million premature deaths globally every year, according to the International Energy Agency (IEA).

In Africa, the push towards climate-friendly cooking has lagged global progress - something the IEA hopes to reverse at a summit in Paris on Tuesday that aims to raise $4 billion in annual pledges for green cooking projects across the continent.

About 80% of African households - or about one billion people - still cook using smoky, high-emissions fuels such as wood, kerosene, charcoal and dung that contribute to climate change and take a particularly heavy toll on women's health, the IEA says.

Many are reluctant to give up the old-fashioned stoves and charcoal pots they have used for decades - unconvinced about the potential health benefits of swapping to a modern replacement.

But it is mostly the cost that puts off Ajayi's potential customers - most of whom are housewives or snack vendors in her low-income neighbourhood of Lagos. Her cheapest stove costs 42,000 naira ($29.58) - way above the monthly national minimum wage of 30,000 naira.

"Most families don't have that kind of money lying around. They need a year to save that much," she said.

Financing and homegrown solutions

Access to modern and less polluting cooking equipment is rising in Asia and Latin America, but inadequate financing and a dearth of government initiatives has left Africa behind, the IEA says.

The distribution of free stoves and government subsidies on cylinders of liquefied petroleum gas (LPG) - a cleaner fuel - was key to the success of India, China and Indonesia in halving the number of people without clean cooking access, the agency says.

"What we think is most important was getting a clear signal from high up in these governments that this is a priority and that they are going to put specific resources and attention behind this," said Daniel Wetzel, the head of the IEA's Sustainable Transitions Unit.

Wetzel said Tuesday's summit would yield aid commitments in the form of grants or low-cost loans or big investments that support cleaner energy infrastructure like bioethanol and LPG facilities, and announcements of plans to manufacture cost-effective cook stoves in Africa.

As countries work to meet their emissions-cutting targets in line with the Paris Agreement, many are seeking to promote the use of cooking stoves that emit less carbon dioxide (CO2) by using gas, biomass pellets and electricity.

Dirty, low-tech cooking stoves emit between two to six tons of CO2 annually, according to the U.S Environmental Protection Agency, and improving that technology can cut emissions by 50-80%.

In Nigeria, Africa's most populous country, access to clean cooking stoves is included in its nationally determined contributions, or NDCs, a set of policy targets in line with the Paris Agreement.

Under the plans, the oil-exporting nation aims to switch half of households to stoves fired by LPG and upgrade 13% of homes with improved cook stoves by 2030.

But despite sitting on Africa's largest gas reserves of more than 200 trillion cubic feet, Nigeria flares, or burns off, about 300 million cubic feet daily due to inadequate processing facilities, and relies heavily on LPG imports.

The price of a 12.5-kg LPG canister doubled to 12,500 naira ($8.68) - out of reach of many Nigerian families - as gas prices rose globally and the government axed a fuel subsidy last year.

Such issues highlight some of the challenges of boosting cleaner cooking fuel consumption in Africa, said Mikael Melin from SEforALL, a U.N. initiative on energy access in several Global South countries.

Instead of relying on imports, he urged governments to consider homegrown solutions that connect energy efficient cookstoves with off-grid options such as solar panels to boost access.

"If you just rely on importing your cooking fuel from somewhere, that provides a one-way traffic of money out from your country, but if you're looking at homegrown solutions ... then you'll be able to create those business opportunities," he said.

($1 = 1,439.8000 naira)

- Thomson Reuters Foundation.

Niger: Can China Resolve Niger-Benin Border Dispute?

Benin is blocking Niger's crude oil exports to China -- while Niger refuses to open its land borders to goods from Benin in a tit-for-tat trade spat.

Tensions between West African neighbors Niger and Benin began with the July 2023 military coup in Niger and the arrest of the country's democratically elected President Mohamed Bazoum.

West African bloc ECOWAS condemned the coup and imposed sanctions on the Nigerien military regime led by General Abdourahamane Tiani.

In Benin, the protests against the coup leaders were particularly explicit. Beninese President Patrice Talon loudly demanded Bazoum's reinstatement and even advocated for a military intervention by ECOWAS troops against the coupists in Niger.

Niger closes borders to Benin

Niger's military leaders responded promptly by closing the borders with Benin.

Ulf Laessing, head of the Sahel Regional Program at the Bonn-based Konrad Adenauer Foundation think tank, who recently visited Niger, described the situation at the Niger-Benin frontier.

"The borders remain closed and Niger does not seem ready to reopen them soon," said Laessing. "There are Nigerien army troops stationed at the border with Benin. The Nigerien government is still afraid that ECOWAS or France could try to reinstall the ousted president through military intervention."

Laessing told DW that there is a certain degree of paranoia in Niger.

What are the implications of the border closure?

Trade between Niger and Benin has practically come to a standstill, resulting in significant financial losses, especially on the Beninese side.

Before the coup, almost all of Niger's imports -- food, cars, consumer goods, etc. -- traveled through Benin's port of Cotonou .

Alternative routes, such as through Togo's port of Lome and then through Burkina Faso, were considered complicated, not to mention unsafe due to an Islamist insurgency Burkina Faso.

Despite the risks, Niger increasingly shifted its imports through Burkina Faso, and expanded its cooperation with the country that has been ruled by a military junta since a violent coup in January 2022.

The fact that Burkina Faso and Niger are now politically and economically approaching each other while trade relations between Niger and Benin collapse has raised eyebrows in Benin.

After the lifting of ECOWAS sanctions against Niger, Benin demanded that Niger immediately reopen their shared borders.

"To emphasize the demand, Benin has now resorted to a highly effective means of pressure," said Laessing. "Benin says that Niger's oil exports to China through a newly built Chinese pipeline to the port of Cotonou can only begin when the borders between the two countries are reopened."

Conflict escalates

Benin's decision not to allow ships carrying Nigerien crude oil to enter the port of Cotonou has threatened the survival of Niger's military junta.

More than 90,000 barrels of crude per day were earmarked for shipping to China through a pipeline that travels through Benin.

The Chinese state-owned company China National Petroleum Corporation (CNPC) had even signed a memorandum of understanding to this effect -- and completed an almost 2,000-kilometer (1,200-mile) pipeline between Agadem in eastern Niger and Seme-Kpodji, near Benin's port of Cotonou.

But for the time being, Benin is thwarting Niger's plans and prohibiting the loading of Nigerien crude oil onto Chinese ships -- a decision that was made on May 6 at the highest government level and communicated to the Chinese ambassador in Benin as well as the pipeline management company.

Is the blockade legal?

According to Beninese political analyst David Morgan, Benin's decision to temporarily block the export of Nigerien crude oil to China through Beninese ports is "at least understandable."

Benin could justify invoking the principle of state sovereignty and the principle of reciprocity, meaning that the Nigerien side had also closed the borders with its neighbor, and thus must expect a similar countermeasure, said Benin.

"This measure by Benin aims to force Niger to reopen its borders so that the populations on both sides of the border can resume conditions for common trade," Morgan added.

At the same time, Morgan suggests that Benin's decision to block Niger's crude oil exports might potentially contravene international law.

Under the United Nations Convention on the Law of the Sea (UNCLOS), an international agreement providing a legal framework for all marine and maritime activities, landlocked states like Niger are legally guaranteed access to the sea.

"Now it needs to be examined whether the decision of the Beninese government corresponds to this internationally anchored guarantee of access by landlocked states to the sea," Morgan told DW.

Great economic damage

The conflict inflicts great economic damage on both countries, according to Ulf Laessing, who told DW that Niger and Benin depend on each other.

"But Niger, it seems, needs Benin more than vice versa because oil exports can only go through Benin," Laessing said. "The pipeline was built that way. The oil pipeline, which was supposed to go into operation these days, runs through Beninese territory."

Indeed, Niger urgently needs revenue from oil exports to China. Since the 2023 coup, Niger has been facing major financial difficulties.

Laessing pointed out that Western countries have suspended development aid, except for humanitarian assistance. Therefore, oil exports are crucial for the Nigerien regime.

Can China mediate a solution?

"The key lies with China, which maintains good relations with both countrie," said Laessing. "China will probably try to mediate. After all, China built the oil pipeline. And it's also Chinese companies that buy oil from Niger."

All three countries involved -- Niger, Benin and China -- attach great importance to the business of crude oil and the pipeline.

As recently as April, representatives from the three nations celebrated the completion of the Seme-Podji pipeline as a "trailblazing" project.

Ultimately, Niger and Benin need each other.

The port of Cotonou wants to continue handling imports for Niger. And Niger urgently needs to pump its crude oil through Beninese territory towards Cotonou to prevent state bankruptcy.

"In this respect, I hope that both countries, apart from the hostile rhetoric, will come together again soon, with the mediation of the Chinese," said Ulf Laessing.

Rodrigue Guezodje contributed to this article, which has been adapted from German.

While you're here: Every weekday, we host AfricaLink, a podcast packed with news, politics, culture and more. You can listen to AfricaLink wherever you get your podcasts.

Sudan: Telecommunications Blackout in Sudan: Parties to the Conflict Must End Collective Punishment and Enable Access to Life-Saving Telecommunications

In the midst of the devastating humanitarian crisis that is fast deteriorating in Sudan, we, representing 94 humanitarian, civil society, human rights organizations and members of the #KeepItOn coalition, urgently appeal for the re-establishment of telecommunications infrastructure across the entire country. Sudan has become the world's worst displacement crisis and is on the brink of becoming the world's worst hunger crisis. In total, more than half of Sudan's population – nearly 25 million people – need humanitarian aid. Over a year of relentless warfare and indiscriminate violence have destroyed homes, towns, livelihoods, and critical civilian infrastructure.

Indiscriminate attacks and disruption of telecommunications by warring parties have severely affected civilians' ability to cope with the effects of the war, as well as aid workers' capacity to deliver essential services, with local responders most severely impacted. Both sides have consistently used targeted attacks on telecommunication infrastructure or the imposition of bureaucratic restrictions (such as the banning of the importation and use of certain satellite-internet devices). severely impacting civilian populations.

When available, internet access has been instrumental in assisting civilians share and receive critical and often lifesaving information, including about safe areas and routes. Civilians also use the internet to access cash and bank transfers—often receiving support from relatives living overseas—which for many has become a lifeline, allowing them to purchase the most basic necessities, such as food and water. Local aid groups, who have been the first and main responders in most conflict-affected parts of the country, rely heavily on telecommunications to reach vulnerable communities and receive funding for their lifesaving activities. In areas where formal telecommunication is barely functioning, both civilians and local responders, such as Emergency Response Rooms (ERRs), often connect through informal Starlink internet cafes. Humanitarian organizations also rely on functional telecommunications to coordinate and deliver relief efforts safely, particularly to provide cash assistance into the most remote areas.

A nationwide telecommunication shutdown in February 2024 left almost 30 million Sudanese without access to the internet or telephone calls for more than a month. Across the country, those experiencing the horrors of war have been separated from and unable to contact their families and loved ones. While some levels of services were restored in the east of the country, large swathes of territory remain disconnected from the network providers, such as Zain, MTN and Sudani – namely the Darfur region, and parts of Khartoum and the Kordofans. The same areas are also the most exposed to conflict and risk of famine, making the consequences of telecommunications blackout even more life-threatening. In some areas cut-off from broader telecommunications, the only available service has been via satellite connectivity devices such as Starlink. While the cost of satellite services is prohibitive to most civilians and there are significant restrictions on the importation of satellite equipment, such services remain critical for both international humanitarian organizations and local responders to remain operational in Sudan. While there remain valid concerns around the use of this technology—and other telecommunications systems--by the parties to the conflict, the potential shutdown of Starlink (as announced in April 2024) would have a disproportionate impact on civilians and the aid organizations who are trying to reach them.

We call upon all stakeholders to ensure the uninterrupted provision of telecommunication services in Sudan. Any shutdown of telecommunication services is a violation of human rights and may be considered to be a collective punishment that will not only isolate individuals from their support networks but also exacerbate the already dire economic situation facing millions.

Telecommunications infrastructure must be considered as critical civilian infrastructure. As such, parties to the conflict must refrain from attacking, destroying, damaging, or otherwise rendering inoperable telecommunications infrastructure, facilitate the rehabilitation of damaged systems, and ensure telecommunication services are accessible to all, regardless of where they live. In addition, they should lift restrictions on all satellite-internet and actively facilitate the importation of satellite-internet devices.

All service providers able to ensure connectivity in Sudan must immediately ensure that access to the internet remains accessible without interruption or additional cost increases. This includes diversifying the means to access the internet, such as solutions based on satellite (including, though not limited to, Starlink) and WiMAX technology, or the use of e-SIMs near the country's borders.

Development donors and financial institutions should support the development of the telecommunication sector in the longer term, by promoting decentralized infrastructure and reducing barriers for smaller businesses to enter the telecommunications market.

The United Nations, through the Emergency Telecommunications Cluster, must urgently increase emergency telecommunication capacity in Darfur and the Kordofans, and provide access to the services to all humanitarian actors, including expanding its services to civilians until other options become available.

Could the US economy be doing too well?

The US is enjoying a strange economic boom, with consequences for the global balance of power, the future of the planet and the UK's future growth prospects. It is borrowing billions to boost its economy - taking a huge risk but with potentially huge rewards.

The boom is visible on the ground. On a recent trip to Georgia in the south of the US, I saw fields and forests being turned into factories with extraordinary speed. In 20 years of reporting around the world, what I have seen in the US over the past year can only compare to what I saw in China in the mid-2000s.

US President Joe Biden's economic policies are changing the country’s landscape. The numbers show the scale: Since February 2021 - just after his inauguration - monthly investment in factory construction has more than trebled, to almost $20bn (£16bn).

The China comparison is not a coincidence. Mr Biden is spending huge amounts of money to bring the manufacturing of green industries and microchips back to the US from China.

Where the global green economic transition once looked like it was destined to be "made in China", now the US is now staking its claim. But it comes with risks.

The US is borrowing hundreds of billions of dollars to pay for it. There are concerns that this could push US inflation higher again just as price rises are beginning to slow. And there are fears the country is building up too much debt. The US annual deficit is around 6% of the size of the economy, well above the historical average of 3.7%.

There are positives. Unemployment in the US is at its lowest rate for 50 years and hundreds of thousands of new workers are joining the US workforce every month, defying all expectations. The US says it is on course to build a fifth of the world’s advanced microchips.

Chart showing rising spending on manufacturing in the US between 2002 and 2024

Wall Street titan Jamie Dimon, the boss of JP Morgan, said the "booming" US economy was "unbelievable", with the average consumer "much wealthier than before".

The state of Georgia is one of the big beneficiaries of this spending spree. It is part of the so-called Battery Belt, an area of land largely across the south east where factories for electric car batteries and related components are springing up.

Covington is best known as the small town where the Vampire Diaries was filmed, but it is now the site of a factory for Archer Aviation, which will be completed this year. It plans to mass-produce what it describes as flying cars, though the model I saw looked more like a giant drone-copter, with a dozen propellers and wheels.

Across town, the ground has been prepared for a factory for electric trucks. Once finished, it's expected to produce thousands of $100,000 trucks every year. On the Georgia coast, within a year a brand new Hyundai "meta factory" for electric cars and batteries will start production, with plans to produce half a million cars a year.

Yet at the local Scoops ice cream parlour, both locals and tourists say they don't feel they are living through a boom. Prices remain high. Families are depending on their credit cards. This is an industrial boom, taking place in factories and not something people have noticed in their everyday lives.

"It's not terrible," one customer told me. "I mean, we adjust to it, the cost of everything, and you just kind of move on. We're not going to stop living life as things are, but just work harder. That's our motto."

That prices are still rising by more than expected means interest rates are staying high. The cost of borrowing in the US is currently at its highest level for 22 years as the US central bank tries to slow inflation.

But in Georgia's capital, the Atlanta Federal Reserve president Raphael Bostic says many people are "less sensitive" to interest rate rises than they were. He says this is because of the trend in the US for long-term, 30-year mortgages - people's biggest loans are often fixed at a much lower rate.

Yet the US decision to keep rates higher for longer has a knock-on effect outside the US. If you are facing a rise in mortgage rates in the UK, that can be directly traced back to European markets following the US and assuming interest rates will come down more slowly than expected.

Longer term, Mr Biden’s extra investments could make the US economy even more productive. But the more immediate challenge of the US economy is the stubbornness of inflation and the risk of high government debts becoming entrenched.

US national debt is now $34 trillion and as a proportion of GDP, it is expected to reach an all-time high at the end of the next presidential term. The costs of the pandemic, military aid, tax giveaways as well as the borrowing to fund green investments, have all contributed.

Just paying the interest on this debt at current rates will cost the US more than it spends on defence - $870bn. In a decade, the combination of debt interest with mandatory government spending on Medicare, Medicaid and social security will eat up all US tax revenues, leaving nothing for anything else, like defence, infrastructure and the courts, says the Congressional Budget Office.

All this is risking the US reputation as a country with a stable currency that is safe to invest in. Last year, it lost two of its three AAA credit ratings, and the Treasury, the Federal Reserve and the IMF have all said its fiscal trajectory is "unsustainable".

To be clear, the US is not going to go bankrupt - it can print all the dollars it wants. Its stability means the dollar is the world’s reserve currency, it is accepted around the world and seen as a safe investment in troubled times. It means the US benefits from a seemingly endless flow of cheap money, supporting the economy.

But the US is now really testing whether there are limits to the patience of some investors. Ahead of a forthcoming US presidential election where neither candidate is talking much about reining in borrowing, Mr Bostic candidly warns the country's safe haven status could be up for grabs.

"We should be having a conversation about, 'are we undermining the confidence in the full faith and credit of the US government?', because we really can't afford to do that."

But surely the US dollar’s role as the world’s number one reserve currency is safe? "It’s safe today," he tells me.

But he suggests the US can no longer take this for granted. "Everyone has to do things to make sure safety occurs. When we ride a bus or a car or plane, we put on a seatbelt."

'Subsidy race'

Mr Biden’s "ambitious" spending of borrowed money to fuel the economy of the future is a stark contrast to the UK.

Here both the government and opposition have settled on the idea that the UK cannot mimic the US, because the UK does not have the advantages of a reserve currency.

The UK's shadow Chancellor Rachel Reeves told me boosting green industry is "not just about money" after scaling back plans to spend £28bn on similar projects. She said US Treasury secretary Janet Yellen had advised her of the inflationary risks of doing this without first investing in skills training and freeing up planning laws to make it easier to build factories.-BBC

China's Nio unveils Tesla Model Y rival

Chinese electric vehicle (EV) maker Nio has unveiled the first car from its new lower-priced brand Onvo, in a direct challenge to Tesla's best-selling car.

With prices starting at 219,900 yuan ($30,465, £23,990), the L60 SUV is more than 10% cheaper than the world's most popular EV, Tesla's Model Y, which has a price tag of 249,900 yuan.

It comes in the same week that US President Joe Biden announced he would quadruple the import tax on electric cars from China.

Like other EV makers, Tesla has been struggling with falling sales in the face of intense competition from Chinese brands.

The vehicle was unveiled in Shanghai by Nio's chief executive, William Li, who said the company aimed to rival Tesla's Model Y and the Toyota RAV4.

"With technologies evolving and people’s understanding in smart EVs deepening, today it’s time for us to redefine the new standards for family cars," Mr Li said.

The company has started taking orders for the L60 and aims to begin deliveries by September.

Nio executives said they have plans to launch a new Onvo model a year as part of efforts to expand into the family car market.

The brand could also help Nio build up its presence outside its home country.

However, it faces 100% tariffs in the US and an ongoing anti-subsidy probe launched by the European Union into EV imports from China.

Electric car brands around the world are facing major challenges as they face slower sales and increased competition.

In April, Tesla started to lay off more than 10% of its global EV workforce.

Later that month, the company announced its profits for the first three months of the year had fallen by more than half compared to the same time last year.

Meanwhile, China's BYD said its profits had fallen as it was hit by weaker demand and a price war in the world's largest car market.

-bbc

Easing US inflation stokes interest rate cut debate

The pace of price increases in the US showed signs of slowing last month, after a streak of higher-than-expected inflation data had stoked concerns about the world's largest economy.

Consumer prices rose 3.4% in the 12 months to April, down from 3.5% for the month before, the Labor Department said.

Higher rents and petrol costs accounted for the majority of the increase in the cost of living.

But analysts said the fall in inflation was unlikely to resolve debates about how the US central bank should set interest rates.

The Federal Reserve has kept its key interest rate hovering around 5.3% since last July, hoping that the highest borrowing costs in two decades will help ease pressures pushing up prices.

Expectations of imminent rate cuts have been repeatedly pushed back since the start of the year, as economic growth holds up and prices continue to rise faster than the Fed's 2% annual target.

A separate report on retail sales on Wednesday showed spending was flat in April, compared with March, raising speculation that the economy might be starting to weaken.

It followed a string of updates from big retailers warning that shoppers, especially those with lower incomes, are cutting back.

Richard Flynn, managing director at investment firm Charles Schwab UK, said the latest inflation figures would offer reassurance but were "unlikely to prompt an imminent change in interest rates".

"Officials have been fairly consistent in stating that current interest rates are sufficiently restrictive to bring inflation under control and that the next move will be a cut. However, it is also clear that they are in no rush to make that move," he said.

"Whether we see rates reduced in July, September, or December will depend on how inflation changes in the coming months, how the economy performs, and whether any issues arise in the financial system or jobs market."

The Labor Department reported that prices for new and used cars, furniture, toys and airline fares were among those falling from last year.

Grocery prices were 1.1% higher than a year ago, as declines in egg, milk, cheese and other dairy products were offset by higher prices in other areas.

Housing costs, which are driven by rents, rose 5.5% over the year. Car insurance and medical costs also climbed.

Stripping out food and energy, which tend to swing month-to-month, prices rose 3.6% over the last 12 months, the slowest pace since 2021.

Seema Shah, chief global strategist at Principal Asset Management, said the figures would be "a relief to the niggling concerns that inflation was starting to trend upwards again".

But she warned: "The weaker than expected retail sales number needs to be watched - cooling consumer spending is good, but if that transitions into a deeper slowdown it could herald some economic problems that markets would not welcome."-BBC

US brothers arrested for stealing $25m in crypto in just 12 seconds

Two brothers who studied at one of the most prestigious universities in the US have been charged with stealing $25m (£20m) in cryptocurrency in 12 seconds.

Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, are accused of wire fraud and money laundering.

The US Department of Justice said the alleged heist is the first of its kind.

Prosecutors also say the pair, reportedly educated at the Massachusetts Institute of Technology (MIT), carried it out in April 2023.

"The Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds," said Deputy Attorney General Lisa Monaco.

She added that agents from the Internal Revenue Service (IRS) played a key role in unravelling the "first-of-its kind wire fraud and money laundering scheme".

Prosecutors allege the two used highly specialised skills that they learned at "one of the most prestigious universities in the world" to exploit Ethereum's process for validating transactions.

The brothers studied mathematics and computer science, according to the indictments, and both attended MIT, according to news reports.

"The defendants' scheme calls the very integrity of the blockchain into question," US Attorney Damian Williams said in a statement on Wednesday, referring to the public ledger that records crypto payments.

The brothers allegedly stole from Ethereum traders by fraudulently gaining access to pending private transactions and then altering the transactions to obtain their victims' cryptocurrency.

The process, which investigators say they referred to as "the Exploit", took only a matter of seconds to execute.

When confronted by a representative for Ethereum, officials say the brothers declined to return the funds and took steps to launder and hide their stolen gains.

Prosecutors note that this is the first time that such a "novel" form of fraud has ever been subject to criminal charges.

They each face over 20 years in prison if found guilty.-BBC

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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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