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Zimbabwe has invited bids for the state-owned airline as President Emmerson Mnangagwa’s government pushes ahead with a drive to privatise and end state funding to loss-making firms, Air Zimbabwe’s administrator said on Monday.
 
Air Zimbabwe, which owes foreign and domestic creditors more than $300 million, was in October placed into administration to try and revive its fortunes.
 
The troubled airline is among dozens of state-owned firms, known locally as parastatals, that are set to be partially or fully privatised in the next nine months as the government seeks to cut its fiscal deficit seen at 11 percent of GDP this year.
 
Air Zimbabwe administrator, Reggie Saruchera said in a notice published in media on Monday that potential investors should make their bids before November 23 after paying a non-refundable deposit of 20,000 dollars.
 
Ms Saruchera did not indicate whether investors would be allowed to tender for partial or total shareholding in Air Zimbabwe. He was not immediately reachable for comment.
 
Only three of Air Zimbabwe’s planes are operational, with another three grounded, which has forced it to abandon international routes.
 
 
(Reuters/NAN)
 
The Central Bank of Nigeria (CBN) has said Nigeria is leading other Africa nations and one of the top five (5) globally in remittances inflows.
 
CBN Governor, Godwin Emefiele, who made this known, however, did not mention the exact amount of inflow but simply said Nigerians in the diaspora and other African nationals sent $72 billion home last year.
 
Emefiele, who was represented at a workshop on Remittance Household Surveys by the Director, Statistics Department of the apex bank, Mohammed Tumala, on Tuesday in Abuja, also said, while quoting a World Bank report that Nigeria was one of the top five countries of the world which received about $613 billion in remittances in 2017.
 
Although, the World Bank had in the same report disclosed that Nigeria received a total of N22 billion remittances inflows in 2017.
 
In his address, the CBN boss said remittances inflows contribute substantially to foreign exchange earnings and household finances in most developing countries.
 
“Money sent home by migrant workers is among the major financial inflows to developing countries and in some cases, it exceeds international aids and grants.
 
“According to the World Bank, global remittances have risen gradually over the years to about $613 billion in 2017, of which $72 billion was received by African countries. As a recipient country, Nigeria tops African countries and is also ranked among the top five globally,” he said.
 
Emefiele added that Nigeria had taken steps to attract more remittances inflow into the nation to further develop the Nigerian economy.
 
The steps aimed at attracting Nigerians in diaspora to remit funds home, Emefiele said, include the floating of a $300 million diaspora bond by the federal government.
 
He also added that the introduction of electronic Certificate of Capital Importation to Nigerians abroad and the country’s membership of the International Association of Money Transfer Networks were parts of measures to encourage Nigerians outside the country to remit monies home.
 
Emefiele said the former statistics on remittances inflows in the country were based on bank records and staff estimates, which according to him is a “methodology with limitations.”
 
“We think that a large chunk of migrants’ remittances pass through informal channels and are thus, unrecorded.
 
“Nigeria is yet to conduct a household based remittances survey to provide scientific estimates of these informal inflows.
 
“In addition, data from banking records also come with some discrepancies due to classification challenges on the part of reporting,” he added.
 
 
Source: The Ripples
The Nigerian manufacturing sector has reported an expansion for the nineteenth consecutive month in October, latest data from the Central Bank of Nigeria (CBN) have shown.
 
The Purchasing Managers’ Index (PMI), a barometer of the economic health of manufacturing and services sectors, grew by 0.6 index points to 56.8 index points in October, its fastest pace this year.
 
According to the data released on Wednesday, of the 14 sub-sectors captured in the survey, 13 reported growth in the review month.
 
The sub-sectors comprise of electrical equipment; petroleum & coal products; printing & related support activities; cement; chemical & pharmaceutical products; textile, apparel, leather & footwear; and furniture & related products.
 
Others include transportation equipment; plastics & rubber products; food, beverage & tobacco products; fabricated metal products; nonmetallic mineral products; and paper products.
 
However, only the primary metal sub-sector recorded a decline in the review month.
 
The CBN data show that the production level index for the manufacturing sector grew for the twentieth consecutive month in October to 58.9 points from 58.4 points in September.
 
Similarly, the new orders index grew for the nineteenth consecutive month to 56.8 points, indicating an increase in new orders in the review month.
 
The manufacturing supplier delivery time index grew faster to 56.4 points, while the sector’s inventories index also grew for the nineteenth consecutive month to 56.2 points, the index grew at a faster rate when compared to its level in the previous month.
 
In spite of these, the employment level index, which recorded 54.8 points, grew at a weaker pace in October.
 
The composite PMI for the non-manufacturing sector grew at 57.0 points in October 2018, indicating expansion in the non-manufacturing PMI for the eighteenth consecutive month.
 
Business activity, new orders, employment, inventory in the non-manufacturing sector all grew at a slower rate, recording 58.3 points, 56.4 points, 55.7 points and 57.6 points in October as against 58.1 points, 55.8 points, 55.4 points and 56.8 points recorded in the preceding month, respectively.
 
 
Source: The Ripples

A pilot project to test the strength and purity of recreational drugs was launched in Berlin on Thursday, a spokeswoman said.

Recreational drugs are chemical substances taken for enjoyment, or leisure purposes, rather than for medical reasons.

They can lead to addiction, to health and social problems and to crime; most are illegal.

The “drug-checking’’ project aims to provide one official location where drugs such as ecstasy can be chemically analysed, according to the spokeswoman for the Berlin Senate Department for Health, Care and Equality.

The city’s administration has been considering such a move for some time to protect clubbers from tainted or particularly powerful drugs.

According to the health administration, the aim is to obtain as much accurate information as possible about the ingredients in the drugs and their dosages and to publicise the results.

The project will receive $34,000 (30,000 euros) of funding in 2018 and 120,000 euros in 2019.

It is being run by organisations in Berlin working in the areas of drugs and addiction.

However, there remain some legal issues to iron out before the project is rolled out.

Because of the legal situation in Germany, Berlin needs special permission from the Federal Institute for Medicines and Medical Products.

In other countries like Switzerland, drug-checking has been around for years.

There, online warnings are issued when high-dose pills are in circulation, for example.

A survey commissioned by the Berlin Senate showed that partygoers in Berlin are widely using drugs such as cannabis, amphetamines and ecstasy.

Nigeria has ranked fourth among other African nations in the list of Foreign Direct Investment (FDI) Projects to Africa, as the United States, the single largest country investing into the continent, remained confident in the market.
 
The nation, with a total of 64 FDI projects in 2017, was ranked behind countries like South Africa with 96 FDI projects; Morocco, 96 projects; and Kenya, 67 projects occupying the first, second and third position respectively.
 
This was contained in the 2018 Africa Attractiveness report released by EY on Monday titled, “Turning tides.” The report provides an analysis of FDI Investment into Africa over the past ten years.
 
According to the report, the number of FDI projects into Nigeria increased from 51 projects in 2016 to 64 projects in 2017, accounting for 9 percent share of the entire investment into the continent for the review year.
 
In view of this, the nation rose a step higher from the fifth investment destination in Africa in 2016 to the fourth in 2017.
 
The report shows that the performance was largely driven by increase in the number of projects invested by U.S. companies into the country, launching 22 projects against 10 in the previous year, just as South African, Chinese and UK investors also increased their FDI activity into Nigeria.
 
According to the World Bank, Nigeria was among 10 economies globally with the strongest improvement in their business environment last year. The country jumped 24 places on the Ease of Doing Business index.
 
FDI projects into Africa rebounded from their lowest level in ten years in 2017 as the continent recorded a growth of 6.2 percent to 718 inward investment projects compared with 676 projects recorded in 2016.
 
The report attributed the growth to interest in “next generation” sectors such as manufacturing, infrastructure and power generation.
 
“Foreign investors committed to 718 FDI projects in Africa in 2017, a 6% increase from 2016. This brings us back to 2014 levels of FDI projects, but considerably below the 10-year average,” it read.
 
East Africa emerged Africa’s major FDI hub for the first time as the region recorded 82 percent growth in the number of FDI projects compared with 2016. Countries in the region with the strongest gains include Ethiopia, Kenya and Zimbabwe.
 
 
Source: The Ripples
Following expected shortfall in Nigeria's independent revenue and recoveries, fiscal deficit in the 2018 budget is likely to widen by about 132 percent, according to a report by Afrinvest West Africa.
 
This implies the nation may have to increase its borrowing to meet up some of its spending obligations for the 2018 fiscal year, even as concerns over the nation’s rising debt profile heightened.
 
Data from the Debt Management Office reveals that Nigeria’s external debt profile rose by 114 percent from N10.32 trillion in June 30, 2015 to N22.08 trillion as of June 30, 2018.
 
In the ‘Nigerian Banking Sector Report’ by the Lagos-based investment banking firm, which was launched on Monday in Abuja, government’s independent revenue and recoveries, accounting for 40.5 percent of total projected revenues in the 2018 budget was predicted to underperform by 40 percent.
 
The company said the projection, which was premised on political distractions caused by election campaigns ahead of the 2019 polls, might widen fiscal deficit up to 3.5 percent of nominal Gross Domestic Product (GDP.
 
On June 20, President Muhammadu Buhari signed the 2018 Appropriation Act into law. The budget with an estimate of N9.12 trillion has N2.87 trillion allocated for capital expenditure and N3.51 trillion for recurrent (non-debt) expenditure.
 
A breakdown of the budget shows that a total of N2.01 trillion was estimated to be spent on debt servicing, deficit was put at N1.95 trillion, while statutory transfer and sinking fund were allocated N530 billion and N190 billion, respectively.
 
The budget was expected to be funded by N2.99 trillion to be generated from oil revenue and N31.25 billion from Nigeria Liquefied Natural Gas (NLNG) dividend.
 
Revenue from minerals and mining was projected at N1.17 billion; N1.25 trillion from non-oil revenue of which N658.55 billion will be generated from Companies Income Tax (CIT); N207.51 billion from Value Added Tax (VAT); N324.86 from the Nigerian Customs Service (NCS), while N57.87 billion was expected to come from Federation Account levies.
 
Furthermore, the government projected N847.95 billion from independent revenue, while N374 billion was expected from domestic recoveries, assets and fines, and N138.44 billion from other federal government recoveries.
 
Tax amnesty income was put at N87.84 billion; unspent balance in previous fiscal year, N250 billion, and signature bonus was to generate and N114.30 billion.
 
But according to the report, while the revenue projection from oil was achievable owing to increased oil prices in the internationals market, that of independent revenue and recoveries remained undoubtful.
 
“The Federal Government plans to generate 41.6 percent of its revenues from oil and the remainder from taxes, independent revenue and recoveries, which account for 40.5 percent of total projected revenues and have historically underperformed.
 
“Given these considerations as well as political distractions, we estimate a significant underperformance in revenues by 40 percent.
 
“Hence, we estimate the fiscal deficit to expand to N4.4 trillion above budget estimate of N1.9 trillion, representing 3.5 percent of nominal GDP, well above the three percent threshold prescribed by the Fiscal Responsibility Act,” the report read in part.
 
 
Source: The Ripples
Perhaps the biggest financial market story in 2018 so far is the colossal fall from grace of the Chinese stock market, which has witnessed losses in excess of 30% since the start of the year.
 
The fall, which has seen the benchmark Shanghai Composite index drop to its lowest level in almost four years this week, is generally explained through the prism of investors realising that the blockbuster growth China has enjoyed over the last decade is on the wane, and that things are likely to slow down to a strong, but not stellar, rate.
 
Such a view has been exacerbated by the rise of the trade conflict between the US and China, which has seen the world's two largest economies exchange tit-for-tat tariffs, which now apply to goods totalling close to a cumulative $300 billion (about R4.3 trillion).
 
Many economists see the trade war having a major negative impact on Chinese growth, with JPMorgan earlier in October saying a full-blown trade war could have a 1% shrinking effect on the economy.
 
While these two factors are evidently at play, there's reason to believe that another factor could soon come into play, and force Chinese stocks even deeper into bear market territory - forced selling.
 
In China, hundreds of companies use their shares as collateral for loans, but when share prices fall they are forced to sell in order to maintain a certain level of balance in brokerage accounts, used to lend the companies money.
 
According to the Report available, about 4.18 trillion yuan (R8.6 trillion) worth of shares have been put up by company founders and other major investors as collateral for loans, accounting for about 11% of the country's stock market capitalisation, based on calculations using China Securities Depository and Clearing Corporation data.
 
The South China Morning Post, citing a report by Tianfeng Securities, said earlier in the week that more than 600 company stocks have fallen to levels where forced sales may kick in.
 
"It's a vicious cycle: share drops lead to liquidation and liquidation leads to further share drops," Wang Zheng, chief investment officer at Jingxi Investment Management told the South China Morning Post earlier in the week.
 
"The recent declines, particularly in small caps, are blamed for the problem arising from share pledges."
 
 
Source: Business Insider
Following concerns over the nation’s rising debt profile and dwindling revenue, the Federal Government of Nigeria said it was planning to reduce its fiscal plan for the first time since the return of democracy in 1999.
 
This, according to the government, was to ensure prudence, reduce deficit financing and borrowing, even as it vowed to deploy strategies to improve the nation’s revenue so as to reduce the country’s debt service to revenue ratio which is currently at 62 percent.
 
To achieve this, a budget size of N8.65 trillion is being proposed for the 2019 fiscal year, indicating about N470 billion reduction from N9.12 trillion budgeted for the 2018 fiscal year.
 
The Minister of Budget and National Planning, Sen. Udoma Udo Udoma, made the disclosure at a public consultation on the 2019 – 2021 Medium Term Fiscal Framework (MTEF) and Fiscal Strategy Paper (FSP) on Thursday in Abuja.
 
Udoma revealed that deficit in the 2019 budget would be cut from N1.9 trillion in 2018 to N1.6 trillion, noting that the key assumptions for the 2019 proposed fiscal plan include an oil production volume of 2.3 million barrels per day (mbpd), $60 per barrel of oil benchmark and an exchange rate of N305 per dollar
 
He said Inflation rate was put at 9.98 percent, while Gross Domestic Product (GDP) growth rate was reviewed downward to 3.01 percent from 3.5 percent earlier projected in the Economic Recovery and Growth Plan (ERGP).
 
Udoma added that N3.6 trillion oil revenue was being targeted as against N2.9 trillion for the current fiscal year, while N1.385 trillion is projected as non-oil revenue as against N1.348 trillion in the 2018 budget.
 
The Federal Government said nine government-owned enterprises, excluding the Nigerian National Petroleum Corporation (NNPC), is expected to generate the sum of N955.3 billion, while a sum of N624.5 billion was being expected from independent revenue sources, down from about N847 billion in 2018.
 
Udoma said for the government expenditure, a sum of N506.8 billion is projected for statutory transfer against N530.4 billion in 2018; debt service of N2.144 trillion in contrast to N2.013 trillion in 2018; and sinking fund of N220 billion, against N190 billion in 2018.
 
According to him, up to August 2018, the 2018 revenues was N2.48 trillion, while the full year 2017 revenue was N2.6 trillion. The minister added that the overall 2018 revenues current run-rate is 30 percent higher than that of 2017.
 
“2018 revenues up to August 2018 was N2.48tn, while the full year 2017 revenue was N2.6tn. Overall, 2018 revenues current run-rate is 30 per cent higher than last year’s. This is the reason we have cut the size of the budget from N9.12 trillion to N8.65 trillion.
 
“In 2019, we will concentrate on getting more revenue, oil and non-oil, by squeezing the maximum from oil, and build up non-oil revenue by an average of 30 percent up from the previous figure,’ he said.
 
Explaining the rationale behind the nation’s ballooned debt profile, Udoma said the borrowing was critical as the country needed funds to bring it out of recession, “that borrowing was directed at capital projects and it worked. That is why you see activities on Lagos-Ibadan rail line and others.”
 
 
Source: The daily mail
The Federal Government of Nigeria has admitted that Nigeria is in debt distress as pointed out by the International Monetary Fund (IMF) on Thursday.
 
The Director of African Department at the IMF, Abebe Selassie, while addressing participants at a special session on African development at the on-going 2018 IMF/ World Bank Group Meetings in Bali, Indonesia, had categorised eight African countries as being in debt distress over rising foreign debt.
 
Selassie had stressed the need for African nations to constantly monitor their debts and make external borrowing sustainable.
 
He however did not mention the name of the affected countries, he simply described most of the oil exporting countries in Africa as being engrossed in the ensuing burden.
 
Africa’s oil producing countries in order of production capacity are, Nigeria, Angola, Algeria, Egypt, Libya, Congo, South Sudan, Chad, Cameroon, Ghana, among others.
 
The Minister of Budget and National Planning, Sen. Udo Udoma, who spoke at the presentation of the IMF Regional Economic Outlook Report for Sub-Sahara Africa at the ongoing event on Thursday, agreed with IMF’s position and said Nigeria’s debt vulnerabilities was an issue that should be adequately monitored.
 
A statement by his Special Adviser on Media, Akpandem James, quoted him as saying, “Even though we in Nigeria have one of the lowest debt levels among our African peers, we realise that we need to improve our revenues to bring down our debt service to revenue ratio to more comfortable levels.”
 
Udoma noted that the Federal Government was deploying some measures for domestic revenue mobilisation and maintaining fiscal discipline, adding that its tax reform policy such as the tax amnesty programme has helped in broadening the nation’s tax base.
 
“This, among, other measures, has resulted in the number of taxpayers rising from 13 million to over 19 million. We are also deploying technology in tax and customs’ collections to automate processes and enhance efficiencies.
 
“Our external debt is primarily concessional borrowing, representing 54 per cent of our external debt as of June 2018. The Debt Sustainability Analysis is conducted annually to reaffirm that our public debt stock is sustainable. In Nigeria, our borrowing is being utilised principally to fix our infrastructure,” Udoma said.
 
 
Source: The Ripples
The South African economy is in the midst of its longest business cycle downturn in more than 73 years, according to the Reserve Bank, and things aren't looking particularly favourable right now either.
 
The adverse business climate has impacted the stock market too this year, seeing listed companies declining year-to-date on the whole. 
 
According to analysis done by Corion Capital, a boutique hedge fund manager, 60% of listed counters had depreciated by the end of September, with more than a third slumping in excess of 15%. Only 16% of the stocks in the All Share Index gained more than 15% this year to end-September.
 
Topping the list of poor performers are Tiger Brands, off more than 40%, two healthcare companies, Aspen and Mediclinic, MTN, and Woolworths.
 
Performance of the top 40 JSE shares. Tiger Brands and Aspen were the biggest losers, while Sasol and BHP Billiton were the top performers. (Corion Capital)
Performance of the top 40 JSE shares. Tiger Brands and Aspen were the biggest losers, while Sasol and BHP Billiton were the top performers. (Corion Capital)
And the sharp sell-off has continued into October, with only the Resource Index managing to gain ground last week and the Banks Index hardest hit, losing 7%.
 
Garreth Montano, a director of Corion Capital, puts the bout of negativity swamping investor sentiment this year down to:
 
- Low GDP growth. South Africa has unfortunately missed out on a resurgence in the world economy and has been left well behind in terms of GDP growth. The reasons behind the sluggish performance of the domestic economy can be debated at length, but many view the Zuma era as a large contributor to the underperformance of SOEs, heightened corruption, lack of job creation and lack of investor confidence in attracting foreign direct investment.
 
- The land debate and mining charter have further dented prospects of new investment, which would aid growth as well as assist in creating new jobs. All of which are dearly needed.
 
- Many commentators believe that president Ramaphosa’s hands are tied until general elections, and the righting of the ship and benefits to the economy will start gaining momentum once there is more clarity around the land issue and elections are behind us.
 
To add to these internal challenges, emerging markets, as a whole, have had a difficult 2018, being largely led down by the crises in Turkey and Argentina. Trade wars have also had a negative effect, creating concerns about a drag on emerging markets exports due to potential for tariff impositions by the US, Montano says.
 
Locally the negative sentiment towards broader emerging markets has played out in large outflows fromn our bond market, as well as foreigners selling off equities, says Montano. Last week almost R6bn alone was taken out of South Africa by foreign investors.
 
These disinvestments have also played out in currency markets, driving the rand dramatically lower to more than R15 to the dollar at stages compared with its peak of almost R11.50 in February this year.
 
 
Source: Business Insider

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