Items filtered by date: Friday, 12 May 2017

Fitch ratings agency upgraded Ghana's outlook to stable on Friday and said the government was making progress in stabilizing the economy after a period of crisis.

The agency kept its 'B' rating on the gold, oil and cocoa producer, but said it expected a revival of GDP growth and a decline in inflation and the budget deficit.

Ghana was seen as having one of Africa's most dynamic economies until it was hit by fall in oil prices and a fiscal crisis caused by government spending on civil service wages in 2014.

It is now following a $918-million International Monetary Fund programme to restore fiscal balance.

The government of President Nana Akufo-Addo, which took power in January promising to rebuild finances, called the rating a vote of confidence in its turnaround strategy.

"We have sought to bring clarity into what we are doing and we have taken steps with more transparency. This has been the anchor of our policy," a senior government official told Reuters.

The government had said it found a hole in the budget and a bigger-than-expected deficit when it took over after winning elections in January.

(Reporting by Matthew Mpoke Bigg; Editing by Andrew Heavens)- Reuters

Published in Economy


China's trade with African countries in the first quarter climbed by nearly a fifth from a year earlier, while its direct investment in the continent soared 64 percent, the Chinese commerce ministry said on Thursday.

Trade cooperation between China and Africa is "off to a flying start" in 2017, thanks to policy benefits from a cooperative framework laid down by the Chinese and African leaders in South Africa in 2015, said Sun Jiwen, spokesman at the ministry.

Chinese President Xi Jinping announced plans to plough $60 billion into African development projects at a summit in Johannesburg in 2015, saying it would boost agriculture, build roads, ports and railways and cancel some debt.

China's total trade with Africa rose 16.8 percent to $38.8 billion in the first quarter, its first year-on-year increase since 2015, Sun told a regular news briefing in Beijing.

That's mainly due to a 46 percent jump in annual imports from Africa in the first quarter with agricultural imports rising 18 percent, while Chinese exports recorded a smaller fall of 1 percent from a year earlier, Sun said.

China's non-financial direct investment to the continent also jumped 64 percent in the quarter, as countries such as Djibouti, Senegal and South Africa all saw a more than 100 percent rise in the quarter.

China's growing investment in the region is also likely to have been buoyed by its ambitious global trading strategy known as the Belt and Road Initiative, which appeared to be gaining traction recently, particularly in parts of East Africa where major infrastructure and defence projects are being built.

However, despite the bullish figures, some experts on China-African trade said that sharp price rises in products such as copper since late last year could be a major factor contributing to the impressive gains in trade value in the first quarter. China's trade relations with African countries are often dominated by big natural resource deals.

There was also scepticism over Beijing's willingness to ramp up trade and investment in Africa, as China appears to have been looking at investments in resource-rich markets with better economic performance such as Peru.

Chinese firms rushed to court the remote African continent in the past because of stiff competition from savvy western multinationals in traditional resource-rich countries, said Kai Xue, a Beijing-based lawyer and Africa expert at DeHeng Law Offices.

But Africa's strategic significance has been fading as competition lessened with the downturn in global commodities in recent years, leaving a gap for China to fill, while slowing growth in Africa muted some Chinese interest, he said.

"There could still be increases (in trade and investment to Africa) every year in a decline scenario, because China's economy is still expanding quite considerably. But a modest growth figure is not comparable to the peak times in the past."

Xue added that the Belt and Road Initiative may actually divert some of the Chinese financing away from Africa as China moves increasingly closer to other allies such as Pakistan.

Africans broadly see China as a healthy counterbalance to Western influence but, as ties mature, there are growing calls from policymakers and economists for more balanced trade relations.

(Reporting by Yawen Chen and Ben Blanchard; Editing by Jacqueline Wong) - Reuters

Published in Economy
Friday, 12 May 2017 09:16

German economic growth speeds up

Germany's economy grew strongly in the first three months of this year, driven by investment and consumption, official figures show.

First-quarter GDP growth was 0.6%, faster than the October-to December 2016 figure of 0.4%.

Household and state spending were strong, while firms invested money in construction and equipment, said German statistics authority Destatis.

Foreign trade also helped, as exports increased faster than imports.

Germany has the largest economy in the eurozone and its performance is in marked contrast to that of other big countries, such as Italy and France.

However, its relative strength has prompted concern in Brussels.

In February, the European Commission said Germany's current account surplus - which measures the balance of goods, services and investments into and out of the country - was too big.

It said that cutting that surplus would help the whole of the eurozone.

Source: BBC

Published in World

Namibia has secured a 10 billion Namibian dollars ($750 million)loan from the African Development Bank to finance its budget deficit and infrastructure projects, Finance Minister Calle Schlettwein said on Thursday.

Namibia's budget deficit is expected to narrow to 3.6 percent of GDP in the current 2017/18 fiscal year from 6.3 percent in the prior year.

Schlettwein said the loan will be distributed over a two-year period with N$6 billion allocated for budget support, while N$4 billion will be used to finance infrastructure in sectors such as transport and renewable energy.

The Namibia government is facing a severe cash crunch that has resulted in budget cuts, as well as liquidity constraints in the domestic market, characterised by persistent undersubscription of government debt instruments.

“The domestic market remains the government’s primary source of funding the budget deficit. This programme-based operation is thus a time-bound measure to supplement what the domestic market could provide, while liquidity conditions improve,” Schlettwein said.

($1 = 13.3260 Namibian dollars)

(Reporting by Nyasha Nyaungwa; Editing by Olivia Kumwenda-Mtambo and Pritha Sarkar) - Reuters

Published in Economy

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