INTERNATIONAL

The United Kingdom Supreme Court annuls the suspension of Parliament: What are the implications for Brexit? – Brexit has rewritten many of the rules of the game for British politics and constitutional law. It has just added another chapter of major importance to this saga. On 24 September 2019, the Supreme Court of the United Kingdom ruled, in a unanimous judgment by all eleven Supreme Court Judges, that Boris Johnson’s prorogation of Parliament was unlawful. Commentators described this as a “stunning defeat” for the Prime Minister. Mr. Johnson is the Prime Minister (PM) of the United Kingdom (UK) since 24 July 2019, after Theresa May resigned. Parliament repeatedly rejected her draft agreement to implement the 2016 British referendum result (adopted by a majority of 51.89%) to leave the European Union (EU). After his election as PM, Mr. Johnson announced he will try one more time to secure a new withdrawal agreement but if that fails, the UK will exit from the EU by the end of October 2019, “come what may”. Brexit would then happen by default because the latest extension by the EU to conclude a withdrawal agreement and secure an “orderly Brexit”, expires on 31 October 2019. He was adamant that no further extensions would be requested.  Exiting without a withdrawal agreement (and without the two-year transition period in which to work out the future EU-UK relationship) is known as a “hard Brexit”. Under this scenario UK firms will immediately start trading with the EU (the UK’s most important trading partner in goods as well as services) and with the rest of the world under the more stringent rules and higher tariffs of the World Trade Organization (WTO). New preferential trade agreements would have to be negotiated from scratch, a process which can take years. (The recent EU-Canada trade deal took seven years to finalize.)  (tralac)

Key Words: Global Trade, UK, Brexit

Regional Risks for Doing Business 2019 – The world in 2019 is more intertwined and complex than ever before. While interconnections have brought stability in past decades, tightly wound systems are becoming more vulnerable. Across every realm – cyber, environmental, economic, geopolitical, societal – we are seeing fraying threads in the fabric that cloaks society. The World Economic Forum’s global risks work serves to signal which threads, when pulled, could lead to an unraveling of entire systems. This complex and interconnected global system affects developments at the regional level as well as the global. For this reason, in 2018 the World Economic Forum piloted its first Regional Risks for Doing Business report, offering a business perspective on the impact of global risks and illustrating how they are experienced differently in each region. In today’s fraught geopolitical context, we also recognize the increasing importance of regional coordination and hope this report will help shape each region’s agenda vis-à-vis the global risks landscape. Our Regional Risks for Doing Business report is part of an expanded risks workstream anchored by the Global Risks Report, which we publish each year ahead of the Forum’s Annual Meeting. We have also begun exploring regional risks landscapes in more depth through analyses meant to serve as springboards for discussion among stakeholders at the Forum’s regional summits. Soon we will also begin working on analysing global risks in specific industries. The rationale behind this expanded risks workstream is to help our stakeholders explore the nuance in global risks as they are felt across economies, regions and industries, and navigate leadership at a time of unparalleled complexity. Our goal in breaking down and analysing global risks across these realms is to increase awareness, promote long-term thinking and encourage collaboration among stakeholders. We hope that this year’s Regional Risks for Doing Business report will help move the needle for regions aiming to play an increasingly pivotal role in the years ahead. (WEF)

Key Words: Business, Trade, Regional Risks

From fibre to fabric: Celebrating the value of cotton – UNCTAD is a founding partner of World Cotton Day, alongside the Food and Agriculture Organization, the International Cotton Advisory Committee, the International Trade Centre (ITC) and the World Trade Organization (WTO). The 7 October event to be hosted by the WTO responds to a draft resolution submitted by Benin, Burkina Faso, Chad and Mali (the "Cotton-4" countries) to the UN General Assembly for recognition of a World Cotton Day, reflecting the importance of cotton as a global commodity. World Cotton Day matters to developing countries by highlighting cotton’s enormous potential to contribute to poverty reduction and economic development. With two thirds of developing countries dependent on exports of commodities, a core part of UNCTAD’s work involves building countries’ capacity to move up the value chain and diversify their exports. Through its technical cooperation work, UNCTAD has assisted cotton-producing countries, mainly in Africa, to improve their yields, meet international standards and attract investments in value-added industries.” “More can be done to realise the development potential of cotton, especially in Africa,” Dr. Kituyi said. “Trade negotiations must foster regional integration and provide equitable trading opportunities for producing countries, big and small.” Unlocking the hidden value of by-products Cotton is grown mainly for its fibre, or lint - the raw material in cotton textiles. But commercial applications exist for other parts of the cotton plant, such as the stalks, husks, cottonseed and short-staple fibres. “These by-products represent an opportunity for producing countries to unlock further benefits from cotton production,” said Kris Terauds, economic affairs officer at UNCTAD. Despite many efforts to enhance local value addition, integrated cotton-to-textile value chains in Africa are currently inactive or absent. Given the continued difficulty in reviving textile and apparel industries in Africa, cotton by-products represent potential additional income streams that can improve resilience. (UNCTAD)

Key Words: UNCTAD, WTO, Cotton Day

PAN AFRICAN

Africa’s free trade area: the journey begins – In July 2019, the African Union launched the operational phase of the African Continental Free Trade Area (AfCFTA) at a summit in Niger. Countries had signed the framework agreement for the AfCFTA on 21 March 2018 and last April 22 countries (the number required for the agreement to come into force) had deposited their instruments of ratification. With a combined market of over 1.2 billion people and a GDP of $2.5 trillion, AfCFTA could potentially make Africa the largest free trade area in the world. The United Nations support for the African Union during negotiations and ratifications was led by Vera Songwe, the Executive Secretary of the UN Economic Commission for Africa (ECA). For Africa Renewal, Christabel Ligami interviewed Ms. Songwe about AfCFTA’s implementation phase, empowering African women and her vision for the ECA. The following are the excerpts.  It’s a good thing that some countries are moving a step ahead. It shows how trade is important to African countries and that countries are ready to open their borders. So yes, we are hopeful countries will fully implement the agreement. Countries are realizing they need to trade more with others because of an expected increase in revenues and jobs creation, especially for the youth. Intra-African trade is expected to rise to 53.3 %, meaning that revenues will increase.Ministers of finance of member states signing on to AfCFTA have an important role to play to help countries implement the agreement. Tax and customs, for example, which are key components of AfCFTA, are matters under the ministry of finance. It’s up to the finance ministers to evaluate if, how and when revenues will increase for their countries and how these revenues will be expended. Once countries ratify the document, they have 10 years, some have 13 years, to put key policies in place to fully take advantage of AfCFTA. We expect countries to carry out a review of their macroeconomic policies, focusing on fiscal policies that are fit for purpose, and to help us not only to adapt to, and make the most of, AfCFTA, but more broadly to achieve Agenda 2063 and the 2030 Agenda for Sustainable Development.  (Africa Renewal)

Key Words: AfCFTTA, UNECA, Regional; Integration

The Mobile Economy Sub-Saharan Africa – 2019- By the end of 2018, there were 456 million unique mobile subscribers in Sub-Saharan Africa – an increase of 20 million over the previous year and representing a subscriber penetration rate of 44%. Around 239 million people, equivalent to 23% of the population, also use the mobile internet on a regular basis. Sub-Saharan Africa will remain the fastest growing region, with a CAGR of 4.6% and an additional 167 million subscribers over the period to 2025. This will take the total subscriber base to just over 600 million, representing around half the population. Nigeria and Ethiopia will record the fastest growth rates between now and 2025, at 19% and 11% respectively. Across the region, the demographic bulge will result in large numbers of young consumers becoming adults and owning a mobile phone for the first time. This segment of the population will account for the majority of new mobile subscribers and, as ‘digital natives’, will significantly influence mobile usage patterns in the future. During 2019, 3G will overtake 2G to become the leading mobile technology in Sub-Saharan Africa, with just over 45% of total connections by the end of the year. 3G adoption has doubled over the last two years as a result of network coverage expansion and cheaper devices. The planned KaiOS ‘smart feature phone’ initiative, fronted by some of the region’s leading operators, is set to give impetus to smartphone adoption. The number of smartphone connections in the region reached 302 million in 2018; this will rise to nearly 700 million by 2025, an adoption rate of 66%. (GSMA Intelligence)

Key Words: Africa, Mobile Industry, Economic Growth

The 2019 Africa Agriculture Trade Monitor (AATM 2019) – The 2019 Africa Agriculture Trade Monitor is being published at a critical moment for both international trade relations and African trade integration. At the global level, protectionist tensions are high and could have significant consequences for the world economy and for Africa in particular. Their impact is already evident in the current slowdown in the global economy. At the same time, African governments are multiplying initiatives in support of greater regional integration. The African Continental Free Trade Area is a particularly important initiative. Launched in Kigali, Rwanda, in March 2018, the agreement aims to create the largest free trade area in the world—with 1.2 billion people in 55 countries and a GDP of US$2,500 billion. In July 2019, 54 countries signed this agreement. These historic developments give this report a special significance. There is a particular need today to mobilize the most detailed statistical knowledge and technically robust tools and methods to study Africa’s trade integration and identify the most important barriers to further integration, to identify which African regional trade agreements have worked and which have failed, and to determine which sectors in Africa are most competitive and examine the characteristics of its specialization. It is also necessary to assess the possible consequences of a more protectionist global economy for Africa. Finally, clear policy recommendations are needed for current trade integration efforts on the continent. It is in this spirit that this report was designed. The report comprises six chapters, with Chapter 1 providing a general overview of the report. Chapter 2 is devoted to Africa’s trade performance in world markets, Chapter 3 focuses on measuring regional trade integration, and Chapter 4 looks at the competitiveness of African agricultural value chains. (Resakss)

Key Words: Africa, AfCFTA, Regional Integration

African ministers to discuss innovative ways to close identity gap in fifth CRVS conference – All is set for the Fifth Conference of African Ministers responsible for Civil Registration (COM5) which takes place from 14 to 18 October 2019 in Lusaka, Zambia. The conference aims to provide strategic and policy guidance on pathways towards holistic, innovative and integrated civil registration and vital statistics (CRVS) and digital identity management systems to help close the identity gap in Africa where more than 500 million people have no legal identity. The conference will include discussions on new and emerging initiatives: the United Nations Legal Identity Agenda and the digital identity initiative in Africa, both of which rely on a functioning and efficient CRVS system. Specifically, the ministers will seek to chart the way forward by identifying key challenges in the implementation of the Africa Programme on Accelerated Improvement of Civil Registration and Vital Statistics (APAI-CRVS) at the regional and national levels and proposing solutions. “It is important that as a continent we modernize and harmonize civil registration and digital identity systems, which are foundational to legal identity ecosystems. Vital statistics systems that enable member States to monitor progress towards the sustainable development goals and Agenda 2063 should be strengthened. The conference will allow us to take stock and chart the way forward,” said Mr. Chinganya, Director of the African Statistics Centre at the Economic Commission for Africa. “We need to make sure that we get everyone in the picture. The ECA, working with its partners, is fully committed to supporting our member States to ensure we use innovation and technological solutions to help establish well-functioning CRVS systems to achieve universal coverage and complete the registration of four vital events in the life of a person – birth, death, marriages and even divorce.” (UNECA)

Key Words: Africa, UNECA, CRVS conference

African countries named rising stars of global trade  - Côte d’Ivoire came first out of 66 countries for having the greatest potential for future growth, according to Standard Chartered’s Trade20 Index. Kenya ranked third and Ghana thirteenth, based on metrics such as economic dynamism, trade readiness and export diversity. Researchers found that while existing trade powers like China and India continue to rapidly improve their trade potential, African countries such as Kenya and Côte d’Ivoire have cemented their positions as East and West African trading hubs from a relatively low starting point. Huge investments in infrastructure, e-commerce and ease of doing business have also started paying off in Côte d’Ivoire and Kenya where the business environment has seen a marked improvement. Côte d’Ivoire and Ghana also performed well for economic dynamism, measured in terms of foreign direct investment, export and GDP growth. Côte d’Ivoire enjoyed robust GDP growth at 7.4% in 2019, while exports also grew during the ten year period. FDI flows to Kenya, one of the largest recipients of foreign investment in Africa have also grown 27% since 2010, with the rise in investment coming mainly from China in the mining and hydrocarbon sectors, according to UNCTAD. Home to some of the world’s fastest-growing economies, Africa has the potential to become a much bigger player in global trade, says Standard Chartered’s Regional Co-Head Saif Malik. “Already connected with the trading powers in Asia, particularly China, through the Belt & Road Initiative, and with the launch of the African Continental Free Trade Area, we see numerous growth opportunities for trade and investment in the years ahead. “Additionally, the growing young, digitally-savvy population and an increasing female workforce will aid the continent in its economic transformation.” (African Business)

Key Words: Africa, Trade, Regional Integration

Africa is full of schemes to help entrepreneurs – In 1999 a Ugandan teacher decided to start her own school. Barbara Ofwono Buyondo had $350 of savings. Bankers would not give a loan without collateral, especially to a young woman. With no money for tables, children wrote on their chairs, kneeling. Today her company, Victorious Education Services, is one of the leading schools in Uganda. Over 4,000 fee-paying pupils attend its five campuses, swept up by a fleet of branded buses and welcomed by primly uniformed teachers. Decent jobs are so scarce in Africa that, like Ms Buyondo, many people create their own. Surveys by the Global Entrepreneurship Monitor find that one in three working-age adults in sub-Saharan Africa either runs a new business or is trying to start one, compared with one in six Americans and one in 20 Germans. In Tanzania informal firms created four-fifths of new non-farm jobs between 2002 and 2012. Most such enterprises are also tiny. Schemes to help them emulate Ms Buyondo’s success have a mixed record. Take attempts to give promising entrepreneurs access to capital. A study in 2017 by David McKenzie of the World Bank looked at Youwin!, a government-run contest in Nigeria which awards $50,000 on average to applicants with the best business plans. He found winners used the money well, becoming larger and more profitable than otherwise similar firms that did not win. But such initiatives, which resemble a lottery, are inherently hard to scale. Other studies have found that extending microloans to entrepreneurs does not generally raise their incomes. An alternative approach is to foster good business practices. Enterprise programmes range from small non-profit initiatives to the $100m foundation established by Tony Elumelu, a Nigerian tycoon. At a recent training session run by Enterprise Uganda, a government-backed initiative, some 70 businesspeople discussed how to manage employees. The trainer warns against hiring indolent relatives. (The Economist)

Key Words: Africa, Entrepreneurs, Trade

10 Reasons Why Africa is a Source for Top Tech Talent - Necessity is the mother of innovation, and this old adage is true to Africa’s growth in tech talent. Most innovations in the continent stem from the extreme need that exists to find immediate sustainable solutions for critical problems the continent has been facing. Every day, there is a new technology being launched in the various regions of the continent as part of a solution to an existing problem or challenge facing the community. Young innovators are popping up with various ideas such as mobile applications to improve lives while contributing towards economic development and compensating for the lack of infrastructure. For instance, lack of electricity is a major concern in many parts of the continent. In Tanzania, Mobisol, a local social enterprise is providing an off-the-grid solar home system that provides electricity to rural and low income earners in Tanzania. The system comes with an affordable payment plan, which the beneficiaries pay via mobile phones. The power provided by the system can light LED lights, charge mobile phones, radios, and a variety of household and consumer appliances while their larger systems can power small businesses. The Mobisol entrepreneurs saw a problem facing the people of rural Tanzania and gave them a solution which in turn has impacted the growth rate and economic status of the beneficiaries. The continent has witnessed a steady growth in the number of tech incubators and hubs in the recent years. Today, we have over 100 technological hubs spread across the continent, harboring thousands of innovative minds crafting new technological applications, platforms and ideas that are impactful to the continent. The tech hubs include MEST in Ghana, ActivSpaces in Cameroon, iHub and Nailab in Kenya, Co-Creation Hub in Nigeria, BongoHive in Zambia, IceAddis in Ethiopia, among others. (Africa.Com)

Key Words: Africa, Business, Regional Integration

NORTH AFRICA

Morocco tourism gains momentum –Morocco draws tourists from the far corners of the world. They may be seen strolling along the Corniche in Casablanca—an oceanfront boardwalk lined with restaurants, nightclubs, theatres and hotels—or dining at one of the small cafés in the quiet city of Azemmour—a short day trip or overnight jaunt from the big city. Adil El Fakir, director of the Moroccan National Tourist Office (ONMT), says that over 12 million tourists visited Morocco in 2018, of whom 2.4 million headed for Marrakech. Morocco’s tourist attractions include the spectacular beaches of Essaouira, an Atlantic coastal town included on the World Heritage List of UNESCO since 2001, and the country’s mountains, particularly the Atlas and the Rif. “Tourism is a terrific land-use tool, and our territory, from Tangier to Lagouira, is rich in its activities, its landscape, its heritage, its culture and its gastronomy,” declares Mohamed Benamour, a former president of the Morocco Tourism Federation. The country is also a cultural hub, reflecting the diversity of its inhabitants’ national origins: sub-Saharan Africa, Europe and the Middle East. This crossroads attracts fashion designers, artists, filmmakers and other cultural tourists. In 2017, for example, a museum on the international luxury fashion house Yves Saint Laurent opened in Morocco. The country is also becoming a major hub for international conferences due to its proximity to Europe, Middle East, the Americas and the rest of Africa. The country recently hosted the United Nations Climate Change Conference, which brought about 20,000 participants to Marrakech. Last year, the Global Forum for Migration and Development and the conference on the adoption of the Global Compact for Migration were held in Marrakech and attracted representatives from most UN member states and nongovernmental organizations. (Africa Renewal)

Key Words: Trade, Morocco, Tourism

EAST AFRICA

Kenya named among Africa's top avocado exporters – Kenya ranks among world’s fastest growing exporters of avocado even as demand for the fruit grows in China and Europe. Colombia tops the list of world’s fastest avocado exporters, followed by Morocco. Kenya comes at position three, being the only country in East and Central Africa that produces avocado. A 2019 half year survey shared at the ongoing World Avocado Congress in Colombia on Tuesday, indicated that Kenya has overtaken South Africa in the production of the fruit. Earlier this year, Kenya and China signed a trade pact that gave it the nod to export avocado to the Asian country. A survey undertaken in 2018 puts Colombia, Morocco, Kenya and Germany as the fastest growing exporters of the fruit. United Kingdom, Europe and Asia are the biggest markets for avocado. Kenya is also placed seventh in the list of leading exporters of avocado in 2018. The list is dominated by Spanish speaking countries, with Mexico raking $2.4 billion, Netherlands ($ 733.8 billion), Peru ($ 722.8m) in third, Spain ($ 346 m), Chile ($ 323.2 m), the USA ($ 179 m) as before Kenya seals off the top seven having got $ 118 million (Sh11.8 billion). According to information from the Kenya National Bureau of Statistics, the country earned Sh6.5 billion and Sh5.2 billion in 2016 and 2015 from avocado exports. Kenyan delegates are attending the 2019 World Avocado Congress in Medellin, Colombia, as the country focuses on bidding to host the global event in 2023. Murang’a Governor Mwangi wa Iria is attending the conference. Uasin Gishu County, a region traditionally known as the country’s biggest producer of maize and wheat, is keen to produce avocados. The county government has already given seedlings to farmers in an aggressive push to put at least 1000 acres under avocado.  (Daily Nation)

Key Words: Trade, Kenya, Export

Investment Case for Tobacco Control in Madagascar –The 2030 Agenda recognizes that current tobacco use trends, in Madagascar and around the world, are incompatible with sustainable development. Through Sustainable Development Goal (SDG) Target 3.4., Agenda 2030 commits Member States to achieve a one-third reduction in premature mortality from NCDs (i.e. deaths between 30 and 70) by 2030. Accelerating progress on NCDs requires strengthened implementation of the World Health Organization Framework Convention on Tobacco Control (SDG Target 3.a). Tobacco control is not just a primary means to improve population health, but also a proven approach to reduce poverty and inequalities, grow the economy and advance sustainable development broadly. However, more work must be done to reverse the tobacco epidemic. Madagascar ratified the WHO Framework Convention on Tobacco Control (WHO FCTC) in 2004 and became a member in 2005.16 Since that time, Madagascar has made significant progress in tobacco control by raising tobacco taxes; mandating that large graphic warning labels appear on  WHO FCTC Investment Case for Madagascar Increase tobacco taxation to reduce the affordability of tobacco products. (WHO FCTC Article 6) Enforce bans on smoking in all public places to protect people from tobacco smoke. (WHO FCTC Article 8) Institute mass media campaigns against tobacco use. (FCTC Article 12) Implement plain packaging of tobacco products. (FCTC Article 11: Guidelines for Implementation) 1 2 3 4 tobacco packaging; banning tobacco advertising, promotion, and sponsorship; and expanding the list of public places where smoking is banned.17, 18 By legislating and funding these important measures, Madagascar is helping to curb the tobacco epidemic. Intensifying existing policies and implementing new measures can draw the tobacco use prevalence curve further downward and generate additional health and economic gains. For example, opportunities exist to conduct a nationwide anti-tobacco campaign and implement plain packing laws.  (UNDP)

Key Words: Investment, Madagascar, Business

Smoking out the dirty money in Kenya – In June 2019, the Central Bank of Kenya (CBK) announced that the 1,000-shilling banknote will cease to be legal tender in four months' time. A newly designed 1,000-shilling note would go into circulation along with smaller denominations. Kenya also asked its neighbors, Uganda, Kenya, and Tanzania, not to allow 1,000-shilling notes, valued at around $9,60. Kenyan authorities said scrapping the old note would be a way of ending the corruption that has deeply entrenched in the country. Billions of the high-denomination notes were suspected to be stashed away by corrupt officials, tax evaders and money launderers. CBK Governor Patrick Njoroge recently declared the government's the goal of curbing corruption and money laundering as largely achieved. He hailed neighboring Uganda and Tanzania, where the 1,000-shilling note from Kenya was banned in June. "We have received excellent support from other jurisdictions," Njoroge told reporters. On 29 September 2019, the Sunday Nation reported that at the start of the month, 99 percent of those who had converted the old notes had one million shillings or less, with only 24 individuals presenting to 42 banks with old notes worth more than two million shillings "This means either no one had more than the on million shillings in cash, or those who did decided to beat the system by breaking their loot into smaller amounts to escape the scrutiny of the CBK," the newspaper said. Dozens of government officials and member of the business community have faced court on charges related to the alleged theft public funds amounting to hundreds of millions since May 2018. The government is yet to pronounce on the impact of its anti-corruption drive involving the1,000-shilling note. Kenya Bankers Association (KBA) Chief Executive Habil Olaka told journalists that the level of vigilance in the sector was extremely high as the expiry of the 1,000-shilling note approached. "Banks have been reminded to report any suspicious financial activity using know-your-customer rules. We are continuously advising banks to scrutinize every person who comes to exchange notes or makes unusually high deposits." (DW)

Key Words: East Africa, Business, Money

WEST AFRICA

Nigeria’s Wild Fusion gets recognized as one of the top creative and marketing agencies in the world -  Nigerian digital marketing agency, Wild Fusion has been named one of the top creative and marketing agencies in the world across 14 industries, according to Clutch, a global rating platform. In its new report, Clutch highlighted the top-performing digital agencies in different industries including automotive, business services, dental, e-commerce, education, financial services, financial technology, healthcare, hospitality, legal, media, nonprofit, real estate, and retail. Clutch noted that Wild Fusion “understands the specific needs of the markets they work within”. The integrated marketing communications agency launched in Nigeria in 2010 and has expanded to Ghana and Kenya over the years, providing top quality digital services to an elite clientele. Ben Dobkin, the business analyst at Clutch said, “The top-rated creative and design agencies in this report know what succeeds in each industry, understanding their nuances and audience. The companies have a record of client satisfaction and we are so excited to highlight their ratings and accomplishments.” The presence of Wild Fusion in this report further strengthens Nigeria’s position as one of the most important creative hubs in the world. This year alone, the Nigerian entertainment scene has enjoyed increased global recognition with the feature of prominent Nigerian artistes like Burna Boy, Tiwa Savage, Mr Eazi, and Yemi Alade on Beyonce’s Lion King: The Gift, one of the biggest albums of 2019. There has also been an uptick in the number of Nollywood movies on Netflix. About the award, Abasiama Idaresit, CEO, Wild Fusion, said, “We are honoured to be featured on this elite list of world-class agencies. We continue to lead through digital innovation and our expertise in social and digital marketing. This further proves that we are on the right path of prosperity for Nigeria and Africa.”(Ventures Africa)

Key Words: Business, West Africa, Marketing

SOUTHERN AFRICA

Zimbabwe clamps down on mobile money in new currency directive – Zimbabwe has clamped down on mobile money, tightened controls on foreign-exchange bureaux and dealers and banned the quoting of prices in any currency other than its own dollar as it struggles to manage a monetary system that’s spiralling out of control. The Reserve Bank of Zimbabwe on Monday stopped operators of mobile-money services, the dominant way in which money is moved in the country, from paying out cash. It also tightened the spread at which dealers and bureaux de change can exchange the Zimbabwe dollar to between 3% and 5% from the official rate, down from a 7% spread imposed less than two weeks ago. On September 28 it banned the quoting of prices in foreign currency. Mobile-money transactions created an implied exchange rate because some agents charged premiums of as much as 60%, finance minister Mthuli Ncube told reporters in the capital, Harare. “We decided to close that gap of multiple exchange rates.” Zimbabwe is set for its first economic contraction since 2008, has an inflation rate that is estimated at more than 900% by some economists and is struggling to pay for sufficient food and fuel imports. On the inter-bank market the Zimbabwe dollar fell to a record 15.19 to the US dollar on Monday, down from the 2.5 it was reintroduced at in June, and trades even lower on the black market. Since the local currency’s initial abolition in 2009 the country had mainly been using US dollars. “Government is trying to control the sale of foreign currency, trying to control the parallel rate” to avoid further inflation, said Derek Matyszak, an independent governance consultant in Harare, the capital. “Government is swimming against the tide, there is a lot of pressure to re-dollarise.” (Money Web)

Key Words: Zimbabwe, Mobile Money, Business

Zambia’s $515 Million Mystery Revenue Raises Budget Questions – Zambian Finance Minister Bwalya Ng’andu plans to obtain almost 10% of the southern African nation’s total income next year from undisclosed sources, raising concerns about the accuracy and sustainability of government spending plans for 2020. The budget, which Ng’andu presented to lawmakers on Sept. 27, contains 6.75 billion kwacha ($515 million) of “exceptional revenue” that could further stretch the finances of Africa’s second-biggest copper producer if it doesn’t materialize. Government debt has surged from 20% of gross domestic product a decade ago to a projected 91.6% this year, prompting the International Monetary Fund to warn that Zambia is at high risk of debt distress. “There’s a process tagged to this and an announcement will be made as soon as process completion is attained,” a Finance Ministry spokesman said in response to questions about the source of the funds. “It would be great if the government gave an indication of this exceptional revenue before the budget comes into effect in January to avoid unnecessary speculation,” Lusaka-based economist Chibamba Kanyama said in an emailed response to questions Wednesday. “I think all stakeholders want to ascertain the efficacy of that source so that we are more than guaranteed it will be realized.” There are other concerns about the budget too. The government forecasts economic growth will slow to 2% this year, as a drought drastically curtails the hydropower generation that Zambia depends on for more than 80% of supply. Farm output has also plunged. Even if economic expansion increases to the government’s 3% target next year, revenues will still be constrained, according to Irmgard Erasmus, an economist at NKC African Economics in Paarl, near Cape Town. (Bloomberg)

Key Words: Zambia, Industrial Policy, Business

Mauritius launches first phase of $525 million light rail system – Mauritius launched the first phase of a $525 million light rail system on Thursday, hoping to cut traffic jams with the Indian Ocean island’s biggest infrastructure project. Mauritius has long relied on tourism for public revenue and employment, but the authorities are trying to woo investors in other sectors including finance to diversify the economy and make it more resilient. The railway’s first stage of 13 km inaugurated by Prime Minister Pravind Kumar Jugnauth will connect Rose Hill, a town in the central part of the island, to the capital Port Louis. When completed, the 26 km (16-mile) route will connect Curepipe, a town in central Mauritius, to the capital Port Louis. It is expected to have 19 stations and four interchanges.“This is the biggest project ever undertaken in our country,” Jugnauth said at the launch ceremony, which Indian Prime Minister Narendra Modi attended via video conference. The network is being built by Indian firm Larsen and Toubro and funded by an Indian government grant of $275 million and a $250 million line of credit. Metro Express Ltd, the Mauritian firm supervising the construction of the line, says it expects it to be profitable by 2022. It is expected that the light rail system will be used by some 55,000 people daily when it is fully operational. (reuters)

Key Words: Southern Africa, Mauritius, Infrastructure