BUSINESS - The African Mirror

Dec

01

2020

How West Africa economic partnership deals put the cart before the horse

BUSINESS

A free trade agreement, in its most basic sense, is an attempt by existing industries to find new markets. Their need to do this arises from industrialisation – that is, the process of developing sectors that attract high levels of protection in the international market. Put differently, domestic sectors looking for markets are usually the driving force behind free trade agreements. MICHAEL E ODIJIE, Post Doctoral Researcher, University of Cambridge Most African countries do not have the kinds of industries necessary to take advantage of free trade. Developing an industrial policy (or a production policy) is the way to build…

Dec

01

2020

By The African Mirror

Ivory Coast, Ghana cancel cocoa sustainability schemes run by Hershey

BUSINESS

ANGE ABOA and MAYTAAL ANGEL IVORY Coast and Ghana are cancelling all cocoa sustainability schemes that U.S.-based Hershey runs in their countries, accusing the chocolate maker of trying to avoid paying a cocoa premium aimed at combating farmer poverty. In a letter addressed to Hershey and seen by Reuters, the Ivorian and Ghanaian cocoa regulators accuse Hershey of sourcing unusually large volumes of physical cocoa on the ICE futures exchange in order to avoid the premium, known as a living income differential (LID). The letter, which also accuses Fuji Oil Holdings' Blommer subsidiary of aiding Hershey, was verified as authentic…

Nov

30

2020

By The African Mirror

Sudan inflation soars, raising spectre of hyperinflation

BUSINESS

PATRICK WERR INFLATION in Sudan has risen to one of the highest levels in the world, and the country risks slipping into hyperinflation unless it gets its budget deficit and money supply under control, economists say. The runaway prices have worsened an economic crisis for millions of ordinary Sudanese and imperilled a political transition under a military-civilian power-sharing deal. The government has run up enormous budget deficits by subsidising the cost of fuel, then financed the deficits by printing money. This has debased the currency, weakening it against other currencies and driving inflation up to annual 230% in October, according…

Nov

29

2020

By The African Mirror

How global and local experience would play out in WTO top job

BUSINESS

THE global economy faces profound uncertainties, particularly in the face of the COVID-19 pandemic. In addition, faith in the efficacy of international bodies such as the World Trade Organisation (WTO) has been weakened by a power struggle between China and the US. EZEBUILO UKWUEZE, Senior Lecturer in the Department of Economics, Nsukka, University of Nigeria As the process for appointing a new head of the organisation moves into its final phase, it’s worth considering what front runner Ngozi Okonjo-Iweala could bring to the complex role of managing an international organisation, including designing and implementing reforms. The WTO describes itself as…

Dec

29

2020

By The African Mirror

Banks re-open in Ethiopia’s Mekelle for first time since war began

BUSINESS

BANKING services have resumed in the capital of Ethiopia's northern Tigray region for the first time since conflict broke out there on November 4, state-run Fana TV has reported, as the government seeks to restore normality a month after capturing the city. Prime Minister Abiy Ahmed's government declared victory after seizing Mekelle from the rebellious northern Tigray People's Liberation Front (TPLF) on November 28. By mid-December, it was sending civil servants back to work and re-opening air space, while some power and telecoms links were restored after a near-total communications blackout. Fana cited an interview in the state-run Ethiopia Press…

Dec

25

2020

By The African Mirror

Supply squeeze won’t ease on global stocks and bonds in 2021

BUSINESS

SUJATA RAO AN unrelenting squeeze on the supply of global shares and sovereign bonds shows little sign of easing next year, with companies and central banks predicted to be big buyers of these securities in direct competition with investors. The supply mismatch could help to sustain the decade-long bull run in global equities and also keep bond yields at very low levels. A string of high-profile intial public offerings, as well as emergency secondary listings, this year raised almost $1 trillion in new equity, Dealogic data shows. Yet this flood of new equity issues did not end the supply squeeze…

Dec

24

2020

By The African Mirror

Libyan government approves 20% increase in public salaries

BUSINESS

LIBYA’S internationally recognised government has approved a 20% raise in public sector wages, a spokesman said, boosting a key source of income for many Libyans that has been eroded by inflation. Public salaries account for more than half of public spending in the country of 6 million, and are funded by unstable oil and gas revenues. The decision was approved in an emergency cabinet meeting said Ghaleb Alzgalay, a spokesman for Prime Minister Fayez Sarraj who heads the Tripoli-based Government of National Accord. A government source told Reuters in a message that the decision would put into effect a move…

Dec

22

2020

By The African Mirror

Virus concerns, lower oil prices drag currencies lower

BUSINESS

SASHANK NAYAR THE Russian rouble, South African rand and Mexican peso led losses across emerging market currencies on Monday, as a new fast-spreading coronavirus strain that shut down much of the United Kingdom roiled risky assets globally. Britain was shut off from much of Europe after its closest allies cut transport ties, following Prime Minister Boris Johnson's warning that a highly infectious new strain of the virus was a danger to the country. Currencies of oil exporters Russia and Mexico dropped nearly 2% against a steady U.S. dollar, as crude prices slumped more than 3% over worries of a slower…

Dec

22

2020

By The African Mirror

MTN racing against time to keep up to 30-million Nigerian users from being cut off

BUSINESS

MTN, one of African biggest cellular service providers, is racing against time to ensure that its database complies with Nigerian law so as to prevent up to 30 million subscribers from being cut off. The Nigerian government has stopped the sale of new sim cards and instructed telecommunication companies to ensure that all the active sim cards are linked to an identity number. All sim cards that are not linked with a nine-digit Nigerian ID number by December 31 will be cut off. And that is not the end of trouble for cellular phone companies. The Nigerian authorities have warned…

Dec

19

2020

By The African Mirror

How sub-Saharan Africa can rethink its approach to agriculture

BUSINESS

In response to the economic devastation caused by the coronavirus pandemic, most sub-Saharan governments are developing economic recovery plans. These will require some different thinking, particularly when it comes to agriculture. Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of South Africa, explains to Michael Aliber, a professor of agricultural economics at the University of Fort Hare, what that new thinking might look like. MICHAEL ALIBER, Professor of Agricultural Economics, University of Fort Hare WANDILE SIHLOBO, Visiting Research Fellow, Wits School of Governance, University of the Witwatersrand You have argued that governments should use the post-COVID environment to…