What to Watch in Commodities: Virus, Oil, Glencore, Arcelor, Ags

What to Watch in Commodities: Virus, Oil, Glencore, Arcelor, Ags

LAGOS (Capital Markets in Africa) – Commodities took a heavy beating in January as the virus outbreak spurred across-the-board concerns about demand, and that focus will persist right through this week. Markets in China reopened on Monday, with most raw materials posting steep losses. For global prices, Citigroup Inc. now reckons Brent could soon go sub-$50 a barrel. For the latest, click here. On top of the health emergency, there’s a crowded corporate docket. In Europe, top steelmaker ArcelorMittal reports earnings on…

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IMF Says S. Africa Has No Fiscal Space, Must Push Reforms

IMF Says S. Africa Has No Fiscal Space, Must Push Reforms

JOHANNESBURG (Capital Markets in Africa) – South Africa has no fiscal space left and must implement strong budget consolidation and state-owned company reforms to ensure its debt sustainability, the International Monetary Fund said. The October medium-term budget policy statement showed gross government debt would surge to 80.9% of gross domestic product in the 2028 fiscal year unless urgent action is taken. That trajectory is almost 20 percentage points higher than forecast in the February budget…

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Growth-Boosting Rate Cut in Ghana May Be Risky Ahead of Vote

Growth-Boosting Rate Cut in Ghana May Be Risky Ahead of Vote

ACCRA (Capital Markets in Africa): Ghana’s central bank is caught between cutting interest rates to boost the economy and running the risk of weakening the currency, which could drive up inflation and spook investors ahead of December’s elections. One the one hand, inflation ended the year slightly below the government’s projection and economic growth slowed in the third quarter, giving room for an interest rate cut. However, a repeat of the government missing its fiscal…

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World Bank Raises Rwanda 2019 Growth, Delays Tanzania Loan Decision

World Bank Raises Rwanda 2019 Growth, Delays Tanzania Loan Decision

LAGOS (Capital Markets in Africa): Economic growth in Rwanda could accelerate to more than 10% this year if the construction of a planned $1.3 billion airport starts, according to the World Bank, which increased its estimate for 2019 expansion for a second time. Growth was likely 8.5% last year, more than the 7.8% the Washington-based lender had initially anticipated, according to World Bank Senior Economist Aghassi Mkrtchyan. “The growth will be driven by an unexpected…

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Job Cuts Will Depress Limping South Africa Economy Even More

Job Cuts Will Depress Limping South Africa Economy Even More

JOHANNESBURG (Capital Markets in Africa) – Less than a month into 2020, South African companies have already announced thousands of job cuts. In a country where a third of the labor force is already unemployed, this will put even more strain on demand and economic growth. Almost 8,000 jobs are at risk as companies including Telkom SA SOC Ltd., the country’s largest fixed-line operator, and Walmart Inc.’s local unit Massmart Holdings Ltd. plan to reduce their headcount after…

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At More Than 500%, Zimbabwe’s Ncube Sees Inflation Stabilizing

At More Than 500%, Zimbabwe’s Ncube Sees Inflation Stabilizing

HARARE (Capital Markets in Africa)~ Zimbabwean inflation is beginning to stabilize, even with consumer prices increased more than 500% on an annual basis, Finance Minister Mthuli Ncube said. Year-on-year inflation remains high, “but that’s expected, that happens when you liberalize a currency,” Ncube said Wednesday in an interview with Bloomberg Television at the World Economic Forum in Davos. After a decade of using a basket of foreign currencies, including the South African rand and the…

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Ethiopia Pushes Privatization to Give Economy a Sugar Rush

Ethiopia Pushes Privatization to Give Economy a Sugar Rush

ADDIS ABABA (Capital Markets in Africa) – For decades, Irba Jana has scraped out a modest living from sugar cane, selling his harvest to mills run by Ethiopia’s state-owned sugar monopoly. But lately, he’s been working as a security guard to supplement his income, as two of the three nearby processing facilities have closed because of a lack of upkeep and investment. “Sugar cane just isn’t profitable anymore,” says Irba, a grizzled, 50-year-old father of…

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