Mideast Economy Recovering But Social Unrest On The Rise, Says IMF

In this file photo an exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. Olivier DOULIERY / AFP
In this file photo taken on March 27, 2020, the IMG logo is seen on the building of the International Monetary Fund in Washington, DC. Olivier DOULIERY / AFP

 

The Middle East and North Africa are on track to economic recovery, but rising social unrest and unemployment are threatening to hinder “progress”, the International Monetary Fund said Tuesday.

The MENA region, which includes the Arab countries and Iran, saw its real GDP growth shrink by 3.1 percent in 2020 due to lower oil prices and sweeping lockdowns to prevent the spread of the coronavirus.

But with rapid vaccination campaigns, particularly in the Gulf nations, the IMF predicted that GDP growth would rise to 4.1 percent this year, a slight upgrade of 0.1 percent from the last projection in April.

“The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance,” Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told AFP in an interview.

But “this recovery is not the same in all countries. It is uncertain and uneven because of the divergence in vaccination… and geopolitical developments”, Azour added.

The IMF said this month that while prospects for oil-exporting economies improved with higher oil prices, low-income and crisis-hit countries are witnessing “fragile” recoveries.

It warned of “a rise in social unrest” in 2021 that “could pick up further due to repeated infection waves, dire economic conditions, high unemployment and food prices”.

Unemployment rates increased in MENA last year by 1.4 percent to reach 11.6 percent.

This rise exceeds that seen during the global financial crisis and the 2014-15 oil price shock, the IMF said.

The fund also warned of the longer-term risk of the uneven recovery, which could lead to a “permanent widening of existing wealth, income, and social gaps and, ultimately, weaker growth and less inclusive societies”.

About seven million more people in the region are estimated to have entered extreme poverty during 2020-21 compared to pre-crisis projections, according to the IMF.

In Lebanon, the continuing drop in the value of the currency has dashed hopes that the government formed last month can stem an economic crisis, branded by the World Bank as one of the worst since the mid-19th century.

Nearly 80 percent of the Lebanese population lives below the poverty line.

“The Fund has already started technical discussions with the authorities… to develop what would be in fact that the framework within which the fund can help Lebanon,” said Azour, a former Lebanese finance minister.

How We Intend To Build A More Resilient Economy – Buhari

A file photo of President Muhammadu Buhari wearing a facemask.

 

President Muhammadu Buhari has promised that his administration will build a more resilient economy, especially as Nigeria recovers from the coronavirus pandemic that brought the world to its knees.

To achieve this, he assured Nigerians that the Federal Government would continue to implement fiscal measures to improve the nation’s domestic revenues and mobilise external funding support.

The President stated this on Tuesday in his closing remarks at the end of the Mid-Term Ministerial Performance Review Retreat in Abuja.

READ ALSO: Breakdown Of Senate’s Amendments To Electoral Act

According to him, there must be synergy between fiscal and monetary authorities to keep the economy on the trajectory of growth.

President Buhari also promised that the government’s Social Investment Programmes (SIPs) would be sustained in the coming years.

He added that they would continue to reach out to the poorest and most vulnerable households through the national cash transfer programme and other initiatives.

As a result, the President revealed that he has directed the Ministry of Humanitarian Affairs, Disaster Management and Social Development to develop a legislative framework for social protection which would also guarantee its funding stream.

Acknowledging the critical role of Micro, Small, and Medium Enterprises (MSMEs) in economic growth and development, he said efforts would be geared towards removing all bottlenecks that obstruct access to government support schemes.

The government, according to President Buhari, will also adopt a holistic approach to industrialisation, in line with Nigeria’s aspirations and requirements while working closing with key stakeholders in the private sector.

Meanwhile, he directed cabinet ministers and permanent secretaries to redouble their efforts and work in synergy toward the total delivery of the government’s set targets to improve the livelihood of all Nigerians.

The President also instructed the ministers to ramp up the implementation of their mandates along the nine priority areas of his administration.

Read President Buhari’s full speech at the event below:

CLOSING REMARKS BY HIS EXCELLENCY, MUHAMMADU BUHARI, PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA AT THE END OF THE MID-TERM MINISTERIAL PERFORMANCE REVIEW RETREAT TUESDAY 12TH OCTOBER 2021.

Protocols:
After two days of intensive discussions, we have come to the end of a successful Retreat where we reviewed progress on the implementation of the ministerial mandates along the Nine Priority Areas of this administration.
2. The retreat provided an opportunity for us to undertake an objective assessment of our stewardship in line with the contract we signed with the Nigerian people to deliver on our electoral promises.
3. We reflected on what we have done and identified areas where we need to improve and refocus our attention during the remaining period of our Administration.
4. From the assessment report and discussions at this retreat, I am glad to note that progress has been made towards the achievement of our objectives.
5. The independent performance assessment report presented on day one of the retreat, indicates that significant progress has been achieved in the delivery of the Ministerial Mandates.
6. Distinguished participants, the discussions at the retreat have prompted the need for us to ramp up implementation on the deliverables. We must close the gaps in our implementation efforts to ensure that we attain set targets by 2023.
7. To achieve this, the Office of the Secretary to the Government of the Federation is to immediately begin the process of convening quarterly coordination meetings for each priority area based on the collaborative results framework.
This is with aim to ascertain status of implementation across the nine priority areas, identify bottlenecks, and proffer immediate solutions. All Ministers and Permanent Secretaries must be in attendance. These are not meetings to delegate.
8. The Office of the Secretary to the Government of the Federation is to immediately commence engagement with stakeholders to agree and push forward a framework for the institutionalisation of the Central Delivery Coordinating Unit.
9. All Ministers and Permanent Secretaries are to promote a robust performance culture across their MDAs by setting up intra-ministerial delivery task teams.
10. The Head of Service should as a matter of urgency invest in capacity strengthening of the Planning, Research and Statistics departments in all MDAs. This should be done in collaboration with the Central Delivery Coordinating Unit.
11. Let me assure Nigerians that this Administration will continue to implement fiscal measures to improve our domestic revenues and mobilise external funding support to build a more resilient economy. There must be synergy between the Fiscal and Monetary authorities to keep the economy on the trajectory of growth.
12. Distinguished Ladies and gentlemen, issues around expanding access to quality education, affordable healthcare and productivity of Nigerians will be given priority attention within the period of this administration.
13. We will sustain all ongoing efforts in rebuilding our health system through targeted investment in the health sector, especially our vaccination drive to halt the spread of the coronavirus pandemic.
This administration remains committed to providing the education and training required for employment and entrepreneurship, particularly using technology to impact the relevant skills on our youths.
14. Our Social Investment Programmes will be sustained in the coming years. We will continue to reach out to the poorest and most vulnerable households through the National Cash Transfer Programme and other initiatives of Government.
The Ministry of Humanitarian Affairs, Disaster Management and Social Development has been directed to come up with a legislative framework for social protection that also guarantees its funding stream.
15. In view of the critical role of Micro, Small and Medium Enterprises in economic growth and development, efforts will be geared towards removing all bottlenecks that militate against access to government support schemes by SMEs.
Government will adopt a holistic approach to industrialisation that is aligned with Nigeria’s aspirations and requirements, working closing with key stakeholders in the private sector. We will continue to support SMEs in view of their multiplier effect on the economy.
16. On the National Single Window Project, the Minister of Finance, Budget and National Planning is directed to ensure all relevant MDAs involved in the implementation of the project complete all processes needed for effective take-off of the National Single Window platform by first quarter of 2022.
17. In our determination to build systems to fight corruption and improve governance, this administration will continue to address the issues that foster corruption and impair transparency in the management of public resources. Efforts will be geared towards improving coordination and synergy between anti-corruption agencies.
18. To improve on our infrastructure development, government will prioritise funding and ensure that all high-priority ongoing infrastructure projects are completed before the end of this Administration. The Presidential Infrastructure Development Fund will continue to support the delivery of our legacy infrastructure projects across the country.
19. Distinguished participants, I am confident that the lessons we have learned in the last two years of implementing our Policies, Programmes and Projects will serve as the needed tool to propel every Ministry to remain committed, towards the achievement of our developmental objectives. I therefore charge all of you to step-up, double your efforts and work in synergy toward total delivery of our Administration’s set target.
20. Finally, I would like to thank Secretary to the Government of the Federation and his team for successfully organising this retreat.
21. I wish to also sincerely thank all of the resource persons that have added immense value to this process. Well done and thank you all.
God bless the Federal Republic of Nigeria.

APC Govt Committed More Resources To Diversify Economy Than Past Govts – Lawan

President of the Senate, Ahmed Lawan (A file photo)

 

President of the Senate, Ahmad Lawan, has said the President Muhammadu Buhari-led All Progressive Congress (APC) has committed more resources to diversify the economy than any previous administration.

According to Lawan, no past government had invested as much resources, particularly in agriculture as the Buhari government has done.

He made the comments on Saturday at the commissioning of a Poultry Farm Center which the National Agricultural Land Development Authority (NALDA) established in Gasamu, in Jakusko Local Government Area of Yobe State.

“We have promised to diversify the economy of this country. For more than 50 years, our economy had been dependent on one single commodity and that is oil,” the Senate President was quoted as saying in a statement signed on Sunday by his media aide, Ola Awoniyi.

“Oil does not provide so many employment opportunities. There could be revenues but definitely not the mainstream opportunities in terms of employment. But when you diversify into agriculture, you would have much more people engaged, especially our youths who today are largely unemployed or under-employed.

“So, we are diversifying the economy of Nigeria through agriculture, and we have done so much as a country, as a government, in the last six years or so.

“No previous administration in Nigeria has committed as much fund, resources in agriculture than this administration. And I stand to be contradicted, that if not because of resources that we have put in the agriculture sector, Nigeria would still have been importing the food that we eat.

“But everyone knows that the rice import bill had gone so low, almost to nothing today. We used to spend billions of dollars every year to import rice but we have been producing the rice that we eat.

“Of course, we still have to work to stop the smuggling of rice into Nigeria. But I want to assure you that the APC administration at all levels of government, from the local government to the state and federal government, will continue to work for diversification of the Nigerian economy.

“Only last month, the National Bureau of Statistics released the report that our economy has grown by 5.01 percent in GDP. That is to show that we are making progress. We are not yet there but we will be there by the Grace of God and all indications are there that we will be there.”

Lawan thanked Buhari for giving the approval for the farm. This, he said, was in fulfillment of the promise made by the President on behalf of the APC in 2015, to provide employment opportunities for the youths.

“Presently, 30 youths will be engaged to manage the farm.

“This is only the direct employment on this farm. When you look at the indirect opportunities, when you establish poultry farms across this zone, you would have brought in many youths to manage the poultry farms.

“Gasamu, because of this project, is now going to be prominent in the Nigerian map. And this is something that is very important for us as a community here.

“If someone will come from Kano. If someone will come from Imo. If someone will come from Akwa Ibom to buy chicks here, to go and grow them and sell them to make money, why can’t we in this community do the same?

“That means we should be able to have poultry farms coming up across this zone particularly in Jakusko Local Government.

“This is one of the immediate benefits and I will urge our people not to lose the opportunity. I want to seize this opportunity also to appeal to NALDA that we want the capacity to go beyond 250,000 per annum. I want to assure you that our people will exhaust the 250,000 and they will need more,” Lawan said.

The Executive Secretary of NALDA, Hon. Paul Ikonne said the farm center was established on the mandate of President Buhari in order to empower the youths and get the country closer to achieving food security.

“Mr President has directed NALDA to make agriculture attractive for our youths and for NALDA to produce what we are to eat and for Nigerians to eat what we produce.

“So, we are here today for the commissioning of this 30,000-bird capacity which is specially made to produce Noiler (a hybrid of broilers and cockerels).

“This center is like a reproduction centre that will be producing our locally improved birds that will be distributed across the country,” Hon Ikonne said.

He said the farm had the capacity of generating 850 eggs daily and N1.1 million daily from the sales of birds only.

Ikonne said the birds also had an incubator centre in order to produce day-olds that would be used to establish or sent to other poultry houses across the country.

He said the revenue projection for the farm center, with capacity for up to 250,000 birds, would generate not less than N400 million annually.

“NALDA Integrated farm estates are meant to empower the community, to develop the land within the community, empower the youths, create employment and reduce hunger in our land.

“So, communities within the country are expected to donate land. Mr President has directed NALDA to establish Integrated Farm Estates in all the nooks and crannies of Nigeria. So, these lands are developed for the immediate communities and for the empowerment of the communities,” he said.

Kaduna Has Attracted Over $2.6bn Worth Of Investments Since 2016 – Govt

Executive Secretary of the State Investment Promotion Agency (KADIPA), Umma Aboki at a press conference on September 8, 2021.

 

The Kaduna State Government says it has attracted over $2.6 billion of local and foreign investments to the state through its annual economic and investment summit which commenced in 2016.

The Executive Secretary of the State Investment Promotion Agency (KADIPA), Umma Aboki, disclosed this at a pre-event press conference on Wednesday.

She said the 6th edition of the summit will hold between September 23 and 24, with the theme, Towards A Sustainable Knowledge-Based Economy.

Explaining the theme, Aboki identified information as key and the best way towards achieving a responsive, innovative, and resilient economy especially after the global exploits of COVID-19.

Read Also: Plateau Govt Further Relaxes Curfew In Jos North, Lifts Ban On Tricycles

She further explained that this year’s summit will, again, showcase and promote Kaduna State to domestic and international investors as a major investment destination in Africa including the tourist attractions across the state.

The KADIPA boss also listed some of the benefits recorded by the five previous editions of the investment summit to include improvement in Internally Generated Revenue (IGR), maintaining the position of the state as number one in ease of doing business, gaining active investors, and industrialisation of the state.

According to the organisers, Vice President Professor Yemi Osinbajo, will be the special guest at the summit, which will feature a hybrid event, with attendance being both physical and virtual.

Why Nigeria’s Economy Is ‘Broken’ – Timipre Sylva

A file photo of a food trader at a market in Akure, the Ondo State capital. Sodiq Adelakun/Channels Television
A file photo of a food trader at a market in Akure, the Ondo State capital. Sodiq Adelakun/Channels Television

 

The Minister of State for Petroleum Resources, Mr Timipre Sylva, has defended the handling of the nation’s economy by the Muhammadu Buhari administration.

He was responding to questions about the economy and other issues during his appearance on Thursday’s edition of Channels Television’s Politics Today.

While critics have accused the government of worsening the economy, Sylva put the blame on the Peoples Democratic Party (PDP) led administration.

“What we inherited is like broken China (plate),” he said when asked about the state of the economy. “Somebody broke the China and arranged it very well on the table as if it was not broken.

“So, you came into the room, and you thought there was a China on the table and you tried to pick it up, and it just fell into pieces in your hands; who broke it, is it you or was it already broken?

“That was the kind of economy we inherited; we inherited an economy that was already broken. We tried to pick up the economy and it scattered in our hands.”

President Buhari won the 2015 presidential election on the strength of his campaign promises which bordered on fighting corruption, providing security, and improving the economy.

 

He has, however, been seriously criticised by individuals and groups – especially the opposition party – for the way the economy is being handled.

The criticism is triggered by the increase in the prices of food and other commodities, as well as the devaluation of the naira against the dollar, among others.

The present administration is, however, not bothered by the criticism, according to Sylva.

Instead, it will continue to step up efforts to better the lives of the people.

He is also confident that the ruling APC will be the party to beat in the general elections in 2023.

The minister is certain that Nigerians will vote for his party “over and over again”.

US Senate Leader Pushes Bill To Boost Industry Against China

 In this file photo taken on May 25, 2021 Senate Majority Leader Chuck Schumer (D-NY) speaks at a news conference following a policy luncheon meeting with other Senate Democrats on Capitol Hill May 25, 2021 in Washington, DC.MANDEL NGAN / AFP
In this file photo taken on May 25, 2021, Senate Majority Leader Chuck Schumer (D-NY) speaks at a news conference following a policy luncheon meeting with other Senate Democrats on Capitol Hill on May 25, 2021, in Washington, DC. MANDEL NGAN / AFP

 

US Senate Majority Leader Chuck Schumer on Wednesday said he would push for rapid passage of a bill that would allocate tens of billions of dollars towards boosting American industrial and technological competitiveness, particularly against China.

A key provision of the proposal aims to address a shortage of semiconductors that has put the brakes on auto production this year.

With both American political parties increasingly worried about competition from Beijing, Schumer hopes he can win bipartisan passage of the US Innovation and Competition Act.

The Democratic leader said he aims to get a vote on the bill “by the end of the week.”

The legislation “will supercharge American innovation and preserve our competitive edge not just for the next few years, but for generations to come,” Schumer said in the Senate.

The proposal aims to address a number of technological areas in which the United States has fallen behind its Chinese competitors, including in the production of semiconductors.

An ongoing shortage of the crucial chips has forced US automakers to cut production, and the bill allocates $52 billion in funding for a previously approved plan to increase domestic manufacturing of the components.

Also included is $1.5 billion to pay for a fund to boost American competitiveness in 5G wireless technology.

Another $1.5 billion would go towards a program “to counter the malign influence of the Chinese Communist Party globally,” and require the State Department to appoint a top official dedicated to that goal, according to a summary of the legislation.

Billions of dollars would go towards scholarships and other programs to advance scientific research.

President Joe Biden has pledged to work with opposition Republicans on key issues, and as Democrats control the Senate by a single vote, Schumer would need backing from several Republicans to forestall a potential filibuster that could block passage of the legislation.

The Democratic leader has collaborated with at least one Republican senator on the bill, and said the bipartisan support “reveals that Democrats and Republicans are united in our efforts to preserve and maintain American leadership on the world stage.”

AFP

Italy Approves 40-Bn-Euro Stimulus Package

File: (Photo by Tiziana FABI / AFP)

 

Italy’s government on Thursday approved a 40-billion-euro support package for its struggling economy, including 100 million for ailing flag carrier Alitalia.

The eurozone’s third largest economy has been devastated by the coronavirus pandemic, although Prime Minister Mario Draghi expects growth to improve this year as more people receive vaccines and business activity picks up.

The support package, worth around $49 billion, includes 26 billion euros for businesses and self-employed workers who have been hammered by the worst recession since World War II.

The equally battered tourism sector is to get more than three billion euros in aid.

Alitalia, which has been under state-controlled administration since 2017 and is still struggling to pay wages, won yet another cash injection “for operational and management continuity”, according to a draft government decree seen by AFP.

The airline’s future depends on EU approval of a bigger bailout worth three billion euros that would create a new debt-free company to take over some of Alitalia’s assets.

“I think we will shortly find a solution to allow the launch of this company,” Economy Minister Daniele Franco said, before adding that he did not expect Alitalia to change its name, as initially demanded by Brussels.

After expressing concern last week for a record drop in Italy’s birthrate, Draghi also announced mortgage subsidies for people aged under 36 to help them buy a home and start a family.

Carlo Bonomi, president of the employers’ association Confindustria, called the measures adopted Thursday “important”, but said more was needed to get Italy’s economy back on track.

Last month, the government forecast gross domestic product (GDP) growth of 4.5 percent this year, after 2020’s record contraction of 8.9 percent — Italy’s worst recession since the second world war.

Draghi said “growth figures for this year will probably be revised upwards,” but stressed that a stronger recovery hinged on the success of Italy’s EU-funded 221.1-billion-euro recovery plan.

Since the coronavirus swept across Italy in February 2020, the government has allocated more than 130 billion euros to economic sectors shut down during the country’s lockdown periods.

As a result, public finances have taken a massive hit.

The government’s deficit is expected to balloon to 11.8 percent of GDP this year, compared with just 2.4 percent in 2019.

Public debt should hit 159.8 percent of GDP, the second-highest ratio in the eurozone behind Greece.

AFP

UK Economy In Recovery Mode Ahead Of Lockdown Easing

The front page of the Evening Standard newspaper leads with the story that the government is contemplating making it compulsory that all visitors to the UK will have to quarantine in a hotel, after arriving here, outside Victoria train station in central London on January 25, 2021, as Londoners continue to live under Tier 4 lockdown restrictions.  (Photo by Hollie Adams / AFP)

 

Britain’s economic recovery began to recover strongly at the end of the first quarter despite lockdown restrictions, official data revealed on Wednesday.

Gross domestic product jumped 2.1 percent in March, the Office for National Statistics said, although by not enough for the UK economy to avoid contracting overall in the first quarter.

GDP shrank by 1.5 percent overall in the first three months of 2021 compared with the final quarter last year, the ONS said.

The UK is meanwhile currently exiting lockdown at a gradual pace, allowing the economy to further recover from pandemic fallout.

“As we cautiously reopen the economy, I will continue to take all the steps necessary to support our recovery,” finance minister Rishi Sunak said in reaction to the data.

Darren Morgan, ONS director of economic statistics, said the strong recovery seen in March was led by retail and school reopenings, offsetting weakness in the services sector.

He added that construction grew strongly over the quarter and stood above its pre-pandemic level in March.

Morgan also noted that manufacturing recovered robustly in both February and March.

Meanwhile, “exports of goods to the EU continued to increase in March and are now almost back to their December level” before Brexit took place, he added.

“However, imports from Europe remain sluggish in the first three months of the year, being outstripped by non-EU imports for the first time on record.”

Britain formally exited the European Union at the start of the year.

The growth recovery tallies with the Bank of England’s outlook.

The BoE last week said the UK economy will enjoy a stronger-than-expected recovery this year after the government began easing its coronavirus pandemic lockdowns quicker than anticipated.

It is expected to rebound by 7.25 percent this year amid vaccine rollouts, the central bank predicted after it upgraded its prior guidance of a 5.0-percent expansion.

But it slashed its projection for 2022 to 5.75 percent from 7.25 percent as the government looks to claw back some of its vast pandemic-support outlay with higher taxation.

The UK economy tanked by 9.8 percent last year, Britain’s biggest slump in three centuries — and the worst G7 performance — on Covid-19 lockdowns.

– Restrictions lifted –

From next week, people in England will be able to eat and drink in indoor venues, Prime Minister Boris Johnson announced Monday as the country reported no coronavirus deaths for the first time in over a year.

The latest relaxation will see pubs, bars and restaurants restart indoor services, though only to groups of up to six people, via table service and with social distancing in place.

Indoor entertainment such as cinemas, museums and children’s play areas can reopen, alongside concert halls, conference centres and sports venues — which will operate within capacity limits.

The government will also lift advice against close contact among family and close friends, meaning they can hug one another again.

Devolved governments in Scotland, Wales and Northern Ireland, which have responsibilities for health policy, have been easing restrictions at their own, roughly similar pace.

AFP

South Africa Sets Out Budget As Economy Reels From Pandemic

File: Molise Molise / AFP.

 

The South African government will unveil its fiscal 2021 spending plans Wednesday as the continent’s most industrialised economy chief Ursula von der Leyengrapples with the fallout from the coronavirus pandemic on top of a recession.

Finance Minister Tito Mboweni traditionally delivers his national budget speech alongside a potted aloe vera plant, highly resistant to drought, as a symbol of South Africa’s economic resilience.

Resilience will be needed after a year of rolling restrictions on movement and business to curb the coronavirus outbreak.

“There’s not a lot of money and we need to have a pro-poor and pro-growth balance,” University of Johannesburg business lecturer Daniel Meyer told AFP.

READ ALSO: EU Chief Seeks ‘Amicable’ Solution As AstraZeneca Admits New Delays

Increasing taxes wont be an option, however, given the pandemic-induced losses and with local elections due this year.

Unemployment in South Africa soared to a record 32.5 percent in the fourth quarter of last year, the highest since records began in 2008.

Mboweni “will have to take more loans to finance the budget,” Meyer said.

But public debt is already expected to reach over 80 percent of GDP this year.

“Debt… is rising out of control,” Meyer warned, noting that a junk status downgrade last year makes government borrowing even more expensive.

“So (Mboweni) will have to cut the (public) wage bill.”

South Africa is the country hardest-hit by coronavirus in Africa.

Last March, it imposed one of the world’s strictest lockdowns, which has been gradually eased over the past year, but the measures to stem the spread of the virus, including a six-month border closure, blocked tourists and capital from overseas.

The global economic downturn brought on by the virus dried up revenues further, stifling emerging markets and compounding pre-existing problems.

– Poverty ‘on the rise’ –

Ahead of the budget speech, trade unions called a strike to protest the high level of unemployment and persistent corruption.

At Chris Hani Baragwanath Hospital in Johannesburg’s Soweto township, about 100 members of the South African Federation of Trade Unions picketed at the hospital’s gate in solidarity with overstretched and underpaid medics.

Wearing red shirts and paying little attention to social distancing guidelines, they danced and chanted to apartheid-era struggle songs while brandishing placards saying “It is time to fight back.”

“Employers have taken advantage of the Covid situation to retrench people… the finance minister must wake to the reality that people are loosing jobs,” said 48-year-old City Bokaba, a coordinator for the union.

In Cape Town — where Mboweni will deliver the budget speech — police fired teargas to disperse protesters, stopping them from marching to parliament.

The African continent has seen foreign direct investment decrease by 25 to 40 percent, and remittances drop by nine percent as a result of the pandemic, according to the UN Conference on Trade and Development.

South Africa, which derives at least eight percent of its GDP from mineral exports, has been particularly hard-hit.

“Poverty is on the rise. Inequality is deepening,” President Cyril Ramaphosa said in an annual address to the nation this month.

Without detailing economic recovery plans, he compared South Africans to fynbos — a local plant species whose growth is stimulated by fires, blossoming directly from the ashes.

“Like all those who have walked this land before us, we will rise again,” an upbeat Ramaphosa said.

He pointed to the potential of job creation through the private sector, citing a recent $1.0 billion investment by US car manufacturer Ford.

The International Monetary Fund meanwhile estimates that South Africa’s economy contracted by eight percent last year, predicting growth of just three percent for 2021.

Heineken To Cut 8,000 Jobs As Virus Takes Fizz Out Of Sales

 

 

Dutch brewing giant Heineken said on Wednesday it would cut around 8,000 jobs worldwide as the coronavirus pandemic kept much of the hospitality sector closed.

Heineken, the world’s number two brewer, said it recorded a net loss of 204 million euros ($247 million) in 2020, a 109 percent fall in profits from the year before.

Heineken CEO Dolf van den Brink said it had been “a year of unprecedented disruption and transition” for the company.

“The Covid-19 pandemic and governments’ measures continue to have a material impact on our markets and business,” Heineken said in a statement.

Sales fell by 17 percent to 23 billion euros with bars and cafes closed in many countries, the company said.

Less than 30 percent of outlets were operating in Europe in particular at the end of January, it said.

Heineken had announced in October that restructuring was needed to reduce personnel costs but gave no figure for layoffs at the time.

“The overall restructuring programme will reduce our employee base by c.8,000 people,” Wednesday’s statement said.

This included including cutting jobs at the head office in Amsterdam while other layoffs would depend on local circumstances, it added.

Founded in the 19th century in Amsterdam, Heineken sells more than 300 brands, including its namesake plus others such as Strongbow and Amstel. It employs 85,000 people globally.

AFP

Eurozone Economy Shrank Less Than Expected In 2020

 

The eurozone economy shrank less than expected in 2020 given the devastating consequences of the covid-19 pandemic, official data showed on Tuesday.

The Eurostat statistics agency said the eurozone economy shrank by 6.8 percent in 2020, and by 0.7 percent in the fourth quarter.

Though catastrophic, this was much better than the EU commission’s forecast of a 7.8 percent crash, made in November.

But early indicators show that the 19-countries that use the euro currency now face the prospect of a fresh recession after a recovery last summer was cut short by a second wave of the pandemic.

This is due to a halting start to the vaccination campaign in Europe and continued covid-related restrictions.

The better than expected figure for 2020, though still one of the worst in history, came largely from a better performance in Germany, Europe’s biggest economy.

German economic activity contracted by 5.0 percent in 2020 and even France in the end did better than expected with a slump of 8.3 percent, when a double digit crash was initially feared.

READ ALSO: Japan Says EU Export Curbs Delaying Its COVID-19 Vaccination Plan

“Restrictive measures have been adapted and have become milder compared to the first wave,” said ING analyst Bert Colijn.

“Think of countries like France and Spain, for example, where industry and construction have remained largely open over the course of the quarter,” he added.

Colijn also cited sustained demand for EU goods from China, where restrictions have been scarce.

Help also came from Britain, where businesses stockpiled in the final months of 2020 with the impending end of the post-Brexit transition period.

Eurostat said that the 27-member state EU economy as a whole – which adds Poland and Sweden for example – shrank by 6.4 percent in 2020 and by 0.5 percent in the fourth quarter.

Going forward, the major risk “is that the arrival of new more transmissible variants, as well as the slow speed of vaccination programmes, delays the lifting of restrictions,” remarked Jack Allen-Reynolds, Senior Europe Economist at Capital Economics.

“This would have a much bigger effect on the Mediterranean economies that are more dependent on summer tourism” and not the likes of Germany, he said.

The EU has yet to see the benefits of a 750-billion-euro ($900-billon) recovery fund whose first payouts will hit government coffers hopefully by the middle of the year.

For now, the European economy has been largely kept afloat by an unprecedented stimulus programme by the European Central Bank that has allowed eurozone nations to borrow cheaply on the markets to provide massive support.

COVID-19 Pandemic Caused Worst Year For US Economy Since 1946

A woman rides past the New York Stock Exchange (NYSE) on July 13, 2020 at Wall Street in New York City. Johannes EISELE / AFP
A woman rides past the New York Stock Exchange (NYSE) on July 13, 2020 at Wall Street in New York City. Johannes EISELE / AFP

 

The United States saw its sharpest contraction in growth since 1946 as the coronavirus pandemic hammered the economy last year, but while the country may be set for a recovery, it hasn’t arrived yet.

The Commerce Department on Thursday reported the world’s largest economy shrunk by 3.5 percent in 2020 after Covid-19 rearranged daily life, forcing many businesses to shut down or change their operations while laying off workers in droves.

Those mass layoffs, which began in March as the pandemic intensified, continue to take a toll, with the Labor Department reporting nearly 1.3 million new claims for unemployment benefits filed last week.

The data underscores the job awaiting President Joe Biden, who took office just over a week ago promising to get the country back on track, and who has proposed spending $1.9 trillion in an initial salvo against the twin economic and health crises.

But by this point, analysts agree there’s only so much the government can do to support the economy, which won’t be back to normal until the raging virus is done away with or has at least been brought to manageable levels.

“Additional fiscal stimulus and broader vaccine diffusion should support an improved labor market in the spring, but claims are expected to remain high in the near term as the pandemic continues to restrict activity, with new strains of the virus a concern,” Nancy Vanden Houten of Oxford Economics said.

– The toll becomes clear –

The pandemic caused an unheard-of whipsaw in the growth, with the economy contracting a record 31.4 percent annualized in the second quarter of 2020 when the pandemic’s restriction were at their most severe, then shooting back up 33.4 percent the next quarter as businesses reopened.

In the fourth quarter, GDP grew by an annual rate of 4.0 percent, according to the Commerce Department’s first estimate for the final three months of the year.

That wasn’t enough to stop 2020 from seeing an overall contraction, which the government said was caused by a drop in spending as well as in “exports, private inventory investment, nonresidential fixed investment, and state and local government.”

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Net exports fell 13 percent last year while personal consumption expenditures dropped 3.9 percent.

The declines were partially offset by the strong housing market and federal government spending like the trillions of dollars in stimulus money Congress passed last year amid the pandemic.

“Against the risk of excessive winter pessimism, we believe in spring optimism,” Gregory Daco of Oxford Economics said.

Even if Biden’s stimulus bill is eventually watered down by cost-conscious lawmakers, that — combined with the effects of Covid-19 vaccine drives and a recovery in the employment market — could cause the economy to expand by 5.5 percent in 2021.

– Tough job market –

But if the job market is in for a recovery, the wait continues for now.

The Labor Department reported 847,000 new seasonally adjusted filings for regular unemployment benefits, fewer than the week prior and still above the single worst week of the 2008-2010 global financial crisis, 10 months after the mass layoffs began.

Another 426,856 claims, without seasonal adjustment, were made under a special program for workers not normally eligible for aid, while the data also showed more and more workers claiming benefits under programs for the long-term unemployed.

All told, nearly 18.3 million people were receiving some form of assistance as of the week ended January 9, and Rubeela Farooqi of High Frequency Economics said that massive number is unlikely to decrease meaningfully until the pandemic can be tamed.

“Conditions will remain weak and recovery will be slow until infections can be curbed, and the economy can reopen more completely,” she said in an analysis.

AFP