Mozambique Economy Set To Bounce Back In 2020 – IMF

 

Mozambique’s economy is on track for a “strong rebound” in 2020, the International Monetary Fund said on Wednesday, as it urged the government to ensure an expected gas boom benefits all citizens.

The southern African country has sought to become the world’s third-largest exporter of liquefied natural gas since vast offshore reserves were found in 2010.

But low gas prices, combined with a government debt scandal in 2016, delayed exploitation and triggered a prolonged economic downturn.

Gross domestic product (GDP) growth slowed to an average 3.7 percent between 2016 and 2018 — the lowest since 2000.

“The outlook for 2020 is for a strong rebound in economic activity and low inflation,” said IMF Mozambique mission chief Ricardo Velloso after a seven-day mission in the country.

Real GDP growth is projected to reach 5.5 percent next year, up from the 2.1 percent now expected for 2019.

The boost is mainly supported by “post-cyclones reconstruction efforts”, agricultural recovery and the easing of monetary conditions, added Velloso in a statement.

Two tropical cyclones smashed into northern Mozambique in March and April this year, killing more than 600 people and devastating the region.

The IMF provided financial assistance after the storms.

Velloso said “stronger institutions” would be needed to ensure gas revenues trickled down to “the lives of the Mozambican people, playing a significant role in sustainable development and poverty reduction”.

He added that investments in liquefied natural gas projects should boost “construction and other activities”.

Major revenues from gas exports are not expected before 2023.

The government’s inability to stem a wave of attacks by a shadowy jihadist organisation operating in the gas field region has also been a brake on development.

Donors — including the IMF and the World Bank — suspended aid to Mozambique in 2016 after the government admitted it had secretly borrowed $2.2 billion which was spent on civil and military ships.

The scandal plunged the aid-dependant country into the worst financial crisis in its history.

Debt soared to 112 percent of GDP in 2017, forcing Mozambique to suspend its repayments and arousing distrust among investors.

The IMF said the government’s ability to secure additional support from international private creditors remained “critical for public debt sustainability”.

Mozambique is one of the world’s poorest countries, ranking 180 out of 189 in the United Nations’ latest human development index.

AFP

IMF Releases World Economic Outlook

IMF Attributes Nigeria’s Inflation To Forex ChallengesThe International Monetary Fund (IMF) says the global economic growth noticed since 2016 is likely to continue in 2017 and 2018.

The IMF Economic Counsellor and Director of Research, Maurice Obstfeld, said this on Tuesday at an event to flag-off the Spring Meetings of the World Bank and IMF in Washington D.C.

For Sub-Saharan Africa, the economic growth outlook by the IMF is seen coming behind the rate of population increase on the continent.

Mr Obstfeld noted that it requires contribution from both advanced and emerging countries around the world to sustain economic growth.

He added that the projected 3.5 per cent for 2017 and 3.6 per cent for 2018 are subjected to a number of challenges in key economies like the United States and China.

The economist called for united multi-lateral actions to address issues of nationalism, so as to protect foreign workers and improve trade.

World Bank Spring Meetings: Channels TV Attending

Washington, the United States Capital will this week, play host to thousands of government officials from over 170 countries.

Also in attendance, would be top officials of the World Bank and the International Monetary Fund, Civil Society Groups, as well as participants from the academia and private sectors, for the 2017 annual meetings of the IMF and World Bank.

The meetings which would include series of seminars, is expected to focus on the global economy, international development and the world’s financial markets.

Channels television will also be on ground to bring you daily highlights of the meetings.

IMF Asks Nigeria To Hasten Economic Reform

IMF Asks Nigeria To Hasten Economic ReformsThe International Monetary Fund (IMF) on Wednesday released a document, asking the Federal Government to speed up its economic reform to spur growth.

The latest report hits a more critical tone than the statement released last week, which outlines a raft of failings in the government’s handling of Nigeria’s economy.

The IMF asked the Federal Government to implement immediate changes to its Foreign Exchange Policy, or risk a disorderly exchange rate.

The Washington-based fund’s advice came the same day that President Muhammadu Buhari launched the Economic Recovery Growth Plan in Abuja.

In a statement issued on Tuesday, the President’s spokesman, Mr Femi Adesina, had explained that the launch was in furtherance of the current administration’s drive to sustain and build on the successes so far recorded in tackling corruption, improving security and revamping the economy.

“The Medium-Term ERGP, which had been approved by the Federal Executive Council (FEC), has amongst its broad strategic objectives: restoring sustainable, accelerated inclusive growth and development; investing in the people; and building a globally competitive economy”, the statement said.

President Buhari To Launch ERGP 2017-2020

Buhari Extends Return To NigeriaNigeria’s President, Muhammadu Buhari, will formally launch the Economic Recovery and Growth Plan (ERGP) 2017-2020 on Wednesday, April 5.

A statement issued on Tuesday by the President’s spokesman, Mr Femi Adesina, revealed that the ceremony will take place at the Council Chambers of the Presidential Villa in Abuja, the Federal Capital Territory.

The statement explained that the launch is “in furtherance of the current administration’s drive to sustain and build on the successes so far recorded in tackling corruption, improving security and revamping the economy.

“The Medium-Term ERGP, which had been approved by the Federal Executive Council (FEC), has amongst its broad strategic objectives: restoring sustainable, accelerated inclusive growth and development; investing in the people; and building a globally competitive economy”.

The ERGP, which unveils a road map for Nigeria’s economic recovery, growth and sustainable development, was made public on March 7, while President Buhari was on his medical vacation in the United Kingdom.

The Media Adviser to the Minister of Budget and National Planning, Akpandem James, had said the ceremonial presentation will take place when the President returns from his vacation.

FG Releases Economic Recovery Plan

FG Releases Economic Recovery Plan (ERGP)The Federal Government has released the Economic Recovery and Growth Plan (ERGP) which unveils a road map for Nigeria’s economic recovery, growth and sustainable development.

This was according to a statement issued on Tuesday by the Media Adviser to the Minister of Budget and National Planning, Akpandem James.

According to the statement, the development of the plan went through a rigorous process including wide consultation and robust engagements with stakeholders from a range of relevant fields.

They include: economic experts from the public and private sectors, academia, the Organised Private Sector, Civil Society groups, Organised Labour, sub-regional governments, International Development Partners (including the World Bank, International Monetary Fund and African Development Bank), the National Economic Council (NEC) and the National Assembly.

The statement hinted that the Plan has been approved by the Federal Executive Council, adding that its ceremonial presentation would take place when President Muhammadu Buhari returns from vacation.

Achieving Structural Economic Change

The statement read: “The core vision of the Plan is one of sustained inclusive growth. There is an urgent need as a nation to drive structural economic transformation with an emphasis on improving both public and private sector efficiency.

“The aim is to increase national productivity and achieve sustainable diversification of production, to significantly grow the economy and achieve maximum welfare for the citizens, beginning with food and energy security.

“The Plan envisages that by 2020, Nigeria would have made significant progress towards achieving structural economic change with a more diversified and inclusive economy. Overall, the Plan is expected to deliver on Five key broad outcomes namely: a stable macroeconomic environment, agricultural transformation and food security, sufficiency in energy (power and petroleum products), improved transportation infrastructure and industrialisation focusing on small and medium scale enterprises.

“Realising that the country’s economy would remain on a path of decline if nothing was immediately done to change the trajectory, the present administration, when it assumed office, embarked on strategic moves to halt the trend and redirect the course of the country’s economy and growth process.

A Knowledge-Based Economy

“The process started with the development of the Strategic Implementation Plan (SIP) for the 2016 Budget of Change as a short-term intervention. The ERGP, a Medium Term Plan for 2017 – 2020, builds on the SIP and has been developed for the purpose of restoring economic growth while leveraging the ingenuity and resilience of the Nigerian people.

“The Plan seeks to eliminate the bottlenecks that impede innovations and market based solutions, recognises the need to leverage Science, Technology and Innovation (STI) to build a knowledge-based economy, and is consistent with the aspirations of the UN’s Sustainable Development Goals (SDGs).

“The ERGP differs in several ways from previous strategies and plans as it:

  • is anchored on focused implementation which is at the core of the delivery strategy over the next four years;
  • outlines bold initiatives such as ramping up oil production to 2.5mbpd by 2020, privatising selected public enterprises/assets, and revamping local refineries to reduce petroleum product imports by 60 percent by 2018;
  • builds on existing sectoral plans such as the National Industrial Revolution Plan and the Nigeria Integrated Infrastructure Master-plan;
  • signals a changing relationship between the public and private sector based on close partnership.
  • utilises the value of the merger of budget and planning functions into one Ministry to create a better and stronger link between annual budgets and the ERGP; and
  • provides for strong coordination with the States to ensure that the Federal and sub-regional governments work towards the same goals.

Vision Of Inclusive Growth

“The thinking behind the development of the Plan was driven by several fundamental principles, including a focus on tackling constraints to growth; leveraging the power of the private sector and promoting national cohesion and social inclusion, as well as allowing markets to function.

“The Plan has three broad strategic objectives which are expected to help achieve the vision of inclusive growth: restoring growth, investing in the people, and building a globally competitive economy.

“The ERGP focuses on achieving macroeconomic stability and economic diversification by undertaking fiscal stimulus, ensuring monetary stability and improving the external balance of trade.

“The delivery mechanism has been identified as a major determining factor in the successful implementation of the Plan. The implementation strategy therefore focuses on prioritising the identified strategies, establishing a clear system of accountability for well-defined assignment of responsibilities, setting targets and developing detailed action plans, allocating resources to prioritised interventions, creating an enabling policy and regulatory environment, developing an effective monitoring and evaluation system to track progress, and using effective communication strategies”.

French Court Convicts IMF Chief, Christine Lagarde 

French Court Convicts IMF Chief, Christine Lagarde A French court has found International Monetary Fund Chief, Christine Lagarde, guilty of negligence in approving a massive payout of taxpayers’ money to controversial French businessman, Bernard Tapie.

In 2008, as French Finance Minister, she approved an award of 404 million Euros to Mr Tapie for the disputed sale of a firm.

The French court convicted the head of the International Monetary Fund and former government minister, who had faced a 15,000 Euros fine and up to a year in jail.

The court, however, decided Lagarde should not be punished and that the conviction would not constitute a criminal record.

Accused of allowing the misuse of public funds, rather than actual corruption, she could potentially have been sentenced to a year in prison.

The IMF in a statement says it will meet to consider the latest developments in France.

Senate Confident Of Reviving Nigeria’s Economy

Senate President, Budget reformThe Nigerian Senate says it is focused on fixing the nation’s economy that is in recession by opening up new sectors through legislative interventions.

The Senate President, Dr. Bukola Saraki, gave the indication on Wednesday.

He says the legislative interventions will create jobs.

“With the Senate’s priority bills, private sector participation in railways, road construction and other transport infrastructure that will stimulate job creation will become a reality,” a tweet on his Twitter handle read.

Dr. Saraki’s comment is coming at a time that the lower chamber, the House of Representatives, is to investigate if the concession of assets of the Nigeria Railways Corporation to General Electric violates the county’s privatisation laws.

In a motion considered during Tuesday’s plenary, the lawmakers queried what they described as an attempt by the Federal Executive Council to concession the Western (Lagos-Kano) and Eastern (Port Harcourt-Maiduguri) rail lines, to General Electric, without recourse to the Bureau of Public Enterprises, and privatisation regulations.

The move to investigate the concession agreement with GE came after a motion raised by Hounorable Chukwuemeka Ujam.

Any law that can help reflate the oil-rich nation’s economy will be a welcomed development to many Nigerians, as the effect of the recession is hitting hard on the nation’s currency, the Naira.

The Naira is losing value to the dollar, with an exchange rate of over 450 Naira to a dollar in the parallel market.

The economic recession was officially declared in a report of the National Bureau of Statistics that showed that the Gross Domestic Product contracted by 2.06% in the second quarter.

Hope of a rebound in the economy was, however, reignited by the International Monetary Fund  (IMF) in its report affirmed Nigeria as the biggest economy in Africa.

The IMF’s World Economic Outlook for October 2016, puts South Africa’s GDP at 280.36 billion Dollars, from 314.73 billion Dollars in 2015.

Meanwhile, latest estimates from the IMF put Nigeria’s GDP at 415.08 billion Dollars, from 493.83 billion Dollars at the end of 2015.

Nigerian Governors Pledge Support For FG’s Plan To Revive Economy

Nigerian GovernorsNigerian governors have pledged to work with the federal government, especially in the area of agriculture to reverse the effects of the current economic recession.

This is part of the outcome of a meeting of the governors in the council chambers at the Presidential Villa in Abuja, with the Vice President, Professor Yemi Osinbajo presiding.

The Council in its last meeting on September 22 approved President Muhammadu Buhari’s strategies to pull the economy out of recession.

At the meeting, ministers and governors also debriefed the Finance Minister, Mrs Kemi Adeosun and the Minister of Budget and National Planning, Mr Udoma Udo Udoma as well as the CBN Governor, Godwin Emefiele on the strategies to take the country out of the woods.

The governors who blamed the dwindling power supply in the country on gas pipeline vandalism, also commended the federal government on the plan to diversify energy sources through wind, and solar.

Economic Recession 

The oil-rich nation’s economy officially slipped into recession in the second quarter of 2016, with a report of the National Bureau of Statistics showing that the economy contracted by 2.06% in that quarter.

The Naira had become weak, exchanging for over 480 Naira to a dollar in the parallel market.

Despite the recession, a report of the International Monetary Fund (IMF)  has affirmed Nigeria as the biggest economy in Africa.

Nigeria was reported to have lost its spot as Africa’s biggest economy to South Africa in August 2016, following the recalculation of the country’s Gross Domestic Product.

But the IMF’s World Economic Outlook for October 2016, puts South Africa’s GDP at 280.36 billion Dollars, from 314.73 billion Dollars in 2015.

Meanwhile, latest estimates from the IMF put Nigeria’s GDP at 415.08 billion Dollars, from 493.83 billion Dollars at the end of 2015.

Nigeria’s Economic Council Holds Talks

Yemi Osinbajo Nigeria Vice President presides over National Economic CouncilNigeria’s Vice President, Professor Yemi Osinbajo, is currently presiding over a meeting with state governors at the Council Chambers of the Aso Rock Presidential Villa in Abuja.

Other members of the National Economic Council are also present at the meeting.

It is not clear what the agenda of the meeting is, but it is likely to be on the state of the nation and perhaps how the governors can contribute in getting Nigeria out of recession through collaboration with the Federal Government.

The Council in its last meeting on September 22 approved President Muhammadu Buhari’s strategies to pull the economy out of recession.

At the meeting, ministers and governors also debriefed the Finance Minister, Mrs Kemi Adeosun and the Minister of Budget and National Planning, Mr Udoma Udo Udoma as well as the CBN Governor, Godwin Emefiele on the strategies to take the country out of the woods.

Biggest Economy In Africa

The oil-rich nation’s economy officially slipped into recession in the second quarter of 2016, with a report of the National Bureau of Statistics showing that the economy contracted by 2.06% in that quarter.

The Naira had become weak, exchanging for over 480 Naira to a dollar in the parallel market.

Despite the recession, a report of the International Monetary Fund (IMF)  has affirmed Nigeria as the biggest economy in Africa.

Nigeria was reported to have lost its spot as Africa’s biggest economy to South Africa in August 2016, following the recalculation of the country’s Gross Domestic Product.

But the IMF’s World Economic Outlook for October 2016, puts South Africa’s GDP at 280.36 billion Dollars, from 314.73 billion Dollars in 2015.

Meanwhile, latest estimates from the IMF put Nigeria’s GDP at 415.08 billion Dollars, from 493.83 billion Dollars at the end of 2015.

IMF Affirms Nigeria As Africa’s Biggest Economy

Ahead of South Africa and Egypt, the IMF, Nigeria, EconomyInternational Monetary Fund has affirmed Nigeria as the biggest economy in Africa.

Nigeria was reported to have lost its spot as Africa’s biggest economy to South Africa in August 2016, following the recalculation of the country’s Gross Domestic Product.

However, the IMF’s World Economic Outlook for October 2016, puts South Africa’s GDP at 280.36 billion Dollars, from 314.73 billion Dollars in 2015.

Meanwhile, latest estimates from the IMF put Nigeria’s GDP at 415.08 billion Dollars, from 493.83 billion Dollars at the end of 2015.

Although Egypt’s 2016 data was reported as unavailable, its 2015 size remained at 330.15 billion Dollars while that of Algeria, one of the largest economies on the continent, was put at 168.31 billion Dollars.

Global growth is projected to slow to 3.1 percent in 2016 before recovering to 3.4 percent in 2017.

The forecast, revised down by 0.1% point for 2016 and 2017 relative to April, reflects a more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-than-expected growth in the United States.

Growth In 2017

The International Monetary Fund also predicted that the Nigerian economy will grow by 0.6% in 2017, effectively lifting the country out of an officially declared recession.

IMF, Nigeria, Recession, 2017
According to the Bretton Woods institution, Nigeria has a marginal lead over South Africa and Egypt in terms of GDP

In the IMF’s WEC report released on October 5, Nigeria’s real GDP is expected to increase marginally by 0.6% with Consumer Prices rising by 17.1% also, Fitch ratings on the other hand, also projected a 2.6% growth in Nigeria’s GDP for 2017.

Nigeria’s Current Account Balance is however also forecast to slump further by 0.4% next year.

Beyond 2017, IMF expects global growth to gradually increase by 3.8% in 2021.

This recovery in global activity, which is expected to be driven entirely by emerging market and developing economies, is premised on the normalization of growth rates in countries like Nigeria, Russia, South Africa, Latin America, and parts of the Middle East.

Although the global rating agency had reduced its forecast for the country’s 2016 GDP growth to 1% from 1.5% due to weak performance in the first half of the year, Fitch believes the economy will bounce back in 2017 but with downside risks if dollar liquidity remains tight.

Furthermore, Fitch believes that dollar liquidity will not significantly improve until market participants become more comfortable with the sustainability of the exchange-rate level, which is likely to require further narrowing of the spread between the official and parallel market rates.

The rating agency also increased Nigeria’s average CPI forecast for 2016 to 14% from 11% and expects the government to secure financing from multilateral development banks and bilateral sources.

 

Mugabe Softens Stance On Controversial Indigenisation Law

Mugabe, Zimbabwe, Economy, Growth, Protests, White Farmers
Economists say Mugabe’s indigenization law has stifled economic growth

The President of Zimbabwe, Robert Mugabe, says the country will soft pedal on its controversial indigenisation law which makes it mandatory for foreign-owned companies to sell 51% of their holdings to Zimbabweans.

President Mugabe made the revelation on Thursday while speaking on speaking at the opening of the country’s parliament.

He signed the Indigenisation and Economic Empowerment Bill into law in 2008 despite stiff resistance from the opposition party, Movement for Democratic Change.

The law gives Zimbabweans rights to acquire and control many foreign owned companies in the country.

However, the law does not say if the transfer of ownership would apply to mergers and restructurings in the future, or if it applies to all current companies.

Worsening economy

Zimbabwe has seen a number of anti- government protests in the last few months, largely due to the dire economic circumstances in the country.

The International Monetary Fund blamed the controversial law as one of the major causes of Zimbabwe’s economic woes.

Years ago, President Mugabe in another indigenisation policy redistributed the commercial farms owned by non-black-African farmers to Zimbabweans.

This resulted in the massive exodus of white farmers from the country, leading to a slump in foreign investments and a huge decline in output in the agricultural sector.