<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107120869-1663619761616-gettyimages-1243369951-CLINTON_GLOBAL_INITIATIVE-820x462.jpeg" alt="" class="wp-image-424945" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107120869-1663619761616-gettyimages-1243369951-CLINTON_GLOBAL_INITIATIVE-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107120869-1663619761616-gettyimages-1243369951-CLINTON_GLOBAL_INITIATIVE-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107120869-1663619761616-gettyimages-1243369951-CLINTON_GLOBAL_INITIATIVE-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107120869-1663619761616-gettyimages-1243369951-CLINTON_GLOBAL_INITIATIVE-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107120869-1663619761616-gettyimages-1243369951-CLINTON_GLOBAL_INITIATIVE.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Ngozi Okonjo-Iweala, director general of the World Trade Organization (WTO), speaks during the Clinton Global Initiative (CGI) annual meeting in New York, on Monday, Sept. 19, 2022. Michael Nagle | Bloomberg | Getty Images</figcaption></figure>



World Trade Organization Director-General Ngozi Okonjo-Iweala urged diversification in global supply chains, amid ongoing efforts to progress the body’s reform.



“There is an overconcentration of manufacturing in certain sectors in certain countries,” she told CNBC’s Martin Soong on the sidelines of the latest weekend summit of G-7 (Group of Seven) major economic powers in Hiroshima, Japan. “I agree that we need to build resilience, that the world cannot be reliant on a few countries for a few key products.”



She gave the examples of pharmaceuticals and the dearth of Covid-19 vaccine available to certain importing regions, as producers introduced export restrictions during the pandemic. She also referenced the worldwide shortage of critical semi-conductor chips, which has created bottlenecked manufacturing in the technological and automotive industries.



The WTO’s chief pitched the dual benefits of pursuing diversification in developing countries to simultaneously boost their economic growth and meet global supply requirements.



“Let’s reglobalize by situating diversifying industries into these countries. We kill two birds with one stone. One is we build global resilience beyond just our neighbors and our friends, because you never know who is your friend. Your friend today can be not your friend tomorrow,” she argued.



“Let’s look for those areas where we have the right environment, diversify and use that to bring them in from the margin into the global system. That will re-spur growth in those countries and in the world.”



The emphasis on “reglobalization” comes as geopolitical tensions and recent U.S. legislation have stoked worries over the potential fragmentation of global trade.



The U.S. Inflation Reduction Act — a sweeping green package of tax, health and climate legislation signed by President Joe Biden in August last year — introduced subsidies to galvanize the domestic production of electric vehicles, at the same time unlocking “serious concerns” within the European Union over the outlook for their own exported goods.



The fate of Western trade with key manufacturing hub China has also come under question, although G-7 leaders explicitly restated they are not pursuing a policy of economic decoupling from Beijing in their latest communique of Saturday.



“Our policy approaches are not designed to harm China nor do we seek to thwart China’s economic progress and development. A growing China that plays by international rules would be of global interest. We are not decoupling or turning inwards. At the same time, we recognize that economic resilience requires de-risking and diversifying,” they said, nevertheless noting the need to take collective and individual steps to invest in their own “economic vibrancy” and dwindle “excessive dependencies in our critical supply chains.”



The WTO faces struggles closer to home, amid bids to reform one tier of its global trade dispute settlement system, the Appellate Body, which the U.S. Trade Representative’s office in February 2020 accused of “persistent overreaching” and extending its own power “at the expense of the authority of the United States and the other WTO members.”



The Appellate Body has been effectively paralyzed following the U.S. blockage of adjudicator appointments in recent years.



“Our goal is a fully functioning (dispute system) by 2024,” Deputy United States Trade Representative Maria Pagan told Reuters in January. The WTO’s Okonjo-Iweala said Washington and other countries have been engaging in dialogue to overhaul the Appellate Body, stressing her desire to “move beyond the discussion to specific proposals.”



Asked about reports over an U.S. reform suggestion that both the plaintiff and the defendant must agree before moving a dispute to the attention of the Appellate Body, the director-general said that such a pitch had yet to materialize as a formal proposal.



“I think those are some ideas maybe that people might have heard, the U.S. talk about, and so on. But we don’t have proposals yet on paper.”



The WTO is set to hold its next Ministerial Conference — the so-styled MC13 — in February 2024.



“We may not have completed the reform by then,” she noted, nevertheless adding, “I hope and expect that we will have done a great deal of work that will show that the organization is moving purposefully towards reforming that system.”

107120869-1663619761616-gettyimages-1243369951-CLINTON_GLOBAL_INITIATIVE

WTO chief pushes for reglobalized supply chains to cut down bottleneck risks

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/17086765822_14c89cd230_b-820x615.jpg" alt="" class="wp-image-403062" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/17086765822_14c89cd230_b-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/17086765822_14c89cd230_b-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/17086765822_14c89cd230_b-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/17086765822_14c89cd230_b.jpg 1024w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



May 19 (Reuters)&nbsp;&#8211;&nbsp;Most emerging market currencies on Friday were set for losses at the end of a rollercoaster week that saw the dollar being lifted by optimism over a U.S. debt ceiling deal, while Turkey&#8217;s lira hovered close to an all-time low seen in the previous session.



MSCI&#8217;s index of EM currencies&nbsp;.MIEM00000CUS&nbsp;was up 0.2% at 0828 GMT, set to snap a three-day losing streak. Still, the index was poised to end the week 0.4% lower &#8211; its second straight weekly decline.



The dollar&nbsp;=USD&nbsp;paused for breath on Friday after a rally this week but was not far from its recent two-month high.



The&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N37F3JO&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Turkish lira</a>TRYTOM=D3&nbsp;slipped to a record low of 19.8050 to the dollar late on Thursday, having steadily weakened following Sunday&#8217;s presidential vote where incumbent Tayyip Erdogan&#8217;s strong showing dashed investor hopes for an opposition win and shift to orthodox monetary policy.



The currency, which declined 1% so far this week, still hovered close to the record low.



&#8220;The authorities will intensify efforts to stablise the lira through intervention and measures to encourage banks to hold lira, but without a change in policy direction by Erdogan the situation looks unsustainable, meaning the currency will weaken further,&#8221; said Jon Harrison, managing director of emerging market macro strategy at TS Lombard.



Turkey&#8217;s central bank&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N37G0YX&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">reversed</a>&nbsp;a decision to require banks to hold securities against cash withdrawals on credit cards and jewellery expenses, according to a central bank document seen by Reuters on Friday.



South Africa&#8217;s rand&nbsp;ZAR=&nbsp;shed early gains to trade tepid against the greenback ahead of commentary by U.S. Federal Reserve Chair Jerome Powell later in the day. S&amp;P Global is also expected to review South Africa&#8217;s sovereign rating on Friday.



The rand has been pummelled in recent days by concerns about a mounting power crisis crimping growth and is down marginally on the week.



The Russian rouble&nbsp;RUBUTSTN=MCX&nbsp;edged higher and was last seen at 79.98, pushing back past the level of 80 to the dollar, while among central and eastern European currencies, the Hungarian forint&nbsp;EURHUF=&nbsp;fell 0.8% against the euro.



China&#8217;s yuan, which has been pressured by data highlighting the country&#8217;s slow post pandemic recovery, was set for declines of 1% this week.



EM stocks&nbsp;.MSCIEF&nbsp;were range-bound, but on track to eke out gains this week, boosted by growing hopes that a deal over the U.S. debt ceiling could be reached soon, helping the world&#8217;s largest economy avoid a default.



Chinese President Xi Jinping on Friday&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N37G04Y&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">unveiled</a>&nbsp;a grand plan for Central Asia&#8217;s development, saying the country is ready to coordinate development strategies with Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.



Elsewhere, the U.S. has&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N37F2JN&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">assured</a>&nbsp;the United Nations that it will shield a proposed UN-administered Venezuela humanitarian fund from creditors, people familiar with the matter said on Thursday, removing a key obstacle to getting the money flowing.



For GRAPHIC on emerging market FX performance in 2023, see&nbsp;<a href="http://tmsnrt.rs/2egbfVh" target="_blank" rel="noreferrer noopener">http://tmsnrt.rs/2egbfVh</a>



For GRAPHIC on MSCI emerging index performance in 2023, see&nbsp;<a href="https://tmsnrt.rs/2OusNdX" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/2OusNdX</a>



For TOP NEWS across emerging markets <a href="https://www.reutersconnect.com/all?search=all%3ARR:5877&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



(Reporting by Amruta Khandekar; Editing by Sherry Jacob-Phillips)

Turkey Lira, photo via Flickr

Currencies set for weekly drop, Turkey’s lira hovers near all-time low

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="357" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg" alt="" class="wp-image-400669" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1-300x175.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">World map with charts and graphs as symbols of global finance</figcaption></figure>



May 17 (Reuters)&nbsp;&#8211;&nbsp;Emerging market currencies hit a three-month low on Wednesday as concerns over China&#8217;s slow economic recovery dented sentiment, while the post-election selloff in Turkish markets extended into a third straight day.



Turkey&#8217;s dollar-denominated sovereign bonds tumbled to six-month lows on Wednesday, while bank stocks&nbsp;.XBANK, which had opened higher, reversed course to fall 0.6%.



Turkey&#8217;s main opposition party said it had&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N37E1XG&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">filed complaints</a>&nbsp;over suspected irregularities at thousands of ballot boxes in Sunday&#8217;s landmark election, in which President Tayyip Erdogan performed better than expected.



The lira&nbsp;TRYTOM=D3&nbsp;was last at 19.75, edging closer to its all-time low of 19.80 against the dollar, with Turkey now headed for a second round of votes on May 28, where analysts expect Erdogan to emerge victorious.



Erdogan is likely to stick to policies he has implemented over the past 10 years, and he might allow interest rates to rise somewhat, but not to the degree that is needed, according to Gustavo Medeiros, head of research at Ashmore.



MSCI&#8217;s emerging market currencies index&nbsp;.MIEM00000CUS&nbsp;was down 0.3% by 1054 GMT.



The Chinese yuan&nbsp;CNY=CFXS<a href="https://www.reutersconnect.com/all?search=all%3AL1N37E0LV&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">weakened</a>&nbsp;past 7 per dollar on Wednesday for the first time in five months amid geopolitical tensions and more signs China&#8217;s post-COVID recovery is losing steam.



New home prices&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N37E035&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">rose</a>&nbsp;for the fourth straight month in April but at a slower pace, adding to a pile of recent data suggesting weakening consumer demand in the world&#8217;s second-biggest economy.



Meanwhile, investors gravitated towards the safe-haven dollar&nbsp;=USD, as they assessed risks of a U.S. debt default amid&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N37D0XM&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">talks</a>&nbsp;to lift the debt ceiling.



Additionally, recent U.S. data underscoring robust consumer spending has dampened hopes of interest rate cuts, boosting the dollar.



However, any benefits to the dollar from the debt ceiling uncertainty are likely to be limited, said Mark Haefele, chief investment officer, UBS Global Wealth Management.



&#8220;Currency markets are forward-looking and likely to assume Congress will agree to a last-minute deal.&#8221;



The South African rand&nbsp;ZAR=&nbsp;slipped 0.9% ahead of March retail sales data that could shed more light on the health of the economy amid a mounting power crisis which has crimped growth.



Broader emerging market stocks&nbsp;.MSCIEF&nbsp;fell 0.4%, snapping a two-session rally.



Elsewhere, Ecuador&#8217;s National Assembly on Tuesday&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N37D2C5&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">began</a>&nbsp;an impeachment hearing against President Guillermo Lasso, who could be removed from his post.



<a href="https://www.reutersconnect.com/all?search=all%3AL4N37D4M0&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Moody&#8217;s</a>&nbsp;on Tuesday said it considered Ecuador&#8217;s debt buyback operation for providing debt relief and channelling funds to protect the Galapagos Islands a distressed exchange and a default.



For GRAPHIC on emerging market FX performance in 2023, see&nbsp;<a href="http://tmsnrt.rs/2egbfVh" target="_blank" rel="noreferrer noopener">http://tmsnrt.rs/2egbfVh</a>



For GRAPHIC on MSCI emerging index performance in 2023, see&nbsp;<a href="https://tmsnrt.rs/2OusNdX" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/2OusNdX</a>



For TOP NEWS across emerging markets <a href="https://www.reutersconnect.com/all?search=all%3ARR:5877&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



(Reporting by Amruta Khandekar; additional reporting by Karin Strohecker; Editing by Rashmi Aich and Emelia Sithole-Matarise)

World map with charts and graphs as symbols of global finance

Currencies hit 3-week low, Turkey post-election selloff resumes

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-820x234.jpg" alt="" class="wp-image-424829" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/blog-2099x600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



Weaker currencies make the fight to curb inflation harder given the region’s dependence on imports



Most sub-Saharan African currencies have weakened against the US dollar, fanning inflationary pressures across the continent as import prices surge. This, together with a&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023">growth slowdown</a>, leaves policymakers with difficult choices as they balance keeping inflation in check with a still-fragile recovery.



As the&nbsp;<a href="https://www.imf.org/en/Blogs/chart-of-the-week">Chart of the Week</a>&nbsp;shows, the average depreciation for the region since January 2022 is about 8 percent. The extent varies by country, however. Ghana’s cedi and Sierra Leone’s leone depreciated by more than 45 percent.



The&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023#Managing-Exchange-Rate-Pressures-in-Sub-Saharan-Africa%E2%80%94Adapting-to-New-Realities">depreciations</a>&nbsp;across the region were mostly driven by external factors. Lower risk appetite in global markets and interest rate hikes in the United States pushed investors away from the region towards safer and higher paying US treasury bonds.



Foreign exchange earnings took a hit in many countries as demand for the region’s exports dropped because of the economic slowdown in major economies. At the same time, high oil and food prices, partly due to Russia’s war in Ukraine, pushed up import costs in 2022.



Large budget deficits have compounded the effects of these external shocks by increasing the demand for foreign exchange. About half of the countries in the region had deficits exceeding 5 percent of gross domestic product in 2022, putting pressure on their exchange rates.



<h2 class="wp-block-heading" id="h-implications">Implications</h2>



When currencies weaken against the US dollar, local prices rise, as much of what people buy, including essential items like food, are imported. More than two-thirds of imports are priced in US dollars for most countries in the region.



A 1&nbsp;percentage point increase in the rate of depreciation against the US dollar leads, on average, to an increase in inflation of 0.22&nbsp;percentage points within the first year in the region. There is also evidence that inflationary pressures do not come down quickly when local currencies strengthen against the US dollar.



Weaker currencies also push up public debt. About 40 percent of public debt is external in sub-Saharan Africa and over 60 percent of that debt is in US dollars for most countries. Since the beginning of the pandemic, exchange rate depreciations have contributed to the region&#8217;s rise in public debt by about 10 percentage points of GDP on average by end-2022, holding all else equal. Growth and inflation (which reduces the real value of existing debts) helped to contain the public debt increase to about&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023#Managing-Exchange-Rate-Pressures-in-Sub-Saharan-Africa%E2%80%94Adapting-to-New-Realities">6 percent of GDP</a>&nbsp;during the same period.



Many central banks in the region have tried to prop up their currencies by supplying foreign exchange to importers from their reserves. But with reserve buffers running low in many countries, there is little room to continue intervening in foreign exchange markets.



Countries have also applied administrative measures such as foreign exchange rationing or banning foreign currency transactions. These measures can be highly distortive and create opportunities for corruption.&nbsp;



Given that the external shocks are expected to persist, countries where exchange rates are not pegged (fixed) to a currency have little choice but to let the exchange rate adjust and tighten monetary policy to fight inflation. Countries with pegged exchange rates will need to adjust monetary policy in line with the country of the peg. In both country groups, fiscal consolidation can help to rein in external imbalances and limit the increase in debt related to currency depreciation. Structural reforms can help to boost growth.



This blog is based on an analytical note from the&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023">IMF’s Regional Economic Outlook</a>&nbsp;for sub-Saharan Africa.

blog-2099×600-afr-currencies-esther-ruth-mbabazi-imf-photos-51674780576-a6850dcc5f-o

African Currencies Are Under Pressure Amid Higher-for-Longer US Interest Rates

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/Investment-management-820x547.jpg" alt="" class="wp-image-424734" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/Investment-management-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/Investment-management-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/Investment-management-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/Investment-management-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/Investment-management.jpg 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



May 11 (Reuters)&nbsp;&#8211;&nbsp;Emerging market stocks fell for a third session on Thursday as gloomy data from China stoked concerns about deflation and the country&#8217;s pace of recovery, while currencies were also subdued against a firm dollar.



The MSCI&#8217;s index for emerging market stocks&nbsp;.MSCIEF&nbsp;was down 0.2% at 0827 GMT, while currencies in the region&nbsp;.MIEM00000CUS&nbsp;also logged similar declines.



Stocks in China&nbsp;.CSI300&nbsp;slipped 0.2%, while the yuan&nbsp;CNY=&nbsp;hit its lowest level in two months against the dollar as data showed&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N37803W&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">China&#8217;s consumer prices</a>&nbsp;rose at the slowest pace in more than two years in April, while factory gate deflation deepened.



The dollar&nbsp;=USD&nbsp;which had taken a hit after a U.S. inflation report on Wednesday raised bets of a rate hike pause by the Federal Reserve, found its footing following the release of the Chinese data, which provided further evidence of the country&#8217;s weak post-pandemic recovery.



The&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N37820D&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">South African rand</a>ZAR=&nbsp;was under renewed selling pressure on Thursday, hitting a fresh three-year low against the dollar as sentiment towards the currency was dented by the worst power cuts on record.



&#8220;South Africa is moving into the colder winter months and preparations are being made for an escalation of the load-shedding schedule. This is having a dire effect on what is already a fragile economy,&#8221; said Shaun Murison, senior market analyst at IG.



<a href="https://www.reutersconnect.com/all?search=all%3AL1N378096&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Pakistan&#8217;s rupee</a>&nbsp;slumped to new record low of 296 against the greenback, amid deadly street protests sparked by the arrest of former Prime Minister Imran Khan and of some senior leaders of his party.



The Russian rouble&nbsp;RUBUTSTN=MCX&nbsp;was last at 75.45, jumping to a&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N3780JR&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">seven-week high</a>&nbsp;against the U.S. dollar in early trading on Thursday.



The Hungarian forint&nbsp;EURHUF=&nbsp;and the Polish zloty&nbsp;EURPLN=&nbsp;slid from over one-year highs hit in the previous session, down 0.4% and 0.3% respectively.



<a href="https://www.reutersconnect.com/all?search=all%3AL8N37827F&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Czech inflation</a>&nbsp;slowed further in April to its lowest since March 2022, data showed on Thursday, possibly taking pressure off the country&#8217;s central bank to hike rates.



An&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N3771Z2&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">International Monetary Fund</a>&nbsp;(IMF) staff team is expected to arrive in Sri Lanka on Thursday as the crisis-hit country prepares for the first review of a loan programme in September.



For GRAPHIC on emerging market FX performance in 2023, see&nbsp;<a href="http://tmsnrt.rs/2egbfVh" target="_blank" rel="noreferrer noopener">http://tmsnrt.rs/2egbfVh</a>



For GRAPHIC on MSCI emerging index performance in 2023, see&nbsp;<a href="https://tmsnrt.rs/2OusNdX" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/2OusNdX</a>



For TOP NEWS across emerging markets&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3ARR:5877&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



For CENTRAL EUROPE market report, see&nbsp;CEE/



For TURKISH market report, see&nbsp;.IS



For RUSSIAN market report, see&nbsp;RU/RUB



(Reporting by Amruta Khandekar;Editing by Bernadette Baum)

Investment-management

Stocks fall for third day on China deflation fears, FX subdued

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="533" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/5BJKLQNY65JNLJAAC37N24TIIM-820x533.jpg" alt="" class="wp-image-418142" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/5BJKLQNY65JNLJAAC37N24TIIM-820x533.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/5BJKLQNY65JNLJAAC37N24TIIM-300x195.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/5BJKLQNY65JNLJAAC37N24TIIM-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/5BJKLQNY65JNLJAAC37N24TIIM-768x499.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/5BJKLQNY65JNLJAAC37N24TIIM-1536x999.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/5BJKLQNY65JNLJAAC37N24TIIM-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Bank notes of different currencies, including Euro, U.S. Dollar, Turkish Lira or Brazilian Reais, are photographed in Frankfurt, Germany, in this illustration picture taken May 7, 2017. REUTERS/Kai Pfaffenbach/Illustration</figcaption></figure>



May 10 (Reuters)&nbsp;&#8211;&nbsp;Emerging market currencies were subdued on Wednesday, with investors cautious ahead of U.S. consumer price data that could pare bets that Federal Reserve rates are near a peak while the Hungarian forint rose after inflation slowed for a third month.



The MSCI&#8217;s index for emerging market currencies&nbsp;.MIEM00000CUS&nbsp;was flat at 0825 GMT.



April U.S. consumer price data is due at 1230 GMT and economists expect the headline CPI to hold steady at an annual 5% and core CPI to moderate very slightly to 5.5%, though anything stickier could confound bets of interest rates cuts in the world&#8217;s largest economy.



&#8220;A softer-than-expected CPI report should further fuel the Fed rate cut expectations into this fall and relieve a part of the positive pressure on U.S. yields, whereas a stronger-than-expected read will hardly boost any hawkish bets at this stage,&#8221; said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.



Meanwhile, Hungary&#8217;s forint&nbsp;EURHUF=&nbsp;inched 0.2% up against the euro, leading gains among regional peers.



<a href="https://www.reutersconnect.com/all?search=all%3AL8N37728G&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Inflation in Hungary</a>&nbsp;slowed for a third straight month in April, with the headline rate falling a touch more than expected to 24.0%, potentially giving the central bank scope to pursue interest rate cuts.



The Polish zloty&nbsp;EURPLN=&nbsp;edged 0.1% higher against the euro, as investors awaited its interest rate decision later in the day.



Pakistan&#8217;s rupee&nbsp;PKR=&nbsp;fell to 288.5 per dollar to hit a record low amid&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N37707K&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">political turmoil</a>&nbsp;a day after former prime minister Imran Khan was arrested by the anti-corruption agency in Islamabad.



<a href="https://www.reutersconnect.com/all?search=all%3AL1N3770KT&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Russia&#8217;s rouble</a>RUBUTSTN=MCX&nbsp;strengthened to 77.2050 against the dollar, pulling further away from one-year lows hit at the end of April.



In&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N3770FY&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Egypt, consumer inflation</a>&nbsp;in April slowed to 30.6% from 32.7% in March, lower than analysts had expected.



South Africa&#8217;s rand shed 0.5% against the greenback, extending sharp losses from the previous session. South Africa&#8217;s&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N3772PX&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">international bonds</a>&nbsp;also came under fresh pressure as fears grew of scheduled blackouts known as loadshedding worsening over winter.



The Turkish lira&nbsp;TRYTOM=D3&nbsp;was unchanged after data showed&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AAPN0W4HTK&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">industrial production</a>&nbsp;climbed 5.5% month-on-month in March and the&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AAPN0W4HQS&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">unemployment rate</a>&nbsp;stood at 10%, unchanged from a month earlier.



Emerging market stocks&nbsp;.MSCIEF&nbsp;fell 0.4%, with China and Hong Kong stocks extending losses after disappointing Chinese April trade data re-ignited fears of slowdown in the world&#8217;s second-largest economy.



People in China splashed out on dining, travel and luxury goods after emerging from three years of pandemic restrictions but are still not spending freely on routine consumer items, if&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N3750CO&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">first quarter corporate results</a>&nbsp;are an indication.



(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Jacqueline Wong)

Bank notes of different currencies are photographed in Frankfurt, Germany, in this illustration picture

Currencies muted, shares slip with focus on US inflation

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg" alt="" class="wp-image-413529" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



HARARE, May 8 (Reuters) &#8211; Australia-listed Invictus Energy&nbsp;<a href="https://www.reuters.com/companies/IVZ.AX" target="_blank" rel="noreferrer noopener">(IVZ.AX)</a>&nbsp;on Monday confirmed the presence of light oil, gas condensate and helium at its Cabora Bassa project in Zimbabwe, sending its shares up 8.7%.



The company said that mud gas analysis from the Mukuyu-1 well drilled last year had proved the presence of hydrocarbons in multiple reservoir pay zones.



“Analysis shows the presence of light oil and rich natural gas condensate, with condensate gas ratios estimated at between 30 and 135 barrels per million cubic feet,&#8221; it said.



The analysis also confirmed the presence of helium gas in commercial concentrations comparable with global helium producing fields, the company added.



Helium is a key component in the manufacture of semiconductors, liquid crystal display (LCD) panels and fibre optic wire.



Invictus said it plans to drill a second well, Mukuyu-2, during the third quarter of this year.



“Success at Mukuyu-2 and confirmation of a significant discovery will further unlock the value of our material portfolio,&#8221; said Invictus Energy Managing Director Scott MacMillan.



Reporting by Nyasha Chingono Editing by Nelson Banya and David Goodman

Invictus Energy confirms oil, gas and helium find in Zimbabwe

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="216" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/ssa-country-focus-820x216.jpg" alt="" class="wp-image-424541" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/ssa-country-focus-820x216.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/ssa-country-focus-300x79.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/ssa-country-focus-160x42.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/ssa-country-focus-768x202.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/ssa-country-focus-1536x405.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/ssa-country-focus-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



Countries will need to build resilience to manage the inevitable shifts in trade and foreign direct investment



<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023">Sub-Saharan Africa</a>&nbsp;could stand to lose the most if the world were split into two isolated trading blocs centered around China or the United States and the European Union. In this severe scenario, sub-Saharan African economies could experience a permanent decline of up to 4 percent of real gross domestic product after 10 years&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023#Geoeconomic-Fragmentation:-Sub-Saharan-Africa-Caught-between-the-Fault-Lines">according to our estimates</a>—losses larger than what many countries experienced during the Global Financial Crisis.



Economic and trade alliances with new economic partners, predominantly China, have benefited the region but have also made countries reliant on imports of&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2023/03/28/volatile-commodity-prices-reduce-growth-and-amplify-swings-in-inflation">food and energy</a>&nbsp;more susceptible to global shocks, including disruptions from the surge in trade restrictions following Russia’s invasion of Ukraine. If geopolitical tensions were to escalate, countries could be hit by higher import prices or even lose access to key export markets—about half of the region’s value of international trade could be impacted.&nbsp;



The losses could be compounded if capital flows between trade blocs were cut off due to geopolitical tensions. The region could lose an estimated $10 billion of foreign direct investment (FDI) and official development assistance inflows, which is about half a percent of GDP a year (based on an average 2017–19 estimate). The reduction in FDI in the long run could also hinder much-needed technology transfer.



For countries looking to restructure their debt, deepening geoeconomic fragmen­tation could also worsen coordination problems among creditors.



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The region would fare better if only the US/EU cut ties with Russia and sub-Saharan African countries continue to trade freely. In this scenario—termed “<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2023/04/14/regional-economic-outlook-for-sub-saharan-africa-april-2023#Geoeconomic-Fragmentation:-Sub-Saharan-Africa-Caught-between-the-Fault-Lines">strategic decoupling</a>”—trade flows would be diverted towards the rest of the world, creating opportunities for new partnerships, and possibly boosting intra-regional trade. Because some African countries benefit from access to new export markets and cheaper imports, the region as a whole would not incur a GDP loss. Oil exporters supplying energy to Europe could even gain.



<figure class="wp-block-image"><img decoding="async" src="https://www.imf.org/-/media/Images/IMF/News/Country-Focus/2023/Charts/afr-reo-cf-chart1.ashx?w=1300px" alt=""/></figure>



Building resilience



To better manage shocks, countries need to build resilience. This can be done by strengthening the ongoing regional trade integration under the&nbsp;<a href="https://au-afcfta.org/">African Continental Free Trade Area</a>, which will require reducing tariff and non-tariff trade barriers, strengthening efficiency in customs, leveraging digitalization, and closing the infrastructure gaps. Deepening domestic financial markets can also broaden sources of financing and lower the volatility associated with relying too much on foreign inflows.



To take advantage of the potential shifts in trade and FDI flows, countries in the region can try to identify and nurture sectors that may benefit from trade diversion, for example, in energy. Commodity exporters in the region could potentially displace much of Russia’s energy market share in Europe.



Countries can also rely on trade promotion agencies to help identify potential opportunities, build the necessary skills and capacity for exports, and eventually re-orient production to take advantage of new trade flows. Improving the business environment, such as by lowering entry, regulatory, and tax barriers could also help.&nbsp;



What the exact outcomes will be from fragmentation and polarization, and whether these trends will continue are uncertain. What is clear, however, is multilateral institutions will need to continue to facilitate dialogue among nations to promote economic integration and cooperation.

A woman uses a trolley as she shops at a Pick n Pay store

Economic Growth in Sub-Saharan Africa Could Permanently Decline if Geopolitical Tensions Escalate

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107226778-1681808303292-gettyimages-1262999663-1006_18_fl191110063-820x462.jpeg" alt="" class="wp-image-424334" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107226778-1681808303292-gettyimages-1262999663-1006_18_fl191110063-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107226778-1681808303292-gettyimages-1262999663-1006_18_fl191110063-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107226778-1681808303292-gettyimages-1262999663-1006_18_fl191110063-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107226778-1681808303292-gettyimages-1262999663-1006_18_fl191110063-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107226778-1681808303292-gettyimages-1262999663-1006_18_fl191110063.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chocolate bars on display. Orlando, Winter Park, Rocket Fizz Soda Pop &amp; Candy Shop, chocolate bar display, Milky Way and Snickers. (Photo by: Jeff Greenberg/Education Images/Universal Images Group via Getty Images)</figcaption></figure>



Prices for sugar spiked as rising demand was compounded by a deteriorating weather outlook — and analysts say there’s still room for prices to shoot higher.



Raw sugar futures in recent days rose to 24 cents a pound and reaching an 11-year high.



“Sugar fundamentals are quite bullish for the prices to remain elevated in the short to medium term,” said Girish Chhimwal, a sugar analyst at S&amp;P, citing weather risks plaguing top sugar producers.



Rising costs could be passed on to consumers in the form of pricier candy.



“The rising price of confectionary and sugar-based beverages will incorporate rising sugar values,” said John Stansfield, a senior sugar analyst at commodity data platform DNEXT.



Prices of processed foodstuff are rising globally, Stansfield added.



“In a bar of chocolate you have milk, cocoa powder etc. and these costs are also rising. Energy and labor costs to make such goods are also rising,” he said.



<h2 class="wp-block-heading" id="h-production-concerns">Production concerns</h2>



“In recent weeks, the Asian cane crushing season has started to wind down and we have seen large downward crop revisions in the key producing countries most notably India, Thailand, China and Pakistan,” said Stansfield.



India is the world’s second largest sugar producer after Brazil.



In early April, the All India Sugar Trade Association trimmed its sugar production estimates by nearly 3% for the crop year spanning October 2022 to September 2023. The association cited unseasonal rainfall in Maharashtra, which accounts for more than one third of the country’s sugar output.



Stansfield added that the lower production was compounded by a poor European beet crop resulting from reduced acreage and a severe summer drought, as well as demand continuing to recover from the Covid period.



About 80% of global sugar production comes from sugarcane, according to the International Sugar Organization, while 20% derived from beets.



<h2 class="wp-block-heading"><a></a>Extreme weather could ‘take prices much higher’</h2>



“Prices should trend towards staying elevated in the 21 to 24 cents per pound range,” S&amp;P’s Chhimwal forecasts.



While China could potentially draw upon state reserves to relieve the pressure in global markets, Chhimwal cautions there are many factors that could drive prices higher.



“However, the El Nino risk on Asian production outlook could far offset in the medium term and take prices much higher,” Chhimwal cautioned.



According to the National Oceanic and Atmospheric Administration, there is a 62% chance of El Niño conditions from May to June.



Depending on the Asian monsoon rainfall, the sugar market could potentially become “very volatile” and weather driven in the medium term, he added.



Rain in number one producer Brazil is also slowing the start of harvest in April.



The sugarcane harvest in Brazil’s south-central region — which accounts for 90% of the country’s production — runs from April to December and its yield would be a key gauge to monitor, said Fitch Solutions’ commodities analyst Matthew Biggin.



But ”[sugar] prices are so high right now that even if prices cool substantially when the Brazilian harvest hits the market, prices could still be considered elevated above historical levels,”&nbsp;he said.



Another factor pushing prices higher is OPEC’s recent surprise decision to slash oil output by around 1.16 million barrels per day. That has encouraged the diversion of sugarcane toward ethanol production and away from sugar supplies, Fitch Solutions wrote in a report dated April 13.



“The OPEC decision and the upturn in oil prices will likely keep prices elevated,” Biggin also pointed out.



The push towards increased biofuel mandates will also place a floor under prices over the longer term, Biggin said.



<h2 class="wp-block-heading"><a></a>Bitter pill for some</h2>



As with higher food prices, countries grappling with high levels of food insecurity will be hardest hit by sugar price spikes, said S&amp;P’s Chhimwal.



This will hit “particularly hard” in North African and Sub-Saharan African countries, where sugar consumption and import demand are high, he said.



“The average consumer is already seeing the impact of higher prices,” said DNEXT’s Stansfield.

107226778-1681808303292-gettyimages-1262999663-1006_18_fl191110063

Sugar prices spike to 11-year high and could rise further due to extreme weather

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107158938-1669814994706-GettyImages-1439241887-820x547.jpg" alt="" class="wp-image-424308" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107158938-1669814994706-GettyImages-1439241887-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107158938-1669814994706-GettyImages-1439241887-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107158938-1669814994706-GettyImages-1439241887-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107158938-1669814994706-GettyImages-1439241887-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107158938-1669814994706-GettyImages-1439241887-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107158938-1669814994706-GettyImages-1439241887-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">ACCRA, Ghana &#8211; Nov. 5, 2022: Ghanaians march during the ‘Ku Me Preko’ demonstration to protest against the soaring cost of living, aggravated since the Russian invasion of Ukraine. Some expressed opposition to the government’s pursuit of IMF assistance. Ernest Ankomah/Getty Images</figcaption></figure>



Leaders of several global financial bodies warned that rising interest rates are increasing pressure on low-income developing countries, around 60% of which are now in or at high risk of debt distress.



Public debt burdens in developing countries have been exacerbated in recent years by back-to-back global crises, with Russia’s invasion of Ukraine coming on the heels of the Covid-19 pandemic, while many heavily-indebted nations are also dealing with idiosyncratic pressures from climate events or conflict.



Major central banks around the world have tightened monetary policy aggressively over the past year in order to rein in soaring inflation. A lot of the debt accrued by low-income countries is coming due over the next couple of years, however, and rising interest rates mean these countries will find it increasingly difficult to meet their repayments.



The International Monetary Fund and the World Bank have established a host of relief measures in recent years, including the IMF-World Bank Debt Sustainability Framework, designed to guide the borrowing of low-income countries in a way that ensures stability in public finances.



Meanwhile the G-20 Common Framework, an initiative endorsed by the Paris Club — the group of officials from major lending countries tasked with finding solutions for debtor countries — was established in late 2020 to offer additional support in the form of grants to countries with unsustainable debt.



Ghana in January became the fourth country to seek debt treatment under the Common Framework, alongside Chad, Ethiopia and Zambia.



Yet the implementation, in practical terms, has not been smooth. Zambia, which became the first African country to default in 2020 after the onset of the pandemic, complained earlier this month that it was being “punished” in the debt restructuring process because its two main creditors, international bondholders and China, had failed to reach an agreement.



The IMF said earlier this month that the next instalment of Zambia’s $1.3 billion rescue loan was contingent on a debt restructuring agreement being reached.



Despite the provisions already in place, World Bank Senior Managing Director Axel van Trotsenburg told CNBC last week that with interest rates still rising and global growth slowing, more collaborative efforts from international bodies and developed economies would be needed.



“I think we should be worried. World economic growth is relatively weak and that has its implications, the increased interest rate means that a lot of capital has flowed out of developing countries — this is badly needed for investment, so many of the developing countries are under stress,” he told CNBC’s Joumanna Bercetche at the IMF Spring Meetings in Washington, D.C.



High interest rates in developed nations like the U.S. lead many investors to flock back to dollar-denominated assets, curbing their foreign investments.



“Particularly the poorest countries are bearing the brunt of it because they have in the first place a hard time to attract capital, and they have also to deal with other crises from conflict to climate, so this is a tough time,” van Trotsenburg said.



As such, van Trotsenburg called for “renewed solidarity with developing countries” from international bodies and major economies not just in the form of words, but with increased resources.



This was echoed by Makhtar Diop, managing director of the International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution devoted to the private sector in developing nations.



Addressing concerns about the impact of interest rate increases on financial stability and debt sustainability in the developing world, Diop said debt distress was “one of the main risks” that the global economy faces in the short term, especially as much of the at-risk debt is coming to maturity imminently.



“That’s actually something that we raised a decade ago when we saw a rapid rise in the indebtedness levels of low-income countries. We warned them by saying to them that the conditions at which this debt might be paid and refinanced in the future might be worse conditions, and will affect the sustainability of their economies,” Diop explained.



“A lot of bullet payments, as we call them, occurred eight years after the loans were made, and we need to address that situation.”



A bullet repayment refers to an entire outstanding loan amount being met with a single lump sum payment, usually at maturity.



Diop said establishing a firm path toward economic growth in developing economies would enable them to generate investment and stand a better chance of meeting future loan obligations.



He also suggested that institutions such as the Paris Club should include some of the borrowers in question, rather than just the world’s biggest lenders, in order to bring debtors and creditors into the same conversation and reach more workable solutions.



A third problem that must be addressed in order to return distressed countries to debt sustainability is the “currency mismatch,” he added.



“A lot of the debt was in dollar when countries are generating their income in local currency, so deepening the capital markets will be very important for countries to be able to offset some of this long-term risk,” Diop said.



The IMF last week forecast that global growth will be around 3% five years from now — the lowest medium-term forecast in the D.C.-based organization’s World Economic Outlook for more than 30 years.



In the short term, the Fund expects global growth of 2.8% this year and 3% in 2024, slightly below its estimates published in January.



South African Finance Minister Enoch Godongwana also told CNBC that even as the most industrialized, technologically sophisticated and diversified economy in Africa, his country’s outsized exposure to global economic cycles was a potential concern.



“By way of example, if we look at the global financial crisis of 2007/2008, we were one of the heavily affected countries on the African continent, and lost one to 2 million jobs,” Godongwana said.



“Our connection to the global economy is deep, and therefore any changes in the global economy are likely to be massive.”

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‘We should be worried’: Finance leaders warn rising interest rates are squeezing low-income countries

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107225913-1681631865209-gettyimages-1372863580-284064final-820x547.jpeg" alt="" class="wp-image-424304" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107225913-1681631865209-gettyimages-1372863580-284064final-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107225913-1681631865209-gettyimages-1372863580-284064final-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107225913-1681631865209-gettyimages-1372863580-284064final-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107225913-1681631865209-gettyimages-1372863580-284064final-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107225913-1681631865209-gettyimages-1372863580-284064final-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107225913-1681631865209-gettyimages-1372863580-284064final-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Bowl of white rice at Bamboo Sushi restaurant in San Ramon, California, January 23, 2022. Gado | Archive Photos | Getty Images</figcaption></figure>



From China to the U.S. to the European Union, rice production is falling and driving up prices for more than 3.5 billion people across the globe, particularly in Asia-Pacific – which consumes 90% of the world’s rice.



The global rice market is set to log its largest shortfall in two decades in 2023, according to Fitch Solutions.



And a deficit of this magnitude for one of the world’s most cultivated grains will hurt major importers, analysts told CNBC.



“At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,” Fitch Solutions’ commodities analyst Charles Hart said.



Rice prices are expected to remain notched around current highs until 2024, stated a report by Fitch Solutions Country Risk &amp; Industry Research dated April 4.



The price of rice averaged $17.30 per cwt through 2023 year-to-date, and will only ease to $14.50 per cwt in 2024, according to the report. Cwt is a unit of measurement for certain commodities such as rice.



“Given that rice is the staple food commodity across multiple markets in Asia, prices are a major determinant of food price inflation and food security, particularly for the poorest households,” Hart said.



The global shortfall for 2022/2023 would come in at 8.7 million tonnes, the report forecast.



That would mark the largest global rice deficit since 2003/2004, when the global rice markets generated a deficit of 18.6 million tonnes, said Hart.



<h2 class="wp-block-heading" id="h-strained-rice-supplies"><a></a>Strained rice supplies</h2>



There’s a short supply of rice as a result of the ongoing war in Ukraine, as well as bad weather in rice-producing economies like China and Pakistan.



In the second half of last year, swaths of farmland in the world’s largest rice producer China were plagued by heavy summer monsoon rains and floods. 



The accumulated rainfall in the country’s Guangxi and Guangdong province, China’s major hubs of rice production, was the second highest in at least 20 years, according to agriculture analytics company Gro Intelligence.



Similarly, Pakistan — which represents 7.6% of global rice trade — saw annual production plunge 31% year-on-year due to severe flooding last year, said the U.S. Department of Agriculture (USDA), labeling the impact as “even worse than initially expected.” 



The shortfall is partly due to result of “an annual deterioration in the Mainland Chinese harvest caused by intense heat and drought as well as the impact of severe flooding in Pakistan,” Hart pointed out.



Rice is a vulnerable crop, and has the highest probability of simultaneous crop loss during an El Nino event, according to a scientific study.



In addition to tighter supply challenges, rice became an increasingly attractive alternative following the surge in price of other major grains since Russia’s invasion of Ukraine in February 2022, Hart added.&nbsp;The resulting rice substitution has driven up demand.



<h2 class="wp-block-heading"><a></a>Whose rice bowls will be affected?</h2>



Lower year-on-year rice production in other countries like the U.S. and EU have also contributed to the deficit, said Oscar Tjakra, senior analyst at global food and agriculture bank Rabobank.



“The global rice production deficit situation will increase the cost of importing rice for major rice importers such as Indonesia, Philippines, Malaysia and African countries in 2023,” said Tjakra.



Many countries will also be forced to draw down their domestic stockpiles, said Kelly Goughary, senior research analyst at Gro Intelligence. She said countries most affected by the deficit would be those already suffering from high domestic food price inflation such as Pakistan, Turkey, Syria and some African countries.



“The global rice export market, which is typically tighter than that of the other major grains &#8230; has been affected by India’s export restriction,” said Fitch Solutions’ Hart.



India banned exports of broken rice in September, a move Hart said has been a “major price driver” for rice. 



<h2 class="wp-block-heading"><a></a>Surplus in the horizon</h2>



However, the shortage may soon be a thing of the past.



Fitch Solutions estimates that the global rice market will return to “an almost balanced position in 2023/24.”



That could lead to rice futures falling in year-on-year terms to below their 2022 level, but remain elevated at “more than one third above their pre-Covid (2015-2019) mean value, in part as inventories are replenished after a period of extensive drawdown.”



“We believe that the rice market will return to surplus in 2024/25 and then continue to loosen through the medium term.”



Fitch further projects that the prices of rice could drop almost 10% to $15.50 per hundredweight in 2024.



“It is our view that global rice production will stage a solid rebound in 2023/24, expecting total output to rise by 2.5% year on year,” Fitch’s report forecast, hinging on India being a “principal engine” of global rice output over the next five years. 



However, rice production remains at the mercy of weather conditions.



While India’s Meteorological Department expects the country to receive “normal” monsoon rainfall, forecasts for intense heat and heat waves through the second and third quarters of 2023 continue to pose a threat to India’s wheat harvest, the report cautioned.



Other countries may not be spared either.



“China is the largest rice and wheat producer in the world and is currently experiencing the highest level of drought in its rice growing regions in over two decades,” said Goughary.



Major European rice-growing countries like France, Germany and the UK have also been afflicted with the highest level of drought in 20 years, she added.

107225913-1681631865209-gettyimages-1372863580-284064final

Global rice shortage is set to be the biggest in 20 years

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/PY7PZYV6EJL4BL5OKUEAMPGOFM-820x547.jpg" alt="" class="wp-image-424293" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/PY7PZYV6EJL4BL5OKUEAMPGOFM-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/PY7PZYV6EJL4BL5OKUEAMPGOFM-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/PY7PZYV6EJL4BL5OKUEAMPGOFM-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/PY7PZYV6EJL4BL5OKUEAMPGOFM-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/PY7PZYV6EJL4BL5OKUEAMPGOFM-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/PY7PZYV6EJL4BL5OKUEAMPGOFM-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Ivorian police officers are seen by the entrance of Pullman Hotel during the opening session of the 18th African Growth and Opportunity Act (AGOA) Forum in Abidjan, Ivory Coast August 5, 2019. REUTERS/Thierry Gouegnon</figcaption></figure>



WASHINGTON, April 17 (Reuters)&nbsp;&#8211;&nbsp;A major U.S. trade preference program for Sub-Saharan&nbsp;Africa&nbsp;has been successful for developing the region&#8217;s apparel sector in selected countries, but its benefits are not widespread throughout all countries and sectors, a new report to the U.S. Congress showed on Monday.



The U.S. International Trade Commission&nbsp;(USITC) said its&nbsp;<a href="https://www.usitc.gov/publications/332/pub5419.pdf" target="_blank" rel="noreferrer noopener">report</a>&nbsp;on the&nbsp;African Growth and Opportunity Act (AGOA) trade benefits shows that they have helped reduce poverty and create jobs in certain countries, particularly for women.



But over three quarters of duty-free non-petroleum exports to the United States under AGOA during 2014-2021 came from just five countries: South&nbsp;Africa, Kenya, Lesotho, Madagascar and Ethiopia, the report said.



The research, requested by the U.S. House of Representatives Ways and Means Committee, will help shape debate in Congress on whether to renew or restructure AGOA, which expires on Sept. 30, 2025. The program, an anchor for U.S.-African trade relationship, was launched in 2000 to help develop Sub-Saharan&nbsp;African economies and foster democracy.



The report highlighted apparel as the biggest success story for the program, with the industry having a positive impact on poverty reduction in major exporters Madagascar, Kenya, Lesotho, Mauritius and Ethiopia.



&#8220;AGOA benefits appear to be essential for Sub-Saharan&nbsp;Africa&nbsp;countries to maintain their apparel exports to the United States,&#8221; the USITC report said, noting that loss of AGOA benefits by failing to meet eligibility criteria results in significant declines in exports to the United States.



The report also noted less success in AGOA&#8217;s influence in reducing poverty for workers in other sectors including cotton farming, cocoa production, and chemicals, due to lack of development of higher value-added downstream product production.



&#8220;While certain sectors and countries have benefited from the program, AGOA has not achieved all that we had hoped, and more work must be done to improve our economic relationships,&#8221; said U.S. Representative Richard Neal, the top Democrat on the Ways and Means Committee.



(Reporting by David Lawder; Editing by Christopher Cushing)

FILE PHOTO: 18th African Growth and Opportunity Act (AGOA) Forum in Abidjan

U.S.-Africa duty free program has had mixed results -trade panel report

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg" alt="" class="wp-image-413529" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/oil-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



SINGAPORE, April 17 (Reuters) &#8211; Oil prices turned lower on Monday as investors mulled over a possible May interest rate hike by the U.S. Federal Reserve, which could dampen economic recovery hopes, though Chinese GDP data was expected to augur well for demand growth.



Brent crude futures were down 55 cents or 0.6% at $85.76 a barrel at 1240 GMT, while U.S. West Texas Intermediate crude was at $81.92 a barrel, down 60 cents or 0.6%.



Both contracts notched their fourth weekly gain in a row last week, the longest such streak since mid-2022.



&#8220;Crude futures were relatively rangebound as a fresh week began &#8230; with the OPEC/non-OPEC output cuts announced a fortnight ago fully baked in&#8221;, Vandana Hari, founder of oil market analysis provider Vanda Insights, said.



&#8220;The oil complex continues to digest ongoing signs of a U.S. economic cool-down.&#8221;



Earnings from U.S. companies could also provide clues for the Fed&#8217;s policy path and the dollar&#8217;s trajectory.



The greenback has been strengthening alongside interest rate hikes, making dollar-denominated oil more expensive for holders of other currencies.



Traders are betting the Fed will raise its lending rate in May by another quarter of a percentage point and have pushed out to late this year expectations of a rate cut, as typically occurs in a slowdown.



The release of China&#8217;s first-quarter gross domestic product (GDP) data at 0200 GMT on Tuesday is meanwhile expected to be positive for commodity prices, with the&nbsp;<a href="https://www.reuters.com/business/energy/opec-cuts-risk-oil-supply-deficit-threaten-economic-recovery-iea-2023-04-14/">International Energy Agency</a>&nbsp;(IEA) forecasting it will account for most of 2023 demand growth.



However, the IEA also warned in its monthly report that output cuts announced by OPEC+ producers risked exacerbating an oil supply deficit expected in the second half of this year and could hurt consumers and a global economic recovery.



Further tightening supplies, oil exports from northern Iraq to the Turkish port of Ceyhan <a href="https://www.reuters.com/business/energy/iraqs-northern-oil-exports-stuck-turkey-negotiations-2023-04-14/">remain at a standstill</a> almost three weeks after an arbitration case ruled Ankara owed Baghdad compensation for unauthorised exports.

Oil slips as recession fears loom over economic data

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg" alt="" class="wp-image-404443" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling.jpg 1254w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering</figcaption></figure>



April 17 (Reuters)&nbsp;&#8211;&nbsp;Shanghai stocks hit their highest level since July as signs of rebound in corporate earnings fuelled hopes of economic recovery in the world&#8217;s second-largest economy and lifted the emerging markets stocks index.



The Shanghai Composite Index&nbsp;.SSEC&nbsp;closed 1.4% higher, hitting a&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3ARR:5877&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">nine-month high</a>, while China&#8217;s bluechip CSI300 Index&nbsp;.CSI300&nbsp;and Hong Kong&#8217;s Hang Seng Index&nbsp;.HIS&nbsp;added more than 1% each.



More than 300 China-listed companies have published, or forecast first-quarter results, 70% of which have reported year-on-year profit increases, the official Securities News reported.



<a href="https://www.reutersconnect.com/all?search=all%3AL1N36I00Y&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">New home prices</a>&nbsp;rose in March at the fastest pace in 21 months, further lifting China stocks.



&#8220;Part of it is the strength of rebound in activity in China that&#8217;s boosting sentiment towards Chinese stocks,&#8221; said Mitul Kotecha, head of emerging markets strategy at TD Securities.



&#8220;Monetary conditions remain fairly easy and inflation has been fairly benign as well and that&#8217;s also conducive to more of a positive environment for China&#8217;s assets. And also, there is a sense that Chinese officials seem to be taking a softer hand in terms of some of the regulatory constraints in some sectors.&#8221;



Investors are now focused on Chinese data on retail sales, industrial output and gross domestic product due on Tuesday.



&#8220;There are question marks about the sustainability of this growth momentum going forward, but at least for now, the data is showing that recovery has been fairly solid in the last few months,&#8221; Kotecha said.



The MSCI&#8217;s index for emerging market stocks&nbsp;.MSCIEF&nbsp;was up 0.3%, as of 0808 GMT.



The EM currencies index&nbsp;.MIEM00000CUS&nbsp;slipped 0.2% against a subdued dollar and was on track to snap a four-day winning streak.



South Africa&#8217;s rand&nbsp;ZAR=&nbsp;traded at 18.11 against the dollar, about 0.1% weaker than its closing level on Friday, with investors focused on inflation data this week from Africa&#8217;s most industrialised economy.



The <a href="https://www.reutersconnect.com/all?search=all%3AL1N36K0GH&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Russian rouble</a> RUBUTSTN=MCX hit a one-year low, past 82 against the dollar, waiting for support from month-end tax payments and the positive impact from higher oil prices.



The rouble-based MOEX Russian index&nbsp;.IMOEX&nbsp;gained 1% to touch a one-year high.



Israel&#8217;s shekel&nbsp;ILS=&nbsp;rose 1.0% against the dollar and was on track for its best daily performance in nearly three weeks.



Credit ratings agency Moody&#8217;s on Friday downgraded&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N36H3PN&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">its outlook</a>&nbsp;on Israel to stable from positive, citing deterioration of the country&#8217;s governance due the recent events around the government&#8217;s proposal to overhaul the judiciary.



In central and eastern Europe, the Hungarian forint&nbsp;EURHUF=&nbsp;and the Polish zloty&nbsp;EURPLN=&nbsp;added 0.1% each against the euro, while the Czech crown&nbsp;EURCZK=&nbsp;slipped 0.1% after hitting its highest level last week since 2008.



(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sonia Cheema)

Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering

Shanghai shares hit 9-month high on recovery hopes, boost broader EM

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/QOM6DFY4YFKBTJHWK36SCHU26U-820x547.jpg" alt="" class="wp-image-424241" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/QOM6DFY4YFKBTJHWK36SCHU26U-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/QOM6DFY4YFKBTJHWK36SCHU26U-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/QOM6DFY4YFKBTJHWK36SCHU26U-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/QOM6DFY4YFKBTJHWK36SCHU26U-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/QOM6DFY4YFKBTJHWK36SCHU26U-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/QOM6DFY4YFKBTJHWK36SCHU26U-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The International Monetary Fund (IMF) logo in Washington, United States, September 4, 2018. REUTERS/Yuri Gripas/File Photo</figcaption></figure>



WASHINGTON, April 14 (Reuters)&nbsp;&#8211;&nbsp;Africa is facing a severe financing squeeze that, on the back of a series of unprecedented shocks, is disrupting economic growth and endangering its long-term development, the International Monetary Fund&#8217;s (IMF) top official for the region said.



Sub-Saharan Africa was only beginning to recover from&nbsp;the COVID-19 pandemic&#8217;s economic fallout&nbsp;when Russia&#8217;s invasion of Ukraine roiled capital and commodity markets, drove up inflation and&nbsp;paved the way for higher interest rates around the world.



Abebe Selassie, director of the IMF&#8217;s African Department, said&nbsp;in an interview with Reuters&nbsp;that any one of those shocks would have been historic on their own.



&#8220;And they&#8217;ve been layered in a region, which has limited resilience &#8230; So, yeah, it is very problematic,&#8221; he said.



The Fund published its Regional Economic Outlook for Sub-Saharan Africa on Friday during the IMF and World Bank&nbsp;spring meetings&nbsp;in Washington.



In the report, it forecast that regional growth will slow for the second year in a row to 3.6% this year from 3.9% in 2022, before rebounding to 4.2% next year.



A tightening of global monetary policy to rein in inflation has led to higher interest rates, raising Africa&#8217;s borrowing costs on both domestic and international markets.



Sovereign debt spreads for the region have climbed to three times the emerging market average, leaving Africa&#8217;s frontier market countries cut off from international capital markets since early 2022.



Two countries &#8211; Zambia and Ghana &#8211; have already defaulted on their sovereign debt since the start of the pandemic. A Group of 20-backed initiative aimed at assisting with debt restructuring is&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N36F22M&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">plagued by delays</a>&nbsp;and has so far failed to provide relief.



The U.S. dollar&#8217;s effective exchange rate, meanwhile, reached a 20-year high last year, driving up the cost of servicing existing dollar-denominated debt, the IMF report said.



This occurred amid a drop in Chinese bilateral funding &#8211; a key source of critical infrastructure financing &#8211; and a long-term decline in traditional development finance.



&#8220;All of the key sources of financing of deficits &#8211; both the current account and the fiscal deficit &#8211; really are now very curtailed,&#8221; Selassie said.



<h2 class="wp-block-heading" id="h-urgent-help-needed">URGENT HELP NEEDED</h2>



Selassie said the IMF and World Bank would seek to step up to fill the gap, but they will need help.



&#8220;Honestly, this is also a time when other bilateral creditors need to come forward,&#8221; he said.



Failure to act could hamper African governments&#8217; ability to address an ongoing cost-of-living crisis and potentially force them to reduce resources for health, education and infrastructure.



Longer term, Africa is faced with a gaping shortfall in funding for climate adaptation.



While wealthy countries are beginning to mobilise resources, Selassie said Africa, which has done little to cause climate change but is disproportionately impacted by it, must not be hobbled by more onerous debt.



&#8220;For the poorest countries, the most fragile countries, it is really, really important that we lower the weighted average cost of financing they face big time,&#8221; he said.



&#8220;What has transpired over the last 15 to 20 years clearly has not been ideal.&#8221;



(Reporting by Joe Bavier; Editing by Paul Simao)

FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington

Africa needs bilateral help to cope with major funding squeeze, IMF says

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="698" height="439" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/images-2.jpeg" alt="" class="wp-image-424225" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/images-2.jpeg 698w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/images-2-300x189.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/images-2-143x90.jpeg 143w" sizes="auto, (max-width: 698px) 100vw, 698px" /><figcaption class="wp-element-caption">A man jogs as office buildings under construction are seen in the distance, in Luanda, Angola, August 26, 2022. REUTERS/Siphiwe Sibeko</figcaption></figure>



WASHINGTON, April 13 (Reuters)&nbsp;&#8211;&nbsp;Angola&#8217;s next sovereign debt issuance will be an ESG bond of up to $1 billion, its finance minister told Reuters on Thursday, but she added that the southern African oil producer&#8217;s&nbsp;government&nbsp;would not tap the market this year.



Angola, like other African frontier market nations, has been frozen out of international capital markets since early last year. It last issued dollar bonds in late 2019 to fund its ambitious economic reforms.



But yields on its bonds spiked to around 30% during the COVID-19 market rout in March 2020.



In an interview on the sidelines of the International Monetary Fund and World Bank&nbsp;spring meetings&nbsp;in Washington,&nbsp;Finance Minister Vera&nbsp;Daves de Sousa said the government had now approved a framework for issuing so called environment, social and governance debt.



That framework will likely be published this month, she added.



&#8220;We are open to get funding from whoever is interested to participate,&#8221; she said. &#8220;We already know how to do eurobond issuances &#8230; But any ESG issuance will be the first one for us, so we want to start with the hard work.&#8221;



However, she said Angola would wait for market conditions to improve before returning to the market.



&#8220;We are very cautious about the moment to step into the markets because we want to stabilise our debt,&#8221; she said.



TEMPORARY OIL BUMP



Daves de Sousa said that recent efforts to attract new investment to the OPEC member&#8217;s oil and gas sector were beginning to be reflected in oil output.



&#8220;We will have a slight increase (next year) but still less than 1.5 (million barrels per day), I think. And after that, we will start seeing a slight reduction,&#8221; she said, adding that current production stood at around 1.12 million bpd.



Beyond 2024, she said production was set to stabilise around 1 million bpd.



Oil constitutes the bulk of Angola&#8217;s government revenues, and Daves de Sousa said it was using a reference price of $75 per barrel when calculating its budget.



&#8220;Below $70, it starts becoming uncomfortable, and we should take some measures like freezing some expenditures. In a worst scenario of $50 per barrel, we should present a supplementary budget,&#8221; she said.



The government of President Joao Lourenco, who came to power in 2017, has embarked on an ambitious push to reform the former communist nation, including a campaign to privatise, at least in part, state-owned companies.



The strategy is making progress, Daves de Sousa said. But plans to partially privatise state oil company Sonangol were moving slowly due to the need to ensure that all its assets are accounted for ahead of a planned dual listing in Angola and a yet to be chosen foreign stock market.



&#8220;We hope to see in one year, worst case scenario two, all this situation stabilised,&#8221; Daves de Sousa said. &#8220;We need to fix this &#8230; Despite all this, it is a good company.&#8221;



Angola had initially hoped to list a 30% stake in the company in 2022.



The country&nbsp;is forecasting economic growth of 3% this year with an increase to an average of 3.6% over the next five years on the back of an acceleration of the country&#8217;s non-oil sector, its economy and planning minister told Reuters on Thursday.



(Reporting by Jorgelina do Rosario and Joe Bavier; Editing by Paul Simao)

images-2

Angola’s next debt issuance to be ESG bond, but not in 2023

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="350" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1040865674-612x612-1.jpg" alt="" class="wp-image-400879" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1040865674-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1040865674-612x612-1-300x172.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">Stock market report. 3d illustration</figcaption></figure>



April 13 (Reuters)&nbsp;&#8211;&nbsp;Emerging market currencies extended gains for a third straight session on Thursday as the dollar hit a two-month low after data showing cooling U.S. inflation raised bets of a pause in the U.S. Federal Reserve&#8217;s rate hike cycle.



The MSCI&#8217;s emerging market currencies index&nbsp;.MIEM00000CUS&nbsp;added 0.3% by 0859 GMT.



The dollar index&nbsp;=USD&nbsp;dipped to its lowest level since February after&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3ARR:5877&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">cooler-than-expected</a>&nbsp;U.S. inflation data on Wednesday stoked expectations that the Federal Reserve&#8217;s monetary tightening is either already finished or will be by May.



South Africa&#8217;s rand&nbsp;ZAR=&nbsp;gained 0.8% ahead of an investment conference and gold production and mining production data due later in the day.



Stocks in South Africa&nbsp;.JTOPI&nbsp;rose 0.7%.



In central and eastern Europe, the Romanian leu&nbsp;EURRON=&nbsp;slipped 0.2% against the euro after data showed inflation rose 14.53% on the year in March, exceeding&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AS8N32S0CT&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">expectations</a>&nbsp;of 14.2% year-on-year.



&#8220;This doesn’t change the bigger disinflationary picture as we expect an approximate 3pp drop in April inflation and single-digit inflation by September,&#8221; said Valentin Tataru, ING&#8217;s chief economist for Romania, in a note.



&#8220;The central bank should be on hold for the rest of the year.&#8221;



The Czech crown&nbsp;EURCZK=&nbsp;eased 0.2% against the euro.



Czech consumer prices rose by 15.0% on a yearly basis in March,&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N36G1WL&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">easing</a>&nbsp;from the previous month to hit the lowest rate since April 2022, official data showed.



&#8220;What continues to be the case across much of the world and that includes Europe, EM and otherwise is that a much larger chunk of inflation has persisted and stuck around for a lot longer than people expected, and that should have people worrying a little bit,&#8221; said Will Hobbs, chief investment officer at Barclays Wealth.



The Russian rouble&nbsp;RUBUTSTN=MCX&nbsp;steadied near 82 to the dollar. Overnight,&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N36F20J&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">data showed</a>&nbsp;annual inflation in Russia dropped below the central bank&#8217;s 4% target in March for the first time in a year.



The MSCI EM stocks index&nbsp;.MSCIEF&nbsp;edged up 0.2%, while China&#8217;s CSI300 index&nbsp;.CSI300&nbsp;and Shanghai&#8217;s stock index&nbsp;.SSEC&nbsp;closed lower.



Chinese tech stocks slid after the Financial Times&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N36F44G&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;SoftBank was selling down its Alibaba&nbsp;9988.HK&nbsp;stake, on the heels of Netherlands investor Prosus flagging some selling of its Tencent stake on Wednesday.



Later in the day, investors will be looking out for an interest rate decision in Peru and minutes from the Mexican central bank&#8217;s March monetary policy meeting.



(Reporting by Shashwat Chauhan and Bansari Mayur Kamdar in Bengaluru; Editing by Christina Fincher)

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Currencies hit 3-week low, Turkey post-election selloff resumes

African Currencies Are Under Pressure Amid Higher-for-Longer US Interest Rates

Stocks fall for third day on China deflation fears, FX subdued

Currencies muted, shares slip with focus on US inflation

Invictus Energy confirms oil, gas and helium find in Zimbabwe

Economic Growth in Sub-Saharan Africa Could Permanently Decline if Geopolitical Tensions Escalate

Sugar prices spike to 11-year high and could rise further due to extreme weather

‘We should be worried’: Finance leaders warn rising interest rates are squeezing low-income countries

Global rice shortage is set to be the biggest in 20 years

U.S.-Africa duty free program has had mixed results -trade panel report

Oil slips as recession fears loom over economic data

Shanghai shares hit 9-month high on recovery hopes, boost broader EM

Africa needs bilateral help to cope with major funding squeeze, IMF says

Angola’s next debt issuance to be ESG bond, but not in 2023

Emerging market currencies rise again as dollar dips

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Economy

WTO chief pushes for reglobalized supply chains to cut down bottleneck risks

Currencies set for weekly drop, Turkey’s lira hovers near all-time low

Currencies hit 3-week low, Turkey post-election selloff resumes

African Currencies Are Under Pressure Amid Higher-for-Longer US Interest Rates

Stocks fall for third day on China deflation fears, FX subdued

Currencies muted, shares slip with focus on US inflation

Invictus Energy confirms oil, gas and helium find in Zimbabwe

Economic Growth in Sub-Saharan Africa Could Permanently Decline if Geopolitical Tensions Escalate

Sugar prices spike to 11-year high and could rise further due to extreme weather

‘We should be worried’: Finance leaders warn rising interest rates are squeezing low-income countries

Global rice shortage is set to be the biggest in 20 years

U.S.-Africa duty free program has had mixed results -trade panel report

Oil slips as recession fears loom over economic data

Shanghai shares hit 9-month high on recovery hopes, boost broader EM

Africa needs bilateral help to cope with major funding squeeze, IMF says

Angola’s next debt issuance to be ESG bond, but not in 2023

Emerging market currencies rise again as dollar dips

News Tips

Advertise With Us

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