NEW YORK/WASHINGTON (Reuters) &#8211; President Donald Trump said on Friday he would sign an executive order as soon as Saturday to ban TikTok in the United States, ratcheting up the pressure on the popular short-video app’s Chinese owner to sell it.



The move would be the culmination of U.S. national security concerns over the safety of the personal data that TikTok handles. It would represent a major blow for TikTok’s owner, Beijing-based ByteDance, which became one of only a handful of truly global Chinese conglomerates thanks to app’s commercial success.



Trump’s announcement followed frantic negotiations on Friday between the White House, ByteDance and potential buyers of TikTok, including Microsoft Corp. They failed to produce a deal that would result in the Chinese company shedding the app’s U.S. operations, according to people familiar with the matter. The talks are expected to continue in the coming days.



While Microsoft already owns professional social media network LinkedIn, it would face fewer regulatory hurdles in acquiring TikTok than its more direct competitors, such as FaceBook Inc, one of the sources said.



But ByteDance’s valuation expectations for TikTok of more than $50 billion, and its insistence on retaining a minority stake in the app complicated deal talks, another source said.



“Not the deal that you have been hearing about, that they are going to buy and sell&#8230; and Microsoft and another one. We are not an M&amp;A (mergers and acquisitions) country,” Trump said.



It was not immediately clear what authority Trump had to ban TikTok, which has up to 80 million active monthly users in the United States. It was also not clear how the ban would be enforced and what legal challenges it would face.



ByteDance, Microsoft and the U.S. Treasury Department, which chairs the government panel that has been reviewing ByteDance’s ownership of TikTok, declined to comment.



“While we do not comment on rumors or speculation, we are confident in the long-term success of TikTok,” TikTok said in a statement.



As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.



Last week, the U.S. Senate Committee on Homeland Security and Governmental Affairs unanimously passed a bill that would bar U.S. federal employees from using TikTok on government-issued devices. It will be taken up by the full Senate for a vote. The House of Representatives has already voted for a similar measure.



ByteDance has been considering a range of options for TikTok amid pressure from the United States to relinquish control of the app, which allows users to create short videos with special effects and has become wildly popular with U.S. teenagers.



ByteDance has received a proposal from some of its investors, including Sequoia and General Atlantic, to transfer majority ownership of TikTok to them, Reuters reported on Wednesday. The proposal values TikTok at about $50 billion, but some ByteDance executives believe the app is worth more than that.



ByteDance has also fielded acquisition interest in TikTok from other companies and investment firms, Reuters has reported.



ByteDance acquired Shanghai-based video app Musical.ly in a $1 billion deal in 2017 and relaunched it as TikTok the following year. ByteDance did not seek approval for the acquisition from CFIUS, which reviews deals for potential national security risks. Reuters reported last year that CFIUS had opened an investigation into TikTok.



The United States has been increasingly scrutinizing app developers over the personal data they handle, especially if some of it involves U.S. military or intelligence personnel. Ordering the divestment of TikTok would not be the first time the White House has taken action over such concerns.



Earlier this year, Chinese gaming company Beijing Kunlun Tech Co Ltd sold Grindr LLC, a popular gay dating app it bought in 2016, for $620 million after being ordered by CFIUS to divest.



In 2018, CFIUS forced China’s Ant Financial to scrap plans to buy MoneyGram International Inc over concerns about the safety of data that could identify U.S. citizens.FILE PHOTO: TikTok logos are seen on smartphones in front of a displayed ByteDance logo in this illustration taken November 27, 2019. REUTERS/Dado Ruvic/Illustration/File Photo



<h3 class="wp-block-heading">VALUABLE STARTUP</h3>



ByteDance was valued at as much as $140 billion earlier this year when one of its shareholders, Cheetah Mobile, sold a small stake in a private deal, Reuters has reported. The startup’s investors include Japan’s SoftBank Group Corp.



The bulk of ByteDance’s revenue comes from advertising on apps under its Chinese operations including Douyin &#8211; a Chinese version of TikTok &#8211; and news aggregator app Jinri Toutiao, as well as video-streaming app Xigua and Pipixia, an app for jokes and humorous videos.



Some of the company’s other overseas apps include work collaboration tool Lark and music streaming app Resso.



TikTok CEO Kevin Mayer, a former Walt Disney Co executive, said in a blog post on Wednesday that the company was committed to following U.S. laws, and was allowing experts to observe its moderation policies and examine the code that drives its algorithms.

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Trump says will ban TikTok amid pressure on Chinese owner to sell

JOHANNESBURG (Reuters) &#8211; South Africa’s economy could contract 8.2% this year and grow just 0.6% in 2021, if it is hit by a second wave of coronavirus infections that also affects major trading partners, the OECD said on Friday.



If a second wave of infections is avoided, the economy will probably contract 7.5% in 2020 before rebounding 2.5% next year, the OECD said in its latest report on Africa’s most industrialised economy.

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South Africa economy could contract 8.2% if second COVID-19 wave hits, OECD says

JOHANNESBURG (Reuters) &#8211; South Africa’s central bank will extend its tool kit to manage market liquidity by adding short-term, bilateral reverse repurchases of government bonds from commercial banks, it said on Friday.



The South African Reserve Bank (SARB) has taken a number of measures since March to manage market liquidity as the spread of the coronavirus crisis globally hit demand for government bonds, including the launch of a bond-buying programme.



The bank has decided to expand such operations, it said in a statement, with changes to be introduced from Aug. 3.



“The SARB will commence conducting short-term buy-sell backs, of up to one month, with commercial banks on a bilateral basis for the purposes of managing money market liquidity,” it said, using a term for reverse repurchases.



The programme would be on an ad-hoc basis, it said, while the sum on offer would be at the SARB’s discretion.



It added that the SARB would also apply greater flexibility by allotting debentures and long-term reverse repurchases at a wider variety of rates.

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South Africa’s central bank plans more reverse bond repurchases

NAIROBI (Reuters) &#8211; Kenya’s central bank governor Patrick Njoroge on Thursday said that underlying economic numbers pointed to strong growth this year.



“All these point to strong growth in 2020 despite COVID,” Njoroge told an online news conference, citing higher production of tea, maize and cement.

Macro Fifty Dollar Bill Currency Close Up Kenya

Kenya’s underlying economic numbers point to strong growth -central banker

LAGOS/ABUJA (Reuters) &#8211; As women in hairnets and anti-coronavirus masks sort through folded nappies coming off a conveyor belt, the head of the Nigerian firm they work for wonders how much longer he can afford to keep them in employment.



Around 80% of the materials that go into Lagos-based diaper and sanitary towel manufacturer Wemy’s products are imported. To buy them, Paul Odunaiya needs dollars, which he can no longer find.



“We’re pleading with our suppliers to wait a bit longer so that we can source dollars and pay them,” Odunaiya told Reuters.



With the price of oil, Nigeria’s main export, depressed and foreign exchange reserves dwindling, its central bank is hanging on to its dollars to support the local naira &#8211; leaving a dwindling supply of hard currency to buy the imports that are the bedrock of Africa’s largest economy.



Muda Yusuf, director general of the Lagos Chamber of Commerce, said that, like Odunaiya, the dollar shortage is hitting most of its 2,000 members hard.



“If the situation persists it will lead to lay-offs,” he said. “If you are not producing, there will be a shortage of goods in the market, prices will go up.”



Inflation has risen for 10 straight months, hitting a two-year high of 12.56% in June, piling on greater economic hardship for a population of whom 40% already live below the official poverty line of 137,430 naira ($382) per year.



Added to that, there have been two devaluations of the naira’s official rate this year.



With the oil market depressed by a producer price war and the pandemic-induced global recession, central bank reserves have fallen 20% in the past year to $36.1 billion, around five months of import cover.



The bank initially sought to stem the decline by suspending dollar auctions in March and continues to severely ration their supply.



“It’s been excruciating,” said Fred Ameobi, executive director of Coscharis Group, a conglomerate whose businesses include automobile assembly.



The government says the economy could shrink by up to 8.9% in 2020, while many of the local banks that Nigerian companies rely on have seen their dollar credit lines halted by international lenders who fear they won’t be paid back.



Many firms have resorted to the black market, where the naira trades at around 20% below the official rate, making dollar purchases even more expensive.



For now Odunaiya, whose firm had year to March turnover of 2.5 billion naira, sees only hard times ahead. “It’s going to be a tough year &#8230; Some businesses will die.”

Why Printing Trillions of Dollars May Not Cause Inflation

Starved of dollars, Nigerian businesses struggle for survival

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JOHANNESBURG (Reuters) &#8211; Steel producer ArcelorMittal South Africa Ltd fell deeper into a half-year loss as demand for steel dropped due to the new coronavirus and output declined after operations were shut during a lockdown, the company said on Thursday.



Africa’s biggest steel producer, which is majority-owned by ArcelorMittal SA, said its headline loss had increased to 2.613 billion rand ($157 million) for the six months to June 30 from a loss of 638 million rand a year earlier.



ArcelorMittal South Africa said some parts of its business would remain idle until demand recovered, including placing the melting operations at its Vereeniging Works on care and maintenance from the third quarter.



The company said it expected steel demand to be at between 70% to 75% of pre-lockdown levels for the foreseeable future.



“On the back of a demanding 2019, the first half of 2020 proved to be incredibly difficult with the widespread health, social and business impact brought about by the global COVID-19 pandemic,” ArcelorMittal South Africa Chief Executive Kobus Verster said.



The steel producer, which has long battled against cheap imports, rising costs and a flagging local economy, said last month it had begun talks to cut an unspecified number of jobs as it slashes costs to deal with the impact of the pandemic.



Job cuts are politically sensitive in a country where unemployment stands at a record high of about 30%.



During the period, liquid steel production fell 54% to 1.1 million tonnes and sales volumes dropped 47% to 1.1 million tonnes.



The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell from a profit of 167 million rand to a loss of 1.256 billion rand

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ArcelorMittal South Africa falls deeper into half-year loss as steel demand falls

Zimbabwe finance minister Mthuli Ncube has told sceptical farmers that his government will pay them out in hard currency for farms taken by violent mobs 20 years ago.



Speaking to CNBC Africa from Harare, Ncube confirmed that the government was negotiating with more than 4,000 dispossessed farmers to pay compensation for improvements to their erstwhile &nbsp;&nbsp;land after a referendum gave the green light to the idea. Many farmers fear that the government will try to pay them out in discredited bonds. &nbsp;&nbsp;



“I can assure you that this agreement is in US dollars &#8211; it will be honoured in dollars, no other currency. In terms of the process of approval there was a referendum of 4,000 plus farmers around the globe who accepted this deal,” says Ncube.



“A lot of this money will make its way back into farming. &nbsp;It is a constitutional requirement the supreme law of the land Zimbabwe wants to follow the law that is what this agreement is going to do.”



Yet many former Zimbabwean farmers remain sceptical, including veteran farmer Ben Freeth. Privately, farmers feel that this is a way Zimbabwe is trying to ingratiate itself with the international finance community by giving the impression that property rights have been restored.



“It is a pie in the sky scheme as far as I am concerned. The government doesn’t have the money. The idea is to portray this as the government and farmers kissing and making up leaving Zimbabwe looking like a great place to invest – it is just an illusion,” says Freeth.



“There is a lot of concern out there no one has actually seen the agreement there is a great deal of secrecy around the deal it is all a bit mysterious.”



Farmers have also questioned the 99-year lease on farms that government is offering in a bid to kick start what was once the bread basket of Southern Africa. Ncube tried to reassure farmers.



“In terms of 99 year leases that is a different matter..the way we will do it is working with farmers &nbsp;and provide a guarantee to banks&nbsp; extending loans &nbsp;to farmers , but we understand it take time for banks to accept 99 year leases,”says Ncube



“It is a big step in the right direction 20 years after the land acquisition was carried out. We will work together to deal with our issues.”

Finmin Ncube on who will fund Zim’s $3.5bn compensation to white farmers

EXCLUSIVE: “I can assure you that this agreement will be honoured in dollars” Zimbabwe’s finance minister Mthuli Ncube on the $3.5 billion deal with farmers

HARARE (Reuters) &#8211; Zimbabwe agreed on Wednesday to pay $3.5 billion in compensation to white farmers whose land was expropriated by the government to resettle black families, moving a step closer to resolving one the most divisive policies of the Robert Mugabe era.Zimbabwe&#8217;s President Emmerson Mnangagwa speaks during his meeting with Belarussian President Alexander Lukashenko (not pictured) in Minsk, Belarus January 17, 2019. Natalia Fedosenko/REUTERS/File Photo



But the southern African nation does not have the money and will issue long term bonds and jointly approach international donors with the farmers to raise funding, according to the compensation agreement.



Two decades ago Mugabe’s government carried out at times violent evictions of 4,500 white farmers and redistributed the land to around 300,000 Black families, arguing it was redressing colonial land imbalances.



The agreement signed at President Emmerson Mnangagwa’s State House offices in Harare showed white farmers would be compensated for infrastructure on the farms and not the land itself, as per the national constitution.



Details of how much money each farmer, or their descendants, given the time elapsed since the farms were seized, was likely to get were not yet clear, but the government has said it would prioritise the elderly when making the settlements.



Farmers would receive 50% of the compensation after a year and the balance within five years.



Finance Minister Mthuli Ncube and acting Agriculture Minister Oppah Muchinguri-Kashiri signed on behalf of the government, while farmers unions and a foreign consortium that undertook valuations also penned the agreement.



“As Zimbabweans, we have chosen to resolve this long-outstanding issue,” said Andrew Pascoe, head of the Commercial Farmers Union representing white farmers.



The land seizures were one of Mugabe’s signature policies that soured ties with the West. Mugabe, who was ousted in a coup in 2017 and died last year, accused the West of imposing sanctions on his government as punishment.



The programme still divides public opinion in Zimbabwe as opponents see it as a partisan process that left the country struggling to feed itself. But its supporters say it has empowered landless Black people.



Mnangagwa said the land reform could not be reversed but paying of compensation was key to mending ties with the West.

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Zimbabwe agrees to pay $3.5 billion compensation to white farmers

WINDHOEK (Reuters) &#8211; The Namibian government has approached the International Monetary Fund (IMF) for a 4.5 billion Namibian dollars ($274 million) emergency loan to help fight the COVID-19 pandemic, a Ministry of Finance spokesman said on Wednesday.



“We submitted an application to IMF last week. We will assess the terms and conditions to see if they are favourable to Namibia,” the ministry’s spokesman Tonateni Shidhudhu told Reuters.



Namibia had previously avoided loans from the IMF since becoming a member in 1990, but the coronavirus pandemic has seen many nations seek assistance from the lender in recent months.



The IMF on Monday approved $4.3 billion in emergency financing for South Africa to help address the “severe economic impact” and health challenges of the coronavirus pandemic.



In Namibia, confirmed COVID-19 cases have surged in recent weeks after a slower infection rate at the start of the outbreak in the country in March.



So far, Namibia has 1,917 cases and has recorded eight deaths.



Its budget deficit for the current fiscal year is seen widening to 68.7% of gross domestic product, from an estimate of 54.8% in the previous year.



($1 = 16.4130 Namibian dollars)

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Namibia seeks IMF funding to help fight COVID-19

PARIS (Reuters) &#8211; Global airlines cut their coronavirus recovery forecast on Tuesday, saying it would take until 2024 &#8211; a year longer than previously expected &#8211; for passenger traffic to return to pre-crisis levels.



In an update on the pandemic’s crippling impact on air travel, the International Air Transport Association (IATA) cited slow virus containment in the United States and developing countries, and a weaker outlook for corporate travel.



<figure class="wp-block-image size-large"><img decoding="async" src="https://www.cnbcafrica.com/wp-content/uploads/2020/04/hqdefault-100.jpg" alt="" class="wp-image-369765"/><figcaption>How Airlines Park Thousands Of Planes</figcaption></figure>



Lingering travel barriers and new restrictions in some markets are also weighing on nearer-term prospects, IATA said, cutting its 2020 passenger numbers forecast to a 55% decline &#8211; sharper than the 46% drop predicted in April.



“The second half of this year will see a slower recovery than we’d hoped,” IATA Chief Economist Brian Pearce said. June passenger numbers were down 86.5% year-on-year, the organisation said, after a 91% contraction in May.



A surprise move by Britain to quarantine arrivals from Spain has created lot of uncertainty, Pearce said. “That is clearly going to be an issue with the recovery.”



Recovery prospects are weakened by the spread of COVID-19 in the United States and developing countries together representing 40% of global air travel, IATA said.



Business travel may also face a sustained slump, threatening the profitability of long-haul airlines and routes as corporate clients rein in spending and make greater use of video-conferences that have become the norm during lockdowns.



“It will remain to be seen whether we see a recovery to pre-crisis business travel patterns,” Pearce said. “Our concern is that we won’t.”



Long-haul carriers may need to rely more heavily on cargo to maintain the viability of some routes because of lower business demand, he said.



“For many network airlines, the premium-paying passengers were essentially the ones who drove the profitability.”

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Global airlines less hopeful on COVID-19 recovery

LONDON (Reuters) &#8211; The coronavirus crisis may have triggered the long-anticipated tipping point in oil demand and it is focusing minds in OPEC.



The pandemic drove down daily crude consumption by as much as a third earlier this year, at a time when the rise of electric vehicles and a shift to renewable energy sources were already prompting downward revisions in forecasts for long-term oil demand.



It has prompted some officials in the Organization of the Petroleum Exporting Countries, oil’s most powerful proponent since it was founded 60 years ago, to ask whether this year’s dramatic demand destruction heralds a permanent shift and how best to manage supplies if the age of oil is drawing to a close.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="338" height="253" src="https://www.cnbcafrica.com/wp-content/uploads/2020/07/oil-oil-production-oil-pump-heating-oil-crude-oil-thumbnail.jpg" alt="" class="wp-image-376014" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-oil-production-oil-pump-heating-oil-crude-oil-thumbnail.jpg 338w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/oil-oil-production-oil-pump-heating-oil-crude-oil-thumbnail-300x225.jpg 300w" sizes="auto, (max-width: 338px) 100vw, 338px" /></figure>



“People are waking up to a new reality and trying to work their heads around it all,” an industry source close to OPEC told Reuters, adding the “possibility exists in the minds of all the key players” that consumption might never fully recover.



Reuters interviewed seven current and former officials or other sources involved in OPEC, most of whom asked not to be named. They said this year’s crisis that sent oil below $16 a barrel LCOc1 had prompted OPEC and its 13 members to question long-held views on the demand growth outlook.



Just 12 years ago, OPEC states were flush with cash when oil peaked above $145 a barrel as demand surged.



Now it faces a dramatic adjustment if consumption starts a permanent decline. The group will need to manage even more closely its cooperation with other producers, such as Russia, to maximise falling revenues and will have to work to ensure relations inside the group are not frayed by any fratricidal dash to defend market share in a shrinking businesses.



“OPEC’s job will be harder in the future because of lower demand and rising non-OPEC production,” said Hasan Qabazard, OPEC’s head of research from 2006 to 2013 whose work now includes advising hedge funds and investment banks on OPEC policy.



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One official, who works in energy studies in the oil ministry of a major OPEC member, said shocks to oil demand had in the past led to permanent changes in consumer behaviour. He said this time was unlikely to be different.



“The demand does not return to pre-crisis levels or it takes time for this to happen,” he said. “The main concern is that oil demand will peak in the next few years due to rapid technological advances, especially in car batteries.”



In 2019, the world consumed 99.7 million barrels per day (bpd) &#8211; and OPEC was forecasting a rise to 101 million bpd in 2020.



But global lockdowns this year that grounded planes and took traffic off the streets, prompted OPEC to slash the 2020 figure to 91 million bpd, with 2021 demand still seen below 2019 levels.

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End game for oil? OPEC prepares for an age of dwindling demand

JOHANNESBURG (Reuters) &#8211; South Africa’s rand firmed in early trade on Tuesday, as lack of local drivers turned attention to a U.S. Federal Reserve meeting that was expected to reiterate a dovish policy stance.



At 0625 GMT, the rand traded at 16.4275 per dollar, 0.17% firmer than its close on Monday.



The United States central bank, the Federal Reserve, meets on Tuesday and Wednesday. It could confirm recent hints about the benefits of an average inflation target, which would allow rates to stay lower for longer and benefit high-yielding assets.



“With no data scheduled to drive currency markets today, we can expect them to continue their current momentum, with the rand setting its sights on breaking through the R16.35/$ mark,” said Bianca Botes, executive director at Peregrine Treasury Solutions.



Analysts expected investor focus to be on offshore events, despite some key local data releases this week including consumer inflation and trade figures.



The International Monetary Fund said on Monday its executive board approved $4.3 billion in emergency financing for South Africa to help address the “severe economic impact” and health challenges of the coronavirus pandemic.



“This &#8230;should really be currency neutral as they will in all likelihood provide the funding through a cross-currency swap,” Standard Bank chief trader Warrick Butler said in a note.



In fixed income, the yield on the benchmark instrument due in 2030 was down 2 basis points to 9.135% in early trade.

South Africa’s rand firms, focus on Fed meeting

The International Monetary Fund will lend South Africa $4.3 billion in emergency financial support to help the country repair the catastrophic economic damage wreaked by the COVID-19 pandemic.



The South African economy is expected to contract by more than 11 per cent as it buckles under the lockdown imposed in March to try to ward off the disease that has claimed nearly 7,000 lives in a matter of months. Three million South Africans have lost their jobs &#8211; nearly a third of the working population with formal jobs. Economists fear many more jobs could be lost as cash-strapped companies go down like dominoes.



&#8220;The additional IMF funding is a low interest loan that contributes to government’s fiscal relief package while respecting South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis. It will also pave the way for government to provide the necessary financial relief required to forge a new economy and mitigate further harm to the economy, &#8221; Treasury said in a statement.



The money will go to frontline health services, job creation, stabilising public debt and reforms to encourage job creation.



“Government’s Covid-19 economic support package directs R500 billion straight at the problem. This is one of the largest economic response packages in the developing world. The South African Reserve Bank has reduced interest rates and made it easier for banks to lend money, and supported liquidity in the domestic bond market. Government spending and tax proposals, guarantee scheme and wage protection measures, are providing protection to workers and the poor, while assisting to stay afloat during these tough economic times. Going forward, our fiscal measures will build on our policy strengths and limit the existing economic vulnerabilities which have been exacerbated by the Covid-19 pandemic,” says South African finance minister Tito Mboweni.



Mboweni, presented a Special Adjustments Budget in Parliament on June 24 as part of government’s key interventions to the Covid-19 pandemic. This loan from the IMF goes some way to financing those measures.

PRETORIA, SOUTH AFRICA - MARCH 16: Finance minister, Tito Mboweni briefs the media on the details of government interventions in various sectors of the departmental portfolios on COVID-19 at DIRCO Media Centre.

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IMF approves $4.3 bn to help South Africa fight COVID-19

JOHANNESBURG (Reuters) &#8211; A pandemic-delayed African free trade deal, if fully implemented, could boost incomes across the continent, pull millions out of poverty and cushion against the negative fallout from COVID-19, the World Bank wrote in a report on Monday.



The African Continental Free Trade Area (AfCFTA) was due to come into force on July 1, but that proved unworkable after the virus forced widespread border closures and halted talks between governments over the removal of tariffs.



It may now begin operating from the start of 2021.



The pandemic is expected to cost Africa up to $79 billion in lost economic output this year alone with the additional risk of millions of job losses.



“In this context, a successful implementation of AfCFTA would be crucial,” the report said. “(It) is a major opportunity for Africa, but implementation will be a significant challenge. Lowering tariffs is only the first step.”



Once in force, the AfCFTA will bring together 1.3 billion people across 55 countries with combined gross domestic product of $3.4 trillion.



World Bank researchers estimated the trade deal would lift 30 million Africans out of extreme poverty and 68 million from moderate poverty by 2035.



Full implementation could increase real income in Africa by 7%, or nearly $450 billion, mainly by reducing the cost of trade through the elimination of tariffs and red tape.



Ivory Coast and Zimbabwe &#8211; countries with the highest costs of trade &#8211; could see income gains of 14%.



The volume of total exports would increase by almost 29%, according to the World Bank, with exports between African nations rising 81%. Exports to non-African countries would increase 19%.



“The report estimates that compared with a business-as-usual scenario, implementing AfCFTA would lead to an almost 10%increase in wages, with larger gains for unskilled workers and women,” the report said.

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African trade deal could lift millions out of poverty, World Bank says

MONTREAL (Reuters) &#8211; A pick-up in leisure trips and easing European travel restrictions are driving demand for business jet flights this summer, fueling cautious hopes for a rebound in an industry hit hard by the coronavirus pandemic, executives and forecasters said.



Commercial and business aviation are both seeing improved domestic traffic this summer. But private flights, which carry smaller groups and promise wealthy passengers less risk of exposure to the coronavirus, have generally fared better than commercial airlines since the start of the pandemic.



U.S. business aviation traffic is down around 20% year to date through July 19 on an annual basis, compared to a decline in U.S. commercial airline traffic of 48% over the same period, according to FlightAware data.



Adam Twidell, chief executive at Private Fly, a global booking service for charter flights, said his company’s booking levels are around 80% of last year’s mark in Europe, and over 100% in the U.S., helped by inquiries from new passengers.



Nw customers, including those who normally fly first class on airlines, now make up around 60% of the company’s flight bookings compared with around a quarter normally.



“We know that a considerable number of them have not flown privately before,” Twidell said.



Private jet charter VistaJet said it recorded a 153% increase for European departures between May and June and expects a similar increase for July.



<h3 class="wp-block-heading">GREEN SHOOTS</h3>



Business aviation flights in Europe could be down just 10% this summer compared with the same period a year earlier, helped by pent-up leisure travel demand and limited selection of commercial flights, said Richard Koe, managing director of data research and consulting company WINGX Advance GmbH. By comparison, European flights were down 15% in July and 30% in June on an annual basis, Koe said.



But industry executives cautioned that the green shoots of demand for private aviation will only continue into the fall if there is a pick-up in company travel.



“Personal travel is the driving force on both continents at the moment as business travel continues to be down significantly,” said Patrick Gallagher, a marketing executive for Berkshire Hathaway Inc’s NetJets, which is seeing improved European demand following the easing of travel restrictions last month.



“Relaxation in travel restrictions certainly played a part in that, but the seasonality of demand in Europe also led to the later, steeper recovery,” he said.









Business jet makers are waiting to see if the revival in flights could eventually lead to new orders. For now, charters are using existing fleets to meet demand.



While jet makers are seeing little appetite for new plane sales, firm orders are not being canceled, which points to some stability, two industry sources said.



Business jet makers, like General Dynamics Corp’s Gulfstream Aerospace, Textron Aviation and Bombardier, have cut jobs and some forecasters expect a 30% decline in deliveries this year.

Vacation trips, easing of travel rules fuel hopes of business jet rebound

JOHANNESBURG (Reuters) &#8211; Sub-Saharan Africa’s economy will contract this year after shutdowns disrupted activity and as daily cases of coronavirus are still rising in the region but a recovery is expected next year, a Reuters poll found on Friday.



Following months of lockdowns which have muted economic activity a Reuters poll taken in the past week suggested the region will contract 3.1% this year but bounce back to around 3.5% growth in 2021.



Some countries have begun relaxing restrictions but virus cases are still increasing, unlike in many developed countries that have started to show signs of recovery, so the uncertainty meant the range of forecasts for next year was wide &#8211; between flatlining and 4.8% growth.



South Africa has reported the most cases in Africa, partly reflecting more widespread testing, and it is harder to gauge the full extent of outbreaks elsewhere although there are no signs numbers are falling.



“Growth downgrades dominate in a region where external and fiscal buffers were already substantially eroded. The impact of COVID-19 will reduce growth even further,” Standard Chartered wrote in a note.



Nigeria, Africa’s biggest economy, was expected to contract 3.7% this year but bounce back to 2.0% growth next year.



Continental peer South Africa was expected to grow 3.5% next year following an 8.0% contraction this year, a Reuters poll showed last week. 



However, Ghana, one of the continents oil exporters, was still expected to grow, expanding 1.9% this year and 4.2% in 2021.



“Despite the obvious downside risks from lower oil prices and headwinds from COVID-19, we believe Ghana has a decent growth outlook and reasonably comfortable external sector metrics relative to other African oil exporters,” said Michael Kafe, economist at Barclays.



“The fallout from COVID-19 and associated lockdown means GDP growth is likely to be weak this year. However, unlike other African oil exporters such as Angola, Gabon and Nigeria, where GDP growth is likely to contract this year, we expect Ghana to post positive GDP growth.”



Kenya &#8211; east Africa’s biggest economy &#8211; was expected to have a lacklustre performance this year with no growth, a poor outcome having averaged around 6% annual growth in the past decade.

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Sub-Saharan Africa GDP to contract 3.1% this year

JOHANNESBURG (Reuters) &#8211; South Africa’s rand weakened early on Friday after the central bank cut interest rates on Thursday and signalled it may have reached the end of its easing cycle.



At 0645 GMT the rand was up 0.03% to 16.6700 per dollar, after falling to 16.7350 overnight, its weakest in four sessions — missing a brief emerging-market advance that had seen most risk currencies climb.



The central bank’s five-member monetary policy committee on Thursday voted three to two for a 25-basis-point rate cut to a record low of 3.50%. The rate cut had been expected. 



Analysts said steadier rates in the final half of the could see the rand add to its recovery, with excess liquidity from stimulus programs in developed markets favouring risk assets.



In the current sessions, investor attention turned back to global issues, foremost among them tension between China and the United States.



“Relatively riskier assets, including the rand, are trading defensively as market sentiment deteriorated even further overnight due to an escalation of US-Sino tensions,” said economists at ETM Analytics in a note.



On Thursday, China ordered the United States to shut its Chengdu consulate, in retaliation for the closure of a Chinese consulate in Texas, in a tit-for-tat battle that may have implications for global trade and a growth recovery.



Bonds were weaker in early trade, with the yield on the benchmark 2030 government issue up 7.5 basis points to 9.195%.

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Economy

Trump says will ban TikTok amid pressure on Chinese owner to sell

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