<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="429" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/T36KKEMZKBN7LFA5QARLJ6JYBA-820x429.jpg" alt="" class="wp-image-497783" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/T36KKEMZKBN7LFA5QARLJ6JYBA-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/T36KKEMZKBN7LFA5QARLJ6JYBA-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/T36KKEMZKBN7LFA5QARLJ6JYBA-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/T36KKEMZKBN7LFA5QARLJ6JYBA-768x402.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/T36KKEMZKBN7LFA5QARLJ6JYBA-1536x804.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/T36KKEMZKBN7LFA5QARLJ6JYBA.jpg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



GABORONE, June 18 (Reuters)&nbsp;&#8211;&nbsp;Botswana&#8217;s economy may fall short of the government&#8217;s 4.2% growth target for this year, a senior central bank official said on Tuesday, citing global and domestic constraints.



Finance minister Peggy Serame made the projection for a 4.2% increase in GDP in a budget speech in February, saying the government expected growth to accelerate from 2023 due to an improved performance in the diamond sector. Gross domestic product grew 2.7% in 2023.



However, Botswana&#8217;s mining sector, which is dominated by diamonds, is still struggling, reflecting sluggish market conditions globally.



Sales at Debswana Diamond Company, a joint venture between the southern African country&#8217;s government and Anglo American&#8217;s De Beers unit, were down about 48% year-on-year in the first quarter of 2024.



&#8220;From what we have seen in the first half of the year, unfavourable global economic conditions &#8230; as well as domestic structural constraints, one would expect that we are unlikely to attain the projected economic growth,&#8221; Innocent Molalapata, the central bank&#8217;s director of research and financial stability, told an economic briefing.



&#8220;A downward revision of the growth target might therefore be required,&#8221; Molalapata said, adding that mining output contracted roughly 27% in the first quarter.



The Bank of Botswana tends not to give precise GDP growth forecasts, leaving that to the finance ministry.



The International Monetary Fund forecasts Botswana&#8217;s economy will grow 3.6% in 2024.



(Reporting by Brian Benza; Editing by Tannur Anders, Alexander Winning and Susan Fenton)

T36KKEMZKBN7LFA5QARLJ6JYBA

Botswana may fall short of 4.2% growth target, cenbank official says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2020/03/shutterstock_392452534_ZAR-spread_cu-1024x683-1-820x547.jpg" alt="ArcelorMittal South Africa fined R3.64 million over hydrogen sulfide emissions" class="wp-image-365501" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/03/shutterstock_392452534_ZAR-spread_cu-1024x683-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/03/shutterstock_392452534_ZAR-spread_cu-1024x683-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/03/shutterstock_392452534_ZAR-spread_cu-1024x683-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/03/shutterstock_392452534_ZAR-spread_cu-1024x683-1-696x464.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/03/shutterstock_392452534_ZAR-spread_cu-1024x683-1.jpg 1024w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">ArcelorMittal South Africa fined R3.64 million over hydrogen sulfide emissions</figcaption></figure>



JOHANNESBURG, June 18 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s rand was slightly stronger in early trade on Tuesday, building on gains after unity government members were confirmed last week and ahead of talks by U.S. Federal Reserve officials later in the day.



At 0641 GMT, the rand traded at 18.2350 against the dollar, about 0.15% stronger than its previous close.



South Africa&#8217;s National Assembly sat for the first time on Friday after last month&#8217;s election. Cyril Ramaphosa of the African National Congress (ANC) was re-elected as president.



Five political parties have signed up to join a government of national unity after the ANC lost its majority in the vote, including the pro-business Democratic Alliance which is favoured by markets.



&#8220;The formation of a government of national unity is being liked by investors as the new government sets a platform for accelerated infrastructure and other reforms, to get the economy back on track after years of low growth and high unemployment,&#8221; Rand Merchant Bank analysts said in a research note.



Traders will on Tuesday look for hints from Fed officials on the future interest rate path of the world&#8217;s biggest economy.



Like other emerging market economies, the risk-sensitive rand often takes cues from global factors.



South Africa&#8217;s benchmark 2030 government bond was stronger in early deals, with the yield down 3 basis points to 10.095%.



(Reporting by Tannur Anders; Editing by Andrew Heavens)

ArcelorMittal South Africa fined R3.64 million over hydrogen sulfide emissions

South African rand extends gains after unity government confirmed, Fed talks ahead

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1024" height="512" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/AFREXIMBANK-HQ-scaled-1.jpg" alt="" class="wp-image-497710" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/AFREXIMBANK-HQ-scaled-1.jpg 1024w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/AFREXIMBANK-HQ-scaled-1-300x150.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/AFREXIMBANK-HQ-scaled-1-820x410.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/AFREXIMBANK-HQ-scaled-1-160x80.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/AFREXIMBANK-HQ-scaled-1-768x384.jpg 768w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Photo: via Flickr</figcaption></figure>



LONDON, (Reuters) &#8211; Some of Africa&#8217;s smaller multilateral development banks, including the Africa Export-Import Bank (Afrexim) and the Trade and Development Bank (TDB), could be stripped of their Preferred Credit Status, JPMorgan analysts warned.



Preferred Creditor Status (PCS) is a widely accepted principle under which MDBs are given priority for repayment of debt when a country or company they have lent to experiences financial stress.



It is at the heart of why the banks are able to provide cheaper financing to developing countries. However, larger MDBs have suggested that some smaller regional ones, especially in Africa, may not provide enough concessional loans to justify the privilege.



It is something that has been source of tension in debt restructurings taking place in Zambia, Ghana and Malawi where there is uncertainty about what happens to the loans Afrexim, TDB and others have provided to the countries.



JPMorgan&#8217;s analysts said in a research note on Monday that it, &#8220;looks more likely to us now that PCS gets tested negatively in a few sovereign restructurings for smaller MDBs.&#8221;



&#8220;This could result in their claims being treated as part of overall restructured debt,&#8221; adding that if that was the case it would raise the riskiness of their bonds.



They estimated that TDB’s exposure to the governments of Malawi and Zambia was likely to be included in both countries debt restructurings.



Afrexim’s exposure to Ghana and Malawi&#8217;s governments is also at risk, although this is less certain with Ghana&#8217;s big official sector creditors reportedly wanting Afrexim to take losses but the government also approaching the IMF in support of the bank.&#8221;Taking this risk and banks’ loan concentrations in mind and also bond valuations, we position underweight Afrexim and TDB,&#8221; JPMorgan&#8217;s analysts said, underweight effectively being a recommendation to sell or avoid a bond.



Afrexim primarily makes direct loans to central banks, commercial banks and central governments. Its big shareholders include Nigeria&#8217;s government and Egypt&#8217;s central bank which both have a 15% stake but it has some private shareholders too.



TDB focuses on trade and project financing in Eastern and Southern Africa. The African Development Bank has a 9% shareholding. Egypt, Ethiopia, Kenya and Tanzania have 5-7% each and, like Afrexim, it has some private ownership as well.



(Reporting by Marc Jones; Editing by Sharon Singleton)

AFREXIMBANK-HQ-scaled-1

Smaller African development banks Preferred Credit Status under threat, JPMorgan warns

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/EGXY342QSRKIDPZSVUXAGVBH4I-820x547.jpg" alt="" class="wp-image-496612" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/EGXY342QSRKIDPZSVUXAGVBH4I-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/EGXY342QSRKIDPZSVUXAGVBH4I-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/EGXY342QSRKIDPZSVUXAGVBH4I-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/EGXY342QSRKIDPZSVUXAGVBH4I-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/EGXY342QSRKIDPZSVUXAGVBH4I-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/EGXY342QSRKIDPZSVUXAGVBH4I-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A general view of a hall in the Cape Town International Convention Center (CTICC), which has been designated a precinct of parliament, ahead of the first sitting of the National Assembly following elections in Cape Town, South Africa, June 14, 2024. REUTERS/Nic Bothma</figcaption></figure>



CAPE TOWN, South Africa, June 14 (Reuters) &#8211; The African National Congress and its largest rival, the white-led, pro-business Democratic Alliance, agreed on Friday to work together in South Africa&#8217;s new government of national unity, a step change after 30 years of ANC majority rule.



Once unthinkable, the deal between two sharply antagonistic parties is the most momentous political shift in South Africa since Nelson Mandela led the ANC to victory in the 1994 elections that marked the end of apartheid.



&#8220;Today, South Africa is a better country than it was yesterday. For the first time since 1994, we&#8217;ve embarked on a peaceful and democratic transfer of power to a new government that will be different from the previous one,&#8221; DA leader John Steenhuisen said in a televised address.



&#8220;From today, the DA will co-govern the Republic of South Africa in a spirit of unity and collaboration,&#8221; he said, adding that multi-party government was the &#8220;new normal&#8221;.



The ANC lost its majority for the first time in an election on May 29 and has spent two weeks locked in intensive behind-the-scenes talks with other parties, which came down to the wire on Friday morning as the new parliament was convening.



The DA&#8217;s entry into national government is a big moment for a country still processing the legacy of the racist colonial and apartheid regimes. The party has struggled to shake off its image as a defender of rich white people and convince a broad spectrum of South Africans that it reflects their aspirations.



Two smaller parties, the socially conservative Inkatha Freedom Party and the right-wing Patriotic Alliance, will also take part in the unity government, they said.



&#8220;Today marks the beginning of a new era where we put our differences aside and unite for the betterment of all South Africans,&#8221; said Sihle Zikalala, a member of the ANC&#8217;s governing body, in a post on X.



Meeting in a Cape Town convention centre because its permanent home was damaged by fire in 2022, the newly elected National Assembly began proceedings with the swearing-in of lawmakers. The chamber was then due to elect its speaker and deputy speaker,&nbsp;and the country&#8217;s president.



President Cyril Ramaphosa, the 71-year-old ANC leader, is expected to win a new term in office with support from the other parties in the unity government pact.



A DA source said the party would receive the post of deputy speaker of the National Assembly as part of the deal.



<h2 class="wp-block-heading" id="h-investors-welcome-deal">INVESTORS WELCOME DEAL</h2>



Long seen as unbeatable in national elections, the ANC lost support in recent years as voters wearied of persistently high levels of poverty, inequality and crime, rolling power cuts and corruption in party ranks.



The ANC won 159 of 400 seats in the National Assembly, while the DA got 87. The populist uMkhonto we Sizwe (MK) party led by former President Jacob Zuma has 58, the hard-left Economic Freedom Fighters 39 and the Inkatha Freedom Party 17.



The ANC&#8217;s central dilemma since the election has been whether to work with the DA, which investors like because of its free-market policies but is unpopular with ANC voters who see it as a defender of the privileged white minority&#8217;s interests.



The inclusion of the IFP, with its ethnic Zulu base, may help sweeten the DA pill for ANC voters. The Patriotic Alliance draws its support from the coloured (mixed-race) community.



The News24 website published details from a draft statement of intent it said had been circulated to party negotiators by ANC Secretary-General Fikile Mbalula. Reuters saw the document but could not immediately confirm its authenticity.



Among the &#8220;basic minimum programme of priorities&#8221; outlined in the document were rapid, inclusive and sustainable economic growth, the promotion of fixed capital investment and industrialisation, job creation, land reform, infrastructure development, structural reforms and fiscal sustainability.



London-based research firm Capital Economics said in a note that the prospect of a coalition involving the ANC and DA was being well received by investors because there was expected to be policy continuity or an acceleration of reforms.



It said another reason was that the EFF and MK, which it said had set out &#8220;radical agendas, including rapid land redistribution, widespread nationalisations and increased welfare support&#8221;, would be excluded from policymaking.



Zuma&#8217;s MK, new to the political scene, came a strong third in the election but alleged it was robbed of victory by vote-rigging, and is boycotting the new parliament.



The Constitutional Court rejected MK&#8217;s application to stop parliament sitting on grounds of fraud, saying it had no merit. The Independent Electoral Commission said the election was free and fair and other parties have accepted the results.



(Additional reporting by Alexander Winning, Tannur Anders, Bhargav Acharya and Sfundo Parakozov; Writing by Estelle Shirbo; Editing by Gareth Jones, William Maclean abd Timothy Heritage)

First sitting of parliament in Cape Town

White-led DA party joins ANC in South African unity government

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-820x547.jpg" alt="" class="wp-image-423556" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/IQMT7SFA2RNQLAQHUEOA2VEMMQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Illustration photo shows a two-rand coin above a South African flag April 12, 2017. REUTERS/Thomas White/Illustration</figcaption></figure>



JOHANNESBURG, June 14 (Reuters) &#8211; The South African rand gained on Friday after local media reported that a deal had been struck between the African National Congress and the pro-business Democratic Alliance to form a unity government.



At 0946 GMT, the rand traded at 18.3850 against the dollar, around 0.3% stronger than its previous close.



The ANC, which lost its parliamentary majority in a May election, agreed to enter into a government of national unity with parties including the DA, the Inkatha Freedom Party and the Patriotic Alliance, public broadcaster SABC reported.



The ANC&#8217;s Cyril Ramaphosa is likely to be re-elected as the president.



A deal with the DA will be welcomed by investors, Capital Economics economist Jason Tuvey said in a note.



&#8220;If confirmed, President Ramaphosa&#8217;s broad policy agenda, centred around fiscal tightening and addressing infrastructure problems, is likely to remain intact. But the coalition is likely to prove fragile,&#8221; he said.



On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded up around 1%. South Africa&#8217;s benchmark 2030 government bond was down, with the yield up 4 basis point to 10.165%.



(Reporting by Tannur Anders; Editing by Gareth Jones)

Illustration photo of South African rand

South African rand gains after reports ANC, DA struck unity government deal

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="518" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/12/XGW2VAJGGVKTZOIMO2U27VMREE-820x518.jpg" alt="" class="wp-image-435757" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/12/XGW2VAJGGVKTZOIMO2U27VMREE-820x518.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/XGW2VAJGGVKTZOIMO2U27VMREE-300x190.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/XGW2VAJGGVKTZOIMO2U27VMREE-142x90.jpg 142w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/XGW2VAJGGVKTZOIMO2U27VMREE-768x485.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/XGW2VAJGGVKTZOIMO2U27VMREE-1536x971.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/XGW2VAJGGVKTZOIMO2U27VMREE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Kenya&#8217;s Finance Minister Njuguna Ndung&#8217;u presents the Government Budget for the 2023/24 fiscal year inside the Parliament building in Nairobi, Kenya June 15, 2023. REUTERS/Monicah Mwangi/File Photo</figcaption></figure>



NAIROBI, June 13 (Reuters)&nbsp;&#8211;&nbsp;Kenya&#8217;s 2024/25 budget aims to tackle the country&#8217;s debt while protecting its fragile economic recovery, with growth estimated at 5.5% in 2024 and 2025, Finance Minister Njuguna Ndung&#8217;u said on Thursday.



Presenting the budget in parliament, Ndung&#8217;u said the fiscal deficit was expected to be 3.3% of gross domestic product (GDP), compared with a revised deficit of 5.7% for 2023/24.



Economic growth is expected to be in line with the ministry&#8217;s expectation of 5.5% this year from 5.6% in 2023.



&#8220;Kenya&#8217;s economy is unwinding from layers of negative and persistent shocks,&#8221; Ndung&#8217;u said, citing the effects of pandemic, and climate change related events such as devastating floods in 2023 and 2024.



He said policy efforts have reduced the cost of living and created vibrancy in an economy that is showing signs of a strong recovery.



Kenya&#8217;s economy is largely driven by agriculture, manufacturing, transport and storage, financial and insurance services and real estate.



Ndung&#8217;u told journalists earlier on Thursday that the budget would put emphasis on policies needed to strengthen and to support the fragile growth and recovery.



&#8220;We want to make sure that we revive the economy so that it can generate jobs for the youth. We want to revive the economy so that we can pay our debt. We have been buffeted by that,&#8221; he said.



<h2 class="wp-block-heading" id="h-debt-management">DEBT MANAGEMENT</h2>



Kenya&#8217;s total public debt stands at an estimated 68% of GDP for fiscal 2023/24, and is expected to fall to 64.8% in 2024/25, according to the World Bank.



Ndung&#8217;u said total spending for the fiscal year 2024/35 is seen at 3.992 trillion Kenyan shillings ($31.19 billion). To finance the budget, Kenya aims to borrow 333.8 billion shillings from external sources, and 263.2 billion from the domestic market.



&#8220;The government will slow down uptake of new external commercial debt and undertake liability management operations through debt swaps and other innovative solutions,&#8221; he said.



The East African country sold a $1.5 billion international bond in February at a premium to fund the buyback of a large portion of a $2 billion bond maturing in June.



Before that, investors had feared Kenya might not be able to repay the bond due to its strained public finances.



Last week, parliament approved overall spending for the year at 4 trillion shillings, up from the 3.75 trillion shillings the minister presented last June for the 2023/24 year. That budget was later adjusted to 3.85 trillion shillings.



The 2024/25 budget will be accompanied by the Finance Bill 2024 that will come before parliament next week. The bill is a separate law outlining proposed tax increases on various goods and services, which critics say could cripple some sectors, including financial and internet services, transport, manufacturing and retail.



Ndung&#8217;u said measures in the bill are expected to bring in an extra 346.7 billion shillings in additional revenues.



The proposals have drawn strong resistance from the public, bankers and manufacturers, as well as from the Law Society of Kenya, which stated its views to a parliamentary committee reviewing the measures.



President William Ruto has said the measures are aimed at reducing Kenya&#8217;s reliance on borrowing to fund its budget.



Last week, the central bank governor said Kenya will use part of a $1.2 billion World Bank budget support loan to make a payment of roughly $500 million on a Eurobond maturing this month.



($1 = 128.0000 Kenyan shillings)



(Reporting by George Obulutsa; Editing by Bate Felix, Miral Fahmy, Hugh Lawson and Jane Merriman)

FILE PHOTO: Kenya’s Finance Minister Njuguna Ndung’u presents the Government Budget for the 2023/24 fiscal year in Nairobi

Kenya budget sees deficit at 3.3%, seeks to protect economic recovery

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-1604532165-820x547.jpg" alt="" class="wp-image-496333" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-1604532165-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-1604532165-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-1604532165-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-1604532165-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-1604532165-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-1604532165-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Vehicles and pedestrians make their way along a busy retail street in central Kampala, Uganda, on Wednesday, Aug. 16, 2023. Uganda&#8217;s central bank said it stands ready to act if the World Bank&#8217;s decision to halt new funding over the country&#8217;s passage of anti-LGBTQ legislation impacts the currency further. Photographer: Luke Dray/Bloomberg via Getty Images</figcaption></figure>



KAMPALA, June 13 (Reuters)&nbsp;&#8211;&nbsp;Uganda&#8217;s budget deficit&nbsp;is projected to rise to&nbsp;5.7% of gross domestic product (GDP) in the fiscal year that starts in July, up from 4.5% in the current fiscal year,&nbsp;its finance&nbsp;minister said on Thursday.



The economy of Africa&#8217;s biggest coffee producer has fared better than many of its peers since the COVID-19 pandemic.



It is expected to grow between 6.4% and 7% in the 2024/25 fiscal year, finance minister Matia Kasaija said in a budget speech.



&#8220;Uganda&#8217;s economy has fully recovered from the various external and internal shocks that impacted performance in the past four years,&#8221; Kasaija said.



The government will spend 72.1 trillion Ugandan shillings ($19.4 billion) in the next fiscal year, borrowing 8.97 trillion shillings domestically and helped by 1.4 trillion shillings in budget support, he said.



($1 = 3,725.0000 Ugandan shillings)



(Reporting by Elias Biryabarema; Writing by Hereward Holland; Editing by Alexander Winning)

Ugandan Economy Following Rate Cut

Uganda sees budget deficit rising to 5.7% of GDP next fiscal year

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1325" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/4OOZWTKIY5LIFJQATNM7KMQ4T4-scaled.jpg" alt="" class="wp-image-496289" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/4OOZWTKIY5LIFJQATNM7KMQ4T4-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/4OOZWTKIY5LIFJQATNM7KMQ4T4-300x194.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/4OOZWTKIY5LIFJQATNM7KMQ4T4-820x531.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/4OOZWTKIY5LIFJQATNM7KMQ4T4-139x90.jpg 139w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/4OOZWTKIY5LIFJQATNM7KMQ4T4-768x497.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/4OOZWTKIY5LIFJQATNM7KMQ4T4-1536x994.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">A building of the Bank of Botswana is seen in the capital Gaborone in Botswana, in this November 26, 2015 file photo. REUTERS/Siphiwe Sibeko</figcaption></figure>



GABORONE, June 13 (Reuters)&nbsp;&#8211;&nbsp;Botswana&#8217;s central bank lowered its key lending rate&nbsp;by 25 basis points to 2.15% on Thursday.



Governor Cornelius Dekop told a news conference that there was scope to ease monetary policy as the economy was forecast to operate below full capacity and not generate any demand-driven inflationary pressures.



The southern African country&#8217;s consumer inflation rose to 3.1% year on year in April from 2.9% in March, at the bottom end of the bank&#8217;s 3% to 6% medium-term objective range.



Inflation is expected to remain within the objective range in the medium term, averaging 3.6% in 2024 and 4.5% in 2025, Dekop added.



The central bank&#8217;s Monetary Policy Rate is based on a seven-day instrument. It was lowered to 2.40% in December, before which it had been at 2.65% for over a year.



(Reporting by Brian Benza; Writing by Tannur Anders; Editing by Alexander Winning)

File photo of building of the Bank of Botswana in the capital Gaborone in Botswana

Botswana central bank cuts key rate by 25 basis points

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1247" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/V23ILMSJMNN2RL62T7LQBERPAI-1-scaled.jpg" alt="" class="wp-image-496274" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/V23ILMSJMNN2RL62T7LQBERPAI-1-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/V23ILMSJMNN2RL62T7LQBERPAI-1-300x183.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/V23ILMSJMNN2RL62T7LQBERPAI-1-820x499.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/V23ILMSJMNN2RL62T7LQBERPAI-1-148x90.jpg 148w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/V23ILMSJMNN2RL62T7LQBERPAI-1-768x468.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/V23ILMSJMNN2RL62T7LQBERPAI-1-1536x936.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Kenya&#8217;s Finance Minister Njuguna Ndung&#8217;u presents the Government Budget for the 2023/24 fiscal year inside the Parliament building in Nairobi, Kenya June 15, 2023. REUTERS/Monicah Mwangi</figcaption></figure>



NAIROBI, June 13 (Reuters)&nbsp;&#8211;&nbsp;Kenya&#8217;s 2024/25 budget will aim to tackle its debt while protecting its fragile economic recovery at the same time, Finance Minister Njuguna Ndung&#8217;u said on Thursday.



In April, the finance ministry forecast economic growth to increase to 5.5% this year from 5.6% in 2023.



Ndung&#8217;u is due to present the budget later to parliament.



&#8220;The budget today is going to emphasise on the policies that we need to strength to implement &#8230; to support that fragile growth, that fragile economic recovery,&#8221; he told reporters.



&#8220;We want to make sure that we revive the economy so that it can generate jobs for the youth. We want to revive the economy so that we can pay our debt. We have been buffeted by that,&#8221; he added.



Total public debt stands at an estimated 68% of GDP for fiscal 2023/24, and is expected to fall to 64.8% in 2024/25, according to the World Bank.



The East African nation sold a $1.5 billion&nbsp;international bond&nbsp;in February at premium to fund the buyback of a large portion of a $2 billion bond maturing in June.



Before that, investors had feared Kenya might not be able to repay the bond due to its strained public finances.



Kenya&#8217;s economy is largely driven by agriculture, manufacturing, transport and storage, financial and insurance services and real estate.



Last week, parliament approved overall spending for the year at 4 trillion shillings ($31 billion), up from the 3.75 trillion shillings the minister presented last June for the 2023/24 year. That budget was later adjusted to 3.85 trillion shillings.



The 2024/25 budget will be accompanied by the Finance Bill 2024, a separate law outlining revenue-raising proposals which many critics say some could cripple sectors including financial and internet services, transport, manufacturing and retail.



Last week, the central bank governor said Kenya will use part of a $1.2 billion World Bank budget support loan to make a payment of roughly $500 million on a Eurobond maturing this month.



(Reporting by George Obulutsa; Editing by Bate Felix and Miral Fahmy)

Kenya’s Finance Minister Njuguna Ndung’u presents the Government Budget for the 2023/24 fiscal year in Nairobi

Kenya budget to tackle debt, protect economy, finance minister says

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1365" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-630005282-scaled.jpg" alt="" class="wp-image-496255" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-630005282-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-630005282-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-630005282-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-630005282-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-630005282-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/GettyImages-630005282-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Street scene, Dar es Salaam, Tanzania. (Photo by: Education Images/Universal Images Group via Getty Images)</figcaption></figure>



DAR ES SALAAM, June 13 (Reuters)&nbsp;&#8211;&nbsp;Tanzania&#8217;s economy is forecast to grow&nbsp;even&nbsp;faster this year&nbsp;than&nbsp;in 2023, Kitila Mkumbo, minister of state in the president&#8217;s Office for Planning and Investment, said on Thursday.



Mkumbo told parliament that the economy was projected to grow 5.4% this year from 5.1% in 2023, which was faster than the 4.7% a year earlier.



Tanzania&#8217;s economy largely relies on tourism, mining, agriculture and manufacturing.



Mkumbo said the government expected&nbsp;the&nbsp;budget deficit in&nbsp;the coming fiscal year&nbsp;to not exceed 3% of gross domestic product.



Finance Minister Mwigulu Nchemba is due to present the 2024/25 (July-June) budget to parliament later on Thursday.



The World Bank said in March that Tanzania had sustained its economic growth&nbsp;despitethe&nbsp;increasing impact of climate change.



The bank said&nbsp;growth was&nbsp;due to stronger business&nbsp;confidence&nbsp;and improved trade balances which boosted aggregate demand, balancing the damaging impact of droughts and floods on household income.



In the last three years, President Samia Suluhu Hassan’s administration has&nbsp;undertaken&nbsp;various economic reforms with ambitions to return the country’s economic growth to the pre-pandemic real GDP growth rates of 6-7%.



Tanzania’s central bank raised its key interest rate to 6% in April for the quarter ending June 2024 from 5.5% in January to&nbsp;keep a lid on&nbsp;lingering inflationary pressure.



(Reporting by Nuzulack Dausen; writing by George Obulutsa; editing by Jason Neely and Christina Fincher)

Street scene, Dar es Salaam, Tanzania

Tanzania’s GDP to accelerate to 5.4% in 2024, minister says

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1365" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/DGXHOJLFTBOPZEJ42TWSLF6634-scaled.jpg" alt="" class="wp-image-496201" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/DGXHOJLFTBOPZEJ42TWSLF6634-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/DGXHOJLFTBOPZEJ42TWSLF6634-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/DGXHOJLFTBOPZEJ42TWSLF6634-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/DGXHOJLFTBOPZEJ42TWSLF6634-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/DGXHOJLFTBOPZEJ42TWSLF6634-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/DGXHOJLFTBOPZEJ42TWSLF6634-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">FILE PHOTO: Prime Minister of Rwanda Edouard Ngirente addresses Tallinn Digital Summit in Tallinn, Estonia October 10. 2022. REUTERS/Ints Kalnins/File Photo</figcaption></figure>



NAIROBI, June 13 (Reuters)&nbsp;&#8211;&nbsp;Rwanda has named statistics official Yusuf Murangwa as its new finance minister, Prime Minister Edouard Ngirente said, while the foreign minister will be Olivier Nduhungirehe, its ambassador to the Netherlands.



The appointments were unveiled in a statement on Wednesday, along with those of ministers holding the portfolios of public service and labour, gender and family promotion and the environment.



Murangwa, the new finance minister, was director-general of the government statistics office, the National Institute of Statistics of Rwanda, until his appointment.



The statement did not say where the former occupant, Uzziel Ndagijimana, had been reassigned, however, although Nduhungirehe&#8217;s predecessor will go to the interior ministry, Ngirente said in the statement.



Rwanda is set to hold its presidential election on July 15.



(Reporting by George Obulutsa; Editing by Jamie Freed and Clarence Fernandez)

Tallinn Digital Summit in Tallinn

Rwanda appoints new finance, foreign ministers

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/HYOZR4V5OFMSPNBFMBMKEZUGSQ-820x547.jpg" alt="" class="wp-image-495992" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/HYOZR4V5OFMSPNBFMBMKEZUGSQ-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/HYOZR4V5OFMSPNBFMBMKEZUGSQ-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/HYOZR4V5OFMSPNBFMBMKEZUGSQ-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/HYOZR4V5OFMSPNBFMBMKEZUGSQ-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/HYOZR4V5OFMSPNBFMBMKEZUGSQ-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/HYOZR4V5OFMSPNBFMBMKEZUGSQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A girl carries a jerrycan filled with water at a Tolou Keur garden in the Walalde department of Podor, in the Great Green Wall of the Sahara and the Sahel area, Senegal, July 11, 2021. REUTERS/Zohra Bensemra/File Photo</figcaption></figure>



LONDON/DAKAR, June 12 (Reuters)&nbsp;&#8211;&nbsp;Africa&#8217;s Great Green Wall, which is meant to restore degraded landscapes and boost economies across the continent, is low on cash and unlikely to meet a 2030 completion goal, the president of the most recent UN summit on desertification told Reuters.



Launched in 2007, the project to reinstate 100 million hectares of land is only 30% complete, said Alain Richard Donwahi, president of the 2022 U.N. summit held in the Ivory Coast, who has access to the analysis of how it is progressing.



The project aims to restore an 8,000 kilometre-long (500 mile-long) corridor from the Atlantic to the Red Sea and benefits some of the world&#8217;s poorest countries at the edge of the Sahara Desert, including Ethiopia, Mali and Sudan.



&#8220;It is an understatement to stress that we are not in line with our common objective to complete by 2030,&#8221; Donwahi said on the sidelines of this month&#8217;s Bonn Climate Change Conference, where he was seeking renewed support for the landmark project.



&#8220;The project faces substantial challenges, primarily in terms of financing and implementation,&#8221; said Donwahi, who serves as president of the U.N. summit on desertification until the next one in Riyadh, Saudi Arabia, in December.



With no centralised monitoring entity in charge of the project, coordinating the work across the 11 African countries involved has been especially challenging, Donwahi said.



Meanwhile, some of those countries have been beset by humanitarian crises in recent years fuelled by military coups, war, or Islamist insurgencies.



The project was estimated to need at least $33 billion more funding to achieve its 2030 target, according to a progress review in 2020 by the U.N. Convention to Combat Desertification (UNCCD), which has provided occasional implementation reports.



International donors pledged some $19 billion at a 2021 summit, but by March of last year, only $2.5 billion had come through, with the rest due by end-2025, according to the most recent funding update from the UNCCD.



Those pledged funds are also being spread across different projects that may be dedicated to international development, but not necessarily to the Great Green Wall, Donwahi said.



The difficulty keeping track of funding so far has been a key stumbling block, he added, welcoming the launch in June of an &#8216;observatory&#8217; to monitor financing and progress.



Even so, it is unclear where the project will get the remaining billions needed to get back on track. Donwahi said more investment would be needed from international donors, the private sector and Green Wall countries themselves.



Donwahi noted some progress, including 3 million jobs created in the restoration of the some 30 million hectares (74 million acres) of degraded land, roughly equivalent to the size of the Philippines.



With climate change escalating, though, the issue was increasingly a problem the wider world needs to face, said Donwahi, adding: &#8220;For too long, desertification and drought have been considered African problems&#8221;.



(Editing by Katy Daigle and Alexander Smith)

FILE PHOTO: Senegalese plant circular gardens in Green Wall defence against desert

Africa’s Great Green Wall to miss 2030 goal says UN desertification president

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-820x547.jpg" alt="" class="wp-image-423316" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/F4TO3YKQWNK6NCNXZJUQ2UEGC4-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A man walks past the International Monetary Fund (IMF) logo at its headquarters in Washington, U.S., May 10, 2018. REUTERS/Yuri Gripas/</figcaption></figure>



ACCRA, June 12 (Reuters)&nbsp;&#8211;&nbsp;Ghana&nbsp;has finalized&nbsp;a&nbsp;pact with its official creditor committee to&nbsp;formalise a debt restructuring deal agreed in January,&nbsp;smoothing the path towards a release of further funding from the International Monetary Fund,&nbsp;its finance ministry said on Wednesday.



The&nbsp;outlines of the agreement&nbsp;pave the way for approval by the&nbsp;IMF&#8217;s executive board for a&nbsp;second review of a $3 billion loan package and release of the next tranche of $360 million.



&#8220;The IMF Board&#8217;s approval should also trigger more financial assistance from our development partners, particularly the World Bank,&#8221; the finance ministry said in a statement.



The announcement confirms a Reuters report last week that a memorandum of agreement was about to be formalised.



Ghana is restructuring its debt to help it emerge from its worst economic crisis in a generation after defaulting on&nbsp;much of&nbsp;its overseas debt in 2022 amid soaring servicing costs.



Each creditor nation is now expected to sign the agreement individually, the ministry said, adding it would&nbsp;also bolster ongoing restructuring discussions with private creditors.



Ghana&#8217;s sovereign dollar bonds were little changed by 0837 GMT, with most issues trading between 50-51 cents on the dollar, a distressed level that suggests the market expects trims on private debt.



The financial terms of the agreement with official creditors remained unchanged from the deal agreed in January, the ministry said, adding it provided &#8220;significant debt service relief&#8221; during the period of the IMF-supported programme.



Ghana, the world&#8217;s second largest cocoa producer, is also facing cocoa delivery delays due to poor harvests, a move that could cut its income and compound debt distress



(Reporting by Maxwell Adombila Akalaare; Additional reporting by Libby George in London; Writing by Sofia Christensen and Duncan Miriri; Editing by Bernadette Baum)

FILE PHOTO: Man walks past the IMF logo at HQ in Washington

Ghana, creditor panel agree on debt restructuring, paving way for IMF cash

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/VHFMCME3UZO7DANJAKAOCLCA2U-820x547.jpg" alt="" class="wp-image-495905" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/VHFMCME3UZO7DANJAKAOCLCA2U-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/VHFMCME3UZO7DANJAKAOCLCA2U-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/VHFMCME3UZO7DANJAKAOCLCA2U-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/VHFMCME3UZO7DANJAKAOCLCA2U-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/VHFMCME3UZO7DANJAKAOCLCA2U-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/VHFMCME3UZO7DANJAKAOCLCA2U-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Nigeria&#8217;s President Bola Tinubu looks on after his swearing-in ceremony in Abuja, Nigeria May 29, 2023. REUTERS/Temilade Adelaja/File Photo</figcaption></figure>



ABUJA, June 12 (Reuters)&nbsp;&#8211;&nbsp;Nigeria&#8217;s President Bola Tinubu said on Wednesday economic reforms would continue despite increasing hardships that have fuelled public anger, and promised to send an executive bill to parliament soon to set a new minimum wage.



Tinubu, who came to power a year ago, removed a decades-old petrol subsidy that kept prices artificially low and devalued the currency, sending inflation soaring to 33.69% in April, its highest level in nearly three decades and eroding incomes.



In a television broadcast to mark Democracy Day, Tinubu acknowledged hardships caused by the reforms, which also include higher interest rates and the partial removal of electricity subsidies, but he said this would create a stronger foundation for future growth.



&#8220;Our economy has been in desperate need of reform for decades. It has been unbalanced because it was built on the flawed foundation of over-reliance on revenues from the exploitation of oil,&#8221; Tinubu said.



&#8220;As we continue to reform the economy, I shall always listen to the people and will never turn my back on you.&#8221;



Nigeria is grappling with the worst cost-of-living crisis in decades and labour unions last week suspended a strike called to pressure the government to agree a new monthly minimum wage.



The government has offered to double the minimum wage to 62,000 naira ($41.89) a month against labour demands of 250,000 naira, and Tinubu said his government had negotiated in good faith. The last minimum wage was set in 2019.



&#8220;We shall soon send an executive bill to the National Assembly to enshrine what has been agreed upon as part of our law for the next five years or less,&#8221; Tinubu said.



He did not say whether the bill would contain the government minimum wage proposal or a new figure.



Labour union leaders have said they would wait to hear back from Tinubu before deciding on next steps.



($1 = 1,480.0000 naira)



(Writing by MacDonald Dzirutwe; Editing by Jamie Freed)

FILE PHOTO: Nigeria’s President Bola Tinubu looks on after his swearing-in ceremony in Abuja

Nigeria’s president says economic reforms will continue despite hardships

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="459" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/PJCHMVECYFJSHBL6FLC3BX34ZM-1.jpg" alt="" class="wp-image-425605" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/06/PJCHMVECYFJSHBL6FLC3BX34ZM-1.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/PJCHMVECYFJSHBL6FLC3BX34ZM-1-300x189.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/06/PJCHMVECYFJSHBL6FLC3BX34ZM-1-143x90.jpg 143w" sizes="auto, (max-width: 728px) 100vw, 728px" /><figcaption class="wp-element-caption">A woman uses a trolley as she shops at a grocery store in East London, in the Eastern Cape province, South Africa, July 7, 2022. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, June 11 (Reuters) &#8211; South African business confidence slipped for the second month in a row in May, dented by a decrease in tourist arrivals and merchandise imports in the leadup to last month&#8217;s election, data showed on Tuesday.



The South African Chamber of Commerce and Industry (SACCI) Business Confidence Index fell to 107.8 in May, down from 108.9 in April and 114.7 in March.



SACCI said the future course of business confidence would be largely determined by the makeup of the new government, after the African National Congress (ANC) lost its parliamentary majority for the first time since coming to power at the end of apartheid 30 years ago.



The ANC is talking to a broad spectrum of political parties about setting up a government of national unity.



&#8220;Political stability and policy certainty will be fundamental assurances that drive business and investor sentiment,&#8221; SACCI said in a statement. 



(Reporting by Tannur Anders; Editing by Alexander Winning)

Woman shops at a grocery store, in East London

South African business confidence index falls for second month in May

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="500" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/J32EXN6PQFNGNFCW2LXA3JCAGE-820x500.jpg" alt="" class="wp-image-495627" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/J32EXN6PQFNGNFCW2LXA3JCAGE-820x500.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/J32EXN6PQFNGNFCW2LXA3JCAGE-300x183.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/J32EXN6PQFNGNFCW2LXA3JCAGE-148x90.jpg 148w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/J32EXN6PQFNGNFCW2LXA3JCAGE-768x468.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/J32EXN6PQFNGNFCW2LXA3JCAGE-1536x936.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/J32EXN6PQFNGNFCW2LXA3JCAGE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings/Illustration/File Photo</figcaption></figure>



JOHANNESBURG, June 11 (Reuters)&nbsp;&#8211;&nbsp;The South African rand gained in early trade on Tuesday, as political parties continued talks to try and form a government of national unity in the country, days away from the first sitting of lawmakers.



At 0725 GMT, the rand traded at 18.6450 against the dollar, around 0.44% stronger than its previous close.



The African National Congress (ANC) last week said it would look to form a government of national unity after it lost its parliamentary majority in an election in May, the first time since it came to power at the end of a apartheid 30 years ago.



Potential partners include the pro-business Democratic Alliance (DA) and the leftist Economic Freedom Fighters (EFF).



&#8220;The ongoing talks will remain at the front of investors&#8217; minds ahead of Friday when the National Assembly will hold its first sitting,&#8221; said Rand Merchant Bank analysts in a research note.



New lawmakers will be sworn-in, and the speaker, deputy speaker and next president will be elected.



South Africa&#8217;s benchmark 2030 government bond was stronger in early deals, with the yield down 4.5 basis points to 10.33%.



(Reporting by Tannur Anders; Editing by Rashmi Aich)

FILE PHOTO: South African Rand coins are seen in this illustration picture

South African rand gains as unity government talks continue

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-820x547.jpg" alt="" class="wp-image-493882" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas</figcaption></figure>



NAIROBI, June 11 (Reuters)&nbsp;&#8211;&nbsp;Kenya has reached a staff level agreement with the International Monetary Fund on Tuesday, the organisation said, paving the way for the disbursement of about $976 million.



The fund said in a statement that if its Executive Board approves a second review of Kenya&#8217;s Resilience and Sustainability Facility, it would have immediate access to $120 million.



The lender also urged the East African nation to adjust its 2024/25 budget to include more revenue raising measures, as a worsening in the primary fiscal balance in the previous financial year and a tax collection shortfall was expected to keep domestic borrowing needs high.



Although Kenya has been facing liquidity challenges since 2022, it managed to sell a new $1.5 billion Eurobond from international markets in February, albeit at a steep price, to partly buy back another Eurobond that is maturing in June.



The issuance assuaged investor concerns about a potential default, restored foreign investors confidence in the economy and caused the shilling currency to strengthen against the dollar.



The fund said fiscal adjustments for 2024/25 could remedy the situation.



&#8220;Authorities have taken decisive steps towards fiscal consolidation by introducing several measures in the context of the draft 2024/25 Budget and the 2024 Finance Bill,&#8221; it added.



The finance minister is due to present the 2024/25 (July-June) budget to parliament on Thursday.



Parliament approved overall spending for the year at 4 trillion shillings ($31 billion), up from the 3.75 trillion shillings the minister presented last June for the 2023/24 year. That budget was later adjusted to 3.85 trillion shillings.



The 2024/25 budget will be accompanied by the Finance Bill 2024, a separate law outlining revenue-raising proposals which some critics say some could cripple sectors including financial services, transport, manufacturing and retail.



Kenya&#8217;s current IMF deal, which is for a total of $3.6 billion, was agreed in April 2021. The current review is the seventh under the program.



Last week, the central bank governor said Kenya will use part of a $1.2 billion World Bank budget support loan to make a payment of roughly $500 million on a Eurobond maturing this month.



($1 = 129.0000 Kenyan shillings)



(Additional reporting by Gursimran Kaur in Bangalore; Editing by Jacqueline Wong and Miral Fahmy)

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