<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-820x547.jpeg" alt="" class="wp-image-467526" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">High-rise residential and commercial buildings are being constructed near Dongyu Road, Qiantan, in the Pudong New Area of Shanghai, China, on March 15, 2024.  Nurphoto | Nurphoto | Getty Images</figcaption></figure>



BEIJING — &nbsp;China’s economic data for the first two months of the year beat analysts’ expectations across the board on Monday.



Retail sales rose 5.5%, better than the 5.2% increase forecast in a Reuters poll, while industrial production climbed 7%, compared with estimates of 5% growth.



Fixed asset investment rose by 4.2%, more than the 3.2% estimated by analysts.



The unemployment rate in February for cities came in at 5.3%.



Online retail sales of physical goods rose 14.4% from a year earlier during the first two months of the year.



Investment into real estate fell 9% in the first two months of the year from a year ago. Investment in infrastructure rose by 6.3% while those in manufacturing increased by 9.4% during that time.



“We believe China’s sequential growth momentum remained solid in Q1 despite notable divergence across sectors,” Goldman Sachs analysts said in a report Monday following the data release.



“However, to secure the ambitious “around 5%” growth target this year, more policy easing is still necessary, especially on the demand-side (e.g., fiscal, housing and consumption).”



Despite the upbeat results, National Bureau of Statistics Spokesperson Liu Aihua cautioned that domestic demand remains insufficient.



She told reporters that real estate remains in a period of “adjustment,” and that the overall economy is “in a critical period of recovery, transformation and upgrading,” according to a CNBC translation of her comments in Mandarin.



When asked about the unemployment rate for people aged 16 to 24, Liu said the figures would be released a few days after the monthly press conference on economic data.



<h2 class="wp-block-heading" id="h-holiday-boost"><a></a>Holiday boost</h2>



Economic figures for January and February are typically combined in China to smooth out variations from the Lunar New Year, which can fall in either month depending on the calendar year. It is the country’s biggest national holiday, in which factories and businesses remain closed for at least a week.



This year, the number of domestic tourist trips and revenue during the holiday grew compared with last year as well as pre-pandemic figures from 2019. But Nomura’s Chief China Economist Ting Lu pointed out that “average tourism spending per trip was still 9.5% below pre-pandemic levels in 2019.”



Retail sales did not rebound from the pandemic as strongly as many had expected as consumers have grown uncertain about their future income.



“Consumers were buoyed temporarily by festivities-related spending at this start of the year. In the absence of decisive consumption-related stimulus this year, we think it would be difficult to sustain a robust consumer spending pace this year,” Oxford Economics’ Chief Economist Louise Loo said in a report on Monday.



<h2 class="wp-block-heading" id="h-lackluster-demand"><a></a>Lackluster demand</h2>



New loans in February missed expectations and fell from the prior month, “even after adjusting for seasonality,” Goldman Sachs analysts said in a report on Friday.



“The persistent weakness in property transactions and low consumer sentiment may continue to weigh on household borrowing,” the analysts said. “More monetary policy easing is needed.”



People’s Bank of China Governor Pan Gongsheng said earlier this month there was still room to cut the reserve requirement ratio, or the amount of cash banks need to have on hand.



Goldman expects 25 basis point cuts to that ratio in the second quarter of this year, as well as in the fourth quarter.



Real estate, which accounts for a significant part of household assets, has slumped over the last few years after Beijing’s crackdown on developers’ high reliance on debt for growth.



The average property price for 70 major Chinese cities fell by 4.5% in February from January on a seasonally adjusted, annualized basis, according to Goldman Sachs’ analysis using a weighted average of official figures.



That’s steeper than the 3.5% month-on-month drop in property prices in January, Goldman Sachs said.



“Our high frequency tracker suggests that 30-city new home transaction volume declined by 53.2% [year-on-year] in early March after adjusting to the lunar calendar basis,” the analysts said in a report.



<h2 class="wp-block-heading" id="h-focus-on-manufacturing"><a></a>Focus on manufacturing</h2>



Chinese authorities did not reveal significant new support for the massive real estate sector during an annual parliamentary meeting that ended last week.



Instead, Beijing emphasized the country’s focus on developing manufacturing and technological capabilities.



When asked Monday about overcapacity concerns, Liu said that China’s manufacturing capacity utilization rate was 76% in the fourth quarter, a 0.2 percentage point increase from a year earlier.



She described efforts to increase the level of high-end manufacturing a “strategic decision for achieving high-quality development,” while noting that efforts are needed to prevent inefficient and ineffective investments in the sector.



Data earlier this month showed China’s exports for January and February rose by 7.1% in U.S. dollar terms, beating expectations for a 1.9% increase.



Imports climbed by 3.5% during that time, also topping Reuters’ forecast for growth of 1.5%.

107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7

China kicks off the year on strong note as retail, industrial data tops expectations

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="573" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/G6IQ2EEFO5PCHEPUVS6EXIGITA-820x573.jpg" alt="" class="wp-image-466544" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/G6IQ2EEFO5PCHEPUVS6EXIGITA-820x573.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/G6IQ2EEFO5PCHEPUVS6EXIGITA-300x210.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/G6IQ2EEFO5PCHEPUVS6EXIGITA-129x90.jpg 129w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/G6IQ2EEFO5PCHEPUVS6EXIGITA-768x537.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/G6IQ2EEFO5PCHEPUVS6EXIGITA-1536x1074.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/G6IQ2EEFO5PCHEPUVS6EXIGITA-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Governor of the South African Reserve Bank Lesetja Kganyago speaks at a press conference ahead of South Africa&#8217;s Finance Minister Enoch Godongwana 2024 budget speech in Cape Town, South Africa, February 21, 2024. REUTERS/Esa Alexander/File Photo</figcaption></figure>



OHANNESBURG, March 15 (Reuters)&nbsp;&#8211;&nbsp;South African President Cyril Ramaphosa has extended the term of central bank governor Lesetja Kganyago for another five years from November and appointed Mampho Modise as a new deputy governor of the bank, the presidency said on Friday.



&#8220;The re-appointment of Governor Kganyago will ensure continuity and institutional stability at the reserve bank,&#8221; the presidency said in a statement.



Kganyago&#8217;s term was extended to 2029, which will make him one of the longest serving governors in democratic South Africa. He was first appointed in 2014.



Modise, who is currently a deputy director-general in the National Treasury, will start her role on April 1 for a term of five years, the statement said. She replaces former deputy governor Kuben Naidoo.



Minister of Finance Enoch Godongwana said in a statement that Modise was a competent leader who had a &#8220;keen appreciation of the challenging macroeconomic period the country is facing&#8221;.



According to the central bank, Modise will be responsible for financial stability and economic statistics and will be a member of the Monetary Policy Committee.



The MPC will announce its next interest rate decision on March 27.



(Reporting by Bhargav Acharya and Kopano Gumbi; Editing by Alexander Winning and Alison Williams)

Governor of the South African Reserve Bank Lesetja Kganyago speaks at a press conference ahead of 2024 budget speech, in Cape Town

South African president extends central bank governor’s term, appoints new deputy

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-820x547.jpg" alt="" class="wp-image-466609" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Angola&#8217;s President Joao Lourenco, left, shakes hands with Chinese President Xi Jinping during the Forum on China-Africa Cooperation held at the Great Hall of the People in Beijing September 3, 2018. Andy Wong/POOL Via REUTERS/File Photo</figcaption></figure>



BEIJING, March 15 (Reuters)&nbsp;&#8211;&nbsp;Chinese President Xi Jinping said he would support Chinese firms that invest in Angola&#8217;s agriculture and manufacturing sectors, state media reported on Friday, as the African oil producing nation seeks help in diversifying its economy.



&#8220;The Chinese side is willing to work with Angola to implement key infrastructure projects and support strong Chinese companies to go to Angola to carry out various forms of cooperation,&#8221; Xi told visiting Angolan President Joao Lourenco at the Great Hall of the People in Beijing.



Lourenco&#8217;s visit follows Angola&#8217;s announcement in December it would leave producer group the Organization of the Petroleum Exporting Countries and agreements with China on cooperation.



Xi told Lourenco on Friday Chinese firms could &#8220;help Angola achieve agricultural modernisation, industrialisation and economic diversification,&#8221; the state media report said, part of Beijing&#8217;s long-term drive to deepen economic and political ties with Africa.



China has a vested interest in Angola&#8217;s quest to overhaul its economy because Luanda owes Chinese creditors just under $21 billion, World Bank data shows.



Lourenco, who is accompanied on this visit by his agriculture minister, needs funds to implement structural reforms to cut its reliance on oil, as Luanda does not have enough non-oil revenue sources to finance its transition.



In December, China and Angola signed an investment protection agreement, while Angolan firms from Dec. 25 have had tariff-free access to China&#8217;s massive consumer market across 98% of goods under a separate agreement.



On Friday, the two leaders also agreed to upgrade bilateral ties to the level of comprehensive strategic cooperative partnership, allowing for greater trade and investment.



Chinese firms have invested close to $12 billion in Angola since it joined China&#8217;s Belt and Road Initiative in 2014, data from the American Enterprise Institute think tank shows, just under half of which went into the country&#8217;s energy sector.



The littoral state has plentiful reserves of base metals and ample agricultural resources, such as sugarcane, coffee, cotton and livestock, but they have been neglected compared to oil.



The International Monetary Fund on March 8 released its Executive Board&#8217;s assessment of Angola&#8217;s economy said &#8220;heavy dependence on the oil sector&#8221; put Luanda at a high risk of missing the 0.5% growth target the Fund forecast for 2023, as the IMF expects its oil sector to have shrunk by an annual 6.1% over last year.



(Reporting by Joe Cash; Editing by Sharon Singleton and Barbara Lewis)

FILE PHOTO: Angola’s President Joao Lourenco, left, shakes hands with Chinese President Xi Jinping during the Forum on China-Africa Cooperation held at the Great Hall of the People in Beijing

China’s Xi willing to work with Angola as it moves on from oil

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/IOK76AEDEZC2XPP3KQR2YLGFMI-820x547.jpg" alt="" class="wp-image-466482" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/IOK76AEDEZC2XPP3KQR2YLGFMI-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/IOK76AEDEZC2XPP3KQR2YLGFMI-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/IOK76AEDEZC2XPP3KQR2YLGFMI-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/IOK76AEDEZC2XPP3KQR2YLGFMI-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/IOK76AEDEZC2XPP3KQR2YLGFMI-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/IOK76AEDEZC2XPP3KQR2YLGFMI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song &#8211; RC2GX1AXMNDP</figcaption></figure>



LAGOS, March 15 (Reuters)&nbsp;&#8211;&nbsp;Visually-impaired Nigerian Kehinde Olutubosun is a geography and animal enthusiast who struggled to find information because he has no smartphone. But that is changing, thanks to an Artificial Intelligence-powered mobile phone that works offline.



The service, launched by Canada-based Viamo in Nigeria last month, allows anyone – even in the middle of nowhere without the internet &#8211; to access AI technology.



Viamo uses a traditional handset to tap into local mobile phone networks to send commands or requests for information through SMS or voice calls.



It works like other AI chatbots and can be used by illiterate persons since it can be prompted by voice. It is also cheaper.



&#8220;For people who are not that financially buoyant, they still have this opportunity to use even as little as 10 naira to ask lots of questions that will actually benefit them, I am so happy,&#8221; said Olutubosun.



Viamo said the device was targeted at the world&#8217;s poorest and remotest communities and is being expanded to Pakistan, India and Tanzania after being first launched in Zambia.



Viamo is supported by development agencies in the United States and the United Kingdom, among others. UNICEF has partnered with Viamo to provide information on HIV, tropical diseases, nutrition, water, sanitation and hygiene.



(Reporting by Seun Sanni in Lagos and Abraham Achirga in Abuja; Editing by Sharon Singleton)

An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai

No smartphone or internet? No problem; AI-backed phone has the answers

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2025403522-820x547.jpg" alt="" class="wp-image-466465" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2025403522-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2025403522-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2025403522-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2025403522-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2025403522-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-2025403522-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Wally Adeyemo, deputy US Treasury secretary, during a Bloomberg Television interview in New York, US, on Friday, Feb. 23, 2024. Adeyemo said that the US is exploring options to use $300 billion in Russian state assets frozen at the outbreak of its Ukraine invasion to help pay for the war-torn country&#8217;s reconstruction. Photographer: Christopher Goodney/Bloomberg via Getty Images</figcaption></figure>



MARIKANA, South Africa, March 14 (Reuters) &#8211; The United States is looking to Africa to help loosen a Chinese stranglehold on battery metals and reduce Russia&#8217;s influence over the market for other minerals, U.S. Deputy Treasury Secretary Wally Adeyemo said on Thursday.



Coronavirus pandemic fallout and Moscow&#8217;s war in Ukraine have sent Western governments scrambling to reduce their reliance on Chinese supply chains and disentangle their economies from Russia.



But as Washington plots a course for its energy transition it is lagging behind China, which has spent the past decade securing access to minerals needed for the production of products like electric vehicle batteries and solar panels.



&#8220;We don&#8217;t want to be overly reliant on any one country or any one company for global supply chains for critical minerals,&#8221; Adeyemo told Reuters during a visit to a platinum mine in Marikana, South Africa, owned by Sibanye-Stillwater.



While the U.S. government has launched a raft of measures to incentivise increased production of strategic and critical minerals at home, notably under the Inflation Reduction Act, Adeyemo acknowledged that overseas resources were also vital.



&#8220;Africa is going to play a huge role,&#8221; he said. &#8220;A lot of critical minerals are located here.&#8221;



Chinese assets in Africa already include massive copper and cobalt projects in Democratic Republic of Congo and Zambia as well as lithium in Zimbabwe, where companies are assisted by heavy Chinese state investment in accompanying infrastructure.



Adeyemo said the United States was working with G7 allies to close that infrastructure gap.



The U.S. International Development Finance Corporation is, meanwhile, aiming to de-risk private investment in Africa. And the deputy secretary said Washington was incentivising U.S. manufacturing to boost demand for those minerals and create favourable market conditions for miners.



But he added that the White House also stood ready to ensure a level playing field.



&#8220;We are talking to our European allies &#8230; about some of the actions we can take using trade tools to make sure that a country like China can&#8217;t flood the market with things like electric vehicles and solar panels,&#8221; he said.



<h2 class="wp-block-heading" id="h-hold-accountable">HOLD ACCOUNTABLE</h2>



Regarding Russia, Adeyemo said countries like South Africa also had a role to play.



In the wake of Moscow&#8217;s 2022 full-scale invasion of Ukraine, the U.S. government slapped sanctions on a number of Russian miners and mineral exports. But it left Russian platinum group metals (PGM) largely untouched.



The United States is a major consumer of palladium, a PGM used in catalytic converters, with 32% of its imports of the metal coming from Russia between 2019 and 2022, according to the U.S. Geological Survey.



&#8220;South Africa has a real opportunity to help supply the global economy,&#8221; Adeyemo said. &#8220;And it gives us the ability to take other actions to hold Russia accountable.&#8221;



South Africa is a major palladium producer, and Sibanye-Stillwater mines the metal both in Marikana and at a U.S. project in Montana.



&#8220;Between what comes out of South Africa and what&#8217;s produced in the U.S., the U.S. does not need to be dependent on sources from any other country,&#8221; CEO Neal Froneman told Reuters.



However, he said companies like his needed U.S. government support.



&#8220;You can provide loans or introduce tariffs or whatever it might be,&#8221; he said. &#8220;That is a role that they need to think very differently about and help companies that are trying to source and provide these critical metals into those ecosystems.&#8221; 



(Reporting by Joe Bavier; Editing by Mark Potter)

Deputy US Treasury Secretary Wally Adeyemo Interview

Africa to play ‘huge role’ in US critical mineral strategy, says Treasury’s No. 2

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="548" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/TP3J7GYZQFJPRMG5M7QAFSB3M4-820x548.jpg" alt="" class="wp-image-466201" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/TP3J7GYZQFJPRMG5M7QAFSB3M4-820x548.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/TP3J7GYZQFJPRMG5M7QAFSB3M4-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/TP3J7GYZQFJPRMG5M7QAFSB3M4-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/TP3J7GYZQFJPRMG5M7QAFSB3M4-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/TP3J7GYZQFJPRMG5M7QAFSB3M4-1536x1026.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/TP3J7GYZQFJPRMG5M7QAFSB3M4-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A view shows a Microsoft logo at Microsoft offices in Issy-les-Moulineaux near Paris, France, January 25, 2023. REUTERS/Gonzalo Fuentes</figcaption></figure>



JOHANNESBURG, March 14 (Reuters)&nbsp;&#8211;&nbsp;A&nbsp;major internet outage affected&nbsp;West and Central Africa&nbsp;on&nbsp;Thursday, the internet observatory Netblocks said,&nbsp;as&nbsp;operators of multiple subsea cables&nbsp;reported&nbsp;failures.



The cause of the cable failures was not immediately clear.



African subsea cable operator SEACOM confirmed that services on its West African Cable System were down and that customers who relied on that cable were redirected to the Google Equiano cable, which SEACOM uses.



&#8220;The redirection happens automatically when a route is impacted,&#8221; it said via email.



Ivory Coast was experiencing a severe outage, while Liberia, Benin, Ghana and Burkina Faso were seeing a high impact, Netblocks&#8217;s data showed.



Internet firm Cloudflare said&nbsp;in a post on the X social media platform&nbsp;that major internet disruptions were ongoing in Gambia, Guinea, Liberia, Ivory Coast, Ghana, Benin and Niger.



&#8220;There seems to be a pattern in the timing of the disruptions, impacting from the north to the south of Africa,&#8221; Cloudflare Radar said.



South African telecoms operator Vodacom&nbsp;VODJ.J&nbsp;also blamed connectivity issues on undersea cable failures&nbsp;that impacted&nbsp;the country&#8217;s network providers.



(Reporting by Anait Miridzhanian, Ngouda Dione and Nqobile Dludla; Editing by Hugh Lawson, Alex Richardson and Bernadette Baum)

A Microsoft logo is seen in Issy-les-Moulineaux near Paris

West, Central Africa see major internet outage with undersea cables down

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/3298090388_8ea8ea9c2a_k-820x547.jpg" alt="" class="wp-image-405408" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/3298090388_8ea8ea9c2a_k-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/3298090388_8ea8ea9c2a_k-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/3298090388_8ea8ea9c2a_k-120x80.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/3298090388_8ea8ea9c2a_k-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/3298090388_8ea8ea9c2a_k-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/3298090388_8ea8ea9c2a_k.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Standard Bank, photo: via Flickr</figcaption></figure>



JOHANNESBURG, March 14 (Reuters)&nbsp;&#8211;&nbsp;Africa&#8217;s biggest lender by assets Standard Bank&nbsp;SBKJ.J&nbsp;said on Thursday its annual profit jumped by 27% as high interest rates helped offset rising bad loans.



The lender posted headline earnings of 42.9 billion rand ($2.31 billion) for the year ended Dec. 31, while total net income grew by 20% to 177.6 billion rand, driven by net interest income growth of 25% and non-interest revenue growth of 13%.



The top five private South African banks, including Standard Bank &#8211; among the continent&#8217;s biggest &#8211; are generally known to have well-capitalised balance sheets and conservative lending practices.



But inflationary pressures, high interest rates, regular power blackouts and logistical bottlenecks are taking a toll on their most sensitive retail and small business customers, leading to defaults.



Standard Bank said credit impairment charges increased by 22% to 16.3 billion rand, which pushed the lender&#8217;s credit loss ratio- a measure of bad loans as a percentage of total loans- up to 98 basis points (bps) from 83 bps and close to the upper range of its target of 100 bps.



As a result, total provisions increased by 15% to 64 billion rand.



The lender&#8217;s loans and advances grew by 7% to 1.7 trillion rand as strong growth in corporate and sovereign lending offset subdued retail lending growth together with a decline in business lending.



&#8220;Our clients are likely to remain constrained until interest rates start to decline,&#8221; the bank said. It said credit impairment charges were expected to peak in the first half of 2024, driven primarily by ongoing strain in personal and private banking.



Meanwhile the credit loss ratio is expected to remain within the target but near the top of its range.



($1 = 18.6104 rand)



(Reporting by Nqobile Dludla; Editing by Muralikumar Anantharaman and Tomasz Janowski)

Standard Bank, photo: via Flickr

South Africa’s Standard Bank posts 27% jump in annual profit

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107387314-1710403838407-gettyimages-1168663318-UK_LANE-820x547.jpeg" alt="" class="wp-image-466196" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107387314-1710403838407-gettyimages-1168663318-UK_LANE-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107387314-1710403838407-gettyimages-1168663318-UK_LANE-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107387314-1710403838407-gettyimages-1168663318-UK_LANE-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107387314-1710403838407-gettyimages-1168663318-UK_LANE-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107387314-1710403838407-gettyimages-1168663318-UK_LANE-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107387314-1710403838407-gettyimages-1168663318-UK_LANE-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



The European Central Bank must take its time to get interest rate cuts right and will have a clearer picture of inflationary pressures in June, the institution’s chief economist told CNBC.



“A lot of evidence is accumulating, but what’s also fair to say is that the transition from this holding phase, we’ve been on hold since last September since a substantial hiking cycle, we do have to take our time to get that right, from holding to dialing back restrictions,” Philip Lane told CNBC’s Steve Sedgwick on Thursday.



Lane, a Governing Council member, said the euro zone central bank’s March meeting had been an “important milestone” in the accumulation of evidence, and showed the “disinflation process has been ongoing.” During the meeting, the ECB held rates and released updated macroeconomic projections, which lowered its inflation forecast for this year to 2.3% from 2.7%.



Inflation in the 20-nation bloc eased to 2.6% in February.



In line with the ECB’s March messaging, Lane said that more data was required, particularly around wages, and that the Governing Council would “learn a lot by April, a lot more by June” — the dates of its next two meetings.



In a press conference following the March meeting, ECB President Christine Lagarde said market pricing on the timing of rate cuts — which indicate a start in June as of Thursday — “seems to be converging better” with the central bank’s view.



June emerged as a key date in market commentary, as it’s set to mark the first meeting where the ECB can assess spring data on wage negotiations for the year.



Asked about other colleagues on the ECB’s Governing Council who have suggested rate cuts could take place before the summer, Lane said he believed this was a reference to the second quarter, which would include June.



“I think Q2 is a time when we will be far enough into 2024 to see more of the wage dynamic, to see more of the price pressures.”



He stressed that it was important, in his own role, to “avoid trying to provide calendar guidance to the market.”



“Once we are sufficiently confident that we will get back to target in a sustainable manner, in a timely manner, that’s the right time to move to the next phase,” he said.



<h2 class="wp-block-heading" id="h-room-for-profits-to-come-down"><a></a>Room for profits to come down</h2>



Policymakers have repeatedly stressed that many of the causes of the inflationary cycle have subsided, such as the energy price spike and supply chain issues. But they remain concerned about domestic inflationary pressures from corporate profits and wage rises.



Bank of England Governor Andrew Bailey caused controversy in 2022 for suggesting workers should not ask for a pay rise in order to avoid stoking inflation.



Lane said Thursday that, while the ECB’s forecast relied on some moderation in wage growth, it was “important” for people’s inflation-adjusted salaries to improve, and that companies should shoulder lower profits to allow this to happen.



“Wages were not the source of this inflation problem. But in terms of making sure we get back to target, the interplay between wages and profits, our forecast is built on a degree of wage deceleration,” he said.



“It’s important to say, we need to see workers’ real incomes improve, to rebuild, not just this year, [but] the year after. So we allow for higher to normal wage increases.”



Lane added, “But we also need to see, essentially, firms absorbing a fair amount of that in lower profits. Profits were quite high in 2022, there is some room for profits to come down. And that is part of the open questions we have.”

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European Central Bank chief economist: Must ‘take our time’ on rate cuts, clearer picture due in June

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="531" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/FVXMR5IP2RPR5GK36AFACMY2CM-1-820x531.jpg" alt="" class="wp-image-466137" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/FVXMR5IP2RPR5GK36AFACMY2CM-1-820x531.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/FVXMR5IP2RPR5GK36AFACMY2CM-1-300x194.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/FVXMR5IP2RPR5GK36AFACMY2CM-1-139x90.jpg 139w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/FVXMR5IP2RPR5GK36AFACMY2CM-1-768x497.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/FVXMR5IP2RPR5GK36AFACMY2CM-1-1536x994.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/FVXMR5IP2RPR5GK36AFACMY2CM-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Supporters of the African National Congress (ANC) wait beneath posters of South African President Cyril Ramaphosa, with a fenced-off statue of Boer war leader Paul Kruger, a controversial figure in the history of South Africa, ahead of the launch of an election manifesto at the church square in Pretoria, South Africa, September 27, 2021. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, March 14 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s ruling African National Congress (ANC) party is betting on retaining its parliamentary majority in a May election and is not in talks with other parties on a possible coalition government, the party&#8217;s deputy secretary general said.



South Africans will go to polls on May 29 to elect a new National Assembly, which will then choose the next president.



&#8220;We will not go to war having accepted defeat. We are going to war to win,&#8221; ANC veteran Nomvula Mokonyane told Reuters in an interview, adding that the party was aware that &#8220;stakes are high because not everybody is comfortable with us in power.&#8221;



Surveys show that the ANC is likely to lose its parliamentary majority for the first time since Nelson Mandela led it to power at the fall of apartheid 30 years ago. This would open up the prospect of coalition rule.



&#8220;A coalition government won&#8217;t work for now,&#8221; said Mokonyane, pointing to failed power-sharing attempts at the local government level, where coalitions have largely proved unstable due to a lack of legislation to regulate the partnerships.



But the ANC is open to working with anyone as long as they agree on &#8220;the task at hand&#8221;, Mokonyane added.



The ANC&#8217;s image has been tarnished in the past decade by economic stagnation, rising unemployment and repeated corruption scandals involving its top officials.



Analysts say losing its majority might jolt the party to do better on service delivery, expand the economy and address other ills like crime and corruption. But coalitions could also end up being fractious and impeding already poor service delivery.



Potential coalition partners for the ANC could include the largest opposition party, the Democratic Alliance, and the far-left Economic Freedom Fighters party.



Mokonyane portrayed the ANC as having learned from its mistakes, such as extending the country&#8217;s electricity network to more people without boosting generation capacity or investing in renewables. Power cuts are now a part of daily life in South Africa.



Thirty years after the end of white minority rule, more than 30% of South Africans are unemployed, the murder rate is rising, and income inequality is among the highest in the world.



&#8220;We are quite certain that with our challenges and imperfections, those happened because we&#8217;re doing something that was never done,&#8221; said Mokonyane.



She criticized foreign ownership of land and mineral resources and said the ANC would do more to put national interests first, while emphasizing the progress it has made in areas such as social welfare and girls&#8217; education.



&#8220;The inequality that we see&#8230; it&#8217;s very stubborn,&#8221; she said. &#8220;We&#8217;ve tried to turn it around, and 30 years is not a (long) enough period to turn things around.&#8221;



(Reporting by Olivia Kumwenda-Mtambo and Nellie Peyton, Editing by William Maclean)

Supporters of the African National Congress (ANC) wait for the launch of an election manifesto in Pretoria

South Africa’s ANC wary of post-election coalition, says it ‘won’t work’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-820x547.jpg" alt="" class="wp-image-466091" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Farmers separate infected cocoa beans from a pile at a farm in San Pedro, western Ivory Coast August 12, 2010. REUTERS/Luc Gnago/File Photo</figcaption></figure>



LONDON/ACCRA, March 13 (Reuters)&nbsp;&#8211;&nbsp;Major African cocoa plants in Ivory Coast and Ghana have stopped or cut processing because they cannot afford to buy beans, four trading sources said, meaning chocolate prices around the world are likely to soar.



Chocolate-makers have already increased prices to consumers, after three years of poor cocoa harvests, with a fourth expected, in the two countries that produce nearly 60% of the world&#8217;s cocoa.



Cocoa prices&nbsp;LCCc2&nbsp;have more than doubled over the last year, scaling numerous all-time highs.



&#8220;We need massive demand destruction to catch up with the supply destruction,&#8221; Tropical Research Services&#8217; Steve Wateridge, a world expert on cocoa, said.



Chocolate-makers cannot produce chocolate using raw cocoa and rely on processors to turn beans into butter and liquor that can be made into chocolate.



But the processors say they cannot afford to buy the beans.



State-controlled Ivorian bean processor Transcao, one of the country&#8217;s nine major plants, said it had stopped buying beans because of their price.



It said it was still processing from stock, but did not say what capacity it was running at. Two industry sources said the plant was almost idle.



They asked not to be named because they were not authorised to speak publicly on the issue.



One of the two sources said more major state run plants could shut soon in top grower Ivory Coast, which produces nearly half the world&#8217;s cocoa.



The same two sources said even global trader Cargill struggled to source beans for its major processing plant in Ivory Coast, halting operations for about a week last month. Cargill did not respond to a request for comment.



In No. 2 cocoa grower Ghana, most of its eight plants, including state-owned Cocoa Processing Company (CPC), have repeatedly suspended work for weeks since the season started in October, two separate industry sources said.



CPC said it is operating at about 20% of capacity because of the shortage of beans.



<h2 class="wp-block-heading" id="h-disruption-at-the-farm-gate">DISRUPTION AT THE FARM GATE</h2>



The price rally has derailed a long-established mechanism for global cocoa trade, through which farmers sell beans to local dealers who sell them on to processing plants or global traders.



Those traders then sell beans or cocoa products &#8211; butter, powder and cocoa liquor &#8211; to global chocolate giants such as Nestle&nbsp;NESN.S, Hershey&nbsp;HSY.N&nbsp;and Mondelez&nbsp;MDLZ.O.



In normal times, the market is heavily regulated &#8211; traders and processors purchase beans from local dealers up to a year in advance at pre-agreed prices. Local regulators then set lower farmgate prices that farmers can charge for beans.



However, in times of shortage like this year, the system breaks down &#8211; local dealers often pay farmers a premium to the farmgate price to secure beans.



The dealers then sell the beans on the spot market at higher prices instead of delivering them at pre-agreed prices.



As global traders rush to purchase those beans at any price to meet their obligations with the chocolate firms, local processors are often left short of beans.



Ivorian and Ghanian authorities normally try to protect local plants by issuing them with cheap loans or by limiting volumes of beans that global traders can purchase.



This year, however, plants are not getting the cocoa they pre-ordered and cannot afford to buy at higher spot prices.



Already, chocolate-makers have raised prices. U.S. retail stores charged 11.6% more for chocolate products last year compared with 2022, data from market research firm Circana shows.



The International Cocoa Organisation (ICCO) expects global cocoa production will fall by 10.9% to 4.45 million metric tons this season.



Grindings &#8211; a measure of demand &#8211; will fall by 4.8% to 4.78 million as processors struggle to buy beans, and supply less butter at a higher price to chocolate-makers, which in turn raise prices.



The supply-demand mismatch will leave the market with a deficit of 374,000 tons this season, up from 74,000 tons last season, according to the ICCO.



This means processors and chocolate firms will have to draw on cocoa stocks to fully cover their needs. The ICCO expects global cocoa stocks to fall to their lowest in 45 years by the season end.



Wateridge of Tropical Research said the cocoa market could post another deficit next season based on the severity of bean disease in West Africa.



The market has not seen four successive years of deficit since the late 1960s, ICCO data shows.



(Reporting by Maytaal Angel; editing by Barbara Lewis)

FILE PHOTO: Farmers separate infected cocoa beans from a pile at a farm in San Pedro

African cocoa plants run out of beans as global chocolate crisis deepens

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386763-1710330203990-gettyimages-1998660059-2024-2-9dfdfe.png" alt="" class="wp-image-465858" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386763-1710330203990-gettyimages-1998660059-2024-2-9dfdfe.png 740w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386763-1710330203990-gettyimages-1998660059-2024-2-9dfdfe-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386763-1710330203990-gettyimages-1998660059-2024-2-9dfdfe-160x90.png 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption class="wp-element-caption">Artificial Intelligence: the new technology that has taken the sector by storm.  Just_super | E+ | Getty Images</figcaption></figure>



The European Union’s parliament on Wednesday approved the world’s first major set of regulatory ground rules to govern the mediatized artificial intelligence at the forefront of tech investment.



The EU brokered provisional political consensus&nbsp;<a href="https://www.europarl.europa.eu/news/en/press-room/20231206IPR15699/artificial-intelligence-act-deal-on-comprehensive-rules-for-trustworthy-ai" target="_blank" rel="noreferrer noopener">in early December</a>, and it was then endorsed in the Parliament’s Wednesday session, with 523 votes in favour, 46 against and 49 votes not cast.



“Europe is NOW a global standard-setter in AI,” Thierry Breton, the European Commissioner for internal market, wrote on X.



President of the European Parliament, Roberta Metsola, described the act as trail-blazing, saying it would enable innovation, while safeguarding fundamental rights.



“Artificial intelligence is already very much part of our daily lives. Now, it will be part of our legislation too,” she wrote in a social media post.



Dragos Tudorache, a lawmaker who oversaw EU negotiations of the agreement, hailed the agreement, but noted that the biggest hurdle remains implementation.



Born in 2021, the EU AI Act divides the technology into categories of risk, ranging from “unacceptable” — which would see the technology banned — to high, medium and low hazard.



The regulation is expected to enter into force at the end of the legislature in May, after passing final checks and receiving endorsement from the European Council. Implementation will then be staggered from 2025 onwards.



Some EU countries have previously advocated self-regulation over government-led curbs, amid concerns that stifling regulation could set hurdles in Europe’s progress to compete with Chinese and American companies in the tech sector. Detractors have included Germany and France, which house some of Europe’s promising AI startups.



The EU has been scrambling to keep pace with the consumer impact of tech developments and the market supremacy of key players.



Last week, the Union brought into force landmark competition legislation set to rein in U.S. giants. Under the Digital Markets Act, the EU can crack down on anti-competitive practices from major tech companies and force them to open out their services in sectors where their dominant position has stifled smaller players and choked freedom of choice for users. Six firms — U.S. titans Alphabet, Amazon, Apple, Meta, Microsoft and China’s Bytedance — have been put on notice as so-called “gatekeepers.”



Concerns have been mounting over the potential for abuse of artificial intelligence, even as heavyweight players like Microsoft, Amazon, Google and chipmaker Nvidia beat the drum for AI investment.



Governments fear the possibility of deepfakes — forms of artificial intelligence that generate false events, including photos and videos — being deployed in the lead-up to a swathe of key global elections this year.



Some AI backers are already self-regulating to avoid disinformation. On Tuesday, Google announced it will limit the type of election-related queries that can be asked of its Gemini chatbot, saying it has already implemented the changes in the U.S. and in India.



“The AI Act has pushed the development of AI in a direction where humans are in control of the technology, and where the technology will help us leverage new discoveries for economic growth, societal progress, and to unlock human potential,” Tudorache said on social media on March 12. 



“The AI Act is not the end of the journey, but, rather, the starting point for a new model of governance built around technology. We must now focus our political energy in turning it from the law in the books to the reality on the ground,” he added.&nbsp;



Legal professionals described the act as a major milestone for international AI regulation, noting that it could pave the path for other countries to follow suit.



“Once again, it’s the EU that has moved first, developing a very comprehensive set of regulations,” said Steven Farmer, partner and AI specialist at international law firm Pillsbury.



“The bloc moved early in the rush to regulate data, giving us the GDPR, which we are seeing a global convergence towards,” he continued, referring to the EU’s General Data Protection Regulation law. “The AI Act seems to be a case of history repeating itself.”



Mark Ferguson, public policy expert at Pinsent Masons, added that the passage of the act was just the beginning, and that businesses will need to work closely with lawmakers to understand how it will be implemented as the fast-moving technology continues to evolve.

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World’s first major act to regulate AI passed by European lawmakers

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386786-1710332256577-gettyimages-2066794515-porzycki-bahraind240304_npQj7-820x461.png" alt="" class="wp-image-465841" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386786-1710332256577-gettyimages-2066794515-porzycki-bahraind240304_npQj7-820x461.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386786-1710332256577-gettyimages-2066794515-porzycki-bahraind240304_npQj7-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386786-1710332256577-gettyimages-2066794515-porzycki-bahraind240304_npQj7-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386786-1710332256577-gettyimages-2066794515-porzycki-bahraind240304_npQj7-768x432.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386786-1710332256577-gettyimages-2066794515-porzycki-bahraind240304_npQj7.png 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A view of an oil well at Arab Desert in Jebel Dukhan, Bahrain on March 4, 2024. Nurphoto | Nurphoto | Getty Images</figcaption></figure>



Investors could be caught off guard by the strength of an oil price rally this summer, according to Morgan Stanley’s Martijn Rats.



His comments came as oil prices rose on Wednesday amid fears of potential supply disruption after Ukrainian drone attacks on Russian refineries, and hopes that the Federal Reserve may soon start cutting interest rates which traditionally boosts demand.



International benchmark Brent crude futures for May delivery traded at $83.23 a barrel at 12:20 p.m. London time, up $1.3 for the session, while U.S. West Texas Intermediate (WTI) futures for April delivery stood at $78.95, roughly $1.37 higher.



Brent futures have largely been trading in a narrow $75 to $85 interval since the start of the year.



“They are quite benign. We’ve had a nice rally [in] December, January and first half of February but the last couple of weeks we’ve been fairly rangebound,” Rats told CNBC’s “Squawk Box Europe” on Wednesday.



“There is a view in the market that the non-OPEC producers can meet all of the demand growth this year and therefore there isn’t much incremental room for OPEC oil and that means you rely on continued OPEC cuts,” Rats said.



“Now, they are doing that, but people think that that dynamic for now puts a little bit of a cap on the price. We’ve had a good amount of spare capacity. I think the summer could be tighter than people expect but this is the dynamic that currently exists.”



Earlier this month, OPEC+ agreed to extend voluntary output reductions until the end of the second quarter in a bid to shore up the short-term stability of crude markets.



OPEC+ refers to a group of some of the world’s largest oil producers, including heavyweights such as Saudi Arabia and Russia.



<h2 class="wp-block-heading" id="h-really-elevated-prices"><a></a>‘Really elevated prices’</h2>



Asked why fuel supplies could be tighter in the summer, Rats said that the oil research community had been “quite cautious” about the outlook at the start of the year. However, a flurry of stronger-than-expected data had convinced many to upwardly revise oil demand forecasts.



“On the supply side, we’re seeing a slowdown in U.S. shale, we’ve seen a wobbly start in Brazil [and] we’ve seen a wobbly start in Canada. We expected inventories to build but year-to-date they are kind of flat. If in the first quarter, inventories [are] flat then they can draw possibly quite significantly during the summer period.”



Rats said there were plenty of indicators, such as physical differentials and refining margins, among others, that indicate the oil market has already tightened a bit more than the current spot price suggests.



“Now, at the moment we are going through oil refinery maintenance so [this] is always a bit of a soft part of the year but I think as the summer driving season unfolds, inventories draw … look, we’re not calling for the super cycle, but we could have a bit of strength in the summer.”



The summer driving season typically refers to the months between the U.S. Memorial Day and Labor Day holidays when people in the Northern Hemisphere tend to hit the roads.



Speaking to CNBC’s Dan Murphy in late January, Amrita Sen of Energy Aspects said geopolitical factors such as the Israel-Hamas war and tensions in the Red Sea could also push oil prices higher this summer.



Reflecting on attacks in the Red Sea, Sen said that naphtha (a hydrocarbon mixture) and jet fuel markets had been significantly impacted.



“This is the weak period for jet demand,” Sen said.



“Summer jet is ahead of us, and we think these attacks are going to go on for months so we could see some really elevated prices into the summer.”



<a href="https://news.expertmoney.co.za/beat-debt" rel="noreferrer noopener" target="_blank"></a>

107386786-1710332256577-gettyimages-2066794515-porzycki-bahraind240304_npQj7

Oil strategist says the market could be caught off guard by a crude spike this summer

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="562" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/N3IOJDZWQZL2TF6OEGJSEQTQFU-820x562.jpg" alt="" class="wp-image-464028" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/N3IOJDZWQZL2TF6OEGJSEQTQFU-820x562.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/N3IOJDZWQZL2TF6OEGJSEQTQFU-300x206.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/N3IOJDZWQZL2TF6OEGJSEQTQFU-131x90.jpg 131w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/N3IOJDZWQZL2TF6OEGJSEQTQFU-768x526.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/N3IOJDZWQZL2TF6OEGJSEQTQFU-1536x1053.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/N3IOJDZWQZL2TF6OEGJSEQTQFU-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: U.S. Deputy Treasury Secretary Wally Adeyemo speaks at the Royal United Services Institute in London, Britain, October 27, 2023. REUTERS/Hannah McKay/File Photo</figcaption></figure>



March 13 (Reuters)&nbsp;&#8211;&nbsp;U.S. Deputy Treasury Secretary Wally Adeyemo on Wednesday urged South Africa to step up its battle against corruption, saying that work could help boost job creation in a country facing an unemployment rate of 43% among those under 35.



Adeyemo highlighted the need for increased anti-corruption efforts, continued work to accelerate South Africa&#8217;s just transition to renewable energy, and steps to foster growth in its diverse service sector in a speech prepared for the American Chamber of Commerce in Johannesburg.



U.S. Treasury Secretary Janet Yellen hammered home similar messages during her visit to South Africa just over a year ago.



&#8220;Investments alone cannot unlock the potential of your economy,&#8221; Adeyemo said on the third day of his visit to the United States&#8217; biggest trading parter in Africa.



&#8220;My conversations with South Africans from a diversity of backgrounds makes clear that progress on reliable energy and addressing all the other challenges this great country faces is inhibited by corruption.&#8221;



Adeyemo, whose visit includes stops in Cape Town, Pretoria and Johannesburg, said Washington stood ready to build upon a joint effort to combat illicit wildlife trafficking &#8211; a trade fueled by corruption and organized crime &#8211; that both countries launched during Yellen&#8217;s visit last year.



&#8220;We want to build upon this work to leverage international frameworks to combat corruption and promote transparency in various sectors, ensuring that resources are allocated efficiently for the benefit of all citizens,&#8221; Adeyemo said.



He noted that U.S. Treasury Department recently released its National Risk Assessment on Money Laundering, which highlights the costs of corruption in the U.S. and how to end it.



&#8220;No nation is immune from these challenges. We humbly want to be your partner as the South African people take steps to address corruption,&#8221; he said.



Doing so, he said, would create a positive environment for job creation in South Africa, given the high unemployment rate among young people and challenges in its educational system.



Adeyemo&#8217;s trip comes amid strains between Washington and Africa’s most industrialized economy over Russia&#8217;s February 2022 invasion of Ukraine, and more recently Pretoria&#8217;s criticism of Israel&#8217;s offensive in Gaza.



Corruption has been an ongoing challenge in South Africa, which was added to the &#8220;grey list&#8221; of countries under special scrutiny by the international financial crime watchdog, the Financial Action Task Force (FATF), last year.



Adeyemo also urged South Africa to summon the political will to make decisions needed to modernize its electrical grid and enable new generation sources to come online, saying more transmission investments were needed to jumpstart the country&#8217;s energy transition and solve its energy crisis.



To help smooth the transition, South Africa also needed &#8220;the right economic incentives&#8221; to persuade companies to invest in extraction of critical minerals, Adeyemo said.



&#8220;This can and must be done in a way in which the benefits of investments in this sector are not concentrated in the hands of a few,&#8221; he said, adding that the United States was ready to continue supporting efforts to build clean energy supply chains that invested in workers and protected the environment.



(Reporting by Andrea Shalal; Editing by Shri Navaratnam)

FILE PHOTO: U.S. Deputy Treasury Secretary Wally Adeyemo speaks at the Royal United Services Institute in London

US Treasury’s No. 2 urges South Africa to boost fight against corruption

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="523" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/SINVWFGWQBKE5P2HMXE3TSGHTE-820x523.jpg" alt="" class="wp-image-465766" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/SINVWFGWQBKE5P2HMXE3TSGHTE-820x523.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/SINVWFGWQBKE5P2HMXE3TSGHTE-300x191.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/SINVWFGWQBKE5P2HMXE3TSGHTE-141x90.jpg 141w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/SINVWFGWQBKE5P2HMXE3TSGHTE-768x490.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/SINVWFGWQBKE5P2HMXE3TSGHTE-1536x979.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/SINVWFGWQBKE5P2HMXE3TSGHTE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A supporter of Senegalese presidential candidate Anta Babacar holds posters as he waits for her electoral campaign caravan to arrive in Thiaroye on the outskirts of Dakar, Senegal March 10, 2024. REUTERS/ Zohra Bensemra</figcaption></figure>



March 13 (Reuters)&nbsp;&#8211;&nbsp;Senegal holds a delayed election on March 24 to elect a successor to President Macky Sall, who is stepping down after two terms.



Below are some of the main issues influencing voters.



<h2 class="wp-block-heading" id="h-lack-of-jobs">LACK OF JOBS</h2>



Successive administrations have struggled to curb youth unemployment &#8211; an increasingly urgent issue for its fast-growing population, more than 60% of whom are now under the age of 25.



The share of young Senegalese not in employment, education or training stood at 35% in 2019. Since then the economic fallout from the coronavirus pandemic has further squeezed the job market.



Frustration at the lack of opportunities has spurred support for opposition firebrand Ousmane Sonko, particularly among the young. He is not running, but has called for supporters to back Bassirou Diomaye Faye, who is seen as a strong contender.



<h2 class="wp-block-heading" id="h-cost-of-living">COST OF LIVING</h2>



External shocks including the pandemic, Russia&#8217;s war on Ukraine and the appreciation of the dollar have hit growth and helped drive up the cost of living &#8211;&nbsp;a major concern in a country where around a third of the population of 17 million live in poverty, World Bank data shows.



Inflation has been declining slower than expected from a peak of 14% in late 2022, partly due to food price rises, according to the International Monetary Fund. India&#8217;s rice export restrictions have been especially painful for Senegal, where rice is the main staple.



These economic hardships have undermined support for the current authorities despite subsidies for poor families.&nbsp;Nearly three-quarters of Senegalese judged the government to be mishandling the economy, according to a 2023 poll by Afrobarometer.



The same poll showed that the number of people who believed the economic situation to be bad had risen to 62% in 2022 from 33% in 2017.



<h2 class="wp-block-heading" id="h-migration">MIGRATION</h2>



Many voters hope that whoever of the 19 candidates wins the presidency will make it easier to find work and earn a living in Senegal, curbing the flow of Senegalese risking their lives in the quest for better prospects abroad.



Migration from West Africa to Europe via the dangerous Atlantic route more than doubled in 2023 from 2022 with more than 39,900 people reaching Spain&#8217;s Canary Islands &#8211; mostly from Senegal and neighbouring Gambia, according to Spanish interior ministry data.



There is no reliable data on the number of people who don&#8217;t survive the perilous passage by wooden boat on the open ocean.



&#8220;The youth are not working and have nothing. The consequence is that they will die at sea,&#8221; said student Oumy Tall at a campaign rally of opposition candidate Anta Babacar, who has promised to create more jobs.



<h2 class="wp-block-heading" id="h-oil-boom">OIL BOOM</h2>



The launch of oil and gas production later in 2024 is set to boost the economy, raising questions about whether the natural resource wealth will benefit the wider population and create jobs.



Candidates&#8217; campaigns have targeted this concern. The Sonko-backed opposition coalition has promised to renegotiate energy contracts to maximise revenues, while Amadou Ba of the ruling Benno Bokk Yakaar (BBY) coalition is running on the slogan &#8220;Prosperity Shared&#8221;.



<h2 class="wp-block-heading" id="h-thwarted-postponement">THWARTED POSTPONEMENT</h2>



Recent political turmoil linked to the authorities&#8217; unsuccessful bid to postpone the vote by 10 months may have further undermined support for the ruling BBY coalition.



The move provoked widespread protests and revived fears Sall wanted to tweak the constitution to extend his mandate. He denies this.



There are no official public election polls, but of those who voted for Sall in the last election, only 60% are believed to be planning to vote for BBY&#8217;s candidate this time, according to internal government polling.



(Reporting by Alessandra Prentice; Additional reporting by Ngouda Dione; Editing by Bate Felix and Nick Macfie)

Senegal kicks off short election campaign after poll delays

Key issues shaping Senegal’s presidential vote

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-820x462.jpeg" alt="" class="wp-image-465729" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Euros, U.S. dollars, Canadian dollars, Russian rubles and Czech korunas lie on a table as banknotes.  Picture Alliance | Picture Alliance | Getty Images</figcaption></figure>



As inflation loosens its grip in most economies, investors are closely monitoring interest rate decisions, with markets expecting a slew of rate cuts this year.



While rates in most economies are set to remain elevated in 2024, economists expect a mild rollback late this year, the Economist Intelligence Unit said in a recent report. Most central banks sharply hiked policy rates from early 2022 in a bid to stifle inflation.



China and Japan remain exceptions in the global tightening cycle, though Beijing’s rates have started to ease slightly, said the global intelligence firm. EIU also expects the Bank of Japan will exit its negative interest rate policy in the second quarter.



<h2 class="wp-block-heading" id="h-united-states"><a></a>United States</h2>



U.S. Federal Reserve Chair Jerome Powell reiterated last week that he expects interest rates to start coming down this year should inflation signals cooperate, but stopped short of giving a specific timeline.



Inflation as assessed by the Fed’s preferred gauge currently stands at an annual rate of 2.4%, remaining ahead of the Fed’s 2% goal. 



The Fed held rates steady in a range of 5.25% to 5.5% in its January meeting. Markets currently expect the Fed to start with a 25-basis-point rate cut in June.



<h2 class="wp-block-heading"><a></a>Euro zone</h2>



The European Central Bank last week also held its policy rate at a record high of 4%, signaling that it won’t cut rates before June.



The central bank acknowledged that inflation was easing faster than it anticipated and lowered its annual inflation forecast from an average of 2.7% to 2.3%. The ECB has a 2% inflation target.



<h2 class="wp-block-heading"><a></a>Switzerland</h2>



Swiss inflation in February rose 1.2% from a year ago, the lowest reading in almost two and a half years, fueling hopes that the Swiss National Bank could trim interest rates in its March 21 meeting.



The SNB’s current policy rate stands at 1.75%, and the central bank has an inflation target range of between 0% and 2%. According to LSEG, there’s a more than 40% chance of a 25-basis-point cut in March, which would take the SNB’s key rate down to 1.5%.



UBS expects the SNB to wait until the second quarter for its first key interest rate cut, while not ruling out the possibility of a cut this month.



<h2 class="wp-block-heading"><a></a>Bank of Canada</h2>



In March, the Bank of Canada left rates unchanged for a fifth consecutive meeting. Its governor said that it was too early to consider a cut.



Canada’s inflation slowed to 2.9% in January, compared with a year ago. That’s a drop from December’s 3.4% and within the BOC’s target range of 1% to 3%.



<h2 class="wp-block-heading">Turkey</h2>



Turkey’s central bank kept its interest rate steady at 45% in February, ending its tightening cycle after eight straight hikes, with many expecting it to hold for most of 2024. The country’s inflation currently stands at around 65%.



JPMorgan said in a research note that the Turkish central bank may cut its policy rate in November and December, keeping its year-end policy rate forecast of 45%.&nbsp;



<h2 class="wp-block-heading"><a></a>Australia</h2>



The Reserve Bank of Australia kept rates unchanged in February at a 12-year high of 4.35%.



Nomura predicts the RBA will start cutting rates in August as inflation eases and unemployment rises. The firm said it expects the country to “narrowly avoid a recession.”



In a recent note, ANZ noted that Australia’s economy experienced a “continued slowdown” in the second half of 2023 as fourth-quarter GDP grew just 0.2% from the prior quarter. That comes after third-quarter GDP edged 0.3% higher from the previous three-month period.



<h2 class="wp-block-heading"><a></a>New Zealand</h2>



The Reserve Bank of New Zealand kept the official cash rate steady at 5.5% in its February meeting, forecasting that inflation will re-enter the 1% to 3% per year target band by September.



Auckland Savings Bank does not expect the RBNZ to start cutting the cash rate until November.



<h2 class="wp-block-heading"><a></a>Indonesia</h2>



Indonesia’s central bank kept its benchmark policy rate at 6% in its recent meeting. 



While the Southeast Asian nation’s consumer price inflation is now within the Bank Indonesia’s targeted range of 1.5% to 3.5% for the year, Indonesia’s central bank governor is considering a 75 basis point cut only in the second semester of the year.



“We are still watching closely is about the global spillover&#8230; mainly of the impact of U.S. monetary policy direction,” Bank Indonesia governor Perry Warjiyo recently told CNBC’s JP Ong.



BMI, a Fitch Solutions research unit, expects the bank to lower the benchmark&nbsp;rate to 5% by the end of 2024, starting in the second half of the year in tandem with the U.S. and other developed market central banks “in order to not raise undue depreciatory pressures on the Indonesian rupiah.”



<h2 class="wp-block-heading"><a></a>Bank of Japan</h2>



Unlike its peers, economists expect the Bank of Japan to raise interest rates this year instead of cutting.



The BOJ is expected to move toward ending its negative interest rate policy by April, contingent on annual wage negotiations, said economists at Oxford Economics and Macquarie.&nbsp;



Spring wage negotiations are an important factor in whether Japan’s inflation has sustainably met the BOJ’s 2% target, a prerequisite for the BOJ to end its negative rate policy.



<h2 class="wp-block-heading"><a></a>South Korea&nbsp;</h2>



South Korea’s central bank in late February kept rates steady at 3.5%.



The BOK governor reportedly said that most board members still deem it “premature” to discuss any interest rate cuts while inflation is above target level.



The BOK could still be one of the first in Asia to cut rates, said Goldman Sachs senior Asia economist Goohoon Kwon, citing ongoing disinflation and subdued private consumption.



A strong rebound in exports driven by semiconductors due to the advent of AI will allow the BOK to be less constrained by U.S. monetary policy and inflation, Kwon said.



<h2 class="wp-block-heading"><a></a>So who’s first?</h2>



“The Bank of Canada is my candidate to be the first to cut,” Carl Weinberg, chief economist at High Frequency Economics told CNBC. He explained that Canada’s CPI, excluding shelter prices, is rising by just 1.7%. That’s below the central bank’s inflation target and Weinberg noted that all the prices the BOC can control in the economy are rising less than the inflation target mandates.



“2024 will be the year of the rate cut pivot,” Weinberg added.



But Asian central banks are unlikely to cut ahead of the Fed as a strong U.S. dollar means that most Asian currencies remain relatively weaker, said Morgan Stanley.



The potential for further depreciation could still lend some higher inflation risks to these countries, the investment bank’s economists said in a report.



“While inflation is coming off, in most of the region’s economies it has either just reached the target range or is still closing the gap to target range,” Morgan Stanley said.

107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362

2024 is the year of the rate cut pivot — here’s when the world’s central banks will budge

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="437" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Z7WYPZPJW5OBHIDH2OEK6FYVC4-820x437.jpg" alt="" class="wp-image-465502" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Z7WYPZPJW5OBHIDH2OEK6FYVC4-820x437.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Z7WYPZPJW5OBHIDH2OEK6FYVC4-300x160.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Z7WYPZPJW5OBHIDH2OEK6FYVC4-160x85.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Z7WYPZPJW5OBHIDH2OEK6FYVC4-768x409.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Z7WYPZPJW5OBHIDH2OEK6FYVC4-1536x818.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Z7WYPZPJW5OBHIDH2OEK6FYVC4-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Container ships wait to load and offload goods in port during a 21-day nationwide lockdown aimed at limiting the spread of coronavirus disease (COVID-19) in Cape Town, South Africa, April 17, 2020. REUTERS/Mike Hutchings/File Photo</figcaption></figure>



Namibia and South Africa are in talks to launch infrastructure projects worth R7bn ($377 million) over the next three years to address current rail and port inefficiencies.



The Namibian Executive Director for the Ministry of Finance and Public Enterprises, Titus Ndove told CNBC Africa that his ministry is mobilising an initial R2bn this year as part of the project linking the two nations and other parts of the Southern Africa region.



South Africa’s economy barely escaped a recession last year as transport bottlenecks and a severe shortage of power constrained economic activity, forcing the government to rope in the private sector to improve efficiencies at its ports and improve its rail network.



“We are elevating our bi-national arrangements with the government and [we have identified] different areas of collaborations ranging from tourism, border protection, water issues, trade facilities and seeking ways to go hunt together for more markets,” Ndove said.



South Africa is Namibia’s largest trading partner and both countries are members of the Southern African Customs Union, the world’s oldest customs union. &nbsp;



Ndove told delegates at the second annual NinetyOne Infrastructure Forum that it was vital that South Africa resolves its logistics and port crisis by investing in key infrastructure.



“Most of our goods- about 70% of them coming from South Africa- move on the road and that has complications in the form of high maintenance costs for the roads. Sometimes we transport dangerous goods, which ideally, we want to get them off the road and carry on the rail.”



His call was backed by Helvi Fillipus, a senior government adviser who added that Namibia was specifically targeting rail infrastructure investments to help alleviate existing pressures.



“We are looking at the rail infrastructure because current ones are out-dated and aged and therefore need to be upgraded. In addition, we have an ambition as a country to position Namibia as a logistics hub in the Southern Africa region, and specifically, we are targeting to provide services to our landlocked neighbours,” she said.



“We need to stabilize the system so that we are able to move heavier cargo on the rail. We also need to increase the speed at which the trains can move because at the moment it takes a longer to get the goods from one point to another.” At the conference, Namibia presented several infrastructure projects ranging from energy, rail, port expansion and green hydrogen to oil and gas.

FILE PHOTO: Container ships in Cape Town, South Africa

South Africa, Namibia seek to build $377mn Transport Infrastructure Fund

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/106941351-1639158059467-106941351-1631619886115-gettyimages-1234643404-US-ECONOMY-CPI-820x461.jpg" alt="" class="wp-image-465499" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/106941351-1639158059467-106941351-1631619886115-gettyimages-1234643404-US-ECONOMY-CPI-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/106941351-1639158059467-106941351-1631619886115-gettyimages-1234643404-US-ECONOMY-CPI-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/106941351-1639158059467-106941351-1631619886115-gettyimages-1234643404-US-ECONOMY-CPI-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/106941351-1639158059467-106941351-1631619886115-gettyimages-1234643404-US-ECONOMY-CPI-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/106941351-1639158059467-106941351-1631619886115-gettyimages-1234643404-US-ECONOMY-CPI-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/106941351-1639158059467-106941351-1631619886115-gettyimages-1234643404-US-ECONOMY-CPI.jpg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Inflation rose again in February, keeping the Federal Reserve on course to wait at least until the summer before starting to lower interest rates.



The consumer price index, a broad measure of goods and services costs, increased 0.4% for the month and 3.2% from a year ago, the Labor Department’s Bureau of Labor Statistics reported Tuesday. The monthly gain was in line with expectations, but the annual rate was slightly ahead of the 3.1% forecast from the Dow Jones consensus.



Excluding volatile food and energy prices, the core CPI rose 0.4% on the month and was up 3.8% on the year. Both were one-tenth of a percentage point higher than forecast.



While the 12-month pace is off the inflation peak in mid-2022, it remains well above the Fed’s 2% goal as the central bank approaches its two-day policy meeting in a week.



A 2.3% increase in energy costs helped boost the headline inflation number. Food costs were flat on the month, while shelter rose another 0.4%.



The BLS reported that the increases in energy and shelter amounted to more than 60% of the total gain. Gasoline jumped 3.8% on the month while owners’ equivalent rent, a hypothetical gauge of what homeowners could get renting their properties, rose 0.4%.



“Inflation continues to churn above 3%, and once again shelter costs were the main villain. With home prices expected to rise this year and rents falling only slowly, the long-awaited fall in shelter prices isn’t coming to the rescue any time soon,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Reports like January’s and February’s aren’t going to prompt the Fed to lower rates quickly.”



Airline fares posted a 3.6% increase, apparel prices rose 0.6% and used vehicles were up 0.5%. Medical care services, which helped feed a higher-than-expected CPI increase in January, decreased 0.1% last month.



The year-over-year increase for headline CPI was 0.1 percentage point higher than January, while core was one-tenth of a point lower.



Wall Street opened higher following the report, major stock averages as well as Treasury yields positive in early trading.



While the 12-month pace is off the inflation peak in mid-2022, it remains well above the Fed’s 2% goal as the central bank approaches its two-day policy meeting in a week.



Fed officials in recent weeks both have signaled that rate cuts are likely at some point this year and expressed caution about letting up too soon in the battle against high prices. The statement after the January meeting indicated that policymakers need “greater confidence” that inflation is moving back to target.



Chair Jerome Powell, in congressional testimony last week, echoed those concerns, though he did mention that the Fed is probably “not far” from the point where it can start easing up on monetary policy.



Tuesday’s report “leaves Fed officials some way from attaining the ‘greater confidence’ needed to begin cutting interest rates,” said Paul Ashworth, chief North America economist at Capital Economics.



For financial markets, the shift in the Fed stance from its apparent policy pivot in late 2023 has meant a repricing on the pace of rate cuts. Where futures traders entered the year expecting cuts to start coming in March, with six or seven total on the year, they have pushed out the first reduction to June, with two or three to follow, assuming cuts in quarter percentage point increments.



A bustling economy has helped the Fed focus on incoming data and allowed policymakers to avoid having to rush to lower rates. Gross domestic product expanded at a 2.5% annualized pace in 2023 and is on pace to increase at a 2.5% pace in the first quarter of 2024, according to the Atlanta Fed’s GDPNow tracker.



One key ingredient in that growth has been a resilient consumer boosted by a strong labor market. The economy added another 275,000 nonfarm jobs in February, though the increase skewed heavily to part-time positions and the unemployment rate rose to 3.9%.



Such strength can be a double-edged sword: While the growth in the face of aggressive rate hikes has bought the Fed time on policy, it also raises concerns that inflation could be more durable than expected.



Housing costs in particular have caused concern.



Shelter comprises about one-third of the CPI weighting and has been slow to decelerate, at least according to the BLS measure. Fed officials see rental prices coming down through the year, and other measures outside the CPI computation of owners-equivalent rent have shown easing price pressures.



Correction: The BLS reported that the increases in energy and shelter amounted to more than 60% of the total gain. An earlier version misstated a sector.

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featured

China kicks off the year on strong note as retail, industrial data tops expectations

South African president extends central bank governor’s term, appoints new deputy

China’s Xi willing to work with Angola as it moves on from oil

No smartphone or internet? No problem; AI-backed phone has the answers

Africa to play ‘huge role’ in US critical mineral strategy, says Treasury’s No. 2

West, Central Africa see major internet outage with undersea cables down

South Africa’s Standard Bank posts 27% jump in annual profit

European Central Bank chief economist: Must ‘take our time’ on rate cuts, clearer picture due in June

South Africa’s ANC wary of post-election coalition, says it ‘won’t work’

African cocoa plants run out of beans as global chocolate crisis deepens

World’s first major act to regulate AI passed by European lawmakers

Oil strategist says the market could be caught off guard by a crude spike this summer

US Treasury’s No. 2 urges South Africa to boost fight against corruption

Key issues shaping Senegal’s presidential vote

2024 is the year of the rate cut pivot — here’s when the world’s central banks will budge

South Africa, Namibia seek to build $377mn Transport Infrastructure Fund

U.S. consumer prices rose 0.4% in February and 3.2% from a year ago

News Tips

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