<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1670" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/IMG_0422-Edit-1-scaled.jpg" alt="" class="wp-image-513825" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/IMG_0422-Edit-1-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/IMG_0422-Edit-1-300x245.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/IMG_0422-Edit-1-820x669.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/IMG_0422-Edit-1-110x90.jpg 110w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/IMG_0422-Edit-1-768x626.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/IMG_0422-Edit-1-1536x1253.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Hasan Khan, Standard Bank Group Head of Corporate and Investment Banking, Africa</figcaption></figure>



Africa is at a turning point; with a gross domestic product (GDP) nearing $3 trillion, the continent’s economic and development potential is undeniable. Contained in that growth is the burgeoning East Africa region where we see great potential for additional development.



The African Development Bank Group (AFDB) notes that East Africa is set to grow at a projected 5.1% in 2024 and 5.7% in 2025. The projected growth acceleration of 1.6% in 2024 from 3.5% in 2023 reflects the anticipated strong economic performance of countries in the region, with seven economies projected to grow 5% or more in 2024. The region has relatedly seen an increase in its contribution to the continent’s broader economic growth. According to the Institute for Security Studies (ISS), the region contributed 14% in 2018 and 17% in 2022. This is expected to grow to a projected 29% by 2040. &nbsp;&nbsp;



The East African economy has demonstrated remarkable resilience, buoyed by its diversification efforts, innovative spirit, and collaborative mindset. This region, a shiny jewel in the African crown, has invested heavily in infrastructure development through Public-Private Partnerships (PPPs). Through the concerted infrastructure investment, we have encouragingly seen a progressive move from traditional debt-led infrastructure projects to a joint approach that is cognisant of all parties. We also believe that this is the best way to ensure development that best serves the communities who benefit and use the infrastructure that is built.  In a recent example of this collaborative approach, Stanbic Bank Kenya, as part of the Standard Bank Group, along with MiDA Advisors, announced a partnership with Acorn Holdings, a renowned real estate developer, to facilitate a USD$700 million Kenya Shilling (KES) equivalent in long-term blended finance commitments for green, affordable student housing in Kenya. Upon approval, the transaction will comprise up to USD$180 million commitment from the United States Development Finance Corporation (DFC) and comprise raising funds from Kenyan Capital markets as well, deepening the positive impact of the transaction of the Kenyan Capital Markets and providing an opportunity for investors to participate in this opportunity. The collaboration will result in the construction of 35 certified green housing projects, creating approximately 48,000 new student beds over the next 10 years, making it the single largest investment into student housing in Africa. The initiative will create an estimated 15,000 direct jobs and 35,000 indirect jobs.



As the world seeks to transition to cleaner energy sources, East African countries have been actively utilising their rich natural endowments to harness renewable energy to&nbsp;meet their growing energy demands sustainably. Kenya, Tanzania, Uganda, and Rwanda have been at the forefront of developing&nbsp;solar and wind power over the last decade. It is estimated that by 2050, clean energy could generate over 26 million jobs in Africa.&nbsp;



Beyond the exciting developments in East Africa, the continent will account for eleven of the world’s twenty fastest-growing economies in 2024 according to the AFDB. Real GDP growth for the continent is expected to average 3.8% and 4.2% in 2024 and 2025, surpassing projected global averages of 2.9% and 3.2% respectively.



This makes Africa the fastest growing region after Asia.



In an increasingly fragmented globe experiencing upheaval across geographies, the continent’s influence is growing as traditional powerhouses turn their eyes to emerging markets. This is most notably marked by the African Union’s (AU) recent entry into the Group of 20 nations – now the G21 – a premier grouping of country and regional bloc members shaping international economic cooperation. Populated by the globe’s youngest demographic, Africa boasts the world’s largest free trade area, recently punctuated by the African Continental Free Trade Area (AfCFTA). This has been ratified in 30 countries across the continent. Africa also has vast mineral deposits and natural resources, positioning it favourably for a dominant role in the ever-increasing global energy transition. This transition, dependent on extractive industries, is marked through the growth of alternative energy solutions for electricity and the growing electronic vehicle market, which stands at $15.8 billion, and which is expected to grow to $21.4 billion by 2027, according to market research by Mordor Intelligence. As the continent has grown, so too has the complexity of the requirements for services. African start-ups reportedly raised approximately$1.5 billion during the COVID-19 pandemic in 2020, over $4 billion in 2021, and an estimated $4.5 billion in 2022.



These are fundamental leading indicators which position Africa as the next growth frontier with untapped potential and opportunities for investors looking for long-term diversified value.



In the past, Africa was often regarded as a <a>hegemonic entity </a>that worked and existed in a unitary way. I am certain you have heard some of the stereotypical phrases that accompanied this view, including the term “African economy”.



These views created misperceptions about the real market opportunities that exist on the continent and distorted the risks of doing business here. Certainly, like any intricate society, there are risks to doing business in many African countries, but this is not dissimilar to the reality of doing business in most emerging markets.



Through our insights, we are forging enduring partnerships with clients and governments to drive positive impact and help create the growth which we are slated to see. This includes expanding agri-processing to substituting imports with local content and subsequently championing the expert of soft commodities. Infrastructure is the key backbone for development, and we actively work with partners to invest in the expansion of ports, roads, and rail infrastructure to remove barriers to trade. At Standard Bank, we are not just in awe of the trajectory of this continent we call home, we are actively and passionately shaping it.

IMG_0422-Edit 1

Unleashing East Africa’s growth and tapping into the continent’s potential

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="529" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/OODUGWAXRFIS5FEW3AWJQSJCUE-820x529.jpg" alt="" class="wp-image-513792" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/OODUGWAXRFIS5FEW3AWJQSJCUE-820x529.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/OODUGWAXRFIS5FEW3AWJQSJCUE-300x194.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/OODUGWAXRFIS5FEW3AWJQSJCUE-140x90.jpg 140w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/OODUGWAXRFIS5FEW3AWJQSJCUE-768x495.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/OODUGWAXRFIS5FEW3AWJQSJCUE-1536x991.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/OODUGWAXRFIS5FEW3AWJQSJCUE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Nigeria Labor Congress (NLC) protest against the high cost of living and massive suffering following a hike in petrol and devaluation of the Naira in Lagos, Nigeria February 27, 2024. REUTERS/Marvellous Durowaiye/File Photo</figcaption></figure>



ABUJA, Aug 1 (Reuters)&nbsp;&#8211;&nbsp;Police fired tear gas to disperse crowds of protesters in Nigeria&#8217;s capital city Abuja on Thursday, as thousands rallied against escalating cost of living and governance issues in Africa&#8217;s most populous nation, according to eyewitness accounts.



Protesters demonstrated in Abuja, the commercial capital Lagos and several other cities to show discontent with economic reforms that have led to rampant inflation and inflicted increasing hardship on ordinary Nigerians. President Bola Tinubu has vowed to pursue the changes that he says are needed to keep the country afloat.



Authorities deployed armed security personnel in an effort to preempt potential violence.



In Lagos, armed police watched as protesters marched towards the government house and then proceeded to two locations that were authorised for the protest. Some shopping malls in the city were shut and guarded by a heavy police presence.



Inspired by protests in Kenya in June that led to the government there scrapping some planned tax increases, Nigerians are mobilizing online to demand the reinstatement of subsidies for petrol and electricity, free primary and secondary education and measures to combat insecurity, among other demands.



In Abuja, the military mounted roadblocks along the highway leading into town, while some protesters gathered at a stadium.



Youths demonstrated in the city of Maiduguri, the hotbed of a militant insurgency in the northeast of the country, in the face of a heavy security presence, to voice their frustration at the government and its policies.



<h2 class="wp-block-heading" id="h-tinubu-reforms">TINUBU REFORMS</h2>



The government said before the protests it was open to dialogue.



Tinubu has asked citizen to bear with his reforms, but citizen complain that politicians are not making enough sacrifices themselves.



After taking office more than a year ago, Tinubu removed some fuel subsidies, devalued the naira currency and later hiked electricity tariffs, moves that have sent inflation soaring past 34%, eroding incomes.



Consumer inflation rose to a new 28-year high of 34.19% in annual terms in June.



Nigerians are also grappling with widespread insecurity, which has damaged the farming sector, while armed gangs kidnap residents and school children for ransom in the north.



Labour unions have led previous protests. But Thursday&#8217;s march was mostly by unemployed youth &#8211; introducing a new element for the government trying to lessen the impact of its economic policies



Tinubu signed a new minimum wage into law on Monday to help workers cope with hardship caused by his economic changes, but many of the country&#8217;s 200 million people are either self-employed or do not have jobs.



(Additional reporting by Camillus Eboh in Abuja and Ahmed Kingimi in MaiduguriWriting by Chijioke OhuochaEditing by Bate Felix and Frances Kerry)

FILE PHOTO: Nigerians protest against the high cost of living in Lagos

Protesters in Nigeria demonstrate over high cost of living

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="747" height="467" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/stock-market.jpg" alt="" class="wp-image-401907" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/stock-market.jpg 747w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/stock-market-300x188.jpg 300w" sizes="auto, (max-width: 747px) 100vw, 747px" /><figcaption class="wp-element-caption">Trading board is showing a crash in stock exchange market. Selective focus. Horizontal composition with copy space.</figcaption></figure>



Aug 1 (Reuters) &#8211; Emerging market stocks rose on Thursday after the Federal Reserve signalled it could start easing policy in September, while currencies across emerging Europe slipped amid weak manufacturing data for several economies.



In focus, the Czech crown lost 0.3% against the euro ahead of an expected 25 basis point (bps) rate reduction from the country&#8217;s central bank, slowing the pace of easing after four 50 bps cuts.



&#8220;We expect a hawkish outcome from today&#8217;s meeting &#8230; CZK has moved back above 25.400 EUR/CZK under the pressure of aggressive dovish pricing in recent days,&#8221; said Frantisek Taborsky, EMEA forex and fixed income strategist at ING.



&#8220;In our view, the CZK has decent potential to rally from these levels.&#8221;



MSCI&#8217;s index of emerging market stocks rose 0.4%, tracking gains in global equities after Wednesday&#8217;s signal from Fed Chairman Jerome Powell that the central bank could start easing rates in September if U.S. economic data continues on its current trajectory.



Lower borrowing costs in the U.S. typically weaken the dollar and lift the appeal of emerging market assets.



However, the dollar regained some ground after slipping for two straight sessions, with most currencies in emerging European economies weakening against the greenback.



Weaker manufacturing data also weighed, with the Hungarian forint losing 0.6% versus the euro, after manufacturing activity remained in contraction territory.



The Polish zloty dipped 0.2% against the euro, after S&amp;P Global&#8217;s Purchasing Managers&#8217; Index showed its manufacturing sector slowed its decline in July, but was still in contraction.



Ukraine was also in focus after it temporarily suspended international debt payments as it finalises a restructuring plan to slash $20 billion of international debt. However, the move is unlikely to trigger much concern in debt markets.



A bond maturing in 2026 rose about 1.5 cents on the dollar, while a bond that provides additional payments when the country&#8217;s economy grows was little changed.



MSCI&#8217;s International Emerging Markets Currency Index edged 0.1% higher after briefly touching its highest since mid-July.



Russia&#8217;s rouble strengthened 0.5% against the dollar, as worries about rising conflict in the Middle East lifted the price of oil, one of its main exports.



In equities, Turkish stocks jumped 1.7%, led by a 3.6% rise in its bank index.



Manufacturing in Turkey contracting for a fourth straight month, data showed.



Meanwhile, Nigerian security forces were deployed in major cities, while the government said it was open to dialogue ahead of planned protests against a cost of living crisis.



Weaker PMI data also weighed on Chinese shares, with a slump in its manufacturing activity leading generally weak readings across Asia&#8217;s factories in June.



(Reporting by Lisa Mattackal in Bengaluru; editing by Giles Elgood)

Trading Board Is Showing A Crash In Stok Exchange Market

Dovish Fed lifts stocks while FX slips; Czech rate decision eyed

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="520" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/KX46IZCR5JJZLHMSIBYSC4M6LY-1-820x520.jpg" alt="" class="wp-image-513757" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/KX46IZCR5JJZLHMSIBYSC4M6LY-1-820x520.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/KX46IZCR5JJZLHMSIBYSC4M6LY-1-300x190.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/KX46IZCR5JJZLHMSIBYSC4M6LY-1-142x90.jpg 142w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/KX46IZCR5JJZLHMSIBYSC4M6LY-1-768x487.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/KX46IZCR5JJZLHMSIBYSC4M6LY-1-1536x975.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/KX46IZCR5JJZLHMSIBYSC4M6LY-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A person works at &#8221;The Faktory&#8221;, a fashion design and clothing manufacturing company in Johannesburg, South Africa, March 4, 2021. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, Aug 1 (Reuters)&nbsp;&#8211;&nbsp;South African manufacturing activity rose in July, a Purchasing Managers&#8217; Index (PMI) survey showed on Thursday,&nbsp;as both domestic and global demand picked up.



The seasonally-adjusted PMI for the factory sector was at 52.4 points in July compared to 45.7 in June. A reading above the 50-point mark shows growth.



&#8220;In these months (May and June), significant policy uncertainty remained and hurt demand,&#8221; local bank Absa, which sponsors the survey, said in a statement, referring to South Africa&#8217;s national election in May and its aftermath.



The business activity sub-index and new sales orders also rose in July.



&#8220;The improvements suggest that on-hold orders are now being realised and translated into better activity,&#8221; Absa said.



(Reporting by Bhargav Acharya; Editing by Bate Felix and Gareth Jones)

A person works at ”The Faktory”, in Johannesburg

South African factory activity rises in July – Absa PMI

<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/GettyImages-924883576-1-820x547.jpg" alt="" class="wp-image-422955" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/GettyImages-924883576-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/GettyImages-924883576-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/GettyImages-924883576-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/GettyImages-924883576-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/GettyImages-924883576-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/GettyImages-924883576-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Uganda shillings. Uganda. (Photo by: Godong/Universal Images Group via Getty Images)</figcaption></figure>



KAMPALA, Aug 1 (Reuters) &#8211; The Ugandan shilling was weaker on Thursday, pressured by strong demand for dollars from commercial banks, traders said.



At 0829 GMT, commercial banks quoted the shilling at 3,733/3,743, compared with Wednesday&#8217;s closing rate of 3,724/3,734.



(Reporting by Elias Biryabarema; Editing by George Obulutsa)

107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010

Ugandan shilling weaker due to increased commercial bank FX demand

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-820x547.jpeg" alt="" class="wp-image-513752" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Blurred buses pass the Bank of England in the City of London on 7th February 2024 in London, United Kingdom.  Mike Kemp | In Pictures | Getty Images</figcaption></figure>



LONDON — Several analysts expect the Bank of England to announce an interest rate cut on Thursday, but a lack of clear signaling from the central bank has shrouded the decision in uncertainty.



Markets were pricing in a 61% probability of a 25-basis-point reduction of its key rate at the August meeting as of 8:15 a.m. in London, despite U.K. inflation hitting the BOE’s 2% target for two straight months.



The Bank Rate has been held at a 16-year high of 5.25% since August 2023.



The BOE typically provides less forward guidance than some other central banks, but the Thursday decision is viewed as an especially close call, given the recent six-week period in which its communications were restricted because of the U.K. general election.



While recent breakdowns have seen two votes for a rate cut and seven for a hold, some of the BOE’s more hawkish policymakers have been vocal about their concerns over wage growth and sticky services inflation.



The decision will be announced at midday U.K. time and will be followed by a press conference. Thursday will also see the release of the quarterly Monetary Policy Report, which will contain economic growth and inflation projections.



This is a developing story&#8230;

Bank of England to make knife-edge call on interest rates as markets favor cut

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1200" height="628" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY.jpg" alt="" class="wp-image-506011" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY.jpg 1200w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-768x402.jpg 768w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /><figcaption class="wp-element-caption">A teller serves a client with Kenya shilling notes at the cashier&#8217;s booth of a forex exchange bureau in Kenya&#8217;s capital Nairobi, April 20, 2016. REUTERS/Thomas Mukoya/File Photo</figcaption></figure>



AIROBI, Aug 1 (Reuters) &#8211; The Kenyan shilling dipped against the US dollar on Thursday, according to data from the London Stock Exchange Group (LSEG).



As of 0802 GMT, the shilling exchanged hands at 129.00/130 per dollar, sliding from Wednesday&#8217;s closing rate of 128.50/129.50.



The depreciation of the shilling is usually attributed to heightened demand for dollars from sectors such as energy and manufacturing.



(Reporting by George Obulutsa; Editing by Bate Felix)

HCVRNAVJRJMOJBUK4XOB7PEJGY

Kenya’s shilling dips against the dollar – LSEG data

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="444" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA.jpg" alt="" class="wp-image-422268" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA-300x183.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA-148x90.jpg 148w" sizes="auto, (max-width: 728px) 100vw, 728px" /><figcaption class="wp-element-caption">South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings</figcaption></figure>



JOHANNESBURG, Aug 1 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s rand was steady early on Thursday, ahead of a purchasing managers&#8217; index (PMI) survey for the local manufacturing sector.



At 0727 GMT, the rand traded at 18.2275 against the dollar, not far from its previous close.



The Absa PMI for July is set to be released at 0900 GMT, and should shed light on manufacturing conditions in Africa&#8217;s most industrialised economy. Local investors will also turn their focus toward July vehicle sales data.



The rand was supported by the Federal Reserve Chair Jerome Powell&#8217;s softening tone on Wednesday, fuelling expectations of a September interest rate cut by the Fed.



&#8220;The rand remains volatile as financial market expectations have shifted around the timing and speed of the anticipated US interest rate cutting cycle,&#8221; said Investec chief economist Annabel Bishop.



On the stock market, the Top-40 index was down 0.14%.



South Africa&#8217;s benchmark 2030 government bond was marginally stronger in early deals, with the yield down 1 basis point to 9.395%.



(Reporting by Bhargav Acharya; Editing by Bernadette Baum)

South African Rand coins are seen in this illustration picture

South African rand steady ahead of manufacturing PMI

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="516" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/TY7OYQCA35KY5IVPS5BCE5Y65M-820x516.jpg" alt="" class="wp-image-513730" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/TY7OYQCA35KY5IVPS5BCE5Y65M-820x516.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/TY7OYQCA35KY5IVPS5BCE5Y65M-300x189.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/TY7OYQCA35KY5IVPS5BCE5Y65M-143x90.jpg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/TY7OYQCA35KY5IVPS5BCE5Y65M-768x484.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/TY7OYQCA35KY5IVPS5BCE5Y65M-1536x967.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/TY7OYQCA35KY5IVPS5BCE5Y65M-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Diamonds are displayed at the De Beers Global Sightholder Sales (GSS) in Gaborone, Botswana, November 24, 2015. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



GABORONE, Aug 1 (Reuters)&nbsp;&#8211;&nbsp;Sales of rough diamonds at Debswana Diamond Company fell 49.2% in the first half of 2024, according to data released by the Botswana central bank late on Wednesday, as the downturn in the global diamond market continued.



Debswana, equally owned by the government of Botswana and Anglo American Plc&#8217;s De Beers, sells 75% of its output to De Beers with the balance taken up by state-owned Okavango Diamond Company (ODC).



Botswana and De Beers in June last year agreed a new ten-year diamond sales deal, which will see ODC&#8217;s share of Debswana output rise to 30% before gaining gradually to 50% by the end of the new contract, as the country seeks to get more revenues from its resources.



In the first half of the year, Debswana sold diamonds worth $1.29 billion compared to $2.54 billion registered in the same period last year, Bank of Botswana data showed. In local currency terms, the Debswana sales fell 47.3% to 17.555 billion pula.



Anglo, which plans to divest from De Beers as part of an organisational shake up, cut diamond production by 19% during the first six months of the year. It reported last week that output guidance at De Beers was revised down to 23-26 million carats from 26-29 million in response to the diamond market&#8217;s ongoing downturn.



Botswana gets 30%-40% of its revenue, 75% of its foreign exchange earnings and a third of national output from diamonds.



($1 = 13.5685 pulas)



(Reporting by Brian Benza, Editing by Bhargav Acharya and Miral Fahmy)

FILE PHOTO: Diamonds are displayed at the De Beers Global Sightholder Sales (GSS) in Gaborone, Botswana

Diamond sales at Botswana’s Debswana fall 49.2% as market downturn continues

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="544" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/YYLYKEPD7VPT7BMKRXFZGAU5JA-820x544.jpg" alt="" class="wp-image-513712" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/YYLYKEPD7VPT7BMKRXFZGAU5JA-820x544.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/YYLYKEPD7VPT7BMKRXFZGAU5JA-300x199.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/YYLYKEPD7VPT7BMKRXFZGAU5JA-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/YYLYKEPD7VPT7BMKRXFZGAU5JA-768x510.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/YYLYKEPD7VPT7BMKRXFZGAU5JA-1536x1020.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/YYLYKEPD7VPT7BMKRXFZGAU5JA-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An industrial harvester cuts a new rice variety at a rice paddy in Yamoussoukro, Ivory Coast June 3, 2024. REUTERS/Luc Gnago</figcaption></figure>



YAMOUSSOUKRO, Aug 1 (Reuters)&nbsp;&#8211;&nbsp;Ivorian rice farmer Francois Kasse Yao has struggled to make ends meet with only one harvest per year before he planted a new variety, resistant to unpredictable weather conditions capable of producing larger yields.



The grain, introduced as a part of a programme designed to increase output of the regional staple food and cut dependence on imports, allows rice growers to get two harvests per year, with a yield of up to 5 metric tons per hectare.



This shift signals a potential boost for local farmers and the nation as a whole, which could reduce its reliance on foreign rice imports.



Before the introduction of the new programme that includes better irrigation, mechanization and improved short-cycle drought-resistant seeds, farmers struggled to produce one metric ton per hectare in some areas.



&#8220;Today&#8217;s yields are better &#8230; This time we&#8217;ve started with a new variety, so today we&#8217;re doing just fine,&#8221; the 52-year-old farmer harvesting rice in the village of Subiakro, over 14 km from the Ivorian capital Yamoussoukro, told Reuters.



A farmer from another village, Hermane N&#8217;Guessan Kouame, praised the new variety&#8217;s scent and flavour as well as its capacity to resist frequent water shortages &#8211; the qualities that make the grain highly prized on the local rice market.



The average price for this type of milled rice is 650 CFA francs ($1.09) per kilogram, Kouame said.



&#8220;When you plant it, no matter how the weather changes, it&#8217;s always intact&#8230; It adapts to all climates,&#8221; said the 50-year-old who farms a 44-hectare plot in Zatta located 20 km from Yamoussoukro.



<h2 class="wp-block-heading" id="h-self-sufficient">SELF-SUFFICIENT</h2>



Ivorian production of local white rice currently stands at 1.4 million metric tons, far below the national consumption of 2.1 million, according to a managing director of the Agency for the development of the rice sector (Aderiz).



To fully cover domestic demand, Ivory Coast imports rice mainly from countries such as India, Thailand and Pakistan.



A decision by India to curb its exports last year has raised shortage concerns in several African countries.



But Aderiz says the latest investment of 330 billion CFA francs ($551.38 million) made by the state, its partners and the private sector, will enable the country to self-sufficient in three years.



Production could reach 2.2 million tons by 2027, Yacouba Dembele said.



&#8220;We&#8217;re going to make progress. We&#8217;re going to go fast, especially with the system we&#8217;ve put in place,&#8221; he added.



($1 = 598.5000 CFA francs)



(Reporting by Loucoumane Coulibaly; Editing by Anait Miridzhanian and David Evans)

Ivorian farmers turn to new rice variety for increased yields and profit

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="408" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg" alt="" class="wp-image-400697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1-300x200.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">Double exposure of coin stack with city background and world map, financial graph, world map and global network business concept idea, element by NASA.</figcaption></figure>



JOHANNESBURG, Aug 1 (Reuters)&nbsp;&#8211;&nbsp;The following scheduled economic events, equity and currency market moves may affect South African markets on Thursday.



<h2 class="wp-block-heading" id="h-economic-events">ECONOMIC EVENTS</h2>



South Africa July manufacturing sector PMI



South Africa July vehicle sales



<h2 class="wp-block-heading" id="h-south-african-markets">SOUTH AFRICAN MARKETS</h2>



South Africa&#8217;s rand strengthened on Wednesday, ahead of a much-anticipated policy decision by the U.S. Federal Reserve.



On the stock market, the Top-40 index closed over 2% up.



<h2 class="wp-block-heading" id="h-global-markets">GLOBAL MARKETS</h2>



Asian shares rallied on Thursday, tracking a huge revival in tech stocks helped by Meta and Nvidia, while prospects of imminent policy easing in the United States boosted global bonds and commodities.



<h2 class="wp-block-heading" id="h-wall-street">WALL STREET</h2>



The S&amp;P 500 and Nasdaq scored their biggest daily percentage gains since Feb. 22 and the Dow rose on Wednesday as chip stocks rallied and the Federal Reserve kept U.S. interest rates unchanged while signaling possible easing in September if inflation cools.



<h2 class="wp-block-heading" id="h-gold">GOLD</h2>



Gold prices hit a two-week high on Thursday as U.S. Federal Reserve Chair Jerome Powell opened the door to cutting interest rates as early as September.



&#8211; &#8211; &#8211; &#8211;



Some of the main stories out in the South African press:



<h2 class="wp-block-heading" id="h-business-day">BUSINESS DAY</h2>



&#8211; Helen Zille says DA relying on ANC’s disintegration to become majority party



<h2 class="wp-block-heading" id="h-fin-24">FIN 24</h2>



&#8211; Dis-Chem questioned at AGM about &#8216;zero percent&#8217; black top management



&#8211; Disappointment as Woolies misfires in Australia, SA clothing



(Compiled by Bhargav Acharya)

istockphoto-1076949610-612×612-1

South African Markets – Factors to watch on Aug 1

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



NAIROBI, Aug 1 (Reuters) &#8211; The following company announcements, scheduled economic indicators, debt and currency market moves and political events may affect African markets on Thursday.



<h2 class="wp-block-heading" id="h-global-markets">GLOBAL MARKETS</h2>



Asian shares rallied on Thursday, tracking a huge revival in global tech stocks helped by Meta and Nvidia, while prospects of imminent policy easing in the U.S. boosted global bonds and commodities.



<h2 class="wp-block-heading" id="h-world-oil-prices">WORLD OIL PRICES</h2>



Oil prices rose during Asian trade on Thursday, extending gains from the previous session, after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and concern over its impact on oil.



<h2 class="wp-block-heading" id="h-south-africa-markets">SOUTH AFRICA MARKETS</h2>



South Africa&#8217;s rand strengthened on Wednesday, ahead of a much-anticipated policy decision by the U.S. Federal Reserve.



<h2 class="wp-block-heading" id="h-nigeria-markets">NIGERIA MARKETS</h2>



Nigeria&#8217;s naira currency firmed sharply to 1,399.04 per dollar on the official market on Wednesday from a low of 1,632, LSEG data showed.



<h2 class="wp-block-heading" id="h-nigeria-politics">NIGERIA POLITICS</h2>



Nigerian security forces deployed in major cities and the government said it was open to dialogue ahead of planned protests on Thursday against a cost of living crisis and poor governance that authorities fear could turn violent.



<h2 class="wp-block-heading" id="h-kenya-markets">KENYA MARKETS</h2>



Kenya&#8217;s shilling strengthened on Wednesday, lifted by dollar inflows from horticultural produce exporters, traders said.



<h2 class="wp-block-heading" id="h-kenya-sukuk">KENYA SUKUK</h2>



Kenya&#8217;s bourse on Wednesday listed its first-ever Shariah-compliant bond or Sukuk, as it seeks to boost the range of financial products available and attract new capital.



<h2 class="wp-block-heading" id="h-kenya-inflation">KENYA INFLATION</h2>



Kenya&#8217;s inflation fell to 4.3% year-on-year in July from 4.6% a month earlier, the statistics office said on Wednesday.



<h2 class="wp-block-heading" id="h-kenya-finance-law">KENYA FINANCE LAW</h2>



Kenya&#8217;s Court of Appeal on Wednesday declared the government&#8217;s 2023 finance law unconstitutional, inflicting a new blow to the government of President William Ruto who withdrew this year&#8217;s finance bill after deadly protests.



<h2 class="wp-block-heading" id="h-ghana-politics">GHANA POLITICS</h2>



A high court in Ghana has blocked civil society groups from holding protests in the capital Accra, one of the organisers said, joining other African governments in trying to quell youth-led demonstrations over the high cost of living.



<h2 class="wp-block-heading" id="h-mozambique-central-bank-rate">MOZAMBIQUE CENTRAL BANK RATE</h2>



Mozambique&#8217;s central bank cut its MIMO interest rate to 14.25% from 15.00% on Wednesday, the fourth meeting in a row at which the rate has been reduced. 



((Compiled by Nairobi Newsroom))

World map with charts and graphs as symbols of global finance

African Markets – Factors to watch on Aug 1

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-820x547.jpg" alt="" class="wp-image-513690" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">PARAGUAY &#8211; 2024/07/30: In this photo illustration, the Artificial intelligence (AI) text logo seen in the background with a silhouette hand holding a smartphone. (Photo Illustration by Jaque Silva/SOPA Images/LightRocket via Getty Images)</figcaption></figure>



The European Union’s landmark artificial intelligence law officially enters into force Thursday — and it means tough changes for American technology giants.



The AI Act, a landmark rule that aims to govern the way companies develop, use and apply AI, was given final approval by EU member states, lawmakers, and the European Commission — the executive body of the EU — in May.



CNBC has run through all you need to know about the AI Act — and how it will affect the biggest global technology companies.



<h2 class="wp-block-heading" id="h-what-is-the-ai-act"><a></a>What is the AI Act?</h2>



The AI Act is a piece of EU legislation governing artificial intelligence. First proposed by the European Commission in 2020, the law aims to address the negative impacts of AI.



It will primarily target large U.S. technology companies, which are currently the primary builders and developers of the most advanced AI systems.



However, plenty other businesses will come under the scope of the rules — even non-tech firms.



The regulation sets out a comprehensive and harmonized regulatory framework for AI across the EU, applying a risk-based approach to regulating the technology.



Tanguy Van Overstraeten, head of law firm Linklaters’ technology, media and technology practice in Brussels, said the EU AI Act is “the first of its kind in the world.”



“It is likely to impact many businesses, especially those developing AI systems but also those deploying or merely using them in certain circumstances.”



The legislation applies a risk-based approach to regulating AI which means that different applications of the technology are regulated differently depending on the level of risk they pose to society.



For AI applications deemed to be “high-risk,” for example, strict obligations will be introduced under the AI Act. Such obligations include adequate risk assessment and mitigation systems, high-quality training datasets to minimize the risk of bias, routine logging of activity, and mandatory sharing of detailed documentation on models with authorities to assess compliance.



Examples of high-risk AI systems include autonomous vehicles, medical devices, loan decisioning systems, educational scoring, and remote biometric identification systems.



The law also imposes a blanket ban on any applications of AI deemed “unacceptable” in terms of their risk level.



Unacceptable-risk AI applications include “social scoring” systems that rank citizens based on aggregation and analysis of their data, predictive policing, and the use of emotional recognition technology in the workplace or schools.



<h2 class="wp-block-heading"><a></a>What does it mean for U.S. tech firms?</h2>



U.S. giants like Microsoft, Google, Amazon, Apple, and Meta have been aggressively partnering with and investing billions of dollars into companies they think can lead in artificial intelligence amid a global frenzy around the technology.



Cloud platforms such as Microsoft Azure, Amazon Web Services and Google Cloud are also key to supporting AI development, given the huge computing infrastructure needed to train and run AI models.



In this respect, Big Tech firms will undoubtedly be among the most heavily-targeted names under the new rules.



“The AI Act has implications that go far beyond the EU. It applies to any organisation with any operation or impact in the EU, which means the AI Act will likely apply to you no matter where you’re located,” Charlie Thompson, senior vice president of EMEA and LATAM for enterprise software firm Appian, told CNBC via email.



“This will bring much more scrutiny on tech giants when it comes to their operations in the EU market and their use of EU citizen data,” Thompson added



Meta has already restricted the availability of its AI model in Europe due to regulatory concerns — although this move wasn’t necessarily the due to the EU AI Act.



The Facebook owner earlier this month said it would not make its LLaMa models available in the EU, citing uncertainty over whether it complies with the EU’s General Data Protection Regulation, or GDPR.



The company was previously ordered to stop training its models on posts from Facebook and Instagram in the EU due to concerns it may violate GDPR.



<h2 class="wp-block-heading"><a></a>How is generative AI treated?</h2>



Generative AI is labelled in the EU AI Act as an example of “general-purpose” artificial intelligence.



This label refers to tools that are meant to be able to accomplish a broad range of tasks on a similar level — if not better than — a human.



General-purpose AI models include, but aren’t limited to, OpenAI’s GPT, Google’s Gemini, and Anthropic’s Claude.



For these systems, the AI Act imposes strict requirements such as respecting EU copyright law, issuing transparency disclosures on how the models are trained, and carrying out routine testing and adequate cybersecurity protections.



Not all AI models are treated equally, though. AI developers have said the EU needs to ensure open-source models — which are free to the public and can be used to build tailored AI applications — aren’t too strictly regulated.



Examples of open-source models include Meta’s LLaMa, Stability AI’s Stable Diffusion, and Mistral’s 7B.



The EU does set out some exceptions for open-source generative AI models.



But to qualify for exemption from the rules, open-source providers must make their parameters, including weights, model architecture and model usage, publicly available, and enable “access, usage, modification and distribution of the model.”



Open-source models that pose “systemic” risks will not count for exemption, according to the AI Act.



It’s “necessary to carefully assess when the rules trigger and the role of the stakeholders involved,” he [who said this?] said.



<h2 class="wp-block-heading"><a></a>What happens if a company breaches the rules?</h2>



Companies that breach the EU AI Act could be fined between 35 million euros ($41 million) or 7% of their global annual revenues — whichever amount is higher — to 7.5 million or 1.5% of global annual revenues.



The size of the penalties will depend on the infringement and size of the company fined.



That’s higher than the fines possible under the GDPR, Europe’s strict digital privacy law. Companies faces fines of up to 20 million euros or 4% of annual global turnover for GDPR breaches.



Oversight of all AI models that fall under the scope of the Act — including general-purpose AI systems — will fall under the European AI Office, a regulatory body established by the Commission in February 2024.



Jamil Jiva, global head of asset management at&nbsp;fintech firm Linedata, told CNBC the EU “understands that they need to hit offending companies with significant fines if they want regulations to have an impact.”



Similar to how GDPR demonstrated the way the EU could “flex their regulatory influence to mandate data privacy best practices” on a global level, with the AI Act, the bloc is again trying to replicate this, but for AI, Jiva added.



Still, it’s worth noting that even though the AI Act has finally entered into force, most of the provisions under the law won’t actually come into effect until at least 2026.



Restrictions on general-purpose systems won’t begin until 12 months after the AI Act’s entry into force.



Generative AI systems that are currently commercially available — like OpenAI’s ChatGPT and Google’s Gemini — are also granted a “transition period” of 36 months to get their systems into compliance.

In this photo illustration, the Artificial intelligence (AI

World’s first major AI law enters into force — here’s what it means for U.S. tech giants

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1005" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/12/PF3JNZQUQ5M65OD7XXTYURHSSI.jpg" alt="" class="wp-image-433367" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/12/PF3JNZQUQ5M65OD7XXTYURHSSI.jpg 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/PF3JNZQUQ5M65OD7XXTYURHSSI-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/PF3JNZQUQ5M65OD7XXTYURHSSI-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/PF3JNZQUQ5M65OD7XXTYURHSSI-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/PF3JNZQUQ5M65OD7XXTYURHSSI-768x402.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/12/PF3JNZQUQ5M65OD7XXTYURHSSI-1536x804.jpg 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /><figcaption class="wp-element-caption">Construction work is seen opposite a statue of Samora Machel, the first President of Mozambique, and the Cathedral of the Immaculate Conception, a Roman Catholic cathedral in downtown Maputo, Mozambique, September 1, 2019. REUTERS/Siphiwe Sibeko</figcaption></figure>



MAPUTO, July 31 (Reuters)&nbsp;&#8211;&nbsp;Mozambique&#8217;s central bank cut its MIMO interest rate to 14.25% from 15.00% on Wednesday, the fourth meeting in a row at which the rate has been reduced.



Bank of Mozambique Governor Rogério Zandamela told reporters that inflation was projected to remain in single digits in the medium term.



The southern African country&#8217;s inflation fell to 3.04% year on year in June from 3.07% in May, statistics agency data showed this month.



(Reporting by Manuel Mucari; Writing by Tannur Anders; Editing by Alexander Winning)

PF3JNZQUQ5M65OD7XXTYURHSSI

Mozambique central bank cuts key rate by 75 basis points

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-820x547.jpg" alt="" class="wp-image-513423" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">JOHANNESBURG, SOUTH AFRICA &#8211; SEPTEMBER 15: Mpho Parks Tau (Department of Economic Development) at the Arbor Day celebration at Diepsloot Memorial Park on September 15, 2021 in Johannesburg, South Africa. National Arbor Week calls on all citizens to plant indigenous trees as a practical and symbolic gesture of sustainable environmental management. (Photo by Sharon Seretlo/Gallo Images via Getty Images)</figcaption></figure>



I was heartened by Department of Trade, Industry and Competition Minister Parks Tau’s commitment to engage the private sector in identifying priority areas to accelerate economic growth and implementing coherent industrial policy.&nbsp; We have many common goals, South Africa’s economic well-being being the most obvious. We are here to help find solutions to any obstacles that stand in the way of achieving those goals.



In the spirit of collaborating for growth, shortly after his appointment the Minister reached out to BLSA and its members, among others, requesting that we share high-level issues faced by big business. There were few surprises – the challenges and frustrations that have accumulated over years of stagnant economic growth and alarming de-industrialisation have been repeatedly highlighted by BLSA.



But our members, which include some of South Africa’s biggest employers, have also made sensible, practical recommendations, and it was encouraging to see the alignment coming through in the Minister’s Budget Vote speech and those of his deputies.



This commitment is an opportunity to build on the successful collaboration to date — and it fosters business confidence, which is one of the key ingredients needed to get South Africa’s economy growing again.



BLSA welcomes the focus on creating a more predictable and stable regulatory environment, clarifying industrial policy and sector support, coordinating economic policy to enable more effective policy implementation, and ensuring greater transparency between the DTIC and the private sector.



Currently, complex and inconsistent regulatory requirements deter business operations and foreign investment, while frequent changes in legislation increase the cost of doing business and the compliance burden. Streamlining regulations to ensure they are clear and consistent will go a long way to address this and, as been suggested by some of our members, a one-stop regulatory body could be established to simplify compliance processes. Involving universities and deploying artificial intelligence and research capabilities could assist with large-scale policy modernisation.



In terms of industrial policy and sector support, it has been argued that the focus to date has been too broad, thus limiting its effectiveness.&nbsp; It makes sense, therefore, to concentrate on fewer sector priorities and revitalise the industrial policy action plans (or the masterplans) for targeted sectors, starting with the green economy. In the process of revitalising the sector masterplans — which are the often-complex industrial and trade strategies to promote local industry and improve competitiveness — the focus should be on designing the framework to be adaptable to allow for ongoing monitoring and course correction as conditions change.



There is a powerful opportunity for industry-government collaboration in the evolution of the special economic zone (SEZ) programme, which currently lacks both the required investment and a nationally integrated work programme. Incentives should be co-ordinated with other programmes/ instruments run by the DTIC, be more evenly applied, and be made visible to the foreign investors and export market players and future tenants who are the prospective users of the SEZ system.



The masterplan approach has the potential to be an effective industrial policy tool, but its success depends on addressing the challenges identified around evidence-based decision-making, balancing objectives, resourcing, and cross-stakeholder alignment. Securing alignment and buy-in for the masterplans across different government agencies and the broader business community will be key.



BLSA has previously highlighted the need for greater economic policy coordination. Several issues have been widely acknowledged as causing unnecessary friction and increasing the cost of doing business in South Africa. These include, but are not limited to, exchange control regulations, crime, skills shortages, unnecessary regulatory red tape, the need to broaden internet connectivity, and the well-documented challenges related to energy security, reliable electricity and water supply, and the ports, rail networks and logistics hubs.



We acknowledge that many of these factors engage with mandates of other government departments. However, the work conducted by the DTIC has wide influence, impacting about one in eight formal private sector jobs in the country. The department also plays a critical role in promoting investment, facilitating trade, stimulating industry, and supporting globally competitiveness and inclusive growth. We would argue there is logic in the DTIC leading a whole-of-government approach to these matters as the lead interface with industry and organised business.



Harmonising policies between departments and sectors would establish regulatory certainty as a key element of South Africa’s value proposition to global investors and trading partners. The DTIC could lead this process as part of the “Invest SA” mandate and as an implementation thrust of the draft Country Investment Strategy tabled in 2022. Some specific areas of focus here are: cross-government/industry collaboration to lower perceived sovereign lending risk to South African projects; constructive, growth-accelerating approaches on empowerment standards and practices for foreign direct investment in priority sectors; and addressing uncertainty around masterplans and their interaction with other national instruments.



In addition, the country needs trade instruments, globally and regionally, to be harmonised and optimised. The AGOA (African Growth and Opportunity Act) trade access negotiations are an opportunity to harmonise US market access with industrial policy instruments from the US that play to South African strengths (for example in the low carbon industries).



Another opportunity is industry-government strategic alignment on positioning with the EU on CBAM (Carbon Border Adjustment Mechanism) — the rate at which carbon-intensity is to be taxed should be paced and aligned with South Africa’s carbon tax regime and be commercially literate in both design and application to maximise both low carbon outcomes and developmental objectives.



The African Continental Free Trade Area (AfCFTA) presents yet another excellent opportunity for South African exporters and should also drive increased traffic of goods through our ports and airports. With some sectors/industries unable to make the business case for investment due to the market size in South Africa, extending the market into the African continent would be a game changer.



There is consensus on the need for greater transparency and accountability between the DTIC and the private sector. Our suggestion is to develop a public accountability system that tracks and publishes progress on key initiatives. A publicly accessible dashboard could be implemented that highlights the status of projects and government commitments.



South Africa has for too long battled with low growth, high unemployment, widening inequality and poor and failing infrastructure. While impressive policies have been crafted to reignite the economy, all too often implementation has failed — thus damning one of Africa’s largest and most industrialised economies.



We look forward to an integrated and outcomes-based approach from the DTIC, which can form a sturdy cornerstone of South Africa’s broader economic strategy.



Minister Tau can rely on business to be available for meaningful dialogue. More than that, the private sector has skills, experience and the will to work with the government and civil society to fix blockages and help ensure delivery. What matters now is pragmatism, undertaking research, testing new ideas, and embracing the course of action that will best deliver for the country. That is how to foster confidence, which will in turn lead to investment and expanded economic activity. I am optimistic about what we can achieve together.

MEC Parks Tau hosts Arbor Day Celebration in South Africa

What business wants from the DTIC

Startups are building balloons to hoist tourists 100

Startups are building balloons to hoist tourists 100,000 feet into the stratosphere

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1815421853-820x547.jpg" alt="" class="wp-image-510612" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1815421853-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1815421853-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1815421853-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1815421853-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1815421853-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1815421853-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">President of Kenya William Ruto during the United Nations Climate Change Conference COP28 High Level Segment meeting in Dubai, United Arab Emirates on December 1, 2023. (Photo by Jakub Porzycki/NurPhoto via Getty Images)</figcaption></figure>



NAIROBI, July 31 (Reuters) &#8211; Kenya&#8217;s Court of Appeal on Wednesday declared the government&#8217;s 2023 finance law unconstitutional, inflicting a new blow to the government of President William Ruto who withdrew this year&#8217;s finance bill after deadly protests.



The finance bills, which are presented to parliament at the start of every financial year, are the main vehicle for the government to set out its revenue-raising measures including tax hikes and the introduction of new levies.



The 2023 version was challenged in court following a round of political opposition-led street protests that turned violent, after Ruto&#8217;s government used it to double the value added tax on fuel, introduce a housing tax, and raise the top personal income tax rate, among other measures.



&#8220;A further declaration is hereby issued that the failure to comply with this constitutional dictate renders the entire Finance Act, 2023 unconstitutional,&#8221; a three-judge bench of the Court of Appeal said in a ruling.



The court&#8217;s verdict was in respect of an appeal of another one from the High Court late last year, which largely left the finance bill intact, only striking out the housing levy.



The government pushed through a new law to allow it to continue collecting the housing tax after that ruling and that law is also being challenged in court.



The government, which has been relying on the 2023 finance law to continue collecting taxes after Ruto withdrew this year&#8217;s bill, did not immediately comment on the ruling.



The government can appeal the Court of Appeal ruling at the Supreme Court, which is the highest court.



Reuters could not reach the office of the Chief Minister Musalia Mudavadi for comment. The top official at the finance ministry, Chris Kiptoo, did not respond to requests for comment.



Ruto has nominated a new finance minister after he fired all ministers but one in response to the youth-led violent protests that started last month.



Ruto says the higher taxes are necessary to enable the government to fund development programmes while paying off a heavy public debt load that currently exceeds the recommended level by the International Monetary Fund and the World Bank.



The government has submitted a new economic plan to the IMF and it expects the board of the fund to consider it at the end of August.



(Writing by Duncan Miriri; Editing by George Obulutsa and Mark Potter)

home

Unleashing East Africa’s growth and tapping into the continent’s potential

Protesters in Nigeria demonstrate over high cost of living

Dovish Fed lifts stocks while FX slips; Czech rate decision eyed

South African factory activity rises in July – Absa PMI

Ugandan shilling weaker due to increased commercial bank FX demand

Bank of England to make knife-edge call on interest rates as markets favor cut

Kenya’s shilling dips against the dollar – LSEG data

South African rand steady ahead of manufacturing PMI

Diamond sales at Botswana’s Debswana fall 49.2% as market downturn continues

Ivorian farmers turn to new rice variety for increased yields and profit

South African Markets – Factors to watch on Aug 1

African Markets – Factors to watch on Aug 1

World’s first major AI law enters into force — here’s what it means for U.S. tech giants

Mozambique central bank cuts key rate by 75 basis points

What business wants from the DTIC

Startups are building balloons to hoist tourists 100,000 feet into the stratosphere

Kenyan court nullifies 2023 finance law in new blow to President Ruto

News Tips

Advertise With Us

home

Unleashing East Africa’s growth and tapping into the continent’s potential

Protesters in Nigeria demonstrate over high cost of living

Dovish Fed lifts stocks while FX slips; Czech rate decision eyed

South African factory activity rises in July – Absa PMI

Ugandan shilling weaker due to increased commercial bank FX demand

Bank of England to make knife-edge call on interest rates as markets favor cut

Kenya’s shilling dips against the dollar – LSEG data

South African rand steady ahead of manufacturing PMI

Diamond sales at Botswana’s Debswana fall 49.2% as market downturn continues

Ivorian farmers turn to new rice variety for increased yields and profit

South African Markets – Factors to watch on Aug 1

African Markets – Factors to watch on Aug 1

World’s first major AI law enters into force — here’s what it means for U.S. tech giants

Mozambique central bank cuts key rate by 75 basis points

What business wants from the DTIC

Startups are building balloons to hoist tourists 100,000 feet into the stratosphere

Kenyan court nullifies 2023 finance law in new blow to President Ruto

News Tips

Advertise With Us

Newsletters