<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;

107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010

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)

COP28 In Dubai High Level Segment

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

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="753" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner.png" alt="" class="wp-image-513383" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner.png 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-300x118.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-820x322.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-160x63.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-768x301.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-1536x602.png 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /><figcaption class="wp-element-caption">Image: <a href="https://www.dreamstime.com/street-protests-nairobi-kenya-july-month-long-over-government-william-ruto-continue-youth-seeking-better-leadership-image326684651" target="_blank" rel="noreferrer noopener">Joshua Wanyama/Dreamstime</a></figcaption></figure>



<h2 class="wp-block-heading" id="h-recent-protests-in-kenya-signal-a-shift-from-ethnic-based-to-interest-based-politics-which-could-have-broader-implications-for-the-region">Recent protests in Kenya signal a shift from ethnic-based to interest-based politics which could have broader implications for the region.</h2>



The recent protests in Kenya mark a turning point in Kenya’s, and perhaps Africa’s, political trajectory. Changes were already apparent in Kenya’s last elections, which showed a growing number of Kenyans turning away from ethnic-based voting towards class and interest-based voting. The tax protests take this a step further, giving voice to those who felt ignored and disenfranchised by the government’s decisions. The crowd, through their protests, have exerted an influence beyond the traditional patronage networks. How did this happen? Will it have a lasting impact? And will it spread to other African countries?&nbsp;



In 1971, the British historian E.P. Thompson published an&nbsp;<a href="https://www.jstor.org/stable/650244" target="_blank" rel="noreferrer noopener">article</a>&nbsp;titled ‘The Moral Economy of the English Crowd in the 18th Century.’ It argued that the riots, especially bread riots, that plagued 18th-century British politics reflected not so much the disorder of agitators, looters and hooligans, as contemporary politicians liked to paint them, but the attempt by ordinary poor people to enforce the laws and customs that protected their livelihoods and made life affordable for them. Their targets were traders and magistrates who ignored the rules for their own profit. The state nevertheless saw them as a threat and responded with repression. It took decades for the protesters to organise themselves politically and campaign successfully for the vote as a more effective way for their voices to be heard.&nbsp;



The recent Kenyan protests were linked to similar concerns, in this case rising prices caused by tax increases, but with one big difference: it was not just the poor protesting but the middle classes, the mobile phone-owning, digitally-mobilised youth of Gen Z. This is much more politically threatening to the status quo.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1108" height="658" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph.png" alt="" class="wp-image-513381" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph.png 1108w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-300x178.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-820x487.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-152x90.png 152w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-768x456.png 768w" sizes="auto, (max-width: 1108px) 100vw, 1108px" /></figure>



While the immediate target was to rescind the proposed tax increases, which would have immediately impacted the cost of living for all Kenyans, the protests were&nbsp;<a href="https://www.theguardian.com/commentisfree/article/2024/jul/01/kenya-protests-finance-bill-government-debt" target="_blank" rel="noreferrer noopener">focused</a>&nbsp;as much on the endemic corruption amongst the political and business elite, including Ruto’s immediate circle, as on the IMF, which approved the tax increases to pay off the accumulated debts of the past. The elite’s affluent lifestyle, flaunted on social media and impervious to the tax hikes, simply rubbed salt in the wound.&nbsp;



Above all, protesters were making the point that the taxes proposed in the budget were&nbsp;unfair.&nbsp;Not only were they retrogressive, impacting more heavily on the poor, but they were designed to raise money to repay loans from which the elite had grown fat and from which the middle and lower classes had derived little tangible benefit. Sure, there was now another train line to Mombasa; but that didn’t provide them with jobs, or help them cover the rising cost of living.&nbsp;



President Ruto initially&nbsp;<a href="https://foreignpolicy.com/2024/06/28/kenya-protests-ruto-imf-taxes-poverty-broke-social-contract/" target="_blank" rel="noreferrer noopener">condemned</a>&nbsp;the protests as the ‘treasonous’ actions of ‘criminal’ elements and sent in the army to ‘restore order’, killing some&nbsp;<a href="https://www.aljazeera.com/news/2024/7/12/kenya-police-chief-resigns-after-criticism-over-protest-crackdown#:~:text=Kenya&amp;apos;s%20national%20rights%20watchdog%20said,resignation%20was%20%E2%80%9Cvery%20significant%E2%80%9D." target="_blank" rel="noreferrer noopener">39 protesters</a>&nbsp;in the process. There is still an&nbsp;<a href="https://trtafrika.com/insight/kenya-anti-tax-protests-how-businesses-became-collateral-damage-18181320" target="_blank" rel="noreferrer noopener">argument</a>&nbsp;over whether the looting of shops and burning of the Parliament building was caused by hired vandals brought in to discredit the protests and provide a justification for repression, or by some protesters simply expressing their anger or taking advantage of the situation. In practice, it doesn’t matter: the damage was done and the country was shocked.



Ruto is finding out that in a society with a degree of accountability, protest that deteriorates into disorder is what Thompson calls a ‘social calamity’: it destroys existing social and political relations on which political stability is built. Under an authoritarian government, those in power have little compunction in deploying force to repress dissent: they rule by fear, and this simply reinforces the intimidation of society. Opposition leaders and dissidents can be rounded up, beaten, imprisoned or killed without it threatening their dominance.&nbsp;



But where the government is by consent, the authorities need to protect their legitimacy. The question is, whose consent? Kenya is a democracy, and Ruto became President in an election in 2022 declared adequately free and fair. The budget was approved by a democratically-elected Parliament. And yet people still took to the streets in protest.&nbsp;



As Peter Lockwood has argued,&nbsp;<a href="https://academic.oup.com/afraf/article/122/487/205/7133587" target="_blank" rel="noreferrer noopener">Kenyan politics</a>&nbsp;is already moving away from ethnically-based voting, where people trust only someone from their own region and ethnic group to represent them, towards interest-based voting. Ruto’s success among Kikuyu voters was based partly on his appeal to the ‘hustlers’: the poor, the street vendors, the disadvantaged who wanted to believe he would help them. But it was also based on their disenchantment with Uhuru Kenyatta’s ‘elite capitalism’ and Kenya’s patron-client politics (neo-patrimonialism for political scientists), in which political support for the President buys access to lucrative business opportunities. As in 18th century England, corruption (‘Old Corruption’ as it was called then) is integral to the political system: it is how political loyalty is bought and political patrons secure money to satisfy their clients. But it only works where constituencies can be bought off in this way. Where a political system is sewn up through such patronage, the only way for those outside the system to make their voices heard is in the street.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1060" height="699" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2.png" alt="" class="wp-image-513382" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2.png 1060w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-300x198.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-820x541.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-136x90.png 136w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-768x506.png 768w" sizes="auto, (max-width: 1060px) 100vw, 1060px" /></figure>



What underpinned the protests of the crowds in Nairobi and throughout the country was that Ruto had not changed this political process but simply shifted the benefit to his friends and political allies. Not just the hustlers but Kenya’s growing middle classes are suffering from the inflation that debt-fuelled spending and the falling shilling have brought. They saw no reason to suffer higher taxes to pay off the debts that were accumulated without their agreement or benefit. Ruto had done little to prepare the political ground for his debt strategy – either through the tax-and-pay-back approach approved by the IMF or the cut-and-pay policy he is now proposing.&nbsp;



In Britain’s recent election, neither party was willing to admit that Brexit was substantially responsible for the country’s economic woes: the subject was too toxic to raise, seen as a vote loser by both sides. The problem therefore remains unaddressed. So too in Kenya, no one seems willing to admit that it is the imprudent borrowing and incompetent investment by the previous government (in which Ruto was Vice-President) which fuelled the debt crisis that now dominates budget policy. Far easier to blame the international financial system – which has its share of blame, but where the inequality is less immediately visible to Kenyans than is the unfair affluence of their own elite.



Being forced first to withdraw the budget and now to re-structure his whole cabinet shows that Ruto has registered the need to re-establish his legitimacy by bringing in a wider range of political forces to the government. But until the policy issue is debated honestly in public, Ruto’s government will remain vulnerable to popular protest, whoever is co-opted into the cabinet. The moral authority of the crowd has been asserted: it will not disappear, even if it is no longer on the street.&nbsp;



Kenya is not alone in facing this kind of economic crunch over debt, but others have handled it differently.&nbsp;<a href="https://www.reuters.com/markets/ghanas-debt-restructuring-takes-another-step-forward-2024-06-24/#:~:text=*%20January%202024%20%2D%20Ghana%20reaches%20a,loan%20payout%20a%20week%20later." target="_blank" rel="noreferrer noopener">Ghana</a>&nbsp;and&nbsp;<a href="https://www.reuters.com/world/africa/zambias-three-year-debt-restructuring-takes-step-forward-2024-03-25/#:~:text=July%202022%3A%20Zambia&amp;apos;s%20OCC%2C%20co,worth%20of%20loans%20to%20Zambia." target="_blank" rel="noreferrer noopener">Zambia</a>&nbsp;both chose to default and restructure their debt obligations rather than try to meet the unaffordable repayments by drastically raising taxes or cutting spending. The cost for these countries has been excluded from global capital markets and weakened currencies, but they have so far avoided riots. The issue is already a critical one in the Ghanaian elections due in December, so the debate there cannot be avoided.&nbsp;



<a href="https://africacenter.org/spotlight/key-takeaways-from-senegals-presidential-election/" target="_blank" rel="noreferrer noopener">Senegal’s elections</a>&nbsp;earlier this year posed a political rather than economic challenge, but it was as much the people on the street as the phone calls from global leaders that finally persuaded Macky Sall to allow the elections to go ahead and hand over the Presidency peacefully to opposition leader Diomaye Faye who stood on a strong anti-corruption platform. In Senegal too, the elite had to listen to the crowd, which now has a leader it trusts.



In&nbsp;<a href="https://www.bbc.co.uk/news/articles/ceqde3dqd05o" target="_blank" rel="noreferrer noopener">Uganda</a>&nbsp;also the crowd has taken up the anti-corruption message and taken to the streets. As in Kenya, the authorities have responded with repression, but their legitimacy is put at risk. Just as coups spread across the Sahelian countries reflecting people’s unhappiness with their ruling elites, in African countries with more robust civil societies, popular protest is spreading demanding more democratic change.



Nigeria is the African country currently most vulnerable to such popular protests. The&nbsp;<a href="https://journals.sagepub.com/doi/10.1177/17506352241239550?icid=int.sj-abstract.citing-articles.1" target="_blank" rel="noreferrer noopener">#EndSARS protests</a>&nbsp;in October 2020 already demonstrated the ability of young Nigerians to mobilise public protest against what was seen as a recurrent injustice of arbitrary arrest by the police. Though it came to an abrupt end after the&nbsp;<a href="https://www.theguardian.com/global-development/2021/nov/01/nigeria-end-sars-protesters-find-no-justice-one-year-on" target="_blank" rel="noreferrer noopener">‘Lekki Gate massacre’</a>&nbsp;and the state has taken extensive&nbsp;<a href="https://www.hrw.org/news/2021/10/19/nigeria-year-no-justice-endsars-crackdown" target="_blank" rel="noreferrer noopener">steps</a>&nbsp;to discourage such protests since, the mobilisation of middle-class opinion fed through into&nbsp;<a href="https://www.cfr.org/blog/peter-obi-and-dream-deferred" target="_blank" rel="noreferrer noopener">Peter Obi’s</a>&nbsp;strong showing in the 2022 Nigerian elections.



The Nigerian state, even more than the Kenyan, revolves around&nbsp;<a href="https://www.cfr.org/article/nigerias-all-too-familiar-corruption-ranking-begs-broader-questions-around-normative" target="_blank" rel="noreferrer noopener">patronage networks</a>&nbsp;lubricated by access to state funds. The dependence on oil revenue has meant that personal and trade taxation in Kenya is negligible. The tax take is reported to have risen from 6.7% of GDP in 2021 (<a href="http://chrome-extension//efaidnbmnnnibpcajpcglclefindmkaj/https:/www.oecd.org/tax/tax-policy/revenue-statistics-africa-nigeria.pdf" target="_blank" rel="noreferrer noopener">OECD</a>) to 10.8% in 2023 (<a href="https://www.aljazeera.com/news/2023/7/7/nigeria-on-quest-to-almost-double-tax-to-gdp-ratio-in-three-years#:~:text=Nigeria%20has%20one%20of%20the%20lowest%20tax%20collection%20rates%20in,and%20the%20rest%20from%20borrowing." target="_blank" rel="noreferrer noopener">government adviser</a>), but this is as likely to reflect that Nigeria’s measured GDP has fallen sharply since the last election, and is still amongst the lowest in the world. But people do care about the cost of living, the removal of fuel subsidies, and the falling value of the Naira – all of which underpinned the&nbsp;<a href="https://www.reuters.com/world/africa/nigerian-unions-shut-down-power-grid-start-strike-over-minimum-wage-2024-06-03/" target="_blank" rel="noreferrer noopener">general strikes</a>&nbsp;called by Nigerian unions in May and June this year, demanding a raise in the minimum wage. If nothing is done about it sooner rather than later, the Nigerian crowd could take to the streets once more to demand action from a government that has so far failed to deliver.&nbsp;



For now, Tinubu’s government seem to believe that maintaining the patronage networks is more important for their political survival than fending off public protest and that the corruption underpinning those networks can be left in place. Given the size, diversity and devolution of Nigeria’s political system, that may be right – for now. But the risk is that if things do not improve very soon, protests will break out and the authorities may lose political control completely in some areas which they will find very hard to restore without more drastic political and economic reform. Only time will tell.&nbsp;

MoralEconomybanner

The Moral Economy of the African Crowd

<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-1604532787-820x547.jpg" alt="" class="wp-image-506008" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Ugandan shilling and US dollars in the draw at a foreign exchange currency bureau in Kampala, Uganda, on Wednesday, Aug. 16, 2023. Uganda&#8217;s central bank said it stands ready to act if the World Bank&#8217;s decision to halt new funding over the country&#8217;s passage of anti-LGBTQ legislation impacts the currency further. Photographer: Luke Dray/Bloomberg via Getty Images</figcaption></figure>



KAMPALA, July 31 (Reuters) &#8211; The Ugandan shilling was barely changed on Wednesday, with some end-month dollar inflows from charities offering some support, traders said.



At 1050 GMT, commercial banks quoted the shilling at 3,716/3,726, compared with Tuesday&#8217;s closing rate of 3,717/3,727.



(Reporting by Elias Biryabarema; Editing by George Obulutsa)

Ugandan Economy Following Rate Cut

Ugandan shilling stable, draws support from charity FX inflows

<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-1853257074-820x547.jpg" alt="" class="wp-image-513290" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1853257074-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1853257074-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1853257074-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1853257074-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1853257074-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1853257074-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">ACCRA, GHANA &#8211; DECEMBER 13: H.E. President Nana Akufo-Addo of Ghana, speaks at the Diaspora Engagement Policy launch at the Jubilee House on December 13, 2023 in Accra, Ghana.The Diaspora Engagement Policy (DEP), for the first time in the history of the country of Ghana, was developed to provide the necessary framework within which the Ghanian Diaspora can be constructively engaged in political, social, economic and cultural discourse towards the effective mobilization and coordination of their contributions to the national development process. (Photo by Robert Okine/Getty Images)</figcaption></figure>



ACCRA, July 31 (Reuters)&nbsp;&#8211;&nbsp;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.



Organisers said the protests would draw over two million people onto the streets to demand more action from President Nana Akufo-Addo on corruption and living conditions, as well as to protest delays in signing an anti-LGBT bill into law.



High court Justice Abena Afia Serwaa approved a request by Ghana&#8217;s police to ban a handful of organisations from carrying out protests planned between July 31 and August 6 after the police said it lacked the personnel necessary to provide security as officers have been deployed to political rallies amid election campaigning for elections.



A wave of youth demonstrations has swept across several African countries in recent weeks.



In Kenya, more than 50 people have been killed and nearly 700 arrested in a police crackdown on demonstrations since mid-June, when protesters began taking to the streets to oppose tax increases proposed by President William Ruto, according to the government-funded Kenya National Commission on Human Rights (KNCHR).



Ruto has fired his cabinet and scrapped the tax bill.



Last week, young people in Uganda took to the streets to protest against alleged corruption and demand the resignation of the parliament speaker.



Police there shut down a march and arrested more than 70 people, according to a legal aid organisation.



Nigeria, meanwhile, on Saturday offered its young people jobs in the state-oil company and billions of naira worth of grants among other incentives to discourage protests, days before a planned nationwide demonstration over bad governance and a high cost of living.



In Ghana, protest organiser Mensah Thompson said elections should not block citizens from exercising their right to demonstrate.



&#8220;Young people are poised to demonstrate with or without the approval of the authorities,&#8221; he said.



&#8220;A time comes when they will spontaneously jump on the streets and we will have a &#8216;Kenya&#8217; on our hands.&#8221;



Ghana&#8217;s economy buckled after the effects of years of over-stretched borrowing were exacerbated by the COVID-19 pandemic, the knock-on impacts of the war in Ukraine and higher global interest rates.



The gold, cocoa and oil producer has been restructuring most of its $30 billion external debt to be able to implement a $3 billion, three-year International Monetary Fund bailout programme and emerge from its worst economic crisis in a generation.



Ghanaians head to the polls in December to elect legislators and a replacement to President Akufo-Addo in an election expected to be keenly contested.



(Editing by Portia Crowe; editing by Miral Fahmy)

Launch Of The Diaspora Engagement Policy In Ghana

Ghana court bans planned protests against cost of living

Why becoming an Olympic athlete is so expensive

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1254" height="836" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling.jpg" alt="" class="wp-image-404443" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling.jpg 1254w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-768x512.jpg 768w" sizes="auto, (max-width: 1254px) 100vw, 1254px" /><figcaption class="wp-element-caption">Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering</figcaption></figure>



July 31 (Reuters)&nbsp;&#8211;&nbsp;Currencies of most emerging European countries slipped against the dollar on Wednesday, with the Turkish lira touching a record low, while a gauge of EM stocks rose as investors awaited the Federal Reserve&#8217;s interest rate decision later in the day.



MSCI&#8217;s indexes tracking emerging market stocks jumped 1.1%, lifted by gains on Asian bourses on hopes for economic stimulus in China after data showed the country&#8217;s manufacturing activity slipped to a five-month nadir in July.



Additionally, geopolitical risks remained on the radar after Hamas said its leader Ismail Haniyeh was assassinated in Iran, drawing worries about further escalation in the region.



Turkey&#8217;s lira dipped 0.2% versus the dollar, touching a fresh all-time low of 33.1075 against the greenback, while stocks in Turkey dipped 0.5%.



Currencies in emerging European economies edged lower, with the Hungarian forint and Czech crown losing about 0.1% against both the euro and the greenback.



Meanwhile, the Polish zloty slipped 0.2% against the euro after data showed inflation jumped significantly in July, from 2.6% to 4.2% year-on-year, primarily due to the government&#8217;s partial withdrawal of measures aimed at keeping down energy prices.



Investors awaited the U.S. Federal Reserve&#8217;s policy decision later on Wednesday, where the central bank is expected to hold rates but could potentially signal rate cuts are imminent.



The Fed is a key event on a central bank-packed week. The Bank of Japan hiked interest rates earlier in the day. Decisions are on deck from the central banks of Colombia, Brazil, Chile on Wednesday, and the Czech Republic on Thursday.



&#8220;The BoJ and FOMC meetings bookend and are the focal points for a very busy day,&#8221; said Marc Ostwald, global strategist at ADM Investor Services International.



&#8220;It is also month end, and price action thus far this week suggests this has been a constraint, above all given all of the event risk this week, not to mention long-standing national and geopolitical issues,&#8221; Ostwald said, adding plenty of trading activity was likely post the Fed meeting as investors rebalance portfolios.



The emerging markets stock index is on pace for its first monthly decline since January, while an index tracking EM currencies is on track to rise about 0.3%, as markets have grappled with a U.S. tech-led equity selloff, while gauging the likelihood of lower interest rates in the U.S.



Emerging market bonds have fared better, with J.P. Morgan&#8217;s index of dollar-denominated EM bonds returning 1.6% in July, putting its year-to-date gains at nearly 4%.



Elsewhere, the World Bank&#8217;s board approved $1.5 billion in financing for its first ever budget support lending to Ethiopia, it announced on Tuesday.



Ethiopia&#8217;s birr was trading around 74.738 against the dollar.



Nigeria&#8217;s naira was also under pressure, quoted at 1610 to the dollar and on course to fall nearly 7% in July.



(Reporting by Lisa Mattackal in Bengaluru; Editing by Shailesh Kuber)

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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

The Moral Economy of the African Crowd

Ugandan shilling stable, draws support from charity FX inflows

Ghana court bans planned protests against cost of living

Why becoming an Olympic athlete is so expensive

Emerging European FX slips, EM stocks rise as all eyes on Fed

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