HARARE (Reuters) &#8211; Zimbabwe agreed on Wednesday to pay $3.5 billion in compensation to white farmers whose land was expropriated by the government to resettle black families, moving a step closer to resolving one the most divisive policies of the Robert Mugabe era.



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



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



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



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



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



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



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



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



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



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

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Zimbabwe agrees to pay $3.5 billion compensation to white farmers

The last survivor of a defiant group of young activists who stared down death in the name of freedom has been laid to rest in his home of Soweto, in Johannesburg among the people he had served in politics for seven decades. With him died a lot of the hopes for freedom and prosperity for all South Africans that he fought for until his last breath. 



In paying tribute to Andrew Mlangeni,who died aged 95, Gauteng education MEC Panyaza Lesufi had stinging words for the country&#8217;s post aprtheid leaders as he spoke as the funeral on behalf of Gauteng premier David Makhura, laid low by COVID-19. 



&#8220;&#8221;The struggle you waged may turn to be something else if we don&#8217;t self-correct. That the sacrifices you made, if nothing drastic is done, may be fruiltess,&#8221; says Lesufi.



&#8220;The mistrust between the leadership and our people is growing daily, Never in our history have greediness and corruption preoccupied the mind of our people . In your honour , we need to let go of all these wrong things.&#8221; 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="480" height="360" src="https://www.cnbcafrica.com/wp-content/uploads/2020/07/hqdefault-58.jpg" alt="" class="wp-image-376849" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/07/hqdefault-58.jpg 480w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/hqdefault-58-300x225.jpg 300w" sizes="auto, (max-width: 480px) 100vw, 480px" /><figcaption>Last Rivonia trialist Andrew Mlangeni dies aged 95</figcaption></figure>



Mlangeni was accused number 10 in the so called Rivonia trial that began in 1963 and lasted for a year. Accused number one was Nelson Mandela who was to turn world opinion in favour his band of brothers who stood, resolutely, behind their principles in the face of the death penalty. The apartheid authorities had failed to secure convictions of the increasingly troublesome activists, with treason charges, in the 1950s because of the complexities of proof. Sabotage was a lot easier to prove and prosecutors pressed for the death penalty when the trial concluded in 1964.



Even on the cold morning in 1964, when the accused ascended the stairs at the Palace of Justice in Pretoria for teh verdict they didn&#8217;t know whether they were going to hang. The judge sentenced them to life in prison, which meant that Mlangeni, who had been trained by the military in China, spent 27 years behind bars.



Ironically Mlangeni spent a lifetime in prison for doing nothing wrong. The authorities transferred the sabotage of the late defence minister Joe Modise to Mlangeni&#8217;s charge sheet and never even bothered to question him about it in court.



Mlangeni pleaded guilty to all charges in solidarity with his comrades, on principle, in the cause of putting the apartheid government of the day on trial. It worked and soon the desperadoes of the struggle were being seen as the principled Benjamin Franklins of Africa, in the words of advocate George Bizos, one of the men who defended them. 



The kind of selfless principle that South Africa, in 2020, is crying out for.

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The last survivor of a defiant dance with death and Nelson Mandela is laid to rest.

JOHANNESBURG (Reuters) &#8211; South Africa’s Standard Bank said on Wednesday that its profits for the six-months to June 30 could be as much as 50% lower as the coronavirus crisis hits its performance.



Africa’s biggest bank by assets said in a trading update the hit to its headline earnings per share &#8211; the main profit measure in South Africa &#8211; for the period would likely be between 30% and 50%, compared to the 837.4 cents it reported in the same period last year.

Standard_Bank_Headquarters_logo_at_Johannesburg

South Africa’s Standard Bank warns of up to 50% profit slump

(Reuters) &#8211; Sasol has agreed to sell the world’s biggest oxygen production site in Secunda, South Africa, to France’s Air Liquide for about 8.5 billion rand ($515 million), as it sheds assets to pay off debts and avoid a rights issue.



Sasol, the world’s biggest producer of motor fuel from coal, said on Wednesday it had reached an agreement to sell the 16 air separation units, which have a capacity of 42,000 tons per day and produce oxygen for its fuels and chemicals production processes as well as other gases.



The move is part of Sasol’s drive to sell off assets amid the coronavirus crisis and oil price slump, which have left the company &#8211; already struggling following problems at a massive chemicals project in the United States &#8211; potentially facing a rights issue of $2 billion.



Air Liquide, an industrial gases company that has been present at the site since 1979 and already owns and operates one other air separation unit, said it would launch a multi-year plan to modernise the facilities.



“(The transaction) will allow both Air Liquide and Sasol to focus on their core business, combining operational efficiency and reduction of CO2 emissions,” said Benoit Potier, chairman and CEO of Air Liquide, which will supply gases to Sasol if the transaction goes ahead.



Sasol added the companies were aiming to negotiate final agreements by mid-August, with the transaction expected to close within fiscal 2021.



($1 = 16.4895 rand)

Sasol_Place_-_Sandton

Sasol to sell world’s biggest oxygen production site to Air Liquide

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



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



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



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



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



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



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



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



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



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



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

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Global airlines less hopeful on COVID-19 recovery

By&nbsp; Zinathi Gquma



What is it about finance ministers and farming? It seems that when they are not racking their brains over the national budget they can find happiness down on the farm, amid the cows, crops and clucking of chickens in the barnyard.



That appears to be the case for South Africa’s current and previous finance ministers. Tito Mboweni, the current finance minister is never happier than when he is on his farm in Limpopo in the north of South Africa. Mboweni puts videos of chickens and plants on his Twitter feed. &nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="296" height="343" src="https://www.cnbcafrica.com/wp-content/uploads/2020/06/hqdefault-101-e1593178816521.jpg" alt="SA Finance Minister Tito Mboweni delivers his emergency budget" class="wp-image-374798" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/06/hqdefault-101-e1593178816521.jpg 296w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/hqdefault-101-e1593178816521-259x300.jpg 259w" sizes="auto, (max-width: 296px) 100vw, 296px" /><figcaption>#SpecialBudget2020: Finance Minister Tito Mboweni delivers emergency budget (full speech)</figcaption></figure>



His predecessor, Nhlanlha Nene, who stepped down from office at the end of 2018, owns a 22- hectare farm in KwaZulu Natal. lt runs in his blood, Nene tells CNBC Africa in an exclusive interview, dressed more for the field than finance . Behind Nene, is a painting that proves his passion; a picture of Ringo, one of his prized bulls &#8211; a gift from a neighbour.



“Even when I was in office I would always retreat back to the farm, to gain some sanity…I love animals and I love nature, it is really therapeutic…nature gives you a sense of clarity,” he says.



“I grew up in a rural area, where my parents were subsistence farmers.”



Marrying his passion for finance and his joy of farming, Nene says that agriculture should be used by South Africans as a tool to lift individuals and communities out of poverty.



“COVID 19? This is a wake- up call that precious metals are no longer important, but agricultural products mean less imports, food security, employment and self- sustenance .We could lift ourselves out of poverty we will always be able to lift ourselves out of poverty and a lot of jobs could be created if we were to re-introduce that way of life (farming) to our people,” says Nene.

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Why African finance ministers go farming.

LAGOS/LONDON (Reuters) &#8211; Nigeria’s state oil firm NNPC has signed a $1.5 billion prepayment deal led by Standard Chartered and backed by oil traders Vitol Group and Matrix Energy, two sources close to the matter said, the first such agreement since the coronavirus pandemic.



The deal provides OPEC-member Nigeria with much-needed cash after its finances were hit by the oil price crash in April as COVID-19 lockdowns erased nearly one third of global oil demand.



The financing package called Project Eagle was also backed by African Export Import Bank (Afrexim) and United Bank for Africa. Vitol and Matrix will each get 15,000 barrels per day (bpd) of crude as repayment over five years, starting in August. Nigeria’s crude production is nearly 2 million bpd.



Nigerian trader Matrix confirmed its participation in the deal. Vitol, the world’s biggest independent oil trader, declined to comment. A spokesman for Standard Chartered declined to comment. Afrexim did not have an immediate comment.



UBA and NNPC did not immediately respond to requests for comment.



Prepayments with traders are widely used in commodity finance as banks consider them to be one of the more secure forms of lending in countries viewed as risky.



For trading firms such as Vitol, these loans are ideal for securing long-term supplies and boosting razor-thin margins.



NNPC has been trying to raise cash through prepayments with traders for years. However, the firm’s opaque finances and costly gasoline subsidies have made it tough for it to secure private financing on attractive terms. Nigeria announced the end of subsidies earlier this year.



NNPC will use a large portion of the money to pay taxes owed by its subsidiary NPDC, the sources said. The remainder will go towards operational expenses and capital expenditure. One of the sources said money from the pre-payment could fund an upgrade of the Port Harcourt refinery.

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Nigeria in $1.5 bln oil prepay deal with traders Vitol, Matrix

An independent review panel has exonerated Akinwumi Adesina, the president of the African Development Bank, of any ethical wrong doing. It clears the way for Adesina to stand for a second five-year term as president of the bank, at its annual meetings between August 25 and 27.



The panel was set up by the bureau of governors of the AfDB following a complaint by the United States. It included: former Irish president &nbsp;Mary Robinson; &nbsp;Hassan B Jallow, the chief justice of the supreme court of Gambia; and Leonard McCarthy, a former director of public prosecutions in South Africa.



The probe began in January when 16 allegations of ethical conduct were levelled by a group of whistle blowers. The allegations were reviewed first by the AfDB’s ethics committee and dismissed as frivolous and without merit. These findings were upheld by a meeting of the bank’s board of governors in May. &nbsp;



“It has considered the president’s submissions on their face value and find them consistent with his innocence,” the three-person panel said in a statement.



When Adesina was elected, in 2015, he was seen as a breath of fresh air in development finance in the continent. He had studied in the United States, the same university that produced astronaut Neil Armstrong, and slogged his way up through development work in Africa and a stint as the agriculture minister of Nigeria – the country of his birth. &nbsp;He promised action and spoke passionately about Africa



“When I watch on TV Africans clinging to rickety boats trying to get to Europe that is not the Africa I want to see,” says Adesina at the launch of the Africa Investment Forum, in 2018, in Johannesburg. The AIF is his brainchild and raised billions in investment in Africa. 



“I want a new Africa that people want to come to and not move out of.”&nbsp;&nbsp;&nbsp;



&nbsp;On Adesina’s watch the AfDB launched a $10 billion fund to help African nations fight the COVID-19 pandemic. In June and July, Standard and Poors and Fitch Ratings gave the AfDB &nbsp;a AAA rating with a stable outlook.

PRST Adesina

Adesina cleared to stand for a second term at the AfDB as probe  exonerates him

There is no shortage of technological innovations designed to boost animal agriculture in Africa. These range from&nbsp;<a href="https://cgspace.cgiar.org/handle/10568/57322">GPS tracking systems</a>&nbsp;which identify and trace pastoralists’ herds to livestock vaccine&nbsp;<a href="https://www.cowtribe.com/">SMS services</a>&nbsp;that alert farmers to disease outbreaks.



But to unlock the economic potential of the sector as&nbsp;<a href="http://www.fao.org/3/a-i3706e.pdf">demand for meat and milk</a>&nbsp;swells threefold towards 2050, countries must invest in the critical areas that will improve quality across the whole value chain. That is increasing productivity and quality from the breeding of the animal throughout the production process to the end product. This includes safe storage, handling and sale.



My native Uganda offers some useful lessons from its use of smart investments in technology and farmer organisation. These have made it the only East African country that is&nbsp;<a href="http://pure.au.dk/portal/files/71178513/mwebaze_and_kjaer_article.pdf">self-sufficient in milk</a>.



In recent years, some private sector players in Uganda have invested in testing systems to detect aflatoxin in animal feeds. The goal is to prevent milk and meat contamination. Others have developed refrigeration units that are powered with&nbsp;<a href="https://energypedia.info/wiki/Biogas-Powered_Evaporative_Cooling_for_Uganda%E2%80%99s_Dairy_Industry">biogas</a>&nbsp;from manure. Both are among the innovations that improve the quality of the final product.



As highlighted by a&nbsp;<a href="https://www.mamopanel.org/resources/reports-and-briefings/meat-milk-more-policy-innovations-shepherd-inclusi/">new report</a>&nbsp;from the Malabo Montpellier Panel on which I sit, the same can be achieved elsewhere. It can also benefit other livestock commodities, to give Africa food sovereignty across animal-sourced foods and greater access to international markets.



The report makes 11 recommendations for Africa’s livestock sector. These range from technological innovations and supportive policies to addressing trade barriers and challenges specific to each commodity.



<h2 class="wp-block-heading">Priority areas</h2>



African nations must be strategic in prioritising the infrastructure that will make the most difference to quality and productivity. The first priority is to increase consumer awareness around food safety, nutrition and sustainability to kickstart demand for better quality products.



Partly as a response to European consumer expectations around quality and safety, for example, Morocco developed a new system for&nbsp;<a href="http://www.onssa.gov.ma/fr/sante-animale/identification-animale">animal identification and traceability</a>&nbsp;in 2015.



Livestock can be identified using electronic tags that communicate with the national database via mobile phone networks. This increases transparency and traceability. It also promotes Moroccan animal products on international markets such as the European Union.



The second priority is then to direct technology towards opportunities to open up market access.



To unlock trade means investing in improved animal health, processing operations, storage and distribution. Meeting regional and international standards for food safety and quality is a vital goal. Africa currently contributes 2.8% of the global meat market, which translates to 14 million tons. The continent produces just over 10% of the world’s milk.



There are a number of barriers to increasing this production and gaining greater market share. They include limited availability of quality animal feed, access to affordable energy needed in producing and processing livestock, and limited infrastructure, particularly in the last mile.



With meat and milk being perishable goods, innovation in the cold chain and sustainable energy supplies will help strengthen the sector.



For example, an East African&nbsp;<a href="https://www.heifer.org/our-work/flagship-projects/east-africa-dairy-development-project.html">initiative</a>&nbsp;which centralised milk quality testing and storage in chillers prior to sale increased yields sixfold within five years.



The volume of milk supplied to the 30km catchment area rose to three million litres a month. This increased income per smallholder household by more than 160% in Uganda, 120% in Kenya, and almost 65% in Rwanda.



The success of such projects in turn drives demand for continued innovation, such as solar-powered cold chains or interventions that protect other resources like water and grasslands.



Finally, countries also need to prioritise policies that support new technologies across the livestock sector.



To&nbsp;<a href="https://www.dda.or.ug/profile.html">transform</a>&nbsp;its milk production sector, Uganda privatised the state-owned processing company Dairy Corporation as well as creating a Dairy Development Authority.



The Dairy Industry Act of 1998 empowered the authority to enforce milk hygiene standards and quality controls. As a result, traders were licensed to meet public health and milk quality standards. This encouraged the modernisation of the sector through the expansion of pasteurisation plants and processing infrastructure as well as processing of high value products.



Certainly, the gains have trickled down to the farmers in better farm gate prices.



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



As the Malabo Montpellier Panel points out, many of the tools needed to tap into the potential of Africa’s livestock sector exist already. But with limited resources, they must be deployed smartly to improve the entire value chain.



Scaling up innovation at critical points will unlock new opportunities and help ensure animal agriculture keeps pace with a rising demand from a growing population.

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How smart investments in technology can beef up Africa’s economy

Former South African finance minister Nhlanhla Nene says government needs more teeth to sort out misconduct and corruption in its ranks.



Nene fell on his sword as finance minister, in 2018,after admitting meeting members of the Gupta family – accused of corruption in South Africa – during his time in office. He was succeeded by former reserve bank governor Tito Mboweni.



“I think the government needs real authority to execute their task. If anything happens, at times we do not see action in that space when people, who do get out of their way, being dealt with as they should be,” Nene told CNBC Africa in an exclusive live interview.



Nene also said that that COVID-19 was also proving worse than the global financial crisis, in 2008, that he worked through as deputy finance minister.



“When the pandemic hit the country it was facing a very tough economic situation. Back in 2008 you were suffering a global situation , but it was not complicated by a natural disaster like the one we have now. This is much more complex than the one we had back then…The solutions are just as difficult to find. Finding a solution is like trying to fix an aeroplane while you are flying it and I don’t envy the leadership in making decisions,” says Nene.



Nene, born to subsistence rural farmers in 1958, has retreated to his farm in KwaZulu Natal since he left office.



“Even when I was in office I would always retreat back to the fam to gain some sanity…I love animals and I love nature it is really therapeutic,” he says.

“It must be like trying to fix a plane when you are flying it” why former finance minister Nene doesn’t envy those in power fighting COVID-19.

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



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



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



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



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



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



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



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



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



ADVERTISEMENT



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



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



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



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

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

JOHANNESBURG (Reuters) &#8211; South Africa’s Kumba Iron Ore Ltd on Tuesday reported a 17% drop in interim earnings due to the impact of the new coronavirus on output and sales but remained upbeat about its ability to withstand the turmoil.



The company, a unit of Anglo American, on Tuesday reported headline earnings per share, the main profit measure used in South Africa, down 17% to 26.19 rand for the six months ended on June 30, compared with 31.51 rand a year earlier.



“We are a resilient and capital efficient business with a robust balance sheet, well positioned to navigate the current environment and the longer term,” said Kumba chief executive Themba Mkhwanazi.



The company, which declared an interim cash dividend of 19.60 rand, also approved a 7 billion rand ($426 million) project to develop the new Kapstevel South pit at its Kolomela operations in the Northern Cape province.



The project, which is expected to deliver its first ore in 2024, will contribute to sustaining production of 13 million tonnes for the remaining life of the Kolomela mine.



During the period production dropped by 11% to 17.9 million tonnes compared with the same period a year ago due to the lockdown and reduced output levels during the pandemic.



Kumba said sales volumes had also declined by 13% to 18.6 million tonnes due to weaker exports and lower domestic sales.



($1 = 16.4506 rand)

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Kumba Iron Ore’s interim earnings fall on lower sales and lockdown

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



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



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



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



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



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



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



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

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South Africa’s rand firms, focus on Fed meeting

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



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



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



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



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



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

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

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

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



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



It may now begin operating from the start of 2021.



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



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



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



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



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



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



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



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

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

At one time or another, nations and individuals confront crisis points – moments of existential challenge that also open up new possibilities. African countries, at just such a crisis point as a result of the novel coronavirus, face three possible outcomes post-pandemic: play catch-up, stand still or fall even further behind the industrialized world1.



With this crisis comes an economic disruption of unprecedented proportion. To avoid falling further behind, Africans must narrow the scientific and technology gap and leverage our comparative advantages. It is time for Africa to adopt radical technological and policy innovations. The global economy is increasingly driven by science-based and patent-intensive systems. Through investments in molecular technology, AI and other technologies the 4th industrial Revolution is ushering in, they can overcome existing barriers to entry.



Catching Up



India offers an example of how to catch up. There, two key developments in the sixties and seventies sharply altered the country’s trajectory.



In 1965, following past famines crises, India imported 250 tons of high-yielding Mexican dwarf wheat seed varieties for wide-scale testing on farms. Early positive results led to the importation of a further 18,000 tons. Along with the use of irrigation and other innovations adopted by farmers, Indian agriculture was transformed.



Within five years, India produced enough grains to support its population and, even following a drought in 1979, had no need to import grain. Overall, the country’s wheat and rice production tripled between 1961 and 1980. Radical policy response to famine-induced crisis birthed the Green Revolution.



India’s pharmaceutical sector also experienced a crisis-inflection point in 1972, when the government passed the Patents Act, which enabled domestic firms to replicate drugs that had been patented by multinational corporations. Local companies have since dominated the global market through reverse-engineering leading to generic medicines that are far more affordable than patented ones. Radical policy response to crisis-induced shortage of medicines transformed Indian Pharma.



Falling Behind



Africa processes a very small proportion of its agricultural produce. We continue to export raw commodities like cocoa, timber and cotton that others process and re-sell to Africa at a much higher valuation. Our continent also has sufficient sunlight, wind and hydropower, technologies that can power Africa sustainably, and other regions besides.



Critically, Africa also has a median age of 19, far younger than that of any continent, a potential demographic dividend of young innovation-driven workers and a relatively small proportion of elderly workers. This human capital will foster Africa’s forging ahead.



If we fail to harness new technologies and leverage our strengths to create abundant high paying manufacturing and service jobs to compete within global supply chains, then we risk falling even farther behind on socioeconomic terms.



Forging ahead



To forge ahead, Africa will first have to return swiftly to economic growth. Beyond that, diversifying our economies will be critical, particularly for those countries that are dependent on one or two mineral resources or commodities. Above all, African companies must deepen capacities for competitive advantage to master new technologies in emerging sectors.



African innovators need a robust innovation framework and a better enabling environment to master the so-called industrial biology embedded in the 4th Industrial Revolution. For instance, firms in Morocco, Senegal, Nigeria and some other African countries have developed COVID-19 test kits but face a difficult path to commercialization.



China’s response to the COVID-19 pandemic is once more illustrative of a dynamic industrial policy. It is targeting ambitious increases in domestic firms’ share of the global medical supplies market. The government has provided cheap land for factories subsidized loans, helps them to secure a supply chain of raw materials, and to stimulate domestic demand by incentivizing hospitals and companies to use their products.



And there are powerful examples right here on the continent. South Africa successfully financed the production of The National Ventilator Project to address COVID-19, developing prototypes, securing component supply chains, and a manufacturing facility. The project owes its success in part to strong government support and broad coordination among economic and technological agencies. As with South Africa, the rest of the continent would benefit from strong innovation systems that are part of national budgeting and planning frameworks.



African businesses have a critical role to play, but so do African leaders, who must strike a delicate balance between state intervention and open markets. African governments are best placed to identify market failures and opportunities, and devise policies and regulations that benefit Africa’s private sector and its people.



Professor Banji Oyelaran-Oyeyinka, is the Senior Special Adviser on Industrialization to the President, AfDB, he is a fellow of the Nigerian Academy of Engineering and Professorial Fellow, United Nations University.

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OPINION: COVID-19 – will Africa catch up, stand still or fall further behind?

ACCRA (Reuters) &#8211; Ghana’s central bank on Monday maintained its policy rate at 14.5%, citing a need for macro-economic stability despite the slowdown brought on by the coronavirus pandemic.



Ghana’s economy, which relies heavily on natural resources like cocoa, gold and oil, is expected to grow in 2020 at its slowest rate in nearly 40 years, leading the government last week to announce a $17.4 billion support programme. [nL5N2EU61X]



Bank of Ghana Governor Ernest Addison described mixed economic indicators during a monthly news conference. He noted a gradual rebound in credit growth and “reassuring results” from stress tests conducted on banks this month.



However, he said the budget deficit for the first half of 2020 stood at 6.3% compared with the 3% target and expressed concern about rising inflation.

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Newsletter

Zimbabwe agrees to pay $3.5 billion compensation to white farmers

The last survivor of a defiant dance with death and Nelson Mandela is laid to rest.

South Africa’s Standard Bank warns of up to 50% profit slump

Sasol to sell world’s biggest oxygen production site to Air Liquide

Global airlines less hopeful on COVID-19 recovery

Why African finance ministers go farming.

Nigeria in $1.5 bln oil prepay deal with traders Vitol, Matrix

Adesina cleared to stand for a second term at the AfDB as probe exonerates him

How smart investments in technology can beef up Africa’s economy

“It must be like trying to fix a plane when you are flying it” why former finance minister Nene doesn’t envy those in power fighting COVID-19.

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

Kumba Iron Ore’s interim earnings fall on lower sales and lockdown

South Africa’s rand firms, focus on Fed meeting

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

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

OPINION: COVID-19 – will Africa catch up, stand still or fall further behind?

Ghana central bank keeps benchmark policy rate steady at 14.5%

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Advertise With Us

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