The Zimbabwean economy seems to go from bad to worse, as authorities leave behind a trail of policy missteps.



The government announced late on Friday that monetary transactions on mobile-based money platforms are suspended, potentially impacting up to 80% to 90% of all transactions.



This unprecedented move leaves Zimbabweans stranded with almost no mode of transacting. Residents with money stored in any of these mobile providers need to visit a local bank to liquidate their accounts.



The most prominent players in the industry include EcoCash, One Money, MyCash, and Telecash. EcoCash is the biggest non-banking financial institution and holds no less than ZWL$8bn on its mobile money platform.



In a statement following the announcement, the company urged its 10 million users, most of whom do not have bank accounts, to remain calm.



The government is accusing mobile money providers of economic sabotage and malpractice, which have led to the creation of a parallel central bank.



The government’s animosity towards non-banking financial institutions is nothing new.



Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya voiced his support for the government and issued a monetary policy statement over the weekend specifying revised conditions to the ban.



“The unprecedented measures have been necessitated by the need to protect consumers on mobile money platforms which are being abused by unscrupulous and unpartisan individuals and entities to create instability and inefficiencies in the economy,” the statement read.



Meanwhile, trade on the Zimbabwe Stock Exchange (ZSE) is also suspended and investors are frantic and deeply concerned over what has happened to their money.



This is a blow for Zimbabweans who usually turn to the local bourse to safeguard the value of their money against rising inflation and currency depreciation.



Yet not long ago, officials were still upbeat about the Victoria Falls Stock Exchange (VFEX) and the foreign investment it would unlock.



On Tuesday, June 30, the RBZ proceeded to hold the second weekly foreign exchange (FX) auction.



Last week saw Zimbabwe’s currency peg to the US dollar end after the weighted-average rate was calculated at ZWL$57.4/$, thereby setting the new exchange rate. At the latest auction, this rate was calculated at ZWL$63.7/$.



The Zimbabwean dollar has been in freefall since the start of the year as a lack of confidence erodes its value. We believe this trend is likely to persist while foreign exchange reserves remain at distressingly low levels.



The latest move is simply another desperate attempt to enforce the use of a currency with no credibility.



We have stated before that the economy is in a state of dysfunction, characterised by irrational policy measures.



The banning of mobile money services further exacerbates confusion and turmoil in Zimbabwe’s monetary environment.



Jee-A Van Der Linde, Economist

Zimbabwe tightens coronavirus lockdown in capital Harare as cases hit 203

Hello?  – How Zimbabwe’s got the wrong number when it comes to mobile money

The African continent is home to what is considered a huge growth opportunity – agriculture. With 65% of the world’s available uncultivated arable land, potential exists for African countries to reach their developmental goals and become major players in the global food system.



Despite the continent’s abundance in arable land and water resources, its economies and communities are yet to reap the benefits. Agribusinesses in Africa still face serious challenges and as a result, the sector remains largely untapped.



With poor supply chain channels, inadequate infrastructure, poor access to markets, and a lack of access to know-how of modern farming practices, tools and equipment, smallholder farmers, who contribute 70-80% of the continent’s food production, cannot migrate from subsistence to commercial farming.



The developed world now considers technology as an essential enabler to modern day farming, and without transformation, sub-Saharan Africa risks falling even further behind on the competitive scale; this while the sector remains an important driver of economic growth and employment on the continent. It then becomes critical to consider ways to support and develop what is seen as Africa’s rural last mile. Technology and mechanisation have proven to enhance productivity, yields, cost reduction at scale, improve quality and farm profitability.



While smallholder farmers remain an important grouping, it is one that is typically overlooked by many financial institutions. Many have tried to crack this market but have been unsuccessful.



Agritech solutions, for example, are transforming traditional farming practices and there are now more than 350 active agritech start-ups on the continent who are responding to the potential opportunity. But without connectivity or access to finance, it is often difficult for emerging farmers to take advantage of the benefits of modern farming technologies.



The real challenge lies in delivering a range of financial and non-financial services to farmers and food producers on the continent. It is impossible to overcome this alone. An ecosystem involving multiple players will ultimately close the gap.



This type of ecosystem and platform thinking are the latest themes coming out of international research and stems from the exponential growth of businesses like Alibaba and Amazon. These businesses bring together a network of ecosystem participants to create new markets for producers and consumers.



Standard Bank believes there is a significant opportunity to grow sectors on the continent by partnering with other players to build new platforms and models that enable clients to access services for their financial needs and beyond.



We are embedding this design thinking across all areas of the business, but more actively in Agribusiness where, in 2019, we started on-the-ground research in Uganda to understand the pain points experienced across the agricultural value chain. This would be the starting point of the agriculture ecosystem project.



Our team engaged over 150 stakeholders from farm to fork (input suppliers, farmers and aggregators, to industries involved in processing and value-addition) with a view of building the OneFarm platform to help address these pain points.



This platform aims to bring together a network of digitised solutions that could unlock the ability of all our clients – from input suppliers to off takers and corporates who facilitate the trade – and ultimately improve the quality and quantity of agricultural output across the continent.



Through this exploration, we have learned that education is a fundamental enabler to help farmers to realize the benefits of digitised solutions. The team employed an agronomist to provide training on best practices to the farmers and manage demo farms to better understand the effects of adopting good agronomic practices. In this first iteration, some farmers have increased their capacity by over 100% simply as a result of being able to access finance.



We hope that through OneFarm, we can create a culture where farmers and co-operatives embrace the opportunity to formalise themselves knowing the benefits it will unlock.



In Nigeria, through our investment in Founders Factory Africa, we partnered with local agritech FoodLocker to create a marketplace platform, where machine learning is leveraged to forecast foodstuff demand. This enables large-scale buyers to efficiently procure fast-moving consumer goods and fresh produce from smallholder farmers.



The intention of OneFarm and other initiatives that we have launched within Agribusiness is to leverage platforms to impact a lasting difference in the lives of rural agricultural players. This forms part of greater vision to go beyond the role of financiers or bankers to provide all-encompassing services that drives the ecosystem and helps communities move forward.



Louis van Ravesteyn, Head: Agribusiness – Pan Africa, Standard Bank Group.

shutterstock_123544153

How to grow a fortune in the golden fields of Africa.

DAKAR (Reuters) &#8211; Africa countries have lost almost $55 billion in travel and tourism revenues in three months due to the coronavirus pandemic, the African Union commissioner for infrastructure and energy said on Thursday.



Amani Abou-Zeid told a news conference that due to the prolonged lockdown and border closures to curb the spread of the virus, the air industry will be greatly impacted.



“Some airlines in the continent will not make it post-COVID-19,” she said.

tourism-1845203_1280

Africa lost almost $55 billion in travel and tourism due to pandemic -AU

Tesla Inc is building mobile molecule printers to help make the potential COVID-19 vaccine being developed by CureVac in Germany, the electric-car maker’s Chief Executive Officer, Elon Musk, tweeted on Wednesday.FILE PHOTO: SpaceX owner and Tesla CEO Elon Musk arrives on the red carpet for the automobile awards &#8220;Das Goldene Lenkrad&#8221; (The golden steering wheel) given by a German newspaper in Berlin, Germany, November 12, 2019. REUTERS/Hannibal Hanschke/File Photo



CureVac, an unlisted German company, has said it is developing portable, automated mRNA production units that it calls printers and which Musk described as “RNA microfactories”.



They are being designed to be shipped to remote locations, where they can churn out its vaccine candidate and other mRNA-based therapies depending on the recipe fed into the machine.



But for the immediate pandemic use &#8211; should its vaccine candidate win market approval – it has production sites with regulatory approval in Germany with a capacity to produce hundreds of millions of doses.



The company, based in Tuebingen and backed by the Bill &amp; Melinda Gates Foundation, is a pioneer of the so-called messenger RNA approach, which is also pursued by BioNTech and its partner Pfizer as well as Moderna.



RNA molecules are single-stranded versions of the DNA double-helix. Thanks to their recurring molecular pattern, they can be produced in a relatively simple biochemical process that do not require genetically modified living cells, which are needed to produce most other biotech drugs.



CureVac is also building a new stationary site that could increase its output tenfold to billions of doses.



The “microfactories” would be built at Tesla Grohmann Automation in Germany, Musk said in a Twitter thread late on Wednesday night.



Tesla acquired the company that develops automated manufacturing systems for batteries and fuel cells in 2016 to expand its production.



CureVac has been working with Tesla Grohmann to develop the mobile printer technology, a person familiar with CureVac said.



Musk did not elaborate on his plans. Tesla and CureVac were not immediately available to comment.



Musk, who is known to make impromptu announcements on Twitter, had in March said that Tesla has extra FDA-approved ventilators that can be shipped free of cost to hospitals within regions where the electric-car maker delivers.

Billionaire Elon Musk: I am not Warren Buffett’s biggest fan

Billionaire Elon Musk: I am not Warren Buffett’s biggest fan. gettyimages-1155740300-594×594

African born Elon Musk tweets: Tesla to make molecule printers for COVID-19 vaccine developer.

By Anu Shah



Covid 19 has brought unprecedented economic uncertainty across the world and tech companies think hard about the future and investments.



Especially, since the FANGs of the world are sitting on cash reserves larger than the GDPs of some countries. Infact Apple and Google are shopping aggressively for the strategic companies at a discount. For instance, Apple acquired NextVR &nbsp;for $100Mn, Amazon acquired Zoox for $1Bn. So what does the future of the tech start-ups and venture capital look like? To understand that let&#8217;s take a look at how does a venture capital works.



Typically, a venture capital firm raises money from the largest and most diversified institutional investors with a fund life of roughly 10 years. New investments are made in the first two to three years of a fund’s life. Venture capital creates a large reserve to make follow-on investments through the end of a fund’s term. As a rule of thumb, investors reserve $1 for every $1 invested in an early-stage company. The combination of long fund terms and dedicated reserves helps mitigate the effects of turbulence on funds and portfolio companies.



The United States venture capital industry has existed for 50 years. It has weathered many storms and is ready for anything. There the venture capital industry aggregated $275Bn in the last six years. Using both a fund-by-fund analysis and averages across the industry, it is estimated that the industry has $150Bn of “dry powder” of which likely $76Bn is earmarked for reserves for existing companies and $74Bn for new investments.



This present level of reserves is strong relative to any recent cycle. While one can be optimistic, albeit cautiously about a large reserve to help start-ups through this fundraising drought, venture capitalists will change their strategy drastically to advance further, here are some tips for the industry: &nbsp;



1. Be very selective about investing: Venture capitalists have invested $280bn in the last two years. In the case of backing companies at current levels, we would run out of reserves in four quarters. Hence, there will be increased scrutiny and diligence in investing, more focus on unit metrics cash flows, sustainable and profitability; over traction and growth at the expense of high cash burn; &nbsp;having said that, funding for innovative technologies, such as personalized medicine, online education, remote workforce solutions, and reliable Internet connectivity, will be bullish.



2. Prioritise existing portfolio companies for funding: Since 2014, more than 10,000 US companies in the U.S. that have been funded. Many companies have exited, found profitability, or already have strong balance sheets, but many more do not have alternatives and will need capital assistance. Venture capitalists will use the reserves to support their portfolio first.



3. Redirect focus on institutional investors for raising new funds: In good times, capital can come from a variety of sources including hedge funds, mutual funds, and wealthy individuals. When the cycle turns, these alternative sources can substantially pause their investing or exit the industry indefinitely, leaving only institutional investors as a primary capital source. Hence venture capitalists trying to close the new funds will double down on one channel, putting more pressure on the performance and exits of current portfolio companies. 4. Employ alternate investment and fund raising tools to continue funding: Alternate tools, such as fund recycling, that is, investing profits from old investments into strong existing portfolio companies, crossover investing, that is, investing from newer funds into older funds, and formal and informal co-investment vehicles.This will provide a boost to the industry’s reserve capacity to continue investing in the start-ups.

pictures

COMMENT: How to make money from venture capital in the uncertain world of COVID-19

GOMA (Reuters) &#8211; For decades, eastern Congo’s underground riches such as gold and coltan have sustained cycles of deadly violence in the area.



But before the country fell apart in the 1990s, North Kivu province exported overground riches too, like coffee and cocoa.



“People have that ignorance of looking at chocolate like it’s something from abroad, that can’t be made in Africa,” Kalinda said, stirring the pot. “We decided to break that rule.”



Boosted by increased consumer interest in the provenance of ingredients, cocoa and coffee are experiencing a renaissance in Congo, said Kevin Wilkins, a cocoa specialist from ELAN DRC, a UK Aid-funded private sector development programme.



Thriving in the rich volcanic soils, the beans have attracted interest from brands like coffee-chain Starbucks and specialty chocolatier Theo Chocolate.



Exports surged to 11,000 tonnes in 2016, up from 600 tonnes in 2000, government data shows.



But while the big brands provide jobs and valuable export earnings for the country, Congolese chocoholics have for many years been deprived the pleasure of gorging on their own supply.



In 2014 Kalinda’s grandfather, Kalinda Salumu, had a dream of turning plantations abandoned after Congo’s independence into productive cooperatives that could export beans abroad.



In 2018 his first harvest of 200 kg (441 lb) was not enough to reach the legal minimum to export so he sent his son to Kampala, Uganda’s capital, to train as a chocolatier.



“We have cocoa, even the best cocoa of all the cocoa in the world,” Salumu boasts happily.



Last year the family established the Lowa factory, named after the river near where the beans are grown, 150 km (93 miles) west of provincial capital Goma.



Lacking sophisticated modern equipment, their output is meagre, only 2 kg (4.40 lb) per day, but the bars have found a devoted following in Goma.



At a local supermarket Baritegera Nikuse Gloria grabbed a $5 bar. She likes it because it’s local, and organic.



“Since I tasted this chocolate, I haven’t been able to put it down.”

chocolate

The Congo chocolate factory hits the sweet spot making money in its African melting pot

(Reuters) &#8211; Tesla Inc on Wednesday became the highest-valued automaker as its shares surged to record highs and the electric carmaker’s market capitalization overtook that of former front runner Toyota Motors Corp.



Tesla shares gained 5% in early morning trade to a record of $1,133, boosting the company’s market cap to $209.47 billion &#8211; roughly $6 billion more than Toyota is currently valued by investors.



Tesla is now worth more than triple the combined value of U.S. automakers General Motors Co and Ford Motor Co.



The shares’ meteoric rise, up more than 163% since the start of 2020, highlight growing confidence among investors about the future of electric vehicles and Tesla’s shift from a niche carmaker into a global leader in cleaner cars.



After several years of losses, Tesla has delivered three straight profitable quarters since the third quarter of 2019 and surprised investors with solid first-quarter deliveries despite the virus outbreak.



Toyota, one of the world’s most profitable automakers, sold 10.46 million vehicles during its 2019 financial year, ending on March 31, 2020. It reported net revenues of 30,226 billion yen, or roughly $281.20 billion, during that time.



Tesla, in comparison, ended 2019 with $24.6 billion in revenues, having delivered 367,200 vehicles last year. Chief Executive Elon Musk in the past said Tesla would deliver at least 500,000 vehicles in 2020, a forecast the company has not changed despite the coronavirus pandemic.



Tesla is expected to report second-quarter delivery numbers this week.

Elon Musk At SpaceX Headquarters

Elon Musk’s Tesla becomes most valuable automaker in latest stock rally

GENEVA (Reuters) &#8211; Nations who fail to use all mechanisms available to combat the still-raging coronavirus will struggle to beat it, the World Health Organization (WHO) said on Wednesday.



“Some countries &#8230; have taken a fragmented approach. These countries face a long, hard road ahead,” Director General Tedros Adhanom Ghebreyesus told a virtual briefing from WHO headquarters in Geneva.



More than 10.5 million people have been infected globally and more than half a million have died since the COVID-19 disease first emerged in the Chinese city of Wuhan.



WHO emergencies expert Mike Ryan told the same briefing that the U.N. body planned to send two experts from its headquarters to join its country team in China to establish the scope for a mission looking into the origins of the coronavirus.

Clarification on COVID-19 “hotspots” as SA moves to level 3 lockdown

WHO warns some nations still face ‘long, hard’ battle with COVID-19

Out from under the pall of gloom over Africa brought by COVID-19 and contracting economies emerges a deal that’ll see locomotives moving freight across the continent on the way to a brighter trading future.



This week the ink dried on a deal signed by TheloDB with the government of Ghana to repair and extend 217 kilometres of railway track to haul everything from iron ore and bauxite to cocoa for export from the coastal ports.



The railway will open up a new trade corridor and is another step towards African Continental Free Trade Area; the single market may have been postponed from July 1 to January, but political will for it appears to be growing across the continent. One of the impediments to this dream of trade on the continent is poor transport infrastructure. According to the African Development Bank, Africa’s total infrastructure needs between $130-170 billion-a-year and has a financing gap of $68-108 billion.



On top of this, the fact that this was a contract won at one end of the continent by an entrepreneur from another end of continent also bodes well for the pan-African future of business.



The entrepreneur behind it all is South African Ronnie Ntuli, the chairman of TheloDB, who worked on the deal for more than two years. He says the company is negotiating for at least two similar rail projects, one in West Africa and the other in Southern Africa.



“My passion in life, as an African, is economic development in the continent. It has to be sustainable development aimed at infrastructure and building industrial capacity,” says Ntuli.



The project will create many jobs and see locomotives shipped to Ghana from manufacturers in South Africa. TheloDB will also train workers in the Ghana run the railway and oversee its operation and maintenance on completion, expected in 2024.



It was difficult closing the project in the world of COVID-19, but Ntuli believes that the pandemic has an unintended consequence.



“Many countries around the world have a lot of capital liquidity and it is going into the capital markets right now,” says Ntuli.



“Our job is to tap into that liquidity so we can do the solid infrastructure projects that the continent needs.” &nbsp;&nbsp;

Thelo_Transnet 3605

A train bound for Africa’s future to emerge from the continent’s COVID-19 gloom.

Tanzanian miner Saniniu Laizer has become a millionaire overnight by selling two Tanzanite gemstones — the largest ever found in the country — for 7.7 billion Tanzanian shillings ($3.4 million), according to multiple media reports.



The stones weigh 9.2 kg (20.3 lbs) and 5.8kg, and Laizer mined them last week but sold them Wednesday at a trading event in the region of Manyara, the BBC reported.&nbsp;



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" width="1110" height="740" src="https://www.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-1110x740.jpg" alt="" class="wp-image-375244" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-1110x740.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-696x464.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-1068x712.jpg 1068w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-1920x1280.jpg 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/GettyImages-1222767163-600x400.jpg 600w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /><figcaption>Tanzanian small-scale miner Saniniu Kuryan Laizer, 52, poses with the enlarged cheque copy from the government after selling two of the biggest of the country&#8217;s precious gemstones, Tanzanite, during the ceremony for his historical discovery in Manyara, northern Tanzania, on June 24, 2020. &#8211; Laizer found the stones weighing 9.27 and 5.1 kilogrammes respectively in the northern Mirerani hills, an area which President John Magufuli had fenced off in 2018 to stop smuggling of the gem. He sold them to the government for 7.7 billion Tanzanian shillings (nearly $3.3 million/2.9 million euros). The broken biggest record of Tanzanite was 3.5 kilogrammes. (Photo by Filbert RWEYEMAMU / AFP) (Photo by FILBERT RWEYEMAMU/AFP via Getty Images)</figcaption></figure>



Laizer, reportedly a father of more than 30 children, told the BBC that he planned to use the money to build a shopping mall and school in his community in Simanjiro, a district of Manyara.&nbsp;



“I want to build this school near my home,” he told the news outlet. “There are many poor people around here who can’t afford to take their children to school.”



He added: “I am not educated but I like things run in a professional way. So I would like my children to run the business professionally.”



Despite his newfound wealth, Laizer said he would continue to look after his herd of 2,000 cows. The small-scale miner said he would slaughter one of the cows to celebrate and that there would also be a “big party.”



Tanzanian President John Magufuli has reportedly congratulated Laizer over the phone and said the find showed the benefit of small-scale miners and “proves that Tanzania is rich.”



Read the report on the BBC’s website&nbsp;<a href="https://www.bbc.co.uk/news/world-africa-53148612" target="_blank" rel="noreferrer noopener">here</a>.

TANZANIA-MININIG-TANZANITE

Tanzanian miner becomes overnight millionaire by selling rare gemstones for over $3 million

<div style="max-width: 700px;">
 <video-js
 data-account="1571595826001"
 data-player="c0AOssA7"
 data-video-id="6168313901001"
 data-embed="default"
 controls=""
 data-application-id=""
 class="vjs-fluid"></video-js>
</div>
<script src="//players.brightcove.net/1571595826001/c0AOssA7_default/index.min.js">
</script>
In a decision that surprised many, South African High Court favoured Eskom dispute with energy regulator Nersa today.

Court sides with Eskom over dispute with Nersa

<div style="max-width: 700px;">
 <video-js
 data-account="1571595826001"
 data-player="c0AOssA7"
 data-video-id="6168314738001"
 data-embed="default"
 controls=""
 data-application-id=""
 class="vjs-fluid"></video-js>
</div>
<script src="//players.brightcove.net/1571595826001/c0AOssA7_default/index.min.js">
</script>
At a time when many property companies are struggling Vukile has posted healthy performance. The group reported a continued strength in their Southern African portfolio and well diversified sources of funding. Vukile Property Fund CEO, Laurence Rapp joins CNBC Africa for more.

Vukile bucks the trends with strong results in a tough environment

Vukile bucks the trend with strong results in a tough environment

<div style="max-width: 700px;">
 <video-js
 data-account="1571595826001"
 data-player="c0AOssA7"
 data-video-id="6168300972001"
 data-embed="default"
 controls=""
 data-application-id=""
 class="vjs-fluid"></video-js>
</div>
<script src="//players.brightcove.net/1571595826001/c0AOssA7_default/index.min.js">
</script>
Somalia has recorded over 2900 confirmed cases of COVID-19 with 90 deaths, and as the cases continue to rise, the health systems in the country are being rapidly confronted with increasing demand for patient care from COVID-19. Dr. Mahad Mohammed Hassan, Head of the National Humanitarian Coordination Center joins CNBC Africa for more.

Examining the impact of COVID-19 on Somalia’s healthcare sector

How Nigeria can reduce COVID-19 impact on farmers in the second half of 2020

<div style="max-width: 700px;">
 <video-js
 data-account="1571595826001"
 data-player="c0AOssA7"
 data-video-id="6168237478001"
 data-embed="default"
 controls=""
 data-application-id=""
 class="vjs-fluid"></video-js>
</div>
<script src="//players.brightcove.net/1571595826001/c0AOssA7_default/index.min.js">
</script>
One of the industries reeling from the COVID-19 supply chain disruption and consumer demand is the fashion industry.

How COVID-19 is changing the fashion industry in Africa

How COVID-19 is impacting the runways of Africa

<a href="https://www.reuters.com/journalists/andy-bruce" target="_blank" rel="noreferrer noopener">Andy Bruce</a>







<ul class="wp-block-list"><li><a href="https://www.twitter.com/share?url=https%3A%2F%2Freut.rs%2F2YHGApk&amp;text=UK%20economy%20shows%20biggest%20drop%20in%2040%20years%20in%20early%202020" target="_blank" rel="noreferrer noopener"></a></li><li><a href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Freut.rs%2F2YHGApk&amp;t=UK%20economy%20shows%20biggest%20drop%20in%2040%20years%20in%20early%202020" target="_blank" rel="noreferrer noopener"></a></li></ul>



LONDON (Reuters) &#8211; Britain’s economy shrank by the most since 1979 in early 2020 as households slashed their spending, according to official data that included the first few days of the coronavirus lockdown.



Gross domestic product dropped by a quarterly 2.2% between January and March, the Office for National Statistics (ONS) said.



That was below the median forecast in a Reuters poll of economists for a fall of 2.0%.



Prime Minister Boris Johnson will set out his plan to speed up the British economy’s recovery later on Tuesday when he will promise to fast-track 5 billion pounds ($6.13 billion) of infrastructure investment.



Britain’s economy may have contracted by 20% in the first half of 2020, the Bank of England said earlier this month as the full effects of the lockdown hammered most sectors in the April-June period. The BoE has said the slump in the economy this year could be the worst in three centuries.



Tuesday’s figures &#8211; which build on previously released data for the first quarter &#8211; showed a surge in household saving as their spending collapsed by the largest amount, in cash terms, since records began in the 1950s.



ADVERTISEMENT



<figure><iframe width="755" height="129"></iframe></figure>



“The lockdown of most businesses on March 23 meant that households were unable to spend even if they wanted to,” said Thomas Pugh, UK economist at Capital Economics, adding that it will take the economy until 2022 to regain its pre-crisis level.



The household savings ratio shot up to 8.6% in the first quarter from 6.6% at the end of 2019.



The ONS has previously estimated that Britain’s economy shrank by a record 20.4% in April from March but there have been some signs of recovery more recently.



The ONS also said Britain’s current account deficit widened by more than expected in the first three months of 2020.



The balance of payments deficit &#8211; a long-standing concern for investors because it leaves Britain reliant on foreign inflows of cash &#8211; grew to 21.1 billion pounds ($25.9 billion) in the first quarter, compared with a median forecast of 15.4 billion pounds in a Reuters poll of economists.



Stripping out volatile movements of gold and other precious metals, the current account deficit narrowed slightly, the ONS said.







3 MIN READ



<ul class="wp-block-list"><li><a href="https://www.twitter.com/share?url=https%3A%2F%2Freut.rs%2F2YHGApk&amp;text=UK%20economy%20shows%20biggest%20drop%20in%2040%20years%20in%20early%202020" target="_blank" rel="noreferrer noopener"></a></li><li><a href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Freut.rs%2F2YHGApk&amp;t=UK%20economy%20shows%20biggest%20drop%20in%2040%20years%20in%20early%202020" target="_blank" rel="noreferrer noopener"></a></li></ul>



LONDON (Reuters) &#8211; Britain’s economy shrank by the most since 1979 in early 2020 as households slashed their spending, according to official data that included the first few days of the coronavirus lockdown.FILE PHOTO: The Canary Wharf financial district is seen from the construction site of 22 Bishopsgate in London, Britain June 25, 2019. REUTERS/Hannah McKay/File Photo



Gross domestic product dropped by a quarterly 2.2% between January and March, the Office for National Statistics (ONS) said.



That was below the median forecast in a Reuters poll of economists for a fall of 2.0%.



Prime Minister Boris Johnson will set out his plan to speed up the British economy’s recovery later on Tuesday when he will promise to fast-track 5 billion pounds ($6.13 billion) of infrastructure investment.



Britain’s economy may have contracted by 20% in the first half of 2020, the Bank of England said earlier this month as the full effects of the lockdown hammered most sectors in the April-June period. The BoE has said the slump in the economy this year could be the worst in three centuries.



Tuesday’s figures &#8211; which build on previously released data for the first quarter &#8211; showed a surge in household saving as their spending collapsed by the largest amount, in cash terms, since records began in the 1950s.



“The lockdown of most businesses on March 23 meant that households were unable to spend even if they wanted to,” said Thomas Pugh, UK economist at Capital Economics, adding that it will take the economy until 2022 to regain its pre-crisis level.



The household savings ratio shot up to 8.6% in the first quarter from 6.6% at the end of 2019.



The ONS has previously estimated that Britain’s economy shrank by a record 20.4% in April from March but there have been some signs of recovery more recently.



The ONS also said Britain’s current account deficit widened by more than expected in the first three months of 2020.



The balance of payments deficit &#8211; a long-standing concern for investors because it leaves Britain reliant on foreign inflows of cash &#8211; grew to 21.1 billion pounds ($25.9 billion) in the first quarter, compared with a median forecast of 15.4 billion pounds in a Reuters poll of economists.



Stripping out volatile movements of gold and other precious metals, the current account deficit narrowed slightly, the ONS said.

Administrators propose sales plan for SA retailer Edcon, see potential job cuts

UK economy shows biggest drop in 40 years in early 2020

Newsletter

Hello? – How Zimbabwe’s got the wrong number when it comes to mobile money

How to grow a fortune in the golden fields of Africa.

Africa lost almost $55 billion in travel and tourism due to pandemic -AU

African born Elon Musk tweets: Tesla to make molecule printers for COVID-19 vaccine developer.

COMMENT: How to make money from venture capital in the uncertain world of COVID-19

The Congo chocolate factory hits the sweet spot making money in its African melting pot

Elon Musk’s Tesla becomes most valuable automaker in latest stock rally

WHO warns some nations still face ‘long, hard’ battle with COVID-19

A train bound for Africa’s future to emerge from the continent’s COVID-19 gloom.

Tanzanian miner becomes overnight millionaire by selling rare gemstones for over $3 million

Court sides with Eskom over dispute with Nersa

Vukile bucks the trend with strong results in a tough environment

Examining the impact of COVID-19 on Somalia’s healthcare sector

How Nigeria can reduce COVID-19 impact on farmers in the second half of 2020

How COVID-19 is impacting the runways of Africa

UK economy shows biggest drop in 40 years in early 2020

Unlocking Rwanda’s fitness industry

News Tips

Advertise With Us

Newsletter

Hello? – How Zimbabwe’s got the wrong number when it comes to mobile money

How to grow a fortune in the golden fields of Africa.

Africa lost almost $55 billion in travel and tourism due to pandemic -AU

African born Elon Musk tweets: Tesla to make molecule printers for COVID-19 vaccine developer.

COMMENT: How to make money from venture capital in the uncertain world of COVID-19

The Congo chocolate factory hits the sweet spot making money in its African melting pot

Elon Musk’s Tesla becomes most valuable automaker in latest stock rally

WHO warns some nations still face ‘long, hard’ battle with COVID-19

A train bound for Africa’s future to emerge from the continent’s COVID-19 gloom.

Tanzanian miner becomes overnight millionaire by selling rare gemstones for over $3 million

Court sides with Eskom over dispute with Nersa

Vukile bucks the trend with strong results in a tough environment

Examining the impact of COVID-19 on Somalia’s healthcare sector

How Nigeria can reduce COVID-19 impact on farmers in the second half of 2020

How COVID-19 is impacting the runways of Africa

UK economy shows biggest drop in 40 years in early 2020

Unlocking Rwanda’s fitness industry

News Tips

Advertise With Us

Newsletters