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Sub–Saharan Africa poised for growth – IMF

Strong growth in the majority of sub-Saharan Africa’s economies should underpin a robust regional expansion in 2014 and 2015,  although energy supply constraints, strikes, and weak global and domestic demand will limit South Africa’s  growth.

This is according to the International Monetary Fund (IMF) African department director Antoinette Sayeh during the release of the October 2014 regional economic outlook report for sub-Saharan Africa on Monday.

The IMF forecast that the region’s economy would grow by 5.1% this year and 5.8% next year, while SA was seen growing at 1.4% this year and 2.3% next year.

Sayeh said the region’s growth would be supported by “continued public investment in infrastructure, buoyant services sectors and strong agricultural production.”

The IMF urged countries to support policies that emphasised growth-enhancing measures given the effect a more pronounced slowdown in emerging makerts a disorderly normalisation of monetary policy in the US could have on the region’s economies.

“In particular, the focus should be on boosting fiscal revenue mobilisation, channelling spending towards infrastructure investment and other development needs, safeguarding social safety nets to encourage more inclusive growth and improving the business climate,” Sayeh said.

The report advised that monetary policies should continue to focus on reducing inflation, including by reining in countries with rapid growth and persistent high inflation.

SA is among countries that are tightening monetary policy and began an interest-rate hiking cycle with a 50 basis point increase in rates in January. Another rate increase of 25 basis points was implemented in July. The moderate rate increases are to take into account weak economic growth.

Sayeh also said fiscal consolidation, which SA, among other countries, was embarking on, should continue. “In the few countries where budgets have become overextended and financing constraints have emerged, fiscal consolidation is necessary, but will need to avoid overly adverse consequences for the poor and vulnerable groups,” she said.

The IMF acknowledged that economic growth would take a knock in countries worst affected by the Ebola outbreak.  Sayeh said the virus, expected to have killed more than 4,000 people mainly in West Africa, was “exacting a heavy economic toll, with economic spillovers starting to materialise in some neighbouring countries.”

The report highlighted Ebola and high debt ratios as challenges to countries in the region.“In a few countries, continued high growth and favourable global financial  makert conditions have not been sufficient to avert debt build up and financing difficulties,” Sayeh said.

The report states that during the past decade, growing links with emerging makerts have supported the region’s expansion and economic diversification but have also increased its vulnerability to external shocks.

Although global growth is projected to gradually strengthen, an expected deceleration in emerging makerts and a rebalancing of Chinese demand toward private consumption will make the external environment less supportive for the region. In particular, these trends could soften global demand for key sub-Saharan African exports, including commodities.

Tightening financial conditions stemming from a faster-than-expected normalization of U.S. monetary policy, adverse geopolitical developments, or a worsening of the countries’ fundamentals could also result in lower and more expensive access to external funding and a scaling down of foreign direct investment.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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