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BBC

Under-pricing deprives Africa of much-needed money, the report says

Tax avoidance, secret mining deals and financial transfers are depriving Africa of the benefits of its resources boom, ex-UN chief Kofi Annan has said.

Firms that shift profits to lower tax jurisdictions cost Africa $38bn (£25bn) a year, says a report produced by a panel he heads.

"Africa loses twice as much money through these loopholes as it gets from donors," Mr Annan told the BBC.

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BBC

Troops are already present in large numbers in Nigeria's north-east

Nigeria has announced a "massive deployment of men and resources" to combat Islamist militants in the country's border territories.

A statement said the drive was aimed at "asserting the nation's territorial integrity" and "enhancing security".

On Tuesday President Goodluck Jonathan declared a state of emergency in three north-eastern states after a series of deadly attacks by militant groups.

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SAPA/allAfrica

By Jonisayi Maromo, 14 May 2013

Photo:                   IRIN

                  Voting in Zimbabwe

Pretoria — South Africa will provide financial assistance to cash-strapped Zimbabwe to hold elections, International Relations Deputy Minister Ebrahim Ebrahim said on Tuesday.

It was the responsibility of not only South Africa, but the Southern Africa Development Community to ensure free elections were held in Zimbabwe, Ebrahim told reporters in Pretoria.

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Food prices have been going up in recent months

“Based on regular economic and monetary analyses, the MPC decided to keep the Bank rate and the Liquidity Reserve Requirement (LRR) unchanged at 25.0 percent and 15.5 percent, respectively,” reads the latest minutes of the third bank’s Monetary Policy Committee.

The central bank last hiked the benchmark rate in December last year by 400 basis points from 21 percent to 25 percent.

The central bank said that it arrived at the decision to maintain the base lending rate and LRR after considering latest developments in the economy.

“The tight monetary policy stance adopted by the authorities since May 2012 has started yielding desired outcomes as pressure on the kwacha and inflation have abated,” reads the minutes in part.

Year-on-year headline inflation rate decelerated by 1.5 percentage points to settle at 36.5 percent in March backed by improved availability of maize.

The deceleration in month-on-month inflation provides a clear sign that inflation is being brought under control and that the prospects for lower annual inflation rates have strengthened.

The central bank also said that that during April 2013, signs of Kwacha stabilization were evidenced by the appreciation of the local currency against the United State dollar mainly on account of curtailed demand for foreign exchange as a result of tight monetary conditions and proceeds from tobacco auction sales.

The strengthening of the kwacha against the dollar, the Bank said, will serve to dampen inflationary pressures, including fuel prices, provided that the stability is sustained over the next few months.

The southern African country scrapped its currency peg to the dollar last year, triggering a devaluation of around 50 percent in the Malawian kwacha in a bid to unblock frozen aid and halt a downward spiral in the economy.

The currency devaluation triggered a wave of price increases, including the pump price of petrol and diesel, and has pushed headline inflation since then until in March when it eased from 37.9 percent in February to 36.5 percent.

She has attempted to right Malawi’s economy by devaluing its currency, giving herself a 30 percent pay cut and proposed to offload a fleet of Mercs for her 35 member cabinet.

But the economy has continued to sputter despite the reforms although central bank Governor Peter Chuka has remained optimistic that the economy will start to stabilize from mid 2013.

Commodity prices have gone up and pushed inflation to 36.5 percent in March; higher than the IMF forecast.

Since she took over, the cost of living in urban Malawi for a family of six now needs $200 per month to meet basic food needs, ten times more than the monthly minimum wage of $20 for many.

President Banda has,however, remained resolute and believes that she has laid the foundation for stronger exports and 200,000 new jobs by 2014—the same year she’s seeking re-election.

But the reality is that she has become a darling of the West and back home there is growing anger and disappointment as many families struggle to earn enough either because they lost their jobs or simply have become too poor as a result of soaring commodity prices.

Armed robberies have spiked in recent months because many people have lost jobs. Incidences of mob justice are also on the increase because communities feel that police are not doing much to help. All this is being blamed on Banda and the IMF.

Last week two suspected armed robbers in one of Lilongwe’s most populous townships were caught and set on fire (see picture on the left).

“This is the fourth incidence in just two weeks and it’s worrying us,” police spokeswoman Rhoda Manjolo said.

Police confirmed that crime is on the raise and that communities are now taking the law in their own hands.

“We always see these trends when times are hard and this is does not happen only in Malawi but many other countries,” Manjolo said.

The Malawi Economic Justice Network (Mejn), a think tank and economic watchdog, says IMF programmes have hurt the poor more in Malawi than helped to solve economic challenges the country faces.

“Despite the two programmes bringing some positive results, the overall assessment is that they both flopped in several areas and hurt the poor masses even more.

In all fairness, the effects seen in the economy are more of the ‘without’ IMF facility than the ‘with’ facility scenario,” said Francis Ng’ambi, one of the founders of Mejn.

“Devaluation is not an economic policy it is only a solution to a symptom of a problem and has to be implemented along other supporting policies. Malawi’s default was probably because that these agreements are pitched too high for us,” said Ng’ambi.

“The social sectors are the ones that have felt the most pitch of dwindling services, for instance delivery of medicines,teaching and learning materials in schools. This is a direct result of the shortages of both fuel and forex.”

ESF was a one year US$77.1 million financial assistance meant to help Malawi address external shocks following the rise of fuel and fertilizer prices due to the 2008 financial global crisis while the ECF is a three-year US$79.4 million facility meant to support the country in its medium term reforms, address balance of payments weaknesses and sustain growth and poverty reduction.

The ESF was abandoned mid-way due to lack of adherence to set targets while the ECF went off-track in 2010. On Tuesday this week the IMF and Malawi Government announced that they have agreed on a new three-year ECF programme.

Ng’ambi, however, said for an appropriate way forward on these programmes people of this country, through their MPs, should be involved in the negotiation process so that parliament should be able to monitor the implementation of the programmes and their impact.

He also told the Parliamentarians that it was high time that Malawi has to look at other alternatives to solve its long standing economic problems such as a review of its exports and imports to find a way of replacing all unnecessary imports with local products.

Action Aid’s Advocacy and Campaign Coordinator Chandiwira Chisi said the research was aimed at analysing the two IMF facilities and find out the impact on social service provision in the country.

“The IMF is now back in town and the question now is; will the agreements be done differently, what would be the level of input from the people through their MPs and to what extent can we engage to our benefit?” asked Chisi.

During her first ever visit to Malawi in January this year, IMF chief Christine Lagarde urged Malawi to stick to economic reforms that have stoked inflation and made President Banda unpopular.

“There has been huge efforts undertaken by Malawi government and the Malawi population and its really important to stay on course,” Lagarde said when she was in Malawi.

President Banda has admitted that because of the IMF reforms, people are hurting. “But we have to go through this for us to start doing better and move our people out of poverty.”

Reblogged from Africa - News and Analysis:

Zambia Report

Journalists at State Media Dare PF to Fire Them

Published May 6, 2013 By Charles Sakala

Just three days after World Press Freedom Day, things are not looking too free in Zambia, as a number of journalists from the state-owned Zambia Daily Mail find themselves in a stand-off with the Patriotic Front (PF) government, who had threatened to fire them because of alleged sympathies with the opposition Movement for Multiparty Democracy (MMD).

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Capital FM

ICC trial of Kenya’s deputy president postponed

By JUDIE KABERIA |  May 6, 2013

Trial Chamber V agreed to change the May 28 date earlier set for the trial, and will announce a new date after a status conference to be held next Tuesday/FILE

NAIROBI, Kenya, May 6 – The International Criminal Court (ICC) has now postponed the May trial of Deputy President William Ruto and former radio presenter Joshua arap Sang.

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South African Institute of International Affairs

By  Oladiran Bello and Alfredo Tjiurimo Hengari        

           

           Nigerian Foreign Affairs Minister Olugbenga Ashiru welcomes President Jacob Zuma to Nigeria during his state visit in April 2013    © GCIS

Since the advent of democracy in South Africa in 1994, Pretoria’s relationship with Nigeria has been a mix of rivalry, tension and cooperation. The pattern of interaction has oscillated from President Mandela’s principled stance against General Sani Abacha’s dictatorship in the late 1990s, to close and effective engagement between Presidents Thabo Mbeki and Olusegun Obasanjo during the last decade.

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“Africa has benefited tremendously from this trend. In 2008/2009, many were concerned that the continent would be hard hit by the global financial crisis. There was an impact, but most countries in Sub-Saharan Africa were remarkably resilient, notably the low-income countries. Growth was robust in 2012 at 5.1 percent, and that should accelerate moderately in the coming years. We project 5.4 percent growth in 2013 and 5.7 percent next year. Low-income countries should grow even faster, benefiting from rising domestic demand.

Demand for Africa’s commodities has helped spur this growth, particularly as new resources have been discovered and developed. But Sub-Saharan Africa’s resilience and growth are not simply a matter of rising commodity exports. In fact, some of the fastest-growing economies are not natural resource exporters.

This economic performance reflects many political, social and economic changes over the past generation. Most important was a new commitment to political stability as Africa moved beyond the ideological strife of the Cold War and then found strength in regional solutions to the conflicts of the 80s and 90s. At the same time, many governments gave a greater role to market forces in the economy, while strengthening economic stability. With rising educational standards, young populations increasingly are taking advantage of the new economic opportunities.

Information technology—computers and phones—is increasingly bridging the geographical distance between Africa and the global economy. And within countries, that same technology is rapidly bringing services that were unavailable just a few years ago; for example, mobile banking. Now online education can help young people like you to break down the knowledge barriers that have contributed to Africa’s remoteness…”

Reblogged from Africa - News and Analysis: