DAILY TRUST
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Wednesday, February 16, 2011
Busi ness/I nternationa I EU extends Zimbabwe sanctions THE European Union extended sanctions on Zimbabwe for a year yesterday and expressed deep concern about political violence, but removed 35 people from a list of those affected by asset freezes and visa bans. An EU review noted significant progress in addressing Zimbabwe's economic crisis and in delivery of basic social services, EU foreign policy chief Catherine Ashton said. "However, economic and social developments have not been matched by equivalent progress on the political front;' she said in a statement.
Ashton said further reforms were essential in terms of respect for rule oflaw, human ,rights and democracy to create an environ-
ment conducive to the holding of credible elections. Her statement expressed "deep concerns at the upsurge in political violence seen in recent weeks~ Ashton said theEU was remov· ing 35 names from the travel·ban and asset-freeze list, but the restric· lions would remain on 163 people and 31 businesses linked to rights abuses, undermining democracy or abuse of the rule oflaw. (Reuters)
Africa investors shrug off Egypt contagion risk THE cost of political risk insurance in sub-Saharan Africa has not risen with upheaval in North Africa, suggesting investors are not overly worried about copycat uprisings, an industry expert said yesterday. "Obviously in North Africa, it's off the charts .- some of the providers literally won't provide it at any price:' said James Bond, chief operating officer ofthe MuI· tilateral Investment Guarantee Agency, the political risk arm of the World Bank. "But in Africa specifically, I actually haven't seen an increase
in the risk premia over the last three or four months; he told Reuters at a conference in Johan· nesburg. The view of a stable sub-Saba· ran risk prome is supported by the performance of the region's dollar-denominated bonds, which have not reacted to events in Egypt and Tunisia. The yield on Ghana's $750 mil· lion 10-year Eurobond, due in 2017, dropped from 6.3 percent to 6.9 percent at the end of/anu· ary, although analysts said that was more in reaction to a default by Ivory Coast. (Reuters)
Tanzania 2011 inflation seen returning to double-digits RISING food and fuel prices coupled with a chronic energy shortage are expected to push Tanzania,s inflation rate back to doubledigit levels in 2011, analysts said yesterday. The east African country's year·on-year inflation rate was up for the third successive month to 6.4 percent in January from 5.6 percent in December, the National Bureau of Statistics (NBS) said. "We will very soon hit a double-digit inflation r~te this year because of energy ·shortages at the domestic level and the rise of crude oil prices at the world market:' said leading Tanzanian economist Haji Semboja. "Starting in mid February to March and onwards, we will see a full swing increase of the inflation rate~'
Tanzania's full-year 2010 inflation rate fell to 5.5 percent from 12.1 percent in 2009. Analysts said last month they expected Tanzania's inflation rate to also creep higher in 20 II due to the impact on food prices of dry weather and higher productioncosts.
Inflation rates in east Africa often depend on weather because fond carries significant weights in consumer price baskets. The region relies heavily on rain -fed agriculture and drought in the past few years has hit its economiesbadly. Food and non-alcoholic beverages have a 47.8 percent weight in Tanzania's basket of goods used to measure inflation. It was cut from 55.9 percent in October in an overhaul of the calculation methodology. (Reuters)
Rising food prices increasing poverty - W/Bank RISING global food prices has pushed an estimated 44 million more people into extreme poverty in developing countries over the past eight months, the World Bank said on Tuesday. The poverty-fighting institution said its food price index increased by 15 percent between October 2010 and January 2011 and is just 3 percent below its 2008 peak during the last food price crisis.
But unlike during the 20072008 food crisis, higher prices have not yet affected all regions of the world. For details, see Across Asia and in some parts of Latin America and Eastern Europe countries, costlier food
is pushing up inflation pressures, while good harvests of staple foods in Sub-Sabaran Africa has so far spared that region from risingprices. "Higher maize, sugar, and oil prices have contributed to increase the costs of various types of food, though local maize prices have largely been stable in sub-Sabaran Africa;' the World Bank said in an updated Food Price Watch report. The report came days before a meeting of the Group of 20 major economies in Paris, where higher food prices is expected to be discussed. Catastrophic storms and droughts have hurt the world's leading agriculture-producing
countries, including flooding and a massive cyclone in Australia, major winter storms in the United
States, and fires last year in Russia. Crunching the numbers from 28 household surveys in poorer countries, the World Bank noted that in one-half of the samples it looked at, poverty increased by more than 0.5 percentage points due to rising food prices. In eight countries, poverty rose by more than 1 percentage point. In Tajikistan, poverty is expected to rise by more than 3.6 percentage points due to higher food prices, and in Pakistan, a 1.9 percentage point increase in pov-
erty is mostly due to higher wheat prices, the World Bank said.
Ghana ups minimum wage by 20% GHANA has increased its minimum daily wage by 20 percent with effect from yesterday, a trade union official said, citing an agreement reached by a committee representing employers, the government and labour groups. "What this means is that from today no worker shall receive less than 3.73 cedis as daily minimum wage;' Kofi Asamoah, Trade Union Congress Secretary-General, told Reuters by telephone. The move comes after a 10 percent rise in public sector pay announced·l.ast May and a revamp of civil service pay structures that is widely seen boosting many salaries in the sector. However Asamoah said the impact on the econ-
omy of the latest measure may be mitigated by the fact that up to 85 percent of Ghanaian workers are employed in the informal sector, where implementation of the minimum wage may be patchy. Most employees in the formal sector are thought to currently receive more than the minimum wage
through negotiated collective bargaining agreements. Ghana last year achieved middle income status with an upwards revision ofits national output that produced a new estimate of average per capita income at$I,318. That was up from a previous estimate of $753 widely seen as lagging economic gains of recent years. (Reuters)
Energy disruptions shut Ivorian cocoa facilities DISRUPTIONS to energy supplies have forced some cocoa processing facilities in Ivory Coast to shut temporarily and shipping services have halted, inhibiting cocoa exports and wheat and rice
imports, two trade bodies said. The Federation of Cocoa Commerce and the European Cocoa AssociatIon, whose mem-
bers comprise industry, said they had observed not only a massive displacement of people, but also an increase in cocoa smuggling
across neighbouring borders. "This is placing the short, medium and long term future of the cocoa chain at risk:' they said in a joint statement yesterday. It said the temporary closure
of the cocoa processing facilities threatened the quality of existing cocoa stocks.
Cocoa trade in top producer Ivory Coast, which accounts for more than a third of global supplies, has been thrown into disarray after a fiercely disputed presidential election on November 28 resulted in two rival governments.