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IMF warns South Africa’s economy still faces major risks

South Africa still faces major risks despite a stabled economic growth forecast for 2018, the International Monetary Fund has warned

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South Africa still faces major risks despite a stabled economic growth forecast for 2018, the International Monetary Fund has warned.

On Monday the IMF maintained South Africa’s growth forecast at 1.5 percent but says the economy faces several challenges.

The Fund said those challenges mainly arise from rapid rise in public debt and potential bailouts to state firms.

National Treasury said in a statement that “The IMF’s concerns on fiscal policy relates to the rapid increase in public debt as a share of GDP, which has doubled over the last decade, depleting fiscal buffers and constraining fiscal policy space”.

Read Also: Nigeria is first African nation to issue sovereign green bond

The treasury was quoting the IMF’s article IV statement following a two week-long country visit by the lender’s officials.

“Risks related to potential SOE’s (state-owned enterprises) bailouts will further constrain fiscal policy” the statement added.

South Africa recently announced series of investment portfolios it was receiving from foreign countries including China.

China has said it is to invest $14.7 billion in South Africa as the Asian super power deepens its trade relations in Africa.

Meanwhile the New Development Bank, set up by the BRICS group of emerging economies, has approved loans of $300 million for energy projects in South Africa.

These facilities are to propel the growth of the South African economy.

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Tanzanian Central Bank reduces economic liquidity to curb rising inflation

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The Tanzanian Central Bank on Saturday said one of the measures it has taken to slow down rising inflation in September and October is to reduce the liquidity in the economy.

A statement published by the east African country’s apex bank’s Monetary Policy Committee (MPC), said inflation in the country has been on the rise since the beginning of the year, rising from 4.6% on August from a previous 4.5% in July.

MPC said while the country’s economy was facing a range of challenges, including weak global growth, high commodity prices, tight financial conditions and the recurrence of COVID-19 in some countries, it was necessary to reduce the liquidity to stabilise the economy.

“In the context of high inflation and commodity prices, which has contributed to rising inflationary pressures in the country, the MPC approved for the bank to continue with gradual reduction of liquidity in September and October 2022.

“The policy decision aims at reducing inflationary pressures, while safeguarding economic activities,” the statement said.

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Air traffic controllers in West, Central Africa suspend strike for negotiations after 48-hour disruption

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The industrial action by air traffic controllers in West and Central Africa has been suspended.

The unions announced the suspension after a 48-hour strike having disrupted flights across the region and left hundreds of passengers stranded at airports.

According to a statement by the Union of Air Traffic Controllers’ Unions (USYCAA), the decision to suspend its strike notice for 10 days immediately so as to allow for negotiations.

“Air traffic services will be provided in all air spaces and airports managed by ASECNA from today Saturday, September 24, 2022 at 1200 GMT,” the statement said.

One of the stranded passengers, Nsoh Brinston, lamented on how the strike would make him spend more than his budget on his intended travel to Kigali, Rwanda.

“I will have to spend more than I intended due to the cancelled flight. I will have to do another COVID test which costs 30,000 CFA francs ($45),” he said.’

Also, eight flights scheduled to leave the commercial hub of Abidjan on Saturday were cancelled in Ivory Coast.

Industries like aviationtelecom operators have all their operations disrupted across Africa lately largely as part of the fallout of the Russian/Ukraine war which has caused a hike in aviation fuel.

It is yet to be seen if the negotiations between air traffic controllers and government authorities will birth lasting solutions to the challenge which now cuts across the continent.

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