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World richest billionaires take massive hits as fortunes decline by $1.4 trillion in 2022

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The year 2022 is turning out to be a bad year for world’s richest billionaires including Tesla and SpaceX boss, Elon Musk, Chief Executive Officer of Amazon, Jeff Bezos and Mark Zuckerberg, the Chief Executive Officer of Meta, as they have seen their fortunes take massive hits with their wealth dropping to as much as a combined $1.4 trillion.

Bloomberg reports that Musk alone has seen his fortune plunging by almost $62 billion while Bezos saw his wealth tumble by about $63 billion, just as Zuckerberg’s net worth dropped by more than half.

The Bloomberg report also noted that the world’s 500 richest people lost the whopping $1.4 trillion in the first half of 2022 alone which marked the steepest six-month drop ever for the global billionaire class, while there are fears that the volatility could continue in the second half of the year.

The decline is a sharp departure from the previous two years, when the fortunes of the ultra-rich swelled as governments and central banks unleashed unprecedented stimulus measures in the wake of the Covid-19 pandemic, juicing the value of everything from tech companies to cryptocurrencies, the report stated.

Musk still has the biggest fortune on the planet at $208.5 billion, while Amazon’s Bezos is second with a $129.6 billion net worth, with Bernard Arnault, France’s richest person, ranked third with a $128.7 billion fortune, followed by Bill Gates with $114.8 billion, according to the Bloomberg Billionaires Index.

Changpeng Zhao, the crypto pioneer who debuted on the Bloomberg Billionaires Index in January with an estimated fortune of $96 billion, has seen his wealth tumble by almost $80 billion this year amid the turmoil in digital assets.

At the start of the year, only four billionaires were worth more than $100 billion with 10 people worldwide exceeding that amount, including Zuckerberg, who is now 17th on the wealth list with $60 billion, the report said.

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Musings From Abroad

World Bank doubts Ethiopia-IMF debt assessment

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Some officials of the World Bank have questioned if the study supporting Ethiopia’s debt restructuring may be “faulty” after criticising an evaluation of the country’s finances done with the International Monetary Fund (IMF).

World Bank consultant, Brian Pinto, and its head economist, Indermit Gill, evaluated the July Debt Sustainability Analysis (DSA), which was created by the IMF and employees of the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries, in an internal document seen by Reuters.

According to the authors, Ethiopia is experiencing a short-term cash shortage rather than a long-term solvency problem, which is a source of conflict between the government and holders of its $1 billion international bond that is in default, based on the DSA.

“We found that the bondholders have interpreted the DSA correctly, but the DSA itself may be faulty,” Pinto and Gill wrote in the paper from earlier this month. “The disagreements about Ethiopia’s debt sustainability will be repeated as other countries become debt distressed.”

A World Bank representative responded to a question regarding the paper by saying, “We generally don’t comment on internal deliberations between the World Bank and the IMF or any of our partner institutions.”

As part of the most recent review of the Fund’s loan program, Ethiopian State Finance Minister Eyob Tekalign told Reuters that the DSA had just been reviewed by IMF and World Bank teams and that the status had not changed significantly.

Without providing further details, an IMF representative acknowledged that its officials travelled to Ethiopia in November for the second review of the Fund’s loan program and added that every review incorporates an update to the DSA. Regarding the memo, the spokeswoman remained silent.

A request for comment from Pinto and Gill was not answered. There has been a tense confrontation between Ethiopian officials and bondholders.

The main point of contention is whether, as bondholders contend, Ethiopia is experiencing a liquidity shortage that may be resolved by rescheduling debt or if it is experiencing longer-term financial issues that necessitate haircuts, or debt write-downs.

According to the DSA, certain statistics on exports indicated pressures on both liquidity and solvency.

It was reported in October that the DSA indicated a solvency problem and that writedowns were inevitable. Investors have criticised a government proposal that suggests an 18% haircut in addition to rejecting the evaluation.

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Musings From Abroad

Swiss company Mercuria partners Zambia’s IDC in new metals trading firm

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According to a statement released by Swiss commodities trader, Mercuria, on Thursday, it has established a metals trading arm with Zambia, the second-largest producer of copper in Africa.

The trading unit is jointly owned by Mercuria and an arm of Zambia’s Industrial Development Company (IDC), and its purpose is to allow Zambia to engage directly in the minerals trading market.

The joint venture “envisages the establishment of a vehicle to market and trade Zambian copper by mutual leverage,” according to a statement from Cornwell Muleya, the CEO of IDC.

The southern African nation wants to increase copper output to roughly 3 million metric tonnes within the next ten years, and in 2023, it produced roughly 698,000 tonnes of copper, down from 763,000 metric tonnes the year before.

In June, the Zambian government announced that it would establish a minerals trading unit.

Investors including First Quantum Minerals and Barrick Gold are ramping up production, with output set to receive a further boost once Vedanta Resources’ Konkola Copper Mines restart activity.

“Our joint venture with IDC marks a significant milestone for Zambia as it positions itself more strategically in the global minerals market,” Kostas Bintas, Mercuria’s global head of metals and minerals, said in the statement.

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