Connect with us

VenturesNow

UNCTAD concerned over disruption of trade on major sea routes

Published

on

The United Nations Conference on Trade and Development (UNCTAD) expressed alarm over the mounting disruptions to business, which have been linked to a 42% reduction in global trade volumes and an average $500 increase in container market freight charges.

The Suez Canal handled 12–15% of world trade in 2023, according to UNCTAD’s February 2024 report Navigating Troubled Waters. This was because the majority of ships rerouted or ceased operations as a result of Houthi rebel attacks in Yemen.

Shippers continue to have serious concerns about the Suez Canal, a vital canal that connects the Mediterranean Sea to the Red Sea. As a result, the vessels have been rerouted along a longer route that spans more than 1,300 kilometres through Southern Africa.

“Weekly container ship transits have fallen by 67 percent. Tanker transits and gas carriers have also seen major declines,” the report said.

The UN agency added that there have been significant changes in the oil and grain trade as a result of the ongoing conflict in Ukraine and its effects on the Black Sea.

“The $500 surge in average container spot freight rates during the last week of December was the highest-ever weekly increase. Average container shipping spot rates from Shanghai have more than doubled (up 122 percent) since early December. Rates from Shanghai to Europe have more than tripled (up 256 percent). Rates to the US west coast increased by 162 percent,” the report added.

Egypt receives a significant amount of its foreign exchange revenue from the Suez Canal; in the fiscal year 2022–2023, it contributed $9.4 billion, or almost 2.3 percent, of its GDP.

Suez Canal revenues have reportedly dropped by 40% as a result of the Red Sea situation. A worsening scenario in Egypt can affect Ethiopia and Sudan, in addition to other nations in the area.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

VenturesNow

IMF says South Africa needs to do more to cut spending, lower debt-to-GDP ratio

Published

on

A top official from the International Monetary Fund has revealed that South Africa needs to do more to cut spending and lower its debt-to-gross domestic product ratio. The multilateral body stressed that the ratio is expected to rise from 74% in 2022 to almost 86% by 2029.

Era Dabla-Norris, deputy head of Fiscal Affairs, said that the government could cut back on transfers to state-owned businesses, make cuts to subsidies that don’t help specific companies, and make big changes to the way the economy works to boost growth.

She told a news conference that South Africa’s energy and logistics problems had to be fixed right away.

A Statista study shows that between 2023 and 2028, the South African national debt was expected to keep going up by a total of 163.3 billion U.S. dollars, or 59.99%.

The national debt is expected to hit a new high point of 435.46 billion U.S. dollars in 2028, after going up for ten years in a row. Notably, the national debt has steadily risen over the past few years.

The IMF says that the general government’s gross debt is made up of all its debts that need to be paid back with interest and/or capital at some point in the future.

Continue Reading

VenturesNow

Nigeria’s central bank insists depleting external reserves not due to Naira defence

Published

on

According to the Central Bank of Nigeria (CBN), the big drop in the country’s foreign exchange reserves was not due to the defence of the Naira. Instead, it was done to partly pay off debts owed to creditors.

Furthermore, the bank said it wanted to stay out of the market as much as possible, hoping to create an environment where costs are set by willing buyers and sellers.

The CBN governor, Olayemi Cardoso, clarified on Wednesday while the International Monetary Fund and World Bank held their Spring Meetings in Washington, D.C., USA following curiosity around the big drop in the country’s foreign exchange reserves—about $2.16bn in just 29 days—even though the government was working hard to keep the naira stable, underlying important it is to let the market decide prices instead of depending too much on the bank to step in.

The CBN website showed that as of April 15, 2024, the foreign exchange stocks had dropped to $32.29bn, a big drop from March 18, 2024, when they were $34.45bn. Also, the funds grew by $1.28bn over 43 days, from February 5, 2024, to March 18, 2024.

The apex had earlier stated that the rise was due to more money being sent back to Nigeria by Nigerians living abroad and more interest from foreign buyers in local assets, such as government debt securities. The top bank also said that the rise was caused by changes in the foreign exchange market and more oil being produced, among other things.

Cardoso maintained that the bank would not get involved in the exchange unless unusual circumstances arose. He also made it clear that the recent small change in reserves had nothing to do with protecting the naira. He said that there will be an increase soon because the country is getting an extra $600 million into its funds.

He said, “I want to make this as clear as possible, it is not in our intention to defend the naira. and as much I have read in the recent few days, some opinions concerning what is happening with our reserves and if the central bank is defending the naira. If you think about what our overall policy and philosophy has been here, you can see it is counterintuitive.

“What we are encouraging is for the market to be a willing-buyer and willing-seller price discovery system, and ultimately I perceive a future where the central bank would not intervene except in very unusual circumstances. What is important to us is that there is sufficient liquidity in the market. We recorded trading of $1bn, sometimes it is $600m or $700m as the case may be and that will continue. So as long as we have a vibrant currency market, why do we need to intervene? There has been little amount given to the Bureau de Change to get that segment going and a small amount of money has gone into that to catalyse because individuals must have access to funds for school fees, health and the rest.”

Foreign currency shortages in the country have been a problem for a long time for the CBN. That governments, commercial banks, merchant banks, other financial institutions (OFIs), or public officials cannot directly or indirectly own Bureaux de Change (BDCs) was ruled in February.

Continue Reading

EDITOR’S PICK

Metro10 hours ago

‘Reconsider your anti-people policies, they are causing hardship, insecurity in Nigeria’— PDP tells Tinubu

Nigeria’s main opposition party, the Peoples Democratic Party (PDP), has called on President Bola Tinubu to consider what it calls...

Sports1 day ago

Top European, Asian clubs on alert as Super Eagles keeper set to make contract decision

Some top clubs in Europe and Asia have been put on alert as Super Eagles and Chippa United goalkeeper, Stanley...

VenturesNow1 day ago

IMF says South Africa needs to do more to cut spending, lower debt-to-GDP ratio

A top official from the International Monetary Fund has revealed that South Africa needs to do more to cut spending...

Politics1 day ago

Burkina Faso expels 3 French diplomats over ‘subversive activities’

According to a letter quoted by Reuters on Thursday, three French diplomats have been sent back to France by Burkina...

Tech1 day ago

Nigeria’s MAX partners Ghana’s Kofa in e-bike financing deal

Nigeria’s electric vehicle solutions provider, MAX, has announced striking a partnership deal with Ghana’s innovator in energy networks, Kofa, that...

Metro1 day ago

Zambia asks EU to help strengthen its democratic initiatives ahead of 2026 elections

The Zambian government has called on the European Union (EU) to help in strengthening democratic initiatives in the country as...

Metro1 day ago

Nigeria destined to become major global economy under Tinubu— VP Shettima

Nigeria’s Vice President, Kashim Shettima, has predicted that the country is destined to become a major economic force in the...

VenturesNow1 day ago

Nigeria’s central bank insists depleting external reserves not due to Naira defence

According to the Central Bank of Nigeria (CBN), the big drop in the country’s foreign exchange reserves was not due...

Tech2 days ago

African Guarantee Fund partners Nordic Development Fund to launch green finance in Nigeria

The African Guarantee Fund (AGF) has teamed up with the Nordic Development Fund (NDF) to launch a green finance fund...

Sports2 days ago

Ethiopia’s Lemma, Kenya’s Obiri give Africa double podium finish at Boston Marathon

Ethiopia’s long distance runner, Sisay Lemma, and Kenyan female marathon sensation, Hellen Obiri, teamed up to give Africa a double...

Trending