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World Bank warns Zimbabwe needs predictable policy to support currency

Published

2 months ago

March 2, 2024

A senior World Bank official has revealed that Zimbabwe must increase the predictability of its monetary and fiscal policies in order to restore confidence in its declining currency value.

The World Bank’s Regional Vice President for Eastern and Southern Africa, Victoria Kwakwa, told journalists in an interview that the country may advance by straying from the central bank’s “quasi-fiscal operations.”

After ten years of dollarization, the local currency was reintroduced in 2019, but it quickly lost value, leading authorities to quickly approve the use of foreign currencies in domestic transactions. The finance ministry and central bank announced last month that they were working on ways to stabilise the value of the currency and that they were thinking of, among other things, tying the exchange rate to the price of gold.

“Policy predictability… the improvements that are being made moving away from quasi-fiscal operations, all of that will contribute to building greater confidence,” Kwakwa said.

She stated that the World Bank is “committed” to the ongoing process that has been in place since 2022 for Zimbabwe to pay off billions of dollars in arrears to the organisation and other international lenders.

Kwakwa, meantime, expressed her “delight” at the news that China and India had reached debt restructuring deals with neighbouring Zambia. The President of Zambia announced the accords last week, raising optimism that Zambia would be on the verge of exiting its more than three-year default.

“With the official creditors out of the way, the government has a chance now to focus more on getting an agreement with the commercial creditors. And we hope that that will also be in the offing soon,” she said.

The International Monetary Fund (IMF) stated last month that the central bank should cut back on its non-core operations, which have included printing money and borrowing to lend to the government, though she did not specify what those operations were.

With annual inflation at 47.6% and the Zimbabwean currency having lost over 60% of its value against the US dollar thus far this year, the nation is still reeling from the memory of hyperinflation under longstanding former leader Robert Mugabe.

“That’s at the heart of the problem—the fact that there hasn’t been confidence. And every time people get (the currency), they try to get rid of it to get something else, and so it’s constantly losing value.”

Related Topics:Featured World Bank Zambia Zimbabwe

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Nigeria wants managers for proposed $10 billion diaspora fund

Published

6 hours ago

April 28, 2024

Ifeoluwa Dada

A tender paper shows that Nigeria is looking for fund managers for a $10 billion diaspora fund to bring in dollars and foreign investment for the economy.

The fund wants to pool the billions of dollars that its people send back to the country every month so that they can be used for local investments in things like healthcare, education, and infrastructure.

The World Bank says that Nigeria got more than $20 billion in payments from people living outside of Nigeria last year.

The Ministry of Industry and Trade in Nigeria said in a public post that it was looking for “fund managers for the development and establishment of a multisectoral, multilateral private sector-led investment fund to form the $10 billion Nigeria Diaspora Fund.”

The tender paper said that the fund manager’s job is to plan and set up the fund’s legal, operational, financial, and administrative structures.

The investment is intended to last for three to five years, and then more money will be put in after that. The government said the fund would last for 10 years and could be used for an extra two years.

The trade ministry’s tender said that people who want to run the fund must have done business in Nigeria in the last five years and must have a track record of raising money and running big, profitable venture capital funds.

Anglo-American turned down BHP Group’s $39 billion takeover offer on Friday, saying it was way too low for the London-listed company and its future.

In a statement, Minister of Industry and Trade Doris Anite said that it was a “once-in-a-lifetime chance for our citizens in the diaspora to drive Nigeria’s economic growth.”

The naira is under pressure because of a lack of foreign currency because of lower crude oil exports. This has led companies and people to buy dollars on the black market.

Nigeria is going to issue migrant bonds later this year to bring in even more foreign currency.

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World Bank grants Malawi $57.6 million for food crisis

Published

1 day ago

April 27, 2024

Ifeoluwa Dada

As a response to its food crisis, the World Bank said on Friday that it would give Malawi $57.6 million in “quick release” grants.

“This support comes in the context of the severe food crisis the country is suffering due to El Niño conditions in the wider southern Africa region,” the World Bank said in a statement.

“A series of intense disaster events over the last few years has left almost no time for the country to recover and has resulted in a severe erosion of food security at the national level.”

Malawi is one of the least developed countries in the world. It is ranked 170 out of 187 countries in the 2010 Human Development Index. Almost 16 million people live there, and 90% of them make less than $2 a day. That’s 53% of the total population.

The United Nations Children’s Fund (UNICEF) says that 46,000 children in Malawi are seriously malnourished. In 2023, UNICEF said that more than 500,000 Malawian children were at risk of not getting enough food.

Now, Malawi has a lot of programs in place to deal with things like poverty, and climate change, and to make the business and agriculture more diverse.