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Zimbabwe awaits IMF programme in Q3 after currency changes

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Zimbabwe’s Finance Minister, Mthuli Ncube, has revealed that a staff-monitored programme with the IMF would not start until the third quarter of 2024.

The minister noted that the delay is due to the country’s launch of a new currency called Zimbabwe Gold (ZiG). An IMF program would help the southern African country get back in touch with the world’s financial community by showing that it has a history of good economic policies.

Zimbabwe said last year that it hoped to have a plan in place by April 2024, but that date was pushed back because of the ZiG this month.

“We have moved the (staff-monitored programme) to the third quarter due to the new currency. We should not rush these things,” Ncube said on the sidelines of the World Bank and IMF spring meetings in Washington.

In a bid aimed to make gold-backed ZiG stable and stop the vicious circle of high inflation. The ZiG needed more time to be fully operational before talks with the IMF could move forward, according to Ncube.

Zimbabwe’s third new currency in ten years has already had trouble being accepted by suppliers and users in the black market. Black market sellers are offering 20 ZiG for every dollar, but the value of one ziG is 13.31 dollars.

“Whoever is trading on the alternative market is doing money laundering,” said Finance Secretary George Guvamatanga at the media briefing, saying the government would crack down on this.

Ncube also revealed that the country was making progress in talks about paying off its debts. Zimbabwe hasn’t been able to access foreign financial markets in over 20 years, but they recently agreed to pay off their $6 billion in debt.

“As part of the traditional methods of clearing arrears, Zimbabwe would need a sponsor… and we need about $2 billion,” said Ncube.

He also said that Zimbabwe would be focused on the arrears owed to the World Bank and the African Development Bank while they looked for more sponsors.

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As inflation slows down, Angolan central bank maintains stable interest rate

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The central bank of Angola maintained its main interest rate at 19.5% on Friday, noting a possible short-term improvement in the supply of necessities and a possible decrease in inflation.

To contain growing inflation, which has reached 30%, the Bank of Angola hiked its main rate by 50 basis points at its most recent monetary policy meeting in May after raising it by 100 basis points in March.

The annual inflation rate increased last month, from 30.16% in May to 31.00%, although at a slower rate than in prior months.

“The decision (on Friday) was motivated by the prospect of a slowdown in the rate of price growth and an improvement in the supply of essential goods,” said Central Bank Governor Manuel Tiago Dias.

“If current conditions prevail from August onwards, we predict a slowdown in year-on-year inflation,” Tiago Dias added.

Since the middle of last year, inflation has been increasing in the nation that produces oil in Africa.

By September, the central bank will make its next move on monetary policy.

 

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Bean disease affects 81% of major cocoa region in Ghana

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The International Cocoa Organisation (ICCO) reports that 81% of a significant cocoa-producing region in Ghana, the second-largest cocoa grower in the world, is affected by swollen shoot disease.

Due to unfavourable weather and disease in leading cocoa-producing countries, Ghana and Ivory Coast, prices for the ingredient used in chocolate have nearly doubled this year.

However, expectations are growing for better production the following season. About 60% of the cocoa produced worldwide is produced by the two nations combined.

 

The data on bean disease in Ghana’s Western North, the country’s third-largest cocoa-producing region by output, cast doubt on hopes for a production rebound partly because they show how severe the outbreak is still.

Usually, within a few years, the swollen shoot virus first lowers yields before killing trees. Cocoa cannot be replanted until the sick trees are removed and the soil is treated.

The ICCO reports that 330,456 hectares of Ghana’s 410,229-hectare Western North region are contaminated. The intergovernmental agency was using information from Ghana’s cocoa sector regulator, Cocobod, through its Cocoa Health and Extension Division (CHED).

 

At an industry gathering in April, Joseph Aidoo, the chief executive of that industry regulator, said Reuters that 500,000 hectares nationwide—or 25.7% of Ghana’s 1.94 million hectares of cocoa-growing land—were afflicted.

He claimed that an additional 100,000 hectares are unproductive because of old trees and that the nation has already treated an additional 100,000 hectares, opening a new tab for swollen shoot. Replanted trees require two to four years to reach maturity and yield beans following rehabilitation.

 

“Swollen shoot is a serious problem that’s not improved in the last 12 months and is not going away,” said Steve Wateridge, a veteran world expert on cocoa and head of research at Tropical Research Services by Expana.

The Ivory Coast’s authorities have been more cautious about disclosing the full scope of the outbreak to the public, but the ICCO said that swollen shoot is also spreading there. Wateridge previously informed Reuters that the infection probably affected up to 30% of Ivorian cocoa plants.

Ghana usually produces more than 800,000 tons of cocoa annually, but due to smuggling, disease, aged trees, illegal gold mining, and climate change, it is predicted to produce just over half that amount this season.

 

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