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South Africa needs significant fiscal consolidation— IMF

Published

1 week ago

September 6, 2024

To restore the viability of its public finances, South Africa must seek aggressive fiscal consolidation, according to a statement from the International Monetary Fund (IMF).

The announcement came after the IMF visited South Africa in early July to carry out a “post-financing assessment” in response to its $4.3 billion loan to the nation in 2020 to aid in its efforts to combat the COVID-19 pandemic’s effects.

“Durable expenditure-based consolidation of at least 3% of GDP over the next three years is required to place debt on a sustained downward path while protecting vulnerable groups,” the IMF said.

The reform program that was already in place should be expanded upon and implemented more quickly by the incoming South African administration, according to the Fund.

“The new government should use the opportunity of a new mandate to implement bold reforms to address long-standing challenges and achieve the economy’s full potential,” it said.

After losing its legislative majority for the first time in thirty years in an election held in May, the African National Congress (ANC) in South Africa forged a broad coalition with many parties, including the Democratic Alliance, which is sympathetic to the market.

The South African economy is beset by problems, including growing debt, high unemployment, falling GDP per capita, inequality, and poverty, according to the IMF.

The National Treasury of South Africa said that the government was focused on strengthening the country’s fiscal position and attaining inclusive economic growth that would alleviate poverty and inequality and that discussions with the IMF had been positive.

“The newly established Government of National Unity is firmly committed to addressing immediate and long-term economic challenges,” it said in a statement.

Related Topics:Featured IMF South Africa

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Malawi’s tobacco sales rise 40% despite drought

Published

20 hours ago

September 15, 2024

Ifeoluwa Dada

Malawi’s industry regulator reported on Saturday that tobacco sales, its main export, rose 40% in 2024 despite an El Nino-induced drought.

The Malawi Tobacco Commission (TC) reported a 10% sales growth for the April–August season. Malawi produces some of the most burley tobacco.

The TC reported $396.28 million in leaf sales in its final season report, up from $283.76 the year before. Volumes rose from 120.5 million to 133.1 million kilogrammes.

“This represents a substantial surge. The increase in sales volume, revenue and the average price per kilogram indicates a strong and positive performance compared to the previous year,” the TC said.

The drought devastated Malawi’s agricultural output, especially maize, but the tobacco crop survived, allowing the country to profit from worldwide demand.

“Global demand is high due to consecutive calamitous weather impacts in major producing countries,” said Limbani Kakhome, a spokesperson for Japan Tobacco Leaf, one of the commodity’s top buying companies in Malawi.

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Nigeria’s central bank issues deadline to PoS operators for use of aggregators

Published

2 days ago

September 14, 2024

Ifeoluwa Dada

All point-of-sale operators are required by the Central Bank of Nigeria to route transactions through authorised payment terminal service aggregators. The steps were taken to improve the nation’s electronic transaction tracking and management, according to a circular that was issued by the CBN.

“As part of efforts to mitigate the concerns regarding channelling all Point of Sale transactions through a single aggregator, the CBN on April 19, 2024, granted a second PTSA licence to Unified Payment Services Limited.

“In furtherance of the above, the CBN with this directs as follows: 1 Acquirers are henceforth required to route all transactions from PoS terminals at merchant and agent locations, whether on physical or electronic PoS terminals, through any CBN-licensed Payment Terminal Service Aggregator PTSAs are required to send PoS transactions to only Processors certified by the relevant Payment Scheme, nominated by the Acquirer and licensed by CBN,” the apex bank noted.

It was mentioned that a PTSA licence was given to Nigeria Interbank Settlement System Plc in 2011 so that it could manage the aggregate of PoS transactions.

Earlier this year in April, Unified Payment Services Limited was awarded a second PTSA licence by the CBN in response to concerns regarding the routing of all transactions through a single aggregator.

“To achieve the objective of tracking electronic transactions in Nigeria, the Central Bank of Nigeria in August 2011, granted a Payment Terminal Service Aggregator licence to Nigeria Interbank Settlement System Plc. As part of efforts to mitigate the concerns regarding channelling all Point of Sale transactions through a single aggregator, the CBN on April 19, 2024, granted a second PTSA licence to Unified Payment Services Limited.”

All acquirers—the organisations in charge of handling payments from PoS terminals—must route transactions through one of the two authorised aggregators, under the directive of the CBN.

To provide acquirers with the freedom to select their preferred service providers, licensed processors must also connect with both PTSAs.

It was mentioned that payment terminal service providers, who are in charge of setting up and maintaining PoS terminals, have to make sure their hardware and software are set up to function with any PTSA that the acquirers select.

The CBN states that PTSPs must also provide monthly reports to the CBN that include information on the number of agents and merchants they oversee, as well as the PTSA services that are utilised.

In a similar vein, all PTSAs are required by CBN to submit monthly reports detailing all transactions that are conducted through their systems.

The director of the Payments System Management Department must receive the reports, per the apex bank, within seven days of the end of each month.

The CBN had threatened to take necessary action if any PSPs did not regularise their operations with the PTSAs within 30 days after issuing the instruction.

Recall that on July 7, the Corporate Affairs Commission declared that all Point of Sale providers in the nation needed to register with them by September 5 at the latest.