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South Africa needs significant fiscal consolidation— IMF

Published

1 month 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.

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Nigeria to supply gas to $3.5 billion petrochemical facility

Published

3 days ago

October 12, 2024

Ifeoluwa Dada

According to an official cited by Reuters, Nigeria has made significant progress in generating income from its enormous gas reserves as it entered into agreements with joint venture partners to supply gas to a proposed $3.5 billion Brass fertiliser and petrochemical facility.

According to the deal, the facility in Brass, in the coastal state of Bayelsa, Nigeria, will receive an estimated 270 million standard cubic feet of gas per day from joint venture partners Shell, TotalEnergies, and Eni.

The Gas Sale and Purchase Agreement, which is a component of the Brass Fertiliser and Petrochemical Project, is anticipated to produce at least $1.5 billion in exports of petrochemicals and other gas-based goods each year, according to Petroleum Ministry Permanent Secretary Nicholas Agbo Ella.

“This agreement represents a significant milestone in our ongoing efforts to monetize Nigeria’s vast gas reserves,” Ella said.

Nigeria, the continent’s leading energy producer, aims to develop its gas reserves, which total over 200 trillion cubic feet. The goal is to eliminate routine flaring by 2030 and increase gas supply to power plants, industry, and exports.

“In addition to boosting exports, the project will reduce fertilizer imports by 30%, saving Nigeria approximately $200 million in foreign exchange annually,” Ella said.

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Fortuna Mining says Burkina Faso won’t scrap permits

Published

6 days ago

October 9, 2024

Ifeoluwa Dada

The Burkina Faso government does not intend to revoke Fortuna Mining’s current mining permits within the nation, the Canadian company said on Monday.

Ibrahim Traoré, the leader of the Junta, stated on Saturday that Burkina Faso intended to remove some mining permissions from international businesses and work towards increasing local gold production. However, he did not specify which permits would be revoked.

The entire index fell on Monday as shares of gold miners with projects in the West African nation plummeted precipitously at the Toronto Stock Exchange.

Fortuna Mining’s stock was down 9% at 3:25 PM ET (19:25 GMT). The owner of the Bombero gold mine, Orezone Gold Corp., had a 9% decrease on the TSX.

In addition to addressing several subjects on Saturday to mark two years as president, gold producer Endeavour Mining said Traor hinted that some mining permits would be cancelled.

Endeavour asserted that it is unaware of any intentions to cancel any of the company’s mining permits and that the government continues to support the business.

Growing insecurity has made things more difficult in West African country despite its rich mineral resources. ACLED, a U.S.-based crisis-monitoring organisation, asserts that in 2023, over 8,000 individuals lost their lives in the nation, even though the junta promised to suppress groups linked to Al Qaeda and the Islamic State.

Burkina Faso has witnessed a boom in the mining sector since the early 2000s, primarily in the gold but also in the zinc and manganese industries. At the moment, the country is Africa’s fifth-largest producer of gold.