Africa Briefs

Zambia open to dialogue over mining tax

Zambia's finance ministry said on Sunday that it was open to dialogue with mining companies over the government's plans to increase mining taxes.

Africa's second-largest copper producer said late last month that it would introduce new mining duties and increase royalties to help bring down mounting debt.

Large miners such as First Quantum, Glencore and Vedanta Resources have often criticised the Zambian government over rising costs at their operations.

The ministry’s statement said a tax policy review committee would be appointed to deal with technical issues related to the tax changes and that the ministry had taken note of criticism by Zambia's Chamber of Mines.

The Chamber of Mines said last week that some companies had already scrapped expansion plans over the tax hikes and that the country's copper output could fall. – Nampa/Reuters

Nigeria to intervene in FX markets

Nigeria’s central bank governor Godwin Emefiele on Friday said the bank would continue to intervene in the foreign exchange markets, adding that he believed in a stable exchange rate regime.

Nigeria has been battling to defend its currency and shore up its reserves of around $44 billion, hobbled by lower oil prices. At the same time, the oil exporter has suffered from high inflation, which edged up to 11.2% at its last reading - well above the central bank's 6-9% target.

Emefiele said Nigeria's current stance of monetary tightening would continue. – Nampa/Reuters

Sudan sets daily exchange rate in sharp devaluation

Sudan sharply devalued its currency on Sunday after a body of banks and money changers was tasked with setting the country's exchange rate under a new system established by the government to tackle an acute shortage of foreign exchange.

The team set the Sudanese pound at 47.5 to the US dollar on what was the new system's first day, the head of the country's bankers' union said, down from 29 Sudanese pounds under the old system run by the central bank. The rate was kept unchanged yesterday.

Dealers on the black market were offering to sell dollars at 48.5 pounds and buy dollars at 48.0 pounds even after the devaluation, although few transactions occurred.

Long queues of customers collecting salaries or withdrawing cash formed at banks and teller machines.

The new official rate for the pound was weaker than even the previous black market price of around 45.5 pounds per US dollar, indicating the committee might be seeking to overshoot. – Nampa/Reuters

Foreign investment in Egypt falls

Foreign direct investment (FDI) in Egypt’s non-oil economy fell in the second quarter to its lowest levels since just after an IMF-backed austerity plan began nearly two years ago, a sign more pain may lie ahead before Egyptians begin reaping benefits.

Egypt is counting on new private-sector investment to spur the economy and create jobs for its rapidly expanding population but the austerity measures have reduced domestic demand and the incentive to invest.

The country attracted US$600 million in non-oil FDI in the second quarter, down from US$956 million in the first quarter and US$1.51 billion in the last quarter of 2017, according to a Reuters calculation based on balance of payments data released last week.

"Domestic consumption has been low," said Mohamed Abu Basha, an economist at Egyptian investment bank EFG Hermes. "Now there is no urgency to deploy capital."

An IMF study published in December estimated that about 700 000 Egyptians would join the labour market over each of the next five years. – Nampa/Reuters