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Global Coffee Prices May Increase, Says Uganda2 minutes read

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Uganda is expecting an increase in global coffee price following harsh weather in Brazil that may affect the North American country’s next harvest.

Brazil is the world’s biggest supplier of coffee.

The Uganda Coffee Development Authority (UCDA), the state-owned regulator of the industry, said in a tweet on Tuesday that the prices may get a boost from La Nina as the weather phenomenon threatens Brazil’s next crop.

“After a bumper 2020 harvest, La Nina is escalating the risk of a decline in output next year as most crops endure scorching temperatures,” UCDA said.

According to the International Coffee Organisation on Global Coffee Exports, Uganda is among the world’s top 10 producers and exporters of coffee.

“The country is currently implementing a coffee roadmap to increase coffee exports from 3.5 million 60 kg bags in 2016/17 to 20 million 60 kg bags in 2025.

“Which is partly based on favorable weather and an increased supply of seedlings to farmers,’’ UCDA noted.

According to the finance ministry, the country’s coffee export earnings reached a record 494 million dollars in the fiscal year ending on June 30.

Coffee is one of the 14 commodities identified by President Yoweri Museveni as critical to Uganda’s economic transformation in the wake of COVID-19.

“About 1.7 million households in Uganda depend on coffee production,’’ UCDA said.

Meanwhile, while the COVID-19 pandemic negatively impacted every country’s economy, Uganda’s coffee sub sector grew with exports hitting the highest level since 1994.

The Minister of Agriculture, Animal Industry and Fisheries (MAAIF), Vincent Sempijja, on Tuesday, announced the International Coffee Day which will be commemorated on October 1, 2020.

“Despite the challenges posed by the pandemic, the coffee sub sector in Uganda has remained buoyant with coffee exports at the end of the Financial Year 2019/20 hitting the highest level since liberalisation of the economy in 1994 at 5.1 million 60kg bags from only 4.2 million bags worth USD 415 million in Financial Year 2018/19,” he said.

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UACN Tops Gainers’ Table As Nigeria’s Bourse Rebounds By N59M

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The Nigeria Stock Exchange (NSE), on Thursday, rebounded with a growth of N59 billion in spite of social unrest and curfew in major cities of the country.

Specifically, the market capitalisation which opened at N14.870 trillion rose by N59 billion or 0.40 per cent to close at N14.929 trillion.

Also, the All-Share Index increased by 114.38 points or 0.40 per cent to close at 28,563.87 compared with 28,449.49 achieved on Wednesday.

The upturn was impacted by gains recorded in large and medium capitalised stocks, amongst which are; MTN Nigeria Communications, Stanbic IBTC Holdings, UACN, Lafarge Africa and Dangote Sugar Refinery.

Market sentiment measured by the market breadth was positive with 21 stocks gainers against 12 losers.

UACN drove the gainers’ table in percentage table, growing by 8.33 per cent to close at N7.15 per share.

Union Diagnostic followed with eight per cent to close at 27k, while FCMB Group rose by 7.96 per cent to close at N2.44 per share.

United Capital increased by 6.44 per cent to close at N3.80, while Neimeth appreciated by 5.26 per cent to close at N1.80 per share.

Conversely, Wapic Insurance led the losers’ chart in percentage terms dropping by 9.09 per cent to close at 40k per share.

UACN Property Development trailed with 3.66 per cent to close at 79k, while GlaxoSmithKline shed 3.57 per cent to close at N5.40 per share.

International Breweries dipped 2.95 per cent to close at N6.25, while Fidelity Bank depreciated by 2.50 per cent to close at N1.95 per share.

However, the total volume traded decreased by 4.67 per cent with an exchange of 311.33 million shares worth N4.69 billion traded in 3,375 deals.

This was in contrast with a total of 326.58 million shares valued at N4.22 billion transacted in 4,367 deals on Wednesday.

Transactions in the shares of Guaranty Trust Bank topped the activity chart with 77.84 million shares worth N2.34 billion.

Access Bank followed with 57.66 million shares valued at N442.78 million, while Zenith Bank traded 39.58 million shares worth N813.77 million.

FBN Holdings sold 21.75 million shares valued at N131.58 million, while United Bank for Africa transacted 18.16 million shares worth N122.81 million

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Sub-Saharan Africa Economy To Recover By 3.1% In 2021 – IMF

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The International Monetary Fund (IMF), says economic activity in sub-Saharan Africa is projected to recover by 3.1 per cent in 2021 after declining by 3.0 per cent in 2020.

Mr Abebe Selassie, the Director, IMF’s African Department said this at the launch of the “Regional Economic Outlook for Sub-Saharan Africa: A Difficult Road to Recovery’’ on Thursday in Washington D.C.

Selassie quoted the report as saying that the region as a whole was not expected to return to 2019 levels until 2022, adding that in some of the region’s largest economies such as Angola, Nigeria, South Africa, real Gross Domestic Product (GDP) would not return to pre-crisis levels until 2023 or 2024.

For Nigeria, he said that the economy would contract by –4.3 per cent in 2020 due to low oil prices, reduced production under the Organisation of Petroleum Exporting Countries and other major oil producers (OPEC+) agreement and declining domestic demand from the lockdown.

He said that growth was projected to recover to only 1.7 per cent in 2021, responding to firmer oil prices and increasing oil production.

In South Africa, he said growth would contract by – 8.0 per cent in 2020, driven mainly by the impact of containment measures.

“Output will recover modestly during 2021, growing by 3.0 per cent, and will maintain momentum thereafter as business confidence responds to growth-enhancing reforms.”

According to Selassie, it is the worst outlook on record, adding that the figure represents a drop in per capita income of 4.6 per cent over 2020 to 2021, which is larger than in other regions.

“Sub-Saharan Africa is contending with an unprecedented health and economic crisis. In just a few months, this crisis has jeopardized years of hard-won region’s development gains and upended the lives and livelihoods of millions.

“The onset of the pandemic was delayed in sub-Saharan Africa, and infection rates have been relatively low compared to other parts of the world.

“However, the resurgence of new cases in many advanced economies and the specter of repeated outbreaks across the region suggest that the pandemic will likely remain a very real concern for some time to come.”

Selassie said nonetheless amid high economic and social costs, African countries were now cautiously starting to reopen their economies and were looking for policies to restart growth.

He said that with the imposition of lockdowns, regional activity dropped sharply during the second quarter of 2020, but with a loosening of containment measures, higher commodity prices and easing financial conditions, there had been some tentative signs of a recovery in the second half of the year.

He said that tourism-dependent economies faced the largest impact, while commodity exporting countries had also been hit hard.

According to him, growth in more diversified economies will slow significantly, but in many cases will still be positive in 2020.

“Looking forward, regional growth is forecast at 3.1 per cent in 2021. This is a smaller expansion than expected in much of the rest of the world, partly reflecting sub-Saharan Africa’s relatively limited policy space within which to sustain a fiscal expansion.

“Key drivers of next year’s growth will include an improvement in exports and commodity prices as the world economy recovers along with a recovery in both private consumption and investment.

“The current outlook is subject to greater-than-usual uncertainty with regard to the persistence of the COVID-19 shock, the availability of external financial support, and the development of an effective, affordable, and trusted vaccine.”

Selassie, however, pointed to a number of policy priorities going forward.

He said that where the pandemic continued to linger, the priority remained to save lives and protect livelihoods.

He said that for countries where the pandemic was under greater control, limited resources would mean that policy makers aiming to rekindle their economies would face some difficult choices.

The director said that both fiscal and monetary policy would have to balance the need to boost the economy against the need for debt sustainability, external stability and longer-term credibility.

He said that financial regulations and supervisions would have to help crisis-affected banks and firms without compromising the financial system’s ability to support longer-term growth.

“These efforts must also be balanced against the need to maintain social stability while simultaneously preparing the ground for sustained and inclusive growth over the long term.

“Navigating such a complex policy challenge will not be easy and will require continued external support.

“Indeed, without significant assistance, many countries will struggle to simply maintain macroeconomic stability while meeting the basic needs of their population.”

He said that in this context, the IMF had moved swiftly and disbursed about 17 billion dollars so far in 2020, which was about 12 times more than it typically disbursed each year.

He said this was to help cover a significant portion of the region’s needs and to catalyse additional support from the international community.

Selassie, however said that looking ahead, sub-Saharan Africa faces significant financing gaps.

He said that if private financial inflows remained below their pre-crisis levels, sub-Saharan Africa could face a gap in the order of 290 billion dollars over 2020 to 2023.

“This is important as a higher financing gap could force countries to adopt a more abrupt fiscal adjustment, which in turn would result in a weaker recovery.

“Countries must also play their part; governance reforms will not only improve trust in the rule of law and improve business conditions but also encourage external support.

“Despite the lingering effects of the crisis, the potential of the region and the resourcefulness of its people remain intact, and tapping this potential will be vital if the region is to find its way back to a path of sustainable and inclusive development.”

Selassie said that in this context, the need for transformative reforms to promote resilience, lift medium-term growth and create the millions of jobs needed to absorb new entrants into labour markets was more urgent than ever.

He advocated for priority reforms in the areas of revenue mobilisation, digitalisation, trade integration, competition, transparency and governance, and climate-change mitigation.

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Tanzania Inaugurates $59m Leather Factory, To Produce 1.2 Million Shoes Annually

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Tanzania’s President John Magufuli on Thursday inaugurated the $59m leather factory in Kilimanjaro region, saying the new facility will end importation of leather goods.

The Kilimanjaro International Leather Industries Company Limited is a joint venture between the Public Service Social Security Fund (PSSSF) and the Prisons Corporation.

Speaking shortly before he inaugurated the factory, Magufuli said construction of the facility would help to expand the market for hides and skins in the east African nation.

“Livestock keepers are throwing away hides and skins of their animals for lack of markets. With the construction of the new leather factory this will now be history,” he said.

In Africa, Tanzania has the second largest herd of livestock after Ethiopia, and produces 3.9 million bovine hides, 2.5 million goat skins and 2.3 million sheep skins annually.

Magufuli said Tanzania’s demand for shoes stood at 54 million pairs annually, while the country’s five leather industries were producing a total of 1.715 million pairs each year.

“In the next one to two years, I hope Tanzanians will stop wearing imported shoes. We should start cultivating the habit of buying locally made goods,” said the president.

Hosea Kashimba, PSSSF Director-General, said the initial production capacity for the new factory was 1.2 million pairs of shoes annually and 184,500 pieces of other leather products, including belts and wallets.

Kashimba said the factory had created 3,000 direct jobs and 7,000 indirect jobs.

Statistics from the Ministry of Livestock and Fisheries show that Tanzania had 25 million cattle and 16.7 million goats.

Kashimba said Karanga Prison provided land for the industry while PSSF which was managing the project provides the machinery and buildings under the consultancy of Tanzania Industrial Research and Development Organization (TIRDO) who were paid Sh2 billion.

He further noted that the machinery was imported from Italy to a cost of Sh60 billion (Euro23.6 million).

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