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IMF suspends Kenya’s $1.5 billion loan talks

The two-year standby loan facility, which expired in September last year, is intended to cushion the shilling against external shocks

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IMF suspends Kenya's $1.5 billion loan talks

Kenya’s talks with the International Monetary Fund (IMF) for the renewal of a $1.5 billion standby credit facility have collapsed.

This follows the exit of the country’s treasury’s two most senior officials in an anti-corruption purge, leaving the country exposed to economic shocks.

An IMF delegation expected in Nairobi in July, cancelled the visit after Treasury Secretary, Henry Rotich and his Principal Secretary, Kamau Thugge were charged with corruption offences.

Collapse of the talks left in abeyance, the renewal of the standby credit facility intended to cushion the Kenyan shilling, which last week, depreciated to a four-month low against the US dollar.

The two-year standby loan facility, which expired in September last year, is intended to cushion the shilling against external shocks and raise the country’s credibility in the eyes of foreign lenders.

Rotich had in May this year, said that he expected to conclude talks with the IMF over renewal of the loan in two months.

“They did not come,” says Geoffrey Mwau, the Treasury’s director-general in-charge of budget, fiscal and economic affairs, while declining to disclose reasons for cancellation of the visit.

Being in good books with the IMF is considered a plus as it gives comfort to foreign lenders, who are currently holding in excess of $26 billion Kenyan debt.

The new Treasury Principal Secretary, Julius Muia in an interview says plans are underway to re-engage the IMF, with the possibility of resuming talks next month.

The new Treasury officials will be laying the groundwork for fresh discussions with the IMF during the Fund’s annual meetings in Washington starting October 14-20.

“We’re arranging for a detailed engagement with the IMF during its annual meetings in Washington starting from October 14, from there they will be coming in November, which is when we will kick off discussions in a structured manner,” Muia adds.

Kenya initially secured the two-year IMF precautionary facility in March 2016. It expired in March last year, but was extended up to September.

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Zimbabweans lament after price of bread rises by 60% overnight

Bakers said they were forced to hike their prices due to rising production costs

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Zimbabweans lament after price of bread rises by 60% overnight

The price of bread shot up 60 per cent overnight in Zimbabwe, in the latest blow for a population already struggling with spiralling living costs.

Zimbabweans can barely keep pace with the price rises that have rekindled fears of hyperinflation which reached 500 billion per cent a decade ago and forced the country to trash its own currency.

Already, many families live on one meal a day, with the country in the grip of a major downturn that has provoked biting shortages of basics such as fuel and medicine.

Bakers said they were forced to hike their prices due to rising production costs.

Electricity prices have “gone up significantly, the price of fuel has also been going up weekly, the prices of raw materials have also gone up including the cost of importing wheat,” said Dennis Wala, the president of the National Bakers’ Association.

Electricity is only available for around six hours a day, forcing many bakers to use generators to run their ovens.

“The bread manufacturer is at the end of the value chain and we have to factor in all these costs, but we don’t prescribe prices to our members,” Wala told reporters.

The price of a loaf of bread soared to 15 Zimbabwe dollars (around US$1) on Wednesday from nine dollars the previous day, according to a correspondent.

Bread is the second most important staple in the country after a thick cornmeal porridge known in the local Shona language as “sadza”.

After decades of mismanagement under former President Robert Mugabe, Zimbabwe reached absurd levels of hyperinflation in 2008-2009 when the central bank started printing money.

Mugabe’s successor, Emmerson Mnangagwa has failed to stop the latest inflation surge, last week begging for patience to bring the economy back from the “dead”.

But the economy is near breaking point.

Hundreds of thousands of government workers said this week they could no longer afford to report for duty as their wages had been rendered almost worthless.

Last week, the authorities quadrupled the price of electricity — which is already in short supply after a 400 per cent hike in August.

Earlier this month, the price of fuel rose more than 25 per cent, the latest in series of regular increases.

The official inflation rate was 290 per cent last month, but economists estimate it is at least double that figure.

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Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari is due to meet Putin on the sidelines of a Russia-Africa summit in Sochi

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Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari hopes to sign a military-technical cooperation deal with Russia at talks with President Vladimir Putin this month that will help it fight Boko Haram militants.

The Nigerian leader is due to meet Putin on the sidelines of a Russia-Africa summit in the Black Sea city of Sochi amid a push by Moscow to expand its influence in Africa.

“We’re sure that with Russian help we’ll manage to crush Boko Haram, given Russia’s experience combating Islamic State in Syria,” Nigerian envoy, Steve Ugbah said in an interview with Russia’s RIA news agency, adding that Nigeria was interested in purchasing Russian helicopters, planes, tanks and other military equipment.

Ugbah says a military-technical cooperation deal between Russia and Nigeria had already been drafted and that it is awaiting finalisation. 

“We hope President Buhari can take the talks to their logical end. The agreement will open new possibilities in such areas as the supply of military equipment and training for specialists,” he adds.

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Nigeria, Cameroon to plan Cocoa price cartel

The plan suggested by Nigeria is part of a trend by cocoa growers in West Africa and Latin America

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Nigeria, Cameroon to plan Cocoa price cartel

Nigeria aims to team up with Cameroon to agree on a premium for its cocoa with buyers, after the world’s top growers, Ivory Coast and Ghana set a price floor for the crop.

The plan suggested by Nigeria, the world’s fourth-largest cocoa producer, is part of a trend which has seen growers in West Africa and Latin America seek to influence prices in the global market.

The move follows Ghana and Ivory Coast’s union in July, which set the price for a ton of cocoa from their countries at $2,600 plus a $400 premium described as “living income differential”.

READ: Cocoa industry stakeholders accept Ghana, Ivory Coast price

Both countries produced 60 per cent of the world’s cocoa in 2018.

Vice President of the World Cocoa Producers Organisation, Sayina Riman says discussions will be held with the private sector and the Nigerian Government before formal talks are held with Cameroon.  

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