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South Sudan Secures $52.3M IMF Loan To Address COVID-19 Challenges

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South Sudan has secured its first loan of $52.3 million from the International Monetary Fund (IMF) since joining the Fund in 2012 to address its urgent balance of payments needs.

Announcing approval for the disbursement of the funds under the Rapid Credit Facility (RCF), the IMF Executive Board said in a statement released on Thursday that the coronavirus pandemic and oil price shock created severe economic disruption, leading to a sharp decline in South Sudan’s growth and reversing some early gains from political stability

“The disbursement will help finance South Sudan’s urgent balance of payments needs, contain the fiscal impact of the shock and will provide critical fiscal space to maintain poverty-reducing and growth-enhancing spending,” the statement said.

According to the IMF, prior to the COVID-19 pandemic, South Sudan had achieved significant progress due to improved political stability and an uptick in global oil prices. Economic growth rebounded, inflation declined, and the exchange rate stabilised.

However, the pandemic and oil price shock created severe economic disruption, leading to deterioration in the fiscal and external balances, and a sharp decline in growth, reversing some early gains from political stability.

South Sudan economy is projected to contract 3.6 percent in fiscal year20/21, about 10 percentage points below the pre-pandemic baseline.

The authorities have committed to public financial management reforms, transparency and accountability to ensure that the RCF resources are used appropriately and for their intended purpose.

Following the Executive Board discussion, IMF Deputy Managing Director and Acting Chair, Mr. Mitsuhiro Furusawa remarked that the health and economic impact of the pandemic, coupled with the decline in oil prices, led to a collapse of revenues and have created urgent balance of payments and fiscal financing needs.

“The authorities’ efforts to address the human and economic effects of the pandemic are appropriate and have helped limit its spread. Additional financing from the international community remains critical to close the external financing gap and ease the adjustment burden,” he observed.

Mr. Furusawa said that the authorities were implementing public financial management reforms to enhance the budget process and improve governance.

Towards that objective, they have established a Public Financial Management Oversight Committee and are preparing a reform strategy. With technical assistance, they are strengthening budget and cash management systems.

“The authorities are committed to full transparency and accountability of crisis-related spending, including publishing information on procurement and ex-post audits,” Mr. Furusawa added.

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Rwanda Cancels Plan to Increase RwandAir Fleet

The government says expansion of the airline’s fleet will wait until business goes back to normal.

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Rwanda has announced that it is putting on hold the acquisition of new airplanes for its national carrier RwandAir, mainly due to the impact of Covid-19 on businesses.


The additional planes were to enable RwandAir serve the increasingly opened skies through the Bilateral Air Services Agreement (BASA).


Due to the global pandemic, RwandAir was forced to suspend operations following the lockdown in March, and only resumed operations in August when the country started a gradual re-opening of the economy.


The airline has gradually re-opened routes, though passenger occupancy remains low as some parts of the world remain in a lockdown while in other countries, travel remain restricted.


The government says expansion of the airline’s fleet will wait until business goes back to normal.


RwandAir currently has 12 airplanes including two Boeing 737-700NG, two Bombardier CRJ-900 NextGen, four Boeing 737-800NG, two Bombardier Q-400 NextGen, one Airbus A330 – 300, and one Airbus A330 – 200.


Before the pandemic hit, the airline had planned to lease two Airbus A330neo and two Boeing 737 Max 8.

Read also: Rwanda, Qatar sign aviation pact


Rwanda’s Minister of Infrastructure Claver Gatete says “Even the planes we have are not being used to the maximum due to the Covid-19. We have to wait until the passengers are free to keep travelling in a safer environment, so that we can now expand as we cannot expand in this environment.”


He spoke during a press briefing on Friday after signing a bilateral air services agreement (BASA) with the Republic of Korea, bringing the total to 101 BASAs within and outside Africa. Out of these, 52 have been ratified, 17 signed, and 32 initiated.


According to the airline’s earlier plans, the A330neos were to be deployed on long-haul routes to Guangzhou, China, and New York, as well as boost capacity to Dubai, Lagos, and Johannesburg.


RwandAir recently secured clearance to serve New York on code-share and wet-lease basis; an arrangement where one airline provides an aircraft, complete crew, maintenance, and insurance to another airline or other type of business acting as a broker of air travel (the lessee), which pays by hours operated.


The 737 Max 8s were scheduled to serve Tel Aviv in Israel, and other regional flights such as Addis Ababa in Ethiopia.


Despite the halting of airplane acquisitions, the government says infrastructure investment to support the aviation sector will continue.
Qatar is set to acquire 60 per cent stake in RwandAir and is expected to complete construction of Bugesera Airport.


According to Gatete, negotiations with Qatar have advanced, and inking the deal between the two parties should take place anytime soon, under which the construction work should take off.

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NC Interview | African Startups Ecosystems

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Startups in Africa have become a phenomenon. The COVID-19 Lockdown encouraged many businesses to move online with the new normal of doing business virtually.

In the second quarter of 2020, African startups have raised more than $500 million according to Maxime Bayen of GreenTec Capital.

News Central had an exclusive chat with an investor and startup founder, Gulbet Kiros.

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Business Edge | Africa Continental Free Trade Agreement (AfCFTA)

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Today on Business Edge, Tolulope Adeleru Balogun discusses the Africa Continental Free Trade Agreement (AfCFTA) with Andrew Mold, Chief, Regional Integration and AfCFTA, Sub-Regional Office for Eastern Africa, United Nations Economic Commission for Africa.

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