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Tunisia’s economic growth hampered in first quarter1 minute read

Decline is hinged on reduced agricultural output, low tourist patronage and decline in industrial production.

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Tunisia's economic growth hampered in first quarter

Tunisia has fallen short of its Q1 economic target for 2019, according to economic adviser to the Tunisian government, Lufti Ben Sassi.

He based his comment on the latest report from the country’s statistical bureau that growth slowed by 1.1 per cent year-on-year.

A decline hinged on reduced agricultural output, low tourist patronage and decline in industrial production amongst others. In 2018, the growth rate was 2.7 per cent for Q1 and in Q4, 2.1 per cent was recorded.

Tunisia is still optimistic of meeting projected growth figures close to 3 per cent for 2019 compared to the 2.5 per cent of 2018. The government also intends to reduce budget deficit to 3.9 per cent in 2019 compared to 5 percent in 2018.

Since the 2011 Arab Spring led to the overthrow of former leader, Zine El-Abidine Ben Ali, Tunisia had recovered slowly. Major militant attacks in 2015 also contributed to the economy’s contraction.

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Jumia shuts down travel department in Nigeria

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Jumia Travel shuts down operations in Nigeria

Managing Director of Jumia Travel Nigeria, Omalara Adagunodo has announced the shutdown of Jumia’s travel operations in Nigeria. This follows reports of Jumia shutting down its operations in Cameroon and Tanzania.

A Twitter user with the handle @njinjoya tweeted: “So Jumia Travel just closed down operation in Nigeria?”

Another Twitter user claiming to be a staff of Jumia Travel lamented: ” Woke up this morning to hear the franchise I worked for in Jumia, Jumia Travel, is no more…so sad, buh still grateful to God…
New chapter, digital marketing n SEO “

Travelstart is expected to take over Jumia Travel’s operations in Nigeria according to a Jumia Travel staff who spoke under condition of anonymity.

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South African airways to go into business rescue

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South Africa’s minister of Public enterprise, Pravin Ghordan, has declared the government’s resolve to “rescue” national carrier, South African Airways.

The move comes after a week of speculation on the airline’s future, which is loss-making and has been unable to raise funding to continue operations.

It is proposed that the government will give the airline an extra $137 million with a second tranche of the same amount to come from existing lenders.

The failing airline which has not made a profit since 2011, has lost more than $2 billion over the past 13 years and experience some internal turbulence last month, when staff went on strike over plans to cut a fifth of its workforce.

“It must be clear that this is not a bailout. This is the provision of financial assistance in order to facilitate a radical restructure of the airline,” Pravin Gordhan says.

SAA, which has not made a profit since 2011 and has depended on government bailouts, suffered an employee strike last month, forcing it to cancel hundreds of flights and pushing it to the brink of collapse. 

Outlining what is expected from the process – described as the “optimal mechanism” to restore confidence in SAA as it seeks a future equity investor, Gordhan says the 2 billion rand provided by existing lenders will be guaranteed by the government and repayable in future budgets. 

The government, via the national treasury, will provide another 2 billion rand in a “fiscally neutral manner” with the full recovery of capital and interest on existing debt not impacted by the rescue proceedings. 

In a business rescue process, a specialist administrator takes control of a company with the aim of rehabilitating it to improve its chance of survival, or securing a better return for creditors than they would receive from liquidation. 

“This initiative demonstrates that the government will undertake the necessary bold steps in order to reposition its assets in such a way that they do not continue to depend on the fiscus and thereby burden taxpayers” , Gordhan adds.

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South Africa’s competition watchdog orders data rate cuts

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South African telecommunication behemoths, Vodacom Group and MTN Group could face prosecution if they do not agree with the country’s Competition Commission in the next two months to lower data prices.

A data services inquiry was launched in August 2017, in response to a request from the country’s minister of economic Development, Ebrahim Patel, following complaints from users about high data costs.

“What we found is that there is anti-poor pricing and we see it not only in tariffs but in data bundles as well. The prices for lower bundles are more expensive than higher bundles and there is no persuasive explanation [from the mobile operators] for this,” according to James Hodge, the Competition Commission’s chief economist.

In its final report, the Commission recommends that the two mobile operators must independently reach an agreement with the competition watchdog on substantial reductions on tariff levels, especially prepaid monthly bundles, within two months.

Patel, who is currently the minister of trade and industry says:

“If we want to grow the economy, we need to lower data prices.

“Within policy reflection, we have spoken about economic growth that is inclusive of young people and rural people. When data discriminates against poor people, it goes against public policy.” 

Preliminary evidence suggests that there is scope for price reductions in the region of 30% to 50%.

In addition to the imposed rate cuts, the mobile operators must also reach an agreement to cease ongoing partitioning and price discrimination strategies that may facilitate greater exploitation of market power and anti-poor pricing. The final report found there is a “duopoly between MTN and Vodacom” highlighting that data prices from these two market leaders are cheaper for users who have contracts than for prepaid customers. “The majority of prepaid customers are poor and have to buy daily or hourly data bundles”, says Hodge.

The report came down heaviest on the high costs of prepaid data bundles- to access 1GB prepaid from MTN, customers would have to pay R149, while an hourly data bundle costs R30. 

For Vodacom prepaid customers, 1GB costs R149, while an hourly 1GB data bundle costs R12. These bundles expire after an hour. 

Hodge says it is clear that MTN and Vodacom don’t charge these excessively high data prices in other countries where they operate. 

“There are strong indications that there is exploitative pricing [in South Africa],” he adds.

In response, both players have blamed the government for its failure to release mobile spectrum, highlighting a ‘significant difference in opinion’ between the Competition Commission and ICASA on a number of issues that are critical to data prices in South Africa. 

This difference of opinion, Vodacom says, is most apparent reviewing mobile data prices in relation to the allocation of spectrum to local mobile operators. 

Addressing mobile data prices, ICASA states that South Africa’s prices are neither extremely high nor very low in relation to other African countries or compared with countries that are more similar to South Africa in terms of their size and level of development. 

When put in further context with data on speeds and LTE coverage, it is clear that customers in South Africa are benefiting from a much higher quality of access than those in other African countries, says Vodacom.

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