Kenya budget strains escalate debt distress risks

2015 ◽  
Keyword(s):  
Real Estate ◽  
Interest Rates ◽  
Fiscal Year ◽  
Content Type ◽  
Revenue Collection ◽  
Finance Minister ◽  
Fiscal Space ◽  
The Government ◽  
Bank Risks ◽  
Economic Outlook

Subject Kenya's economic outlook. Significance Finance Minister Henry Rotich on October 21 announced intentions to implement austerity measures, but without providing details. The July budget for fiscal year 2015-16 revealed shortfalls in revenue collection, expenditure overruns and higher domestic borrowing costs. While thin on details, Rotich's announcement signals that the government may be acknowledging the liquidity crunch that has concerned the Central Bank of Kenya (CBK) since June. Impacts Mounting debt obligations could narrow fiscal space available for growth-enhancing infrastructure. Growth expectations for 2015-16 of 6.0% (compared to 5.3% in 2014-15) are over-ambitious. High domestic interest rates may spur non-performing loans, raising bank risks and hurting real estate growth.

Jamaican budget offers stability, but risks persist

2015 ◽  
Keyword(s):  
Public Sector ◽  
Fiscal Year ◽  
Investment Climate ◽  
Content Type ◽  
Finance Minister ◽  
The Government ◽  
Economic Outlook

Subject Jamaica's economic outlook. Significance The government has worked hard to stabilise the economy after several years of uncertainty. Its policies for the next fiscal year, presented by the finance minister on March 12, set out plans to maintain stability and lay the groundwork for re-invigorating growth. Impacts Sluggish growth will only be boosted by improved productivity and a better investment climate. The debt-to-GDP ratio is unlikely to fall to 100% -- until at least 2020. Continued public sector wage freezes risk undermining support for the economic programme.

Zimbabwe faces uphill task normalising donor relations

2015 ◽  
Keyword(s):  
External Debt ◽  
Job Creation ◽  
Development Plan ◽  
Content Type ◽  
Finance Minister ◽  
Donor Relations ◽  
Labour Costs ◽  
The Government ◽  
Economic Outlook

Subject Zimbabwe economic outlook. Significance On November 26 Finance Minister Patrick Chinamasa presented the 2016 budget articulating the government's IMF-backed plan to clear the backlog of external debt arrears to international creditors. The aim is to normalise relations with Western donors after 15 years of isolation. The government faces a deepening employment crisis, an unfunded development plan and deflationary risks. Impacts The Labour Amendment Bill adopted in August will raise labour costs and discourage job creation. Some deals signed during Xi's visit such as funding for fibre optic broadband may improve long-term competitiveness. However, others such as an agreement for a new Chinese-built parliament will add to the debt load.

Debt, revenue woes to push African states to seek help

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Financial Management ◽  
Sovereign Debt ◽  
Sub Saharan Africa ◽  
Municipal Bond ◽  
Content Type ◽  
Finance Minister ◽  
Sub Saharan ◽  
Commercial Sources ◽  
The Government

Subject Outlook for sovereign debt in sub-Saharan Africa. Significance Nigerian Finance Minister Kemi Adeosun on January 31 announced that the government is in "exploratory talks" with the World Bank to borrow 2.5 billion dollars. Squeezed by low commodity revenues, sub-Saharan African states (SSA) are struggling to manage their external debt, which has grown by 90% to 46.5 billion dollars overall during 2010-14, much of it from commercial sources. Impacts South Africa will dominate SSA municipal bond issuance since most states lack adequate subnational financial management. Donors may use the new loans to Angola and Nigeria as leverage for sharper currency depreciation. Yet this would pressure central banks, which will likely raise interest rates to support thier currency and mitigate inflation. Despite falling copper revenues, Zambia will likely delay seeking IMF assistance since reform conditions will prove politically toxic.

Virus will stymie Seoul's economic recovery hopes

2020 ◽  
Keyword(s):  
South Korea ◽  
Interest Rates ◽  
Economic Recovery ◽  
Gdp Growth ◽  
Content Type ◽  
Finance Minister ◽  
Percentage Points ◽  
Monthly Total ◽  
Real Estate Prices ◽  
Economic Outlook

Subject The economic outlook for South Korea in 2020. Significance Hong Nam-ki, South Korea’s finance minister and deputy premier for economic affairs, admitted on February 3 that the coronavirus outbreak in China could cut South Korea’s GDP growth by up to 0.7 percentage points this year. Hyundai and other carmakers are already suspending production, owing to shortages of key components sourced from China. Impacts The risk to South Korea is less from illness than economic disruption, principally disrupted supply chains and reduced consumption. Tourism is especially vulnerable to damage by individual and collective responses to the coronavirus. GDP growth this year will fall below 2019’s 2%, already the slowest figure since 2009. Demographic pressures are growing, as highlighted by November’s lowest-ever monthly total of births. Moon’s bid to curb real estate prices may inhibit the nominally independent central bank from cutting interest rates to boost demand.

Pakistan will struggle to widen tax base

2019 ◽  
Keyword(s):  
Central Bank ◽  
Financial Support ◽  
Budget Deficit ◽  
Annual Growth ◽  
Fiscal Year ◽  
Tax Base ◽  
Content Type ◽  
Revenue Collection ◽  
The Government

Significance He will release a mini-budget on January 23. Revenue collection in the first half of fiscal year 2018/19 (July-June) showed 3.8% annual growth. The government targets a budget deficit of 5.1% of GDP for 2018/19, down from 6.6% in 2017/18. Impacts Financial support from allies will shape Pakistan’s diplomacy, Islamabad likely to align more closely with Saudi policy. By avoiding an IMF bailout for now, Pakistan would be able to avoid US pressure during talks with the Fund. The central bank will likely undertake monetary tightening.

Bank of Mexico governor nomination sparks uncertainty

2021 ◽  
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Content Type ◽  
Finance Minister ◽  
The Us ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
The Government

Significance AMLO initially nominated Arturo Herrera for the role in June, replacing him as finance minister with Rogelio Ramirez de la O. Incumbent Governor Alejandro Diaz de Leon will stand down at the end of December. Impacts A tighter monetary policy will open a significant gap with US interest rates, helping to stabilise the peso against the US dollar. Given Rodriguez’s provenance, the harmonious relationship between Banxico and the finance ministry will probably continue. The nomination of an unexpected individual to lead the central bank will reaffirm AMLO’s authority on economic matters. Although the finance ministry controls exchange rate policy, the government is not likely to modify the free-floating exchange rate regime.

The problems facing agricultural sector in Zanzibar and the prospects of Waqf-Muzar’ah-supply chain model

Humanomics ◽  
2017 ◽  
Vol 33 (2) ◽  
pp. 189-210 ◽  
Author(s):  
Issa Salim Moh’d ◽  
Mustafa Omar Mohammed ◽  
Buerhan Saiti
Keyword(s):  
Supply Chain ◽  
Interest Rates ◽  
Financial Models ◽  
Agricultural Sector ◽  
Chain Model ◽  
Content Type ◽  
High Interest ◽  
Supply Chain Model ◽  
The Government ◽  
Clove Industry

Purpose This paper aims to identify the appropriate model to address the financial challenges in agricultural sector in Zanzibar. Since the middle of 1960, clove production has continually and significantly decreased because of some problems and challenges that include financial ones. The financial intermediaries such as banks, cooperatives and micro-enterprises provide micro-financing to the farmers with high interest rates along with collateral requirements. The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. Design/methodology/approach The authors will review and examine several existing financial models, identify the issues and challenges of the current financial models and propose an appropriate Islamic financing model. Findings The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. This study, therefore, proposed a Waqf-Muzara’ah-supply chain model to address the financial challenge. Partnership arrangement is also suggested in the model to mitigate the issues of high interest rates and collateral that constrains the financial ability of the farmers and their agricultural output. Originality/value The contribution of the agricultural sector to the economic development of Zanzibar Islands is considerable. As one of the important agricultural sectors, the clove industry was the economic backbone of the government of Zanzibar. This study is believed to be a pioneering work; hence, it is the first study that investigates empirically the challenges facing the clove industry in Zanzibar.

Australia budget keeps defence spending commitments

2021 ◽  
Keyword(s):  
South China Sea ◽  
Interest Rates ◽  
Fiscal Year ◽  
National Politics ◽  
Content Type ◽  
Defence Spending ◽  
Low Interest Rates ◽  
Defence Expenditure ◽  
Conducive Environment ◽  
Made In

Significance With an election due soon, the governing Liberal-National Coalition’s pledge to ring-fence the defence spending commitments made in 2016 was under some pressure. However, defence spending in fiscal year 2021/22 will grow by over 4% in real terms and stay above the symbolic level of 2% of GDP. Impacts Growing popular and bipartisan concern with Chinese aggression is a conducive environment for increased defence spending. Low interest rates and a stronger Australian dollar are also supporting sustained levels of defence expenditure. Washington may increase pressure on Australia to conduct freedom of navigation exercises in the South China Sea. Major business groups are concerned that increased criticism of China in national politics will produce yet more punitive backlash.

The South African public service wage bill deadlock in 2021: living on the edge

2021 ◽  
Vol 11 (4) ◽  
pp. 1-15
Author(s):  
Marianne Matthee ◽  
Albert Wöcke
Keyword(s):  
Fiscal Policy ◽  
Learning Outcomes ◽  
South African ◽  
Public Service ◽  
Subject Area ◽  
The South ◽  
Content Type ◽  
Academic Level ◽  
Finance Minister ◽  
The Government

Subject area Macro-Economics. Study level/applicability Undergraduate and MBA. Case overview The COVID 19 pandemic-related restrictions devastated South Africa’s economy in 2020 and although the restrictions were generally less damaging than in 2020, the government had to budget for vaccinations and rebuild the economy. Public service unions had just announced that they were demanding an increase of 4% above inflation for their members and that they were preparing for a strike. They were bitter about the fact that the South African Government had withdrawn from the last year of a three-year wage agreement in February 2020 and their members had not received an increase for the two years. These demands and Finance Minister Mboweni’s response to them had to consider the structural and cyclical impact on the fiscus and economy. Expected learning outcomes The learning outcomes are as follows: understand the general objectives of fiscal policy and stakeholders’ interests; understand the tradeoffs in fiscal policy and the implications of taking a position; and make recommendations based on reasoned judgements about those recommendations. Complexity academic level Undergraduate and MBA level courses on Macro Economics. Supplementary materials Teaching notes are available for educators only. Subject code CSS 10: Public Sector Management.

Australian central bank holds rate as growth slips

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Interest Rates ◽  
Labour Markets ◽  
Content Type ◽  
Commercial Lenders ◽  
The Government ◽  
Roll Out ◽  
Growth Forecasts

Significance The RBA has cut its growth forecasts amid rising job losses, weakening demand and increasing signs that the latest COVID-19 lockdowns will continue to slow the economy until the pace of the vaccine roll-out programme can be increased. Impacts Although the RBA is independent, the government will hope it keeps rates low ahead of the elections due next year. Commercial lenders could raise interest rates independently of the RBA if inflation remains high. Wage pressures will re-emerge as labour markets tighten but may be mitigated by the extent of underemployment. Economic growth will be uneven across the country in coming months as pandemic-related restrictions vary by location.

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