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IMF warns African countries against debt distress by borrowing.

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Sub-Saharan African nations are at growing risk of debt distress because of heavy borrowing and gaping deficits, despite an overall uptick in economic growth, the International Monetary Fund said on Tuesday.

The sober assessment came as African countries continue to tap international debt markets and issue record levels of debt in foreign currencies, spurred on by insatiable investor demand for yields.



“What really we’re concerned about is the pace of increase, rather than the average,” IMFAfrica Director Abebe Aemro Selassie told Reuters at the launch of its economic outlook for the region in Accra.

“What we’re calling for right now is that those countries are going to need to go through fiscal consolidation,” he said, adding that oil producers and other resource-dependent economies were seeking the sharpest growth in their debt loads.

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The Fund projected the rate of economic expansion would rise to 3.4 percent this year, up from 2.8 percent in 2017, boosted by global growth and higher commodity prices.

Slower growth in South Africa and Nigeria – the continent’s two largest economies – weighed on the region-wide average, but the IMF expects growth to pick up in around two-thirds of African nations. However, under current policies, that rate is expected to plateau below 4 percent over the medium term.

GROWTH SEEN SLOWING

Meanwhile, around 40 percent of low-income countries in the region are now in debt distress or at high risk of it, the IMF report said. And refinancing that debt could soon become more costly.

“The current growth spurt in advanced economies is expected to taper off, and the borrowing terms for the region’s frontier markets will likely become less favourable … which could coincide with higher refinancing needs for many countries across the region,” it said.

African governments issued a record $7.5 billion in sovereign bonds last year, 10 times more than in 2016. And they have issued or plan to issue over $11 billion in additional debt in the first half of 2018 alone, the report said.

Foreign currency debt increased by 40 percent from 2010-13 to 2017 and now accounts for about 60 percent of the region’s total public debt on average, IMF data showed. Average interest payments, meanwhile, increased from 4 percent of expenditures in 2013 to 12 percent in 2017.

Six countries – Chad, Eritrea, Mozambique, Congo Republic, South Sudan and Zimbabwe – were judged to be in debt distress at the end of last year. And the IMF’s ratings for Zambia and Ethiopia were changed from moderate to “high risk of debt distress.”

The IMF conceded that Africa’s enormous needs will continue to demand heavy investments to build infrastructure and social development. But to do so while avoiding the risk of a debt trap, the continent, which currently has the lowest revenue-to-GDP ratio in the world, will need to become more self-reliant.

“Borrowing to finance spending is part of the macroeconomic policy tool kits which all countries use,” Selassie said. “But over the medium to long-term they have to rely more on domestic revenues, tax revenues to address their development spending needs.”

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REUTERS

Crime

Sex in car in Nigeria public places not a crime – NPF

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The Nigeria Police has stated that having sex in a car in public places is not a crime.




The force through ACP Abayomi Shogunle who is in charge of Nigeria Police Public Complaint Response Unit (PPCRU) stated this on his official Twitter page.

According to Abayomi Shogunle, having sex in a car in a public place is not a crime.

He, however, stated conditions where the parties can be arrested for having sex in public place.

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He wrote: “NO. Sex in a car in a public place is not a crime in Nigeria provided; 1. Location is not a place of worship.

2. Parties are 18 yrs+

3. The act is consensual (agreed to by parties)

4. Parties are of the opposite sex if threatened with an arrest over above, please contact the police.”

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Motherland News

Somalia: 14 Lawmakers flops impeachment move against President Farmaajo.

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An impeachment motion brought against Somalia president Mohamed Abdullahi Farmaajo has been dropped after the required number of petitioners was not met.



The main crust of the petition was because of international deals Farmaajo had signed with neighbouring Ethiopia and Eritrea. The issue of unilateral appointments in the army and judiciary was also highlighted.

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Fourteen out of an initial 92 MPs who signed a petition last Sunday rescinded their decision crippling the motion which had insufficient members to proceed with.

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Reports indicate that the fourteen said they did not support the motion but had been included wrongly.

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