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Djibouti commissions $3.5 billion Chinese-built free trade zone

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Djibouti commissioned a $3.5 billion, Chinese-built free trade zone on Thursday, deepening ties with the Asian giant and helping the Horn of Africa nation generate more jobs for its youths.

Djibouti, with a population of 876,000, already hosts Chinese, U.S. and French naval bases and it also handles roughly 95 percent of the goods imported by Ethiopia, its land-locked neighbour with 99 million people.

The zone will be jointly operated by Djibouti Ports and Free Zones Authority and China’s Merchants Holdings company.

The zone which will house manufacturing and warehouse facilities, an export-processing area and a services centre, is expected to handle trade worth $7 billion within two years, and create 15,000 jobs when complete.

 

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Ghanaian government boost Agric sector lending with GHC400m provision.

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The Ghanaian Government has set aside GH¢400 million, with an additional funding of $14.0 million from the Africa Development Bank, towards the establishment and operationalisation of the Ghana Incentive Base Risk Sharing System for Agricultural Lending (GIRSAL) next year.

This system would to help manage the risks and stimulate private sector lending to the agricultural sector by providing guarantees to promote commercial bank lending.



Mr Ken Ofori-Atta, Minister of Finance, announced this when he presented the 2019 Budget Statement and Economic Policy of the Government to Parliament, The Budget is on the theme: ‘A Stronger Economy for Jobs and Prosperity’.

He said the Government would launch the livestock model of Planting for Food and Jobs dubbed: “Rearing for Food and Jobs” (RFJ) with the objective of increasing the production of selected livestock, especially poultry.

The Government, he said, believed that the country could leverage the PFJ and RFJ programmes and other efforts in agriculture to reduce the large food imports.

He said following a year of implementation of the PFJs Programme, the agricultural sector witnessed a growth rate of 8.4 per cent in 2017 and this was after almost a decade of erratic sector performance with an average growth rate of 3.4 per cent.

Mr Ofori-Atta said on account of this massive success, the Government implemented an expanded version of the PFJ in 2018, with more ambitious targets.

He said compared with a target of 500,000 farmers, a total of 577,000 farmers were supplied with subsidised fertilisers and seeds for the 2018 cropping season. ‘We expect another highly successful year and in 2019, we plan to expand the programme to cover a million farmers.’

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The Minister said as a country, ‘we spend over $2 billion every year importing food, for example, we import over a billion dollars of rice, $ 320 million of sugar, and $374 million of poultry.’

He said most of these the country could produce here in Ghana; creating jobs and saving foreign exchange.

It was, therefore, a key goal of the Government, he said, to replace a significant fraction of these imports with domestic production in the medium-term.

He said in the case of rice, the strategy was to increase volumes through increased yields of rice by expanding production areas in irrigated schemes, valleys and low lands around the country.

Mr Ofori-Atta said this strategy would be underpinned by making available to farmers, improved and certified seeds, subsidised fertilizers, enhanced access to mechanised harvesters to reduce post-harvest losses due to traditional labour-intensive threshing, and encourage private sector investment in milling facilities.

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‘This will ensure that the quality of locally processed rice will be at par with imported rice,’ he added.

In the case of poultry, the Minister said about 70 per cent of the cost of production was from feed, which in turn was primarily determined by the cost and availability of maize and soya bean.

He said in order to bring down the cost of feed and make poultry production competitive, the Ministry of Food and Agriculture was working on a programme to sustainably boost soybean production through the provision of improved and certified seeds, subsidised fertilisers and harvest equipment to reduce field losses.

The Minister said adequate good storage for agricultural produce was a challenge that the country must address to avoid a situation, where the increased agricultural production arising from the support to farmers would end up going to waste.

‘In 2019, Government expects to increase its warehouse storage capacity by around 80,000 metric tonnes,’ he said.

On World Cocoa prices, he said the prices remained low after declining by about a third in the 2017/2018 season.

However, despite the significant decline, the Government maintained the producer price at GH¢7,600.00 per tonne to ensure that farmers did not suffer loss of income and purchased 904,000 metric tonnes of cocoa in the 2017/18 season.

He said Ghana needed to add value to its Cocoa output and Ghana, adding that, together with Cote d’Ivoire, they produced about 60 per cent of the world’s Cocoa.

‘But we earn only $6 billion of the world Cocoa value chain earnings of $125 billion—just about five per cent,’ he pointed out.

Through the Ghana-Cote d’Ivoire Cocoa Initiative, the Government, he said, was working on several fronts to increase the value they gained from Cocoa.

They include: Vigorously promoting both domestic and international cocoa consumption; and initiatives for market expansion for exports of cocoa products to Asia; and provision of incentives to the private sector to set up cocoa processing factories.



The Minister said the Government, had also as part of its strategy, to revamp the agricultural sector by placing focus on the tree crop subsector.

‘Cabinet has approved the formation of a Tree Crop Development Authority (GTCDA) to regulate and create a favourable environment for the growth and development of that sector,’ he said.

The Authority will initially regulate the cashew, sheanut butter, oil palm and the rubber crop sub-sectors, with other tree crops being added as and when necessary.

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South Africa Rand stables against embattled pound

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The rand was relatively stable on Friday morning, and headed for its best week against the beleaguered pound in about nine weeks.



The fallout from the failure of the UK’s Brexit plan is on traders’ radars, overshadowing the controversial and divisive land reform debate, which has previously hurt the rand.

“May has seen her plans for ‘Shmexit’ torn apart: that is what one could dub a Brexit that is literally leaving the EU, but which in no way regains sovereignty in key areas, and which might be impossible to ever change further unilaterally,” UK-based Rabobank International analyst Michael Every said in a note.

“Indeed, we have seen a swathe of key ministerial resignations, and suggestions there are enough MPs’ votes in hand to trigger a leadership election as soon as next week.”

The pound tanked against a host of currencies on the news, but has since stabilised at lower levels as markets await further developments.

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The rand has benefited from the ensuing market volatility, settling a hefty 3% stronger against the pound on Thursday night. Local bonds have benefited, too.

The local currency has fared better against the dollar so far this week, strengthening the case for a big cut in fuel prices in December.

According to AA, the petrol price is likely to be cut by R1.54 a litre, diesel by 92c and illuminating paraffin 85c.

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The expected drop in fuel prices comes as oil prices fall: Brent crude is about 10% lower in November, according to Iress data.

At 10.12am, the rand was 0.2% softer against the dollar at R14.2075, 0.32% weaker against the euro at R16.12 and 0.36% softer against the pound at R18.1858. The euro was 0.14% stronger to $1.1346.

The yield on the benchmark R186 bond slipped to 9.145% in early trade, from 9.17% at its last settlement.

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