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United States Tells African Countries Not To Expect Debt Relief

African countries running up debt they won’t be able to pay back, including to China, should not expect to be bailed out by western-sponsored debt relief, the United States’ top Africa diplomat warned.

The International Monetary Fund and World Bank began the Heavily Indebted Poor Countries (HIPC) Initiative in 1996 to help the world’s poorest countries clear billions of dollars worth of unsustainable debt.

But Africa is facing another potential debt crisis today, with around 40 percent of low-income countries in the region now in debt distress or at high risk of it, according to an IMF report released a year ago.

“We went through, just in the last 20 years, this big debt forgiveness for a lot of African countries,” said U.S. Assistant Secretary of State for African Affairs Tibor Nagy, referring to the HIPC programme.

“Now all of a sudden are we going to go through another cycle of that? … I certainly would not be sympathetic, and I don’t think my administration would be sympathetic to that kind of situation,” he told reporters in Pretoria, South Africa, recently.

Under Donald Trump’s administration, the United States has criticised China for pushing poor countries into debt, mainly through lending for large-scale infrastructure projects. It has warned those nations risk losing control of strategic assets if they can’t repay the Chinese loans.

Sri Lanka formally handed over commercial activities in its main southern port in the town of Hambantota to a Chinese company in 2017 as part of a plan to convert $6 billion (£4.7 billion) of loans that Sri Lanka owes China into equity.

U.S. officials have warned that a strategic port in the tiny Horn of Africa nation of Djibouti could be next, a prospect the government there has denied.

From 2000 to 2016, China loaned around $125 billion to the continent, according to data from the China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies.

And a number of African countries form part of China’s $126 billion Belt and Road Initiative to link China by sea and land through an infrastructure network with southeast and central Asia, the Middle East, Europe and Africa.

China has rejected criticism of its lending in Africa. And debt campaigners point to the fact that much of Africa’s current debt load consists of commercial debt to western financial institutions or Eurobonds, which are more expensive to service than Chinese loans.

“All of these countries are sovereign states, so it’s for them to decide who they want to trade with,” Nagy said. “We feel we have an obligation to point out to them when we believe they are getting into severe economic difficulties.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

World Bank Invests $200 million in Egyptian SMEs, Focuses on Women-Led Projects

The World Bank (WB) has approved the allocation of $200 million for backing entrepreneurship and SMEs in Egypt, giving top priority to women-run projects, the country’s Investment Minister Sahar Nasr said.

It has been widely proven that companies run by women are one of the fastest growing small sized companies, she added.

The Investment Ministry seeks encouraging businesswomen to make investments, as well as empowering women to get funds, Nasr said while addressing a session of the World Bank spring meeting under the theme “A New Economy for the Middle East and North Africa”.

She highlighted the importance of boosting support offered by the bank to the private sector, along with encouraging innovation in the Arab region.

Tahya Misr (Long Live Egypt) fund plays a key role in supporting women-run projects like “Mastora” project which targets breadwinning mothers, Nasr said, pointing out to the ongoing coordination between her ministry and the SMEs development program.

Meanwhile, World Bank Group Vice President for Middle East and North Africa Ferid Belhaj praised progress achieved by Egypt in the domains of empowering women and supporting SMEs, along with the domain of communication and information technology.

Belhaj also commanded the digital conversion adopted by Egypt’s government bodies along side efforts of the government to turn itself into a digital one through creating a digital participatory environment among state ministries and institutions.

Meanwhile, the two sides asserted the importance of joint regional cooperation with the aim of enhancing the regional economic integration that targets improving the pro-emerging projects business climate.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

South Africa-India Trade Relations Deepen

Two KwaZulu-Natal companies are on a mission to explore export opportunities for their products in India. Royalty Agri-Biz, which is based in Pietermaritzburg and Your Best Choice, which is located in Pinetown, will be part of the Outward Trade and Investment Mission to New Delhi and Mumbai in March 2019.

The mission is organised and funded by the Department of Trade and Industry (the dti). The purpose of the mission is to increase the trade of value-added goods and investment between South Africa and India.

The Director of Royalty Agri-Biz, Ms Fatima Cele says the trip to India could not have come at a more opportune time as the company is in the process of expanding by acquiring a tannery that will enable it to produce leather and leather products for the export market.

“We are currently sourcing cow hides from the local farmers and various communities. We then process them and supply people who make drums, shields, cushions and carpets. But we have decided to look at the bigger market and produce leather for the manufacturing of leather products. As part of our process to grow our business and achieve our objectives, we are in the process of acquiring a fully-fledged tannery from which we will be able to produce leather and leather products for the export market,” says Cele.

She also said that she will be using the trip to India to learn about the Indian leather market and to explore possible opportunities that her company can take advantage of and export leather and leather products to India.

“India is big in leather manufacturing and the mission will provide us with an opportunity to get to know how their market functions and how we can penetrate it as suppliers of leather or the actual leather products. We have undertaken a visit to China where we identify possible export opportunities and we are excited that our plans to export our products will gradually fall into place as we are optimistic about the India trip,” adds Cele.

The Chief Executive Officer of Your Best Choice, Mr Subasen Naidoo says his company is on the verge of breaking into the export market after shipping off samples of his moringa products to the United States of America, Colombia, Brazil, Ghana. Australia and the United Kingdom.

“We attended the Americas Food and Beverage Show in Miami through the assistance of the dti in October last year where we got a good order from Ghana and generated a number of good trade leads in America and other countries. We are excited that these leads are steadily developing into concrete deals. As a result, we are on the verge of signing contracts in Brazil and the US,” says Naidoo.

He adds that he will be targeting the fast food market in India and is confident that their proudly South African, organically-produced moringa Ice Tea and sugar-free energy drink will receive a warm reception in the country.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].