Africa Briefs

Drought to drag down Kenya's growth

Dry weather across much of Kenya is likely to curb its economic growth this year, the World Bank said yesterday, cutting its forecast to 5.7% growth.

Kenya's economy expanded by an estimated 5.8% last year, the bank said in its latest report on the country, as the country recovered from a slowdown the year before caused by another drought and election jitters.

The so-called long rains season from March till May hasn't started in most of the country. Agriculture accounts for close to a third of Kenya's annual economic output.

If the government fails to meet its revenue collection targets, the economy could face more risk from macroeconomic instability, the bank said in the report.

Externally, Kenya faces risks from global trade tensions, which could cut its exports and the funds sent home by Kenyans abroad. – Nampa/Reuters

Mozambique ex-finance minister can be extradited

A South African court has ruled that Mozambique's former finance minister Manuel Chang can be extradited to the United States, where he is wanted on charges related to a US$2 billion debt scandal, one of Chang's lawyers said on Monday.

While a blow to Chang's legal team, who would prefer him to face related charges in Mozambique, the judge's ruling effectively constitutes only a recommendation to South Africa's justice minister, who has the final say.

Chang has been in custody in South Africa since December when he was arrested at the request of the United States for his alleged involvement in US$2 billion of borrowing that US authorities say was fraudulent.

Chang signed off on the loans, which were guaranteed by the government but not disclosed, during his time as finance minister. Mozambique's subsequent acknowledgement of the undisclosed borrowing prompted donors to cut off support and triggered a currency collapse.

Chang's lawyers had argued against him being sent to the United States, where a trial would likely lift the lid on as-yet unknown details of the debt affair with potential implications for senior members of Mozambique's ruling party ahead of elections in October. – Nampa/Reuters

Egypt to slash fuel subsidies

Egypt will remove subsidies on most energy products by June 15, it told the International Monetary Fund in a January letter released by the IMF on Saturday as part of a review of Cairo's three-year, US$12 billion loan programme with the lender.

This will mean increasing the price to consumers of gasoline, diesel, kerosene and fuel oil, which are now at 85-90% of their international cost, said the letter, which is dated January 27.

The letter from Egypt's finance minister and central bank governor was included in an IMF staff report dated January 28 and published following the disbursement in February of the fifth out of six tranches of the loan.

The loan programme began in 2016 and is tied to reforms that have included a sharp devaluation of the Egyptian pound and the introduction of a value-added tax. They have helped steady Egypt's economy but also put millions of Egyptians under increased economic strain.

Fuel prices have increased steadily over the past three years. LPG and fuel oil used for electricity generation and bakeries are not included in the commitment to reaching full cost recovery through subsidy cuts, the letter said. – Nampa/Reuters