World Bank lowers sub-Saharan Africa growth forecast for 2018
This week, the World Bank released its biannual Africa’s Pulse report, which includes an update on the region’s economic outlook and a special chapter on boosting productivity. The World Bank report lowered the region’s growth forecast for 2018 from 3.1 percent (April 2018 Africa’s Pulse report) to 2.7 percent, largely due to weak growth in the region’s largest economies: Angola, Nigeria, and South Africa. South Africa is currently in a recession, having recorded two consecutive quarters of negative economic growth. Angola and Nigeria’s recovery from the oil price crash in 2014 suffered from lower oil production in 2018 in both. Excluding the three large economies, growth was above 4 percent in the region’s other economies.
First lady Melania Trump embarks on 5-day trip to Africa
This week, United States First Lady Melania Trump departed for her first solo trip abroad, a five-day tour of four African countries. The countries on her itinerary include Ghana, Malawi, Kenya, and Egypt. In Ghana, the first lady visited infants at the Greater Accra Regional Hospital, where she donated blankets branded with the slogan “Be Best,” a campaign launched in May to focus on overall child well-being, with an emphasis on opioid addiction and online bullying. She also toured a former slave outpost and learned about some of the tragic parts of the country’s history. In Malawi, the first lady toured a local primary school and donated books and soccer balls. On Friday, the first lady visited an elephant orphanage in Kenya and is expected to visit an orphanage.
Experts have commented that the first lady’s trip could put a softer lens on the Trump administration’s international strategies and help close the existing rift between the Trump administration and Africa.
Zambia’s 2019 budget raises taxes on mining companies
Last week, Zambia’s Finance Minister Margaret Mwanakatwe announced several tax changes during her 2019 budget presentation in parliament. The budget includes new taxes and raises rates on other existing ones. The additional revenue will help narrow the fiscal deficit to 6.5 percent of GDP in 2019 (from 7.4 percent this year), as the government works to address its high debt levels. Among the proposed changes are new taxes and increased rates on the mining sector; royalties on copper will increase by 1.5 percentage points from the current rates ranging between 4-6 percent. The budget will also impose an additional 10 percent tax if copper prices cross $7,500 per ton. Precious gemstones and mineral exports will now be subject to a 15 percent export duty. According to Bloomberg, this is the 10th tax change mining companies have faced in the past 16 years. The mining industry in Zambia is opposing the changes, with Zambia Chamber of Mines President, Nathan Chishimba, noting, “tax regime instability, massive increases… will hurt the mining industry.”