Economy
IMF Predicts 4.3% Growth for Madagascar in 2017
By Dipo Olowookere
The International Monetary Fund (IMF) has disclosed that Madagascar’s recent economic performance had been encouraging, with GDP growth reaching 4.2 percent in 2016.
From March 9–22, 2017, a team from the IMF led by Mr Marshall Mills, Mission Chief for Madagascar, visited Antananarivo from to conduct the 2017 Article IV Consultation and hold discussions on the first review of Madagascar’s economic reform program supported by the IMF’s three-year Extended Credit Facility (ECF).
At the end of the mission, Mr Mills said the macroeconomic outlook in the near term was generally positive, aided by growth in public investment, continued strength in export processing zones, and a recovery in mining.
He said this outlook was diminished by a drought in the central plateau and the cyclone that hit the northeast, saying the full impact was not yet clear, and the Fund was continuing discussions with the authorities and development partners to help identify the scale of the damage and financing to address urgent needs.
Growth is currently projected to reach 4.3 percent in 2017, while inflation is expected to remain contained at 7.7 percent. Positive external developments prior to the cyclone enabled the central bank to boost reserves significantly, reaching USD 1.12 billion at end-February 2017, he said.
“The authorities have achieved significant progress under the ECF-supported program, although challenges remain. All quantitative performance criteria for end-December 2016 were met, supported by prudent monetary policy and improving revenue collection that surpassed targets. The government also implemented the measures envisioned in most of the program’s structural benchmarks, although some with a delay.
“Difficulties at state-owned enterprises, especially JIRAMA and Air Madagascar, continue to weigh on the budget and the economy. The difficulties of the public utility JIRAMA, aggravated by drought, will require additional transfers of around 0.5 percent of GDP. However, new management is developing a business plan to restructure operations, which will reduce costs, improve revenue, and contain transfer needs. Air Madagascar is negotiating a strategic partnership, which is expected to involve a substantial, one-off transfer from the government to offset past losses. Staff and the authorities are continuing discussions on recapitalizing Air Madagascar, including obtaining financial assurances, and on restructuring JIRAMA.
“In the medium-term, the authorities aim to break Madagascar’s pattern of low growth by scaling up priority spending and accelerating structural reform. Drawing on substantial pledges of grants and concessional loans at the donor conference of December 2016, the authorities intend to boost investment and social spending steadily from 2017 to 2019, while maintaining a moderate risk of debt distress. To ensure the success of the scaling up and to minimize risks, the authorities are enhancing their investment management and monitoring capacity. Revised frameworks to encourage private investment are also under consideration for mining, petroleum, and special economic zones. Staff stressed the need to incentivize private investment efficiently, without undermining the government’s key objectives of enhancing revenue and containing fiscal risks.
“The authorities continue to make progress in strengthening the legal and institutional framework for enhancing governance and fighting corruption. The government is committed to submitting draft laws on asset recovery, international cooperation, and combating anti-money laundering to the next parliamentary session. It remains important to follow through with implementation.
“The central bank has successfully maintained stable inflation while pursuing reforms to improve monetary policy effectiveness and financial stability. Enhancing the effectiveness of policy instruments, which requires an efficient interbank and repo markets, is a priority. Reforms are being put in place to deepen financial intermediation and inclusion, such as the new law on electronic money. Revisions under preparation to banking and microfinance laws will reinforce stability, as will the ongoing audit of two government-owned non-bank financial institutions.
“The mission met with President Hery Rajaonarimampianina, Speaker of the National Assembly Jean Max Rakotomamonjy, Prime Minister Olivier Solonandrasana, Minister of Finance and Budget Gervais Rakotoarimanana, Minister of Economy and Planning and interim Minister of Energy and Hydrocarbons Herilanto Raveloharison, Central Bank of Madagascar Governor Alain Rasolofondraibe, Commissioner General Léon Rajaobelina, and other members of parliament, senior officials, as well as private sector representatives, civil society and development partners,” Mr Mills said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
