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IMF may grant Zambia $1.3bn to plug budget deficit

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  • As EU threatens year-long delay in Brexit talks over UK’s negotiating stance

The International Monetary Fund (IMF) may grant Zambia up to 1.3 billion dollar to help plug a budget deficit of around 7 per cent, the lender’s mission chief said on Saturday.

Tsidi Tsikata told a joint news conference with the Zambian Finance Ministry in Lusaka that a decision would be made by the IMF board in August.

Tsikata said the three-year credit facility would halve the deficit to around 4 per cent of Gross National Product by 2019.

He said Zambia needed to take concrete steps to achieve fiscal consolidation targets outlined in the 2017 budget, which include improving revenue collection, limiting borrowing and scaling back on new capital projects.

“We aim to reach understanding in the coming weeks that would form the basis for presenting the authorities’ request for an ECF (Extended Credit Facility) arrangement and report on the 2017 Article IV consultation to the IMF board in August 2017,” he said.

Africa’s second-biggest copper producer has suffered from the steep commodity price drop of recent years.

Last March, Zambia began talks with the IMF about a potential loan package after agreeing that its budget deficit was not sustainable.

The southern African country joined other sub-Saharan nations in borrowing on the euro bond market between 2012 and 2015, selling dollar-denominated debt.

The government relied on external financing as revenues failed to keep pace with spending.

In the meantime, Theresa May is to be told the EU will take a year to draft a new mandate for its chief negotiator, Michel Barnier, effectively killing the Brexit negotiations, if she insists on discussing a future trade relationship at the same time as the UK’s divorce bill.

In a sign of growing impatience with the shambolic state of the British side of the talks, senior EU sources said that if London insisted on talking about a free trade deal before the issues of its divorce bill, citizens rights and the border in Ireland were sufficiently resolved, it would be met with a blunt response.

“If they don’t accept the phased negotiations then we will take a year to draw up a new set of negotiating guidelines for Barnier,” one senior EU diplomat said, adding that the EU could not understand Britain’s continued claim that it would be able to discuss trade and the divorce terms in parallel.

The EU’s 27 leaders formally agreed to give Barnier a narrow set of tasks at a summit in April and they have no intention of rethinking the so-called phased approach when they meet May at a European summit on 22-23 June.

Formal Brexit talks are due to begin on 19 June, the same day as the Queen’s speech, at which point it will be known whether May has secured the support of a majority of MPs for her policy agenda.

The Department for Exiting the European Union (DExEU) sent a note to the European commission on Friday evening to signal that the government was operational and pre-negotiation talks about logistics should begin this week as planned.

Olly Robbins, May’s EU adviser, told his European counterparts: “The prime minister has directed that the procedures for preparing the negotiations for the formal withdrawal from the European Union should start as soon as possible.”

There is some scepticism in Brussels, however, about the ability of May’s minority administration to make effective decisions.

The threat to take a year out of the already dwindling window for negotiations under article 50 of the Lisbon treaty illustrates the intense frustration felt in Brussels.

The European commission president, Jean-Claude Juncker, had privately urged May to hold a general election on several occasions, hoping she would be able to secure a big enough majority to free herself from the whim of the hardline Brexiters in the cabinet, only to be left dismayed by the result.

An EU source disclosed that Brussels had also been secretly briefing Downing Street on the 27 member states’ negotiating position for months, well ahead of it being public, to allow the government to shape its response.

“They have had everything, sometimes before senior people here have seen the positions”, the source said. “May has known about the sequencing of talks since last September. None of this has been a surprise to her.”

Roberto Gualtieri, an Italian Socialist who leads his group on Brexit, said: “The previous government did not show a full awareness of what the negotiation is going to be,” Gualtieri said. “I hope the interlocutor will be fully aware.”

Elmar Brok, a senior MEP in Germany’s ruling centre-right party, said the EU would be open-minded if Britain reneged on its pledge to come out of the single market and the customs union following the election result. “We are open to everything from internal market and customs union to a free trade agreement. It depends on the flexibility of the British government. We want to keep the damage of Brexit low,” he said.

Additional report from Guardian

Economy

Equity Market Opens With N324bn Gain, eTranzact, Champion Lead Losers Table 

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Equity Market Opens With N324bn Gain, eTranzact, Champion Lead Losers Table 

 The Nigerian equity market on Monday opened the week on a positive note with a gain of 0.58 per cent.

Consequently, investors gained N324 billion or 0.58 per cent, as the market capitalisation which opened at N56.128 trillion, closed at N56.452 trillion.

The All-Share Index also closed 0.58 per cent or 573 points stronger to close at 99,793.71 as against 99,221.14 recorded on Friday.

As a result, the Year-To-Date (YTD) return rose to 33.46 per cent.

The market’s positive performance was primarily driven by gains in Seplat, Guaranty Trust Holding Company (GTCO) Zenith Bank, United Bank For Africa(UBA), Transcorp Hotel and Nigerian Breweries, among other advanced equities.

Market breadth closed positive with 30 gainers and 10 losers on the floor of the Exchange.

On the gainers’ chart, Flour Mill led by 10 per cent to close at N41.80 per share.

Total Energies followed closely by 9.98 per cent to close at N353.60 per share.

Access Corporation gained 9.86 per cent to close at N18.95, Chams rose by 9.74 per cent to close at N1.69, and Veritas Kapital Assurance advanced by 9.52 per cent to close at 69k per share.

On the other side, eTranzact led the losers’ chart to close at N4.55, and Daar Communications trailed at 9.52 per cent to close at 57k per share.

Champion lost 6.67 per cent to close at N2.80, Unity Bank shed 6.67 per cent to close at N1.12 and Wapic Insurance went down by 2.86 per cent to close at 68k per share.

Market analysis revealed that trade turnover settled higher relative to the previous session with the value of transactions up by 83.55 per cent.

A total of 963.54 million shares valued at N13.50 billion were exchanged in 8,657 deals, compared to 388.02 million shares valued at N7.35 billion exchanged in 7,106 deals.

Meanwhile, Fidelity Bank led the activity chart in volume and value with 605.26 million shares worth N6.03 billion, Access Corporation followed by 93.07 million shares valued at N1.74 billion.

UBA transacted 58.73 million shares worth N1.26 billion, Nigerian Breweries traded 45.26 million shares valued at N1.27 billion and Zenith Bank sold 16.08 million shares worth N539.55 million.

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Economy

Strike: Labour records 100% compliance in Niger, As Anambra Records 90% Compliance

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Strike: Labour records 100% compliance in Niger, As Anambra Records 90% Compliance

Mr Ibrahim Gana, Chairman of Trade Union Congress (TUC) in Niger, on Monday, said the union recorded 100 per cent success compliance with the ongoing strike over the minimum wage in the state.

He said this in an interview with newsmen shortly after monitoring the level of compliance in Minna, the state capital.

Gana said that unlike in the past, the officials of organised labour did not struggle with workers in their offices this time around.

“This is a fantastic strike we have ever had, the level of compliance is 100 per cent, and we didn’t struggle with people in their offices this time around.

“Just a circular that workers should comply with the national directive of both NLC and TUC and virtually everywhere we have gone we have 100 per cent compliance.

He said that the level of compliance indicates that workers were beginning to listen to the labour leaders and also understanding the yearnings of the union in the country.

The chairman said both Federal and state organisations observed total compliance, adding that the strike would continue until the union received further directives from its national body.

It was reported that parts of organisations shut down by NLC included the Minna General Hospital, Bola Ahmed Tinubu International Airport, Federal Inland Revenue and the state High Court.

Other places visited by the union officials were the Niger State House of Assembly, the state Secretariat, the Office of the Secretary to the Niger Government and the Office of the Deputy Governor.

It was also recalled that NLC had on June 1, announced a nationwide strike commencing on June 3, following the tripartite committee’s failure to reach an agreement on a new minimum wage for workers.

In addition, unions are protesting against recent hikes in electricity tariffs, which they said have placed an undue burden on workers and consumers across the country. 

In a related development, Mr Humphrey Nwafor, Chairman of the Nigeria Labour Congress (NLC) in Anambra on Monday, said that the organised labour recorded 90 per cent compliance in the state.

Nwafor told newsmen after going around Awka to monitor compliance in Awka and its environs.

Offices at the federal and state secretariats, the state House of Assembly schools, banks and courts did not open for business.

Nwafor, while commending union leaders for their cooperation, said the strike would continue until the federal government yielded to their demands

“To be honest with you, I am very much delighted with the Anambra workers’ total compliance to the strike.

 “Picketing is ongoing across the state according to the directive from the national body, and it will continue until 6 p.m. to ensure that no office is open for any administrative businesses,” he said

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Economy

NGX: Investors Lose N103bn As Trading Continues Amid Strike

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Equity Market Opens With N324bn Gain, eTranzact, Champion Lead Losers Table 

…ETranzact, Jaiz Bank lead losers’ table

Opening the week, the equity market halted last session’s winning streak as investors lost N103 billion, following sell-offs in Tier-one banking stocks and cautious trading.

Specifically, sell-offs in FBN Holdings, United Bank For Africa (UBA) and Access Corporation, Fidelity Bank, Transnational Corporation, Nigerian Breweries, WAPCO, and ETranzact, among other declined stocks, drove the market’s weak performance.

Consequently, the market capitalisation which opened at N56.172 trillion, lost N103 billion or 0.18 per cent to close at N56.069 trillion.

The All-Share Index also shed 0.18 per cent or 112 points, to settle at 99,118.86, as against 99,300.38 recorded on Friday.

As a result, the Year-To-Date (YTD) return fell to 32.56 per cent.

However, while investors traded cautiously, the losses recorded on the Exchange were not related to the ongoing indefinite strike embarked upon by workers under the auspices of the Nigeria Labour Congress (NLC) and the Trade Union Congress(TUC).

Reacting, a Stockbroker with Global View Capital Ltd., Mr Haruna Kebira, said that trading on the Exchange was not usually affected by such national industrial actions, except public holidays declared by the Federal Government.

Kebira explained that this was because the Exchange Group did not belong to any workers’ union, hence labour union leaders usually did not interrupt trading on the floor of the Exchange during strikes.

The stockbroker noted that the first week of a new month usually experienced a slowdown of activities that might lead to such losses experienced at the day’s trading.

He stated that the bullish run that dominated the equity market last week was a result of month-end effect activities.

“The market is expected to pick up positively by mid-week.

“The month of June is usually positive for the market because investors who just received their dividends are investing back into the market, so the market will surely bounce back,” Kebira said.

However, the market breadth closed positive with 23 gainers and 17 losers on the floor of the Exchange.

On the gainers’ table, Cornerstone Insurance, and Deap Capital Management and Trust Plc led by 10 per cent each to close at N2.09 and 44k per share respectively.

Oando followed by 9.75 per cent to close at N12.95, Veritas Kapital Assurance rose by 8.47 per cent to close at 64k and RTBriscoe gained 8.33 per cent to close at 52k per share.

On the other hand, ETranzact led the losers’ table with 9.82 per cent to close at N5.05 while Unity Bank trailed closely by 9.80 per cent to close at N1.38 per share.

Jaiz Bank declined by 9.65 per cent to close at N2.06, McNichols Plc shed 9.09 per cent to close at N1.00 and Japaul Gold lost 4.78 per cent to close at N1.99 per share.

Analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 38.92 per cent.

A total of 349.59 million shares valued at N5.24 billion were exchanged in 8,082 deals, compared to 434 million shares valued at N8.58 billion exchanged in 8,525 deals posted in the previous session.

Veritas Kapital led the activity chart in volume with 57.95 million shares worth N35.94 million, while Guaranty Trust Holding Company (GTCO) followed by N47.63 million shares valued at N47.63 billion to lead in value.

Access Corporation traded 46.32 million shares valued at N796.32 million, AIICO Insurance transacted 30.71 million shares worth N30.79 million and Regency Alliance Insurance sold 14.55 million shares worth N5.64 million. 

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