Economy
Algeria shelves subsidy reforms before presidential elections
Algeria is backtracking on some economic reforms such as cutting costly subsidies as the country wants to minimise the risk of protests before presidential elections next year, according to the budget data and experts.
The North African oil producer country had said at the start of the year subsidies for fuel and other products would be lowered from 2019 to rein in spending following a fall in oil revenues from 2014 to 2017. It gave no specifics.
But its draft budget for next year includes a 7 percent increase in subsidy spending, accounting for 21 percent of the budget. The rise will be used to subsidise basic food items including milk and cereals as well as housing, officials say.
The government had also approved this year higher and new taxes for some products and increases in subsidised fuel prices for the third straight year. But no new such hikes are planned for next year, according to the draft.
Analysts said a rise in oil prices this year had made officials confident of being able to postpone cuts in subsidies, part of welfare spending to discourage dissent, without straining public finances.
Speaking to Reuters, central bank governor Mohamed Loukal noted that the 2019 budget assumes oil prices at $50 a barrel, whereas benchmark crude prices are around $67, and hit $87 last month.
Finance Minister Abderrahmane Raouia signalled the change in tack this month. “Our subsidy policy will be maintained because Algerian citizens still need it,” he said, without giving details.
AVOIDING UPHEAVAL
Algeria has avoided upheaval like other Arab countries but riots broke out in 2011 over a rise in sugar and cooking oil prices.
This year doctors and teachers went on strike for months over work conditions, while the unemployment rate remains at around 11 percent. Youth unemployment is believed to be higher.
“(The) next elections require a stable social policy. It would be wrong to upset people (by cutting subsidies),” said economics professor Abderrahmane Aya.
eek a fifth term in the election in April. The 81-year old, in office since 1999, has not yet said whether he would stand.
The economy has improved in recent months. Oil and gas revenues, which account for 60 percent of the budget and 94 percent of export revenues, rose by 15 percent in the first nine months from the same period in 2018.
The economy is expected to grow by 4 percent this year after 2.2 percent last year.
But diplomats and business leaders say backtracking on curbing subsidies might give investors the impression the government is not serious about reforms and opening up the state and oil dominated economy.
Officials have repeatedly said they wanted to boost the small non-energy sector to reduce the import bill and create jobs.
Ali Haddad, head of the country’s largest business association, Algerian Business Forum, said Algeria needed to encourage private investment. “This … requires bold reforms,” he said.
Another prominent businessman, Boualem Merakech, head of the Algerian Confederation of Employers (CAP), recently complained about “difficulties faced by business leaders seeking to invest in a calm environment and a clear economic vision”.
Some diplomats said the shelved subsidy plan will add to confusion among investors trying to figure out economic policies in a secretive country.
They point to three different rules applied in the past two years to reduce imports.
“I think that this kind of changes (of the import rules) makes it difficult for firms to make plans and understand the environment in which they will work in six or 12 months,” U.S. ambassador John Desrocher told reporters. “Attracting more investment requires more transparency, more predictability and better access to markets.”
– REUTERS
Meta recently hosted its first Youth Summit in Lagos, Nigeria, bringing together over 200 young professionals, students, recent graduates, creatives, tech enthusiasts and aspiring entrepreneurs.
Themed ‘Empowering Youth Through Technology, Innovation and Entrepreneurship’, the summit included a series of thought-provoking panel discussions, a mentoring session and an interactive workshop designed to equip young Nigerians with the skills, insights and networks needed to thrive in today’s tech-driven world.
Commenting about the event, Phil Oduor, Head of Policy Programs, Sub-Saharan Africa said, “At Meta, we believe that today’s youth are tomorrow’s change-makers. Through initiatives like the Youth Summit, we aim to foster innovation, promote digital literacy and empower young Nigerians with the tools and opportunities to realise their potential and contribute to Nigeria’s growing digital economy.”
Delivering the keynote address, Femi Aluko, CEO/Co-Founder, Chowdeck, shared his journey of breaking barriers to achieve success in tech. He encouraged attendees to embrace the limitless opportunities within today’s technology ecosystem.
A panel discussion, led by Chinny Francis, Public Policy Manager at Meta, featured panellists Nifemi Akinwamide, Head of Operations, Alt School; Adaora Mbelu, Co-Founder of Lumination Global and Obaloluwa Adeagbo, Marketing Lead at Talstack. They shared valuable insights about the future of work, emphasising the importance of storytelling to build a personal brand, practicing self-awareness, developing soft skills, lifelong learning and honing problem-solving skills to thrive in a digitally transformed world.
Francis Sani, Technical Adviser for Innovation, Entrepreneurship & Capital at the Federal Ministry of Communications, Innovation & Digital Economy, spoke at the event. He highlighted the 3 Million Technical Talent (3MTT) program, emphasising that the program aims to build Nigeria’s technical talent backbone to drive the digital economy and position Nigeria as a net talent exporter. He encouraged youth to take advantage of this opportunity.
Another panel of industry experts took the stage during the ‘Lunch and Learn: Navigating Entrepreneurship in a Rapidly Changing Landscape’ session, moderated by Sade Dada, Head of Public Policy for Anglophone West Africa at Meta. Seye Bandele, CEO of PaidHR and Damilola Teidi-Ayoola, Head of Platform and Networks at Ventures Platform Fund, shared their invaluable insights. Seye highlighted the importance of grit, curiosity and candour, while Damilola reinforced the need to understand one’s target audience, deliver value through their business and embrace data-driven decision-making in the dynamic entrepreneurial landscape.
The event also featured inspiring conversations with leading figures in the creative industry. Miss Techy, an award winning tech content creator and Salem King, a creator, storyteller, author and speaker, shared their experiences and advice on achieving long-term success. Attendees also benefited from an interactive workshop and a mentoring session, where industry experts shared practical advice and strategies for entrepreneurs and tech enthusiasts.
Meta’s Youth Summit 2024 highlights a commitment to driving positive change, championing youth empowerment and advancing economic opportunities in Nigeria. Through investments in key areas—such as the creative industry, digital literacy, economic impact and youth job training—Meta is dedicated to empowering young Nigerians to thrive in today’s tech-driven world.
Cross-section of some of the attendees at the Meta Youth Summit 2024 in Lagos
L-R: Chinny Francis, Public Policy Manager, Meta; Nifemi Akinwamide, Head of Operations, Alt School; Adaora Mbelu, Co-Founder of Lumination Global and Obaloluwa Adeagbo, Marketing Lead at Talstack.
L-R: Sade Dada, Head of Public Policy, Anglophone West Africa, Meta; Damilola Teidi-Ayoola, Head of Platform and Networks, Ventures Platform Fund, and Seye Bandele, Chief Executive Officer, PaidHR during the Lunch and Learn: Navigating Entrepreneurship in a Rapidly Changing Landscape panel session.
Salem King, a creator, storyteller, author and speaker and Miss Techy, an award winning tech content creator
During a mentoring session workshop
Femi Aluko, Chief Executive Officer and Co-founder, Chowdeck.
Francis Sani, Technical Adviser to the minister of communications and digital economy of Nigeria
Economy
Tosin Eniolorunda: Fighting fraud related issues in financial ecosystem requires collaboration
Nigeria’s financial system has come under renewed scrutiny against the backdrop of the increase in the value of electronic payment transactions in Q1 2023 and the challenges posed by bad faith actors who exploit gaps in the payment systems even as Nigerian financial institutions have reported ₦159 billion ($201.5 million) lost to fraud since 2020. There is a need for all players in the financial services sector to come together in tackling these challenges.
Group CEO, Moniepoint Inc., Tosin Eniolorunda during a courtesy visit to the Chief Executive Officer, Fidelity Bank, Nneka Onyeali-Ikpe in Lagos. Onyeali-Ikpe, who welcomed the Moniepoint boss, used the opportunity to reaffirm her bank’s appreciation for the patience and understanding demonstrated during its banking channel integration optimization which resulted in service disruptions and the inability of Moniepoint customers to receive financial inflow.
It will be recalled that Fidelity Bank had recently announced to its customers and the general public, the resumption of interbank transfers to all licensed financial institutions in the country. This was following speculative reports from various media publications that the bank had imposed transaction restrictions on some neo banks operating in the country.
During conversations around the growth of the digital payments segment and contributions of the financial services to Nigeria’s socio-economic development, Tosin Eniolorunda used the occasion to stress the point that Moniepoint as a responsible and compliant organization takes customer KYC very seriously. “KYC is not merely an acronym but indeed a cornerstone in establishing trust, ensuring security, and complying with regulatory standards. All accounts created on our platform have BVN verification and in addition to this we perform a liveliness check at the point of onboarding. This is a comparison of the account holder’s life picture and the BVN image as a way to reduce impersonation,” Eniolorunda maintained.
He continued, “we have zero tolerance for fraud and typically go all out to ensure that we track fraudsters and fraudulent transactions on our platforms. We have deployed and utilize robust fraud detection systems and technologies that can analyze patterns, identify anomalies, and detect suspicious activities in the system. As such we are better empowered to identify potential fraud incidents and trigger alerts for further investigations and remedial actions.”
As partners in deepening the CBN’s mandate of ensuring provision of adequate and convenient financial services to consumers and guaranteeing their protection as well as the various undercurrents in the financial services industry, Moniepoint and Fidelity agreed to work closely together to develop a tightly knit mechanism to stem the menace of fraudulent transactions and collaboratively push through in addressing payment challenges in the country.
The Republic of Angola has become the 21st African Member State and the 1st Lusophone Member State of pan-African insurer, Africa Trade Insurance Agency – ATI, after paying a capital subscription of USD25 million. The membership was funded the Angolan National Treasury resources and proceeds from the landmark BITA water project – a strategic public investment for the construction of infrastructure for the treatment, supply and storage of drinking water that will benefit 2.5 million people in Angola.
Welcoming Angola’s membership, ATI’s Chief Executive Officer, Manuel Moses, noted the country’s demonstration of its commitment to diversify its economy through ATI’s trade and investment risk mitigation solutions.
“We are happy to support Angola in its quest to economic diversification and becoming an agricultural powerhouse on the African continent. Angola’s membership is timely as ATI’s risk mitigation and credit enhancement services will act as a catalyst for strengthening and diversifying Angola’s economy, supporting both increased investment, exports and trade under Africa’s continental framework of the AfCFTA,” Mr. Manuel said.
Under this one of a kind blended finance and guarantee innovative structure, the Republic of Angola – along with the lenders covered by ATI under the transaction – agreed for the use of proceeds under the syndicated loan to also include the financing for the purpose of Angola becoming a member of ATI. ATI provided guarantee and insurance support for this World Bank’s partially guaranteed facility to the Government of Angola for the expansion and improvement of water supply service in the urban and peri-urban belts of Luanda.
Current exposure
ATI’s gross exposure in Angola, the largest country in Southern Africa Region, currently stands at USD467M mainly in construction, energy & gas, trade & transport, water supply and wholesale & retail sectors, with transactions valued at USD1.4B.
“This development was made possible because of ATI’s pan African mandate that allows the organization to cover transactions in Angola and beyond, despite ATI non-membership. Now that Angola is a fully-fledged shareholder of ATI, the country can fully access more of ATI’s guarantee solutions to attract more Foreign Direct Investments and boost its internal and external trade across the region,” Mr. Manual explained.
Angola’s economy is mainly driven by its oil sector but the country seeks to pursue new growth models for economic diversification through the agricultural sector and private sector development.
With ATI’s support, Angola is on the path to fiscal consolidation, manage their debt ceiling, increase in public and private investment, in order to resume the ascending curve of sustainable and inclusive economic growth as well as human development.
ATI has grown from a small African start-up in 2001 into a pan-African institution with presence across Africa and with a significant global reach. Besides Angola, other member countries include Benin, Burundi, Cameroon, Côte d’Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Senegal, South Sudan, Tanzania, Togo, Uganda, Zambia, and Zimbabwe.
Institutional members include African Development Bank, African Reinsurance Corporation, Atradius Group, Chubb, CESCE (Spanish ECA), Ministry of Finance India (represented by ECGC), SACE SIMEST, The Common Market of Eastern and Southern Africa (COMESA), Trade and Development Bank (TDB), Kenya-Re, The PTA Reinsurance Company (Zep-Re), and the UK Export Finance.
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