Author: James Ndwaru

• The IMF has approved an expansion of the original economic rescue program for Egypt by $5 billion.
• Spillovers from the recent conflict in Gaza and Israel aggravated the shaky economic situation in Egypt.
• Egypt has recently taken difficult but necessary reforms to correct the country’s microeconomic imbalance.

IMF’s Economic Rescue Program for Egypt

The Executive Board of the International Monetary Fund (IMF) has completed the first and second reviews of Egypt’s Extended Fund Facility (EFF)arrangement, approving an expansion of the original economic rescue program by $5 billion.

The IMF had initially approved a $3 billion loan in December 2022 but has …

• The Central Bank of Nigeria has decided to increase the minimum capital requirement for lenders to bolster the country’s economy.
• Nigerian banks now face weaker capital ratios and higher impaired loans.
• The last time Nigeria recapitalised its banking sector dates back to 2004.

Minimum capital requirement for lenders

Following the surge in inflation levels, a deteriorating economy, and the plummeting of the Naira, the CBN has decided to increase the minimum capital requirement for lenders to bolster the country’s economy.

Under the new regulations, the Central Bank of Nigeria has raised the capital threshold for international banks to $359 million …

• The situation involving Binance in Nigeria has turned sour due to several events.
• For a few years, the Binance marketplace seemed to work well enough, but in 2023, the Nigerian government ended the naira’s peg to the US dollar as part of sweeping economic reforms.
• In what is now a testament to the sprained relationship between Binance and Nigeria, the authorities filed tax evasion charges against the cryptocurrency exchange.

Binance Under Regulatory Spotlight

Binance’s journey from a small start-up to one of the largest cryptocurrency exchanges globally has been impressive but not a smooth run. The platform’s rapid growth and global expansion brought it under the regulatory spotlight globally.

• Sudan’s humanitarian crisis is the worst in recent history, according to the United Nations.
• One-third of Sudan’s population, that is, 18 million people, are facing acute food insecurity, while 730,000 Sudanese children are believed to be suffering from severe malnutrition.
• World Food Programme(WFP) has delivered food to over 5.2 million people within Sudan since conflicts started in April.

Sudan’s humanitarian crisis

The United Nations Humanitarian Office has warned that Sudan is on the verge of facing the worst humanitarian crisis in recent history. Key drivers of this situation include intensified conflict and growing inter-communal violence, an economic crisis, soaring prices of food, fuel and essential goods, and below-average agricultural production.

“By all measures – the sheer scale of humanitarian needs, the numbers of people displaced and facing hunger – Sudan is one of the worst humanitarian disasters in recent memory,” Edem Wosornu, director of operations at the UN Office for …

• The three-year EU-Egypt strategic partnership aims to facilitate economic reforms and avert a migration crisis within the region.
• The triennial agreement represents the latest endeavour by the bloc to prevent refugees from traversing the Mediterranean.

EU-Egypt strategic partnership

EU leaders have finalised a deal worth $7.4 billion with Egypt to bolster the nation’s struggling economy. This move seeks to foster stability within the “troubled” region and prevent a new European migration crisis.

The three-year EU-Egypt strategic partnership includes $5 billion in soft loans to facilitate economic reforms, $1.8 billion to encourage private sector investments, and $600 million in grants. Of these grants, $200 million is allocated for migration management.

Following months of intense and productive diplomatic engagement between the EU and Egypt, six EU leaders journeyed to Cairo on Sunday, as stated by Italian Prime Minister Giorgia Meloni.”

The visit occurred just days following allegations by members of the European …

• Over a decade since gaining independence, South Sudan continues to be affected by fragility, economic stagnation, and instability.
• South Sudan’s economy is clouded by production bottlenecks in the oil sector, with production dwindling in the face of limited new investment.
• The susceptibility of South Sudan to climate change and natural calamities exacerbates the nation’s economic challenges, threatening the progress of growth and development initiatives.

The Republic of South Sudan emerged as the world’s newest sovereign state and the 54^th country in Africa on July 9, 2011. However, the progress of development post-independence was significantly hampered by civil war outbreaks in 2013 and 2016, which also aggravated the humanitarian crisis.

Over a decade since gaining independence, South Sudan continues to be affected by fragility, economic stagnation, and instability. Pervasive poverty is further intensified by ongoing conflict, displacement, and external shocks.

Crisis facing the oil and energy sector

Oil production is …

• In a significant escalation of tensions between Nigeria and the global cryptocurrency market, the African nation has detained two senior Binance executives.
• Anjarwalla and Gambaryan were detained in Abuja, Nigeria’s capital, under circumstances highlighting the country’s aggressive stance towards cryptocurrency exchanges.
• In recent years, Nigeria has faced significant economic challenges, with the devaluation of the naira emerging as a central issue.

Anjarwalla and Gambaryan detained

In a significant escalation of tensions between Nigeria and the global cryptocurrency market, the African nation has detained two senior Binance executives, the world’s leading cryptocurrency exchange.

Nadeem Anjarwalla, a UK citizen living in Kenya and serving as Binance’s Regional Manager for Africa, and Tigran Gambaryan, the Global Head of Intelligence and Investigations at Binance and a former US Internal Revenue Service special agent, find themselves at the heart of a diplomatic and financial controversy.

Now extending into its third week, the detention stems from …

• Nigeria’s cost of living crisis has been the worst in decades, exacerbated by worsening food insecurity and record inflation. 
• The lack of enough resources has led to insecurity in Nigeria as people fight for scarce resources and food.
• In response to Nigeria’s cost of living crisis, Tinubu announced a state of emergency in July and intends to begin grain distribution in the coming weeks.

Tinubu’s Reforms worsen Nigeria’s cost of living crisis

Nigeria, Africa’s largest economy, is grappling with the worst cost of living crisis in decades and a worsening food security situation. A significant portion of the population is experiencing extreme food insecurity. After assuming power in May 2023, Bola Tinubu’s administration adopted bold but unpopular reforms that further strained the already-battered economy.

Nigeria imports food and fuel and was buffeted by rising commodity prices due to a glim global economic situation in the last two years. President Tinubu …

• Egypt’s economy has recently been on life support as the national debt continued to mount.
• The investments from Saudi Arabia and further funds anticipated from the World Bank and IMF will give Egypt enough cash to meet its debt obligations and maintain stability in its recently floated currency.
• The significant official and bilateral support announced and marked policy steps that Egypt has taken will, if maintained, support macroeconomic balancing.

Egypt’s economy on life support

Egypt’s economy has recently been on life support as the national debt continued to mount. The Egyptian currency has weakened against the US dollar, with rising inflation rates close to 30 per cent, occasioning a capital flight. Moreover, the overlapping global shocks and the domestic supply of bottlenecks have adversely impacted the country’s economic activity.

Egypt has also suffered from rising global interest rates and soaring commodity prices in international markets. These overlapping factors widen the …

• Submarine cable systems form the crucial infrastructure at the heart of the global network and internet connectivity. 
• Seacom, a leading player in the submarine cable systems market, launched Africa’s first broadband submarine cable system in 2009.
• As Africa navigates digital infrastructure challenges, there’s hope on the horizon with several transformative internet projects poised to reshape the continent’s digital landscape.

The crucial role of submarine cable systems

The Internet is the backbone of modern communication, powering everything from global commerce to personal communications. At the heart of this global network lies a critical infrastructure often unseen and unthought of by the average user: submarine cable systems.

These undersea pathways are vital for international data exchange, carrying over 99 per cent of the world’s telecommunications traffic. A recent incident involving damage to Seacom’s cable in the Red Sea offers a stark reminder of the vulnerability of these underwater lifelines and the …