Africa News
LAST UPDATE: May 16, 2025
Malawi's IMF programme ends after only $35 million disbursed
Reuters
Malawi's $175 million loan programme from the IMF has been terminated after no review was completed over an 18-month period. Only an initial disbursement of $35 million was made. The IMF cited challenges such as high inflation over 30%, foreign exchange shortages, and unsustainable external debt as reasons for the programme's failure.
Insight
The termination of Malawi's IMF programme underscores the difficulties faced by aid-dependent economies in maintaining fiscal discipline amid external shocks like health crises and climate events. The inability to complete programme reviews reflects structural weaknesses and the need for comprehensive economic reforms. This situation may hinder Malawi's access to future international financial support and emphasizes the importance of building resilient economic frameworks.
Rwanda's central bank holds its key rate at 6.5%
Reuters
Rwanda's central bank has maintained its policy rate at 6.5%, aiming to keep inflation within the target range while supporting economic growth. Annual inflation eased to 6.3% in April, within the central bank's 2%-8% target. The bank projects inflation to decline to 3.9% by 2026, despite potential risks from trade uncertainties and geopolitical tensions.
Insight
The decision to hold the policy rate reflects Rwanda's balanced approach to monetary policy, striving to control inflation without stifling economic growth. The central bank's projections indicate confidence in the country's economic stability, although external risks remain. This stance may bolster investor confidence and support continued economic expansion.
S.African president to meet Trump on Wednesday over rising tensions
AFP
South African President Cyril Ramaphosa is scheduled to meet U.S. President Donald Trump on May 21 to address rising tensions between the two countries. The meeting aims to reset strategic relations, which have been strained since Trump's return to the White House.
Insight
The upcoming meeting between Ramaphosa and Trump signifies a critical juncture in U.S.-South Africa relations. Engaging in direct dialogue may help resolve bilateral issues and foster cooperation. The outcome could influence diplomatic ties and economic partnerships, impacting both nations' foreign policies.
Bank of Uganda Buys $1.5 Billion, Uses FX Swaps to Grow Reserves
Bloomberg
The Bank of Uganda has purchased $1.5 billion from the market this fiscal year and utilized currency swaps to rebuild its foreign-exchange reserves. These measures aim to strengthen the country's financial stability and buffer against external shocks.
Insight
Uganda's proactive approach in bolstering its foreign-exchange reserves demonstrates a commitment to maintaining economic resilience. By engaging in currency swaps and significant market purchases, the central bank seeks to mitigate potential vulnerabilities from global financial fluctuations. This strategy may enhance investor confidence and support sustainable economic growth.
Zimbabweans Escaping Economic Woes in a Bind as UK Scraps Care Visas
Bloomberg
Zimbabweans seeking to escape economic hardships by working in the UK's care sector face challenges as the UK government scraps care visas. This policy change has left many in a difficult position, unable to pursue employment opportunities abroad.
Insight
The UK's decision to eliminate care visas significantly impacts Zimbabweans aiming to improve their livelihoods through overseas employment. This development not only affects individuals but also has broader implications for Zimbabwe's economy, which relies on remittances. The policy shift may exacerbate economic difficulties and prompt the need for alternative strategies to address unemployment and financial instability.
Can cash handouts replace aid? Kenya offers some answers
AFP
Kenya is piloting one of the world's largest universal basic income (UBI) programs, managed by the nonprofit GiveDirectly. The program includes 20,000 participants in 200 rural villages, receiving various forms of payments: monthly for two years or twelve years, or a one-time lump sum. Results indicate that long-term UBI and large lump sums are more effective in combating poverty than short-term assistance. Participants reported improvements in housing, food security, mental health, and household savings.
Insight
Kenya's UBI pilot demonstrates that unconditional cash transfers can significantly improve the well-being of recipients. Long-term support and substantial lump-sum payments enable families to invest in their futures, leading to sustainable economic growth and reduced poverty. This approach challenges traditional aid models, suggesting that direct cash transfers may be a more efficient and empowering method of assistance. The success of Kenya's program provides valuable insights for other countries considering similar initiatives.
