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UN urges Africa to swap commodities for tech

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Gaming buzz: Players and developers gathered in Cape Town in February for Africa Games Week
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The UN’s trade body on Thursday said African economies were vulnerable to a triple shock as it urged governments to pave the way for tech startups that would  ease dependence on commodities.

“A recent analysis by the UN Global Crisis Response Group on Food, Energy and Finance, which analyses the global economic cost by the war in Ukraine, indicates that Africa and especially sub-Saharan Africa is now one of the world’s most exposed regions to the current crisis,” Rebeca Grynspan, secretary-general of the United Nations Conference on Trade and Development (UNCTAD), said at the launch of the body’s latest Africa report. 

“One out of two Africans — that means over 600 million people — are severely vulnerable to food, energy and finance shocks, all at once,” she added.

The report recommended diversifying away from both commodities exports, on which many African economies continue to depend, and traditional service sectors — such as travel and transport — towards more knowledge-intensive services.

“We have been talking about diversification as long as I can remember, and how Africa can diversify its economy, and the fact is  that we’ve been looking at it through the lens of diversifying within the commodity sector,” said Paul Akiwumi, a director with UNCTAD. 

“Now it’s also very timely because of technology,” he added.

He pointed to budding fintech, healthtech, agritech, e-mobility and other tech-focused sectors in African countries.  

“Africa has a growing educated middle class who need these jobs, and these types of small and medium size enterprises provide high skilled jobs — operational officers, finance officers, government liaison relations officers, software engineers, HR managers, administrative accountants,” he said. 

Akiwumi said governments must provide entrepreneurs the necessary regulatory frameworks, as well as training and capacity building. 

He also said they must implement the African Continental Free Trade Area (AfCFTA) agreement, a trade pact that came into force last year, to scale up developments across the continent.

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Outage hits Twitter service in US, Europe

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Temporary outage hits Twitter service
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Twitter experienced a widespread but seemingly brief outage in the United States and parts of Europe on Thursday — fresh turbulence for the firm locked in a buyout battle with Elon Musk.

The Downdetector website showed that outage reports spiked in the United States around 8:00 am (1200 GMT), while users reported service interruptions in France and elsewhere.

However, by around 1245 GMT reports of outages to Downdetector were dropping off and users were back on the social media platform joking about the disruption.

“I’ve just had my most productive 30 minutes for years. In unrelated news, it seems Twitter went down for 30 minutes,” tweeted @joelyagar.

Twitter did not immediately respond to a request for comment.

Service disruptions on social media platforms happen periodically, but major and long-term service outages are not common.

The service problems on Twitter come as the company has embarked on a legal fight with Musk over his moves to walk away from his $44 billion buyout bid that has roiled the company.

Twitter has sued to force Musk to complete the deal after he said he was terminating it over issues including his argument that the company has not been forthcoming about the number of fake accounts.

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JPMorgan Chase reports lower profits, gives cautious economic outlook

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JPMorgan Chase reported a drop in profits after setting aside reserves in case of defaults
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JPMorgan Chase reported a drop in second-quarter profits on Thursday, reflecting the impact of a weakening macroeconomic outlook that led it to set aside funds in case of bad loans.

The big US bank’s earnings came in at $8.6 billion for the quarter, down 28 percent from the year-ago period in results that missed analyst expectations.

Revenues were $30.7 billion, up one percent.

Chief Executive Jamie Dimon said key elements in the US economy remained healthy, such as the job market and consumer spending. 

But headwinds — including high inflation, geopolitical uncertainty and fast-changing Federal Reserve policy to sharply curtail liquidity — “are very likely to have negative consequences on the global economy sometime down the road,” Dimon said.

The bank added $428 million in credit reserves due to a “modest deterioration in the economic outlook.” In the year-ago period, JPMorgan’s profits were boosted by a $3 billion release in reserves.

JPMorgan enjoyed a boost from higher net interest income following Fed interest rate increases. But the bank also incurred higher expenses on salaries, technology and marketing.

In corporate and investment banking, JPMorgan posted higher revenues in its trading businesses, but lower investment banking fees.

Dimon said the bank performed well in the quarter and was “prepared for whatever happens” in the global economy.

JPMorgan temporarily suspended share buybacks to meet new federal stress tests requirements for managing risk assets, Dimon said.

Shares fell 2.8 percent to $108.82 in pre-market trading.

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Russia’s war in Ukraine ‘greatest challenge’ to global economy: Yellen

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US Treasury Secretary Janet Yellen said she will express her condemnation of Russia's invasion at the G20 meeting
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Russia’s war in Ukraine poses the greatest threat to the global economy, US Treasury Secretary Janet Yellen said Thursday as G20 ministers prepare to start talks in Indonesia.

Moscow’s invasion has sent inflation soaring at a time when the world is struggling to recover from the Covid-19 pandemic, endangering the gains of the past two years and threatening widespread hunger and poverty.

“Our greatest challenge today comes from Russia’s illegal and unprovoked war against Ukraine,” she said on the resort island of Bali ahead of a meeting between finance ministers from the world’s top economies and central bank governors on Friday and Saturday.

“We are seeing negative spillover effects from that war in every corner of the world, particularly with respect to higher energy prices, and rising food insecurity,” she added.

“The international community must be clear-eyed about holding Putin accountable for  the global economic and humanitarian consequences of his war.”

Yellen said she will continue to press G20 allies at the meeting for a price cap on Russian oil to choke off Putin’s war chest and pressure Moscow to end its invasion while bringing down energy costs.

“A price cap… is one of our most powerful tools,” she said, adding that a limit would deny Putin “the revenue his war machine needs”.

She expressed hope that India and China would join such a cap, saying it “would serve their own interests” to put downward pressure on prices for consumers across the world.

But she refused to be drawn on whether Western officials will stage a multi-nation walkout when Russian officials speak, as they did at a G20 meeting in Washington in April.

“It cannot be business as usual,” she said. “I can tell you that I can certainly expect to express in the strongest possible terms my views on Russia’s invasion… to talk about its impact on Ukraine and the entire global economy and to condemn it.”

“I expect that many of my colleagues will do the same.”

– Global outlook ‘darkened’ –

Russia’s finance minister will not attend the Bali talks, instead addressing it virtually, a week after Foreign Minister Sergei Lavrov found himself outnumbered by G20 counterparts in their criticism of Moscow’s military assault.

Yellen’s comments echo the head of the International Monetary Fund, who said Wednesday that the global economic outlook had “darkened significantly” because of Moscow’s invasion, just months after it revised down its global growth forecast for 2022 and 2023.

The IMF is “projecting a further downgrade to global growth” in 2022 and 2023, Kristalina Georgieva said in a blog post published ahead of this weekend’s meeting.

The risk of “social instability” was also increasing because of rising food and energy prices, she wrote.

But there was substantive progress made in attempts to break the impasse on Wednesday after Russia and Ukraine met in Turkey for their first direct talks since March on a deal to relieve the food crisis caused by blocked Black Sea grain exports.

UN Secretary General Antonio Guterres called it a “ray of hope to ease human suffering and alleviate hunger around the world” ahead of another planned round of talks next week.

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