<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/KC4JBNQVH5KDFMNHV4IGIF4FRY-820x547.jpg" alt="" class="wp-image-546353" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/KC4JBNQVH5KDFMNHV4IGIF4FRY-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/KC4JBNQVH5KDFMNHV4IGIF4FRY-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/KC4JBNQVH5KDFMNHV4IGIF4FRY-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/KC4JBNQVH5KDFMNHV4IGIF4FRY-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/KC4JBNQVH5KDFMNHV4IGIF4FRY-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/KC4JBNQVH5KDFMNHV4IGIF4FRY-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: IMF African Department Director Abebe Aemro Selassie listens to a question during an interview with Reuters at the annual meeting of the International Monetary Fund and the World Bank, in Marrakech, Morocco October 9, 2023. REUTERS/Susana Vera/File Photo</figcaption></figure>



April 25 (Reuters)&nbsp;&#8211;&nbsp;Sub-Saharan African economies should work to increase their domestic revenue collection to avoid having to take on debt amid &#8220;turbulent global conditions&#8221;, International Monetary Fund Africa Director Abebe Aemro Selassie said.



The region&#8217;s economy is likely to expand by 3.8% this year, the Fund said in its World Economic Outlook report this week, marking a cut from its previous forecast of 4.2% due to the potential impact of the U.S. administration&#8217;s stance on trade.



&#8220;There is a period where maybe relying on debt financing is not the right way to do development,&#8221; Abebe told Reuters, adding that policymakers have to also identify new sources of cheaper capital.



Investors sold off risky assets after President Donald Trump announced sweeping tariffs on dozens of U.S. trading partners, pushing up the yields of most issuers in sub-Saharan Africa into double digits, a sign that such so-called frontier economies could struggle to access capital markets.



&#8220;You have to look for internal resources to address the development and address social spending needs,&#8221; Abebe said. &#8220;These policies that are to enhance resilience, there is a higher premium on those.&#8221;



The average debt-to-economic-output ratio in the region was steady last year at less than 60% of GDP, the IMF said, but some economies like Kenya have been struggling with high debt-servicing costs.



Although the United States is not a major trading partner for many economies in the region, the knock-on effects from its approach to international trade are also piling pressure on the foreign exchange rates of economies, he said.



&#8220;We have already seen oil prices decline&#8230; Countries like Nigeria and Angola are going to see a mark-down in economic activity, and they are some of the largest economies in sub-Saharan Africa,&#8221; he said.



The projected setback could interrupt a &#8220;hard fought economic recovery&#8221; from the global pandemic, a worldwide inflation spike and an interest rate surge that effectively locked many African economies out of foreign capital markets, the IMF said.



Growth in the region, home to a wide range of economies, including fairly diversified ones like Tanzania and Senegal, reached 4% last year, surpassing the IMF&#8217;s forecast of 3.6%, the Fund said.



Last year&#8217;s robust economic expansion in the region was accompanied by an improvement in macroeconomic imbalances, the IMF said, citing lower average inflation and stable debt levels.



&#8220;We have seen quite a lot of resilience in the region,&#8221; Abebe said, adding that 11 out of the 20 fastest-growing economies in the world will be in sub-Saharan Africa.



(Reporting by Karin Strohecker in Washington DC and Duncan Miriri in Nairobi; Editing by Hugh Lawson)

FILE PHOTO: IMF African Department Director Selassie at interview with Reuters during International Monetary Fund and the World Bank meeting in Marrakech

Sub-Saharan Africa must lift revenue to ride out global turbulence – IMF Africa head

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="474" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/INJ7YSACHNMCJGVADGR3LX4GQA.avif" alt="" class="wp-image-613563"/><figcaption class="wp-element-caption">Members of the M23 rebel group mount their vehicles after the opening ceremony of Caisse Generale d&#8217;epargne du Congo (CADECO) which will serve as the bank for the city of Goma where all banks have closed since the city was taken by the M23 rebels, in Goma, North Kivu province in the East of the Democratic Republic of Congo, April 7, 2025. REUTERS/Arlette Bashizi/File Photo</figcaption></figure>



April 25 (Reuters)&nbsp;&#8211;&nbsp;Congo and Rwanda plan to sign an agreement in Washington on Friday to promote peace and economic development, sources told Reuters, part of a diplomatic push to end violence after an advance by Rwandan-backed rebels in eastern Congo.



The agreement, expected to be signed by the two countries&#8217; foreign ministers at a ceremony with U.S. Secretary of State Marco Rubio, comes as Washington is in talks to invest billions of dollars in mineral-rich Congo. Rwanda said this week it was also speaking to Washington about a possible minerals deal.



Congo has seen a surge in violence after Rwandan-backed M23 rebels launched a major offensive in January that led to the capture of the two largest cities in the east.



The United Nations and Western governments say Rwanda has provided arms and troops to M23. Rwanda denies backing M23 and says its military has acted in self-defence against Congo&#8217;s army and a militia founded by perpetrators of the 1994 genocide.



Both Qatar and the U.S. have shown an interest in mediating a resolution. The Gulf state has long positioned itself as a peacemaker, while Washington is interested in accessing a greater share of Congo&#8217;s mineral wealth.



A diplomatic source said the agreement to be signed on Friday aims to foster a &#8220;pathway to peace, stability, and integrated economic development&#8221; in eastern Congo and &#8220;the resumption of normal bilateral relations&#8221;.



Another source briefed on the agreement said it was intended to build investor confidence.



The Trump administration has taken a special interest in Congo since a Congolese senator contacted U.S. officials to pitch a minerals-for-security deal this year.



Washington wants greater access to minerals like copper, cobalt and lithium, which are used in mobile phones and electric cars, and are currently exploited predominantly by China and its mining companies.



(Reporting by Sonia Rolley and Jessica Donati; Editing by Robbie Corey-Boulet, Alison Williams, Alexandra Hudson)

INJ7YSACHNMCJGVADGR3LX4GQA

Congo and Rwanda to sign agreement in US on peace, economic development, sources say

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2713" height="1897" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/MF7YJCVU2JJNLNHDA33ALMRGHM.avif" alt="" class="wp-image-613520"/><figcaption class="wp-element-caption">South Africa&#8217;s Finance Minister Enoch Godongwana speaks at a press conference ahead of his 2025 budget speech in Cape Town, South Africa March 12, 2025. REUTERS/Esa Alexander/File Photo </figcaption></figure>



WASHINGTON, (Reuters) &#8211; South African Finance Minister Enoch Godongwana said on Thursday he will not resign after the government&#8217;s U-turn on a planned value-added tax hike, despite opposition calls for him to quit.



&#8220;My job is to introduce money bills &#8211; nothing says they must be popular,&#8221; he told Reuters on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington.



Godongwana,&nbsp;who&nbsp;landed in the U.S. capital this week already grappling with the worst rift in U.S.–South African relations in&nbsp;decades, was forced on Thursday&nbsp;to scrap a rise in&nbsp;the value-added tax that&nbsp;threatened the stability of the ruling coalition government.



The proposal to raise the VAT by 1 percentage point over two years, which was intended to boost state revenue, met resistance as Africa&#8217;s most industrialized economy grapples with sluggish growth and public discontent over rising living costs.



The about-turn blows a 75 billion rand ($4 billion)&nbsp;hole in the medium-term budget&nbsp;and leaves Godongwana with the task of drawing up what he said was &#8220;a different fiscal framework in line with the new realities of revenue and spending.&#8221;



&#8220;I still maintain that if the purpose for which the VAT was raised is taken into account, its reversal will have a negative impact on those issues&nbsp;&#8211;&nbsp;that cannot be disputed,&#8221;&nbsp;he&nbsp;said.



The revamped fiscal framework will be keenly watched by S&amp;P Global Ratings, which currently has a positive outlook on South Africa.



A credible outcome could secure the first credit rating upgrade for South Africa in two decades, while the opposite could raise future borrowing costs and dent investor appetite for the country.



&#8220;If you ask me, I don&#8217;t think what will inform them is the noise,&#8221; Godongwana said. &#8220;What will trigger them is whether the final product is a sustainable budget.&#8221;



($1 = 18.7792 rand)



(Reporting by Karin Strohecker in Washington and Colleen Goko in Johannesburg; Editing by Leslie Adler and Paul Simao)

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South Africa’s finance minister says he won’t resign after VAT U-turn

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="5000" height="3334" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/VZZUZJG5MVPPXDITWKEDW2SOB4.avif" alt="" class="wp-image-613502"/><figcaption class="wp-element-caption">Chinese Finance Minister Lan Foan attends a press conference about a bill on raising ceilings on local government debt, at the Great Hall of the People in Beijing, China November 8, 2024. REUTERS/Josh Arslan</figcaption></figure>



BEIJING, April 25 (Reuters)&nbsp;&#8211;&nbsp;China warned a G20 meeting that world economic growth was &#8220;insufficient&#8221; as tariff and trade wars exacerbated economic and financial instability and sapped growth momentum, its finance ministry and central bank said.



Speaking at the group&#8217;s meeting in Washington, Finance Minister Lan Foan called on all parties to strengthen multilateral cooperation, saying that China supported dialogue and consultation &#8220;on equal footing&#8221; to settle trade and tariff disputes.



Meanwhile, People&#8217;s Bank of China Governor Pan Gongsheng said that economic fragmentation and trade tensions had disrupted supply chains, weakening the momentum of global economic growth, the central bank said in a separate readout on Friday.



Pan also told the meeting, which took place on Wednesday and Thursday, that the world&#8217;s major economies should strengthen their participation in international macroeconomic and financial policy coordination.



Other participants at the finance ministers and central bank governors meeting also flagged the significant increase in risks to global growth from trade tensions, tighter financing conditions and long-term structural challenges, according to the PBOC statement.



They also called for strengthening dialogue and policy coordination, the statement said without referring to the United States.



The Group of 20 major economies were meeting in the wake of U.S. President Donald Trump&#8217;s announcement of hefty tariffs on imports that have triggered turmoil in financial markets and prompted the International Monetary Fund to cut its growth forecasts for most countries around the world.



While Trump later put some of the tariffs on hold, he raised China levies to 145%, and maintained a universal import tariff of 10% as well as 25% duties on cars, steel and aluminium.



The U.S. indicated talks were taking place with China on tariffs but Beijing on Thursday denied that, demanding the U.S. drop the levies.



Lan also urged for better implementation of the debt treatment mechanism under the G20&#8217;s Common Framework, and said all parties should pool more resources for Africa&#8217;s development and strengthen Africa&#8217;s capacity-building.



The finance ministry said Lan held bilateral meetings and exchanges with representatives from countries and organisations including South Africa, the European Commission, Pakistan, Germany, South Korea, Indonesia, Britain, Japan and the World Bank.



The meetings were mainly to discuss the macroeconomic situation, key issues of the G20 fiscal channels and bilateral cooperation, the readout said.



(Reporting by Liz Lee and Beijing newsroom; Editing by Himani Sarkar, Shri Navaratnam and Kate Mayberry)

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China warns G20 global economic growth ‘insufficient’, trade tensions weaken momentum

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/GettyImages-2191254056-820x615.jpg" alt="" class="wp-image-613204" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/GettyImages-2191254056-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/GettyImages-2191254056-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/GettyImages-2191254056-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/GettyImages-2191254056-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/GettyImages-2191254056-1536x1152.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/GettyImages-2191254056-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">ZANZIBAR, TANZANIA &#8211; DECEMBER 14: A view of the Rock Restaurant, located on famous Paje Beach in Zanzibar, Tanzania, stands out for its unique location and atmosphere on December 14, 2024. Built on a rock in the middle of the Indian Ocean, this iconic restaurant offers its visitors an unforgettable experience with a landscape that changes with the tides. Known for its seafood menu and natural beauty, the restaurant is not only a popular dining spot but also one of Zanzibar&#8217;s landmarks, attracting both local and international tourists. (Photo by Mehmet Aslan/Anadolu via Getty Images)</figcaption></figure>



DAR ES SALAAM, April 24 (Reuters)&nbsp;&#8211;&nbsp;Tanzania has banned the importation of agricultural products from Malawi and South Africa, saying it was retaliation for similar hostile trade measures from both countries.



The three countries all belong to a regional economic bloc, the Southern African Development Community, SADC.



Tanzania had demanded that both countries rescind bans on imports of agricultural goods from Tanzania by Wednesday, but they had not done so, agriculture minister Hussein Bashe said in a video posted on his X account late on Wednesday.



Malawi had recently banned imports of Tanzanian commodities like maize flour, rice, ginger, and bananas, among others, while South Africa has also proscribed the import of bananas shipped by Dar es Salaam.



&#8220;I would like to officially announce that from this night&#8230; we won&#8217;t allow any agricultural products from South Africa in our country,&#8221; Bashe said, adding a similar ban was being imposed on Malawi.



Talks to resolve the trade impasse, however, would continue with both countries, he said.



He said Tanzania will start prohibiting the transit of agricultural goods from other countries through its territory to land-locked Malawi, and will also ban the export of Tanzanian fertilizer to Malawi.



&#8220;We are taking this measure to protect our business. This is business, and we should all respect each other,&#8221; Bashe said.



(Reporting by Nuzulack Dausen; Writing by Elias Biryabarema; Editing by William Maclean)

The Rock Restaurant on Zanzibar’s Paje Beach

Tanzania bans agriculture imports from South Africa, Malawi

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="4630" height="2675" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/I626AAIJRJP7DJDRYXCYV56KLA-1.avif" alt="" class="wp-image-613046"/><figcaption class="wp-element-caption">The Hillbrow Tower, an iconic tower used to identify the Johannesburg skyline, is seen as the sun rises, in Johannesburg, South Africa, June 20, 2019. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, April 24 (Reuters)&nbsp;&#8211;&nbsp;South Africa on Thursday scrapped plans to raise value-added tax after a political backlash that threatened the stability of the ruling coalition government.



The proposal to raise VAT by 1 percentage point over two years, intended to boost state revenue, met resistance as Africa&#8217;s biggest economy grapples with sluggish growth and public discontent over rising living costs.



The dominant African National Congress backed the hike, saying there were no other sustainable revenue sources, while the second largest coalition party, the Democratic Alliance, said the move would pile more pressure on struggling households.



As the DA celebrated the decision, announced by the finance ministry, senior party official Helen Zille said there was a lack of trust between the two groups, leaving the future of the coalition uncertain.



ANC Secretary-General Fikile Mbalula described the differences over the VAT hike as a learning experience for the former liberation movement.



&#8220;If we had a wealth of experience, we may have approached this differently, meaning negotiations and engagement with political parties, with Treasury and parliament oversight prior the passing of the budget,&#8221; Mbalula told a media briefing.



VAT will be maintained at 15%,&nbsp;the finance ministry said.&nbsp;Finance Minister Enoch Godongwana will introduce a revised version of the Appropriation Bill and Division of Revenue Bill within the next few weeks,&nbsp;it added.



&#8220;Political flip-flopping about tax proposals has created confusion, which sends the wrong message to foreign investors,&#8221; Jee-A van der Linde, a senior economist at Oxford Economics Africa, said.



<h2 class="wp-block-heading" id="h-lost-revenue">LOST REVENUE</h2>



Without the VAT increase, estimated revenue is expected to fall short by around 75 billion rand ($4.02 billion) over the medium term,&nbsp;the ministry said.



&#8220;Parliament will be requested to adjust expenditure in a manner that ensures that the loss of revenue does not harm South Africa&#8217;s fiscal sustainability,&#8221;&nbsp;the finance ministry said.



The withdrawn tax hike was a significant retreat from an initial proposal by the National Treasury in February to raise VAT by 2 percentage points to fund spending on health, transport and education.



The DA had challenged the planned tax hike in court and voted against the budget&#8217;s fiscal framework in parliament because of it.



Finance Minister Godongwana had argued in court papers that failure to raise the VAT would cause severe harm to state finances.



The DA had argued the government should cut expenditure instead and some smaller political parties had also proposed deeper expenditure cuts.



The finance ministry said while some suggestions were worthwhile, they &#8220;would not provide an immediate avenue for further revenue in the short term to replace a VAT increase&#8221;.



($1 = 18.6741 rand)



(Reporting by Olivia Kumwenda-Mtambo; Additional reporting by Sfundo Parakozov, Alexander Winning and Kopano Gumbi; Editing by Kim Coghill, Alison Williams and Andrew Heavens)

I626AAIJRJP7DJDRYXCYV56KLA

South Africa abandons planned VAT hike after pushback

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="5000" height="3186" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/M2ZI6JYVCRIEJFPLEKGFTIN3BA.avif" alt="" class="wp-image-613097"/><figcaption class="wp-element-caption">South Africa&#8217;s Minister of International Relations and Cooperation Ronald Lamola greets Ukraine&#8217;s President Volodymyr Zelenskiy on his arrival ahead of talks with South African president Cyril Ramaphosa in Pretoria, South Africa April 24, 2025. Jacoline Schoonees/DIRCO/Handout via REUTERS</figcaption></figure>



KYIV, April 24 (Reuters) &#8211; Ukrainian President Volodymyr Zelenskiy said he would cut short a trip to South Africa on Thursday and return to Kyiv following a Russian missile attack on the Ukrainian capital.



Zelenskiy, who has been trying to shore up international support for Ukraine&#8217;s defence against Russia&#8217;s invasion, said he would immediately travel back to Ukraine after meeting South African President Cyril Ramaphosa.



&#8220;The Minister of Foreign Affairs of Ukraine will hold all necessary meetings in South Africa to fully inform the country&#8217;s political and public leaders about the situation,&#8221; Zelenskiy wrote on the Telegram app.



Russia pounded Kyiv with missiles and drones overnight, killing at least eight people, wounding more than 70 and smashing buildings in the biggest attack on the Ukrainian capital this year.



(Reporting by Olena Harmash and Tom Balmforth; Editing by)

M2ZI6JYVCRIEJFPLEKGFTIN3BA

Zelenskiy cuts short S.Africa trip after Russian strike on Kyiv

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1080" height="720" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/HZRODE5UBVK35L6PSBZDHSBEBI.avif" alt="" class="wp-image-613079"/><figcaption class="wp-element-caption">Chinese President Xi Jinping and Kenyan President William Ruto attend a welcome ceremony at The Great Hall of The People on April 24, 2025 in Beijing, China. IORI SAGISAWA/Pool via REUTERS</figcaption></figure>



BEIJING, April 24 (Reuters)&nbsp;&#8211;&nbsp;China and Kenya announced they had upgraded ties to a &#8220;new level&#8221; on Thursday during a meeting between President Xi Jinping and Kenyan President William Ruto in Beijing, as they both pledged to create an &#8220;all weather&#8221; China-Africa community.



In a joint China-Kenya statement, both leaders said they were &#8220;committed to injecting more stability into the world with the certainty of China-Africa solidarity and cooperation&#8221;.



This would provide a backbone to safeguard the &#8220;common interests of developing countries&#8221;, it said, and defend the multilateral system, via &#8220;inclusive economic globalisation&#8221;.



The decision to upgrade China-Kenya relations was made &#8220;in the face of a turbulent international situation&#8221;, the Chinese president was quoted as saying in a separate media pool report.



Africa is a key focus of Xi&#8217;s ambitious Belt and Road Initiative, launched in 2013 to extend China&#8217;s geopolitical and economic influence through global infrastructure development.



Kenya has been a key BRI recipient, and Nairobi has taken a slew of loans from China to finance infrastructure construction projects that have made China the east African nation&#8217;s biggest bilateral lender.



Among the projects, China is helping fund the development of a modern railway line from the port of Mombasa into the hinterland.



Xi and Ruto signed 20 documents together on Thursday, according to a media pool report. These included agreements on science and technology cooperation, vocational education, water resources, ecommerce, intelligent transport systems and the railway sector.



Kenyan officials have been engaging with their Chinese counterparts to secure funds for more projects, including the extension of a railway line to the border with Uganda.



The country has been struggling with a heavy debt load and the accompanying cost of servicing it.



Ruto, who took office in September 2022, has promised that his government will not default on its external debt, pledging to cut waste and boost revenue to tackle the challenge.



It is Ruto&#8217;s first state visit to China as president of Kenya.



<h2 class="wp-block-heading" id="h-increased-cooperation">INCREASED COOPERATION</h2>



Ruto and Xi&#8217;s joint statement said both countries would continue to uphold the World Trade Organisation&#8217;s values and basic principles and &#8220;resolutely oppose new hegemonic tactics such as illegal unilateral sanctions, &#8216;decoupling and chain breaking&#8217;, tariff barriers and technological blockades&#8221;.



The two sides said they would deepen peace and security exchanges by strengthening cooperation in personnel training, the military industry, counter-terrorism, joint exercises and training.



Chinese companies can cooperate with Kenya in building a local medical and health industry according to Kenya&#8217;s needs, the statement said.



Both sides are also willing to rely on major projects such as the Mombasa-Nairobi railway to enhance infrastructure construction and connectivity within Africa.



The opening of direct flights between Beijing and Nairobi was also being &#8220;actively explored&#8221; it said.



(Reporting by Farah Master in Hong Kong, Liz Lee and Beijing newsroom; Editing by Himani Sarkar, Kate Mayberry and Michael Perry)

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China, Kenya upgrade ties amid ‘turbulent international situation’

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="768" height="402" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1DsPom.jpg" alt="" class="wp-image-612780" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1DsPom.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1DsPom-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1DsPom-160x84.jpg 160w" sizes="auto, (max-width: 768px) 100vw, 768px" /><figcaption class="wp-element-caption">Selim Korkutata | Anadolu Agency | Getty Images</figcaption></figure>



Bitcoin rose for a third day in a broad relief rally after President Donald Trump softened his tone on China tariffs and ratcheted down his rhetoric against Federal Reserve Chair Jerome Powell.



The price of the flagship cryptocurrency was last higher by 2.4% at $93,660, according to Coin Metrics. Earlier, it rose as high as $94,499.86, its highest level since March 3. Bitcoin has now given back more than half of its losses since Inauguration Day and is hovering just under the flat line for the year.



“This recent surge primarily reflects a market seizing the opportunity to capitalize on a dip in an asset that consistently proves its value as a compelling option for portfolio diversification and hedge against macroeconomic uncertainty and U.S. dollar volatility,” Joel Kruger, market strategist at LMAX, told CNBC.



On Tuesday, exchange-traded funds tracking the price of bitcoin saw a spike in inflows as interest in the cryptocurrency’s potential as a hedge strengthened amid continued stock market turbulence and a diving dollar. Bitcoin ETFs logged $936.43 million in daily inflows, their biggest day since Jan. 17, according to data from SoSoValue.



Bitcoin’s rally this week has forced short sellers to buy bitcoin back from the market to close their positions, thereby pushing the price even higher. In the past 24 hours, bitcoin has seen more than $300 million in short liquidations across exchanges, according to CoinGlass.



Demand for spot bitcoin has been contracting on a monthly basis, although that contraction has slowed in recent days, taking downward pressure off the price, Julio Moreno, head of research at crypto data provider CryptoQuant, told CNBC. However, he warned, the demand growth indicators have a ways to go before getting to late 2024 levels, which is what bitcoin would need to sustain its rally and see new all-time highs.

AA1DsPom

Bitcoin heads toward $95,000, rising for a third day and turning positive on the year

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="536" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/34VAE6NZTJLMTNUVKTT6O3FWY4-820x536.jpg" alt="" class="wp-image-529745" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/34VAE6NZTJLMTNUVKTT6O3FWY4-820x536.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/34VAE6NZTJLMTNUVKTT6O3FWY4-300x196.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/34VAE6NZTJLMTNUVKTT6O3FWY4-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/34VAE6NZTJLMTNUVKTT6O3FWY4-768x502.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/34VAE6NZTJLMTNUVKTT6O3FWY4-1536x1005.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/34VAE6NZTJLMTNUVKTT6O3FWY4-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Shoppers look for items as they shop at an outlet of retailer Checkers in Sandton City mall, in Sandton, South Africa, August 28, 2024. REUTERS/Lelethu Madikane</figcaption></figure>



JOHANNESBURG, April 23 (Reuters) &#8211; South Africa&#8217;s annual inflation rate fell for the first time in five months in March to its lowest level since June 2020, due to a drop in fuel costs and softer price rises for tuition.



Headline consumer inflation eased to 2.7% year-on-year from 3.2% in February, below the 2.9% expected by economists polled by Reuters, and outside the South African Reserve Bank&#8217;s (SARB) 3% to 6% target range.



A breakdown by Statistics South Africa showed the fuel index was down 8.8% last month.



Education fees, which are surveyed once a year in March, increased 4.5%, slower than the previous year&#8217;s 6.4% rise.



Some analysts thought the latest inflation numbers gave the central bank scope to cut interest rates at its next monetary policy meeting in May.



&#8220;There is ample room for the (central bank) to cut rates further to support the economy, to soften the hit from the global trade war,&#8221; Elize Kruger, a South Africa-based independent economist,&nbsp;said.



The SARB left its key lending rate unchanged at its last meeting in March after three consecutive cuts, citing risks from U.S. President Donald Trump&#8217;stariffs and the country&#8217;s disputed national budget.



It stuck to that cautious tone in a biannual review of its monetary policy last week.



Elna Moolman at Standard Bank saw signs of weakness in the residential rental market in Wednesday&#8217;s release, which she said was helping keep inflationary pressures benign.



However, the SARB&#8217;s concerns around global tariffs and a weaker local currency meant further rate cuts may not necessarily happen soon, she said.



(Additional reporting by Bhargav Acharya; Editing by Alexander Winning and Rachna Uppal)

Shoppers look for items as they shop at an outlet of retailer Checkers

South African inflation falls to five-year low in March as fuel, education costs ease

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-1258656549-820x547.jpg" alt="" class="wp-image-523855" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-1258656549-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-1258656549-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-1258656549-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-1258656549-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-1258656549-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-1258656549-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Wamkele Mene, secretary-general of African Continental Free Trade Area (AfCFTA), during a Bloomberg Television interview at the Bloomberg New Economy Gateway Africa event in Marrakesh, Morocco, on Tuesday, June 13, 2023. The event brings together leaders in the private and public sectors to discuss the world&#8217;s most pressing issues and evaluate potential solutions in the context of local and regional priorities. Photographer: Hollie Adams/Bloomberg via Getty Images</figcaption></figure>



African Continental Free Trade Agreement Secretary General Wamkele Mene says African countries must unify trade policies in order to deal with the disruption caused by U.S. President Donald Trump’s global tariffs.



“The good news out of this crisis is that our heads of states understand that there is not a single market in Africa that will survive on its own,’’ Mene told CNBC Africa in an interview. ’’We are not going to be able to negotiate bilaterally successfully. I think that&#8217;s clear. We will have to leverage on our combined efforts, our combined market size, market share, and combined population size.’’



President Trump has slapped tariffs on almost every country in the world, complaining they have been taking advantage of the world’s largest economy’s openness for trade. Economists have however questioned the methodology used to arrive at the tariffs which saw the small mountain kingdom of Lesotho slapped with the highest tariff rate at 50 percent under Trump’s ‘reciprocal’ tariffs.



While most countries have sought to negotiate, China, the world’s second largest economy has retaliated with 125% tariffs on the U.S. after it jacked up the initial tariffs to 145%.



The tariffs on Africa have called into question the future of the African Growth and Opportunity Act (AGOA) under which a number of African countries enjoyed duty free access to U.S. markets. The pact is due for renewal this year.



Mene said AGOA was practically dead anyway, given the sweeping nature of President Trump’s tariffs.



“I think if we look at the measures that the U.S. introduced, both the tariff and non-tariff measures, AGOA is no longer alive,’’ Mene said. “What we should always remember, though, is that it was a unilateral preference.’’



He said the disruption caused by the tariffs was going to hurt countries like South Africa and Nigeria, the continent’s largest economies as well as smaller ones like Lesotho, Madagascar, Angola and Kenya. But he suggests the continent should use the opportunity to diversify its markets and strengthen intra-African trade, which remains the lowest among global regions at under 20 percent.



He cited the example of Ethiopia which doubled its exports after being kicked out of AGOA by partnering with China.



‘’The benevolence of others is not going to get us anywhere. We&#8217;ve got to very, very quickly redouble our efforts to build this domestic market because we can&#8217;t rely on others.’’



To accelerate the implementation of the AfCFTA, Mene said African Ministers of Trade are looking at ways of simplifying the ‘’complicated method’’ used to reduce tariffs among member countries which was negotiated in 2017. ‘’It’s a very different world to today. So, how do we make sure that we have a liberalization modality that takes account for where we are, the reality of today?,’’ he said lamenting the $50 billion African countries expend annually to import grain when it has grain exporters.

Key Speakers at New Economy Gateway Africa Event

AfCFTA Secretary General Calls for Unified African Trade Policy as Trump Tariffs Hit

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg" alt="" class="wp-image-420118" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The new economic measures laid out by the U.K. government “will likely increase inequality”, according to a spokesperson from the International Monetary Fund.
Yuri Gripas | Reuters</figcaption></figure>



The International Monetary Fund has cut its forecast for African economic growth by 0.3 percentage points, citing multiple shocks hitting the continent including U.S. President Donald Trump’s sweeping tariffs across the world.



While lauding resilience across the continent, the Washington-based lender now expects its 54 economies to expand by 3.9 percent this year, down from its October forecast of 4.2 percent, it said in a joint statement by its Managing Director Kristalina Georgieva and Hervé Ndoba, the Central African Republic’s Minister of Finance and Budget who is Chair of the African Caucus.



‘’The strong policy actions that have been taken to bring down inflation, stabilize public debt, and reduce external imbalances risk being undone in the face of further shocks,’’ the statement said. &#8220;Risks to the outlook are high amid elevated uncertainty and there are significant differences across countries, with fragile and conflict affected states facing particularly acute challenges.’’



President Trump’s universal tariffs threaten recovering growth across Africa and access to the world’s largest economy through the African Growth and Opportunity Act which is due for renewal this year. Lesotho, derided by Trump as a country nobody has ever heard of, ended with the world’s largest rate at 50 percent.



The continent has struggled to respond, with some countries including Zimbabwe and South Africa saying they would not retaliate and seeking talks, while Kenya has said it is confident it will secure a deal on its own.



The joint statement said African countries will need to intensify domestic reform efforts in the face of the disruption, in order to promote fiscal sustainability while strengthening economic integration through the African Continental Free Trade Agreement (AfCFTA). Central banks should cut rates where appropriate to support economic growth, it added.



‘’At the same time, ambitious structural reforms will unlock growth and drive job creation,’’ it said. “The IMF will remain agile in adapting our toolkit, policy advice, and capacity development to respond to emerging challenges, including from more frequent shocks and transformational shifts from digitalization and AI.’’



The IMF said it remained supportive of initiatives like the G20 Common Framework and the Global Sovereign Debt Roundtable on debt reduction to help countries battling high debt. World Bank figures show average African government debt to gross domestic product ratios remain high at around 60 percent.



The African Caucus, which is made up of African finance ministers and central bank governors, meets with fund management at its annual meetings while the African Consultative Group comprises the Fund Governors of a subset of 12 African countries who are members of the African Caucus and only meets at the Spring Meetings.

107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico

IMF Cuts 2025 African growth forecast as Trump tariffs disrupt trade

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/GettyImages-1251784454-820x547.jpg" alt="" class="wp-image-564339" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/GettyImages-1251784454-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/GettyImages-1251784454-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/GettyImages-1251784454-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/GettyImages-1251784454-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/GettyImages-1251784454-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/GettyImages-1251784454-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The World Bank Group headquarters during the spring meetings of the International Monetary Fund (IMF) and World Bank in Washington, DC, US, on Thursday, April 13, 2023. The IMF trimmed its global-growth projections, warning of high uncertainty and risks as financial-sector stress adds to pressures emanating from tighter monetary policy. Photographer: Samuel Corum/Bloomberg via Getty Images</figcaption></figure>



WASHINGTON, April 22 (Reuters)&nbsp;&#8211;&nbsp;Given big cuts in development aid by Europe and the United States, think tanks and other groups are urging the World Bank to reduce the equity-to-lending ratio of its main lending arm to free up billions in additional lending capacity.



Reducing the equity to lending ratio of the International Bank for Reconstruction and Development to 17% from 18% would allow the bank to boost its lending capacity by $30 billion to $40 billion without burdening taxpayers or shareholders, or jeopardizing its capital reserves, said Eric Pelofsky, vice president of the Rockefeller Foundation.



He said a large portion of these new resources could be used to provide loans to help governments rapidly address actual or anticipated budget gaps and shore up health-care networks, water and sanitation systems, or other critical public systems impacted by foreign aid cuts.



The bank could also offer short-term, low-interest loans to non-governmental organizations facing program cancellations, layoffs, and even bankruptcy that would help them bridge to new long-term funding models, Pelofsky said.



The World Bank voted last year to change its internal lending guidelines and lower its equity-to-lending ratio by 1 percentage point as part of reforms recommended by an independent commission for the Group of 20 major economies. It took a similar step in 2023, dropping the ratio to 19% from 20%.



Since U.S. President Donald Trump returned to office in January for a second term, his administration has cut billions of dollars in foreign assistance in a review that aimed to ensure programs align with his &#8220;America First&#8221; foreign policy. European governments have also cut their foreign aid budgets.



&#8220;Inaction will have concrete consequences,&#8221; Pelofsky said, citing studies which say U.S. foreign aid cuts could put millions of lives at risk.



Jubilee USA Network, a religious development group, said it backs the push, and it urged the World Bank to act quickly.



&#8220;The World Bank can and should make this decision as soon as possible,&#8221; said Eric LeCompte, the group&#8217;s executive director and a United Nations adviser. &#8220;With the significant cuts we&#8217;ve seen from the U.S. and Europe on development aid, this action by the World Bank can fill this aid gap.&#8221;



(Reporting by Andrea Shalal; Editing by Leslie Adler)

Spring Meetings Of The International Monetary Fund And World Bank

World Bank urged to reduce equity-to-loan ratio to free up funds for poor countries

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-820x461.jpeg" alt="" class="wp-image-612440" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION.jpeg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Shoppers pass along the high street in Maidstone, UK, on Wednesday, April 16, 2025. Bloomberg | Bloomberg | Getty Images</figcaption></figure>



The International Monetary Fund downgraded the U.K.’s 2025 growth forecast in its latest economic outlook released on Tuesday, warning that U.S. President Donald Trump’s trade tariffs, higher borrowing costs and increased energy prices will dent output this year.



In its reference forecast, the IMF predicted the British economy will grow 1.1%, down by 0.5 percentage points from its previous forecast issued in January. The fund now also expects the U.K. to grow by 1.4% in 2026, 0.1 percentage points lower than its previous estimate.



The figures were part of the IMF’s reference outlook, which does not include the tariff announcements made after April 4,&nbsp;such as the 90-day pause on the higher duties that Trump initially announced.



The downgrade for 2025 “reflects a smaller carryover from 2024, the impact of recent tariff announcements, an increase in gilt yields, and weaker private consumption amid higher inflation as a result of regulated prices and energy costs,” the IMF wrote in its World Economic Outlook report.



The downgrade pours more cold water on the U.K.’s Labour government which has made a main priority of growing the economy and is already contending with the uncertainty posed by trade tariffs from one of its largest trading partners, the U.S.



Trump announced a baseline 10% tariff on U.K. imports to the U.S. on April 2, despite Britain and the U.S. having almost balanced trade when it comes to the exchange of goods.



While the U.K. is hopeful it can strike a trade deal with the U.S., the White House leader’s mercurial stance on trade and tariffs has put financial institutions on edge.



The latest IMF downgrade for Britain echoes a similar downturn in domestic forecasts. In February, the Bank of England halved the U.K.’s growth projection for 2025 from 1.5% to 0.75%, warning of an uncertain global economic outlook and a sharp uptick in inflation later this year on the back of higher energy and water bills.



The U.K.’s Office for Budget Responsibility in March also halved its growth forecast for the U.K., slashing its outlook from 2% to 1% growth in 2025.



Despite the recent downgrades, the U.K. economy has shown some signs of life recently. The latest monthly growth data released earlier in April showed the economy grew by a larger-than-expected 0.5% month-on-month in February, from zero growth in January. National inflation, meanwhile, cooled to a lower-than-expected 2.6% in March.



The Bank of England appears sanguine on interest rate cuts as it looks to balance boosting growth with its predicted uptick in the inflation rate. Economists widely expect the BOE to cut its key interest rate from 4.5% to 4.25% at its next monetary policy meeting in May.



<h2 class="wp-block-heading" id="h-bright-spots-in-the-euro-zone"><a></a>Bright spots in the euro zone</h2>



Looking at the U.K.’s continental neighbors in the euro zone, the IMF predicted a slight decline in 2025 output, forecasting that growth in the euro area’s GDP will hit 0.8% in 2025, before picking up modestly to 1.2% in 2026.



“Rising uncertainty and tariffs are key drivers of the subdued growth in 2025,” the fund said. It noted that offsetting forces that support the modest uptick in 2026 include stronger consumption on the back of rising real wages, along with a projected fiscal easing in Germany following major changes to its fiscal rule, known as the “debt brake.”



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108086018-1736840423739-gettyimages-1090698142-amf06159.jpeg?v=1736840447&amp;w=1858&amp;h=1045&amp;vtcrop=y" alt="Spain, holiday homes, tax"/><figcaption class="wp-element-caption">Spain, holiday homes, tax Westend61 | Westend61 | Getty Images</figcaption></figure>



The IMF singled out Spain as a bright spot in the euro zone, stating its growth momentum “contrasts with the sluggish dynamics elsewhere,” with the Mediterranean nation expected to expand its economy by 2.5% this year following an upward revision of 0.2 percentage points from the forecast made in January.



“This reflects a large carryover from better-than-expected outturns in 2024 and reconstruction activity following floods,” the IMF said.



Trump’s tariffs cast a shadow over the wider EU, however. The U.S. president initially imposed a 20% “reciprocal” tariff on all goods coming from the European Union but paused the measures for 90 days until early July, lowering the duty to 10% until that time.



As it looks to sign its own trade deal with the States in the interim, the EU paused its retaliatory duty targeting 21 billion euros ($24.1 billion) worth of U.S. goods “to allow time and space for EU-U.S. negotiations,” the European Commission said.

108134615-1745320819888-gettyimages-2209959602-UK_INFLATION

IMF slashes UK’s growth forecast, points to U.S. tariffs and borrowing costs

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="5000" height="3483" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/XFBSMRNLQVND3AANHME4FQBHPQ.avif" alt="" class="wp-image-612391"/><figcaption class="wp-element-caption">A severely malnourished child drinks from a bottle, at a camp for internally displaced people in Afdera town, Afar region, Ethiopia, February 23, 2022. REUTERS/Tiksa Negeri/File Photo</figcaption></figure>



GENEVA, April 22 (Reuters)&nbsp;&#8211;&nbsp;The World Food Programme suspended malnutrition treatment for 650,000 malnourished women and children in Ethiopia this week due to severe funding shortages, the U.N. agency said, with millions more at risk of losing access to aid.



WFP gets financing from 15-20 donors including the United States but many of them have cut funding this year, said Zlatan Milisic, WFP Country Director in Ethiopia. The agency has received exemptions from U.S. President Donald Trump&#8217;s aid freeze that has disrupted humanitarian work around the world, he added, but little for 2025 so far.



More than 10 million people in Ethiopia are gravely short of food, including 3 million displaced by conflict and extreme weather conditions as well as refugees from war-torn neighbouring Sudan, according to WFP.



Milisic said WFP had already reduced rations in recent months but that its operations were now at &#8220;breaking point&#8221; due to severe underfunding, forcing more drastic measures.



&#8220;We&#8217;ve been left no choice but to this week suspend treatment for 650,000 malnourished women and children — simply because we&#8217;ve run out of commodities and funding,&#8221; he told a Geneva press briefing by video from Addis Ababa.



A&nbsp;WFP&nbsp;spokesperson later added that those cut off were in various locations including the northern regions of Tigray and Afar, and that the U.N. agency is actively seeking funding to purchase more supplies to resume treatments.



Around 3.6 million people could lose access to assistance, including some being treated for malnutrition, if more funding is not received by June, Milisic added.



&#8220;I would hope that we will get the resources and put in place measures to really do our best to assist them. But if they don&#8217;t receive assistance, we will have serious consequences.&#8221;



Ethiopia&#8217;s food crisis has worsened in recent years as a result of a 2020-22 civil war in Tigray. The country also faced the Horn of Africa&#8217;s worst drought in decades in 2022.



WFP previously warned of a return of drought conditions to the region this year.



(Reporting by Emma Farge; editing by Mark Heinrich)

XFBSMRNLQVND3AANHME4FQBHPQ

Malnutrition treatments halted in Ethiopia due to underfunding, WFP says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-820x461.jpeg" alt="" class="wp-image-612340" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. President Donald Trump speaks as he meets with Italian Prime Minister Giorgia Meloni (not pictured) in the Oval Office at the White House in Washington, D.C., U.S., April 17, 2025. Evelyn Hockstein | Reuters</figcaption></figure>



Yesterday’s edition of this newsletter cautioned that U.S. President Donald Trump’s desire to intervene in the Federal Reserve, as he expressed to reporters on Friday, could result in upheaval in the markets. That didn’t happen because markets were closed for the Good Friday holiday.



On Monday, trading resumed. So have Trump’s attacks on the central bank — and, more pointedly, on Fed Chair Powell, describing him as “Mr. Too Late” and “a major loser” for not cutting interest rates. Trump appointed Powell to the Federal Reserve’s highest seat in his first presidential term during 2017.



With no market closure to shield shares from Trump’s threats, investors unloaded their stocks. All major U.S. indexes fell, weighed down by steep declines in the “Magnificent Seven” group of shares. The U.S. dollar weakened to a three-year low while gold prices hit a new high, suggesting, in combination, that global investors are losing confidence in the U.S. economy and reallocating their capital to safer assets shielded from Trump.



<h2 class="wp-block-heading" id="h-what-you-need-to-know-today"><a></a>What you need to know today</h2>



Trump escalates attacks on Powell U.S. President Donald Trump on Monday renewed and escalated his attacks on Federal Reserve Chair Jerome Powell. ″‘Preemptive Cuts’ in Interest Rates are being called for by many,” Trump said on Truth Social. “There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote, referring to Powell. On Friday, Trump also called for Powell to cut rates.



Stocks and U.S. dollar fall as gold hits high Stocks in the U.S. fell Monday. The S&amp;P 500 lost 2.36%, the Dow Jones Industrial Average tumbled 2.48% and the Nasdaq Composite was down 2.55%. The ICE U.S. Dollar Index fell as low as 97.92 on Monday, the lowest level since March 2022, according to FactSet. Gold prices jumped to $3,452.30 per ounce, a fresh record. Asia-Pacific markets traded mixed Tuesday. Hong Kong’s Hang Seng Index climbed nearly 0.5% but Japan’s Nikkei 225 declined roughly 0.2%. The Bank of Japan will likely pause rate hikes in its May meeting, said Moody’s Analytics.



Shares of Tesla drop before earnings Tesla shares fell almost 6% on Monday, a day ahead of its first-quarter earnings report. The stock is now down 44% for the year after wrapping up their worst quarter since 2022 in March. In the online forum that Tesla solicits investor inquiries before its earnings calls, one investor, referring to CEO Elon Musk, asked, “What steps has the board of directors taken to mitigate the brand damage caused by Elon’s political activities?”



Vance and Modi optimistic on deal India’s Prime Minister Narendra Modi met U.S. Vice President JD Vance, who was in India for a mostly personal trip, in the nation’s capital on Monday. A statement from Modi’s office said the two leaders “welcomed the significant progress in the negotiations for a mutually beneficial India-U.S. Bilateral Trade Agreement.” On Monday, U.S. Trade Representative Jamieson Greer said both countries have “finalized the terms of reference to lay down a roadmap for the negotiations on reciprocal trade.”



Nomura to buy parts of Macquarie Japanese investment bank and brokerage group Nomura said Tuesday it will buy the U.S. and European public asset management businesses of Macquarie, an Australian investment banking company, for $1.8 billion. The all-cash deal is expected to close by the end of this year, subject to regulatory approvals.



[PRO] Markets could have ‘severe’ reaction to Trump Stocks and bonds would likely have a “severe reaction” and sell off sharply if Trump makes a move to get rid of Federal Reserve Chair Jerome Powell, Evercore ISI’s vice chairman, Krishna Guha, told CNBC’s “Squawk Box” Monday. While Powell has said he doesn’t believe the president can legally remove the Fed Chair, Guha highlighted one way that Trump can pressure Powell without firing him.



<h2 class="wp-block-heading" id="h-and-finally"><a></a>And finally&#8230;</h2>



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108131827-1744683718571-gettyimages-2203962201-baglietto-notitle250310_np76O.jpeg?v=1745301518&amp;w=1858&amp;h=1045&amp;vtcrop=y" alt="U.S. one hundred dollar bills."/><figcaption class="wp-element-caption">Nurphoto | Nurphoto | Getty Images</figcaption></figure>



As the dollar falters, the world’s central banks tread a tightrope — devalue their currency or not



Uncertainty about U.S. policymaking has led to a flight from the greenback and Treasurys in recent weeks, with the dollar index weakening more than 9% so far this year. The drop in the U.S. dollar has led other currencies to appreciate against it, especially safe havens such as the Japanese yen, the Swiss franc and the euro.



While a stronger local currency might help tame inflation through cheaper imports, it complicates export competitiveness particularly under renewed U.S. tariffs, said Thomas Rupf, VP Bank’s co-head for Singapore and Asia chief investment officer.



Currency devaluation is likely to be more of an active consideration across emerging markets, particularly in Asia, said Nick Rees, head of macro research at Monex Europe. However, those countries and Asian central banks will need to tread a fine line to avoid capital flight and other risks.

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Investors grow wary of U.S. assets as Trump intensifies attacks on Powell

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="768" height="402" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee.jpg" alt="" class="wp-image-612268" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee-160x84.jpg 160w" sizes="auto, (max-width: 768px) 100vw, 768px" /><figcaption class="wp-element-caption">Nurphoto | Nurphoto | Getty Images</figcaption></figure>



The dollar has been sliding and the ripple effect on other currencies has brought a mix of relief and headache to central banks around the world.



Uncertainty about U.S. policymaking has led to a flight out of the U.S. dollar and Treasurys in recent weeks, with the dollar index weakening more than 9% so far this year. Market watchers see further declines.&nbsp;



According to Bank of America’s most recent Global Fund Manager Survey, a net 61% of participants anticipate a decline in the dollar’s value over the next 12 months — the most pessimistic outlook of major investors in almost 20 years.



The exodus from U.S. assets may reflect a broader crisis of confidence, with potential spillovers such as higher imported inflation as the dollar weakens.



The drop in the greenback has led other currencies to appreciate against it, especially safe havens such as the Japanese yen, the Swiss franc as well as the euro.



Since the start of the year, the Japanese yen has strengthened over 10% against the greenback, while the Swiss franc and the euro has appreciated about 11%, according to LSEG data.



Aside from the safe havens, other currencies that have strengthened against the dollar this year include the Mexican peso, up 5.5% against the dollar, and the Canadian dollar which has appreciated over 4%. The Polish zloty has strengthened more than 9% while and Russian rouble has appreciated over 22% against the greenback.



Some emerging market currencies, however, have depreciated despite the weakness in the greenback.



The Vietnamese dong and Indonesian rupiah weakened to a record low per U.S. dollar earlier this month. The Turkish lira also hit an all-time low last week. China’s yuan hit a record low against the dollar nearly two weeks back but has since strengthened.&nbsp;



<h2 class="wp-block-heading" id="h-breathing-room-to-cut-rates"><a></a>Breathing room to cut rates?</h2>



Barring a few exceptions like the Swiss National Bank, a weakening U.S. dollar is a relief to governments and central banks around the world, analysts told CNBC.



“Most central banks would be happy to see 10%-20% declines in the U.S. dollar,” said Adam Button, chief currency analyst at ForexLive. He added that the dollar strength has been a persistent problem for years and poses a difficulty for countries with hard and soft dollar pegs.



With many emerging market countries having large dollar-denominated debt, a weaker dollar lowers real debt burden. Additionally, a softer greenback and stronger local currency tend to make imports relatively cheaper, lowering inflation and hence allowing central banks the room to cut rates to boost growth.



The recent U.S. dollar sell-off offers more “breathing room” for central banks to cut rates, said Button.&nbsp;



While a stronger local currency might help tame inflation via cheaper imports, it complicates export competitiveness particularly under renewed U.S. tariffs where Asia is exposed as the world’s largest goods producer, said Thomas Rupf, VP Bank’s co-head for Singapore and Asia chief investment officer.



Currency devaluation is likely to be more of an active consideration across emerging markets, particularly in Asia, said Nick Rees, head of macro research at Monex Europe.



However, these emerging markets and Asian central banks will need to tread a fine line, to avoid capital flight and other risks.



“Emerging markets face high inflation, debt, and capital flight risks, making devaluation dangerous,” said Wael Makarem, financial markets strategists lead at Exness.



Additionally, devaluation could be seen by the U.S. administration as a trade measure which could attract retaliation, he added.



Emerging market economies may be reluctant to cut rates as it can affect the debt burden of domestic households and firms that have borrowed in U.S. dollars, said Fitch Ratings’ director of economics, Alex Muscatelli. A weaker domestic currency can also lead to capital outflows in response to lower interest differentials with the U.S., he added.



For example, Muscatelli does not see Indonesia’s central bank cutting rates too much given the recent currency volatility, but cited that Korea and India may have space for cutting rates.



The European Central Bank took the opportunity offered by declining inflation to cut rates by another 25 basis point at its April meeting. The ECB on Thursday said that “Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.”



Another example is the Swiss National Bank, which has grappled with a strong franc for much of the past 15 years, observed Button. Exports of goods and services make up over 75% of Switzerland’s GDP and a strong franc makes Swiss goods more expensive abroad.



“If capital continues to flow in, they may have to take drastic measures to devalue,” he said. Investors flood into the franc during times of uncertainties, such as in recent weeks, strengthening the franc.



<h2 class="wp-block-heading"><a></a>Central banks are avoiding devaluation — for now</h2>



Devaluing the currency poses the risk of stoking price growth and monetary authorities will be wary of inflation staying above their targets.



The risk of higher inflation arising from currency depreciation as well as tariffs — as countries respond to U.S. levies — are likely to make central banks reluctant to pursue a path of voluntary devaluation, said Wells Fargo’s international economist and FX strategist, Brendan McKenna.



On top of that, while most foreign central banks do theoretically have the bandwidth to weaken their own currency, the likelihood is still low in the current environment, the strategist added.



Whether a country can devalue its currency is influenced by several factors: the size of its FX reserves, exposure to foreign debt, its trade balance, and sensitivity to imported inflation.&nbsp;



“Export-oriented countries with sufficient reserves and lower reliance on foreign debt would have more room to devalue – but even those are likely to tread carefully,” said McKenna.&nbsp;



The broader direction of trade negotiations will be key to how countries choose to act. Aside from China, several countries have displayed a willingness to engage in trade negotiations, and if these talks lead to lower tariffs, then central banks will not be as likely to pursue weaker currencies, he added.



In the current geopolitical climate, devaluation could also invite retaliation and risks of accusations of currency manipulation, said VP Bank’s Rupf.



Though there is still the possibility that trade tensions could lead to more protectionist outcomes, which will drive central banks toward devaluing their currencies.



“But for now, it seems the preferred action is avoiding a currency war that would only add more instability to the local and global economy,” McKenna said.

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Sub-Saharan Africa must lift revenue to ride out global turbulence – IMF Africa head

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South Africa’s finance minister says he won’t resign after VAT U-turn

China warns G20 global economic growth ‘insufficient’, trade tensions weaken momentum

Tanzania bans agriculture imports from South Africa, Malawi

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As the dollar falters, the world’s central banks tread a tightrope — devalue their currency or not

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