Press Review CW 15/2024: A question of money
Press Review 5 April 2024 to 12 April 2024

Commemoration of the genocide in Rwanda 30 years ago

On 7 April, the annual commemoration of the genocide against the Tutsi (and moderate Hutu) took place in Kigali, marking its 30th anniversary. The ceremony was attended by numerous international politicians, including 19 African Heads of State and Government, Israeli President Yitzchak Herzog, French Foreign Minister Stéphane Séjourné and former German President Horst Köhler. The United Nations Day of Remembrance is a global reminder of the genocide that took place over around 100 days between April and mid-July 1994. Radical members of the Hutu majority killed more than 800,000 people during this period, mainly members of the Tutsi minority. However, moderate and opposition Hutu as well as members of the very small Twa population group were also killed. In addition, an estimated 150,000 to 250,000 women were raped during this time.

The genocide in Rwanda is also considered a failure of the international community. Despite the presence of the UN peacekeeping mission United Nations Assistance Mission for Rwanda (UNAMIR), the genocide could not be prevented as warnings were ignored and the situation on the ground was misjudged. This was also the case for Germany, which was the colonial power of Rwanda (then part of German East Africa) from 1897 to 1919 and was one of the largest donors in the field of development cooperation in 1994. In November 1994, the International Criminal Tribunal for Rwanda (ICTR) began its work in Tanzania to legally investigate the atrocities and inaction of the international community during the genocide. This was replaced in 2015 by the International Residual Mechanism for Criminal Tribunals (IRMT) of the United Nations. The United Nations also created the office of the Special Adviser on the Prevention of Genocide. The genocide in Rwanda also led to a reassessment of the role of UN peacekeeping missions within the framework of the Responsibility to Protect (R2P).

To mark the 30th anniversary of the genocide in Rwanda, the German Bundestag debated the reappraisal of and responsibility for the genocide on Thursday.

 

Côte d’Ivoire receives financing tranche of 574 million US dollars from the IMF

On Monday, the International Monetary Fund (IMF) announced the approval of a financing tranche of 574 million US dollars to Côte d’Ivoire. The announcement follows the visit by IMF staff and the successful completion of the second semi-annual review of Côte d’Ivoire’s economic reform program, supported by the IMF through the Extended Fund Facility/Extended Credit Facility (EFF/ECF) program, and the first review of the climate change reform program financed by the IMF’s Resilience and Sustainability Facility (RSF). In addition, important political framework conditions and structural reforms for the mobilisation of domestic revenues, public revenue management and governance have been agreed, announced the Head of the IMF mission Olaf Unteroberdoerster in a statement. This also includes further revenue-based fiscal consolidation with the aim of reducing the budget deficit to three percent of gross domestic product (GDP) by 2025. Both reviews still have to be approved by the IMF’s Executive Board.

The financial aid of 3.5 billion US dollars under the EFF/ECF to Côte d’Ivoire was approved in May last year. These have a term of 40 months and are intended to financially support the Ivorian government’s economic reform plans. At the first review in May 2023, 500 million US dollars had already been disbursed. Côte d’Ivoire’s climate reform programme, on the other hand, has only been officially co-financed by the IMF’s RSF programme since February of this year. This has a term of two years (2024-2026) and a volume of 1.3 billion US dollars. The RSF was set up by the IMF in 2022 to provide recipient countries with longer-term funding to support political reforms to reduce macroeconomic risks in relation to climate change and pandemic preparedness. The financial resources for Côte d’Ivoire from both IMF-programmes total 4.8 billion US dollars.

The economic and climate reforms supported by the IMF are part of the national development plan adopted by the government in 2021. In addition to comprehensive budget consolidation measures, which include a tax increase to reduce the public deficit from four to three percent as agreed with the IMF, this also includes various investment programmes to strengthen the national processing industry. A particular focus here is on cocoa production. Although Côte d’Ivoire is one of the world’s largest producers of cocoa beans, most of the actual processing takes place abroad. In addition, the West African country is increasingly confronted with the effects of climate change. In the north of the country, there are repeated crop failures due to droughts, while flooding is becoming more frequent in the south. The IMF predicts that without measures, the country’s GDP could fall by 13% by 2050 and one million more people will be affected by poverty. Cocoa cultivation, the most important economic sector, is also vulnerable to climate change. For this reason, the government enacted the reform package Le Programme National d’Atténuation des Gaz à Effet de Serre et d’Adaption aux Changements Climatiques (PNCC) in 2017, which provides for the following measures: Integrating climate into key aspects of public financial management, strengthening climate governance, strengthening safeguards for the agricultural sector, creating a framework for green and sustainable finance, building resilience to climate hazards, and controlling and reducing greenhouse gas emissions. The IMF supports these climate policy reforms through the RSF.

Côte d’Ivoire is considered one of the most dynamic countries in West Africa, which is primarily due to the country’s steady economic growth. The IMF is forecasting growth of 6.6% for 2024. Last year, this figure was still at 6.1 percent. The continued growth is primarily the result of oil production and rising income from exports of important metals such as gold, manganese and nickel. According to Tradingeconomics, inflation is very low compared to neighboring countries at 3.1 percent. Even though the country’s economy is growing, Côte d’Ivoire is still dependent on loans from the IMF.

 

Zimbabwe introduces gold-backed currency

Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), was officially launched and put into circulation on Monday with an exchange rate of 13.56 to the Zimbabwe dollar set by the central bank and a new interest rate of 20%. The new currency is backed by gold, foreign currency and precious minerals. The introduction came just days after the Reserve Bank of Zimbabwe and the Zimbabwe Stock Exchange (ZSE) announced last Friday that they would be replacing the Zimbabwe dollar with the new Zimbabwe Gold (ZiG) currency. The new ZiG banknotes will be issued in eight denominations ranging from 1 to 200 ZiG. Banks are now being asked to exchange their current stocks of Zimbabwe dollars for ZiG with immediate effect, while citizens have until the end of April, just under three weeks, to exchange their old notes and coins for the new ones, according to the central bank’s monetary policy statement. It also announced that it had “recalibrated” the key interest rate, which now stands at 20 per cent compared to the previous rate of 130 per cent.

There were long queues at many banks in the capital Harare on Tuesday as most banks took their systems offline to process the currency changeover. About half of the 27 financial institutions connected to the national payment platform ZimSwitch were able to process ZiG payments on Wednesday, the platform said on X. Meanwhile, numerous businesses are reportedly refusing to continue accepting the Zimbabwe dollar as a means of payment and are demanding payment in US dollars instead. This should remain in circulation as legal tender. Although not all banks in the country have yet fully converted to the new currency, the Reserve Bank of Zimbabwe recorded an increase of 0.2 per cent to 13.50 per cent against the US dollar on Wednesday. A single ZiG is worth about seven US cents, which is equivalent to the price of one milligram of gold. Critical voices, meanwhile, are questioning whether Harare has sufficient reserves to adequately support the new currency and how the volatility of the gold price could affect them. The governor of the central bank, John Mushayavanhu, however, emphasised at a press conference last Friday that the total value of the reserves of gold, cash and valuable minerals such as diamonds would amount to 285 million US dollars, which is three times the issued ZiG currency.Mushayavanhu, who has been in office since the end of March, predicted that the currency changeover would lead to an annual inflation rate of 2 to 5 per cent and a monthly inflation rate of less than 1 per cent by the end of the year.

President Emmerson Mnangagwa first indicated in February that his government would introduce a “structured currency”. Last year, the Zimbabwe dollar lost almost 100 per cent of its value against the US dollar. As recently as Friday, it was officially trading at around 30,000 against the coveted US equivalent, according to tracker Zim Price Check. Inflation rose from 26.5 per cent in December last year to 34.8 per cent in January this year, reaching 55.3 per cent in March according to official figures. The introduction of the ZiG is Zimbabwe’s sixth attempt since 2008 to introduce a functioning national currency. Under then ruler Robert Mugabe, so-called hyperinflation exceeded 500 billion per cent according to estimates by the International Monetary Fund, rendering the then national currency worthless. Since then, the country has experienced a period of currency volatility, including a ban on foreign currencies such as the US dollar for domestic transactions in 2019, which was later lifted.

 

In other news

On Sunday, Nigerian travel blogger and solo driver Pelumbi Nubi arrived in Lagos after her 68-day solo journey from London to Nigeria and was welcomed by Nigerian officials. Her road trip took the 28-year-old through 17 countries, including France, Spain, Morocco and other countries in the Sahara. Despite some delays and challenges, including a 24-hour traffic jam at the border with Liberia, a car accident shortly after her arrival in Liberia and being denied entry into Sierra Leone last month, Nubi continued her tour. Born in Lagos, Nigeria, Nubi has lived in the UK since the age of ten. During her research beforehand, she realised that no black woman had ever undertaken such a journey alone before. With her solo journey, which she documented on her YouTube channel, Nubi wanted to show her followers that travelling is easy, safe and doable. The entire journey amounted toi almost 20,000 US dollars, including fuel, accommodation and food. The governor of the Nigerian state of Lagos, Babajide Sanwo-Olu, appointed the solo traveller as Lagos’ tourism ambassador upon her arrival.

 

Update: South African court rules that Jacob Zuma can run in parliamentary elections

In South Africa, former president Jacob Zuma is now allowed to stand for the parliamentary elections in May. This was decided by the country’s electoral court without giving reasons. The court thus overturned a decision by the Independent Electoral Commission (IEC), which had rejected Zuma’s candidacy a fortnight ago (press review CW 14/2024). Zuma had lodged an objection and appealed against the decision.

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