Uganda shilling stable on subdued demand
KAMPALA, May 8 (Reuters) - The Ugandan shilling was stable against the dollar on Thursday, with hard currency demand subdued across both merchandise importers and interbank players, traders said.
At 0821 GMT commercial banks quoted the shilling at 3,655/3,665, unchanged from Wednesday's close.
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The Guardian
5 hours ago
- The Guardian
The Guardian view on Zambia's Trumpian predicament: US aid cuts are dwarfed by a far bigger heist
Donald Trump's decision to cut $50m a year in aid to Zambia – one of the world's poorest nations – is dreadful, and the reason given, corruption, rings hollow. There is evidence of large-scale looting, but the real scandal is that the theft appears legal, systemic and driven by foreign interests. In a paper presented to the Association for Heterodox Economics conference in London later this month, Andrew Fischer of Erasmus University Rotterdam argues that Zambia's economy is not being plundered by domestic actors but rather by transnational corporate practices enabled by opaque accounting. His findings point to a staggering extraction of wealth that dwarfs the value of the aid intended to help. Zambia is blessed – or perhaps cursed – with mineral wealth. It is Africa's second-largest copper producer. The metal, key to the green energy transition, accounts for around 70% of the country's export earnings. Despite this, in 2020 Zambia became Africa's first pandemic-era defaulter. It has only just agreed a debt restructuring with major creditors. How did a nation so rich in natural resources become so poor? Prof Fischer says this is a textbook example of a low-income commodity exporter shaped by foreign capital, where export booms enrich multinationals rather than the country itself. In Zambia's case, copper may bring in foreign exchange, but much of that money simply flows straight back out. His most striking discovery is the scale and concealment of capital flight. He uncovered billions flowing out of Zambia, hidden in its balance-of-payments data. These were not flagged as 'errors and omissions' but obscured in entries considered too elaborate to probe. In 2021 alone, $5bn – about 20% of GDP – vanished offshore, just as Zambia was defaulting on its debt. This was in addition to profit remittances of $1.2bn. In contrast, US annual grant aid amounted to just $250m, or 1% of Zambia's GDP. It's a sobering difference between a trickle of assistance against a torrent of extraction. Prof Fischer links the outflows to mining giants dominating Zambia's economy. These firms invested billions from abroad to fund operations, but the money left almost as soon as it arrived. What looked like foreign direct investment during last decade's mining boom masked a deeper drain: profits repatriated through financial outflows. The numbers are extraordinarily large for Zambia: more than $5bn in 2012, $3bn in 2015, and nearly $2bn in 2017. These private sector flows were beyond public scrutiny. Mining companies have long been accused of dodging taxes in Zambia. In 2018 the tax authorities slapped an $8bn tax bill on the Canadian mining company First Quantum Minerals, which later reportedly settled for $23m. Glencore, an Anglo-Swiss giant, left the country in 2021 after falling out with the authorities. Yet in 2023 half of Zambia's copper was exported to Switzerland – that is, bought and sold by Swiss commodity traders like Glencore. Academics Rita Kesselring and Gregor Dobler noted in 2019 that such firms exploit transfer pricing and a lack of transparency to shift profits abroad. Prof Fischer's research similarly points to legal mechanisms embedded in world commerce. He concedes that some outflows may involve wealthy Zambians, but questions whether they could move funds on this scale and complexity. His research exposes a form of wilful blindness. If transnational corporations can legally strip Zambia of its wealth while donors look the other way, then the real scandal isn't theft. It's the global economic system itself.
Telegraph
5 hours ago
- Telegraph
Starmer's Chagos ‘surrender' will fund tax cuts for Mauritians
Sir Keir Starmer's Chagos ' surrender ' deal will fund tax cuts for Mauritians, it has emerged. The Mauritian government has said it will use almost £500 million in payments under the terms of the Chagos agreement to pay off its national debt. This will allow ministers to abolish income tax entirely for 81 per cent of employed Mauritians, and raise minimum salaries. Sir Keir has been criticised over the deal, which will cost the UK up to £30 billion over a 99-year period, including rent payments to use a joint US-UK military base on the Chagos Islands and creating a pot of development spending for Mauritius. Conservative and Reform MPs have said the 'surrender' of the islands, which have been owned by the UK since before Mauritius was granted independence in 1968, is unnecessary and expensive. The terms of the deal include rent payments of £165 million a year for the next three years for the Diego Garcia military base, which has been used for bombing runs by Britain and America in the Middle East. Mauritian leaders celebrated the deal as the ' decolonisation ' of the Chagos Islands, which lie at the centre of the Indian Ocean and are uninhabited except for military personnel. Navin Ramgoolam, the Mauritian prime minister, has now announced that the money paid by the UK will help Mauritius cut taxes, so that 81 per cent of people in the African island nation will not pay any income tax. It comes despite warnings that Britons face tax hikes in Rachel Reeves's Budget this autumn, which is now thought to contain a black hole tens of billions of pounds large. The Mauritian reforms were announced in a budget speech by Mr Ramgoolam on Wednesday, when he said that the UK's Chagos payments for the next three years would be used to help pay off the country's national debt, which has reached 90 per cent of GDP. He said that to reach a long-term debt level of 60 per cent, the government would adjust 'both the expenditure side and the revenue side of the budget', and raise the minimum salary before an employee pays income tax to £1,774 a year. That increase, of 28 per cent, will scrap income tax entirely for 44,000 people and reduce levies on all other earners. 'As a result of the measures I have introduced, 81 per cent of employees in our country will not pay any income tax,' he said, adding that he had also decided to cut VAT on some food products. After three years, British payments for the Chagos Islands will be used for a 'future fund' to 'create wealth for future generations,' Mr Ramgoolam said. Dame Priti Patel, the shadow foreign secretary, said the announcement showed that Mauritius had taken the 'feeble and pathetic' Sir Keir 'for a ride'. 'The only people benefiting from Labour's higher taxes are the people of Mauritius,' she said. 'While causing a financial black hole in Britain, whacking up our taxes and planning further tax raids, Labour's Chagos surrender deal means families in Mauritius will see their taxes cut at our expense. 'This is an insult to hard-working British people who have once again been betrayed by Keir Starmer with millions more paying more in tax.'
Reuters
5 hours ago
- Reuters
Zimbabwe to ban export of lithium concentrates from 2027
HARARE, June 10 (Reuters) - Zimbabwe will ban the export of lithium concentrates from 2027 as it extends its push for more local processing, mines minister Winston Chitando said on Tuesday. Africa's top producer of lithium, used in batteries to power renewable energy technologies, banned the export of lithium ore in 2022 and has been pushing miners to process more domestically. Lithium miners in Zimbabwe, who are mostly from China, have been exporting concentrates to their home country. Chitando said lithium sulphate plants were currently being developed at two Zimbabwean mines, Bikita Minerals, owned by Sinomine ( opens new tab and Prospect Lithium Zimbabwe, owned by Zhejiang Huayou Cobalt ( opens new tab. Lithium sulphate is an intermediate product which can be refined into a battery-grade material such as lithium hydroxide or lithium carbonate used in battery manufacturing. "Because of that capacity which is now in the country, the export of all lithium concentrates will be banned from January 2027," Chitando said during a media briefing following a weekly cabinet meeting. In 2023, Zimbabwe gave lithium miners up to March 2024 to submit plans for developing local refineries, but softened its stance after prices of the metal collapsed. Sinomine and Zhejiang Huayou Cobalt are part of a group of Chinese firms, including Chengxin Lithium Group ( opens new tab Yahua Group ( opens new tab and Canmax Technologies ( opens new tab, which have spent more than $1 billion since 2021 to acquire and develop lithium projects in Zimbabwe.
