SOUTH AFRICA MAY CUT INFLATION TARGET WITHOUT BREAKING THE BANK, SAYS CENTRAL BANK CHIEF

AFRICA NEWS

18th October 2024

By Oyenike

SOUTH AFRICA MAY CUT INFLATION TARGET WITHOUT BREAKING THE BANK, SAYS CENTRAL BANK CHIEF

South Africa’s central bank governor, Lesetja Kganyago, stated that the nation could adopt a lower inflation target with minimal impact. He supports reducing the current target range of 3% to 6% and mentioned discussions between the central bank and the National Treasury.

In April, he noted that discussions were ongoing between teams from both institutions regarding this matter. During a lecture at the University of Stellenbosch, Kganyago explained that lowering the target could lead to reduced inflation and interest rates.

He has emphasised a preference for an inflation rate close to 4.5%, the midpoint of the existing target band, since 2017. He stated that if executed effectively, this lower target could be reached with minimal expense, similar to the previous adjustment to 4.5%.

Kganyago also referenced studies indicating that there was little to no adverse impact on economic growth resulting from the bank’s focus on a 4.5% inflation preference, rather than viewing the 3% to 6% range as a “zone of indifference.” He pointed out that this emphasis on the 4.5% midpoint has contributed to lowering inflation through clear and credible communication.

NETHERLANDS LOOKS TO RELOCATE REJECTED AFRICAN ASYLUM SEEKERS TO UGANDA

The Dutch government is considering a proposal to relocate rejected African asylum seekers to Uganda, as stated by the country’s trade and development minister, Reinette Klever, during her recent visit to the East African nation.

While the idea has been put forward, there remains uncertainty regarding its legality and practicality, as well as whether Uganda would be willing to accept such individuals.

In response to the proposal, Ugandan Foreign Affairs Minister Jeje Odongo indicated that Uganda is open to discussions, suggesting a willingness to explore the idea further. This proposal is part of a broader European trend aimed at establishing “return hubs” outside the European Union.

These hubs would serve as temporary housing for rejected asylum seekers before they are ultimately returned to their countries of origin. The situation highlights ongoing debates around immigration policies and the responsibilities of nations in accommodating or repatriating individuals seeking asylum.

An Asylum seeker outside at the main reception centre

NIGERIA POLICE INSPECTOR GENERAL ORDERS RETRIEVAL OF 612 STOLEN VEHICLES

The Inspector General of Police, Kayode Egbetokun, has mandated a thorough investigation and retrieval of a second group of 612 vehicles identified as stolen on the Electronic Central Motor Registry (e-CMR) platform.

Additionally, he instructed the investigation of over 1,610 vehicles with inconsistent registration details. The e-CMR, launched in July 2024, is a real-time online database aimed at aiding police efforts against vehicle-related crimes.

A stolen car from Abuja was recovered after a buyer’s application for a CMR certificate triggered an alert. The vehicle had been re-registered twice to disguise its stolen status. The group involved in vehicle theft has been dismantled, and one of its members has been apprehended.

This individual will face legal proceedings once all investigative processes are finalized. The police also mentioned that they are working with other agencies to guarantee the protection and safety of citizens’ vehicles nationwide.

The Inspector General of Police, Kayode Egbetokun

KENYA’S PRESIDENT RUTO APPOINTS INTERIOR MINISTER AS NEW DEPUTY

Kenya’s interior minister, Kithure Kindiki, has been appointed by President William Ruto as his new deputy president, just a day after the Senate voted to impeach Ruto’s former deputy, Rigathi Gachagua. Speaker Moses Wetang’ula stated in parliament on Friday that he has received communication from the president regarding the appointment of Professor Kithure Kindiki to occupy the position that has become vacant.

Gachagua, who refuted all allegations against him during impeachment proceedings, supported Ruto in his 2022 election victory and helped secure a significant number of votes from the populous central Kenya region.

However, in recent months, Gachagua has expressed feelings of being marginalized amid widespread reports in local media that he has had a falling out with Ruto as political alliances have evolved.

Kindiki, a close associate of Ruto, has served as the interior minister throughout Ruto’s two-year presidency.

Kenya’s interior minister Kithure Kindiki

TUNISIAN MPs INTRODUCE BILL TO REMOVE CENTRAL BANK’S EXCLUSIVE AUTHORITY ON INTEREST RATES, THREATENING ITS INDEPENDENCE

A proposed bill in Tunisia aims to revoke the central bank’s exclusive authority to adjust interest rates and foreign exchange policy, mandating that such decisions be made in consultation with the government. This bill also allows the central bank to finance the treasury, significantly undermining its independence amid a severe financial crisis.

President Kais Saied, who has consistently criticized the bank’s autonomy, supports this legislative change. Lawmakers argue that without this reform, Tunisia faces inevitable bankruptcy, citing the current law’s restrictions, which have led to substantial state losses estimated at $36.6 billion.

Additionally, the bill stipulates that the central bank cannot enter agreements with foreign oversight authorities without the president’s approval. This move follows President Saied’s previous rejection of the bank’s independence, advocating for direct lending to the state treasury to avoid costly bank loans. Earlier this year, the government requested $2.25 billion in direct funding from the central bank to address a budget deficit.

Former central bank governor Marouan Abassi warned of the risks associated with such actions, including inflation and currency devaluation.

Central Bank in Tunis, Tunisia

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