By Antonio Guerrero
Botswana, the world's largest diamond producer, received a $1.5 billion loan from the African Development Bank, marking the bank's largest-ever budget support facility. It is also Botswana's first loan from the development bank in 17 years. The loan will help finance an expected 13.5% fiscal deficit prompted by a marked decline in diamond prices and export earnings. Botswana is reportedly also in talks with the IMF for further budget assistance. In February S&P cut its outlook on Botswana's A foreign currency rating from stable to negative.
Rwandan finance minister James Musoni presented an ambitious $1.5 billion annual budget for fiscal year 2009-2010, which is 24% higher than the previous one. It is also Rwanda's first budget to conform to the budget calendar set by the East African Community (EAC). The budget predicts 5% to 6% GDP growth for the period, down from last year's 11.2%. It includes $308 million in infrastructure investments, equal to 21.8% of the budget total (up from the previous budget's 20.2%). Authorities aim to reduce the country's dependence on foreign aid, with 51% of the budget's financing set to come from domestic revenues.
The Economic Community of West African States (Ecowas) has revised its schedule for introducing a common currency for member states. The revised calendar now calls for harmonizing the financial sector regulatory and supervisory framework by 2013, with a single currency to be fully implemented by 2020. The proposed West African Monetary Zone (WAMZ) will include Nigeria, Gambia, Guinea, Sierra Leone and Ghana. The common currency initiative has been in the works for a decade.
S&P affirmed its BBB+ sovereign rating for South Africa, though also maintaining its negative outlook. While the rating agency's affirmation was supported by South Africa's prudent macroeconomic policies, moderate debt burden and stable political institutions, it remains concerned over current account financing risks.
Liberia was accepted as the newest member of the Africa Finance Corporation (AFC), the pan-African investment and development institution. The AFC, based in Nigeria, aims to support Liberia's infrastructure development program, particularly regarding energy projects.
|Botswana loses its sparkle as diamond prices fall|