Southern Africa - severe drought warning

 

‘Southern Africa is currently in the grip of its worst food crisis in decades, with more than 27 million people facing severe hunger due to the impact of a months-long drought, the UN’s World Food Program (WFP) said.

The drought, which is attributable to the El Nino weather phenomenon, has ravaged crops, killed livestock, and left entire communities without sufficient food supplies, creating what WFP spokesperson Tomson Phiri described as a potential “full-scale human catastrophe.”

During a press briefing in Geneva, Phiri highlighted the urgency of the situation, stating “the need for action has never been clearer.”

“This is the worst food crisis in decades,” the WFP spokesperson said.

Lesotho, Malawi, Namibia, Zambia, and Zimbabwe have declared national disasters because of the drought, while Angola and Mozambique are also severely affected. The WFP estimates that around 21 million children in the region are now malnourished, exacerbating an already dire situation as communities face soaring food prices and dwindling resources.

The WFP has outlined plans to provide food and cash assistance to more than 6.5 million people across the seven hardest-hit countries until the next harvest in March. However, the states have so far received only 20% of the $369 million they require.

The drought, which the US Agency for International Development described as the most severe in 100 years during the crucial January to March agricultural season, has wiped out vast swathes of crops. This crisis has caused food prices to skyrocket, which has exacerbated the challenges facing vulnerable communities.

In addition to the food crisis, the drought has had other far-reaching consequences. Zambia, which relies heavily on hydroelectric power from the Kariba Dam, has faced severe power blackouts as the dam’s water levels have dropped dramatically. In April, Zimbabwe, which shares the dam with Zambia, declared a national disaster in response to the crisis, which it described as the worst in 40 years.’

Kenya: Soaking the Poor

 ‘Curb pollution at the household level’ It’s capitalism that’s the real problem.

‘A revised version of the controversial eco-levy tax will soon be tabled in Kenya’s Parliament.’

‘Speaking to Citizen TV Kenya, Treasury Secretary John Mbadi confirmed that "about 49 measures" were being considered as part of a tax amendment bill.

The eco-levy tax aims to curb pollution and waste management at the office and household level.

Unlike the initial proposal, this one will exclude sanitary towels, the newly appointed secretary has insisted.

Companies remains in the authorities' sights. The minister rebuked a challenge by US beverage manufacturer Coca-Cola which opposed the 10 percent levy on all locally manufactured plastics.

"They will tell us why they oppose it," Mbadi said. "This country is not a dumping place."

"If you are injurious to the environment then you must pay for helping make good the harm that you have caused."

The government also aims to collect more taxes by prolonging the tax amnesty period by six months.

The cancellation of Kenya's Finance Bill 2024 in June followed widespread anti-tax protests. This forced President William Ruto to reassess the budget and explore alternative revenue sources.

During the handover ceremony last week, Treasury Secretary John Mbadi said he was keen on reinstating some provisions contained in the scrapped finance bill.’

Additional sources • AP

AfricaNews 19 August

https://www.africanews.com/2024/08/19/kenya-to-revive-scrapped-tax-plans-risking-unrest/

‘Kenya's Supreme Court has temporarily suspended a lower court's decision that declared the 2023 finance law unconstitutional. The suspension aims to maintain budget stability until the government's appeal is heard next month.

The finance law, presented annually, outlines the government's tax and revenue measures. A recent ruling by the Court of Appeal that last year's Finance Act was unconstitutional dealt a blow to President William Ruto's administration.

This comes after Ruto withdrew this year's finance bill in June following significant youth-led protests, marking one of the biggest challenges of his presidency.

President Ruto has faced the difficult task of balancing the needs of Kenya's struggling citizens with demands from international lenders like the IMF. He argues that tax increases are necessary to fund development programs and manage the country's debt.

The Supreme Court stated that maintaining stability in the budget process is in the public's best interest while the appeal is being considered. Hearings on the constitutionality of the 2023 finance law are scheduled for September 10 and 11.

The government, which has been using the 2023 law to collect taxes since the withdrawal of this year's bill, has not yet commented on the ruling.

The 2023 law faced legal challenges after violent protests led by opposition parties last year. The law includes measures such as doubling the value-added tax on fuel, introducing a housing tax, and raising the top personal income tax rate.’

AfricaNews 20 August

https://www.africanews.com/2024/08/20/supreme-court-temporarily-halts-ruling-nullifying-finance-act-2023/

Zimbabwe: Shock horror, government losing out on taxes.

 From AfricaNews, ‘Economy’ clutching its pearls and screaming pass the smelling salts, and giss us yer money!

Socialism is still the only answer.

‘Zimbabwe’s capital, Harare, is undergoing a rapid transformation which has seen the proliferation of small, informal shops, known locally as tuck shops.

While they have created employment for many of the country’s citizens who are outside of the labour market, neither the stores nor their staff pay tax.

In the process, they are pushing out big retailers and wholesalers, presenting a complex challenge for the government which wants to formalise the economy.

Economist, Farai Mutambanengwe, says this is obviously not a good development as a country typically would want its economy to consist mostly of large formalised enterprises.

“The moment you start getting informal businesses taking over the economy, first of all, obviously, it reduces the quality of your CBD. It reduces the value of the properties,” he says.

“But it also results in things like people no longer remitting taxes, people no longer using formal business channels, and ultimately, informality, dollarisation of the economy.”

All of these things, he says, are negative for the economy. 

With most of the tuck shops selling illegal imported goods, the government is concerned about this trade bypassing the country’s tax system and therefore not bringing money into the state coffers.

As the number of informal tuckshops continues to rise, the evasion of taxes and regulations presents a thorn in the side of policymakers.

“There’s a proliferation of smuggled and counterfeit goods that are unfairly competing with local products, since the smuggled goods are not subject to taxation and import duties,” says Minister of Publicity, Information, and Broadcasting Services, Dr Jenfan Muswere.

As the ongoing drought continues to impact Zimbabwe’s economy, the finance minister in July warned that the 2024 budget deficit was forecast to be 1.3 per cent of gross domestic product.

Projected 2024 growth of the economy was at 2 per cent, down from 3.5 per cent forecast in November.’

https://www.africanews.com/2024/08/19/informal-traders-present-a-complex-challenge-for-zimbabwe-government/

IMF still forcing austerity on Africans

 

It’s reported that, ‘Police in Kenya have clashed with protesters rallying against a controversial finance bill that the East African country’s government is pushing through parliament. One person has been shot dead and at least 105 others have been arrested across the country, a coalition of rights groups said.

Protests broke out in Kenya in response to the government’s 2024 Finance Bill, which passed the second stage of reading.

A parliamentary committee recommended that the government withdraw some new taxes proposed in the bill, including an annual 2.5% tax on car ownership and a 16% tax on bread, following a public outcry.

The government has justified the tax measures as necessary to reduce the country’s budget deficit, but protesters argue that they will be harmful to the economy and escalate the already high cost of living.

The finance bill is in response to the International Monetary Fund’s recommendation that Nairobi make a “sizable and upfront” fiscal adjustment in its 2024/25 budget to reduce state borrowing.’

The below from SOYMB 21 April 2022

‘The conditions of nearly 90% of the International Monetary Fund's pandemic-related loans are forcing developing nations suffering some of the world's worst humanitarian crises to implement austerity measures that fuel further impoverishment and inequality, an analysis published by Oxfam International revealed. 13 out of the 15 IMF loan programs negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk.This stands in stark contrast with IMF managing director Kristalina Georgieva's advice to the European Union last year that the wealthy bloc should not endanger its economic recovery with "the suffocating force of austerity."

"This epitomizes the IMF's double standard," Oxfam International senior policy adviser Nabil Abdo said in a statement. "It is warning rich countries against austerity while forcing poorer ones into it."

The IMF has reverted to its highly controversial practice of requiring nations to

 impose the type of austerity measures that have exacerbated poverty and

 inequality, stymied countries' efforts to meet climate goals, fuelled global unrest,

 and even played a key role in sparking revolutions. For example, the conditions

 of a 2021 loan of $2.3 billion to Kenya compelled the country to freeze public

 sector pay for three years while mandating higher taxes on food and cooking

 gas. More than three million Kenyans are facing acute hunger as the driest

 conditions in decades spread a devastating drought across the country. Oxfam

 notes, "Nearly half of all households in Kenya are having to borrow food or buy

 it on credit."

Meanwhile, Sudan has had to end fuel subsidies, a policy that has disproportionately affected the nearly 50% of the population that is impoverished. Over 14 million people need humanitarian assistance (almost one in every three people) and 9.8 million are food insecure in Sudan, which imports 87% of its wheat from Russia and Ukraine.

Nine nations including Cameroon, Senegal, and Surinam must introduce or increase the collection of value-added taxes (VAT), which often apply to everyday products like food and clothing, and fall disproportionately on people living in poverty; and

Ten countries including Kenya and Namibia are likely to freeze or cut public sector wages and jobs, which could mean lower quality of education and fewer nurses and doctors in countries already short of healthcare staff. Namibia had fewer than six doctors per 10,000 people when Covid-19 struck’.

87% of IMF Loans Forcing Austerity on Crisis-Ravaged Nations: Analysis (commondreams.org)

https://socialismoryourmoneyback.blogspot.com/2022/04/austerity-imposed-by-imf.html

FGM in Gambia

Comment is superflous.

‘An attempt to repeal a 2015 ban on female genital cutting in Gambia was sent for further committee discussions by lawmakers on Monday. Gambian activists fear the passage of the bill would overturn years of work to better protect girls and women.

The legislation was referred to a national committee for further debate and could return to a vote in the weeks and months ahead.

Activists in the largely Muslim country had warned that lifting the ban would hurt years of work against a procedure often performed on girls under age five in the mistaken belief that it would control their sexuality.

The procedure, which also has been called female genital mutilation, includes the partial or full removal of external genitalia, often by traditional community practitioners with tools such as razor blades or at times by health workers.

It can cause serious bleeding, death and childbirth complications but remains a widespread practice in parts of Africa.

Jaha Dukureh, the founder of Safe Hands for Girls, a local group that aims to end the practice, told The Associated Press she worried that other laws safeguarding women’s rights could be repealed next.

Dukureh underwent the procedure and watched her sister bleed to death.

“If they succeed with this repeal, we know that they might come after the child marriage law and even the domestic violence law. This is not about religion but the cycle of controlling women and their bodies,” she said.

The United Nations has estimated that more than half of women and girls ages 15 to 49 in Gambia have undergone the procedure.

The bill is backed by religious conservatives in the nation of less than 3 million people.

Its text says that “it seeks to uphold religious purity and safeguard cultural norms and values.”

The country’s top Islamic body has called the practice “one of the virtues of Islam.’

”https://www.africanews.com/2024/03/19/gambian-lawmakers-debate-to-overturn-fgm-ban-postponed/

Promoted by The Socialist Party, 52 Clapham High Street, London, SW4 7UN

Zimbabwe: New Currency. Same Old Capitalism.

 AfricaNews 6 April reports, ‘Zimbabwe has launched a new currency to replace its previous one that in recent months has been battered by depreciation, and in some instances rejection by the population. Authorities hope the new measure will halt a currency crisis underlining the country’s years long economic troubles.

Reserve Bank of Zimbabwe Gov. John Mushayavanhu said the new currency will be called ZiG, and will be anchored on gold reserves and a basket of foreign currencies. 

The Zimbabwe dollar has come under sustained pressure in recent weeks, making it one of the world’s worst performing currencies.

Since January, the Zimbabwe dollar lost over 70% of its value on the official market, and was plunging even further on the thriving but illegal black market.

Inflation increased from 26.5% in December last year to 34.8% this January before spiking to 55.3% in March, according to official figures.

Traders were increasingly rejecting lower denominations of the now scrapped currency, with many insisting on payment only in U.S. dollars, which are also legal tender in the southern African country.

“We are doing what we are doing to ensure that our local currency does not die. We were already in a situation where almost 85% of the transactions are being conducted in U.S dollars,” Mushayavanhu told reporters in the capital, Harare. People have three weeks to exchange the old notes with the new currency, he said.

The announcement is the latest of a cocktail of currency measures undertaken by the Zimbabwean government since the initial spectacular collapse of the Zimbabwe dollar in 2009.

The period saw the country at one point issuing a 100 trillion Zimbabwe dollar banknote before the government was forced to temporarily scrap its currency and allow the U.S. dollar to be used as legal tender.

The country re-introduced a domestic note in 2016, marking the beginning of another round of currency volatility highlighted by changes to currency policy that included the banning of foreign currencies such as the U.S dollar for domestic transactions in 2019.

This was followed by the unbanning of the greenback a while later after few ordinary people took heed to the U.S dollar ban and the black market thrived, while the local currency quickly depreciated.’

https://www.africanews.com/2024/04/06/zimbabwe-unveils-new-currency-as-depreciation-inflation-stoke-turmoil/

The following is from the Socialist Standard November 1980

‘A currency unit is always in the end the name for a specific amount of gold (or silver). At one time—when paper currency was convertible on demand into a fixed amount of gold—this was obvious but has now become obscured in the system of “managed currencies’’ which grew up between the wars. In nearly all countries today the currency—the actual medium of circulation—is not gold nor even a paper currency convertible into gold but inconvertible paper notes and coins. Such a currency is said to be “managed” because the amount of it in circulation depends entirely on political decisions.

Before the era of managed currencies the link between a currency and gold was always clear. A law defined the meaning of the name of the currency (pound, mark, franc) in terms of a certain amount of gold (or silver, or both). This is no longer the case but the pound and other currencies continue to represent in economic reality a certain amount of gold. Gold is still today the money-commodity, the only real money, even though it has been replaced as the medium of circulation by paper and metallic tokens.

With a managed currency a government institution (Ministry of Finance, Central Bank) has to decide how much is put into circulation. The amount of currency needed to maintain a stable price level, however, is fixed by economic factors outside of government control, such as the total amount of buying and selling transactions, debts to be settled, velocity of circulation of the currency. The government is of course free to issue more (or less) than this amount, but if it issues more then the currency will depreciate.

The effect will be the same as if, under the old system, the government had passed a law re-defining the meaning of the word pound in terms of a lesser amount of gold—which is equivalent to increasing the prices of all goods expressed in the currency unit. This—overissuing an inconvertible paper currency—is what has caused the inflationary price rises which have gone on continuously in Britain since the beginning of the last world war. Inflation (properly understood as inflating, or overissuing, the currency) means that the currency has come to be defined in terms of lesser and lesser amounts of gold.

A managed currency only has a circulation within the borders of the state which manages it. No state can enforce the use of its paper currency outside its borders, though people there may choose to accept it. Paper currencies, however, can still be exchanged with each other. What determines their rate of exchange?

What we have said about the paper pound being the name for a certain amount of gold applies equally to the other paper currencies. The paper mark and the paper franc are also names for amounts of gold, though different amounts of course. In fact up until the end of 1971 the currencies of the member states of the International Monetary Fund were declared to the Fund in terms of weights of gold. Thus if the French franc was defined as 3gm of gold and the English pound as 39gm, then the rate of exchange between francs and pounds was £1 = 13 francs. The Member states of the IMF were supposed to maintain a more or less fixed rate of exchange between their currencies and those of the other members.

Had it not been for the inflationary policies pursued by all states this would have proved a relatively easy task. But in fact all states inflated their currencies, though not to an equal extent, so that the parities declared to the IMF came to no longer correspond to the economic reality. Those countries which had inflated their currencies more than average were sooner or later compelled to declare to the IMF that their currency should now be officially regarded as representing a lesser amount of gold. This devaluation meant that the exchange rate with other currencies had altered: their currency would now exchange for a lesser amount of all other currencies. On the other hand those countries which had a below average inflation were compelled to up-value their currency, known as revaluation, as happened a number of times to the D-mark and the Swiss Franc.

A devaluation then was a recognition on the international level of a currency depreciation that had already occurred internally. This was why Wilson was in a sense right when he declared in his famous 1967 statement that devaluation left unchanged the value of the pounds in our pockets. It did, because the depreciation had already taken place before! (As the Wilson government continued the policy of currency inflation, the pounds in our pockets did in fact continue to shrink, but because of the continuing inflation of the currency rather than because of the devaluation).

At the end of 1971 the IMF system of fixed parities, with periodic devaluations and revaluations as necessary, broke down. Instead countries just let their currencies float. What this means is that an internal depreciation of a currency resulting from its inflation is now immediately reflected in its rate of exchange with other currencies instead of building up towards an eventual devaluation.

Some countries link their currencies to others, agreeing that they will not let their currencies fall or rise above or below a certain margin compared with the other currencies in the system. One such system was the famous “snake” of European currencies, of which Britain was a member for a short while. The European Monetary System (EMS) is another such system.

For such systems to work each of the states involved has to have more or less the same rate of inflation. For if one state had a greater rate of inflation than the others, then its currency would tend to fall below the lower limit and in order to maintain itself in the system it would have to use up its reserves to buy its own currency so as to maintain its price (exchange rate with the others). The EMS does provide for the establishment of a special fund to help states in difficulty but its clear aim is to try to keep inflation rates down to the German level.

The last Labour government, presumably anxious to have a free hand to continue inflating the pound as it wished, refused to give an undertaking to keep inflation down that much and so Britain didn’t join. The present Conservative government has announced its intention to join, but is waiting for the time when (if!) the rate of inflation in Britain is at a more internationally acceptable level.

All these “systems” in the end are just makeshifts since none of them openly recognise that the only real money in the world today remains gold. Capitalists are more realistic—which explains the rise in the price of gold, and why it likely to keep on rising: nobody wants to be left holding worthless paper money as the international monetary system staggers from crisis to crisis.

Adam Buick

https://socialiststandardmyspace.blogspot.com/2016/09/international-money-chaos-1980.html

Promoted by The Socialist Party, 52 Clapham High Street,  London, SW4 7UN

Zimbabwe faces famine

 Almost forty per cent of Zimbabweans live in extreme poverty. 

In capitalist terms two billion dollars is small change compared with the sums given to warring states.

‘Zimbabwe declared a national disaster on Wednesday as the El Nino weather pattern continues to cause drought across southern Africa.

The declaration follows a similar move by Malawi late last month. Neighbouring Zambia designated the regional drought a national disaster late in February.

President Emmerson Mnangagwa said that Zimbabwe needed $2 billion (€1.85 billion) in aid to help millions of people who are going hungry.

"No Zimbabwean must succumb or die from hunger," Mnangagwa told a press conference. "To that end, I do hereby declare a nationwide State of Disaster, due to the El Nino-induced drought."

He said that over 2.7 million people, or around a sixth of the country's population, have not had adequate access to food this year due to low yields produced during the drought.

Mnangagwa appealed to UN agencies, local businesses, and religious charity organizations to contribute to humanitarian assistance.

The World Food Organization (WFO) has already rolled out an assistance program for 2.7 million people in Zimbabwe from January to March.

More than 60% of Zimbabweans live in rural areas. Much of the country's rural population lives off subsistence farming, occasionally selling small surpluses.

Zimbabwe was once a major grain exporter, but has in recent years increasingly relied on aid agencies to avert famine.’

https://www.dw.com/en/zimbabwe-declares-national-disaster-amid-el-nino-drought/a-68733615

Promoted by The Socialist Party, 52 Clapham High Street, London, SW4 7UN