African economies to grow 3.4 per cent in 2024, says World Bank - Business Guardian
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African economies to grow 3.4 per cent in 2024, says World Bank



The report said increased private consumption and declining inflation were supporting an economic rebound in Sub-Saharan Africa.

The latest Africa’s Pulse report by the World Bank indicates an economic rebound in Sub-Saharan Africa, driven by increased private consumption and decreasing inflation. However, the recovery remains fragile due to uncertain global economic conditions, mounting debt service obligations, frequent natural disasters, and escalating conflict and violence.

The report emphasizes the necessity for transformative policies to address entrenched inequality, ensuring sustained long-term growth and effective poverty reduction. While the region’s growth is expected to rebound from 2.6% in 2023 to 3.4% in 2024 and 3.8% in 2025, the recovery remains precarious. Despite a decline in inflation across most economies to 5.1% in 2024 from a median of 7.1%, it remains elevated compared to pre-COVID-19 levels.

Additionally, while growth of public debt is slowing, more than half of African governments grapple with external liquidity problems and face unsustainable debt burdens. Overall, the report underscores that despite the projected boost in growth, the pace of economic expansion in the region remained below the growth rate of the previous decade (2000-2014) and is insufficient to have a significant effect on poverty reduction. Moreover, due to multiple factors including structural inequality, economic growth reduces poverty in Sub-Saharan Africa less than in other regions.

“Per capita GDP growth of 1 percent is associated with a reduction in the extreme poverty rate of only about 1 percent in the region, compared to 2.5 percent on average in the rest of the world,” said Andrew Dabalen, World Bank Chief Economist for Africa. “In a context of constrained government budgets, faster poverty reduction will not be achieved through fiscal policy alone. It needs to be supported by policies that expand the productive capacity of the private sector to create more and better jobs for all segments of society.”

The World Bank’s Africa’s Pulse report called for several policy actions to foster stronger and more equitable growth. These include restoring macroeconomic stability, promoting inter-generational mobility, supporting market access, and ensuring that fiscal policies do not overburden the poor.

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Amazon’s new seller fees criticized as a ‘Kick in the Gut’



amazon Inc. merchants are facing significant economic pressure. Earlier this year, the e-commerce giant implemented fee changes, effectively transferring more operating costs onto the small businesses that constitute the majority of its product sellers. Additionally, merchants are grappling with a trend of consumers opting for cheaper products across various categories in the first four months of the year, as reported by Adobe Inc. This shift towards lower-priced items makes it challenging for merchants to increase prices and maintain profitability online.

Duncan Freer, who sells weighted blankets and sleep masks on Amazon, expects his profit margin to slide to 8% from 20% as a result of the new fees. One, imposed in March, charges a levy on shipments sent to the company’s fulfillment centers. That will drive the cost of shipping two pallets of Freer’s products to Amazon to more than $800, up four-fold from what it cost him in October, he said. Amazon reduced the cost of fulfilling each customer order, but Freer said it only partially offsets the new fees.

“Amazon just keeps grabbing more and more,” said the Chicago businessman, whose sales on the marketplace amount to about $500,000 a year. “It’s like a kick in the gut.”

Amazon said the new fees are intended to reflect its own cost of distributing inventory around the US so more items can be delivered in just one day, which helps boost overall sales for online merchants. Some fees actually went down. In January, Amazon cut commissions for sellers of low-cost apparel, a move interpreted by merchants as an effort to blunt competition from Chinese fast-fashion startup Shein.

“When we announced these new fee changes in December, we estimated that sellers will on average see an increase of $0.15 per unit sold, which is significantly less than the average fee increases announced by other fulfillment service providers,” company spokeswoman Mira Dix said in an emailed statement. “As sellers are adapting to these changes we have seen that the actual impact is even lower, and many more sellers are seeing a decrease in the average fees that they are paying to Amazon.”

Still, many merchants say Amazon is mostly benefiting from the higher fees, an assertion reflected in the company’s earnings. Revenue from seller services, which includes the popular Fulfillment by Amazon logistics operation, increased at a faster rate than fulfillment expenses in each of the past seven quarters. Amazon’s seller services revenue of $34.6 billion for the period ended March 30 was up 36.5% from two years earlier, more than triple the pace of growth of its fulfillment costs, which were $22.3 billion in the period.

In last month’s earnings report, the cloud computing division’s strong performance overshadowed the growing tension between Amazon and its sellers. Amazon Web Services in the first quarter contributed more than 60% of the company’s operating income even though it accounts for less than 20% of revenue. But sales in the core e-commerce business grew at a slower pace than the number of units sold, another indication that consumers are watching their budgets.

Amazon’s marketplace model helps the company keep growing through a slowdown by charging fees for advertising and logistics. Antonio Bindi, a Brazilian businessman who has sold home storage and kitchen products on Amazon for five years, said the fee structure is getting increasingly complex. Of particular concern: a levy introduced in April charged when sellers’ inventory runs low. That’s on top of previous storage fees that increase when slow-selling inventory lingers in Amazon warehouses. It’s too much for his 20-person team to manage, so he’s whittling his catalog of 500 products down to 400 to simplify the operation. Five years ago, he said, “Amazon was a platform that would facilitate your business operations and let you focus on what you’re good at, like creating great products. You could just send your products to Amazon, and they’d take care of everything. Now you need an entire department to deal with the complexity. The costs are prohibitive.”

San Francisco seller Neil Ayton sells golf yardage books, yoga gear, and pickleball equipment. One of his most popular products is a yoga stick practitioners use to stretch. It was 59 inches, the longest it could be to avoid higher fee tier. Earlier this year, he noticed Amazon cut the size limit, and suddenly his yoga sticks were one inch too long. Shipping costs for each product jumped from $10 to $26, and Ayton began losing $3 per sale.

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Sovereign gold bonds shine as safe haven for Akshaya Tritiya, say Experts



On the auspicious occasion of Akshaya Tritiya, celebrated with traditional zeal across India, the focus on the price of gold has intensified, particularly in Delhi where gold prices surged to Rs 71,240 per 10 grams of 24k gold on Friday.

This marked a noticeable increase compared to April 22, 2023, when the price stood at Rs 59,845 for the same quantity of gold. Kishore Narne, the Commodity head and executive director at Motilal Oswal group, attributed the significant gains in both gold and silver prices to geopolitical tensions and Central Bank purchases. He noted a 13 percent increase in gold prices and an 11 percent rise in silver prices Year-to-Date (YTD).

Narne highlighted that while there have been occasional price corrections in the gold market, the overall trend has been upward, with gold demonstrating a 10 percent Compound Annual Growth Rate (CAGR) over the past 15 years.

Akshaya Tritiya, also known as Akti or Akha Teej, holds great cultural significance for Hindus and Jains, symbolizing prosperity, wealth, and new beginnings. Traditionally, it is believed that any investment or purchase made on this day will bring prosperity and good fortune, leading to a surge in gold purchases.

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Price hike for home-cooked veg thalis, up 8% compared to last year



The cost of a home-cooked vegetarian thali witnessed an 8 per cent increase in April compared to the same month last year, reaching Rs 27.4 from Rs 25.4, as reported on Wednesday. Conversely, the cost of a non-vegetarian thali experienced a 4 per cent decline to Rs 56.3 from Rs 58.9, attributed to a reduction in broiler prices, according to CRISIL’s ‘Roti Rice Rate’ report.

The vegetarian thali typically comprises roti, onion, tomato, potato, rice, dal, curd, and salad, while the non-vegetarian variant substitutes dal with chicken (broiler). These calculations are based on input prices from North, South, East, and West India.

CRISIL attributed the surge in prices to lower onion arrivals due to a significant drop in rabi acreage and crop damage in West Bengal, affecting potato yields. Furthermore, rice and pulses recorded price hikes of 14 per cent and 20 per cent year-on-year (Y-o-Y), respectively.

Despite these increases, the escalation was mitigated by declines in cumin (jeera), chili, and vegetable oil prices, which decreased by 40 per cent, 31 per cent, and 10 per cent, respectively. This prevented a more pronounced rise in the cost of the vegetarian thali.

Meanwhile, the cost of broiler chicken declined by 12 per cent Y-o-Y, contributing to the affordability of the non-vegetarian thali. Broiler chicken constitutes 50 per cent of the total thali cost.

Sequentially, the price of a vegetarian thali in April remained stagnant due to a 4 per cent reduction in onion prices and a 3 per cent fall in fuel costs. However, prices of tomatoes and potatoes continued to rise. In contrast, the cost of a non-vegetarian thali increased by 3 per cent compared to March due to heightened broiler demand and rising input costs.

Pushan Sharma, Director of Research at CRISIL Market Intelligence and Analytics, suggested that vegetable prices are likely to remain elevated in the near future. He noted a divergence in prices between vegetarian and non-vegetarian thalis since November 2023, with the former becoming costlier year-on-year while the latter becomes more affordable. This trend is primarily driven by declining broiler prices juxtaposed with rising vegetable costs.

Looking ahead, Sharma anticipated firm vegetable prices, though a projected decline in wheat and pulses prices could provide some relief.

The report also provided a historical overview of thali costs over the past year, highlighting fluctuations in both vegetarian and non-vegetarian variants. For instance, in April 2023, the vegetarian thali cost Rs 25.4, while the non-vegetarian counterpart was priced at Rs 58.9. These figures fluctuated over subsequent months, with varying impacts on consumers.

Such insights offer valuable perspectives for policymakers, economists, and consumers alike, enabling them to discern trends, anticipate market movements, and make informed decisions. As food prices continue to fluctuate, stakeholders across the supply chain must remain vigilant, adaptive, and responsive to changing dynamics to ensure food affordability and accessibility for all segments of society.

All in all, the CRISIL report sheds light on the intricate dynamics influencing thali prices, underscoring the interplay between supply, demand, and external factors such as crop yields, weather conditions, and input costs. As India grapples with inflationary pressures, particularly in the food sector, concerted efforts are needed to address structural challenges, enhance agricultural productivity, and foster sustainable food systems to safeguard the well-being and livelihoods of millions.

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India and Ghana to launch mobile payments system within 6 months



In a landmark move aimed at fostering closer economic ties, India and Ghana have agreed to expedite the process of linking their respective payment systems. The agreement, reached during a Joint Trade Committee (JTC) meeting held in Accra from May 2-3, signifies a significant step forward in facilitating seamless financial transactions between the two nations.

The primary focus of the discussions centered around integrating India’s Unified Payment Interface (UPI) with Ghana’s Interbank Payment and Settlement Systems (GHIPSS) within a timeframe of six months. Once implemented, this linkage will enable users in both countries to conduct instant fund transfers, thereby enhancing convenience and efficiency in cross-border transactions.

India’s push for UPI integration extends beyond Ghana, with similar arrangements already in place with countries such as France, UAE, Sri Lanka, and Mauritius. This strategic expansion underscores India’s commitment to leveraging its advanced payment infrastructure to facilitate international trade and financial interactions.

In addition to the UPI-GHIPSS linkage, both nations explored avenues for further collaboration in digital transformation solutions. Discussions also encompassed the prospect of establishing a memorandum of understanding (MoU) on various fronts, including the Local Currency Settlement System (LCCS). LCCS facilitates cross-border transactions in local currencies, thereby reducing reliance on third-party currencies such as the US dollar and fostering greater financial autonomy.

Furthermore, the deliberations underscored the potential synergies arising from the African Continental Free Trade Agreement, highlighting opportunities for enhanced bilateral trade and investment between India and Ghana.

The identified sectors for collaboration encompass a diverse range of industries, including pharmaceuticals, healthcare, information and communication technology (ICT), agriculture, food processing, renewable energy, power, digital economy, and digital infrastructure. This broad spectrum reflects the multifaceted nature of the bilateral relationship and the shared commitment to exploring new avenues for mutual growth and development.

India’s engagement with Ghana is part of its broader strategy to strengthen economic ties with African nations. Trade between India and Ghana reached $2.87 billion in the fiscal year 2022-23, underscoring the significance of the bilateral partnership.

Moreover, India’s proactive approach towards local currency settlement systems has garnered traction, with recent advancements including the fast-tracking of LCCS with Nigeria. This initiative aims to facilitate trade in domestic currencies and streamline capital and current account transactions between the two countries.

India’s efforts to promote direct currency trade extend beyond Africa, with initiatives underway in neighboring countries such as Nepal and Bhutan. Additionally, collaborations with nations like Bangladesh and Sri Lanka signal growing interest in exploring similar arrangements.

The adoption of local currency settlement mechanisms aligns with India’s broader objectives of enhancing financial autonomy and reducing dependency on traditional reserve currencies. Recent developments, including the initiation of Rupee-Dirham direct trade between India and the UAE, underscore India’s commitment to expanding the reach of its currency in global trade.

In conclusion, the agreement to link UPI with GHIPSS represents a significant milestone in India-Ghana economic relations, promising to facilitate seamless financial transactions and foster greater collaboration across various sectors. As both nations embark on this transformative journey, the prospects for deeper integration and mutual prosperity are bound to flourish, heralding a new era of economic cooperation and synergy between India and Ghana.

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GST collection for April’ 24 surges to Rs 2.10 lakh cr, posts 12.4% y-o-y growth



The GST collection figures, notes Aditi Nayar, Chief Economist, ICRA, displays an impressive double-digit expansion and reflecting the collections for the previous month, which typically include year-end adjustments made by the taxpayers.

Underscoring the robust health of the Indian economy, gross Goods and Services Tax (GST) collections hit a record high in April 2024 at ₹2.10 lakh crore, representing a significant 12.4 per cent year-on-year growth. The surge was driven by a strong increase in domestic transactions which registered 13.4 per cent increase and imports which accounted for 8.3 per cent increase, the Finance Ministry said on Wednesday. After accounting for refunds, the net GST revenue for April 2024 stands at ₹1.92 lakh crore, reflecting an impressive 15.5 per cent growth compared to the same period last year.

“GST collection crosses ₹ 2 lakh crore benchmark,” said Finance Minister Nirmala Sitharaman in a tweet, attributing the achievement to “the strong momentum in the economy and efficient tax collections. “Congratulations to the Central Board of Indirect Taxes & Customs, Department of Revenue, all officers at the state and central levels. Their sincere and collaborative efforts has achieved this landmark,“ Sitharaman said. The finer print of April 2024 collections reflects positive performance across components with Central GST (CGST) at ₹43,846 crore and state GST (SGST) at ₹53,538 crore. The integrated GST (IGST) collection was ₹99,623 crore, including ₹37,826 crore collected on imported goods.

The cess collection was ₹13,260 crore, including ₹1,008 crore collected on imported goods. The GST collection figures, notes Aditi Nayar, Chief Economist, ICRA, displays an impressive double-digit expansion and reflecting the collections for the previous month, which typically include year-end adjustments made by the taxpayers. In the month of April, 2024, the Central Government settled ₹50,307 crore to CGST and ₹41,600 crore to SGST from the IGST collected. This translates to a total revenue of ₹94,153 crore for CGST and ₹95,138 crore for SGST for April 2024 after regular settlement. “This IGST settlement of ₹91907 crore is ₹4,413 crore more than the actual net IGST collections of ₹87,494 crore and stands settled by the Central Government. There are no dues pending on account of IGST settlement to the states,” the Finance Ministry said.

Economists have lauded the GST collections with Shravan Shetty, Managing Director at Primus Partners observing that the 12.4 per cent y-o-y increase in GST points to the fact that growth is driven by both an increase in goods produced and the formalisation of the economy driven by increasing compliance. “April typically has the highest collection of GST in a year as seen last year,” points out Shetty, who expects coming months to be close to the 1.7-2 lakh crore mark which should pick up as India enters the festive season post rainy season.

Key factors to consider for the coming months, as per Shetty, would be the current heat wave and the impact of it on manufacturing and services output. “Also, the coming monsoon will impact the agricultural and rural economy which will determine GDP growth and GST collections in the second half of the year,” Shetty adds. Nayar anticipates that the CGST collections exceeded the FY2024 revised estimate by Rs 250- 300 billion, suggesting an embedded growth of 9 per cent to meet the target set in the Interim Budget Estimates for FY2025,” said Nayar. According to the Finance Ministry’s monthly economic review last month, March 2024 witnessed a significant milestone in India’s tax revenue landscape, particularly in GST collections.

The gross GST revenue for the month stood at an impressive ₹1.78 lakh crore, a substantial 11.5 per cent year-on-year growth. The increase was primarily driven by domestic transactions that witnessed a huge surge. Collection from domestic transactions signifies a buoyant domestic economic landscape, instilling optimism and bolstering overall revenue accruals.

Furthermore, the steady rise in average monthly collections by approximately ₹18,000 crore throughout the year underscores a compelling narrative of robust growth and economic recovery. With March concluding the fiscal year 2024, the uptick in GST collections not only reflects robust compliance but also signifies an expansion in the ambit of GST, covering a broader spectrum of economic activities within its purview, the Finance Ministry said.

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Real Estate

High-End homes: 5% of total sales, report reveals



Home prices in India are likely to increase by 4-6 per cent this year but rising per capita income will support demand.

A real estate consultancy firm reported a 10% increase in the sales of luxury homes priced at Rs 4 crore and above during the quarter ending on March 31 compared to the previous year. According to CBRE’s ‘India Market Monitor Q1 2024’ report, 4,140 luxury homes were sold between January and March 2024, compared to 3,780 sold during the same period last year.

This growth trend has persisted for the past two years, with sales surging by 75% in 2023 to 12,935 units. Additionally, the share of luxury homes in total sales doubled to 4% in 2023 from 2% the previous year. At the end of March 2024, their share has risen to 5 per cent. Mumbai led in the March quarter by selling 1,330 luxury homes: 15 per cent higher than 1,150 units sold last year.

It was followed by Delhi National Capital Region (NCR) at 1,150 units and Hyderabad at 800 units. While Hyderabad saw a twofold jump in luxury home sales, demand for such properties in Delhi NCR fell from 1,880 units in the same quarter last year. Residential property sales across categories reached 85,000 units in January-March, growing 8 per cent year-on-year.

The largest sales were in the mid-end segment homes (priced between Rs 45 lakh to 1 crore) which compised 47 per cent share in total sales. It was followed by high-end (Rs 1 – 2 crore) and affordable projects (up to Rs 45 lakh). Luxury home sales ranked fifth. Pune, Mumbai, and Bangalore cumulatively accounted for about 65 per cent of the total sales. The report said the demand has also led developers to focus on luxury homes. In the March quarter, there was a 64 per cent increase in new launches of luxury segment units.

“The Indian luxury real estate sector demonstrates robust fundamentals for sustained expansion, underpinned by consistent increases in household income and consumer spending power,” said Anshuman Magazine, chairman and chief executive officer (India, South-East Asia, Middle East & Africa) at CBRE. “These factors are anticipated to cultivate a segment characterized by discerning buyers prioritising quality, financial prudence, and a desire for an elevated living experience.”

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