Abuja, Nigeria — Nigeria plans to resume local refining of crude oil in early August, national petroleum authorities announced Monday.

The resumption would end years of idleness at Nigeria’s state-owned refineries, and analysts say that if successfully implemented, it would lower fuel prices.

The Nigerian National Petroleum Company made the announcement while addressing an emergency session at the National Assembly. Lawmakers called the session to interrogate central bank authorities, the national economic management team and the NNPC about the country’s economic standing.

The chief executive officer of the NNPC, Mele Kyari, said one of the two Port Harcourt refineries in the oil-rich Niger Delta region will begin operations in about two weeks.

He said the other one will come into operation by the end of the year and allow Nigeria to begin exporting refined oil.

“We’re very optimistic that by December this country will be a net exporter,” he said, “that is [in] combination of production coming from us and the Dangote refinery and other smaller producing companies.”

The Dangote refinery is a privately owned facility being built near Lagos.

Nigeria’s minister of state of petroleum resources, Heineken Lokpobiri, voiced optimism about the impact of the revived refineries.

“The easiest way for Nigeria to come out of its economic problems is through the oil and gas sector,” Lokpobiri said. “As a sector, we have a clear plan to gradually ramp up production. Right now, we have a clear plan to see how we can get 2 million barrels and more.”

This is not the first time officials have announced the resumption of domestic oil refining.

They made similar announcements in December and March. On Monday, authorities said unforeseen technical difficulties hampered previous resumption dates.

All four government-owned refineries, which can process about 450,000 barrels of crude per day, have been moribund for years, forcing the country to rely on imports to meet its petroleum needs, estimated at 66 million liters (17.4 million gallons) per day.

Oil industry analyst Faith Nwadishi voiced doubts the refineries will operate again.

“I’m just keeping my fingers crossed and trying to be very optimistic about this because it will go a long way in reducing the hardship and perhaps also reduce the pump price … especially,” Nwadishi said. “But being somebody who’s in the sector, I become a little bit skeptical. We have an allocation of about 445,000 [barrels per day] for domestic consumption, which, if properly refined, we’ll have about 70 million liters. That covers our daily consumption.”

The Nigerian oil industry has been hampered in recent years by theft and corruption. On Monday, the Nigeria Extractive Industries Transparency Initiative said about 140,000 barrels of crude oil were lost to theft every day between 2009 and 2018.
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Nairobi, Kenya — Advocacy group Human Rights Watch called Tuesday for greater accountability of public funds in Kenya, framing it partially as a human rights issue.

Kenyans have taken to the streets for four consecutive weeks to protest the high cost of living, corruption and misuse of the country’s finances. What began as a tax protest has morphed into a demand for the end of President William Ruto’s government, with demonstrators saying they do not trust it to solve the country’s political and economic problems.

Human Rights Watch called on the International Monetary Fund to work with the Kenyan government to ensure that IMF’s support for the country is aligned with human rights — and that corruption doesn’t take funds meant to improve the lives of ordinary people.

Allan Ngari, the Africa advocacy director at Human Rights Watch, said, “Our greatest concern is that the outrage sparked by the proposed taxes is something that is endemic in Kenya in the sense that corporate tax evasion, for example, is one of the issues that haven’t been taken into consideration, in addition to the opulent lifestyle that we have seen among the Kenyan executive.”

Kenya’s debt pressures spurred the IMF to approve $941 million for the country in January, bringing the total amount loaned to the East African nation by the financial agency to $3.9 billion.

Kenyans have raised concerns about such heavy borrowing, saying it has done little to improve their lives. At the same time, protesters say, citizens are paying more taxes so Kenya can repay the loans.

The IMF argues that the money it provided to Kenya helped alleviate market concerns, allowing the East African nation access to the bond market and partially rolling over a maturing Eurobond.

Ngari said the Kenyan government needs to be accountable to the IMF and other foreign loan providers, but also for the revenue it collects in the country.

“Monies that have been allocated or are within the government expenditure should be for projects and processes of development in the country,” Ngari said. “That’s the reason why these loans have been sought. So, accountability is that [the] public should be really aware of the extent of the borrowing.”

Activists have repeatedly asked the government to disclose the country’s total current debt, specifically the amount owed to China, which the government has been reluctant to make public.

Ruto has formed a task force to audit the country’s debt and report back by the end of September.

In the streets of many cities and towns, protesters continue to cry out about hard economic times and a government that they say has become blind and deaf to its problems.

Sharon, a Nairobi resident who gave only her first name, said that if the borrowed money can be accounted for and used for its intended purpose, it will improve the situation of many Kenyans.

“We need accountability for the money we pay and for the money we borrow,” she said. “This will create more employment opportunities because there will be money to pay for those jobs.”

Stella Nkirote, a 31-year-old street vendor and mother of four, said corruption has hampered the country’s economic growth, saying that people in power have refused to use money in the way it is supposed to be used.

In its 2016 periodic review of Kenya, the United Nations Committee on Economic, Social and Cultural Rights said the country has large amounts of illicit financial flows, tax avoidance and cases of corruption involving top government officials that are not investigated.

Human Rights Watch argues that many countries’ problems could be solved if they aligned their economic policies with human rights on every level — domestic and international.
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Johannesburg     — Rotondwa Mbadaliga is a self-professed “shopping addict.” The 25-year-old South African fashion influencer says she is a huge fan of Chinese-linked e-commerce companies Shein and Temu because she can get the latest trends at the cheapest prices delivered straight to her door.

Mbadaliga has more than 200,000 followers on TikTok where she mostly talks about fashion, sometimes posting videos of herself excitedly opening her newly arrived purchases from China.

“The variety is the main thing I really like and enjoy with shopping on Temu or Shein,” she says, adding that South African brands and shops aren’t as trendy.

“I don’t think you can beat the prices,” she adds.

But the prices of clothing on these e-commerce sites are expected to soon get more expensive.

South Africa’s tax authority plans to start imposing a 45% tariff and a value-added tax, or VAT, an indirect tax on the consumption of goods and services on orders of imported clothing that cost under 500 rand, or $27. Some consumers are pushing back with an online petition protesting the higher import duties.

Chinese e-commerce in South Africa

Shein, which has been available in South Africa since 2020, and Temu, which entered the market in January, have had huge success in the country, which has a growing middle class, tech-savvy youth and widespread internet access.

For women’s clothing purchases online, Shein is the top retailer with a 35% market share, according to data from Marketing Research Foundation, a nonprofit South Africa-based marketing survey group.

For its part, Temu is the most-downloaded app among iOS and Android users in South Africa.

Mbadaliga acknowledges that quality can sometimes be an issue.

“With shopping from China, you need to be OK with making a loss in some way,” she says, adding that she has a box of clothes bought on the platforms that didn’t fit or work out.

Her aunts in their 30s, who earn more, prefer to buy from foreign brands with brick-and-mortar stores in South Africa such as Zara because they believe the quality of clothing is better, Mbadaliga notes.

But she says longevity and quality don’t matter so much to her because she will only wear a garment while it is in style.

Industry pushback

South African retailers and local e-commerce platforms have been left reeling by the success of Chinese e-commerce and fearing their inability to compete.

Some South African companies and industry groups have lobbied the government to close an import tax loophole, a so-called de minimis rule, for small parcels of clothing. The loophole was introduced decades ago for items such as gifts before the advent of online shopping.

Under that system, small parcels pay a low 20% import duty. However, local clothing retailers, who order in bulk, pay a 45% tariff plus a VAT rate.

“We don’t mind competition … but what we find unpalatable, quite frankly, is an opportunity which is being taken advantage of where we believe we actually have an unfair and non-level playing field,” Michael Lawrence, executive director the National Clothing Retail Federation of South Africa, told VOA.

“We’re seeing 100,000 parcels a day, I’m told by some players, coming in. So, we’re not talking about an occasional occurrence. We’re talking about a significant commercial activity,” he says.

When South Africa’s tax authorities implement the higher tax rate for imported clothing under 500 rand, those shippers will be paying the same rate of 45% plus a VAT as the bulk shipments incur.

Contacted for comment, a Temu spokesperson told VOA: “Temu operates a direct-from-factory online marketplace that connects consumers with cost-efficient manufacturers. By reducing the number of intermediaries between consumers and producers, we can eliminate extra costs and pass those savings on to consumers through lower prices.”

“We compete fairly and transparently, adhering to the rules and regulations of each market we serve. Our growth does not rely on the de minimis policy. We support policy changes that benefit consumers and believe that as long as rules are applied fairly, they will not affect the competitive landscape,” the spokesperson added.

Shein did not respond to a request for comment.

Local alternatives

South Africa is not without its own e-commerce sites.

E-commerce company Takealot has accused the Chinese online shopping giants of exploiting tax loopholes.

“These platforms contribute to a market imbalance by flooding the market with inexpensive imports,” the company said last month in a statement. “Such trends pose significant challenges to the development and sustainability of domestic industries.”

“This form of commerce extracts value from South African consumers without contributing to local communities, ultimately harming small businesses, local manufacturers and the limited job opportunities available,” it continued.

To boost local industry, Takealot recently signed a multimillion-dollar deal with the government in South Africa’s Gauteng province, which includes the capital, Pretoria, and economic powerhouse Johannesburg. Called the Takealot Township Economy Initiative, it is focused on creating jobs and supporting small, Black-owned businesses.

Local online fashion retailer Zando launched its international e-commerce platform Zando Global earlier this year.

“With the rise of Shein and Temu, South African consumers have often found themselves hesitant to order internationally due to concerns about product quality, delivery reliability, and returns processes. Zando Global steps in as the local hero, offering a trustworthy alternative for those seeking international products without the uncertainties of ordering from abroad,” the company said in an April press statement.

When asked whether the market is already saturated by Shein and Temu, Zando Global’s CEO Morgane Imbert told VOA she believed the company could compete.

“We genuinely believe there is room for a player like Zando, because we think that we can offer a different experience, focusing on the quality of the product, the customer service and curated local and global fashion trends,” she says.

“We’re definitely supporting local brands and companies through the marketplace,” Imbert added.

US behemoth

Zando and Takealot must also compete with U.S. e-commerce company Amazon, which entered the South African market in May, its first foray into sub-Saharan Africa. Reports suggest Amazon had a slow start, but that could change.

On its website, Amazon says it is providing South African consumers with a “new online shopping experience.” It added, the site will include products from independent South African sellers and small and medium-size enterprises “to connect customers with businesses throughout the country.”

Still, like “shopping addict” Mbadaliga, many South Africans will not be easily weaned off Shein and Temu.

The on-line petition to the South African government aimed at stopping the import duty has garnered more than 21,000 signatures since June, hoping to change the minds of government authorities who have yet to implement the new tax rules originally set for July 1.
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ISLAMABAD — Pakistan said Saturday that a newly secured multibillion-dollar loan from the International Monetary Fund would help improve the cash-starved country’s macroeconomic stability.

The official reaction came hours after the Washington-based global lender announced its preliminary agreement with Islamabad for a “37-month” loan of about $7 billion under the IMF’s Extended Fund Facility arrangement.

“This agreement is subject to approval by the IMF’s executive board and the timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners,” stated Friday’s announcement by the IMF. It did not mention a date for board action, which typically is a formality before the disbursement of funds.

“The new program aims to support the authorities’ efforts to cement macroeconomic stability and create conditions for a stronger, more inclusive and resilient growth,” said the IMF statement.

On Saturday, Pakistani Prime Minister Shehbaz Sharif shared the news while meeting with his finance team and praised them for negotiating the staff-level agreement.

“The IMF [executive] board will now convene its meeting and will also approve it, God willing,” Sharif said in his televised remarks at a meeting of top finance ministry officials.

He emphasized the importance of timely implementation of economic reforms and structural changes “to improve our macroeconomic indicators … because only then can this be the final IMF program in the country’s history.” 

Pakistan’s fiscal year, which started July 1, will see roughly $25 billion in external debt payments, a significantly higher amount than its current level of foreign exchange reserves.

Sharif’s coalition government has implemented several unpopular reforms — such as imposing unprecedentedly high taxes and raising energy costs — to meet IMF requirements and secure the loan, triggering strong public opposition.

Inflation in Pakistan declined from 28% in January to 12% last month, but experts say the rate is still the highest in Asia.

Since gaining independence in 1947, Pakistan has received 23 bailout packages from the IMF, the most of any country. Critics blame chronic financial mismanagement, rampant corruption and repeated military-led dictatorial rules for hindering economic progress in the South Asian nation of more than 240 million people.

“The authorities have also committed to advance anti-corruption as well as governance and transparency reforms, and gradually liberalize trade policy,” Friday’s IMF statement quoted its mission chief to Pakistan, Nathan Porter, as saying.

Pakistan’s finance minister, Muhammad Aurangzeb, has stated that the new IMF loan would unlock investments from other international financial institutions and friendly countries, including Saudi Arabia and the United Arab Emirates.

“Pakistan owes about $8.4 billion to the IMF, to be repaid over the next 3-4 years. The bailout package of $7 billion is less than this amount. There is nothing to celebrate,” Yousuf Nazar, a leading economic commentator and former Citigroup executive, wrote Saturday on social media platform X while commenting on the new IMF deal.
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Washington — U.S. inflation edged down in June as analysts expected, government data showed Thursday, a reassuring development for President Joe Biden as he fights to win confidence on his economic record in his reelection bid. 

The consumer price index (CPI) rose 3.0 percent last month from a year ago, said the Labor Department, as a fall in gas prices more than offset housing costs.

A measure that strips out volatile food and energy prices saw the smallest annual rise since 2021.

The world’s biggest economy has been on a bumpy path to reining in inflation, which soared to a blistering 9.1 percent in mid-2022.

This prompted the central bank to rapidly hike interest rates in hopes of easing demand and bringing down price increases.

Federal Reserve Chair Jerome Powell told lawmakers this week that inflation has since shown “modest” progress.

In June, overall CPI declined 0.1 percent on-month for the first time since 2020, the latest Labor Department report showed.

The “core” CPI index excluding the volatile food and energy segments came in at 3.3 percent on-year, the smallest jump since April 2021.

The latest CPI report adds to a series of encouraging data that could give officials confidence that inflation is coming down to their two-percent target.

This, in turn, would allow them to start cutting decades-high interest rates. 
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Windhoek, Namibia — Namibia will attempt to reduce the local seal population by 80,000 this year, officials recently announced, despite opposition from animal rights groups.

The Ministry of Fisheries and Marine Resources said the reduction is necessary to maintain balance in the ecosystem and keep the seals from hurting the nation’s fishing industry.

Seal numbers increased from 1.3 million to 1.6 million over the past three years, said Annely Haifene, executive director of the marine ministry.

She told VOA this is an indication of a healthy marine ecosystem but is also a threat to the $10 billion fishing industry, which is one of the largest contributors to Namibia’s economy, because seals prey on the fish.

Last year’s seal harvest was disappointing, Haifene said, with the companies that hold rights to catch seals along Namibia’s Atlantic coastline harvesting less than 50% of the “total allowable catch.”

“The challenge is really the market,” she said. “There is no demand for pup’s products, and therefore, even if you harvest them, you will likely not get any economic sense out of the pups.”

Markets for the bulls are difficult, too, she said.

The main market for seal pelts and food products is China, but demand has dropped because of an international ban on seal fur.

Last year, the total allowable catch for seal pups was 80,000. Only 3,764, or 5% of the target, was harvested. The companies harvested a larger proportion of adult seals, catching about 3,100 of the 6,000 allowed.

Haifene blamed animal rights groups for last year’s the low numbers.

Naude Dreyer of Ocean Conservation Namibia said Namibia’s attempts to reduce the seal population is having the opposite effect of what the ministry is trying to achieve.

“By taking out the biggest bulls in the group, you are messing with the harem structures in the groups,” he said. “Normally a big bull will have up to 50 females underneath him, which he would then be fighting with other big bulls to keep them exclusively his. By taking out those big bulls, this allows much younger males to come in and do the mating.”

Namibia is the only country in the Global South where seal harvesting takes place. Other countries that harvest seals include the United States, Canada, Denmark, Iceland, Norway, Russia, Finland and Sweden.

Namibian seals live in three colonies along the country’s 1,500-kilometer (932-mile) coastline.

This year’s harvest is set to end in November. Authorities believe the harvest will be less than last year’s due to declining interest in seal products on the international market.
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NAIROBI, Kenya — The ballooning debt in East Africa’s economic hub of Kenya is expected to grow even more after deadly protests forced the rejection of a finance bill that President William Ruto said was needed to raise revenue. He now warns “it will have huge consequences.”

Facing public calls to resign, Ruto said the government will turn to slashing a $2.7 billion budget deficit by half and borrowing the rest, without saying from where.

After anger over bloated bureaucracy and luxurious lives of senior officials helped to fuel the protests, Ruto also promised funding cuts in his own office and said funding would stop for the offices of the first lady, the wife of the vice president and the wife of the prime Cabinet secretary. Almost four dozen state enterprises with overlapping roles will be closed.

Ruto has become deeply unpopular in his two years in office over his quest to introduce taxes meant to enable Kenya to repay its $80 billion public debt to lenders that include the World Bank, the International Monetary Fund and China. 

The public debt makes up about 70% of Kenya’s gross domestic product, the highest in 20 years.

How Ruto’s administration will find the money to pay off debt without further angering millions of Kenyans barely getting by, and without slowing down the economy, is the key question. The economy grew 5.6% in 2023.

Economist Mbui Wagacha, a former adviser to previous President Uhuru Kenyatta, said Kenya needs a professional budget and management body like the Office of Management and Budget in the United States. Currently, Kenya’s treasury makes budget estimates and forwards them to the parliamentary finance committee, which creates the finance bills.

“Parliament has abdicated its mandate on the public finances in the Constitution, and it’s looking after its own interests,” Wagacha said in an interview.

He said further borrowing by Kenya could be “disastrous” and proposed a strategy of using diplomacy to attract investment and restructuring the debt to get creditors to write off some of it.

Another economist, Ken Gichinga, agreed that government borrowing will slow down Kenya’s economy. Businesses still haven’t recovered from the effects of the COVID pandemic and the war in Ukraine, he said.

“When the government borrows more, interest rates go up. And when interest rates go up, businesses slow down, the economy slows down, due to the high cost of repayment,” Gichinga said.

Kenya’s president has advocated self-sustainability, saying the country should raise more revenue instead borrowing. “If we are a serious state, we must be able to enhance our taxes,” he said in May.

But Kenyans have rejected attempts to raise taxes as they struggle with rising prices on basic goods, even storming parliament during the recent protests.

Last week, days after announcing he would not sign the finance bill he once championed, Ruto said that he had worked hard “to pull Kenya out of a debt trap” and that huge consequences lie ahead.

Wagacha said economic growth must come before the government increases revenue targets and tax collection.

“You create an expanded economy with employment and with investment, and people have money in their pockets. It’s much easier for them to hear about your request for taxes,” he said.

He suggested making access to low-interest credit easier for businesses in key sectors such as tourism and agriculture, saying small businesses hold the key to Kenya’s economic growth as they tend to absorb many employees. That could help address high youth unemployment.

The government should give incentives to businesses to create jobs with low taxation and lower interest rates, Gichinga said. “At the end of the day, we need a jobs-centered economic policy. That’s what we’ve been lacking,” he said.

The IMF, which had suggested some of the controversial tax changes, has been a target of Kenya’s public dissatisfaction. Some protesters had posters with messages such as “IMF stop colonialism.”

In a statement late last month, the IMF said it was monitoring the situation in Kenya, adding that its main goal was to help it “overcome the difficult economic challenges it faces and improve its economic prospects and the well-being of its people.”

The IMF needs to do more for Kenya beyond focusing on debt sustainability and be a “strong development partner,” Gichinga said.
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Burkina Faso is home to many people internally displaced by years of insecurity and conflict. Most of them live in various towns across the country, and some are now trying to find jobs in the capital, Ouagadougou, or starting businesses. VOA’s Gildas Da has this report, narrated by Anthony LaBruto.
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Washington — The U.S. Federal Reserve is making “modest” progress in its inflation fight, the head of the U.S. central bank told lawmakers Tuesday, on the first of two days of testimony in Congress.

When prices surged in the wake of the COVID-19 pandemic, the Fed responded by hiking interest rates to a two-decade high as it attempts to cool down the U.S. economy and return inflation to its long-term target of two percent.

Inflation has eased significantly since it peaked in 2022, but progress stalled in the first quarter of this year, effectively putting the Fed’s fight on pause.

The data in the second quarter has been more encouraging, prompting some cautious optimism from some policymakers in recent weeks.

Speaking in Washington on Tuesday, Fed Chair Jerome Powell told lawmakers on the Senate Banking Committee that the most recent readings “have shown some modest further progress” since the first quarter of the year.

“More good data would strengthen our confidence that inflation is moving sustainably toward two percent,” he added, according to prepared remarks.

The Fed is widely expected to hold interest rates again when it meets to set interest rates later this month, but could begin cutting rates in September.

Futures traders have assigned a probability of more than 75% that the Fed will make its first rate cut by September.
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Nairobi, Kenya — Kenyan President William Ruto on Friday ordered significant cuts in the federal budget along with other government reforms to pay off a crushing debt burden in a move seen as a concession to popular disapproval of a tax bill that sparked violent protests.

Following weeks of protests during which dozens of people reportedly were killed, Ruto withdrew a finance bill intended to raise $2.7 billion — most of it from tax increases — to pay off debt.

Ruto instead offered a compromise: a plan is to cut $1.39 billion from the budget and borrow the difference.

To make it work, Ruto said, his government will eliminate 47 state corporations with overlapping or duplicative functions and reduce by 50% the number of government advisors, among many other actions.

Filling the positions of chief administrative secretaries is suspended, Ruto said, and government funds will not be used for the operations of the offices of the first lady, the spouse of the deputy president and the prime cabinet secretary.

And there’s more.

“Public servants who attain retirement age of 60 shall be required to immediately proceed on retirement with no extensions,” Ruto said.

Also, government purchase of new motor vehicles is suspended for 12 months, except for security agencies, and all nonessential travel by state and public officers is suspended, the president said.

Some of the actions were on a list of demands made by protesters.

Ruto also said he has appointed an independent task force to carry out a comprehensive, forensic audit of the country’s public debt.

“This audit will provide Kenyans with clarity on the extent and nature of our debt and how public resources have been expanded and also recommend proposals for managing public debt in a manner that is sustainable and does not burden future generations,” he said.

Nearly 40 people died and 360 were injured nationwide since the protests started three weeks ago, according to Kenya’s National Commission on Human Rights.
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Colombo, Sri Lanka — Sri Lanka will save $5 billion following the restructure of its bilateral debt, much of which is owed to China, through slashed interest rates and longer repayment schedules, the president said Tuesday.

The island nation defaulted on its foreign borrowings in 2022 during an unprecedented economic crisis that precipitated months of food, fuel and medicine shortages.

President Ranil Wickremesinghe said a deal struck last week had secured a moratorium on debt payments until 2028, extending the tenure of loans by eight years and cutting interest rates to an average of 2.1%.

Wickremesinghe said bilateral lenders led by China, the government’s largest single creditor, did not agree to take a haircut on their loans, but the terms agreed would nonetheless help Sri Lanka.

“With the restructure measures we have agreed, we will make a saving of $5.0 billion,” Wickremesinghe told parliament in his first address to the legislature since the debt deal.

Some of Sri Lanka’s loans from China are at high interest rates, going up to nearly 8.0% compared to borrowings from Japan, the second largest lender, at less than 1.0%.

Sri Lanka struck separate deals with China and the rest of the bilateral creditors, including Japan, France and India.

Bilateral creditors account for 28.5% of Sri Lanka’s outstanding foreign debt of $37 billion, according to treasury data from March. This excludes government-guaranteed external loans.

China accounts for $4.66 billion of the $10.58 billion that Sri Lanka has borrowed from other countries.

Wickremesinghe said he expected to complete shortly the restructure of a further $14.7 billion in external commercial loans, including $2.18 billion from the China Development Bank.

Sri Lanka’s 2022 crisis sparked months of public protests that eventually forced the resignation of then-president Gotabaya Rajapaksa after an angry mob stormed his compound.

Wickremesinghe said the nation was bankrupt when he took over and he hoped the $2.9 billion International Monetary Fund bailout he secured last year would be the island’s last.

Colombo had gone to the IMF, the international lender of last resort, on 16 previous occasions and the debt restructuring is a condition of the IMF bailout.
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Washington — U.S. manufacturing activity edged lower in June, deepening a recent slump on continued weak demand, according to industry survey data published Monday.

The Institute for Supply Management’s (ISM) manufacturing index came in at 48.5% last month, down 0.2 percentage points from May.

The June data came in below market expectations of 49.1%, according to Briefing.com, and marked the third consecutive month where the reading was below the 50-point mark separating expansion from contraction.

“U.S. manufacturing activity continued in contraction at the close of the second quarter,” ISM survey chief Timothy Fiore said in a statement.

“Demand remains subdued, as companies demonstrate an unwillingness to invest in capital and inventory due to current monetary policy and other conditions,” he continued, referring to the U.S. Federal Reserve’s ongoing battle against rising prices.

Inflation has fallen sharply since the Fed began hiking interest rates in 2022, but remains stuck above its long-term target of 2% — keeping borrowing costs high for both consumers and producers.

“Production execution was down compared to the previous month, likely causing revenue declines, putting pressure on profitability,” Fiore said.

June’s data extends the recent slump, which began after a positive reading in March briefly snapped 16 straight months of contraction.

The ISM survey found that eight manufacturing industries reported growth in June, including petroleum and coal products, and chemical products, while nine contracted, including textile mills, transportation equipment, and electrical equipment.

“Manufacturing activity remained in contraction territory in June, but in a sign of moderating inflation pressure, the prices paid component fell 4.9 points,” Wells Fargo economists wrote in a note to clients.

“New orders rose more than any other component but remains in contraction,” they added.

 
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LA PAZ — Signs reading “I’m buying dollars” line the doors of Víctor Vargas’ shoe shop in the heart of Bolivia’s biggest city, a desperate attempt to keep his family business alive.

Just a few years ago, the 45-year-old Vargas would unlock the doors at 8 a.m. to a crush of customers already waiting to buy tennis shoes imported from China. Now, his shop sits hopelessly empty.

“Right now, we’re in a dreadful crisis,” he said. “No one buys anything anymore. … We don’t know what’s going to happen.”

Bolivians like Vargas have been hit hard by economic turmoil in the small South American nation fueled by a longtime hyper-dependence on, and now shortage of, U.S. dollars.

The economic downturn has been exacerbated by an ongoing feud between President Luis Arce and his ally-turned-rival former President Evo Morales in the lead-up to next year’s presidential election. Many Bolivians impacted by the crisis have lost trust in Arce, who denies the country is even in an economic crisis.

“Bolivia has an economy that’s growing. An economy in crisis doesn’t grow,” Arce told The Associated Press in an interview. That was contradicted by both economists and dozens of Bolivians.

That deep distrust came to a head on Wednesday following a spectacle which the government called a “failed coup d’etat” and opponents including Morales called a staged “self-coup” meant to earn the unpopular leader political points before elections.

Whether the coup attempt was real or not, most Bolivians who spoke to the AP said they no longer believe what their leader says, and say Arce would be better served addressing Bolivia’s gasping economy and less time carrying out political stunts.

“He should think about Bolivia’s economy, make a plan to move forward, find a way to get dollars and work to move Bolivia forward,” Vargas said. “No more of these childish ‘self-coups.’”

That simmering anger has paved the way for even more strife in a country that is no stranger to political unrest.

Bolivia’s economic crisis is rooted in a complex combination of dependence on the dollar, draining international reserves, mounting debt and failures to produce products like gas, once the Andean nation’s economic boon.

This has meant that Bolivia has largely become an import economy “totally dependent on dollars,” said Gonzalo Chávez, an economist with Bolivia’s Catholic University. That once worked in Bolivia’s favor, driving the country’s “economic miracle” as it became one of the region’s fastest growing economies.

Vargas’ family opened the shoe business nearly 30 years ago because they saw it as a surefire way to ensure stability for coming generations. The family imports shoes from China, which they pay for in dollars and sell them in Bolivia’s currency, bolivianos. Without dollars, they have no business.

The shortage of dollars has led to the emergence of a black market, with many sellers bringing in greenbacks from neighboring Peru and Chile and selling them at a gouged price.

Pascuala Quispe, 46, spent her Saturday walking around La Paz’s downtown going to different currency exchange shops, desperately searching for dollars to buy car parts. While the official exchange rate is 6.97 bolivianos to the dollar, she was told the real price was 9.30 bolivianos, far too high a price for her. So she kept walking, hoping to find luck elsewhere.

Gouged prices have trickled down to everything. People have stopped buying shoes, meat and clothing, and that has pushed working class people deeper into poverty. Bolivians make jokes about having “mattress banks,” storing cash at home because they don’t trust banks.

“There are no jobs. … and the money we earn isn’t enough for anything,” Quispe said. “Everyone suffers.”

Some vendors like Vargas paste signs on their business doors, hopeful sellers will trade dollars at a more reasonable price.

It’s a complicated economic bind that has few short-term solutions, said Chávez, the economist.

But Arce insists that Bolivia’s economy is “one of the most stable” and says he’s taking action to address problems ailing Bolivians, including shortages of dollars and gasoline. He said the government is also industrializing, investing in new economies like tourism and lithium.

While Bolivia sits on the world’s biggest stores of lithium, a high-value metal key to transitioning to a green economy, investment is only viable in the long term, largely due to government failures, said Chávez. Meanwhile, inflation has outpaced economic growth, and most Bolivians face unstable work conditions with minuscule pay.

That is only compounded by ongoing fights between Arce and Morales, who returned from exile after resigning during unrest in 2019, which Morales maintains was a coup against him. Now the former allies have slung insults and fought over who will represent their Movement for Socialism party, known by its Spanish acronym MAS, ahead of 2025 elections.

“Arce and Evo Morales, they fight over who is more powerful,” Vargas said. “But neither govern for Bolivia. … There’s a lot of uncertainty.”

Broad discontent has fueled waves of protests and strikes in recent months. Protests and road blocks have dealt another economic blow to Vargas, the shoe vendor, because customers from all over the country no longer travel to buy products because of the chaos of ubiquitous protests.

Morales, who still wields a great deal of power in Bolivia, blocked Arce’s government from passing measures in Congress to ease the economic turmoil, which Arce told the AP was a “political attack.”

Morales has fueled speculation that the military assault on the government palace last week allegedly led by former military commander José Zúñiga was a political stunt organized by Arce to gain sympathy from Bolivians. The claim was first made by Zúñiga himself upon his arrest.

“He tricked and lied to, not just the Bolivian people, but the entire world,” Morales said in a Sunday radio program.

The political spats left many like 35-year-old Edwin Cruz, a truck driver, shaking their heads as they wait for hours, sometimes days, in long lines for diesel and gasoline because of intermittent shortages caused by lack of foreign currency.

“Diesel is like gold now,” he said. “People aren’t idiots. And with this whole thing with the ‘self-coup’ this government has to go.”

Cruz is among those who don’t want to vote for either Morales or Arce. While Bolivians have few other options, Chávez said discontent opened a “small window” for an outsider to gain traction, just as it has with a number of Latin American outsiders in recent years.

Most recently, self-described “anarcho-capitalist” Javier Milei has taken the helm of neighboring Argentina with promises to lift the country out of its economic spiral, which shares a number of similarities with Bolivia’s.

Meanwhile, Vargas doesn’t know what he’ll do with his family’s shoe store. Once a point of pride, the shop has turned into a financial drain. He would pass it down to one of his four children, but all of them want to leave Bolivia. One of his children has already migrated to China.

“They don’t want to live here anymore,” Vargas said in his empty store. “Here in Bolivia, there’s no future.”
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Washington — Opium poppy cultivation in Afghanistan was down sharply last year, according to the United Nations and private sources, but the plants are being grown in most provinces despite a ban imposed by the Taliban. Some areas grow more than others.

According to sources inside Afghanistan and on Taliban-run social media accounts, farmers in about 29 provinces have been growing poppies since spring. The largest amounts are grown in Badakhshan, Helmand, Herat and Nangarhar provinces.

Poppies, which farmers process to make opium, are being grown in the open and hidden behind property walls.

Taliban forces conducted thousands of operations to destroy the plant, as was announced on the X social media platform by the Ministry of Interior Counter Narcotics. It listed 29 provinces where they conducted eradication efforts.

The Taliban Interior Ministry said that in the past six months, its police conducted more than 15,000 poppy eradication operations on more than 3,600 hectares (8,900 acres). It also said thousands of people were arrested for violating the ban.

Abdul Haq Akhundzada, Taliban deputy interior minister for counternarcotics, told VOA there won’t be problems with narcotics this year.

“In those provinces, in areas where farmers grow hidden poppy, we conducted operations there as well, and we eradicated their hidden poppy,” he said.

Not everyone is peacefully accepting the opium ban and eradication. In northeastern Badakhshan province, violent clashes erupted last month between the Taliban and farmers. Two people were killed.

Local Taliban eradication officials reported that in Badakhshan, 35,000 to 40,000 acres were cleared.

Aminullah Taib, deputy Taliban governor in Badakhshan, said they were able to eradicate the fall and spring poppy cultivation in eight districts and will not allow further growth.

Farmers said the eradication was disrespectful of the local culture as the Taliban went to the villages without talking to the elders and informing the villagers about the process.

Abdul Hafiz, a resident of Argo district, where the clash between the farmers and Taliban took place, told VOA the Taliban entered people’s homes and destroyed their poppy crops “without a prayer, notice or acknowledgment.”

Poppy growth was at its high in 2021, the year the Taliban regained power. Farmers grew as much as possible, fearing the crop would be banned. While the Taliban banned poppy growth in 2022, they allowed the farmers to harvest what they had already planted.

It was a record year. The United Nations estimated that Afghan opium production was 6,800 metric tons (7,500 tons) in 2021 and 6,200 metric tons (6,800 tons) in 2022.

Last year, the Taliban were largely successful in banning the crop. In opium-rich Helmand province, poppy crop cultivation was down by 99.9%.

Yet how successful the ban was considered depends on the source.

The United Nations reported in October that poppy cultivation was down by 95%. Across Afghanistan, the U.N. said, opium cultivation fell from 233,000 hectares (575,755 acres) in 2022 to just 10,800 hectares (26,687 acres) in 2023.

But the imaging company Alcis, in its comprehensive satellite survey, says poppy cultivation was down by 86% to 31,088 hectares (76,200 acres).

William Byrd, a senior researcher at the U.S. Institute of Peace, told VOA that the 9 percentage-point spread between Alcis and the U.N. makes a difference in how much poppy is estimated to have been harvested for 2023.

He said Alcis paints a more complete picture.

“Opium poppies’ distinctive characteristics and the tools developed by Alcis over a number of years facilitate the complete-coverage approach,” he said, adding that the U.N. relies on sampling different areas. Alcis analyzes satellite imagery for all agricultural land and poppy fields multiple times during the planting, cultivation and harvesting of opium poppy.

Results for 2024 poppy planting are expected by both organizations in the fall.

The economic situation in Afghanistan is dire as more than 12 million people face acute food insecurity.

The poppy ban takes about $1 billion in income away from the rural economy. So, even faced with the ban, impoverished farmers continue to grow poppies because they have few options for income.

For decades now, poppies and the resulting opium have been the biggest cash crop for farmers. Most practice subsistence farming. They have no extra income or time to buy the seeds of other plants and then wait years for them to mature to be harvested and sold.

Farmers complain that the Taliban government isn’t helping them with alternative crops.

Hassebullah, a farmer in Laghman province, told VOA that farmers need support and that they are still waiting for the Taliban government’s help.

“If a farmer doesn’t grow poppy and hashish,” said Hassebullah, who, like most rural Afghans, goes by his first name, “then as an alternative, the government should provide seeds and fertilizer, some agriculture products and other assistance.”

Taliban Deputy Counternarcotics Minister Javed Qaem told VOA that until farmers are provided alternatives, “unfortunately, we will be witnessing more clashes in the coming years.”
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After more than three decades, Egypt has increased the fixed price of subsidized bread from 0.05 Egyptian pounds ($0.0010) a loaf to 0.20 Egyptian pounds ($0.0042). With record levels of inflation already straining the Egyptian people — the majority of whom rely upon the discounted dietary staple — Cairo-based photojournalist Hamada Elrasam turns his lens on bakeries and their customers amid the 300% price hike. Captions by Elle Kurancid.
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HARARE, ZIMBABWE — Officials in Zimbabwe, which is facing a growing problem of substance abuse — especially among unemployed youth, say arrests have surged in 2024, with close to 2,400 people taken into custody so far.

Officials say economic difficulties are hampering efforts to curb the problem.

Zimbabwean Information Minister Jenfan Muswere said the Cabinet recently approved a review of fines ranging from $30 to $400 or imprisonment not exceeding two years for any business convicted of selling illicit drugs.

He said that in addition to the 2,373 people who have been arrested in 2024, 48 bases in six provinces have been raided and destroyed.

“The fight against the scourge of drug and substance abuse will continue across all provinces of Zimbabwe,” Muswere said. “Religious organizations have embraced the fight against drug and substance abuse through campaigns encouraging particularly the youths to live drug-free lives.”

Oscar Pambuka, who was recently released from jail after serving time for drug use, said more tools are needed to fight the vice, such as creating more jobs.

He said he started taking crystal methamphetamine after he and his wife divorced and he had no job.

“I began to associate with the new characters,” Pambuka said. “They became my new friends. And within those associations, I fell in love with a drug called crystal meth. … It used to make me feel comfortable. It used to give me temporary joy.”

But his drug use led to losing financial resources and his networks, he said, because many people don’t want to associate with drug users. He also lost weight — 20 kilograms (44 pounds) between 2016 and 2020 — although he started regaining some in jail.

“I thank God for the incarceration,” he said.

Officials say Zimbabwe’s economy has been hurt by U.S. sanctions against the government for alleged corruption and human rights abuses in the early 2000s.

Critics attribute the economic decline to corruption and bad policies by Harare.

Inflation is running at an annual rate of 55% — lower than the hyperinflation that plagued Zimbabwe in the past but still high enough to make the cost of living difficult for most ordinary Zimbabweans.

Representatives from government and United Nations agencies in Zimbabwe are expected to meet with President Emmerson Mnangagwa in Harare this Wednesday to devise a national plan on drug and substance abuse.
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BEIJING — Beijing wants the EU to scrap its preliminary tariffs on Chinese electric vehicles by July 4, China’s state-controlled Global Times reported, after both sides agreed to hold new trade talks. 

Provisional European Union duties of up to 38.1% on imported Chinese-made EVs are set to kick in by July 4 while the bloc investigates what it says are excessive and unfair subsidies. 

China has repeatedly called on the EU to cancel its tariffs, expressing a willingness to negotiate. Beijing does not want to be embroiled in another tariff war, still stung by U.S. tariffs on its goods imposed by the Trump administration, but says it would take all steps to protect Chinese firms should one happen. 

Both sides agreed to restart talks after a call between EU Commissioner Valdis Dombrovskis and China’s Commerce Minister on Saturday during a visit to China by Germany’s economy minister, who said the doors for discussion are “open.” 

China’s Global Times, citing observers, said the best outcome is that the EU scraps its tariff decision before July 4. 

But the Commission, analysts and European trade lobby groups stressed that talks would be a major undertaking and China would need to come willing to make major concessions. 

“Nobody will dare to do this now. Not before the elections in France,” said Alicia Garcia Herrero, senior fellow at Bruegel, an influential EU affairs think tank, on whether the planned curbs could be dropped. 

“The Commission can’t change a decision it has been pondering for months on months on months,” she added. “Yes, China is putting pressure on the member states, but they would need to vote with a qualified majority against the Commission.” 

The tariffs are set to be finalized on Nov. 2 at the end of the EU anti-subsidy investigation. 

“The EU side emphasized that any negotiated outcome to its investigation must be effective in addressing the injurious subsidization,” a Commission spokesperson said on Monday. 

The Chinese commerce ministry did not immediately respond to a Reuters request for comment. 

Talks are a ‘good sign’  

Siegfried Russwurm, head of Germany’s biggest industry association BDI, said it was a “good sign” that both sides would hold talks in the ongoing dispute. 

“You know the old saying: as long as there are talks you’re not shooting at each other,” he told German public broadcaster Deutschlandfunk. 

Russwurm, who also serves as chairman for German conglomerate and car supplier Thyssenkrupp, said tariffs was the last thing Germany needed as a major exporting nation. 

At the same time, Brussels’ move to apply tariffs of varying degrees suggested a thorough analysis has taken place and that this was not an effort that targets the entire Chinese car sector in equal measure. 

Meantime, Maximilian Butek, executive director at the German Chamber of Commerce in China, said there was “zero chance” that the preliminary tariffs would be removed by July 4 unless China eliminated all the issues flagged by the European Commission. 

EU trade policy has turned increasingly protective over concerns that China’s production-focused development model could see it flooded with cheap goods as Chinese firms look to step up exports amid weak domestic demand. 

China has rejected accusations of unfair subsidies or that it has an overcapacity problem, saying the development of its EV industry has been the result of advantages in technology, market and industry supply chains.  

“When European Commission President Von der Leyen announced she would investigate China’s new energy vehicles … I had an intuitive feeling it was not only an economic issue but also a geopolitical issue,” said Zhang Yansheng, chief research fellow at the China Center for International Economic Exchanges. 

Armed and ready 

Trade relations between the 27-strong bloc and the world’s No. 2 economy took an abrupt turn for the worse in May 2021 when the European Parliament voted to freeze ratification of what would have been a landmark investment treaty because of tit-for-tat sanctions over allegations of human rights abuses in China’s Xinjiang region. 

They came to blows again that year when China downgraded diplomatic ties with Lithuania and told multinationals to sever relations with the Baltic state after Vilnius invited democratically governed Taiwan, which China claims as part of its territory, to open a representative office in the capital. 

Although calling for talks, Beijing has also indicated that it has retaliatory measures ready if the EU does not back down, and that it considers Brussels wholly responsible for the escalating tensions. 

The Global Times, which first reported China was considering opening a tit-for-tat anti-dumping investigation into European pork imports — which the commerce ministry confirmed last week — has also teed up an anti-subsidy investigation into European dairy goods and tariffs on large engine petrol cars. 

Chinese authorities have dropped hints about possible retaliatory measures through state media commentaries and interviews with industry figures. 

“It seems probable that Beijing will raise tariffs up to 25% for Europe-made cars with 2.5 or above liter engines,” said Jacob Gunter, lead analyst at Berlin-based China studies institute MERICS. 

“Pork and dairy are already on the table for Beijing, and likely more agricultural products will be threatened,” he added. 

“On the EU side, there are a variety of ongoing investigations … so we should expect some sort of measures targeting distortions on [Chinese] products ranging from medical devices to airport security scanners to steel pipes.” 
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