The Leather and Leather Products Industry and Research Development Centre propose for the government to ease the foreign currency retention rate in order to alleviate input shortage on the leather industry.
It can be recalled that the financial sector regulatory body introduced a new retention ration for hard currency earnings that only allow exporters to access only a fifth of their hard currency generated from export which resulted in erosion of the rate they secured in the past.
According to Mohammed Hussein, head of Leather and Leather Products Industry and Research Development Center that was formerly known as Leather Industry Development Institute, the manufacturing industry particularly the sector he leads is foreign currency dependant to import inputs.
“We understand the hard currency crunch the country faces, but the sector is challenging to operate since almost 99 percent of inputs like chemical, accessories and others are imported for factories,” he told Capital.
“So we proposed to the relevant government body, Ministry of Industry, for factories to access more foreign currencies they earned from their export earnings to import inputs,” he added.
“If it was a trade it could be understandable, but our industry entails manufacturers and even exporters so they need adequate foreign currency to import the proportion they need for their operations,” the Center head explained.
According to the proposal, the Center expressed that the leather industry aught at least access 40 percent of the foreign currency they earned for the purpose of import inputs.
The retention and utilization of export earnings and inward remittances directives no. FXD/79/2022 that was amended and became effective on January 6 on its article 4.1 stated that banks are required to surrender 70 percent of the foreign currency earnings from export of goods and services, private transfer and NGO’s transfer to the NBE.
Article 4.2 stated that exporter of goods and services and recipients of inward remittance shall have the right to retain 20 percent of their export earnings in foreign currency indeterminately in a retention account after the deduction of 70 percent surrender requirement from the total earnings. It added that the remaining 10 percent shall be surrendered to the respective bank.
Mohammed said that the Centre is working with the Ministry of Industry, which is the upper body for the Leather Industry Center, and others for factories who are in critical condition to get special solution to their problems and accelerate the production.
Besides foreign currency, regarding access to finance, factories particularly local industries have some sort of working capital problems to which the Center is approaching banks to solve their problems.
“Access to finance policy generally includes all sectors at the same range, while manufacturing industry needs a separate attention since it is totally different from other businesses,” he said, adding, “the recently ratified industry policy has considered access to finance for the sector to be treated separately unlike other businesses.”
In the budget year, the leather and leather goods export generated USD 40 million, which is almost the same compared with the preceding year.
In the past three years, the export earnings from the sector have declined in related with internal and external factors like COVID 19.
In the 2017/18 and 2018/19 budget year the sector contributed USD 130 million and USD 120 million respectively that reduced to USD 75 million in the 2019/20 budget year.
Meanwhile the export earnings eroded compared with the preceding year however the local market has been boosted in the budget year as per the explanation of Mohammed. He said that the import substation was very fruitful in the budget year that ended on July 7, “the local sales helps factories at least to operate smoothly and keep their employees.” The sector at least manages 30,000 jobs.
He reminded that the global market particularly the shoe business is significantly downgraded “the export of Huajian shoe export, which individually contributed up to USD 30 million, and other major exporters have eroded in the past few years. On the other hand factories that used to exported goat fur leather have now totally halted their export due to the market reduction.”
Alternative products that substitute the leather goods with lesser price have also affected the global leather industry.
Leather industry requests for ease of foreign currency retention rate
UNRAVELLING BANKING
It seems the world of money has finally started to unravel in earnest. The current worldwide system of banking is based on ‘Fractional Reserve Banking’ (FRB). This fraudulent enterprise, which has been running the world roughshod for over half a millennium, is visibly floundering. The proliferation of phony money created out of thin air by FRB facilitated the ascendance of financialization, which in turn led to the prevailing dominant form of capitalism, namely, ‘crony capitalism.’ The gross inequality and polarization that is afflicting the world is one visible outcome of FRB! The other exogenous factor accelerating FRB’s demise is modern informatics!
Thanks to modern informatics, those who have had enough of this unjust system of money are meticulously developing new systems of exchange that will not rely on FRB! Even the most beneficial element of the current banking system, that of being an intermediary, will (most likely) be superseded by the new technology of ‘Cryptocurrencies and ‘Blockchain’! We will revisit these topics in the coming editorials. Today we will only examine the fraudulent foundations of FRB and the existing global banking edifice that rests on FRB. We will try to give the rationale for the complete dismantling of this unfair and dishonest system. Since the ‘empty suits’, aka, neighborhood bankers, are hardly aware of the subtle underlying principles of their industry, we believe they might also benefit from exposes of this sort. Being a dutiful and loyal functionary (a ‘useful idiots’, a la Lenin) will not be helpful going forward!
It all began when ancient goldsmiths started the ‘business of safekeeping’ for people with gold (mostly the wealthy) in their heavily fortified vaults, for a fee. The goldsmiths issued receipts to gold depositors ascertaining the exact quantity and date of deposition. The well-established goldsmiths (just like the big banks of today) became more reliable and started to attract a whole lot of gold deposition. Gradually the goldsmiths’ receipts became medium of exchanges and were used (in the market) for the selling and buying of goods/services. People assumed all receipts (equivalent to present day bank notes) in circulation were backed by gold in the various vaults. Soon the goldsmiths (present day bankers) became greedy and started to issue receipts without gold deposition and charging interests on these fraudulent receipts. The goldsmiths became rich without lifting a finger, save the effort of writing the phony receipts!
In those days crisis (both natural and man-made) were frequent occurrences. During these times people tended to rush to their respective goldsmiths, with their receipts on hand, to collect their gold. Obviously there were more receipts in circulation than actual gold in the vaults. In those days justice was swift and the crooked goldsmiths were dealt with promptly and appropriately. Today’s equivalent of such an incident is called a ‘bank run’ (when a particular bank faces massive request for withdrawal of deposits, which of course it doesn’t have.) Today when such a scenario obtains, instead of banks and bankers facing justice, they are promptly bailed out by their respective central banks, read taxpayers (by availing ‘unlimited’ amount of liquidity/money which they again create out of thin air, with adverse consequences to the sheeple’s livelihood. The interstate world system dictates that each and every nation should have a central bank, mostly to avoid bank runs. In those days, imprudent banks would have been wiped out if found engaged in fraudulent activities, but today they might not even get a slap on the wrists, so to speak. The moral of it all is, our world system condones the conning business of banking and has legalized and legitimized its blatant frauds! What are the consequences of fractional reserve banking?
Inequality is one major consequence! How is this inequality created? If a business/individual is positioned closer to the money spigot, then riches are made, not always from productive activities that crate wealth, but via phony instruments concocted to dispense unearned money via credits/loans under the pretexts of viable projects. A well-connected entity will submit a project (on paper) to financial institutions, which are always eager to extend loans (without creating debts banks cannot survive a day), irrespective of the real risks involved. If the borrower is lucky and the project prospers on the account of the loans extended to it, then there is no problem. On the other hand, if the project fails, then the problems are transferred to tax payers. The possibility of non-payment or non-performance according to agreed upon conditions doesn’t really bother the bank so much, as it can always print more money (out of thin air) to fulfill its obligations. If such tricks become too much and things gets very difficult to handle, there is always the state (again read tax payers) to bail them (banks) out. Subprime loans to house buyers or auto buyers were examples of known un-payable loans systemically transferred to tax payers. Such phenomenon take place all over the world and is not only restricted to the wealthy countries of the West. From Estonia to Ethiopia, from Ukraine to Uruguay the game remains the same.
Global institutions that back such ludicrous scheme include institutions like WB/IMF, WTO, etc. Fractional Reserve Banking is a cartel operation, a protected business. If a country employing FRB becomes very indebted because of excessive bank malfeasance, the IMF and other creditors will come in and will literally take over the country’s assets, via all sorts of disguise, (austerity, privatization, etc.) We are currently witnessing this in Greece. In this game of inequity, those working stiff on fixed salary as well as operating in the informal sector (low income) lose their purchasing power on a continuous basis. The inflation created by the bank’s non-stop ‘printing of money’ dilutes the hard earned money of labor. In this category we can also include small business operators/entrepreneurs who try to create wealth without resorting to the gimmick of phony money, characteristic of the connected! As these types of economic agents are not openly welcomed by the institutionalized cartel of banks, they have started to use other forms of medium of exchanges/currencies; like precious metals, coupons, crypto currencies, etc. FRB also damages nature by availing phony money for unnecessary, useless and unsustainable projects; don’t forget, in order for the banks to survive, they have to continuously create debt. Concrete jungles enveloped by smog detrimental to health pass for livable environments. Habitat destruction by way of construction!
Africa prepares rollout of world’s first Malaria Vaccine
Preparations are underway for the mass rollout of the world’s first malaria vaccine to protect millions of children in Africa.
The rollout is being funded by Gavi, the Vaccine Alliance, for nearly $160 million.
The World Health Organization said Gavi’s multimillion-dollar funding marks a key advance in the fight against one of Africa’s most severe public health threats. It noted that countries in sub-Saharan Africa bear the brunt of the yearly toll of more than 240 million global cases of malaria, including more than 600,000 reported deaths. The main victims are children under age 5.
WHO regional director for Africa Matshidiso Moeti said one child dies every minute in Africa, with catastrophic consequences for families, communities and national development.
The vaccine was introduced in Africa in 2019. Since then, more than 1.3 million children have benefited from the lifesaving inoculations in three pilot countries – Ghana, Kenya and Malawi. Moeti said those countries have reported a 30 percent drop in hospitalizations of children with severe malaria and a 9% reduction in child deaths.
“If delivered at scale, millions of new cases could be averted, and tens of thousands of lives saved every year,” Moeti said. “We were encouraged to see that demand for the vaccine is high, even in the context of COVID-19, with the first dose reaching between 73% to over 90% coverage.”
Thabani Maphosa, managing director of country programs at Gavi, called the vaccine the most effective tool in the fight against malaria, one that will save children’s lives. However, he said, demand for the lifesaving product will outstrip supply.
“Our challenge during this critical phase is to ensure the doses we have available are used as effectively and equitably as possible,” Maphosa said. “With this is mind, Gavi today is opening an application window for malaria support.”
He said the three pilot countries, which already have experience in rolling out the vaccine, will get first crack at applying for and receiving funding. So, practically speaking, Maphosa said, they will require little help in setting up their systems to get the operation underway.
Maphosa said a second round of funding will take place at the end of the year. At that time, he said other countries with moderate to high cases of severe malaria can submit applications for support.
COVID-19 vaccination remains a key priority for Africa
Dr. Ahmed Ouma, Acting Director of the Africa CDC, affirmed that COVID-19 vaccination remains a key priority for Africa, as the continent works towards a target of ensuring 70 percent of the population is vaccinated by the end of this year. So far, two African countries have achieved a vaccination rate of 70 percent, and six African countries have vaccinated between 40 and 70 percent of their populations. Overall, less than 20 percent of the people in Africa are fully vaccinated.
“We commemorate the first anniversary of the Mastercard Foundation’s partnership with the Africa CDC to purchase and deliver millions of vaccines and drive long-term health security in Africa. We reiterate our commitment and drive towards the new public health order, which calls for a strengthened Africa CDC and our National Public Health Institute. To increase investment in the public health workforce and train the next generation of leaders and experts. Finally, to expand local manufacturing of vaccines, diagnostics, and therapeutics, which will ensure quick access and reduced costs in the continent,” he said.
Dr. Ahmed Ouma also emphasized the importance of focusing vaccination efforts on young people, given that 70 percent of Africa’s population is under the age of 30. The African Union and Africa CDC, under the Saving Lives and Livelihoods initiative, recently launched an initiative called Bingwa (a Swahili word meaning champion) to recruit young people as vaccine advocates in their communities.
Speaking on the one-year commemoration, Reeta Roy, President and CEO of the Mastercard Foundation, highlighted that the next phase of the Saving Lives and Livelihoods initiative would focus on turning vaccine delivery into vaccinations.
“We must lean in and focus on vaccination uptake. It is an opportunity to work with governments to help set up vaccination centres, train and support health care workers, and engage directly with communities to understand the importance of getting vaccinated to secure the lives and livelihoods of their loved ones,” she said.
Moving forward, the Saving Lives and Livelihoods initiative will include a strong focus on Risk Communication and Community Engagement (RCCE) to enable African citizens, particularly young people, and rural populations, to understand the safety and benefits of vaccination. RCCE will play a crucial role in creating demand for and uptake of COVID-19 vaccinations and supporting other non-pharmaceutical efforts to break the transmission chain and mitigate the pandemic’s impact.
The Mastercard Foundation and Africa CDC launched the Saving Lives and Livelihoods initiative – a now $1.5 billion partnership.
The historic initiative – the largest public health partnership between a global philanthropic organization and an African institution – has proven to be catalytic. The Saving Lives and Livelihoods commitment to purchase 65 million vaccine doses was instrumental in enabling the African Vaccine Acquisition Trust to negotiate and secure 510 million doses for Africa from vaccine manufacturers. The initiative also helped inform the decision of African Union Heads of State to designate the Africa CDC as an autonomous public health agency. Additionally, the initiative has delivered over 15 million vaccines across the continent since its launch while deploying rapid responders to accelerate vaccination campaigns in countries at-risk of vaccine expiration.
