By Dylan Robertson in Ottawa
The head of the World Food Program is urging countries to follow Canada in trying to avert a looming famine in East Africa, which he warns could get even worse due to sanctions against Russia.
David Beasley, the American who leads the United Nations agency, said the number of people in acute need of food has multiplied by four since 2017.
“The world is in a very fragile state. We can’t, in my opinion, take much more,” he said in an interview.
“If we have a massive earthquake, or a volcano, or something in the next six months? Holy mackerel, all the fire trucks are out.”
His gravest concern is for the Horn of Africa, a region that spans all of Somalia and large swaths of Ethiopia and Kenya. The past five consecutive growing seasons have all had a drought, and armed conflict has emboldened some militias to withhold access to food.
On a visit to the region last month, Beasley was taken aback to learn that food aid is now reaching farmers and ranchers, he said. Before, they occasionally got equipment to help with farming, but they hardly ever needed actual food.
“The amount of dead animals that I saw was extraordinary,” he said. “The Horn of Africa is a picture-perfect scenario of a catastrophe.”
Beasley started his job in March 2017, overseeing an organization that provides everything from school meals to farming machines to the world’s poorest.
At that time, 80 million people were in acute food insecurity, meaning they are either malnourished or cutting back on essentials to feed themselves.
That number rose to 135 million by the time the COVID-19 pandemic started in early 2020, due to wars and climate change.
At the start of this year, 276 million people were in need, in part due to supply-chain shocks and a drought in Afghanistan, where the Taliban takeover has plunged the country into an economic crisis.
Since Russia’s invasion of Ukraine in February, the number of people in acute need has risen to an unprecedented 345 million.
The invasion has drastically reduced grain exports from Europe’s breadbasket and caused a jump in oil prices, which Beasley said is costing his organization an extra $75 million U.S. each month.
“Right now in our operations, we’re having to take food from hungry children to give to starving children, because of a lack of funding,” he said during a Tuesday visit to Ottawa.
Food prices dropped this year when grain gradually started to leave Ukraine’s main port, Odessa, but they remain the highest in a decade.
Western sanctions on Russia include some exemptions for certain types of food and fertilizer, but Beasley said global powers need to further compromise. If regions that are not facing climate woes don’t receive enough fertilizer, they won’t be able to ramp up their production, he said, and millions will die.
“Regardless of whether you love or hate Russia, you’ve got to get these fertilizers out,” he said.
“We very well could go from a food-pricing problem right now to a food availability problem in 2023, and that’s my grave concern.”
Beasley said Canadian governments under Liberal and Conservative leaders have been “a great voice for food security globally,” as have the U.S., Germany and France.
Prime Minister Justin Trudeau cited global food security as a priority going into the United Nations General Assembly last week, but the New York meetings were dominated by news of Russia ramping up its war in Ukraine.
Canada has long been among the top five donors to the World Food Program, with Ottawa pledging US$360 million this year and earmarking funding for future years so officials can plan ahead.
“It’s huge; it’s a godsend. But other countries, like the Gulf states, have got to step up,” he said.
“I’m jumping up and down, trying to get the world leaders to recognize (that) everyone’s got to engage.”
Beasley, the former Republican governor of South Carolina, said people should see development aid as a hedge against more expensive crises.
He said challenges such as COVID-19 and inflation have the developed world questioning the virtue of helping foreigners, but he argued that not intervening will drive conflict and mass migration that will only end up being more expensive for the west.
“I’ve seen it first hand; it will cost a thousand times more if we don’t go down and help people where they are.”
This report by The Canadian Press was first published Sept. 28, 2022.
What the latest Bank of Canada rate hike means for inflation, consumers
By Tara Deschamps
The Bank of Canada hiked its key policy rate by half a percentage point to 4.25 per cent — the highest it’s been since January 2008 — on Wednesday in its final rate decision of a year that has been marked by stubbornly high inflation and rapidly increasing interest rates.
The bank, which has made a steady succession of large hikes over the course of the year, is widely believed to be nearing an end to the increases.
In announcing the rate hike Wednesday, the bank said it will consider whether the rate “needs to rise further to bring supply and demand back into balance and return inflation to target.”
Here’s a look at what the rate means, how analysts are interpreting it and what it could mean for consumers.
What is the key policy rate and what does it do?
The key policy rate, also known as the target for the overnight rate, is how much interest the Bank of Canada wants commercial banks to charge when lending each other money overnight to settle daily balances.
Knowing how much it costs to lend money, or deposit it with the central bank, helps set the interest rates charged on things like loans and mortgages.
Lowering the rate generally makes borrowing money more affordable, while raising it makes such activities more expensive.
Why is the bank using the rate to target inflation?
Inflation is a measure of how much prices of goods and services are rising or falling. High inflation is a sign of an economy that’s overheating.
Canada’s annual inflation rate reached a peak of 8.1 per cent in June, the highest level in four decades.
It has eased since then, reaching 6.9 per cent in September, but didn’t budge in October. And shoppers have seen higher prices for common expenses like groceries. Grocery prices have been rising at the fastest pace in decades and were 11 per cent higher in October than they were a year ago.
Economists and the central bank want to see a further easing, which is why interest rates have been rising so quickly in the hope of cooling consumer spending patterns.
“Inflation is still too high and short-term inflation expectations remain elevated,” the bank said in its announcement. “The longer that consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched.”
What does this mean for my mortgage?
Mortgage rates tend to increase or decrease in tandem with interest rates.
When Canadians buy homes there are two kinds of mortgages they can select — fixed rate or variable. Fixed-rate mortgages allow borrowers to lock in the interest rate they will pay for a set amount of time, while variable-rate mortgages can fluctuate.
Allison Van Rooijen, vice-president of consumer credit at Meridian Credit Unit, estimates the rate hike Wednesday will bump payments on a $450,000 variable-rate mortgage on a 25-year amortization up another $130 or so every month. Since the beginning of 2022, rising rates have amounted to roughly $1,000 more per month since the beginning of 2022.
“Because of the high cost of housing in Canada and years of low borrowing rates, Canadians are carrying record-levels of debt on mortgages and lines of credit, so it’s really important that people go through their expenses and look to scale back discretionary spending where they can,” she said in an email.
She recommends people double down on efforts to pay off debt with higher interest rates as much as possible and if they are running into trouble making payments, discuss whether switching to another format of mortgage is right for them.
Does this mean interest rates will stop rising soon?
Shortly after the announcement, many economists predicted the bank isn’t done with hikes yet, even though the language in the statement signalled the possibility of holding steady at 4.25 per cent.
BMO Capital Markets chief economist Douglas Porter said a further hike of about 25 basis points is likely still to come because he’s concerned about the “stickiness of underlying inflation.”
James Orlando of TD Economics agreed. He expects the bank will deliver its final rate hike for the foreseeable future in January, bringing the measure to 4.5 per cent.
“We don’t think the Bank of Canada is done yet, but it is quickly approaching the end of its hiking cycle,” he wrote in a note to investors.
“As all Canadians know, the rapid rate hikes over 2022 have caused a dramatic adjustment in the real estate market, and we are starting to see this in consumer spending data. We expect this to continue to weigh on the economy over 2023 as the lagged effects of past hikes filter through.”
This report by The Canadian Press was first published Dec. 7, 2022.
Experts raise concerns as Nigeria limits cash withdrawals
By Chinedu Asadu in Abuja
ABUJA, Nigeria (AP) — Experts on Wednesday raised concerns over a new policy announced by the Central Bank of Nigeria that heavily limits withdrawals of money in a push for a cashless economy.
The monetary policy, which applies to ATMs, banks and cash back from purchases, follows the launch of the West African nation’s newly designed currency notes to control the money supply.
The central bank limited weekly over-the-counter cash withdrawals to 100,000 naira ($225) for individuals and 500,000 naira ($1,124) for corporations, with a processing fee required to access more.
When the policy takes effect in Jan. 9, ATMs will no longer dispense Nigeria’s high denominations of 1,000 naira ($2.25) and 500 naira ($1.10) while withdrawals from ATMs and point-of-sale terminals also will be limited to 20,000 naira ($45) daily.
“In compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits are required for legitimate purposes, such cash withdrawals shall not exceed 5,000,000 naira ($11,236) and 10,000,000 naira ($22,471) for individuals and corporations, respectively,” said Haruna Mustafa, the bank’s director of banking supervision.
Policymakers say the withdrawal limits and recent monetary initiatives from the central bank would bring more people into the banking system and curb currency hoarding, illicit flows and inflation.
But analysts worry that with digital payments often unreliable in Nigeria, the initiative could hurt daily transactions that people and businesses make.
“The policy is intended to cause discomfort, to move you from cash to cashless because they (the central bank) have said they want to make it uncomfortable and expensive for you to hold cash,” economic analyst Kalu Aja said.
“That is a positive for the CBN (because) the more discomforting they are able to achieve, the more people can move,” Aja said.
In Nigeria, the majority of people work in the informal sector — mainly activities outside of the legal framework and government regulation such as farming, street and market trade, and public transport. The economy is heavily dependent on this sector, and cash is usually preferred for transactions because many lack bank accounts.
Only 45% of adults in Nigeria have accounts with regulated financial institutions, according to the World Bank. In the absence of bank accounts, point-of-sale terminals have emerged as one of the fastest-growing areas of financial inclusion in the country.
Through the withdrawal limits, the central bank is “directly attacking” such agency banking services and “people will essentially begin to hoard their money,” said Tunde Ajileye, a partner at Lagos–based SBM Intelligence firm.
“It is not going to drive people to start to try doing electronic transactions. On the contrary, it is going to move people away from the financial institutions,” he said.
If We Only Knew
Unemployment rate drops slightly to 5.1% in November: Statistics Canada
When Leadership Fails: Add Panic And Stir
Inquiry into Emergencies Act urged to recommend greater oversight of police
Local moving company donating 101 moves to support vulnerable Canadians this holiday season
Over 100 stolen vehicles, plus trailers, farm equipment and machinery seized by police in East Central Alberta
Canada-Morocco: Canada fans look forward to next World Cup after loss in final match
RCMP2 days ago
UPDATE: Red Deer family found – safe
Alberta2 days ago
Alberta to bring in more children’s pain medication as illnesses strain hospitals
demonstration2 days ago
Military was told to prepare to intervene in ‘Freedom Convoy’ protests: official
Alberta2 days ago
CannTrust CEO was warned over illicit pot growing: former compliance worker
COVID-192 days ago
Most unused COVID-19 vaccines will expire at the end of the year: auditor general
Top Story CP2 days ago
Federal Court of Appeal upholds all but one rule on airline compensation
Bruce Dowbiggin2 days ago
Misconduct: NHL Succumbs To Non-Binary Power Play
Top Story CP16 hours ago
CP NewsAlert: B.C. finance minister replaced in Premier David Eby’s cabinet shuffle