Coronavirus struck at a tough time for Morocco: it aggravated the impact of a second year of drought, in a country where economic growth is vulnerable to fluctuations in rainfall. Agriculture, which accounts for about 10 per cent of gross domestic product and employs almost 30 per cent of the workforce, was already suffering as a result of two years of poor rains, the Financial Times reported. The pandemic was another disaster, leading to the collapse of the tourism sector and disrupting exports to Europe, the country’s foremost economic partner.
North Africa/Middle East
Lara Mustafa and Wassim Hachem are among thousands of university students caught up in Lebanon’s financial crisis, which started in 2019 with popular protests against leaders whom demonstrators blamed for corruption and mismanaging the economy, Reuters reported. An insolvent banking system, which had lent more than two thirds of its assets to the central bank and state, shut out all depositors from their dollar accounts, and Lebanon defaulted on its debts. The COVID-19 pandemic added to mass job losses and business collapses. Lebanon traditionally prides itself on its education system.
Restructuring consultancy Alvarez & Marsal has pulled out of a forensic audit of Lebanon’s central bank because it did not receive information required to carry out the task, caretaker Finance Minister Ghazi Wazni told Reuters on Friday, Reuters reported. The decision is a blow to Lebanon as it attempts to extricate itself from a financial crisis, rooted in endemic waste and corruption, that has crashed its currency, paralysed banks and prompted a sovereign debt default.
A Lebanese judge has ordered a protective freeze on some property assets of SGBL bank, its CEO and two board members in a case filed by a Jordanian businessman seeking repatriation of millions of dollars in deposits, a judicial document showed, Reuters reported. It was the first such move in cases brought against Lebanese lenders by customers seeking access to dollar deposits frozen under informal capital controls. The curbs, imposed by the banks in late 2019, also largely blocked customers from making transfers abroad.
Dubai-listed contractor Arabtec has terminated thousands of workers again in recent weeks, sources said, as the construction firm prepares for liquidation after the coronavirus pandemic deepened its financial woes, Reuters reported. Arabtec Holding shareholders in September authorised the board to file for liquidation due to its untenable financial position. The company, which helped build the Louvre Abu Dhabi and the world’s tallest skyscraper, the Burj Khalifa in Dubai, suffered a first-half loss of $216.18 million, piling up accumulated losses of nearly $400 million.
Lebanon’s caretaker Finance Minister Ghazi Wazni announced on Thursday a three-month extension of a deadline to provide all data required for a forensic audit of the central bank after it declined to submit some information, citing bank secrecy laws, Reuters reported. The caretaker prime minister and three sources familiar with the matter have said that Banque du Liban (BDL) was withholding information needed by restructuring consultancy Alvarez & Marsal to begin the audit, which is a key demand for foreign financial assistance to help Lebanon exit a financial meltdown.
The Lebanese central bank’s refusal to provide full data for a forensic audit may force consultancy Alvarez & Marsal (A&M) to walk away or wait for a new cabinet to salvage the review, a key condition for foreign aid, two sources close to the matter said, Reuters reported. Banque du Liban (BDL) said in a statement on Wednesday that it had provided its own accounts to the turnaround specialist hired by Lebanon this year, but that it should be the government that submits full state accounts to the audit.
Saudi Arabian state oil giant Aramco on Tuesday reported a 44.6% drop in third-quarter net profit as the coronavirus crisis continued to choke demand and weigh on crude prices, Reuters reported. Share prices of global oil companies have been hammered this year as investors fret over the impact of the pandemic on energy demand and the long-term shift away from fossil fuels. Oil prices have recovered only slightly since tumbling to their lowest in almost two decades in March, prompting Aramco and other majors such as Shell and BP Plc to slash capital expenditure this year and next.
Abu Dhabi’s government has stumped up around $22 billion for Etihad Airways since it began flying in 2003, underscoring the ambition of the oil-rich emirate to turn its national carrier into a global player before the effort faltered in recent years, Bloomberg News reported. The heavy investments, made before Covid-19 lockdowns strangled demand for air travel, were likely a prelude to support for the carrier this year, given the sector’s dire need for cash during the pandemic.