By Mwaura http://investafrica.biz
In the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.
The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
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Example of making money by buying Euros
Trader's Action EUR USD
You purchase 10,000 euros at the EUR/USD exchange rate of 1.18 so you pay the broker $11,800 in exchange of 10,000 euros.
Two weeks later, you exchange your 10,000 euros back into US dollars at the exchange rate of 1.2500. 10,000 x 1.2500 so the broker buys back your euros and pay you $12,500
You earn a profit of $700.
*EUR 10,000 units x 1.18 = US $11,800
** EUR 10,000 units x 1.25 = US $12,500
An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
How to Read an FX Quote
Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:
GBP/USD = 1.7500
The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).
When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.
When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound.
The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.
You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency.
Long/Short
First, you should determine whether you want to buy or sell.
If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position". Just remember: long = buy.
If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell.
bid/Ask /Spread
All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.
The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you (as the trader) will sell.
The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy.
The difference between the bid and the ask price is popularly known as the spread.
Let's take a look at an example of a price GBP/USD quote, the bid price is 1.7445 and the ask price is 1.7449.
If you want to sell GBP, you will sell pounds at 1.7445. If you want to buy GBP,you will buy pounds at 1.7449.
In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair.
EUR/USD
In this example Euro is the base currency and thus the “basis” for the buy/sell.
If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar.
If you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar.
USD/JPY
In this example the US dollar is the base currency and thus the “basis” for the buy/sell.
If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen.
If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.
GBP/USD
In this example the GBP is the base currency and thus the “basis” for the buy/sell.
If you think the British economy will continue to do better than the United States in terms of economic growth, you would execute a BUY GBP/USD order. By doing so you have bought pounds in the expectation that they will rise versus the US dollar.
If you believe the British's economy is slowing while the United State's economy remains strong like bull, you would execute a SELL GBP/USD order. By doing so you have sold pounds in the expectation that they will depreciate against the US dollar.
USD/CHF
In this example the USD is the base currency and thus the “basis” for the buy/sell.
If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order. By doing so you have bought US dollars in the expectation that they will appreciate versus the Swiss Franc.
If you believe that the US car markers crisis will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order. By doing so you have sold US dollars in the expectation that they will depreciate against the Swiss franc.
I don't have enough money to buy $10,000 euros. Can I still trade?
You can with margin trading! Margin trading is simply the term used for trading with borrowed capital. This is how you're able to open $10,000 or $100,000 positions with as little as $50 or $1,000. You can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital.
Margin trading in the foreign exchange market is quantified in “lots”. We will be discussing these in depth later on this lesson. For now, just think of the term "lot" as the minimum amount of currency you have to buy. When you go to the grocery store and want to buy an egg, you can't just buy a single egg; they come in dozens or "lots" of 12. In Forex, it would be just as foolish to buy or sell $1 EUR, so they usually come in "lots" of $10,000 or $100,000 depending on the type of account you have.
For Example:
You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot ($100,000) for buying the Pound with a 1% margin at the price of 1.5000 and wait for the exchange rate to climb. This means you now control $100,000 worth of British Pound with $1,000. Your predictions come true and you decide to sell. You close the position at 1.5050. You earn 50 pips or about $500. (A pip is the smallest price movement available in a currency). So for an initial capital investment of $1,000, you have made 50% return. Return equals your $500 profit divided by your $1,000 you risked to trade.
Your Actions GBP USD Your Money
You buy 100,000 pounds at the GBP/USD exchange rate of 1.5000 +100,000 x1.500 =150,000
You blink for two seconds and the GBP/USD exchange rate rises to 1.5050 and you sell. 100,000 X1.5050 = 150,500
You have earned a profit of $500. (150500 -150000)
Note that with amargin of 1% you ony needed $1000 to open the position.
When you decide to close a position, the deposit that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
http://investafrica.biz
Tuesday, March 3, 2009
Monday, March 2, 2009
Why forex traders are cashing in serious bucks and sharpening their brains.
By,Alex Mwaura http://investafrica.biz
First, let's understand what makes FOREX trading the best home based business around:
• Low Start Up Costs
• No Marketing Costs
• No Employees
• No Inventory
• No Website to Create or Maintain
• No Office
• No Schedule
• No Customers to chase
It's just you, your FOREX trading education, and your computer.
Introduction to forex.
With the increasingly widespread availability of electronic trading networks, trading on the currency exchanges is now more accessible than ever. The foreign exchange market, or forex, is notoriously the domain of government central banks and commercial and investment banks, not to mention hedge funds and massive international corporations. At first glance, the presence of such heavyweight entities may appear rather daunting to the individual investor. But the presence of such powerful groups and such a massive international market can also work to the benefit of the individual trader. The forex offers trading 24-hours a day, five days a week, and the daily dollar volume of currencies traded in the currency market exceeds $1.4 trillion, making it the largest and most liquid market in the world.
Trading Opportunities
The sheer number of currencies traded serves to ensure a rather extreme level of volatility on a day-to-day basis. There will always be currencies that are moving rapidly up or down, offering opportunities for profit (and commensurate risk) to astute traders. Yet, like the equity markets, forex offers plenty of instruments to mitigate risk and allows the individual to profit in both rising and falling markets. Forex also allows highly leveraged trading with low margin requirements relative to its equity counterparts. Perhaps best of all, forex charges zero dealing commissions!
Many of the instruments utilized in forex - such as forwards and futures, options, spread betting, contracts for difference and the spot market - will appear similar to those used in the equity markets. Since the instruments on the forex often maintain minimum trade sizes in terms of the base currencies (the spot market, for example, requires a minimum trade size of 100,000 units of the base currency), the use of margin is absolutely essential for the person trading these instruments.
Buying and Selling Currencies
Regarding the specifics of buying and selling on forex, it is important to note that currencies are always priced in pairs. All trades result in the simultaneous purchase of one currency and the sale of another. This necessitates a slightly different mode of thinking than what you might be used to. While trading on the forex, you would execute a trade only at a time when you expect the currency you are buying to increase in value relative to the one you are selling. If the currency you are buying does increase in value, you must sell the other currency back in order to lock in a profit. An open trade (or open position), therefore, is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.
Base and Counter Currencies and Quotes
Currency traders must become familiar also with the way currencies are quoted. The first currency in the pair is considered the base currency; and the second is the counter or quote currency. Most of the time, U.S. dollar is considered the base currency, and quotes are expressed in units of US$1 per counter currency (for example, USD/JPY or USD/CAD). The only exceptions to this convention are quotes in relation to the euro, the pound sterling and the Australian dollar - these three are quoted as dollars per foreign currency.
Forex quotes always include a bid and an ask price. The bid is the price at which the market maker is willing to buy the base currency in exchange for the counter currency. The ask price is the price at which the market maker is willing to sell the base currency in exchange for the counter currency. The difference between the bid and the ask prices is referred to as the spread.
The cost of establishing a position is determined by the spread, and prices are always quoted using five numbers (for example, 134.85), the final digit of which is referred to as a point or a pip. For example, if USD/JPY was quoted with a bid of 134.85 and an ask of 134.90, the five-pip spread is the cost of trading this position. From the very start, therefore, the trader must recover the five-pip cost from his or her profits, necessitating a favorable move in the position in order simply to break even.
More about Margin
Trading in the currency markets requires a trader to think in a slightly different way also about margin. Margin on the forex is not a down payment on a future purchase of equity but a deposit to the trader's account that will cover against any currency-trading losses in the future. A typical currency trading system will allow for a very high degree of leverage in its margin requirements, up to 100:1. The system will automatically calculate the funds necessary for current positions and will check for margin availability before executing any trade.
Rollover
In the spot forex market, trades must be settled within two business days. For example, if a trader sells a certain number of currency units on Wednesday, he or she must deliver an equivalent number of units on Friday. But currency trading systems may allow for a "rollover", with which open positions can be swapped forward to the next settlement date (giving an extension of two additional business days). The interest rate for such a swap is predetermined, and, in fact, these swaps are actually financial instruments that can also be traded on the currency market.
In any spot rollover transaction the difference between the interest rates of the base and counter currencies is reflected as an overnight loan. If the trader holds a long position in the currency with the higher interest rate, he or she would gain on the spot rollover. The amount of such a gain would fluctuate day-to-day according to the precise interest-rate differential between the base and the counter currency. Such rollover rates are quoted in dollars and are shown in the interest column of the forex trading system. Rollovers, however, will not affect traders who never hold a position overnight since the rollover is exclusively a day-to-day phenomenon.
http://investafrica.biz
First, let's understand what makes FOREX trading the best home based business around:
• Low Start Up Costs
• No Marketing Costs
• No Employees
• No Inventory
• No Website to Create or Maintain
• No Office
• No Schedule
• No Customers to chase
It's just you, your FOREX trading education, and your computer.
Introduction to forex.
With the increasingly widespread availability of electronic trading networks, trading on the currency exchanges is now more accessible than ever. The foreign exchange market, or forex, is notoriously the domain of government central banks and commercial and investment banks, not to mention hedge funds and massive international corporations. At first glance, the presence of such heavyweight entities may appear rather daunting to the individual investor. But the presence of such powerful groups and such a massive international market can also work to the benefit of the individual trader. The forex offers trading 24-hours a day, five days a week, and the daily dollar volume of currencies traded in the currency market exceeds $1.4 trillion, making it the largest and most liquid market in the world.
Trading Opportunities
The sheer number of currencies traded serves to ensure a rather extreme level of volatility on a day-to-day basis. There will always be currencies that are moving rapidly up or down, offering opportunities for profit (and commensurate risk) to astute traders. Yet, like the equity markets, forex offers plenty of instruments to mitigate risk and allows the individual to profit in both rising and falling markets. Forex also allows highly leveraged trading with low margin requirements relative to its equity counterparts. Perhaps best of all, forex charges zero dealing commissions!
Many of the instruments utilized in forex - such as forwards and futures, options, spread betting, contracts for difference and the spot market - will appear similar to those used in the equity markets. Since the instruments on the forex often maintain minimum trade sizes in terms of the base currencies (the spot market, for example, requires a minimum trade size of 100,000 units of the base currency), the use of margin is absolutely essential for the person trading these instruments.
Buying and Selling Currencies
Regarding the specifics of buying and selling on forex, it is important to note that currencies are always priced in pairs. All trades result in the simultaneous purchase of one currency and the sale of another. This necessitates a slightly different mode of thinking than what you might be used to. While trading on the forex, you would execute a trade only at a time when you expect the currency you are buying to increase in value relative to the one you are selling. If the currency you are buying does increase in value, you must sell the other currency back in order to lock in a profit. An open trade (or open position), therefore, is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.
Base and Counter Currencies and Quotes
Currency traders must become familiar also with the way currencies are quoted. The first currency in the pair is considered the base currency; and the second is the counter or quote currency. Most of the time, U.S. dollar is considered the base currency, and quotes are expressed in units of US$1 per counter currency (for example, USD/JPY or USD/CAD). The only exceptions to this convention are quotes in relation to the euro, the pound sterling and the Australian dollar - these three are quoted as dollars per foreign currency.
Forex quotes always include a bid and an ask price. The bid is the price at which the market maker is willing to buy the base currency in exchange for the counter currency. The ask price is the price at which the market maker is willing to sell the base currency in exchange for the counter currency. The difference between the bid and the ask prices is referred to as the spread.
The cost of establishing a position is determined by the spread, and prices are always quoted using five numbers (for example, 134.85), the final digit of which is referred to as a point or a pip. For example, if USD/JPY was quoted with a bid of 134.85 and an ask of 134.90, the five-pip spread is the cost of trading this position. From the very start, therefore, the trader must recover the five-pip cost from his or her profits, necessitating a favorable move in the position in order simply to break even.
More about Margin
Trading in the currency markets requires a trader to think in a slightly different way also about margin. Margin on the forex is not a down payment on a future purchase of equity but a deposit to the trader's account that will cover against any currency-trading losses in the future. A typical currency trading system will allow for a very high degree of leverage in its margin requirements, up to 100:1. The system will automatically calculate the funds necessary for current positions and will check for margin availability before executing any trade.
Rollover
In the spot forex market, trades must be settled within two business days. For example, if a trader sells a certain number of currency units on Wednesday, he or she must deliver an equivalent number of units on Friday. But currency trading systems may allow for a "rollover", with which open positions can be swapped forward to the next settlement date (giving an extension of two additional business days). The interest rate for such a swap is predetermined, and, in fact, these swaps are actually financial instruments that can also be traded on the currency market.
In any spot rollover transaction the difference between the interest rates of the base and counter currencies is reflected as an overnight loan. If the trader holds a long position in the currency with the higher interest rate, he or she would gain on the spot rollover. The amount of such a gain would fluctuate day-to-day according to the precise interest-rate differential between the base and the counter currency. Such rollover rates are quoted in dollars and are shown in the interest column of the forex trading system. Rollovers, however, will not affect traders who never hold a position overnight since the rollover is exclusively a day-to-day phenomenon.
http://investafrica.biz
Legitimate work from home business it is never too late to start.
By,Alex Mwaura http://investafrica.biz
Although there are many legitimate work from home opportunities, none of them will help you unless you take the first steps toward obtaining financial independence.
Legitimate work from home can be one of the most profitable opportunities that you can participate in, but it is up to the individual to do their own preparation. If you are considering starting a home based business, some of the steps you must do are the same as with any new business. Research your market; prepared for lean months especially as you get started; and always prepare a comprehensive business plan to help guide you on your path to prosperity. Completing these steps will not guarantee that your new business will be a success, but it will certainly make the chances of a successful business much higher.
Look for a sizable market.
If you are expecting to make a good income from your legitimate work from home plan, you should make certain that the product you choose or the niche market is large enough to earn the money you require. Because the market for a home based business is globally sized, you never need worry about having a product that is too specialized to sell in your own community. Anything that can be sold online probably has a significant audience base, but you can learn how to match your approach to the needs of the market you are aiming at in order to ramp up the sales level.
Don't expect instant wealth.
Even with legitimate work from home plans, you should not expect to receive instant wealth from your home based business. Sensible growth according to a business plan that has been carefully researched is more likely to result in a business that is able to withstand the expected fluctuations in income and expenses. Be patient and build a good base for your business if you want to be around in the long run to enjoy the results of your labor and planning.
Do your research.
Research into as many of the factors that will be associated with your prospective home based business as possible will help to ensure the longevity of your legitimate work from home business. You should know and understand your business and how your plans will match up to the audience available in the world marketplace. You should also research such factors as required licenses and certificates needed in your business location. Plan for the equipment and supplies that will be required at the beginning of your business startup and which items can be put off until your business balance sheet looks stronger.
Write a business plan.
Regardless of the type of legitimate work from home business that interests you, be sure to prepare and use a business plan for your entrepreneurial adventure. You may not see the importance of planning your business route, but this action is credited as one of the most important in ensuring the success of your business by those who know. Writing a business plan involves understanding and identifying the key factors of your business and how those can be used for successful long term profits. A good business plan helps you stay on track.
Although there are many legitimate work from home opportunities, none of them will help you unless you take the first steps toward obtaining financial independence.
Legitimate work from home can be one of the most profitable opportunities that you can participate in, but it is up to the individual to do their own preparation. If you are considering starting a home based business, some of the steps you must do are the same as with any new business. Research your market; prepared for lean months especially as you get started; and always prepare a comprehensive business plan to help guide you on your path to prosperity. Completing these steps will not guarantee that your new business will be a success, but it will certainly make the chances of a successful business much higher.
Look for a sizable market.
If you are expecting to make a good income from your legitimate work from home plan, you should make certain that the product you choose or the niche market is large enough to earn the money you require. Because the market for a home based business is globally sized, you never need worry about having a product that is too specialized to sell in your own community. Anything that can be sold online probably has a significant audience base, but you can learn how to match your approach to the needs of the market you are aiming at in order to ramp up the sales level.
Don't expect instant wealth.
Even with legitimate work from home plans, you should not expect to receive instant wealth from your home based business. Sensible growth according to a business plan that has been carefully researched is more likely to result in a business that is able to withstand the expected fluctuations in income and expenses. Be patient and build a good base for your business if you want to be around in the long run to enjoy the results of your labor and planning.
Do your research.
Research into as many of the factors that will be associated with your prospective home based business as possible will help to ensure the longevity of your legitimate work from home business. You should know and understand your business and how your plans will match up to the audience available in the world marketplace. You should also research such factors as required licenses and certificates needed in your business location. Plan for the equipment and supplies that will be required at the beginning of your business startup and which items can be put off until your business balance sheet looks stronger.
Write a business plan.
Regardless of the type of legitimate work from home business that interests you, be sure to prepare and use a business plan for your entrepreneurial adventure. You may not see the importance of planning your business route, but this action is credited as one of the most important in ensuring the success of your business by those who know. Writing a business plan involves understanding and identifying the key factors of your business and how those can be used for successful long term profits. A good business plan helps you stay on track.
4.8 million africans to lose jobs this year.
By Isaac Muiruri, http://investafrica.biz
Africa was believed to some extent insulated from the global crisis affecting many parts of the world but this is a short term relief and no cause for rejoicing. Africa is set to experience big economic challenges in the near future if the economic data being released is something to go by.
South Africa's third- largest sector still contracted by 2,2% last year -- its first decline since 1999, and the worst since 1992.
That was when the economy was last in a recession, defined as two quarters in a row of falling output. Interest rates and inflation are now falling, so there may be reason to speculate that the worst may be over for local retailers. But SA's hard-pressed consumers are unlikely to loosen their purse strings soon.
Job cuts are only now starting to kick in, with some analysts estimating that a quarter of a million jobs will be shed over the course of this year. That may look insignificant compared to what is happening in the world economy, which is sinking into its worst recession in eight decades.
But for SA it is alarming, especially given official plans to halve unemployment by 2014. The official jobless rate already crept up to 23,2% in the third quarter of last year, from 23,1% in the previous quarter. And things are definitely going to get worse before they get better. Miners have announced plans to retrench thousands of workers as lower commodity prices erode demand.
Manufacturing jobs are also being shed, and this is likely to gather momentum after output contracted at its steepest pace in a decade in December.
There is anecdotal evidence of retrenchments elsewhere as well, including in finance -- the economy's largest sector -- and construction, its fastest-growing.
Fear of job losses is the most potent restraint to spending that there is, and is likely to linger for months as economic growth slows to an expected 1,2% this year -- its slowest pace since 1998.
Banks are also making it much harder to access credit, both because of tougher regulations and a rise in nonperforming loans. All of this means that consumer spending is unlikely to rebound any time soon, after contracting for the first time in a decade late last year.
Massive job losses in Congo mines
More than 200,000 jobs have been lost in the Democratic Republic of Congo amid a collapse in mineral prices as a result of the global economic downturn.
There are fears the job losses could reach 300,000 by the end of this month.
Officials said the cost of producing minerals like cobalt and copper was greater than the price the commodities are fetching on world markets.
More than 40 firms processing minerals had shut by last month, mainly in the southern Katanga province.
BOTSWANA: Job losses as diamonds lose their lustre
Thousands of mining jobs in Botswana are in jeopardy as diamond and other mineral sales dwindle and companies begin retrenching to cut costs. The Botswana Mine Workers Union (BMWU) have been locked in talks with management in an attempt to avert looming retrenchments as diamond sales plummeted in response to the global financial crisis. Further declines in diamond sales are anticipated. Botswana has used its mineral wealth to enhance its development, unlike some of the continent's other resource-rich countries, where minerals have often become a source of conflict. "Diamond sales revenue is expected to decline by about 50 percent, as prices are estimated to decrease by 15 percent, while production is expected to reduce by 35 percent," the Minister of Finance and Development Planning, Baledzi Gaolathe, said in his recent 2009/10 budget address.
NAIROBI Kenya: Finance Minister Uhuru Kenyatta on Monday said that the Kenya’s economy grew by between two and 2.5 percent in 2008, according to provisional estimates.During the opening session of the public sector hearing for the budget process, he attributed the slow growth to the post-election crisis and the global economic meltdown.“Provisional estimates of our gross domestic output show that growth may have edged up by around two to 2.5 percent in 2008,” he said.“Other external developments such as droughts, exceptionally high oil prices, and the meltdown of the world economy associated with the global financial crisis, caused even more damage to the economy,” he added.The government had last year forecast that the growth would be anything between 4.5 and six percent for 2008, but was to review it this January to 3.5-4.0 percent.
Africa was believed to some extent insulated from the global crisis affecting many parts of the world but this is a short term relief and no cause for rejoicing. Africa is set to experience big economic challenges in the near future if the economic data being released is something to go by.
South Africa's third- largest sector still contracted by 2,2% last year -- its first decline since 1999, and the worst since 1992.
That was when the economy was last in a recession, defined as two quarters in a row of falling output. Interest rates and inflation are now falling, so there may be reason to speculate that the worst may be over for local retailers. But SA's hard-pressed consumers are unlikely to loosen their purse strings soon.
Job cuts are only now starting to kick in, with some analysts estimating that a quarter of a million jobs will be shed over the course of this year. That may look insignificant compared to what is happening in the world economy, which is sinking into its worst recession in eight decades.
But for SA it is alarming, especially given official plans to halve unemployment by 2014. The official jobless rate already crept up to 23,2% in the third quarter of last year, from 23,1% in the previous quarter. And things are definitely going to get worse before they get better. Miners have announced plans to retrench thousands of workers as lower commodity prices erode demand.
Manufacturing jobs are also being shed, and this is likely to gather momentum after output contracted at its steepest pace in a decade in December.
There is anecdotal evidence of retrenchments elsewhere as well, including in finance -- the economy's largest sector -- and construction, its fastest-growing.
Fear of job losses is the most potent restraint to spending that there is, and is likely to linger for months as economic growth slows to an expected 1,2% this year -- its slowest pace since 1998.
Banks are also making it much harder to access credit, both because of tougher regulations and a rise in nonperforming loans. All of this means that consumer spending is unlikely to rebound any time soon, after contracting for the first time in a decade late last year.
Massive job losses in Congo mines
More than 200,000 jobs have been lost in the Democratic Republic of Congo amid a collapse in mineral prices as a result of the global economic downturn.
There are fears the job losses could reach 300,000 by the end of this month.
Officials said the cost of producing minerals like cobalt and copper was greater than the price the commodities are fetching on world markets.
More than 40 firms processing minerals had shut by last month, mainly in the southern Katanga province.
BOTSWANA: Job losses as diamonds lose their lustre
Thousands of mining jobs in Botswana are in jeopardy as diamond and other mineral sales dwindle and companies begin retrenching to cut costs. The Botswana Mine Workers Union (BMWU) have been locked in talks with management in an attempt to avert looming retrenchments as diamond sales plummeted in response to the global financial crisis. Further declines in diamond sales are anticipated. Botswana has used its mineral wealth to enhance its development, unlike some of the continent's other resource-rich countries, where minerals have often become a source of conflict. "Diamond sales revenue is expected to decline by about 50 percent, as prices are estimated to decrease by 15 percent, while production is expected to reduce by 35 percent," the Minister of Finance and Development Planning, Baledzi Gaolathe, said in his recent 2009/10 budget address.
NAIROBI Kenya: Finance Minister Uhuru Kenyatta on Monday said that the Kenya’s economy grew by between two and 2.5 percent in 2008, according to provisional estimates.During the opening session of the public sector hearing for the budget process, he attributed the slow growth to the post-election crisis and the global economic meltdown.“Provisional estimates of our gross domestic output show that growth may have edged up by around two to 2.5 percent in 2008,” he said.“Other external developments such as droughts, exceptionally high oil prices, and the meltdown of the world economy associated with the global financial crisis, caused even more damage to the economy,” he added.The government had last year forecast that the growth would be anything between 4.5 and six percent for 2008, but was to review it this January to 3.5-4.0 percent.
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