The Most Costly Banking Mistakes You Can Make

Every bank has a slew of fees associated with opening and maintaining accounts, and those fees are on the rise. A recent study by Bankrate.com found that only 39% of non-interest checking accounts are free of a monthly charge. That's down from last year's 45% and a high of 76% in 2009. The average monthly service fee has jumped 25% from last year. Here are four of the most expensive mistakes you can make with your bank accounts.

Using Overdraft ProtectionAt most banks, you can choose to allow your account to go into negative territory to allow a purchase to go through. Banks charge dearly for that service. The average overdraft fee is $31.26, and many banks charge upwards of $35 per item. Federal consumer protection law now requires that you have to choose this service. If you have done so, the danger lies in running your account close to the zero line if you have an unexpected charge go through. The overdraft fee adds to your negative balance and can cause more transactions to trigger the overdraft. For example, you may have thought there was $100 in your account and forget that your car insurance is charged automatically. Each additional transaction will trigger further overdraft fees, and your negative balance can grow quickly. Monitor your account closely to ensure that the funds are there to cover your transactions.

Not Maintaining the Minimum BalanceMany banks reduce or even eliminate monthly maintenance and other fees if you keep a certain amount of money in your account at all times. This fee break can often outweigh any interest you receive in a savings account. It's often worthwhile to keep the minimum in your checking account to bring the fees down. According to the Bankrate.com survey, the average balance to avoid the fee for non-interest checking accounts is $723. That's higher than the previous year by 23%.

Writing Post-Dated ChecksIn the United States, a personal check is nothing more than a promise to pay someone. It does not represent actual payment until it is presented at a bank and the money is withdrawn from your account. Post-dating a check to a future date indicates your intentions to the recipient to wait until that date to present the check to the bank. However, banks have the upper hand and are legally allowed to honor checks when presented. If the recipient is not someone you trust, it is safer to hold on to the check until the future date to avoid having it create havoc on your bank balance. The convenience of providing post-dated checks is outweighed by the risk to your account.

Using Other Banks' ATMsAlmost all banks charge a fee when users who are not customers use the ATM. Some also charge a fee when their own customers use another bank's ATM. These fees are also on the rise. The average charge for non-customers is $2.50 per transaction, and the average cost for customers using another ATM is $1.57. The easiest way to avoid these fees is to plan your cash flow more closely so that you do not need to hit up the ATM or that you can use your own bank's machine. Some banks refund other institutions' transaction fees, so look for accounts with this feature.

The Bottom LineWith bank fees going up year after year, it is more important than ever to ensure that you know the ins and outs of bank fees, are paying the least amount, and keeping the money in your pocket. Know what your bank's policies are, and be on the lookout for lower-fee accounts.

Source: Investopedia

Middle-Income Africa in Sight

The day when Africa becomes a middle-income continent — at least by the World Bank’s yardstick — could be in sight if growth trends continue and the global economy stabilises.

"We can look to the continent being middle-income," Shantayanan Devarajan, the World Bank’s chief Africa economist, said yesterday.

The economies of sub-Saharan Africa’s 48 countries are expected to grow by an average of 4.8% this year, the World Bank said in a report yesterday, slightly down from last year’s 4.9%. Officially, 22 states with a combined population of 400-million have now achieved middle-income status, meaning per capita annual income in excess of $1,000.

If the economic growth trend of the past decade is sustained, another 10 will reach the target by 2025, Mr Devarajan said in a video conference broadcast from Washington to African capitals.

Seven more will join the list if they average 7% growth in the coming years.

The biannual World Bank report, called Africa’s Pulse, analyses key economic and social developments. The last one forecast average growth for this year of 5.2% but trimmed the estimate because of slowing global economic activity.

The projected average was brought down by SA, the continent’s biggest economy and its most sophisticated. Excluding SA, this year’s African growth was forecast to rise by 6%.

The continent’s mineral resources have powered the past 10 years of expansion, much of it driven by booming exports of raw materials to China.

This year’s fastest-growing economy is Sierra Leone’s, which is heading for a 25% rise in gross domestic product compared with last year. The reason is a huge jump in iron-ore exports from a West African country that was devastated by civil war in the 1990s and held up as a basket case. Second is Niger because of uranium and oil exports.

Earning revenue from mineral resources is one thing, sharing it with the populace and the national treasury has proved much harder for many African presidents and their governments.

"People don’t feel this growth. As a taxi driver once said to me — I cannot eat growth," Mr Devarajan said.

The World Bank report referred to the central African state of Gabon, whose oil and timber wealth allied to a small population account for a per capita income of more than $10,000. Yet it has the lowest child immunisation rates on the continent, according to the World Bank.

Asked whether $1,000 per capita should qualify a country as "middle income", Mr Devarajan said: "Even if you earn more than that, it doesn’t mean you won’t have a huge poverty problem."

Source: BDlive

Africa to Foreign Investors - We're Open for Business

Squeezing the poor for the sake of corporate profit? Or providing vital jobs and incomes? Whatever your view of foreign investors, analysts believe that business will be essential to African development.
With Africa's population likely to double in the first quarter of this century, the private sector may be the only sector able to match this growth with precious jobs. In Africa, one job goes a long way towards protecting a family or community, as Africa Progress Panel member and former Nigerian President Olusegun Obasanjo told a recent conference of investors ahead of this week's UN General Assembly meeting.
Besides, many issues confronting the African continent can only be resolved with private sector involvement. Only the private sector, for example, has the know-how to build power plants that will reduce Africa's enormous energy shortages. Fortunately, foreign investors are increasingly keen to invest in Africa, because, as stated in our policy paper, "Africa - Investment Ready", this is a great time to get involved.
Africa is home to seven of the world's ten fastest growing economies, business regulation is getting better all the time, and the outlook for continued growth is good, according to both the World Bank and IMF.
Foreign investors say foreign investment would be higher if African countries had more stable public policies, more liquid stock exchanges, or even lower risk. They cite solutions that range from venture capital to use of donor funds.
But foreign investment does not have all the answers to African development. And in some cases, especially in the oil and mining industries, the social and environmental impacts on local communities have been disastrous.
But slowly Africa's development paradigm is shifting away from aid dependency towards wealth creation as a model for the future. And business will be central.
At the Africa Progress Panel, we have several policy recommendations for African governments that will help increase both the quantity and quality of foreign investment.
Governments should strengthen regional economic integration, which makes Africa a more attractive proposition by creating larger consumer markets.
They should keep commitments to regional and international initiatives on corruption and transparency, such as the Open Government Partnership or the New Partnership for Africa's Development (NEPAD). Lower corruption levels help attract foreign investment.
And governments should demand that foreign investment supports local companies, employs Africans, and transfers technology and skills. They should make job creation an explicit objective of economic policy, because job creation means sustainable and equitable growth.
Africa's workforce is young and growing fast. Leaders across the continent and their partners must find new and effective ways to harness this energy and creativity. And business must play a central role.

Source: allAfrica

Africa May Have Up to 200 Hidden Billionaires, Mobius Says

Africa may have as many as 200 “hidden” billionaires operating in the unofficial economy who will seek to legitimize their wealth in the future, investor Mark Mobius said.
“There is a lot of hidden wealth,” Mobius, who oversees more than $40 billion as executive chairman of Templeton Emerging Markets Group, said yesterday in London. “You hear about Dangote but there are maybe 200 with the same kind of resources that we do not see. The black economy is very big.”
Aliko Dangote, Africa’s richest man, is benefiting from the continent’s economic growth, adding $3 billion to his wealth this year, taking him to $13 billion, according to the Bloomberg Billionaires Index. Africa’s gross domestic product is forecast to expand an average 6 percent a year for the next five years if Europe, the largest trading partner, records 0 percent to 2 percent annual growth, Moody’s Investors Service said today.
Dangote controls Dangote Group, one of the continent’s largest conglomerates with publicly traded businesses in cement, sugar, flour and salt that make up about a third of the Nigerian Stock Exchange’s market value. Many of the continent’s richest individuals don’t have publicly traded assets, Mobius said.
“What we see is that these very wealthy people will begin to want to legitimize their wealth by a listing, by putting these assets together, forming a company, listing it,” Mobius told reporters yesterday. “Many of these people escaped to London or other countries in order to preserve their wealth. But it is going to get more and more difficult because of anti- bribery and all the rest that is going on in the U.S. and other parts of the world.”

Hidden Wealth

A lot of “hidden wealth” is concentrated in mining, Mobius said. Dangote said in May he “needs” to invest $7.5 billion in industries including mining in the next four years.
Mobius said he’s considering buying shares in Kenyan banks, and is most interested in lenders that issue credit cards, open savings accounts and offer money-transfer services. The prospect of violence in Kenya ahead of elections next year was not a “big issue,” he said.
A disputed 2007 vote sparked two months of ethnic and political violence that killed more than 1,000 people.
“The general consensus now is that they have sort of learnt the lesson,” Mobius said. “I don’t see it as being a big issue.”

Source: Bloomberg Businessweek

Citi Raises Gold Price Forecasts for 2012-13

Citigroup raised its gold price forecasts for 2012 and 2013, saying ongoing global economic issues are causing gold to remain a favored asset for investors.
"With continued concerns over the economic health in the developed world, safe-haven demand has seen renewed investor interest in gold-linked securities," analysts at the bank said in a note dated Sept. 24.
Citi raised its year-end price forecasts for most precious and base metals.
The bank increased its 2012 price forecasts for gold, silver and platinum by about 2 percent, 5 percent and 1.5 percent, respectively, while it cut its earlier forecast for palladium prices by about 1.7 percent.
For 2013, Citi raised gold and silver price expectations by over 3 percent each, and those of platinum and palladium by over 6 percent each.
Illegal strikes in South Africa, mine closures and project delays were seen causing supply issues in the market for platinum and palladium, analysts at the bank said.
Base metals were mostly forecast about 1 percent higher for 2012, with lead expected to rise 4.3 percent from earlier. Nickel was seen falling about 1 percent for the year, from previous forecasts.
For a list of the latest price forecasts of Citigroup on precious and base metals, click the following link. (Reporting by Naveen Arul in Bangalore; Editing by Steve Orlofsky)

Source: Reuters

Statement by an IMF Mission to The Gambia for Discussions of the First Review of the ECF Arrangement

An IMF mission led by Mr. David Dunn visited The Gambia during September 5-18, 2012, to discuss performance under the authorities' macroeconomic and financial program that is supported by the IMF under its Extended Credit Facility (ECF). The mission met with Minister of Finance and Economic Affairs Abdou Kolley, Governor of the Central Bank of The Gambia (CBG) Amadou Colley, and other senior officials. It also met with representatives of the private sector, civil society, and development partners.
At the conclusion of the visit, Mr. Dunn made the following statement in Banjul:
“Last year's severe crop failure, caused by drought throughout the region, led to a sharp contraction in the Gambian economy. In 2011, The Gambia's real gross domestic product (GDP) fell by about 5 percent. Economic activity remained weak for much of 2012, but is expected to pick up substantially in the final quarter, as the upcoming harvest points to a strong rebound in crops and growth in the tourism sector continues. The relief effort by the Government of The Gambia, international aid agencies, and bilateral donors appears to have helped to mitigate the impact of the drought on vulnerable families and provided critical support to farmers. For 2012 as a whole, real GDP is projected to be about 4 percent, while inflation has remained under control at about 4½ percent (year-on-year).
“Based on a projected further rebound in agriculture in 2013, which anticipates that crop production will have fully recovered to pre-drought levels, real GDP growth could surge to about 10 percent next year, before returning to its longer-term trend of about 5½ percent a year over the medium term. There are downside risks to this outlook, as well as greater upside potential. In particular, the possibility of prolonged weaknesses in the global economy or strong shocks to food and fuel prices could dampen growth in key sectors of the Gambian economy. At the same time, sound macroeconomic policies combined with a structural agenda that seeks to promote productive private sector investment in infrastructure—as envisaged in the authorities' Programme for Accelerated Growth and Employment (PAGE)—could boost longer-term growth trends. Strengthening The Gambia's relations with the regional and international communities would be important for building confidence in the economy and generating greater support from development partners for PAGE priorities.
“The Government has taken some initial steps toward addressing its heavy debt burden. During the first half of 2012, Government's net domestic borrowing (NDB) was reduced to 1.2 percent of annual GDP, compared with 2.3 percent of annual real GDP during the same period in 2011. Moreover, the Government remains committed to ceilings on NDB of 2½ percent of GDP for 2012 as a whole and 1 percent of GDP in 2013. By easing pressure on the domestic financial market and T-bill yields, it is projected that Government's interest payments on domestic debt relative to its revenues would fall from 18½ percent in 2011, to 18 percent in 2012, to just under 15½ percent in 2013. Updated external debt indicators also show progress has been made toward reducing The Gambia's debt vulnerability.
“In line with commitments to ECOWAS (Economic Community of West African States) The Government is committed to replacing the general sales tax with a value-added tax (VAT) on January 1, 2013, which is expected to lead to a boost in revenue collections. Beyond the VAT, the Government seeks to pursue a comprehensive tax reform that broadens the tax base, simplifies procedures, and lowers tax rates, while preserving revenues. However, fuel subsidies continue to cut into potential tax revenues, as little progress has been achieved toward eliminating them, despite monthly price adjustments.
“Growth of credit to the private sector and deposits in commercial banks has slowed considerably in 2012. In May, with inflation pressures contained, the Central Bank of The Gambia (CBG) acted to ease its monetary policy stance by reducing the reserve requirement on deposits by two percentage point (to 10 percent). Also, the CBG continues to strengthen banking supervision. In preparation for the upcoming increase in the minimum capital requirement at the end of 2012, the CBG has reviewed banks' plans for meeting the new requirement and stands ready to strictly enforce the new measure.
“Preliminary data indicate that all performance criteria for the first review of the new ECF-supported program were met. In addition, understandings were reached on several key policy issues. The mission will return to IMF Headquarters, but will remain in close contact with the Gambian authorities to conclude discussions as soon as possible.
“The mission thanks the authorities for candid and constructive policy discussions and expresses its appreciation for the excellent cooperation during its visit.” 

Source: StarAfrica.Com

IMF: Gambia Could See 10% Growth in 2013

Gambia could see economic growth hit 10 percent next year on the back of an expected rebound in its drought-stricken agricultural sector, an International Monetary Fund official said on Tuesday. The tiny West African nation's central bank in July projected a 1.7 percent contraction of GDP for 2012, which would represent the second straight dip in output after growth slipped to 3.3 percent last year from 5.5 percent in 2010.
Gambia appealed for food aid in March after it said that 70 percent of its crops failed during the last growing season.
But David Dunn, who headed a one-week IMF mission to the country, said the agricultural sector is expected to return to full output next year, leading a broad economic revival.
"Based on a projected further rebound in agriculture in 2013, which anticipates that crop production will have fully recovered to pre-drought levels, real GDP growth could surge to about 10 percent next year," Dunn said at the end of the mission.
Growth is then expected to return to a medium-term trend of around 5.5 percent in the mid-term, he said.
Gambia, which had a GDP of around $1 billion in 2010 and is heavily dependent upon agriculture and tourism, remains vulnerable to external shocks.
"The possibility of prolonged weaknesses in the global economy or strong shocks to food and fuel prices could dampen growth in key sectors of the Gambian economy," Dunn said.
Some 60 percent of the country of 1.7 million people, living in a nation completely surrounded on land Senegal, are farmers.

Source: Reuters Africa