Business

AMMAN — Jordan Capital & Investment Fund (JCIF) announced that it has finalised details on a significant minority investment in Aqaba Digital Hub (ADH), a flagship project poised to tap into the growing demand for modern digital transformation in Jordan. 

The project encompasses the largest carrier-neutral 6MW data centres in Jordan and stands as one of the MENA region’s largest. Its array of services covers a range of offerings, including an open-access submarine cable landing station, cloud services, long-haul telecommunications services, a carrier-neutral Internet exchange point, expanded fibre networks and satellite services, according to a JCIF statement.

During a ceremony held at ADH’s offices in Aqaba on Thursday, JCIF — which is owned by Jordanian banks — and ADH signed the deal in the presence of Minister of Investment Kholoud Al Saqqaf; ASEZA Chief Commissioner Nayef Al Fayez; Deputy Governor of the Central Bank of Jordan Khaldoun Al Wshah; and Chairman of the Board of Commissioners of the Telecommunications Regulatory Commission Bassam Al Sarhan. The ceremony was also attended by leaders and dignitaries from the private sector.

Founded in 2017 by Eyad Abu Khorma, ADH currently operates regional fibre-optic networks and a carrier-neutral, Uptime-Certified Tier-III data centre; serves as a hub for connectivity, infrastructure technologies and cloud services; and provides wholesale capacity services to local and neighbouring markets. Moreover, ADH has been chosen as the Jordanian hosting facility and landing station for the Blue Raman submarine cable, linking Asia with Europe. Leveraging its existing infrastructure from the BlueRaman cable landing station, ADH will introduce new options for cloud services, international gateway services and other high-technology solutions and applications to the Jordanian and regional markets.

Strategically located within Aqaba, ADH data centres act as an ideal disaster recovery site for banks across Jordan, fortified by their secure and technologically advanced facilities. This development not only strengthens the financial sector’s resilience but also elevates Jordan’s financial technology ecosystem.

Saqqaf underscored the significance of the first investment agreement between JCIF and ADH as a vital step towards addressing the increasing demand for modern digital transformation services in Jordan. The minister emphasised the importance of establishing investment funds, as they stimulate and attract capital to invest in various priority and competitive economic sectors. This, in turn, is poised to substantively contribute towards the realisation of economic and developmental goals that will directly influence economic growth while combating poverty and unemployment issues.

Furthermore, Saqqaf added that the Investment Environment Law for 2022, for the first time, laid the foundation for a legal framework that facilitates the inception of investment funds devoted to the pursuit of economic activities. According to the law, an investment fund assumes legal personality following its establishment and formal registration under the Ministry of Investment. She also highlighted that the Investment Promotion Strategy 2023-2026, approved by the Investment Council in May, targets multiple sectors — namely IT — as a priority sector set to attract investments to Jordan.

Fayez stated that Aqaba serves as a host for the first Jordanian digital city and is considered a primary hub for tech investments within the region, which thereby helps promote Jordan globally. He emphasised ASEZA's pivotal role in providing facilitations for investors and in equipping and empowering youth through dedicated tech initiatives aimed at preparing them for such investments, as well as for the local and international job markets.

“This deal will mark a key investment for JCIF since its official launch in 2022 and aligns with the fund’s strategy to play a central role in the Jordanian economy by creating jobs, attracting new businesses and bringing cutting-edge technologies to local communities,” stated Hani Qadi, chairman of JCIF Management Company. “Information and communications technology [ICT] has emerged as a core driver of the modern knowledge-based economy and plays a crucial role in the socioeconomic development of a country. On this note, we extend our sincere appreciation to the government of Jordan and the Central Bank of Jordan for their consistent support of JCIF.” 

“Since its inception, the Aqaba Digital Hub has attracted distinguished local, regional and international telecommunications operators, as well as global content delivery networks,” said Abu Khorma. “Our partnership with JCIF will provide capital for growth, increase access to resources and help drive expansion by further opening up new market opportunities,” Abu Khorma added. 

“We are delighted to partner with Eyad Abu Khorma on this pioneering project, which will help serve the growing demand for modern digital services in Jordan and the MENA region. This project will be critical to enhancing solutions for digital transformation and developing hubs for companies and organisations of all sizes,”commented Faris Sharaf, CEO of JCIF Management Company.  

JCIF is wholly owned by 16 Jordanian commercial and Islamic banks and is the largest private sector investment fund in Jordan, with a capital commitment of JD275 million ($388 million). The fund aims to invest in pioneering companies with opportunities for growth, development and expansion by providing fresh capital to help increase employment and promote economic growth across Jordan. JCIF targets investments in dynamic and promising sectors, notably in the fields of food and health security, manufacturing, and ICT, with the aim of unleashing Jordan’s potential to build for the future, according to the statement. 

LONDON — Britain's annual inflation rate dropped sharply in July to a 15-month low, official data revealed Wednesday, off the back of lower energy prices and in line with economists' expectations.

The Consumer Prices Index (CPI) rose by an annual rate of 6.8 per cent, down from 7.9 per cent in June, the Office for National Statistics (ONS) said, easing the country's cost-of-living crisis.

July's price growth met the predictions of analysts, including the Bank of England, which had forecast the 6.8 per cent rate. 

It follows a bigger-than-expected drop in June, when the CPI fell 0.8 per cent.

However, UK inflation has for months been the highest among G-7 nations, despite the Bank of England hiking its key interest rate more than a dozen times in succession to try to tame it.

Although there was a fall in gas and electricity prices in July, food prices continued to rise, but less quickly than in the same month a year earlier.

"Inflation slowed markedly for the second consecutive month, driven by falls in the price of gas and electricity," ONS Deputy Director of Prices Matthew Corder said.

"Although remaining high, food price inflation has also eased again, particularly for milk, bread and cereal.

"Core inflation was unchanged in July, with the falling cost of goods offset by higher service prices," he added.

'Get it done' 

Prime Minister Rishi Sunak has set a target of halving inflation through this year to around five per cent by 2024.

Despite the Bank of England projecting inflation could actually rise again next month, due to the impact of public sector pay rises, Sunak insisted Wednesday's figures showed "the plan is working".

"If we stick to the plan I've set out, we'll get it done," Sunak added.

However, the Institute for Fiscal Studies economic think-tank was sceptical.

"The stubbornly high rate of price inflation for goods and services other than food and energy has put the target in jeopardy," said IFS Research Economist Heidi Karjalainen.

Finance Minister Jeremy Hunt welcomed the latest CPI data but cautioned "we're not at the finish line" and that hitting the Bank of England's 2 per cent inflation target "as soon as possible" remained the overarching goal.

Data published Tuesday showed that UK unemployment increased in the three months to the end of June while wages grew at a record annual pace.

Martin McTague, national chairman of the Federation of Small Businesses (FSB), said the latest CPI statistics would renew fears of a "wage-price spiral".

"The worry now is that rising wages ignite a fresh wave of inflation in September, which will threaten the momentum from June's GDP growth," he added.

Interest rate rises since late 2021 have sparked widespread financial pain, with mortgage turmoil in particular as commercial lenders lift their own rates on home loans.

Wednesday's CPI figures may not prevent a further rate rise in late September, when the Bank of England's monetary policy committee next meets to decide whether to hike its current base rate of 5.25 per cent.

DAMASCUS — Syrian President Bashar al-Assad has decreed a 100 per cent pay rise for civil servants and pensioners while fuel subsidies were lifted in a country ravaged by 12 years of war.

The Syrian economy has been battered by the conflict that has killed more than 500,000 people and displaced millions since it began in 2011.

In two decrees issued late Tuesday, Assad doubled the salaries and pensions of those currently and formerly employed in the civil service and military, as well as contract workers.

Prior to the decision, the monthly salary of civil servants had been between around $10 and $25, depending on the Syrian pound's street value.

The presidential decrees also set the minimum monthly wage in the private sector at 185,940 Syrian pounds, or about $13 on the black market.

In a separate statement late Tuesday, the commerce ministry announced the total lifting of subsidies on petrol and a partial lifting of subsidies on fuel oil.

As a result the price of petrol has risen to 8,000 pounds from 3,000 previously, and fuel oil to 2,000 pounds from 700 previously, according to the ministry.

The Syrian pound was trading at around 14,300 to the US dollar on Wednesday, according to unofficial monitoring websites, compared with the official rate of 8,542.

The currency has lost most of its value since the start of the war, when it was worth 47 against the greenback.

Most of the population has been pushed into poverty, according to the United Nations.

LONDON — UK unemployment increased in the three months to the end of June while wages grew at record annual pace, official data showed on Tuesday, as the economy struggles with high inflation.

The number of people out of work increased to 4.2 per cent compared to 4.0 per cent in the three months to the end of May, the Office for National Statistics (ONS) said. 

The rise is "mainly due to people taking slightly longer to find work than those who started job hunting in recent months," said Darren Morgan, director of economic statistics at the ONS.

He added that the number of people "prevented from working by long-term sickness has risen again to a new record". 

The UK finance ministry noted that Britain's unemployment rate was lower than that of Canada, France, Italy, Spain and the Euro area. 

While the unemployment rate is the highest since the period from July to September 2021, the ministry added that it remains "low by historical standards". 

The ONS figures also showed that regular pay excluding bonuses was 7.8 per cent higher in the three months to the end of June compared to the same period last year.

This is the highest annual growth rate since comparable records began in 2001.

"Coupled with lower inflation, this means the position on people's real pay is recovering and now looks a bit better than a few months back," Morgan said.

UK annual inflation stands at 7.9 per cent, the highest among G-7 nations, while the Bank of England is tasked by the UK government with keeping annual inflation at around 2 per cent.

Further rate hike 

The Bank of England has hiked its key interest rate several times since late 2021 and analysts predict that the central bank will increase its rates further following today's figures.

"The fall in employment in the three months to June and further rise in the unemployment rate will be welcomed by the Bank of England as a sign labour market conditions are cooling," said Ruth Gregory, deputy chief UK economist at Capital Economics.

But she added that with wage growth still accelerating, the Bank of England is likely to increase its key rate to 5.5 per cent "before it brings its tightening cycle to a close".

"There was always the likelihood that today's unemployment and wages numbers would give the Bank of England a headache when it comes to deciding what to do when it comes to further rate increases," said Michael Hewson, chief market analyst at CMC Markets UK.

"And this morning's numbers have not just given the central bank a headache, but a migraine," he added.

For Susannah Streeter, head of money and markets at Hargreaves Lansdown, the record annual wage growth means another rate hike from the Bank of England "looks bolted on in September". 

According to a report by the Chartered Institute of Personnel and Development published Monday, 40 per cent of British employers making a counteroffer have offered a higher salary amid persistent labour shortages.

At the same time, workers across the economy have over the past year staged industrial action to demand pay rises in response to the worst cost-of-living crisis in a generation. 

According to the ONS, 160,000 working days were lost because of labour disputes in June, and over half of those were in the health and social work sector. 

MOSCOW — The Russian ruble slid past 100 against the dollar Monday, its lowest level since March 23, 2022 — weeks after Moscow unleashed full-scale hostilities in Ukraine.

The ruble has shed around 30 per cent of its value against the dollar since the beginning of the year, as the country imports more and exports less.

Data from the Moscow Exchange showed the ruble trading at 101.01 to the dollar at 11:33am (0833 GMT), while against the euro it tumbled to a near 17-month low of 110.73.

The ruble could sink further to 115-120 per dollar, Alor Broker analyst Alexei Antonov warned in a note published by financial firms on Monday.

"For the decline in the ruble to end," Antonov said, "we need to wait for a reduction in imports or decisive steps by the monetary authorities."

Russia's central bank already hiked its key interest rate to a greater-than-expected 8.5 percent in July, and last week set aside its budget rule in a bid to stabilise the currency.

The decline in the ruble has prompted fears ordinary Russians' standard of living could take a hit, as inflation creeps up.

Kremlin aide Maxim Oreshkin blamed what he called "loose monetary policy" in an opinion piece published by the state-run TASS news agency Monday.

He said the central bank had all the "necessary tools" to address the situation and predicted the ruble exchange rate would return to normal in the near future.

BEIRUT — A preliminary forensic audit of Lebanon's central bank by professional services firm Alvarez & Marsal (A&M) has painted a damning picture of the institution under long-serving former governor Riad Salameh.

Since late 2019, Lebanon has been mired in an economic crisis that the World Bank has dubbed one of the worst in modern times, but officials have largely failed to take action to stem the collapse or implement reforms demanded by creditors.

An audit of the central bank has been among the top demands of creditors as Lebanon seeks bailout funds.

The financial position of the central bank (BdL) "deteriorated rapidly" between 2015 and 2020, according to a leaked copy of the preliminary report which was seen by AFP on Friday.

"However, this deterioration was not reported in BdL's balance sheet presented in its annual financial statements, which were prepared using unconventional accounting policies," it said.

Those policies allowed the central bank "to overstate assets, equity and profits while understating liabilities", it added.

Former governor Salameh, who left his post at the end of last month, is widely viewed as a key culprit in the country's dramatic economic crash.

On Thursday, Britain, Canada and the United States announced sweeping sanctions against the 73-year-old, who is also wanted in Europe for alleged financial crimes. Salameh has denied all charges against him.

In 2015, he launched so-called financial engineering measures aimed at increasing central bank reserves, in measures that some have compared to a Ponzi scheme.

The preliminary audit report said the central bank's "accounting policy in respect of financial engineering was exceptional in the extent of personal, unscrutinised discretion given to the governor to determine accounting estimates", it said, calling the measures "costly".

'Misconduct' 

It recommended "immediate action" to "introduce further governance, oversight and scrutiny measures to mitigate any further risk arising from BdL's misconduct".

It also recommended implementing "strong internal controls across BdL's risk taking departments".

Salameh is the subject of judicial investigations at home and abroad into allegations including embezzlement.

In May, judicial authorities in France and Munich in Germany issued arrest warrants for Salameh over accusations including money laundering and fraud.

Lebanon does not extradite its nationals.

European investigators have been probing the central bank's ties to Forry Associates Ltd., a British Virgin Islands-registered company that listed Salameh's brother Raja as its beneficiary.

The US Treasury said on Thursday that Forry was a "shell company" used "to divert approximately $330 million from transactions involving the BdL".

"Salameh and Raja then moved these funds to bank accounts in their own names or the names of other shell companies," the statement said. 

A&M's preliminary audit report said "there is evidence of the payment of illegitimate commissions during the period totalling $111 million".

"This appears to be a continuation of the commission scheme under investigation by Lebanese and international prosecuting authorities," the report said.

"We have identified no records to confirm that a service was actually performed to justify the commission payments," it added.

A&M had agreed to complete its work in 12 weeks, the preliminary report said, but "the review was in fact completed 49 weeks after mobilisation due to the frequent delays in receipt of data".

It cited "many challenges in conducting the forensic audit, including that we have not been allowed access on site at BdL, nor have we been permitted to conduct interviews with BdL staff or leadership".