18 Dec

Voting Continues for New Leader of South Africa’s Ruling ANC

South Africa’s ruling African National Congress started voting in the early hours of Monday for a new leader to replace President Jacob Zuma in a tight race between his former wife and his deputy.

The vote at a national conference in Johannesburg follows a bitter dispute over a decision to exclude almost a 10th of the original 5,240 delegates who the party ruled weren’t properly accredited. Balloting started after the ANC had earlier announced a postponement of the vote, which was originally scheduled to begin Saturday. Delegates from branches in four of the nation’s nine provinces have yet to vote, Talk Radio 702 reported, citing the party.

In the run-up to the conference, Deputy President Cyril Ramaphosa, 65, won more nominations from the party branches than Nkosazana Dlamini-Zuma, the 68-year-old former chairwoman of the African Union Commission.

“Unless there is electoral fraud of some kind, my reading of the mood of the conference is that, if anything, Ramaphosa is likely to win more comfortably as some delegates decide to slip the shackles of their provincial barons,” said Richard Calland, a political analyst and associate law professor at the University of Cape Town.

Besides the ANC leader, the delegates are voting for five other top officials in a ballot that was initially scheduled to take place overnight on Saturday. The race has caused deep rifts in the 105-year-old ANC and unnerved investors seeking political and policy clarity.

The rand rallied to a three-month high as traders bet Ramaphosa will win. The currency gained 0.1 percent to 13.0843 per dollar, the strongest on a closing basis since Sept. 12, by 7:30 a.m. in Johannesburg.

Zuma Scandals

The conference is taking place as Zuma’s immersion in a succession of scandals is eroding the party’s standing to such an extent that it’s now at risk of losing its majority in 2019 elections.

To read the full article, click here. 

18 Dec

South African Rand Near 3-Month High on Ramaphosa Vote Optimism

South Africa’s rand fluctuated near a three-month high against the dollar and bond yields fell as traders bet Cyril Ramaphosa is poised to become the next leader of the ruling African National Congress.

Ramaphosa, one of the wealthiest black South Africans, has pledged to revive the struggling economy and stamp out corruption. His opponent, Nkosazana Dlamini-Zuma, has echoed President Jacob Zuma’s call for “radical economic transformation” to redistribute wealth to the black majority, a shift investors fear may blow out the budget deficit and spark rating downgrades.

The South African currency gained as much as 1.5 percent before trading 0.3 percent weaker at 13.1337 per dollar as of 10:04 a.m. in Johannesburg, according to data compiled by Bloomberg. Overnight implied volatility soared to a record 73 percent, suggesting traders are hedging for a large swing after the result, which may be announced Monday.

“Our base case of a win for Ramaphosa appears still to be on track, though there remains sufficient uncertainty in the process for caution to be exercised,” Zaakirah Ismail, a strategist at Standard Bank Group Ltd. in Johannesburg, wrote in a client note. “Volatility is also still at multi-year highs, implying that the currency is geared up for a sharp move after the winner is announced.”

Yields on benchmark government bonds due December 2026 dropped 14 basis points, the most since October, to 9.02 percent.

Long-Term Risks

The rand’s 4.1 percent gain over the past five days will probably not be sustained even in the event of a Ramaphosa victory as the country’s economic challenges won’t disappear, said Tsutomu Soma, general manager of the IFA department at SBI Securities in Tokyo.

“This isn’t likely to be a long-term strong rand trend,” Soma said. “Ramaphosa’s victory is seen as better than Nkosazana Dlamini-Zuma, but it will probably not improve the nation’s problems drastically, including fiscal positions. In the long run, the rand doesn’t look so attractive.”

Traders added bearish bets on the currency over the next three month, with the premium of options to sell the rand over those to buy it rising eight basis points to 2.83 percentage points in the past week.

Source: https://www.bloomberg.com/news/articles/2017-12-17/south-africa-s-rand-reaches-3-month-high-as-anc-prepares-to-vote

15 Dec

Under-Fire UN Peacekeepers Struggle in African Nation at War

Scanning the road from a police armored vehicle, Martine Epopa says she isn’t fazed when people make throat-slitting gestures at her United Nations convoy patrolling the capital of the Central African Republic.

Sometimes men jump in the road brandishing machetes, while others just stand and scowl, said Epopa, a 29-year-old Cameroonian police officer and the sole woman in a six-vehicle UN patrol that included Portuguese special forces and Mauritanian troops.

“We just wait until they give up and leave,” she said, clutching her rifle as her vehicle bounced over potholes. “We’re here to make people understand that the UN is here to protect them and their country. It can be challenging.”

Yet the threat is real. Fourteen peacekeepers have died this year in the Central African Republic, and public hostility is increasing toward what’s already one of the UN’s most difficult peacekeeping operations. A series of sexual-abuse scandals hasn’t helped, nor has the perception that the “blue helmets” favor the minority Muslim population over their Christian countrymen. Hidden from sight behind huge blast walls in central Bangui, the capital, the UN headquarters are often a target of violent protests.

In what the UN ranks as the world’s poorest nation where most state institutions crumbled after a 2013 coup, the peacekeepers face a near impossible task of shielding civilians from armed groups roaming the countryside.

Emergency Aid

The 13,750-member force, known by its acronym Minusca, also does everything from helping ship emergency food supplies across a territory as large as Afghanistan to providing logistical support to aid agencies whose workers themselves are under attack.

The UN force has little choice. Fighting rages on in parts of the country and state authority barely extends beyond Bangui. While a few hundred men have been trained for the new army, a UN arms embargo means the government can’t import weapons.

To read the full article, click here. 

15 Dec

Africa Needs a Commodity-Price Surge to Avert Debt Crunch

Sub-Saharan Africa faces a potential debt crunch unless commodity prices improve and boost the pace of economic growth.

 The region’s median government debt level will probably exceed 50 percent of gross domestic product this year from 34 percent in 2013, while the cost of servicing the liabilities will average almost 10 percent compared with half that four years ago, the International Monetary Fund said. There are no investment-grade dollar-debt issuers in sub-Saharan Africa after Moody’s Investors Service and Fitch Ratings Ltd. cut Namibia to junk this year.
Commodity returns have dropped in six of the past seven years and expectations for slower growth in China, the biggest consumer, don’t bode well for African nations that depend on mining, crops and oil for the bulk of their income. The region’s growth may average 2.6 percent this year, almost double 2016’s level but barely above population expansion, with delays in making policy changes risking this, the IMF said in October.
“Rising debt levels present a major risk to progress in sub-Saharan Africa, especially if there is another major shock in the global commodity market and if African markets are still in a recovery stage in the economic cycle,” Gaimin Nonyane, London-based economic-research head at Ecobank Transnational Inc., said by email.
More Planned

Nigerian debt-sale plans will more than double its outstanding U.S.-currency bonds to about $9 billion. That will add to issuances by South Africa, Ghana, Senegal, Ivory Coast and Gabon.

Policy uncertainty in South Africa and Nigeria, the region’s biggest economies, are restraining growth, with the IMF reducing their 2017 expansion forecasts to below 1 percent for the two nations.

In Kenya, the central bank said the nation can’t continue its current debt build-uppath if it’s to remain sustainable. Authorities are also negotiating with the IMF to rollover a standby facility of $1.5 billion.

The number of sub-Saharan African countries in or at risk of debt distress almost doubled to 12 over the past four years, while Mozambique — which defaulted this year — is among those engaging creditors to restructure debt.

To read the full article, click here.

15 Dec

New Africa Gas Comes at the Right Time for Europe

A week ago, Cameroon was getting ready to jostle for space in a global liquefied natural gas market already crowded with new supplies from the U.S. and Russia. Now the extra output couldn’t come at a better time.

France’s Perenco SA and U.S.-traded Golar LNG Ltd. will start shipments from their $1.2 billion LNG project off Cameroon in February, according to people familiar with the plans. That’ll be just in time for a surge of almost a third in European imports, according to consultants Energy Aspects Ltd., after a cold snap and disruptions at supply hubs in Austria, the U.K. and Norway sent gas prices to a four-year high.

“It’s good to see a new African exporter coming into the market,” Trevor Sikorski, head of natural gas and carbon research at Energy Aspects, said by phone. “An obvious market is Europe, particularly when the markets can be a bit stressed.”

Cameroon enjoys a geographical advantage in the European market. It takes about 11 days to ship a cargo to Britain, while a tanker from Qatar, Europe’s biggest supplier of LNG, takes about two weeks. Saving a few days may prove crucial during freezing weather or a sudden supply crisis — a growing risk as the region’s own gas infrastructure ages and becomes vulnerable to breakdown.

Floating Facilities

The Cameroon project — named Hilli Episeyo after its production vessel — is only the second floating LNG facility to come into production worldwide, after Malaysia launched a vessel last year. While the latter was built from scratch, the Cameroon unit is a converted LNG tanker. Its success could trigger more investments in the technology, potentially helping companies such as Ophir Energy Plc, which needs funds for a project off Equatorial Guinea.

“Once this project demonstrates its technical, operational and commercial viability, smaller E&P companies and funding sources should become more willing to develop and finance such projects,” said Claudio Steuer, senior visiting research fellow at the Oxford Institute for Energy Studies.

The recent price jump on the continent has made northwest Europe a more attractive destination for tankers carrying the super-chilled fuel. The U.K. is now set to take the first LNG from Russia’s Yamal project, rather than Asia as initially expected. The $27 billion plant in northern Siberia started production earlier this month, while Cove Point in Maryland is readying for operations too.

To read the full article, click here.

15 Dec

Nigeria Takes $1 Billion From Oil Savings to Fight Militants

Nigeria will take $1 billion from a special account for oil-revenue savings to boost its war against Boko Haram Islamist militants in the country’s northeast.

Governors of the country’s 36 states met with the federal government as the National Economic Council to deliberate on the expenditure, according to Godwin Obaseki, governor of southern Edo state.

“The governors have given permission to the federal government to spend the sum of $1 billion in the fight against the insurgency,” he told reporters in Abuja after the meeting on Thursday. That will leave $1.32 billion remaining in the excess crude account, where oil income above budgeted estimates are saved, according to figures provided by the government.

Boko Haram militants, who are opposed to Western education and seek to impose their version of Islamic law in Nigeria, are in the eighth year of an insurgency that has left at least 20,000 people dead, according to the government. President Muhammadu Buhari won elections in 2015 with the defeat of the group among his key campaign pledges.

“We are getting closer to the elections and defeating Boko Haram was a major campaign promise; going in these elections without delivering on that promise will be tough,” said Freedom Onuoha, a senior political science lecturer at the University of Nigeria, in the southeastern town of Nsukka.

With a new vote approaching, some of these funds for security may find their way into the election campaign, Onuoha said. “The details of spending aren’t usually made public. That creates an opportunity, a smokescreen, that can be used to fund elections and other hidden spending,” he said.

Ambushing Troops

Concerns the government may misuse the money are misplaced, according Laolu Akande, a spokesman for Vice President Yemi Osinbajo, who represented the federal side at the meeting with governors. “Nigerians have come to appreciate that the Buhari administration is as one that is judicious with the management of the country’s resources and actively fighting corruption,” he said.

To read the full article, click here.

14 Dec

Angola to Offer Grace Period to Recover Overseas Funds

Angola will set a moratorium in January to allow citizens with money abroad to repatriate their funds, as the oil-producing country struggles to ease an acute dollar shortage that began soon after oil prices dropped in 2014.

“Angolans who repatriate overseas funds and invest in the economy, companies that generate goods, services and jobs won’t be harassed,” President Joao Lourenco said Wednesday in the capital, Luanda. “No questions will be asked about why their money was abroad and they won’t face legal prosecution.”

The Angolan economy, sub-Saharan Africa’s third-largest, has been crippled by oil prices that have halved since mid-2014, causing zero growth last year, soaring inflation and a shortage of dollars needed to import products.

Lourenco, who took over as president in September after the 38-year rule of Jose Eduardo dos Santos, has promised to fight corruption in a country where his predecessor’s family has amassed great fortunes. He fired Dos Santos’s eldest daughter, Isabel, last month from her position as chairwoman of the state-owned oil company Sonangol.

Once the grace period to repatriate funds is over, the government will consider money in foreign accounts to belong to Angola and work with authorities abroad to bring the money back, Lourenco said.

“We want Angolans who have fortunes abroad to be the first to invest in the country, thus demonstrating that they are true patriots,” he said. “One must not confuse the fight against corruption with the persecution of the rich or wealthy families.”

The measure is similar to a decree issued last month by Zimbabwean President Emmerson Mnangagwa, who ordered anyone who had illegally moved cash and assets out of the country to return them within three months or face arrest.


14 Dec

Arab States Commit to Backing West African Anti-Terror Force

Arab countries pledged more money and five West African countries said they’d accelerate efforts to get a joint anti-guerrilla military force up and running as they met Wednesday near Paris at the invitation of French President Emmanuel Macron.

Saudi Arabia will contribute 100 million euros ($118 million) and the United Arab Emirates 30 million euros to the so-called “G5 Sahel” force, Macron said. The U.S. confirmed its commitment to spend $60 million on the force being put together by Niger, Chad, Mali, Burkina Faso, and Mauritania to combat Islamic militants across the southern rim of the Sahara.

“We must win this battle against terrorism in the Sahel,” Macron said at a press conference after the meeting, held in the Paris suburb of Celles-Saint-Cloud. “There are attacks every day and states are under threat. We must intensify efforts.”

The talks, which were also attended by German Chancellor Angela Merkel and Italian Prime Minister Paolo Gentiloni, as well as by representatives from Belgium, Spain, and the U.S., were described by French officials as a “give-give’ meeting where outside countries would show more support and the Africans would accelerate efforts to have the force operational by mid-2018. The project was originally intended to have 5,000 men, but Niger today committed another two battalions, or roughly 1,600 men.

Defending Bamako

France intervened in Mali in early 2013 to successfully push back Islamic militants who were marching on the capital Bamako. But the defeated forces spread across the region, where desert borders are often porous and have continued to carry out deadly attacks.

France has 4,000 special forces in the region as part of its “Barkhane” mission, and six months ago pushed for the creation of the G5 force to lighten its load. While the missions will be kept separate, the French say they will provide support and air cover for the Africans. The Sahel force will also be able to rely on logistical support from the United Nation’s 12,000-strong Minusma peacekeeping operation in Mali.

To read the full article, click here.

14 Dec

‘Make-or-Break’ Time for South Africa as ANC Chooses New Leaders

Almost a quarter-century after Nelson Mandela led the African National Congress to power at the end of apartheid and the world heralded the birth of the “rainbow nation,” South Africa stands at a crossroads.

As delegates of the ruling African National Congress meet this weekend to choose a successor to President Jacob Zuma as party leader, they face a clear choice: his ex-wife, Nkosazana Dlamini-Zuma, who favors the president’s push for “radical economic transformation” to redistribute wealth to the black majority, or his deputy, Cyril Ramaphosa, who’s pledging to fight corruption and revive a moribund economy to cut a 28 percent unemployment rate.

The leadership conference comes as Zuma’s immersion in a succession of scandals is eroding the 105-year-old party’s support to such an extent that it’s now at risk of losing its majority in 2019 elections. The run-up to the vote by 5,240 delegates that’s scheduled for Dec. 17 and is too close to call has caused deep rifts in the ANC, weighed on the rand and nation’s bonds and unnerved investors seeking political and policy clarity.

“What’s really at stake now is the future of South Africa, not just the ANC’s continued governance of South Africa — everyone needs to understand that,’’ David Makhura, the 49-year-old premier of the nation’s richest province, Gauteng, where an overwhelming majority of ANC branches back Ramaphosa, said in an interview Tuesday. “Even people who don’t vote for the ANC are hoping that we will make one move that will bring South Africa back on track.”

Support for the party slipped to an all-time low of 54 percent in last year’s municipal elections, from a peak of almost 70 percent in 2004, and it lost control of Johannesburg, the economic hub, and Pretoria, the capital, to opposition coalitions.

Fifty-nine percent of 2,100 people who said they’d voted for the ANC favor Ramaphosa to take over as leader, while 19 percent backed Dlamini-Zuma, a computer-generated poll published this month by survey company RatePop found. The party will probably struggle to retain power in 2019 with her at the helm, according to the survey.

To read the full article, click here.

13 Dec

Zuma ordered to pay legal costs for attempts to stop state capture report

President Jacob Zuma has been told to cover the legal costs of his frivolous attempts to stop the Public Protector’s state capture report from making it to court.

The judgement, handed down by Justice Mlambo at Pretoria High Court, highlighted the ‘frenzy’ Zuma caused when he asked for an interdict of the PP’s report. It sparked as mass of counter-applications for all other major political parties. At the end of October, he abandoned the process.

Zuma must cover costs for state capture hold-ups

After wasting the court’s time by eventually abandoning his appeal against the state capture case, Jacob Zuma must now foot the bill himself. Which also means, the investigation into the state of capture is looking increasingly likely to go ahead without any further challenges.

Former Public Protector Thuli Madonsela made a 2016 ruling that the ANC leader must face an inquiry into state capture, as details of his overly-cosy business relationship with the Guptas became public knowledge.

Madonsela’s decision meant that an investigation team would have to be chosen by a neutral party. However, Jacob Zuma wanted this particular detail reviewed, given that he’s the president and he argues it falls under his remit.

Will Zuma face a state capture inquiry?

After spending the best part of a year protesting, Zuma eventually withdrew his application two months ago. However, the reviews and legal processes had come at a great cost.

Judge Mlambo ruled out a ‘punitive costs’ punishment, as this would burden the taxpayer. Instead, he hit the President where it hurt: his wallet.

Judge Mlambo ruled out a ‘punitive costs’ punishment, as this would burden the taxpayer. Instead, he hit the President where it hurt: his wallet.

The fun hasn’t finished quite yet, though. JZ is also facing judgement day over who will be allowed to appoint an independent judge to lead the state capture commission of inquiry. Could it be double-trouble for Zuma? We’ll keep you all updated.

To read the full article, click here.

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