macroafricaintel | South Africa – Inquiry nation

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Nhlanhla Nene, the former South African finance minister, probably now wishes he stayed away from public office after his unceremonious exit a few years ago from the administration of former president Jacob Zuma. His “integrity” was paying off. He had some lucrative board memberships and there were probably more on the way before he was beckoned upon again to serve his fatherland. What did Mr Nene do? He lied about the extent of his association with the Guptas, a now infamous Indian family which rose to stupendous wealth on the back of the South African Commonwealth. This was revealed at the ongoing commission of inquiry into state capture led by deputy chief justice Raymond Zondo. Malusi Gigaba, another former minister, whose video of himself engaged in a private indiscretion became public, had to resign as well. His exit from cabinet was not particularly due to the video scandal, though. The Public Protector, the country’s anti-graft body, asked President Cyril Ramaphosa to take action against him in late October for allegedly lying under oath.

The two star politicians are a good study of contrasts. Their personalities are different. Mr Nene is ideally discreet, quiet and not one for the limelight if he can help it. Mr Gigaba, on the other hand, is attention-seeking, aims to be suave, and dresses flashily. And even as Mr Gigaba insists he has done nothing wrong, and that his resignation was not an admission of guilt, revelations since then suggest he may have likely lied about some of his activities in government. Mr Nene’s case is pitiable because there was really no need for him to lie in the first place. There is probably no senior member of the ruling African National Congress (ANC) party under Mr Zuma’s leadership who did not have to deal with the Guptas at some point in time. And it is to Mr Nene’s credit that he never succumbed to the pressure they put on him to do wron

Public interest is served by probes
Asked about his thoughts on the trend of inquiries under Mr Ramaphosa’s leadership, Darias Jonker, director for southern Africa at Eurasia Group, a political risk consultancy, in London says, “This is a positive trend for Ramaphosa, in the sense that it is a safer tactic to use in his strategy to remove or neutralize his opponents within the ruling African National Congress. First, by building up a solid case against them there is less room for them to wriggle out of these allegations once they get tested in court. Second, because the inquiry is public the allegations against the Zuma patronage network are being aired in the open and the public is becoming increasingly aware of the scale and audacity of the patronage network. This will boost Ramaphosa’s image as a reformer. One downside is that the inquiries take time, and some people are impatient with the slow pace and want to see arrests and court cases: but Ramaphosa is playing a long game.”

Ronak Gopaldas of Signal Risk, a risk consultancy, in Cape Town shares similar sentiments. He believes the corruption inquiries are “definitely positive.” He opines further: “From a governance and institutional perspective, we have seen a positive shift since Ramaphosa took over. There is a cleanup being undertaken and these commissions are attempts to get information out in the open and to build consensus. It also provides Ramaphosa with necessary ammunition to act against those implicated without burning his political capital within the ANC, which remains tenuous given the narrow victory margin in December.”

But would it indeed help to curb corruption as envisaged? Mr Jonker believes so: “The inquiries are part of Ramaphosa’s anti-corruption reforms and will drastically reduce the grand scale corruption in national and provincial government and in SOEs [state-owned enterprises]. Smaller scale corruption will, however, persist across government and be a particular problem on the local government level.” For his view, Signal Risk’s Gopaldas says “the commisions themselves are simply a start – much will however depend on whether Ramaphosa is able to act decisively against corruption, reform the ANC and replace captured organisations with competent technocrats. In this sense, the commissions should be seen as the diagnosis rather than the cure.”

Simply put, these inquiries make a difference. And there is empirical evidence to back the claim. New research by Eric Avis and Frederico Finan, both of the University of California at Berkeley, and Claudio Ferraz of Pontificia Universidade Catolica do Rio de Janeiro published by the Journal of Political Economy in October finds in Brazil that “being audited in the past reduces future corruption by 8 percent, while also increasing the likelihood of experiencing a subsequent legal action by 20 percent.” Expectedly, there is now palpable hesitation on the part of some ANC politicians to testify before the Zondo commission. It is increasingly clear quite a couple of them lied about the extent of their malfeasance and misdemeanour under Mr Zuma. Could the revelations cost the ANC at the polls? What does Eurasia’s Jonker think? “Yes and no. The opposition will use the revelations to paint the ANC as endemically corrupt, which it largely is. However, other major opposition parties also have serious corruption allegations haunting them, and voters know this too.”

But Ramaphosa wins as well
There are other ongoing commissions of inquiry. One has just been commissioned to investigate the Public Investment Corporation (PIC), the investment manager of the state pension fund. There would probably be more. Consequently, Mr Jonker of Eurasia Group believes there could be inquiry fatigue at some point, “especially if there are no arrests of high-level state capture participants.” That said, even as the motivation for establishing these inquiries might not be entirely altruistic, they are inadvertently beginning to serve the public interest.

Ironically, some day in the future, there might be inquiries into how past inquiries conducted their affairs. But not yet; that is even as Mr Ramaphosa’s foes probably wish otherwise. Could the costs of these inquiries become a subject of inquiry at some point, for instance? Eurasia’s Jonker does not think so. “No. Ramaphosa’s detractors are complaining about the cost in an effort to undermine him, but in reality the cost of the inquiries are a fraction of the sums that were taken from the public purse through corruption and patronage. The public knows this and it is not keeping tabs on the costs involved.” Besides, “many voters who turned away from the ANC because of the corruption and mismanagement during the Zuma years will return to vote for Ramaphosa now that he is being seen as a fighter of grandscale corruption,” he adds.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. https://www.businessdayonline.com/columnist/rafiq-raji/article/south-africa-inquiry-nation/

#Africa #Markets | 11 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia shares near 3-week lows, sterling struggles on Brexit woes
  • Pound near 20-mth trough on Brexit related uncertainty
  • Disappointing economic data, Sino-US trade war weigh
  • Chinese shares bounce on trade optimism, sentiment cautious
  • Focus on Indian markets after RBI governor resigns

Oil Markets

  • Oil prices rise on Libyan export interruption, but markets remain weak
  • Libya’s National Oil Company declares force majeure
  • But sentiment on prices remains weak amid stock market slump
  • Speculators cut their long crude positions to 2016 lows
  • Kuwait, Iran lower price for January oil supplies to Asia
  • Brent crude oil futures up 0.3 pct at $60.19 per barrel (0336GMT)
  • US WTI crude futures up 0.3 pct at $51.16 per barrel

Grains

  • Soybeans extend losses to hit 5-day low
  • Most active CBOT wheat futures down 0.6 pct at $5.22 per bushel (0119GMT)
  • Most active corn futures down 0.3 pct at $3.83 per bushel
  • Most active soy futures down 0.3 pct at $9.06-3/4 per bushel
  • Most active rice futures unchanged at $10.67 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa mining production data for Oct 2018 due [fcst. -1.7% yy, prev. -1.8%]
  • South Africa manufacturing production data for Oct 2018 expected [fcst. -0.1% yy, prev. 0.1%]

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Kenya struggles to give life to futuristic ‘Silicon Savannah’ city
  • UK to invest 100 mln pounds in sub-Saharan Africa renewables fund
  • Ex-head of Egypt’s Customs Authority faces graft charges – prosecution office
  • Libya’s NOC won’t negotiate with group that closed Sharara oilfield – chairman
  • Africa Crude – Unsold Angolan cargoes whittled down, Nigerian still struggling for buyers
  • Egypt sells $1.1 bln in 1-yr t-bills – central bank
  • Nobel Peace Prize laureate Mukwege worried Congo vote could lead to war
  • UK’s Experian to buy Africa’s Compuscan
  • Egypt’s urban inflation drops back within target range
  • UN members adopt global migration pact rejected by US and others
  • Sudan pound slides to widest over official rate since devaluation
  • Ivory Coast aims to double gold output by 2025
  • South Sudan health workers to get ebola shots as Congo outbreak grows
  • Egypt’s core inflation decreases to 7.94 pct y/y in Nov – c.bank
  • EU renews Congo sanctions ahead of presidential election
  • South Africa’s MTN says still in talks with Nigerian authorities
  • Congo’s Gecamines to boost stake in Boss Mining JV to 49 pct
  • Kenyan pipeline, health insurance fund officials charged over graft
  • South Africa needs to bail out Eskom, says former Eskom adviser Rothschild
  • UN members adopt global migration pact – Moroccan foreign minister
  • Nigeria’s economy grew 1.81 pct in Q3, driven by non-oil sector, stats office says
  • KPMG South Africa appeals for second chance after corruption scandals
  • Kenya’s Consolidated Bank says seeking investor to inject 3.5 bln shillings
  • Heavy rains to slash Nigeria’s 2017/18 cocoa output by 10 pct

N.B. Full stories of above headlines are available on Reuters

#Global #Markets | 11 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

(GMT+1)

CALENDAR
10:30 UK Average Earnings incl. Bonus 
10:30 UK Unemployment Rate 
10:30 UK Claimant Count Change 
10:30 UK Employment Change 
11:00 Euro Area ZEW Economic Sentiment Index 
11:00 Germany ZEW Current Conditions 
11:00 Germany ZEW Economic Sentiment Index 
14:30 US PPI MoM 
14:30 US Core PPI MoM 
22:30 US API Crude Oil Stock Change 
00:00 South Korea Unemployment Rate 
00:30 Australia Westpac Consumer Confidence Index
NEWS
Philippines Exports Grow 3.3% YoY 
Philippines Imports Rise 21.4% YoY 
Philippines Trade Gap Hits Record High in October 
US Stocks Edge Higher on Monday 
European Stocks Slump on Growth, Brexit Worries 
Ukraine Inflation Rate Rises Less than Expected 
US Job Openings Beat Forecasts 
Sterling Falls on Brexit Uncertainty 
Canada Building Permits Fall 0.2% MoM in October 
Canada Housing Starts Beats Estimates in November 
Mozambique Annual Inflation Rate at 6-Month Low 
Egypt Inflation Rate Hits 3-Month Low of 15.7%

Source: Trading Economics, Macroafricaintel Research

macroafricaintel Weekly | 10 Dec [Update]

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
10 Dec Nigeria GDP, % yy Q3 2018 0.8 [act. 1.8] 1.5
11 Dec South Africa Mining Production, % yy Oct 2018 -1.7 -1.8
11 Dec South Africa Manufacturing Production, % yy Oct 2018 -0.1 0.1
12 Dec South Africa CPI, % yy (mm) Nov 2018 5.3 (0.3) 5.1 (0.5)
12 Dec South Africa Retail Sales, % yy Oct 2018 2.8 0.7
13 Dec South Africa PPI, % yy (mm) Nov 2018 6.8 (0.4) 6.9 (1.4)
31 Dec South Africa PSCE, % yy Nov 2018 5.2 5.8
31 Dec South Africa M3. % yy Nov 2018 5.7 6.0
Seychelles CPI, % yy (mm) Nov 2018 4.1 (0.2) 3.4 (0.2)
Tanzania CPI, % yy (mm) Nov 2018 2.9 (0.2) 3.2 (-0.3)
Botswana CPI, % yy (mm) Nov 2018 3.8 (0.4) 3.6 (0.7)
Namibia CPI, % yy (mm) Nov 2018 5.3 (0.4) 5.1 (0.4)
Nigeria CPI, % yy (mm) Nov 2018 11.4 (0.9) 11.3 (0.7)
Ghana CPI, % yy (mm) Nov 2018 9.2 (0.6) 9.5 (0.7)
Ethiopia CPI, % yy (mm) Nov 2018 11.1 (0.3) 11.5 (-0.3)
Mauritius CPI, % yy (mm) Nov 2018 2.7 (0.3) 2.8 (0.4)

#Africa #Markets | 10 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Stocks extend slump as global growth worries mount
  • MSCI Asia-Pacific index down 1.4 pct, Nikkei sheds 2.25 pct
  • Latest flare-up in US-China trade tensions take toll
  • Dollar drops broadly after soft US jobs data

Oil Markets

  • Brent oil prices rise after OPEC-led group announces 1.2 mln bpd supply cut
  • OPEC to curb supply by 800k bpd from January
  • Group of non-OPEC members led by Russia to cut 400k bpd
  • Fuel demand-growth set to slow next year amid economic woes
  • Brent crude oil futures up 0.2 pct at $61.81 per barrel (0016GMT)
  • US WTI crude futures down 0.5 pct at $52.35 per barrel

Precious metals

  • Gold steady near 5-mth peak, soft US jobs data supports
  • Spot gold steady at $1,247.80 per ounce (0103GMT)
  • US gold futures up 0.2 pct at $1,254.6 per ounce

Grains

  • Soybeans fall as US-China trade war escalates
  • Most active CBOT wheat futures down 0.5 pct at $5.28-1/2 per bushel (0123GMT)
  • Most active corn futures down 0.3 pct at $3.84-1/4 per bushel
  • Most active soy futures down 0.6 pct at $9.11-1/4 per bushel
  • Most active rice futures down 0.7 pct at $10.70 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Nobel peace prize ceremony today; big day for Africans
  • Nigeria GDP data for Q3-2018 expected [fcst. 0.8% yy, prev. 1.5%]

Key African events or data releases over the weekend & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Libya is shutting down El Sharara after field seized by tribesmen – sources
  • More than 150 govts to adopt UN migration pact in Morocco
  • Nigeria opposition says govt has frozen VP candidate’s accounts
  • Opposition parties in Tanzania say proposed law will criminalise them
  • Egypt aims to kickstart African trade as it takes AU chair
  • Motion filed to impeach Somalia president – statement
  • Egypt’s Carbon Holdings secures $1.25 bln to build petrochemical complex
  • World Bank shifts focus to Egypt’s private sector with $1 bln loan
  • Nobel Peace prize winners seek justice for war rape victims
  • Congo’s outgoing president Kabila doesn’t rule out running again in 2023
  • Egypt approves BP purchase of 25 pct of Nour gas concession
  • Mubadala buys 20 pct interest in Egypt’s Nour oil concession
  • Libya’s NOC warns of “catastrophic” consequences if Sharara oilfield halted
  • At least 7 officials killed in Sudan helicopter crash – news agency
  • Protesters force shutdown at Libyan El Sharara oilfield – sources
  • Cities to work together to tackle migration ahead of UN pact
  • Libyan state oil firm scrambles to keep El Sharara oilfield open amid “occupation”
  • Gold output on hold at Randgold’s Loulo mine over pay dispute – union
  • UN climate negotiators sweat over detail and divides
  • IMF approves $3.7 bln credit facility for Angola
  • Roadside blast injures three in northeast Kenya – official
  • Fifteen civilians killed in ethnic attack on Mali village
  • Egypt says police kill two suspects in November attack on Christians
  • Air fares in Sudan soar due to local currency’s devaluation
  • Telecom Egypt, Liquid Telecom sign data centre, infrastructure deal
  • Belgium’s Africa Musuem reopens to confront its colonial demons
  • 3 Sudanese miners dead, 10 trapped in collapsed gold mine – company
  • Zambian court says Lungu can run for president in 2021, opposition cries foul
  • Nigeria oil minister expects green light for Bonga oilfield by February
  • Cocoa companies fail on pledge to stop Africa deforestation – report
  • Militants kill at least 18 civilians in Congo’s ebola zone
  • Africa Crude – Angolan cargoes sell slowly, Qua offer steady
  • Kenya Pipeline Company’s CEO arrested over loss of funds
  • Mozambique loan holders will not get future gas revenues in debt overhaul – legal counsel
  • Fastjet has only enough cash to fly for a week
  • South Africa’s minimum wage to apply from January 2019
  • South Africa axes board at state nuclear firm Necsa
  • Senegal opens new art musuem honouring black civilization
  • Nigeria’s cabinet agrees to send 2019 budget to parliament
  • Egyptian court to hear petition to cancel presidential term limits
  • Nearly half of Tanzania’s banks vulnerable to financial shocks – IMF
  • Kenya shilling firms on liquidity tightness
  • Tunisia PM says he expects new foreign exchange law
  • Kenya’s Ascent Capital looks to raise $120 mln for second fund
  • Amnesty says executions rising in South Sudan, govt denies it
  • Congo arrests army colonel in connection with killing of UN monitors – lawyer
  • South Africa’s Distribution and Warehousing sees bigger loss
  • Seawalls and forests aim to save the living – and dead – in Tanzania
  • South Africa’s Absa bank aims to lift lagging return on equity in 2021
  • Kenya’s NIC Bank shares surge 32 pct on merger talks with CBA
  • Kenya finance minister welcomes NIC Bank, CBA merger talks
  • South Africa’s Nov net foreign reserves rise to $42.577 bln

N.B. Full stories of above headlines are available on Reuters

macroafricaintel Weekly | 10 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
10 Dec Nigeria GDP, % yy Q3 2018 0.8 1.5
Seychelles CPI, % yy (mm) Nov 2018 4.1 (0.2) 3.4 (0.2)
Tanzania CPI, % yy (mm) Nov 2018 2.9 (0.2) 3.2 (-0.3)
Botswana CPI, % yy (mm) Nov 2018 3.8 (0.4) 3.6 (0.7)
Namibia CPI, % yy (mm) Nov 2018 5.3 (0.4) 5.1 (0.4)
Nigeria CPI, % yy (mm) Nov 2018 11.4 (0.9) 11.3 (0.7)
Ghana CPI, % yy (mm) Nov 2018 9.2 (0.6) 9.5 (0.7)
South Africa CPI, % yy (mm) Nov 2018 5.3 (0.3) 5.1 (0.5)
Ethiopia CPI, % yy (mm) Nov 2018 11.1 (0.3) 11.5 (-0.3)
Mauritius CPI, % yy (mm) Nov 2018 2.7 (0.3) 2.8 (0.4)

#Global #Markets | 10 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

(GMT+1)

CALENDAR
06:00 Japan Eco Watchers Survey Outlook 
07:45 Switzerland Unemployment Rate 
08:00 Germany Balance of Trade 
08:00 Turkey GDP Growth Rate YoY 
08:00 Turkey GDP Growth Rate QoQ 
09:00 Nigeria GDP Growth Rate QoQ 
09:00 Nigeria GDP Growth Rate YoY 
10:00 Italy Industrial Production MoM 
10:30 UK Construction Output YoY 
10:30 UK Industrial Production YoY 
10:30 UK Industrial Production MoM 
10:30 UK Manufacturing Production YoY
NEWS
Irish Construction Activity Picks Up in November 
New Zealand Manufacturing Sales Drop in Q3 
China Producer Prices Rise the Least in Over 2 Years 
China Inflation Rate Slows to 4-Month Low of 2.2% 
Week Ahead 
China Exports Growth Slows Sharply 
China Trade Surplus Largest in 11 Months 
China Imports Rise the Least in Over 2 Years 
S&P Revises Qatar’s Outlook to Stable 
Nicaragua Inflation Rate Eases to 13-Month Low 
US Stocks Tumble on Friday 
US Consumer Credit Growth Beats Expectations

Source: Trading Economics, Macroafricaintel Research