macroafricaintel Weekly | 18 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

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Date Data / Event Period Forecast Previous
18 Dec Uganda Policy Rate, % 9.0 9.5
18 Dec Botswana Policy Rate, % 5.0 5.0
South Africa M3, % yy Nov 2017 6.0 5.0
South Africa PSCE, % yy Nov 2017 5.5 5.4
Nigeria CPI, % yy (mm) Nov 2017 15.8 (0.7) 15.9 (0.8)

*Uganda MPC view changed; now expect a rate cut.

macroafricaintel | South Africa: A race of three

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Just days to the elective conference of the ruling African National Congress (ANC) party on 16 December, Jacob Zuma, the South African president suffered a slight setback. That is an understatement, actually. A Pretoria High Court ruled he should implement the recommendations of the Public Protector (PP), the South African anti-corruption watchdog; who had asked him to set up an inquiry into what is now widely referred to as “State Capture.” In its simplest form, it means corruption. A wider interpretation would be to refer to it as the use of state resources by private elements for private gain with the active collaboration of public officials. Many revelations suggest President Zuma could be culpable of state capture. Naturally, Mr Zuma had wanted the court to tell him if the PP’s directives were binding on him. It was a time-wasting gimmick. And the court told him so punitively. Just before, he got some reprieve from the chief prosecutor, Shaun Abrahams – widely believed to be a Zuma loyalist – who gave him until the end of January next year to make representations as to why almost 800 previously dropped corruption charges should not now be instituted against him; after a court ruled sometime ago it was wrong to have dropped them in the first place. Incidentally, the judge who ruled the PP’s directives were binding on Mr Zuma also nullified his appointment of Mr Abrahams as chief prosecutor. Furthermore, the court ruled he could not appoint his replacement because he was clearly conflicted. That task it assigned to his deputy, Cyril Ramaphosa, the leading candidate to replace him as ANC president. Although Mr Zuma’s tenure as South Africa’s president would not expire until 2019, he could be recalled by the ANC if someone not favourably disposed to him wins the party’s presidency. With the only shield Mr Zuma would have thereafter being that offered by his position as president of The Republic, there is no gainsaying how highly motivated he must be to ensure that the person that emerges as the ANC president this weekend is someone that would protect him from what are clearly imminent troubles. Only one candidate can do this: former African Union Commission chairperson Nkosazana Dlamini-Zuma, his ex-wife. And even though ahead of the conference, Mr Ramaphosa is leading with nominations from the party branches, it is not definite. What matters more are the number of delegates he has in his pocket. And that is where Mr Zuma has an advantage. Oops! I meant Ms Dlamini-Zuma. Well, maybe I meant both of them. Mr Ramaphosa is nominally in battle with Ms Dlamini-Zuma but effectively at war with Mr Zuma.

Fight to finish
Despite being embattled, Mr Zuma still has the power to dish out patronage. Mr Ramaphosa is rich too. But Mr Zuma can offer much more than money. He can offer positions, contracts, and so on. It is not impossible that more cadres might decide it best to pitch their tents with the person that everyone seems to want to succeed Mr Zuma. Market participants want Mr Ramaphosa to win, at least. One actually estimated as much as US$10 billion in capital flight in the aftermath of an almost certain rating downgrade to junk status by Moody’s if Ms Dlamini-Zuma wins instead. Respected former finance minister Pravin Gordhan went as far as boasting that the economy could turn around in months if Mr Ramaphosa is elected. This is an exaggeration, of course. Mr Ramaphosa is no magician. (But it speaks to the enthusiasm around his candidacy.) The problems bedevilling South Africa would require very tough structural reforms. They tend to take time to bear fruit. And any president willing to embark on them would need to have not only strong political capital and will, but must also be willing to suffer the fate of probably not lasting long in office. Of all the candidates, Mr Ramaphosa is perhaps the only one that comes closest to being qualified to do the needed right things. Take labour reforms. It would be a very brave ANC president that takes on unions that form the bedrock of the party’s support base. COSATU, the umbrella labour union body, is a member of the tripartite alliance that ensures ANC is able to retain power. Were the ANC to lose their support because of what are germane but likely unpopular labour reforms, it may not be in power long enough to see them through. But if there is anyone with the skill and experience to do the task, it is Mr Ramaphosa. A former labour leader himself, Mr Ramaphosa is credited with helping former president and father of the nation, Nelson Mandela, with negotitations to end the apartheid regime. And it is widely known that when Mr Mandela was in a jam during what were very tasking talks, Mr Ramaphosa, when called upon, as he often was, was able to help make some headway. But Mr Ramaphosa is not without troubles of his own. He is tainted by the Marikana massacre, which resulted in the deaths of many protesting miners. And Mr Zuma has reportedly not relented in his efforts to ensure Mr Ramaphosa does not prevail. Lately, what came out was that Mr Zuma might be looking to invoke a state of emergency. Like always, his office came out vociferously with a denial. If past events are a barometer of Mr Zuma’s schemings, it is not totally out of the question that he is still contemplating this. Should Mr Ramaphosa win, Mr Zuma would need to move quickly to ensure the party is not able to recall him. Such is the risk of something unusual happening that market participants are already beginning to derisk themselves of South African exposure as a precaution. For the sake of dear South Africans, may the best candidate win.

macroafricaintel Weekly | 11 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

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Date Data / Event Period Forecast Previous
12 Dec South Africa Manufacturing Production, % yy Oct 2017 -0.7 -1.6
13 Dec Uganda Policy Rate, % 9.5 9.5
13 Dec South Africa CPI, % yy (mm) Nov 2017 4.9 (0.4) 4.8 (0.3)
14 Dec South Africa Retail Sales, % yy Oct 2017 5.3 5.4
14 Dec South Africa Current Account, % GDP Q3 2017 -2.5 -2.4
14 Dec South Africa PPI, % yy (mm) Nov 2017 5.2 (0.6) 5.0 (0.7)
Tanzania CPI, % yy (mm) Nov 2017 4.0 (0.1) 5.1 (-0.1)
Botswana CPI, % yy (mm) Nov 2017 2.9 (0.1) 3.0 (0.0)
Namibia CPI, % yy (mm) Nov 2017 5.1 (0.2) 5.2 (0.1)
Nigeria CPI, % yy (mm) Nov 2017 15.8 (0.7) 15.9 (0.8)
Ghana CPI, % yy (mm) Nov 2017 11.6 (0.7) 11.6 (0.9)
Ethiopia CPI, % yy (mm) Nov 2017 13.4 (0.4) 12.2 (0.3)

macroafricaintel | Africa FX Monthly – Dec-17

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for the PDF version

Currency   1 month

(29 Dec 2017)

3 month

(28 Feb 2018)

6 month

(31 May 2018)

12 month

(30 Nov 2018)

South African Rand (USD:ZAR) 14.0 13.6 13.3 13.1
Nigerian Naira (USD:NGN) 361.0 365.0 350.0 315.0
Ghanaian Cedi (USD:GHS) 4.5 4.6 4.1 3.7
Kenyan Shilling (USD:KES) 103.0 103.5 103.1 102.5
Ugandan Shilling (USD:UGX) 3,637 3,631 3,630 3,640
Tanzanian Shilling (USD:TZS) 2,237 2,231 2,235 2,230
Ethiopian Birr (USD:ETB) 27.5 27.8 28.1 28.6
Mauritian Rupee (USD:MUR) 33.7 33.1 33.3 33.5
Namibian Dollar (USD:NAD) 14.0 13.6 13.3 13.1
Botswanan Pula (USD:BWP) 10.5 10.3 10.1 10.0
Zambian Kwacha (USD:ZMW) 10.1 9.9 9.7 9.5
US Dollar Index (DXY) 93.0 92.7 94.1 93.3

macroafricaintel Weekly | 4 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
5 Dec South Africa GDP, % qq saa Q3 2017 0.6 2.5
6 Dec Namibia Policy Rate, % 6.75 6.75
7 Dec South Africa Gross Gold & FX Reserves, US$bn Nov 2017 49.1 48.9
7 Dec South Africa Mining Production, % yy Oct 2017 5.8 -0.9
Mauritius CPI, % yy (mm) Nov 2017 3.3 (0.1) 3.5 (-0.4)
Seychelles CPI, % yy (mm) Nov 2017 3.6 (0.1) 3.5 (0.0)
Tanzania CPI, % yy (mm) Nov 2017 4.0 (0.1) 5.1 (-0.1)
Botswana CPI, % yy (mm) Nov 2017 2.9 (0.1) 3.0 (0.0)
Namibia CPI, % yy (mm) Nov 2017 5.1 (0.2) 5.2 (0.1)
Nigeria CPI, % yy (mm) Nov 2017 15.8 (0.7) 15.9 (0.8)
Ghana CPI, % yy (mm) Nov 2017 11.6 (0.7) 11.6 (0.9)
South Africa CPI, % yy (mm) Nov 2017 4.9 (0.4) 4.8 (0.3)
Ethiopia CPI, % yy (mm) Nov 2017 13.4 (0.4) 12.2 (0.3)

 

macroafricaintel Weekly | 27 Nov

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
27 Nov Ghana Policy Rate, % 21.0 21.0
30 Nov South Africa PPI, % yy (mm) Oct 2017 4.8 (0.5) 5.2 (0.7)
29 Nov South Africa M3, % yy Oct 2017 5.9 6.7
29 Nov South Africa PSCE, % yy Oct 2017 6.3 5.6
30 Nov Kenya CPI, % yy (mm) Nov 2017 5.1 (0.1) 5.7 (-0.6)
30 Nov Uganda CPI, % yy (mm) Nov 2017 4.5 (0.4) 4.8 (0.3)
30 Nov Zambia CPI, % yy (mm) Nov 2017 5.4 (0.5) 6.4 (0.4)

macroafricaintel | African politics takes a positive turn

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Not long after the news that the Zimbabwean military had put former president Robert Mugabe under house arrest, Uganda’s longtime leader, Yoweri Museveni, made changes to the leadership of his army. Coincidence? Not really. Even though there are reports of foreign support for the recent military takeover in Zimbabwe, it could not have been carried out without the support of the army chief General Constantino Chiwenga. Probably realising this, Mr Museveni decided he had better put someone “reliable” in the post. He did not stop there. Afterwards, he signalled he would be looking to raise the salaries of “soldiers, public servants, health workers and teachers…”. (See how soldiers come first.) The real question then becomes what the chances are that what happened in Zimbabwe may soon happen in Uganda, Togo, Equatorial Guinea, Angola, or Cameroon; where other longtime leaders and/or their children preside. In Togo, for instance, there are continued protests demanding President Faure Gnassingbe, who succeeded his father, Gnassingbe Eyadema, resign or at least not seek another term when his current third 5-year stint expires. In Cameroon, the only major challenge to Paul Biya’s almost 35-year rule is probably something he would be able to resolve easily: Anglophones want better treatment and representation. So they are not so much challenging him as they are really just seeking a better life. And in Equatorial Guinea, where vice-president Teodoro Nguema Obiang Mangue, the son of President Teodoro Obiang Nguema, another sit-tight leader, only just got prosecuted for corruption in France, there is little or no sign the ruling family would give up the reins of power anytime soon. In fact, in recent legislative and municipal elections, the ruling Democratic Party of Equatorial Guinea (PDGE) won almost 100 percent of the vote. In Angola’s Jose Eduardo dos Santos’ case, however, he had the good sense to quit while he was still ahead. Of course, his successor, Joao Lourenco, has moved swiftly to consolidate power, firing Isabel dos Santos, the former president’s powerful daughter, and replacing the police and intelligence chiefs; all barely two months into his presidency.

Love potion
In determining who might be ousted amongst the remaining longtime rulers on the African continent, it would help to consider what triggered that which happened in Zimbabwe. Firstly, Mr Mugabe decided to put his wife in his place; a woman with no credentials other then she shared a bed with him. In an African context, there could not be a more infuriating development in what is still largely a patriarchal society. Incidentally, just some kilometres away, in neighbouring South Africa, embattled President Jacob Zuma desires that his ex-wife takes his place in the elective conference of the ruling African National Congress (ANC) party in December. In her case, at least, she is well-educated, has apartheid struggle credentials, and has served as minister and most recently as chair of the African Union (AU) commission; to mention a few. But for her surname, being that well-credentialled and experienced makes her fit for the job. And to have kept the name of her ex-husband suggests she is likely still fond of the wily Zulu man. Even so, Mr Zuma could probably still pull it off. But her rival for the top job, deputy president Cyril Ramaphosa, is leading in support at the party branches and would barring an act of God, likely become ANC president come December. Secondly, Mr Mugabe fired his major pillar of support hitherto, former vice-president Emmerson Mnangagwa (who is now set to become president). Thereafter, the powerful clique of army generals, war veterans and grandees in the ruling ZANU-PF party that hitherto enabled him decided they had had enough.

Sun must set
The remaining old men still lording over their people on the continent are not necessarily susceptible to Mr Mugabe’s folly. Mr Museveni perhaps shares his weakness, though. His fondness for his wife, Janet Museveni, who he appointed to the education ministry in June 2016, is well known: when a sharp-tongued female academic disparaged her, he made an example of her. Besides, he has appointed his son, Muhoozi Kainerugaba, whose sharp rise in the military he facilitated, as one of his special advisers. Time will tell. A potentially good thing to come out of the Mugabe debacle, though, is that these longtime and oft-insensitive African rulers might begin to be more empathetic and caring of their country men and women. Not that it would come from the bottom of their hearts. No matter. They will all soon die.