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King Abdullah's friends in the West stayed loyal, but revolution is on the horizon in Saudi Arabia @Independent
Law & Politics
King Abdullah died at 90. He had outlived two other crown princes. His
successor Salman is already 79 and cannot expect to survive much more
than a decade. And at 69, the new Crown Prince Muqrin is no spring
chicken. Can these old folk go on ruling one of the richest nations on
earth without a revolution?
Abdullah was rightly fearful of the Arab revolutions in 2011, sending
his troops to crush Shia dissent in Bahrain while promising to throw
almost £300bn in education grants, new infrastructure, public housing
and unemployment benefits at his own people to buy their quiescence.
But age is withering the monarchy. The last direct family of the
Kingdom’s founder are now growing older – Crown Prince Muqrin is
himself the youngest surviving son of King Abdulaziz – and the
revolution that threatens the monarchy will not come from Iran. Nor
from Saudi Arabia’s own Shia minority, nor the country’s armed
Wahhabists. It will come from within the royal family.
Currency Markets at a Glance WSJ
Euro 1.1176 The euro fell 0.4 percent to $1.1163 at 11:45 a.m. in
Tokyo after sliding to $1.1098, the weakest level since September
Dollar Index 94.99
Japan Yen 117.57 The yen was also supported after a finance ministry
report today showed Japan’s exports rose to the highest level in six
Swiss Franc 0.8790
Aussie 0.7882 The Aussie slid 0.3 percent to 78.86 U.S cents, after
earlier touching 78.55, the lowest since July 2009
India Rupee 61.425
South Korea Won 1080.42 The won rose 0.4 percent to 1,080.01 per
dollar, the best performer among 16 major currencies tracked by
Brazil Real 2.5802
Egypt Pound 7.4006
South Africa Rand 11.4161
The euro has tumbled 6.2 percent during the past month, the worst
performer of 10 developed-nation currencies tracked by Bloomberg
Correlation-Weighted Indexes. The yen rose 5.9 percent, the best
performance, while the dollar gained 3.4 percent.
The loonie tumbled 3.5 percent to $1.2420 and touched $1.2456, the
lowest since April 2009.
The kiwi dropped 4.4 percent to 74.50 U.S. cents and touched 74.32,
the least since November 2011.
The Aussie fell 3.8 percent to 79.12 U.S. cents after earlier dropping
to 78.81, the lowest since July 2009.
Bloomberg’s gauge of the dollar climbed a sixth day, the longest
streak since September, on prospects the U.S. economy will outperform
those of Europe and Japan as the Fed moves to become the first major
central bank to raise interest rates later this year. It sets policy
The chance of a Fed interest-rate increase by its October meeting was
at 51 percent, futures data show, down from 72 percent at the end of
2014. The central bank has kept its target for the federal funds rate
at zero to 0.25 percent since 2008.
Record high Chinese imports of Russian oil in 2014
Chinese imports of oil from major OPEC countries fell last year, while
the purchases of Russian oil saw a record increase, said the Chinese
General Administration of Customs. It is part of Chinese plans to
diversify its oil sources.
Last year, the share of Saudi oil in the Chinese market fell 8 percent
and the volume from Venezuela dropped 11 percent (below 20 million
tons), while the share of Russian oil leapt 36 percent, the equivalent
to 665,000 barrels a day, General Administration of Customs said
Friday in a report.
Saudi Arabia remains China’s largest supplier with 49.67 million tons
of exports in 2014, or 997,000 barrels a day, the least since 2010.
Russia surpassed Oman as China’s third-largest supplier in 2014 and
sold crude roughly at $103 a barrel, according to the customs data.
The agreement with Rosneft signed in 2013 could make China Russia’s
biggest crude export market by 2018. Oil flows to China through the
East Siberia-Pacific Ocean pipeline which could increase supplies to
20 million tons a year by 2017.
Rosneft obtained $2 billion in loans from the China Development Bank
and advanced payment for part of the oil deliveries.The flow of
Russian oil to China may exceed 50 million tons annually by 2020, Wood
Mackenzie’s Sushant Gupta told The Wall Street Journal.
“China’s surging imports from Russia is mostly a reflection of their
oil supply contracts that would continue to grow for decades to come,”
Gao Jian, an analyst at SCI International, a Shandong-based energy
consultant, told Bloomberg. “China is already on track to diversify
crude purchases and with its oil demand stabilizing, imports from its
traditional suppliers will be displaced.”
By purchasing more oil from Russia, China reduces dependence on
maritime oil supplies from the Middle East that is subject to
interruptions due to the weather.
In November 2014, Saudi Arabia significantly reduced its official
price to Asian buyers to its lowest since 2008. The move was made to
keep market share in the region with the fastest growing demand.
December cargoes were sold at $75 a barrel, and that’s compared with
the full-year average of $101.50.
Spain negotiates permanent US Marines Africa force
The US force was first stationed at Moron in April 2013 in the wake of
a deadly attack on the US consulate in Benghazi, Libya the previous
year. Its temporary status was renewed last year.
Its duties in Africa include protecting embassies, rescuing military
personnel and evacuating civilians or intervening in conflicts and
The force is made up of 800 Marines plus air support, including MV-22
Osprey vertical take-off transport planes.
The contingent aims to strengthen vigilance in "an area that is a top
security priority for our partners and neighbours but also for Spain",
The US has a decisive Hard Power Advantage in Africa.
US warplanes are seen at the Moron de la Frontera air base, on March 18, 2011, near Sevilla, Spain @AFP
Zambia’s Lungu Wins Presidential Vote as Opposition Objects
Lungu, 58, got 48.3 percent of the votes against the United Party for
National Development leader Hakainde Hichilema’s 46.7 percent, Irene
Mambilima, chairwoman of the Electoral Commission of Zambia, told
reporters in the capital, Lusaka. The polls that began on Jan. 20 were
hampered by torrential rains that contributed to a low turnout.
Edgar Lungu was sworn in as Zambian president Sunday at a tricky time in Africa’s second-biggest copper producer.
He starts his job with prices for the metal close to six-year lows,
the economy growing at its slowest pace in 12 years, and mining
companies threatening to close operations because of a new tax system
implemented this month that they say is unsustainable. In addition,
Lungu has only about a year and a half before the next general
elections are due.
“It’s a very delicate time,” Isaac Ngoma, president of the Economics
Association of Zambia, said by phone Sunday in the capital, Lusaka.
“The economy has not performed as expected, we’ve had serious
challenges on the fiscal side and revenue inflows have been
constrained. This could get worse if the mining sector takes a
“There will therefore be a need not only for belt tightening but for a
radical re-thinking of the way we do things,” he told a near capacity
crowd at a 50,000-seat stadium during his inauguration speech Sunday
in Lusaka. “It cannot be business as usual.”
THURSDAY, JANUARY 22, 2015 Protests in Kinshasa: Why this time it's different @jasonkstearns
The past three days has seen the worst protests in Kinshasa since the
controversial elections three years ago. The violence was sparked by a
proposed electoral law that links the electoral process to the census,
which could delay national elections by several years and illegally
prolong President Kabila's stay in power (he has to step down in
Dozens of protesters have been killed (42, according to FIDH, 20
according to HRW) by the police and presidential guard units, and the
government briefly shut down internet, social media, and SMS services
across the whole country. Violent protests were also reported in the
eastern cities of Bukavu and Goma.
While violence continued in Goma on Thursday, the streets of Kinshasa
were calmer and internet service (albeit very slow) had been
re-established. The senate met today, but President Kengo wa Dondo
said he would give the Political, Administrative, and Legal Commission
more time to debate the law before voting tomorrow.
Will this just be like protests in 2011 and 2012, when despite
blatantly rigged elections, protests fizzled out in the face of severe
repression? (An essay I wrote about this here). While I think this
round of protests is indeed likely to dwindle, there are different
1. Splits within the elite: This is the big change in the past
year––not the street protests, but divisions among elites. As Jack
Goldstone, an expert on mass mobilization, suggests: "It is a truism
that fiscally and militarily sound states that enjoy the support of
united elites are largely invulnerable to revolution from below."
That unity now appears to be cracking. The main reason for that is
Kabila's term limits. Members of his presidential coalition (including
stalwarts like Pierre Lumbi, Olivier Kamitatu, Christophe Lutundula,
and Kengo wa Dondo) have all come out publicly against constitutional
revisions. More importantly, the governor of mineral-rich Katanga,
Moise Katumbi, seems to be parting ways with Kabila, and could rally
Katangan heavyweights like Kyungu wa Kumwanza behind him. That would
strike Kabila, who is from Katanga, at the heart of his political and
military power base, and poses a security threat unlike any of the
current opposition members. Kabila has now backed off a constitutional
change to his term limits and seems to be opting for a strategie de
glissement (i.e. playing for time). That was the purpose of the
proposed electoral law. It now remains to be seen whether this
approach––in other words, giving Kabila a few more years in
power––will provoke similar internal dissent as constitutional
2. A changing protest dynamic: In 2011, the protests centered around
UDPS strongholds in Kinshasa––Limete and Masina, in particular. This
time, the UDPS leader Etienne Tshisekedi––who has been in medical
treatment in Brussels for months––waited until Tuesday afternoon to
weigh in on the protests, and his secretary-general in Kinshasa did
not initially throw his weight behind protests organized by other
Instead, students are now playing a much more important role than in
2011. The epicenter of the protests has been at the University of
Kinshasa (UNIKIN), which has been stormed by presidential guards and
police. There are over 30,000 students at the university, and hundreds
of thousands of students across the country. In Bukavu, too,
university students were at the forefront of demonstrations organized
yesterday. In the past, the political fervor of university campuses
has often been tempered when student bodies have been co-opted by
political elites. This time that seems to be different.
In general, the protests seems to be more decentralized, lacking one
single leader or political organization. Some have also remarked that
the relative absence of Tshisekedi and the rise of easterners such as
Moise Katumbi and Vital Kamerhe has papered over ethnic tensions that
sometimes divide protestors.
The protests also appear to be more targeted: Protesters have attacked
Transco buses, which were purchased by the government, looted the
office of the head of Kabila's PPRDD party, Evariste Boshab, and were
beginning an operation called "Toyebi Ndako" (We Know Your House")
that aimed at picketing the houses of MP belonging to Kabila's
coalition. Of course, some of the protests also degenerated into
3. The rise of social media: There is a reason why the government shut
down internet and social media across the country. Smart phone
ownership has been exploding in the Congo. In the past days, we have
seen pictures and videos emerge from across the country of police and
presidential guard members firing on protesters. Some of the pictures
can be found on this opposition site (warning: some are graphic),
others are posted with the hashtag #telema ("stand up") on Twitter. An
audio recording of police orders to fire on students has been posted
(analysts Jean-Jacques Wondo argues this is police General Célestin
Kanyama), and YouTube has been very active (a compilation of amateur
So where will this end? It is still unclear. The senate may decide to
water down the electoral law, and even take out the controversial
language linking the electoral process to the census. Or the backers
of the bill could try to steamroll the current version through senate
with bribes and threats.
In any case, the fate of the protests lies both in the streets as well
as in the political stratosphere.
Congo’s Senate Rules Out Census Before Vote After Protests
“We’ve responded to the street,” Senate President Leon Kengo wa Dondo
said after the vote. “We’ve discarded the census and identification so
that we can move towards good elections in peace and so we can respect
the constitutional timetable and our laws.”
Kabila, who came to power after his father Laurent was killed in 2001,
was first elected in 2006 and again in a disputed election in 2011.
The constitution bars him from running for a third term.
Protests against the law erupted on Jan. 19 in the capital, Kinshasa,
and other cities and towns including Goma, capital of the mineral-rich
North Kivu province in eastern Congo. The government suspended
Internet and mobile-phone text-message services to try and curb the
"We are not forum shopping," he insisted.
While Kenyan and Tanzanian leaders hailed the Swiss-funded Arusha
meeting as a "new dawn," Troika diplomats were more reserved. In a
curt acknowledgment of the process their statement says merely, "We
recognize the recent agreement in Arusha, Tanzania to reconcile the
Speaking to Radio Tamazuj, a diplomatic source from a Western country
referred to the Arusha deal as "a mostly meaningless agreement." The
source also pointed out that the involved heads of state only attended
a signing ceremony, rather than actual deliberations, as contrasted to
the IGAD-led process in which Ethiopia's prime minister has been
directly involved in negotiations.
Africa Debt Rising Africa Research Institute
An implicit assumption prevails that there is little danger of African
countries going bust. While there is no immediate likelihood of
widespread sovereign default, the nature and consequences of financial
mismanagement in Ghana – a flag-bearer for the “Africa rising”
narrative – should not be ignored. Debt levels do not have to match
those of developed economies to trigger an economic crisis.
South Africa All Share Bloomberg +0.18% 2015
49,816.57 -56.12 -0.11%
The rand was little changed at 11.4008 per dollar, bringing its 2015
increase to 0.9 percent. Rates on rand-denominated notes due December
2026 tumbled to the lowest level since May 2013, falling 80 basis
points this year to 7.17 percent.
Dollar versus Rand 6 Month Chart INO 11.4189
Egypt Pound versus The Dollar 3 Month Chart INO 7.4006
Egypt EGX30 Bloomberg +10.93% 2015
9,898.86 +42.56 +0.43%
.@JohnKerry Breaking with Custom to Visit Nigeria Ahead of Vote
The top U.S. diplomat will meet the rival presidential candidates --
incumbent Goodluck Jonathan and former military dictator Muhammadu
Buhari -- to urge that they accept the results of the Feb. 14 poll and
instruct their supporters to refrain from violence, said the
officials, who asked not to be named under department protocol.
While President Barack Obama’s administration believes Nigeria is
ready to hold the election as scheduled, it has seen signs of a
potential repeat of deadly post-election riots in 2011, they said in a
briefing in Zurich.
Nigeria All Share Bloomberg -13.98% 2015
29,812.05 +124.12 +0.42%
The gauge is down 14 percent this year, the most among 93 primary
global indexes tracked by Bloomberg.
The naira retreated for a second straight week as measures taken by
Nigeria’s central bank failed to stop the decline of a currency
battered by falling oil prices.
It depreciated 3.3 percent in the past five days, bringing its
two-week decline to 6.5 percent, the most among the 24 African
currencies tracked by Bloomberg. It swung between gains and losses on
Friday, advancing as much as 4.4 percent and weakening 0.7 percent.
“The United States needs to recognize we have a problem that’s second
only to the problem we have with ISIS (Islamic State),” said J. Peter
“The United States needs to recognize we have a problem that’s second
only to the problem we have with ISIS (Islamic State),” said J. Peter
Pham, director of the Africa program at the Atlantic Council, a
Washington think tank. “We have a group holding territory and shooting
down jet fighters. . If Nigeria collapses — it is the strong state in
the region — there are no strong states to contain what would happen
if Boko Haram succeeds in carving out an Islamic state in that area.”
Ghana Stock Exchange Composite Index Bloomberg -3.44% 2015
Foreign investment in Africa A sub-Saharan scramble @Economist
WHEN Paul Kavuma began approaching private companies in Africa a
decade ago to suggest investing in their businesses and improving the
way they were run, he was often shown the door. “They were offended,
asking if I thought they were broke,” says the founder of Catalyst
Principal Partners, an east Africa-focused fund manager. Even when,
after hours of explaining the merits of private equity, Mr Kavuma
changed business owners’ minds, many still struggled with the idea
that within a few years he would sell the stake he had bought. “When
we exited, some people thought we had lost confidence in them, rather
than that we’d finished what we’d come to do,” he says.
Today, much has changed. African entrepreneurs now boast about being
approached by one of the many private-equity investors scouring the
continent for opportunities. And it is the financiers, or at least
those from beyond Africa, who are having to adapt. Money managers on
Wall Street and in the City of London are taking crash courses in
Swahili and learning to find Ouagadougou on a map.
A few years ago people would ask “Why the hell are you in Africa?”
says Robert van Zwieten of EMPEA, an industry body. Now they ask “Why
the hell aren’t you?”
Despite the recent flurry of fund-raising, only about 1% of global
private equity goes to Africa.
26-JAN-2015 Kenyan Asset Markets have been Displaying a lot of Alpha
AFRICA is now more interconnected to the world than ever before. The
mobile phone has been a silver bullet in connecting Africans to each
other and the world. The side effects of this increased and even hyper
connectivity in our cities is, I believe, directly responsible for
events in Ouagadougou, Burkina Faso, and now in Kinshasa, Democratic
Republic of the Congo. In Kinshasa, the Senate president Leon Kengo wa
Dondo said after the vote to discard the proposed census that:
“We have responded to the street.”
What is clear to me is that the street has a voice and has muscle.
This is a new development, in my opinion.
Returning to the theme of interconnectedness, the world’s third
sharpest oil price collapse since World War II has created some seri-
ous blowback across sub-Saharan Africa. The International Monetary
Fund released its latest World Eco- nomic Outlook in which it
downgraded SSA’s GDP growth forecast for 2015 to 4.9 per cent from 5.8
per cent previously, and 5.2 per cent for 2016 from six per cent in a
past projection. That’s a chunky downsizing. The IMF cut Nigeria’s
2015 GDP growth projection to 4.8 per cent from a previous forecast of
a massive expansion of 7.3 per cent. Nigeria [and Angola and South
Sudan] are at the bleeding edge of the global oil price collapse. The
Nigerian stock market is the worst performing index world- wide bar
none in 2015. The country’s Central Bank has a finger in the ‘Dyke
Strategy’ with the naira and there is a tsunami coming. The big story
about Nigeria is very much intact, but at this moment, buying Nigeria
is like trying to catch a knife. Until the oil price stabilises, and
there is absolutely no sign of that, Nigeria – like Russia, Venezuela,
Canada and Angola – remains a ‘sell’. This is a fact of life and the
markets. By the way, Nigerian Eurobonds trade substantially higher
I am not sure we have properly internalised how the new price normal
[$50 per barrel or less for the next 24 months] changes the dynamics
and timing around Kenya’s oil resource. Essentially, at the very
least, we have a 48-60 months delay in our original best estimates
before extraction begins. Buyers of our $2.75 billion of Eurobonds and
others were expecting a shorter time-line. We need to reconfigure our
plans to factor in the delay.
As an importer of petroleum, the sharply reduced price will provide a
significant stimulus to our economy. It is very ‘grassroots’ because
everyone buys fuel. This, combined with lower food prices [oil is a
leader in this regard], will juice the economy meaningfully. The
Jubilee government will owe a big vote of thanks to US President
Barrack Obama, the 21st century oil war specialist, for wrestling the
price below $50 a barrel because these are exactly the right
ingredients for creating the ‘feel-good’ factor. It was Pradeep
Paunrana, chairman of the Kenya Association of Manufacturers, who drew
a parallel of the current events with the 2006/2007 period. You will
recall that in the fourth quarter 2007, Kenya grew at its fastest pace
since independence. The boom [which came horribly unstuck in 2008]
then was built on the back of low fuel and food prices and the
wananchi having some money in their pocket. If more than 41 million
Kenyans have an extra dollar a day in their pockets, on average, I
venture this will represent a meaningful boost. However, transmission
of the low oil price is lagging big time still, but it will catch up.
The sharp underperformance in Nigeria is sending portfolio inflows
that were aimed at the West of Africa to the East [Nairobi]. The South
[Johannesburg] had a very good run last week and it is ex- pected that
some of Draghi’s ‘free money’ will flow into South Africa.
The Nairobi All-Share has posted a very solid 2.3 per cent return in
January. It has been a story of continued big capitalisation stocks’
strength, but previously bombed out shares have staged a come- back,
with Mumias Sugar 33.3 per cent up in 2015. Kenya Airways has rallied
13.8 per cent over the same period.
In a world of extraordinary moves, from the Swiss franc spinning into
orbit, to the euro diving off a cliff [going to 1.00 versus the
dollar], Kenyan asset markets have been displaying a lot of alpha.
Fitch Affirms Kenya at 'B+'; Outlook Stable @Reuters
The Ministry of Finance has announced that it now forecasts a deficit
of 8.7% of GDP for FY15, up from 7.4% (or 6.2% of re-based GDP)
announced at the time of the budget in June 2014. The revision is due
to spending on a single-gauge railway project, which is estimated to
cost USD3.8bn (or 5.5% of GDP) as well as revenue underperformance.
Fitch expects a deficit of 7.8% of GDP for FY15, due to on-going
challenges associated with implementing large-scale infrastructure
projects. Widening fiscal balances have pushed the debt-to-GDP ratio
above the 'B' median. Fitch expects government debt to rise to 51.2%
of GDP by FY16, from 43.3% in FY13 and 36.9% in FY08. The increase
reflects significant new debt incurred to fund infrastructure as well
as a steady loosening in fiscal policy since the global financial
crisis. While current debt levels are not unsustainable, Fitch
highlights the risk of increased reliance on commercial debt, high
carry costs if shovel-ready projects are not available, as well as
repayment risk posed by large issue sizes.
17-NOV-2014 the new challenge is execution
In ‘Scarface ‘ a 1983 film directed by Brian De Palma, Tony Montana
(Al Pacino) says to his Boss, Frank Lopez:
You short a couple of million,
I go on the street for you.
I make a couple of moves...
...a million here, a million there,
you got it.
The availability of cash as evidenced by the more than four times
oversubscription of our Eurobond
Now as we leverage Kenya Inc’s balance sheet, the new challenge is execution
Execution is all about making sure the money is spent on what it was
meant to be spent on and that there is reduced ‘’slippage’’