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Thursday 14th of January 2016 |
Morning Africa |
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Macro Thoughts |
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10-AUG-2015 “The end is nigh’’ for crude oil and oil producers from Caracas to Luanda, from Riyadh to Abuja Africa |
Oil based economies are going to contract, currencies which have already collapsed are going to be routed and Greek- style austerity will be the order of the day. The melt-down is coming.
Home Thoughts
Last Year my Eldest Daughter Aysha whom I adore endured a set back in her A Levels. It caught us all by surprise. Well she resat her Exams and yesterday we learnt she got an A Star, an A and a B. And we are so pleased.
And I told Aysha - ''Its not about who you are when you are up. Its how you stand up when you have fallen down''
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Obama's State of the Union Optimism at Odds With Voter Anxiety #SOTU @Potus [Thats called Leadership] Law & Politics |
In true Obama fashion, it was a call for hope over fear. He argued against the gloom dominating Republican campaign rhetoric.
If it sounded familiar, that’s because it contained echoes of the optimistic tone and unifying vision of the 2004 Democratic National Convention speech that thrust Obama onto the national stage.
Still, Obama’s valedictory report on the nation provided him a chance to brag. The auto industry “just had its best year ever," he reminded Americans. "Gas under two bucks a gallon ain’t bad, either.”
The U.S has gone from losing jobs at a rate of 800,000 a month when he took office after a financial crash to posting the biggest back-to-back annual employment gains in 2014 and 2015 since the boom years of the 1990s. The Standard & Poor’s 500 Index more than doubled and the jobless rate of 5 percent is close to what many economists consider full employment.
“Anyone claiming that America’s economy is in decline is peddling fiction,” he said in one of many pointed, if indirect, references to the rhetoric of the Republican presidential campaign field.
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South Korea Fires Warning Shots Over Border as Tensions Rise Law & Politics |
South Korea’s military fired warning shots after spotting an unidentified aerial vehicle approaching its heavily fortified border with North Korea, in the latest incident fueling tensions stemming from Pyongyang’s fourth nuclear test last week.
The device appeared around 2:10 p.m. local time, prompting the South Korean army to broadcast a warning, the Joint Chiefs of Staff in Seoul said in a text message. It returned northward immediately after the shots were fired.
“North Korea may be trying to raise anxiety among South Korean troops by deliberately letting them spot its drone,” said Kim Jin Moo, a North Korea researcher at South Korea’s state-run Korea Institute for Defense Analyses in Seoul. “If not, it could be part of a scouting mission before North Korea devises a plan to target South Korean loudspeakers.”
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"It’s a well-calculated target aimed at undermining Turkey’s tourism industry," said Oytun Orhan Law & Politics |
Tourism directly accounts for 4.7 percent of the economy compared with 7 percent in neighboring Greece, according to the World Travel and Tourism Council. The government plans to boost receipts to $35.5 billion by the end of 2017 from $31.5 billion last year.
German Foreign Minister Frank-Walter Steinmeier said eight of his countrymen were killed and another nine severely injured. “For many years, terror hasn’t impacted us Germans as it has today,” he said. “We need to clarify who the assailant is swiftly, and clarify the circumstances.”
"Every vulnerable emerging market has its idiosyncratic weaknesses,” Nicholas Spiro, managing director at Spiro Sovereign Strategy in London. “Turkey’s is the dramatic escalation in geopolitical risk which is plastered over TV screens and newspapers the world over and has a corrosive impact on sentiment."
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Zimbabwe declines comment on Mugabe health rumours Africa |
Zimbabwe President Robert Mugabe's spokesman declined to comment on Wednesday on rumours that the 91-year-old leader had suffered a heart attack, saying a response to the latest speculation about his health was "unnecessary".
Spokesman George Charamba's response was to a text message sent by Reuters asking for an update on Mugabe's health.
The online Zimbabwe news website Zim Eye (www.zimeye.net) published a letter on Tuesday by an anonymous author saying Mugabe was "reported to have collapsed after suffering a heart attack while on holiday with his family".
Conclusions
President Mugabe's Mother lived to over 100. His longevity DNA is not to be doubted
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Anxious times for Africa's oil giants as commodities boom starts to bust Guardian Africa |
As leaders of some African countries brace themselves for a rocky financial year, they might reflect ruefully on the words of Polish author Ryszard Kapuściński: “Oil is a resource that anaesthetises thought, blurs vision, corrupts.”
As the wheels come off a decade-long commodities supercycle, Africa’s oil-producing and metal-rich giants find themselves facing a dangerous mix of lower export revenues, depreciating currencies, declining financial flows from China, falling domestic demand and higher debt costs following last month’s US interest rate rise.
For the continent’s oil importers, there is a different story: lower prices mean more money for governments, and possibly cheaper goods.
For those on both sides of the oil coin, the first year of the new global development agenda – introduced with much fanfare in September – is a challenging start to a 15-year project to enshrine sustainable development in national policies across the globe.
The question is: have some African countries squandered their chance to invest in the building blocks of sustainable development, and is it now too late?
Since September 2014, the price of Brent crude oil, the global benchmark, has plummeted from around $100 (£70) a barrel to below $30 this week. Prices for other commodities, such as copper and zinc, have also fallen, mainly because of slowing demand in China, once hailed as the no-strings economic saviour for African countries tired of dealing with former colonial powers.
More than 80% of African exports are still linked to commodities, and particularly extractive industries.
“The commodities supercycle is dead in the water … It’s already sent some big African sub-Saharan economies into a tailspin,” said Aly Khan Satchu, an independent trader in Nairobi. “In Zambia, the currency has pretty much collapsed. If you put $100 in the Zambian market at the beginning of last year, at the end of the year, you would be taking out 14.” But Satchu remained bullish on east Africa.
“The sharply reduced oil prices have really improved the dynamics of the east African economies because we are still net oil importers … you are already seeing it improve the current account deficit in Tanzania and Kenya, and I think it’s going to provide some momentum to our economies,” he said.
In early January, the World Bank warned that a synchronised slowdown in the biggest emerging markets, the so-called Brics, could be intensified by a fresh bout of economic turmoil.
In its annual Global Economic Prospects, the bank said growth in developing countries reached a post-crisis low of 4.2% in 2015, down from 4.9% in 2014, and warned that 2016 could be another difficult year. In sub-Saharan Africa, growth slowed to 3.4% last year, and was expected to rise to 4.2% this year.
According to the International Monetary Fund, Africa’s real gross domestic product fell from 5% in 2014 to 3.7% in 2015 and is expected to climb to 4.3% this year.
Debt will be a problem. Some oil-producing African countries have accepted loans from China, and some of these are collateralised by oil priced at a level that is now just a fond memory. To add to their woes, the cost of their dollar-denominated debt is rising; the US Federal Reserve said December’s rate hike is just the start of a “gradual” tightening cycle.
Ibrahim Mayaki, the head of the New Partnership for Africa’s Development, said the sustainability of African debt is in question as repayment services – already a major portion of state budgets – look set to increase significantly.
“This will lead states to make tough choices, from the amputation of certain infrastructure investments to the postponement of social services,” Mayaki said, adding that he hoped these cuts would not affect investments vital for development, such as infrastructure and education.
“African governments will therefore have to steel themselves to diversify their financial resources and to reclaim industrial development policies,” Mayaki said.
This gloomy economic outlook will weigh on efforts to implement the sustainable development goals. At a financing meeting in Ethiopia last year, there was consensus that domestic resource mobilisation, as well as traditional aid and private finance, would be needed to turn the paper goals into real policies – at a cost of “trillions not billions”.
But as growth slows, tax revenues are likely to fall, particularly in oil-producing countries. For some governments, the problems have already started.
“Those countries that were just making it now have tipped over the edge because they are going to find it very expensive to borrow international money. They are being squeezed, they don’t have enough of a productive economy and also taxes will slow down very, very dramatically,” said Satchu.
Africa’s top oil producer, Nigeria, is facing pressure to devalue the naira, which has come under extreme pressure despite unorthodox monetary policies aimed at restricting the supply of dollars. Satchu says a devaluation is inevitable, and that the tough market conditions may force necessary policy changes.
“It’s an irony that Nigeria is sending any of its oil out to be refined only to import it back,” he said. “It’s definitely been a wake-up call. You find policymakers tend to make changes when their feet are held to the fire; this is the equivalent of having their feet held to the fire.”
Amadou Sy, director and senior fellow at the Brookings Institute’s Africa Growth Initiative, said African countries needed a two-pronged approach to accelerate growth: they need to implement macroeconomic policies to cope with external shocks, and stay the course in bringing in medium- to long-term structural policies.
“As the continent takes its first steps in meeting the sustainable development goals, it is crucial that it achieves faster and better quality economic growth … and relies on more engines of growth, such as agriculture and manufacturing, than exports of oil and other commodities,” he wrote in a recent report.
For Satchu, the hardest-hit African countries will be forced to call on the IMF for help in raising money on international markets, as oil-producer Ghana has already been forced to do.
“It’s really unprecedented the kind of pressure that policymakers are under and quite a lot of these guys are making a lot of idiotic and schoolboy errors,” he said, citing as an example the Zambian president’s call for prayer rallies for the country’s embattled currency.
“The room for error is no longer there, and mistakes will be badly punished.”
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Hunger Stalks Southern Africa as El Nino Decimates Harvests Africa |
The price of white corn, a staple, has more than doubled since the start of 2015, while the yellow variety that’s a base for animal feed has advanced 63 percent on the South African Futures Exchange. Both cereals have traded at record highs this month.
“It’s Zimbabwe,” he said. “I don’t know if it’s God or the ancestors, but it seems to me that we’re being made to suffer disaster after disaster after disaster. Perhaps we are being punished.”
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Angola: The War On Social Media and the Trial of Activists Africa |
Following the president's outline of his war on social media, Judge Januário Domingos is making history by being the first to hear a case of a political joke on Facebook that has displeased the regime.
Yesterday, the judge of the Luanda Provincial Court questioned a Catholic priest, Father Jacinto Pio Wakussanga, for being part of an imaginary government, generated in a playful Facebook discussion, as the head of the National Electoral Commission. In court, the priest told the judge that he had heard through social media about this imaginary government and thought it was just a joke.
Last May, a lawyer Albano Pedro set up an open online forum on his Facebook page to entice discussants to come up with names for what would be an ideal government of national salvation. The leader of the millennial religious sect "The Light of the Day", José Julino Kalupeteka, who has been in jail since last April, was chosen by the participants as president of the Republic. On April 16, 2015, police and military forces massacred Kalupeteka's faithful, after he resisted arrest in the Central Highland Province of Huambo.
South Africa All Share Bloomberg -4.5% 2016 http://www.bloomberg.com/quote/JALSH:IND
48,412.80 -16.62 -0.03%
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Egypt Pound versus The Dollar 3 Month Chart INO 7.83 Africa |
Egypt EGX30 Bloomberg -11.43% 2016 http://www.bloomberg.com/quote/CASE:IND
6,205.23 -258.69 -4.00%
President Buhari and the Anxious Expectations of Nigerians http://www.counterpunch.org/2016/01/13/president-buhari-and-the-anxious-expectations-of-nigerians/
The passing away of 2015 did not go away quietly. At the tail end of that year, Nigerians were entertained with a sad comedy of Abuja profligate monoculture of graft and corruption in high places. We read through confessions of how Nigeria’s petrol wealth was squandered to indulge the appetite of few avaricious and greed-driven elite and their systemic stripping of this nation’s money among themselves. The repulsive evil of corruption was exposed and its fall out of class collaboration and collusion astounded our sense of moral indignation and national pride. It was the first time Nigerians will see a sitting president who took on the fight against corruption, not as a lip service, but as an obsessive cause worth dying for.
The mantra of CHANGE which has remained the slogan for the redemption of Nigeria acquired more force, and along its tortuous journey, nationwide support of Nigerians for the evolving vision of President Mohammadu Buhari. However, the overwhelming support for President Buhari from most Western nations, to Ms Christine Lagarde, the IMF Managing Director, to the man in the streets is not without its own condition: get Nigeria out of trouble and calm the anxious expectations of Nigerians with the fierce urgency it requires.
Nigerian Stock Exchange All Share Index fell 3.3 percent on Wednesday to 25,186.34 by 1:11 p.m. in Lagos, the lowest level since September 2012 http://www.bloomberg.com/news/articles/2016-01-13/nigerian-stocks-fall-into-correction-as-oil-plunge-dims-outlook
Nigerian Stock Exchange All Share Index fell 3.3 percent on Wednesday to 25,186.34 by 1:11 p.m. in Lagos, the lowest level since September 2012 and the most among 93 global indexes tracked by Bloomberg after Egypt. The measure is down 12 percent since the previous peak on Dec. 31, more than the 10 percent drop that indicates a market correction.
Nigeria All Share Bloomberg -12.36% 2016 http://www.bloomberg.com/quote/NGSEINDX:IND
25,103.0 -931.88 -3.58%
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US denies direct support for Kenya’s oil pipeline Kenyan Bonds - Long Term |
In a statement on Wednesday, the US said that Mr Godec did not say that the US government would help finance the construction of the pipeline.
“He expressed support for a proposal by a consortium of American companies to participate in the Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) Corridor Project, which conceptually includes an oil pipeline component,” said the statement.
Godec is then quoted as mentioning in a January 5 meeting with Energy and Petroleum Cabinet Secretary Charles Keter that “a Power Africa analysis indicates that Kenya will need $14-18 billion to finance renewable energy power development, and not a pipeline.”
A US publication, the Wall Street Journal on January 10 raised questions on whether US taxpayers will allow their money to be spent in Kenya.
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Kenya is run by mafia-style cartels, says chief justice Kenyan Economy |
Speaking to a Dutch newspaper, Willy Mutunga claimed organised crime stretched across all of Kenyan society and had “never been worse”.
“The influence of the cartels is overwhelming,” he said. “They are doing illegal business with politicians. If we do not fight [them], we become their slaves.”
As president of Kenya’s supreme court, Mutunga admitted the legal system was ill-equipped to tackle the problem. “You are taking these people into a corrupt investigating system, through a corrupt anti-corruption system, and a corrupt judiciary,” he said.
“In Kenya, the counterfeit economy is worth $1.2bn annually according to the Kenya Association of Manufacturers. It has got involved in supporting politicians in a big way,” he claimed.
Citing a recent publication by Journalists for Justice exposing the Kenyan army’s links to Islamist group al-Shabaab in the Somali port of Kismayo, Mutunga said the government had become closely tied up in illegal trading.
“When a racket as in Kismayo prevails, what is the role of the state?” he asked.
“The connection between cartels and politicians must be broken... The status quo is deeply rooted, but there comes a time when the leaders have to say ‘and now we fight it out’,” Mutunga said.
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