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14-NOV-2016 a populist wave or zeitgeist which has now swept the United Kingdom and the US and has Italy (where Matteo Renzi has called for a Referendum) in its crosshairs
The result in the US mimicked the Brexit result and what is clear to
me is that we are watching a populist wave or zeitgeist (some have
characterised it as a ‘’whitelash’’) which has now swept the United
Kingdom and the US and has Italy (where Matteo Renzi has called for a
Referendum), France (where Marine Le Pen is the most popular
politician by a street) and the Netherlands all in its crosshairs.
Comic-turned-politician Beppe Grillo, co-founder of Five Star, said
“ This is the deflagration of an epoch. It’s the apocalypse of this
information system, of the TVs, of the big newspapers, of the
intellectuals, of the journalists.”
And this is another important point, traditional media has lost its
position of control. It’s been upended by the internet which allowed
insurgent politics to broadcast over the top.
Here’s some good news: The world’s poorest consumers will get richer.
It’s a bet that is already enriching a top performing emerging markets
fund in Norway.
Betting on a new consumer class in frontier markets such as Kenya,
Tanzania and Vietnam, has given the Holberg Rurik a return of 30
percent, in dollars, over the past five years. That’s better than 91
percent of its peers, according to data compiled by Bloomberg.
“They are in an early growth phase, in their most attractive economic
phase through history,” Leif Anders Fronningen, who manages the 420
million-krone ($49 million) fund at Holberg Fondsforvaltning AS, said
in an interview in Oslo on Tuesday. “They’re smaller markets so there
are fewer investors that look at them. You combine higher growth with
Holberg’s dive into some of the world’s poorest nations has allowed it
to skirt a broader drop in more mature emerging markets. Stocks in
many developing economies have been dragged down by falling commodity
prices and high debt levels. The MSCI Emerging Markets Index, Holberg
Rurik’s benchmark, is down 9 percent over the past five years while
the MSCI frontier index is down 1.4 percent.
One of the measures 34-year-old Fronningen and his partner, Harald
Jermiassen, look at is credit penetration, or how much debt there is
in an economy. In many African countries, debt growth has just
started, while the “race is finished” in countries such as Turkey and
South Africa, he said.
Capturing that growth means investing in high quality, capital-light
companies. Typically, the fund finds three to four companies per
country after a “tough screening process” and now holds a concentrated
portfolio of 25 to 30 “high conviction” cases. Nigerian lender
Guaranty Trust Bank Plc, Naspers Ltd., and Vietnam Dairy Products JSC
are among the biggest holdings.
“We position ourselves for consumption, the domestic demand in the
fastest growing economies,” he said. “Good companies that are exposed
to the story about the growing middle class.”
Delaying Democracy in the Democratic Republic of Congo STRATFOR
If the international aid flowing to the Democratic Republic of the
Congo dries up, it could upset the precarious political balance the
government has worked to maintain.
Congolese President Joseph Kabila has intentionally adopted an opaque
political strategy toward the approaching presidential election to
throw the opposition into disarray.
The president's intentions, however, will become clear in the months
ahead, informing the reactions of his opponents at home and abroad.
Over the past few years, abolishing constitutional term limits has
become a popular tactic among African leaders hoping to stay in
office. But Joseph Kabila, the president of the Democratic Republic of
the Congo, has proved an exception — at least so far. Having held
power since the 2001 assassination of his father, Laurent Kabila, the
president has reached the maximum number of terms allowed by Congolese
law. Faced with the prospect of being forced to relinquish his post,
Kabila has chosen to postpone the next presidential election on the
pretext of addressing problems with voter registration and funding. On
Oct. 17, the country's constitutional court approved a petition to
delay the vote, originally slated for November, to April 2018. The
measure builds on an earlier ruling that the president could stay in
office until the election takes place.
With nearly a year and a half tacked onto his term, it is unclear what
Kabila's next move will be. He has not tried to amend the
constitution, though he has floated the idea before, and he has
studiously avoided the question of whether he will try to stay in
office. By all appearances, his strategy appears to be to hide his
true intentions to catch his rivals off guard and to avoid upsetting
the fragile political balance of his inherently unstable country.
A House of Cards
Even in the best of circumstances, the Congo is a weak country prone
to fragmentation. The largely landlocked terrain enclosed within its
borders is nearly the same size as Western Europe and is difficult to
navigate. Since gaining its independence from Belgium in 1960, the
Congo has been plagued by political power struggles and rebellions,
and none of its governments have willingly ceded power to their
successors. The country's valuable but unexploited natural resources
have only exacerbated these problems. Meanwhile, its expansive,
far-flung regions and weak central government have yielded a fractious
society riven by communal rivalry. As a result, the Congo's neighbors
have repeatedly intervened in the country to protect their own
security interests, while many Congolese communities have taken
security into their own hands by setting up local militias known as
the Mai-Mai. Each of these factors has made it difficult for Kinshasa
to strengthen its grip over the country.
Kabila, like his predecessors, is no stranger to the challenge of
trying to govern the Congo effectively while keeping political rivals
at bay. Withholding government resources does little to quash dissent,
in part because the country's regions are fairly self-sufficient and
in part because the president has few means of enforcing his writ
beyond the capital. This has made room for plots and rebellions to
fester in the Congo's ungovernable spaces. Instead, Kabila has had to
take a different approach, granting more autonomy to the provinces
than ever before seen, particularly compared with President Mobutu
Sese Seko's reign in 1965-1997. Nevertheless, the Congo's persistent
problems have fueled instability in Central Africa, forcing nearby
Rwanda, Uganda and Angola to periodically wade into the conflict over
the past two decades to safeguard their own security.
Kabila's motives may be rooted, at least in part, in his age. At 45
years old, he is younger than most other African heads of state by
several decades (he assumed office at the age of 29). Moreover,
political assassinations are not unheard of in the Congo, as evidenced
by the killing of Kabila's father in 2001. The president no doubt
realizes that political security is physical security and that staying
in office increases the safety of himself and those around him from
With such a weak hand, the president has worked tirelessly to maintain
a balance among the divergent interest groups that put his father in
power and that undergird his own political standing. Laurent Kabila
rose to prominence as the rebel leader who managed to capture the
capital from the collapsing Mobutu government, and the militant
outfits that made up the elder Kabila's forces still form a key
component of his son's power base. Kabila has worked to integrate
these units and other rebel groups into the Congolese army, but it has
proved a challenging endeavor: Several factions have quit the
arrangement, only to rejoin when their rebellions fail. The president
has responded by shuffling commanders around the country to prevent
any single faction from using the military to strengthen itself. The
precarious arrangement has left Kabila with a loose grip on the
military at best.
So far Kabila has managed to keep his position in power, in spite of
the opposition to his rule that has mounted throughout the year. But
the system underpinning his presidency is fragile, and when he chooses
to broadcast his intention to stay in office, it could be put to the
test once again. Already, the announcement of his plan to postpone the
next election has sparked protests followed by harsh crackdowns in
many cities, including Kinshasa. The demonstrations, however, have not
been nearly destabilizing enough for him to reconsider his plan,
especially since the government still holds a significant advantage
over the country's opposition.
At this point, it is difficult to tell whether Kabila aims to hold
onto power beyond 2018. He has intentionally hidden his plans for fear
of giving the opposition a reason to unite against him. Whatever his
true motives are, they will determine not only his actions but also
those of his rivals. In all likelihood, the situation will play out in
one of four ways. First, Kabila could try to delay the election yet
again, with the justification that the electoral commission failed to
register enough voters ahead of the April 2018 vote. This would extend
his rule indefinitely and deal a serious blow to the country's
democratic system. Such a move could compel the country's political
factions to realign in order to check Kabila's power, likely leading
to even greater instability — especially if Kabila is unable or
unwilling to cede some influence in exchange for their support. A
realignment of this sort is particularly risky since it could occur
within the fractured but influential military, rather than among the
opposition. Another possibility is that the president may be trying to
shape the political environment in a way that allows him to hand off
power to a trusted member of his inner circle. This would give Kabila
an exit, but it may not mitigate the long-term threats to his safety
if he decides to forgo exile and stay in the country.
A third possibility is that the president may believe his gamble will
eventually pay off. To date, his decision to delay the election until
April 2018 has had few real repercussions for his government beyond
ineffective (if bloody) protests, and the Congolese opposition has
struggled to mount a serious challenge to his reign. Kabila could yet
try to amend the term limits put forth in the country's constitution;
he and his supporters have raised the issue several times before.
Though such a move would almost certainly unite the fractured
opposition to a level previously unseen, Kabila may be willing to
accept the risks associated with a stronger opposition. Alternatively,
Kabila may simply have no end game and has delayed the election to buy
more time to decide his next move.
In the months ahead, several factors could signal that trouble is
brewing for Kabila. The Congo relies heavily on international aid,
which amounts to over $2 billion a year. Should frequent and deadly
protests continue, they might give donors pause. This would be
disastrous for Kabila, who would have trouble funneling patronage to
his supporters and keeping basic services running for countless
Congolese citizens. (The latter explains why international donors are
generally resistant to cutting aid.) The former, in turn, could spur
defections and fragmentation, a particularly concerning prospect if
military units peel off to form their own rebel outfits. Should the
lack of funding undermine the work of the U.N. Organization
Stabilization Mission in the Democratic Republic of the Congo, it
could also open new power vacuums in the country's hinterlands.
Certain actors in the Congo and its surrounding region will also bear
watching. The Roman Catholic Church, to which 35 percent of Congolese
citizens belong and from which a significant share of the population
has received its education, wields a considerable amount of influence
in the Congo. If it or the opposition stoke popular anger, protests
against Kabila could intensify. Pressure against the president could
likewise increase if Moise Katumbi (a young and charismatic opposition
candidate) and Etienne Tshisekedi (a longtime opposition figure) join
forces. Though the two have struggled to find common ground this year,
their alliance could create headaches for the Kabila administration.
Farther afield, Rwanda and Uganda have long opposed Kabila's rule by
backing rebellions in the Congo's eastern regions, just as Angola and
South Africa have long supported it. Signs that any of these actors
are renewing their interest in the Congo could herald change to come
in the country's political order.
Much still needs to be settled in the months ahead. But regardless of
how events unfold, the next year and a half will almost certainly be
turbulent for Kabila and his volatile nation.
May 2015 '"The revolutionary contingent attains its ideal form not in the place of production, but in the street'"
PAUL Virilio (born 1932) is a French cultural theorist and urbanist.
In his book ‘Speed and Politics’ he says: “The revolutionary
contingent attains its ideal form not in the place of production, but
in the street, where for a moment it stops being a cog in the
technical machine and itself becomes a motor (machine of attack),
becomes in other words a producer of speed.’’
As we look around the world today, we can see a battle for the
‘street’ from the streets of Bujumbura to the streets of Baltimore. In
November last year, I wrote about Ouagadougou’s signal to sub-Saharan
Africa and concluded that: We need to ask ourselves how many people
can incumbent shoot stone cold dead in such a situation – 100, 1000,
This is another point: there is a threshold beyond which the incumbent
cannot go. Where that threshold lies will be discov- ered in the
throes of the event.
Therefore, the preeminent point to note is that protests in Burkina
Faso achieved escape velocity.
Tendai Biti Eyes Bitcoin To Fix Zimbabwean Economy
“If Zimbabwe establishes a privatised bitcoin national currency, if
the market naturally went to a bitcoin type currency, as other
currencies around the world indicate weakness with money printing
happening, you’d have a whole lot of currency flowing into Zimbabwe.
Zimbabwe would transform from a basket case to a global banking centre
in a stable crypto currency. And that would be fairly quick.”
It's anyone's guess where South Africa's rand is headed.
Donald Trump’s U.S. election victory has caught the world’s most
volatile currency in a tug of war, with end-2017 forecasts ranging
from a 9 percent gain to a 14 percent retreat against the dollar,
estimates compiled by Bloomberg show. That’s the widest distribution
since at least 2006, when Bloomberg started tracking the data.
Citi Sells 1st Egypt-Tied Notes Since 2010 After IMF Loan
The New-York based bank plans to issue 305 million Egyptian pounds
($17.26 million) of one-year securities tied to the Arab Republic of
Egypt on Nov. 25, according to data compiled by Bloomberg. The
zero-coupon notes will be sold at about 85 percent of face value. It
plans to sell a further 273 million Egyptian pounds of one-year notes
on Dec. 2. Egypt’s central bank adopted a free-floating currency
earlier this month and raised its benchmark rate to 14.75 percent to
21-NOV-2016 What is unfolding in Nigeria is a debacle of spectacular and monstrous proportions worthy of a Nollywood movie all of its own.
Authorities should be able to jail for as long as two years anybody
holding dollars in cash for more than 30 days, or fine them 20 per
cent of the amount, according to a draft amendment to Nigeria’s
foreign exchange Act. Last week, security agents threatened to arrest
black market money traders if they exchanged the naira at a rate
weaker than 400 per dollar, compared with the existing street-rate of
around 460. e currency’s official exchange rate, which analysts say
the Central Bank is still manipulating, is 315 against the greenback.
“ The CBN wants to take its regulatory onus to frightening
proportions,” analysts at SBM said in an e-mailed note on Friday in
response to the new draft law. is is taking policymaking insanity to
a whole new level.
What is unfolding in Nigeria is a debacle of spectacular and monstrous
proportions worthy of a Nollywood movie all of its own.
"The black market will go further underground," said Omotola Abimbola, an analyst at Afrinvest.
“The fact they went as low as getting security forces on the streets
shows a new level of desperation.”
On Nov. 9, Nigeria’s intelligence arm, the Department of State
Services, raided bureaux de change and black-market traders and
instructed them to cap their rates at 400 per dollar. As a result,
people with hard currency are hoarding it rather than selling at an
artificially low rate, according to Haruna Usman, a money-changer in
“It’s a struggle even to get someone to sell us $200, whereas before
they’d often sell us $1,000 or $5,000,” the kaftan-clad Usman said
from the mosque compound where he trades. “Now, they’re only
exchanging when they’re desperate.”
The central bank is in no mood to back down. Emefiele said this week
that “the security agencies should sustain their checks on the
activities of illegal foreign-exchange operators in order to bring
sanity to that segment of the market.”
It’s another signal to foreign investors that Nigeria’s currency
policy is broken, according to JPMorgan Chase & Co.
“The Central Bank of Nigeria is clearly not ready to embrace a truly
free-floating exchange rate and arguably has further undermined the
confidence in the exchange-rate regime,” Yvette Babb and Sonja Keller,
analysts at the New York-based lender, said in a note to clients on
Nov. 18. “These events are likely to deter inflows.”
Nigeria security forces 'killed 150 peaceful pro-Biafra protesters'
Nigeria's security forces have killed more than 150 peaceful
protesters since August 2015, a human rights group has claimed.
Amnesty International said the military used live ammunition and
deadly force against pro-Biafra protesters who were campaigning for an
independent state in the south-east.
Nigeria's police denies allegations that it used unnecessary force.
The country's army said Amnesty was trying to tarnish its reputation.
East Africa's booming camel trade Economist
“ALLAHU akbar!” the boys shout gleefully from atop their camels, the
reins of others held in their raised fists, their backs to the setting
sun. Beside them a metal-fenced racing track cuts through the
pancake-flat desert. Every dawn and dusk the camels are trained to run
on this plain outside Kassala, a city in eastern Sudan. Their owners
hope they will catch the eye of the wealthy Emiratis who visit two to
four times a year to buy steeds for multimillion-dollar prize races in
The Rashaida, a tribe that migrated to Sudan and Eritrea from Saudi
Arabia in the mid-19th century, are infamous for kidnapping and
trafficking Eritreans who cross the border, around 20km (12 miles)
from Kassala, in the hope of eventually reaching Europe. But they are
also renowned for breeding some of the world’s speediest racing
camels. Emiratis buy between 100 and 300 young camels a year from the
village of Abu Talha, some for as much as $80,000, says Hamed Hamid, a
mustachioed patriarch. There are around 800 racing beasts in a
settlement of 1,200 people, he estimates, and many more being raised
for slaughter. “The camels are everything. They give us milk, meat and
trade,” Mr Hamid says, as his wife brews tea and coffee over hot coals
under a starry sky.
Although the Rashaida are traditionally nomadic, many have settled in
villages like Abu Talha, a jumble of earthen-walled and brightly
painted concrete houses. They have also adapted to the United Arab
Emirates’ ban on child jockeys, after the state was censured by the UN
in 2005. Boys still train some camels, but others are whipped along by
miniature robots dressed in jockey silks and given orders remotely
from white Toyota pickup trucks.
Each month the villagers also sell around 200 baby camels to Saudi
Arabia and 120 adult ones to Egypt for human consumption, says Mr
Hamid, pointing out a large female that will fetch 25,000 Sudanese
pounds ($1,525 at the black-market exchange rate). Livestock is a big
and growing business in east Africa, fuelled by the Gulf’s increasing
appetite for meat. Sudanese live animal exports more than trebled to
$670m between 2010 and 2013 (the most recent year for which the World
Bank has data). More than 70% were sheep, demand for which surges
around the Muslim festival of Eid al-Adha, when the animals are
ceremonially slaughtered. Somalia sold 5.3m animals worth $384m in
2015; livestock accounts for 40% of the fractured country’s GDP.
Other Sudanese may sneer that the Rashaida’s new cars and houses have
been bought with the proceeds of people-smuggling. But there is plenty
of money to be made in the legitimate business of exporting livestock.
Kenya's Credit Slowdown to Curb Growth Next Year, IMF Says
Slowing credit growth in Kenya, where a government cap on loan rates
has yet to boost lending, will probably act as a drag on the country’s
economic expansion next year, the International Monetary Fund said.
Lending to the private sector slowed for the 14th consecutive month in
September, central bank data published this week show. In August,
President Uhuru Kenyatta signed a law that capped banks’ loan charges
at four percentage points above the benchmark central bank rate, which
is currently 10 percent.
“We know credit growth has an impact with a lag, so we think we will
have an impact in 2017,” Armando Morales, the IMF’s country
representative in Kenya, said in a phone interview from the capital,
Banks in East Africa’s biggest economy have criticized the rate cap,
warning that credit may dry up if they can’t price loans according to
the risks they’re taking. The IMF has warned that the law may impede
access to loans. Kenyatta introduced the caps against the advice of
the central bank, which opposed the measure. A similar law in
countries including Zambia and Nigeria failed to stimulate lending.
Credit to the private sector grew 5.3 percent in September, the
slowest pace since June 2008. That year, the Kenyan economy grew just
0.2 percent after two months of violence following a disputed
presidential election slashed output. The country will hold its next
presidential vote in August 2017.
Growth in private-sector credit may begin contracting before the end
of this year, Aly Khan Satchu, chief executive officer of
Nairobi-based Rich Management, said in an e-mailed response to
questions. One of the side effects of the interest-rate bill has been
a “stampede” into government debt, considered risk-free on banks’
balance sheets, at the expense of lending to the private sector, he
Standard Chartered Plc Chief Economist for Africa Razia Khan on
Tuesday cut her forecast for growth next to 5 percent from a previous
estimate of 5.6 percent, citing weaker credit growth. The Kenyan
government has said it expects the economy to grow 6 percent in 2017.
“We do not expect credit growth to pick up in the remaining part of
the year,” Morales said. “The question is how much would be the impact
on economic growth from declining credit growth. We would like to
collect information to have a clearer picture of this.”
Kenya’s Monetary Policy Committee meets on Monday to decide its latest
interest-rate stance. Economists surveyed by Bloomberg expect the MPC
to leave the benchmark gauge at 10 percent.