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Wednesday 10th of July 2019 |
Morning Africa |
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The Latest Daily PodCast can be found here on the Front Page of the site http://www.rich.co.ke
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17-JUN-2019 :: So lets start with the enigmatic and mercurial Fugitive and Bitcoin evangelist John McAfee, who always seems to pop up in my Feed like an acid Trip whenever Bitcoin is doing its Parabola imitation. Africa |
''But it is a curve each of them feels, unmistakably. It is the parabola. They must have guessed, once or twice -gues- sed and refused to believe -that everything, always, collectively, had been moving toward that purified shape latent in the sky, that shape of no surprise, no second chance, no return.’’
Bitcoin is trading at Fresh Highs of $9,270.00 and aside from Beyond Meat and Zoom has posted the best returns in 2019 and is in triple digit % gain territory. Paul Virilio captured the es- sence of our c21st Zeitgeist with this quote “Wealth is the hidden side of speed and speed the hidden side of wealth” Bitcoin, Beyond Meat and Zoom is Virilio’s quote expressed in market terms. Bitcoin is something like 50% below the All Time Highs. I recommended Bitcoin this year at $5,350.00. I am recommending Bitcoin again on a supreme conviction basis. A great deal of the Price surge is correlated to Chinese Flight Capital, in my opinion.
Home Thoughts
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How a single 1,000-year-old coin could change the history of an entire continent and prove seafarers reached Australia hundreds of years before Capitain Cook @TheSun Africa |
The copper coins are from Kilwa, an ancient African trading port that is now Tanzania The coin was discovered on the remote Elcho Island off the coast of Australia and home to just over 2,000 people But the archaeologist who found the ancient coin on the beach on the island of Elcho says the discovery could change history. According to experts, it is a "dead ringer" for a Kilwa coin, from an ancient trading city in what is now Tanzania - some 6,000 miles away. It's not the first time Kilwa coins have been discovered in Australia, with several others found in mainland Australia in 1944. The discovery of the coin on the remote island could mean that the first non-Aboriginals to set foot in Australia were not Europeans, but Africans from Kilwa. Archaeologists have theorised that Kilwa sailors may have brought the coins from Africa themselves, or that they could have washed ashore from a shipwreck. Alternatively, it could have been the Portuguese - who raided Kilwa in 1505 - with experts saying they may have left the coin behind on their travels through south-east Asia. Portuguese seafarers were in East Timor in 1515 and could potentially had reached the Australian mainland. This would mean that the first European to reach Australia wasn't Captain Cook, but potentially Portuguese explorers some 250 years before. Mike Hermes, an archaeologist who discovered the coin said: “The Portuguese were in Timor in 1515 - to think they didn’t go three more days east with this monsoon wind is ludicrous.”
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@SNB_BNS_en Study Finds Evidence of 1,000-Franc Banknote Hoarding @economics International Trade |
The majority of Switzerland’s high-denomination bills are effectively parked in vaults or stuffed under mattresses, according to a Swiss National Bank working paper. In a study that has implications for officials at central banks, who must figure out how much below zero they can cut interest rates before the public begins stockpiling cash, the authors calculate that in between 80% and 90% of 1,000-franc ($1,007) notes were hoarded in 2017. For the 200-franc note the proportion was between 30% and 60%.
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Production of hand-dug cobalt in the Democratic Republic of Congo is poised to drop sharply after prices tumbled @markets Commodities |
Production of hand-dug cobalt in the Democratic Republic of Congo is poised to drop sharply after prices tumbled, prompting many of the country’s thousands of artisanal miners to switch focus to copper instead. Congo last year produced about 72% of the world’s cobalt, a key ingredient in the rechargeable batteries that power electric vehicles and smartphones. While most of the country’s production is from large, mechanized mines run by companies including Glencore Plc, diggers that use rudimentary tools tend to respond more quickly to price changes. Artisanal output soared during cobalt’s rally during 2017 and early 2018 and accounted for as much as 20% of Congo’s production of the metal last year, according to Darton Commodities. The Congolese authorities say the figure was as high as 30%. After a supply glut sent cobalt prices plummeting about 70% from the peak, many of the country’s artisanal miners are now switching focus to copper instead. “At the moment the diggers prefer to work the copper,” said Jacques Kaumbu, the president of a mining cooperative in Lualaba province. “The old cobalt pits no longer interest them.” “Artisanal mining will continue to be the swing producer,” said George Heppel, senior analyst at CRU Group.
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Turkey Is Heading for Economic Collapse, Ashmore Says @economics Emerging Markets |
President Recep Tayyip Erdogan risks pushing Turkey’s economy into an economic collapse similar to those seen in Latin America under populist regimes, according to Ashmore Group Plc. While more diversified than Venezuela’s oil-dependent economy, Turkey is currently on a very similar path of policy missteps that are likely to lead to ruin, the $85 billion emerging-market asset manager said. Capital controls, nationalization and other policies designed to prevent the private sector from protecting its property as the macroeconomic environment deteriorates are the next “logical policy steps” that will follow in Turkey, Jan Dehn, the London-based head of research at Ashmore, said in emailed comments. His comments came after Erdogan rattled markets by dismissing central-bank Governor Murat Cetinkaya early Saturday. “The longer he delays the bigger the cost, which is why politicians who go down the heterodox route rarely change tack and they almost always end in crisis.” Here is Dehn’s characterization of the decline: Bad economic policies begin to extract a political cost Instead of fixing the causes of the underlying economic problem, the government decides to attack the symptoms of the problem, such as inflation, slower growth, weaker currency and slowing investment The real problems meanwhile are ignored and get worse. They include bad monetary policies, increasing interventionism, failure to develop local financing markets, overly low savings rates and bad foreign policies The government also blames other groups instead of itself, because this works politically, but it only makes investors and businesses even more worried as Erdogan will need more and more scapegoats as the economy worsens As the economic outlook worsens, investors and businesses begin to take action to defend their wealth and livelihoods. This results in capital flight, declining investment and other hedging strategies The government starts to blame the private sector for bad performance, taking action to prevent their defensive actions. Enter capital controls, nationalization, forced conversion of contracts Eventually the government has no financing, no growth, no future and plunges into a crisis
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13-AUG-2018 :: Cold Turkey Emerging Markets |
President Erdogan is a shakespearean figure, he has slayed enemies real and not real, his chest has been puffed up with pride, he even rescued the Emir of Qatar but he has now met his match, that match being the market
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Sudan's gold: Hemedti's untold power @AfricanBizMag @thomashcollins1 Africa |
“My patience has limits,” he said. Hemedti, along with the head of the army, Abdul Fattah al-Burhan, has emerged as a key figure within the TMC. With a violent past and control of a paramilitary force estimated to number as many as 40,000, many fear that he has set his ambitions on more than simply preventing Sudan’s transition to democracy. His reported vast personal wealth – accrued from the gold trade, along with outsourcing his militia to the former regime and Saudi Arabia to fight the war in Yemen – under pins his power. In 2017, Sudan produced 107 tonnes of gold, making it the third-largest producer on the continent after Ghana and South Africa. Some 70% of output is estimated to be smuggled abroad, although the true size of the illicit trade is hard to quantify. Through his militia, Hemedti controls one of the country’s most lucrative gold mines – Jebel Amer in North Darfur. By origin a member of the Rezeigat tribe in the Darfur region, Hemedti rose from humble origins as a trader of cloth and camels. In 2003, he joined the Janjaweed, a local militia that was waging a brutal campaign against Darfuri rebels on behalf of the government under the leadership of tribal chief Musa Hilal. The conflict has left 300,000 dead, according to UN estimates. Through his role in the war, he gained favour with President Bashir, who in 2014 put him in charge of the RSF, which had been formed as an offshoot of the Janjaweed. The group was given the status of a regular force but retained its violent modus operandi, and Bashir began to use it as a bulwark against the strength of Sudan’s military. “That’s when Hemedti became quite strong,” says Omer Ismail, senior advisor at the Washington-based NGO Enough Project. “Bashir was not confident in the army because the economy was deteriorating rapidly and there were many problems.” Yet along with a position of almost unparalleled power, Hemedti’s ascendance was accompanied by access to riches. In 2015, a report drawn up for the UN Security Council found that Hilal’s militia was making up to $54m a year from control of the Jebel Amer goldmine. The following year, Hemedti moved against Hilal, who had come into conflict with the government, and seized control of the lucrative mine. Ismail estimates that his earnings may now outstrip those of his former boss. With this money, the militia kingpin has been able to recruit jobless youths from the across the Sahel to the RSF, resulting in an ever-growing force which Ismail claims is presently “occupying” Sudan: “I would say that Sudan is occupied now because the troops that he is using to control and monopolise power, most of them are not even Sudanese. They are recruited from Chad, Mali and Niger. They are from the Sahel.” As the RSF continues to sow terror, much of the gold coming from the Jebel Amer mine, which supports a surrounding settlement of around 70,000 people, is exported clandestinely to various international buyers via a shady and complicated web of smuggling activities. “Almost everything makes its way east to Khartoum,” says Ismail. “From there it is almost exclusively sold to traders in the UAE.” With very little capacity for smelting and refining gold in Sudan, the metal travels onwards in rough kilogram bricks to countries including Dubai, which act as a gateway for much of Africa’s illicit gold trade. Comtrade data shows that the UAE imported $15.1bn worth of gold from Africa in 2016, more than any other country and up from $1.3bn in 2006. The share of African gold in the UAE’S gold imports increased from 18% to nearly 50% over the same period and the industry accounts for approximately one fifth of the country’s total GDP. The substantial offtake of Sudanese gold in Dubai’s markets suggests that economic considerations are part of the UAE’s chequebook diplomacy, which saw a joint $3bn aid package pumped into Khartoum alongside Saudi Arabia. Hemedti has close links with both Gulf countries as the agent who recruited around 15,000 of his troops to fight the war in Yemen against Houthi-led militia. Ismail speculates that he may receive anywhere between $2,000 to $3,000 a month per person as payment for outsourcing his troops. Other gold routes, according to Ismail, include the “40-day route” through the desert, historically used to smuggle slaves and ivory to either Tripoli in Libya or Cairo in Egypt. Ismail estimates that the country has around 440 remote airstrips used in the clandestine trade. “They put the gold in a Land Cruiser and smuggle the gold outside the city of Khartoum,” he explains. “Then one of the smaller companies who have licences to fly out of Sudan will set up a local flight. They will put the gold in the belly of the plane. The gold will then come back through Khartoum airport and onwards to its final destination.” One of these destinations is Russia. Ramping up its presence across Central Africa and the Horn, Moscow has begun gold mining operations in Sudan over the last two years – predominantly in the northeastern region away from Darfur. Sim Tack, global security analyst for Stratfor, says that the Wagner Group, a Russian private-military outfit with close links to the Kremlin, has been providing security to Russian companies working in the region. “Russia has become very involved in mineral extraction in Sudan,” he says. “We have seen big accounts of Russia doing this in the Central African Republic (CAR) but at the same time they are doing it in Sudan. Sudan is the entry point into Africa which Russia is using to support its presence in CAR.” Data from the Russian central bank cited by Bloomberg show that its gold reserves have nearly quadrupled over the past 10 years, and that 2018 marked the most “ambitious year yet” for Russian gold-buying. Much of Russia’s activities across Sudan and the CAR are shrouded in secrecy, and the Enough Project’s Ismail believes there is “no way of knowing” how large the trade is. As for Hemedti, it’s clear that the vast amount of money earned from his gold-mining activities is a key enabler of the fearsome power he continues to wield in Khartoum and beyond.
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And now we have two visions of the Future Africa |
And now we have two visions of the Future. One Vision played out on our screens, the Protestors could have been our Wives, our Children, our Daughters and Sons. The Other Vision is that of MBS, MBZ and Al-Sisi and its red in tooth and claw. Vladimir and Xi backed the Gulf and America is below the radar.
Hugh Masakela said ''I want to be there when the People start to turn it around'' Sudan is a Masakela Pivot moment
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Lets start in Khartoum. The "zeitgeist" of the Revolution was as intoxicating as the Oudh that the Saudi Arabian Ambassador once gave me and I found myself semi delirious intoxicated on my own perfume. Africa |
The exquisite murals, the composition of the crowds, the element of Girl Power which spoke to hope and a Future. As I watched events unfold it felt like Sudan was a Portal into a whole new another Normal. David Pilling in the Financial Times captured the Essence by quoting William Wordsworth, who wrote of the French Revolution:
OH! pleasant exercise of hope and joy! For mighty were the auxiliars which then stood Upon our side, we who were strong in love! Bliss was it in that dawn to be alive, But to be young was very heaven!-- Not in Utopia, subterranean fields, Or some secreted island, Heaven knows where! But in the very world, which is the world Of all of us,--the place where in the end We find our happiness, or not at all!
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.@IATA Says Zimbabwe Owes Airlines $196 Million in Trapped Funds @business Africa |
Zimbabwe owes airlines about $196 million that’s stuck in the country due to a shortage of hard currency, according to the International Air Transport Association. The last payment received by the industry body was in January, regional vice president for IATA in Africa, Muhammad Ali Albakri, said in an interview on Tuesday. The group held a meeting with Zimbabwe President Emmerson Mnangagwa and will now finalize the payment plan, he added.
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Treasury Bill auctions make a comeback, Zimbabwe prepares infrastructure bond Africa |
Reserve Bank of Zimbabwe has carried out its first public Treasury Bill (TB) auction in years, hoping to gauge appetite for the paper while preparing to issue a long-term infrastructure bond. Ncube announced announced a plan to fully relaunch TB auctions when he launched the Transitional Stabilisation Programme last October, steps he said were needed to deepen the country’s financial markets, dominated by stocks. The last major Treasury Bill auctions were in 2008, before a few more failed attempts were made in 2012 to revive the TB market. In the Tuesday auction, Treasury offered a 91-day bill at 16.5%, a 180-day TB at 19.6% and a 365-day TB at 17%. A total $80 million was on offer in the auction. The yields are below inflation, which may dampen interest at current levels, at a time Mthuli is desperate to give central bank more tools to deal with monetary policy.
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The Big Read Angola: can Joao Lourenco cure Angola of its crony capitalism? @FinancialTimes Africa |
Not far from the flashy skyscrapers of downtown Luanda, the capital of one of Africa’s supposedly richest countries, is a public morgue. Celestino Chivava, who worked in the Angolan oil industry until he lost his job after the price collapse of 2014, describes how families wash the bodies of their loved ones on a slab outside. “They put perfume in the mouth to stop the corpse smelling,” he says of the capital’s do-it-yourself funeral services. “Sometimes, when the electricity goes off, the bodies get stuck together and the families have to pull them apart.” Oil-rich Angola is the third-biggest economy in sub-Saharan Africa, but it is also one of the most unequal, with a gulf separating a rich, politically connected elite from the mass of the 30m population. After the devastating civil war, which ended in 2002, its oil-fuelled economy, boosted by huge investment in infrastructure from China, became one of the fastest-growing in the world, piling on near-double digit growth over the course of more than a decade. But the southern African country also became one of the continent’s most corrupt, a crony capitalist state in which proximity to the ruling People’s Movement for the Liberation of Angola, led for 38 years by President José Eduardo dos Santos, was the single biggest factor in personal enrichment. In a 2011 audit, the IMF identified a $32bn discrepancy linked largely to “quasi-fiscal operations” by state oil company Sonangol that did not appear in official budget accounts. While a wealthy elite prospered, living a glamorous lifestyle on Luanda’s Riviera-style Atlantic coast or snapping up property and assets in Portugal, the former colonial power, the majority of Angolans live on less than $2 a day. Social indicators, from life expectancy to child mortality, are significantly worse than they should be for a country of Angola’s supposed wealth. Now there is a hint of change. Angola has a new president, handpicked to succeed Mr dos Santos, who relinquished the party chairmanship last year after giving up the presidency in 2017. Many had expected João Lourenço, a former defence minister and MPLA stalwart, to continue as usual, protecting his benefactor, preserving the supremacy of the party and maintaining Angola’s tight links with China. To their surprise, Mr Lourenço, universally known as “JLO”, has set about dismantling at least part of his predecessor’s legacy. The president has spoken of the need to help the poor in what analysts see as an attempt to shore up the MPLA’s legitimacy against an opposition Unita party that has steadily improved its electoral performance. More concretely, Mr Lourenço has waged a public war on corruption that has ensnared some of the former president’s children, including one of his sons, José Filomeno dos Santos, who had been put in control of the country’s $5bn sovereign wealth fund towards the end of his father’s tenure. José Filomeno was detained last year for alleged embezzlement, but released this March, without charge, after authorities said they had recovered control over several billion dollars belonging to the fund. While some see Mr Lourenço’s actions as a Xi Jinping-style anti-corruption drive designed to consolidate power — or even a vendetta against his former patron — others have glimpsed a chance for Angola to correct its course. “So far, it’s more of a vendetta and less of a systemic clean-up, though I’m not closing the file on future progress,” says Ricardo Soares de Oliveira, an Angola expert at Oxford university. Mr Lourenço has already signed a $3.7bn credit facility with the IMF, the biggest ever such arrangement made by an African country and one that will open up one of the continent’s most opaque regimes to wider scrutiny. As part of the agreement, it has promised to cease the oil-for-infrastructure contracts with China that paid for a massive postwar reconstruction boom, but left the country heavily indebted. Angola’s ratio of debt to gross domestic product is close to 100 per cent, a serious restraint on its room for budgetary manoeuvre. The new president has also made sweeping changes to the oil industry in an effort to revive production that has fallen from a peak of 1.9m barrels a day a decade ago to 1.4m b/d. The idea is to use tax breaks and other incentives to persuade oil majors such as Total of France and Eni of Italy to pump more from existing wells and to entice others to explore for new reserves. As part of that reorganisation, Mr Lourenço sacked Isabel dos Santos, the richest woman in Africa and the most successful of the former president’s offspring, as head of Sonangol. The state-owned company has now been split into two, clipping its previous status as both industry regulator and operator. Oil accounts for 95 per cent of the country’s foreign revenue, making Angola possibly the most commodity-dependent country in Africa. But lower prices and falling production have squeezed the state’s coffers and plunged the economy into a four-year recession. In spite of its plentiful water and abundant arable land, Angola imports almost everything from tinned carrots to lettuce flown in from Lisbon. Many farmers abandoned land during the civil war and the oil economy pushed the kwanza, the currency, to unrealistic levels, making it uneconomic for businesses or farmers to produce even the most rudimentary items. Until a massive devaluation of the kwanza of 85 per cent last year, the elite simply imported everything they needed, from diesel to champagne. Mr Lourenço is not the first to press for economic diversification. But with dwindling oil reserves, high indebtedness and a political imperative to enact social change, advisers say he has little option but to restructure the economy and make it more attractive for foreign investors. To add to the impression of change, the president has cultivated a more modest and open public image. Unlike his predecessor, Mr Lourenço has insisted that his face does not appear on banknotes. “This is a historic moment for the country,” says Ricardo Viegas d’Abreu, transport minister and a former economic adviser to Mr Lourenço. “We have reached a stage where we can’t continue having public expenditure as the main driver of growth.” Mr Viegas grasps the magnitude of the task, particularly given what he alleges was the massive scale of corruption in the last years of the dos Santos administration. He adds: “Every stone you turn, you don’t find a pearl, you find a snake.” Yet the president, insists Mr Viegas, knows that a new economy can be built only on what he calls “a legal framework [of], reasonable [minimal] levels of corruption for a developing country and rights, like freedom of speech”. Those, he says, “are the building blocks, but they are not that easy to put on the ground. Lourenço has shown the courage to move us in that direction.” At the central bank, an opulent colonial-style structure with Portuguese murals decorating its domed entrance, José de Lima Massano, the governor, echoes the positive narrative. “The country is on the move. Things are really changing and changing fast,” he says, pointing to evidence from a drive to weed out undercapitalised banks to a new investment law allowing foreigners to enter Angola without a local partner. The central bank has long been associated with weak supervision — including lax oversight of anti-money laundering regulations — and poor control of financial institutions, which have often been treated as personal piggy banks by those with political connections. Mr Massano has shut several banks and instituted an auction process designed to clean up a less-than-transparent system for allocating scarce dollars. He has also stepped up the rhetoric against money laundering. Only by cleaning up their image, he says of local banks, will they be able to repair relations with US counterparts, which have severed so-called correspondent-banking relations with Angola, worsening the dollar crisis. “The fight against corruption by Joao Lourenço is very good news,” says Mr Massano. “One of the risks to those correspondent banks is that illicit money might go through their accounts, so no one dares do anything.” The central bank moved to address the underlying shortage of dollars itself, a bane of investors trying to do business in Angola, by allowing the market to determine a more realistic exchange rate. “The currency was fixed to the US dollar,” he says. “It was not sustainable and we had to do something.” Rafael Marques de Morais, an investigative journalist and notable thorn in the side of the ruling elite, acknowledges real change under the new presidency. For one thing, he says, the surveillance equipment outside his home has gone. Although the Lourenço administration has moved swiftly against parts of the old regime, he says, others tainted by corruption have remained close to power. An amnesty on laundered money deposited abroad resulted in no meaningful return of illicit funds, he adds. Defenders of Mr Lourenço say that, given the small size of the Angolan elite, the president has little option but to recycle educated technocrats. He has drawn a line under past misdeeds, goes the explanation, but will not tolerate new ones. Mr Marques has a simpler interpretation. “If you surround yourself with sharks it’s because you like sharks,” he says. “If I had to summarise what’s happening in the country I would say the president came in with very good intentions, unprecedented political goodwill — and a total lack of vision on how to proceed.” One incident that has raised eyebrows involves Manuel Vicente, a former vice-president accused of corruption and money laundering by Portuguese prosecutors. Mr Lourenço pressed hard for a trial in Angola, rather than Portugal, accusing Lisbon of interfering in its sovereignty. Since Mr Vicente’s release by Portuguese authorities last May, no trial has taken place. A recent auction for a fourth telecoms licence — including mobile, fixed-line and pay-TV services — has also raised questions over the extent of the reform. It attracted the interest of foreign companies hitherto excluded from one of Africa’s most lucrative markets, that has been dominated by Unitel, a private company until recently chaired by Ms dos Santos, who owns 25 per cent, with a further 25 per cent held by Sonangol. The licence was won by Telstar, a company with a limited record but controlled by a recently promoted general. The arrangement, which some considered had all the hallmarks of a cosy deal from the past, was annulled in April by Mr Lourenço “to ensure a clean and transparent procedure”. Another example of alleged business as usual has been raised by Africa Growth Corporation, a US company, which provides affordable housing. AGC claims that property it developed was illegally expropriated in 2017 by a well-connected general. Although a court ruled in its favour in November of that year, says Scott Mortman, AGC’s executive chair, the Angolan police never enforced the order, obliging his company to seek compensation. Mr Mortman says the government this year finally agreed to pay $47.5m, but has since reneged on the deal, something denied by Angolan authorities. Mr Mortman says that US companies should not do business with Angola until the issue is resolved. Angolan officials, asked whether the incident taints the country’s claim to be a reformed investment destination, told the Financial Times the case was a private matter that no longer involved the state. “The courts have retrieved the property,” says Mr Massano at the central bank. “If they [AGC] want to sell it they have to sit down with someone who wants to buy.” While Angola’s pitch as a safe haven for foreign investment is still a work-in-progress, the economy continues to suffer. GDP is predicted by the IMF to grow by less than 0.5 per cent this year. A well-placed member of the elite, who spoke on condition of anonymity, says of the president’s reforms: “We are not feeling it yet. People have no food, no money, no jobs.” Mr Marques says problems run deeper than failing to rekindle a stalled economy and that Mr Lourenço needs to choose between preserving an MPLA that is perceived as corrupt to its core or dismantling its structures in pursuit of more fundamental reform. “The ruling [MPLA] was essentially the hotbed of those who plundered the country and those people have not been removed,” he says. The president, he adds, has “made a fundamental error” in not taking on the MPLA more aggressively. “He cannot be a reformist,” says Mr Marques, “by saving the party and throwing breadcrumbs and false promises to the people.”
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