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Satchu's Rich Wrap-Up
Tuesday 17th of May 2022

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Economic growth and cultural syncretism in 19th century East Africa: Trade and Swahili acculturation on the African mainland @rhaplord

Much writing about 19th-century East Africa historiography has been distorted by the legacy of post-enlightenment thought and colonial literature, both of which condemned Africa to the periphery of universal history.

Until the 19th century, the Swahili city-states were largely politically autonomous, most of them having peaked in prosperity during their classical era between the 11th and 16th century. 

The advent of the Portuguese in 1498, who for a century tried to impose themselves over the independent and fiercely competitive Swahili city-states, coincided with a radical shift in the fortunes of some of the cities and the collapse of others. 

To preserve their autonomy, the Swahili cities forged shifting alliances with various foreign powers including the Ottomans in 1542 and the Omani-Arabs in 1652, the latter of whom were instrumental in expelling the Portuguese in 1698 but who were themselves expelled by the Swahili by the 1720s. 

It wasn't until the ascendance of the Oman sultan Seyyid Said in 1804 that a concerted effort was made to take over the northern and central Swahili coast; with the capture of; Lamu in 1813, Pemba in 1822, Pate in 1824, and Mombasa in 1837, afterwhich, Seyyid moved his capital from Muscat (in Oman) to Zanzibar in 1840, and expelled the last Kilwa sultan in 1843. 

Seyyid and his successors were “merchant princes”, who engaged in trade personally and used their profits and customs dues to advance their political interests,

Cloth was the primary export item into the mainland since its low weight and relatively high sale price compared to its purchase price made it the most attractive trade item over the long distance routes. 

For most of the 19th century, the majority of this cloth was merikani (American), preferred for its strong weave, sturdy quality and durability as cloth currency, which were all qualities of locally-produced cloths, in whose established exchange system the merikani was integrated, and sold, alongside glass-beads and copper-wire (for making jewelry), all of which were exchanged for ivory from the mainland markets

The latter enterprise of porterage created some of east Africa's earliest wage laborers who were paid $5-$8 per month or at times 18-55 meters of cloth per month, and thus consumed upto 20% of Zanzibar's cloth imports.

Criss-crossing the various caravan trade routes and towns, these porters represented one of the most dynamic facets of the coast-mainland trade, without whom, "nothing would have moved", no trade, no travel and no "exploration" by anyone from the coast —be they Swahili, or Arab, or European— would have been undertaken. 

It was these relatively well-paid porters, whose floating population numbered between 20,000-100,000 a month, who carried ivory tusks to Zanzibar and cloth into the mainland markets, that European writers would often intentionally (or mistakenly) identify as slaves and greatly exaggerate the supposed “horrors” of the ivory trade which they presumed was interrelated with slave trade, wrongly surmising that these porters were sold after offloading their tusks at the coast

It was ivory, above all commodities, that was the most lucrative export of the coastal cities and arguably the main impetus of the Mainland-coastal trade. 

For most of the 19th century save for the decade between 1878-1888, ivory exports alone nearly equaled all other exports of the east African coast combined; and this includes cloves (for which Zanzibar had cornered 4/5ths of the global production), gum-copal, rubber and leather

Zanzibar’s export earnings of ivory (sold to US, UK and (british) India), rose from $0.8m in 1871 to $1.9m in 1892, largely due to increasing global prices rather than increased quantity

But the 19th century demand-driven elephant hunting pushed the ivory frontier further inwards, first from Mrima coast near Zanzibar, to Ugogo and Nyamwezi in central Tanzania, then to the western shores of lake Victoria and Rwanda-Burundi, and finally to eastern Congo, and the caravans moved with the advancing frontier

The Swahili are speakers of a bantu language related to the Majikenda, Comorians and other African groups, and are thus firmly autochthonous to east-central african region

The first itinerant coastal traders arrived in Buganda as early as 1844 during Kabaka (King) Suuna II's reign (r. 1832-1856), following an old trade route that connected the Nyamwezi, Karagwe and Buganda markets. I

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Kilwa, Tanzania @rhaplord

The largest Swahili city, it flourished from the gold trade from great Zimbabwe. Its architectural monuments date from the 11th, 14th and 18th centuries corresponding with peaks in prosperity

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The Gereza Fort is one of the last in a series of great forts and palaces built on the island of Kilwa Kisiwani, at one point the most powerful city-state in the whole of East Africa. @nomadmagafrica

The Gereza Fort was erected after the Portuguese seized control of the Swahili coastal trade routes and is one of the last in a series of great forts and palaces built on the island of Kilwa Kisiwani, at one point the most powerful city-state in the whole of East Africa.

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M.G Vassanji's The Magic of Saida

M. G. Vassanji: I would describe it as a love story that in its development and description tells other stories. It is set in Kilwa, the ancient town on the east coast of Africa, which is associated historically with slavery, international (Indian Ocean) trade, and twentieth-century colonialism, as well as Swahili culture and poetry. 
This history is manifest in various forms in the lives of the people. The story of Kilwa is therefore also the story of the two childhood sweethearts in the book. Thus, the boy Kamal is mesmerized by the history narrated by the old poet of the town.
Vassanji: Sometimes, it's hard to remember. I think I had the town of Kilwa in mind, having read about it. It has a certain romance to it, being ancient. It's one of the oldest urban settlements in sub-Saharan Africa. 
The Arab traveler Ibn Batuta mentions it in the fourteenth century; the English poet John Milton mentions it. It's older than Delhi. Its descriptions in old Portuguese texts are fantastic. 
Then there was the mystique of magic--which is very strong in Tanzania. I got fascinated by Swahili culture.

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Interview with Maria Joao Lopo de Carvalho about Luis de Camoes and her book which followed his c16th journey from Portugal to Macau via Cape of Good Hope

Interview with Maria Joao Lopo de Carvalho about Luis de Camoes and her book which followed his c16th journey from Portugal to Macau via the Cape of Good Hope Mozambique Mombasa Malindi Oman Hormuz Goa Sri Lanka Macau Malacca

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Western media outlets are gripped by a Cold War fantasy @unherd
Law & Politics

Sharp internal policy divisions in Beijing may indeed exist, and this is interesting and worth considering. 

But we should beware that such eager speculation, if taken too far, probably says more about ourselves than about political realities in China.
Xi Jinping is in no real danger of losing power. His whole political method since 2012 has been to seize control over what Christopher Johnson, former head China analyst at the CIA, has described as the three key “levers of power” within the “Chinese ‘Deep State’.” 

Using a ruthless “anti-corruption” campaign as a knife, he was able to quickly break his rivals’ hold over the military, security services, and party bureaucracy (i.e. the HR department, essentially), and aggregate control over them entirely into his own hands – where they still very much remain. 

This means a little public discontent or elite financial distress is not going to meaningfully weaken Xi’s grip. 

Moreover, he retains the powerful force of popular Chinese nationalism to lean on in any period of real difficulty.

One can’t help but suspect that something more is contributing to the current excitement over Xi’s possible political headaches: that Cold War atmosphere lingering in the air these days thanks to Vladimir Putin’s invasion of Ukraine and the West’s economic isolation of Russia

Not only are hopeful rumours of impending coups in the Kremlin now regularly aired in Western news media, but the rather ambitious goal of instigating Putin’s removal from power seems to in fact be de facto U.S. government policy.

A chance to retell ourselves the familiar story of the West’s Cold War experience, in which authoritarianism inevitably collapsed and democracy prevailed, is of course an irresistibly comforting one. And we’d love to tell ourselves that story about China too.

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The Charge of the Light Brigade BY ALFRED, LORD TENNYSON

Half a league, half a league, Half a league onward,
All in the valley of Death
Rode the six hundred.

 “Forward, the Light Brigade! Charge for the guns!” he said. Into the valley of Death
Rode the six hundred.
“Forward, the Light Brigade!” Was there a man dismayed? Not though the soldier knew
Someone had blundered. Theirs not to make reply, 

Theirs not to reason why, 

Theirs but to do and die.

Into the valley of Death Rode the six hundred.

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For a while regime change was de rigeur
Law & Politics

Muammar Gaddafi was decapitated and the domino effect only stopped when Vladimir Putin decided he was going to put a stop to it and intervened on behalf of Bashar Al-Assad in Syria.

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Sunday, April 10, 2022 Apocalypse Now
Law & Politics

Secretary Blinken has refused to meet Lavrov, Biden calls for ‘’Regime Change’’ on a daily basis and ‘’defensive’’ weapons are being shoveled into Ukraine at an unprecedented speed. 

There is clearly zero intention to resolve this matter anywhere other than on the battlefield and through an insurgency which will bleed Russia to death and the Ukrainians as well.

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Figurões nas catacumbas do Azovstal: @PepeEscobarPT
Law & Politics

Uma verdadeira caixinha de surpresas, quanto mais o tempo passa mais grandes nomes militares da OTAN/EUA surgem misteriosamente dos porões do Azovstal. O plano Russo nunca foi Kiev, sempre foi Donbass.

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EU Braces for Storm as Ukraine Fallout Cascades Through Economy @business @YahooFinance
Law & Politics

A gathering storm of renewed energy price-spikes, surging food costs and corresponding social and economic dangers is focusing the minds of Brussels officials who worry of multiple shocks cascading through the European Union from Russia’s war in Ukraine.
Viewed from the Berlaymont headquarters and nearby buildings that house the European Commission in the Belgian capital, the conflict raging just over the bloc’s frontier presents a unique combination of threats looming large for the second half of the year.
A common assumption of how that could transpire is first as a summer of worry, then a winter of woe. 

Concerns focus on how energy rationing and a worsening cost-of-living squeeze may test voters whose patience is already thin, and on the vulnerability of Germany’s industrial machine to shutdowns if gas supplies stop.
The officials from across the EU bureaucracy who spoke to Bloomberg for this story, often on condition of anonymity, represent a generation of policy practitioners attuned to crises from the region’s sovereign-debt turmoil to Brexit and the pandemic, giving them the perspective to judge this one isn’t yet existential.
Even so, the security realignment gripping Europe -- inflicting new pressure on public finances -- and the intensifying energy crunch is unfamiliar ground whose full consequences, according to two insiders, haven’t sunk in among decision makers and advisers pivoting from two years of the Covid-19 emergency.
An initial crystallization of views on the economy will emerge on Monday, as the commission releases forecasts likely to acknowledge a significant slowdown in economic growth, according to a draft of the outlook seen by Bloomberg.
“The impact of the war in Ukraine could still be significantly bigger than either markets or the ECB expect and there remains scope for escalation. Severe energy disruption could easily tip the eurozone into recession.”
That will be followed this week by EU measures to counter the energy crunch. Later this month, a new judgment on national fiscal policies is expected to lead to a prolongation of the suspension of limits on deficits that the bloc agreed when the pandemic struck.
Among the dangers commission officials see looming, the potential of further destabilization in the market for foodstuffs has been shared between institutions. 

Officials worry Russian President Vladimir Putin might weaponize supplies of agri-food products, fertilizers and energy exports to inflict economic pain on the bloc.
Associated is the possibility that the coming winter might be more severe than the relatively mild one just passed. 

That would stoke gas demand just as Russia turns the screws, driving competition for alternative sources while potentially mobilizing discontent, particularly in countries dependent on energy imports such as Bulgaria.
Meanwhile officials are also cognizant of an influx of Ukrainian refugees now totaling more than 5 million, a tally dwarfing the refugee crisis in 2015-2016 and one causing strain especially in neighboring countries.
“We are fully aware of the social pressure,” Maros Sefcovic, the commission’s vice president for interinstitutional relations and foresight, told Bloomberg. 

“National governments have their hands full because of high inflation, energy prices, the huge wave of refugees. And all this brings higher costs of living.”
Against that backdrop, officials judge the multiple economic policy responses being deployed as hard to calibrate.
On the one hand, to combat inflation, the European Central Bank is likely to raise interest rates in July, maybe moving above zero later this year. 

Such tightening could bear down on growth and possibly further squeeze indebted families.
The ECB faces a “very complicated dilemma,” Governing Council member Olli Rehn, a former EU commissioner for economic affairs, told reporters in Salzburg earlier this month.

“We are facing a very challenging economic environment.”
Meanwhile at national level, the level of budgetary support is mixed. 

Some pandemic-era fiscal stimulus is filtering through, and governments are offering varying support to insulate families and businesses from the energy shock. New military spending is a competing priority too.
At the EU level, officials have greater license than before to offer help, with full coffers of funds and no austerity dogma constraining them as in prior crises.
But their 2 trillion euros ($2.1 trillion) of funds are largely already committed to farmers, infrastructure projects, national recovery plans and a growing list of new priorities ranging from energy independence to joint defense projects.
The commission has granted flexibility to countries to offer subsidies to companies in the aftermath of the invasion, and is discussing how to redirect spending to energy independence and other critical areas. 

That could include reprogramming some of the 220 billion euros remaining in their Recovery Fund.
The energy package due this week may include measures to address the increasing household costs and energy poverty.
Meanwhile the commission’s bleaker economic view on Monday will show a major cut in its growth forecast for this year from 4% to 2.7%, a draft of the outlook shows.
Officials worry how the wider consequences of weaker growth could influence voters, cognizant of how so-called “yellow vest” protests impacted the first term of French President Emmanuel Macron, who faces parliamentary elections in June.
Italy and Spain, the weakest among Europe’s largest economies, also have national ballots next year.

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.044910
Dollar Index 104.076
Japan Yen 129.3555
Swiss Franc 1.000955 
Pound 1.236325
Aussie 0.701000
India Rupee 77.64300 
South Korea Won 1274.265 
Brazil Real 5.0613 
Egypt Pound 18.274704 
South Africa Rand 16.03265 

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The last time wheat was so high,.. there is no last time @TheMarketDog

Sunday, April 10, 2022 ‘’You can print money, but not oil to heat or wheat to eat’’ wrote @CreditSuisse’s Zoltan Pozsar.

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Sunday, April 10, 2022 Apocalypse Now The consequences for global stability are now unfathomable.
Food, Climate & Agriculture

Food prices are soaring at a record pace, rising another 13% in March. @lisaabramowicz1
“But it is a curve each of them feels, unmistakably. It is the parabola They must have guessed, once or twice -guessed 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.’’

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Bond Traders Reel as Inflation Hits World’s Emerging Local Debt @markets
Emerging Markets

As spiraling inflation spreads across the globe, emerging-market bonds from Turkey to Thailand are feeling the brunt.
Local-currency debt from developing nations -- which is far more sensitive to a country’s domestic inflationary pressures than dollar denominated equivalents -- has slumped almost 9% this year, the most since at least 2008, according to a Bloomberg index. 

There’s unlikely to be any relief soon as central bankers around the world attempt to control surging prices by raising interest rates even more aggressively -- potentially risking growth in doing so.

That certainly wasn’t the plan. Many developing economies led the charge in rate hikes last year, getting ahead of policy makers in the US and hoping to avoid a redux of the 2013 taper tantrum.  

But with inflation raging in the US and the strong dollar pressuring currencies elsewhere, these countries are now making a new rulebook. 

Policy makers across emerging nations are either signaling a longer campaign of hikes or making a policy u-turn from their more dovish ways. 

South Africa, the Philippines and Egypt may raise interest rates in the coming days.

“Longer tightening cycles are likely to weigh on local bonds -- which were so popular at the start of 2022 -- as emerging-market central banks were early to tighten policy and perceived as more mature in their tightening cycles,” according to Brendan Mckenna, strategist at Wells Fargo & Co. 

Inflation concerns have long weighed on Turkish bonds -- the worst performers this month falling about 13% -- but Czech bonds, already fighting off concerns about the nearby war exacerbating price pressures, were also among the hardest hit in May. 

A cumulative 5.5 percentage points of rate increases since June failed to tame the country’s worst inflation in almost three decades. 

Thai bonds, which are also among the biggest losers, are down 5.5% this month and are vulnerable to the prospect of heavy bond issuance this year, alongside inflation and pressure for rate increases, said Duncan Tan, a rates strategist at DBS Group Holdings Ltd. in Singapore.

Price pressures are so severe that markets see even dovish central banks rethinking their stances. 

In Malaysia and India, swaps traders are pricing in further moves in the coming months after policy makers recently surprised investors by raising rates. 

And in Latin America -- where some policy makers were trying to wrap up their hiking campaign -- traders are winning bets on further tightening with Brazil, Chile and Colombia forced to adopt a more aggressive tone this month amid rampant inflation.

Policy makers “feel compelled to hike every time there is an upside surprise” in inflation, said Edwin Gutierrez, head of emerging-market sovereign debt at abrdn in London. 

“Realistically we may not see a pause until there is confirmation that inflation has peaked, which unfortunately for many emerging-market countries is unlikely to come till the third or fourth quarter.”
Oil prices were already hovering at multi-year highs as global demand grew alongside an economic rebound from the pandemic. 

Crude skyrocketed to as high as $130 a barrel -- the highest since 2008 -- as sanctions imposed on Russia following its invasion of Ukraine threatened to shrink supply. 

The war has also driven natural gas prices more than 100% higher this year as Russia is a large exporter of the commodity.
Still, slowing growth expectations, especially in China, could ease commodity price pressures, said Lewis Jones, an emerging-market debt portfolio manager at William Blair Investment Management LLC in New York. 

And with hiking laggards, such as countries in Asia, catching up with their peers, interest rates in other parts of the developing world may be near the peak, he said.
That’s creating some select opportunities to buy debt in countries with higher yields. 

“We are quite cautious on rates overall, but we are seeing more value in some of the higher-yielding countries such as Brazil and South Africa, where improving terms of trade are offsetting inflationary risks and where higher carry is cushioning some of the downside risks,” Jones said.

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African states are facing 'a Catch-22 situation' as the war in Europe is driving up the cost of food and the cost of growing it locally, according to Ahunna Eziakonwa @Africa_Conf

Russia's war on Ukraine is set to unleash a food and energy poverty crisis in Africa, UN officials say.
In 2020, African countries imported $4 billion worth of agricultural products from Russia, 90% of which was wheat. 

A handful of countries are highly exposed. Russia says the claims of crisis are confected by western states 
Egypt is the world's largest importer – some 80% of its wheat comes from Russia and Ukraine. It also spends $955 million a year on wheat subsidies. 

Other countries that import large quantities of wheat from Russia include Benin, Cabo Verde, Mauritania, Senegal, Guinea, Sierra Leone, Ghana, Nigeria, Cameroon, Côte d'Ivoire, Mali, and Liberia.
Wheat and maize supplies are down and prices are rising fast. 

But wheat and maize account for less than 10% of household budgets in most African countries. 

The bigger problem, say UN economists, is imported inflation, triggering a general increase in prices.
The conflict has already led to a 21% increase in the price of fertiliser, and higher prices reduce farm yields, undercutting African countries' ability to feed their citizens 

Last week, Nigeria had to purchase emergency potash supplies from Canada.
International financial institutions don't expect African states to start defaulting on debt in the short term as few countries in the region have to make big principal repayments to commercial creditors this year. 

That gives creditors and debtor country officials more time to work out a new structure. But so far, progress has been slow.
The more immediate fear is the growing percentage of national budgets allocated to servicing foreign loans. 

The proportion of revenues servicing foreign loan repayments hit 16.5% last year, compared with the 12.5% average in other emerging markets.
According to the IMF, Ghana's external debt-service costs 44% of government revenues. In Cameroon, Ethiopia and Malawi, it is about 25%. 

That, coupled with increased domestic interest rates following rate rises in the United Kingdom and the United States, will put further pressure on debt burdens and access to credit, the UN fears.

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Steps taken of late to revive the capital markets in Kenya: @Sang252
N.S.E General

- Removal of tax benefits on listing 

- Diluting the standards required for companies to list 

- Increase in the cost of participating in the markets

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A trade at the NSE attracts: @MwangoCapital
N.S.E General

- Brokerage commissions 
- @cdsckenya transactions levy 
- @CMAKenya transactions levy
- @NSE_PLC transactions levy
-@CMAKenya guarantee fund fee 
-@cdsckenya guarantee fund fee 
- @KRACorporate stamp duty

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by Aly Khan Satchu (www.rich.co.ke)
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May 2022

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