🔅 IMF: Africa's Wants a Louder Voice at the Table
"I got punched by a Gorilla, and it was the most luxurious experience of my life"
Image of the Day
Good Morning from The Gambia
Last Week in Numbers
Year-to-Date Performance:
🟢 Johannesburg SE: 85,124.52 (+10.70%)
🟢 Nigerian SE: 97,236.19 (+30.04%)
🟢 Nairobi SE: 115.59 (+25.49%)
🟢 Ghana SE: 4,629.10 (+47.88%)
🟢 US S&P 500: 5,995.54 (+26.41%)
🟢 Shanghai Composite: 3,452.30 (+16.54%)
The Good News First
🇹🇿 128%: While many African nations struggle with food security, Tanzania has achieved remarkable self-sufficiency at 128%, enabling surplus exports to neighboring countries. A rare bright spot in regional agriculture.
🇸🇨 🇲🇺 🇿🇦 Passport Power: Seychelles leads Africa with visa-free access to 156 destinations (24th globally), followed by Mauritius at 150 countries (29th globally). South Africa, despite being the continent's most advanced economy, ranks 48th globally with access to 106 countries. Somalia holds the continent's weakest passport, accessing only 35 countries.
🇸🇴 $1.1 Billion: Somalia's debt relief breakthrough as the US cancels outstanding loans dating back to the Siad Barre military dictatorship. This represents about a quarter of the country's remaining debt, offering a fresh start after three decades of civil war.
The Plot Twists
🌍 $3 Trillion: Africa's total GDP puts the continent's economic scale in perspective - it's less than the individual market caps of tech giants Microsoft, Apple, or NVIDIA. A sobering reminder of both untapped potential and current economic realities. Elon Musk’s net worth is larger than Nigeria’s GDP.
🇳🇬 Starlink Pause: After expanding to 15 African countries since its Nigerian debut last year, Elon Musk's internet service is halting new sign-ups due to overwhelming demand in major cities. A classic case of success creating its own challenges.
🇬🇭 🇨🇮 Cocoa Comeback? Ghana expects production to bounce back to 650,000 tons in 2024/25, after falling below 55% of average seasonal output - a two-decade low. Combined with Ivory Coast's struggles, this slump created a four-year global supply deficit and record cocoa prices.
The Plot Complications
🌍 $300,000: The price tag on Africa's export credit agency's lobbying efforts to save AGOA amid growing concerns about the trade program's future. Trump's first term showed little interest in Africa, raising questions about the program's fate under a potential second term.
🇿🇲 Mining Stakes: Zambia's new strategy requires 30% state ownership in future critical-minerals mines through a state-owned company. Government officials stress this only applies to 40+ reserved permits, not existing operations.
🇪🇹 Revenue Target: Ethiopia more than doubles its revenue goals under new IMF program conditions aimed at reforming East Africa's largest economy, signaling ambitious but challenging fiscal objectives.
Coming Soon...
🇳🇬 Asian Expansion: Access Bank, Nigeria's largest bank, targets Hong Kong for its first Asian branch amid growing China-Africa economic ties and US-China tensions. A strategic pivot that could reshape African banking's global footprint.
🌍 $2 Billion Investment: French oil firm Perenco SA, owned by the billionaire Perrodo family, plans to concentrate 75% of its 2024 investments in African countries, particularly in gas projects. The company, which specializes in mature fields, currently derives most production from four central African nations, including Gabon.
*Data accurate as of the close of markets across the continent
Spotlight Stories
Africa's Quest for a Louder Voice at the IMF Table
Imagine you're a leader of an African nation, grappling with mounting debt, skyrocketing food and fuel prices, and a population on the brink of revolt. In a last-ditch effort, you turn to the International Monetary Fund (IMF) for a lifeline, only to find that you have little say in the policymaking that ultimately determines your country's fate. It's like being invited to a fancy dinner party but being told you can only sit at the kids' table.
Last week, the IMF added another African seat to its now-25-member board, a move that proponents hope will address the concerns of African leaders who have been campaigning for more representation. It's a step in the right direction, but some experts argue that it's like putting a Band-Aid on a bullet wound.
The fact of the matter remains that there are only 3 African seats on the board, while individual global powers like the United States, France, and Britain have a disproportionate say in how the IMF operates.
At the heart of the issue is the IMF's complex voting system. Voting power is allocated through basic votes (the same for all members) and extra quota-based votes, which effectively give a bigger say to larger economies that put more money into the IMF's reserves. It's really a game of "who has the deepest pockets?" and spoiler alert: it's not the developing nations.
Africa's 54 countries, the biggest bloc among the IMF's 191 members, hold a measly 6.5% of IMF voting rights, despite hosting 18% of the world's population. Sub-Saharan Africa's voting share accounts for around half of that. Meanwhile, the United States alone holds 16.5% of the voting rights, while France and Britain each have 4%.
And despite having the least say in IMF decision-making, Africa has had the largest number of IMF lending programs over the past two decades.
When asked about Africa's grievances, the IMF says it's hiring more staff from Africa and establishing new offices and training centres in the region. Managing Director Kristalina Georgieva touts the addition of a third African chair as "the most significant step we have taken to increase the voice and representation of Africa."
Hmmmm…
Quote of the Day
“I was punched by a gorilla in Rwanda — and it was the most luxurious experience of my life.
Curious? Here’s where that’s from.
The Elusive Dream of a Single African Currency
First things first, let's talk about the elephant in the room: currency difficulties are a massive headache for intra-African trade. Big shots are often forced to conduct their deals in US dollars or other non-African hard currencies, but those are about as rare as a unicorn sighting in many parts of the continent.
To make matters worse, confidence in many African currencies is shakier than a newborn giraffe, thanks to fluctuating exchange rates that make the dollar look like a beacon of stability.
Enter the grand vision of a single African currency: the ultimate solution to the continent's currency woes and the key to unlocking economic independence. It's a dream that's been floating around since the dawn of the Organisation of African Unity in 1963, but progress has been as slow as you have figured.
While a continent-wide currency remains a distant dream, the idea of regional currencies seems to be inching their way forward. The Southern African Development Community (SADC), East African Community (EAC), Economic Community of West African States (Ecowas), and Common Market for Eastern and Southern Africa (Comesa) all have grand plans for monetary union and regional currencies.
But, as with any group project, getting everyone on the same page is like herding cats. Deadlines have been missed, disagreements have arisen, and some member states have even threatened to take their ball and go home (looking at you, Burkina Faso, Mali, and Niger).
While we wait for the single currency dream to materialize, the Pan-African Payment and Settlement System (PAPSS), launched by the African Export-Import Bank (Afreximbank) and AU in 2022, now allows instant payments in over 40 African currencies and international hard currencies, reducing currency risks and speeding up cross-border transactions.
More than 50 commercial banks have already jumped on the PAPSS bandwagon, and it's hoped that this system will encourage African businesses to ditch their reliance on cash in advance and embrace more buyer-friendly payment options.
But let’s face it, the continent is still a long way from having the political will or monetary muscle to make a single currency a reality. After all, it took the EU decades to get their economic ducks in a row before launching the euro, and Africa's journey is likely to be just as bumpy.
But with currency and payment barriers acting as significant roadblocks to the success of the AfCFTA, it's crucial that the PAPSS gains universal acceptance and that progress is made on creating at least one regional currency in the near future.
Food for Thought
“Never throw away the old at the sight of the new.”
— Mozambican Proverb