🔅 Mozambique's $2bn corruption case
Today’s Issue: Ramaphosa's scandal, grilled meat as proxy for measuring poverty, and Rwanda's Kagame has a few choice words for his Congolese counterpart... ☕
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Photo of the day: Viewpoint of the Moon, Belas, Angola
Markets
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🔺 Johannesburg SE: 75,020.01 (+0.26%)
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🔻 US S&P 500: 4,070.21 (-0.24%)
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*Data accurate as of the close of markets across the continent
China: In a surprise move, China is ready to throw out its tough COVID-19 quarantine protocols and cut back on mass testing in the wake of public protests against its strict lockdown measures (you can see how its stock index has responded, above). This is a marked shift in policy for a country that has been praised for its effective response to the pandemic. The easing of the lockdown measures comes after a week of protests that included candle-lit vigils in Beijing, street clashes with police in Guangzhou, and other acts of civil disobedience that had not been seen in mainland China since President Xi Jinping took power in 2012. As a result, expectations are growing that China could look to reopen its borders at some point next year once it achieves better vaccination rates among its elderly.
CORRUPTION
Mozambique's $2bn corruption case.
What's happening?
Nineteen high-profile defendants, including the son of a former president, have been on trial since August last year for their alleged roles in a $2bn "hidden debt" scandal. After months of hearings, the Maputo City Court is finally handing down its verdicts - 1,388 pages worth, which is expected to take five days to read out! The charges include money laundering, bribery, and blackmail related to the scandal, which crashed the nation's economy when it came to light in 2016.
What's the scandal about?
Basically, state-owned companies borrowed $2bn from international banks without telling parliament or the public. The money was to buy a tuna-fishing fleet and surveillance vessels, but an audit later found that $500m of the loans had been diverted - money that remains unaccounted for.
When the debt was discovered, donors, including the IMF, cut off financial support, triggering a sovereign debt default and currency collapse. Ouch.
What's the verdict?
As we said, the judge said it would take five days to read out the 1,388-page judgement, so stay tuned. Some activists are calling for tough sentences, but others predict the penalties will be politically rigged. And although 19 defendants are on trial, many more people are likely to have been involved in the scandal.
That said, former Finance Minister Manuel Chang, who signed off the loans, is being extradited to the US for his alleged involvement in the fraudulent scheme.
ACROSS THE CONTINENT
Other Headlines
🇿🇦 South Africa doesn't fail to deliver on the drama, and this time, President Cyril Ramaphosa is caught up in it. Apparently, someone stole a cool $4 million from his farm in 2020, and the President may have attempted to cover it up by bribing and kidnapping the burglars. An independent panel has submitted a three-volume report that found that Ramaphosa may have broken an anti-corruption law and abused his position. He denies any wrongdoing, claiming that the money was from selling buffalo. Parliament is set to examine the panel’s findings and decide whether or not to launch impeachment proceedings next week. The Farmgate scandal has already taken a toll on the President, as he is set to run for a second term with his party, the African National Congress (ANC), in 2024. He ran for office on an anti-corruption ticket, so this incident is particularly damaging.
🇿🇦 Again in South Africa, Bloomberg reported on a new proxy for measuring poverty: shisa nyama — barbecues. The report tracks the prices of key ingredients (corn meal, onions, carrots, tomatoes, curry powder, salt, frozen chicken portions, beef and wors — a type of sausage), and highlights that prices have increased almost twice as fast as official inflation. Soweto's average backyard barbecue price jumped 11% from a year ago. That compares with a 7.6% year-on-year increase in consumer prices in October. It is an interesting window into the impact of inflation on South Africa’s most vulnerable.
🇷🇼🇨🇩🇰🇪 The East African Community is convening talks to try to end the decades-long conflict, with 53 rebel groups attending for the first time. Former Kenyan President Uhuru Kenyatta had a few words for the parties involved, telling them to respect each other’s sovereignty and open their minds to peace. At the same time, Rwandan President Paul Kagame had a few choice words for his Congolese counterpart. He accused President Félix Tshisekedi of trying to delay next year’s elections by blaming Rwanda for the instability in the east of the country. He also denied claims that Rwanda was stealing minerals from DR Congo and accused UN forces of failing to eradicate the Rwandan rebel group - FDLR. But he did offer to help address the problem of the M23 and other rebel groups, as Rwanda is “interested in a stable neighbourhood”.
IN TECH
Badili raises $2.1 million to make pre-owned smartphones more accessible.
Badili, a Kenyan-based startup, just raised $2.1 million to make pre-owned smartphones more accessible to people in Africa. The company is tapping into the growing demand for affordable second-hand smartphones, even as it expands to new markets in East and West Africa. It’s all part of an effort to increase smartphone penetration across the continent, which is key to powering Africa’s digital economy. After all, feature phones still dominate the market in Kenya and many other African countries. Badili buys devices, uses a price estimation algorithm to calculate the value of each device, and then refurbishes and repackages them with a one-year warranty.
FOOD FOR THOUGHT
Proverb of the Day
“If your only tool is a hammer, you will see every problem as a nail.”
— Gambian Proverb.