🔅 South Africa Walks a Fine Russia-West Line
Plus: Tensions over the Nile, Nigeria’s debt drama, South Africa mass shooting, And much more… ☕
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Adani Group's Slump Continues: Gautam Adani's Adani Group isn't having the best of times. On Monday, shares in the Indian conglomerate fell sharply after their response to criticism from a US short-seller failed to appease investors. This means that the group's stocks have lost a whopping $65 billion in value in only days.
Nigeria's Cash-Reliant Citizens Get a Reprieve: If you're one of those Nigerians still using the 1,000, 500, and 200 naira notes that the Central Bank of Nigeria (CBN) announced it was replacing last October, you're in luck. The CBN extended the deadline to exchange your old bills for new ones to February 10. Despite the CBN's plans to reduce the use of cash, Nigeria is still largely cash-reliant, particularly in rural and unbanked communities. Since October, 1.3 trillion nairas in old notes have been deposited into the bank, but there's still a lot to be done.
*Data accurate as of the close of markets across the continent
GEOPOLITICS
South Africa Walks a Fine Russia-West Line
South Africa is playing it cool and calm in the Russia vs Ukraine drama. Instead of taking sides, they decided to take a step back and watch the show from a safe distance.
First, they abstained from UN resolutions condemning Moscow's invasion, much to the frustration of the US and its allies.
Since then, the US has criticised South Africa for conducting military exercises with Russia and China, called "Mosi," from February 17 to 27. The exercises will take place off South Africa's coast and will involve 350 of South Africa's soldiers. The US has expressed concerns about any country conducting exercises with Russia as Russia wages war against Ukraine.
What's South Africa's reasoning?
South Africa's government says it wants to maintain its neutral stance and is impartial in the Russia-Ukraine conflict. It believes that the only path to peace is through diplomacy and dialogue.
However, this strategy could be dangerous, as the country relies heavily on the US and EU for trade and investment.
So what's the history between South Africa and Russia?
South Africa's relationship with Russia is a strong one. It dates back to the Soviet Union's support for the African National Congress during apartheid.
Many ANC leaders underwent military training in the former communist state and established strong ties with the country even before it came to power. This connection may be why South Africa is trying to remain neutral and avoid taking sides in this conflict.
The South African economy also has some significant Russian investors embedded in it, and South Africa is a member of the BRIC: an acronym that stands for the countries of Brazil, Russia, India, and China, which are considered to be among the world's fastest-growing economies and are expected to play a significant role in the global economy in the 21st century. The term was first used in 2001 by economists at Goldman Sachs.
Is South Africa's strategy going to pay off?
Only time will tell. But for now, South Africa is walking a tight rope - trying to stay neutral while not offending their major trading partners.
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OTHER HEADLINES
Across the Continent
🇪🇹🇸🇩 Ethiopia-Sudan Tensions Over the Nile | Sudan and Ethiopia have reached an agreement on the Grand Ethiopian Renaissance Dam (GERD), which downstream Sudan (and Egypt) views as a threat to its water supply. Abdel Fattah al-Burhan, Sudan's de facto leader, and Ethiopian Prime Minister Abiy Ahmed, who was on a one-day visit to Khartoum, had a meeting and agreed that the dam won't cause any harm to Sudan, and will, in fact, benefit it in terms of electricity. Despite multiple rounds of talks between the three governments, an agreement over the filling and operation of the reservoir has yet to be reached.
🇳🇬 Nigeria's Debt Drama | On Friday, Moody's downgraded the country to Caa1 from B3, citing a deteriorating fiscal and debt position. Moody's is a credit rating agency. When a country is downgraded by Moody's, it means that Moody's has reduced its credit rating for that country. This usually indicates that it has revised its view of the country's ability to repay its debts and that it is considered to be a higher credit risk. This makes it harder for the country to borrow money. Moody's credit ratings range from Aaa (highest credit quality) to C (lowest credit quality). In between, the ratings are Aa, A, Baa, Ba, B, Caa, Ca and C. Moody’s Nigeria rating has dramatically affected the country’s bond prices, with the 2051 Eurobond falling more than 2.8 cents against the dollar. Moody’s cited the country's high debt-to-GDP ratio (45%) and said it expects interest payments to take up half of the government's revenue in the medium term. The International Monetary Fund has estimated that Nigeria spent 80% of its revenues on servicing debt last year, a ratio that could rise to 100%. Finance Minister Zainab Ahmed said the country's debt trajectory was sustainable, but investors don't seem so sure.
🇿🇦 South Africa Mass Shooting | South Africa's police are on the hunt after a mass shooting at a birthday party in Kwazakele, Gqeberha, left eight dead and three injured. No arrests have been made yet, and authorities are still trying to figure out the motive behind the attack. This isn't the first time something like this has happened in the country. Last July, 19 people were killed in a series of random shootings. South Africa has one of the highest murder rates in the world, with around 20,000 people killed every year out of a population of 60 million. There are 3 million guns registered in the country and plenty more unregistered.
🇪🇹 Eritrean Troops Still in Ethiopia | US Ambassador to the UN, Linda Thomas-Greenfield, says Eritrean troops are still in Ethiopia, despite the Ethiopian government and the Tigray forces signing an agreement to end hostilities in November. The Eritreans fought alongside the Ethiopian government. This contradicts the claims of the Ethiopian military, which say all foreign forces have left the region. The presence of Eritrean troops has been seen as a critical obstacle to the peace deal, and a Tigrayan spokesperson dismissed claims that they had left and said "thousands" were still there. Ethiopia's government, national security advisor, and the spokesperson for the Ethiopian Army have all stayed mum on the issue.
FOOD FOR THOUGHT
Proverb of the Day
“When the right-hand washes the left-hand and the left-hand washes the right-hand, both hands become clean.”
— Kenyan Proverb.
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