🔅 The Headlines that will Dominate 2023
Today’s Issue: The continent bids farewell to the Covid-19 era and braces for a new problem: debt.... ☕
Happy New Year, everyone!
As we kick off the first newsletter of the year, we’ll look at events that could dominate African headlines inn 2023. From elections to economic developments, there’s sure to be plenty to keep us on our toes.
Photo of the day: Avenue of the Baobabs, Madagascar
Markets performance in 2022:
🔺 Nigerian SE: 49,485.51 (+15.85%)
🔻 Johannesburg SE: 73,588.31 (-0.16%)
🔻 Ghana SE: 2,444.88 (-12.35%)
🔻 Nairobi SE: 127.72 (-23.27%)
🔻 US S&P 500: 3,878.44 (-19.14%)
🔻 Shanghai Composite: 3,054.43 (-15.91%)
*Data accurate as of the close of markets across the continent
Happy New Year, Africa!
As the continent bids farewell to the Covid-19 era, it’s bracing for a new problem: debt.
The IMF recently highlighted the fact that loans across the continent have more than doubled to $636 billion in the last decade.
Ghana, Zambia, Ethiopia, Nigeria, and Kenya are all dealing with mounting debt. But perhaps it should not all be all glum, with Bloomberg pointing out the fact that many African countries have the opportunity to create funds using their natural resources, such as diamonds, iron ore, bauxite, cobalt, copper, and platinum, to buffer themselves against future economic shocks.
Take Botswana, for example. It has used its diamond sales to create a $4 billion fund, which has helped it weather the pandemic slump and provide a safety net for its citizens.
Let’s take a more detailed look at what could grab the headlines across regions:
East Africa
Could 2023 bring another war to the continent? Rwanda and the Democratic Republic of Congo are at odds, and it’s gotten so heated that the East African bloc had to step in to launch a peacekeeping mission. If war does break out, it’ll affect millions of people and disrupt the world’s most significant source of cobalt—Congo.
As that plays out, the International Rescue Committee has identified Somalia and Ethiopia as countries at risk of deteriorating humanitarian crises, while Kenya’s President William Ruto is hoping to tackle the nation’s debt burden.
On a brighter note, Tanzania is inching closer to signing agreements for a $40 billion natural gas plan. And passing through the country from Uganda, a crude pipeline is scheduled to start exports in 2025.
West Africa
Ghana is dealing with serious financial woes, with inflation going through the roof and the cedi in free fall. The government is already trying to figure out how to navigate an IMF program and a debt crisis, so get ready for some austerity measures come 2023.
Plus, new European Union rules will make it hard for Ghana and Ivory Coast (the world’s biggest cocoa producers) to prove that no child labour was used in the production of chocolate. So, Ghana will need to do some serious supply chain clean up and record-keeping.
The region will have to worry about military coups and terrorist violence, too, as transitional, military governments try to keep things together in Mali, Guinea and Burkina Faso. The region has its hands full!
Special focus on Nigeria
Nigeria’s presidential election is just around the corner, and it looks like the country’s two-party domination might be coming to an end. Opinion polls have Labor Party’s Peter Obi in the lead. However, the two dominant parties still have a good chance at taking the election—mostly because they have the money and the national infrastructure to support mass campaigns.
No matter who wins, the real challenge is just beginning. The new leader will have to figure out what to do with a tanking economy and a fuel subsidy that could cost a whopping $14 billion.
No pressure!
South Africa
It’s been a dark decade for South Africa — literally — with the risk of a full-on power grid collapse. If the South African President Cyril Ramaphosa wants to pull the country out of this mess, he’s going to have to start with Eskom and Transnet, the state-run companies responsible for electricity and freight-rail.
And then he’ll have to deal with the global financial grey list that the country is on the brink of joining. Not an easy feat. But it has got to be done if the ANC wants to keep voters happy in time for the 2024 election.
Ramaphosa’s got his work cut out for him.
FOOD FOR THOUGHT
Proverb of the Day
“How gently glides the married life away, When she who rules still seems but to obey.”
— Kenyan Proverb.