Politics: Latest News
Dana Sanchez, 3:50 pm
An Israeli garment firm manufacturing in Ethiopia just made its first shipment to the U.S. for Sweden’s H&M. Ethiopia has all the key elements for manufacturing — cheap labor, government support, and access to the U.S. through AGOA, the Israeli CEO said. Ethiopian garment workers start at about $21 a month compared to Bangladesh’s minimum wage of $68 per month and China’s average monthly wage of $500 in the textile sector.
Dana Sanchez, 1:29 pm
Canada’s renewed commitment to Africa seems strategically timed to coincide with uncertainty about future U.S. commitment. President elect Donald Trump has tweeted almost nothing on the subject. Canadian Prime Minister Justin Trudeau just returned from his first African trip as head of state, unveiling a host of spending initiatives that support gender equality. “I’m hoping that the new president of the U.S. will be inspired by Canada’s position,” a stakeholder said. Absent from Trudeau’s agenda was discussion of freedom of speech.
Kevin Mwanza, 9:11 am AFKI Original
Fidel Castro was a revolutionary leader and president of Cuba from January 1959 to February 2008 when he formally ceded power to his younger brother, Raul Castro, due to his ailing health. During his stay in power, Castro enjoyed good relations with African leaders and liberation activists such as the late Kwame Nkrumah of Ghana, Nelson Mandela of South Africa, Julius Nyerere of Tanzania and Augustinho Neto of Angola.
Dana Sanchez, 3:56 pm
Donald Trump’s election could not have been better news for the economic and political ambitions of China. Suddenly, all roads lead to China from Africa, Europe, most of Asia and most of South America. African manufacturers could profit from China’s growing power, but that may have more to do with rising labor costs in China than it has to do with retreating U.S.-Africa trade. Manufacturing salaries are rising fast in China, which is starting to outsource production to other countries. China has become a victim of its own success.
Kurt Davis Jr., 12:26 pm AFKI Original
Egypt floated its currency earlier this month. The Egyptian pound dropped nearly 50%. Early signs show increased investment in the country. Despite diverging perspectives on the methodology, most economists buy the long-term upside. If the Egyptian story is any indication of success, letting the naira hit rock bottom on a fully-floated basis will result in greater investment in the country and a recovering naira over time. As one local put it, Nigeria should be able to do this (and many other things) better than Egypt. Maybe this is the opportunity to back up such bold statements.
Dana Sanchez, 11:17 am
Hyperinflation in 2008 had Zimbabweans paying 50 billion Zimbabwean dollars for an egg and 100 trillion dollars for a weekly bus ticket. The U.S. dollar has been Zimbabwe’s main currency since 2009 but those are in short supply. Now it’s deja vu all over again as the Zimbabwe government forces bond notes into circulation, a move many feel is a ploy to bring back the Zimbabwean dollar. The central bank promised to keep a lid on issuing bond notes, insisting they are not an official currency and will have no value outside of Zimbabwe. The first test will be in the informal foreign exchange markets on the streets.
Dana Sanchez, 5:24 pm
Fidel Castro was no angel. He ran Cuba with “a strong arm and dodgy economic policies,” but for many in Africa, the Cuban leader was a friend in need. Castro is credited with helping pit Russia against the U.S. in a war in Angola that brought about the beginning of the end of apartheid. It wasn’t just about independence from colonialists but also from the perceived injustices of capitalism. “I find capitalism repugnant. It is filthy, it is gross, it is alienating,” Castro said.
Dana Sanchez, 5:24 pm
Credit ratings agency Fitch on Friday revised its outlook for South Africa from stable to negative, citing political risks. Moody’s was also expected to release its outlook Friday, but had not done so by late afternoon. There are fears that South Africa will be downgraded to junk status. Junk status means high risk, and therefore, high borrowing costs. For fund managers representing investors, a downgrade to junk status means they will have to sell the assets (bonds) they hold. Their mandates require that they only invest in investment-grade assets. For ordinary South Africans it means paying more interest, leaving less money for savings or food.
Staff, 5:34 pm
South Africa this week put on hold proposals to introduce a national minimum wage as part of an effort to stabilize the labor market. Labor upheaval is a potential risk factor to the country’s credit rating, which faces in the next two weeks a possible downgrade to junk status by ratings agencies. The economy has grown slowly in the last six years — too slowly to recoup the 1 million jobs lost during the 2008-2009 recession. Despite the gloomy numbers, the rand held its ground, propped up by firmer metal prices which boosted commodity currencies.
Dana Sanchez, 10:31 am
Bond notes will not be forced on consumers, the Zimbabwe government has said. This is not about re-introducing the Zimbabwean dollar, which became worthless in 2008 due to hyperinflation. The public has been warned not to adopt a negative attitude towards bond notes because they’ll ease the country’s cash shortage. Zimbabweans fear bond notes will trigger a repeat of 2008 hyperinflation. Adopting the U.S. dollar as the official currency in 2009 helped stop the bleeding. For Zimbabweans, cash isn’t the only thing running low. There’s a shortage of trust.
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