Politics: Latest News
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.
Dana Sanchez, 11:32 am
South Africa was criticised in June by human rights groups and praised this week when it changed its mind about appointing the first-ever U.N. expert tasked with investigating LGBT rights abuses worldwide. In a turnaround that broke ranks with other African countries, South Africa approved the legality of the post and voted against delaying it. South Africa was one of the few African countries that did not support delaying the appointment. Several countries said Monday that they would not recognize or cooperate with the U.N.
Dana Sanchez, 5:25 pm
In the last few years it seems like news reports about HIV/AIDS in Africa have been dominated by South Africa’s success making antiretrovirals available to the public. SA still has the worst HIV/AIDS epidemic in the world. Almost 20% of the population has it, with adolescent girls disproportionatley so. Trump’s election raised anxieties that U.S. humanitarian aid like PEPFAR will stop. Trump said that the U.S. should “stop sending foreign aid to countries that hate us.” On the other hand, there is one foreign aid program Trump likes: the U.S. President’s Emergency Plan for AIDS Relief.
Dana Sanchez, 2:22 pm
In June 2016, Angolan President José Eduardo dos Santos controversially appointed his billionaire daughter Isabel head of the state-owned oil company Sonangol. The collapse of oil prices is nothing new, but the nature of Angolan politics and the stranglehold of the dos Santos family are threatening economic collapse. Under Isabel’s watch, Sonangol can’t afford to pay for toilet paper, never mind repay $1.135 billion in debt. Soon after Isabel became CEO of Sonangol, Angola pulled out of discussions with the IMF for a $4.5 billion loan. Isabel’s banking monopoly is the reason, an analyst said. The richest woman in Africa, Isabel owns stakes in five of the largest Angolan banks.
Dana Sanchez, 10:07 am
Until now, Zimbabwean President Robert Mugabe has insisted he will die in office. Over the weekend the 92-year-old leader announced for the first time that he plans to retire. He told veterans that the war is over, colonizers have been defeated, and regime change has entered a critical period. The country is so broke that it has run out of cash — it uses U.S. dollars. Later this week, a new currency called bond notes will start showing up in some exporters’ bank accounts. The ruling Zanu PF party insists Mugabe will be elected president again in the 2018 elections.
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