Africa News blog
African business, politics and lifestyle
from Global News Journal:
This week U.N. Secretary-General Ban Ki-moon's chief of staff, Vijay Nambiar, defended the United Nations' record on Ivory Coast. In a highly unusual public rebuttal, Nambiar told former South African President and African Union mediator for the Ivory Coast conflict, Thabo Mbeki, that it was he -- not the international community -- who got it wrong in the world's top cocoa producer.
In April, Ivory Coast's long-time President Laurent Gbagbo was ousted from power by forces loyal to his rival Alassane Ouattara, who won the second round of a U.N.-certified election in November 2010, with the aid of French and U.N. troops. According to Mbeki -- who has also attempted to mediate in conflicts in Sudan and Zimbabwe -- there never should have been an election last fall in the country that was once the economic powerhouse of West Africa.
Mbeki wrote in an article published by Foreign Policy magazine at the end of April: "The objective reality is that the Ivorian presidential elections should not have been held when they were held. It was perfectly foreseeable that they would further entrench the very conflict it was suggested they would end."
Ivory Coast was split in two by the 2002-3 civil war and the failure to disarm the northern rebels meant the country held an election last year with two rival armies in place, leading to a new outbreak of hostilities when Gbagbo rejected the internationally-accepted election results.
from Global Investing:
Direct and indirect foreign investors fled from Africa as the credit crisis sparked a flight to safety, or at least familiarity, but Ayo Salami, manager of the Duet Victoire Africa Index fund believes domestic demand can step in to underpin growth.
African governments have been hit hard by a withdrawal of investor money from the continent and need to make sure they remember reforms and avoid high inflation in their attempts to protect their economies, says Razia Khan, head of Africa research at Standard Chartered Bank in London.
Africa gets 3 percent of the world’s cross-border flows, but BIS end-2008 data shows the region suffered the world’s largest decline in cross-border financing due to the global financial crisis, Khan told a breakfast audience of politicians, bankers, investors and journalists in London today.
Few investors dispute the view that Nigeria’s banks look
cheap at the moment, with most of the major players trading at a
discount to book value and with earnings multiples way below
consumer stocks such as Guinness Nigeria.
Nor is anybody arguing against the long-term logic of the
financial sector’s potential growth in an oil-rich country of
140 million people but only 23 million bank accounts.
A new central bank head with a background in risk management
is also making all the right noises about improving the sector’s
notoriously murky financial disclosure – part of the reason the
shares crashed so spectacularly in the latter half of 2008.
Furthermore, Lamido Sanusi’s stated desire to relax limits
on foreign ownership has breathed new life into the view that
another wave of consolidation, this time involving major global
players, sits around the corner.
Does all this sound – like so many other Nigerian promises of easy money – too good to be true,
or are its banks set on a long-term trajectory that will ultimately see them realise the dream of making Lagos a financial hub to rival Johannesburg?
On the one hand, Zuma is anxious to assure investors that there will be continuity in the economic policies that have secured the country’s status as the regional powerhouse.
Recent events in South Africa have sent some conflicting signals to investors about sovereign risks. On the one hand there was some regulatory flip-flopping over the Vodacom listing given objections from the union organisation COSATU, which raised questions about the influence of unions in Jacob Zuma’s administration. On the other hand the sovereign issuing some $1.5 billion was highly successful and oversubscribed.
With Zuma recently elected on a platform of change for his domestic audience and continuation of old policies when speaking to investors, there is a raft of new ministers and new ministries and quite a bit of policy uncertainty. No foreign investor will deny South Africa’s need to address serious social problems of inequality, housing, jobs and education through a more developmental state agenda.
Thousands of South Africans danced, cheered and sang hymns to celebrate President Jacob Zuma’s swearing in. Zuma, they said, as a man of the people, would give them houses and electricity, fight AIDS and crime, and ensure prosperity even as South Africa is on the brink of its first recession in 17 years.
But appointments to key ministries have raised questions over how well the new government will function.
from Global Investing:
Nigerian banks were advertising their services on billboards in Terminal 5 last year, and travelling investors felt it showed the banks were rashly trying to keep up with international investment banks in aiming for a global profile, causing many to sell, a banker specialising in Africa told journalists this morning over breakfast.
The overthrow of Madagascar’s leader may have had nothing to do with events elsewhere in Africa, but after four violent changes of power within eight months the question is bound to arise as to whether the continent is returning to old ways.
Three years without coups between 2005 and last year had appeared to some, including foreign investors, to have indicated a fundamental change from the first turbulent decades after independence. This spate of violent overthrows could now be another reason for investors to tread more warily again, particularly as Africa feels the impact of the global financial crisis.
Good news and bad news for Africa from the latest take on global risks from the World Economic Forum. Not much danger for most of the continent, it says, from an asset bubble burst. That’s the good. The bad, of course, is that this is because there are not many financial assets to bubble. In fact, it deems the overall exposure even to economic risks is small because African economies are not particularly tied in to global markets.
Actually, the report shows that there are two Africas. Mapped by their susceptibility for economic and asset bubble trouble, most African countries are bunched together in a low risk range. But another, smaller cluster, including Nigeria and South Africa, finds itself in much more peril and shares space on the WEF risk map with Western and Eastern Europe.