Wednesday, 24 August 2016

SOUTH AFRICA: In the cities, ANC starts a new life in opposition

This week elections dominate our list of things to watch: the recent past, in the case of South Africa, where the ANC comes to terms with its loss of power in the big cities; the present, in Ghana, where the governing National Democratic Congress has just launched its campaign ahead of the national elections on 7 December; and the perhaps indeterminate future in Congo-Kinshasa where President Joseph Kabila is trying to delay elections due in November. And then, for the optimists, there are a few green shoots of recovery in Nigeria where some foreign investors are returning and there are hopes of oil production and prices going back up.

SOUTH AFRICA: In the cities, ANC starts a new life in opposition
Post-election bargaining has enabled the Democratic Alliance to win control of the country’s three main municipalities – Johannesburg, Tshwane/Pretoria, and Nelson Mandela Bay (which includes Port Elizabeth) – where no party won an absolute majority.

Along with its continuing control of Cape Town, the DA now runs four out of the five biggest cities in South Africa, with the African National Congress in charge in Durban, capital of KwaZulu-Natal. The DA won the most votes in Nelson Mandela Bay and the ANC quickly conceded control. But the post-election jockeying in Johannesburg and Tshwane/Pretoria and adjacent municipalities has taken much longer, with ANC politicians putting up more of a fight.

In particular, the ANC’s Parks Tau, who has been mayor of Johannesburg since 2011, battled hard to make a deal to give him a second term. The decisive factor was the Economic Freedom Fighters, in third place with 8% of the vote, which used its position to back the DA as the ‘lesser evil’ against the ANC.

CONGO-KINSHASA: Opposition strike echoes anti-Mobutu campaign of the 1990s
The opposition alliance launched its national strike with some success on 23 August as the next step in its campaign to force President Joseph Kabila to step down at the end of his second term in November, as set out in the constitution. Discreet support for this campaign from several Western countries including the United States and France has given the opposition a fillip.

Older Congolese say the opposition’s campaign resembles the tortuous efforts to depose the long-time late dictator Mobutu Sese Seko in the 1990s. A leading figure then and now, Etienne Tshisekedi, has returned to the political stage, after a long respite in Belgium, to mobilise his loyal supporters.

But this time much will depend on how much support the strike gets across the country. If it extends to the economically critical copper and cobalt mining industry, the campaign could start to put real pressure on the Kabila government. If that happens, the government’s response could become much tougher. After the strike was launched police fired tear-gas in the Limité area of Kinshasa, where many of Tshisekedi’s followers live.

NIGERIA: Come on in! The devalued water is lovely, say investors
As US Secretary of State John Kerry was meeting President Muhammadu Buhari in Abuja on 23 August on regional security matters, some glimmers of economic hope started to filter in.
Prior to the meeting with Buhari, Kerry had used a speech at the palace of the Sultan of Sokoto to call for better international coordination in the fight against political and religious extremism, but added critically that all governments had to do more to promote social inclusion, and educational and economic opportunities.

Kerry was speaking as Nigeria grapples with its worst recession for two decades and the Buhari government faces criticism from Western officials for its reluctance to end fuel subsidies and allow the naira to depreciate.

Yet two months after the government allowed the naira to float, two major financial institutions – Standard Bank and Exotix – are advising their clients to start buying naira assets again. After falling to a record US$1=N320 in mid-August, the naira has started to strengthen again. Other banks and financial advisors are said to be cautiously following suit. Two unconnected pieces of good news might also tempt investors: global oil prices are edging upwards again and, after many conflicting signals, the Niger Delta Avengers militant groups appear to be ready to talk to, if not negotiate with, the government.

GHANA: IMF passes judgement on government in midst of election campaign
With Ghana facing one of its most closely-fought elections on 7 December, the International Monetary Fund has been dragged into the middle of the campaign which will focus on the government’s economic record. An IMF report in June had already recommended deep cuts in state spending to reduce the fiscal deficit; a tough demand for Finance Minister Seth Terkper in the run up to elections.

When President John Mahama launched his re-election campaign in Cape Coast, one of the key swing areas, on 21 August, he talked up his government’s investments in education, healthcare, transport and electricity.

His opponent, Nana Addo Akufo Addo, flagbearer for the opposition New Patriotic Party accuses Mahama of mishandling the economy, allowing debt to grow to 71% of the country’s gross domestic product, and presiding over a regime of wasteful and sometimes corrupt state procurement. Mahama insists the country’s electricity crisis has been addressed but Akufo Addo says any improvements in supply have been achieved by short-term and over-priced projects. Although most voters will not delve into the technicalities of these issues, the main interest is the country’s economic direction: up or down. That gives a huge political importance to the IMF’s verdict.

On 22 August, IMF officials announced that following discussions with the Ghana authorities on the country’s fiscal outlook for the rest of the year it will present a review to their executive board in mid-September. Under IMF procedures, this is will be made public and is likely to be dragged into the election campaign by both sides.

Insiders expect the IMF report to be broadly positive after its board delayed a fourth disbursement of some $115 million, out of a multi-year loan of $918 mn., in June and demanded further cuts to public spending.

No comments: