Monday, 21 November 2016

NIGERIA: Oil and inflation up and politics wobbling

We start in Nigeria where the central bank is holding critical meetings on interest rates and foreign exchange policy. After its budget last week, Zambian officials continue talks with the International Monetary Fund and political tensions rise in neighbouring Congo-Kinshasa. Officials from the Central African Republic are to discuss spending plans after raising pledges worth $1.5 billion at a donor conference in Brussels last week and member states of the International Criminal Court, meeting in the Hague, wind up discussions about the body’s future on Thursday (24 November). Gambia's President Yahya Jammeh, facing a more determined opposition in national elections due on 1 December, has banned European observers.

NIGERIA: Oil and inflation up and politics wobbling
There is a strong possibility of a hike in Nigeria’s base or policy interest rates – to 15% or 16% from the current rate of 14% – after the Central Bank of Nigeria's monetary policy committee meets today (21 November) and tomorrow.

This comes against the backdrop of 'stagflation', weak economic performance but with steadily rising prices. Inflation was 18.3% last month, more than double the central bank's target. CBN directors are to seek the prosecution of people hoarding dollars as part of its plans to step up capital controls.

On the more positive side, the ratings agency Moody's forecasts that Nigeria's economy will grow by at least 2.5% next year if the recent improvements in oil output are maintained. The latest figures from Deputy Oil Minister Emmanuel Kachikwu show that production is back up to 2.1 million barrels a day. This follows a meeting on 1 November between President Muhammadu Buhari and several leaders from the Niger Delta led by veteran politician Edwin Clark.

Further meetings between presidency officials and Delta groups are likely this week. But there is still no sign that the Niger Delta Avengers, the most active militant group this year, will be joining the talks. So far, the talks have discussed extra subventions and investments in the Delta, which have been heavily criticised by the Avengers, who argue that the cash gets diverted by corrupt officials.
There are also signs that the partisan battles in the Delta between supporters of President Buhari and his predecessor Goodluck Jonathan are still raging. Rivers State governor Ezenwo Nyesom Wike has been a particularly fierce critic of Buhari and is seen as a frontrunner to lead the opposition People’s Democratic Party.

ZAMBIA: Will copper boom bail out government in tough talks with IMF?
More discussions between the government and the IMF are likely this week in the wake of the Finance Minister Felix Mutati's budget, announced on 11 November. The IMF is said to want tougher curbs on spending and more accountability on public finances. If these measures are agreed, the two sides would be on course to announce a new IMF programme in January.

Yet the current boom in the world copper price, at its highest level for six years with futures jumping 20% in New York last week, could complicate the talks. President Edgar Lungu may see the prospect of higher revenues from copper and cobalt as a way to avoid the unpopular spending cuts insisted on by the IMF. At the same time, the government is boosting spending on the police in anticipation of protests over the withdrawal of food and fuel subsidies.

Traders differ on how long the copper price boom will last but most say it will not maintain its current momentum. Asian copper buyers have been stepping up purchases, mainly because of plans to increase production of electric cars whose components use substantial quantities of copper and cobalt.

CONGO-KINSHASA: Political crisis deepens as Kabila plans to stay put until 2018
Like neighbouring Zambia, Congo-Kinshasa should benefit from a global copper boom but the country remains mired in its worst political crisis for two decades. Pressure will mount on President Joseph Kabila as the official deadline for the end of his second term of office on 19 December approaches.

Security forces cracked down on an attempt by the opposition alliance, known as the Rassemblement, to organise demonstrations in Kinshasa on 19 November. Police also blocked all routes to the home of opposition leader Etienne Tshisekedi.

These latest attempts to launch street protests follow Kabila's appointment on 17 November of Samy Badibanga, a former ally of Tshisekedi, as Prime Minister. The Rassemblement called Badibanga's appointment a 'non-event'. Opposition activists are expected to regroup this week to plot a more effective plan to force out Kabila, mobilising local support and getting backing from international organisations and foreign governments. 

CENTRAL AFRICAN REPUBLIC: After aid conference, government told to focus on crisis relief measures
This week officials are working on plans for the management of the US$1.5 billion pledged following President Faustin Archange Touadéra's presentation on 17 November of his five-year plan for the country. 

Touadéra was speaking at a special conference convened by the European Union and the United Nations and several non-governmental organisations in Brussels. Reflecting the strong concerns which remain in the wake of recent clashes, several NGOs urged the President to prioritise short-term humanitarian projects.

INTERNATIONAL CRIMINAL COURT: Fight intensifies for the court's future
The United Nations and human rights organisations are urging member countries of the International Criminal Court to stand firm on Article 27 – that is the provision that allows the court prosecutor to issue charges against everyone from ordinary citizens to the President.

Some African countries attending the court's Assembly of State Parties Conference in the Hague, which ends on Thursday (24 November), have been lobbying for immunity for sitting heads of state. This year's Assembly of State parties could prove critical for the court's future.

Botswana, Côte d’Ivoire, Nigeria, Malawi, Senegal, Tanzania, Zambia and Sierra Leone have pledged support for the Court. Burundi, Gambia and South Africa have promised to leave. Many other African countries are sitting on the fence. Last week Russia added its voice to opponents by stating that it would not ratify the 1998 Rome Statute, which established the Court. The United States has still to ratify the Rome Statute, which looks unlikely under Donald Trump's presidency.

GAMBIA: Yahya Jammeh blocks international observers ahead of 1 December elections
Facing businessman Adama Barrow, who is back by eight opposition parties, in national elections on 1 December, President Yahya Jammeh has barred election observers from the European Union. This suggests the election could be much closer than previous contests and that the opposition has a better strategy. But there are also growing fears about violence and rigging in the election. Two opposition politicians have died in state custody this year.

Earlier, the Banjul government had said it would allow in foreign observers and has accredited a team from the African Union. The EU had sent an observer team to the 2011 elections although the regional organisation, the Economic Community of West African States declined to send a team on the grounds that their work would be obstructed.

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