John Campbell

Africa in Transition

Campbell tracks political and security developments across sub-Saharan Africa.

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Showing posts for "Economy"

South Africa’s President Zuma as Mafioso

by John Campbell
South African President Jacob Zuma laughs ahead of Finance Minister Pravin Gordhan's medium term budget speech in Cape Town, South Africa, October 26, 2016. (Reuters/Sumaya Hisham) South African President Jacob Zuma laughs ahead of Finance Minister Pravin Gordhan's medium term budget speech in Cape Town, South Africa, October 26, 2016. (Reuters/Sumaya Hisham)

Critics worldwide of South African President Jacob Zuma characterize his administration as “Mafiosi” in style. South African society is characterized by gross inequality, generally with blacks on the bottom and whites on top. Ostensibly, the president’s goal is the “transformation” of this characterization of society, even if that means an assault on constitutional institutions and the rule of law. However, in cahoots with personal allies, notably the Gupta family, instead of “transformation” he is seeking to remain in power and preserve his wealth. Thus far, he has been successfully countered by the strength of South Africa’s institutions, a mobilized civil society, and the democratic faction within the African National Congress (ANC). Calls for his early recall are mounting within the ANC. A trenchant exposition of this “Mafioso” perspective is provided by Richard Poplak, in the Daily Maverick. Read more »

A Face of Nigerian Corruption

by John Campbell
Nigeria's former President Goodluck Jonathan and wife Patience Jonathan arrives at the polling ward for accreditation in Otuoke, Bayelsa State March 28, 2015.  (Reuters/Afolabi Sotunde) Nigeria's former President Goodluck Jonathan and wife Patience Jonathan arrives at the polling ward for accreditation in Otuoke, Bayelsa State March 28, 2015. (Reuters/Afolabi Sotunde)

The Economic and Financial Crimes Commission (EFCC) has frozen U.S. dollar bank accounts that former Nigerian First Lady Patience Jonathan claims are hers. The total value of the accounts is worth $31.5 million. She has applied to the Federal High Court in Lagos to unfreeze the accounts. Many Nigerians, including the Nigeria Labour Congress, are asking how she accumulated $31.5 million in the first place. Read more »

Africa’s Changing Economic Landscape

by Guest Blogger for John Campbell
A truck is loaded with bags of tea leaves at a plantation in Nandi Hills, in Kenya's highlands region west of capital Nairobi, November 5, 2014. (Reuters/Noor Khamis) A truck is loaded with bags of tea leaves at a plantation in Nandi Hills, in Kenya's highlands region west of capital Nairobi, November 5, 2014. (Reuters/Noor Khamis)

This is a guest post by Allen Grane, research associate for the Council on Foreign Relations Africa Studies program.

Bloomberg Markets’ Michael Cohen and Helen Nyambura-Mwaura have analyzed the current state of Africa’s economies in a very interesting article. They point out that despite the current poor performance of Africa’s larger economies (particularly Nigeria and South Africa), some of the continent’s smaller economies, especially in East Africa, are doing well and will likely continue to do so. Read more »

Home Truths About the Size of Nigeria’s Economy

by John Campbell
Traders work at the Nigerian Stock Exchange in Lagos, February 13, 2015. The naira has crashed through the key level of 200 to the dollar this week in a rout sparked by weak oil prices and escalating tension over the postponement of a presidential election in Africa's biggest economy. (Reuters /Joe Penney) Traders work at the Nigerian Stock Exchange in Lagos, February 13, 2015. The naira has crashed through the key level of 200 to the dollar this week in a rout sparked by weak oil prices and escalating tension over the postponement of a presidential election in Africa's biggest economy. (Reuters /Joe Penney)

In 2014, following the first revision of Nigeria’s gross domestic product data in two decades, Abuja announced that its economy had overtaken South Africa’s as the largest in Africa. Using the rebased data, the International Monetary Fund (IMF) reported that that Nigeria’s economy grew at 12.7 percent between 2012 and 2013. Thereafter, there was some triumphalist rhetoric about the size and strength of the economy from personalities in then-president Goodluck Jonathan’s administration in the run up to the 2015 elections and among those promoting foreign investment in Nigeria. However, in 2016, reflecting the dramatic fall in petroleum prices and the value of the national currency, the naira, the IMF concluded that Nigeria’s GDP had fallen behind that of South Africa. The Economist noted that foreign investors are likely to be discouraged by the latest figures. Read more »

Illegal Mining and the Role of “Zama Zamas” in South Africa

by Guest Blogger for John Campbell
A miner is seen underground at Lonmin Plc's Karee mine in Marikana, Rustenburg 100 km (62 miles) northwest of Johannesburg, March 5, 2013. (Reuters/Siphiwe Sibeko) A miner is seen underground at Lonmin Plc's Karee mine in Marikana, Rustenburg 100 km (62 miles) northwest of Johannesburg, March 5, 2013. (Reuters/Siphiwe Sibeko)

Nathan Birhanu is an intern for the Council on Foreign Relations Africa Studies program. He is a graduate of Fordham University’s Graduate Program in International Political Economy & Development.

In recent years, the mining industry has struggled to turn a profit due to a slowdown in demand from China’s economy and an oversupply from producers. South Africa’s mining companies, who export primarily platinum, iron ore, gold, coal, and manganese, have been heavily affected by the downturn. Read more »

Africans in China: The Pivot Back

by Guest Blogger for John Campbell
African traders buy clothing at a shopping mall in Guangzhou July 31, 2009. (Reuters/Tyrone Siu) African traders buy clothing at a shopping mall in Guangzhou July 31, 2009. (Reuters/Tyrone Siu)

This piece has been co-authored by Nathan Birhanu and Bochen Han. Nathan is an intern for the Council on Foreign Relations Africa Studies program and is a graduate of Fordham University’s Graduate Program in International Political Economy & Development. Bochen is an intern for the Council on Foreign Relations Asia Studies program and is an undergraduate majoring in political science at Duke University. Read more »

BREXIT and Africa

by John Campbell
People chat in front of an electronic board displaying movements in major indices at the Johannesburg Stock Exchange building in Sandton Johannesburg July 9, 2015.
(Reuters/Siphiwe Sibeko) People chat in front of an electronic board displaying movements in major indices at the Johannesburg Stock Exchange building in Sandton Johannesburg July 9, 2015. (Reuters/Siphiwe Sibeko)

It is early to assess the long term consequences for sub-Saharan Africa of the United Kingdom’s (UK) vote to leave the European Union (EU) on June 24. However, in the short term, it is useful to look at the performance in the exchange rates and stock exchanges of Nigeria and South Africa since the referendum. They provide something of an indication of the wider impact Brexit had on Africa. Nigeria and South Africa together account for more than half of sub-Saharan Africa’s gross domestic product. Both have long had close ties with the UK, especially with respect to trade and financial services. In addition, there are myriad other ties between the UK and Nigeria and South Africa. For example, there is a large British expatriate community living in South Africa. The Nigerian expatriate population in the UK is also significant, and wealthy Nigerians have long favored the UK for education, health services, and second homes. Read more »

Nigeria Devalues its Currency

by John Campbell
A trader changes dollars with naira at a currency exchange store in Lagos, February 12, 2015. (Courtesy Reuters/Alessia Pierdomenico) A trader changes dollars with naira at a currency exchange store in Lagos, February 12, 2015. (Courtesy Reuters/Alessia Pierdomenico)

In the face of low international oil and gas prices, the domestic and international business community, academics, and journalists have all urged President Muhammadu Buhari to devalue the national currency, the naira. Buhari steadfastly refused. Based on his 1983-85 experience as head of state, also a period characterized by falling oil prices, he seems to believe that in an economy as dependent on imports as Nigeria, devaluing the naira would increase the cost of living for the poor, the majority of Nigeria’s citizens. Buhari famously observed that “Nigeria even imports toothpicks.” Read more »

Nigeria Sacking Senior Military Officers

by John Campbell
Nigerian army chief-of-staff General Kenneth Minimah (C) leaves a closed door meeting with senators at the national assembly in Abuja, Nigeria, May 15, 2014. (Reuters/Joe Penney) Nigerian army chief-of-staff General Kenneth Minimah (C) leaves a closed door meeting with senators at the national assembly in Abuja, Nigeria, May 15, 2014. (Reuters/Joe Penney)

A Nigerian army spokesman said on June 10 that “quite a number” of senior military officers have been fired, and some have been turned over to the Economic and Financial Crimes Commission (EFCC) for investigation of charges of corruption. The spokesman, Colonel Sani Kukesheka Usman, is quoted in the media as saying, “. . . not too long ago some officers were investigated for being partisan during the 2015 General Elections. Similarly, the investigation by the presidential committee investigating defense contracts revealed a lot. Some officers have already been arraigned in court by the EFCC.” He went on to say: “The military must remain apolitical and professional at all times.” Read more »

Nigeria’s Oil Production Down by 40 Percent

by John Campbell
Ships and tankers seen on the horizon off the coast of the Apapa port Lagos, Nigeria, Febuary 25, 2016. (Reuters/Afolabi Sotunde) Ships and tankers seen on the horizon off the coast of the Apapa port Lagos, Nigeria, Febuary 25, 2016. (Reuters/Afolabi Sotunde)

Oil is the property of the Nigerian state. Most of it is produced through partnerships between the Nigerian National Petroleum Corporation, which is owned by the state, and private oil companies. Oil provides the Nigerian state with about 70 percent of its revenue and roughly 90 percent of its foreign exchange. President Muhammadu Buhari’s current national budget is expansionary, not least because of the struggle against Boko Haram. The budget is based on the production of 2.2 million barrels per day at $38 per barrel. He has also declined to officially devalue the national currency, the naira, which trades at an official rate of about 200 to the U.S. dollar and about 345 to the U.S. dollar on the black market. Read more »