John Campbell

Africa in Transition

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

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Showing posts for "Economy"

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 »

South Africa’s Currency Falls Again on Rumors of Finance Minister’s Arrest

by John Campbell
South African Finance Minister Pravin Gordhan gestures during a media briefing in Sandton near Johannesburg, March 14, 2016. (Reuters/Siphiwe Sibeko) South African Finance Minister Pravin Gordhan gestures during a media briefing in Sandton near Johannesburg, March 14, 2016. (Reuters/Siphiwe Sibeko)

On May 15, the Sunday Times (English, Johannesburg) published rumors of the impending arrest of Finance Minister Pravin Gordhan over alleged revenue service irregularities. However, on May 16, Beeld (Afrikaans, Johannesburg) reported that President Zuma denied the Sunday Times report. Nevertheless, the South African national currency, the rand (ZAR), fell the following two days, reaching its weakest level in two months; it has fallen 2.1 percent against the U.S. dollar since March 15. Read more »

South Africa Moves Against Secretly-Owned Companies

by John Campbell
Demonstrators carry placards as they march to protest against corruption in Cape Town, September 30, 2015. (Reuters/Mike Hutchings) Demonstrators carry placards as they march to protest against corruption in Cape Town, September 30, 2015. (Reuters/Mike Hutchings)

The Tax Justice Network-Africa has issued a press release praising the South African government’s commitment to register and make public the “beneficial owners” of all companies incorporated in the country. “Beneficial owners” are those who ultimately benefit from a company. In many countries, governments do not require such information, resulting in anonymously owned companies that may be used by corrupt politicians or others who want to hide their identity. The “Panama Papers” highlight the role such companies play in activities ranging from money laundering to tax evasion. Read more »

South Africa and Iran Aim to Resume Strong Trade Relationship

by Guest Blogger for John Campbell
Iran's President Hassan Rouhani speaks during a news conference in Islamabad, Pakistan, March 26, 2016. (Reuters/Faisal Mahmood) Iran's President Hassan Rouhani speaks during a news conference in Islamabad, Pakistan, March 26, 2016. (Reuters/Faisal Mahmood)

Tyler Falish is an intern for the Council on Foreign Relations Africa Studies program, and a student in Fordham University’s Graduate Program in International Political Economy & Development.

South African President Jacob Zuma was in Iran for a two-day state visit on April 24 and 25. While in Tehran, Zuma and Iranian President Hassan Rouhani signed eight bilateral trade agreements as part of a commitment to increase non-oil trade between the two countries. Trade between the two nations plummeted after the imposition of expanded sanctions on Iran by the U.S., EU, and UN. According to UN Comtrade, in 2012—the most recent year of significant trade between the two countries—trade was valued at approximately $1.3 billion. By comparison, bilateral trade in 2015 totaled only $30 million. Read more »

What Is New About Sectarian Fighting in Nigeria’s Middle Belt

by John Campbell
A tribal Fulani boy stands near cows at a local milk collecting centre in Dangwala Karfi village on the outskirts of Nigeria's northern city of Kano January 19, 2016. (Reuters/Akintunde Akinleye) A tribal Fulani boy stands near cows at a local milk collecting centre in Dangwala Karfi village on the outskirts of Nigeria's northern city of Kano January 19, 2016. (Reuters/Akintunde Akinleye)

Sectarian conflict in Nigeria’s Middle Belt is attracting more attention both at home and abroad. Typically, conflict involves Muslim Fulani herdsmen clashing with Christian Barome (or other small tribes) farmers. Conflict between pastoralists and farmers has been endemic for years in the Middle Belt, where the predominately Christian south and the mostly Muslim north meet. The coincidence of boundaries between religions, land use, and ethnic groups promotes conflict, as does its manipulation by politicians to advance their particular agendas. Historically, the Fulani preyed on minority tribes to feed the slave trade. When Christianity arrived in the Middle Belt, it was embraced by the minority tribes, as opposed to the Islam of the slave catchers. Read more »

No Legal Rhino Horn Trade for South Africa

by Guest Blogger for John Campbell
A veterinarian inspects a tranquilized black rhino after it was dehorned in an effort to deter the poaching of one of the world's endangered species, at a farm outside Klerksdorp, in the north west province, South Africa, February 24, 2016. (Reuters/Siphiwe Sibeko) A veterinarian inspects a tranquilized black rhino after it was dehorned in an effort to deter the poaching of one of the world's endangered species, at a farm outside Klerksdorp, in the north west province, South Africa, February 24, 2016. (Reuters/Siphiwe Sibeko)

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

The South African government has announced that it will not petition the Convention on International Trade in Endangered Species (CITES) for a legal trade in rhinoceros horn. South Africa formed a committee to determine the viability of a legal trade in rhino horn in February 2015. After nearly a year of deliberating, the committee’s recommendation was “that the current mode of keeping the country’s stock levels be kept as opposed to the trading in rhino horns.” Read more »

The Likelihood of Instability in Zimbabwe

by Guest Blogger for John Campbell
Zimbabwe's President Robert Mugabe gestures as he arrives to address Zimbabwe's Independence Day celebrations in Harare, April 18, 2016.(Reuters/Philimon Bulawayo) Zimbabwe's President Robert Mugabe gestures as he arrives to address Zimbabwe's Independence Day celebrations in Harare, April 18, 2016.(Reuters/Philimon Bulawayo)

Tyler Falish is an intern for the Council on Foreign Relations Africa Studies program, and a student in Fordham University’s Graduate Program in International Political Economy & Development.

Last spring, the Council on Foreign Relations published a Contingency Planning Memorandum (CPM) by Ambassador George F. Ward that described the potential for political instability and violence in Zimbabwe. Amb. Ward detailed three paths to instability in Zimbabwe: President Robert Mugabe’s death before an appointed successor is installed; a serious challenge to Mugabe’s control driven by increased factionalism; and an economic crisis triggering demand for political change. He also offered three corresponding “warning indicators”: any sign that Mugabe’s health is in decline; indication of increased dissent or infighting within the ruling party, Zimbabwe African National Union – Patriotic Front (ZANU-PF); and public unrest. Read more »